Financial Instruments

12 Months Ended

Dec. 31, 2022

Financial Instruments

Financial Instruments

5.    Financial Instruments

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

	December 31, 2022								December 31, 2021
	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	$	283,358	$	—	$	—	$	283,358	$	10,041	$	—	$	—	$	10,041
Liquid demand deposits		125,596		—		—		125,596		—		—		—		—
U.S. Treasury securities (1)		358,385		—		(12,328)		346,057		689,640		1,081		(2,624)		688,097
Corporate bonds and notes (1)		24,045		—		(516)		23,529		52,729		—		(392)		52,337
Municipal securities		65,973		1		(3,259)		62,715		89,814		261		(613)		89,462
Total	$	857,357	$	1	$	(16,103)	$	841,255	$	842,224	$	1,342	$	(3,629)	$	839,937
Classified as:
Cash equivalents (2)							$	408,954							$	10,041
Short-term investments								432,301								829,896
Total							$	841,255							$	839,937

(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, liquid demand deposits 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). The Company sold $248.5 million and $187.6 million of investments during the years ended December 31, 2022 and 2021, respectively. During the year ended December 31, 2022, the amount of gross realized losses upon sales of investments were $0.9 million. The amount of gross realized gains and losses in 2021 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 December 31, 2022, the Company had 61 investments in an unrealized loss position in its portfolio. The fair value for investment securities at an unrealized loss position as of December 31, 2022 was $430.8 million. An allowance for credit losses was not necessary as decrease in the fair market value for a majority of the available-for-sale securities was as a result of a significant average yield rate decrease for similar securities as of December 31, 2022. 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 following table presents debt securities available-for-sale that were in an unrealized loss position as of December 31, 2022, aggregated by major security type and length of time in a continuous loss position.

	Less Than 12 Months				12 Months or Longer				Total
	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
	(in thousands)
U.S. Treasury securities	$	18,677	$	(565)	$	327,374	$	(11,762)	$	346,051	$	(12,327)
Corporate bonds and notes		—		—		23,529		(516)		23,529		(516)
Municipal securities		16,371		(127)		44,843		(3,133)		61,214		(3,260)
Total	$	35,048	$	(692)	$	395,746	$	(15,411)	$	430,794	$	(16,103)

The following table summarizes the Company’s portfolio of available-for-sale securities by contractual maturity as of December 31, 2022:

	December 31, 2022
	Amortized Cost		Fair Value
	(in thousands)
Less than or equal to one year	$	329,499	$	320,708
Greater than one year but less than five years		118,904		111,593
Total	$	448,403	$	432,301