Fair Value Measurements

Assets and Liabilities Measured at Fair Value on a Recurring Basis

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



	Fair Value Measurements at March 31, 2017 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	$	—	$	314.2		$	—	$	314.2
Certificates of deposit	—		57.4			—		57.4
Commercial paper	—		125.9			—		125.9
Corporate debt securities	—		855.4			—		855.4
Foreign government debt securities	—		39.9			—		39.9
Money market funds	1,117.3		—			—		1,117.3
Mutual funds	8.3		—			—		8.3
Publicly-traded equity securities	6.2		—			—		6.2
Time Deposits	—		245.8			—		245.8
U.S. government agency securities	—		132.0			—		132.0
U.S. government securities	337.3		43.1			—		380.4
Total available-for-sale securities	1,469.1		1,813.7			—		3,282.8
Trading securities in mutual funds	22.6		—			—		22.6
Privately-held debt and redeemable preferred stock securities	—		—			42.3		42.3
Derivative assets:
Foreign exchange contracts	—		4.5			—		4.5
Total assets measured at fair value	$	1,491.7	$	1,818.2		$	42.3	$	3,352.2
Liabilities measured at fair value:
Derivative liabilities:
Foreign exchange contracts	$	—	$	(1.2	)	$	—	$	(1.2	)
Total liabilities measured at fair value	$	—	$	(1.2	)	$	—	$	(1.2	)

Total assets measured at fair value, reported as:
Cash equivalents	$	1,074.4	$	355.5		$	—	$	1,429.9
Restricted investments	73.8		—			—		73.8
Short-term investments	186.8		555.5			—		742.3
Long-term investments	156.7		902.7			—		1,059.4
Prepaid expenses and other current assets	—		4.5			—		4.5
Other long-term assets	—		—			42.3		42.3
Total assets measured at fair value	$	1,491.7	$	1,818.2		$	42.3	$	3,352.2

Total liabilities measured at fair value, reported as:
Other accrued liabilities	$	—	$	(1.2	)	$	—	$	(1.2	)
Total liabilities measured at fair value	$	—	$	(1.2	)	$	—	$	(1.2	)



	Fair Value Measurements at December 31, 2016 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	$	—	$	303.0		$	—	$	303.0
Certificates of deposit	—		66.1			—		66.1
Commercial paper	—		147.7			—		147.7
Corporate debt securities	—		844.9			—		844.9
Foreign government debt securities	—		33.9			—		33.9
Money market funds	592.2		—			—		592.2
Mutual funds	8.0		—			—		8.0
Publicly-traded equity securities	4.6		—			—		4.6
Time Deposits	—		264.6			—		264.6
U.S. government agency securities	—		126.7			—		126.7
U.S. government securities	345.0		45.4			—		390.4
Total available-for-sale securities	949.8		1,832.3			—		2,782.1
Trading securities in mutual funds	21.0		—			—		21.0
Privately-held debt and redeemable preferred stock securities	—		—			43.7		43.7
Derivative assets:
Foreign exchange contracts	—		0.9			—		0.9
Total assets measured at fair value	$	970.8	$	1,833.2		$	43.7	$	2,847.7
Liabilities measured at fair value:
Derivative liabilities:
Foreign exchange contracts	$	—	$	(4.9	)	$	—	$	(4.9	)
Total liabilities measured at fair value	$	—	$	(4.9	)	$	—	$	(4.9	)

Total assets measured at fair value, reported as:
Cash equivalents	$	549.3	$	357.7		$	—	$	907.0
Restricted investments	71.9		—			—		71.9
Short-term investments	178.1		574.3			—		752.4
Long-term investments	171.5		900.3			—		1,071.8
Prepaid expenses and other current assets	—		0.9			—		0.9
Other long-term assets	—		—			43.7		43.7
Total assets measured at fair value	$	970.8	$	1,833.2		$	43.7	$	2,847.7

Total liabilities measured at fair value, reported as:
Other accrued liabilities	$	—	$	(4.9	)	$	—	$	(4.9	)
Total liabilities measured at fair value	$	—	$	(4.9	)	$	—	$	(4.9	)

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 three months ended March 31, 2017, 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 lack of observable inputs to determine fair value. The Company estimates the fair value of its privately-held debt and redeemable preferred stock securities 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 three months ended March 31, 2017, there were no purchases or sales or gains or losses related to privately-held debt and redeemable preferred stocks securities.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

As of March 31, 2017, the Company had no assets measured at fair value on a nonrecurring basis. Investments in privately-held companies, 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 carrying value of the investments. As of December 31, 2016, certain investments in privately-held companies with a carrying value of $1.6 million were impaired and written-down to their fair value of zero and were classified as Level 3 assets due to lack of observable inputs to determine fair value. The Company estimates the fair value of its investments in privately-held companies using an analysis of the financial condition and near-term prospects of the investee, including recent financing activities and the investee's capital structure. The impairment charge was recorded to other expense, net in the Condensed Consolidated Statements of Operations.

As of March 31, 2017 and December 31, 2016, 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 March 31, 2017 and December 31, 2016, the estimated fair value of the Company's long-term debt in the Condensed Consolidated Balance Sheets was approximately $2,253.3 million and $2,215.7 million, respectively, based on observable market inputs (Level 2). The carrying value of the promissory note issued to the Company in connection with the previously-completed sale of Junos Pulse (the “Pulse Note”), of $132.9 million approximates its fair value, of which $75.0 million is recorded in prepaid expenses and other current assets and the remaining balance is recorded within other long-term assets in the Condensed Consolidated Balance Sheets as of March 31, 2017 and December 31, 2016. The Pulse Note is classified as a Level 3 asset due to the lack of observable inputs to determine fair value. See Note 7, Other Financial Information, for further information on the Pulse Note.