Investments

Marketable Securities

At October 31, 2014, marketable securities consisted of the following (in thousands):



Investments classified as Marketable Securities	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
Corporate notes and obligations	$	596,671	$	2,186	$	(439	)	$	598,418
U.S. treasury securities	56,563		94		(28		)	56,629
Mortgage backed obligations	46,629		192		(302		)	46,519
Asset backed securities	125,599		88		(43		)	125,644
Municipal securities	38,976		38		(79		)	38,935
Foreign government obligations	20,031		309		0			20,340
U.S. agency obligations	17,987		12		(16		)	17,983
Covered bonds	75,089		1,395		0			76,484
Total marketable securities	$	977,545	$	4,314	$	(907	)	$	980,952

At January 31, 2014, marketable securities consisted of the following (in thousands):



Investments classified as Marketable Securities	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
Corporate notes and obligations	$	340,706	$	1,314	$	(170	)	$	341,850
U.S. treasury securities	16,016		28		0			16,044
Mortgage backed obligations	24,888		281		(93		)	25,076
Asset backed securities	38,213		39		(35		)	38,217
Municipal securities	2,000		1		(3		)	1,998
Foreign government obligations	24,305		171		(2		)	24,474
U.S. agency obligations	14,726		9		(10		)	14,725
Covered bonds	76,282		717		(1		)	76,998
Total marketable securities	$	537,136	$	2,560	$	(314	)	$	539,382

The duration of the investments classified as marketable securities is as follows (in thousands):



	As of
	October 31, 2014		January 31, 2014
Recorded as follows:
Short-term (due in one year or less)	$	79,779	$	57,139
Long-term (due after one year)	901,173		482,243
	$	980,952	$	539,382

As of October 31, 2014, the following marketable securities were in an unrealized loss position (in thousands):



	Less than 12 Months					12 Months or Greater					Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
Corporate notes and obligations	$	206,762	$	(410	)	$	3,276	$	(29	)	$	210,038	$	(439	)
U.S. treasury securities	25,671		(28		)	0		0			25,671		(28		)
Mortgage backed obligations	30,652		(281		)	1,399		(21		)	32,051		(302		)
Asset backed securities	45,589		(38		)	2,357		(5		)	47,946		(43		)
Municipal securities	22,391		(79		)	0		0			22,391		(79		)
U.S. agency obligations	9,980		(16		)	0		0			9,980		(16		)
	$	341,045	$	(852	)	$	7,032	$	(55	)	$	348,077	$	(907	)

The unrealized loss for each of these fixed rate marketable securities ranged from less than $1,000 to $44,000. The Company does not believe any of the unrealized losses represent an other-than-temporary impairment based on its evaluation of available evidence as of October 31, 2014. The Company expects to receive the full principal and interest on all of these marketable securities.

Fair Value Measurement

All of the Company’s cash equivalents, marketable securities and foreign currency derivative contracts are classified within Level 1 or Level 2 because the Company’s cash equivalents, marketable securities and foreign currency derivative contracts are valued using quoted market prices or alternative pricing sources and models utilizing observable market inputs. The Company's restricted cash balance of $114.9 million at October 31, 2014 was held in a money market account and is not included in the following table.

The Company uses a three-tier fair value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value:

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

Level 2. Other inputs that are directly or indirectly observable in the marketplace.

Level 3. Unobservable inputs which are supported by little or no market activity.

The following table presents information about the Company’s assets and liabilities that are measured at fair value as of October 31, 2014 and indicates the fair value hierarchy of the valuation (in thousands):



Description	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Balances as of October 31, 2014
Cash equivalents (1):
Time deposits	$	0	$	129,590	$	0	$	129,590
Money market mutual funds	40,368		0		0		40,368
Marketable securities:
Corporate notes and obligations	0		598,418		0		598,418
U.S. treasury securities	0		56,629		0		56,629
Mortgage backed obligations	0		46,519		0		46,519
Asset backed securities	0		125,644		0		125,644
Municipal securities	0		38,935		0		38,935
Foreign government obligations	0		20,340		0		20,340
U.S. agency obligations	0		17,983		0		17,983
Covered bonds	0		76,484		0		76,484
Foreign currency derivative contracts (2)	0		667		0		667
Total Assets	$	40,368	$	1,111,209	$	0	$	1,151,577
Liabilities
Foreign currency derivative contracts (3)	$	0	$	1,558	$	0	$	1,558
Total Liabilities	$	0	$	1,558	$	0	$	1,558

_____________

(1)Included in “cash and cash equivalents” in the accompanying condensed consolidated balance sheet as of October 31, 2014, in addition to $676.4 million of cash.

(2)Included in “prepaid expenses and other current assets” in the accompanying condensed consolidated balance sheet as of October 31, 2014.

(3)Included in “accounts payable, accrued expenses and other liabilities” in the condensed consolidated balance sheet as of October 31, 2014.

The following table presents information about the Company’s assets and liabilities that are measured at fair value as of January 31, 2014 and indicates the fair value hierarchy of the valuation (in thousands):



Description	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Balances as of January 31, 2014
Cash equivalents (1):
Time deposits	$	0	$	212,700	$	0	$	212,700
Money market mutual funds	87,898		0		0		87,898
Marketable securities:
Corporate notes and obligations	0		341,850		0		341,850
U.S. treasury securities	0		16,044		0		16,044
Mortgage backed obligations	0		25,076		0		25,076
Asset backed securities	0		38,217		0		38,217
Municipal securities	0		1,998		0		1,998
Foreign government obligations	0		24,474		0		24,474
U.S. agency obligations	0		14,725		0		14,725
Covered bonds	0		76,998		0		76,998
Foreign currency derivative contracts (2)	0		1,598		0		1,598
Total Assets	$	87,898	$	753,680	$	0	$	841,578
Liabilities
Foreign currency derivative contracts (3)	$	0	$	1,801	$	0	$	1,801
Total Liabilities	$	0	$	1,801	$	0	$	1,801

______________

(1)Included in “cash and cash equivalents” in the accompanying condensed consolidated balance sheet as of January 31, 2014, in addition to $481.0 million of cash.

