Fair Value Of Financial Instruments

3 Months Ended

Jul. 31, 2011

Fair Value Of Financial Instruments

Fair Value Of Financial Instruments

F. Fair Value of Financial Instruments

We measure our investments based on a fair value hierarchy disclosure framework that prioritizes and ranks the level of market price observability used in measuring assets and liabilities at fair value. A number of factors affect market price observability, including the type of asset or liability and its characteristics. This hierarchy prioritizes the inputs into three broad levels as follows:

• Level 1—Quoted prices in active markets for identical instruments.

• Level 2—Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets.

• Level 3—Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

The following is a general description of the valuation methodologies we use for financial assets and liabilities measured at fair value, including the general classification of such assets and liabilities pursuant to the valuation hierarchy.

Cash Equivalents—Cash equivalents include investments in government obligation based money-market funds, other money market instruments and interest-bearing deposits with initial terms of three months or less. The fair value of cash equivalents approximates its carrying value due to the short-term nature of these instruments.

Marketable Securities—Marketable securities utilizing Level 1 inputs include active exchange-traded equity securities and equity index funds, and most U.S. Government debt securities, as these securities all have quoted prices in active markets. Marketable securities utilizing Level 2 inputs include municipal bonds. We value these securities using market-corroborated pricing or other models that use observable inputs such as yield curves.

The following tables present our assets and liabilities that we measured at fair value on a recurring basis as of July 31, 2011 and July 31, 2010, respectively, and indicates the fair value hierarchy of the valuation techniques we used to determine such fair value (in thousands):

	July 31, 2011
	Quoted Prices in Active Markets for     Identical Assets     (Level 1)		Significant Other     Observable     Inputs (Level 2)		Significant       Unobservable       Inputs (Level 3)		Balance
Cash equivalents	$	19,234		—		—	$	19,234
Marketable securities		6,431		19,227		—	$	25,658
Total	$	25,665	$	19,227	$	—	$	44,892
	July 31, 2010
	Quoted Prices in Active Markets for     Identical Assets     (Level 1)		Significant Other     Observable     Inputs (Level 2)		Significant       Unobservable       Inputs (Level 3)		Balance
Cash equivalents	$	20,664		—		—	$	20,664
Marketable securities		3,961		14,920		—	$	18,881
Total	$	24,625	$	14,920	$	—	$	39,545

In addition to cash equivalents and marketable securities classified as trading securities, we also have an equity method investment valued at approximately $ 282,000 and $264,000 as of July 31, 2011 and July 31, 2010, respectively, and approximately $6 million and $12 million in held-to-maturity investments as of July 31, 2011 and July 31, 2010, respectively, which are not recorded at fair value and thus are not included in the tables above. The held-to-maturity investments consist of certificates of deposits and tax-exempt state and municipal bonds as well as U.S. Government debt securities and are recorded at amortized cost. We obtain fair values for these securities from third-party broker statements. We derive the fair value amounts primarily from quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. These investments consisted of the following at July 31, 2011 and July 31, 2010 (in thousands):

	July 31, 2011
	Carrying value		Unrealized Gain		Unrealized Loss		Fair value
Held-to-maturity:
Certificates of Deposit	$	590	$	—	$	—	$	590
Tax-exempt state and municipal bonds		5,761		74		—		5,835
	$	6,351	$	74	$	—	$	6,425
	July 31, 2010
	Carrying value		Unrealized Gain		Unrealized Loss		Fair value
Held-to-maturity:
Certificates of Deposit	$	1,774	$	3	$	—	$	1,777
Tax-exempt state and municipal bonds		10,179		233		(63)		10,349
	$	11,953	$	236		$(63)		12,126

As of July 31, 2011, there were no investments in a loss position.

As of July 31, 2010, we had two held-to-maturity investments that were in a loss position for less than 2 years. The carrying value of these investments at July 31, 2010 was approximately $141,000 and the fair value was approximately $78,000.

The contractual maturities of debt securities classified as held-to-maturity at July 31, 2011 and 2010 were as follows (in thousands):

	2011		2010
Due within one year	$	5,168	$	5,281
Due within two years		1,156		5,433
Due within three years		27		1,212
Due after three years		—		27
	$	6,351	$	11,953