NOTE 4 — MARKETABLE SECURITIES

The following tables summarize marketable securities held at February 29, 2012 and May 31, 2011 by asset type:


	Available-For-Sale Securities
(In thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value (Net Carrying Amount)
February 29, 2012
Equity securities:
Stocks — foreign	$	1,016	$	267	$	(2	)	$	1,281
Stocks — domestic		25,049		3,470		(931	)		27,588
Kemrock global depository receipts		7,200		—		(114	)		7,086
Mutual funds — foreign		16,030		1,846		—			17,876
Mutual funds — domestic		38,521		2,013		(263	)		40,271

Total equity securities		87,816		7,596		(1,310	)		94,102
Fixed maturity:
U.S. treasury and other government		19,082		394		(73	)		19,403
Corporate bonds		2,365		333		(5	)		2,693
Foreign bonds		38		1		—			39
Mortgage-backed securities		240		109		—			349

Total fixed maturity securities		21,725		837		(78	)		22,484

Total	$	109,541	$	8,433	$	(1,388	)	$	116,586

	Available-For-Sale Securities
(In thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value (Net Carrying Amount)
May 31, 2011
Equity securities:
Stocks — foreign	$	25,387	$	12,162	$	—		$	37,549
Stocks — domestic		28,044		4,222		(417	)		31,849
Mutual funds — foreign		14,680		3,733		—			18,413
Mutual funds — domestic		30,565		2,246		(1,020	)		31,791

Total equity securities		98,676		22,363		(1,437	)		119,602
Fixed maturity:
U.S. treasury and other government		25,916		643		(79	)		26,480
Corporate bonds		2,729		301		(1	)		3,029
Mortgage-backed securities		432		101		(1	)		532

Total fixed maturity securities		29,077		1,045		(81	)		30,041

Total	$	127,753	$	23,408	$	(1,518	)	$	149,643

Marketable securities, which totaled $116.6 million at February 29, 2012, were included in other current assets. At May 31, 2011, marketable securities, included in other current and long-term assets, totaled $113.8 million and $35.8 million, respectively. During the second fiscal quarter ended November 30, 2011, we acquired additional shares in Kemrock, which required us to change our method of accounting for this long-term investment from an available for sale security to the equity method, as further described below under Note 9. In December 2011, we entered into GDR Purchase Agreement with Kemrock, whereby we purchased from Kemrock 693,072 GDRs of Kemrock for an aggregate purchase price of approximately $7.2 million. The fair value of the Kemrock GDRs is based on the price as listed in U.S. dollars on the Luxembourg Stock Exchange, which is based on the underlying price of Kemrock’s equity shares, which are traded on stock exchanges in India with prices quoted in rupees.

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 and losses realized on sales of investments were $0.3 million and $0.1 million, respectively, for the quarter ended February 29, 2012. Gross gains and losses realized on sales of investments were $4.7 million and $1.5 million, respectively, for the quarter ended February 28, 2011. During the third quarter of both fiscal 2012 and 2011, we recognized losses of less than $0.1 million for securities deemed to have other-than-temporary impairments. These amounts are included in investment income, net in the Consolidated Statements of Income.

Gross gains and losses realized on sales of investments were $4.1 million and $4.8 million, respectively, for the nine months ended February 29, 2012. Gross gains and losses realized on sales of investments were $10.6 million and $3.5 million, respectively, for the nine months ended February 28, 2011. During the first nine months of fiscal 2012 and 2011, we recognized losses of $0.8 million and $0.5 million, respectively, for securities deemed to have other-than-temporary impairments.

Summarized below are the securities we held at February 29, 2012 and May 31, 2011 that were in an unrealized loss position and that were included in accumulated other comprehensive income, aggregated by the length of time the investments had been in that position:


	February 29, 2012					May 31, 2011
	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
	(In thousands)
Total investments with unrealized losses	$	42,663	$	(1,388	)	$	21,612	$	(1,518	)
Unrealized losses with a loss position for less than 12 months		33,893		(1,139	)		19,721		(1,301	)
Unrealized losses with a loss position for more than 12 months		8,770		(249	)		1,891		(217	)

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. Unrealized losses at February 29, 2012 were generally related to the volatility in valuations over the last several months for a portion of our portfolio of investments in marketable securities. The unrealized losses, which totaled $1.4 million as of February 29, 2012, generally relate to investments whose fair values at February 29, 2012 were less than 15% below their original cost or have been in a loss position for less than six consecutive months. 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 February 29, 2012, 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.


	Amortized Cost		Fair Value
	(In thousands)
Due:
Less than one year	$	2,679	$	2,632
One year through five years		11,591		11,861
Six years through ten years		5,031		5,175
After ten years		2,424		2,816

	$	21,725	$	22,484