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Document and Entity Information - USD ($)	12 Months Ended
Document and Entity Information - USD ($)	Dec. 31, 2017	Feb. 16, 2018	Jun. 30, 2017
Document And Entity Information [Abstract]
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2017
Document Fiscal Period Focus	FY
Document Fiscal Year Focus	2017
Entity Registrant Name	NATIONAL INSTRUMENTS CORP /DE/
Entity Central Index Key	0000935494
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	Yes
Entity Current Reporting Status	Yes
Entity Public Float			$ 2,138,334,992
Entity Common Stock, Shares Outstanding		131,204,795

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Current assets:
Cash and cash equivalents	$ 290,164	$ 285,283
Short-term investments	121,888	73,117
Accounts receivable, net	248,825	228,686
Inventories, net	184,592	193,608
Prepaid expenses and other current assets	48,621	53,953
Total current assets	894,090	834,647
Property and equipment, net	249,715	260,456
Goodwill	266,783	253,197
Intangible assets, net	123,293	108,663
Other long-term assets	32,553	39,601
Total assets	1,566,434	1,496,564
Current liabilities:
Accounts payable and accrued expenses	49,733	48,800
Accrued compensation	43,309	27,743
Deferred revenue - current	120,638	115,577
Other current liabilities	23,782	32,997
Other taxes payable	31,793	34,958
Total current liabilities	269,255	260,075
Long-term debt	0	25,000
Deferred income taxes	33,609	45,386
Income tax payable - long-term	81,515	0
Liability for uncertain tax positions	10,158	11,719
Deferred revenue - long-term	33,742	29,752
Other long-term liabilities	10,134	10,413
Total liabilities	438,413	382,345
Commitments and contingencies
Stockholders' equity:
Preferred stock: par value $0.01; 5,000,000 shares authorized; none issued and outstanding	0	0
Common stock: par value $0.01; 360,000,000 shares authorized; 130,978,947 and 129,202,979 shares issued and outstanding, respectively	1,310	1,292
Additional paid-in capital	829,979	771,346
Retained earnings	313,241	376,202
Accumulated other comprehensive loss	(16,509)	(34,621)
Total stockholders’ equity	1,128,021	1,114,219
Total liabilities and stockholders’ equity	$ 1,566,434	$ 1,496,564

Consolidated Balance Sheets (Parenthetical) - $ / shares	Dec. 31, 2017	Dec. 31, 2016
Statement of Financial Position [Abstract]
Preferred stock, par value (in usd per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (in usd per share)	$ 0.01	$ 0.01
Common stock, shares authorized	360,000,000	360,000,000
Common stock, shares issued	130,978,947	129,202,979
Common stock, shares outstanding	130,978,947	129,202,979

Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Net sales:
Product	$ 1,173,476	$ 1,116,703	$ 1,113,590
Software maintenance	115,910	111,476	111,866
Total net sales	1,289,386	1,228,179	1,225,456
Cost of sales:
Product	318,863	306,730	311,226
Software maintenance	9,461	6,391	5,730
Total cost of sales	328,324	313,121	316,956
Gross profit	961,062	915,058	908,500
Operating expenses:
Sales and marketing	477,921	461,236	452,262
Research and development	231,761	235,706	225,131
General and administrative	105,602	98,390	93,935
Total operating expenses	815,284	795,332	771,328
Operating income	145,778	119,726	137,172
Other income (expense):
Interest income	2,276	1,122	1,403
Net foreign exchange gain (loss)	892	(4,632)	(7,075)
Other expense, net	(1,566)	(1,581)	(221)
Income before income taxes	147,380	114,635	131,279
Provision for income taxes	94,969	31,901	36,017
Net income	$ 52,411	$ 82,734	$ 95,262
Basic earnings per share (in usd per share)	$ 0.40	$ 0.64	$ 0.74
Weighted average shares outstanding - basic	130,300	128,453	127,997
Diluted earnings per share (in usd per share)	$ 0.40	$ 0.64	$ 0.74
Weighted average shares outstanding - diluted	131,387	129,008	128,668
Dividends declared per share (in usd per share)	$ 0.84	$ 0.80	$ 0.76

Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Statement of Comprehensive Income [Abstract]
Net income	$ 52,411	$ 82,734	$ 95,262
Other comprehensive income, before tax and net of reclassification adjustments:
Foreign currency translation adjustment	24,470	(5,697)	(19,240)
Unrealized (loss) gain on securities available-for-sale	(120)	210	701
Unrealized (loss) gain on derivative instruments	(9,488)	13,166	(19,012)
Other comprehensive income (loss), before tax	14,862	7,679	(37,551)
Tax (benefit) provision related to items of other comprehensive income	(3,250)	4,210	(11,125)
Other comprehensive income (loss), net of tax	18,112	3,469	(26,426)
Comprehensive income	$ 70,523	$ 86,203	$ 68,836

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Cash flow from operating activities:
Net income	$ 52,411	$ 82,734	$ 95,262
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	72,695	73,390	73,329
Stock-based compensation	29,145	25,832	25,489
Tax (benefit) expense from deferred income taxes	(5,774)	(5,430)	11,019
Purchase price adjustment	0	1,585	0
Changes in operating assets and liabilities (net of effects of acquisitions):
Accounts receivable	(15,269)	(14,131)	(10,709)
Inventories	10,154	(9,205)	(9,342)
Prepaid expenses and other assets	1,971	17,421	(11,111)
Accounts payable and accrued expenses	1,584	(2,506)	(9,828)
Deferred revenue	1,791	8,864	6,493
Taxes, accrued compensation, and other current liabilities	75,734	21,645	(1,537)
Net cash provided by operating activities	224,442	200,199	169,065
Cash flow from investing activities:
Capital expenditures	(30,256)	(44,425)	(33,987)
Capitalization of internally developed software	(41,662)	(31,859)	(31,356)
Additions to other intangibles	(2,384)	(2,342)	(2,811)
Acquisitions, net of cash received	0	(549)	(125,612)
Purchases of short-term investments	(87,735)	(39,097)	(36,063)
Sales and maturities of short-term investments	39,627	47,769	151,437
Net cash used in investing activities	(122,410)	(70,503)	(78,392)
Cash flow from financing activities:
Proceeds from revolving line of credit	0	15,000	54,000
Principal payments on revolving line of credit	(25,000)	(27,000)	(17,000)
Proceeds from issuance of common stock	29,094	28,907	27,785
Repurchase of common stock	0	(5,635)	(75,255)
Dividends paid	(109,551)	(102,897)	(97,643)
Other	(842)	0	0
Net cash used in financing activities	(106,299)	(91,625)	(108,113)
Effect of exchange rate changes on cash	9,148	(3,917)	(5,461)
Net change in cash and cash equivalents	4,881	34,154	(22,901)
Cash and cash equivalents at beginning of period	285,283	251,129	274,030
Cash and cash equivalents at end of period	290,164	285,283	251,129
Supplemental disclosures:
Equity consideration issued in business combinations	0	0	13,778
Interest	478	520	287
Income taxes paid	$ 38,033	$ 2,902	$ 29,038

Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-In Capital	Retained Earnings	Accumulated Other Comprehensive Income/(Loss)
Beginning balance (in shares) at Dec. 31, 2014		127,849,271
Beginning balance at Dec. 31, 2014	$ 1,117,496	$ 1,278	$ 662,889	$ 464,993	$ (11,664)
Increase (Decrease) in Stockholders' Equity
Net income	95,262			95,262
Other comprehensive income (loss), net of tax	(26,426)				(26,426)
Issuance of common stock under employee plans, including tax benefits (in shares)		1,846,070
Issuance of common stock under employee plans, including tax benefits	27,785	$ 18	27,767
Stock-based compensation	25,891		25,891
Business acquisition (in shares)		367,481
Business acquisition	13,778	$ 4	13,774
Repurchase of common stock (in shares)		(2,591,218)
Repurchase of common stock	(75,255)	$ (25)	(13,449)	(61,781)
Dividends paid	(97,643)			(97,643)
Disqualified dispositions	833		833
Ending balance (in shares) at Dec. 31, 2015		127,471,604.000
Ending balance at Dec. 31, 2015	1,081,721	$ 1,275	717,705	400,831	(38,090)
Increase (Decrease) in Stockholders' Equity
Net income	82,734			82,734
Other comprehensive income (loss), net of tax	3,469				3,469
Issuance of common stock under employee plans, including tax benefits (in shares)		1,894,151
Issuance of common stock under employee plans, including tax benefits	28,907	$ 19	28,888
Stock-based compensation	25,920		25,920
Business acquisition (in shares)		44,004
Business acquisition	0
Repurchase of common stock (in shares)		(206,780)
Repurchase of common stock	(5,635)	$ (2)	(1,167)	(4,466)
Dividends paid	$ (102,897)			(102,897)
Ending balance (in shares) at Dec. 31, 2016	129,202,979	129,202,979.000
Ending balance at Dec. 31, 2016	$ 1,114,219	$ 1,292	771,346	376,202	(34,621)
Increase (Decrease) in Stockholders' Equity
Adoption of ASU 2016-16	(5,821)			(5,821)
Net income	52,411			52,411
Other comprehensive income (loss), net of tax	18,112				18,112
Issuance of common stock under employee plans, including tax benefits (in shares)		1,775,968
Issuance of common stock under employee plans, including tax benefits	29,094	$ 18	29,076
Stock-based compensation	29,557		29,557
Dividends paid	$ (109,551)			(109,551)
Ending balance (in shares) at Dec. 31, 2017	130,978,947	130,978,947
Ending balance at Dec. 31, 2017	$ 1,128,021	$ 1,310	$ 829,979	$ 313,241	$ (16,509)

Operations and summary of significant accounting policies

12 Months Ended

Dec. 31, 2017

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Operations and summary of significant accounting policies

National Instruments Corporation is a Delaware corporation. We provide flexible application software and modular, multifunction hardware that users combine with industry-standard computers, networks and third party devices to create measurement, automation and embedded systems, which we refer to as “virtual instruments.” Our approach gives customers the ability to quickly and cost-effectively design, prototype and deploy unique custom-defined solutions for their design, control and test application needs. We offer hundreds of products used to create virtual instrumentation systems for general, commercial, industrial and scientific applications. Our products may be used in different environments, and consequently, specific application of our products is determined by the customer and generally is not known to us. We approach all markets with essentially the same products, which are used in a variety of applications from research and development to production testing, monitoring and industrial control. The following industries and applications are served by us worldwide: advanced research, automated test equipment, automotive, commercial aerospace, computers and electronics, consumer electronics, continuous process manufacturing, education, government/defense, medical research/pharmaceutical, power/energy, semiconductors, telecommunications and others. These financial statements have been prepared in accordance with U.S. generally accepted accounting principles.

Principles of consolidation

The Consolidated Financial Statements include the accounts of National Instruments Corporation and its subsidiaries. All significant intercompany accounts and transactions have been eliminated.

Reclassifications

As of December 31, 2017, we revised the presentation of Note 2 - Short-term investments of Notes to Consolidated Financial Statements. Certain amounts appearing in the previous year’s disclosures of short-term investments have been reclassified to conform to the current year’s presentation.

Starting January 1, 2017, we began separately presenting the effect of exchange rate changes on cash and cash equivalents in our consolidated statements of cash flows due to growing operations in foreign currency environments. Amounts in the comparable prior periods have been reclassified to conform to the current period presentation. The reclassifications resulted in the disaggregation of the amount attributable to the “Effect of exchange rate changes on cash” of $(3.9) million and $(5.5) million, with a corresponding increase to “Net cash provided by operating activities”, for the twelve months ended December 31, 2016 and 2015, respectively. We believe the reclassification is immaterial to the consolidated financial statements.

Use of estimates

The preparation of our financial statements in conformity with U.S. generally accepted accounting principles requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosures of contingent assets and liabilities. We base our estimates on past experience and other assumptions that we believe are reasonable under the circumstances, and we evaluate these estimates on an ongoing basis. Our critical accounting policies are those that affect our financial statements materially and involve difficult, subjective or complex judgments by management. Although these estimates are based on management's best knowledge of current events and actions that may impact the company in the future, actual results may be materially different from the estimates.

Cash and cash equivalents

Cash and cash equivalents include cash and highly liquid investments with maturities of three months or less at the date of acquisition.

Short-Term Investments

We value our available-for-sale short-term investments based on pricing from third party pricing vendors, who may use quoted prices in active markets for identical assets (Level 1 inputs) or inputs other than quoted prices that are observable either directly or indirectly (Level 2 inputs) in determining fair value. We classify all of our fixed income available-for-sale securities as having Level 2 inputs. The valuation techniques used to measure the fair value of our financial instruments having Level 2 inputs were derived from non-binding market consensus prices that are corroborated by observable market data, quoted market prices for similar instruments, or pricing models, such as discounted cash flow techniques. We believe all of these sources reflect the credit risk associated with each of our available-for-sale short-term investments. Short-term investments available-for-sale consist of debt securities issued by states of the U.S. and political subdivisions of the U.S., corporate debt securities and debt securities issued by U.S. government organizations and agencies. All short-term investments available-for-sale have contractual maturities of less than 52 months.

Our investments are classified as available-for-sale and accordingly are reported at fair value, with unrealized gains and losses reported as other comprehensive income, a component of stockholders’ equity. Unrealized losses are charged against income when a decline in fair value is determined to be other than temporary. Investments with maturities beyond one year are classified as short-term based on their highly liquid nature and because such marketable securities represent the investment of cash that is available for current operations. The fair value of our short-term investments in debt securities at December 31, 2017 and December 31, 2016 was $122 million and $73 million, respectively. The increase was due to the net purchase of $48 million of short-term investments. We had $5.0 million U.S. dollar equivalent of corporate bonds that were denominated in Euro at December 31, 2017.

We follow the guidance provided by FASB ASC 320 to assess whether our investments with unrealized loss positions are other than temporarily impaired. Realized gains and losses and declines in value judged to be other than temporary are determined based on the specific identification method and are reported in other income (expense), net, in our Consolidated Statements of Income. We did not identify or record any other-than-temporary impairments on our available-for-sale securities during 2017, 2016, and 2015.

