Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Nov. 30, 2014 | Jan. 05, 2015 | |
Entity Information [Line Items] | ||
Trading Symbol | CMC | |
Entity Registrant Name | COMMERCIAL METALS CO | |
Entity Central Index Key | 22444 | |
Document Type | 10-Q | |
Document Period End Date | 30-Nov-14 | |
Amendment Flag | FALSE | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | -23 | |
Entity Tax Identification Number | 750725338 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Current Reporting Status | Yes | |
Entity Common Stock, Shares Outstanding | 117,423,358 |
CONSOLIDATED_STATEMENTS_OF_EAR
CONSOLIDATED STATEMENTS OF EARNINGS (USD $) | 3 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Nov. 30, 2014 | Nov. 30, 2013 |
Net sales | $1,679,990 | $1,617,075 |
Costs and expenses: | ||
Cost of goods sold | 1,493,769 | 1,440,202 |
Selling, general and administrative expenses | 113,383 | 108,674 |
Interest expense | 19,057 | 19,408 |
Total costs and expenses | 1,626,209 | 1,568,284 |
Earnings from continuing operations before income taxes | 53,781 | 48,791 |
Income taxes | 15,447 | 15,091 |
Earnings from continuing operations | 38,334 | 33,700 |
Earnings (loss) from discontinued operations before income taxes | -2,102 | 21,106 |
Income taxes (benefit) | -21 | 8,887 |
Earnings (loss) from discontinued operations | -2,081 | 12,219 |
Net earnings | 36,253 | 45,919 |
Net earnings attributable to CMC | $36,253 | $45,919 |
Basic earnings (loss) per share attributable to CMC: | ||
Earnings from continuing operations | $0.33 | $0.29 |
Earnings (loss) from discontinued operations | ($0.02) | $0.10 |
Net earnings | $0.31 | $0.39 |
Diluted earnings (loss) per share attributable to CMC: | ||
Earnings from continuing operations | $0.32 | $0.29 |
Earnings (loss) from discontinued operations | ($0.02) | $0.10 |
Net earnings | $0.30 | $0.39 |
Cash dividends per share | $0.12 | $0.12 |
Average basic shares outstanding | 117,818,170 | 117,070,499 |
Average diluted shares outstanding | 118,909,618 | 118,156,611 |
CONSOLIDATED_STATEMENTS_OF_COM
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Nov. 30, 2014 | Nov. 30, 2013 |
Net earnings | $36,253 | $45,919 |
Other comprehensive income (loss), net of income taxes: | ||
Foreign currency translation adjustment and other | -27,284 | 19,442 |
Net unrealized loss on derivatives: | ||
Unrealized holding loss, net of income taxes of $(284) and $(449) | -525 | -1,617 |
Reclassification for loss included in net earnings, net of income taxes of $26 and $181 | 39 | 980 |
Net unrealized loss on derivatives, net of income taxes of $(258) and $(268) | -486 | -637 |
Defined benefit obligation: | ||
Net gain, net of income taxes of $4 and $296 | 8 | 550 |
Amortization of prior services, net of income taxes of $1 and $(1) | -4 | -2 |
Defined benefit obligation, net of income taxes of $5 and $295 | 4 | 548 |
Other comprehensive income (loss) | -27,766 | 19,353 |
Comprehensive income | $8,487 | $65,272 |
CONSOLIDATED_STATEMENTS_OF_COM1
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Nov. 30, 2014 | Nov. 30, 2013 |
Income taxes, unrealized holding loss on derivatives | ($284) | ($449) |
Income taxes, reclassification for loss on derivatives included in net earnings | 26 | 181 |
Income taxes, net unrealized loss on derivatives | -258 | -268 |
Income taxes, net gain of defined benefit obligation | 4 | 296 |
Income taxes, amortization of prior services of defined benefit obligation | 1 | -1 |
Income taxes, defined benefit obligation | $5 | $295 |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Nov. 30, 2014 | Aug. 31, 2014 |
In Thousands, unless otherwise specified | ||
Current assets: | ||
Cash and cash equivalents | $326,075 | $434,925 |
Accounts receivable (less allowance for doubtful accounts of $5,750 and $5,908) | 986,405 | 1,028,425 |
Inventories, net | 952,303 | 935,411 |
Current deferred tax assets | 47,006 | 49,455 |
Other current assets | 105,616 | 105,575 |
Assets of businesses held for sale | 94,455 | 0 |
Total current assets | 2,511,860 | 2,553,791 |
Property, plant and equipment: | ||
Land | 77,715 | 79,295 |
Buildings and improvements | 491,681 | 494,842 |
Equipment | 1,700,528 | 1,728,425 |
Construction in process | 35,487 | 30,591 |
Property, plant and equipment, Gross | 2,305,411 | 2,333,153 |
Less accumulated depreciation and amortization | -1,402,957 | -1,408,055 |
Property, plant and equipment, Net | 902,454 | 925,098 |
Goodwill | 74,100 | 74,319 |
Other noncurrent assets | 127,886 | 135,312 |
Total assets | 3,616,300 | 3,688,520 |
Current liabilities: | ||
Accounts payable-trade | 393,670 | 423,807 |
Accounts payable-documentary letters of credit | 142,789 | 125,053 |
Accrued expenses and other payables | 249,252 | 322,000 |
Notes payable | 530 | 12,288 |
Current maturities of long-term debt | 8,931 | 8,005 |
Liabilities of businesses held for sale | 42,896 | 0 |
Total current liabilities | 838,068 | 891,153 |
Deferred income taxes | 51,354 | 55,600 |
Other long-term liabilities | 104,961 | 112,134 |
Long-term debt | 1,282,808 | 1,281,042 |
Total liabilities | 2,277,191 | 2,339,929 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Common stock, par value $0.01 per share; authorized 200,000,000 shares; issued 129,060,664 shares; outstanding 117,666,811 and 117,829,262 shares | 1,290 | 1,290 |
Additional paid-in capital | 356,479 | 359,338 |
Accumulated other comprehensive income (loss) | -47,275 | -19,509 |
Retained earnings | 1,247,958 | 1,225,855 |
Less treasury stock, 11,393,853 and 11,231,402 shares at cost | -219,454 | -218,494 |
Stockholders' equity attributable to CMC | 1,338,998 | 1,348,480 |
Stockholders' equity attributable to noncontrolling interests | 111 | 111 |
Total stockholders' equity | 1,339,109 | 1,348,591 |
Total liabilities and stockholders' equity | $3,616,300 | $3,688,520 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Nov. 30, 2014 | Aug. 31, 2014 |
In Thousands, except Share data, unless otherwise specified | ||
Allowance for doubtful accounts | $5,750 | $5,908 |
Common stock, par value | $0.01 | $0.01 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 129,060,664 | 129,060,664 |
Common stock, shares outstanding | 117,666,811 | 117,829,262 |
Treasury stock, shares | 11,393,853 | 11,231,402 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Nov. 30, 2014 | Nov. 30, 2013 |
Cash flows from (used by) operating activities: | ||
Net earnings | $36,253 | $45,919 |
Adjustments to reconcile net earnings to cash flows from (used by) operating activities: | ||
Depreciation and amortization | 33,859 | 33,860 |
Provision for losses on receivables, net | -95 | -240 |
Stock-based compensation | 5,728 | 5,544 |
Amortization of interest rate swaps termination gain | -1,899 | -1,900 |
Deferred income taxes | -835 | 19,081 |
Tax benefits from stock plans | -13 | -109 |
Net gain on sale of a subsidiary and other | -467 | -25,064 |
Asset impairment | 0 | 1,005 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 100,486 | 73,052 |
Accounts receivable sold, net | -88,201 | 3,327 |
Inventories | -102,954 | -29,789 |
Other assets | 3,804 | -20,185 |
Accounts payable, accrued expenses and other payables | -61,292 | -31,534 |
Other long-term liabilities | -4,270 | 505 |
Net cash flows from (used by) operating activities | -79,896 | 73,472 |
Cash flows from (used by) investing activities: | ||
Capital expenditures | -22,450 | -14,085 |
Proceeds from the sale of property, plant and equipment and other | 882 | 2,126 |
Proceeds from the sale of a subsidiary | 2,845 | 54,265 |
Net cash flows from (used by) investing activities | -18,723 | 42,306 |
Cash flows from (used by) financing activities: | ||
Documentary letters of credit, net change | 32,410 | 18,663 |
Short-term borrowings, net change | -11,758 | 2,020 |
Repayments on long-term debt | -2,444 | -1,551 |
Stock issued under incentive and purchase plans, net of forfeitures | -2,981 | -2,089 |
Treasury stock acquired | -9,341 | 0 |
Cash dividends | -14,150 | -14,067 |
Tax benefits from stock plans | 13 | 109 |
Decrease in restricted cash | 0 | 17,300 |
Payments for debt issuance costs | 0 | -430 |
Purchase of noncontrolling interests | 0 | -52 |
Net cash flows from (used by) financing activities | -8,251 | 19,903 |
Effect of exchange rate changes on cash | -1,980 | 1,022 |
Increase (decrease) in cash and cash equivalents | -108,850 | 136,703 |
Cash and cash equivalents at beginning of year | 434,925 | 378,770 |
Cash and cash equivalents at end of period | 326,075 | 515,473 |
Noncash activities: | ||
Capital lease additions and changes in accounts payable related to purchases of property, plant and equipment | $5,062 | $348 |
CONSOLIDATED_STATEMENTS_OF_STO
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (USD $) | Total | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Treasury Stock | Noncontrolling Interests |
In Thousands, except Share data | |||||||
Beginning balance at Aug. 31, 2013 | $1,270,155 | $1,290 | $363,772 | ($27,176) | $1,166,732 | ($234,619) | $156 |
Beginning balance, treasury stock, shares at Aug. 31, 2013 | -12,049,674 | ||||||
Beginning balance, shares at Aug. 31, 2013 | 129,060,664 | ||||||
Net earnings | 45,919 | 45,919 | |||||
Other comprehensive income (loss) | 19,353 | 19,353 | |||||
Cash dividends ($0.12 per share) | -14,067 | -14,067 | |||||
Issuance of stock under incentive and purchase plans, net of forfeitures | -2,089 | -7,964 | 5,875 | ||||
Issuance of stock under incentive and purchase plans, net of forfeitures, shares | 293,497 | ||||||
Stock-based compensation | 3,818 | 3,818 | |||||
Tax benefits from stock plans | 109 | 109 | |||||
Contribution of noncontrolling interest | -52 | 30 | -82 | ||||
Ending balance at Nov. 30, 2013 | 1,323,146 | 1,290 | 359,765 | -7,823 | 1,198,584 | -228,744 | 74 |
Ending balance, treasury stock, shares at Nov. 30, 2013 | -11,756,177 | ||||||
Ending balance, shares at Nov. 30, 2013 | 129,060,664 | ||||||
Beginning balance at Aug. 31, 2014 | 1,348,591 | 1,290 | 359,338 | -19,509 | 1,225,855 | -218,494 | 111 |
Beginning balance, treasury stock, shares at Aug. 31, 2014 | -11,231,402 | -11,231,402 | |||||
Beginning balance, shares at Aug. 31, 2014 | 129,060,664 | 129,060,664 | |||||
Net earnings | 36,253 | 36,253 | |||||
Other comprehensive income (loss) | -27,766 | -27,766 | |||||
Cash dividends ($0.12 per share) | -14,150 | -14,150 | |||||
Treasury stock acquired | -9,341 | -9,341 | |||||
Treasury stock acquired,shares | -560,493 | ||||||
Issuance of stock under incentive and purchase plans, net of forfeitures | -2,981 | -11,362 | 8,381 | ||||
Issuance of stock under incentive and purchase plans, net of forfeitures, shares | 398,042 | ||||||
Stock-based compensation | 8,490 | 8,490 | |||||
Tax benefits from stock plans | 13 | 13 | |||||
Ending balance at Nov. 30, 2014 | $1,339,109 | $1,290 | $356,479 | ($47,275) | $1,247,958 | ($219,454) | $111 |
Ending balance, treasury stock, shares at Nov. 30, 2014 | -11,393,853 | -11,393,853 | |||||
Ending balance, shares at Nov. 30, 2014 | 129,060,664 | 129,060,664 |
CONSOLIDATED_STATEMENTS_OF_STO1
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) (USD $) | 3 Months Ended | |
Nov. 30, 2014 | Nov. 30, 2013 | |
Statement of Stockholders' Equity [Abstract] | ||
Cash dividends per share | $0.12 | $0.12 |
ACCOUNTING_POLICIES
ACCOUNTING POLICIES | 3 Months Ended |
Nov. 30, 2014 | |
Accounting Policies [Abstract] | |
Accounting policies | NOTE 1. ACCOUNTING POLICIES |
Accounting Principles | |
The accompanying unaudited 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 fiscal year ended August 31, 2014 filed by Commercial Metals Company ("CMC", and together with its consolidated subsidiaries, the "Company") with the Securities and Exchange Commission ("SEC") and include all normal recurring adjustments necessary to present fairly the consolidated balance sheets and the consolidated statements of earnings, comprehensive income, cash flows and stockholders' equity for the periods indicated. These notes should be read in conjunction with the audited consolidated financial statements included in the Annual Report on Form 10-K for the fiscal year ended August 31, 2014. The results of operations for the three month period are not necessarily indicative of the results to be expected for the full year. | |
Recent Accounting Pronouncements | |
In the first quarter of fiscal 2015, the Company adopted guidance issued by the Financial Accounting Standards Board ("FASB") requiring an entity to net an unrecognized tax benefit with a deferred tax asset for a net operating loss carryforward, a similar tax loss or a tax credit carryforward. To the extent a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position or the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets. The adoption of this guidance did not have an impact on the Company's consolidated financial statements. | |
In the first quarter of fiscal 2015, the Company adopted guidance issued by the FASB requiring an entity to release any related cumulative translation adjustment into net income when it either sells a part or all of its investment in a foreign entity or no longer holds a controlling financial interest in a subsidiary or group of assets that is a nonprofit activity or a business within a foreign entity. In addition, the guidance resolves the diversity in practice for the treatment of business combinations achieved in stages involving a foreign entity. The adoption of this guidance did not have an impact on the Company's consolidated financial statements. | |
