 |
|
|
 |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
|
|
2. SHORT-TERM INVESTMENTS AND FUNDS HELD FOR PAYROLL CUSTOMERS
As discussed in Note 1, "Concentration of Credit Risk and Significant Customers and Suppliers," our portfolio of short-term investments consists of
investment-grade securities and our funds held for payroll customers consist of cash and cash equivalents and investment-grade securities. Except
for direct obligations of the United States government, securities issued by agencies of the United States government, and money market or cash
management funds, we diversify our short-term investments by limiting our holdings with any individual issuer.
The following schedule summarizes our short-term investments and funds held for payroll customers at the dates indicated:
| |
JULY 31, 2003 |
JULY 31, 2004 |
|
| (In thousands) |
COST |
FAIR VALUE |
COST |
FAIR VALUE |
|
Type of issue:
Cash and cash equivalents in funds
held for payroll customers |
$ |
306,007 |
|
$ |
306,007 |
|
$ |
231,737 |
|
$ |
231,737 |
|
 |
Available-for-sale debt securities:
Corporate notes |
|
50,457 |
|
|
50,471 |
|
|
54,378 |
|
|
54,009 |
|
|
| Municipal bonds |
|
930,618 |
|
|
931,374 |
|
|
939,717 |
|
|
938,143 |
|
|
| U.S. government securities |
|
55,328 |
|
|
54,913 |
|
|
91,684 |
|
|
91,123 |
|
|
| Total available-for-sale debt securities |
|
1,036,403 |
|
|
1,036,758 |
|
|
1,085,779 |
|
|
1,083,275 |
|
|
Total short-term investments and funds held
for payroll customers |
$ |
1,342,410 |
|
$ |
1,342,765 |
|
$ |
1,317,516 |
|
$ |
1,315,012 |
|
|
|
|
Classification of investments on the balance sheets:
Short-term investments |
$ |
1,036,403 |
|
$ |
1,036,758 |
|
$ |
994,475 |
|
$ |
991,971 |
|
|
| Funds held for payroll customers |
|
306,007 |
|
|
306,007 |
|
|
323,041 |
|
|
323,041 |
|
|
| |
$ |
1,342,410 |
|
$ |
1,342,765 |
|
$ |
1,317,516 |
|
$ |
1,315,012 |
|
|
|
|
Gross unrealized gains and losses on our available-for-sale debt securities were as follows:
| |
JULY 31, |
|
| (In thousands) |
2003 |
2004 |
|
| Gross unrealized gains |
$ |
1,313 |
|
$ |
174 |
|
|
| Gross unrealized losses |
|
(958 |
) |
|
(2,678 |
) |
|
| Net unrealized gains (losses) |
$ |
355 |
|
$ |
(2,504 |
) |
|
|
|
The following table summarizes the fair value and gross unrealized losses related to 367 available-for-sale debt securities, aggregated by type of
investment and length of time that individual securities have been in a continuous unrealized loss position, at July 31, 2004:
| |
IN A LOSS POSITION FOR
LESS THAN 12 MONTHS |
IN A LOSS POSITION FOR
12 MONTHS OR MORE |
TOTAL IN A LOSS POSITION |
|
|
| July 31, 2004 (In thousands) |
FAIR VALUE |
GROSS
UNREALIZED
LOSSES |
FAIR VALUE |
GROSS
UNREALIZED
LOSSES |
FAIR VALUE |
GROSS
UNREALIZED
LOSSES |
|
| Corporate notes |
$ |
41,199 |
|
$ |
(369 |
) |
$ |
- |
|
$ |
- |
|
$ |
41,199 |
|
$ |
(369 |
) |
|
| Municipal bonds |
|
375,651 |
|
|
(1,639 |
) |
|
20,945 |
|
|
(101 |
) |
|
396,596 |
|
|
(1,740 |
) |
| U.S. government securities |
|
72,975 |
|
|
(532 |
) |
|
4,963 |
|
|
(37 |
) |
|
77,938 |
|
|
(569 |
) |
|
| |
$ |
489,825 |
|
$ |
(2,540 |
) |
$ |
25,908 |
|
$ |
(138 |
) |
$ |
515,733 |
|
$ |
(2,678 |
) |
|
|
|
We periodically review our investment portfolios to determine if any investment is other-than-temporarily impaired due to changes in credit risk or other
potential valuation concerns. At July 31, 2004, we believe that the investments that we hold are not other-than-temporarily impaired. While certain
available-for-sale debt securities have fair values that are below cost, we believe that it is probable that principal and interest will be collected in
accordance with contractual terms, and that the decline in market value is due to changes in interest rates and not due to increased credit risk.
Gross realized gains and losses on our available-for-sale debt securities were as follows:
| |
FISCAL |
|
|
| (In thousands) |
2002 |
2003 |
2004 |
|
| Gross realized gains |
$ |
1,909 |
|
$ |
1,885 |
|
$ |
728 |
|
|
| Gross realized losses |
|
(193 |
) |
|
(49 |
) |
|
(337 |
) |
|
| Net realized gains |
$ |
1,716 |
|
$ |
1,836 |
|
$ |
391 |
|
|
|
|
The following table summarizes our available-for-sale debt securities held in short-term investments classified by the stated maturity date of the security:
| |
JULY 31, 2004 |
|
| (In thousands) |
COST |
FAIR VALUE |
|
| Due within one year |
$ |
280,757 |
|
$ |
280,417 |
|
|
| Due within two years |
|
256,985 |
|
|
255,788 |
|
|
| Due within three years |
|
15,295 |
|
|
15,186 |
|
|
| Due after three years |
|
532,742 |
|
|
531,884 |
|
|
| |
$ |
1,085,779 |
|
$ |
1,083,275 |
|
|
|
|
|
|
|
