FAIR VALUE MEASUREMENTS

12 Months Ended

May 29, 2016

Fair Value, Assets, Liabilities and Stockholders' Equity Measured on Recurring Basis [Abstract]

FASB 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 interest rate curves and 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, interest rate swaps, and cross-currency swaps.

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 29, 2016:



	Level 1		Level 2		Level 3		Total
Assets:
Derivative assets	$	4.7	$	21.4	$	—	$	26.1
Available-for-sale securities	3.0		—		—		3.0
Deferred compensation assets	0.7		—		—		0.7
Total assets	$	8.4	$	21.4	$	—	$	29.8
Liabilities:
Derivative liabilities	$	—	$	0.7	$	—	$	0.7
Deferred compensation liabilities	46.5		—		—		46.5
Total liabilities	$	46.5	$	0.7	$	—	$	47.2



	Level 1		Level 2		Level 3		Total
Assets:
Derivative assets	$	13.6	$	18.6	$	—	$	32.2
Available-for-sale securities	2.8		—		—		2.8
Deferred compensation assets	0.9		—		—		0.9
Total assets	$	17.3	$	18.6	$	—	$	35.9
Liabilities:
Derivative liabilities	$	—	$	14.2	$	—	$	14.2
Deferred compensation liabilities	43.7		—		—		43.7
Total liabilities	$	43.7	$	14.2	$	—	$	57.9

Certain assets and liabilities, including long-lived assets, goodwill, asset retirement obligations, and cost and equity investments are measured at fair value on a nonrecurring basis. There were no significant fair value measurement losses recognized for such assets and liabilities in the periods reported.

During fiscal 2015, goodwill impairment charges of $20.9 million were recognized within the Consumer Foods segment. See Note 9 for a discussion of the methodology employed to measure these impairments.

During fiscal 2016, we recognized impairment charges of $50.1 million in our Consumer Foods segment for our Chef Boyardee^® brand. During fiscal 2015, an impairment of an indefinite-lived brand was recognized for $4.8 million in the Consumer Foods segment. The fair values of these brands were estimated using the “relief from royalty” method (see Note 9).

During fiscal 2015, we recognized impairment charges of $1.51 billion and $43.9 million for goodwill and indefinite-lived intangibles, respectively, in our Private Brands business. During fiscal 2015, we also recognized a charge of $13.7 million in our Private Brands business for the impairment of certain long-lived assets. The impairment was measured based upon an estimated disposal value for the related production facility. These impairment charges are included in discontinued operations. (see Note 6).

The carrying amount of long-term debt (including current installments) was $5.5 billion as of May 29, 2016 and $7.9 billion as of May 31, 2015. Based on current market rates, the fair value of this debt (level 2 liabilities) at May 29, 2016 and May 31, 2015 was estimated at $5.9 billion and $8.2 billion, respectively.

- 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.

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