NOTE 12—FAIR VALUE OF FINANCIAL INSTRUMENTS

The following table presents the carrying value and fair value, and the classification level within the fair value measurement hierarchy, of our financial instruments as of February 29, 2016 and May 31, 2015.



	February 29, 2016				Fair Value Measurements Using
(Dollars in thousands)	Carrying Value		Fair Value		Level 1		Level 2		Level 3
Assets:
Cash and cash equivalents	$	299,024	$	299,024	$	299,024	$	—	$	—
Restricted cash	4,268		4,268		4,268		—		—
Time deposits	340,000		340,000		—		340,000		—
Investment securities, available for sale	85,061		85,061		85,061		—		—
Deferred compensation investments	3,953		3,953		3,953		—		—
Loans to members, net	23,106,181		23,424,554		—		—		23,424,554
Accrued interest and other receivables	179,212		179,212		179,212		—		—
Debt service reserve funds	17,151		17,151		17,151		—		—
Derivative assets	104,535		104,535		—		104,535		—

Liabilities:
Short-term debt	3,309,020		3,308,517		1,499,503		1,809,014		—
Long-term debt	17,527,497		18,611,196		—		11,311,512		7,299,684
Accrued interest payable	185,758		185,758		185,758		—		—
Guarantee liability	18,155		20,144		—		—		20,144
Derivative liabilities	688,998		688,998		—		688,998		—
Subordinated deferrable debt	395,754		389,220		—		389,220		—
Members’ subordinated certificates	1,444,515		1,444,539		—		—		1,444,539



	May 31, 2015				Fair Value Measurements Using
(Dollars in thousands)	Carrying Value		Fair Value		Level 1		Level 2		Level 3
Assets:
Cash and cash equivalents	$	248,836	$	248,836	$	248,836	$	—	$	—
Restricted cash	485		485		485		—		—
Time deposits	485,000		485,000		—		485,000		—
Investment securities, available for sale	84,472		84,472		84,472		—		—
Deferred compensation investments	4,294		4,294		4,294		—		—
Loans to members, net	21,435,327		21,961,048		—		—		21,961,048
Accrued interest and other receivables	197,828		197,828		197,828		—		—
Debt service reserve funds	25,602		25,602		25,602		—		—
Derivative instruments	115,276		115,276		—		115,276		—

Liabilities:
Short-term debt	3,127,754		3,127,541		1,494,131		1,633,410		—
Long-term debt	16,244,794		17,356,223		—		10,878,302		6,477,921
Accrued interest payable	123,697		123,697		123,697		—		—
Guarantee liability	19,917		22,545		—		—		22,545
Derivative instruments	408,382		408,382		—		408,382		—
Subordinated deferrable debt	395,699		406,000		—		406,000		—
Members’ subordinated certificates	1,505,420		1,505,444		—		—		1,505,444

We consider observable prices in the principal market in our valuations where possible. Fair value estimates were developed at the reporting date and may not necessarily be indicative of amounts that could ultimately be realized in a market transaction at a future date. For additional information regarding the fair value hierarchy and a description of the methodologies we use to measure fair value, see “Note 13—Fair Value Measurements” and “Note 14—Fair Value of Financial Instruments” to the Consolidated Financial Statements in our 2015 Form 10-K. See “Note 11—Fair Value Measurement” for additional information on assets and liabilities reported at fair value on a recurring and nonrecurring basis on our condensed consolidated balance sheets.