3. Cash Equivalents and Investments

Cash equivalents are highly liquid investments that are readily convertible into cash with original maturities of three months or less when purchased. Investments consist of securities with original maturities greater than 90 days when purchased. The Company classifies these investments as available-for-sale and records them at fair value in the accompanying condensed consolidated balance sheets. Unrealized gains or losses are included in accumulated other comprehensive income (loss). Premiums or discounts from par value are amortized to investment income over the life of the underlying investment.

Cash equivalents and investments, available-for-sale, consisted of the following at March 31, 2017 and December 31, 2016 (in thousands):


	Average		Amortized		Unrealized		Unrealized		Fair
March 31, 2017	Maturity		Cost		Gain		Losses		Value
Cash equivalents:
Money market funds			$	50,364	$	—	$	—	$	50,364
Government agency securities				5,991		1		—		5,992
Investments, available-for-sale:
U.S. treasury obligations		321 Days		180,084		—		(115)		179,969
Total			$	236,439	$	1	$	(115)	$	236,325


	Average		Amortized		Unrealized		Unrealized		Fair
December 31, 2016	Maturity		Cost		Gain		Losses		Value
Cash equivalents:
Money market funds			$	52,069	$	—	$	—	$	52,069
Investments, available-for-sale:
U.S. treasury obligations		298 Days		216,167		14		(32)		216,149
Total			$	268,236	$	14	$	(32)	$	268,218

Although available to be sold to meet operating needs or otherwise, securities are generally held through maturity. The cost of securities sold is determined based on the specific identification method for purposes of recording realized gains and losses. During the three months ended March 31, 2017, there were no realized gains or losses on sales of investments, and no investments were adjusted for other than temporary declines in fair value.

At March 31, 2017, the Company held 33 securities that were in an unrealized loss position. The aggregate fair value of securities held by the Company in an unrealized loss position for less than twelve months as of March 31, 2017 was $179.9 million, and there were no securities held by the Company in an unrealized loss position for more than twelve months. The Company has the intent and ability to hold such securities until recovery. The Company determined that there was no material change in the credit risk of the above investments. As a result, the Company determined it did not hold any investments with an other-than temporary impairment as of March 31, 2017.