FAIR VALUE MEASUREMENTS

6 Months Ended

Nov. 23, 2025

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS

16. 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.

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 November 23, 2025:

	Level 1		Level 2		Level 3		Net Value
Assets:
Derivative assets	$	3.6	$	3.5	$	—	$	7.1
Deferred compensation assets		6.3		—		—		6.3
Available-for-sale debt securities		—		—		2.0		2.0
Total assets	$	9.9	$	3.5	$	2.0	$	15.4
Liabilities:
Derivative liabilities	$	—	$	1.7	$	—	$	1.7
Deferred compensation liabilities		79.7		—		—		79.7
Total liabilities	$	79.7	$	1.7	$	—	$	81.4

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 25, 2025:

	Level 1		Level 2		Level 3		Net Value
Assets:
Derivative assets	$	4.7	$	—	$	—	$	4.7
Deferred compensation assets		6.0		—		—		6.0
Available-for-sale debt securities		—		—		2.2		2.2
Total assets	$	10.7	$	—	$	2.2	$	12.9
Liabilities:
Derivative liabilities	$	—	$	5.1	$	—	$	5.1
Deferred compensation liabilities		70.9		—		—		70.9
Total liabilities	$	70.9	$	5.1	$	—	$	76.0

Nonrecurring Fair Value Measurements

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.

Impairment of Goodwill and Intangible Assets

In the second quarter of fiscal 2026, goodwill impairment charges totaling $771.3 million were recognized within our Refrigerated & Frozen segment. The fair value of the goodwill was measured using a guideline public company method and discounted cash flow valuation method (see Note 7).

In the second quarter of fiscal 2026 and fiscal 2025, we recognized charges for the impairment of indefinite-lived brands of $195.3 million and $18.2 million in our Refrigerated & Frozen segment and $1.7 million and $0.7 million in our Grocery & Snacks segment, respectively. The fair value of these brands was estimated using the “relief from royalty” method (see Note 7).

Other Asset Impairments

In the second quarter of fiscal 2025, we recognized charges of $64.7 million in our Refrigerated & Frozen segment for the impairment of certain long-lived assets based upon a discounted cash flow valuation model and included in restructuring activities. The impairments were based upon management’s intent to exit a manufacturing facility which became probable in the second quarter of fiscal 2025, which reduced the future expected cash flows to be generated at this facility.

Long-Term Debt Fair Value

The carrying amount of long-term debt (including current installments) was $7.24 billion and $7.26 billion as of November 23, 2025 and May 25, 2025, respectively. Based on current market rates, the fair value of this debt (Level 2 liabilities) at November 23, 2025 and May 25, 2025 was estimated at $7.16 billion and $7.03 billion, respectively.