Fair Value Measurements

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following tables provide a summary of assets and liabilities measured at fair value on a recurring basis and as reported in the Consolidated Balance Sheets (in millions):



	Fair Value Measurements at December 31, 2015 Using:
	Quoted Prices in Active Markets For Identical Assets		Significant Other Observable Remaining Inputs			Significant Other Unobservable Remaining Inputs
	(Level 1)		(Level 2)			(Level 3)		Total
Assets measured at fair value:
Available-for-sale securities:
Asset-backed securities	$	—	$	311.7		$	—	$	311.7
Certificates of deposit	—		9.6			—		9.6
Commercial paper	—		17.7			—		17.7
Corporate debt securities	—		911.4			—		911.4
Foreign government debt securities	—		16.5			—		16.5
Government-sponsored enterprise obligations	—		203.7			—		203.7
Money market funds ⁽¹⁾	29.7		—			—		29.7
Mutual funds ⁽²⁾	6.2		—			—		6.2
Publicly-traded equity securities	8.8		—			—		8.8
U.S. government securities	247.3		30.3			—		277.6
Total available-for-sale securities	292.0		1,500.9			—		1,792.9
Trading securities in mutual funds ⁽³⁾	17.7		—			—		17.7
Privately-held debt and redeemable preferred stock securities	—		—			60.2		60.2
Derivative assets:
Foreign exchange contracts	—		0.4			—		0.4
Total assets measured at fair value	$	309.7	$	1,501.3		$	60.2	$	1,871.2
Liabilities measured at fair value:
Derivative liabilities:
Foreign exchange contracts	$	—	$	(1.3	)	$	—	$	(1.3	)
Total liabilities measured at fair value	$	—	$	(1.3	)	$	—	$	(1.3	)

Total assets measured at fair value, reported as:
Cash equivalents	$	—	$	3.4		$	—	$	3.4
Restricted investments	35.9		—			—		35.9
Short-term investments	108.2		418.9			—		527.1
Long-term investments	165.6		1,078.6			—		1,244.2
Prepaid expenses and other current assets	—		0.4			—		0.4
Other long-term assets	—		—			60.2		60.2
Total assets measured at fair value	$	309.7	$	1,501.3		$	60.2	$	1,871.2

Total liabilities measured at fair value, reported as:
Other accrued liabilities	$	—	$	(1.3	)	$	—	$	(1.3	)
Total liabilities measured at fair value	$	—	$	(1.3	)	$	—	$	(1.3	)

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⁽¹⁾	Balance includes $29.7 million of restricted investments measured at fair market value, related to the Company's D&O trust and acquisitions related escrows.


⁽²⁾	Balance relates to the restricted investments measured at fair market value of the Company's India Gratuity Trust.


⁽³⁾	Balance relates to the investments measured at fair value related to the Company's non-qualified deferred compensation plan assets.



	Fair Value Measurements at December 31, 2014 Using:
	Quoted Prices in Active Markets For Identical Assets		Significant Other Observable Remaining Inputs			Significant Other Unobservable Remaining Inputs
	(Level 1)		(Level 2)			(Level 3)		Total
Assets measured at fair value:
Available-for-sale securities:
Asset-backed securities	$	—	$	269.0		$	—	$	269.0
Certificates of deposit	—		10.6			—		10.6
Commercial paper	—		20.3			—		20.3
Corporate debt securities	—		738.0			—		738.0
Foreign government debt securities	—		24.6			—		24.6
Government-sponsored enterprise obligations	—		162.1			—		162.1
Money market funds⁽¹⁾	594.2		—			—		594.2
Mutual funds ⁽²⁾	4.0		—			—		4.0
Publicly-traded equity securities	2.0		—			—		2.0
U.S. government securities	246.0		—			—		246.0
Total available-for-sale securities	846.2		1,224.6			—		2,070.8
Trading securities in mutual funds ⁽³⁾	16.3		—			—		16.3
Privately-held debt and redeemable preferred stock securities	—		—			47.5		47.5
Derivative assets:
Foreign exchange contracts	—		0.1			—		0.1
Total assets measured at fair value	$	862.5	$	1,224.7		$	47.5	$	2,134.7
Liabilities measured at fair value:
Derivative liabilities:
Foreign exchange contracts	$	—	$	(3.9	)	$	—	$	(3.9	)
Total liabilities measured at fair value	$	—	$	(3.9	)	$	—	$	(3.9	)

