Fair Value Measurement

3 Months Ended

Mar. 31, 2017

Fair Value Disclosures [Abstract]

Fair Value Measurement

Note 3— Fair Value Measurement

Based on the observability of the inputs used in the valuation techniques used to determine the fair value of certain financial assets and liabilities, the Company is required to provide the following information according to the fair value hierarchy. The fair value hierarchy ranks the quality and reliability of the information used to determine fair values.

In general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities. Fair values determined by Level 2 inputs utilize observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices 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 related assets or liabilities. Fair values determined by Level 3 inputs are unobservable data points for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability. The following table presents information about the Company’s financial assets and liabilities that have been measured at fair value as of March 31, 2017, and indicates the fair value hierarchy of the valuation inputs utilized to determine such fair value (in thousands):

Description	Fair Value as of March 31, 2017		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)
Assets:
Cash and cash equivalents and restricted cash	$	200,377	$	200,377	$	—
Available-for-sale investments (1)	84,813		84,813		—
Foreign currency exchange contracts (2)	6,723		—		6,723
Assets measured at fair value at March 31, 2017	$	291,913	$	285,190	$	6,723
Liabilities:
Foreign currency exchange contracts (3)	594		—		594
Liabilities measured at fair value at March 31, 2017	$	594	$	—	$	594

(1) Included in “Short-term investments” on the Company’s Condensed Consolidated Balance Sheets.

(2) Included in “Prepaid expenses and other current assets” and “Other non-current assets” on the Company’s Condensed Consolidated Balance Sheets.

(3) Included in “Other accrued liabilities” and “Other non-current liabilities” on the Company’s Condensed Consolidated Balance Sheets.

Foreign Currency Derivatives

The Company may enter into foreign currency derivatives to hedge future cash receipts on certain sales transactions that are payable in foreign currencies.

As of March 31, 2017 and December 31, 2016, the Company had outstanding foreign currency exchange contracts that were designated and accounted for as cash flow hedges of anticipated future cash receipts on sales contracts payable in foreign currencies. The outstanding notional amounts were approximately (in millions):

	March 31, 2017	December 31, 2016
Euros (EUR)	1.5	1.5
Swiss Francs (CHF)	3.6	3.6
Japanese Yen (JPY)	3,377.6	—
Canadian Dollars (CAD)	54.4	54.4

The Company had hedged foreign currency exposure related to these designated cash flow hedges of approximately $77.7 million and $46.9 million as of March 31, 2017 and December 31, 2016, respectively.

As of March 31, 2017 and December 31, 2016, the Company had outstanding foreign currency exchange contracts that had been dedesignated for the purposes of hedge accounting treatment. The outstanding notional amounts were approximately (in millions):

	March 31, 2017	December 31, 2016
British Pounds (GBP)	34.0	33.8
Euros (EUR)	3.6	8.0
Japanese Yen (JPY)	233.8	2,464.7
Canadian Dollars (CAD)	—	32.4

The foreign currency exposure related to these contracts was approximately $56.2 million as of March 31, 2017 and $107.5 million as of December 31, 2016. Unrealized gains or losses related to these dedesignated contracts are recorded in the Condensed Consolidated Statements of Operations and are generally offset by foreign currency adjustments on related receivables. These foreign currency exchange contracts are considered to be economic hedges.

Cash receipts associated with the foreign currency exchange contracts are expected to be received from 2017 through 2022, during which time the revenue on the associated sales contracts is expected to be recognized, or in the case of receivables denominated in a foreign currency, the receivables balances will be collected. Any gain or loss on hedged foreign currency will be recognized at the time of customer acceptance, or in the case of receivables denominated in a foreign currency, over the period during which hedged receivables denominated in a foreign currency are outstanding.

Fair values of derivative instruments designated as cash flow hedges (in thousands):

Hedge Classification	Balance Sheet Location	Fair Value as of March 31, 2017			Fair Value as of December 31, 2016
Foreign currency exchange contracts	Prepaid expenses and other current assets	$	57		$	71
Foreign currency exchange contracts	Other non-current assets	—			367
Foreign currency exchange contracts	Other accrued liabilities	(47		)	(9		)
Foreign currency exchange contracts	Other non-current liabilities	(419		)	(5		)
Total fair value of derivative instruments designated as cash flow hedges		$	(409	)	$	424

Fair values of derivative instruments not designated as cash flow hedges (in thousands):

Hedge Classification	Balance Sheet Location	Fair Value as of March 31, 2017			Fair Value as of December 31, 2016
Foreign currency exchange contracts	Prepaid expenses and other current assets	$	2,163		$	5,344
Foreign currency exchange contracts	Other non-current assets	4,503			5,468
Foreign currency exchange contracts	Other accrued liabilities	(128		)	(27		)
Total fair value of derivative instruments not designated as cash flow hedges		$	6,538		$	10,785