May 31, 2016
Stocks - foreign
Stocks - domestic
Mutual funds - foreign
Mutual funds - domestic
Total equity securities
U.S. treasury and other government
Total fixed maturity securities
Marketable securities, included in other current and long-term assets totaling $89.5 million and $75.0 million at
May 31, 2017, respectively, and included in other current and long-term assets totaling $74.2 million and $72.8 million at May 31, 2016, respectively, are composed of available-for-sale securities and are reported at fair value. We carry a portion of our marketable securities portfolio in long-term assets since they are generally held for the settlement of our general and
product liability insurance claims processed through our wholly owned captive insurance subsidiaries.
Marketable securities are composed of available-for-sale securities and are reported at fair value. Realized gains and losses on sales of investments are recognized in net income on the specific identification
basis. Changes in the fair values of securities that are considered temporary are recorded as unrealized gains and losses, net of applicable taxes, in accumulated other comprehensive income (loss) within stockholders equity.
Other-than-temporary declines in market value from original cost are reflected in investment income, net in the period in which the unrealized losses are deemed other than temporary. In order to determine whether other-
than-temporary declines in market value have occurred, the duration of the decline in value and our ability to hold the
investment are considered in conjunction with an evaluation of the strength of the underlying collateral and the extent to which the investments amortized cost or cost, as appropriate, exceeds its related market value. During May 2017, we made
the decision to shift a portion of our investments away from active equity portfolio management and into index funds, and from time to time, we may make additional changes to our investment portfolio and its management.
Gross gains realized on sales of investments were $12.6 million, $6.9 million and $8.8 million for the years ended May 31, 2017, 2016 and 2015,
respectively. During fiscal 2017, 2016 and 2015, we recognized gross realized losses on sales of investments of $4.4 million, $0.4 million and $0.1 million, respectively. During fiscal 2017 and 2016, we recognized losses of
approximately $0.4 million and $3.8 million, respectively, for securities deemed to have other-than-temporary impairments. During fiscal 2015, such losses were insignificant. These amounts are included in investment (income), net in the
Consolidated Statements of Income.
Summarized below are the securities we held at
May 31, 2017 and May 31, 2016 that were in an unrealized loss position and that were included in accumulated other comprehensive income (loss), aggregated by the length of time the investments had been in that position:
Total investments with unrealized losses
Unrealized losses with a loss position for less than 12 months
Unrealized losses with a loss position for more than 12
We have reviewed all of the securities included in the table above and have concluded that we have the ability and intent
to hold these investments until their cost can be recovered, based upon the severity and duration of the decline. Therefore, we did not recognize any other-than-temporary impairment losses on these investments. The unrealized losses generally relate
to investments whose fair values at May 31, 2017 were less than 15% below their original cost. From time to time, we may experience significant volatility in general economic and market conditions. If we were to experience unrealized losses
that were to continue for longer periods of time, or arise to more significant levels of unrealized losses within our portfolio of investments in marketable securities in the future, we may recognize additional other-than-temporary impairment
losses. Such potential losses could have a material impact on our results of operations in any given reporting period. As such, we continue to closely evaluate the status of our investments and our ability and intent to hold these investments.
The net carrying values of debt securities at May 31, 2017, by contractual maturity, are shown below. Expected
maturities may differ from contractual maturities because the issuers of the securities may have the right to prepay obligations without prepayment penalties.
Less than one year
One year through five years
Six years through ten years
After ten years
44 RPM International Inc. and Subsidiaries
RPM International Inc. (NYSE: RPM) owns subsidiaries that are world leaders in coatings, sealants, building materials and related services. From homes to precious landmarks worldwide, their brands are trusted by consumers and professionals alike to protect, improve and beautify. Among its leading consumer brands are Rust-Oleum, DAP and Zinsser. Learn more about RPM brands >>
RPM is a compelling long-term investment.
The percent by which RPM's 10-year total return has bested the S&P 500. More reasons >>
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