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Financial Instruments | 3 Months Ended
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May 27, 2023
Marketable Securities [Abstract] |
Financial Instruments | Financial Instruments Marketable securities Through our wholly-owned insurance subsidiary, Prism Assurance, Ltd. (Prism), we hold the following available-for-sale marketable securities, made up of municipal and corporate bonds:
(In thousands) |  | Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Estimated Fair Value
May 27, 2023 |  | $ | 10,225 |  |  | $ | — |  |  | $ | 550 |  |  | $ | 9,675 |
February 25, 2023 |  | 10,647 |  |  | — |  |  | 702 |  |  | 9,945 |
Prism insures a portion of our general liability, workers’ compensation and automobile liability risks using reinsurance agreements to meet statutory requirements. The reinsurance carrier requires Prism to maintain fixed-maturity investments for the purpose of providing collateral for Prism’s obligations under the reinsurance agreements. The amortized cost and estimated fair values of these bonds at May 27, 2023, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities, as borrowers may have the right to call or prepay obligations with or without penalty.
(In thousands) |  | Amortized Cost |  | Estimated Fair Value
Due within one year |  | $ | 2,906 |  |  | $ | 2,850 |
Due after one year through five years |  | 7,319 |  |  | 6,825 |
Total |  | $ | 10,225 |  |  | $ | 9,675 |
Derivative instruments We use interest rate swaps, foreign exchange forward contracts, commodity swaps and forward purchase contracts to manage risks generally associated with foreign exchange rate, interest rate and commodity price fluctuations. The information that follows explains the various types of derivatives and financial instruments we use, how such instruments are accounted for, and how such instruments impact our financial position and performance. In fiscal 2020, we entered into an interest rate swap to hedge exposure to variability in cash flows from interest payments on our floating-rate revolving credit facility. As of May 27, 2023, the interest rate swap contract had a notional value of $30.0 million and has a maturity date of February 5, 2026. We periodically enter into forward purchase contracts and/or fixed/floating swaps to manage the risk associated with fluctuations in aluminum prices and fluctuations in foreign exchange rates (primarily related to the Canadian dollar). These contracts generally have an original maturity date of less than one year. As of May 27, 2023, we held foreign exchange forward contracts and aluminum fixed/floating swaps with U.S. dollar notional values of $5.1 million and $12.8 million, respectively. These derivative instruments are recorded within our consolidated balance sheets within other current assets and liabilities. Gains or losses associated with these instruments are recorded as a component of accumulated other comprehensive income. Fair value measurements Financial assets and liabilities are classified in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement: Level 1 (unadjusted quoted prices in active markets for identical assets or liabilities); Level 2 (observable market inputs, other than quoted prices included in Level 1); and Level 3 (unobservable inputs that cannot be corroborated by observable market data). We do not have any Level 3 financial assets or liabilities.
(In thousands) |  | Quoted Prices in Active Markets (Level 1) |  | Other Observable Inputs (Level 2) |  | Total Fair Value
May 27, 2023 |  |  |  |  |  |
Assets: |  |  |  |  |  |
Money market funds |  | $ | 11,901 |  |  | $ | — |  |  | $ | 11,901 |
Municipal and corporate bonds |  | — |  |  | 9,675 |  |  | 9,675 |
Cash surrender value of life insurance |  | — |  |  | 8,188 |  |  | 8,188 |
Interest rate swap contract |  | — |  |  | 1,522 |  |  | 1,522 |
Liabilities: |  |  |  |  |  |
Deferred compensation |  | — |  |  | 10,204 |  |  | 10,204 |
Foreign currency forward/option contract |  | — |  |  | 147 |  |  | 147 |
Aluminum hedging contract |  | — |  |  | 881 |  |  | 881 |
February 25, 2023 |  |  |  |  |  |
Assets: |  |  |  |  |  |
Money market funds |  | $ | 8,062 |  |  | $ | — |  |  | $ | 8,062 |
Municipal and corporate bonds |  | — |  |  | 9,945 |  |  | 9,945 |
Cash surrender value of life insurance |  | — |  |  | 8,282 |  |  | 8,282 |
Interest rate swap contract |  | — |  |  | 1,817 |  |  | 1,817 |
Liabilities: |  |  |  |  |  |
Deferred compensation |  | — |  |  | 9,515 |  |  | 9,515 |
Foreign currency forward/option contract |  | — |  |  | 206 |  |  | 206 |
Aluminum hedging contract |  | — |  |  | 1,075 |  |  | 1,075 |
Money market funds and commercial paper Fair value of money market funds was determined based on quoted prices for identical assets in active markets. Commercial paper was measured at fair value using inputs based on quoted prices for similar securities in active markets. These assets are included within cash and cash equivalents on our consolidated balance sheets. Municipal and corporate bonds Municipal and corporate bonds were measured at fair value based on market prices from recent trades of similar securities and are classified within our consolidated balance sheets as other current or other non-current assets based on maturity date. Cash surrender value of life insurance and deferred compensation Contracts insuring the lives of certain employees who are eligible to participate in certain non-qualified pension and deferred compensation plans are held in trust. Cash surrender value of the contracts is based on performance measurement funds that shadow the deferral investment allocations made by participants in certain deferred compensation plans. Changes in cash surrender value are recorded in other expense. The deferred compensation liability balances are valued based on amounts allocated by participants to the underlying performance measurement funds. Derivative instruments The interest rate swap is measured at fair value using other observable market inputs, based off of benchmark interest rates. Forward foreign exchange and fixed/floating aluminum contracts are measured at fair value using other observable market inputs, such as quotations on forward foreign exchange points, foreign currency exchange rates, and forward purchase aluminum prices. Derivative positions are primarily valued using standard calculations and models that use as their basis readily observable market parameters. Industry standard data providers are our primary source for forward and spot rate information for both interest and currency rates and aluminum prices. Nonrecurring fair value measurements We measure certain financial instruments at fair value on a nonrecurring basis including goodwill, intangible assets, property and equipment and right-of-use lease assets. These assets were initially measured and recognized at amounts equal to the fair value determined as of the date of acquisition or purchase subject to changes in value only for foreign currency translation. Periodically, these assets are tested for impairment, by comparing their respective carrying values to the estimated fair value of the reporting unit or asset group in which they reside. In the event any of these assets were to become impaired, we would recognize an impairment expense equal to the amount by which the carrying value of the reporting unit, impaired asset or asset group exceeds its estimated fair value. Fair value measurements of reporting units are estimated using an income approach involving discounted cash flow models that contain certain Level 3 inputs requiring significant management judgment, including projections of economic conditions, customer demand and changes in competition, revenue growth rates, gross profit margins, operating margins, capital expenditures, working capital requirements, terminal growth rates and discount rates. Fair value measurements of the reporting units associated with our goodwill balances and our indefinite-lived intangible assets are estimated at least annually in the fourth quarter of each fiscal year for purposes of impairment testing if a quantitative analysis is performed.

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- Definition Tabular disclosure of marketable securities. This may consist of investments in certain debt and equity securities, short-term investments and other assets. + References No definition available. + Details
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