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Fair Value | 9 Months Ended
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Feb. 28, 2023
Fair Value Disclosures [Abstract] |
Fair Value | Note R – Fair Value Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is an exit price concept that assumes an orderly transaction between willing market participants and is required to be based on assumptions that market participants would use in pricing an asset or a liability. Current accounting guidance establishes a three-tier fair value hierarchy as a basis for considering such assumptions and for classifying the inputs used in the valuation methodologies. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair values are as follows: Level 1 – Observable prices in active markets for identical assets and liabilities. Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the assets and liabilities, either directly or indirectly. Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets and liabilities. Recurring Fair Value Measurements At February 28, 2023, our assets and liabilities measured at fair value on a recurring basis were as follows:
|  |  |  |  | Significant |  |  |  |  |  |  |
|  | Quoted Prices |  |  | Other |  |  | Significant |  |  |  |
|  | in Active |  |  | Observable |  |  | Unobservable |  |  |  |
|  | Markets |  |  | Inputs |  |  | Inputs |  |  |  |
(in thousands) |  | (Level 1) |  |  | (Level 2) |  |  | (Level 3) |  |  | Totals |
Assets |  |  |  |  |  |  |  |  |  |  |  |
Derivative financial instruments (1) |  | $ | - |  |  | $ | 33,490 |  |  | $ | - |  |  | $ | 33,490 |
Total assets |  | $ | - |  |  | $ | 33,490 |  |  | $ | - |  |  | $ | 33,490 |
Liabilities |  |  |  |  |  |  |  |  |  |  |  |
Derivative financial instruments (1) |  | $ | - |  |  | $ | 22,628 |  |  | $ | - |  |  | $ | 22,628 |
Total liabilities |  | $ | - |  |  | $ | 22,628 |  |  | $ | - |  |  | $ | 22,628 |
(1) The fair value of our derivative financial instruments is based on the present value of the expected future cash flows considering the risks involved, including non-performance risk, and using discount rates appropriate for the respective maturities. Market observable, Level 2 inputs are used to determine the present value of the expected future cash flows. Refer to “Note Q – Derivative Financial Instruments and Hedging Activities” for additional information regarding our use of derivative financial instruments. At May 31, 2022, our assets and liabilities measured at fair value on a recurring basis were as follows:
|  |  |  |  | Significant |  |  |  |  |  |  |
|  | Quoted Prices |  |  | Other |  |  | Significant |  |  |  |
|  | in Active |  |  | Observable |  |  | Unobservable |  |  |  |
|  | Markets |  |  | Inputs |  |  | Inputs |  |  |  |
(in thousands) |  | (Level 1) |  |  | (Level 2) |  |  | (Level 3) |  |  | Totals |
Assets |  |  |  |  |  |  |  |  |  |  |  |
Derivative financial instruments (1) |  | $ | - |  |  | $ | 12,643 |  |  | $ | - |  |  | $ | 12,643 |
Total assets |  | $ | - |  |  | $ | 12,643 |  |  | $ | - |  |  | $ | 12,643 |
Liabilities |  |  |  |  |  |  |  |  |  |  |  |
Derivative financial instruments (1) |  | $ | - |  |  | $ | 9,003 |  |  | $ | - |  |  | $ | 9,003 |
Total liabilities |  | $ | - |  |  | $ | 9,003 |  |  | $ | - |  |  | $ | 9,003 |
(1) The fair value of our derivative financial instruments is based on the present value of the expected future cash flows considering the risks involved, including non-performance risk, and using discount rates appropriate for the respective maturities. Market observable, Level 2 inputs are used to determine the present value of the expected future cash flows. Refer to “Note Q – Derivative Financial Instruments and Hedging Activities” for additional information regarding our use of derivative financial instruments. Non-Recurring Fair Value Measurements At February 28, 2023, our assets measured at fair value on a non-recurring basis were as follows:
|  |  |  |  | Significant |  |  |  |  |  |  |
|  | Quoted Prices |  |  | Other |  |  | Significant |  |  |  |
|  | in Active |  |  | Observable |  |  | Unobservable |  |  |  |
|  | Markets |  |  | Inputs |  |  | Inputs |  |  |  |
(in thousands) |  | (Level 1) |  |  | (Level 2) |  |  | (Level 3) |  |  | Totals |
Assets |  |  |  |  |  |  |  |  |  |  |  |
Long-lived assets held and used (1) |  | $ | - |  |  | $ | 70 |  |  | $ | - |  |  | $ | 70 |
Total assets |  | $ | - |  |  | $ | 70 |  |  | $ | - |  |  | $ | 70 |
(1) During the three months ended February 28, 2023, we recognized a pre-tax impairment charge of $484,000 related to certain assets associated with a capital project at our Building Products facility in Jefferson, Ohio, that were determined to have no alternative use and written down to their estimated salvage value of approximately $70,000. At May 31, 2022, our assets measured at fair value on a non-recurring basis were as follows:
|  |  |  |  | Significant |  |  |  |  |  |  |
|  | Quoted Prices |  |  | Other |  |  | Significant |  |  |  |
|  | in Active |  |  | Observable |  |  | Unobservable |  |  |  |
|  | Markets |  |  | Inputs |  |  | Inputs |  |  |  |
(in thousands) |  | (Level 1) |  |  | (Level 2) |  |  | (Level 3) |  |  | Totals |
Assets |  |  |  |  |  |  |  |  |  |  |  |
Long-lived assets held for sale (1) |  | $ | - |  |  | $ | 700 |  |  | $ | - |  |  | $ | 700 |
Total assets |  | $ | - |  |  | $ | 700 |  |  | $ | - |  |  | $ | 700 |
(1) Comprised of production equipment at our Samuel facility in Twinsburg, Ohio facility with an estimated fair market value of $700,000. Refer to “Note E – Impairment of Long-Lived Assets” for additional information. The fair value of non-derivative financial instruments included in the carrying amounts of cash and cash equivalents, receivables, income taxes receivable, other assets, accounts payable, accrued compensation, contributions to employee benefit plans and related taxes, other accrued items, income taxes payable and other liabilities approximate carrying value due to their short-term nature. The fair value of long-term debt, including current maturities, based upon models utilizing market observable (Level 2) inputs and credit risk, was $638,163,000 and $684,830,000 at February 28, 2023 and May 31, 2022, respectively. The carrying amount of long-term debt, including current maturities, was $689,600,000 and $696,610,000 at February 28, 2023 and May 31, 2022, 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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