Auction Rate Securities

12 Months Ended

Oct. 31, 2013

Auction Rate Securities

6. AUCTION RATE SECURITIES

At October 31, 2013, we held investments in auction rate securities from three different issuers having an aggregate original principal amount of $15.0 million and an amortized cost basis of $13.0 million. During the year ended October 31, 2013, one of the auction rate securities was redeemed by the issuer at its par value of $5.0 million. No gain or loss was recognized upon its redemption. At October 31, 2012, we held investments in auction rate securities from four different issuers having an aggregate original principal amount of $20.0 million and an amortized cost basis of $18.0 million.

Our auction rate securities are debt instruments with stated maturities ranging from 2033 to 2050, for which the interest rate is designed to be reset through Dutch auctions approximately every 30 days. Auctions for these securities have not occurred since August 2007. We have classified all our auction rate security investments as non-current as we do not reasonably expect to liquidate the securities for cash within the next 12 months.

As of October 31, 2013, none of our auction rate securities were in an unrealized loss position. As of October 31, 2012, two of our auction rate securities, with an aggregate fair value of $7.8 million, were in a continuous unrealized loss position for less than twelve months and the remaining two auction rate securities, with an aggregate fair value of $10.0 million, were not in an unrealized loss position.

The following table presents the significant assumptions used to determine the fair values of our auction rate securities at October 31, 2013 and 2012:

Assumption	October 31, 2013	October 31, 2012
Discount rates	L + 0.33% - L + 3.01%	L + 1.37% - L + 6.86%
Yields	2.15%, L + 2.00%	2.15%, L + 2.00% - L + 3.50%
Average expected lives	4 - 10 years	4 - 10 years

L - One Month LIBOR

The following tables present the changes in the cost basis and fair value of our auction rate securities as of October 31, 2013 and 2012:

(in thousands)	Amortized Cost Basis		Fair Value (Level 3)
Balance at November 1, 2012	$	17,994	$	17,780
Unrealized gains recorded in AOCL		—		214
Redemption of security by issuer		(5,000)		(5,000)
Balance at October 31, 2013	$	12,994	$	12,994
(in thousands)	Amortized Cost Basis		Fair Value (Level 3)
Balance at November 1, 2011	$	18,307	$	15,670
Unrealized gains recorded in AOCL		—		2,110
Other-than-temporary credit loss recognized in earnings		(313)		—
Balance at October 31, 2012	$	17,994	$	17,780

At October 31, 2013, there were no unrealized gains or losses included in AOCL. At October 31, 2012, unrealized losses of $0.2 million ($0.1 million net of taxes) were included in AOCL.

During the year ended October 31, 2012, we recorded an OTTI credit loss of $0.3 million for one of our auction rate security investments, driven primarily from a change in the expected values of cash flows to be received in the future. No OTTI credit loss has been recorded in the years ended October 31, 2013 and 2011. The total amount of OTTI credit loss on our auction rate security investments included in our retained earnings as of October 31, 2013 and 2012 was $2.0 million.