FAIR VALUE MEASUREMENTS

Fair value can be measured using valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost). Accounting standards utilize a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:


•	Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.


•	Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.


•	Level 3: Unobservable inputs that reflect the reporting entity’s own assumptions.

Our population of financial assets and liabilities subject to fair value measurements on a recurring basis are as follows (in millions):



			May 31, 2016
	Fair Value		Level 1		Level 2		Level 3
Assets
Cash and cash equivalents	$	131.5	$	131.5	$	—	$	—
Insurance contracts	103.4		—		103.4		—
Bonds and other long-term investments	9.5		9.5		—		—
Interest rate derivatives	3.0		—		3.0		—
Foreign currency derivatives	3.7		—		3.7		—
Total	$	251.1	$	141.0	$	110.1	$	—
Liabilities
Foreign currency derivatives	$	1.5	$	—	$	1.5	$	—
Contingent consideration related to D&A acquisition	29.6		—		—		29.6
Total	$	31.1	$	—	$	1.5	$	29.6



			May 31, 2015
	Fair Value		Level 1		Level 2		Level 3
Assets
Cash and cash equivalents	$	89.5	$	89.5	$	—	$	—
Insurance contracts	107.1		—		107.1		—
Bonds and other long-term investments	7.9		7.9		—		—
Interest rate derivatives	5.9		—		5.9		—
Foreign currency derivatives	6.0		—		6.0		—
Total	$	216.4	$	97.4	$	119.0	$	—
Liabilities
Foreign currency derivatives	$	2.1	$	—	$	2.1	$	—
Contingent consideration related to D&A acquisition	26.0		—		—		26.0
Total	$	28.1	$	—	$	2.1	$	26.0



			November 30, 2015
	Fair Value		Level 1		Level 2		Level 3
Assets
Cash and cash equivalents	$	112.6	$	112.6	$	—	$	—
Insurance contracts	104.1		—		104.1		—
Bonds and other long-term investments	8.5		8.5		—		—
Interest rate derivatives	2.5		—		2.5		—
Foreign currency derivatives	3.4		—		3.4		—
Total	$	231.1	$	121.1	$	110.0	$	—
Liabilities
Foreign currency derivatives	$	0.7	$	—	$	0.7	$	—
Interest rate derivatives	0.6		—		0.6		—
Contingent consideration related to D&A acquisition	27.1		—		—		27.1
Total	$	28.4	$	—	$	1.3	$	27.1

Because of their short-term nature, the amounts reported in the balance sheet for cash and cash equivalents, receivables, short-term borrowings and trade accounts payable approximate fair value. The fair values of insurance contracts are based upon the underlying values of the securities in which they are invested and are from quoted market prices from various stock and bond exchanges for similar type assets. The fair values of bonds and other long-term investments are based on quoted market prices from various stock and bond exchanges. The fair values for interest rate and foreign currency derivatives are based on values for similar instruments using models with market based inputs.

The following table sets forth the carrying amount and fair values of our long-term debt (including the current portion thereof) at May 31, 2016, May 31, 2015 and November 30, 2015 (in millions):



	May 31, 2016		May 31, 2015		November 30, 2015
Carrying amount	$	1,055.8	$	1,013.8	$	1,256.2
Fair value	1,142.5		1,095.7		1,325.6

The acquisition-date fair value of the liability for contingent consideration related to our acquisition of D&A was approximately $27.7 million (see note 2). The fair value of the liability as of November 30, 2015 was $27.1 million and was included in other long-term liabilities in our consolidated balance sheet. The fair value of the liability was estimated using a discounted cash flow technique with significant inputs that are not observable in the market and thus represents a Level 3 fair value measurement as defined in the FASB's Accounting Standards Codification (ASC) 820, Fair Value Measurements and Disclosures. The significant inputs in the Level 3 measurement not supported by market activity included our probability assessments of expected future cash flows related to our acquisition of D&A during the earn-out period, adjusted for expectations of the amounts and ultimate resolution of likely disputes to be raised by the seller and by us as provided in the purchase agreement, discounted considering the uncertainties associated with the obligation, and calculated in accordance with the terms of the purchase agreement. Changes in the fair value of the liability for contingent consideration, excluding the impact of foreign currency, will be recognized in income on a quarterly basis until settlement in fiscal 2018.

The change in fair value of our Level 3 liabilities for the six months ended May 31, 2016 is summarized as follows (in millions):



	Beginning of year		Settlements		Changes in fair value including accretion		Impact of foreign currency		Balance as of May 31, 2016
Contingent consideration related to D&A acquisition	$	27.1	$	—	$	1.0	$	1.5	$	29.6