DERIVATIVES

9 Months Ended

May 31, 2021

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives

The Company's global operations and product lines expose it to risks from fluctuations in metal commodity prices, foreign currency exchange rates, interest rates and natural gas, electricity and other energy prices. One objective of the Company's risk management program is to mitigate these risks using derivative instruments. The Company enters into (i) metal commodity futures and forward contracts to mitigate the risk of unanticipated changes in gross margin due to price volatility in these commodities, (ii) foreign currency forward contracts that match the expected settlements for purchases and sales denominated in foreign currencies and (iii) energy derivatives to mitigate the risk related to price volatility of electricity and natural gas.

At May 31, 2021, the notional values of the Company's foreign currency and commodity commitments were $274.1 million and $239.4 million, respectively. At August 31, 2020, the notional values of the Company's foreign currency and commodity contract commitments were $138.5 million and $195.8 million, respectively.

The following table provides information regarding the Company's commodity contract commitments at May 31, 2021:

Commodity	Long/Short	Total
Aluminum	Long	4,150	MT
Aluminum	Short	1,750	MT
Copper	Long	624	MT
Copper	Short	8,981	MT
Electricity	Long	1,917,000	MW(h)

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MT = Metric Ton

MW(h) = Megawatt hour

The Company designates only those contracts which closely match the terms of the underlying transaction as hedges for accounting purposes. Certain foreign currency and commodity contracts were not designated as hedges for accounting purposes, although management believes they are essential economic hedges.

Commodity derivatives not designated as hedging instruments resulted in a loss, before income taxes, of $7.9 million and $24.5 million, in the three and nine months ended May 31, 2021, respectively, and a gain, before income taxes, of $1.5 million and $1.9 million in the three and nine months ended May 31, 2020, respectively, primarily recorded in cost of goods sold within the condensed consolidated statements of earnings. Commodity derivatives accounted for as cash flow hedging instruments resulted in a net gain of $12.2 million and $21.0 million, in the three and nine months ended May 31, 2021, respectively, and a net loss of $5.2 million and $8.1 million, in the three and nine months ended May 31, 2020, respectively, recognized in the condensed consolidated statements of comprehensive income. See Note 10, Fair Value, for the fair value of the Company's derivative instruments recorded in the condensed consolidated balance sheets.