FAIR VALUE MEASUREMENTS

12 Months Ended

Feb. 27, 2016

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

NOTE 6—FAIR VALUE MEASUREMENTS

Recurring fair value measurements were as follows:

		February 27, 2016
	Balance Sheet Location	Level 1		Level 2		Level 3		Total
Assets:
Deferred compensation	Other assets	$	6	$	—	$	—	$	6
Total		$	6	$	—	$	—	$	6
Liabilities:
Deferred compensation	Other current liabilities	$	—	$	7	$	—	$	7
Deferred compensation	Other long-term liabilities	—		35		—		35
Diesel fuel derivatives	Other current liabilities	—		2		—		2
Interest rate swap derivative	Other current liabilities	—		3		—		3
Interest rate swap derivative	Other long-term liabilities	—		3		—		3
Total		$	—	$	50	$	—	$	50

		February 28, 2015
	Balance Sheet Location	Level 1		Level 2		Level 3		Total
Assets:
Deferred compensation	Other assets	$	7	$	—	$	—	$	7
Total		$	7	$	—	$	—	$	7
Liabilities:
Deferred compensation	Other current liabilities	$	—	$	13	$	—	$	13
Deferred compensation	Other long-term liabilities	—		33		—		33
Diesel fuel derivatives	Other current liabilities	—		1		—		1
Total		$	—	$	47	$	—	$	47

Deferred Compensation

Deferred compensation assets consist of mutual fund investments used to fund certain deferred compensation plans. The fair values of deferred compensation assets are based on quoted market prices of the mutual funds held by the plan at each reporting period. Mutual funds traded in active markets are classified within Level 1 of the fair value hierarchy. Deferred compensation assets are restricted for use to pay deferred compensation liabilities. Deferred compensation liabilities consist of obligations to participants in deferred compensation plans, and are determined based on the fair value of the related deferred compensation plan investments or designated phantom investments of the plan at each reporting period.

Diesel Fuel Derivatives

Commodity derivatives consist of forward fixed price purchase diesel fuel contracts. The fair value of the Company’s diesel fuel derivatives are measured using Level 2 inputs due to the Company’s use of observable market quotations without significant adjustments to determine fair values.

Fuel derivative losses are included within Cost of sales in the Consolidated Statements of Operations and were $3, $1 and $0 for fiscal 2016, 2015 and 2014, respectively.

Interest Rate Swap Derivatives

On February 24, 2015, the Company entered into a forward starting interest rate swap agreement effectively converting $300 of variable rate debt under the Company's Secured Term Loan Facility (defined below) to a fixed rate of 5.5075 percent, effective beginning in February 2016 and through the Secured Term Loan Facility's maturity in March 2019. This transaction was entered into to reduce the Company's exposure to changes in market interest rates associated with its variable rate debt. The Company designated this derivative as a cash flow hedge of the variability in expected cash outflows for interest payments.

In fiscal 2016 and 2015, no amounts were recorded in the Consolidated Statements of Operations for interest rate swap derivative ineffectiveness or reclassifications from Accumulated other comprehensive loss into earnings.

The fair value of the interest rate swap is measured using Level 2 inputs. The interest rate swap agreement is valued using an income approach interest rate swap valuation model incorporating observable market inputs including interest rates, LIBOR swap rates and credit default swap rates. As of February 27, 2016, a 100 basis point increase in forward LIBOR interest rates would increase the fair value of the interest rate swap by approximately $6; and a 100 basis point decrease in forward LIBOR interest rates would decrease the fair value of the interest rate swap by approximately $3.

The Company utilized Level 3 fair value inputs in measuring certain non-recurring transactions in fiscal 2016. See Note 1—Summary of Significant Accounting Policies.

Fair Value Estimates

For certain of the Company’s financial instruments, including cash and cash equivalents, receivables, accounts payable, accrued salaries and other current assets and liabilities, the fair values approximate carrying values due to their short maturities.

The estimated fair value of notes receivable was greater than the carrying value by $1 and $2 as of February 27, 2016 and February 28, 2015, respectively. The estimated fair value of notes receivable was calculated using a discounted cash flow approach applying a market rate for similar instruments using Level 3 inputs.

The estimated fair value of the Company’s long-term debt was less than the carrying amount, excluding debt financing costs, by approximately $236 as of February 27, 2016 and greater than the carrying amount by approximately $59 as of February 28, 2015. The estimated fair value was based on market quotes, where available, or market values for similar instruments, using Level 2 and 3 inputs.