In the first quarter of fiscal 2015, the Company adopted guidance issued by the FASB requiring an entity to measure obligations resulting from joint and several liability arrangements for which the total amount of the obligation is fixed at the reporting date. The guidance also requires entities to disclose the nature and amount of the obligation as well as other information about the obligation. The adoption of this guidance did not have a material impact on the Company's consolidated financial statements. | |
In August 2014, the FASB issued guidance requiring management to evaluate whether there are conditions and events that raise substantial doubt about the entity's ability to continue as a going concern and to provide disclosures in certain circumstances. The new guidance was issued to reduce diversity in the timing and content of footnote disclosures. This guidance is effective for fiscal years, and interim reporting periods therein, beginning after December 15, 2016. The Company does not expect this guidance to have a material impact on its consolidated financial statements. | |
In August 2014, the FASB issued guidance providing a measurement alternative to the existing fair value measurement guidance for reporting entities that consolidate a collateralized financing entity in which (1) the financial assets and financial liabilities are measured at fair value except for those incidental financial assets and financial liabilities with their carrying values that approximate fair values and (2) the changes in the fair values of those financial assets and financial liabilities are reflected in earnings. When the measurement alternative is elected, the financial assets and liabilities of a collateralized financing entity will be measured using the more observable of the fair value of the financial assets and the fair value of the financial liabilities. This guidance is effective for public business entities for annual periods, and for interim periods within those annual periods, beginning after December 15, 2015. Early adoption is permitted as of the beginning of an annual period. The Company does not expect this guidance to have a material impact on its consolidated financial statements. | |
In June 2014, the FASB issued guidance requiring entities to account for a performance target as a performance condition if the target affects vesting and could be achieved after the requisite service period. The new guidance did not introduce additional disclosure requirements and was issued to resolve diversity in practice. This guidance is effective for fiscal years, and interim reporting periods therein, beginning after December 15, 2015. The Company currently accounts for such performance targets in a manner consistent with the new guidance and does not expect this guidance to have a material impact on its consolidated financial statements. | |
In May 2014, the FASB issued guidance requiring entities to recognize revenue from contracts with customers by applying a five-step model in accordance with the core principle to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, this guidance specifies the accounting for some costs to obtain or fulfill a contract with a customer and expands disclosure requirements for revenue recognition. This guidance is effective for fiscal years, and interim reporting periods therein, beginning after December 15, 2016. Entities have the option to adopt this guidance either retrospectively or through a modified retrospective transition method. This new standard will supersede existing revenue guidance and affect the Company's revenue recognition process and the presentations or disclosures of the Company's consolidated financial statements and footnotes. The Company is currently evaluating the impact this guidance will have on its consolidated financial statements. | |
In April 2014, the FASB issued guidance changing the requirements for reporting discontinued operations if the disposal of a component of an entity, or a group of components of an entity, represents a strategic shift that has, or will have, a major effect on an entity's operations and financial results. The guidance requires expanded disclosures for discontinued operations and also requires entities to disclose the pre-tax profit or loss of an individually significant component of an entity that does not qualify for discontinued operations reporting. The new guidance is effective prospectively for fiscal years, and interim periods within those years, beginning on or after December 15, 2014. The guidance will affect the Company's current practice of assessing discontinued operations and the presentation and disclosure in the Company's consolidated financial statements. |
ACCUMULATED_OTHER_COMPREHENSIV
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | 3 Months Ended | ||||||||||||||||
Nov. 30, 2014 | |||||||||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||||||||||||||||
Accumulated other comprehensive income (loss) | NOTE 2. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | ||||||||||||||||
Accumulated other comprehensive income (loss), net of income taxes, for the three months ended November 30, 2014 and 2013 was comprised of the following: | |||||||||||||||||
(in thousands) | Foreign Currency Translation | Unrealized Gain (Loss) on Derivatives | Defined Benefit Obligation | Total Accumulated Other Comprehensive Income (Loss) | |||||||||||||
Balance at August 31, 2014 | $ | (19,891 | ) | $ | 3,014 | $ | (2,632 | ) | $ | (19,509 | ) | ||||||
Other comprehensive income (loss) before reclassifications | (27,284 | ) | (525 | ) | 8 | (27,801 | ) | ||||||||||
Amounts reclassified from AOCI | — | 39 | (4 | ) | 35 | ||||||||||||
Net other comprehensive income (loss) | (27,284 | ) | (486 | ) | 4 | (27,766 | ) | ||||||||||
Balance, November 30, 2014 | $ | (47,175 | ) | $ | 2,528 | $ | (2,628 | ) | $ | (47,275 | ) | ||||||
(in thousands) | Foreign Currency Translation | Unrealized Gain (Loss) on Derivatives | Defined Benefit Obligation | Total Accumulated Other Comprehensive Income (Loss) | |||||||||||||
Balance, August 31, 2013 | $ | (27,477 | ) | $ | 3,594 | $ | (3,293 | ) | $ | (27,176 | ) | ||||||
Other comprehensive income (loss) before reclassifications | 19,442 | (1,617 | ) | 550 | 18,375 | ||||||||||||
Amounts reclassified from AOCI | — | 980 | (2 | ) | 978 | ||||||||||||
Net other comprehensive income (loss) | 19,442 | (637 | ) | 548 | 19,353 | ||||||||||||
Balance, November 30, 2013 | $ | (8,035 | ) | $ | 2,957 | $ | (2,745 | ) | $ | (7,823 | ) | ||||||
The significant items reclassified out of accumulated other comprehensive income (loss) and the corresponding line items in the consolidated statements of earnings to which the items were reclassified were as follows: | |||||||||||||||||
Three Months Ended November 30, | |||||||||||||||||
Components of AOCI (in thousands) | Location | 2014 | 2013 | ||||||||||||||
Unrealized gain (loss) on derivatives: | |||||||||||||||||
Commodity | Cost of goods sold | $ | (20 | ) | $ | (119 | ) | ||||||||||
Foreign exchange | Net sales | — | (250 | ) | |||||||||||||
Foreign exchange | Cost of goods sold | (200 | ) | (922 | ) | ||||||||||||
Foreign exchange | SG&A expenses | 21 | 14 | ||||||||||||||
Interest rate | Interest expense | 134 | 116 | ||||||||||||||
(65 | ) | (1,161 | ) | ||||||||||||||
Income tax effect | Income taxes benefit | 26 | 181 | ||||||||||||||
Net of income taxes | $ | (39 | ) | $ | (980 | ) | |||||||||||
Defined benefit obligation: | |||||||||||||||||
Amortization of prior services | SG&A expenses | $ | 3 | $ | 3 | ||||||||||||
Income tax effect | Income taxes benefit (expense) | 1 | (1 | ) | |||||||||||||
Net of income taxes | $ | 4 | $ | 2 | |||||||||||||
Amounts in parentheses reduce earnings. |
SALES_OF_ACCOUNTS_RECEIVABLE
SALES OF ACCOUNTS RECEIVABLE | 3 Months Ended | ||||||||||||||||
Nov. 30, 2014 | |||||||||||||||||
Transfers and Servicing [Abstract] | |||||||||||||||||
Sales of accounts receivable | NOTE 3. SALES OF ACCOUNTS RECEIVABLE | ||||||||||||||||
The Company has a $200.0 million U.S. sale of accounts receivable program which expires on August 15, 2017. Under the program, CMC contributes, and several of its subsidiaries sell without recourse, certain eligible trade accounts receivable to CMC Receivables, Inc. ("CMCRV"), a wholly owned subsidiary of CMC. CMCRV is structured to be a bankruptcy-remote entity and was formed for the sole purpose of buying and selling trade accounts receivable generated by the Company. CMCRV sells the trade accounts receivable in their entirety to three financial institutions. With the consent of both CMCRV and the program's administrative agent, the amount advanced by the financial institutions can be increased to a maximum of $300.0 million for all trade accounts receivable sold. The remaining portion of the purchase price of the trade accounts receivable takes the form of subordinated notes from the respective financial institutions. These notes will be satisfied from the ultimate collection of the trade accounts receivable after payment of certain fees and other costs. The Company accounts for sales of the trade accounts receivable as true sales, and the trade accounts receivable balances that are sold are removed from the consolidated balance sheets. The cash advances received are reflected as cash provided by operating activities on the Company's consolidated statements of cash flows. Additionally, the U.S. sale of accounts receivable program contains certain cross-default provisions whereby a termination event could occur if the Company defaulted under certain of its credit arrangements. The covenants contained in the receivables purchase agreement are consistent with the credit facility described in Note 7, Credit Arrangements. | |||||||||||||||||
At November 30, 2014 and August 31, 2014, under its U.S. sale of accounts receivable program, the Company had sold $412.9 million and $389.6 million of trade accounts receivable, respectively, to the financial institutions. At November 30, 2014, the Company had no advance payments outstanding on the sale of its trade accounts receivable. The Company had $55.0 million in advance payments outstanding on the sale of its trade accounts receivable at August 31, 2014. | |||||||||||||||||
In addition to the U.S. sale of accounts receivable program described above, the Company's international subsidiaries in Europe and Australia sell trade accounts receivable to financial institutions without recourse. These arrangements constitute true sales, and once the trade accounts receivable are sold, they are no longer available to the Company's creditors in the event of bankruptcy. The European program allows the Company's European subsidiaries to obtain an advance of up to 90% of eligible trade accounts receivable sold under the terms of the arrangement. In October 2014, the Company entered into a first amendment to its Australian program which extended the maturity date to October 2016. Under the Australian program, trade accounts receivable balances are sold to a special purpose vehicle, which in turn sells 100% of the eligible trade accounts receivable of Commercial Metals Pty. Ltd., CMC Steel Distribution Pty. Ltd. and G.A.M. Steel Pty. Ltd. to the financial institution. The financial institution will fund up to A$75.0 million for all trade accounts receivable sold, and the remaining portion of the purchase price of the trade accounts receivable is in the form of a subordinated note from the financial institution. This note will be satisfied from the ultimate collection of the trade accounts receivable after payment of certain fees and other costs. The Company accounts for sales of the trade accounts receivable as true sales, and the trade accounts receivable balances that are sold are removed from the consolidated balance sheets. The cash advances received are reflected as cash provided by operating activities on the Company's consolidated statements of cash flows. | |||||||||||||||||
At November 30, 2014 and August 31, 2014, under its European and Australian programs, the Company had sold $122.0 million and $147.3 million of trade accounts receivable, respectively, to third-party financial institutions and received advance payments of $57.3 million and $90.5 million, respectively. | |||||||||||||||||
During the three months ended November 30, 2014 and 2013, cash proceeds from the U.S. and international sale of accounts receivable programs were $118.9 million and $162.8 million, respectively, and cash payments to the owners of accounts receivable were $207.1 million and $159.4 million, respectively. For a nominal servicing fee, the Company is responsible for servicing the trade accounts receivable for the U.S. and Australian programs. Discounts on U.S. and international sales of trade accounts receivable were $0.5 million for both of the three months ended November 30, 2014 and 2013, and are included in selling, general and administrative expenses in the Company's consolidated statements of earnings. | |||||||||||||||||
The deferred purchase price on the Company's U.S. and European and the Commercial Metals Pty. Ltd. sale of accounts receivable programs are included in accounts receivable on the Company's consolidated balance sheets. The deferred purchase price on the CMC Steel Distribution Pty. Ltd. and the G.A.M. Steel Pty. Ltd. sale of accounts receivable programs are included in assets of businesses held for sale on the Company's consolidated balance sheets. The following tables summarize the activity of the deferred purchase price receivables for the U.S. and international sale of accounts receivable programs: | |||||||||||||||||
Three Months Ended November 30, 2014 | |||||||||||||||||
(in thousands) | Total | U.S. | Australia* | Europe | |||||||||||||
Beginning balance | $ | 385,169 | $ | 329,797 | $ | 34,071 | $ | 21,301 | |||||||||
Transfers of accounts receivable | 1,128,244 | 949,163 | 90,729 | 88,352 | |||||||||||||
Collections | (1,041,573 | ) | (870,640 | ) | (102,424 | ) | (68,509 | ) | |||||||||
