INVESTMENTS

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

The following table summarizes, by major security type, the Company's investments as of June 30, 2017 (in thousands):



	Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Short-term investments:
International government securities	$	650,576	$	920	$	(418	)	$	651,078
U.S. government securities	746,814		8		(690		)	746,132
Corporate debt securities	2,311,980		1,068		(1,774		)	2,311,274
Commercial paper	13,341		—		—			13,341
Total short-term investments	$	3,722,711	$	1,996	$	(2,882	)	$	3,721,825

Long-term investments:
International government securities	$	447,860	$	1,096	$	(992	)	$	447,964
U.S. government securities	801,179		179		(6,242		)	795,116
Corporate debt securities	6,342,818		9,511		(31,315		)	6,321,014
U.S. government agency securities	4,962		—		(27		)	4,935
Ctrip convertible debt securities	1,275,000		254,500		—			1,529,500
Ctrip equity securities	655,311		509,819		—			1,165,130
Total long-term investments	$	9,527,130	$	775,105	$	(38,576	)	$	10,263,659

The Company's investment policy seeks to preserve capital and maintain sufficient liquidity to meet operational and other needs of the business. As of June 30, 2017, the weighted-average life of the Company’s fixed income investment portfolio, excluding the Company's investment in Ctrip convertible debt securities, was approximately 1.7 years with an average credit quality of A+/A1/A+.

The Company invests in international government securities with high credit quality. As of June 30, 2017, investments in international government securities principally included debt securities issued by the governments of the Netherlands, France, Belgium, Germany, Finland and Austria.

On May 26, 2015 and August 7, 2014, the Company invested $250 million and $500 million, respectively, in five-year senior convertible notes issued at par by 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 June 30, 2017, the Company had also invested $655.3 million of its international cash in Ctrip American Depositary Shares ("ADSs"). 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, the Company could hold up to an aggregate of approximately 15% of Ctrip's outstanding equity plus any ADSs issuable upon the conversion of the December 2015 convertible notes. As of June 30, 2017, 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, 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 has classified its investments as available-for-sale securities. These securities are carried at estimated fair value with the aggregate unrealized gains and losses related to these investments, net of taxes, reflected as a part of "Accumulated other comprehensive income (loss)" in the Unaudited Consolidated Balance Sheets. Classification as short-term or long-term investment is based upon the maturity of the debt securities.

The Company recognized net realized gains of $0.2 million for the six months ended June 30, 2017, compared to net realized gains of $2.1 million and net realized losses of $0.8 million for the three and six months ended June 30, 2016, respectively, related to investments. As of June 30, 2017, 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, companies typically at an early stage of development, of approximately $7.6 million at both June 30, 2017 and December 31, 2016. The investments are accounted for under the cost method and included in "Other assets" in the Company's Unaudited Consolidated Balance Sheets.

For the three and six months ended June 30, 2016, the Company recognized impairments of approximately $13 million and $63 million, respectively, which wrote off its entire investments in two other private companies.