| Marketable Securities | NOTE 3 – MARKETABLE SECURITIES The following tables summarize marketable securities held at August 31, 2016 and May 31, 2016 by asset type:
Available-For-Sale Securities
(In thousands)
Amortized Cost
Gross Unrealized Gains
Gross Unrealized Losses
Fair Value (Net Carrying Amount)
August 31, 2016
Equity securities:
Stocks – foreign
$
4,989
$
180
$
(53
)
$
5,116
Stocks – domestic
30,896
2,613
(866
)
32,643
Mutual funds – foreign
35,923
932
(2,828
)
34,027
Mutual funds – domestic
61,070
1,051
(3,364
)
58,757
Total equity securities
132,878
4,776
(7,111
)
130,543
Fixed maturity:
U.S. treasury and other government
21,770
289
(97
)
21,962
Corporate bonds
829
151
-
980
Total fixed maturity securities
22,599
440
(97
)
22,942
Total
$
155,477
$
5,216
$
(7,208
)
$
153,485
Available-For-Sale Securities
(In thousands)
Amortized Cost
Gross Unrealized Gains
Gross Unrealized Losses
Fair Value (Net Carrying Amount)
May 31, 2016
Equity securities:
Stocks - foreign
$
5,051
$
439
$
(247
)
$
5,243
Stocks - domestic
27,717
3,831
(911
)
30,637
Mutual funds - foreign
35,903
802
(4,357
)
32,348
Mutual funds - domestic
60,354
99
(4,587
)
55,866
Total equity securities
129,025
5,171
(10,102
)
124,094
Fixed maturity:
U.S. treasury and other government
21,704
214
(80
)
21,838
Corporate bonds
887
137
-
1,024
Total fixed maturity securities
22,591
351
(80
)
22,862
Total
$
151,616
$
5,522
$
(10,182
)
$
146,956
Marketable securities, included in other current and long-term assets totaling $78.4 million and $75.1 million at August 31, 2016, respectively, and included in other current and long-term assets totaling $74.2 million and $72.8 million at May 31, 2016, respectively, are composed of available-for-sale securities and are reported at fair value. We carry a portion of our marketable securities portfolio in long-term assets since they are generally held for the settlement of our general and product liability insurance claims processed through our wholly owned captive insurance subsidiaries. Marketable securities are composed of available-for-sale securities and are reported at fair value. Realized gains and losses on sales of investments are recognized in net income on the specific identification basis. Changes in the fair values of securities that are considered temporary are recorded as unrealized gains and losses, net of applicable taxes, in accumulated other comprehensive income (loss) within stockholders’ equity. Other-than-temporary declines in market value from original cost are reflected in operating income in the period in which the unrealized losses are deemed other than temporary. In order to determine whether other-than-temporary declines in market value have occurred, the duration of the decline in value and our ability to hold the investment are considered in conjunction with an evaluation of the strength of the underlying collateral and the extent to which the investment’s amortized cost or cost, as appropriate, exceeds its related market value. Gross gains realized on sales of investments were $2.8 million and $2.5 million for the quarters ended August 31, 2016 and 2015, respectively. During the first quarter of fiscal 2017 and 2016, we recognized gross realized losses on sales of investments of $0.2 million and $0.1 million, respectively. During the first quarter of fiscal 2017, we recognized losses of approximately $0.2 million for securities deemed to have other-than-temporary impairments, while there were no such losses recorded during the same period last year. These amounts are included in investment (income), net in the Consolidated Statements of Income. Summarized below are the securities we held at August 31, 2016 and May 31, 2016 that were in an unrealized loss position and that were included in accumulated other comprehensive income (loss), aggregated by the length of time the investments had been in that position:
August 31, 2016
May 31, 2016
(In thousands)
Fair Value
Gross Unrealized Losses
Fair Value
Gross Unrealized Losses
Total investments with unrealized losses
$
85,895
$
(7,208
)
$
89,360
$
(10,182
)
Unrealized losses with a loss position for less than 12 months
21,014
(1,081
)
41,762
(4,856
)
Unrealized losses with a loss position for more than 12 months
64,881
(6,127
)
47,598
(5,326
) We have reviewed all of the securities included in the table above and have concluded that we have the ability and intent to hold these investments until their cost can be recovered, based upon the severity and duration of the decline. Therefore, we did not recognize any other-than-temporary impairment losses on these investments. The unrealized losses generally relate to investments whose fair values at August 31, 2016 were less than 15% below their original cost. From time to time, we may experience significant volatility in general economic and market conditions. If we were to experience unrealized losses that were to continue for longer periods of time, or arise to more significant levels of unrealized losses within our portfolio of investments in marketable securities in the future, we may recognize additional other-than-temporary impairment losses. Such potential losses could have a material impact on our results of operations in any given reporting period. As such, we continue to closely evaluate the status of our investments and our ability and intent to hold these investments. The net carrying values of debt securities at August 31, 2016, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because the issuers of the securities may have the right to prepay obligations without prepayment penalties.
(In thousands)
Amortized
Fair
Due:
Less than one year
$
6,049
$
6,035
One year through five years
11,013
11,051
Six years through ten years
4,420
4,537
After ten years
1,117
1,319
$
22,599
$
22,942 |