Ending balance | $ | 471,840 | $ | 408,320 | $ | 22,376 | $ | 41,144 | |||||||||
* Includes the sales of accounts receivable activities related to businesses held for sale (transfers of accounts receivable of $60.5 million and collections of $63.6 million). | |||||||||||||||||
Three Months Ended November 30, 2013 | |||||||||||||||||
(in thousands) | Total | U.S. | Australia | Europe | |||||||||||||
Beginning balance | $ | 453,252 | $ | 358,822 | $ | 64,996 | $ | 29,434 | |||||||||
Transfers of accounts receivable | 1,037,205 | 840,571 | 73,120 | 123,514 | |||||||||||||
Collections | (1,042,922 | ) | (847,878 | ) | (65,804 | ) | (129,240 | ) | |||||||||
Program termination | (72,312 | ) | — | (72,312 | ) | — | |||||||||||
Ending balance | $ | 375,223 | $ | 351,515 | $ | — | $ | 23,708 | |||||||||
INVENTORIES_NET
INVENTORIES, NET | 3 Months Ended |
Nov. 30, 2014 | |
Inventory Disclosure [Abstract] | |
Inventories, net | NOTE 4. INVENTORIES, NET |
Inventories are stated at the lower of cost or market. Inventory cost for most U.S. inventories is determined by the last-in, first-out ("LIFO") method. At November 30, 2014 and August 31, 2014, 54% and 44%, respectively, of the Company's total net inventories were valued at LIFO. Effective September 1, 2014, the Company changed its method of determining its interim LIFO inventory reserve from the complete quarterly LIFO valuation method to the expected annual LIFO valuation method. This change in accounting estimate did not have a material impact on the Company's consolidated financial statements as of and for the three months ended November 30, 2014. LIFO inventory reserves were $192.6 million and $198.8 million at November 30, 2014 and August 31, 2014, respectively. Inventory cost for the International Mill segment is determined by the weighted average cost method. Inventory cost for the remaining international and U.S. inventories is determined by the first-in, first-out ("FIFO") method. | |
The majority of the Company's inventories are in the form of finished goods with minimal work in process. At November 30, 2014 and August 31, 2014, $93.5 million and $84.3 million, before LIFO reserves, respectively, of the Company's inventories were in the form of raw materials. |
GOODWILL_AND_OTHER_INTANGIBLE_
GOODWILL AND OTHER INTANGIBLE ASSETS | 3 Months Ended | ||||||||||||||||||||||||
Nov. 30, 2014 | |||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||
Goodwill and other intangible assets | NOTE 5. GOODWILL AND OTHER INTANGIBLE ASSETS | ||||||||||||||||||||||||
The following table details the changes in the carrying amount of goodwill by reportable segment: | |||||||||||||||||||||||||
Americas | International | ||||||||||||||||||||||||
(in thousands) | Recycling | Mills | Fabrication | Mill | Marketing and Distribution | Consolidated | |||||||||||||||||||
Balance at August 31, 2014 | $ | 7,267 | $ | 4,970 | $ | 57,144 | $ | 2,776 | $ | 2,162 | $ | 74,319 | |||||||||||||
Foreign currency translation | — | — | — | (127 | ) | (92 | ) | (219 | ) | ||||||||||||||||
Balance at November 30, 2014 | $ | 7,267 | $ | 4,970 | $ | 57,144 | $ | 2,649 | $ | 2,070 | $ | 74,100 | |||||||||||||
The total gross carrying amounts of the Company's intangible assets that are subject to amortization were $49.4 million and $53.8 million at November 30, 2014 and August 31, 2014, respectively, and are included in other noncurrent assets on the Company's consolidated balance sheets. Excluding goodwill, there are no other significant intangible assets with indefinite lives. Amortization expense for intangible assets was $1.8 million and $1.9 million for the three months ended November 30, 2014 and 2013, respectively. |
BUSINESSES_HELD_FOR_SALE_DISCO
BUSINESSES HELD FOR SALE, DISCONTINUED OPERATIONS AND DISPOSITIONS | 3 Months Ended | ||||||||
Nov. 30, 2014 | |||||||||
Discontinued Operations and Disposal Groups [Abstract] | |||||||||
Businesses held for sale, discontinued operations and dispositions | NOTE 6. BUSINESSES HELD FOR SALE, DISCONTINUED OPERATIONS AND DISPOSITIONS | ||||||||
Businesses Held for Sale | |||||||||
The Company did not have any assets and liabilities of businesses held for sale at August 31, 2014. The components of assets and liabilities of businesses held for sale on the Company's consolidated balance sheet were as follows: | |||||||||
(in thousands) | November 30, 2014 | ||||||||
Assets: | |||||||||
Accounts receivable | $ | 15,695 | |||||||
Inventories, net | 69,047 | ||||||||
Other current assets | 735 | ||||||||
Property, plant and equipment, net of accumulated depreciation and amortization | 7,139 | ||||||||
Other noncurrent assets | 1,839 | ||||||||
Assets of businesses held for sale | $ | 94,455 | |||||||
Liabilities: | |||||||||
Accounts payable-trade | $ | 22,086 | |||||||
Accounts payable-documentary letters of credit | 13,447 | ||||||||
Accrued expenses and other payables | 7,363 | ||||||||
Liabilities of businesses held for sale | $ | 42,896 | |||||||
Discontinued Operations | |||||||||
In September 2014, the Company made the decision to exit and sell its steel distribution business in Australia. Despite focused efforts and substantial progress to stabilize and improve the results of the Australian distribution business, the Company determined that achieving acceptable financial returns would take additional time and investment. The Company determined that the decision to exit this business met the definition of a discontinued operation. As a result, this business has been presented as a discontinued operation for all periods presented. The expenses associated with exiting this business were not material for the three months ended November 30, 2014. The Australian steel distribution business was previously an operating segment included in the International Marketing and Distribution reporting segment. | |||||||||
During the fourth quarter of fiscal 2013, the Company decided to sell all of the capital stock of its wholly owned copper tube manufacturing operation, Howell Metal Company ("Howell"). The Company determined that the decision to sell this business met the definition of a discontinued operation. As a result, the Company included Howell in discontinued operations for all periods presented. Howell was previously an operating segment included in the Americas Mills reporting segment. | |||||||||
Financial information for discontinued operations was as follows: | |||||||||
Three Months Ended November 30, | |||||||||
(in thousands) | 2014 | 2013 | |||||||
Net sales | $ | 59,011 | $ | 83,114 | |||||
Earnings (loss) from discontinued operations before income taxes | (2,102 | ) | 21,106 | ||||||
Dispositions | |||||||||
During the first quarter of fiscal 2014, the Company sold all of the outstanding capital stock of Howell for $58.5 million, of which $3.2 million was held in escrow as of both November 30, 2014 and August 31, 2014. As a result of this sale, the Company recorded a pre-tax gain of $23.8 million, subject to customary purchase price adjustments, in the first quarter of fiscal 2014. |
CREDIT_ARRANGEMENTS
CREDIT ARRANGEMENTS | 3 Months Ended | ||||||||||
Nov. 30, 2014 | |||||||||||
Debt Disclosure [Abstract] | |||||||||||
Credit arrangements | NOTE 7. CREDIT ARRANGEMENTS | ||||||||||
On June 26, 2014, the Company entered into a fourth amended and restated credit agreement (the "Credit Agreement") with a revolving credit facility of $350.0 million and a maturity date of June 26, 2019 (the "credit facility"). The maximum availability under the credit facility can be increased to $500.0 million. The Company's obligation under its credit facility is secured by its U.S. inventory. The credit facility's capacity includes $50.0 million for the issuance of stand-by letters of credit and was reduced by outstanding stand-by letters of credit which totaled $25.3 million and $28.1 million at November 30, 2014 and August 31, 2014, respectively. | |||||||||||
Under the credit facility, the Company is required to comply with certain financial and non-financial covenants, including covenants to maintain: (i) an interest coverage ratio (consolidated EBITDA to consolidated interest expense, as each is defined in the Credit Agreement) of not less than 2.50 to 1.00 and (ii) a debt to capitalization ratio (consolidated funded debt to total capitalization, as each is defined in the Credit Agreement) that does not exceed 0.60 to 1.00. In addition, beginning on the date three months prior to each maturity date of the Company's 2017 Notes and 2018 Notes, as defined below, and each day thereafter that the 2017 Notes and the 2018 Notes are outstanding, the Company will be required to maintain liquidity of at least $150.0 million in excess of each of the outstanding aggregate principal amounts of the 2017 Notes and 2018 Notes. Loans under the credit facility bear interest based on the Eurocurrency rate, a base rate, or the LIBOR rate. | |||||||||||
At November 30, 2014, the Company's interest coverage ratio was 4.71 to 1.00, and the Company's debt to capitalization ratio was 0.49 to 1.00. The Company had no amount drawn under its revolving credit facilities at November 30, 2014 and August 31, 2014. | |||||||||||
In May 2013, the Company issued $330.0 million of 4.875% Senior Notes due May 15, 2023 (the "2023 Notes"). Interest on the 2023 Notes is payable semi-annually on May 15 and November 15 of each year, beginning on November 15, 2013. The Company may, at any time, redeem the 2023 Notes at a redemption price equal to 100 percent of the principal amount, plus a "make-whole" premium described in the indenture pursuant to which the 2023 Notes were issued. Additionally, if a change of control triggering event occurs, as defined by the terms of the indenture governing the 2023 Notes, holders of the 2023 Notes may require the Company to repurchase the 2023 Notes at a purchase price equal to 101 percent of the principal amount, plus accrued and unpaid interest, if any, to the date of purchase. The Company is generally not limited under the indenture governing the 2023 Notes in its ability to incur additional indebtedness provided the Company is in compliance with certain restrictive covenants, including restrictions on liens, sale and leaseback transactions, mergers, consolidations and transfers of substantially all of the Company's assets. | |||||||||||
In August 2008, the Company issued $500.0 million of 7.35% senior unsecured notes due in August 2018 (the "2018 Notes"). In anticipation of the offering, the Company entered into hedge transactions which reduced the Company's effective interest rate on these notes to 6.40% per annum. Interest on these notes is payable semiannually. | |||||||||||
In July 2007, the Company issued $400.0 million of 6.50% senior unsecured notes due in July 2017 (the "2017 Notes"). In anticipation of the offering, the Company entered into hedge transactions which reduced the Company's effective interest rate on these notes to 5.74% per annum. Interest on these notes is payable semiannually. | |||||||||||
At November 30, 2014, the Company was in compliance with all covenants contained in its debt agreements. | |||||||||||
During fiscal 2012, the Company terminated its existing interest rate swap transactions and received cash proceeds of approximately $52.7 million, net of customary finance charges. The resulting gain was deferred and is being amortized as a reduction to interest expense over the remaining term of the respective debt tranches. At November 30, 2014 and August 31, 2014, the unamortized portion was $24.9 million and $26.8 million, respectively. Amortization of the deferred gain was $1.9 million for each of the three months ended November 30, 2014 and 2013. | |||||||||||
The Company has uncommitted credit facilities available from U.S. and international banks. In general, these credit facilities are used to support trade letters of credit (including accounts payable settled under bankers' acceptances), foreign exchange transactions and short-term advances which are priced at market rates. | |||||||||||
Long-term debt, including the deferred gain from the termination of the interest rate swaps, was as follows: | |||||||||||
(in thousands) | Weighted Average | November 30, 2014 | August 31, 2014 | ||||||||
Interest Rate as of November 30, 2014 | |||||||||||
$400 million notes at 6.50% due July 2017 | 5.74% | $ | 407,803 | $ | 408,546 | ||||||
$500 million notes at 7.35% due August 2018 | 6.40% | 517,149 | 518,305 | ||||||||
$330 million notes at 4.875% due May 2023 | 4.88% | 330,000 | 330,000 | ||||||||
Other, including equipment notes | 36,787 | 32,196 | |||||||||
1,291,739 | 1,289,047 | ||||||||||
Less current maturities | 8,931 | 8,005 | |||||||||
$ | 1,282,808 | $ | 1,281,042 | ||||||||
Interest on these notes is payable semiannually. | |||||||||||
CMC Poland Sp.z.o.o. ("CMCP") has uncommitted credit facilities of $64.0 million with several banks with expiration dates ranging from December 2014 to March 2015. During the three months ended November 30, 2014, CMCP had total borrowings of $19.0 million and total repayments of $19.0 million under these credit facilities. At November 30, 2014, no material amounts were outstanding under these credit facilities. | |||||||||||
The Company had no material amounts of interest capitalized in the cost of property, plant and equipment during the three months ended November 30, 2014 and 2013, respectively. Cash paid for interest was $9.5 million for each of the three months ended November 30, 2014 and 2013. |
DERIVATIVES_AND_RISK_MANAGEMEN
DERIVATIVES AND RISK MANAGEMENT | 3 Months Ended | ||||||||||
Nov. 30, 2014 | |||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||
Derivatives and risk management | NOTE 8. DERIVATIVES AND RISK MANAGEMENT | ||||||||||
