UNITED NATURAL FOODS INCUNFI

UNITED NATURAL FOODS INC Fair Value Disclosure

10-KFiled Oct 1, 20253 min read
NOTE 7—FAIR VALUE MEASUREMENTS OF FINANCIAL INSTRUMENTS

Recurring Fair Value Measurements

The following tables provide the fair value hierarchy for financial assets and liabilities measured on a recurring basis:
Fair Value at August 2, 2025
(in millions)
Consolidated Balance Sheets Location
Level 1Level 2Level 3
Assets:
Interest rate swaps designated as hedging instruments
Prepaid expenses and other current assets$— $1 $— 
Liabilities:
Interest rate swaps designated as hedging instruments
Other long-term liabilities$— $3 $— 

Fair Value at August 3, 2024
(in millions)
Consolidated Balance Sheets Location
Level 1Level 2Level 3
Assets:
Interest rate swaps designated as hedging instrumentsPrepaid expenses and other current assets$— $5 $— 
Foreign currency derivatives designated as hedging instrumentsPrepaid expenses and other current assets$— $1 $— 
Liabilities:
Fuel derivatives designated as hedging instruments
Accrued expenses and other current liabilities$— $2 $— 
Interest rate swaps designated as hedging instruments
Other long-term liabilities$— $5 $— 

Interest Rate Swap Contracts

The fair values of interest rate swap contracts are measured using Level 2 inputs. The interest rate swap contracts are valued using an income approach interest rate swap valuation model incorporating observable market inputs including interest rates, Secured Overnight Financing Rate (“SOFR”) swap rates and credit default swap rates. Refer to Note 8—Derivatives for further information on interest rate swap contracts.

Fuel Supply Agreements and Derivatives

To reduce diesel fuel price risk, the Company has entered into derivative financial instruments and/or forward purchase commitments for a portion of our projected monthly diesel fuel requirements at fixed prices. The fair values of fuel derivative agreements are measured using Level 2 inputs.
Foreign Exchange Derivatives

To reduce foreign exchange risk, the Company has entered into derivative financial instruments for a portion of our projected monthly foreign currency requirements at fixed prices. The fair values of foreign exchange derivatives are measured using Level 2 inputs.

Fair Value Estimates

For certain of the Company’s financial instruments including cash and cash equivalents, receivables, accounts payable, accrued vacation, compensation and benefits, and other current assets and liabilities the fair values approximate carrying amounts due to their short maturities. The fair value of notes receivable is estimated by using a discounted cash flow approach prior to consideration for uncollectible amounts and is calculated by applying a market rate for similar instruments using Level 3 inputs. The fair value of debt is estimated based on market quotes, where available, or market values for similar instruments, using Level 2 and 3 inputs. In the table below, the carrying value of the Company’s long-term debt is net of original issue discounts and debt issuance costs. Refer to Note 1—Significant Accounting Policies for additional information regarding the fair value hierarchy.
 August 2, 2025August 3, 2024
(in millions)Carrying ValueFair ValueCarrying ValueFair Value
Notes receivable, including current portion$13 $8 $14 $8 
Long-term debt, including current portion$1,862 $1,882 $2,085 $2,072 
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Historical Timeline

Fiscal YearFiled
2025Oct 1, 2025Showing above
2023Sep 26, 2023
2021Sep 28, 2021
2020Sep 29, 2020

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.

Other Available Disclosures

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