2. Investments

As of December 31, 2015, we have primarily invested our excess cash in debt instruments of the U.S. Treasury, financial institutions, corporations, and U.S. government agencies with strong credit ratings and an investment grade rating at or above A-1, P-1 or F-1 by Moody’s, S&P or Fitch, respectively. We have established guidelines relative to diversification and maturities that maintain safety and liquidity. We periodically review and modify these guidelines to maximize trends in yields and interest rates without compromising safety and liquidity.

The following table summarizes the contract maturity of the available-for-sale securities we held as of December 31, 2015:

One year or less		49 %
After one year but within two years		27 %
After two years but within three and a half years		24 %
Total		100 %

As illustrated above, at December 31, 2015, 76 percent of our available-for-sale securities had a maturity of less than two years.

All of our available-for-sale securities are available to us for use in our current operations. As a result, we categorize all of these securities as current assets even though the stated maturity of some individual securities may be one year or more beyond the balance sheet date.

At December 31, 2015, we had an ownership interest of less than 20 percentin one private company and two public companies with which we conduct business. The privately held company is Atlantic Pharmaceuticals Limited and the publicly traded companies are Antisense Therapeutics Limited and Regulus. We account for equity investments in the privately held company under the cost method of accounting and we account for equity investments in the publicly traded companies at fair value. We record unrealized gains and losses as a separate component of comprehensive income (loss) and include net realized gains and losses in gain (loss) on investments.

During 2015, 2014 and 2013, we realized a net gain on investments we sold of $20.3 million, $21.2 million, and $2.4 million, respectively. Our net gain for 2015 and 2014 was primarily from the $20.2 million and $19.9 million gain we realized when we sold a portion of our stock in Regulus, respectively. We have reflected this gain in a separate line called “Gain on investment in Regulus Therapeutics Inc.”, on our Consolidated Statements of Operations. Our net gain on investments for 2013 related to the sale of stock in several of our satellite companies. As of December 31, 2015, we owned approximately five percent of Regulus’ equity, with a carrying balance of $24.8 million on our consolidated balance sheet.

The following is a summary of our investments (in thousands):

			Gross Unrealized
December 31, 2015	Cost		Gains		Losses			Estimated Fair Value
Available-for-sale securities (1):
Corporate debt securities	$	181,670	$	5	$	(250	)	$	181,425
Debt securities issued by U.S. government agencies		50,559		1		(19	)		50,541
Debt securities issued by the U.S. Treasury		2,604		—		(3	)		2,601
Debt securities issued by states of the United States and political subdivisions of the states (2)		79,414		18		(88	)		79,344
Total securities with a maturity of one year or less		314,247		24		(360	)		313,911
Corporate debt securities		258,703		3		(1,705	)		257,001
Debt securities issued by U.S. government agencies		38,956		—		(244	)		38,712
Debt securities issued by states of the United States and political subdivisions of the states		48,552		3		(243	)		48,312
Total securities with a maturity of more than one year		346,211		6		(2,192	)		344,025
Total available-for-sale securities	$	660,458	$	30	$	(2,552	)	$	657,936
Equity securities:
Regulus Therapeutics Inc.	$	7,162	$	17,630	$	—		$	24,792
Total equity securities	$	7,162	$	17,630	$	—		$	24,792
Total available-for-sale and equity securities	$	667,620	$	17,660	$	(2,552	)	$	682,728

			Gross Unrealized
December 31, 2014	Cost		Gains		Losses			Estimated Fair Value
Available-for-sale securities (1):
Corporate debt securities (2)	$	219,856	$	89	$	(89	)	$	219,856
Debt securities issued by U.S. government agencies		47,496		7		(27	)		47,476
Debt securities issued by the U.S. Treasury (2)		19,008		9		—			19,017
Debt securities issued by states of the United States and political subdivisions of the states (2)		45,196		19		(53	)		45,162
Total securities with a maturity of one year or less		331,556		124		(169	)		331,511
Corporate debt securities		152,730		16		(600	)		152,146
Debt securities issued by U.S. government agencies		62,530		—		(151	)		62,379
Debt securities issued by states of the United States and political subdivisions of the states		60,073		32		(234	)		59,871
Total securities with a maturity of more than one year		275,333		48		(985	)		274,396
Total available-for-sale securities	$	606,889	$	172	$	(1,154	)	$	605,907
Equity securities:
Regulus Therapeutics Inc.	$	12,477	$	69,404	$	—		$	81,881
Total equity securities	$	12,477	$	69,404	$	—		$	81,881
Total available-for-sale and equity securities	$	619,366	$	69,576	$	(1,154	)	$	687,788

(1)

Our available-for-sale securities are held at amortized cost.

(2)

Includes investments classified as cash equivalents on our consolidated balance sheet.

Investments we consider to be temporarily impaired at December 31, 2015 are as follows (in thousands):

			Less than 12 months of Temporary Impairment					More than 12 months of Temporary Impairment					Total Temporary Impairment
	Number of Investments		Estimated Fair Value		Unrealized Losses			Estimated Fair Value		Unrealized Losses			Estimated Fair Value		Unrealized Losses
Corporate debt securities		397	$	406,098	$	(1,908	)	$	16,066	$	(47	)	$	422,164	$	(1,955	)
Debt securities issued by U.S. government agencies		19		71,842		(262	)		1,001		(1	)		72,843		(263	)
Debt securities issued by the U.S. Treasury		2		2,601		(3	)		—		—			2,601		(3	)
Debt securities issued by states of the United States and political subdivisions of the states		230		59,882		(173	)		29,634		(158	)		89,516		(331	)
Total temporarily impaired securities		648	$	540,423	$	(2,346	)	$	46,701	$	(206	)	$	587,124	$	(2,552	)

We believe that the decline in value of these securities is temporary and primarily related to the change in market interest rates since purchase. We believe it is more likely than not that we will be able to hold these securities to maturity. Therefore, we anticipate full recovery of their amortized cost basis at maturity.