Trade Accounts Receivable Securitization and Sale Programs	9 Months Ended
May 31, 2012
Trade Accounts Receivable Securitization and Sale Programs	7. Trade Accounts Receivable Securitization and Sale Programs The Company regularly sells designated pools of trade accounts receivable under two asset-backed securitization programs, a factoring program and three uncommitted trade accounts receivable sale programs (collectively referred to herein as the “programs”). The Company continues servicing the receivables sold and in exchange receives a servicing fee under each of the programs. Servicing fees related to each of the programs recognized during the three months and nine months ended May 31, 2012 and 2011, were not material. The Company does not record a servicing asset or liability on the Condensed Consolidated Balance Sheets as the Company estimates that the fee it receives to service these receivables approximates the fair market compensation to provide the servicing activities. Transfers of the receivables under the programs are accounted for as sales and, accordingly, net receivables sold under the programs are excluded from accounts receivable on the Condensed Consolidated Balance Sheets and are reflected as cash provided by operating activities on the Condensed Consolidated Statements of Cash Flows. *a. Asset-Backed Securitization Programs* The Company continuously sells designated pools of trade accounts receivable under its North American asset-backed securitization program and its foreign asset-backed securitization program (collectively referred to herein as the “asset-backed securitization programs”) to special purpose entities, which in turn sell 100% of the receivables to conduits administered by unaffiliated financial institutions (for the North American asset-backed securitization program) and an unaffiliated financial institution (for the foreign asset-backed securitization program). The special purpose entity in the North American asset-backed securitization program is a wholly-owned subsidiary of the Company. The special purpose entity in the foreign asset-backed securitization program is a separate bankruptcy-remote entity whose assets would be first available to satisfy the creditor claims of the unaffiliated financial institution. The Company is deemed the primary beneficiary of this special purpose entity as the Company has the power to direct the activities of the entity and has the obligation to absorb the majority of the expected losses or the right to receive the benefits from the transfer of the trade accounts receivable into the special purpose entity. Accordingly, the special purpose entities associated with these asset-backed securitization programs are included in the Company’s Condensed Consolidated Financial Statements. Any portion of the purchase price for the receivables which is not paid in cash upon the sale taking place is recorded as a deferred purchase price receivable, which is paid as payments on the receivables are collected. Net cash proceeds of up to a maximum of $300.0 million for the North American asset-backed securitization program and $200.0 million for the foreign asset-backed securitization program are available at any one time. The foreign asset-backed securitization program was amended on May 15, 2012 to expire on May 15, 2015. In connection with the asset-backed securitization programs, the Company sold $2.1 billion and $6.2 billion of eligible trade accounts receivable during the three months and nine months ended May 31, 2012, respectively. In exchange, the Company received cash proceeds of $1.6 billion and $5.6 billion during the three months and nine months ended May 31, 2012, respectively, and a net deferred purchase price receivable. At May 31, 2012, the deferred purchase price receivable recorded in connection with the asset-backed securitization programs totaled approximately $542.2 million, net of a $10.1 million valuation allowance established for accounts receivable sold into the asset-backed securitization programs that, subsequent to its sale, became involved in a legal dispute between the Company and the customer. Refer to Note 10 – “Commitments and Contingencies” for further details on the aforementioned legal dispute. The Company recognized pretax losses on the sales of receivables under the asset-backed securitization programs of approximately $1.4 million and $4.5 million during the three months and nine months ended May 31, 2012, which are recorded to other expense within the Condensed Consolidated Statements of Operations. In connection with the North American asset-backed securitization program, the Company sold $1.4 billion and $4.3 billion of eligible trade accounts receivable during the three months and nine months ended May 31, 2011, respectively. In exchange, the Company received cash proceeds of $1.1 billion and $4.0 billion during the three months and nine months ended May 31, 2011, respectively, and a net deferred purchase price receivable. At May 31, 2011, the deferred purchase price receivable recorded in connection with the North American asset-backed securitization program totaled approximately $280.1 million. The Company recognized pretax losses on the sales of receivables under the North American asset-backed securitization program of