NOTE 6 — MARKETABLE SECURITIES

The following tables summarize marketable securities held at February 28, 2013 and May 31, 2012 by asset type:


	Available-For-Sale Securities
(In thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value (Net Carrying Amount)
February 28, 2013
Equity securities:
Stocks — foreign	$	1,090	$	290	$	(5	)	$	1,375
Stocks — domestic		28,594		4,128		(625	)		32,097
Mutual funds — foreign		21,304		3,623		—			24,927
Mutual funds — domestic		24,511		96		(198	)		24,409

Total equity securities		75,499		8,137		(828	)		82,808
Fixed maturity:
U.S. treasury and other government		20,822		285		(69	)		21,038
Kemrock convertible bonds		14,273		—		(2,662	)		11,611
Corporate bonds		1,728		268		—			1,996
Foreign bonds		38		4		—			42
Mortgage-backed securities		114		63		(3	)		174

Total fixed maturity securities		36,975		620		(2,734	)		34,861

Total	$	112,474	$	8,757	$	(3,562	)	$	117,669


	Available-For-Sale Securities
(In thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value (Net Carrying Amount)
May 31, 2012
Equity securities:
Stocks — foreign	$	1,016	$	79	$	—		$	1,095
Stocks — domestic		24,380		2,776		(1,046	)		26,110
Mutual funds — foreign		17,489		521		(936	)		17,074
Mutual funds — domestic		39,246		1,114		(1,077	)		39,283

Total equity securities		82,131		4,490		(3,059	)		83,562
Fixed maturity:
U.S. treasury and other government		19,347		530		(12	)		19,865
Kemrock convertible bonds		13,670		—		—			13,670
Coporate bonds		2,305		349		(5	)		2,649
Foreign bonds		38		1		—			39
Mortgage-backed securities		241		105		(2	)		344

Total fixed maturity securities		35,601		985		(19	)		36,567

Total	$	117,732	$	5,475	$	(3,078	)	$	120,129

Marketable securities, included in other current and long-term assets, totaling $43.8 million and $73.9 million at February 28, 2013, respectively, and $30.5 million and $89.6 million at May 31, 2012, respectively, are composed of available-for-sale securities and are reported at fair value. In April 2012, we invested $22.7 million in 5.5% convertible bonds issued by Kemrock. The bonds are convertible into ordinary shares or global depositary receipts each representing one ordinary share of Kemrock stock, and may be converted at any time on or after June 4, 2012 and up to the close of business on June 12, 2017. Our investment in Kemrock convertible bonds is an available for sale security, which reflects the offsetting value of the discount on the bond as of the balance sheet date and the decline in the market value of the bond, and is classified in other long-term assets in our Consolidated Balance Sheet. We reclassified approximately $62.3 million and $76.0 million out of other current assets into long-term assets as of February 28, 2013 and May 31, 2012, respectively, in order to reflect the timeframe over which these assets are intended to be used.

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 $3.1 million and $0.2 million, respectively, for the quarter ended February 28, 2013. 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. During the third quarter of fiscal 2012, we recognized losses of approximately $0.1 million for securities deemed to have other-than-temporary impairments, while there were no similar losses recognized during the third quarter of fiscal 2013. These amounts are included in investment expense (income), net in the Consolidated Statements of Income.

Gross gains and losses realized on sales of investments were $8.1 million and $0.6 million, respectively, for the nine months ended February 28, 2013. 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. During the first nine months of fiscal 2013 and 2012, we recognized losses of $0.6 million and $0.8 million, respectively, for securities deemed to have other-than-temporary impairments.

Summarized below are the securities we held at February 28, 2013 and May 31, 2012 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 28, 2013					May 31, 2012
(In thousands)	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
Total investments with unrealized losses	$	45,700	$	(3,562	)	$	43,772	$	(3,078	)
Unrealized losses with a loss position for less than 12 months		44,848		(3,357	)		42,114		(2,596	)
Unrealized losses with a loss position for more than 12 months		852		(205	)		1,658		(482	)

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 28, 2013 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 generally relate to investments whose fair values at February 28, 2013 were less than 15% below their original cost or have been in a loss position for less than six consecutive months. Although we have seen recovery in general economic conditions over the past year, if we were to experience continuing or significant 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 28, 2013, 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 Cost		Fair Value
Due:
Less than one year	$	2,073	$	2,088
One year through five years		28,532		26,048
Six years through ten years		4,559		4,690
After ten years		1,811		2,035

	$	36,975	$	34,861

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.