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FAIR VALUE MEASUREMENTS
9 Months Ended
Feb. 27, 2022
FAIR VALUE MEASUREMENTS  
FAIR VALUE MEASUREMENTS

11.   FAIR VALUE MEASUREMENTS

For information about our fair value policies, methods and assumptions used in estimating the fair value of our financial assets and liabilities, see Note 1, Nature of Operations and Summary of Significant Accounting Policies and Note 12, Fair Value Measurements, of the Notes to Consolidated Financial Statements in "Part II, Item 8. Financial Statements and Supplementary Data" of the Form 10-K.

The fair values of cash equivalents, receivables, accounts payable, and short-term debt approximate their carrying amounts due to their short duration.

The following table presents our financial assets and liabilities measured at fair value on a recurring basis based upon the level within the fair value hierarchy in which the fair value measurements fall:  

As of February 27, 2022

(in millions)

    

Level 1

    

Level 2

    

Level 3

    

Fair Value of Assets (Liabilities)

Derivative assets (a)

$

$

6.0

$

$

6.0

Deferred compensation liabilities (b)

  

(22.8)

  

  

(22.8)

Fair value, net

$

$

(16.8)

$

$

(16.8)

As of May 30, 2021

(in millions)

    

Level 1

    

Level 2

    

Level 3

    

Fair Value of Assets (Liabilities)

Derivative assets (a)

$

$

15.3

$

$

15.3

Deferred compensation liabilities (b)

  

(23.5)

  

  

(23.5)

Fair value, net

$

$

(8.2)

$

$

(8.2)

(a)Derivative assets included in Level 2 primarily represent commodity swap and option contracts. The fair values of our Level 2 derivative assets were determined using valuation models that use market observable inputs including both forward and spot prices for commodities. Derivative assets are presented within “Prepaid expenses and other current assets” on our Consolidated Balance Sheets.

(b)The fair values of our Level 2 deferred compensation liabilities were valued using third-party valuations, which are based on the net asset values of mutual funds in our retirement plans. While the underlying assets are actively traded on an exchange, the funds are not. Deferred compensation liabilities are primarily presented within “Other noncurrent liabilities” on our Consolidated Balance Sheets.

At February 27, 2022, we had $2,170.0 million of fixed-rate and $576.9 million of variable-rate debt outstanding. Based on current market rates, the fair value of our fixed-rate debt was estimated to be $2,119.0 million. Any differences between the book value and fair value are due to the difference between the period-end market interest rate and the stated rate of our fixed-rate debt. The fair value of our variable-rate term debt approximates the carrying amount as our cost of borrowing is variable and approximates current market prices.