XML 22 R11.htm IDEA: XBRL DOCUMENT

Short-Term and Long-Term Investments

3 Months Ended

Mar. 31, 2021

Investments, Debt and Equity Securities [Abstract]

As of March 31, 2021, the Company held $95,719,000 of short-term investments, consisting of obligations of the U.S. Treasury, all of which were debt securities with original maturities greater than three months but less than one year at the time of purchase.

As of March 31, 2021 and December 31, 2020, the Company held one auction rate security with a par value of $3,000,000, purchased through and held in custody by a broker-dealer affiliate of Bank of America, N.A., that has experienced failed auctions (the “Failed Auction Security”) since February 2008. The Failed Auction Security held by the Company is Aaa/AA+ rated by major credit rating agencies, is collateralized by student loans, and is guaranteed by the U.S. Department of Education under the Federal Family Education Loan Program. Management is not aware of any reason to believe the issuer of the Failed Auction

Security is presently at risk of default. Through March 31, 2021, the Company has continued to receive interest payments on the Failed Auction Security in accordance with the terms of its indenture. Management believes the Company ultimately should be able to liquidate the Failed Auction Security without significant loss primarily due to the overall quality of the issue held and the collateral securing the substantial majority of the underlying obligation. However, current conditions in the auction rate securities market have led management to conclude the recovery period for the Failed Auction Security exceeds 12 months. As a result, the Company continued to classify the Failed Auction Security as long-term as of March 31, 2021.

Details of our investments are as follows (in thousands):


	March 31, 2021
	Cash and Cash Equivalents		Short-Term Investments		Long-Term Investments
Measured at fair value:
Available-for-sale debt securities:
Money Market Funds	$	43,728	$	—	$	—
U.S. Treasury Obligations		—		95,719		—
Failed Auction Security		—		—		2,541

Total		43,728		95,719		2,541

Other measurement basis:
Cash on hand		83,683		—		—

Total	$	127,411	$	95,719	$	2,541


	December 31, 2020
	Cash and Cash Equivalents		Short-Term Investments		Long-Term Investments
Measured at fair value:
Available-for-sale debt securities:
Money Market Funds	$	69,493	$	—	$	—
U.S. Treasury Obligations		19,998		50,166		—
Failed Auction Security		—		—		2,517

Total		89,491		50,166		2,517

Other measurement basis:
Cash on hand		72,251		—		—

Total	$	161,742	$	50,166	$	2,517

The following is a summary of the

available-for-sale

securities (in thousands):


March 31, 2021	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
U.S. Treasury Obligations	$	95,716	$	3	$	—	$	95,719
Failed Auction Security		3,000		—		459		2,541


December 31, 2020	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
U.S. Treasury Obligations	$	70,172	$	—	$	8	$	70,164
Failed Auction Security		3,000		—		483		2,517

As of March 31, 2021, the Failed Auction Security had been in an unrealized loss position for greater than 12 months.

The amortized cost and estimated fair value of the

available-for-sale

securities on March 31, 2021, by type and

contractual maturities, are shown below (in thousands):


	Cost		Estimated Fair Value
U.S. Treasury Obligations:

Maturities greater than three months but less than one year	$	95,716	$	95,719

	$	95,716	$	95,719


	Cost		Estimated Fair Value
Failed Auction Security:

Due in twenty to forty years	$	3,000	$	2,541

Based on the fair value measurements described in Note 4, the fair value of the Failed Auction Security on March 31, 2021, with a par value of $3,000,000, was estimated by the Company to be approximately $2,541,000. The gross unrealized loss of $459,000 on the Failed Auction Security consists of two types of estimated loss: an aggregate credit loss of $32,000 and an aggregate temporary impairment of $427,000. In determining the amount of credit loss, the Company compared the present value of cash flows expected to be collected to the amortized cost basis of the security, considering credit default risk probabilities and changes in credit ratings as significant inputs, among other factors.

The following table represents a rollforward of the activity related to the credit loss recognized in earnings on the Failed Auction Security for the three months ended March 31 (in thousands):


	2021			2020
Balance at the beginning of the period	$	33		$	37
Reductions in the amount related to credit gain for which other-than- temporary impairment was not previously recognized		(1	)		(1	)

Balance at the end of the period	$	32		$	36

At this time, the Company has no intent to sell the impaired Failed Auction Security and does not believe it is more likely than not the Company will be required to sell this security. If current market conditions deteriorate further, the Company may be required to record additional unrealized losses. If the credit rating of the security deteriorates, the Company may be required to adjust the carrying value of the investment through impairment charges recorded in the Condensed Consolidated Statements of Operations, and any such impairment adjustments may be material.

Based on the Company’s ability to access cash and cash equivalents, its short-term investments and its expected operating cash flows, management does not anticipate the current lack of liquidity associated with the Failed Auction Security held will affect the Company’s ability to execute its current operating plan.