Fair Value Measurements

3 Months Ended

Feb. 29, 2020

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.

At February 29, 2020, February 28, 2019 and November 30, 2019, we had no financial assets or liabilities that were subject to a level 3 fair value measurement. Our population of financial assets and liabilities subject to fair value measurements on a recurring basis are as follows (in millions):


			February 29, 2020
	Fair Value		Level 1		Level 2
Assets
Cash and cash equivalents	$	170.8	$	170.8	$	—
Insurance contracts	120.4		—		120.4
Bonds and other long-term investments	0.7		0.7		—
Interest rate derivatives	34.2		—		34.2
Foreign currency derivatives	5.6		—		5.6
Cross currency contracts	2.6		—		2.6
Total	$	334.3	$	171.5	$	162.8
Liabilities
Foreign currency derivatives	$	7.6	$	—	$	7.6

Cross currency contracts	1.0		—		1.0
Total	$	8.6	$	—	$	8.6


			February 28, 2019
	Fair Value		Level 1		Level 2
Assets
Cash and cash equivalents	$	102.3	$	102.3	$	—
Insurance contracts	111.5		—		111.5
Bonds and other long-term investments	8.1		8.1		—
Interest rate derivatives	0.1		—		0.1
Foreign currency derivatives	3.2		—		3.2
Total	$	225.2	$	110.4	$	114.8
Liabilities
Foreign currency derivatives	$	4.8	$	—	$	4.8
Interest rate derivatives	4.0		—		4.0
Cross currency contracts	9.2		—		9.2
Total	$	18.0	$	—	$	18.0


			November 30, 2019
	Fair Value		Level 1		Level 2
Assets
Cash and cash equivalents	$	155.4	$	155.4	$	—
Insurance contracts	121.7		—		121.7
Bonds and other long-term investments	2.7		2.7		—
Interest rate derivatives	20.9		—		20.9
Foreign currency derivatives	3.3		—		3.3
Cross currency contracts	3.2		—		3.2
Total	$	307.2	$	158.1	$	149.1
Liabilities
Foreign currency derivatives	$	3.6	$	—	$	3.6


Total	$	3.6	$	—	$	3.6

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 derivatives, foreign currency derivatives, and cross currency contracts are based on values for similar instruments using models with market-based inputs.

The following table sets forth the carrying amounts and fair values of our long-term debt (including the current portion thereof) at February 29, 2020, February 28, 2019 and November 30, 2019 (in millions):


	February 29, 2020		February 28, 2019		November 30, 2019
Carrying amount	$	3,716.8	$	4,119.8	$	3,723.5
Fair value	3,936.7		4,068.8		3,859.0

Level 1 valuation techniques	$	3,536.6	$	3,222.2	$	3,437.5
Level 2 valuation techniques	400.1		846.6		421.5
Total fair value	$	3,936.7	$	4,068.8	$	3,859.0

The fair value for Level 2 long-term debt is determined by using quoted prices for similar debt instruments.