UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~November 30, 2020~~February 28, 2021

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 1-4304

COMMERCIAL METALS COMPANY

(Exact Name of Registrant as Specified in Its Charter)

___________________________________


Delaware			75-0725338
(State or Other Jurisdiction of Incorporation or Organization)			(I.R.S. Employer Identification Number)

6565 N. MacArthur Blvd.

Irving, Texas 75039

(Address of Principal Executive Offices) (Zip Code)

(214) 689-4300

(Registrant's Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class

Trading Symbol(s)

Name of Each Exchange on Which Registered

Common Stock, $0.01 par value

CMC

New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 ("Exchange Act") during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of ~~January 8,~~March 23, 2021, ~~120,068,330~~120,510,370 shares of the registrant's common stock, par value $0.01 per share, were outstanding.

COMMERCIAL METALS COMPANY AND SUBSIDIARIES

TABLE OF CONTENTS



PART I — FINANCIAL INFORMATION			3

Item 1. Financial Statements (Unaudited)			3
Condensed Consolidated Statements of Earnings - Three and six months ended ~~November 30~~February 2 8 , ~~2020~~202 1 and ~~2019~~February 29, 2020			3
Condensed Consolidated Statements of Comprehensive Income - Three and six months ended ~~November 30~~,February 28, 2021 and February 29, 2020 ~~and 2019~~			4
Condensed Consolidated Balance Sheets - ~~November~~February 28, 2021 3 0 ~~, 2020~~ and August 31, 20 202020			5
Condensed Consolidated Statements of Cash Flows - ~~Three~~ Six months ended ~~November 30~~,February 28, 2021 and February 29, 2020 ~~and 2019~~			6
Condensed Consolidated Statements of Stockholders' Equity - Three and six months ended ~~November 30~~,February 28, 2021 and February 29, 2020 ~~and 2019~~			7
Notes to Condensed Consolidated Financial Statements			89
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations			1922
Item 3. Quantitative and Qualitative Disclosures About Market Risk			2529
Item 4. Controls and Procedures			2629

PART II — OTHER INFORMATION			2730

Item 1. Legal Proceedings			2730
Item 1A. Risk Factors			2730
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			2730
Item 3. Defaults Upon Senior Securities			2730
Item 4. Mine Safety Disclosures			2730
Item 5. Other Information			2830
Item 6. Exhibits			2931
Signature			3032

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS


COMMERCIAL METALS COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)	COMMERCIAL METALS COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)					COMMERCIAL METALS COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)
		Three Months Ended November 30,					Three Months Ended				Six Months Ended
(in thousands, except share data)	(in thousands, except share data)	2020		2019				(in thousands, except share data)	February 28, 2021		February 29, 2020		February 28, 2021		February 29, 2020
Net sales	Net sales	$	1,391,803	$	1,384,708			Net sales	$	1,462,270	$	1,340,963	$	2,854,073	$	2,725,671
Costs and expenses:	Costs and expenses:							Costs and expenses:
Cost of goods sold	Cost of goods sold	1,174,819		1,146,514				Cost of goods sold	1,228,343		1,123,096		2,403,162		2,269,610
Selling, general and administrative expenses	Selling, general and administrative expenses	113,627		110,999				Selling, general and administrative expenses	115,417		115,538		229,044		226,537
Loss on debt extinguishment								Loss on debt extinguishment	16,841		0		16,841		0
Interest expense	Interest expense	14,259		16,578				Interest expense	14,021		15,888		28,280		32,466
Asset impairments	Asset impairments	3,594		530				Asset impairments	474		0		4,068		530
		1,306,299		1,274,621					1,375,096		1,254,522		2,681,395		2,529,143

Earnings from continuing operations before income taxes	Earnings from continuing operations before income taxes	85,504		110,087				Earnings from continuing operations before income taxes	87,174		86,441		172,678		196,528
Income taxes	Income taxes	21,593		27,332				Income taxes	20,941		22,845		42,534		50,177
Earnings from continuing operations	Earnings from continuing operations	63,911		82,755				Earnings from continuing operations	66,233		63,596		130,144		146,351

Earnings from discontinued operations before income taxes	Earnings from discontinued operations before income taxes	250		895				Earnings from discontinued operations before income taxes	197		301		447		1,196
Income taxes	Income taxes	68		302				Income taxes	73		99		141		401
Earnings from discontinued operations	Earnings from discontinued operations	182		593				Earnings from discontinued operations	124		202		306		795

Net earnings	Net earnings	$	64,093	$	83,348			Net earnings	$	66,357	$	63,798	$	130,450	$	147,146

Basic earnings per share*	Basic earnings per share*							Basic earnings per share*
Earnings from continuing operations	Earnings from continuing operations	$	0.53	$	0.70			Earnings from continuing operations	$	0.55	$	0.53	$	1.08	$	1.23
Earnings from discontinued operations	Earnings from discontinued operations	0		0.01				Earnings from discontinued operations	0		0		0		0.01
Net earnings	Net earnings	$	0.54	$	0.70			Net earnings	$	0.55	$	0.54	$	1.09	$	1.24

Diluted earnings per share*	Diluted earnings per share*							Diluted earnings per share*
Earnings from continuing operations	Earnings from continuing operations	$	0.53	$	0.69			Earnings from continuing operations	$	0.54	$	0.53	$	1.07	$	1.22
Earnings from discontinued operations	Earnings from discontinued operations	0		0				Earnings from discontinued operations	0		0		0		0.01
Net earnings	Net earnings	$	0.53	$	0.70			Net earnings	$	0.55	$	0.53	$	1.07	$	1.22

Average basic shares outstanding	Average basic shares outstanding	119,762,706		118,370,191				Average basic shares outstanding	120,345,432		118,919,455		120,052,459		118,644,823
Average diluted shares outstanding	Average diluted shares outstanding	121,128,044		119,773,538				Average diluted shares outstanding	121,751,859		120,407,256		121,672,194		120,303,259

See notes to condensed consolidated financial statements.

_________________

*Earnings Per Share ("EPS") is calculated independently for each component and may not sum to Net EPS due to rounding.


COMMERCIAL METALS COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)	COMMERCIAL METALS COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)					COMMERCIAL METALS COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)
		Three Months Ended November 30,					Three Months Ended				Six Months Ended
(in thousands)	(in thousands)	2020		2019				(in thousands)	February 28, 2021		February 29, 2020		February 28, 2021		February 29, 2020
Net earnings	Net earnings	$	64,093	$	83,348			Net earnings	$	66,357	$	63,798	$	130,450	$	147,146
Other comprehensive income (loss), net of income taxes:	Other comprehensive income (loss), net of income taxes:							Other comprehensive income (loss), net of income taxes:

Foreign currency translation adjustment	Foreign currency translation adjustment	(8,388)		6,924				Foreign currency translation adjustment	1,465		(1,068)		(6,923)		5,856
Net unrealized gain on derivatives:
Unrealized holding gain		1,164		714
Net unrealized gain (loss) on derivatives:								Net unrealized gain (loss) on derivatives:
Unrealized holding gain (loss)								Unrealized holding gain (loss)	7,723		(3,646)		8,887		(2,932)
Reclassification for gain included in net earnings	Reclassification for gain included in net earnings	(54)		(89)				Reclassification for gain included in net earnings	(259)		(83)		(313)		(172)
Net unrealized gain on derivatives		1,110		625
Net unrealized gain (loss) on derivatives								Net unrealized gain (loss) on derivatives	7,464		(3,729)		8,574		(3,104)
Defined benefit obligation:	Defined benefit obligation:							Defined benefit obligation:
Amortization of prior services	Amortization of prior services	(13)		(8)				Amortization of prior services	(14)		(8)		(27)		(16)

Defined benefit obligation	Defined benefit obligation	(13)		(8)				Defined benefit obligation	(14)		(8)		(27)		(16)
Other comprehensive income (loss)	Other comprehensive income (loss)	(7,291)		7,541				Other comprehensive income (loss)	8,915		(4,805)		1,624		2,736
Comprehensive income	Comprehensive income	$	56,802	$	90,889			Comprehensive income	$	75,272	$	58,993	$	132,074	$	149,882

See notes to condensed consolidated financial statements.


COMMERCIAL METALS COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)	COMMERCIAL METALS COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)					COMMERCIAL METALS COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(in thousands, except share data)	(in thousands, except share data)	November 30, 2020		August 31, 2020		(in thousands, except share data)	February 28, 2021		August 31, 2020
Assets	Assets					Assets
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	465,162	$	542,103	Cash and cash equivalents	$	367,347	$	542,103
Accounts receivable (less allowance for doubtful accounts of $8,407 and $9,597)		869,052		880,728
Accounts receivable (less allowance for doubtful accounts of $7,623 and $9,597)						Accounts receivable (less allowance for doubtful accounts of $7,623 and $9,597)	895,604		880,728
Inventories, net	Inventories, net	653,526		625,393		Inventories, net	776,561		625,393
Prepaid and other current assets	Prepaid and other current assets	181,465		165,879		Prepaid and other current assets	166,124		165,879
Total current assets	Total current assets	2,169,205		2,214,103		Total current assets	2,205,636		2,214,103
Property, plant and equipment, net	Property, plant and equipment, net	1,549,385		1,571,067		Property, plant and equipment, net	1,557,143		1,571,067
Goodwill	Goodwill	64,275		64,321		Goodwill	66,235		64,321
Other noncurrent assets	Other noncurrent assets	233,803		232,237		Other noncurrent assets	235,027		232,237
Total assets	Total assets	$	4,016,668	$	4,081,728	Total assets	$	4,064,041	$	4,081,728
Liabilities and stockholders' equity	Liabilities and stockholders' equity					Liabilities and stockholders' equity
Current liabilities:	Current liabilities:					Current liabilities:
Accounts payable	Accounts payable	$	252,953	$	266,102	Accounts payable	$	309,413	$	266,102
Accrued expenses and other payables	Accrued expenses and other payables	339,545		461,012		Accrued expenses and other payables	341,903		461,012
Current maturities of long-term debt and short-term borrowings	Current maturities of long-term debt and short-term borrowings	20,701		18,149		Current maturities of long-term debt and short-term borrowings	22,777		18,149
Total current liabilities	Total current liabilities	613,199		745,263		Total current liabilities	674,093		745,263
Deferred income taxes	Deferred income taxes	142,686		130,810		Deferred income taxes	126,789		130,810
Other noncurrent liabilities	Other noncurrent liabilities	260,991		250,706		Other noncurrent liabilities	242,632		250,706
Long-term debt	Long-term debt	1,064,893		1,065,536		Long-term debt	1,011,035		1,065,536
Total liabilities	Total liabilities	2,081,769		2,192,315		Total liabilities	2,054,549		2,192,315
Commitments and contingencies (Note 13)	Commitments and contingencies (Note 13)	0		0		Commitments and contingencies (Note 13)	0		0
Stockholders' equity:	Stockholders' equity:					Stockholders' equity:
Common stock, par value $0.01 per share; authorized 200,000,000 shares; issued 129,060,664 shares; outstanding 120,068,021 and 119,220,905 shares		1,290		1,290
Common stock, par value $0.01 per share; authorized 200,000,000 shares; issued 129,060,664 shares; outstanding 120,508,215 and 119,220,905 shares						Common stock, par value $0.01 per share; authorized 200,000,000 shares; issued 129,060,664 shares; outstanding 120,508,215 and 119,220,905 shares	1,290		1,290
Additional paid-in capital	Additional paid-in capital	348,816		358,912		Additional paid-in capital	354,620		358,912
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(111,055)		(103,764)		Accumulated other comprehensive loss	(102,140)		(103,764)
Retained earnings	Retained earnings	1,857,513		1,807,826		Retained earnings	1,909,443		1,807,826
Less treasury stock 8,992,643 and 9,839,759 shares at cost		(161,877)		(175,063)
Less treasury stock 8,552,449 and 9,839,759 shares at cost						Less treasury stock 8,552,449 and 9,839,759 shares at cost	(153,952)		(175,063)
Stockholders' equity	Stockholders' equity	1,934,687		1,889,201		Stockholders' equity	2,009,261		1,889,201
Stockholders' equity attributable to noncontrolling interests	Stockholders' equity attributable to noncontrolling interests	212		212		Stockholders' equity attributable to noncontrolling interests	231		212
Total stockholders' equity		1,934,899		1,889,413
Total equity						Total equity	2,009,492		1,889,413
Total liabilities and stockholders' equity	Total liabilities and stockholders' equity	$	4,016,668	$	4,081,728	Total liabilities and stockholders' equity	$	4,064,041	$	4,081,728

See notes to condensed consolidated financial statements.


