Note 14 – Fair Value Measurements

Assets and liabilities measured at fair value are classified using the fair value hierarchy based upon the transparency of inputs as of the measurement date. The classification of fair value measurements within the hierarchy is based upon the lowest level of input that is significant to the measurement. The three levels are defined as follows:

 

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Level 1 – Valuation is based upon quoted prices (unadjusted) in active markets for identical assets or liabilities.

 

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Level 2 – Valuation is based upon quoted prices for similar assets and liabilities in active markets, or other inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

 

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Level 3 – Valuation is based upon unobservable inputs that are significant to the fair value measurement.

 

The following table summarizes the financial assets and liabilities measured at fair value as of May 27, 2016:

 

(In thousands)		May 27, 2016				Level 1				Level 2				Level 3
Assets measured on a recurring basis:
Deferred compensation plan assets		$	12,004			$	10,780			$	1,224			$	—
Investment in equity securities			45,965				45,965				—				—
		$	57,969			$	56,745			$	1,224			$	—
Liabilities measured on a recurring basis:
Deferred compensation plan liabilities		$	12,987			$	10,780			$	2,207			$	—

The following table summarizes the assets and liabilities measured at fair value as of February 29, 2016:

 

(In thousands)		February 29, 2016				Level 1				Level 2				Level 3
Assets measured on a recurring basis:
Deferred compensation plan assets		$	11,158			$	9,936			$	1,222			$	—
Investment in equity securities			33,230				33,230				—				—
		$	44,388			$	43,166			$	1,222			$	—
Liabilities measured on a recurring basis:
Deferred compensation plan liabilities		$	12,064			$	9,936			$	2,128			$	—

The following table summarizes the assets and liabilities measured at fair value as of May 29, 2015:

 

(In thousands)		May 29, 2015				Level 1				Level 2				Level 3
Assets measured on a recurring basis:
Deferred compensation plan assets		$	12,484			$	11,035			$	1,449			$	—
Investment in equity securities			73,080				73,080				—				—
		$	85,564			$	84,115			$	1,449			$	—
Liabilities measured on a recurring basis:
Deferred compensation plan liabilities		$	13,448			$	11,035			$	2,413			$	—

The deferred compensation plan includes investments in mutual funds and a money market fund. Assets held in mutual funds are recorded at fair value, which is considered a Level 1 valuation as it is based on each fund’s quoted market value per share in an active market. The money market fund is classified as Level 2 as substantially all of the fund’s investments are determined using amortized cost. The fair value of the deferred compensation plan liabilities is based on the fair value of: (i) the plan’s assets for invested deferrals and (ii) hypothetical investments for unfunded deferrals.

The investment in equity securities is considered a Level 1 valuation as it is based on a quoted price in an active market.