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:

	December 31,
(In thousands)	2016		2015
Cash and cash equivalents	$	116,396	$	148,673
Short-term marketable securities		32,417		28,103

Total	$	148,813	$	176,776

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:

	December 31, 2016
(In thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
U.S. government agencies	$	12,428	$	1	$	—	$	12,429
U.S. commercial paper		72,065		—		—		72,065
Money market funds		64,319		—		—		64,319

Total	$	148,812	$	1	$	—	$	148,813

	December 31, 2015
(In thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			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

As of December 31, 2016, 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.

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.

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

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, 2016 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	$	—	$	12,429	$	—	$	12,429
U.S. commercial paper		—		72,065		—		72,065
Money market funds		64,319		—		—		64,319

Total assets measured at estimated fair value	$	64,319	$	84,494	$	—	$	148,813

Liabilities
Convertible subordinated notes due 2023	$	—	$	202,125	$	—	$	202,125
Non-recourse notes due 2029		—		487,189		—		487,189

Total fair value of liabilities	$	—	$	689,314	$	—	$	689,314

	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
U.S. corporate notes		—		2,701		—		2,701
U.S. commercial paper		—		10,997		—		10,997
Money market funds		148,673		—		—		148,673

Total assets measured at 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

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 2023 Notes and 2029 Notes is based on recent trading prices of the instruments.