Fair Value Measurements

We measure our cash equivalents, marketable securities, and foreign currency derivative contracts 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 October 31, 2018 (in thousands):



Description	Level 1		Level 2		Level 3		Total
U.S. agency obligations	$	—	$	187,867	$	—	$	187,867
U.S. treasury securities	376,450		—		—		376,450
Corporate bonds	—		401,013		—		401,013
Commercial paper	—		283,260		—		283,260
Money market funds	194,272		—		—		194,272
Marketable equity investments	32,333		—		—		32,333
Foreign currency derivative assets	—		36,416		—		36,416
Total assets	$	603,055	$	908,556	$	—	$	1,511,611
Foreign currency derivative liabilities	$	—	$	540	$	—	$	540
Total liabilities	$	—	$	540	$	—	$	540



Description	Level 1		Level 2		Level 3		Total
U.S. agency obligations	$	—	$	682,424	$	—	$	682,424
U.S. treasury securities	796,835		—		—		796,835
Corporate bonds	—		469,121		—		469,121
Commercial paper	—		602,727		—		602,727
Money market funds	551,804		—		—		551,804
Foreign currency derivative assets	—		98		—		98
Total assets	$	1,348,639	$	1,754,370	$	—	$	3,103,009
Foreign currency derivative liabilities	$	—	$	32,912	$	—	$	32,912
Total liabilities	$	—	$	32,912	$	—	$	32,912

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 on the condensed consolidated balance sheets (in thousands):



	October 31, 2018				January 31, 2018
	Net Carrying Amount		Estimated Fair Value		Net Carrying Amount		Estimated Fair Value
0.75% Convertible senior notes	$	—	$	—	$	341,509	$	504,994
1.50% Convertible senior notes	229,684		418,310		221,378		385,550
0.25% Convertible senior notes	961,139		1,274,798		928,467		1,200,577

In June 2013, we completed an offering of $350 million of 0.75% convertible senior notes due July 15, 2018 (“2018 Notes”), which were subsequently converted by note holders during the second quarter of fiscal 2019. In June 2013, concurrent with the 2018 Notes offering, we issued $250 million of 1.50% convertible senior notes due July 15, 2020 (“2020 Notes”). In September 2017, we completed an offering of $1.15 billion of 0.25% convertible senior notes due October 1, 2022 (“2022 Notes” and together with the 2018 Notes and 2020 Notes, the “Notes”). The estimated fair values of the Notes, which we have classified as Level 2 financial instruments, were determined based on the quoted bid prices of the Notes in an over-the-counter market on the last trading day of each reporting period. The if-converted value of the 2020 Notes exceeded the principal amount by $157 million. The if-converted value of the 2022 Notes was less than the principal amount by $110 million. The if-converted values were determined based on the closing price of our common stock of $133.02 on October 31, 2018. For further information, see Note 11.