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, 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 August 31, 2012:
Assets:
Money market funds	$	363,251	$	363,251	$	—
Term deposits		583		—		583
Mortgage-backed securities		196		—		196
Foreign currency forward contracts	$	763	$	—	$	763
Liabilities:
Foreign currency forward contracts	$	131	$	—	$	131
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 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. We do not enter into derivative financial instruments for speculative purposes. 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 August 31, 2012 (in thousands):


	Notional Value Local Currency			Notional Value USD			Fair Value Gain (Loss) USD
Forward contracts denominated in United States dollars sold:
Brazilian real		(1,500	)	$	(740	)	$	(15	)
Taiwanese dollar		(31,000	)		(1,037	)		(8	)
Forward contracts denominated in United States dollars bought:
British pound		12,400			19,692			399

							$	376


	Notional Value Local Currency			Notional Value EURO			Fair Value Gain (Loss) USD
Forward contracts denominated in Euros sold:
Australian dollar		(7,000	)	€	(5,743	)	$	275
Japanese yen		(120,000	)		(1,217	)		44
Korean won		(800,000	)		(562	)		17
United States dollar		(1,000	)		(795	)		29
Forward contracts denominated in Euros bought:
British pound		7,500			9,452			(100	)
Canadian dollar		1,000			806			(9	)

							$	256


	Derivatives not Designated as Hedging Instruments
	August 31, 2012		November 30, 2011
Foreign currency forward contracts, fair value included in:
Other Current Assets	$	763	$	142
Accrued Liabilities		131		142


		Amount of Gain or (Loss) Recognized In Income on Derivative
		Three Months Ended August 31,					Nine Months Ended August 31,
Derivatives not Designated as Hedging Instruments	Location	2012		2011			2012			2011
Foreign Currency Contracts	Other income/(exp.)	$	628	$	(109	)	$	(1,167	)	$	(7,678	)