Cash and Cash Equivalents, Investments and Funds Held for Customers

3 Months Ended

Oct. 31, 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 time deposits in all periods presented. Investments at October 31, 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.

	October 31, 2017				July 31, 2017
(In millions)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Classification on balance sheets:
Cash and cash equivalents	$	529	$	529	$	529	$	529
Investments	248		248		247		248
Funds held for customers	319		319		372		372
Long-term investments	31		31		31		31
Total cash and cash equivalents, investments, and funds held for customers	$	1,127	$	1,127	$	1,179	$	1,180

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

	October 31, 2017				July 31, 2017
(In millions)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Type of issue:
Total cash and cash equivalents	$	648	$	648	$	701	$	701
Available-for-sale debt securities:
Municipal bonds	55		55		63		63
Corporate notes	383		383		381		382
U.S. agency securities	10		10		3		3
Municipal auction rate securities	15		15		15		15
Total available-for-sale debt securities	463		463		462		463
Other long-term investments	16		16		16		16
Total cash and cash equivalents, investments, and funds held for customers	$	1,127	$	1,127	$	1,179	$	1,180

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 on our statements of operations. Gross realized gains and losses on our available-for-sale debt securities for the three months ended October 31, 2017 and October 31, 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 October 31, 2017 and July 31, 2017 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 October 31, 2017 were not other-than-temporarily impaired. Unrealized losses on available-for-sale debt securities at October 31, 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.

	October 31, 2017				July 31, 2017
(In millions)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due within one year	$	197	$	197	$	209	$	209
Due within two years	162		162		164		164
Due within three years	70		70		59		60
Due after three years	34		34		30		30
Total available-for-sale debt securities	$	463	$	463	$	462	$	463