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Note 18 - Fair Value Measurements | 12 Months Ended
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May 29, 2022
Notes to Financial Statements |
Fair Value Disclosures [Text Block] | 18. FAIR VALUE MEASUREMENTS Financial Accounting Standards Board guidance establishes a three-level fair value hierarchy based upon the assumptions (inputs) used to price assets or liabilities. The three levels of inputs used to measure fair value are as follows: Level 1 — Unadjusted quoted prices in active markets for identical assets or liabilities, Level 2 — Observable inputs other than those included in Level 1, such as quoted prices for similar assets and liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets, and Level 3 — Unobservable inputs reflecting our own assumptions and best estimate of what inputs market participants would use in pricing the asset or liability. The fair values of our Level 2 derivative instruments were determined using valuation models that use market observable inputs including both forward and spot prices for currencies and commodities. Derivative assets and liabilities included in Level 2 primarily represent commodity and foreign currency option and forward contracts. Our Level 3 available-for-sale debt securities consist of a convertible note receivable acquired in the second quarter of fiscal 2022. The convertible note receivable is not traded in active markets and the fair value was determined using a discounted cash flow valuation model. The following table presents our financial assets and liabilities measured at fair value on a recurring basis for which, based upon the level within the fair value hierarchy in which the fair value measurements fall, as of May 29, 2022:
|  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  | Total |
Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Derivative assets |  | $ | 5.7 |  |  | $ | 1.3 |  |  | $ | — |  |  | $ | 7.0 |
Marketable securities |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Deferred compensation assets |  |  | 7.5 |  |  |  | — |  |  |  | — |  |  |  | 7.5 |
Available-for-sale debt securities |  |  | — |  |  |  | — |  |  |  | 7.6 |  |  |  | 7.6 |
Total assets |  | $ | 13.2 |  |  | $ | 1.3 |  |  | $ | 7.6 |  |  | $ | 22.1 |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Derivative liabilities |  | $ | — |  |  | $ | 2.2 |  |  | $ | — |  |  | $ | 2.2 |
Deferred compensation liabilities |  |  | 72.6 |  |  |  | — |  |  |  | — |  |  |  | 72.6 |
Total liabilities |  | $ | 72.6 |  |  | $ | 2.2 |  |  | $ | — |  |  | $ | 74.8 |
The following table presents our financial assets and liabilities measured at fair value on a recurring basis based upon the level within the fair value hierarchy in which the fair value measurements fall, as of May 30, 2021:
|  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  | Total |
Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Derivative assets |  | $ | 13.0 |  |  | $ | 2.5 |  |  | $ | — |  |  | $ | 15.5 |
Marketable securities |  |  | 6.6 |  |  |  | — |  |  |  | — |  |  |  | 6.6 |
Deferred compensation assets |  |  | 8.8 |  |  |  | — |  |  |  | — |  |  |  | 8.8 |
Total assets |  | $ | 28.4 |  |  | $ | 2.5 |  |  | $ | — |  |  | $ | 30.9 |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Derivative liabilities |  | $ | — |  |  | $ | 6.9 |  |  | $ | — |  |  | $ | 6.9 |
Deferred compensation liabilities |  |  | 81.0 |  |  |  | — |  |  |  | — |  |  |  | 81.0 |
Total liabilities |  | $ | 81.0 |  |  | $ | 6.9 |  |  | $ | — |  |  | $ | 87.9 |
Certain assets and liabilities, including long-lived assets, goodwill, asset retirement obligations, and equity investments are measured at fair value on a nonrecurring basis using Level 3 inputs. During fiscal 2021, we updated our cost estimates associated with certain asset retirement obligations at several manufacturing facilities largely due to recent experience of physically closing a wastewater lagoon. This change in estimate resulted in a non-cash increase to our long-lived assets in the amount of $27.4 million and will result in additional depreciation in future periods generally ranging from 15-25 years. The fair value of our asset retirement obligations was measured using cost estimates to settle our future obligations (including an estimate of inflation) and discounted to present value using a credit-adjusted risk-free rate. We recognized charges for the impairment of certain indefinite-lived brands. The fair values of these brands were estimated using the "relief from royalty" method (see Note 7). Impairments in our Grocery & Snacks segment totaled $90.7 million, $13.0 million, and $46.4 million for fiscal 2022, 2021, and 2020, respectively. Impairments in our Refrigerated & Frozen segment totaled $103.9 million, $76.9 million, and $110.8 million for fiscal 2022, 2021, and 2020, respectively. Impairments in our International segment totaled $14.4 million, $1.0 million, and $8.3 million for fiscal 2022, 2021, and 2020, respectively. During fiscal 2022, we recognized impairment charges totaling $26.3 million in our Grocery & Snacks segment, $28.9 million in our Refrigerated & Frozen segment, and $14.9 million in our Foodservice segment. The impairments were measured based upon the estimated sales price of the disposal group (see Note 5). During fiscal 2020, we recognized impairment charges totaling $54.4 million in our Grocery & Snacks segment and $27.6 million in our Refrigerated & Frozen segment. The impairments were measured based upon the estimated sales price of the disposal group (see Note 5). We recognized charges for the impairment of certain long-lived assets measured based upon the estimated sales price of the assets. Impairments totaled $3.0 million in our Grocery & Snacks segment in fiscal 2021 and $3.8 million in our Refrigerated & Frozen segment in fiscal 2020. During fiscal 2020, we recognized charges of $2.9 million in general corporate expenses related to the impairments of ROU assets. The impairments were measured based upon a discounted cash flow approach. The carrying amount of long-term debt (including current installments) was $8.80 billion as of May 29, 2022 and $8.30 billion as of May 30, 2021. Based on current market rates, the fair value of this debt (level 2 liabilities) at May 29, 2022 and May 30, 2021 was estimated at $8.85 billion and $9.76 billion, respectively.

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- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -URI https://asc.fasb.org/extlink&oid=126976982&loc=d3e19207-110258 + Details
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