v3.23.3
FINANCIAL INSTRUMENTS
 9 Months Ended
Sep. 30, 2023
Investments, All Other Investments [Abstract]  
FINANCIAL INSTRUMENTS FINANCIAL INSTRUMENTS
Cash, Cash Equivalents, and Investments
The following tables summarize the Company’s cash and available-for-sale debt securities’ amortized cost, gross unrealized gains, gross unrealized losses, allowance for credit loss, and fair value by significant investment category reported as cash and cash equivalents, short-term investments, or long-term investments as of September 30, 2023, and December 31, 2022 (in millions):
Reported as:
Amortized
Cost		Gross
Unrealized
Gains		Gross
Unrealized
Losses		Allowance for Credit LossFair
Value		Cash and
Cash
Equivalents		Short-
term
Investments		Long-
term
Investments
September 30, 2023
Cash$474.3 $— $— $— $474.3 $474.3 $— $— 
Level 1:
Money market funds2,967.8 — — — 2,967.8 2,967.8 — — 
U.S. treasuries2,324.2 0.2 (43.9)— 2,280.5 159.9 1,660.5 460.1 
Subtotal5,292.0 0.2 (43.9)— 5,248.3 3,127.7 1,660.5 460.1 
Level 2:
Corporate debt securities1,353.9 — (42.3)(1.1)1,310.5 — 914.7 395.8 
U.S. government agencies400.4 — (11.2)— 389.2 — 214.2 175.0 
Municipal securities101.4 — (3.1)— 98.3 — 84.3 14.0 
Subtotal1,855.7 — (56.6)(1.1)1,798.0 — 1,213.2 584.8 
Total assets measured at fair value$7,622.0 $0.2 $(100.5)$(1.1)$7,520.6 $3,602.0 $2,873.7 $1,044.9 
Reported as:
Amortized
Cost		Gross
Unrealized
Gains		Gross
Unrealized
Losses		Allowance for Credit LossFair
Value		Cash and
Cash
Equivalents		Short-
term
Investments		Long-
term
Investments
December 31, 2022
Cash$497.2 $— $— $— $497.2 $497.2 $— $— 
Level 1:
Money market funds1,084.0 — — — 1,084.0 1,084.0 — — 
U.S. treasuries2,715.2 — (96.6)— 2,618.6 — 1,542.4 1,076.2 
Subtotal3,799.2 — (96.6)— 3,702.6 1,084.0 1,542.4 1,076.2 
Level 2:
Commercial paper20.0 — — — 20.0 — 20.0 — 
Corporate debt securities2,022.0 — (76.0)(1.1)1,944.9 — 651.8 1,293.1 
U.S. government agencies447.2 — (19.9)— 427.3 — 247.8 179.5 
Municipal securities155.5 — (6.0)— 149.5 — 74.7 74.8 
Subtotal2,644.7 — (101.9)(1.1)2,541.7 — 994.3 1,547.4 
Total assets measured at fair value$6,941.1 $— $(198.5)$(1.1)$6,741.5 $1,581.2 $2,536.7 $2,623.6 
The following table summarizes the contractual maturities of the Company’s cash equivalents and available-for-sale debt securities (excluding money market funds), as of September 30, 2023 (in millions):
Amortized
Cost		Fair
Value
Mature in less than one year$3,084.2 $3,033.6 
Mature in one to five years1,095.7 1,044.9 
Total$4,179.9 $4,078.5 
Actual maturities may differ from contractual maturities, because certain borrowers have the right to call or prepay certain obligations. Gross realized gains and losses recognized on the sale of investments were immaterial for the periods presented.
As of September 30, 2023, and December 31, 2022, net unrealized losses on available-for-sale debt securities, net of tax, of $77.9 million and $154.2 million, respectively, were included in accumulated other comprehensive loss in the accompanying Consolidated Balance Sheets.
