Fair Value Measurements

3 Months Ended

Mar. 31, 2020

Fair Value Disclosures [Abstract]

Fair Value Measurements

Note 3. 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, 2020										Fair Value Measurements at December 31, 2019
	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	$	—	$	82.2		$	—	$	82.2		$	—	$	81.4		$	—	$	81.4
Certificates of deposit	—		36.8			—		36.8			—		38.6			—		38.6
Commercial paper	—		109.3			—		109.3			—		168.2			—		168.2
Corporate debt securities	—		546.8			—		546.8			—		605.5			—		605.5
Foreign government debt securities	—		11.2			—		11.2			—		11.4			—		11.4
Time deposits	—		—			—		—			—		226.3			—		226.3
U.S. government agency securities	—		64.8			—		64.8			—		89.0			—		89.0
U.S. government securities	299.0		55.3			—		354.3			318.9		75.6			—		394.5
Privately-held debt and redeemable preferred stock securities	—		—			56.5		56.5			—		—			56.5		56.5
Total available-for-sale debt securities	299.0		906.4			56.5		1,261.9			318.9		1,296.0			56.5		1,671.4
Equity securities:
Money market funds	760.3		—			—		760.3			446.4		—			—		446.4
Mutual funds	21.5		—			—		21.5			26.8		—			—		26.8
Publicly-traded equity securities	2.1		—			—		2.1			3.8		—			—		3.8
Total equity securities	783.9		—			—		783.9			477.0		—			—		477.0
Derivative assets:
Foreign exchange contracts	—		1.1			—		1.1			—		2.5			—		2.5
Interest rate swap contracts	—		25.6			—		25.6			—		—			—		—
Total derivative assets	—		26.7			—		26.7			—		2.5			—		2.5
Total assets measured at fair value on a recurring basis	$	1,082.9	$	933.1		$	56.5	$	2,072.5		$	795.9	$	1,298.5		$	56.5	$	2,150.9
Liabilities:
Derivative liabilities:
Foreign exchange contracts	$	—	$	(32.4	)	$	—	$	(32.4	)	$	—	$	(6.8	)	$	—	$	(6.8	)
Interest rate swap contracts	—		—			—		—			—		(3.1		)	—		(3.1		)
Total derivative liabilities	—		(32.4		)	—		(32.4		)	—		(9.9		)	—		(9.9		)
Total liabilities measured at fair value on a recurring basis	$	—	$	(32.4	)	$	—	$	(32.4	)	$	—	$	(9.9	)	$	—	$	(9.9	)
Total assets, reported as:
Cash equivalents	$	756.3	$	76.2		$	—	$	832.5		$	442.3	$	290.9		$	—	$	733.2
Short-term investments	171.9		351.1			—		523.0			188.8		549.2			—		738.0
Long-term investments	129.2		479.1			—		608.3			133.9		455.9			—		589.8
Prepaid expenses and other current assets	6.5		1.1			—		7.6			4.1		2.5			—		6.6
Other long-term assets	19.0		25.6			56.5		101.1			26.8		—			56.5		83.3
Total assets measured at fair value on a recurring basis	$	1,082.9	$	933.1		$	56.5	$	2,072.5		$	795.9	$	1,298.5		$	56.5	$	2,150.9

	Fair Value Measurements at March 31, 2020										Fair Value Measurements at December 31, 2019
	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
Total liabilities, reported as:
Other accrued liabilities	$	—	$	(32.4	)	$	—	$	(32.4	)	$	—	$	(6.8	)	$	—	$	(6.8	)
Other long-term liabilities	—		—			—		—			—		(3.1		)	—		(3.1		)
Total liabilities measured at fair value on a recurring basis	$	—	$	(32.4	)	$	—	$	(32.4	)	$	—	$	(9.9	)	$	—	$	(9.9	)

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. During the three months ended March 31, 2020, the Company had no transfers into or out of Level 3 of the fair value hierarchy of its assets or liabilities measured at fair value.

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 valuations at the time of financing activities and the investee's capital structure. During the three months ended March 31, 2020, there were no significant activities related to privately-held debt and redeemable preferred stock securities.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

The Company's investments in equity securities without readily determinable fair value are classified as Level 3 assets due to the lack of observable inputs to determine fair value. The Company estimates the fair value on a nonrecurring basis (i.e. when observable transaction occurs) using an analysis of the financial condition and near-term prospects of the investee, including recent financing activities and the investee's capital structure. As of March 31, 2020, there have been no material upward or downward adjustments for price changes to the equity securities without readily determinable fair value.

Certain of the Company's assets, including intangible assets and goodwill, are measured at fair value on a nonrecurring basis. There were no significant impairment charges recognized during the three months ended March 31, 2020.

As of March 31, 2020 and December 31, 2019, 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 March 31, 2020 and December 31, 2019, the estimated fair value of the Company's total outstanding debt in the Condensed Consolidated Balance Sheets was $1,782.1 million and $1,852.1 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, along with the accumulated interest paid in kind, of $84.4 million and $78.9 million approximates its fair value as of March 31, 2020 and December 31, 2019, respectively. Notes receivable are generally classified as Level 3 assets due to the lack of observable inputs to determine fair value. The carrying value of a contract manufacturer deposit of $52.6 million, reported within other long-term assets, in the Condensed Consolidated Balance Sheets approximates its fair value as of March 31, 2020. See Note 5, Other Financial Information, for further information on the contract manufacturer deposit.