XML 113 R22.htm IDEA: XBRL DOCUMENT

FAIR VALUE

12 Months Ended

Aug. 31, 2019

NOTE 13. FAIR VALUE

The Company has established a fair value hierarchy which prioritizes the inputs to the valuation techniques used to measure fair value into three levels. These levels are determined based on the lowest level input that is significant to the fair value measurement. Levels within the hierarchy are defined as follows:

Level 1 - Unadjusted quoted prices in active markets for identical assets and liabilities;

Level 2 - Quoted prices for similar assets and liabilities in active markets (other than those included in Level 1) which are observable, either directly or indirectly; and

Level 3 - Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

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, 2019		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⁾	$	66,240	$	66,240	$	—	$	—
Commodity derivative assets ⁽²⁾	1,269		1,269		—		—
Foreign exchange derivative assets ⁽²⁾	569		—		569		—
Liabilities:
Commodity derivative liabilities ⁽²⁾	99		99		—		—
Foreign exchange derivative liabilities ⁽²⁾	899		—		899		—



			Fair Value Measurements at Reporting Date Using
(in thousands)	August 31, 2018		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⁾	$	541,101	$	541,101	$	—	$	—
Commodity derivative assets ⁽²⁾	1,881		1,881		—		—
Foreign exchange derivative assets ⁽²⁾	407		—		407		—
Liabilities:
Commodity derivative liabilities ⁽²⁾	301		301		—		—
Foreign exchange derivative liabilities ⁽²⁾	1,095		—		1,095		—

_________________

(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. Further discussion regarding the Company's use of derivative instruments and the classification of the assets and liabilities is included in Note 12, Derivatives and Risk Management.

Other than the Measurement Period adjustments made to the preliminary fair value allocated to the Acquired Businesses' assets and liabilities as described in Note 3, Acquisition and the impairment charges described in Note 4, Changes in Business, there were no other material non-recurring fair value remeasurements during 2019, 2018 and 2017.

The carrying values of the Company's short-term items, including the deferred purchase price of accounts receivable, documentary letters of credit and notes payable, approximate fair value due to their short-term nature.

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, 2019				August 31, 2018
(in thousands)	Fair Value Hierarchy	Carrying Value		Fair Value		Carrying Value		Fair Value
2027 Notes (1)	Level 2	$	300,000	$	303,810	$	300,000	$	281,655
2026 Notes (1)	Level 2	350,000		363,444		350,000		339,238
2023 Notes (1)	Level 2	330,000		342,098		330,000		326,090
Short-term borrowings (2)	Level 2	3,929		3,929		—		—
Term Loan (2)	Level 2	210,125		210,125		142,500		142,500

_________________

(1) The fair value of the notes is determined based on indicated market values.

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

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details