Fair Value Measurements

8 Months Ended

May 09, 2020

Fair Value Measurements [Abstract]

Fair Value Measurements

Note C – Fair Value Measurements

The Company defines fair value as the price received to transfer an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In accordance with ASC 820, Fair Value Measurements and Disclosures, the Company uses the fair value hierarchy, which prioritizes the inputs used to measure fair value. The hierarchy, as defined below, gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three levels of the fair value hierarchy are set forth below:

Level 1 inputs—unadjusted quoted prices in active markets for identical assets or liabilities that the Company can access at the measurement date.

Level 2 inputs—inputs other than quoted market prices included within Level 1 that are observable, either directly or indirectly, for the asset or liability.

Level 3 inputs—unobservable inputs for the asset or liability, which are based on the Company’s own assumptions as there is little, if any, observable activity in identical assets or liabilities.

Financial Assets & Liabilities Measured at Fair Value on a Recurring Basis

The Company’s assets and liabilities measured at fair value on a recurring basis were as follows:

	May 9, 2020
(in thousands)	Level 1		Level 2		Level 3		Fair Value
Other current assets	$	34,381	$	—	$	—	$	34,381
Other long-term assets		70,726		11,110		—		81,836
	$	105,107	$	11,110	$	—	$	116,217
Accrued expenses and other	$	—	$	(16,842)	$	—	$	(16,842)

	August 31, 2019
(in thousands)	Level 1		Level 2		Level 3		Fair Value
Other current assets	$	65,344	$	2,614	$	—	$	67,958
Other long-term assets		65,573		5,395		—		70,968
	$	130,917	$	8,009	$	—	$	138,926

At May 9, 2020, the fair value measurement amounts for assets and liabilities recorded in the accompanying Consolidated Balance Sheets consisted of short-term marketable debt securities of $34.4 million, which are included within Other current assets; long-term marketable debt securities of $81.8 million, which are included in Other long-term assets; and cash flow hedging instruments of $16.8 million, which are included within Accrued expenses and other. The Company’s marketable debt securities are typically valued at the closing price in the principal active market as of the last business day of the quarter or through the use of other market inputs relating to the securities, including benchmark yields and reported trades. The fair values of the marketable debt securities, by asset class, are described in “Note D – Marketable Debt Securities.” The fair values of derivative assets and liabilities traded in the over-the-counter markets are determined using quantitative models that require the use of multiple inputs including interest rates, prices and indices to generate pricing and volatility factors. Refer to “Note E – Derivative Financial Instruments”.

Financial Instruments not Recognized at Fair Value

The Company has financial instruments, including cash and cash equivalents, accounts receivable, other current assets and accounts payable. The carrying amounts of these financial instruments approximate fair value because of their short maturities. A discussion of the carrying values and fair values of the Company’s debt is included in “Note G – Financing.”