| Investment Securities At Fair Value |
INVESTMENT SECURITIES AT FAIR VALUE
Investment securities at fair value consisted of the following: | | | | | | | | | | September 30, 2018 | | December 31, 2017 | Debt securities available for sale | $ | 84,252 |
| | $ | 84,814 |
| Equity securities available for sale | — |
| | 65,675 |
| Equity securities at fair value | 50,994 |
| | — |
| Total investment securities at fair value | $ | 135,246 |
| | $ | 150,489 |
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On January 1, 2018, the Company adopted the amendments in ASU 2016-01 which required all equity securities to be measured at fair value with changes in fair value recognized in net income. Therefore, all of the Company’s equity investments that were classified as equity securities available for sale at December 31, 2017 are now classified as equity securities at fair value. These equity securities include marketable equity securities and mutual funds invested in fixed-income securities that had fair values of $44,634 and $21,041 at December 31, 2017, respectively, as shown below. Prior to the adoption of ASU 2016-01, equity securities were measured at fair value with unrealized gains and losses reported as a separate component of AOCI, net of tax. At December 31, 2017, $9,681 of net unrealized gains related to equity securities had been recognized in AOCI. After the adoption of ASU 2016-01, these unrealized gains and losses were reclassified out of AOCI and into opening stockholders’ deficiency with subsequent changes in fair value being recognized in net income. Sales of investment securities totaled $14,895 and $23,066 and proceeds from early redemptions by issuers totaled $18,192 and $97,011 in the nine months ended September 30, 2018 and 2017, respectively, mainly from the sales and redemptions of Corporate securities and U.S. Government securities.
(a) Debt and Equity Securities Available for Sale The components of debt securities available for sale at September 30, 2018 were as follows:
| | | | | | | | | | | | | | | | | | Cost | | Gross Unrealized Gains | | Gross Unrealized Losses | | Fair Value | Marketable debt securities | $ | 84,250 |
| | $ | 2 |
| | $ | — |
| | $ | 84,252 |
| Total debt securities available for sale | $ | 84,250 |
| | $ | 2 |
| | $ | — |
| | $ | 84,252 |
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The table below summarizes the maturity dates of debt securities available for sale at September 30, 2018.
| | | | | | | | | | | | | | | | | Investment Type: | Fair Value | | Under 1 Year | | 1 Year up to 5 Years | | More than 5 Years | U.S. Government securities | $ | 28,311 |
| | $ | 11,215 |
| | $ | 17,096 |
| | $ | — |
| Corporate securities | 42,858 |
| | 9,124 |
| | 33,734 |
| | — |
| U.S. mortgage-backed securities | 3,194 |
| | 771 |
| | 2,423 |
| | — |
| Commercial mortgage-backed securities | 407 |
| | — |
| | 407 |
| | — |
| Commercial paper | 5,992 |
| | 5,992 |
| | — |
| | — |
| Index-linked U.S. bonds | 2,345 |
| | 1,576 |
| | 769 |
| | — |
| Foreign fixed-income securities | 1,145 |
| | 153 |
| | 992 |
| | — |
| Total debt securities available for sale by maturity dates | $ | 84,252 |
| | $ | 28,831 |
| | $ | 55,421 |
| | $ | — |
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The components of debt and equity securities available for sale at December 31, 2017 were as follows:
| | | | | | | | | | | | | | | | | | Cost | | Gross Unrealized Gains | | Gross Unrealized Losses | | Fair Value | Marketable equity securities | $ | 35,020 |
| | $ | 10,994 |
| | $ | (1,380 | ) | | $ | 44,634 |
| Mutual funds invested in fixed income securities | 20,977 |
| | 93 |
| | (29 | ) | | 21,041 |
| Marketable debt securities | 84,708 |
| | 106 |
| | — |
| | 84,814 |
| Total debt and equity securities available for sale | $ | 140,705 |
| | $ | 11,193 |
| | $ | (1,409 | ) | | $ | 150,489 |
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The available-for-sale investment securities with continuous unrealized losses for less than 12 months and 12 months or greater and their related fair values were as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | In loss position for | | | | | | Less than 12 months | | 12 months or more | | | | | | Fair Value | | Unrealized Losses | | Fair Value | | Unrealized Losses | | Total Fair Value | | Total Unrealized Losses | December 31, 2017 | | | | | | | | | | | | Marketable equity securities | $ | 9,523 |
| | $ | (1,380 | ) | | $ | — |
| | $ | — |
| | $ | 9,523 |
| | $ | (1,380 | ) | Mutual funds invested in fixed-income securities | 10,483 |
| | (29 | ) | | — |
| | — |
| | 10,483 |
| | (29 | ) | | $ | 20,006 |
| | $ | (1,409 | ) | | $ | — |
| | $ | — |
| | $ | 20,006 |
| | $ | (1,409 | ) |
Unrealized losses from marketable equity securities were due to market price movements. Unrealized losses from mutual funds invested in fixed-income securities were primarily attributable to changes in interest rates.
