SEC Document

RPM INTERNATIONAL INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

 

Gross gains realized on sales of investments were $2.0 million and $1.9 million for the quarters ended November 30, 2017 and 2016, respectively.  During the second quarter of fiscal 2017, we recognized gross realized losses on sales of investments of $0.8 million, while such losses were de minimis during the current fiscal quarter. During the second quarter of fiscal 2017, we recognized losses of approximately $0.2 million for securities deemed to have other-than-temporary impairments, while there were no such losses during the current fiscal quarter.  

Gross gains realized on sales of investments were $6.1 million and $4.7 million for the six months ended November 30, 2017 and 2016, respectively.  During the first half of fiscal 2018 and 2017, we recognized gross realized losses on sales of investments of $1.2 million and $1.0 million, respectively. During the first half of fiscal 2017, we recognized losses of approximately $0.4 million for securities deemed to have other-than-temporary impairments, while there were no such losses during the first half of fiscal 2018.  These amounts are included in investment (income), net in the Consolidated Statements of Income.

Summarized below are the securities we held at November 30, 2017 and May 31, 2017 that were in an unrealized loss position and that were included in accumulated other comprehensive (loss), aggregated by the length of time the investments had been in that position:

 

 

 

November 30, 2017

 

 

May 31, 2017

 

(In thousands)

 

Fair Value

 

 

Gross

Unrealized

Losses

 

 

Fair Value

 

 

Gross

Unrealized

Losses

 

Total investments with unrealized losses

 

$

55,199

 

 

$

(2,602

)

 

$

59,987

 

 

$

(3,505

)

Unrealized losses with a loss position for less than 12 months

 

 

13,813

 

 

 

(75

)

 

 

40,854

 

 

 

(2,983

)

Unrealized losses with a loss position for more than 12 months

 

 

41,386

 

 

 

(2,527

)

 

 

19,133

 

 

 

(522

)

 

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 November 30, 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 November 30, 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.

 

(In thousands)

 

Amortized Cost

 

 

Fair Value

 

Due:

 

 

 

 

 

 

 

 

Less than one year

 

$

3,727

 

 

$

3,716

 

One year through five years

 

 

16,089

 

 

 

15,879

 

Six years through ten years

 

 

3,224

 

 

 

3,154

 

After ten years

 

 

1,178

 

 

 

1,271

 

 

 

$

24,218

 

 

$

24,020

 

 

 

NOTE 5 — FAIR VALUE MEASUREMENTS

Financial instruments recorded in the balance sheet include cash and cash equivalents, trade accounts receivable, marketable securities, notes and accounts payable, and debt.

An allowance for anticipated uncollectible trade receivable amounts is established using a combination of specifically identified accounts to be reserved, and a reserve covering trends in collectibility. These estimates are based on an analysis of trends in collectibility and past experience, but are primarily made up of individual account balances identified as doubtful based on specific facts and conditions. Receivable losses are charged against the allowance when we confirm uncollectibility.

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