Investments

6 Months Ended

Jun. 30, 2020

Investments Debt And Equity Securities [Abstract]

7. INVESTMENTS

Debt Securities and Other Investments

As of June 30, 2020, the following debt securities and other investments were included on the Condensed Consolidated Balance Sheet and recorded at fair value:

	Amortized		Gross Unrealized					Fair
(In thousands)	Cost		Gains		Losses			Value
Corporate bonds	$	13,747	$	168	$	(1	)	$	13,914
Municipal fixed-rate bonds		2,379		21		—			2,400
Asset-backed bonds		7,600		86		(4	)		7,682
Mortgage/Agency-backed bonds		7,944		152		(12	)		8,084
U.S. government bonds		7,935		211		—			8,146
Foreign government bonds		540		—		—			540
Commercial paper		1,120		4		—			1,124
Variable-rate demand notes		300		—		—			300
Other		442		—		—			442
Available-for-sale debt securities held at fair value	$	42,007	$	642	$	(17	)	$	42,632

As of December 31, 2019, the following debt securities and other investments were included on the Condensed Consolidated Balance sheet and recorded at fair value:

	Amortized		Gross Unrealized					Fair
(In thousands)	Cost		Gains		Losses			Value
Corporate bonds	$	9,304	$	80	$	—		$	9,384
Municipal fixed-rate bonds		930		—		—			930
Asset-backed bonds		6,867		26		(3	)		6,890
Mortgage/Agency-backed bonds		6,944		26		(8	)		6,962
U.S. government bonds		12,311		21		(9	)		12,323
Foreign government bonds		372		—		(1	)		371
Variable-rate demand notes		800		—		—			800
Available-for-sale debt securities held at fair value	$	37,528	$	153	$	(21	)	$	37,660

As of June 30, 2020, contractual maturities related to debt securities and other investments were as follows:

(In thousands)	Corporate bonds		Municipal fixed-rate bonds		Asset- backed bonds		Mortgage/ Agency- backed bonds		U.S. government bonds		Foreign government bonds		Commercial paper		Variable-rate demand notes		Other
Less than one year	$	5,441	$	738	$	465	$	146	$	—	$	—	$	1,124	$	—	$	442
One to two years		2,926		528		465		603		1,638		75		—		—		—
Two to three years		5,547		757		1,141		1,528		6,065		465		—		—		—
Three to five years		—		377		3,932		—		443		—		—		—		—
Five to ten years		—		—		982		1,890		—		—		—		—		—
More than ten years		—		—		697		3,917		—		—		—		300		—
Total	$	13,914	$	2,400	$	7,682	$	8,084	$	8,146	$	540	$	1,124	$	300	$	442

Actual maturities may differ from contractual maturities as some borrowers have the right to call or prepay obligations with or without call or prepayment penalties.

Realized gains and losses on sales of debt securities are computed under the specific identification method. The following table presents gross realized gains and losses related to our debt securities:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
(In thousands)	2020			2019			2020			2019
Gross realized gains on debt securities	$	190		$	8		$	233		$	49
Gross realized losses on debt securities		(19	)		(14	)		(39	)		(33	)
Total gain recognized, net	$	171		$	(6	)	$	194		$	16

The Company’s investment policy provides limitations for issuer concentration, which limits, at the time of purchase, the concentration in any one issuer to 5% of the market value of our total investment portfolio. The Company did not purchase any available-for-sale debt security with credit deterioration during the three months ended June 30, 2020.

Marketable Equity Securities

Our marketable equity securities consist of publicly traded stock, funds and certain other investments measured at fair value or cost (where appropriate).

