Corporate Investments and Funds Held for Clients

9 Months Ended

Mar. 31, 2020

Corporate Investments and Funds Held for Clients

Corporate Investments and Funds Held for Clients

(5) Corporate Investments and Funds Held for Clients

Corporate investments and funds held for clients consist of the following:

	June 30, 2019
			Gross		Gross
	Amortized		unrealized		unrealized
Type of Issue	cost		gains		losses		Fair value
Cash and cash equivalents	$	132,478	$	—	$	(2)	$	132,476
Funds held for clients' cash and cash equivalents		1,293,673		—		(6)		1,293,667
Available-for-sale securities:
Commercial paper		63,397		33		(2)		63,428
Corporate bonds		27,044		59		(4)		27,099
Asset-backed securities		26,488		55		(3)		26,540
U.S. treasury securities		13,736		21		—		13,757
Total available-for-sale securities (1)		130,665		168		(9)		130,824
Total investments	$	1,556,816	$	168	$	(17)	$	1,556,967

(1) Included within the fair value of total available-for-sale securities above is $30,022 of corporate investments and $100,802 of funds held for clients.

	March 31, 2020
			Gross		Gross
	Amortized		unrealized		unrealized
Type of Issue	cost		gains		losses		Fair value
Cash and cash equivalents	$	114,323	$	3	$	(1)	$	114,325
Funds held for clients' cash and cash equivalents		1,520,105		23		(1)		1,520,127
Available-for-sale securities:
Commercial paper		150,388		50		(1)		150,437
Corporate bonds		52,587		18		(357)		52,248
Asset-backed securities		57,612		64		(90)		57,586
U.S. treasury securities		21,302		155		—		21,457
Total available-for-sale securities (2)		281,889		287		(448)		281,728
Total investments	$	1,916,317	$	313	$	(450)	$	1,916,180

(2) Included within the fair value of total available-for-sale securities above is $72,679 of corporate investments and $209,049 of funds held for clients.

Cash and cash equivalents and funds held for clients’ cash and cash equivalents include demand deposit accounts, money market funds, commercial paper and U.S. treasury securities with original maturities of three months or less as of June 30, 2019 and March 31, 2020.

Classification of investments on the unaudited consolidated balance sheets is as follows:

	June 30,		March 31,
	2019		2020
Cash and cash equivalents	$	132,476	$	114,325
Corporate investments		29,314		66,308
Funds held for clients		1,394,469		1,729,176
Long-term prepaid expenses and other		708		6,371
Total investments	$	1,556,967	$	1,916,180

Available-for-sale securities that have been in an unrealized loss position for a period of less and greater than 12 months are as follows:

	June 30, 2019
	Securities in an				Securities in an
	unrealized loss				unrealized loss
	position for less				position for greater
	than 12 months				than 12 months				Total
	Gross				Gross				Gross
	unrealized				unrealized				unrealized
	losses		Fair value		losses		Fair value		losses		Fair value
Commercial paper	$	(2)	$	19,055	$	—	$	—	$	(2)	$	19,055
Corporate bonds		(1)		1,500		(3)		3,701		(4)		5,201
Asset-backed securities		(1)		386		(2)		2,958		(3)		3,344
Total available-for-sale securities	$	(4)	$	20,941	$	(5)	$	6,659	$	(9)	$	27,600

	March 31, 2020
	Securities in an				Securities in an
	unrealized loss				unrealized loss
	position for less				position for greater
	than 12 months				than 12 months				Total
	Gross				Gross				Gross
	unrealized				unrealized				unrealized
	losses		Fair value		losses		Fair value		losses		Fair value
Commercial paper	$	(1)	$	498	$	—	$	—	$	(1)	$	498
Corporate bonds		(357)		42,474		—		—		(357)		42,474
Asset-backed securities		(90)		29,900		—		—		(90)		29,900
Total available-for-sale securities	$	(448)	$	72,872	$	—	$	—	$	(448)	$	72,872

The Company regularly reviews the composition of its portfolio to determine the existence of other-than-temporary-impairment (“OTTI”). The Company did not recognize any OTTI charges in accumulated other comprehensive income during the three or nine months ended March 31, 2019 or 2020, nor does it believe that OTTI exists in its portfolio as of March 31, 2020. The Company plans to retain the securities in an unrealized loss position for a period of time sufficient enough to recover their amortized cost basis or until their maturity date. The Company does not believe that the unrealized losses in its portfolio are due to material credit risks. The securities in an unrealized loss position held an A-1 rating or better as of March 31, 2020.

The Company did not make any material reclassification adjustments out of accumulated other comprehensive income for realized gains and losses on the sale of available-for-sale securities during the three or nine months ended March 31, 2019 or 2020. Gross realized gains and losses on the sale of available-for-sale securities were immaterial for both the three and nine months ended March 31, 2019 and 2020.

Expected maturities of available-for-sale securities at March 31, 2020 are as follows:

	Amortized
	cost		Fair value
One year or less	$	244,939	$	245,004
One year to two years		36,950		36,724
Total available-for-sale securities	$	281,889	$	281,728