NOTE 9. FAIR VALUE

The Company has established a fair value hierarchy which prioritizes the inputs to the valuation techniques used to measure fair value into three levels. These levels are determined based on the lowest level input that is significant to the fair value measurement. Levels within the hierarchy are defined as follows:

Level 1 - Unadjusted quoted prices in active markets for identical assets and liabilities;

Level 2 - Quoted prices for similar assets and liabilities in active markets (other than those included in Level 1) which are observable, either directly or indirectly; and

Level 3 - Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

The following tables summarize information regarding the Company's financial assets and financial liabilities that were measured at fair value on a recurring basis:



			Fair Value Measurements at Reporting Date Using
(in thousands)	May 31, 2015		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Money market investments (1)	$	200,394	$	200,394	$	—	$	—
Commodity derivative assets (2)	958		942		16		—
Foreign exchange derivative assets (2)	4,654		—		4,654		—
Liabilities:
Commodity derivative liabilities (2)	845		603		242		—
Foreign exchange derivative liabilities (2)	2,129		—		2,129		—



			Fair Value Measurements at Reporting Date Using
(in thousands)	August 31, 2014		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Money market investments (1)	$	200,487	$	200,487	$	—	$	—
Commodity derivative assets (2)	911		911		—		—
Foreign exchange derivative assets (2)	1,989		—		1,989		—
Liabilities:
Commodity derivative liabilities (2)	168		162		6		—
Foreign exchange derivative liabilities (2)	1,335		—		1,335		—

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(1) Money market investments are short-term in nature, and the value is determined by broker quoted prices in active markets. The investment portfolio mix can change each period based on the Company's assessment of investment options.

(2) Derivative assets and liabilities classified as Level 1 are commodity futures contracts valued based on quoted market prices in the London Metal Exchange or Commodity Exchange, Inc. Amounts in Level 2 are based on broker quotes in the over-the-counter market. Further discussion regarding the Company's use of derivative instruments and the classification of the assets and liabilities is included in Note 8, Derivatives and Risk Management.

There were no material non-recurring fair value measurements during the three and nine months ended May 31, 2015 and 2014, respectively.

The carrying values of the Company's short-term items, including the deferred purchase price of accounts receivable, documentary letters of credit and notes payable, approximate fair value due to their short-term nature.

The carrying values and estimated fair values of the Company's financial assets and liabilities that are not required to be measured at fair value on the consolidated balance sheets were as follows:



		May 31, 2015				August 31, 2014
(in thousands)	Fair Value Hierarchy	Carrying Value		Fair Value		Carrying Value		Fair Value
$400 million notes at 6.50% due July 2017 (1)	Level 2	$	406,317	$	427,000	$	408,546	$	438,200
$500 million notes at 7.35% due August 2018 (1)	Level 2	514,837		535,000		518,305		567,560
$330 million notes at 4.875% due May 2023 (1)	Level 2	330,000		318,302		330,000		325,050

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(1) The fair values of the 2017 Notes, 2018 Notes and 2023 Notes are estimated based on readily available market prices of these notes at May 31, 2015 and August 31, 2014, or similar notes with the same maturities, rating and interest rates.