Derivative Instruments

9 Months Ended

May 31, 2025

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Note 12 – Derivative Instruments

Foreign operations give rise to market risks from changes in foreign currency exchange rates. Foreign 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 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 AOCL.

At May 31, 2025 exchange rates, notional amounts of foreign 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 $141.2 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 AOCL would be reclassified to the results of operations in Interest and foreign exchange at the time of occurrence. At May 31, 2025 exchange rates, approximately $1.2 million would be reclassified to Revenue and Cost of revenue in the next year.

At May 31, 2025, interest rate swap agreements maturing from August 2027 through March 2032 had notional amounts that aggregated to $694.9 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 AOCL and charged or credited to interest expense. At May 31, 2025 interest rates, approximately $8.6 million would be reclassified to Interest and foreign exchange in the next year.

Fair Values of Derivative Instruments

(in millions)


	Asset Derivatives					Liability Derivatives
		May 31, 2025		August 31, 2024			May 31, 2025		August 31, 2024
	Balance sheet location	Fair Value		Fair Value		Balance sheet location	Fair Value		Fair Value
Derivatives designated as hedging instruments
Foreign exchange contracts	Accounts receivable, net	$	3.2	$	4.3	Accounts payable and accrued liabilities	$	0.1	$	0.1
Interest rate swap contracts	Accounts receivable, net		17.6		19.7	Accounts payable and accrued liabilities		0.4		1.3
		$	20.8	$	24.0		$	0.5	$	1.4

The Effect of Derivative Instruments on the Statements of Income

(in millions)

Three months ended May 31, 2025 and May 31, 2024


Derivatives in cash flow hedging relationships	Gain (loss) recognized in AOCL on derivatives three months ended					Location of gain (loss) reclassified from AOCL into income	Gain (loss) reclassified from AOCL into income three months ended				Gain recognized on derivatives (amount excluded from effectiveness testing) three months ended
	May 31, 2025			May 31, 2024			May 31, 2025		May 31, 2024		May 31, 2025		May 31, 2024
Foreign exchange contracts	$	(1.5	)	$	0.9	Revenue	$	1.5	$	0.9	$	0.8	$	0.6
Foreign exchange contracts		0.2			0.3	Cost of revenue		—		0.2		—		0.2
Interest rate swap contracts		(0.8	)		6.9	Interest and foreign exchange		2.8		4.3		—		—
	$	(2.1	)	$	8.1		$	4.3	$	5.4	$	0.8	$	0.8

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, 2025 and May 31, 2024:


	For the Three Months Ended
	May 31, 2025				May 31, 2024
	Total		Amount of gain (loss) on cash flow hedge activity		Total		Amount of gain (loss) on cash flow hedge activity
Revenue	$	842.7	$	1.5	$	820.2	$	0.9
Cost of revenue	$	691.2	$	—	$	696.4	$	0.2
Interest and foreign exchange	$	13.2	$	2.8	$	24.7	$	4.3

The Effect of Derivative Instruments on the Statements of Income

(in millions)

Nine months ended May 31, 2025 and May 31, 2024


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, 2025			May 31, 2024
Foreign exchange contracts	Interest and foreign exchange	$	(0.3	)	$	0.2


Derivatives in cash flow hedging relationships	Gain (loss) recognized in AOCL on derivatives nine months ended				Location of gain (loss) reclassified from AOCL into income	Gain (loss) reclassified from AOCL into income nine months ended					Gain (loss) recognized on derivatives (amount excluded from effectiveness testing) nine months ended
	May 31, 2025		May 31, 2024			May 31, 2025			May 31, 2024		May 31, 2025		May 31, 2024
Foreign exchange contracts	$	1.6	$	3.8	Revenue	$	3.1		$	1.9	$	0.2	$	1.8
Foreign exchange contracts		—		0.3	Cost of revenue		(0.1	)		0.1		—		0.8
Interest rate swap contracts		11.2		12.9	Interest and foreign exchange		9.9			12.8		—		—
	$	12.8	$	17.0		$	12.9		$	14.8	$	0.2	$	2.6


	For the Nine Months Ended
	May 31, 2025					May 31, 2024
	Total		Amount of gain (loss) on cash flow hedge activity			Total		Amount of gain (loss) on cash flow hedge activity
Revenue	$	2,480.7	$	3.1		$	2,491.7	$	1.9
Cost of revenue	$	2,017.0	$	(0.1	)	$	2,124.4	$	0.1
Interest and foreign exchange	$	58.3	$	9.9		$	72.5	$	12.8