Financial Instruments

Marketable securities

We hold the following available-for-sale marketable securities, made up of municipal and corporate bonds:



In thousands	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
June 1, 2019	$	12,121	$	181	$	(2	)	$	12,300
March 2, 2019	12,481		59		(108		)	12,432

We have a wholly-owned insurance subsidiary, Prism Assurance, Ltd. (Prism), which holds these municipal and corporate bonds. Prism insures a portion of our general liability, workers’ compensation and automobile liability risks using reinsurance agreements to meet statutory requirements. The reinsurance carrier requires Prism to maintain fixed-maturity investments, which are generally high-quality municipal and corporate bonds, for the purpose of providing collateral for Prism’s obligations under the reinsurance agreements.

The amortized cost and estimated fair values of these bonds at June 1, 2019, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities, as borrowers may have the right to call or prepay obligations with or without penalty.



In thousands	Amortized Cost		Estimated Fair Value
Due within one year	$	600	$	601
Due after one year through five years	9,293		9,429
Due after five years through 10 years	1,822		1,863
Due after 10 years through 15 years	—		—
Due beyond 15 years	406		407
Total	$	12,121	$	12,300

Fair value measurements

Financial assets and liabilities are classified in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement: Level 1 (unadjusted quoted prices in active markets for identical assets or liabilities); Level 2 (observable market inputs, other than quoted prices included in Level 1); and Level 3 (unobservable inputs that cannot be corroborated by observable market data). We do not have any Level 3 financial assets or liabilities.



In thousands	Quoted Prices in Active Markets (Level 1)		Other Observable Inputs (Level 2)		Total Fair Value
June 1, 2019
Cash equivalents
Money market funds	$	2,611	$	—	$	2,611
Commercial paper	—		4,500		4,500
Total cash equivalents	2,611		4,500		7,111
Short-term securities
Municipal and corporate bonds	—		601		601
Long-term securities
Municipal and corporate bonds	—		11,699		11,699
Total assets at fair value	$	2,611	$	16,800	$	19,411
March 2, 2019
Cash equivalents
Money market funds	$	2,015	$	—	$	2,015
Commercial paper	—		300		300
Total cash equivalents	2,015		300		2,315
Short-term securities
Municipal and corporate bonds	—		402		402
Long-term securities
Municipal and corporate bonds	—		12,030		12,030
Total assets at fair value	$	2,015	$	12,732	$	14,747

Cash equivalents

Fair value of money market funds was determined based on quoted prices for identical assets in active markets. Commercial paper was measured at fair value using inputs based on quoted prices for similar securities in active markets.

Short- and long-term securities

Mutual funds were measured at fair value based on quoted prices for identical assets in active markets. Municipal and corporate bonds were measured at fair value based on market prices from recent trades of similar securities and are classified as short-term or long-term based on maturity date.

Foreign currency instruments

We periodically enter into forward purchase foreign currency contracts, generally with an original maturity date of less than one year, to hedge foreign currency exchange rate risk. As of June 1, 2019, we held foreign exchange forward contracts with a U.S. dollar notional value of $29.8 million, with the objective of reducing the exposure to fluctuations in the Canadian dollar and the Euro. The fair value of these contracts was a liability of $0.7 million as of June 1, 2019. These forward contracts are measured at fair value using unobservable market inputs, such as quotations on forward foreign exchange points and foreign currency exchange rates, and would be classified as Level 2 within the fair value hierarchy above.