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Investments
12 Months Ended
Dec. 31, 2019
Investments  
Investments

4. Investments

Marketable Investments

Available-for-Sale Debt Securities

Available-for-sale debt securities are recorded at fair value, with unrealized gains and losses included as a component of accumulated other comprehensive loss in stockholders’ equity, until realized. Available-for-sale debt securities consisted of the following (in millions):

Gross

Gross

Amortized

Unrealized

Unrealized

Fair

As of December 31, 2019

  

Cost

  

Gains

  

Losses

  

Value

U.S. government and agency securities

$

1,225.2

$

2.9

$

(0.2)

$

1,227.9

Corporate debt securities

222.4

1.7

224.1

Total

$

1,447.6

$

4.6

$

(0.2)

$

1,452.0

Reported under the following captions on our consolidated balance sheets:

Current marketable investments

684.5

Non-current marketable investments

767.5

Total

$

1,452.0

Gross

Gross

 

Amortized

Unrealized

 

Unrealized

 

Fair

As of December 31, 2018

  

Cost

  

Gains

  

Losses

  

Value

U.S. government and agency securities

$

1,077.4

$

0.7

$

(3.9)

$

1,074.2

Corporate debt securities

72.3

(0.3)

72.0

Total

$

1,149.7

$

0.7

$

(4.2)

$

1,146.2

Reported under the following captions on our consolidated balance sheets:

Current marketable investments

705.8

Non-current marketable investments

440.4

Total

 

  

 

  

$

1,146.2

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

As of December 31, 2019

Amortized

Fair

   

Cost

    

Value

Due within one year

    

$

683.3

    

$

684.5

Due in one to three years

 

764.3

 

767.5

Total

$

1,447.6

$

1,452.0

4. Investments (Continued)

Held-to-Maturity Investments

Our current and long-term marketable investments included zero and $39.6 million of investments classified as held-to-maturity as of December 31, 2019 and 2018, respectively. Marketable investments classified as held-to-maturity were comprised of government-sponsored enterprises and corporate notes and bonds. We did not intend to sell these securities, nor was it more likely than not that we would be required to sell them prior to the recovery of their amortized cost basis. Furthermore, we did not believe that these securities exposed us to undue market risk or counterparty credit risk. As such, we did not consider these securities to be other than temporarily impaired.

Investments in Equity Securities with Readily Determinable Fair Values

We held investments in equity securities with readily determinable fair values of $63.0 million and $3.5 million as of December 31, 2019 and December 31, 2018, respectively, which are included in current marketable investments on our consolidated balance sheets. In 2019, two of the privately-held companies in which we had invested, completed their initial public offerings and their common stock began trading on the Nasdaq Stock Market. As a result, the equity securities we own in these companies are now recorded at fair value rather than reflected as investments in privately-held companies. Changes in the fair value of publicly traded equity securities are recorded on our consolidated statements of operations within other income (expense), net. Refer to Note 5-Fair Value Measurements.

Investments in Privately-Held Companies

As of December 31, 2019, we maintained non-controlling equity investments in privately-held companies of $86.0 million in the aggregate. Adjustments to the carrying values of these securities were not material for the years ended December 31, 2019 and 2018. We made payments of $8.0 million and $5.0 million for investments in privately-held companies during the years ended December 31, 2019 and 2018, respectively.

During the years ended December 31, 2019, 2018 and 2017, we recorded zero, $53.5 million and $49.6 million , respectively, of impairment charges related to our investments in privately-held companies.

Consolidation of a Variable Interest Entity

In August 2019, we entered into an operating agreement and trust agreement related to the expected contribution of an asset to a newly created trust of which we are the beneficiary. The trust was created for legal and administrative purposes and is not expected to make future purchases. As the operator of the asset, we are required to incur all future expenses related to the operation and maintenance of the asset. Accordingly, the trust is deemed a VIE because it relies on our capital to sustain future operating expenses. We are deemed the primary beneficiary of the VIE because we are the sole provider of financial support and can unilaterally remove the trustee without cause. Accordingly, we consolidate the VIE’s balance sheet and results of operations.

As of December 31, 2019, our consolidated balance sheets included a $57.6 million asset due to the consolidation of this VIE included within property, plant and equipment, net. During the fourth quarter of 2019, the asset in the trust was reclassified from other non-current assets to property, plant and equipment, net on our consolidated balance sheets upon being placed into service. Upon consolidating the VIE, which was not deemed a business as defined in ASC 805, Business Combinations, no gain or loss was recognized. This VIE has no recourse against our assets and general credit, and the VIE assets cannot be used to settle the VIE liabilities. Our total risk of loss is the asset we contributed of $57.6 million.

4. Investments (Continued)

Deconsolidation of a Variable Interest Entity

In April 2017, we made a $7.5 million minority equity 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 entitled us to control rights sufficient to require us to regard the company as a VIE and to consolidate the company’s balance sheet and results of operations as the primary beneficiary of this company.

In June 2019, we elected to terminate the License Agreement. The termination of the License Agreement caused us to impair an associated IPR&D asset during the second quarter of 2019 and recognize an impairment charge of $8.8 million, which is included within research and development expense on our consolidated statements of operations. Upon effectiveness of the termination of the License Agreement in the third quarter of 2019, we no longer have the power to direct the entity’s activities. Consequently, we deconsolidated the entity in the third quarter of 2019. Our deconsolidation of the entity’s balance sheet, which included $3.5 million of goodwill and $8.4 million of temporary equity, resulted in a net deconsolidation loss of $2.0 million. We have no further obligations to fund the entity, and our maximum exposure to loss is equal to the carrying value of our retained interest. We now account for our equity investment in this privately-held company using the equity method of accounting because we have the ability to exercise significant influence over the operating and financial policies of the entity, but we no longer have a controlling financial interest.