Investments and Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2020

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 September 30, 2020
Description	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Money market funds (1)	$	373,030	$	373,030	$	—	$	—

Commercial paper (1)	39,884		—		39,884		—

Certificates of deposit (2)	2,108		—		2,108		—

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

Investment securities at fair value
Equity securities at fair value
Marketable equity securities	11,897		11,897		—		—
Mutual funds invested in debt securities	22,956		22,956		—		—
Total equity securities at fair value	34,853		34,853		—		—
Debt securities available for sale
U.S. government securities	11,412		—		11,412		—
Corporate securities	58,481		—		58,481		—
U.S. government and federal agency	5,759		—		5,759		—


Commercial paper	13,587		—		13,587		—


Total debt securities available for sale	89,239		—		89,239		—

Total investment securities at fair value	124,092		34,853		89,239		—

Long-term investments
Long-term investment securities at fair value (3)	31,619		—		—		—

Total	$	571,268	$	408,418	$	131,231	$	—

Liabilities:
Fair value of contingent liability	$	1,064	$	—	$	—	$	1,064

Total	$	1,064	$	—	$	—	$	1,064

(1) Amounts included in Cash and cash equivalents on the condensed consolidated balance sheet, except for $7,224 that is included in Other current assets and $1,907 that is included in Other assets.

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

(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, 2019
Description	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Money market funds (1)	$	307,655	$	307,655	$	—	$	—

Commercial paper (1)	47,328		—		47,328		—

Certificates of deposit (2)	2,193		—		2,193		—

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

Investment securities at fair value
Equity securities at fair value
Marketable equity securities	23,819		23,819		—		—
Mutual funds invested in debt securities	22,377		22,377		—		—
Total equity securities at fair value	46,196		46,196		—		—
Debt securities available for sale
U.S. government securities	14,660		—		14,660		—
Corporate securities	54,413		—		54,413		—
U.S. government and federal agency	6,816		—		6,816		—
Commercial mortgage-backed securities	382		—		382		—
Commercial paper	5,887		—		5,887		—

Index-linked U.S. bonds	779		—		779		—
Foreign fixed-income securities	508		—		508		—
Total debt securities available for sale	83,445		—		83,445		—

Total investment securities at fair value	129,641		46,196		83,445		—

Long-term investments
Long-term investment securities at fair value (3)	45,781		—		—		—

Total	$	533,133	$	354,386	$	132,966	$	—

Liabilities:
Fair value of contingent liability	$	3,147	$	—	$	—	$	3,147
Fair value of derivatives embedded within convertible debt	4,999		—		—		4,999
Total	$	8,146	$	—	$	—	$	8,146

(1) Amounts included in Cash and cash equivalents on the condensed consolidated balance sheet, except for $4,423 that is included in current restricted assets and $3,160 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 sheets.

(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 September 30, 2020:


	Quantitative Information about Level 3 Fair Value Measurements
	Fair Value at
	September 30, 2020		Valuation Technique	Unobservable Input	Range (Actual)




















Fair value of contingent liability	$	1,064	Monte Carlo simulation model	Estimated fair value of the Douglas Elliman reporting unit	$	169,000
				Risk-free rate for a 2.50 year term	0.14		%
				Leverage-adjusted equity volatility of peer firms	70.78		%

The unobservable inputs related to the valuations of the Level 3 assets and liabilities were as follows at December 31, 2019:


	Quantitative Information about Level 3 Fair Value Measurements
	Fair Value at
	December 31, 2019		Valuation Technique	Unobservable Input	Range (Actual)








Fair value of derivatives embedded within convertible debt	$	4,999	Discounted cash flow	Assumed annual stock dividend	5		%
				Assumed remaining cash dividends - Q4 2019 and Q1 2020	$0.40/$0.20
				Stock price	$	13.39
				Convertible trading price (as a percentage of par value)	103.94		%

				Volatility	36.94		%
				Risk-free rate	Term structure of US Treasury Securities
				Implied credit spread	1.0% - 3.0% (2.0%)

Fair value of contingent liability	$	3,147	Monte Carlo simulation model	Estimated fair value of the Douglas Elliman reporting unit	$	271,500
				Risk-free rate for a 3-year term	1.61		%
				Leverage-adjusted equity volatility of peer firms	35.56		%

Nonrecurring fair value measurements

The Company’s investments in real estate ventures subject to nonrecurring fair value measurements are as follows:


			Fair Value Measurement Using:
	Three Months Ended September 30, 2020				Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Description	Impairment Charge		Total

Assets:
Investments in real estate ventures	$	6,617	$	6,901	$	—	$	—	$	6,901

The Company estimated the fair value of its investments in real estate ventures using observable inputs such as market pricing based on recent events, however, significant judgment was required to select certain inputs from observed market data. The decrease in the investments in real estate ventures was attributed to the decline in the projected sales prices of the respective real estate venture. The $6,617 of impairment charges were included in equity in losses from real estate ventures for the three months September 30, 2020.


			Fair Value Measurement Using:
	Year Ended December 31, 2019				Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Description	Impairment Charge		Total

Assets:
Investments in real estate ventures	$	39,757	$	18,335	$	—	$	—	$	18,335

- 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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