Accounts Receivable, net

Accounts receivable are recorded net of allowances for sales returns of $2.1 million and $1.8 million at December 31, 2017 and 2016, respectively, and net of allowances for doubtful accounts of $2.9 million and $1.9 million at December 31, 2017 and 2016, respectively. A provision for estimated sales returns is made by reducing recorded revenue based on historical experience. We analyze historical returns, current economic trends and changes in customer demand of our products when evaluating the adequacy of our sales returns allowance. Our allowance for doubtful accounts is based on historical experience. We analyze historical bad debts, customer concentrations, customer creditworthiness and current economic trends when evaluating the adequacy of our allowance for doubtful accounts.



(In thousands)
Year	Description	Balance at Beginning of Period		Provisions		Write-Offs		Balance at End of Period
2015	Allowance for doubtful accounts and sales returns	$	4,798	$	536	$	968	$	4,366
2016	Allowance for doubtful accounts and sales returns	$	4,366	$	1,024	1,682		$	3,708
2017	Allowance for doubtful accounts and sales returns	$	3,708	$	1,642	359		$	4,991

Inventories, net

Inventories are stated at the lower-of-cost or net realizable value. Cost is determined using standard costs, which approximate the first-in first-out (“FIFO”) method. Cost includes the acquisition cost of purchased components, parts and subassemblies, in-bound freight costs, labor and overhead.

Inventory is shown net of adjustment for excess and obsolete inventories of $16.4 million, $12.6 million and $10.1 million at December 31, 2017, 2016 and 2015, respectively.



(In thousands)
Year	Description	Balance at Beginning of Period		Provisions		Write-Offs		Balance at End of Period
2015	Adjustment for excess and obsolete inventories	$	9,598	$	3,087	$	2,631	$	10,054
2016	Adjustment for excess and obsolete inventories	$	10,054	$	5,793	3,208		$	12,639
2017	Adjustment for excess and obsolete inventories	$	12,639	$	7,130	3,322		$	16,447

Property and equipment, net

Property and equipment are recorded at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, which range from twenty to forty years for buildings, and three to seven years for purchased internal use software and for equipment which are each included in furniture and equipment. Leasehold improvements are depreciated over the shorter of the life of the lease or the asset.

Intangible assets, net

We capitalize costs related to the development and acquisition of certain software products. Capitalization of costs begins when technological feasibility has been established and ends when the product is available for general release to customers. Technological feasibility for our products is established when the product is available for beta release. Amortization is computed on an individual product basis for those products available for market and is recognized based on the product’s estimated economic life, generally three to six years.

We use the services of outside counsel to search for, document, and apply for patents. Those costs, along with any filing or application fees, are capitalized. Costs related to patents which are abandoned are written off. Once a patent is granted, the patent costs are amortized ratably over the legal life of the patent, generally ten to seventeen years.

At each balance sheet date, the unamortized costs for all intangible assets are reviewed by management and reduced to net realizable value when necessary.

Goodwill

The excess purchase price over the fair value of net assets acquired is recorded as goodwill. We have one operating segment and one reporting unit. Goodwill is tested for impairment on an annual basis, and between annual tests if indicators of potential impairment exist, using a fair-value-based approach based on the market capitalization of the reporting unit.

We have historically performed our annual goodwill impairment test as of February 28 of each year. For the annual impairment test as of February 28, 2017, we performed a qualitative assessment of whether it was more likely than not that our reporting unit's fair value was less than its carrying amount. After completing the assessment, we determined that it was more likely than not that the estimated fair value of the reporting unit exceeded the carrying amount and that no impairment existed as of the assessment date. If we had concluded otherwise, a quantitative goodwill impairment test would have been required, which would have included a determination of the fair value of the reporting unit and a comparison of the fair value to its carrying value.

Effective for the annual goodwill impairment test for 2018 and for future testing, we will perform the required annual test as of November 30 of each year rather than on February 28. We reperformed our annual goodwill impairment testing as of November 30, 2017 and determined that it was more likely than not that the estimated fair value of the reporting unit exceeded the carrying amount and that no impairment existed as of the assessment date. We do not believe that the change in the date of the annual goodwill impairment test is a material change in the method of applying an accounting principle nor do we expect that it will result in any delay, acceleration or impact to the results of the impairment testing. We believe this date is preferable because it aligns with the timing of our annual planning process which largely occurs during the fourth quarter. Retrospective application to prior periods is impracticable as we are unable to objectively determine, without the use of hindsight, the assumptions that would be used in those earlier periods.

No impairment of goodwill was identified during 2017 and 2016. Goodwill is deductible for tax purposes in certain jurisdictions.

Concentrations of credit risk

We maintain cash and cash equivalents with various financial institutions located in many countries throughout the world. At December 31, 2017, we had $412 million in cash, cash equivalents and short-term investments. Our cash and cash equivalent balances are held in numerous financial institutions throughout the world, including substantial amounts held outside of the U.S., however, the majority of our short-term investments that are located outside of the U.S. are denominated in the U.S. dollar with the exception of $5 million U.S. dollar equivalent of corporate bonds that are denominated in Euro. The most significant of our operating accounts was our Hungarian Citibank operating account which held approximately $17 million or 6% of our total cash and cash equivalents at a bank that carried Baa1/BBB+/A ratings at December 31, 2017.

The following table presents the geographic distribution of our cash, cash equivalents, and short-term investments as of December 31, 2017 (in millions):



	Domestic	International	Total
Cash and Cash Equivalents	$63	$227	$290
	22%	78%
Short-term Investments	$—	$122	$122
	—%	100%
Cash, Cash Equivalents and Short-term Investments	$63	$349	$412
	15%	85%

The goal of our investment policy is to manage our investment portfolio to preserve principal and liquidity while maximizing the return on our investment portfolio through the full investment of available funds. We place our cash investments in instruments that meet credit quality standards, as specified in our corporate investment policy guidelines. These guidelines also limit the amount of credit exposure to any one issue, issuer or type of instrument. Our cash equivalents and short-term investments carried ratings from the major credit rating agencies that were in accordance with our corporate investment policy. Our investment policy allows investments in the following: government and federal agency obligations, repurchase agreements (“Repos”), certificates of deposit and time deposits, corporate obligations, medium term notes and deposit notes, commercial paper including asset-backed commercial paper (“ABCP”), puttable bonds, general obligation and revenue bonds, money market funds, taxable commercial paper, corporate notes/bonds, municipal notes, municipal obligations and tax exempt commercial paper. All such instruments must carry minimum ratings of A1/P1/F1, MIG1/VMIG1/SP1 and A2/A/A, as applicable, all of which are considered “investment grade”. Our investment policy for marketable securities requires that all securities mature in five years or less, with a weighted average maturity of no longer than 24 months with at least 10% maturing in 90 days or less. (See Note 2 – Cash, cash equivalents, short-term and long-term investments in Notes to Consolidated Financial Statements for further discussion and analysis of our investments).

