Investments

9 Months Ended

Jun. 30, 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 June 30, 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 June 30, 2012 and September 30, 2011 were as follows (in thousands):

	June 30, 2012
	Original Cost		Unrealized Gains		Unrealized Losses			Fair Value
U.S. government and government agency obligations	$	32,614	$	161	$	(1	)	$	32,774
Mortgage-backed securities		3,212		129		(36	)		3,305
Municipal bonds		3,183		30		(1	)		3,212
Asset-backed securities		955		1		(46	)		910
Corporate bonds		2,100		22		(3	)		2,119
Total	$	42,064	$	343	$	(87	)	$	42,320

	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 June 30, 2012 were as follows (in thousands):

	Amortized Cost		Fair Value
Debt securities due within:
One year	$	13,509	$	13,519
One to five years		24,346		24,545
Five years or more		4,209		4,256
Total	$	42,064	$	42,320

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

	Three months ended June 30,					Nine months ended June 30,
	2012			2011		2012			2011
Proceeds from sales	$	649		$	23,247	$	35,203		$	47,827
Gross realized gains	$	3		$	171	$	174		$	383
Gross realized losses	$	(1	)	$	—	$	(2	)	$	(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 June 30, 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.