Investments and Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2019

Company's recurring financial assets and liabilities subject to fair value measurements

The Company’s financial assets and liabilities subject to fair value measurements were as follows:



	Fair Value Measurements as of June 30, 2019
Description	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Gains (Losses)
Assets:
Money market funds ⁽¹⁾	$	196,671	$	196,671	$	—	$	—

Commercial paper⁽¹⁾	43,602		—		43,602		—

Certificates of deposit ⁽²⁾	2,179		—		2,179		—

Money market funds securing legal bonds ⁽²⁾	535		535		—		—

Investment securities at fair value
Equity securities at fair value
Marketable equity securities	24,257		24,257		—		—
Mutual funds invested in fixed-income securities	22,012		22,012		—		—
Total equity securities at fair value	46,269		46,269		—		—
Debt securities available for sale
U.S. government securities	19,535		—		19,535		—
Corporate securities	47,427		—		47,427		—
U.S. government and federal agency	8,623		—		8,623		—
Commercial mortgage-backed securities	394		—		394		—
Commercial paper	9,026		—		9,026		—
Index-linked U.S. bonds	2,664		—		2,664		—
Foreign fixed-income securities	1,162		—		1,162		—
Total debt securities available for sale	88,831		—		88,831		—

Total investment securities at fair value	135,100		46,269		88,831		—

Long-term investments
Equity securities at fair value that qualify for the NAV practical expedient ⁽³⁾	53,175		—		—		—
Total	$	431,262	$	243,475	$	134,612	$	—

Liabilities:
Fair value of contingent liability	$	6,195	$	—	$	—	$	6,195
Fair value of derivatives embedded within convertible debt	17,287		—		—		17,287
Total	$	23,482	$	—	$	—	$	23,482


(1)	Amounts included in Cash and cash equivalents on the condensed consolidated balance sheet, except for $5,086 that is included in Other current assets and $3,910 that is included in Other assets.


(2)	Amounts included in current restricted assets and non-current restricted assets on the condensed consolidated balance sheet.


(3)	In accordance with Subtopic 820-10, investments that are measured at fair value using the NAV practical expedient are not classified in the fair value hierarchy.



	Fair Value Measurements as of December 31, 2018
Description	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Gains (Losses)
Assets:
Money market funds ⁽¹⁾	$	448,560	$	448,560	$	—	$	—

Commercial paper⁽¹⁾	46,062		—		46,062		—

Certificates of deposit ⁽²⁾	2,251		—		2,251		—

Money market funds securing legal bonds ⁽²⁾	535		535		—		—

Investment securities at fair value
Equity securities at fair value
Marketable equity securities	26,010		26,010		—		—
Mutual funds invested in fixed-income securities	21,192		21,192		—		—
Total equity securities at fair value	47,202		47,202		—		—
Debt securities available for sale
U.S. government securities	28,514		—		28,514		—
Corporate securities	41,733		—		41,733		—
U.S. government and federal agency	4,369		—		4,369		—
Commercial mortgage-backed securities	401		—		401		—
Commercial paper	5,870		—		5,870		—
Index-linked U.S. bonds	2,330		—		2,330		—
Foreign fixed-income securities	1,150		—		1,150		—
Total debt securities available for sale	84,367		—		84,367		—

Total investment securities at fair value	131,569		47,202		84,367		—

Long-term investments
Equity securities at fair value that qualify for the NAV practical expedient ⁽³⁾	54,628		—		—		—
Total	$	683,605	$	496,297	$	132,680	$	—

Liabilities:
Fair value of contingent liability	$	6,304	$	—	$	—	$	6,304
Fair value of derivatives embedded within convertible debt	31,424		—		—		31,424
Total	$	37,728	$	—	$	—	$	37,728


(1)	Amounts included in Cash and cash equivalents on the condensed consolidated balance sheet, except for $2,570 that is included in current restricted assets and $3,910 that is included in non-current restricted assets.


(2)	Amounts included in current restricted assets and non-current restricted assets on the condensed consolidated balance sheet.


(3)	In accordance with Subtopic 820-10, investments that are measured at fair value using the NAV practical expedient are not classified in the fair value hierarchy.

Unobservable inputs related to the valuations of the Level 3 liabilities

The unobservable inputs related to the valuations of the Level 3 assets and liabilities were as follows at June 30, 2019:



	Quantitative Information about Level 3 Fair Value Measurements
	Fair Value at
	June 30, 2019		Valuation Technique	Unobservable Input	Range (Actual)

Fair value of derivatives embedded within convertible debt	$	17,287	Discounted cash flow	Assumed annual stock dividend	5		%
				Assumed annual cash dividend	$	1.60
				Stock price	$	9.75
				Convertible trading price (as a percentage of par value)	103.06		%
				Volatility	33.11		%
				Risk-free rate	Term structure of US Treasury Securities
				Implied credit spread	5.25% - 7.25% (6.25%)

Fair value of contingent liability	$	6,195	Monte Carlo simulation model	Estimated fair value of the Douglas Elliman reporting unit	$	320,000
				Risk-free rate for a 3.5 year term	1.71		%
				Leverage-adjusted equity volatility of peer firms	26.24		%

The unobservable inputs related to the valuations of the Level 3 assets and liabilities were as follows at December 31, 2018:



	Quantitative Information about Level 3 Fair Value Measurements
	Fair Value at
	December 31, 2018		Valuation Technique	Unobservable Input	Range (Actual)

Fair value of derivatives embedded within convertible debt	$	31,424	Discounted cash flow	Assumed annual stock dividend	5		%
				Assumed annual cash dividend	$	1.60
				Stock price	$	9.73
				Convertible trading price (as a percentage of par value)	100.31		%
				Volatility	20.39		%
				Risk-free rate	Term structure of US Treasury Securities
				Implied credit spread	8.0% - 9.0% (8.5%)

Fair value of contingent liability	$	6,304	Monte Carlo simulation model	Estimated fair value of the Douglas Elliman reporting unit	$	320,000
				Risk-free rate for a 4-year term	2.45		%
				Leverage-adjusted equity volatility of peer firms	30.22		%

- Definition

Tabular disclosure of financial instruments measured at fair value, including those classified in shareholders' equity measured on a recurring or nonrecurring basis. Disclosures include, but are not limited to, fair value measurements recorded and the reasons for the measurements, level within the fair value hierarchy in which the fair value measurements are categorized and transfers between levels 1 and 2. Nonrecurring fair value measurements are those that are required or permitted in the statement of financial position in particular circumstances.

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