Fair Value Measurements

3 Months Ended

Mar. 31, 2020

The following is a summary of available-for-sale marketable securities held as of March 31, 2020 and December 31, 2019 (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, 2020

Commercial paper	$	42,800	$	26	$	(7)	$	42,819	$	42,819	$	—
Corporate bonds	1,404,124		1,435		(10,550)		1,395,009		725,175		669,834
U.S. government agency obligations	372,266		1,545		(3)		373,808		97,117		276,691
	$	1,819,190	$	3,006	$	(10,560)	$	1,811,636	$	865,111	$	946,525

As of December 31, 2019
Certificates of deposit	$	150,000	$	—	$	—	$	150,000	$	150,000	$	—
Commercial paper	73,829		23		(7)		73,845		73,845		—
Corporate bonds	1,368,668		1,840		(378)		1,370,130		753,538		616,592
U.S. government agency obligations	369,475		80		(74)		369,481		165,623		203,858
	$	1,961,972	$	1,943	$	(459)	$	1,963,456	$	1,143,006	$	820,450

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 March 31, 2020, the Company did not hold any investments which were classified as available-for-sale marketable securities that had been 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 as of March 31, 2020 and December 31, 2019 (in thousands):


	Total Fair Value		Fair Value Measurements at Reporting Date Using
					Level 1			Level 2
As of March 31, 2020
Money market funds	$	1,348	$	1,348		$	—

Commercial paper	42,819		—			42,819
Corporate bonds	1,395,009		—			1,395,009
U.S. government agency obligations	373,808		—			373,808
Mutual funds	14,682		14,682			—
	$	1,827,666	$	16,030		$	1,811,636




As of December 31, 2019
Money market funds	$	50,779	$	50,779		$	—
Certificates of deposit	150,000		—			150,000
Commercial paper	73,845		—			73,845
Corporate bonds	1,370,130		—			1,370,130
U.S. government agency obligations	369,481		—			369,481
Mutual funds	15,177		15,177			—
	$	2,029,412	$	65,956		$	1,963,456

As of March 31, 2020 and December 31, 2019, 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 March 31, 2020 and December 31, 2019, the Company grouped commercial paper, corporate bonds and U.S. government agency obligations using a Level 2 valuation because quoted prices for similar assets in active markets (or identical assets in an inactive market) are available. As of December 31, 2019, the Company also included bank certificates of deposit using Level 2 valuation because quoted prices for similar assets in active markets (or identical assets in an inactive market) are available. 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 March 31, 2020.

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 primarily use 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.

Contractual maturities of the Company’s available-for-sale marketable securities held as of March 31, 2020 and December 31, 2019 were as follows (in thousands):


	March 31, 2020		December 31, 2019
Due in 1 year or less	$	865,111	$	1,143,006
Due after 1 year through 3 years	946,525		820,450
	$	1,811,636	$	1,963,456