Derivative Financial Instruments |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Aug. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Financial Instruments | Note 15 - Derivative Financial Instruments Interest Rate Swaps The Company is exposed to interest rate risk on its debt and may enter interest rate swap contracts to effectively manage the impact of interest rate changes on its outstanding debt, which has predominantly floating interest rates. The Company does not enter interest rate swap transactions for trading or speculative purposes. During the fiscal year ended August 31, 2023, the Company entered three pay-fixed interest rate swap transactions, each with a different major financial institution counterparty and designated as a cash flow hedge, to hedge the variability in interest cash flows associated with the Company’s variable-rate loans under its bank revolving credit facilities. The interest rate swaps involve the receipt of variable-rate amounts from the counterparty in exchange for the Company making fixed-rate payments over the life of the agreement without exchange of the underlying notional amount. These contracts mature in August 2026. As of each of August 31, 2024 and 2023, the total notional amount of these interest rate swaps was $150 million. The fair values of the interest rate swaps are based upon inputs corroborated by observable market data which is considered Level 2 of the fair value hierarchy. The fair value of derivative instruments in the Consolidated Balance Sheet as of August 31, 2024 and 2023 is as follows (in thousands):
See Note 11 - Accumulated Other Comprehensive Loss for tabular presentation of the effects of interest rate swap derivative cash flow hedges on other comprehensive income. All related cash flow hedge amounts reclassified from accumulated other comprehensive income (“AOCI”) were recorded in interest expense on the Consolidated Statement of Operations for the years ended August 31, 2024 and 2023, which reclassified amounts totaled $1 million and less than $1 million, respectively. Total interest expense was $27 million and $19 million for the years ended August 31, 2024 and 2023, respectively. There was no hedge ineffectiveness with respect to the Company’s interest rate swap cash flow hedges for the years ended August 31, 2024 and 2023. |