Financial Instruments

9 Months Ended

Jan. 31, 2020

Investments All Other Investments [Abstract]

5. Financial Instruments

The following tables show the Company’s financial instruments and balance sheet classification as of January 31, 2020 and April 30, 2019:

	January 31, 2020
	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
	(in thousands)
Level 1:
Cash	$	506,816	$	—	$	—		$	506,816	$	506,816	$	—	$	—	$	—
Money market funds		50,402		—		—			50,402		50,402		—		—		—
Mutual funds (1)		143,885		8,366		(662	)		151,589		—		7,800		143,789		—
Total	$	701,103	$	8,366	$	(662	)	$	708,807	$	557,218	$	7,800	$	143,789	$	—

Level 2:
Commercial paper	$	19,281	$	—	$	(2	)	$	19,279	$	2,793	$	16,486	$	—	$	—
Corporate notes/bonds		20,438		1		(6	)		20,433		3,697		16,736		—		—
Total debt investments	$	39,719	$	1	$	(8	)	$	39,712	$	6,490	$	33,222	$	—	$	—
Foreign currency forward contracts	$	—	$	751	$	(629	)	$	122	$	—	$	—	$	—	$	122

	April 30, 2019
	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
	(in thousands)
Level 1:
Cash	$	579,998	$	—	$	—		$	579,998	$	579,998	$	—	$	—	$	—
Money market funds		46,362		—		—			46,362		46,362		—		—		—
Mutual funds (1)		135,439		6,301		(989	)		140,751		—		8,288		132,463		—
Total	$	761,799	$	6,301	$	(989	)	$	767,111	$	626,360	$	8,288	$	132,463	$	—

Level 2:
Foreign currency forward contracts	$	—	$	821	$	(722	)	$	99	$	—	$	—	$	—	$	99
Interest rate swap	$	—	$	619	$	—		$	619	$	—	$	—	$	—	$	619

(1)

These investments are held in trust for settlement of the Company’s vested obligations of $135.7 million and $122.3 million as of January 31, 2020 and April 30, 2019, respectively, under the ECAP (see Note 6 — Deferred Compensation and Retirement Plans). Unvested obligations under the deferred compensation plans totaled $23.2 million and $24.6 million as of January 31, 2020 and April 30, 2019, respectively. During the three and nine months ended January 31, 2020, the fair value of the investments increased; therefore, the Company recognized a gain of $5.2 million and $8.3 million, respectively, which was recorded in other income, net. During the three and nine months ended January 31, 2019, the fair value of the investments increased; therefore, the Company recognized a gain of $2.2 million and $1.3 million, respectively, which was recorded in other income, net.

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 January 31, 2020, marketable securities classified as available-for-sale consist of commercial paper and corporate notes/bonds for which market prices for similar assets are readily available. Investments that have an original maturity of 90 days or less and are considered highly liquid investments are classified as cash equivalents. As of January 31, 2020, available-for-sale marketable securities have remaining maturities ranging from three to eleven months. During the three and nine months ended January 31, 2020, there were no sales/maturities of available-for-sale marketable securities. Investments in marketable securities classified as trading 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 January 31, 2020 and April 30, 2019, the Company’s investments in marketable securities classified as trading consisted 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 interest rate swap agreement locked the interest rates on a portion of the debt outstanding at 1.919%, exclusive of the credit spread on the debt. The Company designated the swap as a cash flow hedge. On December 16, 2019, in conjunction with the payoff of the credit facility, the Company terminated the interest rate swap and recorded $0.5 million in interest expense, net.

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

	January 31, 2020		April 30, 2019
	(in thousands)
Derivative asset:
Interest rate swap contract	$	—	$	619

During the three and nine months ended January 31, 2020 and 2019, the Company recognized the following gains and losses on the interest rate swap:

	Three Months Ended January 31,						Nine Months Ended January 31,
	2020			2019			2020			2019
	(in thousands)
Gains (losses) recognized in other comprehensive income (net of tax effects of $45, $(309), $(238) and $(189), respectively)	$	128		$	(880	)	$	(678	)	$	(538	)
(Losses) gains reclassified from accumulated other comprehensive loss into interest expense, net	$	(493	)	$	135		$	(297	)	$	221

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:

	January 31, 2020		April 30, 2019
	(in thousands)
Derivative assets:
Foreign currency forward contracts	$	751	$	821
Derivative liabilities:
Foreign currency forward contracts	$	629	$	722

As of January 31, 2020, the total notional amounts of the forward contracts purchased and sold were $78.4 million and $58.5 million, respectively. As of April 30, 2019, the total notional amounts of the forward contracts purchased and sold were $51.4 million and $40.0 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 a master netting agreement. During the three and nine months ended January 31, 2020, the Company incurred gains of $0.5 million and $1.0 million, respectively, related to forward contracts, which is recorded in general and administrative expenses in the accompanying consolidated statements of income. These foreign currency gains offset foreign currency losses that result from transactions denominated in a currency other than the Company’s functional currency. During the three and nine months ended January 31, 2019, the Company incurred gains of $0.7 million and $0.6 million, respectively, related to forward contracts, which are 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.