Financial Instruments

6 Months Ended

Oct. 31, 2018

Investments All Other Investments [Abstract]

5. Financial Instruments

The following tables show the Company’s financial instruments and balance sheet classification as of October 31, 2018 and April 30, 2018:

	October 31, 2018
	Fair Value Measurement										Balance Sheet Classification
	Cost		Unrealized Gains		Unrealized Losses			Fair Value			Cash and Cash Equivalents		Marketable Securities, Current		Marketable Securities, Non- current		Income Taxes & Other Receivables		Other Accrued Liabilities
	(in thousands)
Level 1:
Cash	$	366,549	$	—	$	—		$	366,549		$	366,549	$	—	$	—	$	—	$	—
Money market funds		21,130		—		—			21,130			21,130		—		—		—		—
Mutual funds (1)		133,202		5,061		(2,664	)		135,599			—		6,686		128,913		—		—
Total	$	520,881	$	5,061	$	(2,664	)	$	523,278		$	387,679	$	6,686	$	128,913	$	—	$	—

Level 2:
Foreign currency forward contracts	$	—	$	1,436	$	(2,150	)	$	(714	)	$	—	$	—	$	—	$	—	$	(714	)
Interest rate swap	$	—	$	2,452	$	—		$	2,452		$	—	$	—	$	—	$	2,452	$	—

	April 30, 2018
	Fair Value Measurement									Balance Sheet Classification
	Cost		Unrealized Gains		Unrealized Losses			Fair Value		Cash and Cash Equivalents		Marketable Securities, Current		Marketable Securities, Non- current		Income Taxes & Other Receivables		Other Accrued Liabilities
	(in thousands)
Level 1:
Cash	$	519,818	$	—	$	—		$	519,818	$	519,818	$	—	$	—	$	—	$	—
Money market funds		1,030		—		—			1,030		1,030		—		—		—		—
Mutual funds (1)		127,077		11,040		(1,032	)		137,085		—		14,293		122,792		—		—
Total	$	647,925	$	11,040	$	(1,032	)	$	657,933	$	520,848	$	14,293	$	122,792	$	—	$	—

Level 2:
Foreign currency forward contracts	$	—	$	1,778	$	(1,025	)	$	753	$	—	$	—	$	—	$	753	$	—
Interest rate swap	$	—	$	2,076	$	—		$	2,076	$	—	$	—	$	—	$	2,076	$	—

(1)

These investments are held in trust for settlement of the Company’s vested obligations of $115.9 million and $118.2 million as of October 31, 2018 and April 30, 2018, respectively, under the ECAP (see Note 6 — Deferred Compensation and Retirement Plans). Unvested obligations under the deferred compensation plans totaled $24.2 million and $29.5 million as of October 31, 2018 and April 30, 2018, respectively. During the three and six months ended October 31, 2018, the fair value of the investments decreased; therefore, the Company recognized a loss of $4.8 million and $0.8 million, respectively, which was recorded in other (loss) income, net. During the three and six months ended October 31, 2017, the fair value of the investments increased; therefore, the Company recognized income of $3.4 million and $6.8 million, respectively, which was recorded in other (loss) income, net.

Investments in marketable securities are based upon investment selections the employee elects from a pre-determined set of securities in the ECAP and the Company invests in marketable securities to mirror these elections. As of October 31, 2018 and April 30, 2018, the Company’s investments in marketable securities consist of mutual funds for which market prices are readily available.

Designated Derivatives - Interest Rate Swap Agreement

In March 2017, the Company entered into an interest rate swap contract with a notional amount of $129.8 million, to hedge the variability to changes in cash flows attributable to interest rate risks caused by changes in interest rates related to its variable rate debt. The Company has designated the swap as a cash flow hedge. The notional amount will be amortized so that the amount is always half of the principal balance of the debt outstanding. As of October 31, 2018, the notional amount was $113.4 million. The interest rate swap agreement matures on June 15, 2021, and locks the interest rates on half the debt outstanding at 1.919%, exclusive of the credit spread on the debt.

The fair value of the derivative designated as a cash flow hedge instrument is as follows:

	October 31, 2018		April 30, 2018
	(in thousands)
Derivative asset:
Interest rate swap contract	$	2,452	$	2,076

During the three and six months ended October 31, 2018, the Company recognized the following gains and losses on the interest rate swap:

	Three Months Ended October 31,					Six Months Ended October 31,
	2018		2017			2018		2017
	(in thousands)
Gains (Losses) recognized in other comprehensive income (net of tax effects of $67, ($205), $120, and ($56), respectively)	$	193	$	(322	)	$	342	$	(88	)
Gains (Losses) reclassified from accumulated other comprehensive income into interest expense, net	$	64	$	(220	)	$	86	$	(500	)

As the critical terms of the hedging instrument and the hedged forecasted transaction are the same, the Company has concluded that the changes in the fair value or cash flows attributable to the risk being hedged are expected to completely offset at inception and on an ongoing basis.

We estimate that $0.8 million of derivative gains included in accumulated other comprehensive income as of October 31, 2018 will be reclassified into interest expense, net within the following 12 months. The cash flows related to the interest rate swap contract are included in net cash provided by operating activities.

Foreign Currency Forward Contracts Not Designated as Hedges

The fair value of derivatives not designated as hedge instruments are as follows:

	October 31, 2018		April 30, 2018
	(in thousands)
Derivative assets:
Foreign currency forward contracts	$	1,436	$	1,778
Derivative liabilities:
Foreign currency forward contracts	$	2,150	$	1,025

As of October 31, 2018, the total notional amounts of the forward contracts purchased and sold were $36.4 million and $49.6 million, respectively. As of April 30, 2018, the total notional amounts of the forward contracts purchased and sold were $80.8 million and $78.5 million, respectively. The Company recognizes forward contracts as a net asset or net liability on the consolidated balance sheets as such contracts are covered by a master netting agreement. During the three months ended October 31, 2018 and six months ended October 31, 2018 and 2017, the Company incurred losses of $0.2 million, $0.1 million, and $2.3 million, respectively, related to forward contracts which is recorded in general and administrative expenses in the accompanying consolidated statements of income. These foreign currency losses offset foreign currency gains that result from transactions denominated in a currency other than the Company’s functional currency. During the three months ended October 31, 2017, the Company incurred a gain of $0.3 million related to forward contracts which is recorded in general and administrative expenses in the accompanying consolidated statements of income. These gains offset foreign currency losses that result from transactions denominated in a currency other than the Company’s functional currency. The cash flows related to foreign currency forward contracts are included in net cash used in operating activities.