XML 31 R23.htm IDEA: XBRL DOCUMENT
v3.24.2

Derivative Instruments | 9 Months Ended
--- | ---
May 31, 2024
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Derivative Instruments | Note 12 – Derivative Instruments Foreign operations give rise to market risks from changes in foreign currency exchange rates. Foreign currency forward exchange contracts with established financial institutions are utilized to hedge a portion of that risk. Interest rate swap agreements are used to reduce the impact of changes in interest rates on certain current and probable future debt. The Company’s foreign currency forward exchange contracts and interest rate swap agreements are designated as cash flow hedges, and therefore the effective portion of unrealized gains and losses is recorded in Accumulated other comprehensive income. At May 31, 2024 exchange rates, notional amounts of forward exchange contracts for the purchase of Polish Zlotys and the sale of Euros; and the purchase of Mexican Pesos and the sale of U.S. Dollars aggregated to $126.9 million. The fair value of the contracts is included on the Condensed Consolidated Balance Sheets as Accounts payable and accrued liabilities when in a loss position, or as Accounts receivable, net when in a gain position. As the contracts mature at various dates through March 2027, any such gain or loss remaining will be recognized in manufacturing revenue or cost of revenue along with the related transactions. In the event that the underlying transaction does not occur or does not occur in the period designated at the inception of the hedge, the amount classified in accumulated other comprehensive loss would be reclassified to the results of operations in Interest and foreign exchange at the time of occurrence. At May 31, 2024 exchange rates, approximately $2.8 million would be reclassified to revenue or cost of revenue in the next year. At May 31, 2024, interest rate swap agreements maturing from June 2024 through January 2032 had notional amounts that aggregated to $659.7 million. The fair value of the contracts is included on the Condensed Consolidated Balance Sheets in Accounts payable and accrued liabilities when in a loss position, or in Accounts receivable, net when in a gain position. As interest expense on the underlying debt is recognized, amounts corresponding to the interest rate swap are reclassified from Accumulated other comprehensive loss and charged or credited to interest expense. At May 31, 2024 interest rates, approximately $13.9 million of gain would be reclassified to reduce interest expense in the next year. Fair Values of Derivative Instruments (in millions)
|  | Asset Derivatives |  |  | Liability Derivatives |
|  |  |  | May 31, 2024 |  |  | August 31, 2023 |  |  |  |  | May 31, 2024 |  |  | August 31, 2023 |
|  | Balance sheet location |  | Fair Value |  |  | Fair Value |  |  | Balance sheet location |  | Fair Value |  |  | Fair Value |
Derivatives designated as hedging instruments |  |  |  |  |  |  |  |  |  |  |  |
Foreign forward exchange contracts |  | Accounts receivable, net |  | $ | 5.4 |  |  | $ | 2.5 |  |  | Accounts payable and accrued liabilities |  | $ | 0.1 |  |  | $ | 0.1 |
Interest rate swap contracts |  | Accounts receivable, net |  |  | 34.8 |  |  |  | 34.9 |  |  | Accounts payable and accrued liabilities |  |  | 0.1 |  |  |  | 0.1 |
|  |  |  | $ | 40.2 |  |  | $ | 37.4 |  |  |  |  | $ | 0.2 |  |  | $ | 0.2 |
Derivatives not designated as hedging instruments |  |  |  |  |  |  |  |  |  |  |  |
Foreign forward exchange contracts |  | Accounts receivable, net |  | $ | 0.2 |  |  | $ | 0.5 |  |  | Accounts payable and accrued liabilities |  | $ | — |  |  | $ | — |
The Effect of Derivative Instruments on the Statements of Income (in millions) Three months ended May 31, 2024 and May 31, 2023
Derivatives in cash flow hedging relationships |  | Location of gain (loss) recognized in income on derivatives |  | Gain (loss) recognized in income on derivatives three months ended |
|  |  |  | May 31, 2024 |  |  | May 31, 2023 |
Foreign forward exchange contract |  | Interest and foreign exchange |  | $ | — |  |  | $ | 0.1 |
Derivatives in cash flow hedging relationships | Gain (loss) recognized in OCI on derivatives three months ended May 31, |  | Location of gain (loss) reclassified from accumulated OCI into income | Gain (loss) reclassified from accumulated OCI into income three months ended May 31, |  | Location of gain (loss) on derivatives (amount excluded from effectiveness testing) | Gain (loss) recognized on derivatives (amount excluded from effectiveness testing) three months ended May 31, |
