Notes Payable, Long-Term Debt and Capital Lease Obligations

3 Months Ended

Nov. 30, 2014

Debt Disclosure [Abstract]

Notes Payable, Long-Term Debt and Capital Lease Obligations

7. Notes Payable, Long-Term Debt and Capital Lease Obligations

Notes payable, long-term debt and capital lease obligations outstanding at November 30, 2014 and August 31, 2014 are summarized below (in thousands):

	November 30, 2014		August 31, 2014
7.750% Senior Notes due 2016	$	309,089	$	308,659
8.250% Senior Notes due 2018		398,761		398,665
5.625% Senior Notes due 2020		400,000		400,000
4.700% Senior Notes due 2022		500,000		500,000
Borrowings under credit facilities		545		1,685
Borrowings under loans(a)		35,591		38,207
Capital lease obligations		30,021		30,879
Fair value adjustment related to terminated interest rate swaps on the 7.750% Senior Notes		3,857		4,450
Total notes payable, long-term debt and capital lease obligations		1,677,864		1,682,545
Less current installments of notes payable, long-term debt and capital lease obligations		11,487		12,960
Notes payable, long-term debt and capital lease obligations, less current installments	$	1,666,377	$	1,669,585

The $312.0 million of 7.750% senior unsecured notes, $400.0 million of 8.250% senior unsecured notes, $400.0 million of 5.625% senior unsecured notes and $500.0 million of 4.700% senior unsecured notes outstanding are carried at the principal amount of each note, less any unamortized discount. The estimated fair values of these senior notes were approximately $342.0 million, $467.3 million, $425.9 million and $501.4 million, respectively, at November 30, 2014. The fair value estimates are based upon observable market data (Level 2 criteria).

^(a)  During the third quarter of fiscal year 2012, the Company entered into a master lease agreement with a variable interest entity (the “VIE”) whereby it sells to and subsequently leases back from the VIE up to $60.0 million in certain machinery and equipment for a period of up to five years. In connection with this transaction, the Company holds a variable interest in the VIE, which was designed to hold debt obligations payable to third-party creditors. The proceeds from such debt obligations are utilized to finance the purchase of the machinery and equipment that is then leased by the Company. The Company is the primary beneficiary of the VIE as it has both the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. Therefore, the Company consolidates the financial statements of the VIE and eliminates all intercompany transactions. At November 30, 2014, the VIE had approximately $35.4 million of total assets, of which approximately $34.7 million was comprised of a note receivable due from the Company, and approximately $34.7 million of total liabilities, of which approximately $34.6 million were debt obligations to the third-party creditors (as the VIE has utilized approximately $34.6 million of the $60.0 million debt obligation capacity). The third-party creditors have recourse to the Company’s general credit only in the event that the Company defaults on its obligations under the terms of the master lease agreement. In addition, the assets held by the VIE can be used only to settle the obligations of the VIE.