Albertsons 2016 Annual Report Download - page 79
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77
NOTE 6—FAIR VALUE MEASUREMENTS
Recurring fair value measurements were as follows:
February 27, 2016
Balance Sheet Location Level 1 Level 2 Level 3 Total
Assets:
Deferred compensation Other assets $ 6 $ — $ — $ 6
Total $ 6 $ — $ — $ 6
Liabilities:
Deferred compensation Other current liabilities $ — $ 7 $ — $ 7
Deferred compensation Other long-term liabilities — 35 — 35
Diesel fuel derivatives Other current liabilities — 2 — 2
Interest rate swap derivative Other current liabilities — 3 — 3
Interest rate swap derivative Other long-term liabilities — 3 — 3
Total $ — $ 50 $ — $ 50
February 28, 2015
Balance Sheet Location Level 1 Level 2 Level 3 Total
Assets:
Deferred compensation Other assets $ 7 $ — $ — $ 7
Total $ 7 $ — $ — $ 7
Liabilities:
Deferred compensation Other current liabilities $ — $ 13 $ — $ 13
Deferred compensation Other long-term liabilities — 33 — 33
Diesel fuel derivatives Other current liabilities — 1 — 1
Total $ — $ 47 $ — $ 47
Deferred Compensation
Deferred compensation assets consist of mutual fund investments used to fund certain deferred compensation plans. The fair
values of deferred compensation assets are based on quoted market prices of the mutual funds held by the plan at each reporting
period. Mutual funds traded in active markets are classified within Level 1 of the fair value hierarchy. Deferred compensation
assets are restricted for use to pay deferred compensation liabilities. Deferred compensation liabilities consist of obligations to
participants in deferred compensation plans, and are determined based on the fair value of the related deferred compensation
plan investments or designated phantom investments of the plan at each reporting period.
Diesel Fuel Derivatives
Commodity derivatives consist of forward fixed price purchase diesel fuel contracts. The fair value of the Company’s diesel
fuel derivatives are measured using Level 2 inputs due to the Company’s use of observable market quotations without
significant adjustments to determine fair values.
Fuel derivative losses are included within Cost of sales in the Consolidated Statements of Operations and were $3, $1 and $0
for fiscal 2016, 2015 and 2014, respectively.
Interest Rate Swap Derivatives
On February 24, 2015, the Company entered into a forward starting interest rate swap agreement effectively converting $300 of
variable rate debt under the Company's Secured Term Loan Facility (defined below) to a fixed rate of 5.5075 percent, effective
beginning in February 2016 and through the Secured Term Loan Facility's maturity in March 2019. This transaction was