Fair Value Measurements

9 Months Ended

May 31, 2013

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

Assets and liabilities measured at fair value on a recurring basis consist of the following as of May 31, 2013:

			Fair Value Measurements at Reporting Date Using
	May 31, 2013		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
($ in thousands)
Assets:
Cash equivalents (including restricted cash equivalents):
Money market funds	$	893,758	$	893,758	$	—	$	—
Other assets:
Auction-rate securities	5,946		—		—		5,946
Total assets at fair value on a recurring basis	$	899,704	$	893,758	$	—	$	5,946
Liabilities:
Other long-term liabilities:
Contingent payment	$	6,022	$	—	$	—	$	6,022
Total liabilities at fair value on a recurring basis	$	6,022	$	—	$	—	$	6,022

Assets measured at fair value on a recurring basis consist of the following as of August 31, 2012:

			Fair Value Measurements at Reporting Date Using
	August 31, 2012		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
($ in thousands)
Cash equivalents (including restricted cash equivalents):
Money market funds	$	629,166	$	629,166	$	—	$	—
Other assets:
Auction-rate securities	5,946		—		—		5,946
Total assets at fair value on a recurring basis	$	635,112	$	629,166	$	—	$	5,946

We measure the above items on a recurring basis at fair value as follows:

• Money market funds – Classified within Level 1 and valued primarily using real-time quotes for transactions in active exchange markets involving identical assets. As of May 31, 2013 and August 31, 2012, our remaining cash and cash equivalents and current marketable securities not disclosed in the above tables approximate fair value because of the short-term nature of the financial instruments.

• Auction-rate securities – Classified within Level 3 due to the illiquidity of the market and valued using a discounted cash flow model encompassing significant unobservable inputs such as estimated interest rates, credit spreads, timing and amount of cash flows, credit quality of the underlying securities and illiquidity considerations. We include auction-rate securities in other assets on our Condensed Consolidated Balance Sheets for all periods presented.

• Contingent payment – As a result of our purchase of the noncontrolling interest in Apollo Global, we have a contingent payment based on a portion of Apollo Global’s operating results through the fiscal years ending August 31, 2017. This contingent payment is classified within Level 3 and valued using a discounted cash flow valuation method encompassing significant unobservable inputs. The inputs include estimated operating results for the applicable performance period, probability weightings assigned to operating results scenarios and the discount rate applied.

Excluding the new contingent payment obligation recorded during fiscal year 2013, we did not change our valuation techniques associated with recurring fair value measurements from prior periods.

There were no changes in the assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the nine months ended May 31, 2013. The following summarizes the changes in liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3):

($ in thousands)
Balance at August 31, 2012	$	—
Purchase of noncontrolling interest	6,000
Change in fair value included in net income	22
Balance at May 31, 2013	$	6,022

Liabilities measured at fair value on a nonrecurring basis during the nine months ended May 31, 2013 consist of the following:

			Fair Value Measurements at Measurement Dates Using
($ in thousands)	Fair Value at Measurement Dates		Quoted Prices in Active Markets for Identical Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Losses for Nine Months Ended May 31, 2013
Other liabilities:
Initial lease obligations	$	57,596	$	—	$	—	$	57,596	$	57,596
Total liabilities at fair value on a nonrecurring basis	$	57,596	$	—	$	—	$	57,596	$	57,596

During the nine months ended May 31, 2013, we recorded $57.6 million of aggregate initial lease obligations at fair value associated with closing certain leased facilities as part of our restructuring activities. We recorded the lease obligation liabilities on the date we ceased use of the facilities, and we measured the liabilities at fair value using Level 3 inputs included in the valuation method. Refer to Note 3, Restructuring and Other Charges.