FAIR VALUE MEASUREMENTS

6 Months Ended

Nov. 25, 2012

FAIR VALUE MEASUREMENTS

15. 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 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 November 25, 2012:

	Level 1		Level 2		Level 3		Total
Assets:
Derivative assets	$	17.6	$	54.6	$	—	$	72.2
Available-for-sale securities		1.6		—		—		1.6
Deferred compensation assets		5.8		—		—		5.8
Total assets	$	25.0	$	54.6	$	—	$	79.6
Liabilities:
Derivative liabilities	$	—	$	192.7	$	—	$	192.7
Deferred compensation liabilities		31.9		—		—		31.9
Total liabilities	$	31.9	$	192.7	$	—	$	224.6

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, 2012:

	Level 1		Level 2		Level 3		Total
Assets:
Derivative assets	$	13.8	$	44.9	$	—	$	58.7
Available-for-sale securities		1.6		—		—		1.6
Deferred compensation assets		5.8		—		—		5.8
Total assets	$	21.2	$	44.9	$	—	$	66.1
Liabilities:
Derivative liabilities	$	—	$	215.4	$	—	$	215.4
Deferred compensation liabilities		27.1		—		—		27.1
Total liabilities	$	27.1	$	215.4	$	—	$	242.5

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. There were no significant fair value measurement losses recognized for such assets and liabilities in the periods reported.

The carrying amount of long-term debt (including current installments) was $3.6 billion as of November 25, 2012 and $2.9 billion as of May 27, 2012. Based on current market rates provided primarily by outside investment bankers, the fair value of this debt at November 25, 2012 and May 27, 2012, was estimated at $4.3 billion and $3.5 billion, respectively.