5.	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 most money market securities and are generally classified within Level 1 of the fair value hierarchy.

The types of instruments valued based on other observable inputs include investment-grade corporate bonds, mortgage-backed and asset-backed products 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.

The fair value hierarchy of our cash equivalents, marketable securities 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 February 28, 2012:
Assets:
Money market funds	$	16,687	$	16,687	$	—
Term deposits		595		—		595
Mortgage-backed securities		209		—		209
Liabilities:
Foreign currency forward contracts	$	70	$	—	$	70

As of November 30, 2011:
Assets:
Money market funds	$	16,664	$	16,664	$	—
Term deposits		560		—		560
Mortgage-backed securities		225		—		225
Foreign currency forward contracts		142		—		142
Liabilities:
Foreign currency forward contracts	$	142	$	—	$	142

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 in fiscal years 2012 and 2011 was 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. We do not enter into derivative financial instruments for trading purposes. Gains and losses on forward contracts are included in Other Income (Expense) in our Condensed Consolidated Statements of Operations.

We had two outstanding forward contracts denominated in United States dollars and two outstanding forward contracts denominated in Euros as of February 28, 2012, which are summarized as follows (in thousands):


	Notional Value Local Currency		Notional Value USD		Fair Value Gain (Loss) USD
Forward contracts denominated in United States dollars sold:
Brazilian real		1,700		980		(5	)
New Taiwan dollar		30,000		1,019		(9	)

					$	(14	)


	Notional Value Local Currency		Notional Value EURO		Fair Value Gain (Loss) USD
Forward contracts denominated in Euros sold:
Australian dollar		2,200	€	1,786	$	(20	)
South African rand		46,000		4,610		(36	)

					$	(56	)


	Derivatives not Designated as Hedging Instruments
	February 28, 2012		November 30, 2011
Foreign currency forward contracts, fair value included in:
Other Current Assets	$	—	$	142
Accrued Liabilities		70		142

Amount of
Gain or (Loss) Recognized
In Income on Derivative

Three Months Ended
February 28,

Derivatives not Designated as

Hedging Instruments

Location

2012

2011

Foreign Currency Contracts

Other income/(expense)

$(1,358)

$(4,434)

Currently, we do not have master netting agreements with our counterparties for our forward contracts. We mitigate the credit risk of these derivatives by transacting with highly rated counterparties. As of February 28, 2012, we have evaluated the credit and non-performance risks associated with our derivative counterparties, and we believe that the impact of the credit risk associated with our outstanding derivatives was insignificant.