Investments

9 Months Ended

Sep. 30, 2020

Investments, Debt and Equity Securities [Abstract]

Investments

Investments

We classify our short-term investments in fixed income securities as available-for-sale debt investments, except for one foreign government security classified as held-to-maturity and recorded at amortized cost. All of our available-for-sale debt investments as of September 30, 2020 are available to fund current operations and are recorded at fair value (Note 13). Unrealized gains and losses on our available-for-sale debt investments are included as a separate component of accumulated other comprehensive income (loss), net of tax. Realized gains and losses on our available-for-sale debt investments and declines in value judged to be an impairment are included in other (income) expense, net. The cost of short-term investments matured or sold is based on the average cost method.

In determining if and when a decline in value below the adjusted cost of our available-for-sale debt investments is an impairment, we evaluate on an ongoing basis the market conditions, trends of earnings, financial condition, credit ratings, any underlying collateral and other key measures for our short-term investments. An impairment is considered if (i) we have the intent to sell the security, (ii) it is more likely than not that we will be required to sell the security before recovery of the entire amortized cost basis or (iii) we do not expect to recover the entire amortized cost basis of the

security. If impairment is considered on condition (i) or (ii) above, the entire difference between the amortized cost and the fair value of the debt security is recognized in earnings. If impairment is considered based on condition (iii), the amount representing credit losses will be recognized in earnings and as an allowance for credit losses. The amount relating to all other factors will be recognized in other comprehensive income.

The following table summarizes our cash equivalents and available-for-sale debt investments:

	September 30, 2020
									Fair Value Level
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses (1)		Total Fair Value		Level 1		Level 2
	(In thousands)
Cash equivalents
Certificate of deposits	3,303		—		—		3,303		3,303		—
Commercial paper	8,000		—		—		8,000		—		8,000
Corporate bonds	13,856		27		(2)		13,881		—		13,881
Money market funds	161,837		—		—		161,837		161,837		—
Mortgage backed securities	972		—		—		972		—		972
Municipal bonds	4,557		—		—		4,557		—		4,557
Total cash equivalents	192,525		27		(2)		192,550		165,140		27,410
Short-term investments
Asset-backed securities	32,283		32		(7)		32,308		—		32,308
Certificate of deposits	14,334		—		—		14,334		14,334		—
Commercial paper	38,593		—		—		38,593		—		38,593
Corporate bonds	152,668		180		(31)		152,817		—		152,817
Mortgage backed securities	1,041		—		—		1,041		—		1,041
Municipal bonds	12,106		8		(1)		12,113		—		12,113
U.S. government agency bonds	45,474		17		(2)		45,489		—		45,489
U.S. government bonds	54,460		15		—		54,475		54,475		—
Variable rate demand notes	400		—		—		400		—		400
Total short-term investments	351,359		252		(41)		351,570		68,809		282,761
Total	$	543,884	$	279	$	(43)	$	544,120	$	233,949	$	310,171

(1)All unrealized losses have been in a continuous loss position for less than 12 months. We do not intend to sell the investments in an unrealized loss position, and it is not more likely than not that we will be required to sell these investments before recovery of their amortized cost bases.

The following table summarizes the contractual maturities of our cash equivalents and available-for-sale debt investments as of September 30, 2020:

	Amortized Cost	Fair Value
Within 1 year	514,535	514,748
After 1 year through 5 years	27,151	27,172
After 5 years through 10 years	2,198	2,200
Total	543,884	544,120

Actual maturities can differ from contractual maturities due to various factors including the issuers may have the right to call or prepay obligations without call or prepayment penalties, and we view our available-for-sale debt investments as available for current operations.

As of September 30, 2020, the amortized cost and the fair market value of our held-to-maturity security (Level 1) maturing within a year is $4.6 million.

The following table summarizes our debt investments as of December 31, 2019:

	December 31, 2019
	(In thousands)
Cash equivalent money market funds (Level 1) (1)	$	384,474
Short-term investment government bond (Level 2) (2)	6,348

(1)The cash equivalent money market funds (Level 1) at December 31, 2019 have been corrected to include $286.7 million of cash equivalents that were excluded in previously reported amounts. There was no change to total cash and cash equivalents reported on our consolidated balance sheet. We determined this was immaterial to the prior period but have presented the balance as revised for comparability.

(2)The fair market value of the security is $6.3 million.