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FAIR VALUE (Tables)

6 Months Ended

Feb. 28, 2023

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)						February 28, 2023						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)						$	540,516					$	540,516					$	—					$	—
Commodity derivative assets (2)						282,029						1,187						—						280,842
Foreign exchange derivative assets (2)						5,099						—						5,099						—
Liabilities:
Commodity derivative liabilities (2)						8,026						8,026						—						—
Foreign exchange derivative liabilities (2)						3,616						—						3,616						—

												Fair Value Measurements at Reporting Date Using
(in thousands)						August 31, 2022						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)						$	572,384					$	572,384					$	—					$	—
Commodity derivative assets (2)						160,847						17,347						—						143,500
Foreign exchange derivative assets (2)						1,296						—						1,296						—
Liabilities:
Commodity derivative liabilities (2)						1,260						1,260						—						—
Foreign exchange derivative liabilities (2)						3,126						—						3,126						—

__________________________________

(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 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 9, Derivatives.

As of August 31, 2022, the Company had one Level 3 commodity derivative. The Company entered into its second and third Level 3 commodity derivatives in September 2022 and January 2023, respectively, with the same counterparty as the first Level 3 commodity derivative. Both the second and third Level 3 commodity derivatives will begin to settle in January 2025.

The fair value estimates of the Level 3 commodity derivatives are based on internally developed discounted cash flow models primarily utilizing unobservable inputs for which there is little or no market data. The Company forecasts future energy rates using a range of historical prices ("floating rate"). The floating rate is the only significant unobservable input used in the Company's discounted cash flow models. The following table summarizes the floating rate used to measure the fair value of the Level 3 commodity derivatives at February 28, 2023 and August 31, 2022:

						Floating rate (PLN)
						Low						High						Average
February 28, 2023						575.51						1,298.53						793.65
August 31, 2022						460.11						1,298.53						717.22

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 derivatives recognized in the condensed consolidated statements of comprehensive income. The fluctuation in energy rates over time causes volatility in the fair value estimates and is the primary reason for unrealized gains included in other comprehensive income ("OCI") in the three and six months ended February 28, 2023 and 2022.                                     

(in thousands)						Three Months Ended February 28, 2023
Balance, December 1, 2022						$	241,466
Total gains, realized and unrealized:
Unrealized holding gain before reclassification (1)						40,085
Reclassification for gain included in net earnings (2)						(709)
Balance, February 28, 2023						$	280,842
(in thousands)						Six Months Ended February 28, 2023
Balance, September 1, 2022						$	143,500
Total gains, realized and unrealized:
Unrealized holding gain before reclassification (1)						144,282
Reclassification for gain included in net earnings (2)						(6,940)
Balance, February 28, 2023						$	280,842
(in thousands)						Three Months Ended February 28, 2022
Balance, December 1, 2021						$	47,892
Total gains, realized and unrealized:
Unrealized holding gain before reclassification (1)						36,630
Reclassification for gain included in net earnings (2)						(5,643)
Balance, February 28, 2022						$	78,879
(in thousands)						Six Months Ended February 28, 2022
Balance, September 1, 2021						$	26,413
Total gains, realized and unrealized:
Unrealized holding gain before reclassification (1)						61,838
Reclassification for gain included in net earnings (2)						(9,372)
Balance, February 28, 2022						$	78,879

__________________________________

(1) Unrealized holding gains, net of foreign currency translation, less amounts reclassified are included in OCI in the condensed consolidated statements of comprehensive income.

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

Financial assets and liabilities 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 in the condensed consolidated balance sheets were as follows:

												February 28, 2023												August 31, 2022
(in thousands)						Fair Value Hierarchy						Carrying Value						Fair Value						Carrying Value						Fair Value
2032 Notes (1)						Level 2						$	300,000					$	259,629					$	300,000					$	256,488
2031 Notes (1)						Level 2						300,000						254,403						300,000						249,888
2030 Notes (1)						Level 2						300,000						263,439						300,000						263,372
2023 Notes (1)						Level 2						214,059						213,710						330,000						330,182
Series 2022 Bonds, due 2047 (1)						Level 2						145,060						120,324						145,060						126,652
Poland Term Loan (2)						Level 2						—						—						32,439						32,439
Short-term borrowings (2)						Level 2						22,804						22,804						26,390						26,390

__________________________________

(1) The fair values of the notes and the Series 2022 Bonds were determined based on indicated market values.

(2) The Poland Term Loan and short-term borrowings contain variable interest rates, and as a result, the carrying values approximate fair value.

X

- Definition

Tabular disclosure of the fair value of financial instruments, including financial assets and financial liabilities, and the measurements of those instruments, assets, and liabilities.

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- Definition

Tabular disclosure of financial instrument classified as a derivative asset (liability) after deduction of derivative liability (asset) using recurring unobservable inputs that reflect the entity's own assumption about the assumptions market participants would use in pricing.

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Tabular disclosure of assets and liabilities, including [financial] instruments measured at fair value that are classified in stockholders' equity, if any, that are measured at fair value on a recurring basis. The disclosures contemplated herein include the fair value measurements at the reporting date by the level within the fair value hierarchy in which the fair value measurements in their entirety fall, segregating fair value measurements using quoted prices in active markets for identical assets (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3).

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 820
-SubTopic 10
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