Fair Value Measurements

6 Months Ended

Feb. 28, 2013

Disclosure Text Block [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), 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

All marketable debt and equity investments are classified as available-for-sale and are carried at fair value. Assets measured at fair value on a recurring basis were as follows:

As of	February 28, 2013								August 30, 2012
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Cash equivalents:
Money market funds	$	1,634	$	—	$	—	$	1,634	$	2,159	$	—	$	—	$	2,159
Certificates of deposit	—		92		—		92		—		27		—		27
Commercial paper	—		47		—		47		—		29		—		29
Government securities	—		—		—		—		—		5		—		5
	1,634		139		—		1,773		2,159		61		—		2,220
Short-term investments:
Government securities	—		103		—		103		—		51		—		51
Corporate bonds	—		50		—		50		—		31		—		31
Commercial paper	—		11		—		11		—		10		—		10
Asset-backed securities	—		2		—		2		—		4		—		4
Certificates of deposit	—		1		—		1		—		4		—		4
	—		167		—		167		—		100		—		100
Long-term marketable investments:
Corporate bonds	—		311		—		311		—		203		—		203
Government securities	—		117		—		117		—		88		—		88
Asset-backed securities	—		109		—		109		—		73		—		73
Marketable equity securities	7		2		—		9		5		5		—		10
	7		539		—		546		5		369		—		374
	$	1,641	$	845	$	—	$	2,486	$	2,164	$	530	$	—	$	2,694

Government securities consist of securities issued directly by or deemed to be guaranteed by government entities such as U.S. and non-U.S. agency securities, government bonds and treasury securities. Level 2 securities are valued using information obtained from pricing services, which obtain quoted market prices for similar instruments, non-binding market consensus prices that are corroborated by observable market data, or various other methodologies, to determine the appropriate value at the measurement date. We perform supplemental analysis to validate information obtained from our pricing services. As of February 28, 2013, no adjustments were made to such pricing information.

Marketable equity securities included approximately 1.3 million ordinary shares of Tower Semiconductor Ltd. received in connection with the sale of our wafer fabrication facility in Japan in June 2011. As of February 28, 2013, 0.3 million shares received were subject to resale restriction and were valued using a protective put model (Level 2). Resale restriction had lapsed for the remaining 1.0 million shares and they were valued using quoted market prices (Level 1).

Fair Value of Financial Instruments

Amounts reported as cash and equivalents, receivables, and accounts payable and accrued expenses approximate fair value. The estimated fair value and carrying value of debt instruments (carrying value excludes the equity components of our convertible notes classified in equity) were as follows:

As of	February 28, 2013				August 30, 2012
	Fair Value		Carrying Value		Fair Value		Carrying Value
Convertible notes	$	3,132	$	2,463	$	2,669	$	2,321
Other notes	246		253		56		58

The fair value of our convertible debt instruments was determined based on inputs that are observable in the market or that could be derived from, or corroborated with, observable market data, including our stock price and interest rates based on similar debt issued by parties with credit ratings similar to ours (Level 2).  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 similar debt issued by parties with credit ratings similar to ours (Level 2).