COMMERCIAL METALS COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)	COMMERCIAL METALS COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)					COMMERCIAL METALS COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
		Three Months Ended November 30,					Six Months Ended
(in thousands)	(in thousands)	2020		2019		(in thousands)	February 28, 2021		February 29, 2020
Cash flows from (used by) operating activities:	Cash flows from (used by) operating activities:					Cash flows from (used by) operating activities:
Net earnings	Net earnings	$	64,093	$	83,348	Net earnings	$	130,450	$	147,146
Adjustments to reconcile net earnings to cash flows from (used by) operating activities:	Adjustments to reconcile net earnings to cash flows from (used by) operating activities:					Adjustments to reconcile net earnings to cash flows from (used by) operating activities:
Depreciation and amortization	Depreciation and amortization	41,799		40,947		Depreciation and amortization	83,372		82,338
Stock-based compensation						Stock-based compensation	21,758		15,805
Loss on debt extinguishment						Loss on debt extinguishment	16,841		0
Deferred income taxes and other long-term taxes	Deferred income taxes and other long-term taxes	11,720		27,939		Deferred income taxes and other long-term taxes	(8,129)		42,142
Stock-based compensation		9,062		8,269
Net gain on disposals of subsidiaries, assets and other						Net gain on disposals of subsidiaries, assets and other	(5,481)		(5,585)
Asset impairments	Asset impairments	3,594		530		Asset impairments	4,068		530
Amortization of acquired unfavorable contract backlog	Amortization of acquired unfavorable contract backlog	(1,523)		(8,331)		Amortization of acquired unfavorable contract backlog	(3,032)		(14,328)
Net gain on disposals of subsidiaries, assets and other		(69)		(6,733)
Other	Other	30		645		Other	(105)		1,041
Changes in operating assets and liabilities	Changes in operating assets and liabilities	(140,794)		(196)		Changes in operating assets and liabilities	(238,539)		(15,673)
Net cash flows from (used by) operating activities		(12,088)		146,418
Net cash flows from operating activities						Net cash flows from operating activities	1,203		253,416

Cash flows from (used by) investing activities:	Cash flows from (used by) investing activities:					Cash flows from (used by) investing activities:
Capital expenditures	Capital expenditures	(37,201)		(45,559)		Capital expenditures	(87,688)		(96,592)
Proceeds from the sale of property, plant and equipment		743		9,651

Proceeds from the sale of property, plant and equipment and other						Proceeds from the sale of property, plant and equipment and other	20,338		14,004
Acquisitions, net of cash acquired						Acquisitions, net of cash acquired	0		(9,850)
Proceeds from insurance	Proceeds from insurance	0		784		Proceeds from insurance	0		974

Net cash flows used by investing activities:	Net cash flows used by investing activities:	(36,458)		(35,124)		Net cash flows used by investing activities:	(67,350)		(91,464)

Cash flows from (used by) financing activities:	Cash flows from (used by) financing activities:					Cash flows from (used by) financing activities:

Proceeds from issuance of long-term debt, net						Proceeds from issuance of long-term debt, net	296,250		11,299
Repayments of long-term debt	Repayments of long-term debt	(3,823)		(53,298)		Repayments of long-term debt	(357,792)		(106,880)
Debt extinguishment costs						Debt extinguishment costs	(13,051)		0
Debt issuance costs						Debt issuance costs	(1,124)		0
Proceeds from accounts receivable programs	Proceeds from accounts receivable programs	4,487		27,050		Proceeds from accounts receivable programs	8,848		85,686
Repayments under accounts receivable programs	Repayments under accounts receivable programs	(4,487)		(31,057)		Repayments under accounts receivable programs	(8,848)		(81,314)
Dividends	Dividends	(14,406)		(14,238)		Dividends	(28,833)		(28,480)
Stock issued under incentive and purchase plans, net of forfeitures	Stock issued under incentive and purchase plans, net of forfeitures	(10,341)		(7,817)		Stock issued under incentive and purchase plans, net of forfeitures	(4,536)		(2,463)

Contribution from noncontrolling interest						Contribution from noncontrolling interest	19		16
Net cash flows used by financing activities	Net cash flows used by financing activities	(28,570)		(79,360)		Net cash flows used by financing activities	(109,067)		(122,136)
Effect of exchange rate changes on cash	Effect of exchange rate changes on cash	(365)		196		Effect of exchange rate changes on cash	(419)		337
Increase (decrease) in cash, restricted cash and cash equivalents	Increase (decrease) in cash, restricted cash and cash equivalents	(77,481)		32,130		Increase (decrease) in cash, restricted cash and cash equivalents	(175,633)		40,153
Cash, restricted cash and cash equivalents at beginning of period	Cash, restricted cash and cash equivalents at beginning of period	544,964		193,729		Cash, restricted cash and cash equivalents at beginning of period	544,964		193,729
Cash, restricted cash and cash equivalents at end of period	Cash, restricted cash and cash equivalents at end of period	$	467,483	$	225,859	Cash, restricted cash and cash equivalents at end of period	$	369,331	$	233,882

See notes to condensed consolidated financial statements.


Supplemental information:	Supplemental information:	Three Months Ended November 30,				Supplemental information:	Six Months Ended
(in thousands)	(in thousands)	2020		2019		(in thousands)	February 28, 2021		February 29, 2020
Cash paid for income taxes	Cash paid for income taxes	$	4,743	$	2,119	Cash paid for income taxes	$	48,757	$	27,759
Cash paid for interest	Cash paid for interest	18,691		20,031		Cash paid for interest	34,094		29,484

Noncash activities:	Noncash activities:					Noncash activities:
Liabilities related to additions of property, plant and equipment	Liabilities related to additions of property, plant and equipment	20,246		17,569		Liabilities related to additions of property, plant and equipment	16,252		29,176

Cash and cash equivalents	Cash and cash equivalents	$	465,162	$	224,797	Cash and cash equivalents	367,347		232,442
Restricted cash	Restricted cash	2,321		1,062		Restricted cash	1,984		1,440
Total cash, restricted cash and cash equivalents		$	467,483	$	225,859
Total cash, cash equivalents and restricted cash						Total cash, cash equivalents and restricted cash	$	369,331	$	233,882


COMMERCIAL METALS COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED)	COMMERCIAL METALS COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED)																			COMMERCIAL METALS COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED)
		Three Months Ended November 30, 2020																			Three Months Ended February 28, 2021
		Common Stock				Additional		Accumulated Other				Treasury Stock			Non-						Common Stock			Additional		Accumulated Other				Treasury Stock			Non-
(in thousands, except share data)	(in thousands, except share data)	Number of Shares	Amount			Paid-In Capital		Comprehensive Loss		Retained Earnings		Number of Shares	Amount		controlling Interests			Total		(in thousands, except share data)	Number of Shares	Amount		Paid-In Capital		Comprehensive Loss		Retained Earnings		Number of Shares	Amount		controlling Interest		Total
Balance, September 1, 2020		129,060,664	$	1,290		$	358,912	$	(103,764)	$	1,807,826	(9,839,759)	$	(175,063)	$	212		$	1,889,413
Balance, December 1, 2020																				Balance, December 1, 2020	129,060,664	$	1,290	$	348,816	$	(111,055)	$	1,857,513	(8,992,643)	$	(161,877)	$	212	$	1,934,899
Net earnings	Net earnings									64,093								64,093		Net earnings								66,357							66,357
Other comprehensive loss								(7,291)										(7,291)
Other comprehensive income																				Other comprehensive income						8,915									8,915
Dividends ($0.12 per share)	Dividends ($0.12 per share)									(14,406)								(14,406)		Dividends ($0.12 per share)								(14,427)							(14,427)
Issuance of stock under incentive and purchase plans, net of forfeitures	Issuance of stock under incentive and purchase plans, net of forfeitures					(23,527)						847,116	13,186					(10,341)		Issuance of stock under incentive and purchase plans, net of forfeitures				(2,120)						440,194	7,925				5,805
Stock-based compensation	Stock-based compensation					8,011												8,011		Stock-based compensation				7,924											7,924
Contribution of noncontrolling interest																				Contribution of noncontrolling interest													19		19

Reclassification of share-based liability awards						5,420												5,420
Balance, November 30, 2020		129,060,664	$	1,290		$	348,816	$	(111,055)	$	1,857,513	(8,992,643)	$	(161,877)	$	212		$	1,934,899
Balance, February 28, 2021																				Balance, February 28, 2021	129,060,664	$	1,290	$	354,620	$	(102,140)	$	1,909,443	(8,552,449)	$	(153,952)	$	231	$	2,009,492

					Six Months Ended February 28, 2021
																	Common Stock				Additional	Accumulated Other				Treasury Stock				Non-

(in thousands, except share data)																				(in thousands, except share data)	Number of Shares	Amount		Paid-In Capital		Comprehensive Loss		Retained Earnings		Number of Shares	Amount		controlling Interest		Total
Balance, September 1, 2020																				Balance, September 1, 2020	129,060,664	$	1,290	$	358,912	$	(103,764)	$	1,807,826	(9,839,759)	$	(175,063)	$	212	$	1,889,413
Net earnings																				Net earnings								130,450							130,450
Other comprehensive income																				Other comprehensive income						1,624									1,624
Dividends ($0.24 per share)																				Dividends ($0.24 per share)								(28,833)							(28,833)
Issuance of stock under incentive and purchase plans, net of forfeitures																				Issuance of stock under incentive and purchase plans, net of forfeitures				(25,647)						1,287,310	21,111				(4,536)
Stock-based compensation																				Stock-based compensation				15,935											15,935
Contribution of noncontrolling interest																				Contribution of noncontrolling interest													19		19
Reclassification of share-based liability awards																				Reclassification of share-based liability awards				5,420											5,420
Balance, February 28, 2021																				Balance, February 28, 2021	129,060,664	$	1,290	$	354,620	$	(102,140)	$	1,909,443	(8,552,449)	$	(153,952)	$	231	$	2,009,492

Three Months Ended November 30, 2019
Common Stock Additional Accumulated
Other Treasury Stock Non-
(in thousands, except share data) Number of
Shares Amount Paid-In
Capital Comprehensive
Loss Retained
Earnings Number of
Shares Amount controlling
Interests Total
Balance, September 1, 2019 129,060,664 $ 1,290 $ 358,668 $ (124,126) $ 1,585,379 (11,135,726) $ (197,350) $ 196 $ 1,624,057
Net earnings 83,348 83,348
Other comprehensive income 7,541 7,541
Dividends ($0.12 per share) (14,238) (14,238)
Issuance of stock under incentive and purchase plans, net of forfeitures (20,282) 724,927 12,465 (7,817)
Stock-based compensation 6,296 6,296
Reclassification of share-based liability awards 2,510 2,510
Balance, November 30, 2019 129,060,664 $ 1,290 $ 347,192 $ (116,585) $ 1,654,489 (10,410,799) $ (184,885) $ 196 $ 1,701,697


	Three Months Ended February 29, 2020
	Common Stock			Additional		Accumulated Other				Treasury Stock			Non-
(in thousands, except share data)	Number of Shares	Amount		Paid-In Capital		Comprehensive Loss		Retained Earnings		Number of Shares	Amount		controlling Interest		Total
Balance, December 1, 2019	129,060,664	$	1,290	$	347,192	$	(116,585)	$	1,654,489	(10,410,799)	$	(184,885)	$	196	$	1,701,697
Net earnings								63,798							63,798
Other comprehensive loss						(4,805)									(4,805)
Dividends ($0.12 per share)								(14,242)							(14,242)
Issuance of stock under incentive and purchase plans, net of forfeitures				(1,948)						412,024	7,302				5,354
Stock-based compensation				6,237											6,237
Contribution of noncontrolling interest													16		16

Balance, February 29, 2020	129,060,664	$	1,290	$	351,481	$	(121,390)	$	1,704,045	(9,998,775)	$	(177,583)	$	212	$	1,758,055

	Six Months Ended February 29, 2020
	Common Stock			Additional		Accumulated Other				Treasury Stock			Non-
(in thousands, except share data)	Number of Shares	Amount		Paid-In Capital		Comprehensive Loss		Retained Earnings		Number of Shares	Amount		controlling Interest		Total
Balance, September 1, 2019	129,060,664	$	1,290	$	358,668	$	(124,126)	$	1,585,379	(11,135,726)	$	(197,350)	$	196	$	1,624,057
Net earnings								147,146							147,146
Other comprehensive income						2,736									2,736
Dividends ($0.24 per share)								(28,480)							(28,480)
Issuance of stock under incentive and purchase plans, net of forfeitures				(22,230)						1,136,951	19,767				(2,463)
Stock-based compensation				12,533											12,533
Contribution of noncontrolling interest													16		16
Reclassification of share-based liability awards				2,510											2,510
Balance, February 29, 2020	129,060,664	$	1,290	$	351,481	$	(121,390)	$	1,704,045	(9,998,775)	$	(177,583)	$	212	$	1,758,055

See notes to condensed consolidated financial statements.

COMMERCIAL METALS COMPANY AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 1. ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP") on a basis consistent with that used in the Annual Report on Form 10-K for the year ended August 31, 2020 ("2020 Form 10-K") filed by Commercial Metals Company ("CMC," and together with its consolidated subsidiaries, the "Company") with the Securities and Exchange Commission (the "SEC") and include all normal recurring adjustments necessary to present fairly the condensed consolidated balance sheets and the condensed consolidated statements of earnings, comprehensive income, cash flows and stockholders' equity for the periods indicated. These notes should be read in conjunction with the consolidated financial statements included in the 2020 Form 10-K. The results of operations for the three and six month ~~period~~periods are not necessarily indicative of the results to be expected for the full fiscal year. Any reference in this Form 10-Q to the "corresponding period" relates to the relevant three or six month period ended February 29, 2020.

Any reference in this Form 10-Q to a year refers to the fiscal year ended August 31st of that year, unless otherwise noted.

~~Recently Adopted Accounting Pronouncements~~

~~In December 2019, the Financial Accounting Standards Board issued Accounting Standards Update ("ASU") 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes ("ASU 2019-12").~~ ~~ASU 2019-12 eliminates certain exceptions to the general principles in Accounting Standards Codification 740 and also clarifies and amends existing guidance to improve consistent application.~~ ~~The Company adopted ASU 2019-12 on September 1, 2020. ASU 2019-12 did not have a material effect on the Company's condensed consolidated financial statements.~~

NOTE 2. CHANGES IN BUSINESS

Facility Closures and Dispositions

In October 2019, the Company closed the melting operations at its Rancho Cucamonga facility, which is part of the North America segment. In August 2020, the Company announced plans to sell the Rancho Cucamonga site and the Company ceased ~~production~~operations at this facility in ~~December 2020.~~ January 2021. As a result, the~~Due to these announcements, the~~ Company recorded ~~$8.0~~$5.4 million and $13.4 million of expense in the three and six months ended February 28, 2021, respectively, and $6.3 million of expense in the ~~three~~six months ended ~~November 30,~~February 29, 2020, ~~and 2019, respectively,~~all of which was recorded in the first quarter of 2020, related to asset impairments, severance, pension curtailment, environmental obligations and vendor agreement terminations. ~~As of November 30, 2020, the~~The disposition does not meet the criteria for discontinued operations, orand as of February 28, 2021, does not qualify for held for sale accounting.

