INVESTMENTS

Short-term and Long-term Investments in Available for Sale Securities

See Note 2 for the Company's accounting policy related to its investments in available-for-sale securities. The following table summarizes, by major security type, the Company's investments as of December 31, 2016 (in thousands):



	Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Short-term investments:
International government securities	$	249,552	$	221	$	(89	)	$	249,684
U.S. government securities	456,971		57		(140		)	456,888
Corporate debt securities	1,510,119		1,119		(928		)	1,510,310
Commercial paper	1,998		—		—			1,998
Total short-term investments	$	2,218,640	$	1,397	$	(1,157	)	$	2,218,880

Long-term investments:
International government securities	$	655,857	$	4,110	$	(623	)	$	659,344
U.S. government securities	773,718		337		(7,463		)	766,592
Corporate debt securities	6,042,271		9,973		(50,455		)	6,001,789
U.S. government agency securities	4,979		—		(27		)	4,952
Ctrip convertible debt securities	1,275,000		65,800		(47,712		)	1,293,088
Ctrip equity securities	655,311		213,233		(3,242		)	865,302
Total long-term investments	$	9,407,136	$	293,453	$	(109,522	)	$	9,591,067

The Company's investment policy seeks to preserve capital and maintain sufficient liquidity to meet operational and other needs of the business. As of December 31, 2016, the weighted-average life of the Company’s fixed income investment portfolio, excluding the Company's investment in Ctrip convertible debt securities, was approximately 2.0 years with an average credit quality of A+/A1/A+.

The Company invests in international government securities with high credit quality. As of December 31, 2016, investments in international government securities principally included debt securities issued by the governments of the Netherlands, Belgium, France, Germany and Austria.

On August 7, 2014 and May 26, 2015, the Company invested $500 million and $250 million, respectively, in five-year senior convertible notes issued at par by Ctrip.com International Ltd. ("Ctrip"). On December 11, 2015, the Company invested $500 million in a Ctrip ten-year senior convertible note issued at par value, which included a put option allowing the Company to require a prepayment in cash from Ctrip at the end of the sixth year of the note. On September 12, 2016, the Company invested $25 million in a Ctrip six-year senior convertible note issued at par value, which included a put option allowing the Company to require prepayment in cash from Ctrip at the end of the third year of the note. The conversion feature associated with this September 2016 Ctrip convertible note met the definition of an embedded derivative (see Note 5). As of December 31, 2016, the Company had also invested $630.3 million and $25.0 million of its international cash in Ctrip American Depositary Shares ("ADSs") and Ctrip ordinary shares, respectively. The convertible debt and equity securities of Ctrip have been marked-to-market in accordance with the accounting guidance for available-for-sale securities.

In connection with the Company's investments in Ctrip's convertible notes, Ctrip granted the Company the right to appoint an observer to its board of directors and permission to acquire its shares (through the acquisition of Ctrip ADSs in the open market) so that combined with ADSs issuable upon conversion of the August 2014, May 2015 and September 2016 convertible notes and ordinary shares, the Company could hold up to an aggregate of approximately 15% of Ctrip's outstanding equity. As of December 31, 2016, the Company did not have significant influence over Ctrip.

The following table summarizes, by major security type, the Company's investments as of December 31, 2015 (in thousands):



	Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Short-term investments:
International government securities	$	395,404	$	497	$	(104	)	$	395,797
U.S. government securities	457,001		—		(507		)	456,494
Corporate debt securities	305,654		25		(419		)	305,260
Commercial paper	11,688		—		—			11,688
U.S. government agency securities	2,009		—		(2		)	2,007
Total short-term investments	$	1,171,756	$	522	$	(1,032	)	$	1,171,246

Long-term investments:
International government securities	$	718,947	$	1,367	$	(683	)	$	719,631
U.S. government securities	580,155		277		(1,982		)	578,450
Corporate debt securities	4,294,282		1,273		(18,941		)	4,276,614
U.S. municipal securities	1,080		3		—			1,083
Ctrip convertible debt securities	1,250,000		158,600		(30,050		)	1,378,550
Ctrip equity securities	630,311		346,724		—			977,035
Total long-term investments	$	7,474,775	$	508,244	$	(51,656	)	$	7,931,363

The Company recognized net realized gains of $1.1 million and $2.2 million related to investments for the years ended December 31, 2016 and 2015, respectively. There were no significant realized gains or losses related to investments for the year ended December 31, 2014. As of December 31, 2016, the Company does not consider any of its investments to be other-than-temporarily impaired.

Cost-method Investments

The Company held investments in equity securities of private companies, which are typically at an early stage of development, of approximately $7.6 million and $62.3 million as of December 31, 2016 and December 31, 2015, respectively. These investments are accounted for under the cost method and included in "Other assets" in the Company's Consolidated Balance Sheets. The Company evaluates its investments quarterly to determine if any indicators of other-than-temporary impairment exist.

In March 2016, the Company received an operating performance update from Hotel Urbano, which showed 2015 results significantly below expectations, significantly reduced forecasts and the need for additional funding in the near term. This update combined with increased political turmoil, the declaration of a public health emergency related to the Zika virus and sustained poor macroeconomic conditions in Brazil in the first quarter of 2016 indicated a potential other-than-temporary impairment in the fair value of the Company’s investment. As a result, the Company analyzed all information available and based on the best estimate of the fair value of this investment, recognized an impairment of approximately $50 million for the three months ended March 31, 2016. In the second quarter of 2016, after discussions with Hotel Urbano's management, the Company reviewed their additional funding needs and based on its business prospects, the Company recognized an impairment of approximately $10 million for the three months ended June 30, 2016 to write-off the remainder of its investment in Hotel Urbano. In addition, the Company recognized an impairment of approximately $3 million for an investment in another private company during the three months ended June 30, 2016.

There has been no further identified events or changes in circumstances to indicate a potential impairment with the Company's cost-method investments as of December 31, 2016.