FAIR VALUE MEASUREMENTS

6 Months Ended

Nov. 28, 2021

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

14. FAIR VALUE MEASUREMENTS

Financial Accounting Standards Board 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 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.

Our Level 3 available-for-sale debt securities consist of a convertible note receivable acquired in the second quarter of fiscal 2022. The convertible note receivable is not traded in active markets and the fair value was determined using a discounted cash flow valuation model.

The following table presents our financial instruments measured at fair value on a recurring basis for which, based upon the level within the fair value hierarchy in which the fair value measurements fall, as of November 28, 2021:

	Level 1		Level 2		Level 3		Net Value
Assets:
Derivative assets	$	3.1	$	3.2	$	—	$	6.3
Marketable securities		6.7		—		—		6.7
Deferred compensation assets		8.7		—		—		8.7
Available-for-sale debt securities		—		—		7.2		7.2
Total assets	$	18.5	$	3.2	$	7.2	$	28.9
Liabilities:
Deferred compensation liabilities		86.4		—		—		86.4
Total liabilities	$	86.4	$	—	$	—	$	86.4

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 30, 2021:

	Level 1		Level 2		Level 3		Net Value
Assets:
Derivative assets	$	13.0	$	2.5	$	—	$	15.5
Marketable securities		6.6		—		—		6.6
Deferred compensation assets		8.8		—		—		8.8
Total assets	$	28.4	$	2.5	$	—	$	30.9
Liabilities:
Derivative liabilities	$	—	$	6.9	$	—	$	6.9
Deferred compensation liabilities		81.0		—		—		81.0
Total liabilities	$	81.0	$	6.9	$	—	$	87.9

Certain assets and liabilities, including long-lived assets, goodwill, asset retirement obligations, and equity investments are measured at fair value on a nonrecurring basis using Level 3 inputs.

In the second quarter of fiscal 2022, we recognized impairment charges totaling $22.4 million in our Grocery & Snacks segment, $12.0 million in our Refrigerated & Frozen segment, and $4.8 million in our Foodservice segment. The impairments were measured based upon the estimated sales price of the disposal group (see Note 2).  

In the first quarter of fiscal 2021, we recognized charges totaling $3.0 million in our Grocery & Snacks segment for the impairment of certain long-lived assets. The impairment was measured based upon the estimated sales price of the assets and has been included in restructuring activities.

The carrying amount of long-term debt (including current installments) was $8.80 billion and $8.30 billion as of November 28, 2021 and May 30, 2021, respectively. Based on current market rates, the fair value of this debt (level 2 liabilities) at November 28, 2021 and May 30, 2021, was estimated at $10.19 billion and $9.76 billion, respectively.