NOTE 3. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The following tables reflect the changes in accumulated other comprehensive income (loss) ("AOCI"):


											Three Months Ended February 28, 2021
(in thousands)										(in thousands)	Foreign Currency Translation		Unrealized Gain (Loss) on Derivatives		Defined Benefit Obligation		Total AOCI
Balance, December 1, 2020										Balance, December 1, 2020	$	(96,321)	$	(10,224)	$	(4,510)	$	(111,055)
Other comprehensive income (loss) before reclassifications										Other comprehensive income (loss) before reclassifications	1,465		9,535		(14)		10,986
Amounts reclassified from AOCI										Amounts reclassified from AOCI	0		(320)		0		(320)
Income taxes										Income taxes	0		(1,751)		0		(1,751)
Net other comprehensive income (loss)										Net other comprehensive income (loss)	1,465		7,464		(14)		8,915
Balance, February 28, 2021										Balance, February 28, 2021	$	(94,856)	$	(2,760)	$	(4,524)	$	(102,140)

		Three Months Ended November 30, 2020									Six Months Ended February 28, 2021
(in thousands)	(in thousands)	Foreign Currency Translation		Unrealized Gain (Loss) on Derivatives		Defined Benefit Obligation		Total AOCI		(in thousands)	Foreign Currency Translation		Unrealized Gain (Loss) on Derivatives		Defined Benefit Obligation		Total AOCI
Balance, September 1, 2020	Balance, September 1, 2020	$	(87,933)	$	(11,334)	$	(4,497)	$	(103,764)	Balance, September 1, 2020	$	(87,933)	$	(11,334)	$	(4,497)	$	(103,764)
Other comprehensive income (loss) before reclassifications	Other comprehensive income (loss) before reclassifications	(8,388)		1,437		(20)		(6,971)		Other comprehensive income (loss) before reclassifications	(6,923)		10,972		(34)		4,015
Amounts reclassified from AOCI	Amounts reclassified from AOCI	0		(67)		0		(67)		Amounts reclassified from AOCI	0		(387)		0		(387)
Income taxes	Income taxes	0		(260)		7		(253)		Income taxes	0		(2,011)		7		(2,004)
Net other comprehensive income (loss)	Net other comprehensive income (loss)	(8,388)		1,110		(13)		(7,291)		Net other comprehensive income (loss)	(6,923)		8,574		(27)		1,624
Balance, November 30, 2020		$	(96,321)	$	(10,224)	$	(4,510)	$	(111,055)

Balance, February 28, 2021										Balance, February 28, 2021	$	(94,856)	$	(2,760)	$	(4,524)	$	(102,140)


											Three Months Ended February 29, 2020
(in thousands)										(in thousands)	Foreign Currency Translation		Unrealized Gain (Loss) on Derivatives		Defined Benefit Obligation		Total AOCI
Balance, December 1, 2019										Balance, December 1, 2019	$	(114,574)	$	1,731	$	(3,742)	$	(116,585)
Other comprehensive loss before reclassifications										Other comprehensive loss before reclassifications	(1,066)		(4,501)		(14)		(5,581)
Amounts reclassified from AOCI										Amounts reclassified from AOCI	(2)		(104)		0		(106)
Income taxes										Income taxes	0		876		6		882
Net other comprehensive loss										Net other comprehensive loss	(1,068)		(3,729)		(8)		(4,805)
Balance, February 29, 2020										Balance, February 29, 2020	$	(115,642)	$	(1,998)	$	(3,750)	$	(121,390)

		Three Months Ended November 30, 2019									Six Months Ended February 29, 2020
(in thousands)	(in thousands)	Foreign Currency Translation		Unrealized Gain (Loss) on Derivatives		Defined Benefit Obligation		Total AOCI		(in thousands)	Foreign Currency Translation		Unrealized Gain (Loss) on Derivatives		Defined Benefit Obligation		Total AOCI
Balance, September 1, 2019	Balance, September 1, 2019	$	(121,498)	$	1,106	$	(3,734)	$	(124,126)	Balance, September 1, 2019	$	(121,498)	$	1,106	$	(3,734)	$	(124,126)
Other comprehensive income (loss) before reclassifications	Other comprehensive income (loss) before reclassifications	6,924		882		(10)		7,796		Other comprehensive income (loss) before reclassifications	5,858		(3,619)		(24)		2,215
Amounts reclassified from AOCI	Amounts reclassified from AOCI	0		(110)		0		(110)		Amounts reclassified from AOCI	(2)		(214)		0		(216)
Income taxes	Income taxes	0		(147)		2		(145)		Income taxes	0		729		8		737
Net other comprehensive income (loss)	Net other comprehensive income (loss)	6,924		625		(8)		7,541		Net other comprehensive income (loss)	5,856		(3,104)		(16)		2,736
Balance, November 30, 2019		$	(114,574)	$	1,731	$	(3,742)	$	(116,585)

Balance, February 29, 2020										Balance, February 29, 2020	$	(115,642)	$	(1,998)	$	(3,750)	$	(121,390)

Items reclassified out of AOCI were immaterial for the three and six months ended ~~November 30, 2020~~February 28, 2021 and ~~2019.~~February 29, 2020. Thus, the corresponding line items in the condensed consolidated statements of earnings to which the items were reclassified are not presented.

NOTE 4. REVENUE RECOGNITION

Each fabricated product contract sold by the North America segment represents a single performance obligation. Revenue from contracts where the Company provides fabricated product and installation services is recognized over time using an input measure, and these contracts represented ~~14%~~11% and 12% of net sales in the North America segment in the three and six months ended ~~November 30, 2020 and 2019,~~February 28, 2021, respectively. Revenue from contracts where the Company does not provide installation services is recognized over time using an output measure, and these contracts represented 9% ~~and 11%~~ of net sales in the North America segment in both the three and six months ended ~~November 30, 2020 and 2019, respectively.~~February 28, 2021. The remaining ~~77%~~80% and 79% of net sales in the North America segment were recognized at a point in time concurrent with the transfer of control, or as amounts were billed to the customer under an available practical expedient, in the three and six months ended ~~November 30, 2020 and 2019.~~February 28, 2021, respectively.

The following table provides information about assets and liabilities from contracts with customers.


(in thousands)	(in thousands)	November 30, 2020		August 31, 2020		(in thousands)	February 28, 2021		August 31, 2020
Contract assets (included in accounts receivable)	Contract assets (included in accounts receivable)	$	46,430	$	53,275	Contract assets (included in accounts receivable)	$	54,468	$	53,275
Contract liabilities (included in accrued expenses and other payables)	Contract liabilities (included in accrued expenses and other payables)	26,462		25,450		Contract liabilities (included in accrued expenses and other payables)	18,638		25,450

~~The amount~~

During the six months ended February 28, 2021, approximately $21.3 million was recognized in the condensed consolidated statements of ~~revenue reclassified from~~earnings related to August 31, 2020 contract ~~liabilities during the three months ended November 30, 2020 was approximately $13.1 million.~~liabilities.

Remaining Performance Obligations

Remaining performance obligations represent the transaction price of fabricated product contracts where revenue is recognized using an input or output measure for which work has not yet been performed. As of ~~November 30, 2020, $679.8~~February 28, 2021, $688.3 million ~~has been~~was allocated to remaining performance obligations in the North America segment related to those ~~contracts where revenue is recognized using an input or output measure.~~contracts.

NOTE 5. INVENTORIES, NET

The majority of the Company's inventories are in the form of semi-finished and finished goods. Under the Company’s business model, products are sold to external customers in various stages, from semi-finished billets through fabricated steel, leading these categories to be combined. As such, at ~~November 30, 2020~~February 28, 2021 and August 31, 2020, work in process inventories were immaterial. At ~~November 30, 2020~~February 28, 2021 and August 31, 2020, the Company's raw materials inventories were ~~$152.0~~$213.3 million and $123.9 million, respectively.

NOTE 6. GOODWILL AND OTHER INTANGIBLES

Goodwill by reportable segment at ~~November 30, 2020~~February 28, 2021 is detailed in the following table:


(in thousands)	(in thousands)	North America		Europe		Consolidated		(in thousands)	North America		Europe		Consolidated
Goodwill, gross*	Goodwill, gross*	$	71,941	$	2,530	$	74,471	Goodwill, gross*	$	71,941	$	4,491	$	76,432
Accumulated impairment losses*	Accumulated impairment losses*	(10,036)		(160)		(10,196)		Accumulated impairment losses*	(10,036)		(161)		(10,197)
Goodwill, net*	Goodwill, net*	$	61,905	$	2,370	$	64,275	Goodwill, net*	$	61,905	$	4,330	$	66,235

_________________

* The change in balance from August 31, 2020 was immaterial.

The total gross carrying amounts of the Company's intangible assets subject to amortization were $21.8 million and $22.1 million, and the total net carrying amounts were ~~$12.0~~$11.4 million and $12.6 million at ~~November 30, 2020~~February 28, 2021 and August 31, 2020, respectively. These assets were included in other noncurrent assets on the Company's condensed consolidated balance sheets. Intangible amortization expense from continuing operations related to such intangible assets was immaterial for the three and six months ended ~~November 30, 2020~~February 28, 2021 and ~~2019.~~February 29, 2020. Excluding goodwill, the Company did not have any significant intangible assets with indefinite lives at ~~November 30, 2020.~~February 28, 2021.

At ~~November 30, 2020~~February 28, 2021 and August 31, 2020, the net carrying amount of the acquired unfavorable contract backlog liability was ~~$4.5~~$3.0 million and $6.0 million, respectively. Amortization of the acquired unfavorable contract backlog was $1.5 million and ~~$8.3~~$3.0 million for the three and six months ended ~~November 30, 2020~~February 28, 2021, respectively, and ~~2019, respectively,~~$6.0 million and $14.3 million for the

corresponding periods, and was recorded as an increase toto net sales in the Company’s condensed consolidated statements of earnings.

NOTE 7. LEASES

The following table presents the components of the total leased assets and lease liabilities and their classification in the Company's condensed consolidated balance ~~sheet:~~sheets:


(in thousands)	(in thousands)	Classification in Condensed Consolidated Balance Sheets	November 30, 2020		August 31, 2020		(in thousands)	Classification in Condensed Consolidated Balance Sheets	February 28, 2021		August 31, 2020
Assets:	Assets:						Assets:
Operating assets	Operating assets	Other noncurrent assets	$	117,582	$	114,905	Operating assets	Other noncurrent assets	$	117,547	$	114,905
Finance assets	Finance assets	Property, plant and equipment, net	53,561		50,642		Finance assets	Property, plant and equipment, net	52,325		50,642
Total leased assets	Total leased assets		$	171,143	$	165,547	Total leased assets		$	169,872	$	165,547

Liabilities:	Liabilities:						Liabilities:
Operating lease liabilities:	Operating lease liabilities:						Operating lease liabilities:
Current	Current	Accrued expenses and other payables	$	27,030	$	27,604	Current	Accrued expenses and other payables	$	27,176	$	27,604
Long-term	Long-term	Other noncurrent liabilities	98,881		95,810		Long-term	Other noncurrent liabilities	98,807		95,810
Total operating lease liabilities	Total operating lease liabilities		125,911		123,414		Total operating lease liabilities		125,983		123,414
Finance lease liabilities:	Finance lease liabilities:						Finance lease liabilities:
Current	Current	Current maturities of long-term debt and short-term borrowings	15,060		14,373		Current	Current maturities of long-term debt and short-term borrowings	15,228		14,373
Long-term	Long-term	Long-term debt	37,421		35,851		Long-term	Long-term debt	35,992		35,851
Total finance lease liabilities	Total finance lease liabilities		52,481		50,224		Total finance lease liabilities		51,220		50,224
Total lease liabilities	Total lease liabilities		$	178,392	$	173,638	Total lease liabilities		$	177,203	$	173,638

The components of lease cost were as follows:


		Three Months Ended November 30,					Three Months Ended				Six Months Ended
(in thousands)	(in thousands)	2020		2019		(in thousands)	February 28, 2021		February 29, 2020		February 28, 2021		February 29, 2020
Operating lease expense	Operating lease expense	$	8,722	$	8,790	Operating lease expense	$	8,651	$	8,815	$	17,373	$	17,605
Finance lease expense:	Finance lease expense:					Finance lease expense:
Amortization of assets	Amortization of assets	3,239		2,165		Amortization of assets	3,219		2,720		6,458		4,885
Interest on lease liabilities	Interest on lease liabilities	555		401		Interest on lease liabilities	563		465		1,118		866
Total finance lease expense	Total finance lease expense	3,794		2,566		Total finance lease expense	3,782		3,185		7,576		5,751
Variable and short term-lease expense		4,962		3,933
Variable and short-term lease expense						Variable and short-term lease expense	4,324		4,381		9,286		8,314
Total lease expense	Total lease expense	$	17,478	$	15,289	Total lease expense	$	16,757	$	16,381	$	34,235	$	31,670

The ~~weighted-average~~weighted average remaining lease term and discount rate for operating and finance leases are presented in the following table:


		November 30, 2020		August 31, 2020			February 28, 2021		August 31, 2020
Weighted-average remaining lease term (years)
Weighted average remaining lease term (years)						Weighted average remaining lease term (years)
Operating leases	Operating leases	6.5		6.3		Operating leases	6.4		6.3
Finance leases	Finance leases	3.8		3.8		Finance leases	3.6		3.8

Weighted-average discount rate
Weighted average discount rate						Weighted average discount rate
Operating leases	Operating leases	4.426	%	4.283	%	Operating leases	4.482	%	4.283	%
Finance leases	Finance leases	4.302	%	4.270	%	Finance leases	4.296	%	4.270	%

Cash flow and other information related to leases is included in the following table:


