4.Marketable Investment Securities, Restricted Cash and Cash Equivalents, and Other Investment Securities

Our marketable investment securities, restricted cash and cash equivalents, and other investment securities consisted of the following:


	As of December 31,
	2017		2016
	(In thousands)
Marketable investment securities:
Current marketable investment securities:
Trading	$	93,367	$	—
Other		92,146		3,833
Total current marketable investment securities		185,513		3,833
Restricted marketable investment securities (1)		72,014		81,679
Total marketable investment securities		257,527		85,512

Restricted cash and cash equivalents (1)		393		681

Other investment securities:
Other investment securities - equity method		113,460		25,098
Other investment securities - cost method		—		8,150
Total other investment securities		113,460		33,248

Total marketable investment securities, restricted cash and cash equivalents, and other investment securities	$	371,380	$	119,441

(1)

Restricted marketable investment securities and restricted cash and cash equivalents are included in “Restricted cash, cash equivalents and marketable investment securities” on our Consolidated Balance Sheets.

Marketable Investment Securities

Our marketable investment securities portfolio consists of various debt and equity instruments, all of which are classified as available-for-sale, except as specified below. See Note 2 for further information.

Current Marketable Investment Securities - Trading

We had an investment in non-marketable preferred shares of a non-public company, which was received for no cash consideration and was accounted for as a cost method investment and included in “Other investment securities” on our Consolidated Balance Sheets. During the year ended December 31, 2017, our non-marketable preferred shares converted into common shares in conjunction with the issuer’s initial public offering, and accordingly we classified the new securities as “Marketable investment securities” on our Consolidated Balance Sheets. We have elected to account for these common shares as trading securities with changes in fair value reported each period as unrealized gains or losses in “Other, net” within “Other Income (Expense)” on our Consolidated Statements of Operations and Comprehensive Income (Loss). As of December 31, 2017, the fair value of our investment was approximately $93 million, and we recognized a pre-tax unrealized gain of approximately $85 million for the change in the fair value of the investment during the year ended December 31, 2017, which was recorded in “Other, net” within “Other Income (Expense).”

Current Marketable Investment Securities - Other

Our current marketable investment securities portfolio includes investments in various debt instruments including, among others, commercial paper, corporate securities and United States treasury and/or agency securities.

Commercial paper consists mainly of unsecured short-term, promissory notes issued primarily by corporations with maturities ranging up to 365 days. Corporate securities consist of debt instruments issued by corporations with various maturities normally less than 18 months. United States Treasury and agency securities consist of debt instruments issued by the federal government and other government agencies.

Restricted Cash, Cash Equivalents and Marketable Investment Securities

As of December 31, 2017 and 2016, our restricted marketable investment securities, together with our restricted cash and cash equivalents, included amounts required as collateral for our letters of credit.

Other Investment Securities

We have strategic investments in certain debt and equity securities that are included in noncurrent “Other investment securities” on our Consolidated Balance Sheets and accounted for using the cost, equity and/or available-for-sale methods of accounting. Certain of our equity method investments are detailed below.

NagraStar L.L.C. As a result of the completion of the Share Exchange on February 28, 2017, we own a 50% interest in NagraStar L.L.C. (“NagraStar”), a joint venture that is our primary provider of encryption and related security systems intended to assure that only authorized customers have access to our programming.

Invidi Technologies Corporation. In November 2016, we, DIRECTV, LLC, a wholly-owned indirect subsidiary of AT&T Inc., and Cavendish Square Holding B.V., an affiliate of WPP plc, entered into a series of agreements to acquire Invidi Technologies Corporation (“Invidi”), an entity that provides proprietary software for the addressable advertising market. The transaction closed in January 2017.

Our ability to realize value from our strategic investments in securities that are not publicly traded depends on the success of the issuers’ businesses and their ability to obtain sufficient capital, on acceptable terms or at all, and to execute their business plans. Because private markets are not as liquid as public markets, there is also increased risk that we will not be able to sell these investments, or that when we desire to sell them we will not be able to obtain fair value for them.

