Fair Value Measurements

6 Months Ended

Jul. 31, 2019

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 July 31, 2019 (in thousands):



	Level 1		Level 2		Level 3		Total
U.S. treasury securities	$	524,985	$	—	$	—	$	524,985
U.S. agency obligations	—		240,218		—		240,218
Corporate bonds	—		439,923		—		439,923
Commercial paper	—		182,886		—		182,886
Money market funds	348,109		—		—		348,109
Foreign currency derivative assets	—		53,135		—		53,135
Total assets	$	873,094	$	916,162	$	—	$	1,789,256
Foreign currency derivative liabilities	$	—	$	518	$	—	$	518
Total liabilities	$	—	$	518	$	—	$	518



	Level 1		Level 2		Level 3		Total
U.S. treasury securities	$	396,230	$	—	$	—	$	396,230
U.S. agency obligations	—		241,836		—		241,836
Corporate bonds	—		419,768		—		419,768
Commercial paper	—		254,173		—		254,173
Money market funds	237,071		—		—		237,071
Marketable equity investments	44,127		—		—		44,127
Foreign currency derivative assets	—		22,570		—		22,570
Total assets	$	677,428	$	938,347	$	—	$	1,615,775
Foreign currency derivative liabilities	$	—	$	3,135	$	—	$	3,135
Total liabilities	$	—	$	3,135	$	—	$	3,135

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):



	July 31, 2019				January 31, 2019
	Net Carrying Amount		Estimated Fair Value		Net Carrying Amount		Estimated Fair Value
1.50% Convertible senior notes	$	238,317	$	662,362	$	232,514	$	557,074
0.25% Convertible senior notes	994,872		1,718,100		972,264		1,560,228

In June 2013, we completed an offering of $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 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 $362 million. The if-converted value of the 2022 Notes exceeded the principal amount by $413 million. The if-converted values were determined based on the closing price of our common stock of $199.98 on July 31, 2019. For further information, see Note 10, Convertible Senior Notes, Net.