Fair Value

The following table summarizes the fair value hierarchy for the Company’s financial assets (cash, cash equivalents, short-term investments, non-current investments, and foreign currency derivatives) and financial liabilities (foreign currency derivatives) measured at fair value on a recurring basis as of March 31, 2016 and December 31, 2015 (in thousands):



Balance as of March 31, 2016:
	Level 1		Level 2		Level 3		Total
Assets:
Cash and cash equivalents	$	53,431	$	36,389	$	—	$	89,820
Short-term investments:
Asset-backed securities	—		53,613		—		53,613
Corporate debt securities	—		77,686		—		77,686
Commercial paper	—		42,354		—		42,354
Government agency securities	—		17,206		—		17,206
Other securities	—		11,633		—		11,633
Total short-term investments	—		202,492		—		202,492
Foreign currency derivatives	—		1,531		—		1,531
Investments:
Asset-backed securities	—		11,917		—		11,917
Corporate debt securities	—		35,436		—		35,436
Government agency securities	—		12,000		—		12,000
Other securities	—		4,008		—		4,008
Total investments	—		63,361		—		63,361
Total	$	53,431	$	303,773	$	—	$	357,204
Liabilities:
Foreign currency derivatives	$	—	$	1,316	$	—	$	1,316
Total	$	—	$	1,316	$	—	$	1,316



Balance as of December 31, 2015:
	Level 1		Level 2		Level 3		Total
Assets:
Cash and cash equivalents	$	84,625	$	27,943	$	—	$	112,568
Short-term investments:
Asset-backed securities	—		51,973		—		51,973
Corporate debt securities	—		81,600		—		81,600
Commercial paper	—		48,762		—		48,762
Government agency securities	—		12,684		—		12,684
Other securities	—		15,128		—		15,128
Total short-term investments	—		210,147		—		210,147
Foreign currency derivatives	—		1,431		—		1,431
Investments:
Asset-backed securities	—		11,818		—		11,818
Corporate debt securities	—		36,414		—		36,414
Government agency securities	—		11,944		—		11,944
Other securities	—		1,999		—		1,999
Total investments	—		62,175		—		62,175
Total	$	84,625	$	301,696	$	—	$	386,321
Liabilities:
Foreign currency derivatives	$	—	$	1,298	$	—	$	1,298
Total	$	—	$	1,298	$	—	$	1,298

The estimated fair values of the Company’s other financial instruments which are not measured at fair value on a recurring basis as of March 31, 2016 and December 31, 2015 were as follows (in thousands):



Balance as of March 31, 2016:
	Level 1		Level 2		Level 3		Total
Liabilities:
Convertible senior notes	$	—	$	312,570	$	—	$	312,570
Total	$	—	$	312,570	$	—	$	312,570



Balance as of December 31, 2015:
	Level 1		Level 2		Level 3		Total
Liabilities:
Convertible senior notes	$	—	$	307,481	$	—	$	307,481
Total	$	—	$	307,481	$	—	$	307,481

The Company utilized levels 1 and 2 to value its financial assets on a recurring basis. Level 1 instruments use quoted prices in active markets for identical assets or liabilities, which include the Company’s cash accounts, short-term deposits, and money market funds as these specific assets are liquid. Level 2 instruments are valued using the market approach, which uses 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 instruments include commercial paper, corporate debt securities, United States government securities, government agency securities, asset-backed securities, and other securities, as similar or identical instruments can be found in active markets.

The Company recorded derivative assets and liabilities at fair value. The Company’s derivatives consist of foreign exchange forward contracts. The Company has elected to use the income approach to value the derivatives, using observable Level 2 market expectations at the measurement date and standard valuation techniques to convert future amounts to a single present amount assuming that participants are motivated, but not compelled to transact.

Level 2 inputs for the valuations are limited to quoted prices for similar assets or liabilities in active markets (specifically foreign currency spot rate and forward points) and inputs other than quoted prices that are observable for the asset or liability (specifically LIBOR rates, credit default spot rates, and company specific LIBOR spread). Mid-market pricing is used as a practical expedient for fair value measurements. The fair value measurement of an asset or liability must reflect the nonperformance risk of the entity and the counterparty. Therefore, the impact of the counterparty’s creditworthiness when in an asset position and the Company’s creditworthiness when in a liability position has also been factored into the fair value measurement of the derivative instruments and did not have a material impact on the fair value of these derivative instruments. Both the counterparty and the Company are expected to continue to perform under the contractual terms of the instruments. The estimated fair value of the convertible senior notes, which have been classified as Level 2 financial instruments, was determined based on the quoted price of the convertible senior notes in an over-the-counter market on March 31, 2016.