FAIR VALUE MEASUREMENTS AND DERIVATIVE INSTRUMENTS

Fair Value Measurements

FASB guidance for fair value measurements clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the guidance establishes a three-tier value hierarchy, which prioritizes the inputs used in measuring fair value as follows: (Level 1) observable inputs such as quoted prices in active markets; (Level 2) inputs other than the quoted prices in active markets that are observable either directly or indirectly; and (Level 3) unobservable inputs in which there is little or no market data, which require us to develop our own assumptions. This hierarchy requires us to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. On a recurring basis, we measure certain financial assets and liabilities at fair value, including our marketable securities and foreign currency contracts.

Our cash equivalents and investment instruments are classified within Level 1 or Level 2 of the fair value hierarchy because they are valued using quoted market prices, broker or dealer quotations, or alternative pricing sources with reasonable levels of price transparency. The types of instruments valued based on quoted market prices in active markets include money market securities. Such instruments are generally classified within Level 1 of the fair value hierarchy.

The types of instruments valued based on other observable inputs include U.S. government and agency securities, sovereign government obligations, investment-grade corporate bonds, mortgage-backed and asset-backed securities, term deposits and state, municipal and provincial obligations. Such instruments are generally classified within Level 2 of the fair value hierarchy.

We execute our foreign currency contracts primarily in the retail market in an over-the-counter environment with a relatively high level of price transparency. The market participants usually are large multi-national and regional banks. Our foreign currency contracts valuation inputs are based on quoted prices and quoted pricing intervals from public data sources and do not involve management judgment. These contracts are typically classified within Level 2 of the fair value hierarchy. There were no transfers between Level 1, Level 2 and Level 3 during the six months ended May 31, 2013.

The fair value hierarchy of our cash equivalents, short-term investments and foreign currency contracts is as follows (in thousands):



			Fair Value Measurements at Reporting Date using
Description	Total Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant other Observable Inputs (Level 2)
As of May 31, 2013
Assets:
Money market funds	$	335,999	$	335,999	$	—
Corporate bonds and commercial paper	53,929		—		53,929
U.S. Government debt and agency securities	9,578		—		9,578
Term deposits	558		—		558
Mortgage-backed securities	278		—		278
Foreign currency forward contracts	2,508		—		2,508
Liabilities:
Foreign currency forward contracts	$	175	$	—	$	175
As of November 30, 2012
Assets:
Money market funds	$	376,480	$	376,480	$	—
Corporate bonds and commercial paper	24,558		—		24,558
U.S. Government debt and agency securities	9,645		—		9,645
Term deposits	595		—		595
Mortgage-backed securities	208		—		208
Foreign currency forward contracts	101		—		101
Liabilities:
Foreign currency forward contracts	$	130	$	—	$	130

Derivative Instruments

We conduct business in the Americas; Europe, the Middle East and Africa (“EMEA”); and Asia Pacific and Japan (“APJ”). As a result, our financial results could be affected by factors such as changes in foreign currency exchange rates or changes in economic conditions in foreign markets. The U.S. dollar is our major transaction currency; we also transact business in approximately 25 foreign currencies worldwide, of which the most significant to our operations is the Euro. We enter into forward contracts with financial institutions to manage our currency exposure related to net assets and liabilities denominated in foreign currencies, and these forward contracts are generally settled monthly. Our forward contracts reduce, but do not eliminate, the impact of currency exchange rate movements. Gains and losses on forward contracts are included in Other Income (Expense) in our Condensed Consolidated Statements of Operations.

We had the following forward contracts outstanding as of May 31, 2013 (in thousands):



	Notional Value Local Currency	Notional Value USD		Fair Value Gain (Loss) USD
Forward contracts sold:
Australian dollar	8,300	$	8,406	$	460
Brazilian real	1,200	593		34
British pound	7,800	11,980		137
Euro	55,700	73,463		1,280
Japanese yen	461,000	4,638		59
Korean won	570,000	518		14
Polish zloty	1,700	537		21
Singapore dollar	1,000	811		22
South African rand	37,000	4,082		409
New Taiwan dollar	31,000	1,048		12
Forward contracts bought:
Australian dollar	2,000	1,920		(5		)
Brazilian real	1,200	562		(2		)
British pound	2,000	3,036		—
Euro	15,000	19,475		(37		)
Hong Kong dollar	10,000	1,289		—
Korean won	570,000	505		(1		)
Singapore dollar	2,000	1,581		(2		)
Swiss franc	1,800	1,908		(30		)
				$	2,371



	Notional Value Local Currency	Notional Value EURO		Fair Value Gain (Loss) USD
Forward contracts bought:
British pound	1,700	€	2,007	$	(25	)
Swedish krona	28,000	3,276		(34		)
United States dollar	1,300	985		21
				$	(38	)



	Derivatives not Designated as Hedging Instruments
	May 31, 2013		November 30, 2012
Foreign currency forward contracts, fair value included in:
Other Current Assets	$	2,508	$	101
Accrued Liabilities	175		130



		Amount of Gain or (Loss) Recognized In Income on Derivative
		Three Months Ended May 31,						Six Months Ended May 31,
Derivatives not Designated as Hedging Instruments	Location	2013			2012			2013			2012
Foreign Currency Contracts	Other income/(exp.)	$	(2,909	)	$	(438	)	$	(86	)	$	(1,795	)