		Three Months Ended November 30,					Six Months Ended
(in thousands)	(in thousands)	2020		2019		(in thousands)	February 28, 2021		February 29, 2020
Cash paid for amounts included in the measurement of lease liabilities	Cash paid for amounts included in the measurement of lease liabilities					Cash paid for amounts included in the measurement of lease liabilities
Operating cash outflows from operating leases	Operating cash outflows from operating leases	$	9,047	$	8,746	Operating cash outflows from operating leases	$	17,812	$	17,594
Operating cash outflows from finance leases	Operating cash outflows from finance leases	560		336		Operating cash outflows from finance leases	1,125		787
Financing cash outflows from finance leases	Financing cash outflows from finance leases	3,795		3,298		Financing cash outflows from finance leases	7,761		6,426

Right of use ("ROU") assets obtained in exchange for lease obligations:	Right of use ("ROU") assets obtained in exchange for lease obligations:					Right of use ("ROU") assets obtained in exchange for lease obligations:
Operating leases	Operating leases	12,267		6,369		Operating leases	20,249		28,942
Finance leases	Finance leases	6,300		5,312		Finance leases	8,784		13,040

Maturities of lease liabilities at ~~November 30, 2020~~February 28, 2021 are presented in the following table:


(in thousands)	(in thousands)	Operating Leases		Finance Leases		(in thousands)	Operating Leases		Finance Leases
Year 1	Year 1	$	32,040	$	17,018	Year 1	$	32,387	$	17,138
Year 2	Year 2	26,550		14,639		Year 2	26,877		14,767
Year 3	Year 3	22,686		12,374		Year 3	22,162		12,336
Year 4	Year 4	17,312		9,542		Year 4	17,182		8,716
Year 5	Year 5	12,889		3,294		Year 5	12,921		2,392
Thereafter	Thereafter	35,301		163		Thereafter	35,374		97
Total lease payments	Total lease payments	146,778		57,030		Total lease payments	146,903		55,446
Less: Imputed interest	Less: Imputed interest	20,867		4,549		Less: Imputed interest	20,920		4,226
Present value of lease liabilities	Present value of lease liabilities	$	125,911	$	52,481	Present value of lease liabilities	$	125,983	$	51,220

NOTE 8. CREDIT ARRANGEMENTS

Long-term debt was as follows:


(in thousands)	(in thousands)	Weighted Average Interest Rate at November 30, 2020	November 30, 2020		August 31, 2020		(in thousands)	Weighted Average Interest Rate as of February 28, 2021	February 28, 2021		August 31, 2020
2031 Notes							2031 Notes	3.875%	$	300,000	$	0
2027 Notes	2027 Notes	5.375%	$	300,000	$	300,000	2027 Notes	5.375%	300,000		300,000
2026 Notes	2026 Notes	5.750%	350,000		350,000		2026 Notes	5.750%	0		350,000
2023 Notes	2023 Notes	4.875%	330,000		330,000		2023 Notes	4.875%	330,000		330,000
Poland Term Loan	Poland Term Loan	1.720%	39,944		40,713		Poland Term Loan	1.710%	40,068		40,713
Other	Other	5.100%	21,329		21,329		Other	5.100%	21,329		21,329

Finance leases	Finance leases		52,481		50,224		Finance leases		51,220		50,224
Total debt	Total debt		1,093,754		1,092,266		Total debt		1,042,617		1,092,266
Less debt issuance costs	Less debt issuance costs		8,160		8,581		Less debt issuance costs		8,805		8,581
Total amounts outstanding	Total amounts outstanding		1,085,594		1,083,685		Total amounts outstanding		1,033,812		1,083,685
Less current maturities of long-term debt	Less current maturities of long-term debt		20,701		18,149		Less current maturities of long-term debt		22,777		18,149
Long-term debt	Long-term debt		$	1,064,893	$	1,065,536	Long-term debt		$	1,011,035	$	1,065,536

In February 2021, the Company issued $300.0 million of 3.875% Senior Notes due February 2031 (the "2031 Notes"). Issuance costs associated with the 2031 Notes were approximately $4.9 million. Interest on the 2031 Notes is payable semiannually.

In May 2018, the Company issued $350.0 million of 5.750% Senior Notes due April 2026 (the "2026 Notes"). In February 2021, the Company accepted for purchase approximately $77.8 million of the outstanding principal amount of the 2026 Notes

through a cash tender offer. Following the expiration of the cash tender offer on February 18, 2021, the Company redeemed the remaining outstanding principal amount of the 2026 Notes. In the three and six month periods ended February 28, 2021, the Company recognized a $16.8 million loss on debt extinguishment related to the retirement of the 2026 Notes.

The Company had 0 amounts drawn under its $350.0 million revolving credit facility (the "Revolver") at ~~November 30, 2020~~February 28, 2021 and August 31, 2020. The availability under the Revolver was reduced by outstanding stand-by letters of credit totaling $3.0 million at ~~November 30, 2020~~February 28, 2021 and August 31, ~~2020.~~2020.

The Company has a Term Loan facility (the "Poland Term Loan") through its subsidiary, CMC Poland Sp. ~~zo.o. (“CMCP”~~z.o.o. ("CMCP"), which allows for a maximum aggregate principal amount of Polish zloty ("PLN") 250.0 million, or ~~$66.6~~$66.8 million, at ~~November 30, 2020.~~February 28, 2021. At ~~November 30, 2020~~February 28, 2021 and August 31, 2020,, PLN 150.0 million, or ~~$39.9~~$40.1 million, and PLN 150.0 million, or $40.7 million, respectively, was outstanding.

The Company also has credit facilities in Poland through its subsidiary CMCP. At ~~November 30, 2020,~~February 28, 2021, CMCP's credit facilities totaled PLN 275.0 million, or ~~$73.2~~$73.5 million. These facilities expire in March 2022. ~~NaN~~No amounts were outstanding under these facilities as of ~~November 30, 2020~~February 28, 2021 or August 31, 2020. The available balance of these credit facilities was reduced by outstanding stand-by letters of credit, guarantees, and/or other financial assurance instruments, which totaled $0.9 million and $0.8 million at ~~November 30, 2020~~February 28, 2021 and August 31, ~~2020.~~2020, respectively.

The Company's debt agreements require compliance with certain non-financial and financial covenants, including an interest coverage ratio and a debt to capitalization ratio. At ~~November 30, 2020,~~February 28, 2021, the Company was in compliance with all covenants contained in its debt agreements.

Accounts Receivable Facilities

The Company had 0no advance payments outstanding under its U.S. accounts receivable facility at ~~November 30, 2020~~February 28, 2021 or August 31, 2020.

The Poland accounts receivable facility has a limit of PLN 220.0 million, ~~($58.6~~or $58.8 million at ~~November 30, 2020).~~February 28, 2021. The Company had 0no advance payments outstanding under the Poland accounts receivable facility at ~~November 30, 2020~~February 28, 2021 or August 31, 2020.

NOTE 9. DERIVATIVES

The Company's global operations and product lines expose it to risks from fluctuations in metal commodity prices, foreign currency exchange rates, interest rates and natural gas, electricity and other energy prices. One objective of the Company's risk management program is to mitigate these risks using derivative instruments. The Company enters into (i) metal commodity futures and forward contracts to mitigate the risk of unanticipated changes in gross margin due to price volatility in these commodities, (ii) foreign currency forward contracts that match the expected settlements for purchases and sales denominated in foreign currencies and (iii) energy derivatives to mitigate the risk related to price volatility of electricity and natural gas.

At ~~November 30, 2020,~~February 28, 2021, the notional values of the Company's foreign currency and commodity commitments were ~~$257.8~~$165.8 million and ~~$203.3~~$217.2 million, respectively. At August 31, 2020, the notional values of the Company's foreign currency and commodity contract commitments were $138.5 million and $195.8 million, respectively.

The following table provides information regarding the Company's commodity contract commitments at ~~November 30, 2020:~~February 28, 2021:

Commodity

Long/Short

Total

Aluminum

Long

~~1,900~~3,350

Aluminum

Short

1,675

Copper

Long

~~714~~1,077

Copper

Short

~~8,686~~7,836

Electricity

Long

~~2,000,000~~1,967,000

MW(h)

_________________

MT = Metric Ton

MW(h) = Megawatt hour

The Company designates only those contracts which closely match the terms of the underlying transaction as hedges for accounting purposes. Certain foreign currency and commodity contracts were not designated as hedges for accounting

purposes, although management believes they are essential economic hedges.

Commodity derivatives not designated as hedging ~~instruments~~instruments resulted in a loss, before income taxes, of ~~$5.6~~$11.0 million and ~~$1.3~~$16.6 million, in the three and six months ended ~~November 30,~~February 28, 2021, respectively, and a gain, before income taxes, of $1.7 million and $0.4 million in the three and six months ended February 29, 2020, ~~and 2019,~~ respectively, primarily recorded in cost of goods sold within the condensed consolidated statements of earnings. ~~Commodity~~Foreign exchange derivatives accounted for as cash flow hedging instruments resulted in a net gain of ~~$1.2~~$7.7 million and ~~$0.7~~$8.9 million, ~~recognized in accumulated other comprehensive income~~ in the three and six months ended ~~November 30,~~February 28, 2021, respectively, and a net loss of $3.6 million and $2.9 million in the three and six months ended February 29, 2020, ~~and 2019, respectively.~~respectively, recognized in the condensed consolidated statements of comprehensive income (loss). See Note 10, Fair Value, for the fair value of the Company's derivative instruments recorded in the condensed consolidated balance sheets.

NOTE 10. FAIR VALUE

The Company has established a fair value hierarchy which prioritizes the inputs to the valuation techniques used to measure fair value into 3 levels. These levels are determined based on the lowest level input that is significant to the fair value measurement. Levels within the hierarchy are defined within the Summary of Significant Accounting Policies footnote in our 2020 Form 10-K.

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									Fair Value Measurements at Reporting Date Using
(in thousands)	(in thousands)	November 30, 2020		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		(in thousands)	February 28, 2021		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:	Assets:									Assets:
Investment deposit accounts (1)	Investment deposit accounts (1)	$	394,943	$	394,943	$	0	$	0	Investment deposit accounts (1)	$	345,240	$	345,240	$	0	$	0
Commodity derivative assets (2)	Commodity derivative assets (2)	291		291		0		0		Commodity derivative assets (2)	1,091		1,091		0		0
Foreign exchange derivative assets (2)	Foreign exchange derivative assets (2)	1,329		0		1,329		0		Foreign exchange derivative assets (2)	1,301		0		1,301		0
Liabilities:	Liabilities:									Liabilities:
Commodity derivative liabilities (2)	Commodity derivative liabilities (2)	19,496		5,882		0		13,614		Commodity derivative liabilities (2)	11,349		7,064		0		4,285
Foreign exchange derivative liabilities (2)	Foreign exchange derivative liabilities (2)	1,555		0		1,555		0		Foreign exchange derivative liabilities (2)	635		0		635		0


				Fair Value Measurements at Reporting Date Using									Fair Value Measurements at Reporting Date Using
(in thousands)	(in thousands)	August 31, 2020		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		(in thousands)	August 31, 2020		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:	Assets:									Assets:
Investment deposit accounts (1)	Investment deposit accounts (1)	$	449,824	$	449,824	$	0	$	0	Investment deposit accounts (1)	$	449,824	$	449,824	$	0	$	0
Commodity derivative assets (2)	Commodity derivative assets (2)	202		202		0		0		Commodity derivative assets (2)	202		202		0		0
Foreign exchange derivative assets (2)	Foreign exchange derivative assets (2)	1,484		0		1,484		0		Foreign exchange derivative assets (2)	1,484		0		1,484		0
Liabilities:	Liabilities:									Liabilities:
Commodity derivative liabilities (2)	Commodity derivative liabilities (2)	19,000		3,993		0		15,007		Commodity derivative liabilities (2)	19,000		3,993		0		15,007
Foreign exchange derivative liabilities (2)	Foreign exchange derivative liabilities (2)	459		0		459		0		Foreign exchange derivative liabilities (2)	459		0		459		0

_________________

(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. ~~Derivative liabilities~~Derivatives classified as Level 3 are described below. Further discussion regarding the Company's use of derivative instruments is included in Note 9, Derivatives.

The fair value estimate of the Level 3 commodity derivative is based on an internally developed discounted cash flow model primarily utilizing unobservable inputs in 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 model.

November 30, 2020

February 28, 2021

Unobservable Inputs

Low

High

Average

Unobservable Inputs

Low

High

Average

Floating rate (PLN)

151.66

247.56

203.96

Floating rate (PLN)

151.74

264.53

221.74

Below is a reconciliation of the beginning and ending balances of the Level 3 commodity derivative recognized in the condensed consolidated statements of comprehensive income. The fluctuation in energy rates over time may cause volatility in the fair value estimate and is the primary reason for the unrealized gain in other comprehensive income ("OCI") in the three and six months ended ~~November 30, 2020.~~February 28, 2021.


(in thousands)	~~November 30, 2020~~Three Months Ended February 28, 2021
Balance, atDecember 1, 2020	$	(13,614)

Total gains, realized and unrealized
Recognized in net earnings(1)	253
Recognized in OCI(2)	9,076
Balance, February 28, 2021	$	(4,285)

(in thousands)	Six Months Ended February 28, 2021
Balance, September 1, 2020	$	(15,007)

Total gains, realized and unrealized
Recognized in net earnings(1)	253
Recognized in OCI~~(1)~~(2)	~~1,393~~10,469
~~Ending balance~~Balance, February 28, 2021	$	~~(13,614)~~(4,285)

_________________

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

(2) Gains recognized in OCI are included in the unrealized holding gain onin the condensed consolidated statements of comprehensive ~~income.~~income (loss).

There were no material non-recurring fair value remeasurements during the three and six months ended ~~November 30, 2020~~February 28, 2021 or ~~2019.~~February 29, 2020.