The following tables present the breakdown of the available-for-sale debt securities with unrealized losses as of September 30, 2023, and December 31, 2022 (in millions):
September 30, 2023
Unrealized losses less than 12 monthsUnrealized losses 12 months or greaterTotal
Fair
Value		Unrealized
Losses		Fair
Value		Unrealized
Losses		Fair
Value		Unrealized
Losses
U.S. treasuries$458.8 $(0.4)$1,427.5 $(43.5)$1,886.3 $(43.9)
Corporate debt securities54.0 (0.1)1,248.8 (42.2)1,302.8 (42.3)
U.S. government agencies114.6 (0.2)274.6 (11.0)389.2 (11.2)
Municipal securities— — 82.3 (3.1)82.3 (3.1)
Total$627.4 $(0.7)$3,033.2 $(99.8)$3,660.6 $(100.5)
December 31, 2022
Unrealized losses less than 12 monthsUnrealized losses 12 months or greaterTotal
Fair
Value		Unrealized
Losses		Fair
Value		Unrealized
Losses		Fair
Value		Unrealized
Losses
U.S. treasuries$731.7 $(26.0)$1,886.9 $(70.6)$2,618.6 $(96.6)
Corporate debt securities631.4 (17.6)1,221.9 (58.4)1,853.3 (76.0)
U.S. government agencies102.7 (4.4)324.6 (15.5)427.3 (19.9)
Municipal securities44.6 (1.1)104.9 (4.9)149.5 (6.0)
Total$1,510.4 $(49.1)$3,538.3 $(149.4)$5,048.7 $(198.5)
The Company’s investments may consist of U.S. government money market funds, U.S. treasury and U.S. government agency securities, high-quality corporate notes and bonds, commercial paper, non-U.S. government agency securities, and taxable and tax-exempt municipal notes. The Company regularly reviews its investments and evaluates the current expected credit loss by considering factors such as historical experience, market data, financial condition and near-term prospects of the investee, the extent of any losses related to the credit of the issuer, and the expected cash flows from the security. The Company segments its portfolio based on the underlying risk profiles of the securities and has a zero-loss expectation for U.S. treasury and U.S. government agency securities. The basis for this assumption is that these securities have consistently high credit ratings by rating agencies, have a long history with no credit losses, are explicitly guaranteed by a sovereign entity, which can print its own currency, and are denominated in a currency that is routinely held by central banks, used in international commerce, and commonly viewed as a reserve currency.
The current unrealized losses on the Company’s available-for-sale debt securities were caused by interest rate increases. The contractual terms of those investments do not permit the issuer to settle the securities at a price less than the amortized cost basis of the investments. As of September 30, 2023, the Company does not intend to sell the investments in unrealized loss positions, and it is not more-likely-than-not that the Company will be required to sell any of the investments before recovery of their amortized cost basis, which may be at maturity. Therefore, the Company does not expect to realize any losses on these available-for-sale debt securities. Additional factors considered in determining the treatment of unrealized losses include the financial condition and near-term prospects of the investee, the extent of the loss related to the credit of the issuer, and the expected cash flows from the security.For the three and nine months ended September 30, 2023, and 2022, the credit losses related to available-for-sales debt securities were not material.
Equity Investments
The Company holds equity investments with readily determinable fair values and equity investments without readily determinable fair values. The Company generally recognizes equity investments that do not have readily determinable fair values at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer.
The following table is a summary of the activity related to equity investments (in millions):
Reported as:
December 31, 2022
Carrying Value
Changes in Fair Value (1)
Purchases / Sales / Other (2)
September 30, 2023
Carrying Value
Prepaids and other current assetsIntangible and other assets, net
Equity investments with readily determinable value (Level 1)$4.3 $(0.4)$(3.9)$— $— $— 
Equity investments without readily determinable value (Level 2)$59.1 $(5.6)$20.0 $73.5 $— $73.5 
(1) Recorded in interest and other income, net.
(2) Other includes foreign currency translation gains/(losses).
For the three months ended September 30, 2023, the Company recognized immaterial increases in fair value on its equity investments that lack readily determinable market values (Level 2), which were reflected in interest and other income, net. For the nine months ended September 30, 2023, Company recognized decreases in fair value of $5.6 million due to an impairment, partially offset by increases in observable prices for certain equity investments that lack readily determinable market values (Level 2), which were also reflected in interest and other income, net.
Foreign Currency Derivatives
The objective of the Company’s hedging program is to mitigate the impact of changes in currency exchange rates on net 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 thirteen 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 Euro (“EUR”), the British Pound (“GBP”), the Japanese Yen (“JPY”), the Korean Won (“KRW”), and the New Taiwan Dollar (“TWD”). 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 loss in stockholders’ equity and reclassifies the amount 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, TWD, Indian Rupee (“INR”), Mexican Peso (“MXN”), Chinese Yuan (“CNY”), Canadian Dollar (“CAD”), and Swedish Kronor (“SEK”).
These derivative instruments are used to hedge against balance sheet foreign currency exposures. The related gains and losses were as follows (in millions):
Three Months Ended September 30,Nine Months Ended September 30,
2023202220232022
Recognized gains in interest and other income, net$10.4 $17.9 $21.8 $46.6 
Foreign exchange losses related to balance sheet re-measurement$(13.1)$(30.5)$(24.0)$(69.4)
The notional amounts for derivative instruments provide one measure of the transaction volume. Total gross notional amounts (in USD) for outstanding derivatives and the aggregate gross fair value at the end of each period were as follows (in millions):
Derivatives Designated as Hedging InstrumentsDerivatives Not Designated as Hedging Instruments
September 30,
2023		December 31,
2022		September 30,
2023		December 31,
2022
Notional amounts:
Forward contracts$262.2 $188.4 $618.0 $496.3 
Gross fair value recorded in:
Prepaids and other current assets$12.8 $1.8 $9.3 $4.3 
Other accrued liabilities$1.7 $5.3 $2.5 $4.2