Concentration of credit risk with respect to trade accounts receivable is limited due to our large number of customers and their dispersion across many countries and industries. No single customer accounted for more than 3%, 3%, or 3% of sales for the years ended December 31, 2017, 2016, and 2015, respectively. The largest trade account receivable from any individual customer at December 31, 2017 was approximately $2.7 million.

Key supplier risk

Our manufacturing processes use large volumes of high-quality components and subassemblies supplied by outside sources. Several of these items are available through sole or limited sources. Supply shortages or quality problems in connection with these key items could require us to procure items from replacement suppliers, which would cause significant delays in fulfillment of orders and likely result in additional costs. In order to manage this risk, we maintain safety stock of some of these single sourced components and subassemblies and perform regular assessments of suppliers performance, grading key suppliers in critical areas such as quality and “on-time” delivery.

Revenue recognition

We sell test and measurement solutions that include hardware, software licenses, and related services. Our sales are generally made under standard sales arrangements with payment terms ranging from net 30 days in the U.S. to net 30 days and up to net 180 days in some international markets. We offer rights of return and standard warranties for product defects related to our products. The rights of return are generally for a period of up to 30 days after the delivery date. Our standard warranties cover periods ranging from 90 days to three years. Our standard sales arrangements do not require product acceptance from the customer.

In recent years, we have made a concentrated effort to increase our revenue through the pursuit of orders with a value greater than $1.0 million. These orders often include contract terms that vary substantially from our standard terms of sale including product acceptance requirements and product performance evaluations which create uncertainty with respect to the timing of our ability to recognize revenue from such orders. These orders may also include most-favored customer pricing, significant discounts, extended payment terms and volume rebates, all of which may create uncertainty with respect to the amount and timing of revenue recognized from such orders.

Sales of application software licenses include post-contract support services. Other services include customer training, customer support, and extended warranties.

We recognize revenue when persuasive evidence of an arrangement exists, delivery has occurred, the price is fixed or determinable, and collectability is reasonably assured. Delivery is considered to have occurred when title and risk of loss have transferred to the customer. For most of our hardware and software sales, title and risk of loss transfer upon shipment. For services, we recognize revenue when the service is provided, except for extended warranties for which revenue is recognized ratably over the warranty period.

We apply the separation guidance under U.S. GAAP for contracts with multiple deliverables. We analyze revenue arrangements with multiple deliverables to determine whether the deliverables should be divided into more than one unit of accounting. For contracts with more than one unit of accounting, we allocate the consideration we receive among the separate units of accounting based on their relative selling prices, which we determine based on prices of the deliverables as sold on a stand-alone basis, or if not sold on a stand-alone basis, the prices we would charge if sold on a stand-alone basis. We recognize revenue for each deliverable based on the revenue recognition policies described below.

For software arrangements that include multiple elements, including perpetual software licenses and undelivered items (e.g., software maintenance; subscriptions/term licenses), we allocate and defer revenue for the undelivered items based on vendor specific objective evidence (“VSOE”) of the fair value of the undelivered elements, and recognize revenue on the perpetual license using the residual method. We base VSOE of each element on the price for which the undelivered element is sold separately. We determine fair value of the undelivered elements based on historical evidence of our stand-alone sales of these elements to third parties or from the stated renewal rate for the undelivered elements. When VSOE does not exist for undelivered items, we recognize the entire arrangement fee ratably over the applicable performance period.

A portion of our revenues are generated from the sale of systems that contain software components that operate together with our hardware platform to provide the essential functionality of the system. When sold in a multiple element arrangement, these systems are considered non-software deliverables, so we can allocate the arrangement fee based upon relative selling price of each element. When applying the relative selling price method, we determine the selling price of each element using best estimate of selling price (“BESP”), because VSOE and third-party evidence (“TPE”) are not available.

The revenues allocated to the software-related elements are recognized based on software industry specific revenue recognition guidance, as noted above. The revenues allocated to the non-software related elements are recognized based on the nature of the element provided. We estimate BESP by considering internal factors such as historical pricing practices and gross margin objectives, as well as market conditions such as competitor pricing strategies, customer demands and geography, and regularly review these assumptions.

The application of revenue recognition standards requires judgment, including whether a software arrangement includes multiple elements, and if so, whether VSOE of fair value exists for those elements. Changes to the elements in a software arrangement, the ability to identify VSOE for those elements, the fair value of the respective elements, and changes to a product’s estimated life cycle could materially impact the amount of our earned and unearned revenue. Judgment is also required to assess whether future releases of certain software represent new products or upgrades and enhancements to existing products.

Product revenue

Our product revenue is generated predominantly from the sales of measurement and automation products. Our products consist of application software and hardware components together with related driver software.

Software maintenance revenue

Software maintenance revenue is post contract customer support that provides the customer with unspecified upgrades/updates and technical support.

Shipping and handling costs

Our shipping and handling costs charged to customers are included in net sales, and the associated expense is recorded in cost of sales.

Warranty reserve

We offer a one-year limited warranty on most hardware products which is included in the terms of sale of such products. We also offer optional extended warranties on our hardware products for which the related revenue is recognized ratably over the warranty period. Provision is made for estimated future warranty costs at the time of the sale for the estimated costs that may be incurred under the limited warranty. Our estimate is based on historical experience and product sales during the period.

The warranty reserve for the years ended December 31, 2017, 2016, and 2015 was as follows:



(In thousands)
	2017			2016			2015
Balance at the beginning of the period	$	2,686		$	1,755		$	1,885
Accruals for warranties issued during the period	2,644			2,454			1,834
Accruals related to pre-existing warranties	274			1,258			(263		)
Settlements made (in cash or in kind) during the period	(2,758		)	(2,781		)	(1,701		)
Balance at the end of the period	$	2,846		$	2,686		$	1,755

Loss contingencies

We accrue for probable losses from contingencies including legal defense costs, on an undiscounted basis, when such costs are considered probable of being incurred and are reasonably estimable. We periodically evaluate available information, both internal and external, relative to such contingencies and adjust this accrual as necessary.

Advertising expense

We expense costs of advertising as incurred. Advertising expense for the years ended December 31, 2017, 2016, and 2015 was $11 million, $12 million, and $12 million, respectively.

Foreign currency translation

The functional currency for our international sales operations is the applicable local currency. The assets and liabilities of these operations are translated at the rate of exchange in effect on the balance sheet date and sales and expenses are translated at average rates. The resulting gains or losses from translation are included in a separate component of other comprehensive income. Gains and losses resulting from re-measuring monetary asset and liability accounts that are denominated in a currency other than a subsidiary’s functional currency are included in net foreign exchange gain (loss) and are included in net income.

Foreign currency hedging instruments

All of our derivative instruments are recognized on the balance sheet at their fair value. We currently use foreign currency forward contracts to hedge our exposure to material foreign currency denominated receivables and forecasted foreign currency cash flows.

On the date the derivative contract is entered into, we designate the derivative as a hedge of the variability of foreign currency cash flows to be received or paid (“cash flow” hedge) or as a hedge of our foreign denominated net receivable positions (“other derivatives”). Changes in the fair value of derivatives that are designated and qualify as cash flow hedges and that are deemed to be highly effective are recorded in other comprehensive income. These amounts are subsequently reclassified into earnings in the period during which the hedged transaction is realized. The gain or loss on the other derivatives as well as the offsetting gain or loss on the hedged item attributable to the hedged risk is recognized in current earnings under the line item “Net foreign exchange gain (loss)”. We do not enter into derivative contracts for speculative purposes.

