Financial Instruments

12 Months Ended

Dec. 31, 2019

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, 2019												December 31, 2018
		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		$	22,477		$	—		$	—		$	22,477		$	26,539		$	—		$	—		$	26,539
U.S. Treasury securities			292,506			731			(80)			293,157			76,061			29			(405)			75,685
U.S. agency securities			—			—			—			—			13,017			—			(126)			12,891
Municipal securities			85,638			277			(7)			85,908			18,935			7			(57)			18,885
Total		$	400,621		$	1,008		$	(87)		$	401,542		$	134,552		$	36		$	(588)		$	134,000

Classified as:
Cash equivalents											$	22,477											$	26,539
Short-term investments												379,065												107,461
Total											$	401,542											$	134,000

The Company invests in U.S. Treasuries, U.S. agency and high-quality municipal bonds which mature at par and are all paying their coupons on schedule. Thus, the Company has determined there is currently no other than temporary impairment of its investments and will continue to recognize unrealized losses in other comprehensive income. As of December 31, 2019, the Company has 8 investments in an unrealized loss position in its portfolio. During the years ended December 31, 2019, 2018, and 2017 the amount of gross realized gains and realized losses upon sales of investments were insignificant. Realized gains and losses are reported in interest and other (expense) income, net in the statements of operations and comprehensive loss. The following table shows the change in the net unrealized positions of the available-for-sale securities and reclassifications from accumulated other comprehensive loss upon the sale of those securities:


		December 31,
		2019			2018
		(in thousands)
Balance at beginning of year		$	(552)		$	(766)
Net unrealized gains (losses) on available-for-sale securities, net of tax			1,487			171
Reclassifications of losses (gains) realized from sale of available-for-sale securities			(16)			43
Increase (decrease) in other comprehensive loss			1,471			214
Balance at end of year		$	919		$	(552)

During the years ended December 31, 2019, 2018 and 2017, the Company earned interest income of $4.1 million, $1.8 million and $1.2 million, respectively, from its investment portfolio.

The following table summarizes the Company’s portfolio of available-for-sale securities by contractual maturity as of December 31, 2019:


		December 31, 2019
		Amortized Cost			Fair Value
		(in thousands)
Less than one year		$	141,380		$	141,552
Greater than one year but less than five years			236,764			237,513
Total		$	378,144		$	379,065