XML 23 R10.htm IDEA: XBRL DOCUMENT

Financial Instruments

12 Months Ended

Jan. 31, 2021

Fair Value Measurements

We define fair value as the exchange price that would be received from sale of an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. We measure our financial assets and liabilities at fair value at each reporting period using a fair value hierarchy which requires us to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s classification within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

Three levels of inputs may be used to measure fair value:

•Level 1 - Observable inputs are unadjusted quoted prices in active markets for identical assets or liabilities;

•Level 2 - Observable inputs are quoted prices for similar assets and liabilities in active markets or inputs other than quoted prices that are observable for the assets or liabilities, either directly or indirectly through market corroboration, for substantially the full term of the financial instruments; and

•Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. These inputs are based on our own assumptions used to measure assets and liabilities at fair value and require significant management judgment or estimation.

Cash Equivalents, Marketable Securities and Restricted Cash

We measure our cash equivalents, marketable securities and restricted cash at fair value on a recurring basis. We classify our cash equivalents, marketable securities and restricted cash within Level 1 or Level 2 because they are valued using either quoted market prices or inputs other than quoted prices which are directly or indirectly observable in the market, including readily-available pricing sources for the identical underlying security which may not be actively traded. Our fixed income available-for-sale securities consist of high quality, investment grade securities from diverse issuers. The valuation techniques used to measure the fair value of our marketable securities were derived from non-binding market consensus prices that are corroborated by observable market data or quoted market prices for similar instruments.

The following tables summarize our cash equivalents, marketable securities and restricted cash by significant investment categories and their classification within the fair value hierarchy at the end of fiscal 2020 and 2021 (in thousands):


	At the End of Fiscal 2020
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Cash Equivalents		Marketable Securities		Restricted Cash
Level 1

Money market accounts	$	—	$	—	$	—	$	26,355	$	11,068	$	—	$	15,287
Level 2
U.S. government treasury notes	323,751		2,146		—		325,897		—		325,897		—
U.S. government agencies	53,930		317		(3)		54,244		—		54,244		—
Corporate debt securities	452,318		3,954		(1)		456,271		3,001		453,270		—
Foreign government bonds	14,994		147		—		15,141		—		15,141		—
Asset-backed securities	87,267		699		—		87,966		—		87,966		—
Total	$	932,260	$	7,263	$	(4)	$	965,874	$	14,069	$	936,518	$	15,287


	At the End of Fiscal 2021
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Cash Equivalents		Marketable Securities		Restricted Cash
Level 1

Money market accounts	$	—	$	—	$	—	$	49,984	$	39,440	$	—	$	10,544
Level 2
U.S. government treasury notes	339,253		3,241		(1)		342,493		15,340		327,153		—
U.S. government agencies	56,729		516		—		57,245		—		57,245		—
Corporate debt securities	425,115		4,176		(33)		429,258		—		429,258		—
Foreign government bonds	21,486		307		—		21,793		—		21,793		—
Asset-backed securities	79,924		1,015		—		80,939		—		80,939		—
Total	$	922,507	$	9,255	$	(34)	$	981,712	$	54,780	$	916,388	$	10,544

The amortized cost and estimated fair value of our marketable securities are shown below by contractual maturity (in thousands):


	At the End of Fiscal 2021
	Amortized Cost		Fair Value
Due within one year	$	316,339	$	318,019
Due in one to five years	590,828		598,369

Total	$	907,167	$	916,388

Unrealized losses on our debt securities have not been recorded into income because we do not intend to sell nor is it more likely than not that we will be required to sell these investments prior to recovery of their amortized cost basis. The decline in fair value of our debt securities is largely due to changes in credit spreads as a result of market conditions. The credit ratings associated with our debt securities are mostly unchanged, are highly rated and the issuers continue to make timely principal and interest payments. As a result, there was no impairment charge for any unrealized losses in fiscal 2019 and 2020, and we had no credit losses recorded for fiscal 2021. The following table presents gross unrealized losses and fair values for those investments that were in a continuous unrealized loss position at the end of fiscal 2020 and 2021, aggregated by investment category (in thousands):


	At the End of Fiscal 2020
	Less than 12 months				Greater than 12 months				Total
	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
U.S. government treasury notes	$	—	$	—	$	1,000	$	—	$	1,000	$	—
U.S. government agencies	4,998		(3)		—		—		4,998		(3)
Corporate debt securities	9,691		(1)		—		—		9,691		(1)


Total	$	14,689	$	(4)	$	1,000	$	—	$	15,689	$	(4)


	At the End of Fiscal 2021
	Less than 12 months				Greater than 12 months				Total
	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
U.S. government treasury notes	$	8,301	$	(1)	$	—	$	—	$	8,301	$	(1)

Corporate debt securities	32,996		(33)		—		—		32,996		(33)


Total	$	41,297	$	(34)	$	—	$	—	$	41,297	$	(34)

Realized gains or losses on sale of marketable securities were not significant for all periods presented.

Other Financial Instruments

We measure the fair value of our Notes on a quarterly basis and we determined the fair value of the Notes at the end of fiscal 2020 and 2021 to be a Level 2 measurement due to its limited trading activity. Refer to Note 7 for the net carrying amounts and estimated fair value of the Notes at the end of fiscal 2020 and 2021.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details