INVESTMENTS

Short-term and Long-term Investments in Available-for-Sale Securities

The following table summarizes, by major security type, the Company's investments as of June 30, 2016 (in thousands):



	Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Short-term investments:
Foreign government securities	$	287,229	$	94	$	(211	)	$	287,112
U.S. government securities	427,344		194		(3		)	427,535
Corporate debt securities	949,907		1,382		(78		)	951,211
Commercial paper	8,012		—		(5		)	8,007
U.S. government agency securities	3,376		1		—			3,377
Total short-term investments	$	1,675,868	$	1,671	$	(297	)	$	1,677,242

Long-term investments:
Foreign government securities	$	641,671	$	4,766	$	—		$	646,437
U.S. government securities	541,307		5,923		—			547,230
Corporate debt securities	4,535,904		47,999		(556		)	4,583,347
U.S. municipal securities	1,064		10		—			1,074
U.S. government agency securities	1,000		—		—			1,000
Ctrip convertible debt securities	1,250,000		92,975		(36,500		)	1,306,475
Ctrip equity securities	630,311		238,540		—			868,851
Total long-term investments	$	7,601,257	$	390,213	$	(37,056	)	$	7,954,414

The Company's investment policy seeks to preserve capital and maintain sufficient liquidity to meet operational and other needs of the business. As of June 30, 2016, the weighted-average life of the Company’s fixed income investment portfolio, excluding the Company's investment in Ctrip convertible debt securities, was approximately 1.8 years with an average credit quality of A+/A1/A+.

The Company invests in foreign government securities with high credit quality. As of June 30, 2016, investments in foreign government securities principally included debt securities issued by the governments of the Netherlands, Germany, France, Belgium and Austria.

On May 26, 2015 and August 7, 2014, the Company invested $250 million and $500 million, respectively, in five-year senior convertible notes issued at par by Ctrip.com International Ltd. ("Ctrip"). On December 11, 2015, the Company invested $500 million in a Ctrip ten-year senior convertible note issued at par value, which included a put option allowing the Company to require a prepayment in cash from Ctrip at the end of the sixth year of the note. As of June 30, 2016, the Company had also invested $630.3 million of its international cash in Ctrip American Depositary Shares ("ADSs"). The convertible debt and equity securities of Ctrip have been marked-to-market in accordance with the accounting guidance for available-for-sale securities.

In connection with the Company's investments in Ctrip's convertible notes, Ctrip granted the Company the right to appoint an observer to its board of directors and permission to acquire its shares (through the acquisition of Ctrip ADSs in the open market) so that combined with ADSs issuable upon conversion of the August 2014 and May 2015 convertible notes, the Company could hold up to an aggregate of 15% of Ctrip's outstanding equity. As of June 30, 2016, the Company did not have significant influence over Ctrip.

The following table summarizes, by major security type, the Company's investments as of December 31, 2015 (in thousands):



	Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Short-term investments:
Foreign government securities	$	395,404	$	497	$	(104	)	$	395,797
U.S. government securities	457,001		—		(507		)	456,494
Corporate debt securities	305,654		25		(419		)	305,260
Commercial paper	11,688		—		—			11,688
U.S. government agency securities	2,009		—		(2		)	2,007
Total short-term investments	$	1,171,756	$	522	$	(1,032	)	$	1,171,246

Long-term investments:
Foreign government securities	$	718,947	$	1,367	$	(683	)	$	719,631
U.S. government securities	580,155		277		(1,982		)	578,450
Corporate debt securities	4,294,282		1,273		(18,941		)	4,276,614
U.S. municipal securities	1,080		3		—			1,083
Ctrip convertible debt securities	1,250,000		158,600		(30,050		)	1,378,550
Ctrip equity securities	630,311		346,724		—			977,035
Total long-term investments	$	7,474,775	$	508,244	$	(51,656	)	$	7,931,363

The Company has classified its investments as available-for-sale securities. These securities are carried at estimated fair value with the aggregate unrealized gains and losses related to these investments, net of taxes, reflected as a part of "Accumulated other comprehensive income" in the Unaudited Consolidated Balance Sheets. Classification as short-term or long-term investment is based upon the maturity of the debt securities.

The Company recognized net realized gains of $2.1 million and net realized losses of $0.8 million related to investments for the three and six months ended June 30, 2016, respectively, compared to net realized gains of $1.6 million and $3.4 million for the three and six months ended June 30, 2015, respectively.

Cost-method Investments

The Company held investments in equity securities of private companies, which are typically at an early stage of development, of approximately $0.6 million and $62.3 million as of June 30, 2016 and December 31, 2015, respectively. The investments are accounted for under the cost method and reported in "Other assets" in the Company's Unaudited Consolidated Balance Sheets. The Company evaluates its investments quarterly to determine if any indicators of other-than-temporary impairment exist.

In March 2016, the Company received an operating performance update from Hotel Urbano, which showed disappointing 2015 results, significantly reduced forecasts and the need for additional funding in the near term. This update combined with increased political turmoil, the declaration of a public health emergency related to the Zika virus and sustained poor macroeconomic conditions in Brazil in the first quarter of 2016 indicated a potential other-than-temporary impairment in the fair value of the Company’s investment. As a result, the Company analyzed all information available and based on the best estimate of the fair value of this investment, recognized an impairment of approximately $50 million for the three months ended March 31, 2016. In the second quarter of 2016, after discussions with Hotel Urbano's management, the Company reviewed their additional funding needs and based on its business prospects, the Company recognized an impairment of approximately $10 million for the three months ended June 30, 2016 to write-off the remainder of its investment in Hotel Urbano.

In addition, the Company recognized an impairment of approximately $3 million for an investment in another private company during the three months ended June 30, 2016.