Cash and Investments in Marketable Securities

9 Months Ended

Sep. 30, 2015

Fair Value Disclosures [Abstract]

Cash and Investments in Marketable Securities

Note 2 — Cash and Investments in Marketable Securities

Cash and investments in marketable securities, including cash equivalents and restricted cash, are as follows (in thousands).

	Estimated Fair Value at
	September 30, 2015		December 31, 2014
Cash and cash equivalents	$	18,819	$	12,365
Short-term investments		249,000		225,459
Restricted cash		—		25,000
Total cash and investments in marketable securities	$	267,819	$	262,824

We invest in liquid, high quality debt securities. Our investments in debt securities are subject to interest rate risk. To minimize the exposure due to an adverse shift in interest rates, we invest in securities with maturities of two years or less and maintain a weighted average maturity of one year or less. As of September 30, 2015 and December 31, 2014, all of our investments had maturities of one year or less.

Gross unrealized gains and losses were not significant at either September 30, 2015 or December 31, 2014. During the three and nine months ended September 30, 2015, we sold available-for-sale securities totaling $18.6 million and $23.8 million, respectively, and gross realized gains and losses on those sales were not significant. During the three and nine months ended September 30, 2014, we sold available-for-sale securities totaling $21.7 million and gross realized gains and losses on those sales were not significant. The cost of securities sold is based on the specific identification method.

Restricted cash of $25.0 million was required to be maintained in a separate account until July 1, 2015 under the terms of our 12% senior secured notes due July 2017. This restriction expired on July 1, 2015 and the restricted funds were returned to us.

Our portfolio of cash and investments in marketable securities includes (in thousands):

		Estimated Fair Value at
	Fair Value Hierarchy Level	September 30, 2015		December 31, 2014
Corporate notes and bonds	2	$	180,300	$	182,544
Corporate commercial paper	2		65,770		42,915
Available-for-sale investments			246,070		225,459
Money market funds	1		17,230		11,229
Certificate of deposit	N/A		2,930		—
Cash, including restricted cash	N/A		1,589		26,136
Total cash and investments in marketable securities		$	267,819	$	262,824

Level 1 —	Quoted prices in active markets for identical assets or liabilities.
Level 2 —	Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3 —	Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

All of our investments are categorized as Level 1 or Level 2, as explained in the table above. We use a market approach to value our Level 2 investments. The disclosed fair value related to our investments is based primarily on the reported fair values in our period-end brokerage statements, which are based on market prices from a variety of industry standard data providers and generally represent quoted prices for similar assets in active markets or have been derived from observable market data. We independently validate these fair values using available market quotes and other information. During the three and nine months ended September 30, 2015 and 2014, there were no transfers between Level 1 and Level 2 of the fair value hierarchy.

Additionally, as of September 30, 2015, based on a discounted cash flow analysis using Level 3 inputs including financial discount rates, we believe the $125.0 million carrying amount of our 12% senior secured notes due July 2017 is consistent with its fair value. As is further described in Note 9, on October 5, 2015, we redeemed the 12% senior secured notes.