Cash and Cash Equivalents, Investments and Funds Held for Customers

9 Months Ended

Apr. 30, 2017

Cash and Cash Equivalents, Investments and Funds Held for Customers [Abstract]

Cash and Cash Equivalents, Investments and Funds Held for Customers

3. Cash and Cash Equivalents, Investments, and Funds Held for Customers

We consider highly liquid investments with maturities of three months or less at the date of purchase to be cash equivalents. Cash equivalents consist primarily of AAA-rated money market funds in all periods presented. Investments at April 30, 2017 consisted of available-for-sale investment-grade debt securities that we carried at fair value. Funds held for customers consist of cash and cash equivalents and investment grade available-for-sale debt securities in all periods presented. Except for direct obligations of the United States government, securities issued by agencies of the United States government, and money market funds, we diversify our investments in debt securities by limiting our holdings with any individual issuer.

The following table summarizes our cash and cash equivalents, investments, and funds held for customers by balance sheet classification at the dates indicated.

	April 30, 2017				July 31, 2016
(In millions)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Classification on balance sheets:
Cash and cash equivalents	$	1,350	$	1,350	$	638	$	638
Investments	243		243		441		442
Funds held for customers	323		323		304		304
Long-term investments	28		28		28		28
Total cash and cash equivalents, investments, and funds held for customers	$	1,944	$	1,944	$	1,411	$	1,412

The following table summarizes our cash and cash equivalents, investments, and funds held for customers by investment category at the dates indicated.

	April 30, 2017				July 31, 2016
(In millions)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Type of issue:
Total cash and cash equivalents	$	1,473	$	1,473	$	742	$	742
Available-for-sale debt securities:
Municipal bonds	85		85		186		186
Corporate notes	358		358		419		420
U.S. agency securities	—		—		36		36
Municipal auction rate securities	15		15		15		15
Total available-for-sale debt securities	458		458		656		657
Other long-term investments	13		13		13		13
Total cash and cash equivalents, investments, and funds held for customers	$	1,944	$	1,944	$	1,411	$	1,412

We use the specific identification method to compute gains and losses on investments. We include realized gains and losses on our available-for-sale debt securities in interest and other income or expense, net in our statements of operations. Gross realized gains and losses on our available-for-sale debt securities for the nine months ended April 30, 2017 and April 30, 2016 were not significant.

We accumulate unrealized gains and losses on our available-for-sale debt securities, net of tax, in accumulated other comprehensive income or loss in the stockholders’ equity section of our balance sheets. Gross unrealized gains and losses on our available-for-sale debt securities at April 30, 2017 and July 31, 2016 were not significant.

We periodically review our investment portfolios to determine if any investment is other-than-temporarily impaired due to changes in credit risk or other potential valuation concerns. We believe that the investments we held at April 30, 2017 were not other-than-temporarily impaired. Unrealized losses on available-for-sale debt securities at April 30, 2017 were not significant and were due to changes in interest rates, including market credit spreads, and not due to increased credit risks associated with specific securities. We do not intend to sell these investments. In addition, it is more likely than not that we will not be required to sell them before recovery at par, which may be at maturity.

The following table summarizes our available-for-sale debt securities classified by the stated maturity date of the security at the dates indicated.

	April 30, 2017				July 31, 2016
(In millions)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due within one year	$	184	$	184	$	285	$	285
Due within two years	180		180		209		210
Due within three years	71		71		143		143
Due after three years	23		23		19		19
Total available-for-sale debt securities	$	458	$	458	$	656	$	657