Derivative Financial Instruments and Hedging Activities (Tables)

9 Months Ended

May 31, 2012

Fair Value of Assets and Liabilities Related to Foreign Forward Exchange Contracts Measured on Recurring Basis

The following table presents the Company’s assets and liabilities related to forward foreign exchange contracts measured at fair value on a recurring basis as of May 31, 2012, aggregated by the level in the fair-value hierarchy in which those measurements are classified (in thousands):

	Level 1		Level 2			Level 3		Total
Assets:
Forward foreign exchange contracts	$	—	$	8,805		$	—	$	8,805
Liabilities:
Forward foreign exchange contracts		—		(14,481	)		—		(14,481	)
Total	$	—	$	(5,676	)	$	—	$	(5,676	)

Fair Value of Derivative Instruments Located on Consolidated Balance Sheets

The following tables present the fair value of the Company’s derivative instruments located on the Condensed Consolidated Balance Sheets utilized for foreign currency risk management purposes at May 31, 2012 and August 31, 2011 (in thousands):

	Fair Values of Derivative Instruments At May 31, 2012
	Asset Derivatives			Liability Derivatives
	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Derivatives designated as hedging instruments:
Forward foreign exchange contracts	Prepaid expenses and other current assets	$	598	Other accrued expense	$	1,978
Derivatives not designated as hedging instruments:
Forward foreign exchange contracts	Prepaid expenses and other current assets	$	8,207	Other accrued expense	$	12,503
	Fair Values of Derivative Instruments At August 31, 2011
	Asset Derivatives			Liability Derivatives
	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Derivatives designated as hedging instruments:
Forward foreign exchange contracts	Prepaid expenses and other current assets	$	2,825	Other accrued expense	$	2,798
Derivatives not designated as hedging instruments:
Forward foreign exchange contracts	Prepaid expenses and other current assets	$	3,517	Other accrued expense	$	3,979

Impact of Derivatives for Foreign Currency Risk and Not Designated as Hedging Instruments on Earnings

The following tables present the impact that changes in fair value of derivatives utilized for foreign currency risk management purposes and not designated as hedging instruments had on earnings during the nine months ended May 31, 2012 and 2011 (in thousands):

Derivatives not designated as hedging instruments	Location of Gain (Loss) Recognized in Income on Derivative	Amount of Gain (Loss) Recognized in Income on Derivative  during the Nine Months Ended May 31, 2012
Forward foreign exchange contracts	Cost of revenue	$	2,954

Derivatives not designated as hedging instruments	Location of Gain (Loss) Recognized in Income on Derivative	Amount of Gain (Loss) Recognized in Income on Derivative  during the Nine Months Ended May 31, 2011
Forward foreign exchange contracts	Cost of revenue	$	(2,483	)

Changes Related to Cash Flow Hedges Included in Accumulated Other Comprehensive Income (Loss) Net of Tax

The changes related to cash flow hedges (both forward foreign exchange contracts and interest rate swaps) included in AOCI net of tax are as follows (in thousands):

	Nine months ended May 31, 2011
Accumulated comprehensive loss, August 31, 2010	$	(16,086	)
Changes in fair value of derivative instruments		6,869
Adjustment for net losses realized and included in net income related to derivative instruments		(291	)
Accumulated comprehensive loss, May 31, 2011	$	(9,508	)

	Nine months ended May 31, 2012
Accumulated comprehensive loss, August 31, 2011	$	(11,172	)
Changes in fair value of derivative instruments		252
Adjustment for net losses realized and included in net income related to derivative instruments		2,094
Accumulated comprehensive loss, May 31, 2012	$	(8,826	)

Forward foreign exchange contracts

Impact of Derivatives for Foreign Currency Risk (Interest Rate Risk) and Designated as Hedging Instruments on Accumulated Other Comprehensive Income (Loss) and Earnings

The following tables present the impact that changes in fair value of derivatives utilized for foreign currency risk management purposes and designated as hedging instruments had on AOCI and earnings during the nine months ended May 31, 2012 and 2011 (in thousands):

Derivatives in Cash Flow Hedging Relationship during the Nine Months Ended May 31, 2012	Amount of Gain (Loss) Recognized in OCI on Derivative (Effective Portion)			Location of Gain (Loss) Reclassified from AOCI into Income (Effective  Portion)	Amount of Gain (Loss) Reclassified from AOCI into Income (Effective Portion)			Location of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)	Amount of Gain (Loss) Recognized in Income on  Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)
Forward foreign exchange contracts	$	3,053		Revenue	$	2,117		Revenue	$	(28	)
Forward foreign exchange contracts	$	(563	)	Cost of revenue	$	1,677		Cost of revenue	$	(1,421	)
Forward foreign exchange contracts	$	(2,238	)	Selling, general and administrative	$	(2,925	)	Selling, general and administrative	$	152

Derivatives in Cash Flow Hedging Relationship during the Nine Months Ended May 31, 2011	Amount of Gain (Loss) Recognized in OCI on Derivative (Effective Portion)		Location of Gain (Loss) Reclassified from AOCI into Income (Effective  Portion)	Amount of Gain (Loss) Reclassified from AOCI into Income (Effective Portion)		Location of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)	Amount of Gain (Loss) Recognized in Income on  Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)
Forward foreign exchange contracts	$	1,624	Revenue	$	1,506	Revenue	$	344
Forward foreign exchange contracts	$	4,212	Cost of revenue	$	1,423	Cost of revenue	$	345
Forward foreign exchange contracts	$	1,033	Selling, general and administrative	$	482	Selling, general and administrative	$	200

Interest rate swap

Impact of Derivatives for Foreign Currency Risk (Interest Rate Risk) and Designated as Hedging Instruments on Accumulated Other Comprehensive Income (Loss) and Earnings

The following tables present the impact that changes in the fair value of the derivative utilized for interest rate risk management and designated as a hedging instrument had on AOCI and earnings during the nine months ended May 31, 2012 and 2011 (in thousands):

Derivatives in Cash Flow Hedging Relationship during the Nine Months Ended May 31, 2012	Amount of Gain (Loss) Recognized in OCI on Derivative (Effective Portion)		Location of Gain  (Loss) Reclassified from Accumulated  OCI into Income (Effective Portion)	Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)			Location of Gain or (Loss)  Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)	Amount of Gain or (Loss) Recognized in Income on  Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)
Interest rate swap	$	—	Interest expense	$	(2,963	)	Interest expense	$	—

Derivatives in Cash Flow Hedging Relationship during the Nine Months Ended May 31, 2011	Amount of Gain (Loss) Recognized in OCI on Derivative (Effective Portion)		Location of Gain  (Loss) Reclassified from Accumulated  OCI into Income (Effective Portion)	Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)			Location of Gain or (Loss)  Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)	Amount of Gain or (Loss) Recognized in Income on  Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)
Interest rate swap	$	—	Interest expense	$	(2,963	)	Interest expense	$	—