| 2024 |  |  | 2023 |  |  | 2024 |  |  | 2023 |  |  | 2024 |  |  | 2023 |
Foreign forward exchange contracts | $ | 0.9 |  |  | $ | 2.7 |  | Revenue | $ | 0.9 |  |  | $ | — |  | Revenue | $ | 0.6 |  |  | $ | 0.6 |
Foreign forward exchange contracts |  | 0.3 |  |  |  | 0.6 |  | Cost of revenue |  | 0.2 |  |  |  | 0.5 |  | Cost of revenue |  | 0.2 |  |  |  | 0.1 |
Interest rate swap contracts |  | 6.9 |  |  |  | (7.2 | ) | Interest and foreign exchange |  | 4.3 |  |  |  | 3.4 |  | Interest and foreign exchange |  | — |  |  |  | — |
| $ | 8.1 |  |  | $ | (3.9 | ) |  | $ | 5.4 |  |  | $ | 3.9 |  |  | $ | 0.8 |  |  | $ | 0.7 |
The following table presents the amounts in the Condensed Consolidated Statements of Income in which the effects of the cash flow hedges are recorded and the effects of the cash flow hedge activity on these line items for the three months ended May 31, 2024 and May 31, 2023:
|  | Three months ended May 31, |
|  | 2024 |  |  | 2023 |
|  | Total |  |  | Amount of gain (loss) on cash flow hedge activity |  |  | Total |  |  | Amount of gain (loss) on cash flow hedge activity |
Revenue |  | $ | 820.2 |  |  | $ | 0.9 |  |  | $ | 1,038.1 |  |  | $ | — |
Cost of revenue |  | $ | 696.4 |  |  | $ | 0.2 |  |  | $ | 910.0 |  |  | $ | 0.5 |
Interest and foreign exchange |  | $ | 24.7 |  |  | $ | 4.3 |  |  | $ | 22.8 |  |  | $ | 3.4 |
The Effect of Derivative Instruments on the Statements of Income (in millions) Nine months ended May 31, 2024 and May 31, 2023
Derivatives in cash flow hedging relationships |  | Location of gain (loss) recognized in income on derivatives |  | Gain (loss) recognized in income on derivatives nine months ended May 31, |
|  |  |  | 2024 |  |  | 2023 |
Foreign forward exchange contract |  | Interest and foreign exchange |  | $ | 0.2 |  |  | $ | (0.2 | )
Derivatives in cash flow hedging relationships |  | Gain (loss) recognized in OCI on derivatives nine months ended May 31, |  |  | Location of gain (loss) reclassified from accumulated OCI into income |  | Gain (loss) reclassified from accumulated OCI into income nine months ended May 31, |  |  | Location of gain (loss) on derivatives (amount excluded from effectiveness testing) |  | Gain (loss) recognized on derivatives (amount excluded from effectiveness testing) nine months ended May 31, |
|  | 2024 |  |  | 2023 |  |  |  |  | 2024 |  |  | 2023 |  |  |  |  | 2024 |  |  | 2023 |
Foreign forward exchange contracts |  | $ | 3.8 |  |  | $ | 4.7 |  |  | Revenue |  | $ | 1.9 |  |  | $ | (0.9 | ) |  | Revenue |  | $ | 1.8 |  |  | $ | 1.4 |
Foreign forward exchange contracts |  |  | 0.3 |  |  |  | 1.7 |  |  | Cost of revenue |  |  | 0.1 |  |  |  | 1.1 |  |  | Cost of revenue |  |  | 0.8 |  |  |  | 0.5 |
Interest rate swap contracts |  |  | 12.9 |  |  |  | 11.8 |  |  | Interest and foreign exchange |  |  | 12.8 |  |  |  | 6.8 |  |  | Interest and foreign exchange |  |  | — |  |  |  | — |
|  | $ | 17.0 |  |  | $ | 18.2 |  |  |  |  | $ | 14.8 |  |  | $ | 7.0 |  |  |  |  | $ | 2.6 |  |  | $ | 1.9 |
The following table presents the amounts in the Condensed Consolidated Statements of Income in which the effects of the cash flow hedges are recorded and the effects of the cash flow hedge activity on these line items for the nine months ended May 31, 2024 and May 31, 2023:
|  | Nine months ended May 31, |
|  | 2024 |  |  | 2023 |
|  | Total |  |  | Amount of gain (loss) on cash flow hedge activity |  |  | Total |  |  | Amount of gain (loss) on cash flow hedge activity |
Revenue |  | $ | 2,491.7 |  |  | $ | 1.9 |  |  | $ | 2,926.6 |  |  | $ | (0.9 | )
Cost of revenue |  | $ | 2,124.4 |  |  | $ | 0.1 |  |  | $ | 2,612.2 |  |  | $ | 1.1 |
Interest and foreign exchange |  | $ | 72.5 |  |  | $ | 12.8 |  |  | $ | 64.0 |  |  | $ | 6.8 |

X
- References No definition available. + Details
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 40 -Name Accounting Standards Codification -Section 50 -Paragraph 5 -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480237/815-40-50-5 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 5C -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480434/815-10-50-5C Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 815 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//815/tableOfContent + Details
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration