FAIR VALUE MEASUREMENTS

12 Months Ended

May 27, 2018

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS

FASB guidance establishes a three-level fair value hierarchy based upon the assumptions (inputs) used to price assets or liabilities. The three levels of inputs used to measure fair value are as follows:

Level 1 — Unadjusted quoted prices in active markets for identical assets or liabilities,

Level 2 — Observable inputs other than those included in Level 1, such as quoted prices for similar assets and liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets, and

Level 3 — Unobservable inputs reflecting our own assumptions and best estimate of what inputs market participants would use in pricing the asset or liability.

The fair values of our Level 2 derivative instruments were determined using valuation models that use market observable inputs including interest rate curves and both forward and spot prices for currencies and commodities. Derivative assets and liabilities included in Level 2 primarily represent commodity and foreign currency option and forward contracts and cross-currency swaps.

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 May 27, 2018:

	Level 1		Level 2		Level 3		Total
Assets:
Derivative assets	$	1.7	$	2.7	$	—	$	4.4
Available-for-sale securities	4.8		—		—		4.8
Total assets	$	6.5	$	2.7	$	—	$	9.2
Liabilities:
Derivative liabilities	$	—	$	0.1	$	—	$	0.1
Deferred compensation liabilities	51.6		—		—		51.6
Total liabilities	$	51.6	$	0.1	$	—	$	51.7

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 May 28, 2017:

	Level 1		Level 2		Level 3		Total
Assets:
Derivative assets	$	2.0	$	0.3	$	—	$	2.3
Available-for-sale securities	3.5		—		—		3.5
Total assets	$	5.5	$	0.3	$	—	$	5.8
Liabilities:
Derivative liabilities	$	—	$	1.3	$	—	$	1.3
Deferred compensation liabilities	47.2		—		—		47.2
Total liabilities	$	47.2	$	1.3	$	—	$	48.5

Certain assets and liabilities, including long-lived assets, goodwill, asset retirement obligations, and cost and equity investments are measured at fair value on a nonrecurring basis.

During fiscal 2018, a charge of $4.7 million was recognized in the Corporate segment for the impairment of certain long-lived assets. The impairment was measured based upon the estimated sales price of the assets.

During fiscal 2017, a charge of $27.6 million was recognized in the Grocery & Snacks segment for the impairment of our Wesson^® oil production facility. The impairment was measured based upon the estimated sales price of the facility (See Note 6).

During fiscal 2017, goodwill impairment charges totaling $198.9 million were recognized within our International segment. See Note 9 for discussion of the methodology employed to measure these impairments.

During fiscal 2018, we recognized indefinite-lived brand impairment charges of $4.0 million in our Grocery & Snacks segment and $0.8 million in our International segment. We recognized indefinite-lived brand impairment charges of $37.0 million in our International segment and $68.2 million in our Grocery & Snacks segment for fiscal 2017, and $50.1 million in our Grocery and Snacks segment for fiscal 2016. The fair values of these brands were estimated using the "relief from royalty" method (See Note 9).

The carrying amount of long-term debt (including current installments) was $3.54 billion as of May 27, 2018 and $2.97 billion as of May 28, 2017. Based on current market rates, the fair value of this debt (level 2 liabilities) at May 27, 2018 and May 28, 2017 was estimated at $3.76 billion and $3.32 billion, respectively.