We formally document all relationships between hedging instruments and hedged items, as well as our risk-management objective and strategy for undertaking various hedge transactions at the inception of the hedge. This process includes linking all derivatives that are designated as cash flow hedges to specific forecasted transactions. We also formally assess, both at the hedge’s inception and on an ongoing basis, whether the hedging instruments are highly effective in offsetting changes in cash flows of hedged items.

We prospectively discontinue hedge accounting if (1) it is determined that the derivative is no longer highly effective in offsetting changes in the fair value of a hedged item (forecasted transactions); or (2) the derivative is de-designated as a hedge instrument, because it is unlikely that a forecasted transaction will occur. When hedge accounting is discontinued, the derivative is sold and the resulting gains and losses are recognized immediately in earnings.

Income taxes

We account for income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for the expected tax consequences of temporary differences between the tax basis of assets and liabilities and their reported amounts. Valuation allowances are established when necessary to reduce deferred tax assets to amounts which are more likely than not to be realized. Judgment is required in assessing the future tax consequences of events that have been recognized in our financial statements or tax returns. Variations in the actual outcome of these future tax consequences could materially impact our financial position or our results of operations. In estimating future tax consequences, all expected future events are considered other than enactments of changes in tax laws or rates. We account for uncertainty in income taxes recognized in our financial statements using prescribed recognition thresholds and measurement attributes for financial statement disclosure of tax positions taken or expected to be taken on our tax returns. Our continuing policy is to recognize interest and penalties related to income tax matters in income tax expense.

Earnings per share

Basic earnings per share (“EPS”) is computed by dividing net income by the weighted average number of common shares outstanding during each period. Diluted EPS is computed by dividing net income by the weighted average number of common shares and common share equivalents outstanding (if dilutive) during each period. The number of common share equivalents, which include stock options and restricted stock units (“RSUs”), is computed using the treasury stock method.

The reconciliation of the denominators used to calculate basic EPS and diluted EPS for years ended December 31, 2017, 2016, and 2015 are as follows:



	Years ended December 31,
(In thousands)	2017	2016	2015
Weighted average shares outstanding-basic	130,300	128,453	127,997
Plus: Common share equivalents
RSUs	1,087	555	671
Weighted average shares outstanding-diluted	131,387	129,008	128,668

Stock awards to acquire 32,400 shares, 10,900 shares, and 292,400 shares for the years ended December 31, 2017, 2016, and 2015, respectively, were excluded in the computations of diluted EPS because the effect of including the stock awards would have been anti-dilutive.

Stock-based compensation

We account for stock-based compensation plans, which are more fully described in Note 11 – Authorized shares of common and preferred stock and stock-based compensation plans, using a fair-value method and recognize the expense in our Consolidated Statement of Income.

Comprehensive income

Our comprehensive income is comprised of net income, foreign currency translation and unrealized gains and losses on forward contracts and securities available-for-sale. Comprehensive income in 2017, 2016, and 2015 was $71 million, $86 million and $69 million, respectively.

Recently Adopted Accounting Pronouncements

In October 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-16, Income Taxes – Intra-Entity Transfers of Assets Other Than Inventory. The standard is intended to address diversity in practice and complexity in financial reporting, particularly for intra-entity transfers of intellectual property. We early adopted ASU 2016-16 effective January 1, 2017. Using the modified retrospective method, the impact of the adoption of the standard was to increase our deferred tax assets by $0.4 million, decrease other assets, net by $6.2 million and decrease retained earnings by $5.8 million. The adoption of the amendments had the effect of increasing our diluted earnings per share by $0.01 and $0.04 for the three and twelve months ended December 31, 2017, respectively.

In March 2016, the FASB issued ASU 2016- 09, Improvements to Employee Share-Based Payment Accounting , which requires the recognition of the income tax effects of awards in the income statement when the awards vest or are settled, thus eliminating additional paid in capital pools. The guidance also allows for the employer to repurchase a greater number of an employee’s shares for tax withholding purposes without triggering liability accounting. In addition, the guidance allows for a policy election to account for forfeitures as they occur rather than on an estimated basis. We adopted ASU 2016-09 effective January 1, 2017 as follows:

•Our adoption of the amendments related to accounting for excess tax benefits resulted in the recognition of $3.2 million of excess tax benefits within income taxes rather than additional paid in capital for the twelve months ended December 31, 2017.

•We elected to retrospectively apply the changes in presentation to the statements of cash flows and no longer classify excess tax benefits as a financing activity, which increased net cash provided by operating activities and reduced net cash provided by financing activities by an immaterial amount for the twelve months ended December 31, 2017.

•We elected to account for forfeitures as they occur using a modified retrospective transition method. The adoption of this one-time accounting policy election did not have a material impact on our financial statements.In July 2015, the FASB issued ASU 2015-11, Simplifying the Measurement of Inventory(Topic 330). The amendments require that reporting entities measure inventory at the lower of cost and net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. The amendments apply to inventory that is measured using the first-in, first-out or average cost basis. We adopted ASU 2015-11 as of January 1, 2017 and the guidance was applied prospectively. We determined there were no changes to disclosure, financial statement presentation, or valuation of inventory as a result of adoption.

Recently Issued Accounting Pronouncements

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). The update is a comprehensive new revenue recognition model that requires a company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. ASU 2014-09 also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. We adopted this standard as of January 1, 2018 by applying the modified retrospective transition method.

We have reached conclusions on our key accounting matters related to the new standard and believe adoption of the new standard will generally result in revenue recognition earlier or at the same time as prior US GAAP. The most significant impact of the standard relates to our accounting for certain software arrangements. We primarily license software on a perpetual basis. However, we also license software under enterprise agreements which includes an unlimited quantity of certain software licenses for a fixed-term bundled with software maintenance, technical support, and a specified amount of training and service credits. Currently, we defer revenue for software licensed under our enterprise agreements and certain perpetual arrangements due to a lack of vendor specific objective evidence (“VSOE”) for certain elements in the contract. Under the new standard, we are no longer required to establish VSOE to recognize software license revenue separately from the other elements, and we will be able to recognize software license revenue once the customer obtains control of the license, which will generally occur at the start of each license term. Due to the complexity of our enterprise agreement contracts, the actual revenue recognition treatment required under the new standard will be dependent on contract-specific terms, and may vary in some instances from recognition at the time of billing. Additionally, we expect the new standard will impact the way we allocate the transaction price for arrangements with separately-priced extended warranty offerings.

We adopted the new revenue recognition guidance effective January 1, 2018, by recognizing the cumulative effect of initially applying the new standard as an increase to the opening balance of retained earnings. We expect this adjustment to be less than $10 million, with an immaterial impact to our net income on an ongoing basis.

