DERIVATIVES

12 Months Ended

Aug. 31, 2023

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.

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 Company considers the total notional value of its futures and forward contracts as the best measure of the volume of derivative transactions. At August 31, 2023 and 2022, the notional values of the Company's commodity contract commitments were $456.4 million and $205.1 million, respectively. The increase in the notional value of the Company’s commodity contract commitments from August 31, 2022 to August 31, 2023 was due to the Company entering into additional Level 3 commodity derivative contracts as described in Note 11, Fair Value. At August 31, 2023 and 2022, the notional values of the Company's foreign currency contract commitments were $221.4 million and $253.5 million, respectively.

The following table provides information regarding the Company's commodity contract commitments as of August 31, 2023:

Commodity	Position	Total
Aluminum	Long	2,850	MT
Aluminum	Short	1,400	MT
Copper	Long	147	MT
Copper	Short	8,459	MT
Electricity	Long	3,312,000	MW(h)
Natural Gas	Long	5,270,500	MMBtu

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MT = Metric ton

MW(h) = Megawatt hour

MMBtu = Metric Million British thermal unit

The following table summarizes the location and fair value amounts of the Company's derivative instruments reported in the consolidated balance sheets:

(in thousands)	Primary Location	August 31, 2023		August 31, 2022
Derivative assets:
Commodity	Prepaid and other current assets	$	11,427	$	26,180
Commodity	Other noncurrent assets	184,261		134,667
Foreign exchange	Prepaid and other current assets	1,898		1,296
Derivative liabilities:
Commodity	Accrued expenses and other payables	$	2,983	$	1,110
Commodity	Other noncurrent liabilities	1,085		150
Foreign exchange	Accrued expenses and other payables	2,566		3,126

The following table summarizes activities related to the Company's derivatives not designated as cash flow hedging instruments recognized in the consolidated statements of earnings. All other activity related to the Company's derivatives not designated as cash flow hedging instruments was immaterial for the periods presented.

		Year Ended August 31,
Gain (Loss) on Derivatives Not Designated as Hedging Instruments (in thousands)	Primary Location	2023		2022		2021
Commodity	Cost of goods sold	$	(3,028)	$	15,862	$	(18,035)
Foreign exchange	SG&A expenses	12,265		(6,547)		(3,674)

The following table summarizes activities related to the Company's derivatives designated as cash flow hedging instruments recognized in the consolidated statements of comprehensive income and consolidated statements of earnings, respectively. Amounts presented do not include the effects of foreign currency translation adjustments.

	Effective Portion of Derivatives Designated as Cash Flow Hedging Instruments Recognized in Other Comprehensive Income, Net of Income Taxes (in thousands)							Amount of Gain Reclassified from AOCI into Earnings on Derivatives (in thousands)
	Year Ended August 31,							Year Ended August 31,
	2023		2022		2021		Primary Location	2023		2022		2021
Commodity	$	6,367	$	138,534	$	35,392	Cost of goods sold	$	11,325	$	27,267	$	2,378
Foreign exchange	28		100		100		SG&A expenses	244		244		555

The Company's natural gas derivatives accounted for as cash flow hedging instruments have maturities extending to August 2026. The Company's electricity commodity derivatives accounted for as cash flow hedging instruments have maturities extending to December 2034. Included in the AOCI balance as of August 31, 2023 was an estimated net gain of $8.2 million from cash flow hedging instruments that is expected to be reclassified into earnings within the next twelve months following August 31, 2023. See Note 11, Fair Value, for the fair value of the Company's derivative instruments recorded in the consolidated balance sheets.