Fair Value Measurements

The following is a summary of available-for-sale marketable securities held as of September 30, 2017 and December 31, 2016 (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 September 30, 2017
Commercial paper	$	5,955	$	—	$	(2	)	$	5,953	$	5,953	$	—
Corporate bonds	815,357		337		(1,797		)	813,897		319,136		494,761
U.S. government agency obligations	220,013		—		(1,180		)	218,833		58,706		160,127
	$	1,041,325	$	337	$	(2,979	)	$	1,038,683	$	383,795	$	654,888

As of December 31, 2016
Commercial paper	$	40,965	$	—	$	(45	)	$	40,920	$	40,920	$	—
Corporate bonds	984,650		123		(3,697		)	981,076		418,495		562,581
U.S. government agency obligations	267,473		35		(1,366		)	266,142		53,157		212,985
	$	1,293,088	$	158	$	(5,108	)	$	1,288,138	$	512,572	$	775,566

The Company offers certain eligible employees the ability to participate in a non-qualified deferred compensation plan. The mutual funds 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 consolidated statements of income. As of September 30, 2017, the Company held for investment corporate bonds with a fair value of $363.4 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 related to these corporate bonds included in accumulated other comprehensive loss as of September 30, 2017 were $1.8 million. The losses are attributable to changes in interest rates. Based on the evaluation of available evidence, the Company does not believe any unrealized losses represent other than temporary impairments.

The following table details the fair value measurements within the fair value hierarchy of the Company’s financial assets and liabilities as of September 30, 2017 and December 31, 2016 (in thousands):



	Total Fair Value			Fair Value Measurements at Reporting Date Using
	Total Fair Value			Level 1		Level 2		Level 3
As of September 30, 2017
Cash Equivalents and Marketable Securities:
Money market funds	$	26,201		$	26,201	$	—	$	—
Commercial paper	5,953			—		5,953		—
Corporate bonds	813,897			—		813,897		—
U.S. government agency obligations	218,833			—		218,833		—
Mutual funds	7,097			7,097		—		—
	$	1,071,981		$	33,298	$	1,038,683	$	—

Liabilities:
Contingent consideration obligations related to completed acquisitions	$	(5,300	)	$	—	$	—	$	(5,300	)

As of December 31, 2016
Cash Equivalents and Marketable Securities:
Money market funds	$	8,726		$	8,726	$	—	$	—
Commercial paper	40,920			—		40,920		—
Corporate bonds	981,076			—		981,076		—
U.S. government agency obligations	266,142			—		266,142		—
Mutual funds	4,022			4,022		—		—
	$	1,300,886		$	12,748	$	1,288,138	$	—

Liabilities:
Contingent consideration obligations related to completed acquisitions	$	(7,100	)	$	—	$	—	$	(7,100	)

As of September 30, 2017 and December 31, 2016, the Company grouped money market funds and mutual funds using a Level 1 valuation because market prices for such investments are readily available in active markets. As of September 30, 2017 and December 31, 2016, the Company grouped commercial paper, corporate bonds and U.S. government agency obligations using a Level 2 valuation because quoted prices for identical or similar assets are available in markets that are inactive. The Company did not have any transfers of assets between Level 1, Level 2 or Level 3 of the fair value measurement hierarchy during the three months ended September 30, 2017.

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 liabilities, which consist of contingent consideration related to the acquisitions of Soha Systems, Inc. and Cyberfend, Inc. in 2016, was primarily an income-based approach. The significant unobservable input used in the fair value measurement of the contingent consideration was the likelihood of achieving development milestones to integrate the acquired technology into the Company's technology as well as achieving certain post-closing financial results.

Contractual maturities of the Company’s available-for-sale marketable securities held as of September 30, 2017 and December 31, 2016 were as follows (in thousands):



	September 30, 2017		December 31, 2016
Due in 1 year or less	$	383,795	$	512,572
Due after 1 year through 5 years	654,888		775,566
	$	1,038,683	$	1,288,138

The following table reflects the activity for the Company’s major classes of liabilities measured at fair value using Level 3 inputs during the nine months ended September 30, 2017 (in thousands):



	Other Liabilities: Contingent Consideration Obligation
Balance as of January 1, 2017	$	(7,100	)
Fair value adjustment to contingent consideration included in general and administrative expense	550
Cash paid upon achievement of milestone	1,250
Balance as of September 30, 2017	$	(5,300	)