The Company's global operations and product lines expose it to risks from fluctuations in metal commodity prices, foreign currency exchange rates, natural gas prices and interest rates. 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 the volatility of the commodities' prices, (ii) foreign currency forward contracts that match the expected settlements for purchases and sales denominated in foreign currencies and (iii) natural gas forward contracts to mitigate the risk of unanticipated changes in operating cost due to the volatility of natural gas prices. When sales commitments to customers include a fixed price freight component, the Company occasionally enters into freight forward contracts to reduce the effects of the volatility of ocean freight rates. | |||||||||||
At November 30, 2014, the notional value of the Company's foreign currency contract commitments and its commodity contract commitments was $423.6 million and $50.8 million, respectively. At November 30, 2013, the notional value of the Company's foreign currency contract commitments and its commodity contract commitments was $433.3 million and $54.9 million, respectively. | |||||||||||
The following table provides information regarding the Company's commodity contract commitments as of November 30, 2014: | |||||||||||
Commodity | Long/Short | Total | |||||||||
Aluminum | Long | 2,366 | MT | ||||||||
Aluminum | Short | 100 | MT | ||||||||
Copper | Long | 1,531 | MT | ||||||||
Copper | Short | 5,012 | MT | ||||||||
Zinc | Long | 7 | MT | ||||||||
Natural Gas | Long | 540,000 | MMBTUs | ||||||||
MT =etric Ton | |||||||||||
MMBTU =ne million British thermal units | |||||||||||
The Company designates only those contracts which closely match the terms of the underlying transaction as hedges for accounting purposes. These hedges resulted in substantially no ineffectiveness in the Company's consolidated statements of earnings, and there were no components excluded from the assessment of hedge effectiveness for each of the three months ended November 30, 2014 and 2013. Certain foreign currency and commodity contracts were not designated as hedges for accounting purposes, although management believes they are essential economic hedges. | |||||||||||
The following tables summarize activities related to the Company's derivative instruments and hedged items recognized in the consolidated statements of earnings: | |||||||||||
Three Months Ended November 30, | |||||||||||
Derivatives Not Designated as Hedging Instruments (in thousands) | Location | 2014 | 2013 | ||||||||
Commodity | Cost of goods sold | $ | 3,435 | $ | 510 | ||||||
Foreign exchange | Net sales | 2,436 | (159 | ) | |||||||
Foreign exchange | Cost of goods sold | 1,871 | (121 | ) | |||||||
Foreign exchange | SG&A expenses | 12,200 | (4,693 | ) | |||||||
Gain (loss) before income taxes | $ | 19,942 | $ | (4,463 | ) | ||||||
The Company's fair value hedges are designated for accounting purposes with the gains or losses on the hedged items offsetting the gains or losses on the related derivative transactions. Hedged items relate to firm commitments on commercial sales and purchases. | |||||||||||
Derivatives Designated as Fair Value Hedging Instruments (in thousands) | Three Months Ended November 30, | ||||||||||
Location | 2014 | 2013 | |||||||||
Foreign exchange | Net sales | $ | (175 | ) | $ | (113 | ) | ||||
Foreign exchange | Cost of goods sold | 1,154 | (127 | ) | |||||||
Gain (loss) before income taxes | $ | 979 | $ | (240 | ) | ||||||
Hedged Items Designated as Fair Value Hedging Instruments (in thousands) | Three Months Ended November 30, | ||||||||||
Location | 2014 | 2013 | |||||||||
Foreign exchange | Net sales | $ | 179 | $ | 93 | ||||||
Foreign exchange | Cost of goods sold | (1,154 | ) | 125 | |||||||
Gain (loss) before income taxes | $ | (975 | ) | $ | 218 | ||||||
Effective Portion of Derivatives Designated as Cash Flow Hedging Instruments Recognized in Accumulated Other Comprehensive Income (Loss) (in thousands) | Three Months Ended November 30, | ||||||||||
2014 | 2013 | ||||||||||
Commodity | $ | (68 | ) | $ | (89 | ) | |||||
Foreign exchange | (457 | ) | (1,528 | ) | |||||||
Gain (loss), net of income taxes | $ | (525 | ) | $ | (1,617 | ) | |||||
Effective Portion of Derivatives Designated as Cash Flow Hedging Instruments Reclassified from Accumulated Other Comprehensive Income (Loss) (in thousands) | Three Months Ended November 30, | ||||||||||
Location | 2014 | 2013 | |||||||||
Commodity | Cost of goods sold | $ | (13 | ) | $ | (89 | ) | ||||
Foreign exchange | Net sales | — | (231 | ) | |||||||
Foreign exchange | Cost of goods sold | (130 | ) | (758 | ) | ||||||
Foreign exchange | SG&A expenses | 17 | 12 | ||||||||
Interest rate | Interest expense | 87 | 86 | ||||||||
Gain (loss), net of income taxes | $ | (39 | ) | $ | (980 | ) | |||||
The Company enters into derivative agreements that include provisions to allow the set-off of certain amounts. Derivative instruments are presented on a gross basis on the Company's consolidated balance sheets. The asset and liability balances in the tables below reflect the gross amounts of derivative instruments at November 30, 2014 and August 31, 2014. The fair value of the Company's derivative instruments on the consolidated balance sheets was as follows: | |||||||||||
Derivative Assets (in thousands) | November 30, 2014 | August 31, 2014 | |||||||||
Commodity — designated for hedge accounting | $ | 5 | $ | 42 | |||||||
Commodity — not designated for hedge accounting | 2,132 | 869 | |||||||||
Foreign exchange — designated for hedge accounting | 1,111 | 136 | |||||||||
Foreign exchange — not designated for hedge accounting | 3,529 | 1,853 | |||||||||
Derivative assets (other current assets)* | $ | 6,777 | $ | 2,900 | |||||||
Derivative Liabilities (in thousands) | November 30, 2014 | August 31, 2014 | |||||||||
Commodity — designated for hedge accounting | $ | 97 | $ | 6 | |||||||
Commodity — not designated for hedge accounting | 467 | 162 | |||||||||
Foreign exchange — designated for hedge accounting | 774 | 325 | |||||||||
Foreign exchange — not designated for hedge accounting | 1,271 | 1,010 | |||||||||
Derivative liabilities (accrued expenses and other payables)* | $ | 2,609 | $ | 1,503 | |||||||
_________________ | |||||||||||
* Derivative assets and liabilities do not include the hedged items designated as fair value hedges. | |||||||||||
As of November 30, 2014, all of the Company's derivative instruments designated to hedge exposure to the variability in future cash flows of the forecasted transactions will mature within twelve months. | |||||||||||
All of the instruments are highly liquid and were not entered into for trading purposes. |
FAIR_VALUE
FAIR VALUE | 3 Months Ended | ||||||||||||||||||
Nov. 30, 2014 | |||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||
Fair value | NOTE 9. FAIR VALUE | ||||||||||||||||||
The Company has established a fair value hierarchy which prioritizes the inputs to the valuation techniques used to measure fair value into three 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 as follows: | |||||||||||||||||||
Level 1 - Unadjusted quoted prices in active markets for identical assets and liabilities; | |||||||||||||||||||
Level 2 - Quoted prices for similar assets and liabilities in active markets (other than those included in Level 1) which are observable, either directly or indirectly; and | |||||||||||||||||||
Level 3 - Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. | |||||||||||||||||||
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 | |||||||||||||||||||
(in thousands) | November 30, 2014 | Quoted Prices in | Significant Other | Significant | |||||||||||||||
Active Markets for | Observable Inputs | Unobservable Inputs | |||||||||||||||||
Identical Assets | (Level 2) | (Level 3) | |||||||||||||||||
(Level 1) | |||||||||||||||||||
Assets: | |||||||||||||||||||
Money market investments (1) | $ | 150,100 | $ | 150,100 | $ | — | $ | — | |||||||||||
Commodity derivative assets (2) | 2,137 | 2,132 | 5 | — | |||||||||||||||
Foreign exchange derivative assets (2) | 4,640 | — | 4,640 | — | |||||||||||||||
Liabilities: | |||||||||||||||||||
Commodity derivative liabilities (2) | 564 | 467 | 97 | — | |||||||||||||||
Foreign exchange derivative liabilities (2) | 2,045 | — | 2,045 | — | |||||||||||||||
Fair Value Measurements at Reporting Date Using | |||||||||||||||||||
(in thousands) | August 31, 2014 | Quoted Prices in | Significant Other | Significant | |||||||||||||||
Active Markets for | Observable Inputs | Unobservable Inputs | |||||||||||||||||
Identical Assets | (Level 2) | (Level 3) | |||||||||||||||||
(Level 1) | |||||||||||||||||||
Assets: | |||||||||||||||||||
Money market investments (1) | $ | 200,487 | $ | 200,487 | $ | — | $ | — | |||||||||||
Commodity derivative assets (2) | 911 | 911 | — | — | |||||||||||||||
Foreign exchange derivative assets (2) | 1,989 | — | 1,989 | — | |||||||||||||||
Liabilities: | |||||||||||||||||||
Commodity derivative liabilities (2) | 168 | 162 | 6 | — | |||||||||||||||
Foreign exchange derivative liabilities (2) | 1,335 | — | 1,335 | — | |||||||||||||||
_________________ | |||||||||||||||||||
(1) Money market investments are short-term in nature, and the value is determined by broker quoted prices in active markets. 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 Commodity Exchange, Inc. Amounts in Level 2 are based on broker quotes in the over-the-counter market. Further discussion regarding the Company's use of derivative instruments and the classification of the assets and liabilities is included in Note 8, Derivatives and Risk Management. | |||||||||||||||||||
There were no material non-recurring fair value measurements during the three months ended November 30, 2014 and 2013, respectively. | |||||||||||||||||||
The carrying values of the Company's short-term items, including the deferred purchase price of accounts receivable, documentary letters of credit and notes payable, approximate fair value due to their short-term nature. | |||||||||||||||||||
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 consolidated balance sheets are as follows: | |||||||||||||||||||
November 30, 2014 | August 31, 2014 | ||||||||||||||||||
(in thousands) | Fair Value Hierarchy | Carrying Value | Fair Value | Carrying Value | Fair Value | ||||||||||||||
$400 million notes at 6.50% due July 2017 (1) | Level 2 | $ | 407,803 | $ | 435,528 | $ | 408,546 | $ | 438,200 | ||||||||||
$500 million notes at 7.35% due August 2018 (1) | Level 2 | 517,149 | 553,125 | 518,305 | 567,560 | ||||||||||||||
$330 million notes at 4.875% due May 2023 (1) | Level 2 | 330,000 | 322,080 | 330,000 | 325,050 | ||||||||||||||
_________________ | |||||||||||||||||||
(1) The fair values of the 2017 Notes, 2018 Notes and 2023 Notes are estimated based on readily available market prices of these notes at November 30, 2014 and August 31, 2014, or similar notes with the same maturities, rating and interest rates. |
INCOME_TAX
INCOME TAX | 3 Months Ended |
Nov. 30, 2014 | |
Income Tax Disclosure [Abstract] | |
Income tax | NOTE 10. INCOME TAX |
The Company's effective income tax rate from continuing operations for the three months ended November 30, 2014 and 2013 was 28.7% and 30.9%, respectively. In each period, the tax rate was lower than the statutory income tax rate of 35% because the Company had income from operations in countries which have lower tax rates than the United States, notably Poland, which has a statutory tax rate of 19%. In addition, the Company benefited under Section 199 of the Internal Revenue Code related to domestic production activity income during the three months ended November 30, 2014. The Company's effective income tax rate from discontinued operations for the three months ended November 30, 2014 was 1.0% and reflected the fact that earnings from discontinued operations before income taxes included a loss in Australia, a jurisdiction in which all tax losses creating a deferred tax asset have a full valuation allowance recorded against them, and thus no tax benefit. The Company's effective income tax rate from discontinued operations for the three months ended November 30, 2013 was 42.1% and reflected a $23.8 million pre-tax gain on the sale of Howell, resulting in the appropriate amount of U.S. federal and state income tax expense. | |
The Company made net payments of $11.6 million and $1.4 million for income taxes during the three months ended November 30, 2014 and 2013, respectively. | |
The reserve for unrecognized income tax benefits related to the accounting for uncertainty in income taxes was $27.3 million, exclusive of interest and penalties, as of both November 30, 2014 and August 31, 2014, respectively. | |
The Company's policy classifies interest recognized on an underpayment of income taxes and any statutory penalties recognized on a tax position as income tax expense, and the balances at the end of a reporting period are recorded as part of the current or noncurrent reserve for uncertain income tax positions. For the three months ended November 30, 2014, before any income tax benefits, the Company recorded immaterial amounts of accrued interest and penalties on unrecognized income tax benefits. | |
During the twelve months ending November 30, 2015, it is reasonably possible that the statute of limitations pertaining to positions taken by the Company in prior year income tax returns may lapse or that income tax audits in various taxing jurisdictions could be finalized. As a result, the total amount of unrecognized income tax benefits may decrease by approximately $16.9 million, which would reduce the provision for income taxes on earnings by $2.7 million. | |
