In accordance with the provisions of fair value accounting, a fair value measurement assumes that the transaction to sell an asset or transfer a liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability and defines fair value based upon an exit price model.

The fair value measurement guidance establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The guidance describes three levels of inputs that may be used to measure fair value:


Level 1		Quoted prices in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 2		Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 2 assets and liabilities include debt securities with quoted prices that are traded less frequently than exchange-traded instruments or securities or derivative contracts that are valued using a pricing model with inputs that are observable in the market or can be derived principally from or corroborated by observable market data.

Level 3		Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the Company categorizes such assets and liabilities based on the lowest level input that

is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset.

Assets and liabilities of the Company measured at fair value on a recurring basis as of December 31, 2019, are summarized as follows:


			Fair Value Measurements at Reporting Date Using
Description	December 31, 2019		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Cash equivalents:
Money market funds	$	288	$	288	$	—	$	—
Time deposits and certificates of deposit		2,190		—		2,190		—
Commercial paper		42,559		—		42,559		—
U.S. treasury obligations		2,700		—		2,700
U.S. agency obligations		17,071		—		17,071		—
Restricted cash – money market funds		333		333		—		—
Available-for-sale securities:
Time deposits and certificates of deposit		13,045		—		13,045		—
Bankers’ acceptance drafts		4,043		—		4,043		—
Commercial paper		61,205		—		61,205		—
U.S. treasury obligations		5,000		—		5,000		—
U.S. agency obligations		26,124		—		26,124		—
Group insurance contracts		5,854		—		5,854		—
Derivatives – currency forward contracts		1,074		—		1,074		—
Derivatives – interest rate hedge - current		843		—		843		—
Funds in investments and other assets:
Israeli pension assets		16,713		—		16,713		—
Deferred compensation plan assets:
Mutual funds and exchange traded funds		2,002		—		2,002		—
Money market securities		485		—		485		—

Total assets	$	201,529	$	621	$	200,908	$	—

Liabilities:
Derivatives – currency forward contracts	$	259	$	—	$	259	$	—
Derivatives – interest rate hedge – non-current		6,510		—		6,510		—

Total liabilities	$	6,769	$	—	$	6,769	$	—

Reported as follows:
Assets:
Cash and cash equivalents, including restricted cash(1)	$	65,141	$	621	$	64,520	$	—
Short-term investments		109,417		—		109,417		—
Other current assets		1,917		—		1,917		—

Total current assets	$	176,475	$	621	$	175,854	$	—

Long-term investments	$	5,854	$	—	$	5,854	$	—
Other assets		19,200		—		19,200		—

Total long-term assets	$	25,054	$	—	$	25,054	$	—

Liabilities:
Other current liabilities	$	259	$	—	$	259	$	—

Other liabilities	$	6,510	$	—	$	6,510	$	—

(1)	The cash and cash equivalent amounts presented in the table above does not include cash of $349,431 as of December 31, 2019.

Assets and liabilities of the Company measured at fair value on a recurring basis as of December 31, 2018, are summarized as follows:


			Fair Value Measurements at Reporting Date Using
Description	December 31, 2018		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Cash equivalents:
Money market funds	$	180,340	$	180,340	$	—	$	—
Time deposits and certificates of deposit		850		—		850		—
Commercial paper		2,687		—		2,687		—
U.S. agency obligations		3,418		—		3,418		—
Restricted cash – money market funds		110		110		—		—
Available-for-sale securities:
Time deposits and certificates of deposit		102		—		102		—
Bankers’ acceptance drafts		989		—		989		—
Asset-backed securities		9,113		—		9,113		—
Commercial paper		19,359		—		19,359		—
Corporate obligations		9,352		—		9,352		—
U.S. treasury obligations		13,298		—		13,298		—
U.S. agency obligations		21,613		—		21,613		—
Group insurance contracts		5,890		—		5,890		—
Derivatives – currency forward contracts		2,485		—		2,485		—
Funds in investments and other assets:
Israeli pension assets		14,408		—		14,408		—
Derivatives – interest rate hedge – non-current		6,083		—		6,083		—

Total assets	$	290,097	$	180,450	$	109,647	$	—

Liabilities:

Derivatives – currency forward contracts	$	1,168	$	—	$	1,168	$	—

Reported as follows:
Assets:
Cash and cash equivalents, including restricted cash(1)	$	187,405	$	180,450	$	6,955	$	—
Short-term investments		73,826		—		73,826		—
Other current assets		2,485		—		2,485		—

Total current assets	$	263,716	$	180,450	$	83,266	$	—

Long-term investments(2)	$	5,890	$	—	$	5,890	$	—
Other assets		20,491		—		20,491		—

Total long-term assets	$	26,381	$	—	$	26,381	$	—

Liabilities:
Other current liabilities	$	1,168	$	—	$	1,168	$	—

(1)	The cash and cash equivalent amounts presented in the table above do not include cash of $456,940 as of December 31, 2018.

(2)	The long-term investments presented in the table above do not include our minority interest investment in a private company, which is accounted for under the cost method.

Money Market Funds

Money market funds are cash and cash equivalents and are classified within Level 1 of the fair value hierarchy.

Available-For-Sale

Investments

As of December 31, 2019,

available-for-sale

investments consisted of time deposits and drafts denominated in the Euro currency, certificates of deposit, bankers’ acceptance drafts, commercial paper, U.S. treasury obligations, U.S. agency obligations and group insurance contracts.

The Company measures its debt and equity investments at fair value. The Company’s

available-for-sale

investments are classified within Level 2 of the fair value hierarchy.

Israeli Pension Assets

Israeli pension assets represent investments in mutual funds, government securities and other time deposits. These investments are set aside for the retirement benefit of the employees at the Company’s Israeli subsidiaries. These funds are classified within Level 2 of the fair value hierarchy.

Derivatives

As a result of the Company’s global operating activities, the Company is exposed to market risks from changes in foreign currency exchange rates and variable interest rates, which may adversely affect its operating results and financial position. When deemed appropriate, the Company minimizes its risks from foreign currency exchange rate and interest rate fluctuations through the use of derivative financial instruments. The principal market in which the Company executes its foreign currency contracts and interest rate swaps is the institutional market in an

over-the-counter

environment with a relatively high level of price transparency. The market participants usually are large commercial banks. The forward foreign currency exchange contracts and interest rate hedge are valued using broker quotations, or market transactions and are classified within Level 2 of the fair value hierarchy.