Fair Value Measurements

6 Months Ended

Nov. 24, 2024

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

The fair values of cash equivalents, receivables, net, accounts payable and short-term debt approximate their carrying amounts due to their short duration or market based interest rates.

The following tables summarize the fair values of financial instruments measured at fair value on a recurring basis as of November 24, 2024 and May 26, 2024. 

Items Measured at Fair Value at November 24, 2024
(in millions)		Fair value of assets (liabilities)		Quoted prices in active market for identical assets (liabilities) (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Derivatives:
Commodities futures, swaps & options	(1)	$	(1.3)	$	—	$	(1.3)	$	—
Equity forwards	(2)	0.6		—		0.6		$	—
Interest rate swaps - fair value hedge	(3)	(45.1)		—		(45.1)		—
Total		$	(45.8)	$	—	$	(45.8)	$	—

Items Measured at Fair Value at May 26, 2024
(in millions)		Fair value of assets (liabilities)		Quoted prices in active market for identical assets (liabilities) (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Derivatives:
Commodities futures, swaps & options	(1)	$	(0.6)	$	—	$	(0.6)	$	—
Equity forwards	(2)	(3.2)		—		(3.2)		—
Interest rate swaps - fair value hedge	(3)	(51.8)		—		(51.8)		—
Total		$	(55.6)	$	—	$	(55.6)	$	—

(1)The fair value of our commodities futures, swaps and options is based on closing market prices of the contracts, inclusive of the risk of nonperformance.

(2)The fair value of equity forwards is based on the closing market value of Darden stock, inclusive of the risk of nonperformance.

(3)The fair value of our interest rate swap agreements is based on current and expected market interest rates, inclusive of the risk of nonperformance.

The carrying value and fair value of long-term debt as of November 24, 2024, was $2.12 billion and $2.13 billion, respectively. The carrying value and fair value of long-term debt as of May 26, 2024, was $1.37 billion. The fair value of long-term debt, classified as Level 2 in the fair value hierarchy, is determined based on market prices or, if market prices are not available, the present value of the underlying cash flows discounted at our incremental borrowing rates.

The fair value of non-financial assets measured at fair value on a non-recurring basis, classified as Level 2 in the fair value hierarchy, is determined based on third-party market appraisals. As of November 24, 2024 and May 26, 2024, adjustments to the fair values of non-financial assets measured at fair value on a non-recurring basis, classified as Level 2, were not material.

The fair value of non-financial assets measured at fair value on a non-recurring basis, classified as Level 3 in the fair value hierarchy, is determined based on appraisals, sales prices of comparable assets, or estimates of discounted future cash flows. As of November 24, 2024, adjustments to the fair values of non-financial assets, classified as Level 3, were not material. As of May 26, 2024, long-lived assets held and used with a carrying amount of $4.8 million, primarily related to three underperforming restaurants, were determined to have a fair value of $1.5 million resulting in an impairment charge of $3.3 million.