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Fair Value
9 Months Ended
Feb. 28, 2022
Fair Value Disclosures [Abstract]  
Fair Value

NOTE S – Fair Value

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.  Fair value is an exit price concept that assumes an orderly transaction between willing market participants and is required to be based on assumptions that market participants would use in pricing an asset or a liability.  Current accounting guidance establishes a three-tier fair value hierarchy as a basis for considering such assumptions and for classifying the inputs used in the valuation methodologies.  This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs.  The three levels of inputs used to measure fair values are as follows:

Level 1 – Observable prices in active markets for identical assets and liabilities.

Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the assets and liabilities, either directly or indirectly.

Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets and liabilities.

 

Recurring Fair Value Measurements

 

At February 28, 2022, our assets and liabilities measured at fair value on a recurring basis were as follows:

 

 

 

 

 

 

 

Significant

 

 

 

 

 

 

 

 

 

 

 

Quoted Prices

 

 

Other

 

 

Significant

 

 

 

 

 

 

 

in Active

 

 

Observable

 

 

Unobservable

 

 

 

 

 

 

 

Markets

 

 

Inputs

 

 

Inputs

 

 

 

 

 

(in thousands)

 

(Level 1)

 

 

(Level 2)

 

 

(Level 3)

 

 

Totals

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivative instruments (1)

 

$

-

 

 

$

7,354

 

 

$

-

 

 

$

7,354

 

Total assets

 

$

-

 

 

$

7,354

 

 

$

-

 

 

$

7,354

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivative instruments (1)

 

$

-

 

 

$

23,954

 

 

$

-

 

 

$

23,954

 

Total liabilities

 

$

-

 

 

$

23,954

 

 

$

-

 

 

$

23,954

 

At May 31, 2021, our assets and liabilities measured at fair value on a recurring basis were as follows:

 

 

 

 

 

 

 

Significant

 

 

 

 

 

 

 

 

 

 

 

Quoted Prices

 

 

Other

 

 

Significant

 

 

 

 

 

 

 

in Active

 

 

Observable

 

 

Unobservable

 

 

 

 

 

 

 

Markets

 

 

Inputs

 

 

Inputs

 

 

 

 

 

(in thousands)

 

(Level 1)

 

 

(Level 2)

 

 

(Level 3)

 

 

Totals

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivative instruments (1)

 

$

-

 

 

$

78,148

 

 

$

-

 

 

$

78,148

 

Total assets

 

$

-

 

 

$

78,148

 

 

$

-

 

 

$

78,148

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivative instruments (1)

 

$

-

 

 

$

15,197

 

 

$

-

 

 

$

15,197

 

Total liabilities

 

$

-

 

 

$

15,197

 

 

$

-

 

 

$

15,197

 

 

 

(1)

The fair value of our derivative instruments is based on the present value of the expected future cash flows considering the risks involved, including non-performance risk, and using discount rates appropriate for the respective maturities.  Market

 

observable, Level 2 inputs are used to determine the present value of the expected future cash flows.  Refer to “NOTE R – Derivative Instruments and Hedging Activities” for additional information regarding our use of derivative instruments.

 

Non-Recurring Fair Value Measurements

At February 28, 2022, our assets measured at fair value on a non-recurring basis were as follows:

 

 

 

 

 

 

 

Significant

 

 

 

 

 

 

 

 

 

 

 

Quoted Prices

 

 

Other

 

 

Significant

 

 

 

 

 

 

 

in Active

 

 

Observable

 

 

Unobservable

 

 

 

 

 

 

 

Markets

 

 

Inputs

 

 

Inputs

 

 

 

 

 

(in thousands)

 

(Level 1)

 

 

(Level 2)

 

 

(Level 3)

 

 

Totals

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Long-lived assets held for sale (1)

 

$

-

 

 

$

700

 

 

$

-

 

 

$

700

 

Total assets

 

$

-

 

 

$

700

 

 

$

-

 

 

$

700

 

 

 

(1)

Comprised of production equipment at our Twinsburg, Ohio facility with an estimated fair market value of $700,000.  Refer to “NOTE F – Goodwill and Long-Lived Assets” for additional information.  

At May 31, 2021, our assets measured at fair value on a non-recurring basis were as follows:

 

 

 

 

 

 

 

Significant

 

 

 

 

 

 

 

 

 

 

 

Quoted Prices

 

 

Other

 

 

Significant

 

 

 

 

 

 

 

in Active

 

 

Observable

 

 

Unobservable

 

 

 

 

 

 

 

Markets

 

 

Inputs

 

 

Inputs

 

 

 

 

 

(in thousands)

 

(Level 1)

 

 

(Level 2)

 

 

(Level 3)

 

 

Totals

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Long-lived assets held for sale (2)

 

$

-

 

 

$

400

 

 

$

-

 

 

$

400

 

Total assets

 

$

-

 

 

$

400

 

 

$

-

 

 

$

400

 

 

 

 

(2)

Comprised of our alternative fuel cylinders assets at the Jefferson, Ohio facility with an estimated fair market value of $400,000.  Refer to “NOTE F – Goodwill and Long-Lived Assets” for additional information.  

The fair value of non-derivative financial instruments included in the carrying amounts of cash and cash equivalents, receivables, income taxes receivable, other assets, accounts payable, accrued compensation, contributions to employee benefit plans and related taxes, other accrued items, income taxes payable and other liabilities approximate carrying value due to their short-term nature.  The fair value of long-term debt, including current maturities, based upon models utilizing market observable (Level 2) inputs and credit risk, was $747,102,000 and $792,632,000 at February 28, 2022 and May 31, 2021, respectively.  The carrying amount of long-term debt, including current maturities, was $701,016,000 and $710,489,000 at February 28, 2022 and May 31, 2021, respectively.