3. Balance Sheet Components

Marketable Securities

The following table summarizes the unrealized gains and losses and fair value of our available-for-sale marketable securities (in thousands):



	December 31, 2017
	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
Commercial paper	$	11,924	$	—	$	—		$	11,924
U.S. government notes	137,025		—		(378		)	136,647
Corporate bonds	313,080		20		(616		)	312,484
Agency securities	215,923		2		(617		)	215,308
Total marketable securities	$	677,952	$	22	$	(1,611	)	$	676,363



	December 31, 2016
	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
Commercial paper	$	5,962	$	—	$	—		$	5,962
U.S. government notes	110,945		5		(194		)	110,756
Corporate bonds	183,455		109		(372		)	183,192
Total marketable securities	$	300,362	$	114	$	(566	)	$	299,910

We did not realize any other-than-temporary losses on our marketable securities for the year ended December 31, 2017 and 2016. We invest in marketable securities that have maximum maturities of up to two years and are generally deemed to be low risk based on their credit ratings from the major rating agencies. The longer the duration of these marketable securities, the more susceptible they are to changes in market interest rates and bond yields. As interest rates increase, those marketable 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 these investments upon maturity or sale and therefore, we do not consider any of our marketable securities to be other-than-temporarily impaired as of December 31, 2017.

As of December 31, 2017, the contractual maturities of our investments did not exceed 24 months. The fair values of available-for-sale investments, by remaining contractual maturity, are as follows (in thousands):



	December 31, 2017
Due in 1 year or less	$	386,506
Due in 1 year through 2 years	289,857
Total marketable securities	$	676,363

The weighted average remaining duration of our current marketable securities is approximately 0.9 years as of December 31, 2017. As we view these securities as available to support current operations, we classify securities with maturities beyond 12 months as current assets under the caption marketable securities in the consolidated balance sheets.

Accounts Receivable, net

Accounts receivable, net consists of the following (in thousands):



	December 31,
	2017			2016
Accounts receivable	$	254,881		$	254,640
Allowance for doubtful accounts	(112		)	(204		)
Product sales rebate and returns reserve	(7,423		)	(1,317		)
Accounts receivable, net	$	247,346		$	253,119

Allowance for Doubtful Accounts

Activity in the allowance for doubtful accounts consists of the following (in thousands):



	Year Ended December 31,
	2017			2016			2015
Balance at the beginning of year	$	204		$	963		$	1,063
Additions (deductions) charged (credited) to expense	17			(292		)	335
Deductions/write-offs	(109		)	(467		)	(435		)
Balance at the end of year	$	112		$	204		$	963

Product Sales Rebate and Returns Reserve

Activity in the product sales rebate and returns reserve consists of the following (in thousands):



	Year Ended December 31,
	2017			2016			2015
Balance at the beginning of year	$	1,317		$	566		$	2,031
Additions charged against revenue	17,371			5,122			818
Consumption	(11,265		)	(4,371		)	(2,283		)
Balance at the end of year	$	7,423		$	1,317		$	566

The increase in activity in 2017 primarily relates to channel rebates that we began to offer in the current year.

Inventories

Inventories consist of the following (in thousands):



	December 31,
	2017		2016
Raw materials	$	69,673	$	99,190
Finished goods	236,525		137,300
Total inventories	$	306,198	$	236,490

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consists of the following (in thousands):



	December 31,
	2017		2016
Inventory deposit	$	34,141	$	60,315
Prepaid income taxes	38,134		17,383
Other current assets	96,215		79,140
Other prepaid expenses and deposits	8,840		11,846
Total prepaid expenses and other current assets	$	177,330	$	168,684

Property and Equipment, net

Property and equipment, net consists of the following (in thousands):



	December 31,
	2017			2016
Equipment and machinery	$	47,711		$	40,721
Computer hardware and software	22,124			17,420
Furniture and fixtures	3,020			2,879
Leasehold improvements	30,548			29,498
Building	35,154			35,154
Construction-in-process	4,742			421
Property and equipment, gross	143,299			126,093
Less: accumulated depreciation	(69,020		)	(49,132		)
Property and equipment, net	$	74,279		$	76,961

Depreciation expense was $20.2 million, $19.4 million and $13.4 million for the years ended December 31, 2017, 2016 and 2015, respectively.

Accrued Liabilities

Accrued liabilities consist of the following (in thousands):



	December 31,
	2017		2016
Accrued payroll related costs	$	56,626	$	52,854
Accrued manufacturing costs	35,703		14,824
Accrued product development costs	21,201		7,103
Accrued warranty costs	7,415		6,744
Accrued professional fees	7,086		6,829
Accrued taxes	794		1,098
Other	5,002		1,499
Total accrued liabilities	$	133,827	$	90,951

Warranty Accrual

The following table summarizes the activity related to our accrued liability for estimated future warranty costs (in thousands):



	Year Ended December 31,
	2017			2016
Warranty accrual, beginning of year	$	6,744		$	4,718
Liabilities accrued for warranties issued during the year	5,542			5,421
Warranty costs incurred during the year	(4,871		)	(3,395		)
Warranty accrual, end of year	$	7,415		$	6,744

There were no significant specific product warranty reserves recorded for the years ended December 31, 2017 or 2016.