approximately $0.8 million and $2.7 million during the three months and nine months ended May 31, 2011, respectively, which are recorded to other expense within the Condensed Consolidated Statements of Operations. Subsequent to the amendment of the foreign asset-backed securitization program on May 11, 2011 through May 31, 2011, the Company sold (including amounts transferred into the program on the amendment date) $352.8 million of eligible trade accounts receivable. In exchange, the Company received cash proceeds of $258.9 million during the same period, and a net deferred purchase price receivable. At May 31, 2011, the deferred purchase price receivable totaled approximately $93.9 million. The resulting losses on the sales of the receivables subsequent to the amendment on May 11, 2011 through May 31, 2011 were $0.5 million and were recorded to other expense within the Condensed Consolidated Statements of Operations. Prior to amendments that were effective for the North American asset-backed securitization program during the first quarter of fiscal year 2011 and for the foreign asset-backed securitization program during the third quarter of fiscal year 2011 (May 11, 2011), the asset-backed securitization programs were accounted for as secured borrowings. Accordingly, the Company incurred interest expense of $0.3 million and $1.4 million in the Condensed Consolidated Statements of Operations during the three months and nine months ended May 31, 2011 in connection with the asset-backed securitization programs. The deferred purchase price receivables recorded under the asset-backed securitization programs are recorded initially at fair value as prepaid expenses and other current assets on the Condensed Consolidated Balance Sheets and are valued using unobservable inputs (Level 3 inputs), primarily discounted cash flows, and due to their credit quality and short-term maturity the fair values approximated book values. The unobservable inputs consist of estimated credit losses and estimated discount rates which both have an immaterial impact on the fair value calculations of the deferred purchase price receivables. *b. Trade Accounts Receivable Factoring Agreement* In connection with a factoring agreement, the Company transfers ownership of eligible trade accounts receivable of a foreign subsidiary without recourse to a third party purchaser in exchange for cash. Proceeds from the transfer reflect the face value of the account less a discount. The discount is recorded as a loss to other expense within the Condensed Consolidated Statements of Operations in the period of the sale. In April 2012, the factoring agreement was extended through September 30, 2012, at which time it is expected to automatically renew for an additional six-month period. The Company sold $19.2 million and $62.6 million of trade accounts receivable during the three months and nine months ended May 31, 2012, respectively, compared to $14.4 million and $50.6 million during the three months and nine months ended May 31, 2011, respectively. In exchange, the Company received cash proceeds of $19.2 million and $62.6 million during the three months and nine months ended May 31, 2012, respectively, compared to $14.3 million and $50.5 million during the three months and nine months ended May 31, 2011, respectively. The resulting losses on the sales of trade accounts receivables sold under this factoring agreement during the three months and nine months ended May 31, 2012 and 2011 were not material. *c. Trade Accounts Receivable Sale Programs* In connection with three separate uncommitted trade accounts receivable sale agreements with banks, the third of which was entered into during the first quarter of fiscal year 2012, the Company may elect to sell and the banks may elect to purchase at a discount, on an ongoing basis, up to a maximum of $200.0 million, $250.0 million and $50.0 million, respectively, of specific trade accounts receivable at any one time. The $250.0 million uncommitted trade accounts receivable sale agreement has no defined termination date and either party can elect to cancel the agreement by giving prior written notification to the other party of no less than 30 days. The $50.0 million uncommitted trade accounts receivable sale agreement will expire no later than June 1, 2015, though either party can elect to cancel the agreement by giving prior written notification to the other party of no less than 30 days. The $200.0 million uncommitted trade accounts receivable sale agreement was terminated on May 31, 2012. During the three months and nine months ended May 31, 2012, the Company sold $0.5 billion and $1.6 billion of trade accounts receivable under these programs, respectively. In exchange, the Company received cash proceeds of $0.5 billion and $1.6 billion during the three months and nine months ended May 31, 2012, respectively. During the three months and nine months ended May 31, 2011, the Company sold $697.8 million and $1.8 billion of trade accounts receivable under these programs, respectively. In exchange, the Company received cash proceeds of $697.3 million and $1.8 billion, respectively. The resulting losses on the sales of trade accounts receivable during the three months and nine months ended May 31, 2012 and 2011 were not material.

