11. Financial instruments

Securities classified as available for sale

The Company’s short-term and long-term investments consist of available-for-sale securities as follows:


(in thousands) December 31, 2017	Amortized cost		Gross unrealized gains		Gross unrealized losses			Fair value
Short-term investments:
U.S. treasury securities	$	56,123	$	—	$	(70	)	$	56,053

Contractual maturities:
Due within one year	$	56,123						$	56,053
December 31, 2016	Amortized cost		Gross unrealized gains		Gross unrealized losses			Fair value
Short-term investments:
U.S. treasury securities	$	70,819	$	—	$	(61	)	$	70,758

Long-term investments:
U.S. treasury securities	$	50,155	$	—	$	(109	)	$	50,046

Contractual maturities:
Due within one year	$	70,819						$	70,758
Due after one year through two years		50,155							50,046

The aggregate estimated fair value of the Company’s investments with unrealized losses are as follows:


	Period of continuous unrealized loss
(in thousands)	12 months or less					Greater than 12 months
	Fair value		Gross unrealized losses			Fair value		Gross unrealized losses
December 31, 2017
U.S. treasury securities	$	15,983	$	(27	)	$	40,070	$	(43	)

December 31, 2016
U.S. treasury securities	$	120,804	$	(170	)		N/A		N/A

Fair value of financial instruments

The fair value of the Company’s financial instruments are determined according to a fair value hierarchy that prioritizes the inputs and assumptions used, and the valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).

The determination of a financial instrument’s level within the fair value hierarchy is based on an assessment of the lowest level of any input that is significant to the fair value measurement. The Company considers observable data to be market data which is readily available, regularly distributed or updated, reliable and verifiable, not proprietary, and provided by independent sources that are actively involved in the relevant market.

The carrying amounts of certain of the Company’s financial instruments including cash, cash equivalents, receivables, accounts payable and other liabilities, approximate their fair values because of their nature and/or short maturities. The Company holds short and long-term investments that are classified as available-for-sale securities, which are measured at fair value determined on a recurring basis according to the fair value hierarchy.

The following tables present the fair value of our financial instruments that are measured at fair value on a recurring basis:


(in thousands)	QUOTED PRICES IN ACTIVE MARKETS FOR IDENTICAL ASSETS (LEVEL 1)		OTHER OBSERVABLE INPUTS (LEVEL 2)		SIGNIFICANT UN-OBSERVABLE INPUTS (LEVEL 3)		TOTAL
BALANCES – December 31, 2017
Short-term investments – U.S. treasury securities	$	56,053	$	—	$	—	$	56,053

	$	56,053	$	—	$	—	$	56,053

BALANCES – December 31, 2016
Short-term investments – U.S. treasury securities	$	70,758	$	—	$	—	$	70,758
Long-term investments – U.S. treasury securities		50,046		—		—		50,046

	$	120,804	$	—	$	—	$	120,804

Level 1 instruments, which include investments that are valued based on quoted market prices in active markets, consisted of U.S. treasury securities.

Level 2 instruments include investments for which all significant inputs are observable. The Company had no Level 2 investments at December 31, 2017 and December 31, 2016.

Level 3 instruments include investments for which significant inputs to the fair value of the assets or liabilities are unobservable and are supported by little or no market activity. The Company had no Level 3 investments at December 31, 2017 and December 31, 2016. There were no transfers between Levels 1, 2, and 3 during the years ended December 31, 2017 and December 31, 2016.

At December 31, 2017, the Company had short-term investments consisting of available-for-sale securities of $56.1 million. Total gains for securities were $0.9 million, $0.6 million and $0.1 million for the years ending December 31, 2017, 2016 and 2015, respectively.