FINANCIAL INSTRUMENTS

9 Months Ended

Sep. 30, 2019

Investments, All Other Investments [Abstract]

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 September 30, 2019, and December 31, 2018 (in millions):


									Reported as:
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Cash and Cash Equivalents		Short- term Investments		Long- term Investments
September 30, 2019
Cash	$	325.2	$	—	$	—	$	325.2	$	325.2	$	—	$	—
Level 1:
Money market funds	641.4		—		—		641.4		641.4		—		—
U.S. treasuries	1,846.9		10.6		(0.7)		1,856.8		—		932.8		924.0
Subtotal	2,488.3		10.6		(0.7)		2,498.2		641.4		932.8		924.0
Level 2:
Commercial paper	117.5		—		—		117.5		3.0		114.5		—
Corporate debt securities	1,958.9		18.0		(0.4)		1,976.5		—		637.0		1,339.5
U.S. government agencies	481.1		1.0		(0.4)		481.7		—		227.9		253.8

Municipal securities	31.2		0.3		—		31.5		—		15.8		15.7
Subtotal	2,588.7		19.3		(0.8)		2,607.2		3.0		995.2		1,609.0



Total assets measured at fair value	$	5,402.2	$	29.9	$	(1.5)	$	5,430.6	$	969.6	$	1,928.0	$	2,533.0


									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 debt 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 that would be considered highly liquid investments with original maturity dates that are 90 days or less) in connection with a concluded legal matter in prepaids and other current assets in the accompanying Condensed Consolidated Balance Sheets.

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 September 30, 2019 (in millions):


	Amortized Cost		Fair Value
Mature in less than one year	$	1,976.2	$	1,980.0
Mature in one to five years	2,459.4		2,484.0

Total	$	4,435.6	$	4,464.0

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.

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 unrealized 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, CHF, Indian Rupee, and New Taiwan Dollar. The net gains (losses) recognized in interest and

other income, net in the Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2019, and 2018, 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
	September 30, 2019		December 31, 2018		September 30, 2019		December 31, 2018
Notional amounts:
Forward contracts	$	192.6	$	183.0	$	255.4	$	182.7
Gross fair value recorded in:
Prepaids and other current assets	$	4.5	$	3.1	$	3.3	$	4.1
Other accrued liabilities	$	0.6	$	0.9	$	0.6	$	1.1