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Fair Value Measurements and Available for Sale Investments | 9 Months Ended
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Sep. 30, 2020
Fair Value Disclosures [Abstract] |
Fair Value Measurements and Available for Sale Investments | Fair Value Measurements and Available for Sale Investments Fair Value Measurements Our financial instruments consist principally of cash, cash equivalents, restricted cash, short-term and long-term investments, receivables, accounts payable, and notes payable. Certain of our financial assets and liabilities have been recorded at fair value in the consolidated balance sheet in accordance with the accounting standards for fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. Accounting guidance also establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value: Level 1 - Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 - Inputs are observable, unadjusted quoted prices in active markets for similar assets or liabilities, unadjusted quoted prices for identical or similar assets or liabilities 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 related assets or liabilities; and Level 3 - Unobservable inputs that are supported by little or no market activities, therefore requiring an entity to develop its own assumptions. Assets and Liabilities Measured at Fair Value on a Recurring Basis The following table summarizes our assets and liabilities that require fair value measurements on a recurring basis and their respective input levels based on the fair value hierarchy:
| Fair Value Measurements at End of Period Using:
(in thousands) | Fair Value |  | Quoted Market Prices for Identical Assets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3)
At September 30, 2020 |  |  |  |  |  |  |
Money market funds(1) | $ | 204,678 |  |  | $ | 204,678 |  |  | $ | — |  |  | $ | — |
Mutual funds(1) | 4,833 |  |  | 4,833 |  |  | — |  |  | — |
U.S. Treasury securities(2) | 107,159 |  |  | 107,159 |  |  | — |  |  | — |
Certificates of deposit(2) | 3,713 |  |  | — |  |  | 3,713 |  |  | — |
Agency securities(2) | 15,805 |  |  | — |  |  | 15,805 |  |  | — |
Commercial and corporate obligations(2) | 38,692 |  |  | — |  |  | 38,692 |  |  | — |
At December 31, 2019 |  |  |  |  |  |  |
Money market funds(1) | $ | 162,928 |  |  | $ | 162,928 |  |  | $ | — |  |  | $ | — |
Mutual funds(1) | 7,619 |  |  | 7,619 |  |  | — |  |  | — |
U.S. Treasury securities(2) | 96,434 |  |  | 96,434 |  |  | — |  |  | — |
Certificates of deposit(2) | 5,428 |  |  | — |  |  | 5,428 |  |  | — |
Agency securities(2) | 33,623 |  |  | — |  |  | 33,623 |  |  | — |
Commercial and corporate obligations(2) | 122,030 |  |  | — |  |  | 122,030 |  |  | — |
(1) Included in cash and cash equivalents or restricted cash in the accompanying consolidated balance sheets. (2) Included in short-term or long-term investments in the accompanying consolidated balance sheets depending on the respective maturity date. The following methods and assumptions were used to estimate the fair value of our financial instruments for which it is practicable to estimate that value: Marketable Securities. For fair values determined by Level 1 inputs, which utilize quoted prices in active markets for identical assets, the level of judgment required to estimate fair value is relatively low. For fair values determined by Level 2 inputs, which utilize quoted prices in less active markets for similar assets, the level of judgment required to estimate fair value is also considered relatively low. Fair Value of Other Financial Instruments The fair value of our other financial instruments estimated as of September 30, 2020 and December 31, 2019 are presented below:
| September 30, 2020 |  | December 31, 2019
(in thousands) | Carrying Amount |  | Fair Value |  | Carrying Amount |  | Fair Value
Notes payable | $ | — |  |  | $ | — |  |  | $ | 1,375 |  |  | $ | 1,365 |
