FAIR VALUE MEASUREMENTS

12 Months Ended

Feb. 24, 2018

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

NOTE 8—FAIR VALUE MEASUREMENTS

Recurring fair value measurements were as follows:

		February 24, 2018
	Balance Sheet Location	Level 1		Level 2		Level 3		Total
Assets:
Mutual funds	Other assets	$	4	$	—	$	—	$	4
Total		$	4	$	—	$	—	$	4
Liabilities:
Interest rate swap derivative	Other current liabilities	—		0		—		0
Interest rate swap derivative	Other long-term liabilities	—		0		—		0
Total		$	—	$	0	$	—	$	0

		February 25, 2017
	Balance Sheet Location	Level 1		Level 2		Level 3		Total
Assets:
Mutual funds	Other assets	$	5	$	—	$	—	$	5
Total		$	5	$	—	$	—	$	5
Liabilities:
Diesel fuel derivatives	Other current liabilities	—		0		—		0
Interest rate swap derivative	Other current liabilities	—		2		—		2
Interest rate swap derivative	Other long-term liabilities	—		1		—		1
Total		$	—	$	3	$	—	$	3

Mutual Funds

Mutual fund assets consist of balances held in investments to fund certain deferred compensation plans. The fair values of mutual fund assets are based on quoted market prices of the mutual funds held by the plan at each reporting period. Mutual funds traded in active markets are classified within Level 1 of the fair value hierarchy. Mutual fund assets are restricted for use to pay deferred compensation liabilities. Deferred compensation liabilities consist of obligations to participants in deferred compensation plans, and are determined based on the fair value of the related deferred compensation plan investments or designated phantom investments of the plan at each reporting period.

Interest Rate Swap Derivatives

In fiscal 2016, we effectively converted $300 of variable rate debt under our Secured Term Loan Facility to a fixed rate by swapping the variable LIBOR rate component to a fixed rate of 2.0075 percent, which matures in March 2019. This transaction was entered into to reduce our exposure to changes in market interest rates associated with our variable rate debt. We designated this derivative as a cash flow hedge of the variability in expected cash outflows for interest payments. On June 8, 2017, we entered into a fourth amendment to the Secured Term Loan Facility that decreased the interest rate for the term loan from LIBOR plus 4.50 percent to LIBOR plus 3.50 percent. Following this amendment, the all-in rate for this $300 tranche was 5.5075 percent.

In fiscal 2018, 2017 and 2016, no amounts were recorded in the Consolidated Statements of Operations for interest rate swap derivative ineffectiveness.

The fair value of the interest rate swap is measured using Level 2 inputs. The interest rate swap agreement is valued using an income approach interest rate swap valuation model incorporating observable market inputs including interest rates, LIBOR swap rates and credit default swap rates. As of February 24, 2018, a 100 basis point increase in forward LIBOR interest rates would increase the fair value of the interest rate swap by approximately $3; a 100 basis point decrease in forward LIBOR interest rates would decrease the fair value of the interest rate swap by approximately $3.

Diesel Fuel Derivatives

Commodity derivatives consist of forward fixed price purchase diesel fuel contracts. The fair value of our diesel fuel derivatives is measured using Level 2 inputs due to our use of observable market quotations without significant adjustments to determine fair values.

Fuel derivative gains (losses) are included within Cost of sales in the Consolidated Statements of Operations and were $0, $0 and $(3) for fiscal 2018, 2017 and 2016, respectively.

Fair Value Estimates

For certain of our financial instruments, including cash and cash equivalents, receivables, accounts payable, accrued salaries and other current assets and liabilities, the fair values approximate carrying values due to their short maturities.

The estimated fair value of notes receivable was less than the carrying value by $1 as of February 24, 2018 and there was no difference to the carrying amount as of February 25, 2017. The estimated fair value of notes receivable was calculated using a discounted cash flow approach applying a market rate for similar instruments using Level 3 inputs.

The estimated fair value of our long-term debt was lower than the carrying amount, excluding debt financing costs, by approximately $23 as of February 24, 2018 and there was no difference to the carrying amount, excluding debt financing costs, as of February 25, 2017. The estimated fair value was based on market quotes, where available, or market values for similar instruments, using Level 2 and 3 inputs.