7. Trade Accounts Receivable Securitization and Sale Programs

The Company regularly sells designated pools of trade accounts receivable under two asset-backed securitization programs, a factoring program and three uncommitted trade accounts receivable sale programs (collectively referred to herein as the “programs”). The Company continues servicing the receivables sold and in exchange receives a servicing fee under each of the programs. Servicing fees related to each of the programs recognized during the three months and nine months ended May 31, 2012 and 2011, were not material. The Company does not record a servicing asset or liability on the Condensed Consolidated Balance Sheets as the Company estimates that the fee it receives to service these receivables approximates the fair market compensation to provide the servicing activities.

Transfers of the receivables under the programs are accounted for as sales and, accordingly, net receivables sold under the programs are excluded from accounts receivable on the Condensed Consolidated Balance Sheets and are reflected as cash provided by operating activities on the Condensed Consolidated Statements of Cash Flows.

a. Asset-Backed Securitization Programs

The Company continuously sells designated pools of trade accounts receivable under its North American asset-backed securitization program and its foreign asset-backed securitization program (collectively referred to herein as the “asset-backed securitization programs”) to special purpose entities, which in turn sell 100% of the receivables to conduits administered by unaffiliated financial institutions (for the North American asset-backed securitization program) and an unaffiliated financial institution (for the foreign asset-backed securitization program). The special purpose entity in the North American asset-backed securitization program is a wholly-owned subsidiary of the Company. The special purpose entity in the foreign asset-backed securitization program is a separate bankruptcy-remote entity whose assets would be first available to satisfy the creditor claims of the unaffiliated financial institution. The Company is deemed the primary beneficiary of this special purpose entity as the Company has the power to direct the activities of the entity and has the obligation to absorb the majority of the expected losses or the right to receive the benefits from the transfer of the trade accounts receivable into the special purpose entity. Accordingly, the special purpose entities associated with these asset-backed securitization programs are included in the Company’s Condensed Consolidated Financial Statements. Any portion of the purchase price for the receivables which is not paid in cash upon the sale taking place is recorded as a deferred purchase price receivable, which is paid as payments on the receivables are collected. Net cash proceeds of up to a maximum of $300.0 million for the North American asset-backed securitization program and $200.0 million for the foreign asset-backed securitization program are available at any one time.

The foreign asset-backed securitization program was amended on May 15, 2012 to expire on May 15, 2015.

In connection with the asset-backed securitization programs, the Company sold $2.1 billion and $6.2 billion of eligible trade accounts receivable during the three months and nine months ended May 31, 2012, respectively. In exchange, the Company received cash proceeds of $1.6 billion and $5.6 billion during the three months and nine months ended May 31, 2012, respectively, and a net deferred purchase price receivable. At May 31, 2012, the deferred purchase price receivable recorded in connection with the asset-backed securitization programs totaled approximately $542.2 million, net of a $10.1 million valuation allowance established for accounts receivable sold into the asset-backed securitization programs that, subsequent to its sale, became involved in a legal dispute between the Company and the customer. Refer to Note 10 – “Commitments and Contingencies” for further details on the aforementioned legal dispute.

The Company recognized pretax losses on the sales of receivables under the asset-backed securitization programs of approximately $1.4 million and $4.5 million during the three months and nine months ended May 31, 2012, which are recorded to other expense within the Condensed Consolidated Statements of Operations.

In connection with the North American asset-backed securitization program, the Company sold $1.4 billion and $4.3 billion of eligible trade accounts receivable during the three months and nine months ended May 31, 2011, respectively. In exchange, the Company received cash proceeds of $1.1 billion and $4.0 billion during the three months and nine months ended May 31, 2011, respectively, and a net deferred purchase price receivable. At May 31, 2011, the deferred purchase price receivable recorded in connection with the North American asset-backed securitization program totaled approximately $280.1 million.

The Company recognized pretax losses on the sales of receivables under the North American asset-backed securitization program of approximately $0.8 million and $2.7 million during the three months and nine months ended May 31, 2011, respectively, which are recorded to other expense within the Condensed Consolidated Statements of Operations.