In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. The ASU simplifies certain aspects of hedge accounting and improves disclosures of hedging arrangements through the elimination of the requirement to separately measure and report hedge ineffectiveness. The ASU generally requires the entire change in the fair value of a hedging instrument to be presented in the same income statement line as the hedged item in order to align financial reporting of hedge relationships with economic results. Entities must apply the amendments to cash flow and net investment hedge relationships that exist on the date of adoption using a modified retrospective approach. The presentation and disclosure requirements must be applied prospectively. Our effective date for adoption of this guidance is our fiscal year beginning January 1, 2019. We are currently evaluating the effect that this guidance will have on our consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which supersedes ASC 840, Leases. The guidance requires lessees to recognize most lease liabilities on their balance sheets but recognize the expenses on their income statements in a manner similar to current practice. The update states that a lessee would recognize a lease liability for the obligation to make lease payments and a right-to-use asset for the right to use the underlying asset for the lease term. The update is effective for interim and annual periods beginning after December 15, 2018, and early adoption is permitted. We are currently evaluating the effect that the updated standard will have on our consolidated financial statements and related disclosures. Based on our initial assessment, we expect that the adoption of this standard will have a material impact on our balance sheet but that it will not have a material impact on our ongoing results of operations. We do not expect to adopt the new standard prior to the required effective date.

Short-term investments

12 Months Ended

Dec. 31, 2017

Cash, Cash Equivalents, and Short-term Investments [Abstract]

Short-term investments

The following tables summarize unrealized gains and losses related to our short-term investments designated as available-for-sale:



(In thousands)	As of December 31, 2017
	Adjusted Cost		Gross Unrealized Gain		Gross Unrealized Loss			Fair Value
Corporate bonds	$	120,341	$	182	$	(395	)	$	120,128
Time deposits	1,760		—		—			1,760
Short-term investments	$	122,101	$	182	$	(395	)	$	121,888



(In thousands)	As of December 31, 2016
	Adjusted Cost		Gross Unrealized Gain		Gross Unrealized Loss			Fair Value
Corporate bonds	$	71,450	$	89	$	(182	)	$	71,357
Time deposits	1,760		—		—			1,760
Short-term investments	$	73,210	$	89	$	(182	)	$	73,117

The following tables summarize the contractual maturities of our short-term investments designated as available-for-sale:



(In thousands)	As of December 31, 2017
	Adjusted Cost		Fair Value
Due in less than 1 year	$	17,862	$	17,824
Due in 1 to 5 years	104,239		104,064
Total available-for-sale debt securities	$	122,101	$	121,888

Due in less than 1 year	Adjusted Cost		Fair Value
Corporate bonds	$	16,102	$	16,064
Time deposits	1,760		1,760
Total available-for-sale debt securities	$	17,862	$	17,824

Due in 1 to 5 years	Adjusted Cost		Fair Value
Corporate bonds	104,239		104,064
Total available-for-sale debt securities	$	104,239	$	104,064

Fair value measurements

12 Months Ended

Dec. 31, 2017

Fair Value Disclosures [Abstract]

Fair value measurements

We define fair value to be the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, we consider the principal or most advantageous market that market participants may use when pricing the asset or liability.

We follow a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. Fair value measurement is determined based on the lowest level input that is significant to the fair value measurement. The three values of the fair value hierarchy are the following:

Level 1 – Quoted prices in active markets for identical assets or liabilities

Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly

Level 3 – Inputs that are not based on observable market data

Assets and liabilities measured at fair value on a recurring basis are summarized below:

໿



(In thousands)	Fair Value Measurements at Reporting Date Using
Description	December 31, 2017			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Assets
Cash and cash equivalents available for sale:
Money Market Funds	$	61,423		$	61,423	$	—		$	—
U.S. Treasuries and agencies	39,461			—		39,461			—
Short-term investments available for sale:
Corporate bonds	120,128			—		120,128			—
Time deposits	1,760			1,760		—
Derivatives	7,232			—		7,232			—
Total Assets	$	230,004		$	63,183	$	166,821		$	—

Liabilities
Derivatives	$	(12,743	)	—		(12,743		)	—
Total Liabilities	$	(12,743	)	$	—	$	(12,743	)	$	—



(In thousands)	Fair Value Measurements at Reporting Date Using
Description	December 31, 2016			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Assets
Cash and cash equivalents available for sale:
Money Market Funds	$	68,577		$	68,577	$	—		$	—
Short-term investments available for sale:
Corporate bonds	71,357			—		71,357			—
Time deposits	1,760			1,760		—			—
Derivatives	15,113			—		15,113			—
Total Assets	$	156,807		$	70,337	$	86,470		$	—

Liabilities
Derivatives	$	(8,199	)	$	—	$	(8,199	)	$	—
Total Liabilities	$	(8,199	)	$	—	$	(8,199	)	$	—

We value our available-for-sale short-term investments based on pricing from third party pricing vendors, who may use quoted prices in active markets for identical assets (Level 1 inputs) or inputs other than quoted prices that are observable either directly or indirectly (Level 2 inputs) in determining fair value. We classify all of our fixed income available-for-sale securities as having Level 2 inputs. The valuation techniques used to measure the fair value of our financial instruments having Level 2 inputs were derived from non-binding market consensus prices that are corroborated by observable market data, quoted market prices for similar instruments, or pricing models, such as discounted cash flow techniques. We believe all of these sources reflect the credit risk associated with each of our available-for-sale short-term investments. Short-term investments available-for-sale consists of debt securities issued by states of the U.S. and political subdivisions of the U.S., corporate debt securities and debt securities issued by U.S. government organizations and agencies. All short-term investments available-for-sale have contractual maturities of less than 52 months.

Derivatives include foreign currency forward and option contracts. Our foreign currency forward contracts are valued using an income approach (Level 2) based on the spot rate less the contract rate multiplied by the notional amount. Our foreign currency option contracts are valued using a market approach based on the quoted market prices which are derived from observable inputs including current and future spot rates, interest rate spreads as well as quoted market prices of similar instruments. We consider counterparty credit risk in the valuation of our derivatives. However, counterparty credit risk did not impact the valuation of our derivatives during the year ended December 31, 2017. There were not any transfers in or out of Level 1 or Level 2 during the year ended December 31, 2017.

Our short-term investments do not include any foreign sovereign debt. The majority of our short-term investments that are located outside of the U.S. are denominated in the U.S. dollar with the exception of $5.0 million U.S. dollar equivalent of corporate bonds that are denominated in Euro.

We did not have any items that were measured at fair value on a nonrecurring basis at December 31, 2017 and December 31, 2016.

The carrying value of net accounts receivable, accounts payable, and long-term debt contained in the Consolidated Balance Sheets approximates fair value.

Derivative instruments and hedging activities

12 Months Ended

Dec. 31, 2017

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative instruments and hedging activities

We recognize all of our derivative instruments as either assets or liabilities in our statement of financial position at fair value. The accounting for changes in the fair value (i.e., gains or losses) of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and further, on the type of hedging relationship. For those derivative instruments that are designated and qualify as hedging instruments, we designate the hedging instrument, based upon the exposure being hedged, as a fair value hedge, cash flow hedge, or a hedge of a net investment in a foreign operation.

