Fair Value Measurements

3 Months Ended

Dec. 01, 2011

Notes to Financial Statements [Abstract]

Fair Value Measurements

Fair Value Measurements

Accounting standards establish three levels of inputs that may be used to measure fair value: quoted prices in active markets for identical assets or liabilities (referred to as Level 1), observable inputs other than Level 1 that are observable for the asset or liability either directly or indirectly (referred to as Level 2) and unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities (referred to as Level 3).

Fair Value Measurements on a Recurring Basis

Assets measured at fair value on a recurring basis were as follows:

	December 1, 2011								September 1, 2011
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Money market(1)	$	1,488	$	—	$	—	$	1,488	$	1,462	$	—	$	—	$	1,462
Certificates of deposit(1)	—		149		—		149		—		155		—		155
Marketable equity investments(2)	41		12		—		53		37		15		—		52
Assets held for sale(2)	—		—		32		32		—		—		35		35
	$	1,529	$	161	$	32	$	1,722	$	1,499	$	170	$	35	$	1,704

⁽¹⁾  Included in cashand equivalents.

⁽²⁾  Included in other noncurrent assets.

Certificates of deposit: Certificates of deposit assets were valued using observable inputs in active markets for similar assets (Level 2).

Marketable equity investments: All marketable equity investments were classified as available-for-sale. Gross realized gains and gross realized losses on sales of our marketable equity investments were not significant for the first quarters of 2012 or 2011. Marketable equity investments included approximately 20 million ordinary shares of Tower Semiconductor Ltd. received in connection with our sale of our wafer fabrication facility in Japan in June, 2011, which were valued using quoted market prices in an active market and discounted using a protective put model for our resale restriction (Level 2).

Assets held for sale: Assets held for sale primarily included semiconductor equipment and facilities.  Fair value for semiconductor equipment was based on quotations obtained from equipment dealers, which consider the remaining useful life and configuration of the equipment, and fair value of facilities was determined based on sales of similar facilities and properties in comparable markets (Level 3).  Losses recognized in the first quarters of 2012 and 2011 due to fair value measurements using Level 3 inputs were not significant. For the first quarter of 2012, activity of assets held for sale was not significant.

Fair Value of Financial Instruments

The estimated fair value and carrying value of debt instruments (carrying value excludes the equity component of the 2014 Notes, the 2027 Notes and the 2031 Notes which is classified in equity) were as follows:

	December 1, 2011				September 1, 2011
	Fair Value		Carrying Value		Fair Value		Carrying Value
Convertible debt instruments (Level 1)	$	1,082	$	965	$	1,216	$	1,049
Convertible debt instruments (Level 2)	737		629		629		529
Other debt instruments	530		525		436		423

The fair value of our Level 1 convertible debt instruments was based on quoted market prices in active markets.  The fair value of our Level 2 convertible debt instruments was determined based on observable inputs of quoted market prices in markets with insufficient activity to be considered active and market prices for our stock.  The fair value of our other debt instruments was estimated based on discounted cash flows using inputs that are observable in the market or that could be derived from, or corroborated with, observable market data, including interest rates based on yield curves of similar debt issued by parties with credit ratings similar to ours (Level 2).  Amounts reported as cash and equivalents, receivables, and accounts payable and accrued expenses approximate fair value.