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

6 Months Ended

Jan. 31, 2018

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. In all periods presented, cash equivalents consist primarily of time deposits, investments consist of available-for-sale investment-grade debt securities, and funds held for customers consist of cash and cash equivalents and investment grade available-for-sale debt securities. 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.

	January 31, 2018				July 31, 2017
(In millions)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Classification on balance sheets:
Cash and cash equivalents	$	478	$	478	$	529	$	529
Investments	250		248		247		248
Funds held for customers	422		422		372		372
Long-term investments	28		28		31		31
Total cash and cash equivalents, investments, and funds held for customers	$	1,178	$	1,176	$	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.

	January 31, 2018				July 31, 2017
(In millions)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Type of issue:
Total cash and cash equivalents	$	700	$	700	$	701	$	701
Available-for-sale debt securities:
Municipal bonds	51		50		63		63
Corporate notes	389		388		381		382
U.S. agency securities	10		10		3		3
Municipal auction rate securities	15		15		15		15
Total available-for-sale debt securities	465		463		462		463
Other long-term investments	13		13		16		16
Total cash and cash equivalents, investments, and funds held for customers	$	1,178	$	1,176	$	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 and six months ended January 31, 2018 and January 31, 2017 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 January 31, 2018 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 January 31, 2018 were not other-than-temporarily impaired. Unrealized losses on available-for-sale debt securities at January 31, 2018 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.

	January 31, 2018				July 31, 2017
(In millions)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due within one year	$	208	$	208	$	209	$	209
Due within two years	158		157		164		164
Due within three years	69		68		59		60
Due after three years	30		30		30		30
Total available-for-sale debt securities	$	465	$	463	$	462	$	463