FAIR VALUE MEASUREMENTS
The fair values of cash equivalents, receivables, net, accounts payable and short-term debt approximate their carrying amounts due to their short duration.
The following tables summarize the fair values of financial instruments measured at fair value on a recurring basis at May 25, 2025 and May 26, 2024:
Items Measured at Fair Value at May 25, 2025
(in millions)Fair Value
of Assets
(Liabilities)
Quoted Prices
in Active
Market for
Identical Assets
(Liabilities)
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable Inputs
(Level 3)
Derivatives:
Commodities futures, swaps & options(1)$(0.9)$— $(0.9)$— 
Equity forwards(2)(3.0)— (3.0)— 
Interest rate swaps(3)(40.0)— (40.0)— 
Foreign exchange forwards(4)(0.2)(0.2)
Total$(44.1)$— $(44.1)$— 
Items Measured at Fair Value at May 26, 2024
(in millions)Fair Value
of Assets
(Liabilities)
Quoted Prices
in Active
Market for
Identical Assets
(Liabilities)
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable Inputs
    (Level 3)    
Derivatives:
Commodities futures, swaps & options(1)$(0.6)$— $(0.6)$— 
Equity forwards(2)(3.2)— (3.2)— 
Interest rate swaps(3)(51.8)— (51.8)— 
Total$(55.6)$— $(55.6)$— 
(1)The fair value of our commodities futures, swaps and options is based on closing market prices of the contracts, inclusive of the risk of nonperformance.
(2)The fair value of equity forwards is based on the closing market value of Darden stock, inclusive of the risk of nonperformance.
(3)The fair value of our interest rate swap agreements is based on current and expected market interest rates, inclusive of the risk of nonperformance.
(4)The fair value of our foreign exchange forwards is based on closing forward exchange market prices, inclusive of the risk of nonperformance.

The carrying value and fair value of long-term debt, as of May 25, 2025, was $2.13 billion. The carrying value and fair value of long-term debt as of May 26, 2024, was $1.37 billion. The fair value of long-term debt, which is classified as Level 2 in the fair value hierarchy, is determined based on market prices or, if market prices are not available, the present value of the underlying cash flows discounted at our incremental borrowing rates.

The fair value of non-financial assets measured at fair value on a non-recurring basis, classified as Level 2 in the fair value hierarchy, is generally determined based on third-party market appraisals which includes market data for similar assets. As of May 25, 2025 and May 26, 2024, adjustments to the fair values of non-financial assets measured at fair value on a non-recurring basis, classified as Level 2, were not material.

The fair value of non-financial assets measured at fair value on a non-recurring basis, classified as Level 3 in the fair value hierarchy, is determined based on appraisals, sales prices of comparable assets, or estimates of discounted future cash flows. As of May 25, 2025, adjustments to the fair values of non-financial assets specifically right-of-use assets, classified as Level 3, were determined to have a fair value of $8.0 million. As of May 26, 2024, adjustments to the fair values of long-lived assets held and used were determined to have a fair value of $1.5 million.

Historical Timeline

Fiscal YearFiled
2025Jul 18, 2025Showing above
2024Jul 19, 2024
2023Jul 21, 2023
2022Jul 22, 2022
2021Jul 23, 2021
2020Jul 24, 2020
2019Jul 19, 2019
2018Jul 20, 2018
2017Jul 21, 2017
2016Jul 25, 2016

About Fair Value Disclosures

Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.

Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.