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Derivative Instruments and Hedging Activities | 9 Months Ended
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Feb. 23, 2025
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities We enter into derivative instruments for risk management purposes only, including derivatives designated as hedging instruments as provided by FASB ASC Topic 815, Derivatives and Hedging, and those utilized as economic hedges. We use financial derivatives to manage interest rate, commodity and compensation risks inherent in our business operations. Cash flows related to derivatives are included in operating activities. By using these instruments, we expose ourselves, from time to time, to credit risk and market risk. Credit risk is the failure of the counterparty to perform under the terms of the derivative contract. When the fair value of a derivative contract is positive, the counterparty owes us, which creates credit risk for us. We minimize this credit risk by entering into transactions with high quality counterparties. Market risk is the adverse effect on the value of a financial instrument that results from a change in interest rates, commodity prices, or the market price of our common stock. We minimize this market risk by establishing and monitoring parameters that limit the types and degree of market risk that may be undertaken. We designate commodity contracts and equity forward contracts as cash flow hedging instruments. We have one interest rate swap agreement, which is designated as a fair value hedge of the related debt. During the first quarter of fiscal 2025, we entered into a contract designated as a cash flow hedge of the benchmark interest rate on the debt expected to be issued during the second quarter of fiscal 2025. Upon issuance of the debt, we settled this contract which resulted in a $1.9 million loss recorded as a component of interest expense due to the immateriality of the loss. Further, we entered into equity forward contracts to hedge the risk of changes in future cash flows associated with recognized, employee-directed investments in our common stock within the non-qualified deferred compensation plan. We did not elect hedge accounting with the expectation that changes in the fair value of the equity forward contracts would offset changes in the fair value of our common stock investments in the non-qualified deferred compensation plan. The notional and fair values of our derivative contracts were as follows:
|  |  |  |  |  |  | Fair Values
(in millions, except per share data) | Number of Shares Outstanding |  | Weighted-Average Per Share Forward Rates |  | Notional Values |  | Derivative Assets (1) |  | Derivative Liabilities (1)
| February 23, 2025 |  | February 23, 2025 |  | May 26, 2024 |  | February 23, 2025 |  | May 26, 2024
Equity forwards: |  |  |  |  |  |  |  |  |  |  |  |  |
Designated | 0.2 |  | $144.58 |  | $ | 28.3 |  |  | $ | — |  |  | $ | — |  |  | $ | 1.8 |  |  | $ | 0.8 |
Not designated | 0.4 |  | 138.14 |  | 57.1 |  |  | — |  |  | — |  |  | 3.8 |  |  | 2.4 |
Total equity forwards (2) | $ | — |  |  | $ | — |  |  | $ | 5.6 |  |  | $ | 3.2 |
Commodity contracts: |  |  |  |  |  |  |  |  |  |  |  |  |
Designated | N/A |  | N/A |  | $ | 13.6 |  |  | $ | 0.8 |  |  | $ | 0.1 |  |  | $ | 0.6 |  |  | $ | 0.7 |
Not designated | N/A |  | N/A |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Total commodity contracts (3) |  | $ | 0.8 |  |  | $ | 0.1 |  |  | $ | 0.6 |  |  | $ | 0.7 |
Interest rate related |  |  |  |  |  |  |  |  |  |  |  |  |
Designated - Fair Value Hedge | N/A |  | N/A |  | $ | 300.0 |  |  | $ | — |  |  | $ | — |  |  | $ | 44.8 |  |  | $ | 51.8 |
Not designated | N/A |  | N/A |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Total interest rate related |  |  |  |  |  | $ | — |  |  | $ | — |  |  | $ | 44.8 |  |  | $ | 51.8 |
Total derivative contracts |  | $ | 0.8 |  |  | $ | 0.1 |  |  | $ | 51.0 |  |  | $ | 55.7 |
(1)Derivative assets and liabilities are included in receivables, net and other current liabilities, as applicable, on our consolidated balance sheets. (2)Designated and undesignated equity forwards extend through July 2028. (3)Commodity contracts extend through March 2026. The effects of derivative instruments accounted for as cash flow hedging instruments in the consolidated statements of earnings were as follows:
|  | Amount of Gain (Loss) Recognized in AOCI |  | Amount of Gain (Loss) Reclassified from AOCI to Earnings |  |
|  | Three Months Ended |  | Three Months Ended |  |
(in millions) |  | February 23, 2025 |  | February 25, 2024 |  | February 23, 2025 |  | February 25, 2024 |  |  |  |
Equity (1) |  | $ | 3.8 |  |  | $ | 2.2 |  |  | $ | 0.1 |  |  | $ | — |  |  |  |  |
Commodity (2) |  | 1.0 |  |  | (1.9) |  |  | (0.6) |  |  | (2.5) |  |  |  |  |
Interest rate (3) |  | — |  |  | — |  | 0.9 |  | 0.9 |  |  |  |
Total |  | $ | 4.8 |  |  | $ | 0.3 |  |  | $ | 0.4 |  |  | $ | (1.6) |  |  |  |  |
|  | Amount of Gain (Loss) Recognized in AOCI |  | Amount of Gain (Loss) Reclassified from AOCI to Earnings |  |
|  | Nine Months Ended |  | Nine Months Ended |  |
(in millions) |  | February 23, 2025 |  | February 25, 2024 |  | February 23, 2025 |  | February 25, 2024 |  |  |  |
Equity (1) |  | $ | 8.5 |  |  | $ | (0.9) |  |  | $ | — |  |  | $ | 1.3 |  |  |  |  |
Commodity (2) |  | (0.8) |  |  | (1.8) |  |  | (1.7) |  |  | (5.6) |  |  |  |  |
Interest rate (3) |  | — |  |  | 34.9 |  |  | 2.6 |  |  | 1.3 |  |  |  |  |
Total |  | $ | 7.7 |  |  | $ | 32.2 |  |  | $ | 0.9 |  |  | $ | (3.0) |  |  |  |  |
(1)Location of the gain (loss) reclassified from AOCI to earnings is general and administrative expenses. (2)Location of the gain (loss) reclassified from AOCI to earnings is food and beverage costs and restaurant expenses. (3)Location of the gain (loss) reclassified from AOCI to earnings is interest, net. The effects of derivative instruments in fair value hedging relationships in the consolidated statement of earnings were as follows:
|  | Amount of Gain (Loss) Recognized in Earnings on Derivatives |  | Amount of Gain (Loss) Recognized in Earnings on Related Hedged Item |  |
|  | Three Months Ended |  | Three Months Ended |  |
(in millions) |  | February 23, 2025 |  | February 25, 2024 |  | February 23, 2025 |  | February 25, 2024 |  |  |  |
Interest rate (1)(2) |  | $ | 0.4 |  |  | $ | 4.3 |  |  | $ | (0.4) |  |  | $ | (4.3) |  |  |  |  |
|  | Amount of Gain (Loss) Recognized in Earnings on Derivatives |  | Amount of Gain (Loss) Recognized in Earnings on Related Hedged Item |  |
|  | Nine Months Ended |  | Nine Months Ended |  |
(in millions) |  | February 23, 2025 |  | February 25, 2024 |  | February 23, 2025 |  | February 25, 2024 |  |  |  |
Interest rate (1)(2) |  | $ | 7.1 |  |  | $ | (3.3) |  |  | $ | (7.1) |  |  | $ | 3.3 |  |  |  |  |
(1) Location of the gain (loss) recognized in earnings on derivatives and related hedged item is interest, net. (2) Hedged item in fair value hedge relationship is debt. The effects of derivatives not designated as hedging instruments in the consolidated statements of earnings were as follows:
|  | Amount of Gain (Loss) Recognized in Earnings
(in millions) | Three Months Ended |  | Nine Months Ended
Location of Gain (Loss) Recognized in Earnings on Derivatives | February 23, 2025 |  | February 25, 2024 |  | February 23, 2025 |  | February 25, 2024
General and administrative expenses |  | 10.7 |  |  | 7.8 |  |  | 18.3 |  |  | 8.3 |
Total |  | $ | 10.7 |  |  | $ | 7.8 |  |  | $ | 18.3 |  |  | $ | 8.3 |
Based on the fair value of our derivative instruments designated as cash flow hedges as of February 23, 2025, we expect to reclassify $5.0 million of net gains on derivative instruments from AOCI to earnings during the next 12 months based on the maturity of our contracts. However, the amounts ultimately realized in earnings may change and will be dependent on the fair value of the contracts on the respective settlement dates.

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- Definition The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 40 -Name Accounting Standards Codification -Section 50 -Paragraph 5 -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480237/815-40-50-5 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 5C -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480434/815-10-50-5C Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 815 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/815/tableOfContent + Details
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