Note 2. Marketable Securities

The following is a summary of our marketable security portfolio as of December 31, 2015 and 2014, respectively.


			Net		Net
	Amortized		Unrealized		Unrealized		Estimated
	Cost		Gains		Losses		Fair Value
	(in thousands)
December 31, 2015
Corporate debt securities	$	187,153	$	—	$	(809)	$	186,344

December 31, 2014
Corporate debt securities	$	144,684	$	—	$	(282)	$	144,402
Mortgage backed securities		1,461		2,103		—		3,564
	$	146,145	$	2,103	$	(282)	$	147,966

Our corporate debt securities generally have contractual maturity dates of between 12 to 18 months. Because of the potential for prepayment on mortgage‑backed securities, they are not categorized by contractual maturity at December 31, 2014.

Fair Value Measurements

FASB accounting guidance defines fair value as the price that would be received to sell an asset or paid to transfer a liability (“the exit price”) in an orderly transaction between market participants at the measurement date. The standard outlines a valuation framework and creates a fair value hierarchy in order to increase the consistency and comparability of fair value measurements and the related disclosures. In determining fair value we use quoted prices and observable inputs. Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of us. The fair value hierarchy is broken down into three levels based on the source of inputs as follows:

Level 1—Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2—Valuations based on observable inputs and quoted prices in active markets for similar assets and liabilities.

Level 3—Valuations based on inputs that are unobservable and models that are significant to the overall fair value measurement.

At December 31, 2015, our marketable securities consist of investments in U.S. government agencies and corporate debt securities that are classified as available‑for‑sale. During 2015, we sold our portfolio of mortgage-backed securities for a realized gain of $1.8 million, which is recorded in interest and other income, net on the consolidated statements of operations.

At December 31, 2015, our Level 2 corporate debt securities were valued using readily available pricing sources which utilize market observable inputs, including the current interest rate and other characteristics for similar types of investments. At December 31, 2014, our Level 2 corporate debt securities and mortgage‑backed securities were valued using readily available pricing sources which utilize market observable inputs, including the current interest rate and other characteristics for similar types of instruments.

The following fair value hierarchy table presents information about each major category of our financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2015 (in thousands):


	Fair Value Measurement at Reporting Date Using:
	Quoted Prices in		Significant Other		Significant
	Active Markets for		Observable		Unobservable
	Identical Assets		Inputs		Inputs		Balance as of
	(Level 1)		(Level 2)		(Level 3)		December 31, 2015
Cash and cash equivalents	$	521,439	$	—	$	—	$	521,439
Corporate debt securities		—		186,344		—		186,344
Long term investment (Note 5)		35,248		—		—		35,248
Total assets	$	556,687	$	186,344	$	—	$	743,031

The following fair value hierarchy table presents information about each major category of our financial assets measured at fair value on a recurring basis as of December 31, 2014 (in thousands):


	Fair Value Measurement at Reporting Date Using:
	Quoted Prices in		Significant Other		Significant
	Active Markets for		Observable		Unobservable
	Identical Assets		Inputs		Inputs		Balance as of
	(Level 1)		(Level 2)		(Level 3)		December 31, 2014
Cash and cash equivalents	$	452,297	$	—	$	—	$	452,297
Corporate debt securities		—		144,402		—		144,402
Mortgage-backed securities		—		3,564		—		3,564
Total assets	$	452,297	$	147,966	$	—	$	600,263

Net realized gains of $1.8 million, $0.0 million and $0.0 million from the sale of restricted cash and investments and marketable securities were included in “Interest and other income, net” on the consolidated statements of operations for the years ended December 31, 2015, 2014 and 2013, respectively.

During 2015 and 2014 there were no measurements required for any assets or liabilities at fair value on a nonrecurring basis.