Total assets measured at fair value, reported as:
Cash equivalents	$	552.9	$	23.7		$	—	$	576.6
Restricted investments	45.2		—			—		45.2
Short-term investments	87.0		245.2			—		332.2
Long-term investments	177.4		955.7			—		1,133.1
Prepaid expenses and other current assets	—		0.1			—		0.1
Other long-term assets	—		—			47.5		47.5
Total assets measured at fair value	$	862.5	$	1,224.7		$	47.5	$	2,134.7

Total liabilities measured at fair value, reported as:
Other accrued liabilities	$	—	$	(3.9	)	$	—	$	(3.9	)
Total liabilities measured at fair value	$	—	$	(3.9	)	$	—	$	(3.9	)

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⁽¹⁾	Balance includes $41.3 million of restricted investments measured at fair market value, related to the Company's D&O trust and acquisition related escrows.


⁽²⁾	Balance relates to the restricted investments measured at fair market value of the Company's India Gratuity Trust.


⁽³⁾	Balance relates to the investments measured at fair value related to the Company's non-qualified deferred compensation plan assets.

The Company's Level 2 available-for-sale fixed income securities are priced using quoted market prices for similar instruments or non-binding market prices that are corroborated by observable market data. The Company uses inputs such as actual trade data, benchmark yields, broker/dealer quotes, or alternative pricing sources with reasonable levels of price transparency which are obtained from quoted market prices, independent pricing vendors, or other sources, to determine the ultimate fair value of these assets. The Company's derivative instruments are classified as Level 2, as they are not actively traded and are valued using pricing models that use observable market inputs. The Company's policy is to recognize asset or liability transfers among Level 1, Level 2, and Level 3 at the beginning of the quarter in which a change in circumstances resulted in a transfer. During the years ended December 31, 2015 and December 31, 2014, the Company had no transfers between levels of the fair value hierarchy of its assets or liabilities measured at fair value.

All of the Company's privately-held debt and redeemable preferred stock securities, are classified as Level 3 assets due to the absence of quoted market prices and an inherent lack of liquidity. The Company estimates the fair value of its privately-held debt investments on a recurring basis using an analysis of the financial condition and near-term prospects of the investee, including recent financing activities and the investee's capital structure. During the year ended December 31, 2015, there were $5.3 million purchases related to privately-held debt securities.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

Certain of the Company's assets, including intangible assets, goodwill, and privately-held equity investments, are measured at fair value on a nonrecurring basis, only if impairment is indicated. Privately-held equity investments, which are normally carried at cost, are measured at fair value on a nonrecurring basis due to events and circumstances that the Company identifies as significantly impacting the fair value of investments. The Company estimates the fair value of its privately-held equity investments using an analysis of the financial condition and near-term prospects of the investee, including recent financing activities and the investee's capital structure. Purchased intangible assets are measured at fair value primarily using discounted cash flow projections.

As of December 31, 2015 and December 31, 2014, the Company had no significant privately-held equity investments measured at fair value on a nonrecurring basis. As of December 31, 2013, the Company had $2.0 million of privately-held equity investments measured at fair value on a nonrecurring basis and were classified as Level 3 assets due to the absence of quoted market prices and inherent lack of liquidity. The impairment charges of $2.8 million, representing the difference between the net book value and the fair value, are recorded to other (expense) income, net in the Consolidated Statements of Operations.

As of December 31, 2014, the Company recorded a goodwill impairment charge of $850.0 million for its Security reporting unit measured at fair value on a nonrecurring basis. The remeasurement of goodwill is classified as a Level 3 value assessment due to the significance of unobservable inputs developed using company-specific information. Refer to Note 7, Goodwill and Purchased Intangible Assets, for further information on the goodwill impairment charge and the unobservable inputs used.

As of December 31, 2015, 2014, and 2013, the Company had no liabilities measured at fair value on a nonrecurring basis.

Assets and Liabilities Not Measured at Fair Value

The carrying amounts of the Company's accounts receivable, financing receivables, accounts payable, and other accrued liabilities approximate fair value due to their short maturities. As of December 31, 2015 and December 31, 2014, the estimated fair value of the Company's short-term and long-term debt in the Consolidated Balance Sheets was approximately $1,946.7 million and $1,395.2 million, respectively, based on observable market inputs (Level 2). As of December 31, 2015, the carrying value of the promissory note, including interest paid in kind, of $132.9 million in connection with the sale of Junos Pulse recorded in other long-term assets in the Consolidated Balance Sheet approximates its fair value. The promissory note is classified as a Level 3 asset due to the absence of quoted market prices and inherent lack of liquidity. Refer to Note 8, Other Financial Information for further information on the promissory note.