We have operations in over 50 countries. Sales outside of the Americas accounted for approximately 61%, 61%, and 59% of our revenues during the years ended December 31, 2017, 2016, and 2015, respectively. Our activities expose us to a variety of market risks, including the effects of changes in foreign currency exchange rates. These financial risks are monitored and managed by us as an integral part of our overall risk management program.

We maintain a foreign currency risk management strategy that uses derivative instruments (foreign currency forward contracts) to help protect our earnings and cash flows from fluctuations caused by the volatility in currency exchange rates. Movements in foreign currency exchange rates pose a risk to our operations and competitive position, since exchange rate changes may affect our profitability and cash flow, and the business or pricing strategies of our non-U.S. based competitors.

The vast majority of our foreign sales are denominated in the customers’ local currency. We purchase foreign currency forward contracts as hedges of forecasted sales that are denominated in foreign currencies and as hedges of foreign currency denominated receivables. These contracts are entered into to help protect against the risk that the eventual dollar-net-cash inflows resulting from such sales or firm commitments will be adversely affected by changes in exchange rates. We also purchase foreign currency forward contracts as hedges of forecasted expenses that are denominated in foreign currencies. These contracts are entered into to help protect against the risk that the eventual dollar-net-cash outflows resulting from foreign currency operating and cost of revenue expenses will be adversely affected by changes in exchange rates.

We designate foreign currency forward contracts as cash flow hedges of forecasted revenues or forecasted expenses. In addition, we hedge our foreign currency denominated balance sheet exposures using foreign currency forward contracts that are not designated as hedging instruments. None of our derivative instruments contain a credit-risk-related contingent feature.

Cash flow hedges

To help protect against the reduction in value caused by a fluctuation in foreign currency exchange rates of forecasted foreign currency cash flows resulting from international sales over the next one to three years, we have instituted a foreign currency cash flow hedging program. We hedge portions of our forecasted revenue and forecasted expenses denominated in foreign currencies with forward contracts. For forward contracts, when the dollar strengthens significantly against the foreign currencies, the change in the present value of future foreign currency cash flows may be offset by the change in the fair value of the forward contracts designated as hedges. We purchase foreign currency forward for up to 100% of our forecasted exposures in selected currencies (primarily in Euro, Japanese yen, Malaysian ringgit, British pound, Chinese yuan, and Hungarian forint) and limit the duration of these contracts to 40 months or less.

For derivative instruments that are designated and qualify as a cash flow hedge, the effective portion of the gain or loss on the derivative is reported as a component of accumulated other comprehensive income (“OCI”) and reclassified into earnings in the same line item (net sales, operating expenses, or cost of sales) associated with the forecasted transaction and in the same period or periods during which the hedged transaction affects earnings. Gains and losses on the derivative representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in current earnings or expenses during the current period and are classified as a component of “net foreign exchange gain (loss)”. Hedge effectiveness of foreign currency forwards designated as cash flow hedges are measured by comparing the hedging instrument’s cumulative change in fair value from inception to maturity to the forecasted transaction’s terminal value.

We held forward contracts with the following notional amounts:



(In thousands)	U.S. Dollar Equivalent
	As of December 31, 2017		As of December 31, 2016
Chinese yuan	$	39,197	$	27,414
Euro	177,406		123,522
Japanese yen	22,857		44,982
Hungarian forint	41,296		57,077
British pound	9,931		—
Malaysian ringgit	28,287		42,510
Total forward contracts notional amount	$	318,974	$	295,505

The contracts in the foregoing table had contractual maturities of 24 months or less and 36 months or less at December 31, 2017 and December 31, 2016, respectively.

At December 31, 2017, we expect to reclassify $6.0 million of losses on derivative instruments from accumulated OCI to net sales during the next twelve months when the hedged international sales occur, $1.4 million of gains on derivative instruments from accumulated OCI to cost of sales when the cost of sales are incurred and $1.4 million of gains on derivative instruments from accumulated OCI to operating expenses during the next twelve months when the hedged operating expenses occur. Expected amounts are based on derivative valuations at December 31, 2017. Actual results may vary as a result of changes in the corresponding exchange rates subsequent to this date.

The gains and losses recognized in earnings due to hedge ineffectiveness were not material for fiscal years 2017, 2016, and 2015 and are included as a component of net income.

Other Derivatives

Other derivatives not designated as hedging instruments consist primarily of foreign currency forward contracts that we use to hedge our foreign denominated net receivable or net payable positions to protect against the change in value caused by a fluctuation in foreign currency exchange rates. We typically attempt to hedge up to 90% of our outstanding foreign denominated net receivables or net payables and typically limit the duration of these foreign currency forward contracts to approximately 120 days. The gain or loss on the derivatives as well as the offsetting gain or loss on the hedge item attributable to the hedged risk is recognized in current earnings under the line item “net foreign exchange gain (loss).” As of December 31, 2017 and December 31, 2016, we held foreign currency forward contracts with a notional amount of $63 million and $60 million, respectively.

The following tables present the fair value of derivative instruments on our Consolidated Balance Sheets and the effect of derivative instruments on our Consolidated Statements of Income.

Fair Values of Derivative Instruments:



	Asset Derivatives
	December 31, 2017			December 31, 2016
(In thousands)
	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Derivatives designated as hedging instruments
Foreign exchange contracts - ST forwards	Prepaid expenses and other current assets	$	4,707	Prepaid expenses and other current assets	$	9,378

Foreign exchange contracts - LT forwards	Other long-term assets	2,339		Other long-term assets	3,866
Total derivatives designated as hedging instruments		$	7,046		$	13,244

Derivatives not designated as hedging instruments

Foreign exchange contracts - ST forwards	Prepaid expenses and other current assets	$	187	Prepaid expenses and other current assets	$	1,869
Total derivatives not designated as hedging instruments		$	187		$	1,869

Total derivatives		$	7,233		$	15,113



	Liability Derivatives
	December 31, 2017				December 31, 2016
(In thousands)
	Balance Sheet Location	Fair Value			Balance Sheet Location	Fair Value
Derivatives designated as hedging instruments
Foreign exchange contracts - ST forwards	Other current liabilities	$	(7,487	)	Other current liabilities	$	(4,672	)

Foreign exchange contracts - LT forwards	Other long-term liabilities	(3,959		)	Other long-term liabilities	(3,352		)
Total derivatives designated as hedging instruments		$	(11,446	)		$	(8,024	)

Derivatives not designated as hedging instruments

Foreign exchange contracts - ST forwards	Other current liabilities	$	(1,297	)	Other current liabilities	$	(175	)
Total derivatives not designated as hedging instruments		$	(1,297	)		$	(175	)

Total derivatives		$	(12,743	)		$	(8,199	)

The following tables present the effect of derivative instruments on our Consolidated Statements of Income for the years ended December 31, 2017 and 2016, respectively:



December 31, 2017
(In thousands)
Derivatives in Cash Flow Hedging Relationship	Gain or (Loss) Recognized in OCI on Derivative (Effective Portion)			Location of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)	Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)			Location of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion)	Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion)
Foreign exchange contracts - forwards	$	(22,788	)	Net sales	$	(544	)	Net foreign exchange gain (loss)	$	—

