v3.25.2
Fair Value Measurements
 12 Months Ended
May 31, 2025
Fair Value Disclosures [Abstract]  
Fair Value Measurements

NOTE E — FAIR VALUE MEASUREMENTS

Financial instruments recorded in the Consolidated Balance Sheets include cash and cash equivalents, trade accounts receivable, marketable securities, notes and accounts payable, and debt.

An allowance for credit losses is established for trade accounts receivable using assessments of current creditworthiness of customers, historical collection experience, the aging of receivables and other currently available evidence. Trade accounts receivable balances are written-off against the allowance if a final determination of uncollectibility is made. All provisions for allowance for doubtful collection of accounts are included in SG&A expense.

The valuation techniques utilized for establishing the fair values of assets and liabilities are based on observable and unobservable inputs. Observable inputs reflect readily obtainable data from independent sources, while unobservable inputs reflect management’s market assumptions. The fair value hierarchy has three levels based on the reliability of the inputs used to determine fair value, as follows:

Level 1 Inputs — Quoted prices for identical instruments in active markets.

Level 2 Inputs — Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable.

Level 3 Inputs — Instruments with primarily unobservable value drivers.

The following tables present our assets and liabilities that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy.

(In thousands)

 

Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)

 

 

Significant
Other
Observable
Inputs (Level 2)

 

 

Significant
Unobservable
Inputs (Level 3)

 

 

Fair Value at
May 31, 2025

 

Available-for-sale debt securities:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury and other government

 

$

-

 

 

$

24,200

 

 

$

-

 

 

$

24,200

 

Corporate bonds

 

 

-

 

 

 

123

 

 

 

-

 

 

 

123

 

Total available-for-sale debt securities

 

 

-

 

 

 

24,323

 

 

 

-

 

 

 

24,323

 

Marketable equity securities:

 

 

 

 

 

 

 

 

 

 

 

 

Stocks-foreign

 

 

1,265

 

 

 

-

 

 

 

-

 

 

 

1,265

 

Stocks-domestic

 

 

8,642

 

 

 

-

 

 

 

-

 

 

 

8,642

 

Mutual funds - foreign

 

 

-

 

 

 

38,943

 

 

 

-

 

 

 

38,943

 

Mutual funds - domestic

 

 

-

 

 

 

86,569

 

 

 

-

 

 

 

86,569

 

Total marketable equity securities

 

 

9,907

 

 

 

125,512

 

 

 

-

 

 

 

135,419

 

Contingent consideration

 

 

-

 

 

 

-

 

 

 

(17,252

)

 

 

(17,252

)

Total

 

$

9,907

 

 

$

149,835

 

 

$

(17,252

)

 

$

142,490

 

 

(In thousands)

 

Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)

 

 

Significant
Other
Observable
Inputs (Level 2)

 

 

Significant
Unobservable
Inputs (Level 3)

 

 

Fair Value at
May 31, 2024

 

Available-for-sale debt securities:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury and other government

 

$

-

 

 

$

26,559

 

 

$

-

 

 

$

26,559

 

Corporate bonds

 

 

-

 

 

 

138

 

 

 

-

 

 

 

138

 

Total available-for-sale debt securities

 

 

-

 

 

 

26,697

 

 

 

-

 

 

 

26,697

 

Marketable equity securities:

 

 

 

 

 

 

 

 

 

 

 

 

Stocks-foreign

 

 

1,518

 

 

 

-

 

 

 

-

 

 

 

1,518

 

Stocks-domestic

 

 

9,028

 

 

 

-

 

 

 

-

 

 

 

9,028

 

Mutual funds - foreign

 

 

-

 

 

 

39,114

 

 

 

-

 

 

 

39,114

 

Mutual funds - domestic

 

 

-

 

 

 

77,966

 

 

 

-

 

 

 

77,966

 

Total marketable equity securities

 

 

10,546

 

 

 

117,080

 

 

 

-

 

 

 

127,626

 

Contingent consideration

 

 

-

 

 

 

-

 

 

 

(2,229

)

 

 

(2,229

)

Total

 

$

10,546

 

 

$

143,777

 

 

$

(2,229

)

 

$

152,094

 

Our investments in available-for-sale debt securities and marketable equity securities are valued using a market approach. The availability of inputs observable in the market varies from instrument to instrument and depends on a variety of factors, including the type of instrument, whether the instrument is actively traded and other characteristics particular to the transaction. For most of our financial instruments, pricing inputs are readily observable in the market, the valuation methodology used is widely accepted by market participants, and the valuation does not require significant management discretion. For other financial instruments, pricing inputs are less observable in the market and may require management judgment.

The contingent consideration represents the estimated fair value of the additional variable cash consideration payable in connection with recent acquisitions that is contingent upon the achievement of certain performance milestones. We estimated the fair value using expected future cash flows over the period in which the obligation is expected to be settled which is considered to be a Level 3 input. During fiscal 2025, we paid approximately $2.2 million to satisfy contingent consideration obligations relating to certain performance milestones that were established in prior periods and achieved during the year, and we increased our accrual by $17.3 million related to acquisitions completed during fiscal 2025, which is considered a noncash investing activity. During fiscal 2024, we paid approximately $1.1 million to satisfy contingent consideration obligations relating to certain performance milestones that were established in prior periods and achieved during the year. In the Consolidated Statements of Cash Flows, payments of acquisition-related contingent consideration for the amount recognized at fair value as of the acquisition date are reported in cash flows from financing activities, while payment of contingent consideration in excess of fair value as of the acquisition date, are reported in cash flows from operating activities within accrued liabilities.

The carrying value of our current financial instruments, which include cash and cash equivalents, marketable securities, trade accounts receivable, accounts payable and short-term debt, approximates fair value because of the short-term maturity of these financial instruments. At May 31, 2025 and 2024, the fair value of our long-term debt was estimated using active market quotes, based on our current incremental borrowing rates for similar types of borrowing arrangements, which are Level 2 inputs. Based on the analysis performed, the fair value and the carrying value of our financial instruments and long-term debt as of May 31, 2025 and 2024 are as follows:

 

 

At May 31, 2025

 

(In thousands)

 

Carrying Value

 

 

Fair Value

 

Long-term debt, including current portion

 

 

2,646,613

 

 

 

2,523,202

 

 

 

 

 

 

 

 

 

 

At May 31, 2024

 

(In thousands)

 

Carrying Value

 

 

Fair Value

 

Long-term debt, including current portion

 

 

2,127,148

 

 

 

1,979,359