4. Available-for-Sale Securities and Fair Value Measurements

Available-for Sale Securities

The classification of available-for-sale securities in the consolidated balance sheets is as follows (in thousands):

	December 31,
	2015		2014
Cash and cash equivalents	$	148,673	$	95,090
Short-term marketable securities		28,103		143,698
Marketable securities		—		42,856

Total	$	176,776	$	281,644

The estimated fair value of available-for-sale securities is based on quoted market prices for these or similar investments that were based on prices obtained from a commercial pricing service. Available-for-sale securities are summarized below (in thousands):

	December 31, 2015
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Other Than Temporary Impairment Loss		Estimated Fair Value
U.S. government agencies	$	14,406	$	—	$	(1	)	$	—	$	14,405
U.S. corporate notes		2,702		—		(1	)		—		2,701
U.S. commercial paper		10,997		—		—			—		10,997
Money market funds		148,673		—		—			—		148,673

Total	$	176,778	$	—	$	(2	)	$	—	$	176,776

	December 31, 2014
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Other Than Temporary Impairment Loss			Estimated Fair Value
U.S. government securities	$	30,019	$	24	$	—		$	—		$	30,043
U.S. government agencies		34,756		6		(12	)		—			34,750
U.S. corporate notes		80,880		5		(110	)		—			80,775
U.S. commercial paper		34,469		—		—			—			34,469
Ordinary shares of Theravance Biopharma		10,269		—		—			(3,752	)		6,517
Money market funds		95,090		—		—			—			95,090

Total	$	285,483	$	35	$	(122	)	$	(3,752	)	$	281,644

We determined that the unrealized loss on our Theravance Biopharma equity securities as of December 31, 2014 was other-than-temporary. Therefore, we recognized a loss of $3.8 million on these equity securities, which was charged to other income (expense), net on the consolidated statements of operations.

As of December 31, 2015, all of the available-for-sale debt securities had contractual maturities within one year and the average duration of debt securities was approximately one month. We do not intend to sell the investments in debt that are in an unrealized loss position, and it is unlikely that we will be required to sell the investments before recovery of their amortized cost basis, which may be maturity. We have determined that the gross unrealized losses on our available-for-sale debt securities as of December 31, 2015 were temporary in nature. All available-for-sale debt securities with unrealized losses as of December 31, 2015 have been in a loss position for less than twelve months.

During the year ended December 31, 2015, we recognized a gain of $1.2 million from the sale of all of the ordinary shares of Theravance Biopharma that we held as of December 31, 2014, which is included in other income (expense), net in the condensed consolidated statement of operations. In addition, we sold other available-for-sale securities totaling $100.4 million, and the related realized gains and losses were not significant during year ended December 31, 2015

During the years ended December 31, 2014 and 2013, we sold marketable securities totaling $7.2 million and $22.6 million, and the related realized gains and losses were not significant in either of these periods.

Fair Value Measurements

Our available-for-sale securities are measured at fair value on a recurring basis and our debt is carried at the amortized cost basis. The estimated fair values were as follows:

	Estimated Fair Value Measurements as of December 31, 2015 Using:
	Quoted Price in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
Types of Instruments (In thousands)	Level 1		Level 2		Level 3		Total
Assets
U.S. government agencies	$	—	$	14,405	$	—	$	14,405
Corporate notes		—		2,701		—		2,701
Commercial paper		—		10,997		—		10,997
Money market funds		148,673		—		—		148,673

Total assets measured as of estimated fair value	$	148,673	$	28,103	$	—	$	176,776


Liabilities
Convertible subordinated notes due 2023	$	—	$	189,100	$	—	$	189,100
Non-recourse notes due 2029		—		470,970		—		470,970

Total fair value of liabilities	$	—	$	660,070	$	—	$	660,070

	Estimated Fair Value Measurements as of December 31, 2014 Using:
	Quoted Price in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
Types of Instruments (In thousands)	Level 1		Level 2		Level 3		Total
Assets
U.S. government securities	$	30,043	$	—	$	—	$	30,043
U.S. government agencies		—		34,750		—		34,750
Corporate notes		—		80,775		—		80,775
Commercial paper		—		34,469		—		34,469
Ordinary shares of Theravance Biopharma		6,517		—		—		6,517
Money market funds		95,090		—		—		95,090

Total assets measured as of estimated fair value	$	131,650	$	149,994	$	—	$	281,644


Liabilities
Convertible subordinated notes due 2023	$	—	$	197,095	$	—	$	197,095
Non-recourse notes due 2029		—		456,411		—		456,411

Total fair value of liabilities	$	—	$	653,506	$	—	$	653,506

The fair value of our marketable securities classified within Level 2 is based upon observable inputs that may include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers and reference data including market research publications.

The fair value of our convertible subordinated notes due 2023 and non-recourse notes due 2029 is based on actual trading prices of the instruments.