Financial Instruments

12 Months Ended

Dec. 31, 2020

Financial Instruments

Financial Instruments

5.    Financial Instruments

The Company elected to invest a portion of its cash assets in conservative, income earning, liquid investments. Cash equivalents and investments, all of which are classified as available-for-sale securities, consisted of the following:

	December 31, 2020								December 31, 2019
	Amortized Cost		Gross Unrealized Gain		Gross Unrealized (Loss)		Estimated Fair Value		Amortized Cost		Gross Unrealized Gain		Gross Unrealized (Loss)		Estimated Fair Value
	(in thousands)
Money market deposits	$	28,990	$	—	$	—	$	28,990	$	22,477	$	—	$	—	$	22,477
U.S. Treasury securities (1)		594,252		3,512		(20)		597,744		292,506		731		(80)		293,157
Corporate bonds and notes (1)		12,331		2		(5)		12,328		—		—		—		—
Municipal securities		77,764		796		(26)		78,534		85,638		277		(7)		85,908
Total	$	713,337	$	4,310	$	(51)	$	717,596	$	400,621	$	1,008	$	(87)	$	401,542
Classified as:
Cash equivalents (2)							$	28,990							$	22,477
Short-term investments								688,606								379,065
Total							$	717,596							$	401,542

(1)

Per the Company’s investment policy, all U.S. Treasury securities, corporate bonds and notes are classified as short-term investments irrespective of holding period.  

(2) Cash equivalents includes cash sweep accounts and U.S. Treasury money market mutual funds.

The Company invests in U.S. Treasuries, U.S. agency and high quality municipal bonds which mature at par value and are all paying their coupons on schedule. The Company has therefore concluded there is currently no other than temporary impairment of its investments and will continue to recognize unrealized gains and losses in other comprehensive income (loss). During the year ended December 31, 2020, the Company sold $30.1 million of investments. There were no sales of investments during the year ended December 31, 2019. During the year ended December 31, 2020, the amount of gross realized gains and realized losses upon sales of investments were insignificant. The Company uses the specific investment identification method to calculate realized gains and losses and amounts reclassified out of other comprehensive income to net income. As of December 31, 2020, the Company had 13 investments in an unrealized loss position in its portfolio. An allowance for credit losses was not necessary since the fair market value for a majority of the available-for-sale securities increased as a result of a significant average yield rate decrease for similar securities as of December 31, 2020.

In accordance with the adoption of ASU 2016-13 (Topic 326), the Company has assessed the unrealized loss position for available-for-sale debt securities for which an allowance for credit losses has not been recorded. The fair value for investment securities at an unrealized loss position as of December 31, 2020 was $144.0 million. The aggregate amount of unrealized losses of these securities were not significant, and the impact of the securities in a continuous loss position to the consolidated statements of operations and comprehensive loss were not material as of December 31, 2020.

The following table summarizes the Company’s portfolio of available-for-sale securities by contractual maturity as of December 31, 2020:

	December 31, 2020
	Amortized Cost		Fair Value
	(in thousands)
Less than or equal to one year	$	322,416	$	323,002
Greater than one year but less than five years		361,931		365,604
Total	$	684,347	$	688,606