Gross realized gains and losses on debt and equity securities available for sale were as follows:
| | | | | | | | | | | | | | | | | | Three Months Ended | | Nine Months Ended | | September 30, | | September 30, | | 2018 | | 2017 | | 2018 | | 2017 | Gross realized gains on sales | $ | 1 |
| | $ | 141 |
| | $ | 3 |
| | $ | 419 |
| Gross realized losses on sales | (5 | ) | | (45 | ) | | (20 | ) | | (136 | ) | Net (losses) gains on sale of debt and equity securities available for sale | $ | (4 | ) | | $ | 96 |
| | $ | (17 | ) | | $ | 283 |
| | | | | | | | | Gross realized losses on other-than-temporary impairments | $ | (161 | ) | | $ | (53 | ) | | $ | (972 | ) | | $ | (179 | ) | |
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Although management generally does not have the intent to sell any specific securities at the end of the period, in the ordinary course of managing the Company’s investment securities portfolio, management may sell securities prior to their maturities for a variety of reasons, including diversification, credit quality, yield and liquidity requirements.
(b) Equity Securities at Fair Value Equity securities at fair value consisted of the following: | | | | | | September 30, 2018 | Marketable equity securities | $ | 29,807 |
| Mutual funds invested in fixed income securities | 21,187 |
| Total equity securities at fair value | $ | 50,994 |
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The following is a summary of unrealized and realized net losses and gains recognized in net income on equity securities at fair value after the adoption of ASU 2016-01 during the three and nine months ended September 30, 2018:
| | | | | | | | | | Three Months Ended | | Nine Months Ended | | September 30, | | September 30, | | 2018 | | 2018 | Net losses recognized on equity securities (1) | $ | (797 | ) | | $ | (306 | ) | Less: Net losses recognized on equity securities sold | (717 | ) | | (534 | ) | Net unrealized (losses) gains recognized on equity securities still held at the reporting date | $ | (80 | ) | | $ | 228 |
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| | (1) | Includes $405 and $3,641 of net gains recognized on equity securities at fair value that qualify for the net asset value (“NAV”) practical expedient during the three and nine months ended September 30, 2018, respectively. These equity securities are included in the “Long-term investments” line item on the condensed consolidated balance sheet and are further discussed in Note 5. |
The Company’s marketable equity securities and mutual funds invested in fixed-income securities are classified as Level 1 under the fair value hierarchy disclosed in Note 11. Their fair values are based on quoted prices for identical assets in active markets or inputs that are based upon quoted prices for similar instruments in active markets. (c) Equity Securities Without Readily Determinable Fair Values That Do Not Qualify for the NAV Practical Expedient
Equity securities without readily determinable fair values that do not qualify for the NAV practical expedient consisted of investments in the common stock of a reinsurance company and a residential real estate company. At December 31, 2017, prior to the adoption of ASU 2016-01 and ASU 2018-03, these investments were classified as cost-method long-term investments and had a total carrying value of $5,428. On January 1, 2018, upon the adoption of the new guidance, the Company classified these investments as equity securities without readily determinable fair values that do not qualify for the NAV practical expedient and valued them at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment. At September 30, 2018, the total carrying value of these investments were $5,428, of which $428 was included in “Other current assets” and $5,000 was included in “Other assets” on the condensed consolidated balance sheet. No impairment or other adjustments related to observable price changes in orderly transactions for identical or similar investments were identified for the nine months ended September 30, 2018.
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