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FAIR VALUE MEASUREMENTS AND INVESTMENTS | 9 Months Ended
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Sep. 30, 2020
FAIR VALUE MEASUREMENTS AND INVESTMENTS |
FAIR VALUE MEASUREMENTS AND INVESTMENTS | 6. FAIR VALUE MEASUREMENTS AND INVESTMENTS ​ In accordance with the provisions of fair value accounting, a fair value measurement assumes that a transaction to sell an asset or transfer a liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability, and defines fair value based upon an exit price model. The fair value measurement guidance establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The guidance describes three levels of inputs that may be used to measure fair value:
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Level 1 | ​ | Quoted prices in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset and liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 1 assets and liabilities include money market funds, debt and equity securities and derivative contracts that are traded in an active exchange market. ​
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Level 2 | ​ | Observable inputs other than Level 1 prices, 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 2 assets and liabilities include debt securities with quoted prices that are traded less frequently than exchange-traded instruments and derivative contracts whose value is determined using a pricing model with inputs that are observable in the market or can be derived principally from or corroborated by observable market data. This category generally includes corporate obligations and non-exchange traded derivative contracts. ​
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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. Level 3 assets and liabilities include financial instruments and intangible assets that have been impaired whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation.
​ ​ ​ Assets and liabilities of the Company measured at fair value on a recurring basis as of September 30, 2020 and December 31, 2019 are summarized as follows (in thousands): ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | September 30, 2020
​ | ​ | Significant Other
​ | ​ | Quoted Prices in | ​ | Observable | ​ | Unobservable | ​ | ​ | ​
​ | ​ | Active Markets | ​ | Inputs | ​ | Inputs | ​ | ​ | ​
Description | ​ | (Level 1) | ​ | (Level 2) | ​ | (Level 3) | ​ | Total
Certificates of deposit | ​ | $ | — | ​ | $ | 380 | ​ | $ | — | ​ | $ | 380
Money market funds | ​ | ​ | 2,450 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 2,450
Short term investments | ​ | ​ | 403 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 403
Other investments | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 13,172 | ​ | ​ | 13,172
Interest rate swap | ​ | ​ | — | ​ | ​ | (189) | ​ | ​ | — | ​ | ​ | (189)
Total assets and liabilities measured at fair value | ​ | $ | 2,853 | ​ | $ | 191 | ​ | $ | 13,172 | ​ | $ | 16,216
​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | December 31, 2019 | ​
| ​ | Significant Other | ​
​ | ​ | Quoted Prices in | ​ | Observable | ​ | Unobservable | ​ | ​ | ​ | ​
​ | ​ | Active Markets | ​ | Inputs | ​ | Inputs | ​ | ​ | ​ | ​
Description | ​ | (Level 1) | ​ | (Level 2) | ​ | (Level 3) | ​ | Total |
Certificates of deposit | ​ | $ | — | ​ | $ | 380 | ​ | $ | — | ​ | $ | 380 | ​
Money market funds | ​ | ​ | 2,329 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 2,329 | ​
Short term investments | ​ | ​ | 416 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 416 | ​
Other investments | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 12,700 | ​ | ​ | 12,700 | ​
Interest rate swap | ​ | ​ | — | ​ | ​ | (56) | ​ | ​ | — | ​ | ​ | (56) | ​
Total assets and liabilities measured at fair value | ​ | $ | 2,745 | ​ | $ | 324 | ​ | $ | 12,700 | ​ | $ | 15,769 | ​
​ Certificate of Deposit ​ As of September 30, 2020 and December 31, 2019, this asset class consisted of a time deposit at a financial institution denominated in US dollars. The asset class is classified within Level 2 of the fair value hierarchy because the fair value was based on observable market data. ​ Money Market Funds ​ As of September 30, 2020 and December 31, 2019, this asset class consisted of a money market portfolio that comprises Federal government and US Treasury securities. The asset class is classified within Level 1 of the fair value hierarchy because its underlying investments are valued using quoted market prices in active markets for identical assets. ​ Short Term Investments and Commercial Paper ​ As of September 30, 2020 and December 31, 2019, these asset classes consisted of short term foreign and US corporate bonds, equity securities, and commercial paper. Corporate bonds and commercial paper are classified within Level 2 of the fair value hierarchy because the fair value is based on observable market data. Equity securities are classified within Level 1 because fair value is based on quoted market prices in active markets for identical assets. The Company held equity securities with a fair value of $0.1 million and $0.2 million at September 30, 2020 and December 31, 2019, respectively. Net income includes $0.1 million of losses for the nine months ended September 30, 2020. No gain or loss was recorded in the three and nine months ended September 30, 2019. ​ Other Investments ​ In the first quarter of 2019, the Company made an investment in an early-stage venture through the acquisition of a convertible debt instrument. The Company elected to fair value the investment upon acquisition. At September 30, 2020, the fair value of the investment was $10.8 million. During the three and nine months ended September 30, 2020, the Company recorded $0.1 million of expense and $0.6 million of income, respectively, from changes in the fair value of the investment. The asset is classified within Level 3 of the fair value hierarchy. The Company used the income approach to fair value the investment and the inputs consisted of a discount rate calculated based on the investment attributes and the probability of potential future scenarios occurring. ​ In the third quarter of 2019, the Company made a $14.4 million investment in a renewable energy partnership, as a tax equity investor. The Company received an investment tax credit of $12.0 million in the three months ended September 30, 2020 and will receive future cash distributions from the partnership’s operations. The Company elected the deferral method to account for the credit and elected the fair value option to account for the equity investment. The Company’s investment had a fair value of $2.4 million at September 30, 2020, and $2.5 million at December 31, 2019. The asset is classified within Level 3 of the fair value hierarchy. The Company used the income approach to fair value the investment and the inputs consisted of a discount rate and future cash flows calculated based on the investment attributes. The Company also holds investments in equity securities consisting of non-controlling investments in privately held companies. These investments, over which the Company does not have the ability to exercise significant influence, are without readily determinable fair values. The investments are measured at cost, less any impairment, adjusted for observable price changes of similar investments of the same issuer. Fair value is not estimated for these investments if there are no identified events or changes in circumstances that may have an effect on the fair value of the investment. The carrying value of the investments was $1.3 million at September 30, 2020 and $2.1 million at December 31, 2019. During the three months ended September 30, 2020 the Company recorded a loss of $0.8 million as the result of an observable price change in the investments. These investments are included with other assets on the consolidated balance sheets. Equity Method Investments In the first quarter of 2020, the Company increased its ownership in one investment of a privately held company to approximately 24% of the outstanding voting equity through an additional $2.8 million investment. With this investment the Company obtained the ability to exercise significant influence over the investee and began accounting for the investment under the equity method of accounting including the recording of its share of the investee’s earnings or losses. The carrying value of the investment was $17.0 million and $15.5 million at September 30, 2020 and December 31, 2019, respectively. The value increased $1.5 million from the December 31, 2019 balance due to an additional investment of $2.8 million, $1.5 million of the Company’s share of investee losses, and currency gains of $0.2 million. The investment is included with other assets on the consolidated balance sheets. Other Fair Value Disclosures The carrying amounts of cash and cash equivalents, accounts receivable, and accounts payable and accrued expenses approximate their fair values because of the relatively short-term maturities of these financial instruments. The fair value of the interest rate swap is measured using Level 2 inputs. The fair value of long-term debt is estimated using Level 2 inputs. At September 30, 2020, the fair value of long-term debt, including the current portion, was $84.2 million and its book value was $83.7 million. At December 31, 2019, the fair value of long-term debt, including the current portion, was $86.9 million and its book value was $86.4 million.

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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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