The Company files income tax returns in the United States and multiple foreign jurisdictions with varying statutes of limitations. In the normal course of business, CMC and its subsidiaries are subject to examination by various taxing authorities. The following is a summary of tax years subject to examination: | |
U.S. Federal — 2009 and forward | |
U.S. States — 2009 and forward | |
Foreign — 2007 and forward | |
The Company is currently under examination by the Internal Revenue Service and state revenue authorities from 2009 to 2011. Management believes the Company's recorded tax liabilities as of November 30, 2014 sufficiently reflect the anticipated outcome of these examinations. |
STOCKBASED_COMPENSATION_PLANS
STOCK-BASED COMPENSATION PLANS | 3 Months Ended |
Nov. 30, 2014 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-based compensation plans | NOTE 11. STOCK-BASED COMPENSATION PLANS |
The Company's stock-based compensation plans are described, and informational disclosures provided, in Note 15, Stock-Based Compensation Plans, to the consolidated financial statements in the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 2014. During the three months ended November 30, 2014 and 2013, restricted stock units and performance stock units totaling 1.0 million and 1.1 million, respectively, were granted at a weighted-average fair value of $16.08 and $16.75, respectively. | |
During the three months ended November 30, 2014 and 2013, the Company granted 392,517 and 376,265 equivalent shares, respectively, of performance stock units and restricted stock units accounted for as liability awards. The fair value of these liability awards is remeasured each reporting period and is recognized ratably over the service period. As of November 30, 2014, the Company had 942,012 equivalent shares in awards outstanding. The Company expects 894,910 equivalent shares to vest. | |
In general, the restricted stock units granted during fiscal 2015 and 2014 vest ratably over a period of three years; however, certain restricted stock units granted during fiscal 2015 vest after a specified service period; one-third of each such award vest on the second anniversary of the grant date and the remaining two-thirds of each such award vest on the third anniversary of the grant date. In addition, certain restricted stock units granted during fiscal 2014 vest after a specified service period; 25% of the award vest on the second anniversary of the grant date; 25% of each such award vest on the third anniversary of the grant date and the remaining 50% of each such award vest on the fourth anniversary of the grant date. Subject to the achievement of performance targets established by the Compensation Committee of CMC's Board of Directors, the performance stock units granted during fiscal 2015 and fiscal 2014 will vest after a period of three years. | |
Stock-based compensation expense for the three months ended November 30, 2014 and 2013 of $5.7 million and $5.5 million, respectively, is included in selling, general and administrative expenses on the Company's consolidated statements of earnings. |
STOCKHOLDERS_EQUITY_AND_EARNIN
STOCKHOLDERSb EQUITY AND EARNINGS PER SHARE ATTRIBUTABLE TO CMC | 3 Months Ended | ||||||||
Nov. 30, 2014 | |||||||||
Earnings Per Share [Abstract] | |||||||||
Stockholder's equity and earnings per share attributable to CMC | NOTE 12. STOCKHOLDERS’ EQUITY AND EARNINGS PER SHARE ATTRIBUTABLE TO CMC | ||||||||
The calculations of basic and diluted earnings per share from continuing operations for the three months ended November 30, 2014 and 2013 are as follows: | |||||||||
Three Months Ended November 30, | |||||||||
(in thousands, except share data) | 2014 | 2013 | |||||||
Earnings from continuing operations | $ | 38,334 | $ | 33,700 | |||||
Basic earnings per share: | |||||||||
Shares outstanding for basic earnings per share | 117,818,170 | 117,070,499 | |||||||
Basic earnings per share attributable to CMC: | $ | 0.33 | $ | 0.29 | |||||
Diluted earnings per share: | |||||||||
Shares outstanding for basic earnings per share | 117,818,170 | 117,070,499 | |||||||
Effect of dilutive securities: | |||||||||
Stock-based incentive/purchase plans | 1,091,448 | 1,086,112 | |||||||
Shares outstanding for diluted earnings per share | 118,909,618 | 118,156,611 | |||||||
Diluted earnings per share attributable to CMC: | $ | 0.32 | $ | 0.29 | |||||
Anti-dilutive shares not included above | 672,352 | 1,364,036 | |||||||
_______________________ | |||||||||
CMC's restricted stock is included in the number of shares of common stock issued and outstanding, but is omitted from the basic earnings per share calculation until the shares vest. | |||||||||
On October 27, 2014, CMC's Board of Directors authorized a new share repurchase program under which the Company may repurchase up to $100.0 million of CMC's outstanding common stock. This new program replaced the existing program, which was terminated by CMC's Board of Directors in connection with the approval of the new program. The Company purchased 560,493 shares of its outstanding common stock, at an average purchase price of $16.67 per share, during the first three months of fiscal 2015 and had remaining authorization to purchase $90.7 million of common stock at November 30, 2014 pursuant to its share repurchase program. |
COMMITMENTS_AND_CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Nov. 30, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and contingencies | NOTE 13. COMMITMENTS AND CONTINGENCIES |
In the ordinary course of conducting its business, the Company becomes involved in litigation, administrative proceedings and governmental investigations, including environmental matters. See Note 18, Commitments and Contingencies, to the consolidated financial statements in the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 2014. | |
On September 18, 2008, the Company was served with a purported class action antitrust lawsuit alleging violations of Section 1 of the Sherman Act, brought by Standard Iron Works of Scranton, Pennsylvania, against nine steel manufacturing companies, including CMC. The lawsuit, filed in the United States District Court for the Northern District of Illinois, alleged that the defendants conspired to fix, raise, maintain and stabilize the price at which steel products were sold in the United States by artificially restricting the supply of such steel products. The lawsuit, which purported to be brought on behalf of a class consisting of all parties who purchased steel products directly from the defendants between January 1, 2005 and September 2008 (collectively, the "Direct Purchaser Plaintiffs"), sought treble damages and costs, including reasonable attorney fees and pre- and post-judgment interest. | |
On March 14, 2014, the Company entered into a final settlement agreement with the Direct Purchaser Plaintiffs. As part of that final settlement, in April 2014, the Company paid approximately $4.0 million to the Direct Purchaser Plaintiffs in consideration for the full and final release of all claims of the Direct Purchaser Plaintiffs. The Company maintains that the claims lacked merit and that it has full and complete defenses to all of the claims asserted against it. However, the Company agreed to enter into the settlement agreement to avoid further expense, inconvenience, and distraction of burdensome and protracted litigation. On October 17, 2014, the court granted final approval of the settlement. | |
On September 24, 2008, a case was filed in the United States District Court for the Northern District of Illinois on behalf of a purported nationwide class of indirect purchasers naming the same defendants and containing allegations substantially identical to those of the complaint filed by Standard Iron Works. The lawsuit sought damages, including reasonable attorney fees and other amounts recoverable by statute. Some document production has occurred in the case. Another action was filed in Tennessee state court on behalf of a purported class of indirect purchasers in Tennessee naming the same defendants but seeking recovery for purchases through 2010. The lawsuit sought damages and costs, including reasonable attorney fees and pre- and post-judgment interest. The case has been removed to federal court, and was transferred to United States District Court for the Northern District of Illinois in March 2012. No motion practice or discovery has taken place. The Company believes that the lawsuits are without merit and plans to defend them vigorously. Due to the uncertainty and the information available as of the date of this Quarterly Report on Form 10-Q, the Company cannot reasonably estimate a range of loss relating to these cases. |
BUSINESS_SEGMENTS
BUSINESS SEGMENTS | 3 Months Ended | ||||||||||||||||||||||||||||||||
Nov. 30, 2014 | |||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||
Business segments | NOTE 14. BUSINESS SEGMENTS | ||||||||||||||||||||||||||||||||
The Company's operating segments engage in business activities from which they may earn revenues and incur expenses and for which discrete financial information is available. Operating results for the operating segments are regularly reviewed by the Company's chief operating decision maker to make decisions about resources to be allocated to the segments and to assess performance. The Company's chief operating decision maker is identified as the Chief Executive Officer. Operating segments are aggregated for reporting purposes when the operating segments are identified as similar in accordance with the basic principles and aggregation criteria in the accounting standards. The Company's reporting segments are based primarily on product lines and secondarily on geographic area. The reporting segments have different lines of management responsibility as each business requires different marketing strategies and management expertise. | |||||||||||||||||||||||||||||||||
The Company structures its business into the following five reporting segments: Americas Recycling, Americas Mills, Americas Fabrication, International Mill and International Marketing and Distribution. The Americas Recycling segment processes scrap metals for use as a raw material by manufacturers of new metal products. The Americas Mills segment manufactures finished long steel products including reinforcement bar ("rebar"), merchant bar, light structural, some special bar quality ("SBQ") and other special sections as well as semi-finished billets for re-rolling and forging applications. The Americas Fabrication segment consists of the Company's rebar and structural fabrication operations, fence post manufacturing plants, construction-related product facilities and plants that heat-treat steel to strengthen and provide flexibility. The International Mill segment includes the Company's minimill and the Company's recycling and fabrication operations in Poland. The International Marketing and Distribution segment includes international operations for the sale, distribution and processing of steel products, ferrous and nonferrous metals and other industrial products. Additionally, this segment includes the Company's marketing and distribution divisions headquartered in the U.S. and also operates a recycling facility in Singapore. Corporate contains expenses of the Company's corporate headquarters and interest expense related to its long-term debt. | |||||||||||||||||||||||||||||||||
The financial information presented for the Americas Mills segment excludes Howell. Additionally, the financial information presented for the International Marketing and Distribution segment excludes the steel distribution business in Australia. These operations have been classified as discontinued operations in the consolidated statements of earnings. See Note 6, Businesses Held for Sale, Discontinued Operations and Dispositions, for more information. | |||||||||||||||||||||||||||||||||
The Company uses adjusted operating profit (loss), a non-GAAP financial measure, to compare and to evaluate the financial performance of its segments. Adjusted operating profit (loss) is the sum of the Company's earnings from continuing operations before income taxes, interest expense and discounts on sales of accounts receivable. Intersegment sales are generally priced at prevailing market prices. Certain corporate administrative expenses are allocated to the segments based upon the nature of the expense. The accounting policies of the segments are the same as those described in Note 2, Summary of Significant Accounting Policies, of the audited consolidated financial statements included in the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 2014. | |||||||||||||||||||||||||||||||||
The following is a summary of certain financial information from continuing operations by reportable segment: | |||||||||||||||||||||||||||||||||
Three Months Ended November 30, 2014 | |||||||||||||||||||||||||||||||||
Americas | International | ||||||||||||||||||||||||||||||||
(in thousands) | Recycling | Mills | Fabrication | Mill | Marketing and Distribution | Corporate | Eliminations | Continuing Operations | |||||||||||||||||||||||||
Net sales-unaffiliated customers | $ | 269,802 | $ | 303,859 | $ | 408,237 | $ | 177,629 | $ | 519,631 | $ | 832 | $ | — | $ | 1,679,990 | |||||||||||||||||
Intersegment sales | 46,257 | 220,992 | 4,251 | — | 18,175 | — | (289,675 | ) | — | ||||||||||||||||||||||||
Net sales | 316,059 | 524,851 | 412,488 | 177,629 | 537,806 | 832 | (289,675 | ) | 1,679,990 | ||||||||||||||||||||||||
Adjusted operating profit (loss) | (1,143 | ) | 75,382 | (3,009 | ) | 4,223 | 18,252 | (19,611 | ) | (805 | ) | 73,289 | |||||||||||||||||||||
Total assets at November 30, 2014* | 310,139 | 665,388 | 678,267 | 454,143 | 1,022,760 | 1,035,764 | (652,430 | ) | 3,514,031 | ||||||||||||||||||||||||
