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Investments
9 Months Ended
Sep. 30, 2017
Investments  
Investments

 

3.     Investments

 

Available-for-Sale Investments

 

Marketable investments classified as available-for-sale consisted of the following (in millions):

 

As of September 30, 2017

 

Amortized
Cost

 

Gross
Unrealized
Losses

 

Fair
Value

 

U.S. government and agency securities

 

$

481.0

 

$

(0.5

)

$

480.5

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

$

481.0

 

$

(0.5

)

$

480.5

 

 

 

 

 

 

 

 

 

 

 

 

Reported under the following captions on the consolidated balance sheet:

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

 

 

 

$

28.1

 

Current marketable investments

 

 

 

 

 

115.5

 

Non-current marketable investments

 

 

 

 

 

336.9

 

 

 

 

 

 

 

 

 

Total

 

 

 

 

 

$

480.5

 

 

 

 

 

 

 

 

 

 

 

We had no available-for-sale investments as of December 31, 2016.

 

The following table summarizes the contractual maturities of available-for-sale marketable investments (in millions):

 

 

 

September 30, 2017

 

 

 

Amortized
Cost

 

Fair
Value

 

Due in less than one year

 

$

143.7

 

$

143.6

 

Due in one to two years

 

252.1

 

251.8

 

Due in three to five years

 

85.2

 

85.1

 

 

 

 

 

 

 

Total

 

$

481.0

 

$

480.5

 

 

 

 

 

 

 

 

 

 

Held-to-Maturity and Other Investments

 

Our current and long-term marketable investments included $29.3 million and $30.1 million of investments classified as held-to-maturity as of September 30, 2017 and December 31, 2016, respectively. Marketable investments classified as held-to-maturity are comprised of government-sponsored enterprises and corporate notes and bonds. We do not intend to sell these securities, nor is it more likely than not that we will be required to sell them prior to the recovery of their amortized cost basis. Furthermore, we do not believe that these securities expose us to undue market risk or counterparty credit risk. As such, we do not consider these securities to be other than temporarily impaired.

 

Investments Held at Cost

 

As of September 30, 2017, we maintain non-controlling equity investments in privately-held companies of approximately $178.9 million in the aggregate. These investments are initially held at cost because we do not have the ability to exercise significant influence over these companies and their fair values are not readily determinable. During the three- and nine-month periods ended September 30, 2017, we made payments of $30.2 million and $55.3 million, respectively, for investments held at cost. We include our investments held at cost within other non-current assets on our consolidated balance sheets. These investments are subject to a periodic impairment review and if they are deemed to be other-than-temporarily impaired, the investment is measured and recorded at fair value. During the three-and nine-month periods ended September 30, 2017, we recorded $3.1 million and $49.6 million, respectively, of impairment charges related to our cost method investments in privately-held companies.

 

Variable Interest Entity

 

In April 2017, we made a $7.5 million minority investment in a privately-held company. In addition to our investment, we entered into an exclusive license, development and commercialization agreement (the License Agreement) with this company. The License Agreement entitles us to certain control rights that require us to consolidate the balance sheet and results of operations of this company. The control rights relate to additional research and development funding that we may provide to this company over a period of six years. We are also entitled to representation on a joint development committee that approves the company’s use of funding provided by us. In April 2017, we provided $5.2 million of financial support to the company. We have the right, at any time and for any reason, to cease our funding of this company’s activities.

 

As of September 30, 2017, our consolidated balance sheet included $9.6 million of cash maintained by this company that can only be used to settle its obligations. Additionally, our consolidated balance sheets included an $8.8 million in-process research and development intangible asset, $3.4 million of goodwill and $8.3 million of preferred stock due to the consolidation of this company. The preferred stock is recorded in temporary equity on our consolidated balance sheets. During the quarter ended September 30, 2017, this company incurred a net loss of $1.5 million. This company’s creditors have no recourse against our assets and general credit.