The carrying values of the Company's short-term items approximate 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 on the condensed consolidated balance sheets were as follows:


			November 30, 2020				August 31, 2020						February 28, 2021				August 31, 2020
(in thousands)	(in thousands)	Fair Value Hierarchy	Carrying Value		Fair Value		Carrying Value		Fair Value		(in thousands)	Fair Value Hierarchy	Carrying Value		Fair Value		Carrying Value		Fair Value
2031 Notes (1)											2031 Notes (1)	Level 2	$	300,000	$	301,674	$	0	$	0
2027 Notes (1)	2027 Notes (1)	Level 2	$	300,000	$	317,835	$	300,000	$	319,377	2027 Notes (1)	Level 2	300,000		319,428		300,000		319,377
2026 Notes (1)	2026 Notes (1)	Level 2	350,000		365,803		350,000		367,374		2026 Notes (1)	Level 2	0		0		350,000		367,374
2023 Notes (1)	2023 Notes (1)	Level 2	330,000		348,813		330,000		345,335		2023 Notes (1)	Level 2	330,000		349,104		330,000		345,335
Poland Term Loan(2)	Poland Term Loan(2)	Level 2	39,944		39,944		40,713		40,713		Poland Term Loan(2)	Level 2	40,068		40,068		40,713		40,713

_________________

(1) The fair value of the notes was determined based on indicated market values.

(2) The Poland Term Loan contains variable interest rates, and as a result, the carrying value approximates fair value.

NOTE 11. STOCK-BASED COMPENSATION PLANS

The Company's stock-based compensation plans are described in Note 15, Stock-Based Compensation Plans, to the consolidated financial statements in the 2020 Form 10-K. In general, restricted stock units granted in 2021 vest ratably over a period of three years. Subject to the achievement of performance targets established by the Compensation Committee of CMC's Board of Directors, performance stock units granted in 2021 vest after a period of three years.

During the ~~three~~six months ended ~~November 30,~~February 28, 2021 and February 29, 2020, ~~and 2019,~~ the Company granted the following awards under its stock-based compensation plans:

November 30, 2020

November 30, 2019

February 28, 2021

February 29, 2020

(in thousands, except per share data)

Shares Granted

Weighted Average Grant Date Fair Value

Shares Granted

Weighted Average Grant Date Fair Value

(in thousands, except per share data)

Shares Granted

Weighted Average Grant Date Fair Value

Shares Granted

Weighted Average Grant Date Fair Value

Equity method

1,399

20.39

1,465

18.15

Equity method

1,512

20.51

1,521

18.32

Liability method

324

N/A

426

N/A

Liability method

324

N/A

426

N/A

During the three and six months ended ~~November 30,~~February 28, 2021 and February 29, 2020, ~~and 2019,~~ the Company recorded immaterial mark-to-market adjustments on liability awards. At ~~November 30, 2020,~~February 28, 2021, the Company had outstanding ~~715,970~~711,648 equivalent shares accounted for under the liability method. The Company expects ~~680,171~~676,065 equivalent shares to vest.

The following table summarizes total stock-based compensation expense, including fair value remeasurements, which was primarily included in selling, general and administrative expenses on the Company's condensed consolidated statements of earnings:


		Three Months Ended November 30,				Three Months Ended				Six Months Ended
(in thousands)	(in thousands)	2020		2019			(in thousands)	February 28, 2021		February 29, 2020		February 28, 2021		February 29, 2020
Stock-based compensation expense	Stock-based compensation expense	$	9,062	$	8,269		Stock-based compensation expense	$	12,696	$	7,536	$	21,758	$	15,805

NOTE 12. STOCKHOLDERS' EQUITY AND EARNINGS PER SHARE

The calculations of basic and diluted earnings per share from continuing operations were as follows:


		Three Months Ended November 30,				Three Months Ended				Six Months Ended
(in thousands, except share data)	(in thousands, except share data)	2020		2019			(in thousands, except share data)	February 28, 2021		February 29, 2020		February 28, 2021		February 29, 2020
Earnings from continuing operations	Earnings from continuing operations	$	63,911	$	82,755		Earnings from continuing operations	$	66,233	$	63,596	$	130,144	$	146,351
Basic earnings per share:	Basic earnings per share:						Basic earnings per share:
Shares outstanding for basic earnings per share	Shares outstanding for basic earnings per share	119,762,706		118,370,191			Shares outstanding for basic earnings per share	120,345,432		118,919,455		120,052,459		118,644,823
Basic earnings per share from continuing operations	Basic earnings per share from continuing operations	$	0.53	$	0.70		Basic earnings per share from continuing operations	$	0.55	$	0.53	$	1.08	$	1.23
Diluted earnings per share:	Diluted earnings per share:						Diluted earnings per share:
Shares outstanding for basic earnings per share	Shares outstanding for basic earnings per share	119,762,706		118,370,191			Shares outstanding for basic earnings per share	120,345,432		118,919,455		120,052,459		118,644,823
Effect of dilutive securities:	Effect of dilutive securities:						Effect of dilutive securities:
Stock-based incentive/purchase plans	Stock-based incentive/purchase plans	1,365,338		1,403,347			Stock-based incentive/purchase plans	1,406,427		1,487,801		1,619,735		1,658,436
Shares outstanding for diluted earnings per share	Shares outstanding for diluted earnings per share	121,128,044		119,773,538			Shares outstanding for diluted earnings per share	121,751,859		120,407,256		121,672,194		120,303,259
Diluted earnings per share from continuing operations	Diluted earnings per share from continuing operations	$	0.53	$	0.69		Diluted earnings per share from continuing operations	$	0.54	$	0.53	$	1.07	$	1.22

Anti-dilutive shares not included above were immaterial for all periods presented.

Restricted stock is included in the number of shares of common stock issued and outstanding, but omitted from the basic earnings per share calculation until the shares vest.

During the first quarter of 2015, CMC's Board of Directors authorized a share repurchase program under which CMC may repurchase up to $100.0 million of shares of common stock. During the three and six months ended ~~November 30, 2020,~~February 28, 2021, CMC did 0t repurchase any shares of common stock. CMC had remaining authorization to repurchase $27.6 million of common stock at ~~November 30, 2020.~~February 28, 2021.

NOTE 13. COMMITMENTS AND CONTINGENCIES

Legal and Environmental Matters

In the ordinary course of conducting its business, the Company becomes involved in litigation, administrative proceedings and governmental investigations, including environmental matters. See Note 19, Commitments and Contingencies, to the consolidated financial statements in the 2020 Form 10-K.

The Company has received notices from the U.S. Environmental Protection Agency ("EPA") or state agencies with similar responsibility that it is considered a potentially responsible party at several sites, none of which are owned by the Company, and may be obligated under the Comprehensive Environmental Response, Compensation and Liability Act of 1980 ("CERCLA") or similar state statutes to conduct remedial investigations, feasibility studies, remediation and/or removal of alleged releases of hazardous substances or to reimburse the EPA for such activities. The Company is involved in litigation or administrative proceedings with regard to several of these sites in which the Company is contesting, or at the appropriate time may contest, its liability at the sites. In addition, the Company has received information requests with regard to other sites which may be under consideration by the EPA as potential CERCLA sites. Some of these environmental matters or other proceedings may result in fines, penalties or judgments being assessed against the Company. At ~~November 30, 2020~~February 28, 2021 and August 31, 2020, the ~~Company had $0.5 million and $0.7 million~~amounts accrued for cleanup and remediation costs in connection with CERCLA sites ~~respectively.~~were immaterial. The estimation process is based on currently available information which is, in many cases, preliminary and incomplete. Total environmental liabilities, including CERCLA sites, were ~~$3.2~~$6.8 million and $3.4 million at ~~November 30, 2020~~February 28, 2021 and August 31, 2020, respectively, of which ~~$2.5~~$2.4 million and $2.7 million were classified as other long-term liabilities at ~~November 30, 2020~~February 28, 2021 and August 31, 2020, respectively. ~~These amounts have not been discounted to their present values.~~ Due to evolving remediation technology, changing regulations, possible third-party contributions, the inherent shortcomings of the estimation process and other factors, amounts accrued could vary significantly from amounts paid. Historically, the amounts the Company has ultimately paid for such remediation activities have not been material.

Management believes that adequate provisions have been made in the Company's condensed consolidated financial statements for the potential impact of these contingencies, and that the outcomes of the suits and proceedings described above, and other

miscellaneous litigation and proceedings now pending, will not have a material adverse effect on the business, results of operations or financial condition of the Company.

NOTE 14. BUSINESS SEGMENTS

The Company structures its business into ~~the following~~ 2 reportable segments: North America and Europe. See Note 1, Nature of Operations, in the 2020 Form 10-K for more information about the reportable segments, including the types of products and services from which each reportable segment derives its net sales. Corporate and Other contains earnings or losses on assets and liabilities related to the Company's Benefit Restoration Plan assets and short-term investments, expenses of the Company's corporate headquarters, interest expense related to its long-term debt and intercompany eliminations.

The following is a summary of certain financial information from continuing operations by reportable segment:


		Three Months Ended November 30, 2020										Three Months Ended February 28, 2021
(in thousands)	(in thousands)	North America		Europe			Corporate and Other		Continuing Operations		(in thousands)	North America		Europe		Corporate and Other		Continuing Operations
Net sales	Net sales	$	1,195,013	$	194,596		$	2,194	$	1,391,803	Net sales	$	1,257,486	$	202,066	$	2,718	$	1,462,270
Adjusted EBITDA	Adjusted EBITDA	155,634		14,470			(26,471)		143,633		Adjusted EBITDA	171,612		16,107		(45,986)		141,733

						Six Months Ended February 28, 2021

Total assets at November 30, 2020*		2,871,933		526,023			618,712		4,016,668
(in thousands)											(in thousands)	North America		Europe		Corporate and Other		Continuing Operations
Net sales											Net sales	$	2,452,499	$	396,662	$	4,912	$	2,854,073
Adjusted EBITDA											Adjusted EBITDA	327,246		30,577		(72,457)		285,366
Total assets at February 28, 2021*											Total assets at February 28, 2021*	2,957,534		566,195		540,312		4,064,041

Three Months Ended November 30, 2019
(in thousands) North America Europe Corporate and Other Continuing Operations
Net sales $ 1,216,720 $ 165,389 $ 2,599 $ 1,384,708
Adjusted EBITDA 174,732 11,359 (26,286) 159,805
Total assets at August 31, 2020*
2,862,805 532,850 686,073 4,081,728


	Three Months Ended February 29, 2020
(in thousands)	North America		Europe		Corporate and Other		Continuing Operations
Net sales	$	1,161,283	$	180,079	$	(399)	$	1,340,963
Adjusted EBITDA	152,831		13,451		(28,561)		137,721

	Six Months Ended February 29, 2020
(in thousands)	North America		Europe		Corporate and Other		Continuing Operations
Net sales	$	2,378,003	$	345,468	$	2,200	$	2,725,671
Adjusted EBITDA	327,563		24,810		(54,847)		297,526
Total assets at August 31, 2020*	2,862,805		532,850		686,073		4,081,728

_________________

*Total assets listed in Corporate and Other includes assets from discontinued operations.

The following table presents a reconciliation of earnings from continuing operations to adjusted EBITDA from continuing operations:


		Three Months Ended November 30,				Three Months Ended				Six Months Ended
(in thousands)	(in thousands)	2020		2019			(in thousands)	February 28, 2021		February 29, 2020		February 28, 2021		February 29, 2020
Earnings from continuing operations	Earnings from continuing operations	$	63,911	$	82,755		Earnings from continuing operations	$	66,233	$	63,596	$	130,144	$	146,351
Interest expense	Interest expense	14,259		16,578			Interest expense	14,021		15,888		28,280		32,466
Income taxes	Income taxes	21,593		27,332			Income taxes	20,941		22,845		42,534		50,177
Depreciation and amortization	Depreciation and amortization	41,799		40,941			Depreciation and amortization	41,573		41,389		83,372		82,330
Amortization of acquired unfavorable contract backlog							Amortization of acquired unfavorable contract backlog	(1,509)		(5,997)		(3,032)		(14,328)
Asset impairments	Asset impairments	3,594		530			Asset impairments	474		0		4,068		530
Amortization of acquired unfavorable contract backlog		(1,523)		(8,331)
Adjusted EBITDA from continuing operations	Adjusted EBITDA from continuing operations	$	143,633	$	159,805		Adjusted EBITDA from continuing operations	$	141,733	$	137,721	$	285,366	$	297,526

1719

Disaggregation of Revenue

The following tables display revenue by reportable segment from external customers, disaggregated by major source. The Company believes disaggregating by these categories depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors.

