FAIR VALUE (Tables)

12 Months Ended

Aug. 31, 2021

Fair Value Disclosures [Abstract]

Financial assets and financial liabilities measured at fair value on a recurring basis

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)	August 31, 2021		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Investment deposit accounts (1)	$	441,297	$	441,297	$	—	$	—
Commodity derivative assets (2)	27,323		910		—		26,413
Foreign exchange derivative assets (2)	2,537		—		2,537		—
Liabilities:
Commodity derivative liabilities (2)	1,352		1,352		—		—
Foreign exchange derivative liabilities (2)	1,880		—		1,880		—

 

			Fair Value Measurements at Reporting Date Using
(in thousands)	August 31, 2020		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant  Other Observable  Inputs (Level 2)		Significant Unobservable  Inputs (Level 3)
Assets:
Investment deposit accounts (1)	$	449,824	$	449,824	$	—	$	—
Commodity derivative assets (2)	202		202		—		—
Foreign exchange derivative assets (2)	1,484		—		1,484		—
Liabilities:
Commodity derivative liabilities (2)	19,000		3,993		—		15,007
Foreign exchange derivative liabilities (2)	459		—		459		—

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(1) Investment deposit accounts are short-term in nature, and the value is determined by principal plus interest. 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 the New York Mercantile Exchange. Amounts in Level 2 are based on broker quotes in the over-the-counter market. Derivatives classified as Level 3 are described below. Further discussion regarding the Company's use of derivative instruments is included in Note 10, Derivatives.

The fair value estimate of the Level 3 commodity derivative is based on an internally developed discounted cash flow model primarily utilizing unobservable inputs in which there is little or no market data. The Company forecasts future energy rates using a range of historical prices ("floating rate"). The following table summarizes the floating rate during 2021 and 2020, which is the only significant unobservable input used in the Company's discounted cash flow model:

Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation

Below is a reconciliation of the beginning and ending balances of the Level 3 commodity derivative recognized in the consolidated statements of comprehensive income. The fluctuation in energy rates over time may cause volatility in the fair value estimate and is the primary reason for the unrealized gains and losses in other comprehensive income ("OCI") in 2021 and 2020.

(in thousands)	Level 3 Commodity Derivative
Balance at September 1, 2019	$	—
New commodity contract	1,083
Unrealized holding loss(1)	(16,090)
Reclassification for loss included in net earnings(2)	—
Balance at August 31, 2020	(15,007)
Unrealized holding gain(1)	43,798
Reclassification for gain included in net earnings(2)	(2,378)
Balance at August 31, 2021	$	26,413

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(1)    Unrealized holding gains/(losses) are included in OCI in the consolidated statements of comprehensive income.

(2)    (Gains)/losses included in net earnings are recorded in cost of goods sold in the consolidated statements of earnings.

Financial assets and liabilities that are not required to be measured at fair value

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:

		August 31, 2021				August 31, 2020
(in thousands)	Fair Value Hierarchy	Carrying Value		Fair Value		Carrying Value		Fair Value
2031 Notes (1)	Level 2	$	300,000	$	306,279	$	—	$	—
2027 Notes (1)	Level 2	300,000		316,839		300,000		319,377
2023 Notes (1)	Level 2	330,000		348,071		330,000		345,335
Poland Term Loan (2)	Level 2	49,726		49,726		40,713		40,713
Short-term borrowings (2)	Level 2	26,560		26,560		—		—
2026 Notes (1)	Level 2	—		—		350,000		367,374

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(1) The fair value of the Notes were determined based on indicated market values.

(2) The Poland Term Loan and short-term borrowings contain variable interest rates and carrying value approximates fair value.