Fair Value Measurements

We measure our financial assets and liabilities at fair value at each reporting period using a fair value hierarchy that requires that we maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s classification within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Three levels of inputs may be used to measure fair value:

Level 1 — Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2 — Other inputs that are directly or indirectly observable in the marketplace.

Level 3 — Unobservable inputs that are supported by little or no market activity.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table presents information about our assets and liabilities that are measured at fair value on a recurring basis and their assigned levels within the valuation hierarchy as of April 30, 2017 (in thousands):



Description	Level 1		Level 2		Level 3		Total
U.S. agency obligations	$	—	$	1,021,163	$	—	$	1,021,163
U.S. treasury securities	254,422		—		—		254,422
Corporate bonds	—		320,449		—		320,449
Commercial paper	—		362,364		—		362,364
Money market funds	57,308		—		—		57,308
Foreign currency derivative assets	—		6,934		—		6,934
Total assets	$	311,730	$	1,710,910	$	—	$	2,022,640
Foreign currency derivative liabilities	$	—	$	4,229	$	—	$	4,229
Total liabilities	$	—	$	4,229	$	—	$	4,229



Description	Level 1		Level 2		Level 3		Total
U.S. agency obligations	$	—	$	908,518	$	—	$	908,518
U.S. treasury securities	192,051		—		—		192,051
Corporate bonds	—		289,885		—		289,885
Commercial paper	—		323,106		—		323,106
Money market funds	24,425		—		—		24,425
Foreign currency derivative assets	—		7,909		—		7,909
Total assets	$	216,476	$	1,529,418	$	—	$	1,745,894
Foreign currency derivative liabilities	$	—	$	2,127	$	—	$	2,127
Total liabilities	$	—	$	2,127	$	—	$	2,127

Fair Value Measurements of Other Financial Instruments

The following table presents the carrying amounts and estimated fair values of our financial instruments that are not recorded at fair value in the condensed consolidated balance sheets (in thousands):



	April 30, 2017				January 31, 2017
	Net Carrying Amount Before Unamortized Debt Issuance Costs		Estimated Fair Value		Net Carrying Amount Before Unamortized Debt Issuance Costs		Estimated Fair Value
0.75% Convertible senior notes	$	329,664	$	407,313	$	325,620	$	402,259
1.50% Convertible senior notes	215,586		311,480		213,180		310,470

The difference between the principal amount of the notes, $350 million for the 0.75% convertible senior notes and $250 million for the 1.50% convertible senior notes, and the net carrying amount before unamortized debt issuance costs represents the unamortized debt discount (see Note 10). The estimated fair value of the convertible senior notes, which we have classified as Level 2 financial instruments, was determined based on the quoted bid price of the convertible senior notes in an over-the-counter market on the last trading day of each reporting period.

Based on the closing price of our common stock of $87.40 on April 30, 2017, the if-converted value of the 0.75% convertible senior notes and the if-converted value of the 1.50% convertible senior notes were greater than their respective principal amounts.