Note 2. Marketable Securities and Fair Value Measurements

As of March 31, 2015 and December 31, 2014, the estimated fair value of our short-term and long-term marketable securities, classified as available for sale, are as follows (in thousands):

Short-term



March 31, 2015	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Commercial paper	$	16,774	$	—	$	—		$	16,774
Corporate bonds	144,230		31		(71		)	144,190
Municipal securities	11,310		9		—			11,319
U.S. government agency bonds	60,342		20		(4		)	60,358
U.S. government treasury bonds	17,772		12		—			17,784
Certificates of deposit	1,399		—		—			1,399
Agency discount notes	2,998		1		—			2,999
Total Marketable Securities, Short-Term	$	254,825	$	73	$	(75	)	$	254,823

Long-term



March 31, 2015	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
U.S. government agency bonds	$	50,542	$	50	$	(5	)	$	50,587
Corporate bonds	66,738		30		(45		)	66,723
U.S. dollar dominated foreign corporate bonds	520		—		—			520
U.S. government treasury bonds	33,310		70		—			33,380
Municipal securities	6,425		10		(1		)	6,434
Asset-backed securities	10,533		—		(6		)	10,527
Total Marketable Securities, Long-Term	$	168,068	$	160	$	(57	)	$	168,171

Short-term



December 31, 2014	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Commercial paper	$	33,998	$	—	$	—		$	33,998
Corporate bonds	152,055		27		(116		)	151,966
U.S. dollar dominated foreign corporate bonds	901		—		—			901
Municipal securities	9,147		13		—			9,160
U.S. government agency bonds	41,574		14		(1		)	41,587
U.S. government treasury bonds	15,770		7		—			15,777
Certificates of Deposits	1,398		—		—			1,398
Total Marketable Securities, Short-Term	$	254,843	$	61	$	(117	)	$	254,787

Long-term



December 31, 2014	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
U.S. government agency bonds	$	48,233	$	12	$	(28	)	$	48,217
Corporate bonds	57,195		6		(112		)	57,089
U.S. dollar dominated foreign corporate bonds	523		—		(2		)	521
U.S. government treasury bonds	20,814		5		(6		)	20,813
Municipal securities	9,552		5		(6		)	9,551
Asset-backed securities	11,713		—		(12		)	11,701
Total Marketable Securities, Long-Term	$	148,030	$	28	$	(166	)	$	147,892

For the three months ended March 31, 2015 and 2014, realized gains were immaterial. Unrealized gains and losses for our available for sale securities as of March 31, 2015 and December 31, 2014 were also immaterial. Cash and cash equivalents are not included in the table above as the gross unrealized gains and losses are not material. We have no material short-term or long-term investments that have been in a continuous unrealized loss position for greater than twelve months as of March 31, 2015 and December 31, 2014. Amounts reclassified to earnings from accumulated other comprehensive income related to unrealized gain or losses were immaterial for the three months ended March 31, 2015 and 2014.

Our fixed-income securities investment portfolio consists of corporate bonds, U.S. dollar dominated foreign corporate bonds, commercial paper, municipal securities, U.S. government agency bonds, U.S. government treasury bonds, certificates of deposit, agency discount notes and asset-backed securities that have a maximum maturity of 27 months. The securities that we invest in are generally deemed to be low risk based on their credit ratings from the major rating agencies. The longer the duration of these securities, the more susceptible they are to changes in market interest rates and bond yields. As interest rates increase, those securities purchased at a lower yield show a mark-to-market unrealized loss. The unrealized losses are due primarily to changes in credit spreads and interest rates. We expect to realize the full value of all these investments upon maturity or sale. The weighted average remaining duration of these securities was approximately 11 months as of March 31, 2015 and December 31, 2014, respectively.