The following methods and assumptions were used to estimate the fair value of our notes payable: Notes Payable—We use the income approach to value the aforementioned debt instrument. We use a present value calculation to discount principal and interest payments and the final maturity payment on these liabilities using a discounted cash flow model based on observable inputs. We discount these debt instruments based on what the current market rates would offer us as of the reporting date. Based on the assumptions used to value these liabilities at fair value, these debt instruments are categorized as Level 2 in the fair value hierarchy. The carrying amounts of certain of our financial instruments, including cash and cash equivalents, accounts payable, and accrued expenses approximate fair value due to their short-term nature. Available for Sale Investments We invest our excess cash in agency securities, debt instruments of financial institutions and corporations, commercial obligations, and U.S. Treasury securities, which we classify as available-for-sale investments. These investments are carried at fair value and are included in the tables above. The aggregate market value, cost basis, and gross unrealized gains and losses of available-for-sale investments by security type, classified in cash equivalents, short-term and long-term investments as of September 30, 2020 are as follows:
(in thousands) | Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Total Fair Value
Agency securities(1) | $ | 15,790 |  |  | $ | 16 |  |  | $ | (1) |  |  | $ | 15,805 |
Certificates of deposit(2) | 3,696 |  |  | 17 |  |  | — |  |  | 3,713 |
Commercial and corporate obligations(3) | 38,590 |  |  | 105 |  |  | (3) |  |  | 38,692 |
U.S. Treasury securities(4) | 106,826 |  |  | 343 |  |  | (10) |  |  | 107,159 |
Total available-for-sale investments | $ | 164,902 |  |  | $ | 481 |  |  | $ | (14) |  |  | $ | 165,369 |
(1) Of our outstanding agency securities, $0.8 million have maturity dates of less than one year and $15.0 million have a maturity date of between one to two years as of September 30, 2020. (2) Of our outstanding certificates of deposit, $3.0 million have maturity dates of less than one year and $0.7 million have a maturity date of between one to two years as of September 30, 2020. (3) All of our outstanding commercial and corporate obligations have maturity dates of less than one year as of September 30, 2020. (4) Of our outstanding U.S. Treasury securities, $86.7 million have maturity dates of less than one year and $20.4 million have a maturity date of between one to two years as of September 30, 2020. The following tables present gross unrealized losses and fair values for those investments that were in an unrealized loss position as of September 30, 2020 and December 31, 2019, aggregated by investment category and the length of time that individual securities have been in a continuous loss position:
| September 30, 2020
| Less than 12 Months |  | 12 Months or Greater |  | Total
(in thousands) | Fair Value |  | Gross Unrealized Losses |  | Fair Value |  | Gross Unrealized Losses |  | Fair Value |  | Gross Unrealized Losses
Agency securities | $ | 9,998 |  |  | $ | (1) |  |  | $ | — |  |  | $ | — |  |  | $ | 9,998 |  |  | $ | (1) |
Commercial and corporate obligations | 4,096 |  |  | (3) |  |  | — |  |  | — |  |  | 4,096 |  |  | (3) |
US Treasury Securities | 25,223 |  |  | (10) |  |  | — |  |  | — |  |  | 25,223 |  |  | (10) |
Total | $ | 39,317 |  |  | $ | (14) |  |  | $ | — |  |  | $ | — |  |  | $ | 39,317 |  |  | $ | (14) |
| December 31, 2019
| Less than 12 Months |  | 12 Months or Greater |  | Total
(in thousands) | Fair Value |  | Gross Unrealized Losses |  | Fair Value |  | Gross Unrealized Losses |  | Fair Value |  | Gross Unrealized Losses
Commercial and corporate obligations | $ | 5,986 |  |  | $ | (4) |  |  | $ | — |  |  | $ | — |  |  | $ | 5,986 |  |  | $ | (4) |
US Treasury Securities | 17,608 |  |  | (2) |  |  | — |  |  | — |  |  | 17,608 |  |  | (2) |
Total | $ | 23,594 |  |  | $ | (6) |  |  | $ | — |  |  | $ | — |  |  | $ | 23,594 |  |  | $ | (6) |

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- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=117815213&loc=d3e19207-110258 + Details
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