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

Note R – Fair Value Measurements

 

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is an exit price concept that assumes an orderly transaction between willing market participants and is required to be based on assumptions that market participants would use in pricing an asset or a liability. Current accounting guidance establishes a three-tier fair value hierarchy as a basis for considering such assumptions and for classifying the inputs used in the valuation methodologies. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair values are as follows:

 

Level 1

–

Quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity can access at the measurement date.

 

 

 

Level 2

–

Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

 

 

 

Level 3

–

Unobservable inputs for the asset or liability and that are significant to the fair value of the assets and liabilities (i.e., allowing for situations in which there is little or no market activity for the asset or liability at the measurement date).

 

Recurring Fair Value Measurements

 

At May 31, 2025, our financial assets and liabilities measured at fair value on a recurring basis were as follows:

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Totals

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Derivative financial instruments (1)

 

$

-

 

 

$

1,042

 

 

$

-

 

 

$

1,042

 

Total assets

 

$

-

 

 

$

1,042

 

 

$

-

 

 

$

1,042

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Derivative financial instruments (1)

 

$

-

 

 

$

7,461

 

 

$

-

 

 

$

7,461

 

Total liabilities

 

$

-

 

 

$

7,461

 

 

$

-

 

 

$

7,461

 

 

 
(1)
The fair value of our derivative financial instruments was based on the present value of the expected future cash flows considering the risks involved, including non-performance risk, and using discount rates appropriate for the respective maturities. Market observable, Level 2 inputs are used to determine the present value of the expected future cash flows. Refer to “Note Q – Derivative Instruments and Hedging Activities” for additional information regarding our use of derivative financial instruments.

 

At May 31, 2024, our financial assets and liabilities measured at fair value on a recurring basis were as follows:

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Totals

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Derivative financial instruments (1)

 

$

-

 

 

$

920

 

 

$

-

 

 

$

920

 

Total assets

 

$

-

 

 

$

920

 

 

$

-

 

 

$

920

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Derivative financial instruments (1)

 

$

-

 

 

$

1,421

 

 

$

-

 

 

$

1,421

 

Total liabilities

 

$

-

 

 

$

1,421

 

 

$

-

 

 

$

1,421

 

 

 
(1)
The fair value of our derivative financial instruments was based on the present value of the expected future cash flows considering the risks involved, including non-performance risk, and using discount rates appropriate for the respective maturities. Market observable, Level 2 inputs are used to determine the present value of the expected future cash flows. Refer to “Note Q – Derivative Instruments and Hedging Activities” for additional information regarding our use of derivative financial instruments.

Non-Recurring Fair Value Measurements

 

At May 31, 2025, our assets measured at fair value on a non-recurring basis were categorized as follows:

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Totals

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Long-lived assets held for use (1)

 

$

-

 

 

$

-

 

 

$

9,322

 

 

$

9,322

 

Investment in unconsolidated affiliate (2)

 

 

-

 

 

 

-

 

 

 

26,225

 

 

 

26,225

 

Investment in notes receivable (3)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Total assets

 

$

-

 

 

$

-

 

 

$

35,547

 

 

$

35,547

 

 

 
(1)
During the fourth quarter of fiscal 2025, impairment indicators were identified related to the intangible assets of GTI. The recoverability of the associated asset group was assessed using projected future cash flows, which were determined to be less than the asset group’s net book value. In accordance with applicable accounting guidance, the intangible assets were written down to their fair market value of $9,322, resulting in an impairment charge of $50,050. Refer to “Note D – Goodwill and Other Long-Lived Assets” for additional information.
(2)
Represents our minority ownership interest in the Sustainable Energy Solutions joint venture, which recognized a non-cash impairment charge during the fourth quarter of fiscal 2025. Refer to “Note C – Investments in Unconsolidated Affiliates” for additional information.
(3)
Reflects the full write-down of an investment in notes receivable that was determined to be other than temporarily impaired.

 

At May 31, 2024, our assets measured at fair value on a non-recurring basis were categorized as follows:

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Totals

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Investment in unconsolidated affiliate (1)

 

$

-

 

 

$

-

 

 

$

31,367

 

 

$

31,367

 

Investment in notes receivable (2)

 

 

-

 

 

 

5,000

 

 

 

-

 

 

 

5,000

 

Total assets

 

$

-

 

 

$

-

 

 

$

31,367

 

 

$

31,367

 

 

 
(1)
On May 29, 2024, in connection with the contribution of the net assets of the Sustainable Energy Solutions business to the newly-formed Sustainable Energy Solutions joint venture, we obtained a 49% minority ownership interest. In accordance with the applicable accounting guidance, our minority ownership interest in the Sustainable Energy Solutions joint venture was recorded at its acquisition date fair value of $31,367.
(2)
Reflects the write-down of an investment in notes receivable that was determined to be other than temporarily impaired.

 

The non-derivative financial instruments included in the carrying amounts of cash and cash equivalents, receivables, income taxes receivable, other assets, deferred income taxes, net, accounts payable, short-term borrowings, accrued compensation, contributions to employee benefit plans and related taxes, other accrued items, income taxes payable and other liabilities approximate fair value due to their short-term nature. The fair value of long-term debt, including current maturities, based upon models utilizing primarily market observable (Level 2) inputs and credit risk, was $263,547 and $257,866 at May 31, 2025 and 2024, respectively. The carrying amount of long-term debt was $302,868 and $298,133 at May 31, 2025 and 2024, respectively.