Fair Value Measurements

The following is a summary of available-for-sale marketable securities held as of March 31, 2015 and December 31, 2014 (in thousands):



			Gross Unrealized							Classification on Balance Sheet
	Amortized Cost		Gains		Losses			Aggregate Fair Value		Short-Term Marketable Securities		Long-Term Marketable Securities
As of March 31, 2015
Commercial paper	$	10,492	$	1	$	—		$	10,493	$	10,493	$	—
Corporate bonds	931,055		1,383		(263		)	932,175		314,352		617,823
U.S. government agency obligations	239,408		146		(27		)	239,527		55,883		183,644
	$	1,180,955	$	1,530	$	(290	)	$	1,182,195	$	380,728	$	801,467

As of December 31, 2014
Certificates of deposit	$	39	$	—	$	—		$	39	$	—	$	39
Commercial paper	10,487		—		(2		)	10,485		10,485		—
Corporate bonds	1,077,387		454		(2,132		)	1,075,709		424,777		650,932
U.S. government agency obligations	303,808		20		(427		)	303,401		84,380		219,021
	$	1,391,721	$	474	$	(2,561	)	$	1,389,634	$	519,642	$	869,992

During the first quarter of 2015, the Company began offering certain qualified individuals the ability to participate in a non-qualified deferred compensation plan. The investments held by the Company that are associated with this plan are classified as restricted trading securities. These securities are not included in the available-for-sale securities table above, but are included in marketable securities in the consolidated balance sheets.

Unrealized gains and unrealized temporary losses on investments classified as available-for-sale are included within accumulated other comprehensive loss in the consolidated balance sheets. Upon realization, those amounts are reclassified from accumulated other comprehensive loss to interest income in the statements of income. As of March 31, 2015, the Company holds for investment corporate bonds with a fair value of $44.3 million, which are classified as available-for-sale marketable securities and have been in a continuous unrealized loss position for more than 12 months. The unrealized losses are insignificant and are attributable to changes in interest rates. The Company does not believe any unrealized losses represent other than temporary impairments based on the evaluation of available evidence. As of December 31, 2014, there were no securities in a continuous unrealized loss position for more than 12 months.

The following table details the fair value measurements within the fair value hierarchy of the Company’s financial assets and liabilities at March 31, 2015 and December 31, 2014 (in thousands):



	Total Fair Value			Fair Value Measurements at Reporting Date Using
	Total Fair Value			Level 1		Level 2		Level 3
As of March 31, 2015
Cash Equivalents and Marketable Securities:
Money market funds	$	872		$	872	$	—	$	—
Commercial paper	12,493			—		12,493		—
Corporate bonds	932,175			—		932,175		—
U.S. government agency obligations	239,527			—		239,527		—
Mutual funds	387			387		—		—
	$	1,185,454		$	1,259	$	1,184,195	$	—
Other Liabilities:
Contingent consideration obligation related to Velocius acquisition	$	(900	)	$	—	$	—	$	(900	)

As of December 31, 2014
Cash Equivalents and Marketable Securities:
Money market funds	$	501		$	501	$	—	$	—
Certificates of deposit	39			39		—		—
Commercial paper	10,485			—		10,485		—
Corporate bonds	1,075,709			—		1,075,709		—
U.S. government agency obligations	303,401			—		303,401		—
	$	1,390,135		$	540	$	1,389,595	$	—

Other Liabilities:
Contingent consideration obligation related to Velocius acquisition	$	(900	)	$	—	$	—	$	(900	)

As of March 31, 2015 and December 31, 2014, the Company grouped money market funds, certificates of deposit and mutual funds using a Level 1 valuation because market prices for such investments are readily available in active markets. As of March 31, 2015 and December 31, 2014, the Company grouped commercial paper, U.S. government agency obligations and corporate bonds using a Level 2 valuation because quoted prices for identical or similar assets are available in markets that are inactive.

When developing fair value estimates, the Company maximizes the use of observable inputs and minimizes the use of unobservable inputs. When available, the Company uses quoted market prices to measure fair value. The valuation technique used to measure fair value for the Company's Level 1 and Level 2 assets is a market approach, using prices and other relevant information generated by market transactions involving identical or comparable assets. If market prices are not available, the fair value measurement is based on models that use primarily market-based parameters including yield curves, volatilities, credit ratings and currency rates. In certain cases where market rate assumptions are not available, the Company is required to make judgments about assumptions market participants would use to estimate the fair value of a financial instrument.

The valuation technique used to measure fair value of the Company's Level 3 liability, which consists of a contingent consideration related to the acquisition of Velocius Networks, Inc. ("Velocius") in 2013, is primarily an income approach. The significant unobservable input used in the fair value measurement of the Velocius contingent consideration is the likelihood of achieving development milestones to integrate the acquired technology into the Company's technology. The remaining milestone, with a maximum value of $1.0 million, is payable in the third quarter of 2015, if achieved.

Changes in the underlying assumptions used to value the Company's Level 3 liability held at March 31, 2015 and December 31, 2014, could increase or decrease the fair value estimates recorded in the consolidated balance sheets. There was no change in the fair value or other activity of the Level 3 Velocius contingent consideration during the three months ended March 31, 2015.

Contractual maturities of the Company’s available-for-sale marketable securities held at March 31, 2015 and December 31, 2014 were as follows (in thousands):



	March 31, 2015		December 31, 2014
Due in 1 year or less	$	380,728	$	519,642
Due after 1 year through 5 years	801,467		869,992
	$	1,182,195	$	1,389,634