Investments

9 Months Ended

Sep. 30, 2018

Available-for-sale Investments

Investments in available-for-sale securities at fair value were as follows for the periods ended (in thousands):



	September 30, 2018									December 31, 2017
Description of the Securities	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Agency securities	$	356,504	$	361	$	(3,268	)	$	353,597	$	441,315	$	509	$	(2,760	)	$	439,064
Corporate securities	625,874		193		(4,277		)	621,790		810,444		268		(3,020		)	807,692
Municipal securities	2,500		5		—			2,505		3,965		2		(2		)	3,965
Government securities	310,208		2		(1,679		)	308,531		367,595		44		(1,516		)	366,123
Total	$	1,295,086	$	561	$	(9,224	)	$	1,286,423	$	1,623,319	$	823	$	(7,298	)	$	1,616,844

The change in net unrealized gains (losses) on available-for-sale securities recorded in Other comprehensive income includes unrealized gains (losses) that arose from changes in market value of specifically identified securities that were held during the period, gains (losses) that were previously unrealized, but have been recognized in current period net income due to sales, as well as prepayments of available-for-sale investments purchased at a premium. This reclassification has no effect on total comprehensive income or equity and was not material for all periods presented. See Note 13 for more information related to comprehensive income.

The average remaining maturities of the Company’s short-term and long-term available-for-sale investments at September 30, 2018 were approximately seven months and two years, respectively.

Realized Gains and Losses on Available-for-sale Investments

For the three and nine months ended September 30, 2018, the Company received proceeds from the sales of available-for-sale investments of $7.5 million and $442.4 million, respectively, and for the three and nine months ended September 30, 2017, the Company received proceeds from the sales of available-for-sale investments of $116.4 million and $678.5 million, respectively.

For the three months ended September 30, 2018, the Company had no realized gains on the sales of available-for-sale investments. For the nine months ended September 30, 2018, the Company had $0.1 million in realized gains on the sales of available-for-sale investments, and during the three and nine months ended September 30, 2017, the Company had no realized gains on the sales of available-for-sale investments, and $0.7 million, respectively, in realized gains on the sales of available-for-sale investments.

For the three and nine months ended September 30, 2018, the Company had realized losses on available-for-sale investments of $0.1 million and $1.5 million, respectively, and for the three and nine months ended September 30, 2017, it had realized losses on available-for-sale investments of $0.2 million and $0.4 million, respectively, primarily related to sales of these investments during these periods.

All realized gains and losses related to the sales of available-for-sale investments are included in Other income (expense), net, in the accompanying condensed consolidated statements of income.

Unrealized Losses on Available-for-Sale Investments

The gross unrealized losses on the Company’s available-for-sale investments that are not deemed to be other-than-temporarily impaired as of September 30, 2018 and December 31, 2017 were $9.2 million and $7.3 million, respectively. Because the Company does not currently intend to sell any of its investments in an unrealized loss position and it is more likely than not that it will not be required to sell the securities before the recovery of its amortized cost basis, which may not occur until maturity, it does not consider the securities to be other-than-temporarily impaired.

Equity Securities without Readily Determinable Fair Values

The Company held direct investments in privately-held companies of $8.4 million as of September 30, 2018, which are accounted for at cost, less impairment plus or minus adjustments resulting from observable price changes in orderly transactions for an identical or a similar investment of the same issuer. These investments are included in Other assets in the accompanying condensed consolidated balance sheets. The Company periodically reviews these investments for impairment and observable price changes on a quarterly basis, and adjusts the carrying value accordingly. For the three and nine months ended September 30, 2018, there were no adjustments resulting from observable price changes to the Company’s investments in privately-held companies without a readily determinable fair value. The fair value of these investments represents a Level 3 valuation as the assumptions used in valuing these investments are not directly or indirectly observable. See Note 7 for detailed information on fair value measurements.

Equity Securities Accounted for at Net Asset Value

The Company held equity interests in certain private equity funds of $11.2 million as of September 30, 2018 which are accounted for under the net asset value practical expedient. These investments are included in Other assets in the accompanying condensed consolidated balance sheets. The net asset value of these investments is determined using quarterly capital statements from the funds which are based on the Company’s contributions to the funds, allocation of profit and loss and changes in fair value of the underlying fund investments.

For 2017, the Company’s investments in privately-held companies and private equity funds were previously classified as cost method investments and were $18.6 million as of December 31, 2017. Due to the Company's adoption of the accounting standard update for the recognition and measurement of financial assets and liabilities, effective January 1, 2018, these investments are now accounted for under the new basis of accounting referenced above. See Note 2 for detailed information regarding the Company's recent accounting pronouncements.