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Table of Contents
the financial statements on a recurring basis (at least annually). SFAS 157 establishes a framework for measuring fair value and expands disclosures about fair
value measurements. FSP FAS 157-2 partially defers the effective date of SFAS 157 to fiscal years beginning after November 15, 2008, and interim periods
within those fiscal years for items within the scope of this FSP for non-financial assets and liabilities. The Company is currently evaluating the potential
impact of the adoption of those provisions of SFAS 157, for which effectiveness was delayed by FSP SFAS 157-2, on its consolidated financial position and
results of operations.
In April 2008, the FASB issued FSP No. 142-3, Determination of the Useful Life of Intangible Assets. FSP 142-3 amends the factors that should be
considered in developing assumptions about renewal or extension used in estimating the useful life of a recognized intangible asset under SFAS No. 142,
Goodwill and Other Intangible Assets. This standard is intended to improve the consistency between the useful life of a recognized intangible asset under
SFAS No. 142 and the period of expected cash flows used to measure the fair value of the asset under SFAS No. 141R, Business Combinations, and other
Generally Accepted Accounting Principles (GAAP). FSP No.142-3 is effective for financial statements issued for fiscal years beginning after December 15,
2008. The measurement provisions of this standard will apply only to intangible assets of the Company acquired after February 1, 2009.
In October 2008, the FASB issued FSP 157-3,"Determining the Fair Value of a Financial Asset When the Market for That Asset Is Not Active" (FSP
157-3). FSP 157-3 clarifies the application of SFAS No. 157 in a market that is not active and addresses application issues such as the use of internal
assumptions when relevant observable data does not exist, the use of observable market information when the market is not active, and the use of market
quotes when assessing the relevance of observable and unobservable data. FSP 157-3 is effective for all periods presented in accordance with SFAS No. 157.
The adoption of FSP 157-3 did not have a significant impact on the Company's consolidated financial statements or the fair values of its financial assets and
liabilities.
In November 2008, the FASB issued EITF Issue No. 08-7, "Accounting for Defensive Intangible Assets" (EITF 08-7). EITF 08-7 addresses the
accounting for assets acquired in a business combination or asset acquisition that an entity does not intend to actively use, otherwise referred to as a defensive
asset.' EITF 08-7 requires defensive intangible assets to be initially accounted for as a separate unit of accounting and not included as part of the cost of the
acquirer's existing intangible asset(s) because it is separately identifiable. EITF 08-7 also requires that defensive intangible assets be assigned a useful life in
accordance with paragraph 11 of SFAS 142 and is effective for financial statements issued for fiscal years beginning after December 15, 2008. The Company
does not anticipate that the adoption of this statement will have a material impact on its financial position, results of operations, or cash flows.
3. CASH AND CASH EQUIVALENTS AND SHORT-TERM AND LONG-TERM INVESTMENTS
The following table summarizes the amortized value of the Company's cash and cash equivalents and short-term investments that approximates their
fair value as of January 31, 2009 and 2008 (in thousands):
As of January 31,
2009 2008
Cash $ 8,410 $ 6,454
Money market funds 153,927 69,363
U.S. corporate debt securities — 2,995
Total cash and cash equivalents 162,337 78,812
Auction rate securities — 16,600
U.S. Treasury Bills 44,991 —
Commercial paper — 3,694
Total short-term investments 44,991 20,294
Total cash and cash equivalents, and short-term investments $ 207,328 $ 99,106
Auction rate securities 3,944 —
Total long-term investments $ 3,944 $ —
The Company currently invests the majority of its cash in U.S. Treasury Bills, U.S. Treasury funds, and money market funds and maintains them with
two financial institutions with a high credit rating. All $45 million of our U.S. Treasury Bills (short-term investments) at January 31, 2009 mature in less than
one year. The unrealized gains (losses) on our short-term investments represented an insignificant amount in relation to our total short-term investments
portfolio as of January 31, 2009 and January 31, 2008.
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