Investments

6 Months Ended

Mar. 31, 2012

Investments [Abstract]

Investments

5. Investments

Investments consist principally of U.S. government and government agency obligations and mortgage-backed securities and are classified as available-for-sale or held-to-maturity at March 31, 2012 and September 30, 2011. Available-for-sale securities are reported at fair value with unrealized gains and losses net of tax excluded from operations and reported as a separate component of stockholders’ equity, except for other-than-temporary impairments, which are reported as a charge to current operations. A loss would be recognized when there is an other-than-temporary impairment in the fair value of any individual security classified as available-for-sale, with the associated net unrealized loss reclassified out of accumulated other comprehensive income with a corresponding adjustment to other income. This adjustment results in a new cost basis for the investment. Investments that management has the intent and ability to hold to maturity are classified as held-to-maturity and reported at amortized cost. When an other-than-temporary impairment in the fair value of any individual security classified as held-to-maturity occurs, the Company writes down the security to fair value with a corresponding adjustment to other income. Interest on debt securities, including amortization of premiums and accretion of discounts, is included in other income. Realized gains and losses from the sales of debt securities, which are included in other income, are determined using the specific identification method.

The original cost, unrealized holding gains and losses, and fair value of available-for-sale securities as of March 31, 2012 and September 30, 2011 were as follows (in thousands):

	March 31, 2012
	Original Cost		Unrealized Gains		Unrealized Losses			Fair Value
U.S. government and government agency obligations	$	31,792	$	85	$	(15	)	$	31,862
Mortgage-backed securities		3,373		123		(37	)		3,459
Municipal bonds		3,020		29		—			3,049
Asset-backed securities		1,027		—		(54	)		973
Corporate bonds		2,807		23		(3	)		2,827
Total	$	42,019	$	260	$	(109	)	$	42,170

	September 30, 2011
	Original Cost		Unrealized Gains		Unrealized Losses			Fair Value
U.S. government and government agency obligations	$	30,433	$	176	$	(6	)	$	30,603
Mortgage-backed securities		3,871		131		(54	)		3,948
Municipal bonds		3,561		53		—			3,614
Asset-backed securities		1,336		1		(49	)		1,288
Corporate bonds		2,474		32		(9	)		2,497
Total	$	41,675	$	393	$	(118	)	$	41,950

The original cost and fair value of investments by contractual maturity at March 31, 2012 were as follows (in thousands):

	Amortized Cost		Fair Value
Debt securities due within:
One year	$	13,398	$	13,404
One to five years		22,555		22,661
Five years or more		6,066		6,105
Total	$	42,019	$	42,170

The following table summarizes sales of available-for-sale securities (in thousands):

	Three months ended March 31,						Six months ended March 31,
	2012			2011			2012			2011
Proceeds from sales	$	31,913		$	23,380		$	34,554		$	24,580
Gross realized gains	$	163		$	210		$	171		$	212
Gross realized losses	$	(1	)	$	(2	)	$	(1	)	$	(4	)

During the second quarter of fiscal 2012, all remaining held-to-maturity debt securities matured. Therefore, there were no held-to-maturity debt securities at March 31, 2012. At September 30, 2011, the amortized cost and fair market value of held-to-maturity debt securities were $3.0 million and $3.1 million, respectively.