Note 2. Financial Instruments

Investments

The following tables present information about our financial assets measured at fair value on a recurring basis as of March 31, 2017 and December 31, 2016 based on the three-tier fair value hierarchy (in thousands):



	Fair Value Measurement at March 31, 2017
	Level 1		Level 2		Total
Description
Corporate bonds	$	—	$	131,527	$	131,527
U.S. treasury securities			30,564		30,564
Asset-backed securities	—		30,399		30,399
Agency securities			8,485		8,485
Commercial paper	—		5,785		5,785
Money market funds	3,825		—		3,825
Total	$	3,825	$	206,760	$	210,585
Included in cash and cash equivalents					$	3,825
Included in marketable securities					$	206,760



	Fair Value Measurement at December 31, 2016
	Level 1		Level 2		Total
Description
Corporate bonds	$	—	$	124,930	$	124,930
Asset-backed securities			32,567		32,567
U.S. treasury securities			30,585		30,585
Commercial paper			9,787		9,787
Agency securities			8,489		8,489
Money market funds	3,545		$	—	$	3,545
Total	$	3,545	$	206,358	$	209,903
Included in cash and cash equivalents					$	3,545
Included in marketable securities					$	206,358

As of March 31, 2017 and December 31, 2016, there were no securities within Level 3 of the fair value hierarchy. There were no transfers between fair value measurement levels during the three months ended March 31, 2017. Gross unrealized gains and losses for cash equivalents and marketable securities as of March 31, 2017 and December 31, 2016 were not material. As of March 31, 2017 and December 31, 2016, there were no securities that were in an unrealized loss position for more than 12 months.

The following table classifies our marketable securities by contractual maturity as of March 31, 2017 and December 31, 2016 (in thousands):



	March 31, 2017		December 31, 2016
Due in one year or less	$	138,440	$	131,190
Due after one year	68,320		75,168
Total	$	206,760	$	206,358

For certain other financial instruments, including accounts receivable, accounts payable and other current liabilities, the carrying amounts approximate their fair value due to the relatively short maturity of these balances.

Derivative Instruments and Hedging

Our foreign currency exposures typically arise from expenditures associated with foreign operations and sales in foreign currencies for subscriptions to our products. In September 2015, we implemented a hedging program to mitigate the effect of foreign currency fluctuations on our future cash flows and earnings. We enter into foreign currency forward contracts with certain financial institutions and designate those contracts as cash flow hedges. Our foreign currency forward contracts generally have maturities of 15 months or less. As of March 31, 2017, the balance of accumulated other comprehensive loss included an unrealized loss of $1.5 million related to the effective portion of changes in the fair value of foreign currency forward contracts designated as cash flow hedges. We expect to reclassify $1.5 million from accumulated other comprehensive loss into earnings over the next 12 months associated with our cash flow hedges.

The following tables present information about our derivative instruments on our consolidated balance sheets as of March 31, 2017 and December 31, 2016 (in thousands):



	March 31, 2017
	Asset Derivatives			Liability Derivatives
Derivative Instrument	Balance Sheet Location	Fair Value (Level 2)		Balance Sheet Location	Fair Value (Level 2)
Foreign currency forward contracts	Other current assets	$	729	Accrued liabilities	$	2,740
Total		$	729		$	2,740



	December 31, 2016
	Asset Derivatives			Liability Derivatives
Derivative Instrument	Balance Sheet Location	Fair Value (Level 2)		Balance Sheet Location	Fair Value (Level 2)
Foreign currency forward contracts	Other current assets	$	868	Accrued liabilities	$	4,280
Total		$	868		$	4,280

Our foreign currency forward contracts had a total notional value of $81.3 million and $79.6 million as of March 31, 2017 and December 31, 2016, respectively. We have a master netting arrangement with each of our counterparties, which permits net settlement of multiple, separate derivative contracts with a single payment. We may also be required to exchange cash collateral with certain of our counterparties on a regular basis. ASC 815 permits companies to present the fair value of derivative instruments on a net basis according to master netting arrangements. We have elected to present our derivative instruments on a gross basis in our consolidated financial statements. As of March 31, 2017 and December 31, 2016, our balances of cash collateral posted with counterparties were none and $1.1 million, respectively.

The following table presents information about our derivative instruments on the statement of operations for the three months ended March 31, 2017 and 2016 (in thousands):



		Three Months Ended March 31, 2017					Three Months Ended March 31, 2016
Hedging Instrument	Location of Loss Reclassified into Earnings	Gain Recognized in AOCI		Loss Reclassified from AOCI into Earnings			Gain Recognized in AOCI		Loss Reclassified from AOCI into Earnings
Foreign currency forward contracts	Revenue, cost of revenue, operating expenses	$	993	$	(533	)	$	2,348	$	(262	)
Total		$	993	$	(533	)	$	2,348	$	(262	)

All derivatives have been designated as hedging instruments. Amounts recognized in earnings related to excluded time value and hedge ineffectiveness for the three months ended March 31, 2017 and 2016 were not material.