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FINANCIAL INSTRUMENTS
3 Months Ended
Mar. 31, 2018
Investments, All Other Investments [Abstract]  
FINANCIAL INSTRUMENTS
FINANCIAL INSTRUMENTS
Cash, Cash Equivalents, and Investments
The following tables summarize the Company’s cash and available-for-sale marketable securities’ amortized cost, gross unrealized gains, gross unrealized losses, and fair value by significant investment category reported as cash and cash equivalents, short-term, or long-term investments as of March 31, 2018, and December 31, 2017 (in millions):
 
 
 
 
 
 
 
 
 
Reported as:
 
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Fair
Value
 
Cash and
Cash
Equivalents
 
Short-
term
Investments
 
Long-
term
Investments
March 31, 2018
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash
$
257.9

 
$

 
$

 
$
257.9

 
$
257.9

 
$

 
$

Level 1:
 
 
 
 
 
 
 
 
 
 
 
 
 
Money market funds
593.0

 

 

 
593.0

 
593.0

 

 

U.S. treasuries
1,160.3

 

 
(7.8
)
 
1,152.5

 
26.6

 
560.2

 
565.7

Subtotal
1,753.3

 

 
(7.8
)
 
1,745.5

 
619.6

 
560.2

 
565.7

Level 2:
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial paper
96.2

 

 

 
96.2

 
62.7

 
33.5

 

Corporate debt securities
988.4

 
0.1

 
(7.0
)
 
981.5

 

 
499.5

 
482.0

U.S. government agencies
939.1

 
0.1

 
(6.2
)
 
933.0

 
34.5

 
395.3

 
503.2

Non-U.S. government securities
2.5

 

 

 
2.5

 

 
2.5

 

Municipal securities
51.6

 

 

 
51.6

 

 
51.6

 

Subtotal
2,077.8

 
0.2

 
(13.2
)
 
2,064.8

 
97.2

 
982.4

 
985.2

Total assets measured at fair value
$
4,089.0

 
$
0.2

 
$
(21.0
)
 
$
4,068.2

 
$
974.7

 
$
1,542.6

 
$
1,550.9

 
 
 
 
 
 
 
 
 
 
Reported as:
 
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Fair
Value
 
Cash and
Cash
Equivalents
 
Short-
term
Investments
 
Long-
term
Investments
December 31, 2017
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash
$
197.7

 
$

 
$

 
$
197.7

 
$
197.7

 
$

 
$

Level 1:
 
 
 
 
 
 
 
 
 
 
 
 
 
Money market funds
445.0

 

 

 
445.0

 
445.0

 

 

U.S. treasuries
1,029.1

 

 
(4.7
)
 
1,024.4

 
5.5

 
396.2

 
622.7

Subtotal
1,474.1

 

 
(4.7
)
 
1,469.4

 
450.5

 
396.2

 
622.7

Level 2:
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial paper
38.4

 

 

 
38.4

 

 
38.4

 

Corporate debt securities
946.6

 
0.2

 
(4.4
)
 
942.4

 

 
403.9

 
538.5

U.S. government agencies
901.3

 

 
(4.4
)
 
896.9

 

 
311.7

 
585.2

Non-U.S. government securities
2.5

 

 

 
2.5

 

 
2.5

 

Municipal securities
301.1

 

 
(1.9
)
 
299.2

 

 
159.7

 
139.5

Subtotal
2,189.9

 
0.2

 
(10.7
)
 
2,179.4

 

 
916.2

 
1,263.2

Total assets measured at fair value
$
3,861.7

 
$
0.2

 
$
(15.4
)
 
$
3,846.5

 
$
648.2

 
$
1,312.4

 
$
1,885.9


The following table summarizes the contractual maturities of the Company’s cash equivalents and available-for-sale investments (excluding cash and money market funds), as of March 31, 2018 (in millions):
 
Amortized
Cost
 
Fair
Value
Mature in less than one year
$
1,671.7

 
$
1,666.4

Mature in one to five years
1,566.4

 
1,550.9

Total
$
3,238.1

 
$
3,217.3


Actual maturities may differ from contractual maturities because certain borrowers have the right to call or prepay certain obligations. Realized gains and losses, recognized on the sale of investments, were not material for any of the periods presented. There were no transfers between Level 1 and Level 2 measurements during the three months ended March 31, 2018, and there were no changes in the valuation techniques used by the Company.
Foreign Currency Derivatives
The objective of the Company’s hedging program is to mitigate the impact of changes in currency exchange rates on cash flow from foreign currency denominated sales, expenses, intercompany balances, and other monetary assets or liabilities denominated in currencies other than the U.S. dollar (“USD”). The terms of the Company’s derivative contracts are generally twelve months or shorter. The derivative assets and liabilities are measured using Level 2 fair value inputs.
Cash Flow Hedges
The Company enters into currency forward contracts as cash flow hedges to hedge certain forecasted revenue transactions denominated in currencies other than the USD, primarily the European Euro (“EUR”), the British Pound (“GBP”), the Japanese Yen (“JPY”), and the Korean Won (“KRW”). The Company also enters into currency forward contracts as cash flow hedges to hedge certain forecasted expense transactions denominated in EUR and the Swiss Franc (“CHF”).
For these derivatives, the Company reports the after-tax gain or loss from the hedge as a component of accumulated other comprehensive gain (loss) in stockholders’ equity and reclassifies it into earnings in the same period in which the hedged transaction affects earnings. The amounts reclassified to revenue and expenses related to the hedged transactions and the ineffective portions of cash flow hedges were not material for the periods presented.
Other Derivatives Not Designated as Hedging Instruments
Other derivatives not designated as hedging instruments consist primarily of forward contracts that the Company uses to hedge intercompany balances and other monetary assets or liabilities denominated in currencies other than the USD, primarily the EUR, GBP, JPY, KRW, and CHF. The net gains (losses) recognized in interest and other income, net in the condensed consolidated statements of comprehensive income for the three months ended March 31, 2018, and 2017, were not material.
The notional amounts for derivative instruments provide one measure of the transaction volume. Total gross notional amounts (in USD) for outstanding derivatives and aggregate gross fair value at the end of each period were as follows (in millions):
 
Derivatives Designated as Hedging Instruments
 
Derivatives Not Designated as Hedging Instruments
 
March 31,
2018
 
December 31,
2017
 
March 31,
2018
 
December 31,
2017
Notional amounts:
 
 
 
 
 
 
 
     Forward contracts
$
142.7

 
$
128.5

 
$
141.6

 
$
168.4

Gross fair value recorded in:
 
 
 
 
 
 
 
     Prepaids and other current assets
$
0.4

 
$
0.9

 
$
0.6

 
$
1.2

     Other accrued liabilities
$
3.7

 
$
2.9

 
$
3.8

 
$
4.6