5.Marketable Investment Securities, Restricted Cash and Cash Equivalents, and Other Investment Securities

Our marketable investment securities, restricted cash and cash equivalents, and other investment securities consisted of the following:


	As of
	June 30,		December 31,
	2018		2017
	(In thousands)
Marketable investment securities:
Current marketable investment securities:
Strategic - available-for-sale	$	196	$	195
Strategic - trading/equity (Note 2)		71,943		93,367
Other		474,865		407,603
Total current marketable investment securities		547,004		501,165
Restricted marketable investment securities (1)		72,554		72,014
Total marketable investment securities		619,558		573,179

Restricted cash and cash equivalents (1)		418		393

Other investment securities:
Other investment securities - equity method		115,870		113,460
Total other investment securities		115,870		113,460

Total marketable investment securities, restricted cash and cash equivalents, and other investment securities	$	735,846	$	687,032

(1)

Restricted marketable investment securities and restricted cash and cash equivalents are included in “Restricted cash, cash equivalents and marketable investment securities” on our Condensed Consolidated Balance Sheets.

Marketable Investment Securities

Our marketable investment securities portfolio consists of various debt and equity instruments. All debt securities are classified as available-for-sale. Subsequent to the adoption of ASU 2016-01 during the first quarter 2018, all equity securities are carried at fair value, with changes in fair value recognized in “Other, net” within “Other Income (Expense)” on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). See Note 2 for further information.

Current Marketable Investment Securities – Strategic

Our current strategic marketable investment securities portfolio includes and may include strategic and financial debt and equity investments in private and public companies that are highly speculative and have experienced and continue to experience volatility. As of June 30, 2018, this portfolio consisted of securities of a small number of issuers, and as a result the value of that portfolio depends, among other things, on the performance of those issuers. The fair value of certain of the debt and equity securities in this portfolio can be adversely impacted by, among other things, the issuers’ respective performance and ability to obtain any necessary additional financing on acceptable terms, or at all.

Current Marketable Investment Securities - Other

Our current other marketable investment securities portfolio includes investments in various debt instruments including, among others, commercial paper, corporate securities and United States treasury and/or agency securities.

Commercial paper consists mainly of unsecured short-term, promissory notes issued primarily by corporations with maturities ranging up to 365 days. Corporate securities consist of debt instruments issued by corporations with various maturities normally less than 18 months. U.S. Treasury and agency securities consist of debt instruments issued by the federal government and other government agencies.

Restricted Cash, Cash Equivalents and Marketable Investment Securities

As of June 30, 2018 and December 31, 2017, our restricted marketable investment securities, together with our restricted cash and cash equivalents, included amounts required as collateral for our letters of credit.

Other Investment Securities

We have strategic investments in certain debt and/or equity securities that are included in noncurrent “Other investment securities” on our Condensed Consolidated Balance Sheets. Our debt securities are classified as available-for-sale and our equity securities are accounted for using the equity method of accounting or recorded at fair value. Certain of our equity method investments are detailed below.

NagraStar L.L.C. As a result of the completion of the Share Exchange on February 28, 2017, we own a 50% interest in NagraStar L.L.C. (“NagraStar”), a joint venture that is our primary provider of encryption and related security systems intended to assure that only authorized customers have access to our programming.

Invidi Technologies Corporation. In November 2016, we, DIRECTV, LLC, a wholly-owned indirect subsidiary of AT&T Inc., and Cavendish Square Holding B.V., an affiliate of WPP plc, entered into a series of agreements to acquire Invidi Technologies Corporation (“Invidi”), an entity that provides proprietary software for the addressable advertising market. The transaction closed in January 2017.

Our ability to realize value from our strategic investments in securities that are not publicly traded depends on the success of the issuers’ businesses and their ability to obtain sufficient capital, on acceptable terms or at all, and to execute their business plans. Because private markets are not as liquid as public markets, there is also increased risk that we will not be able to sell these investments, or that when we desire to sell them we will not be able to obtain fair value for them.