During the three months ended March 31, 2019, an outstanding note receivable of $4.3 million was repaid and reissued in the form of debt and equity. Of the outstanding $4.3 million, $3.4 million was issued as an equity investment, which represented a non-cash investing activity. We elected to record this equity investment that does not have a readily determinable fair value using the measurement alternative. Under the measurement alternative, equity investments that do not have a readily determinable fair value can be recorded at cost less impairment, if any, adjusted for observable price changes for an identical or similar investment. The carrying value of this investment under the measurement alternative was $3.4 million as of December 31, 2019. During the six months ended June 30, 2020, an impairment charge of $1.6 million was recorded related to this equity investment, which is included in net investment gain (loss) on the Condensed Consolidated Statement of Income (Loss). As a result, the carrying value of this investment was $1.8 million as of June 30, 2020. The remaining amount, $0.9 million of the original $4.3 million note receivable, was reissued as a new note receivable, which is included in long-term investments on the Condensed Consolidated Balance Sheets as of June 30, 2020 and December 31, 2019, and represented a non-cash investing activity during the six months ended June 30, 2019. No impairment charge was recognized related to the note receivable as it is a secured loan.

Realized and unrealized gains and losses related to marketable equity securities for the three and six months ended June 30, 2020 and 2019 were as follows:

	Three Months Ended					Six Months Ended
	June 30,					June 30,
(In thousands)	2020		2019			2020			2019
Realized gains (losses) on equity securities sold	$	328	$	(49	)	$	(2,108	)	$	(63	)
Unrealized gains (losses) on equity securities held		9,353		2,540			889			8,458
Total gain (loss) recognized, net	$	9,681	$	2,491		$	(1,219	)	$	8,395

U.S. GAAP establishes a three-level valuation hierarchy based upon observable and unobservable inputs for fair value measurement of financial instruments:

• Level 1 – Observable outputs; values based on unadjusted quoted prices for identical assets or liabilities in an active market;

• Level 2 – Significant inputs that are observable; values based on quoted prices in markets that are not active or model inputs that are observable either directly or indirectly;

• Level 3 – Significant unobservable inputs; values based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. These inputs could include information supplied by investees.

The Company’s cash equivalents and investments held at fair value are categorized into this hierarchy as follows:

			Fair Value Measurements as of June 30, 2020 Using
(In thousands)	Fair Value		Quoted Prices in Active Market for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash equivalents
Money market funds	$	1,697	$	1,697	$	—	$	—
U.S. government securities		1,250		1,250		—		—
Commercial paper		100		—		100		—
Available-for-sale debt securities
Corporate bonds		13,914		—		13,914		—
Municipal fixed-rate bonds		2,400		—		2,400		—
Asset-backed bonds		7,682		—		7,682		—
Mortgage/Agency-backed bonds		8,084		—		8,084		—
U.S. government bonds		8,146		8,146		—		—
Foreign government securities		540		—		540		—
Commercial paper		1,124		—		1,124		—
Variable-rate demand notes		300		—		300		—
Other		442		—		—		442
Marketable equity securities
Marketable equity securities – various industries		26,116		26,116		—		—
Deferred compensation plan assets		20,468		20,468		—		—
Other investments		1,223		1,223		—		—
Total	$	93,486	$	58,900	$	34,144	$	442

			Fair Value Measurements as of December 31, 2019 Using
(In thousands)	Fair Value		Quoted Prices in Active Market for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash equivalents
Money market funds	$	1,309	$	1,309	$	—	$	—
Available-for-sale debt securities
Corporate bonds		9,384		—		9,384		—
Municipal fixed-rate bonds		930		—		930		—
Asset-backed bonds		6,890		—		6,890		—
Mortgage/Agency-backed bonds		6,962		—		6,962		—
U.S. government bonds		12,323		12,323		—		—
Foreign government bonds		371		—		371		—
Variable-rate demand notes		800		—		800		—
Marketable equity securities
Marketable equity securities – various industries		35,501		35,501		—		—
Equity in escrow		298		298		—		—
Deferred compensation plan assets		21,698		21,698		—		—
Other investments		2,442		2,442		—		—
Total	$	98,908	$	73,571	$	25,337	$	—

The fair value of our Level 2 securities is calculated using a weighted average market price for each security. Market prices are obtained from a variety of industry standard data providers, large financial institutions and other third-party sources. These multiple market prices are used as inputs into a distribution-curve-based algorithm to determine the daily market value of each security.

The fair value of Level 3 securities is calculated based on unobservable inputs. Quantitative information with respect to unobservable inputs consists of third-party valuations performed in accordance with ASC 820 – Fair Value Measurement. Inputs used in preparing the third-party valuation included the following assumptions, among others: estimated discount rates and fair market yields.