Three Months Ended November 30, 2013 | |||||||||||||||||||||||||||||||||
Americas | International | ||||||||||||||||||||||||||||||||
(in thousands) | Recycling | Mills | Fabrication | Mill | Marketing and Distribution | Corporate | Eliminations | Continuing Operations | |||||||||||||||||||||||||
Net sales-unaffiliated customers | $ | 293,475 | $ | 291,573 | $ | 353,992 | $ | 228,492 | $ | 443,358 | $ | 6,185 | $ | — | $ | 1,617,075 | |||||||||||||||||
Intersegment sales | 44,727 | 189,578 | 4,226 | 658 | 1,984 | — | (241,173 | ) | — | ||||||||||||||||||||||||
Net sales | 338,202 | 481,151 | 358,218 | 229,150 | 445,342 | 6,185 | (241,173 | ) | 1,617,075 | ||||||||||||||||||||||||
Adjusted operating profit (loss) | 839 | 65,814 | 2,217 | 15,268 | 2,042 | (18,049 | ) | 597 | 68,728 | ||||||||||||||||||||||||
Total assets at August 31, 2014* | 296,564 | 647,437 | 691,765 | 466,449 | 949,016 | 1,100,995 | (470,716 | ) | 3,681,510 | ||||||||||||||||||||||||
* Excludes total assets from discontinued operations of $102.3 million at November 30, 2014 and $7.0 million at August 31, 2014. | |||||||||||||||||||||||||||||||||
Reconciliations of earnings from continuing operations to adjusted operating profit are provided below: | |||||||||||||||||||||||||||||||||
Three Months Ended November 30, | |||||||||||||||||||||||||||||||||
(in thousands) | 2014 | 2013 | |||||||||||||||||||||||||||||||
Earnings from continuing operations | $ | 38,334 | $ | 33,700 | |||||||||||||||||||||||||||||
Income taxes | 15,447 | 15,091 | |||||||||||||||||||||||||||||||
Interest expense | 19,057 | 19,408 | |||||||||||||||||||||||||||||||
Discounts on sales of accounts receivable | 451 | 529 | |||||||||||||||||||||||||||||||
Adjusted operating profit | $ | 73,289 | $ | 68,728 | |||||||||||||||||||||||||||||
ACCOUNTING_POLICIES_Policies
ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Nov. 30, 2014 | |
Accounting Policies [Abstract] | |
Accounting principles | Accounting Principles |
The accompanying unaudited 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 fiscal year ended August 31, 2014 filed by Commercial Metals Company ("CMC", and together with its consolidated subsidiaries, the "Company") with the Securities and Exchange Commission ("SEC") and include all normal recurring adjustments necessary to present fairly the consolidated balance sheets and the consolidated statements of earnings, comprehensive income, cash flows and stockholders' equity for the periods indicated. These notes should be read in conjunction with the audited consolidated financial statements included in the Annual Report on Form 10-K for the fiscal year ended August 31, 2014. The results of operations for the three month period are not necessarily indicative of the results to be expected for the full year. | |
Recent accounting pronouncements | Recent Accounting Pronouncements |
In the first quarter of fiscal 2015, the Company adopted guidance issued by the Financial Accounting Standards Board ("FASB") requiring an entity to net an unrecognized tax benefit with a deferred tax asset for a net operating loss carryforward, a similar tax loss or a tax credit carryforward. To the extent a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position or the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets. The adoption of this guidance did not have an impact on the Company's consolidated financial statements. | |
In the first quarter of fiscal 2015, the Company adopted guidance issued by the FASB requiring an entity to release any related cumulative translation adjustment into net income when it either sells a part or all of its investment in a foreign entity or no longer holds a controlling financial interest in a subsidiary or group of assets that is a nonprofit activity or a business within a foreign entity. In addition, the guidance resolves the diversity in practice for the treatment of business combinations achieved in stages involving a foreign entity. The adoption of this guidance did not have an impact on the Company's consolidated financial statements. | |
In the first quarter of fiscal 2015, the Company adopted guidance issued by the FASB requiring an entity to measure obligations resulting from joint and several liability arrangements for which the total amount of the obligation is fixed at the reporting date. The guidance also requires entities to disclose the nature and amount of the obligation as well as other information about the obligation. The adoption of this guidance did not have a material impact on the Company's consolidated financial statements. | |
In August 2014, the FASB issued guidance requiring management to evaluate whether there are conditions and events that raise substantial doubt about the entity's ability to continue as a going concern and to provide disclosures in certain circumstances. The new guidance was issued to reduce diversity in the timing and content of footnote disclosures. This guidance is effective for fiscal years, and interim reporting periods therein, beginning after December 15, 2016. The Company does not expect this guidance to have a material impact on its consolidated financial statements. | |
In August 2014, the FASB issued guidance providing a measurement alternative to the existing fair value measurement guidance for reporting entities that consolidate a collateralized financing entity in which (1) the financial assets and financial liabilities are measured at fair value except for those incidental financial assets and financial liabilities with their carrying values that approximate fair values and (2) the changes in the fair values of those financial assets and financial liabilities are reflected in earnings. When the measurement alternative is elected, the financial assets and liabilities of a collateralized financing entity will be measured using the more observable of the fair value of the financial assets and the fair value of the financial liabilities. This guidance is effective for public business entities for annual periods, and for interim periods within those annual periods, beginning after December 15, 2015. Early adoption is permitted as of the beginning of an annual period. The Company does not expect this guidance to have a material impact on its consolidated financial statements. | |
In June 2014, the FASB issued guidance requiring entities to account for a performance target as a performance condition if the target affects vesting and could be achieved after the requisite service period. The new guidance did not introduce additional disclosure requirements and was issued to resolve diversity in practice. This guidance is effective for fiscal years, and interim reporting periods therein, beginning after December 15, 2015. The Company currently accounts for such performance targets in a manner consistent with the new guidance and does not expect this guidance to have a material impact on its consolidated financial statements. | |
In May 2014, the FASB issued guidance requiring entities to recognize revenue from contracts with customers by applying a five-step model in accordance with the core principle to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, this guidance specifies the accounting for some costs to obtain or fulfill a contract with a customer and expands disclosure requirements for revenue recognition. This guidance is effective for fiscal years, and interim reporting periods therein, beginning after December 15, 2016. Entities have the option to adopt this guidance either retrospectively or through a modified retrospective transition method. This new standard will supersede existing revenue guidance and affect the Company's revenue recognition process and the presentations or disclosures of the Company's consolidated financial statements and footnotes. The Company is currently evaluating the impact this guidance will have on its consolidated financial statements. | |
In April 2014, the FASB issued guidance changing the requirements for reporting discontinued operations if the disposal of a component of an entity, or a group of components of an entity, represents a strategic shift that has, or will have, a major effect on an entity's operations and financial results. The guidance requires expanded disclosures for discontinued operations and also requires entities to disclose the pre-tax profit or loss of an individually significant component of an entity that does not qualify for discontinued operations reporting. The new guidance is effective prospectively for fiscal years, and interim periods within those years, beginning on or after December 15, 2014. The guidance will affect the Company's current practice of assessing discontinued operations and the presentation and disclosure in the Company's consolidated financial statements. | |
Fair value measurement | The Company has established a fair value hierarchy which prioritizes the inputs to the valuation techniques used to measure fair value into three 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 as follows: |
Level 1 - Unadjusted quoted prices in active markets for identical assets and liabilities; | |
Level 2 - Quoted prices for similar assets and liabilities in active markets (other than those included in Level 1) which are observable, either directly or indirectly; and | |
Level 3 - Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. | |
Uncertain income tax positions | he Company's policy classifies interest recognized on an underpayment of income taxes and any statutory penalties recognized on a tax position as income tax expense, and the balances at the end of a reporting period are recorded as part of the current or noncurrent reserve for uncertain income tax positions. |
ACCUMULATED_OTHER_COMPREHENSIV1
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables) | 3 Months Ended | ||||||||||||||||
Nov. 30, 2014 | |||||||||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||||||||||||||||
Schedule of accumulated other comprehensive income (loss) | Accumulated other comprehensive income (loss), net of income taxes, for the three months ended November 30, 2014 and 2013 was comprised of the following: | ||||||||||||||||
(in thousands) | Foreign Currency Translation | Unrealized Gain (Loss) on Derivatives | Defined Benefit Obligation | Total Accumulated Other Comprehensive Income (Loss) | |||||||||||||
Balance at August 31, 2014 | $ | (19,891 | ) | $ | 3,014 | $ | (2,632 | ) | $ | (19,509 | ) | ||||||
Other comprehensive income (loss) before reclassifications | (27,284 | ) | (525 | ) | 8 | (27,801 | ) | ||||||||||
Amounts reclassified from AOCI | — | 39 | (4 | ) | 35 | ||||||||||||
Net other comprehensive income (loss) | (27,284 | ) | (486 | ) | 4 | (27,766 | ) | ||||||||||
Balance, November 30, 2014 | $ | (47,175 | ) | $ | 2,528 | $ | (2,628 | ) | $ | (47,275 | ) | ||||||
(in thousands) | Foreign Currency Translation | Unrealized Gain (Loss) on Derivatives | Defined Benefit Obligation | Total Accumulated Other Comprehensive Income (Loss) | |||||||||||||
Balance, August 31, 2013 | $ | (27,477 | ) | $ | 3,594 | $ | (3,293 | ) | $ | (27,176 | ) | ||||||
Other comprehensive income (loss) before reclassifications | 19,442 | (1,617 | ) | 550 | 18,375 | ||||||||||||
Amounts reclassified from AOCI | — | 980 | (2 | ) | 978 | ||||||||||||
Net other comprehensive income (loss) | 19,442 | (637 | ) | 548 | 19,353 | ||||||||||||
Balance, November 30, 2013 | $ | (8,035 | ) | $ | 2,957 | $ | (2,745 | ) | $ | (7,823 | ) | ||||||
Schedule of reclassification out of accumulated other comprehensive income (loss) | The significant items reclassified out of accumulated other comprehensive income (loss) and the corresponding line items in the consolidated statements of earnings to which the items were reclassified were as follows: | ||||||||||||||||
Three Months Ended November 30, | |||||||||||||||||
Components of AOCI (in thousands) | Location | 2014 | 2013 | ||||||||||||||
Unrealized gain (loss) on derivatives: | |||||||||||||||||
Commodity | Cost of goods sold | $ | (20 | ) | $ | (119 | ) | ||||||||||
Foreign exchange | Net sales | — | (250 | ) | |||||||||||||
Foreign exchange | Cost of goods sold | (200 | ) | (922 | ) | ||||||||||||
Foreign exchange | SG&A expenses | 21 | 14 | ||||||||||||||
Interest rate | Interest expense | 134 | 116 | ||||||||||||||
(65 | ) | (1,161 | ) | ||||||||||||||
Income tax effect | Income taxes benefit | 26 | 181 | ||||||||||||||
Net of income taxes | $ | (39 | ) | $ | (980 | ) | |||||||||||
Defined benefit obligation: | |||||||||||||||||
Amortization of prior services | SG&A expenses | $ | 3 | $ | 3 | ||||||||||||
Income tax effect | Income taxes benefit (expense) | 1 | (1 | ) | |||||||||||||
Net of income taxes | $ | 4 | $ | 2 | |||||||||||||
Amounts in parentheses reduce earnings. |
SALES_OF_ACCOUNTS_RECEIVABLE_T
SALES OF ACCOUNTS RECEIVABLE (Tables) | 3 Months Ended | ||||||||||||||||
Nov. 30, 2014 | |||||||||||||||||
Transfers and Servicing [Abstract] | |||||||||||||||||
Activity of the deferred purchase price receivables | The following tables summarize the activity of the deferred purchase price receivables for the U.S. and international sale of accounts receivable programs: | ||||||||||||||||
Three Months Ended November 30, 2014 | |||||||||||||||||
(in thousands) | Total | U.S. | Australia* | Europe | |||||||||||||
Beginning balance | $ | 385,169 | $ | 329,797 | $ | 34,071 | $ | 21,301 | |||||||||
Transfers of accounts receivable | 1,128,244 | 949,163 | 90,729 | 88,352 | |||||||||||||
Collections | (1,041,573 | ) | (870,640 | ) | (102,424 | ) | (68,509 | ) | |||||||||
Ending balance | $ | 471,840 | $ | 408,320 | $ | 22,376 | $ | 41,144 | |||||||||
