Fair Value Measurements

12 Months Ended

Aug. 31, 2020

Fair Value Measurements on a Recurring Basis

The following table presents the fair value of the Company's financial assets and liabilities measured at fair value by hierarchy level on a recurring basis as of the periods indicated:



(in thousands)	Fair Value Hierarchy		August 31, 2020		August 31, 2019
Assets:
Cash and cash equivalents:
Cash equivalents	Level 1	⁽¹⁾	$	33,869	$	27,804
Prepaid expenses and other current assets:
Short-term investments	Level 1		16,556		14,088
Forward foreign exchange contracts:
Derivatives designated as hedging instruments (Note 11)	Level 2	⁽²⁾	11,201		904
Derivatives not designated as hedging instruments (Note 11)	Level 2	⁽²⁾	58,893		6,878
Other assets:
Senior Non-Convertible Preferred Stock	Level 3	⁽³⁾	—		33,102
Liabilities:
Accrued expenses:
Forward foreign exchange contracts:
Derivatives designated as hedging instruments (Note 11)	Level 2	⁽²⁾	$	1,522	$	15,999
Derivatives not designated as hedging instruments (Note 11)	Level 2	⁽²⁾	9,100		55,391
Interest rate swaps:
Derivatives designated as hedging instruments (Note 11)	Level 2	⁽⁴⁾	—		5,918
Derivatives not designated as hedging instruments (Note 11)	Level 2	⁽⁴⁾	540		—
Extended interest rate swap not designated as a hedging instrument (Note 11)	Level 2	⁽⁵⁾	26,492		—
Other liabilities:
Interest rate swap:
Derivatives designated as hedging instruments (Note 11)	Level 2	⁽⁴⁾	—		35,045
Derivatives not designated as hedging instruments (Note 11)	Level 2	⁽⁴⁾	329		—
Extended interest rate swap not designated as a hedging instrument (Note 11)	Level 2	⁽⁵⁾	13,111		—


⁽¹⁾	Consist of investments that are readily convertible to cash with original maturities of 90 days or less.


⁽²⁾	The Company’s forward foreign exchange contracts are measured on a recurring basis at fair value, based on foreign currency spot rates and forward rates quoted by banks or foreign currency dealers.


⁽³⁾	During the fourth quarter of fiscal year 2020, the Company recognized an impairment on its investment in the Senior Non-Convertible Preferred Stock of iQor Holdings, Inc. (“iQor”) in connection with iQor’s bankruptcy filing. The Company does not expect to recover any of the investment value and recognized the entire remaining investment of $36.4 million as a loss on securities.


⁽⁴⁾	Fair value measurements are based on the contractual terms of the derivatives and use observable market-based inputs. The interest rate swaps are valued using a discounted cash flow analysis on the expected cash flows of each derivative using observable inputs including interest rate curves and credit spreads.

⁽⁵⁾

The 2020 Extended Interest Rate Swaps are considered a hybrid instrument and the Company elected the fair value option for reporting. Fair value measurements are based on the contractual terms of the contract and use observable market-based inputs. The interest rate swaps are valued using a discounted cash flow analysis on the expected cash flows using observable inputs including interest rate curves and credit spreads.

Assets Held for Sale

The following table presents the assets held for sale (in thousands):



	August 31, 2020		August 31, 2019
(in thousands)	Carrying Amount		Carrying Amount
Assets held for sale⁽¹⁾	$	67,380	$	—


⁽¹⁾	The fair value of assets held for sale exceeds the carrying value for $30.1 million of assets held for sale. For $37.3 million of assets held for sale, the carrying value approximates the fair value with the asset value measured using Level 2 inputs.

Fair Value of Financial Instruments

The carrying amounts of cash and cash equivalents, trade accounts receivable, prepaid expenses and other current assets, accounts payable and accrued expenses approximate fair value because of the short-term nature of these financial instruments. The carrying amounts of borrowings under credit facilities and under loans approximates fair value as interest rates on these instruments approximates current market rates.

Notes payable and long-term debt is carried at amortized cost; however, the Company estimates the fair value of notes payable and long-term debt for disclosure purposes. The following table presents the carrying amounts and fair values of the Company's notes payable and long-term debt, by hierarchy level as of the periods indicated:



			August 31, 2020				August 31, 2019
(in thousands)	Fair Value Hierarchy		Carrying Amount		Fair Value		Carrying Amount		Fair Value
Notes payable and long-term debt: (Note 7)
5.625% Senior Notes	Level 2	⁽¹⁾	$	—	$	—	$	398,886	$	416,000
4.700% Senior Notes	Level 2	⁽¹⁾	498,659		537,180		498,004		525,890
4.900% Senior Notes	Level 3	⁽²⁾	299,300		329,435		299,057		318,704
3.950% Senior Notes	Level 2	⁽¹⁾	495,440		551,930		494,825		509,845
3.600% Senior Notes	Level 2	⁽¹⁾	494,756		536,110		—		—
3.000% Senior Notes	Level 2	⁽¹⁾	590,162		611,616		—		—


⁽¹⁾	The fair value estimates are based upon observable market data.


⁽²⁾	This fair value estimate is based on the Company’s indicative borrowing cost derived from discounted cash flows.

Refer to Note 10 - “Postretirement and Other Employee Benefits” for disclosure surrounding the fair value of the Company’s pension plan assets.

- 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.

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