Three Months Ended November 30, 2020
(in thousands) North America Europe Corporate Total
Major product:
Raw material products $ 210,237 $ 2,830 $ 0 $ 213,067
Steel products 457,657 151,455 0 609,112
Downstream products 437,029 34,473 0 471,502
Other 90,090 5,427 2,605 98,122
Net sales-unaffiliated customers 1,195,013 194,185 2,605 1,391,803
Intersegment net sales, eliminated on consolidation 0 411 (411) 0
Net sales $ 1,195,013 $ 194,596 $ 2,194 $ 1,391,803


		Three Months Ended November 30, 2019										Three Months Ended February 28, 2021
(in thousands)	(in thousands)	North America		Europe			Corporate		Total		(in thousands)	North America		Europe		Corporate		Total
Major product:	Major product:										Major product:
Raw material products	Raw material products	$	181,623	$	2,205		$	0	$	183,828	Raw material products	$	255,012	$	4,775	$	0	$	259,787
Steel products	Steel products	441,163		129,744			0		570,907		Steel products	514,201		157,482		0		671,683
Downstream products	Downstream products	499,727		28,200			0		527,927		Downstream products	400,397		33,762		0		434,159
Other	Other	94,207		4,891			2,948		102,046		Other	87,876		5,540		3,225		96,641
Net sales-unaffiliated customers	Net sales-unaffiliated customers	1,216,720		165,040			2,948		1,384,708		Net sales-unaffiliated customers	1,257,486		201,559		3,225		1,462,270
Intersegment net sales, eliminated on consolidation	Intersegment net sales, eliminated on consolidation	0		349			(349)		0		Intersegment net sales, eliminated on consolidation	0		507		(507)		0
Net sales	Net sales	$	1,216,720	$	165,389		$	2,599	$	1,384,708	Net sales	$	1,257,486	$	202,066	$	2,718	$	1,462,270

						Six Months Ended February 28, 2021

(in thousands)											(in thousands)	North America		Europe		Corporate		Total
Major product:											Major product:
Raw material products											Raw material products	$	465,249	$	7,605	$	0	$	472,854
Steel products											Steel products	971,858		308,937		0		1,280,795
Downstream products											Downstream products	837,426		68,235		0		905,661
Other											Other	177,966		10,967		5,830		194,763
Net sales-unaffiliated customers											Net sales-unaffiliated customers	$	2,452,499	$	395,744	$	5,830	$	2,854,073
Intersegment net sales, eliminated on consolidation											Intersegment net sales, eliminated on consolidation	0		918		(918)		0
Net sales											Net sales	$	2,452,499	$	396,662	$	4,912	$	2,854,073

1820


	Three Months Ended February 29, 2020
(in thousands)	North America		Europe		Corporate		Total
Major product:
Raw material products	$	193,312	$	2,408	$	0	$	195,720
Steel products	437,648		147,525		0		585,173
Downstream products	441,765		23,758		0		465,523
Other	88,558		5,965		24		94,547
Net sales-unaffiliated customers	1,161,283		179,656		24		1,340,963
Intersegment net sales, eliminated on consolidation	0		423		(423)		0
Net sales	$	1,161,283	$	180,079	$	(399)	$	1,340,963

	Six Months Ended February 29, 2020
(in thousands)	North America		Europe		Corporate		Total
Major product:
Raw material products	$	374,935	$	4,613	$	0	$	379,548
Steel products	878,811		277,269		0		1,156,080
Downstream products	941,492		51,958		0		993,450
Other	182,765		10,856		2,972		196,593
Net sales-unaffiliated customers	2,378,003		344,696		2,972		2,725,671
Intersegment net sales, eliminated on consolidation	0		772		(772)		0
Net sales	$	2,378,003	$	345,468	$	2,200	$	2,725,671

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

In the following discussion, references to "we," "us," "our" or the "Company" mean Commercial Metals Company ("CMC") and its consolidated subsidiaries, unless the context otherwise requires. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and the notes thereto, which are included in this Quarterly Report on Form 10-Q (the "Form 10-Q"), and our consolidated financial statements and the notes thereto, which are included in our Annual Report on Form 10-K for the year ended August 31, 2020 (the "2020 Form 10-K"). This discussion contains or incorporates by reference "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the Private Securities Litigation Reform Act of 1995. These forward-looking statements are not historical facts, but rather are based on expectations, estimates, assumptions and projections about our industry, business and future financial results, based on information available at the time this Form 10-Q was filed with the Securities and Exchange Commission ("SEC") or, with respect to any document incorporated by reference, available at the time that such document was prepared. Our actual results could differ materially from the results contemplated by these forward-looking statements due to a number of factors, including those identified in the section entitled "Forward-Looking Statements" at the end of Item 2 of this Form 10-Q and in the section entitled "Risk Factors" in Item 1A of the 2020 Form 10-K and this Form 10-Q. We do not undertake any obligation to update, amend or clarify any forward-looking statements to reflect changed assumptions, the occurrence of anticipated or unanticipated events, new information or circumstances or otherwise, except as required by law.

Any reference in this Form 10-Q to the "corresponding period" relates to the ~~three-month~~three or six month period ended ~~November 30, 2019.~~February 29, 2020.

COVID-19 UPDATE

We continue to closely monitor the impact of the COVID-19 pandemic ("COVID-19") on the Company, employees, customers and supply chain. The impact of COVID-19 on the broader economy has impacted the Company as uncertainty in the market has lowered demand and delayed customers in awarding new contracts which has resulted in a decline in our backlog. However, we are not able to specifically quantify the impact related to COVID-19. While COVID-19 may ~~continue to~~ have a negative impact on our results of operations, cash flows and financial position, the current level of uncertainty over the economic and operational impacts of COVID-19, the actions to contain the outbreak or treat its impact, and the timing of distribution of ~~one or more~~ COVID-19 vaccines and the economic response thereto means the related financial impact cannot be reasonably estimated at this time.

CRITICAL ACCOUNTING POLICIES

There have been no material changes to our critical accounting policies as set forth in Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations, included in the 2020 Form 10-K.

RESULTS OF OPERATIONS SUMMARY

Business Overview

As a vertically integrated organization, we manufacture, recycle and fabricate steel and metal products, related materials and services through a network including seven electric arc furnace ("EAF") mini mills, two EAF micro mills, ~~two~~a rerolling ~~mills,~~mill, steel fabrication and processing plants, construction-related product warehouses, and metal recycling facilities in the U.S. and Poland. Our operations are conducted through two reportable segments: North America and Europe.

When considering our results for the period, we evaluate our operating performance by comparing net sales, in the aggregate and for both of our segments, in the current period to net sales in the corresponding period. In doing so, we focus on changes in average selling price per ton and tons shipped for each of our product categories as these are the two variables that typically have the greatest impact on our results of operations. We group our products into three categories: raw materials, steel products and downstream products. Raw materials include ferrous and nonferrous scrap, steel products include rebar, merchant and other steel products, such as billets and wire rod, and downstream products include fabricated rebar and steel fence post.

We use adjusted EBITDA from continuing operations to compare and evaluate the financial performance of our segments. Adjusted EBITDA is the sum of the Company's earnings from continuing operations before interest expense, income taxes, depreciation and amortization and impairment expense. Although there are many factors that can impact a segment’s adjusted EBITDA and, therefore, our overall earnings, changes in metal margin of our steel products and downstream products ~~period-~~

~~over-period~~period-over-period is a consistent area of focus for our Company and industry. Metal margin is an important metric used by

management to monitor the results of our vertically integrated organization. For our steel products, metal margin is the difference between the average selling price per ton of rebar, merchant and other steel products and the cost of ferrous scrap per ton utilized by our steel mills to produce these products. An increase or decrease in input costs can impact profitability of these products when there is no corresponding change in selling prices due to competitive pressures on prices. The metal margin for our downstream products is the difference between the average selling price per ton of fabricated rebar and steel fence post products and the cost of material utilized by our fabrication facilities to produce these products. The majority of our downstream products selling prices per ton are fixed at the beginning of a project and these projects last one to two years on average. Because the selling price generally remains fixed over the life of a project, changes in input costs over the life of the project can significantly impact profitability.

Financial Results Overview

The following discussion of our results of operations is based on our continuing operations and excludes any results of our discontinued operations.


		Three Months Ended November 30,				Three Months Ended				Six Months Ended
(in thousands, except per share data)	(in thousands, except per share data)	2020		2019			(in thousands, except per share data)	February 28, 2021		February 29, 2020		February 28, 2021		February 29, 2020
Net sales	Net sales	$	1,391,803	$	1,384,708		Net sales	$	1,462,270	$	1,340,963	$	2,854,073	$	2,725,671
Earnings from continuing operations	Earnings from continuing operations	63,911		82,755			Earnings from continuing operations	66,233		63,596		130,144		146,351
Diluted earnings per share	Diluted earnings per share	$	0.53	$	0.69		Diluted earnings per share	$	0.54	$	0.53	$	1.07	$	1.22

Net sales for the three and six months ended ~~November 30, 2020~~February 28, 2021 increased ~~$7.1~~$121.3 million, or 1%9%, and $128.4 million, or 5%, respectively, compared to the ~~three months ended November 30, 2019. Net sales~~corresponding periods. The increases were primarily due to year-over-year increases in raw materials average selling prices in our North America segment ~~decreased~~and in ~~the three months ended November 30, 2020, as compared to the corresponding period, primarily due to~~ ~~a year-over-year~~ ~~decline~~ ~~in downstream~~steel products average selling ~~prices. This decrease was offset by an increase~~prices in n~~et sales in~~both of our ~~Europe segment due to higher shipments of steel products for the three months ended November 30, 2020 compared to the corresponding period.~~segments.

Earnings from continuing operations for the three and six months ended ~~November 30, 2020~~February 28, 2021 increased $2.6 million and decreased ~~by $18.8~~$16.2 million, ~~or 23%,~~ respectively, compared to the corresponding periods. Earnings in the three months ended ~~November 30, 2019. Earnings decreased year-over-year primarily due to~~February 28, 2021 were relatively flat while earnings in the six months ended February 28, 2021 were impacted by compressed metal margins in ~~both segments~~the first quarter of 2021 as a result of rising raw material average selling prices while steel ~~product~~products and downstream products average selling prices decreased or remained flat. In the second quarter of 2021, steel products average selling prices, and therefore metal margins, began to increase to offset the higher raw material prices.

Selling, General and Administrative Expenses

Selling, general and administrative expenses ~~increased $2.6 million~~were relatively flat for the three and six months ended ~~November 30, 2020~~February 28, 2021 compared to the corresponding ~~period. The year-over-year increase in expense was due to gains of~~ periods~~$6.7 million~~ ~~on fixed asset disposals in the three months ended~~ ~~November 30, 2019, while we did not have any gains on fixed asset disposals in the three months ended November 30, 2020. This was partially offset by a~~ ~~$2.6 million~~ ~~year-over-year decrease in employee-related expenses and a~~ ~~$2.0 million~~ ~~year-over-year decrease in travel related expenses primarily due to COVID-19, which has limited travel.~~.

Interest Expense

Interest expense for the three and six months ended ~~November 30, 2020~~ February 28, 2021 decreased ~~$2.3~~$1.9 million and $4.2 million, respectively, compared to the corresponding ~~period.~~ periods. The ~~year-over-year decrease was~~decreases were driven by a reduction inin long-term debt, primarily due to the early repayment of the Term Loan ~~(as~~(as defined in Note 10, Credit Arrangements, to the consolidated financial statements in the 2020 Form 10-K) in the year ended August 31, 2020.

Income Taxes

The effective income tax rate from continuing operations ~~remained relatively flat at 25.3%~~ for the three and six months ended ~~November 30, 2020,~~February 28, 2021 was 24.0% and 24.6%, respectively, compared with ~~24.8%~~26.4% and 25.5% in the corresponding ~~period.~~periods.

SEGMENT OPERATING DATA

Unless otherwise indicated, all dollar amounts below are from continuing operations and calculated before income taxes. See Note 14, Business ~~Segments.~~Segments to our condensed consolidated financial statements for more information. The operational data presented in the tables below is calculated using averages and, therefore, it is not meaningful to quantify the effect that any individual component had on the segment's net sales or adjusted EBITDA.

North America


		Three Months Ended November 30,				Three Months Ended				Six Months Ended
(in thousands)	(in thousands)	2020		2019			(in thousands)	February 28, 2021		February 29, 2020		February 28, 2021		February 29, 2020
Net sales	Net sales	$	1,195,013	$	1,216,720		Net sales	$	1,257,486	$	1,161,283	$	2,452,499	$	2,378,003
Adjusted EBITDA	Adjusted EBITDA	155,634		174,732			Adjusted EBITDA	171,612		152,831		327,246		327,563

External tons shipped (in thousands)	External tons shipped (in thousands)						External tons shipped (in thousands)
Raw materials	Raw materials	330		320			Raw materials	302		321		632		641
Rebar	Rebar	486		475			Rebar	472		461		958		936
Merchant and other	Merchant and other	264		236			Merchant and other	268		238		532		474
Steel products	Steel products	750		711			Steel products	740		699		1,490		1,410
Downstream products	Downstream products	371		413			Downstream products	343		366		714		779

Average selling price (per ton)	Average selling price (per ton)						Average selling price (per ton)
Steel products	Steel products	$	612	$	626		Steel products	$	695	$	625	$	653	$	625
Downstream products	Downstream products	934		976			Downstream products	929		984		931		979

Cost of ferrous scrap utilized per ton	Cost of ferrous scrap utilized per ton	$	266	$	226		Cost of ferrous scrap utilized per ton	$	344	$	256	$	304	$	238
Steel products metal margin per ton	Steel products metal margin per ton	346		400			Steel products metal margin per ton	351		369		349		387

Net sales for the three and six months ended ~~months ended November 30, 2020~~ ~~decreased $21.7~~February 28, 2021 increased $96.2 million, or 2%8%, and $74.5 million, or 3%, respectively, compared to the ~~three~~ ~~months ended November 30, 2019~~corresponding periods. ~~The~~The year-over-year ~~decrease~~increases in net sales ~~was~~ were primarily due ~~in part,~~ to ~~a 42 thousand ton decrease in downstream products shipped, as well as $14~~$251 and $162 per ton increases in raw materials average selling prices and ~~$42~~$70 and $28 per ton ~~decreases~~increases in steel ~~and downstream~~ products average selling prices in the three and six months ended February 28, 2021, respectively, compared to the corresponding ~~period. These decreases were primarily driven by uncertainty~~periods. Heightened demand from steel producers resulted in ~~the market due to COVID-19~~higher raw materials average selling prices which ~~has lowered demand and impacted~~drove increases in steel products average selling prices. The ~~decline~~increases in net sales as a result of these ~~decreases was~~higher average selling prices were partially offset by a$55 and $48 per ton year-over-year ~~increase~~decreases in ~~raw materials~~downstream products average selling prices ~~as demand from steel producers has increased.~~in the three and six months ended February 28, 2021, respectively. Net sales ~~for the three months ended November 30, 2020 and 2019~~ included amortization benefit of $1.5 million and ~~$8.3~~$3.0 millionfor the three and six months endedFebruary 28, 2021, respectively, and $6.0 million and $14.3 million for the corresponding periods, respectively, related to the acquired unfavorable contract backlog.

