Financial Instruments

9 Months Ended

Sep. 30, 2021

Financial Instruments

Financial Instruments

5. Financial Instruments

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

	September 30, 2021								December 31, 2020
	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	$	55,703	$	—	$	—	$	55,703	$	28,990	$	—	$	—	$	28,990
U.S. Treasury securities (1)		786,404		1,821		(350)		787,875		594,252		3,512		(20)		597,744
Corporate bonds and notes (1)		52,868		—		(147)		52,721		12,331		2		(5)		12,328
Municipal securities		87,824		378		(202)		88,000		77,764		796		(26)		78,534
Total	$	982,799	$	2,199	$	(699)	$	984,299	$	713,337	$	4,310	$	(51)	$	717,596
Classified as:
Cash equivalents (2)							$	55,703							$	28,990
Short-term investments								928,596								688,606
Total							$	984,299							$	717,596

(1) Per the Company’s investment policy, all debt securities are classified as short-term investments irrespective of holding period.  

(2) Cash equivalents includes cash sweep accounts and U.S. Treasury money market mutual funds.

The Company invests in U.S. Treasuries, U.S. agency and high quality municipal bonds which mature at par value and are all paying their coupons on schedule. The Company has therefore concluded there is currently no other than temporary impairment of its investments and will continue to recognize unrealized gains and losses in other comprehensive income (loss). During the nine months ended September 30, 2021 and 2020, the Company sold $77.6 million and $11.5 million of investments, respectively. During the nine months ended September 30, 2021, the amount of gross realized gains and realized losses upon sales of investments were insignificant. The Company uses the specific investment identification method to calculate realized gains and losses and amounts reclassified out of other comprehensive income to net income. As of September 30, 2021, the Company had 43 investments in an unrealized loss position in its portfolio. An allowance for credit losses was not necessary for the third quarter of 2021 since the investments are low risk, investment grade securities. The Company has assessed the unrealized loss position for available-for-sale debt securities for which an allowance for credit losses has not been recorded. The fair value for investment securities at an unrealized loss position as of September 30, 2021 was $522.0 million. The aggregate amount of unrealized losses of these securities was $0.7 million, and the impact of the securities in a continuous loss position to the condensed consolidated statements of operations and comprehensive loss were not material as of September 30, 2021.

The following table summarizes the Company’s portfolio of available-for-sale securities by contractual maturity as of September 30, 2021:

	September 30, 2021
	Amortized Cost		Fair Value
	(in thousands)
Less than or equal to one year	$	403,211	$	403,784
Greater than one year but less than five years		523,885		524,812
Total	$	927,096	$	928,596