(2)Included in “prepaid expenses and other current assets” in the accompanying condensed consolidated balance sheet as of January 31, 2014.

(3)Included in “accounts payable, accrued expenses and other liabilities” in the accompanying condensed consolidated balance sheet as of January 31, 2014.

Derivative Financial Instruments

The Company enters into foreign currency derivative contracts with financial institutions to reduce the risk that its cash flows and earnings will be adversely affected by foreign currency exchange rate fluctuations. The Company uses forward currency derivative contracts to minimize the Company’s exposure to balances primarily denominated in Euros, Japanese yen, Canadian dollars and British pounds. The Company’s foreign currency derivative contracts, which are not designated as hedging instruments, are used to reduce the exchange rate risk associated primarily with intercompany receivables and payables. The Company’s derivative financial instruments program is not designated for trading or speculative purposes. As of October 31, 2014 and January 31, 2014, the foreign currency derivative contracts that were not settled were recorded at fair value on the condensed consolidated balance sheets.

Foreign currency derivative contracts are marked-to-market at the end of each reporting period with gains and losses recognized as other expense to offset the gains or losses resulting from the settlement or remeasurement of the underlying foreign currency denominated receivables and payables. While the contract or notional amount is often used to express the volume of foreign currency derivative contracts, the amounts potentially subject to credit risk are generally limited to the amounts, if any, by which the counterparties’ obligations under the agreements exceed the obligations of the Company to the counterparties.

Details on outstanding foreign currency derivative contracts related primarily to intercompany receivables and payables are presented below (in thousands):



	As of
	October 31, 2014			January 31, 2014
Notional amount of foreign currency derivative contracts	$	661,238		$	563,060
Fair value of foreign currency derivative contracts	$	(891	)	$	(203	)

The fair value of the Company’s outstanding derivative instruments are summarized below (in thousands):



		Fair Value of Derivative Instruments
		As of
	Balance Sheet Location	October 31, 2014		January 31, 2014
Derivative Assets
Derivatives not designated as hedging instruments:
Foreign currency derivative contracts	Prepaid expenses and other current assets	$	667	$	1,598
Derivative Liabilities
Derivatives not designated as hedging instruments:
Foreign currency derivative contracts	Accounts payable, accrued expenses and other liabilities	$	1,558	$	1,801

The effect of the derivative instruments not designated as hedging instruments on the condensed consolidated statements of operations during the three and nine months ended October 31, 2014 and 2013, respectively, are summarized below (in thousands):



Derivatives Not Designated as Hedging Instruments	Gains (Losses) on Derivative Instruments Recognized in Income
		Three Months Ended October 31,
	Location	2014			2013
Foreign currency derivative contracts	Other expense	$	(3,068	)	$	4,523




Derivatives Not Designated as Hedging Instruments	Gains (Losses) on Derivative Instruments Recognized in Income
		Nine Months Ended October 31,
	Location	2014			2013
Foreign currency derivative contracts	Other expense	$	(2,964	)	$	2,468

Strategic Investments

The Company has three investments in marketable equity securities measured using quoted prices in their respective active markets and certain interests in non-marketable equity and debt securities that are collectively considered strategic investments. As of October 31, 2014, the fair value of the Company’s marketable equity securities of $11.2 million includes an unrealized gain of $9.3 million. As of January 31, 2014, the Company had three investments in marketable equity securities that had a fair value of $15.5 million, which included an unrealized gain of $13.3 million. These investments are recorded at fair value in other assets, net on the condensed consolidated balance sheets.

The Company’s interest in non-marketable equity and debt securities consists of noncontrolling equity and debt investments in privately-held companies. The Company’s investments in these privately-held companies are reported at cost or marked down to fair value when an event or circumstance indicates an other-than-temporary decline in value has occurred. These investments are valued using significant unobservable inputs or data in an inactive market and the valuation requires the Company’s judgment due to the absence of market prices and inherent lack of liquidity.

As of October 31, 2014 and January 31, 2014, the carrying value of the Company’s investments in privately-held companies was $121.0 million and $77.0 million, respectively. These investments are recorded in other assets, net on the condensed consolidated balance sheets. The estimated fair value of the Company's investments in privately-held companies was $230.0 million as of October 31, 2014.

Investment Income

Investment income consists of interest income, realized gains, and realized losses on the Company’s cash, cash equivalents and marketable securities. The components of investment income are presented below (in thousands):



	Three Months Ended October 31,						Nine Months Ended October 31,
	2014			2013			2014			2013
Interest income	$	2,720		$	1,258		$	7,051		$	8,029
Realized gains	78			332			424			5,732
Realized losses	(176		)	(480		)	(420		)	(4,910		)
Total investment income	$	2,622		$	1,110		$	7,055		$	8,851

Reclassification adjustments out of accumulated other comprehensive loss into net income (loss) were immaterial for the three and nine months ended October 31, 2014 and 2013.