Financial Instruments

12 Months Ended

Dec. 31, 2017

Financial Instruments

Financial Instruments

4.Financial Instruments

The Company elected to invest a portion of its cash assets in conservative, income earning, liquid investments effective September 2015. Cash equivalents and investments, all of which are classified as available-for-sale securities, consisted of the following:

	December 31, 2017								December 31, 2016
	Amortized Cost		Gross Unrealized Gain		Gross Unrealized (Loss)		Estimated Fair Value		Amortized Cost		Gross Unrealized Gain		Gross Unrealized (Loss)		Estimated Fair Value
	(in thousands)
Money market deposits	$	3,477	$	—	$	—	$	3,477	$	10,777	$	—	$	—	$	10,777
U.S. Treasury securities		67,480		10		(464)		67,026		57,846		—		(404)		57,442
U.S. agency securities		27,293		—		(221)		27,072		56,261		—		(147)		56,114
Municipal securities		12,240		—		(91)		12,149		17,478		—		(174)		17,304
Total	$	110,490	$	10	$	(776)	$	109,724	$	142,362	$	—	$	(725)	$	141,637
Classified as:
Cash equivalents							$	3,477							$	10,777
Short-term investments								106,247								130,860
Total							$	109,724							$	141,637

The Company invests in U.S. Treasuries, U.S. agency and high quality municipal bonds which mature at par and are all paying their coupons on schedule. Thus, the Company has determined there is currently no other than temporary impairment of its investments, and will continue to recognize unrealized losses in other comprehensive income. As of December 31, 2017, the Company has 19 investments in an unrealized loss position in its portfolio. During the year ended December 31, 2017, the amount of gross realized gains and realized losses upon sales of investments were insignificant, and during the year ended December 31, 2016, sales of investments resulted in gross realized gains of $0.2 million and insignificant gross realized losses. Realized gains and losses are reported in interest and other income (expense), net in the statements of operations and comprehensive loss. The following table shows the change in the net unrealized positions of the available-for-sale securities and reclassifications from accumulated other comprehensive loss upon the sale of those securities:

	December 31,
	2017		2016
	(in thousands)
Balance at beginning of year	$	(725)	$	(1,416)
Net unrealized (losses) gains on available-for-sale securities, net of tax		(105)		882
Reclassifications of losses (gains) realized from sale of available-for-sale securities		64		(191)
(Decrease) increase in other comprehensive loss		(41)		691
Balance at end of year	$	(766)	$	(725)

During the years ended December 31, 2017, 2016 and 2015, the Company earned interest income of $1.2 million, $1.5 million and $0.5 million, respectively, from its investment portfolio.

The following table summarizes the Company’s portfolio of available-for-sale securities by contractual maturity as of December 31, 2017:

	December 31, 2017
	Amortized Cost		Fair Value
	(in thousands)
Less than one year	$	57,168	$	57,046
Greater than one year but less than five years		49,845		49,201
Total	$	107,013	$	106,247