As the carrying value approximates the fair value for our short-term and long-term marketable securities shown in the tables above, the following table summarizes the fair value of our short-term and long-term marketable securities classified by maturity as of March 31, 2015 and December 31, 2014 (in thousands):



	March 31,		December 31,
	2015		2014
Due in one year or less	$	254,823	$	254,787
Due in greater than one year	168,171		147,892
Total available for sale short-term and long-term marketable securities	$	422,994	$	402,679

Fair Value Measurements

We measure the fair value of our cash equivalents and marketable securities as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. We use the GAAP fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. This hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The three levels of inputs that may be used to measure fair value:

Level 1 — Quoted (unadjusted) prices in active markets for identical assets or liabilities.

Our Level 1 assets consist of money market funds and U.S. government treasury bonds. We did not hold any Level 1 liabilities as of March 31, 2015 or December 31, 2014.

Level 2 — Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities 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 asset or liability.

Our Level 2 assets consist of commercial paper, corporate bonds, U.S. government agency bonds, asset-backed securities, municipal securities, U.S. government treasury bonds, U.S. dollar dominated foreign corporate bonds, certificates of deposit, agency discount notes and our Israeli funds that are mainly invested in insurance policies. We obtain fair values for Level 2 investments from our asset manager for each of our portfolios. Our custody bank and asset managers independently use professional pricing services to gather pricing data which may include quoted market prices for identical or comparable financial instruments, or inputs other than quoted prices that are observable either directly or indirectly, and we are ultimately responsible for these underlying estimates.

We did not hold any Level 2 liabilities as of March 31, 2015 or December 31, 2014.

Level 3 — Unobservable inputs to the valuation methodology that are supported by little or no market activity and that are significant to the measurement of the fair value of the assets or liabilities. Level 3 assets and liabilities include those whose fair value measurements are determined using pricing models, discounted cash flow methodologies or similar valuation techniques, as well as significant management judgment or estimation.

We did not hold any Level 3 assets or liabilities as of March 31, 2015 or December 31, 2014.

Recurring Fair Value Measurements

The following tables summarize our financial assets measured at fair value on a recurring basis as of March 31, 2015 and December 31, 2014 (in thousands):



Description	Balance as of March 31, 2015		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)
Cash equivalents:
Money market funds	$	76,732	$	76,732	$	—
Commercial paper	28,664		—		28,664
Short-term investments:
Commercial paper	16,774		—		16,774
Corporate bonds	144,190		—		144,190
Municipal securities	11,319		—		11,319
U.S. government agency bonds	60,358		—		60,358
U.S. government treasury bonds	17,784		17,784		—
Certificates of deposit	1,399		—		1,399
Agency discount notes	2,999		—		2,999
Long-term investments:
U.S. government agency bonds	50,587		—		50,587
Corporate bonds	66,723		—		66,723
U.S. dollar dominated foreign corporate bonds	520		—		520
U.S. government treasury bonds	33,380		33,380		—
Municipal securities	6,434		—		6,434
Asset-backed securities	10,527		—		10,527
Other assets:
Israeli funds	2,256		—		2,256
	$	530,646	$	127,896	$	402,750



Description	Balance as of December 31, 2014		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)
Cash equivalents:
Money market funds	$	80,786	$	80,786	$	—
Commercial paper	21,997		—		21,997
Corporate bonds	1,745		—		1,745
Short-term investments:
Commercial paper	33,998		—		33,998
Corporate bonds	151,966		—		151,966
U.S. dollar denominated foreign corporate bonds	901		—		901
Municipal securities	9,160		—		9,160
U.S. government agency bonds	41,587		—		41,587
U.S. government treasury bonds	15,777		15,777		—
Certificates of Deposits	1,398		—		1,398
Long-term investments:
U.S. government agency bonds	48,217		—		48,217
Corporate bonds	57,089		—		57,089
U.S. dollar denominated foreign corporate bonds	521		—		521
U.S. government treasury bonds	20,813		20,813		—
Municipal securities	9,551		—		9,551
Asset-backed securities	11,701		—		11,701
Other assets:
Israeli funds	2,307		—		2,307
	$	509,514	$	117,376	$	392,138