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 June 30, 2018										Fair Value Measurements at December 31, 2017
	Quoted Prices in Active Markets For Identical Assets (Level 1)		Significant Other Observable Remaining Inputs (Level 2)			Significant Other Unobservable Remaining Inputs (Level 3)		Total			Quoted Prices in Active Markets For Identical Assets (Level 1)		Significant Other Observable Remaining Inputs (Level 2)			Significant Other Unobservable Remaining Inputs (Level 3)		Total
Assets:
Available-for-sale debt securities:
Asset-backed securities	$	—	$	95.7		$	—	$	95.7		$	—	$	286.5		$	—	$	286.5
Certificates of deposit	—		16.7			—		16.7			—		83.8			—		83.8
Commercial paper	—		61.3			—		61.3			—		217.1			—		217.1
Corporate debt securities	—		445.7			—		445.7			—		927.0			—		927.0
Foreign government debt securities	—		38.0			—		38.0			—		62.7			—		62.7
Time deposits	—		219.2			—		219.2			—		239.2			—		239.2
U.S. government agency securities	—		61.9			—		61.9			—		143.2			—		143.2
U.S. government securities	125.5		87.4			—		212.9			322.4		83.6			—		406.0
Privately-held debt and redeemable preferred stock securities	—		—			54.5		54.5			—		—			53.3		53.3
Total available-for-sale debt securities	125.5		1,025.9			54.5		1,205.9			322.4		2,043.1			53.3		2,418.8
Equity securities:
Mutual funds⁽¹⁾	26.1		—			—		26.1			27.6		—			—		27.6
Money market funds⁽²⁾	1,997.8		—			—		1,997.8			969.8		—			—		969.8
Total equity securities	2,023.9		—			—		2,023.9			997.4		—			—		997.4
Derivative assets:
Foreign exchange contracts	—		1.3			—		1.3			—		9.2			—		9.2
Total assets measured at fair value	$	2,149.4	$	1,027.2		$	54.5	$	3,231.1		$	1,319.8	$	2,052.3		$	53.3	$	3,425.4
Liabilities:
Derivative liabilities:
Foreign exchange contracts	$	—	$	(5.1	)	$	—	$	(5.1	)	$	—	$	(1.8	)	$	—	$	(1.8	)
Total liabilities measured at fair value	$	—	$	(5.1	)	$	—	$	(5.1	)	$	—	$	(1.8	)	$	—	$	(1.8	)

Total assets, reported as:
Cash equivalents	$	1,986.2	$	311.3		$	—	$	2,297.5		$	928.1	$	350.9		$	—	$	1,279.0
Short-term investments	84.2		348.1			—		432.3			247.5		778.6			—		1,026.1
Long-term investments	41.3		366.5			—		407.8			74.8		913.6			—		988.4
Prepaid expenses and other current assets	10.4		1.3			—		11.7			36.3		9.2			—		45.5
Other long-term assets	27.3		—			54.5		81.8			33.1		—			53.3		86.4
Total assets measured at fair value	$	2,149.4	$	1,027.2		$	54.5	$	3,231.1		$	1,319.8	$	2,052.3		$	53.3	$	3,425.4

Total liabilities, reported as:
Other accrued liabilities	$	—	$	(5.1	)	$	—	$	(5.1	)	$	—	$	(1.8	)	$	—	$	(1.8	)
Total liabilities measured at fair value	$	—	$	(5.1	)	$	—	$	(5.1	)	$	—	$	(1.8	)	$	—	$	(1.8	)

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⁽¹⁾	Balance relates to restricted investments measured at fair value related to the Company's NQDC plan.


⁽²⁾	Balance includes $11.6 million and $16.8 million in restricted investments measured at fair value, related to the Company's acquisition-related escrows as of June 30, 2018 and December 31, 2017, respectively. The December 31, 2017 balance also includes $25.0 million related to the Company's Directors and Officers indemnification trust ("D&O") Trust.

The Company's Level 2 available-for-sale debt 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 and six months ended June 30, 2018, 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 and six months ended June 30, 2018, there were no significant activities related to privately-held debt and redeemable preferred stocks securities.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

Certain of the Company's assets, including intangible assets and goodwill are measured at fair value on a nonrecurring basis, when they are deemed to be other-than temporarily impaired. There were no impairment charges recognized during the three and six months ended June 30, 2018.

Equity investments without readily determinable fair value are measured at fair value, when they are deemed to be impaired or when there is an adjustment from observable price changes. For the three and six months ended June 30, 2018, there were no impairment charges or adjustments resulting from observable price changes for equity investments without readily determinable fair value.

As of June 30, 2018 and December 31, 2017, the Company had no liabilities required to be 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, accounts payable, and other accrued liabilities approximate fair value due to their short maturities. As of June 30, 2018 and December 31, 2017, the estimated fair value of the Company's short-term and long-term debt in the Condensed Consolidated Balance Sheets was $2,178.8 million and $2,252.9 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 $64.6 million and $61.2 million approximates its fair value as of June 30, 2018 and December 31, 2017, respectively. The Pulse Note is classified as a Level 3 asset due to the lack of observable inputs to determine fair value.