Foreign exchange contracts - forwards	6,968			Cost of sales	(1,165		)	Net foreign exchange gain (loss)	—

Foreign exchange contracts - forwards	6,332			Operating expenses	(1,239		)	Net foreign exchange gain (loss)	—
Total	$	(9,488	)		$	(2,948	)		$	—



December 31, 2016
(In thousands)
Derivatives in Cash Flow Hedging Relationship	Gain or (Loss) Recognized in OCI on Derivative (Effective Portion)			Location of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)	Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)			Location of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion)	Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion)
Foreign exchange contracts - forwards	$	12,894		Net sales	$	1,280		Net foreign exchange gain (loss)	$	—

Foreign exchange contracts - forwards	(128		)	Cost of sales	(1,924		)	Net foreign exchange gain (loss)	—

Foreign exchange contracts - forwards	400			Operating expenses	(1,854		)	Net foreign exchange gain (loss)	—
Total	$	13,166			$	(2,498	)		$	—



(In thousands)
Derivatives not Designated as Hedging Instruments	Location of Gain (Loss) Recognized in Income	Amount of Gain (Loss) Recognized in Income			Amount of Gain (Loss) Recognized in Income
		December 31, 2017			December 31, 2016
Foreign exchange contracts - forwards	Net foreign exchange gain/(loss)	$	(5,891	)	$	1,911

Total		$	(5,891	)	$	1,911

Gains or losses recognized in OCI on the effective portion of our derivatives are reported net of gains or losses reclassified from accumulated OCI into income.

- Definition

The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 30
-Section 45
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6441202&loc=d3e80720-113993

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
-Paragraph 4C
-URI http://asc.fasb.org/extlink&oid=64837297&loc=SL5624171-113959

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=64837297&loc=d3e41620-113959

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
-Paragraph 4B
-URI http://asc.fasb.org/extlink&oid=64837297&loc=SL5624163-113959

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=64837297&loc=SL5579240-113959

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
-Paragraph 4D
-URI http://asc.fasb.org/extlink&oid=64837297&loc=SL5624177-113959

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 30
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=35736893&loc=d3e80784-113994

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
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+ Details

Inventories

12 Months Ended

Dec. 31, 2017

Inventory Disclosure [Abstract]

Inventories

Inventories, net at December 31, 2017 and December 31, 2016 consist of the following:



(In thousands)	December 31, 2017		December 31, 2016

Raw materials	$	91,513	$	92,906
Work-in-process	8,938		9,125
Finished goods	84,141		91,577
Total	$	184,592	$	193,608

Property and equipment

12 Months Ended

Dec. 31, 2017

Property, Plant and Equipment [Abstract]

Property and equipment

Property and equipment at December 31, 2017 and December 31, 2016, consist of the following:



(In thousands)	December 31, 2017			December 31, 2016

Land	$	33,016		$	32,928
Buildings	217,533			210,188
Furniture and equipment	368,107			353,535
	618,656			596,651
Accumulated depreciation	(368,941		)	(336,195		)
Total, net	$	249,715		$	260,456

Depreciation expense for the years ended December 31, 2017, 2016, and 2015, was $40 million, $40 million and $38 million, respectively.

໿

Intangible assets

12 Months Ended

Dec. 31, 2017

Intangible Assets, Net (Excluding Goodwill) [Abstract]

Intangible assets

Intangible assets at December 31, 2017 and December 31, 2016 are as follows:



(In thousands)	December 31, 2017							December 31, 2016
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Capitalized software development costs	$	116,691	$	(30,345	)	$	86,346	$	103,887	$	(39,180	)	$	64,707
Acquired technology	96,198		(87,341		)	8,857		94,124		(79,485		)	14,639
Patents	33,163		(19,931		)	13,232		31,513		(17,573		)	13,940
Other	45,565		(30,707		)	14,858		42,848		(27,471		)	15,377
Total	$	291,617	$	(168,324	)	$	123,293	$	272,372	$	(163,709	)	$	108,663

Software development costs capitalized in 2017, 2016, and 2015 were $43 million, $33 million, and $33 million, respectively, and related amortization expense was $22 million, $19 million, and $18 million, respectively. Capitalized software development costs for the years ended December 31, 2017, 2016, and 2015 included costs related to stock based compensation of $1.8 million, $1.3 million and $1.3 million, respectively. The related amounts in the table above are net of fully amortized assets.

Amortization of capitalized software development costs is computed on an individual product basis for those products available for market and is recognized based on the product’s estimated economic life, generally three to six years. Acquired technology and other intangible assets are amortized over their useful lives, which range from two to eight years. Patents are amortized using the straight-line method over their estimated period of benefit, generally 10 to 17 years. Total intangible assets amortization expenses were $34 million, $35 million, and $36 million for the years ended December 31, 2017, 2016, and 2015, respectively.

Capitalized software development costs, acquired technology, patents and other intangible assets had weighted-average useful lives of 3.0 years, 2.0 years, 3.0 years, and 4.4 years, respectively, as of December 31, 2017. The estimated future amortization expense related to intangible assets as of December 31, 2017 was as follows:



	Amount
	(In thousands)
2018	$	30,349
2019	26,191
2020	16,198
2021	7,808
2022	4,342
Thereafter	38,405
Total	$	123,293

Goodwill

12 Months Ended

Dec. 31, 2017

Goodwill [Abstract]

Goodwill

A reconciliation of the beginning and ending carrying amounts of goodwill is as follows:



	Amount
	(In thousands)
Balance as of December 31, 2015	$	257,718
Acquisitions	419
Purchase price adjustments	(1,585		)
Foreign currency translation impact	(3,355		)
Balance as of December 31, 2016	$	253,197
Acquisitions	—
Purchase price adjustments	—
Foreign currency translation impact	13,586
Balance as of December 31, 2017	$	266,783

The excess purchase price over the fair value of assets acquired is recorded as goodwill. We have one operating segment and one reporting unit. Goodwill is tested for impairment on an annual basis, and between annual tests if indicators of potential impairment exist, using a fair-value-based approach based on the market capitalization of the reporting unit. Our annual impairment test was performed as of November 30, 2017. No impairment of goodwill was identified during 2017 and 2016. Goodwill is deductible for tax purposes in certain jurisdictions.

See Note 17 – Acquisitions of Notes to Consolidated Financial Statements for additional discussion related to our acquisitions in 2016.

Income taxes

12 Months Ended

Dec. 31, 2017

Income Tax Disclosure [Abstract]

Income taxes

The components of income before income taxes are as follows:



(In thousands)	Years Ended December 31,
	2017		2016		2015
Domestic	$	46,308	$	43,418	$	50,102
Foreign	101,072		71,217		81,177
Total	$	147,380	$	114,635	$	131,279

The provision for income taxes charged to operations is as follows:



(In thousands)	Years Ended December 31,
	2017				2016		2015
Current tax expense:
U.S. federal	$	91,043			$	13,579	$	12,678
State	348				1,251		446
Foreign	9,352				22,631		11,874
Total current	$	100,743			$	37,461	$	24,998
Deferred tax expense (benefit):
U.S. federal	$	(4,796	)	</