8. Fair Value Measurements

The following is a description of the valuation techniques that we use to measure the fair value of assets and liabilities that we measure and report at fair value on a recurring basis:


•	Cash Equivalents. At March 31, 2019 and December 31, 2018, our cash equivalents consisted of money market funds. We value our cash equivalents using observable inputs that reflect quoted prices for securities with identical characteristics, and accordingly, we classify the valuation techniques that use these inputs as Level 1.

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Marketable Securities and Restricted Investments. At March 31, 2019 and December 31, 2018, our marketable securities consisted of foreign debt, foreign government obligations, U.S. debt, and time deposits, and our restricted investments consisted of foreign and U.S. government obligations. We value our marketable securities and restricted investments using observable inputs that reflect quoted prices for securities with identical characteristics or quoted prices for securities with similar characteristics and other observable inputs (such as interest rates that are observable at commonly quoted intervals). Accordingly, we classify the valuation techniques that use these inputs as either Level 1 or Level 2 depending on the inputs used. We also consider the effect of our counterparties’ credit standing in these fair value measurements.

•

Derivative Assets and Liabilities. At March 31, 2019 and December 31, 2018, our derivative assets and liabilities consisted of foreign exchange forward contracts involving major currencies and interest rate swap contracts involving major interest rates. Since our derivative assets and liabilities are not traded on an exchange, we value them using standard industry valuation models. As applicable, these models project future cash flows and discount the amounts to a present value using market-based observable inputs, including interest rate curves, credit risk, foreign exchange rates, and forward and spot prices for currencies. These inputs are observable in active markets over the contract term of the derivative instruments we hold, and accordingly, we classify the valuation techniques as Level 2. In evaluating credit risk, we consider the effect of our counterparties’ and our own credit standing in the fair value measurements of our derivative assets and liabilities, respectively.

At March 31, 2019 and December 31, 2018, the fair value measurements of our assets and liabilities measured on a recurring basis were as follows (in thousands):



			Fair Value Measurements at Reporting Date Using
	March 31, 2019		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Cash equivalents:
Money market funds	$	200,980	$	200,980	$	—	$	—
Marketable securities:
Foreign debt	345,950		—		345,950		—
Foreign government obligations	60,124		—		60,124		—
U.S. debt	59,622		—		59,622		—
Time deposits	638,116		638,116		—		—
Restricted investments	219,108		—		219,108		—
Derivative assets	1,313		—		1,313		—
Total assets	$	1,525,213	$	839,096	$	686,117	$	—
Liabilities:
Derivative liabilities	$	16,362	$	—	$	16,362	$	—



			Fair Value Measurements at Reporting Date Using
	December 31, 2018		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Cash equivalents:
Money market funds	$	200,788	$	200,788	$	—	$	—
Marketable securities:
Foreign debt	318,646		—		318,646		—
Foreign government obligations	98,621		—		98,621		—
U.S. debt	44,468		—		44,468		—
Time deposits	681,969		681,969		—		—
Restricted investments	179,000		—		179,000		—
Derivative assets	2,364		—		2,364		—
Total assets	$	1,525,856	$	882,757	$	643,099	$	—
Liabilities:
Derivative liabilities	$	16,499	$	—	$	16,499	$	—

Fair Value of Financial Instruments

At March 31, 2019 and December 31, 2018, the carrying values and fair values of our financial instruments not measured at fair value were as follows (in thousands):



	March 31, 2019				December 31, 2018
	Carrying Value		Fair Value		Carrying Value		Fair Value
Assets:
Notes receivable – noncurrent	$	31,059	$	32,888	$	8,017	$	8,010
Notes receivable, affiliate – noncurrent	—		—		22,832		24,295
Liabilities:
Long-term debt, including current maturities (1)	$	582,698	$	598,128	$	479,157	$	470,124

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(1)	Excludes unamortized discounts and issuance costs.

The carrying values in our condensed consolidated balance sheets of our trade accounts receivable, unbilled accounts receivable and retainage, restricted cash, accounts payable, and accrued expenses approximated their fair values due to their nature and relatively short maturities; therefore, we excluded them from the foregoing table. The fair value measurements for our notes receivable and long-term debt are considered Level 2 measurements under the fair value hierarchy.

Credit Risk

We have certain financial and derivative instruments that subject us to credit risk. These consist primarily of cash, cash equivalents, marketable securities, accounts receivable, restricted cash and investments, notes receivable, and foreign exchange forward contracts. We are exposed to credit losses in the event of nonperformance by the counterparties to our financial and derivative instruments. We place cash, cash equivalents, marketable securities, restricted cash and investments, and foreign exchange forward contracts with various high-quality financial institutions and limit the amount of credit risk from any one counterparty. We continuously evaluate the credit standing of our counterparty financial institutions. Our net sales are primarily concentrated among a limited number of customers. We monitor the financial condition of our customers and perform credit evaluations whenever considered necessary. Depending upon the sales arrangement, we may require some form of payment security from our customers, including advance payments, parent guarantees, letters of credit, bank guarantees, or surety bonds. We also have power purchase agreements (“PPAs”) that subject us to credit risk in the event our offtake counterparties are unable to fulfill their contractual obligations, which may adversely affect our project assets and certain receivables. Accordingly, we closely monitor the credit standing of existing and potential offtake counterparties to limit such risks.