Financial Instruments

We invest our excess cash in a variety of marketable securities. During fiscal year 2014, we changed the designation of our marketable securities from held-to-maturity to available-for-sale primarily to provide liquidity flexibility, which represented a change in our intent to hold the securities until maturity. Accordingly, we recorded a $0.2 million gain through other comprehensive income to adjust the securities from amortized cost to fair value. Unrealized gains and losses have been insignificant for all periods presented principally because of the short term nature of our debt securities.

The following summarizes our cash and cash equivalents, restricted cash and cash equivalents and marketable securities by significant financial instrument category as of the respective periods:



	August 31, 2014
($ in thousands)	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value		Cash and Cash Equivalents⁽¹⁾		Current Marketable Securities⁽²⁾		Noncurrent Marketable Securities⁽²⁾
Cash	$	1,295,395	$	—	$	—		$	1,295,395	$	1,295,395	$	—	$	—
Level 1:
Money market funds	132,508		—		—			132,508		132,508		—		—
Level 2:
Tax-exempt municipal bonds	106,543		155		(11		)	106,687		—		78,443		28,244
Corporate bonds	106,575		123		(52		)	106,646		—		56,837		49,809
Time deposits	50,100		—		—			50,100		25,041		25,059		—
Commercial paper	11,793		1		—			11,794		—		11,794		—
Other	19,155		1		(1		)	19,155		4		15,339		3,812
Level 3:
Auction-rate securities	5,946		—		—			5,946		—		—		5,946
Total	$	1,728,015	$	280	$	(64	)	$	1,728,231	$	1,452,948	$	187,472	$	87,811



	August 31, 2013
($ in thousands)	Cash and Cash Equivalents⁽¹⁾		Current Marketable Securities⁽²⁾		Noncurrent Marketable Securities⁽²⁾		Total Carrying Value		Unrealized Gains		Unrealized Losses			Fair Value
Cash	$	874,074	$	—	$	—	$	874,074	$	—	$	—		$	874,074
Level 1:
Money market funds	732,530		—		—		732,530		—		—			732,530
Level 2:
Tax-exempt municipal bonds	2,055		69,621		24,070		95,746		19		(54		)	95,711
Certificates of deposit	65,000		1,200		—		66,200		—		—			66,200
Corporate bonds	—		24,503		13,925		38,428		6		(40		)	38,394
Commercial paper	—		9,828		—		9,828		—		—			9,828
Other	—		657		—		657		—		—			657
Level 3:
Auction-rate securities	—		—		5,946		5,946
Total	$	1,673,659	$	105,809	$	43,941	$	1,823,409

⁽¹⁾ Cash and cash equivalents includes restricted cash and cash equivalents.

⁽²⁾ As described above, we changed the designation of our marketable securities to available-for-sale as of August 31, 2014 and they are reported at fair value. Our held-to-maturity securities at August 31, 2013 are recorded at amortized cost.

We measure our marketable securities at fair value on a recurring basis as follows:


•	Money market funds - We use Level 1 inputs that primarily consist of real-time quotes for transactions in active exchange markets involving identical assets.

•

Auction-rate securities - We use a discounted cash flow model encompassing Level 3 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. There were no changes in the assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during fiscal year 2014.


•	All other securities - We use a market approach with Level 2 observable inputs including quoted prices for similar assets in active markets, or quoted prices for identical or similar assets in markets that are not active.

Substantially all of our marketable securities have maturities that occur within three years. We may sell certain of our available-for-sale securities prior to their stated maturities for strategic reasons including, but not limited to, investment yield and credit risk management. We have not recognized significant gains or losses related to such sales.