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 or short-term or long-term investments as of December 31, 2018, and 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
December 31, 2018
Cash	$	269.4	$	—	$	—		$	269.4	$	269.4	$	—	$	—
Level 1:
Money market funds	569.1		—		—			569.1		569.1		—		—
U.S. treasuries	1,477.8		1.7		(5.3		)	1,474.2		10.0		897.8		566.4
Subtotal	2,046.9		1.7		(5.3		)	2,043.3		579.1		897.8		566.4
Level 2:
Commercial paper	110.7		—		—			110.7		1.4		109.3		—
Corporate securities	1,607.8		1.3		(4.8		)	1,604.3		8.0		724.5		871.8
U.S. government agencies	791.8		0.3		(3.8		)	788.3		—		468.9		319.4
Municipal securities	18.4		—		—			18.4		—		4.7		13.7
Subtotal	2,528.7		1.6		(8.6		)	2,521.7		9.4		1,307.4		1,204.9
Total assets measured at fair value	$	4,845.0	$	3.3	$	(13.9	)	$	4,834.4	$	857.9	$	2,205.2	$	1,771.3

As of December 31, 2018, the Company also recorded $36.5 million of restricted cash equivalents (comprised of money market funds and U.S. treasuries which would be considered highly liquid investments with original maturity dates that are 90 days or less) in prepaids and other current assets in the accompanying Consolidated Balance Sheets.



										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 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

During the year ended December 31, 2018, there were no changes in the valuation techniques used.

The following table summarizes the contractual maturities of the Company’s cash equivalents and available-for-sale investments (excluding cash and money market funds), at December 31, 2018 (in millions):



	Amortized Cost		Fair Value
Mature in less than one year	$	2,230.2	$	2,224.6
Mature in one to five years	1,776.3		1,771.3
Total	$	4,006.5	$	3,995.9

Realized gains and losses, net of tax, were not material for any of the periods presented.

As of December 31, 2018, and 2017, net unrealized losses on investments of $9.8 million and $11.3 million, net of tax, respectively, were included in accumulated other comprehensive loss in the accompanying Consolidated Balance Sheets.

The following tables present the breakdown of the available-for-sale investments with unrealized losses at December 31, 2018, and 2017 (in millions):



	Unrealized losses less than 12 months					Unrealized losses 12 months or greater					Total
December 31, 2018	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
Corporate securities	$	727.4	$	(1.7	)	$	409.6	$	(3.1	)	$	1,137.0	$	(4.8	)
U.S. treasuries	478.7		(0.9		)	592.8		(4.4		)	1,071.5		(5.3		)
U.S. government agencies	228.0		(0.2		)	425.2		(3.6		)	653.2		(3.8		)
	$	1,434.1	$	(2.8	)	$	1,427.6	$	(11.1	)	$	2,861.7	$	(13.9	)
December 31, 2017
Corporate securities	$	567.6	$	(2.1	)	$	277.0	$	(2.3	)	$	844.6	$	(4.4	)
U.S. treasuries	763.5		(2.5		)	206.2		(2.2		)	969.7		(4.7		)
U.S. government agencies	428.9		(1.3		)	345.5		(3.1		)	774.4		(4.4		)
Municipal securities	236.3		(1.3		)	51.7		(0.6		)	288.0		(1.9		)
	$	1,996.3	$	(7.2	)	$	880.4	$	(8.2	)	$	2,876.7	$	(15.4	)

The unrealized losses on the available-for-sale investments are related to corporate securities and government securities. The Company determined these unrealized losses to be temporary. Factors considered in determining whether a loss is temporary included the length of time and extent to which the investment’s fair value has been less than the cost basis; the financial condition and near-term prospects of the investee; extent of the loss related to credit of the issuer; the expected cash flows from the security; the Company’s intent to sell the security; and whether or not the Company will be required to sell the security before the recovery of its amortized cost.

Foreign currency derivatives

The objective of the Company’s hedging program is to mitigate the impact of changes in currency exchange rates on net cash flow from foreign currency denominated sales, expenses, and intercompany balances and other monetary assets or liabilities denominated in currencies other than the U.S. dollar (“USD”). 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 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 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 loss in stockholders’ equity and reclassifies into earnings in the same period in which the hedge 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, CHF, and Indian Rupee (“INR”).

These derivative instruments are used to hedge against balance sheet foreign currency exposures. The related gains and losses were as follows (in millions):



	Years Ended December 31,
	2018			2017			2016
Recognized gains (losses) in interest and other income, net	$	8.7		$	(9.2	)	$	6.4
Foreign exchange gains (losses) related to balance sheet re-measurement	$	(2.6	)	$	9.7		$	(5.6	)

The notional amounts for derivative instruments provide one measure of the transaction volume. Total gross notional amounts (in USD) for derivatives and aggregate gross fair value outstanding at the end of each period were as follows (in millions):



	Derivatives Designated as Hedging Instruments				Derivatives Not Designated as Hedging Instruments
	December 31, 2018		December 31, 2017		December 31, 2018		December 31, 2017
Notional amounts:
Forward contracts	$	183.0	$	128.5	$	182.7	$	168.4
Gross fair value recorded in:
Prepaid and other current assets	$	3.1	$	0.9	$	4.1	$	1.2
Other accrued liabilities	$	0.9	$	2.9	$	1.1	$	4.6