* Includes the sales of accounts receivable activities related to businesses held for sale (transfers of accounts receivable of $60.5 million and collections of $63.6 million). | |||||||||||||||||
Three Months Ended November 30, 2013 | |||||||||||||||||
(in thousands) | Total | U.S. | Australia | Europe | |||||||||||||
Beginning balance | $ | 453,252 | $ | 358,822 | $ | 64,996 | $ | 29,434 | |||||||||
Transfers of accounts receivable | 1,037,205 | 840,571 | 73,120 | 123,514 | |||||||||||||
Collections | (1,042,922 | ) | (847,878 | ) | (65,804 | ) | (129,240 | ) | |||||||||
Program termination | (72,312 | ) | — | (72,312 | ) | — | |||||||||||
Ending balance | $ | 375,223 | $ | 351,515 | $ | — | $ | 23,708 | |||||||||
GOODWILL_AND_OTHER_INTANGIBLE_1
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 3 Months Ended | ||||||||||||||||||||||||
Nov. 30, 2014 | |||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||
Changes in the carrying amount of goodwill | The following table details the changes in the carrying amount of goodwill by reportable segment: | ||||||||||||||||||||||||
Americas | International | ||||||||||||||||||||||||
(in thousands) | Recycling | Mills | Fabrication | Mill | Marketing and Distribution | Consolidated | |||||||||||||||||||
Balance at August 31, 2014 | $ | 7,267 | $ | 4,970 | $ | 57,144 | $ | 2,776 | $ | 2,162 | $ | 74,319 | |||||||||||||
Foreign currency translation | — | — | — | (127 | ) | (92 | ) | (219 | ) | ||||||||||||||||
Balance at November 30, 2014 | $ | 7,267 | $ | 4,970 | $ | 57,144 | $ | 2,649 | $ | 2,070 | $ | 74,100 | |||||||||||||
BUSINESSES_HELD_FOR_SALE_DISCO1
BUSINESSES HELD FOR SALE, DISCONTINUED OPERATIONS AND DISPOSITIONS (Tables) | 3 Months Ended | ||||||||
Nov. 30, 2014 | |||||||||
Discontinued Operations and Disposal Groups [Abstract] | |||||||||
Components of assets and liabilities of businesses held for sale | The components of assets and liabilities of businesses held for sale on the Company's consolidated balance sheet were as follows: | ||||||||
(in thousands) | November 30, 2014 | ||||||||
Assets: | |||||||||
Accounts receivable | $ | 15,695 | |||||||
Inventories, net | 69,047 | ||||||||
Other current assets | 735 | ||||||||
Property, plant and equipment, net of accumulated depreciation and amortization | 7,139 | ||||||||
Other noncurrent assets | 1,839 | ||||||||
Assets of businesses held for sale | $ | 94,455 | |||||||
Liabilities: | |||||||||
Accounts payable-trade | $ | 22,086 | |||||||
Accounts payable-documentary letters of credit | 13,447 | ||||||||
Accrued expenses and other payables | 7,363 | ||||||||
Liabilities of businesses held for sale | $ | 42,896 | |||||||
Financial information for discontinued operations | Financial information for discontinued operations was as follows: | ||||||||
Three Months Ended November 30, | |||||||||
(in thousands) | 2014 | 2013 | |||||||
Net sales | $ | 59,011 | $ | 83,114 | |||||
Earnings (loss) from discontinued operations before income taxes | (2,102 | ) | 21,106 | ||||||
CREDIT_ARRANGEMENTS_Tables
CREDIT ARRANGEMENTS (Tables) | 3 Months Ended | ||||||||||
Nov. 30, 2014 | |||||||||||
Debt Disclosure [Abstract] | |||||||||||
Long-term debt, including the deferred gain from the termination of the interest rate swaps | Long-term debt, including the deferred gain from the termination of the interest rate swaps, was as follows: | ||||||||||
(in thousands) | Weighted Average | November 30, 2014 | August 31, 2014 | ||||||||
Interest Rate as of November 30, 2014 | |||||||||||
$400 million notes at 6.50% due July 2017 | 5.74% | $ | 407,803 | $ | 408,546 | ||||||
$500 million notes at 7.35% due August 2018 | 6.40% | 517,149 | 518,305 | ||||||||
$330 million notes at 4.875% due May 2023 | 4.88% | 330,000 | 330,000 | ||||||||
Other, including equipment notes | 36,787 | 32,196 | |||||||||
1,291,739 | 1,289,047 | ||||||||||
Less current maturities | 8,931 | 8,005 | |||||||||
$ | 1,282,808 | $ | 1,281,042 | ||||||||
Interest on these notes is payable semiannually. |
DERIVATIVES_AND_RISK_MANAGEMEN1
DERIVATIVES AND RISK MANAGEMENT (Tables) | 3 Months Ended | ||||||||||
Nov. 30, 2014 | |||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||
Commodity contract commitments | The following table provides information regarding the Company's commodity contract commitments as of November 30, 2014: | ||||||||||
Commodity | Long/Short | Total | |||||||||
Aluminum | Long | 2,366 | MT | ||||||||
Aluminum | Short | 100 | MT | ||||||||
Copper | Long | 1,531 | MT | ||||||||
Copper | Short | 5,012 | MT | ||||||||
Zinc | Long | 7 | MT | ||||||||
Natural Gas | Long | 540,000 | MMBTUs | ||||||||
MT =etric Ton | |||||||||||
MMBTU =ne million British thermal units | |||||||||||
Derivatives not designated as hedging instruments | The following tables summarize activities related to the Company's derivative instruments and hedged items recognized in the consolidated statements of earnings: | ||||||||||
Three Months Ended November 30, | |||||||||||
Derivatives Not Designated as Hedging Instruments (in thousands) | Location | 2014 | 2013 | ||||||||
Commodity | Cost of goods sold | $ | 3,435 | $ | 510 | ||||||
Foreign exchange | Net sales | 2,436 | (159 | ) | |||||||
Foreign exchange | Cost of goods sold | 1,871 | (121 | ) | |||||||
Foreign exchange | SG&A expenses | 12,200 | (4,693 | ) | |||||||
Gain (loss) before income taxes | $ | 19,942 | $ | (4,463 | ) | ||||||
Derivatives designated as fair value hedging instruments | Hedged items relate to firm commitments on commercial sales and purchases. | ||||||||||
Derivatives Designated as Fair Value Hedging Instruments (in thousands) | Three Months Ended November 30, | ||||||||||
Location | 2014 | 2013 | |||||||||
Foreign exchange | Net sales | $ | (175 | ) | $ | (113 | ) | ||||
Foreign exchange | Cost of goods sold | 1,154 | (127 | ) | |||||||
Gain (loss) before income taxes | $ | 979 | $ | (240 | ) | ||||||
Hedged items designated as fair value hedging instruments | |||||||||||
Hedged Items Designated as Fair Value Hedging Instruments (in thousands) | Three Months Ended November 30, | ||||||||||
Location | 2014 | 2013 | |||||||||
Foreign exchange | Net sales | $ | 179 | $ | 93 | ||||||
Foreign exchange | Cost of goods sold | (1,154 | ) | 125 | |||||||
Gain (loss) before income taxes | $ | (975 | ) | $ | 218 | ||||||
Effective portion of derivatives designated as cash flow hedging instruments recognized In accumulated other comprehensive income (loss) | |||||||||||
Effective Portion of Derivatives Designated as Cash Flow Hedging Instruments Recognized in Accumulated Other Comprehensive Income (Loss) (in thousands) | Three Months Ended November 30, | ||||||||||
2014 | 2013 | ||||||||||
Commodity | $ | (68 | ) | $ | (89 | ) | |||||
Foreign exchange | (457 | ) | (1,528 | ) | |||||||
Gain (loss), net of income taxes | $ | (525 | ) | $ | (1,617 | ) | |||||
Effective portion of derivatives designated as cash flow hedging instruments reclassified from accumulated other comprehensive income (loss) | |||||||||||
Effective Portion of Derivatives Designated as Cash Flow Hedging Instruments Reclassified from Accumulated Other Comprehensive Income (Loss) (in thousands) | Three Months Ended November 30, | ||||||||||
Location | 2014 | 2013 | |||||||||
Commodity | Cost of goods sold | $ | (13 | ) | $ | (89 | ) | ||||
Foreign exchange | Net sales | — | (231 | ) | |||||||
Foreign exchange | Cost of goods sold | (130 | ) | (758 | ) | ||||||
Foreign exchange | SG&A expenses | 17 | 12 | ||||||||
Interest rate | Interest expense | 87 | 86 | ||||||||
Gain (loss), net of income taxes | $ | (39 | ) | $ | (980 | ) | |||||
Derivative assets | The fair value of the Company's derivative instruments on the consolidated balance sheets was as follows: | ||||||||||
Derivative Assets (in thousands) | November 30, 2014 | August 31, 2014 | |||||||||
Commodity — designated for hedge accounting | $ | 5 | $ | 42 | |||||||
Commodity — not designated for hedge accounting | 2,132 | 869 | |||||||||
Foreign exchange — designated for hedge accounting | 1,111 | 136 | |||||||||
Foreign exchange — not designated for hedge accounting | 3,529 | 1,853 | |||||||||
Derivative assets (other current assets)* | $ | 6,777 | $ | 2,900 | |||||||
Derivative liabilities | |||||||||||
Derivative Liabilities (in thousands) | November 30, 2014 | August 31, 2014 | |||||||||
Commodity — designated for hedge accounting | $ | 97 | $ | 6 | |||||||
Commodity — not designated for hedge accounting | 467 | 162 | |||||||||
Foreign exchange — designated for hedge accounting | 774 | 325 | |||||||||
Foreign exchange — not designated for hedge accounting | 1,271 | 1,010 | |||||||||
Derivative liabilities (accrued expenses and other payables)* | $ | 2,609 | $ | 1,503 | |||||||
_________________ | |||||||||||
* Derivative assets and liabilities do not include the hedged items designated as fair value hedges. |
FAIR_VALUE_Tables
FAIR VALUE (Tables) | 3 Months Ended | ||||||||||||||||||
Nov. 30, 2014 | |||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||
Financial assets and financial liabilities measured at fair value on a recurring basis | 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 | |||||||||||||||||||
(in thousands) | November 30, 2014 | Quoted Prices in | Significant Other | Significant | |||||||||||||||
Active Markets for | Observable Inputs | Unobservable Inputs | |||||||||||||||||
Identical Assets | (Level 2) | (Level 3) | |||||||||||||||||
(Level 1) | |||||||||||||||||||
Assets: | |||||||||||||||||||
Money market investments (1) | $ | 150,100 | $ | 150,100 | $ | — | $ | — | |||||||||||
Commodity derivative assets (2) | 2,137 | 2,132 | 5 | — | |||||||||||||||
Foreign exchange derivative assets (2) | 4,640 | — | 4,640 | — | |||||||||||||||
Liabilities: | |||||||||||||||||||
Commodity derivative liabilities (2) | 564 | 467 | 97 | — | |||||||||||||||
Foreign exchange derivative liabilities (2) | 2,045 | — | 2,045 | — | |||||||||||||||
Fair Value Measurements at Reporting Date Using | |||||||||||||||||||
(in thousands) | August 31, 2014 | Quoted Prices in | Significant Other | Significant | |||||||||||||||
Active Markets for | Observable Inputs | Unobservable Inputs | |||||||||||||||||
Identical Assets | (Level 2) | (Level 3) | |||||||||||||||||
(Level 1) | |||||||||||||||||||
Assets: | |||||||||||||||||||
Money market investments (1) | $ | 200,487 | $ | 200,487 | $ | — | $ | — | |||||||||||
Commodity derivative assets (2) | 911 | 911 | — | — | |||||||||||||||
Foreign exchange derivative assets (2) | 1,989 | — | 1,989 | — | |||||||||||||||
Liabilities: | |||||||||||||||||||
Commodity derivative liabilities (2) | 168 | 162 | 6 | — | |||||||||||||||
Foreign exchange derivative liabilities (2) | 1,335 | — | 1,335 | — | |||||||||||||||
_________________ | |||||||||||||||||||
(1) Money market investments are short-term in nature, and the value is determined by broker quoted prices in active markets. 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 Commodity Exchange, Inc. Amounts in Level 2 are based on broker quotes in the over-the-counter market. Further discussion regarding the Company's use of derivative instruments and the classification of the assets and liabilities is included in Note 8, Derivatives and Risk Management. | |||||||||||||||||||
Financial assets and liabilities not required to be measured at 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 consolidated balance sheets are as follows: | ||||||||||||||||||
November 30, 2014 | August 31, 2014 | ||||||||||||||||||
(in thousands) | Fair Value Hierarchy | Carrying Value | Fair Value | Carrying Value | Fair Value | ||||||||||||||
$400 million notes at 6.50% due July 2017 (1) | Level 2 | $ | 407,803 | $ | 435,528 | $ | 408,546 | $ | 438,200 | ||||||||||
$500 million notes at 7.35% due August 2018 (1) | Level 2 | 517,149 | 553,125 | 518,305 | 567,560 | ||||||||||||||
$330 million notes at 4.875% due May 2023 (1) | Level 2 | 330,000 | 322,080 | 330,000 | 325,050 | ||||||||||||||
_________________ | |||||||||||||||||||
(1) The fair values of the 2017 Notes, 2018 Notes and 2023 Notes are estimated based on readily available market prices of these notes at November 30, 2014 and August 31, 2014, or similar notes with the same maturities, rating and interest rates. |
STOCKHOLDERS_EQUITY_AND_EARNIN1
STOCKHOLDERSb EQUITY AND EARNINGS PER SHARE ATTRIBUTABLE TO CMC (Tables) | 3 Months Ended | ||||||||
Nov. 30, 2014 | |||||||||
Earnings Per Share [Abstract] | |||||||||
Calculations of the basic and diluted earnings per share from continuing operations | The calculations of basic and diluted earnings per share from continuing operations for the three months ended November 30, 2014 and 2013 are as follows: | ||||||||
Three Months Ended November 30, | |||||||||
(in thousands, except share data) | 2014 | 2013 | |||||||
Earnings from continuing operations | $ | 38,334 | $ | 33,700 | |||||
Basic earnings per share: | |||||||||
Shares outstanding for basic earnings per share | 117,818,170 | 117,070,499 | |||||||
Basic earnings per share attributable to CMC: | $ | 0.33 | $ | 0.29 | |||||
Diluted earnings per share: | |||||||||
Shares outstanding for basic earnings per share | 117,818,170 | 117,070,499 | |||||||
Effect of dilutive securities: | |||||||||
Stock-based incentive/purchase plans | 1,091,448 | 1,086,112 | |||||||
Shares outstanding for diluted earnings per share | 118,909,618 | 118,156,611 | |||||||
Diluted earnings per share attributable to CMC: | $ | 0.32 | $ | 0.29 | |||||
Anti-dilutive shares not included above | 672,352 | 1,364,036 | |||||||
_______________________ | |||||||||
CMC's restricted stock is included in the number of shares of common stock issued and outstanding, but is omitted from the basic earnings per share calculation until the shares vest. |
BUSINESS_SEGMENTS_Tables
BUSINESS SEGMENTS (Tables) | 3 Months Ended | ||||||||||||||||||||||||||||||||
