Short-term Investments

9 Months Ended

Apr. 30, 2011

Short-term Investments [Abstract]

Short-term Investments

5. Short-term Investments

Short-term investments consist of the following:

			Gross		Gross
	Cost		Unrealized		Unrealized		Fair
	Basis		Gains		Losses		Value
	(in thousands)
As of April 30, 2011
Corporate bonds and notes	$	35,839	$	134	$	—	$	35,973
U.S. government agency securities		55,032		46		—		55,078
U.S. treasury bills		35,453		77		—		35,530
Commercial paper		2,449		1		—		2,450
Certificates of deposit		4,517		5		—		4,522
Total short-term investments	$	133,290	$	263	$	—	$	133,553

			Gross		Gross
	Cost		Unrealized		Unrealized			Fair
	Basis		Gains		Losses			Value
	(in thousands)
As of July 31, 2010
Corporate bonds and notes	$	23,802	$	69	$	(4	)	$	23,867
U.S. government agency securities		80,683		78		(9	)		80,752
U.S. treasury bills		12,816		57		—			12,873
Commercial paper		4,495		—		—			4,495
Certificates of deposit		2,179		1		—			2,180
Total short-term investments	$	123,975	$	205	$	(13	)	$	124,167

The cost basis and fair value of debt securities by contractual maturity, are presented below:

	Cost		Fair
	Basis		Value
	(in thousands)
As of April 30, 2011
One year or less	$	60,668	$	60,777
One to two years		72,622		72,776
Total short-term investments	$	133,290	$	133,553

The Company reviews the individual securities in its portfolio to determine whether a decline in a security’s fair value below the amortized cost basis is other than temporary. The Company determined that there were no investments in its portfolio, related to credit losses or otherwise, that were other-than temporarily impaired during the third quarter or first nine months of fiscal 2011 or 2010.

There were no securities in an unrealized loss position as of April 30, 2011.

Fair Value of Financial Instruments

Cash and cash equivalents consist primarily of bank deposits with third-party financial institutions and highly liquid money market securities with original maturities at date of purchase of 90 days or less and are stated at cost which approximates fair value.

Short-term investments are recorded at fair value, defined as the exit price in the principal market in which the Company would transact representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. Level 1 instruments are valued based on quoted market prices in active markets for identical instruments and include the Company’s investments in money market funds. Level 2 securities are valued using quoted market prices for similar instruments, nonbinding market prices that are corroborated by observable market data, or discounted cash flow techniques and include the Company’s investments in corporate bonds and notes, U.S. government agency securities, treasury bills, and commercial paper. Level 3 instruments are valued based on unobservable inputs that are supported by little or no market activity and reflect the Company’s own assumptions in measuring fair value. The Company has no short-term investments classified as Level 3 instruments.

As of April 30, 2011, the fair value measurements of the Company’s cash, cash equivalents and short-term investments consisted of the following:

	Total		Level 1		Level 2
	(in thousands)
Corporate bonds and notes	$	35,973			$	35,973
U.S. government agency securities		55,078				55,078
U.S. treasury bills		35,530				35,530
Commercial paper		2,450				2,450
Money market funds		16,193		16,193
Total cash equivalents and short-term investments		145,224	$	16,193	$	129,031
Certificates of deposit		4,522
Cash deposits with third-party financial institutions		61,052
Total cash, cash equivalents and short-term investments	$	210,798