Unrealized Gains (Losses) on Marketable Investment Securities

As of June 30, 2018 and December 31, 2017, we had accumulated net unrealized losses of less than $1 million. These amounts, net of related tax effect, were accumulated net unrealized losses of less than $1 million. All of these amounts are included in “Accumulated other comprehensive income (loss)” within “Total stockholders’ equity (deficit).” The components of our available-for-sale investments are summarized in the table below.


	As of June 30, 2018								As of December 31, 2017
	Marketable								Marketable
	Investment		Unrealized						Investment		Unrealized
	Securities		Gains		Losses		Net		Securities		Gains		Losses		Net
	(In thousands)
Debt securities (including restricted):
U.S. Treasury and agency securities	$	72,301	$	—	$	(59)	$	(59)	$	84,286	$	22	$	(141)	$	(119)
Commercial paper		50,000		—		—		—		107,962		—		(10)		(10)
Corporate securities		423,253		77		(124)		(47)		282,256		—		(124)		(124)
Other		2,061		58		—		58		5,308		58		(1)		57
Total	$	547,615	$	135	$	(183)	$	(48)	$	479,812	$	80	$	(276)	$	(196)

As of June 30, 2018, restricted and non-restricted marketable investment securities included debt securities of $432 million with contractual maturities within one year and $116 million with contractual maturities extending longer than one year through and including five years. Actual maturities may differ from contractual maturities as a result of our ability to sell these securities prior to maturity.

Marketable Investment Securities in a Loss Position

The following table reflects the length of time that the individual securities, accounted for as available-for-sale, have been in an unrealized loss position, aggregated by investment category. As of June 30, 2018, the unrealized losses related to our investments in debt securities primarily represented investments in United States treasury and agency securities and corporate securities. We have the ability to hold and do not intend to sell our investments in these debt securities before they recover or mature, and it is more likely than not that we will hold these investments until that time. In addition, we are not aware of any specific factors indicating that the underlying issuers of these debt securities would not be able to pay interest as it becomes due or repay the principal at maturity. Therefore, we believe that these changes in the estimated fair values of these marketable investment securities are related to temporary market fluctuations.


	As of
	June 30, 2018				December 31, 2017
	Fair		Unrealized		Fair		Unrealized
	Value		Loss		Value		Loss
	(In thousands)
Debt Securities:
Less than 12 months	$	328,752	$	(147)	$	410,145	$	(156)
12 months or more		14,771		(36)		34,340		(120)
Total	$	343,523	$	(183)	$	444,485	$	(276)

Fair Value Measurements

Our investments measured at fair value on a recurring basis were as follows:


	As of
	June 30, 2018								December 31, 2017
	Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3
	(In thousands)
Cash equivalents (including restricted)	$	969,510	$	2,794	$	966,716	$	—	$	1,425,798	$	655	$	1,425,143	$	—

Debt securities (including restricted):
U.S. Treasury and agency securities	$	72,301	$	72,301	$	—	$	—	$	84,286	$	84,286	$	—	$	—
Commercial Paper		50,000		—		50,000		—		107,962		—		107,962		—
Corporate securities		423,253		—		423,253		—		282,256		—		282,256		—
Other		2,061		—		1,865		196		5,308		—		5,113		195

Equity securities		71,943		71,943		—		—		93,367		93,367		—		—
Total	$	619,558	$	144,244	$	475,118	$	196	$	573,179	$	177,653	$	395,331	$	195

As of June 30, 2018 and December 31, 2017, our Level 3 investments were immaterial.

During the six months ended June 30, 2018, we had no transfers in or out of Level 1 and Level 2 fair value measurements.

Gains and Losses on Sales and Changes in Carrying Amounts of Investments

“Other, net” within “Other Income (Expense)” included on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) is as follows:


	For the Three Months Ended				For the Six Months Ended
	June 30,				June 30,
Other, net:	2018		2017		2018		2017
	(In thousands)
Marketable investment securities - gains (losses) on sales/exchanges	$	5,393	$	2,487	$	6,139	$	4,759
Marketable investment securities - unrealized gains (losses) on equity securities		16,441		—		(20,848)		—
Costs related to early redemption of debt		(2,537)		—		(2,716)		—
Equity in earnings		759		1,120		2,205		394
Other		1,376		(440)		1,844		2,759
Total	$	21,432	$	3,167	$	(13,376)	$	7,912