Unrealized Gains (Losses) on Marketable Investment Securities

As of December 31, 2017 and 2016, we had accumulated net unrealized losses of less than $1 million. These amounts, net of related tax effect, were losses of less than $1 million. All of these amounts are included in “Accumulated other comprehensive income (loss)” within “Total stockholder’s equity (deficit).” The components of our available-for-sale investments are summarized in the table below.


	As of December 31,
	2017								2016
	Marketable								Marketable
	Investment		Unrealized						Investment		Unrealized
	Securities		Gains		Losses		Net		Securities		Gains		Losses		Net
	(In thousands)
Debt securities (including restricted):
U.S. Treasury and agency securities	$	74,788	$	22	$	(141)	$	(119)	$	81,982	$	13	$	(132)	$	(119)
Commercial paper		24,407		—		(2)		(2)		—		—		—		—
Corporate securities		63,809		—		(29)		(29)		3,530		3		—		3
Other		1,156		—		—		—		—		—		—		—
Total	$	164,160	$	22	$	(172)	$	(150)	$	85,512	$	16	$	(132)	$	(116)

As of December 31, 2017, restricted and non-restricted marketable investment securities included debt securities of $164 million with contractual maturities within one year. Actual maturities may differ from contractual maturities as a result of our ability to sell these securities prior to maturity.

Marketable Investment Securities in a Loss Position

The following table reflects the length of time that the individual securities, accounted for as available-for-sale, have been in an unrealized loss position, aggregated by investment category. As of December 31, 2017, the unrealized losses related to our investments in debt securities primarily represented investments in United States treasury and agency securities, commercial paper, and corporate securities. We have the ability to hold and do not intend to sell our investments in these debt securities before they recover or mature, and it is more likely than not that we will hold these investments until that time. In addition, we are not aware of any specific factors indicating that the underlying issuers of these debt securities would not be able to pay interest as it becomes due or repay the principal at maturity. Therefore, we believe that these changes in the estimated fair values of these marketable investment securities are related to temporary market fluctuations.


	As of December 31,
	2017				2016
	Fair		Unrealized		Fair		Unrealized
	Value		Loss		Value		Loss
	(In thousands)
Debt Securities:
Less than 12 months	$	109,853	$	(53)	$	51,796	$	(131)
12 months or more		34,203		(119)		1,410		(1)
Total	$	144,056	$	(172)	$	53,206	$	(132)

Fair Value Measurements

Our investments measured at fair value on a recurring basis were as follows:


	As of December 31,
	2017								2016
	Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3
	(In thousands)
Cash equivalents (including restricted)	$	315,030	$	140	$	314,890	$	—	$	702,331	$	4,126	$	698,205	$	—

Debt securities (including restricted):
U.S. Treasury and agency securities	$	74,788	$	74,788	$	—	$	—	$	81,982	$	81,982	$	—	$	—
Commercial paper		24,407		—		24,407		—		—		—		—		—
Corporate securities		63,809		—		63,809		—		3,530		—		3,530		—
Other		1,156		—		1,156		—		—		—		—		—

Equity Securities		93,367		93,367		—		—		—		—		—		—
Total	$	257,527	$	168,155	$	89,372	$	—	$	85,512	$	81,982	$	3,530	$	—

During the years ended December 31, 2017 and 2016, we had no transfers in or out of Level 1 and Level 2 fair value measurements.

Gains and Losses on Sales and Changes in Carrying Amounts of Investments

“Other, net” within “Other Income (Expense)” included on our Consolidated Statements of Operations and Comprehensive Income (Loss) is as follows:


	For the Years Ended December 31,
Other, net:	2017		2016		2015
	(In thousands)
Marketable investment securities - gains (losses) on sales/exchanges	$	1,803	$	32,509	$	14,449
Marketable investment securities - unrealized gains (losses) on trading securities		85,217		—		—
Costs related to early redemption of debt		(1,470)		—		—
Equity in earnings		2,163		2,508		4,372
Other		798		(2,212)		(1,005)
Total	$	88,511	$	32,805	$	17,816