Adjusted EBITDA for the three months ended ~~November 30, 2020~~ ~~decreased $19.1~~February 28, 2021 increased $18.8 million and was flat for the six months ended February 28, 2021, compared to the corresponding periods. The year-over-year increase in adjusted EBITDA in the three months ended ~~November 30, 2019. The year-over-year~~ ~~decrease in adjusted EBITDA~~February 28, 2021 was due in part to ~~metal margin compression in steel and downstream products. The metal margin compression~~a 41 thousand ton increase in steel products ~~was due~~shipped and significant expansion in raw materials margin. Further, while our steel products metal margin per ton for the three months ended February 28, 2021 contracted $18 per ton compared to ~~increased~~the corresponding period, this operating statistic does not fully reflect the margin achieved throughout the period. In times of sharply rising raw material costs ~~while~~and steel products average selling prices, ~~declined. Downstream products metal margin also decreased, as input costs did not decrease as much as downstream products average~~we benefit from selling ~~prices.~~ lower cost inventory produced in prior periods. A~~Adjusted~~djusted EBITDA did not include the $1.5 million or ~~$8.3~~$3.0 million benefit of the amortization of the acquired unfavorable contract backlog ~~in the~~ reserve described above~~three months ended November 30, 2020 or 2019, respectively.~~. Adjusted EBITDA included non-cash stock compensation expense of ~~$3.3~~$3.8 million and ~~$2.9~~$7.1 million infor the three and six months ended ~~months ended November 30, 2020~~February 28, 2021, respectively, and ~~2019, respectively.~~$2.7 million and $5.6 million for the corresponding periods.

2124

Europe


		Three Months Ended November 30,				Three Months Ended				Six Months Ended
(in thousands)	(in thousands)	2020		2019			(in thousands)	February 28, 2021		February 29, 2020		February 28, 2021		February 29, 2020
Net sales	Net sales	$	194,596	$	165,389		Net sales	$	202,066	$	180,079	$	396,662	$	345,468
Adjusted EBITDA	Adjusted EBITDA	14,470		11,359			Adjusted EBITDA	16,107		13,451		30,577		24,810

External tons shipped (in thousands)	External tons shipped (in thousands)						External tons shipped (in thousands)
Rebar	Rebar	128		122			Rebar	78		145		206		267
Merchant and other	Merchant and other	269		216			Merchant and other	275		235		544		451
Steel products	Steel products	397		338			Steel products	353		380		750		718

Average selling price (per ton)	Average selling price (per ton)						Average selling price (per ton)
Steel products	Steel products	$	461	$	461		Steel products	$	532	$	449	$	495	$	455

Cost of ferrous scrap utilized per ton	Cost of ferrous scrap utilized per ton	$	262	$	244		Cost of ferrous scrap utilized per ton	$	328	$	251	$	296	$	248
Steel products metal margin per ton	Steel products metal margin per ton	199		217			Steel products metal margin per ton	204		198		199		207

Net sales for the three and six months ended ~~months ended~~ ~~November 30, 2020~~February 28, 2021 increased ~~$29.2~~$22.0 million, or ~~18%~~12%, and $51.2 million, or 15%, respectively, compared to the corresponding periods. For the three months ended ~~November 30, 2019.~~ ~~The~~February 28, 2021, the year-over-year increase in net sales wa~~s primarily~~was driven by a ~~59 thousand~~$83 per ton increase in steel ~~product~~products average selling prices, partially offset by a 27 thousand ton decrease in steel products shipped. The year-to-date increase in net sales was driven by a 32 thousand ton year-over-year increase in steel products shipments, as demand ~~has~~ increased in the first quarter of 2021 due to a resilient Polish construction sector and an upturn in Central European manufacturing ~~activity.~~activity, coupled with a $40 per ton year-over-year increase in steel products average selling prices. Net sales for the three and six months ended February 28, 2021 were also impacted by a favorable foreign currency translation ~~adjustment~~adjustments of ~~$4.7~~$8.3 million and $13.0 million, respectively, due to the decrease in the average value of the U.S. dollar relative to the Polish ~~zloty in the~~ ~~three~~ ~~months ended November 30, 2020 compared to the corresponding period.~~zloty.

Adjusted EBITDA infor the three and six months endedFebruary 28, 2021 increased $2.7 million and $5.8 million, respectively, as compared to the corresponding periods. For the three months ended ~~November 30, 2020~~ ~~increased $3.1 million compared to~~February 28, 2021, the~~three~~ ~~months ended November 30, 2019, driven by higher shipments as discussed above. The~~ year-over-year increase in ~~shipments~~adjusted EBITDA was ~~offset by an $18~~due, in part, to a $6 per ton ~~or 8%, year-over-year compression~~increase in steel products metal margin ascompared to the ~~average~~corresponding period. Similar to the North America segment, we benefited from selling ~~price~~lower cost inventory during the majority of the three month period ended February 28, 2021 in an environment of rising prices, which contributed to the increase in adjusted EBITDA compared to the corresponding period. For the six months ended February 28, 2021, the increase in adjusted EBITDA was primarily due to a 32 thousand ton increase in steel products ~~has not increased~~sold in ~~line with~~comparison to the ~~cost of ferrous scrap utilized.~~corresponding period. The impact of foreign currency translation to adjusted EBITDA in the three and six months ended ~~November 30, 2020~~February 28, 2021 was immaterial. Adjusted EBITDA included non-cash stock compensation expense of $0.7 million and ~~$0.5~~$1.4 million in for the three and six months ended ~~November 30, 2020~~February 28, 2021, respectively, and ~~2019, respectively.~~$0.3 million and $0.8 million for the corresponding periods.

Corporate and Other

Corporate and Other reported adjusted EBITDA loss of ~~$26.5~~$46.0 million and $72.5 million for the three and six months ended ~~November 30, 2020~~February 28, 2021, respectively, as compared to adjusted EBITDA loss of ~~$26.3~~$28.6 million and $54.8 million in the corresponding ~~period.~~periods. The primary reason for the increases in adjusted EBITDA loss year-over-year was the $16.8 million loss on debt extinguishment incurred in the three and six months endedFebruary 28, 2021, with no such costs in the corresponding periods. Adjusted EBITDA included non-cash stock compensation expense of ~~$5.1~~$8.2 million and ~~$4.8~~$13.3 million for the three and six months ended ~~November 30, 2020~~February 28, 2021, respectively, and ~~2019, respectively.~~$4.6 million and $9.4 million for the corresponding periods, respectively.

LIQUIDITY AND CAPITAL RESOURCES

Sources of Liquidity and Capital Resources

Our cash flows from operating activities result primarily from the sale of steel, nonferrous metals and related products. We have a diverse and generally stable customer base, and regularly maintain a substantial amount of accounts receivable. We record allowances for the accounts receivable we estimate will not be collected based on market conditions, customers' financial condition, and other factors. Historically, these allowances have not been material. We use credit insurance internationally to mitigate the risk of customer insolvency. We estimate that the amount of credit-insured receivables (and those covered by export letters of credit) was approximately ~~13%~~14% of total trade receivables at ~~November 30, 2020.~~February 28, 2021.

From time to time, we use futures or forward contracts to mitigate the risks from fluctuations in commodity prices, foreign currency exchange rates, interest rates and natural gas, electricity and other energy prices. See Note 9, Derivatives, for further information.

The table below reflects our sources, facilities and available liquidity at ~~November 30, 2020.~~February 28, 2021. See Note 8, Credit Arrangements, for additional information.


(in thousands)	(in thousands)	Total Facility		Availability		(in thousands)	Total Facility		Availability
Cash and cash equivalents	Cash and cash equivalents	$	465,162	$	465,162	Cash and cash equivalents	$	367,347	$	367,347
Notes due from 2023 to 2027		980,000		*
Notes due from 2023 to 2031						Notes due from 2023 to 2031	930,000		*
Revolver	Revolver	350,000		346,958		Revolver	350,000		346,958
U.S. accounts receivable facility	U.S. accounts receivable facility	200,000		179,436		U.S. accounts receivable facility	200,000		193,291
Poland credit facilities	Poland credit facilities	73,230		72,419		Poland credit facilities	73,459		72,601
Poland accounts receivable facility	Poland accounts receivable facility	58,584		53,258		Poland accounts receivable facility	58,767		53,425
Poland Term Loan	Poland Term Loan	66,573		26,629		Poland Term Loan	66,781		26,712

_________________

* We believe we have access to additional financing and refinancing, if needed.

Cash Flows

Operating Activities

Net cash flows ~~used by~~from operating activities were ~~$12.1~~$1.2 million for the ~~three~~six months ended ~~November 30, 2020~~February 28, 2021 compared to ~~$146.4~~$253.4 million ~~of net cash flows from operating activities~~ for the ~~three~~six months ended ~~November 30, 2019.~~February 29, 2020. We had a ~~$19.3~~$16.7 million year-over-year decrease in net earnings and a ~~$140.6~~$222.9 million year-over-year increase in cash used by operating assets and liabilities ("working capital"). The increase in cash used by working capital was primarily due to increases in inventory ~~volumes and pricing~~value in the ~~three~~six months ended ~~November 30, 2020~~February 28, 2021 compared to ~~decreases in inventory volumes and pricing in~~ the corresponding period, coupled with ~~a $125.9 million decrease~~an increase in accounts ~~payable, accrued expenses and other payables~~receivable which reflects the higher average selling prices in the ~~three~~six months ended ~~November 30, 2020~~February 28, 2021, compared to a ~~$101.7 million~~ decrease in accounts receivable in the corresponding period. The higher decrease in accounts payable, accrued expenses and other payables was primarily due to the payment of the working capital adjustment related to the fiscal 2019 acquisition from Gerdau S.A. made in the three months ended November 30, 2020. For continuing operations, operating working capital days decreased ~~seven~~ten days year-over-year.

Investing Activities

Net cash flows used by investing activities were ~~$36.5~~$67.4 million and ~~$35.1~~$91.5 million for the ~~three~~six months ended ~~November 30,~~February 28, 2021 and February 29, 2020, ~~and 2019,~~ respectively. ~~While~~The $24.1 million decrease in net cash flows used by investing activities was due to an $8.9 million year-over-year decline in capital expenditures, ~~decreased $8.4~~a $9.9 million ~~year-over-year, the decrease~~year-over-year decline in ~~expenditures was offset by an~~ ~~$8.9~~acquisitions and a $6.3 million year-over-year ~~decrease~~increase in cash proceeds from the sale of property, plant and equipment and ~~insurance~~other in the ~~three~~six months ended ~~November 30, 2020~~February 28, 2021 compared to the corresponding period.

We estimate that our 2021 capital spending will range from $200 million to $225 million. We regularly assess our capital spending based on current and expected results and the amount is subject to change.

Financing Activities

Net cash flows used by financing activities were ~~$28.6~~$109.1 million and ~~$79.4~~$122.1 million for the ~~three~~six months ended ~~November 30,~~February 28, 2021 and February 29, 2020, ~~and 2019,~~ respectively. We had net debt repayments of ~~$3.8~~$61.5 million in the ~~three~~six months ended ~~November 30, 2020,~~February 28, 2021, compared to net debt repayments of ~~$57.3~~$91.2 million in the corresponding period. In addition, we paid $13.1 million of debt extinguishment costs related to our early retirement of the 2026 Notes in the six months ended February 28, 2021.

COVID-19 has not had a material impact on our operations to date, and our cash and cash equivalents position remains strong at ~~$465.2~~$367.3 million as of ~~November 30, 2020.~~February 28, 2021. We anticipate our current cash balances, cash flows from operations and our available sources of liquidity will be sufficient to meet our cash requirements for the next twelve months. However, as the impact of COVID-19 on the economy and our operations evolves, we will continue to assess our liquidity needs. In the event of a sustained market deterioration, we may need additional liquidity, which would require us to evaluate available alternatives and take appropriate actions.

CONTRACTUAL OBLIGATIONS

Our contractual obligations at ~~November 30, 2020 increased~~February 28, 2021 decreased by approximately ~~$16.9~~$20.5 million from August 31, 2020, primarily due to a decrease in long-term debt and interest payable, offset by an increase in purchase ~~obligations, partially offset by a decrease in interest payable. Our~~obligations. Our estimated contractual obligations for the twelve months ending ~~November 30, 2021~~February 28, 2022 are approximately ~~$461.2~~$512.0 million and primarily consist of expenditures incurred in connection with normal business operations.

Other Commercial Commitments

We maintain stand-by letters of credit to provide support for certain transactions that governmental agencies, our insurance providers and suppliers request. At ~~November 30, 2020,~~February 28, 2021, we had committed ~~$23.9~~$23.7 million under these arrangements, of which $3.0 million reduced availability under the Revolver.

OFF-BALANCE SHEET ARRANGEMENTS

We have no off-balance sheet arrangements that may have a current or future material effect on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

CONTINGENCIES

In the ordinary course of conducting our business, we become involved in litigation, administrative proceedings and governmental investigations, including environmental matters. We may incur settlements, fines, penalties or judgments because of some of these matters. Liabilities and costs associated with litigation-related loss contingencies require estimates and judgments based on our knowledge of the facts and circumstances surrounding each matter and the advice of our legal counsel. We record liabilities for litigation-related losses when a loss is probable and we can reasonably estimate the amount of the loss. We evaluate the measurement of recorded liabilities each reporting period based on the current facts and circumstances specific to each matter. The ultimate losses incurred upon final resolution of litigation-related loss contingencies may differ materially from the estimated liability recorded at a particular balance sheet date. Changes in estimates are recorded in earnings in the period in which such changes occur. We do not believe that any currently pending legal proceedings to which we are a party will have a material adverse effect, individually or in the aggregate, on our results of operations, cash flows or financial condition. See Note 13, Commitments and Contingencies, for more information.

