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Marketable Securities
6 Months Ended
Nov. 30, 2015
Investments Debt And Equity Securities [Abstract]  
Marketable Securities

NOTE 4 — MARKETABLE SECURITIES

The following tables summarize marketable securities held at November 30, 2015 and May 31, 2015 by asset type:

 

 

 

Available-For-Sale Securities

 

(In thousands)

 

Amortized

Cost

 

 

Gross

Unrealized

Gains

 

 

Gross

Unrealized

Losses

 

 

Fair Value

(Net Carrying

Amount)

 

November 30, 2015

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stocks - foreign

 

$

4,282

 

 

$

415

 

 

$

(248

)

 

$

4,449

 

Stocks - domestic

 

 

32,032

 

 

 

3,991

 

 

 

(955

)

 

 

35,068

 

Mutual funds - foreign

 

 

33,605

 

 

 

948

 

 

 

(2,398

)

 

 

32,155

 

Mutual funds - domestic

 

 

57,862

 

 

 

124

 

 

 

(4,030

)

 

 

53,956

 

Total equity securities

 

 

127,781

 

 

 

5,478

 

 

 

(7,631

)

 

 

125,628

 

Fixed maturity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. treasury and other government

 

 

21,714

 

 

 

85

 

 

 

(258

)

 

 

21,541

 

Corporate bonds

 

 

1,032

 

 

 

135

 

 

 

-

 

 

 

1,167

 

Foreign bonds

 

 

36

 

 

 

2

 

 

 

-

 

 

 

38

 

Mortgage-backed securities

 

 

18

 

 

 

23

 

 

 

-

 

 

 

41

 

Total fixed maturity securities

 

 

22,800

 

 

 

245

 

 

 

(258

)

 

 

22,787

 

Total

 

$

150,581

 

 

$

5,723

 

 

$

(7,889

)

 

$

148,415

 

 

 

 

Available-For-Sale Securities

 

(In thousands)

 

Amortized

Cost

 

 

Gross

Unrealized

Gains

 

 

Gross

Unrealized

Losses

 

 

Fair Value

(Net Carrying

Amount)

 

May 31, 2015

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stocks - foreign

 

$

3,722

 

 

$

339

 

 

$

(85

)

 

$

3,976

 

Stocks - domestic

 

 

34,368

 

 

 

5,649

 

 

 

(559

)

 

 

39,458

 

Mutual funds - foreign

 

 

32,657

 

 

 

2,114

 

 

 

(230

)

 

 

34,541

 

Mutual funds - domestic

 

 

56,442

 

 

 

228

 

 

 

(2,779

)

 

 

53,891

 

Total equity securities

 

 

127,189

 

 

 

8,330

 

 

 

(3,653

)

 

 

131,866

 

Fixed maturity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. treasury and other government

 

 

21,340

 

 

 

171

 

 

 

(162

)

 

 

21,349

 

Corporate bonds

 

 

1,218

 

 

 

171

 

 

 

-

 

 

 

1,389

 

Foreign bonds

 

 

36

 

 

 

2

 

 

 

-

 

 

 

38

 

Mortgage-backed securities

 

 

81

 

 

 

47

 

 

 

-

 

 

 

128

 

Total fixed maturity securities

 

 

22,675

 

 

 

391

 

 

 

(162

)

 

 

22,904

 

Total

 

$

149,864

 

 

$

8,721

 

 

$

(3,815

)

 

$

154,770

 

 

Marketable securities, included in other current and long-term assets totaling $72.8 million and $75.6 million at November 30, 2015, respectively, and included in other current and long-term assets totaling $69.3 million and $85.5 million at May 31, 2015, 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 $2.1 million and $3.2 million for the quarters ended November 30, 2015 and 2014, respectively.  During the three months ended November 30, 2015, we recognized gross realized losses on sales of investments of $0.1 million, while we recognized no such losses during the three months ended November 30, 2014. During the three months ended November 30, 2015, we recognized losses of approximately $2.5 million for securities deemed to have other-than-temporary impairments, while we recognized no such losses during the second quarter of fiscal 2015.  These amounts are included in investment (income), net in the Consolidated Statements of Income.

Gross gains realized on sales of investments were $4.6 million and $5.3 million for the six months ended November 30, 2015 and 2014, respectively.  During the first six months of fiscal 2016, we recognized gross realized losses on sales of investments of $0.2 million, while we recognized no such losses during the first six months of fiscal 2015.  During the six months ended November 30, 2015, we recognized losses of approximately $2.5 million for securities deemed to have other-than-temporary impairments, while we recognized no such losses during the first half of fiscal 2015.

Summarized below are the securities we held at November 30, 2015 and May 31, 2015 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:

 

 

 

November 30, 2015

 

 

May 31, 2015

 

(In thousands)

 

Fair Value

 

 

Gross

Unrealized

Losses

 

 

Fair Value

 

 

Gross

Unrealized

Losses

 

Total investments with unrealized losses

 

$

97,059

 

 

$

(7,889

)

 

$

58,978

 

 

$

(3,815

)

Unrealized losses with a loss position for less

   than 12 months

 

 

55,461

 

 

 

(4,872

)

 

 

32,693

 

 

 

(1,441

)

Unrealized losses with a loss position for more

   than 12 months

 

 

41,598

 

 

 

(3,017

)

 

 

26,285

 

 

 

(2,374

)

 

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 November 30, 2015 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 November 30, 2015, 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

 

$

3,738

 

 

$

3,706

 

One year through five years

 

 

15,818

 

 

 

15,683

 

Six years through ten years

 

 

2,135

 

 

 

2,150

 

After ten years

 

 

1,109

 

 

 

1,248

 

 

 

$

22,800

 

 

$

22,787