Fair Value Measurements

3 Months Ended

Feb. 28, 2023

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.

At February 28, 2023 and November 30, 2022, 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 28, 2023
	Fair Value		Level 1		Level 2
Assets
Cash and cash equivalents	$	356.8	$	356.8	$	—
Insurance contracts	109.6		—		109.6
Bonds and other long-term investments	2.4		2.4		—

Foreign currency derivatives	6.4		—		6.4
Cross currency contracts	43.0		—		43.0
Total	$	518.2	$	359.2	$	159.0
Liabilities
Foreign currency derivatives	$	2.3	$	—	$	2.3
Interest rate derivatives	54.3		—		54.3
Cross currency contracts	14.9		—		14.9
Total	$	71.5	$	—	$	71.5


			November 30, 2022
	Fair Value		Level 1		Level 2
Assets
Cash and cash equivalents	$	334.0	$	334.0	$	—
Insurance contracts	110.0		—		110.0
Bonds and other long-term investments	5.1		5.1		—

Foreign currency derivatives	11.0		—		11.0
Cross currency contracts	44.5		—		44.5
Total	$	504.6	$	339.1	$	165.5
Liabilities
Foreign currency derivatives	$	1.5	$	—	$	1.5
Interest rate derivatives	42.4		—		42.4
Cross currency contracts	8.3		—		8.3
Total	$	52.2	$	—	$	52.2

At February 28, 2023 and November 30, 2022, the carrying amounts of interest rate derivatives, foreign currency derivatives, cross currency contracts, insurance contracts, and bond and other long-term investments were equal to their respective fair values. 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. Investments in affiliates are not readily marketable, and it is not practicable to estimate their fair value.

Insurance contracts, bonds, and other long-term investments are comprised of fixed income and equity securities held for certain non-qualified U.S. employee benefit plans and are stated at fair value on the balance sheet. 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):


	February 28, 2023		November 30, 2022
Carrying amount	$	3,901.0	$	3,912.9


Level 1 valuation techniques	$	3,402.4	$	3,424.8
Level 2 valuation techniques	172.7		176.1
Total fair value	$	3,575.1	$	3,600.9

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