Fair Value Measurements

9 Months Ended

May 29, 2014

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). There were no significant Level 3 fair value measurements for the periods presented.

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	May 29, 2014						August 29, 2013
	Level 1		Level 2		Total		Level 1		Level 2		Total
Cash equivalents:
Money market funds	$	370	$	—	$	370	$	1,188	$	—	$	1,188
Certificates of deposit	—		280		280		—		38		38
Government securities	—		5		5		—		—		—
Commercial paper	—		5		5		—		35		35
	370		290		660		1,188		73		1,261
Short-term investments:
Corporate bonds	—		114		114		—		112		112
Government securities	—		58		58		—		72		72
Commercial paper	—		20		20		—		26		26
Certificates of deposit	—		8		8		—		9		9
Asset-backed securities	—		2		2		—		2		2
	—		202		202		—		221		221
Long-term marketable investments:
Corporate bonds	—		332		332		—		302		302
Asset-backed securities	—		115		115		—		95		95
Government securities	—		95		95		—		96		96
Certificates of deposit	—		2		2		—		—		—
Marketable equity securities	1		—		1		6		—		6
	1		544		545		6		493		499
Restricted cash:
Certificates of deposit	—		4		4		—		302		302
	—		4		4		—		302		302

	$	371	$	1,040	$	1,411	$	1,194	$	1,089	$	2,283

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 May 29, 2014, no adjustments were made to such pricing information.

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, which are classified in equity) were as follows:



As of	May 29, 2014				August 29, 2013
	Fair Value		Carrying Value		Fair Value		Carrying Value
Convertible notes	$	5,445	$	1,906	$	4,167	$	2,506
MMJ creditor installment payments and other notes	2,861		2,771		2,269		2,279

The fair values of our convertible notes were 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).

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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