Subsequent to the amendment of the foreign asset-backed securitization program on May 11, 2011 through May 31, 2011, the Company sold (including amounts transferred into the program on the amendment date) $352.8 million of eligible trade accounts receivable. In exchange, the Company received cash proceeds of $258.9 million during the same period, and a net deferred purchase price receivable. At May 31, 2011, the deferred purchase price receivable totaled approximately $93.9 million. The resulting losses on the sales of the receivables subsequent to the amendment on May 11, 2011 through May 31, 2011 were $0.5 million and were recorded to other expense within the Condensed Consolidated Statements of Operations.

Prior to amendments that were effective for the North American asset-backed securitization program during the first quarter of fiscal year 2011 and for the foreign asset-backed securitization program during the third quarter of fiscal year 2011 (May 11, 2011), the asset-backed securitization programs were accounted for as secured borrowings. Accordingly, the Company incurred interest expense of $0.3 million and $1.4 million in the Condensed Consolidated Statements of Operations during the three months and nine months ended May 31, 2011 in connection with the asset-backed securitization programs.

The deferred purchase price receivables recorded under the asset-backed securitization programs are recorded initially at fair value as prepaid expenses and other current assets on the Condensed Consolidated Balance Sheets and are valued using unobservable inputs (Level 3 inputs), primarily discounted cash flows, and due to their credit quality and short-term maturity the fair values approximated book values. The unobservable inputs consist of estimated credit losses and estimated discount rates which both have an immaterial impact on the fair value calculations of the deferred purchase price receivables.

b. Trade Accounts Receivable Factoring Agreement

In connection with a factoring agreement, the Company transfers ownership of eligible trade accounts receivable of a foreign subsidiary without recourse to a third party purchaser in exchange for cash. Proceeds from the transfer reflect the face value of the account less a discount. The discount is recorded as a loss to other expense within the Condensed Consolidated Statements of Operations in the period of the sale. In April 2012, the factoring agreement was extended through September 30, 2012, at which time it is expected to automatically renew for an additional six-month period.

The Company sold $19.2 million and $62.6 million of trade accounts receivable during the three months and nine months ended May 31, 2012, respectively, compared to $14.4 million and $50.6 million during the three months and nine months ended May 31, 2011, respectively. In exchange, the Company received cash proceeds of $19.2 million and $62.6 million during the three months and nine months ended May 31, 2012, respectively, compared to $14.3 million and $50.5 million during the three months and nine months ended May 31, 2011, respectively. The resulting losses on the sales of trade accounts receivables sold under this factoring agreement during the three months and nine months ended May 31, 2012 and 2011 were not material.

c. Trade Accounts Receivable Sale Programs

In connection with three separate uncommitted trade accounts receivable sale agreements with banks, the third of which was entered into during the first quarter of fiscal year 2012, the Company may elect to sell and the banks may elect to purchase at a discount, on an ongoing basis, up to a maximum of $200.0 million, $250.0 million and $50.0 million, respectively, of specific trade accounts receivable at any one time. The $250.0 million uncommitted trade accounts receivable sale agreement has no defined termination date and either party can elect to cancel the agreement by giving prior written notification to the other party of no less than 30 days. The $50.0 million uncommitted trade accounts receivable sale agreement will expire no later than June 1, 2015, though either party can elect to cancel the agreement by giving prior written notification to the other party of no less than 30 days. The $200.0 million uncommitted trade accounts receivable sale agreement was terminated on May 31, 2012.

During the three months and nine months ended May 31, 2012, the Company sold $0.5 billion and $1.6 billion of trade accounts receivable under these programs, respectively. In exchange, the Company received cash proceeds of $0.5 billion and $1.6 billion during the three months and nine months ended May 31, 2012, respectively. During the three months and nine months ended May 31, 2011, the Company sold $697.8 million and $1.8 billion of trade accounts receivable under these programs, respectively. In exchange, the Company received cash proceeds of $697.3 million and $1.8 billion, respectively. The resulting losses on the sales of trade accounts receivable during the three months and nine months ended May 31, 2012 and 2011 were not material.