Fair Value Measurements

6 Months Ended

May 31, 2021

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 May 31, 2021 and November 30, 2020, 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):


			May 31, 2021
	Fair Value		Level 1		Level 2
Assets
Cash and cash equivalents	$	291.8	$	291.8	$	—
Insurance contracts	130.7		—		130.7
Bonds and other long-term investments	4.3		4.3		—
Interest rate derivatives	30.8		—		30.8
Foreign currency derivatives	2.9		—		2.9
Cross currency contracts	2.8		—		2.8
Total	$	463.3	$	296.1	$	167.2
Liabilities
Foreign currency derivatives	$	9.0	$	—	$	9.0

Cross currency contracts	25.1		—		25.1
Total	$	34.1	$	—	$	34.1


			November 30, 2020
	Fair Value		Level 1		Level 2
Assets
Cash and cash equivalents	$	423.6	$	423.6	$	—
Insurance contracts	126.0		—		126.0
Bonds and other long-term investments	3.9		3.9		—
Interest rate derivatives	43.1		—		43.1
Foreign currency derivatives	1.4		—		1.4

Total	$	598.0	$	427.5	$	170.5
Liabilities
Foreign currency derivatives	$	8.2	$	—	$	8.2

Cross currency contracts	18.8		—		18.8
Total	$	27.0	$	—	$	27.0

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 (in millions):


	May 31, 2021		November 30, 2020
Carrying amount	$	5,003.7	$	4,017.7
Fair value	5,224.8		4,357.1

Level 1 valuation techniques	$	5,020.1	$	4,161.3
Level 2 valuation techniques	204.7		195.8
Total fair value	$	5,224.8	$	4,357.1

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