Marketable Securities and Fair Value Measurements

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

Short-term



December 31, 2015	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Commercial paper	$	38,537	$	—	$	—		$	38,537
Corporate bonds	179,765		6		(251		)	179,520
U.S. dollar dominated foreign corporate bonds	510		—		(2		)	508
Municipal securities	14,209		7		(2		)	14,214
U.S. government agency bonds	75,172		—		(53		)	75,119
U.S. government treasury bonds	51,763		1		(81		)	51,683
Total Marketable Securities, Short-Term	$	359,956	$	14	$	(389	)	$	359,581

Long-term



December 31, 2015	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
U.S. government agency bonds	$	43,853	$	—	$	(178	)	$	43,675
Corporate bonds	64,012		9		(217		)	63,804
U.S. government treasury bonds	37,673		—		(107		)	37,566
Municipal securities	3,993		—		(2		)	3,991
Asset-backed securities	2,338		—		(3		)	2,335
Total Marketable Securities, Long-Term	$	151,869	$	9	$	(507	)	$	151,371

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
Asset-backed securities	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 year ended December 31, 2015 and 2014, realized losses were immaterial. Cash and cash equivalents were not included in the table above as the gross unrealized gains and losses were not material. We have no material short-term or long-term investments that have been in continuous unrealized loss positions for greater than twelve months as of December 31, 2015. Amounts reclassified to earnings from unrealized gain or losses were immaterial in 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 and asset-backed securities that have a maximum maturity of two years. 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 9 months and 10 months as of December 31, 2015 and 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 December 31, 2015 and 2014 (in thousands):



	December 31,		December 31,
	2015		2014
One year or less	$	359,581	$	254,787
Due in greater than one year	151,370		147,892
Total available for short-term and long-term marketable securities	$	510,951	$	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 U.S. 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 December 31, 2015 or 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. dollar denominated foreign corporate bonds, municipal securities, U.S. government agency bonds, asset-backed securities, and our Israeli funds that are mainly invested in insurance policies and foreign currency forward contracts. We obtain these 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. The foreign currency forward contracts are valued using observable inputs such as quotations on forward foreign exchange rates.

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 ("DCF") 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 December 31, 2015 and 2014.

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



Description	Balance as of December 31, 2015		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)
Cash equivalents:
Money market funds	$	70,148	$	70,148	$	—
Commercial paper	36,887		—		36,887
U.S. government Agency bonds	3,599				3,599
Corporate bonds	625		—		625
Short-term investments:
Commercial paper	38,537		—		38,537
Corporate bonds	179,520		—		179,520
U.S. dollar denominated foreign corporate bonds	508		—		508
Municipal securities	14,214		—		14,214
U.S. government agency bonds	75,119		—		75,119
U.S. government treasury bonds	51,683		51,683		—
Long-term investments:
Corporate bonds	63,804		—		63,804
U.S. government agency bonds	43,675		—		43,675
U.S. government treasury bonds	37,566		37,566		—
Municipal securities	3,991		—		3,991
Asset-backed securities	2,335		—		2,335
Long-term other assets:
Israeli funds	2,436		—		2,436
	$	624,647	$	159,397	$	465,250



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		—
Certificate of Deposits	1,398				1,398
Long-term investments:
Corporate bonds	57,089		—		57,089
U.S. government agency bonds	48,217		—		48,217
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
Long-term other assets:
Israeli funds	2,307		—		2,307
	$	509,514	$	117,376	$	392,138

Derivative Financial Instruments

In September 2015, we began entering into foreign currency forward contracts to minimize the short-term impact of foreign currency exchange rate fluctuations on certain trade and intercompany receivables and payables, which are classified within level 2 of the fair value hierarchy. The net loss on these forward contracts was immaterial for the year ended December 31, 2015. As of December 31, 2015, the fair value of foreign exchange forward contracts outstanding was immaterial.

The following table presents the gross notional value of all our foreign exchange forward contracts outstanding as of December 31, 2015 (in thousands):



	As of December 31, 2015
	Local Currency Amount		Notional Contract Amount (USD)
US dollar	$	20,700	$	20,700
Euro	€22,100		24,222
Japanese yen	¥583,000		4,839
Australian dollar	A$4,700		3,426
Hong Kong dollar	HK$	51,000	6,579
			$	59,766