FORWARD-LOOKING STATEMENTS

This Form 10-Q contains or incorporates by reference a number of "forward-looking statements" within the meaning of the federal securities laws with respect to general economic conditions, key macro-economic drivers that impact our business, the effects of ongoing trade actions, the effects of continued pressure on the liquidity of our customers, potential synergies and organic growth provided by acquisitions and strategic investments, demand for our products, metal margins, the effect of COVID-19 and related governmental and economic responses thereto, the ability to operate our steel mills at full capacity, future supplies of raw materials and energy for our operations, share repurchases, legal proceedings, the undistributed earnings of our non-U.S. subsidiaries, U.S. non-residential construction activity, international trade, capital expenditures, our liquidity and our ability to satisfy future liquidity requirements, estimated contractual obligations and our expectations or beliefs concerning future events. These forward-looking statements can generally be identified by phrases such as we or our management "expects," "anticipates," "believes," "estimates," "intends," "plans to," "ought," "could," "will," "should," "likely," "appears," "projects," "forecasts," "outlook" or other similar words or phrases. There are inherent risks and uncertainties in any forward-looking statements. We caution readers not to place undue reliance on any forward-looking statements.

Our forward-looking statements are based on management's expectations and beliefs as of the time this Form 10-Q is filed with the SEC or, with respect to any document incorporated by reference, as of the time such document was prepared. Although we believe that our expectations are reasonable, we can give no assurance that these expectations will prove to have been correct, and actual results may vary materially. Except as required by law, we undertake no obligation to update, amend or clarify any forward-looking statements to reflect changed assumptions, the occurrence of anticipated or unanticipated events, new information or circumstances or any other changes. Important factors that could cause actual results to differ materially from our expectations include those described in Part I, Item 1A, Risk Factors, of the 2020 Form 10-K, as well as the following:

•changes in economic conditions which affect demand for our products or construction activity generally, and the impact of such changes on the highly cyclical steel industry;

•rapid and significant changes in the price of metals, potentially impairing our inventory values due to declines in commodity prices or reducing the profitability of our downstream contracts due to rising commodity pricing;

•impacts from COVID-19 on the economy, demand for our products and on our operations, including the responses of governmental authorities to contain COVID-19 and the impact from the distribution of various COVID-19 vaccines;

•excess capacity in our industry, particularly in China, and product availability from competing steel mills and other steel suppliers including import quantities and pricing;

•compliance with and changes in ~~environmental~~existing and future government laws, regulations and ~~regulations,~~other legal requirements and judicial decisions that govern our business, including increased ~~regulation~~environmental regulations associated with climate change and greenhouse gas emissions;

•involvement in various environmental matters that may result in fines, penalties or judgments;

•potential limitations in our or our customers' abilities to access credit and non-compliance by our customers with our contracts;

•activity in repurchasing shares of our common stock under our repurchase program;

•financial covenants and restrictions on the operation of our business contained in agreements governing our debt;

•our ability to successfully identify, consummate and integrate acquisitions, and the effects that acquisitions may have on our financial leverage;

•risks associated with acquisitions generally, such as the inability to obtain, or delays in obtaining, required approvals under applicable antitrust legislation and other regulatory and third party consents and approvals;

•operating and start-up risks, as well as market risks associated with the commissioning of new projects could prevent us from realizing anticipated benefits and could result in a loss of all or a substantial part of our investment;

•lower than expected future levels of revenues and higher than expected future costs;

•failure or inability to implement growth strategies in a timely manner;

•impact of goodwill impairment charges;

•impact of long-lived asset impairment charges;

•currency fluctuations;

•global factors, such as trade measures, military conflicts and political uncertainties, including the impact of the 2020 U.S. election on current trade regulations, such as Section 232 trade tariffs, tax legislation and other regulations which might adversely impact our business;

•availability and pricing of electricity, electrodes and natural gas for mill operations;

•ability to hire and retain key executives and other employees;

•competition from other materials or from competitors that have a lower cost structure or access to greater financial resources;

•information technology interruptions and breaches in security;

•ability to make necessary capital expenditures;

•availability and pricing of raw materials and other items over which we exert little influence, including scrap metal, energy and insurance;

•unexpected equipment failures;

•losses or limited potential gains due to hedging transactions;

•litigation claims and settlements, court decisions, regulatory rulings and legal compliance risks;

•risk of injury or death to employees, customers or other visitors to our operations; and

•civil unrest, protests and ~~riots;~~

•~~new and clarifying guidance with regard to interpretation of certain provisions of the Tax Cuts and Jobs Act that could impact our assessment; and~~

•~~increased costs related to health care reform legislation.~~riots.

You should refer to the “Risk Factors” disclosed in our periodic and current reports filed with the SEC for specific risks which would cause actual results to be significantly different from those expressed or implied by these forward-looking statements. It is not possible to identify all of the risks, uncertainties and other factors that may affect future results. In light of these risks and uncertainties, the forward-looking events and circumstances discussed herein may not occur and actual results could differ materially from those anticipated or implied in the forward-looking statements. Accordingly, readers of this Form 10-Q are cautioned not to place undue reliance on the forward-looking statements.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There were no material changes to the information set forth in Item 7A, Quantitative and Qualitative Disclosures about Market Risk, included in the 2020 Form 10-K.

ITEM 4. CONTROLS AND PROCEDURES

The term "disclosure controls and procedures" is defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act. This term refers to the controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within required time periods, and includes controls and procedures designed to ensure that such information is accumulated and communicated to the company's management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure. Our Chief Executive Officer and our Chief Financial Officer have evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Form 10-Q, and they have concluded that as of that date, our disclosure controls and procedures were effective.

There were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) that occurred during our quarter ended ~~November 30, 2020~~February 28, 2021 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

~~The Company is a defendant~~For information regarding our legal proceedings, refer to “Legal and Environmental Matters” in ~~lawsuits associated with~~Note 13 to our condensed consolidated financial statements included in Part I, Item 1, Financial Statements, of this Form 10-Q.

With respect to administrative or judicial proceedings arising under any Federal, State, or local provisions that have been enacted or adopted regulating the ~~normal conduct~~discharge of ~~its businesses~~materials into the environment or primarily for the purpose of protecting the environment, we have determined that we will disclose any such proceeding if we reasonably believe such proceeding will result in monetary sanctions, exclusive of interest and ~~operations. It is not possible to predict the outcome~~costs, of ~~the pending actions, and as with any litigation, it is possible that these actions could be decided unfavorably to the Company.~~at least $1.0 million. We believe that ~~there~~this threshold is reasonably designed to result in disclosure of environmental proceedings that are ~~meritorious defenses~~material to ~~these actions and that these actions will not have a material adverse effect upon~~ our ~~results of operations, cash flows~~business or financial ~~condition, and where appropriate, these actions are being vigorously contested.~~

We are the subject of civil actions, or have received notices from the U.S. Environmental Protection Agency ("EPA") or state agencies with similar responsibility, that we and numerous other parties are considered a potentially responsible party ("PRP") and may be obligated under the Comprehensive Environmental Response, Compensation and Liability Act of 1980 ("CERCLA"), or similar state statutes,condition. Applying this threshold, there were no environmental matters to ~~pay~~disclose for the cost of remedial investigation, feasibility studies and ultimately remediation to correct alleged releases of hazardous substances at eleven locations. We have accrued reserves for remediation or other expenses at the following locations, none of which involve real estate we ever owned or upon which we ever conducted operations: the Sapp Battery Site in Cottondale, Florida, the Interstate Lead Company Site in Leeds, Alabama, the R&H Oil Site in San Antonio, Texas, the SoGreen/Parramore Site in Tifton, Georgia, the Jensen Drive site in Houston, Texas, the Chemetco site in Hartford, Illinois and the Ward Transformer site in Raleigh, North Carolina. We may contest our designation as a PRP with regard to certain sites, while at other sites we are participating with other named PRPs in agreements or negotiations that have resulted or that we expect will result in agreements to remediate the sites. During 2010, we acquired a 70% interest in the real property at Jensen Drive as part of the remediation of that site. We have periodically received information requests from government environmental agencies with regard to other sites that are apparently under consideration for designation as listed sites under CERCLA or similar state statutes. Often we do not receive any further communication with regard to these sites, and as of the date of this ~~Form 10-Q, we do not know if any of these inquiries will ultimately result in a demand for payment from us.~~

The EPA notified us and other alleged PRPs that under Section 106 of CERCLA, we and the other PRPs could be subject to a maximum fine of $25,000 per day and the imposition of treble damages if we and the other PRPs refuse to clean up the Peak Oil, Sapp Battery and SoGreen/Parramore sites as ordered by the EPA. We are presently participating in PRP organizations at these sites, which are paying for certain site remediation expenses. We do not believe that the EPA will pursue any fines against us if we continue to participate in the PRP groups or if we have adequate defenses to the EPA's imposition of fines against us in these matters.

We believe that adequate provisions have been made in the financial statements for the potential impact of any loss in connection with the above-described legal proceedings and environmental matters. Management believes that the outcome of the proceedings mentioned, and other miscellaneous litigation and proceedings now pending, will not have a material adverse effect on our business, results of operations or financial condition.period.

ITEM 1A. RISK FACTORS

~~There have been~~Except as set forth below, there were no material changes to the risk factors previously disclosed in Part I, Item 1A, Risk Factors, of the 2020 Form ~~10-K.~~10-K and Part II, Item 1A, Risk Factors, of the Quarterly Report on Form 10-Q for the period ended November 30, 2020:

Operating and start-up risks, as well as market risks associated with the commissioning of new projects could prevent us from realizing anticipated benefits and could result in a loss of all or a substantial part of our investment.

Although we have successfully commissioned and operated similar technologies, there are some new technological, as well as operational, market and start-up risks associated with the construction and start-up of our third rolling mill in Poland and third micro mill to be located in Mesa, Arizona. We believe these facilities should be capable of consistently producing high-quality products, and in sufficient quantities and at a cost that will compare favorably with other similar steel manufacturing facilities; however, there can be no assurance that these expectations will be achieved. If we encounter cost overruns, system or process difficulties during or after start-up or quality control restrictions, our capital costs could increase materially, the expected benefits from the development of these facilities could be diminished or lost, and we could lose all or a substantial portion of our investment. We could also encounter commodity market risk if, during a sustained period, the cost to manufacture is greater than projected.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

There were no purchases of equity securities registered by the Company pursuant to Section 12 of the Exchange Act during the quarter ended ~~November 30, 2020.~~February 28, 2021.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

Not applicable.

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ITEM 6. EXHIBITS

3.1(a)

Restated Certificate of Incorporation dated March 2, 1989 (filed as Exhibit 3(i) to Commercial Metals Company's Annual Report on Form 10-K for the fiscal year ended August 31, 2009 and incorporated herein by reference).

3.1(b)

Certificate of Amendment of Restated Certificate of Incorporation dated February 1, 1994 (filed as Exhibit 3(i)(a) to Commercial Metals Company's Annual Report on Form 10-K for the fiscal year ended August 31, 2009 and incorporated herein by reference).

3.1(c)

Certificate of Amendment of Restated Certificate of Incorporation dated February 17, 1995 (filed as Exhibit 3(i)(b) to Commercial Metals Company's Annual Report on Form 10-K for the fiscal year ended August 31, 2009 and incorporated herein by reference).

3.1(d)

Certificate of Amendment of Restated Certificate of Incorporation dated January 30, 2004 (filed as Exhibit 3(i)(d) to Commercial Metals Company's Quarterly Report on Form 10-Q for the quarter ended February 29, 2004 and incorporated herein by reference).

3.1(e)

Certificate of Amendment of Restated Certificate of Incorporation dated January 26, 2006 (filed as Exhibit 3(i) to Commercial Metals Company's Quarterly Report on Form 10-Q for the quarter ended February 28, 2006 and incorporated herein by reference).

3.1(f)

Certificate of Designation, Preferences and Rights of Series A Preferred Stock (filed as Exhibit 2 to Commercial Metals Company's Form 8-A filed August 3, 1999 and incorporated herein by reference).

3.2

Fourth Amended and Restated Bylaws (filed as Exhibit 3.1 to Commercial Metals Company's Current Report on Form 8-K dated September 23, 2019 and incorporated herein by reference).

4.1

Fourth Supplemental Indenture, dated February 2, 2021, by and among Commercial Metals Company and U.S. Bank National Association, as trustee (filed as Exhibit 4.1 to Commercial Metals Company's Current Report on Form 8-K dated February 2, 2021 and incorporated herein by reference).

4.2

Form of 3.875% Senior Note due 2031 (filed as Exhibit 4.2 to Commercial Metals Company's Current Report on Form 8-K dated February 2, 2021 and incorporated herein by reference).

31.1

Certification of Barbara R. Smith, President and Chief Executive Officer of Commercial Metals Company, pursuant to Section 302 to the Sarbanes-Oxley Act of 2002 (filed herewith).

31.2

Certification of Paul J. Lawrence, Vice President and Chief Financial Officer of Commercial Metals Company, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).

32.1

Certification of Barbara R. Smith, President and Chief Executive Officer of Commercial Metals Company, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).

32.2

Certification of Paul J. Lawrence, Vice President and Chief Financial Officer of Commercial Metals Company, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).

101.INS

Inline XBRL Instance Document (filed herewith).

101.SCH

Inline XBRL Taxonomy Extension Schema Document (filed herewith).

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document (filed herewith).

101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase Document (filed herewith).

101.LAB

Inline XBRL Taxonomy Extension Label Linkbase Document (filed herewith).

101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document (filed herewith).

104

Cover Page Interactive Data File

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


			COMMERCIAL METALS COMPANY

~~January 11,~~March 24, 2021			/s/ Paul J. Lawrence
			Paul J. Lawrence
			Vice President and Chief Financial Officer
			(Duly authorized officer and principal financial officer of the registrant)

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