5. Financial Instruments

The following tables show the Company’s financial instruments and balance sheet classification as of April 30, 2018 and 2017:


	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		$	—


	April 30, 2017
	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		$	409,824		$	—		$	—			$	409,824			$	409,824		$	—		$	—		$	—		$	—
Money market funds			1,058			—			—				1,058				1,058			—			—			—			—
Mutual funds (1)			113,818			6,697			(578	)			119,937				—			4,363			115,574			—			—

Total		$	524,700		$	6,697		$	(578	)		$	530,819			$	410,882		$	4,363		$	115,574		$	—		$	—

Level 2:
Foreign currency forward contracts		$	—		$	129		$	(846	)		$	(717	)		$	—		$	—		$	—		$	—		$	(717	)
Interest rate swap		$	—		$	—		$	(947	)		$	(947	)		$	—		$	—		$	—		$	—		$	(947	)

(1)

These investments are held in trust for settlement of the Company’s vested obligations of $118.2 million and $99.5 million as of April 30, 2018 and 2017, respectively, under the ECAP (see Note 6 — Deferred Compensation and Retirement Plans). During fiscal 2018 and 2017, the fair value of the investments increased; therefore, the Company recognized income of $10.3 million and $10.8 million, respectively which was recorded in other income (loss), net. During fiscal 2016, the fair value of the investments decreased; therefore, the Company recognized a loss of $3.3 million, which was recorded in other income (loss), net.

Investments in marketable securities classified as trading are based upon employee elections from a pre-determined set of securities in the ECAP and the Company invests in marketable securities to mirror these elections. As of April 30, 2018 and 2017, the Company’s investments in marketable securities classified as trading consist of mutual funds for which market prices are readily available. Investments in marketable securities classified as available-for-sale securities are made based on the Company’s investment policy, which restricts the types of investments that can be made. As of April 30, 2018 and April 30, 2017, the Company does not hold marketable securities classified as available-for-sale. During fiscal 2016, the Company received $13.1 million in proceeds from maturities of available-for-sale marketable securities.

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 April 30, 2018, the notional amount was $119.5 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:


	April 30,
	2018		2017
	(in thousands)
Derivative asset:
Interest rate swap contract	$	2,076	$	—
Derivative liability:
Interest rate swap contract	$	—	$	947

During fiscal 2018 and 2017, the Company recognized the following gains and losses on the interest rate swap:


	Year Ended April 30,
	2018			2017
	(in thousands)
Gains (Losses) recognized in other comprehensive income (net of tax effects of $828 and ($406), respectively)	$	1,465		$	(635)
Losses reclassified from accumulated other comprehensive income into interest (expense) income, net	$	(730	)	$	(94)

As the critical terms of the hedging instrument and the hedged forecasted transaction are the same, the Company has concluded 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 $0.4 million of derivative gains included in AOCI as of April 30, 2018 will be reclassified into interest (expense) income, net within the following 12 months. The cash flows related to interest rate swap contracts 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:


	April 30,
	2018		2017
	(in thousands)
Derivative assets:
Foreign currency forward contracts	$	1,778	$	129
Derivative liabilities:
Foreign currency forward contracts	$	1,025	$	846

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. As of April 30, 2017, the total notional amounts of the forward contracts purchased and sold were $19.4 million and $70.0 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 master netting agreements. During fiscal 2018 and 2016, the Company incurred losses of $3.7 million and $1.8 million, respectively, related to forward contracts which is recorded in general and administrative expenses in the accompanying consolidated statements of income. These losses offset foreign currency gains that result from transactions denominated in a currency other than the Company’s functional currency. During fiscal 2017, the Company incurred gains of $0.6 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 cash flows from operating activities in the accompanying statements of cash flow.