DERIVATIVES

9 Months Ended

May 31, 2022

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives

NOTE 10. 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 net earnings 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) natural gas and electricity commodity derivatives to mitigate the risk related to price volatility of these commodities.

At May 31, 2022, the notional values of the Company's foreign currency and commodity contract commitments were $377.2 million and $228.8 million, respectively. At August 31, 2021, the notional values of the Company's foreign currency and commodity contract commitments were $389.5 million and $213.4 million, respectively.

The following table provides information regarding the Company's commodity contract commitments at May 31, 2022:

Commodity	Long/Short	Total
Aluminum	Long	3,300	MT
Aluminum	Short	1,525	MT
Copper	Long	975	MT
Copper	Short	8,482	MT
Electricity	Long	1,717,000	MW(h)
Natural Gas	Long	4,870,250	MMBtu

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MT = Metric Ton

MW(h) = Megawatt hour

MMBtu = Metric Million British thermal unit

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.

The following tables summarize activities related to the Company's derivative instruments and hedged items recognized in the condensed consolidated statements of earnings. All other activity related to the Company's derivative instruments and hedged items was immaterial for the periods presented.

		Three Months Ended May 31,				Nine Months Ended May 31,
Gain (Loss) on Derivatives Not Designated as Hedging Instruments (in thousands)	Primary Location	2022		2021		2022		2021
Commodity	Cost of goods sold	$	2,042	$	(7,921)	$	2,574	$	(24,535)
Foreign exchange	SG&A expenses	6,157		1,915		(2,886)		75

Effective Portion of Derivatives Designated as Cash Flow Hedging Instruments Recognized in Accumulated Other Comprehensive Loss (in thousands)	Three Months Ended May 31,				Nine Months Ended May 31,
	2022		2021		2022		2021
Commodity	$	25,920	$	12,167	$	81,285	$	20,971

The Company's natural gas and electricity commodity derivatives accounted for as cash flow hedging instruments have maturities extending to May 2025 and December 2030, respectively. Included in the AOCI balance as of May 31, 2022 was an estimated net gain of $16.1 million from cash flow hedging instruments that is expected to be reclassified into earnings within the next twelve months. See Note 11, Fair Value, for the fair value of the Company's derivative instruments recorded in the condensed consolidated balance sheets.