Quarterly report pursuant to Section 13 or 15(d)

Fair Value of Financial Instruments

v3.5.0.1
Fair Value of Financial Instruments
 3 Months Ended
May 31, 2016
Fair Value Disclosures [Abstract]  
FAIR VALUE OF FINANCIAL INSTRUMENTS
FAIR VALUE OF FINANCIAL INSTRUMENTS:

Authoritative guidance establishes a framework for measuring fair value and requires disclosures about fair value measurements for financial instruments. This guidance emphasizes that fair value is a market-based measurement, not an entity-specific measurement, and states that a fair value measurement should be determined based on assumptions that market participants would use in pricing an asset or liability. It establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. The hierarchy includes three levels:

•
Level 1 inputs are quoted prices in active markets for identical assets or liabilities;
•
Level 2 inputs include data points that are observable such as quoted prices for similar assets or liabilities in active markets, quoted prices for identical assets or similar assets or liabilities in markets that are not active, and inputs (other than quoted prices) such as interest rates and yield curves that are observable for the asset and liability, either directly or indirectly; and
•
Level 3 inputs are unobservable data points for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability.

Fair value methodology and assumptions –
The methods and assumptions we use to estimate the fair value for each class of our financial instruments are presented in Notes 1 and 7 of our consolidated financial statements included in our 2016 Annual Report and have not changed significantly for the three months ended May 31, 2016. The carrying amounts of certain of our financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and notes payable to banks, approximate fair value as of May 31, 2016, and February 29, 2016, due to the relatively short maturity of these instruments. As of May 31, 2016, the carrying amount of long-term debt, including the current portion, was $8,278.4 million, compared with an estimated fair value of $8,154.8 million. As of February 29, 2016, the carrying amount of long-term debt, including the current portion, was $7,672.9 million, compared with an estimated fair value of $7,252.0 million.

Recurring basis measurements –
The following table presents our financial assets and liabilities measured at estimated fair value on a recurring basis:
 
Fair Value Measurements Using
 
 
 
Quoted
Prices in
Active
Markets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
 
Total
(in millions)
 
 
 
 
 
 
 
May 31, 2016
 
 
 
 
 
 
 
Assets:
 
 
 
 
 
 
 
Foreign currency contracts
$
—

 
$
9.1

 
$
—

 
$
9.1

Commodity derivative contracts
$
—

 
$
2.9

 
$
—

 
$
2.9

Interest rate swap contracts
$
—

 
$
1.7

 
$
—

 
$
1.7

Available-for-sale (“AFS”) debt securities
$
—

 
$
—

 
$
4.7

 
$
4.7

Liabilities:
 
 
 
 
 
 
 
Foreign currency contracts
$
—

 
$
63.9

 
$
—

 
$
63.9

Commodity derivative contracts
$
—

 
$
26.6

 
$
—

 
$
26.6

Interest rate swap contracts
$
—

 
$
7.2

 
$
—

 
$
7.2

 
 
 
 
 
 
 
 
February 29, 2016
 
 
 
 
 
 
 
Assets:
 
 
 
 
 
 
 
Foreign currency contracts
$
—

 
$
11.5

 
$
—

 
$
11.5

Commodity derivative contracts
$
—

 
$
0.9

 
$
—

 
$
0.9

Interest rate swap contracts
$
—

 
$
1.0

 
$
—

 
$
1.0

AFS debt securities
$
—

 
$
—

 
$
4.6

 
$
4.6

Liabilities:
 
 
 
 
 
 
 
Foreign currency contracts
$
—

 
$
69.0

 
$
—

 
$
69.0

Commodity derivative contracts
$
—

 
$
46.1

 
$
—

 
$
46.1

Interest rate swap contracts
$
—

 
$
7.6

 
$
—

 
$
7.6