Nov. 30, 2014 | |||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||
Summary of certain financial information from continuing operations by reportable segment | The following is a summary of certain financial information from continuing operations by reportable segment: | ||||||||||||||||||||||||||||||||
Three Months Ended November 30, 2014 | |||||||||||||||||||||||||||||||||
Americas | International | ||||||||||||||||||||||||||||||||
(in thousands) | Recycling | Mills | Fabrication | Mill | Marketing and Distribution | Corporate | Eliminations | Continuing Operations | |||||||||||||||||||||||||
Net sales-unaffiliated customers | $ | 269,802 | $ | 303,859 | $ | 408,237 | $ | 177,629 | $ | 519,631 | $ | 832 | $ | — | $ | 1,679,990 | |||||||||||||||||
Intersegment sales | 46,257 | 220,992 | 4,251 | — | 18,175 | — | (289,675 | ) | — | ||||||||||||||||||||||||
Net sales | 316,059 | 524,851 | 412,488 | 177,629 | 537,806 | 832 | (289,675 | ) | 1,679,990 | ||||||||||||||||||||||||
Adjusted operating profit (loss) | (1,143 | ) | 75,382 | (3,009 | ) | 4,223 | 18,252 | (19,611 | ) | (805 | ) | 73,289 | |||||||||||||||||||||
Total assets at November 30, 2014* | 310,139 | 665,388 | 678,267 | 454,143 | 1,022,760 | 1,035,764 | (652,430 | ) | 3,514,031 | ||||||||||||||||||||||||
Three Months Ended November 30, 2013 | |||||||||||||||||||||||||||||||||
Americas | International | ||||||||||||||||||||||||||||||||
(in thousands) | Recycling | Mills | Fabrication | Mill | Marketing and Distribution | Corporate | Eliminations | Continuing Operations | |||||||||||||||||||||||||
Net sales-unaffiliated customers | $ | 293,475 | $ | 291,573 | $ | 353,992 | $ | 228,492 | $ | 443,358 | $ | 6,185 | $ | — | $ | 1,617,075 | |||||||||||||||||
Intersegment sales | 44,727 | 189,578 | 4,226 | 658 | 1,984 | — | (241,173 | ) | — | ||||||||||||||||||||||||
Net sales | 338,202 | 481,151 | 358,218 | 229,150 | 445,342 | 6,185 | (241,173 | ) | 1,617,075 | ||||||||||||||||||||||||
Adjusted operating profit (loss) | 839 | 65,814 | 2,217 | 15,268 | 2,042 | (18,049 | ) | 597 | 68,728 | ||||||||||||||||||||||||
Total assets at August 31, 2014* | 296,564 | 647,437 | 691,765 | 466,449 | 949,016 | 1,100,995 | (470,716 | ) | 3,681,510 | ||||||||||||||||||||||||
* Excludes total assets from discontinued operations of $102.3 million at November 30, 2014 and $7.0 million at August 31, 2014. | |||||||||||||||||||||||||||||||||
Reconciliations of earnings from continuing operations to adjusted operating profit | Reconciliations of earnings from continuing operations to adjusted operating profit are provided below: | ||||||||||||||||||||||||||||||||
Three Months Ended November 30, | |||||||||||||||||||||||||||||||||
(in thousands) | 2014 | 2013 | |||||||||||||||||||||||||||||||
Earnings from continuing operations | $ | 38,334 | $ | 33,700 | |||||||||||||||||||||||||||||
Income taxes | 15,447 | 15,091 | |||||||||||||||||||||||||||||||
Interest expense | 19,057 | 19,408 | |||||||||||||||||||||||||||||||
Discounts on sales of accounts receivable | 451 | 529 | |||||||||||||||||||||||||||||||
Adjusted operating profit | $ | 73,289 | $ | 68,728 | |||||||||||||||||||||||||||||
ACCUMULATED_OTHER_COMPREHENSIV2
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (AOCI by Components) (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Nov. 30, 2014 | Nov. 30, 2013 |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Beginning balance | ($19,509) | ($27,176) |
Other comprehensive income (loss) before reclassifications | -27,801 | 18,375 |
Amounts reclassified from AOCI | 35 | 978 |
Other comprehensive income (loss) | -27,766 | 19,353 |
Ending balance | -47,275 | -7,823 |
Foreign Currency Translation | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Beginning balance | -19,891 | -27,477 |
Other comprehensive income (loss) before reclassifications | -27,284 | 19,442 |
Amounts reclassified from AOCI | 0 | 0 |
Other comprehensive income (loss) | -27,284 | 19,442 |
Ending balance | -47,175 | -8,035 |
Unrealized Gain (Loss) on Derivatives | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Beginning balance | 3,014 | 3,594 |
Other comprehensive income (loss) before reclassifications | -525 | -1,617 |
Amounts reclassified from AOCI | 39 | 980 |
Other comprehensive income (loss) | -486 | -637 |
Ending balance | 2,528 | 2,957 |
Defined Benefit Obligation | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Beginning balance | -2,632 | -3,293 |
Other comprehensive income (loss) before reclassifications | 8 | 550 |
Amounts reclassified from AOCI | -4 | -2 |
Other comprehensive income (loss) | 4 | 548 |
Ending balance | ($2,628) | ($2,745) |
ACCUMULATED_OTHER_COMPREHENSIV3
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Reclassification from AOCI) (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Nov. 30, 2014 | Nov. 30, 2013 |
Unrealized gain (loss) on derivatives: | ||
Income tax effect | $26 | $181 |
Net of income taxes | -39 | -980 |
Unrealized gain (loss) on derivatives | ||
Unrealized gain (loss) on derivatives: | ||
Reclassification adjustments from AOCI on derivatives, before tax | -65 | -1,161 |
Income tax effect | 26 | 181 |
Net of income taxes | -39 | -980 |
Unrealized gain (loss) on derivatives | Commodity | Cost of goods sold | ||
Unrealized gain (loss) on derivatives: | ||
Reclassification adjustments from AOCI on derivatives, before tax | -20 | -119 |
Unrealized gain (loss) on derivatives | Foreign exchange | Cost of goods sold | ||
Unrealized gain (loss) on derivatives: | ||
Reclassification adjustments from AOCI on derivatives, before tax | -200 | -922 |
Unrealized gain (loss) on derivatives | Foreign exchange | Net sales | ||
Unrealized gain (loss) on derivatives: | ||
Reclassification adjustments from AOCI on derivatives, before tax | 0 | -250 |
Unrealized gain (loss) on derivatives | Foreign exchange | SG&A expenses | ||
Unrealized gain (loss) on derivatives: | ||
Reclassification adjustments from AOCI on derivatives, before tax | 21 | 14 |
Unrealized gain (loss) on derivatives | Interest rate | Interest expense | ||
Unrealized gain (loss) on derivatives: | ||
Reclassification adjustments from AOCI on derivatives, before tax | 134 | 116 |
Defined benefit obligation | ||
Defined benefit obligation: | ||
Income tax effect | 1 | -1 |
Net of Income taxes | 4 | 2 |
Defined benefit obligation | SG&A expenses | ||
Defined benefit obligation: | ||
Amortization of prior services | $3 | $3 |
SALES_OF_ACCOUNTS_RECEIVABLE_N
SALES OF ACCOUNTS RECEIVABLE (Narrative) (Details) | 3 Months Ended | 3 Months Ended | ||||||
Nov. 30, 2014 | Nov. 30, 2013 | Nov. 30, 2014 | Aug. 31, 2014 | Nov. 30, 2014 | Nov. 30, 2014 | Nov. 30, 2014 | Aug. 31, 2014 | |
USD ($) | USD ($) | U.S. | U.S. | European program | Australian program | European and Australian programs | European and Australian programs | |
USD ($) | USD ($) | AUD | USD ($) | USD ($) | ||||
entities | ||||||||
Securitization or Asset-backed Financing Arrangement, Financial Asset for which Transfer is Accounted as Sale [Line Items] | ||||||||
Current advance limit for accounts receivable sold | $200,000,000 | |||||||
Number of financial institutions | 3 | |||||||
Maximum advance limit for accounts receivable sold | 300,000,000 | 75,000,000 | ||||||
Trade accounts receivable sold | 412,900,000 | 389,600,000 | 122,000,000 | 147,300,000 | ||||
Advance payment received on sale of trade account receivable | 0 | 55,000,000 | 57,300,000 | 90,500,000 | ||||
Advances, maximum percentage of eligible receivables | 90.00% | |||||||
Percentage of eligible receivables sold | 100.00% | |||||||
Cash proceeds from sales of accounts receivable programs | 118,900,000 | 162,800,000 | ||||||
Cash payments to the owners of accounts receivable | 207,100,000 | 159,400,000 | ||||||
Discounts on sales of accounts receivable | 451,000 | 529,000 | ||||||
Transfers of accounts receivable | 60,500,000 | |||||||
Collections | $63,600,000 |
SALES_OF_ACCOUNTS_RECEIVABLE_A
SALES OF ACCOUNTS RECEIVABLE (Activity of Deferred Purchase Price Receivables) (Details) (USD $) | 3 Months Ended | ||
In Thousands, unless otherwise specified | Nov. 30, 2014 | Nov. 30, 2013 | |
Securitization or Asset-backed Financing Arrangement, Financial Asset for which Transfer is Accounted as Sale [Line Items] | |||
Beginning balance | $1,028,425 | ||
Transfers of accounts receivable | 60,500 | ||
Collections | -63,600 | ||
Ending balance | 986,405 | ||
Deferred purchase price receivables | |||
Securitization or Asset-backed Financing Arrangement, Financial Asset for which Transfer is Accounted as Sale [Line Items] | |||
Beginning balance | 385,169 | 453,252 | |
Transfers of accounts receivable | 1,128,244 | 1,037,205 | |
Collections | -1,041,573 | -1,042,922 | |
Program termination | -72,312 | ||
Ending balance | 471,840 | 375,223 | |
Deferred purchase price receivables | U.S. | |||
Securitization or Asset-backed Financing Arrangement, Financial Asset for which Transfer is Accounted as Sale [Line Items] | |||
Beginning balance | 329,797 | 358,822 | |
Transfers of accounts receivable | 949,163 | 840,571 | |
Collections | -870,640 | -847,878 | |
Program termination | 0 | ||
Ending balance | 408,320 | 351,515 | |
Deferred purchase price receivables | Australia | |||
Securitization or Asset-backed Financing Arrangement, Financial Asset for which Transfer is Accounted as Sale [Line Items] | |||
Beginning balance | 34,071 | [1] | 64,996 |
Transfers of accounts receivable | 90,729 | [1] | 73,120 |
Collections | -102,424 | [1] | -65,804 |
Program termination | -72,312 | ||
Ending balance | 22,376 | [1] | 0 |
Deferred purchase price receivables | Europe | |||
Securitization or Asset-backed Financing Arrangement, Financial Asset for which Transfer is Accounted as Sale [Line Items] | |||
Beginning balance | 21,301 | 29,434 | |
Transfers of accounts receivable | 88,352 | 123,514 | |
Collections | -68,509 | -129,240 | |
Program termination | 0 | ||
Ending balance | $41,144 | $23,708 | |
[1] | Includes the sales of accounts receivable activities related to businesses held for sale (transfers of accounts receivable of $60.5 million and collections of $63.6 million). |
INVENTORIES_NET_Narrative_Deta
INVENTORIES, NET (Narrative) (Details) (USD $) | Nov. 30, 2014 | Aug. 31, 2014 |
In Millions, unless otherwise specified | ||
Inventory Disclosure [Abstract] | ||
Percentage of total net inventories valued at LIFO | 54.00% | 44.00% |
LIFO inventory reserves | $192.60 | $198.80 |
Raw materials before LIFO reserves | $93.50 | $84.30 |
GOODWILL_AND_OTHER_INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Narrative) (Details) (USD $) | 3 Months Ended | ||
In Millions, unless otherwise specified | Nov. 30, 2014 | Nov. 30, 2013 | Aug. 31, 2014 |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Gross carrying amounts of the intangible assets subject to amortization | $49.40 | $53.80 | |
Amortization expense for intangible assets | $1.80 | $1.90 |
GOODWILL_AND_OTHER_INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS (Changes in the Carrying Amount of Goodwill) (Details) (USD $) | 3 Months Ended |
In Thousands, unless otherwise specified | Nov. 30, 2014 |
Goodwill [Roll Forward] | |
Balance at August 31, 2014 | $74,319 |
Foreign currency translation | -219 |
Balance at November 30, 2014 | 74,100 |
Americas Recycling | |
Goodwill [Roll Forward] | |
Balance at August 31, 2014 | 7,267 |
Foreign currency translation | 0 |
Balance at November 30, 2014 | 7,267 |
Americas Mills | |
Goodwill [Roll Forward] | |
Balance at August 31, 2014 | 4,970 |
Foreign currency translation | 0 |
Balance at November 30, 2014 | 4,970 |
Americas Fabrication | |
Goodwill [Roll Forward] | |
Balance at August 31, 2014 | 57,144 |
Foreign currency translation | 0 |
Balance at November 30, 2014 | 57,144 |
International Mill | |
Goodwill [Roll Forward] | |
Balance at August 31, 2014 | 2,776 |
Foreign currency translation | -127 |
Balance at November 30, 2014 | 2,649 |
International Marketing and Distribution | |
Goodwill [Roll Forward] | |
Balance at August 31, 2014 | 2,162 |
Foreign currency translation | -92 |
Balance at November 30, 2014 | $2,070 |
BUSINESSES_HELD_FOR_SALE_DISCO2
BUSINESSES HELD FOR SALE, DISCONTINUED OPERATIONS AND DISPOSITIONS (Narrative) (Details) (USD $) | 3 Months Ended | ||
Nov. 30, 2013 | Nov. 30, 2014 | Aug. 31, 2014 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Assets of businesses held for sale | $94,455,000 | $0 | |
Liabilities of businesses held for sale | 42,896,000 | 0 | |
Howell | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Business divestiture disposal price | 58,500,000 | ||
Escrow receivable | 3,200,000 | ||
Pre-tax gain | $23,800,000 |
BUSINESSES_HELD_FOR_SALE_DISCO3
BUSINESSES HELD FOR SALE, DISCONTINUED OPERATIONS AND DISPOSITIONS (Components Of Assets And Liabilities Of Businesses Held For Sale) (Details) (USD $) | Nov. 30, 2014 | Aug. 31, 2014 |
In Thousands, unless otherwise specified | ||
Assets: | ||
Accounts receivable | $15,695 | |
Inventories, net | 69,047 | |
Other current assets | 735 | |
Property, plant and equipment, net of accumulated depreciation and amortization | 7,139 | |
Other noncurrent assets | 1,839 | |
Assets of businesses held for sale | 94,455 | 0 |
Liabilities: | ||
Accounts payable-trade | 22,086 | |
Accounts payable-documentary letters of credit | 13,447 | |
Accrued expenses and other payables | 7,363 | |
Liabilities of businesses held for sale | $42,896 | $0 |
BUSINESSES_HELD_FOR_SALE_DISCO4
BUSINESSES HELD FOR SALE, DISCONTINUED OPERATIONS AND DISPOSITIONS (Financial Information for Discontinued Operations) (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Nov. 30, 2014 | Nov. 30, 2013 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Earnings (loss) from discontinued operations before income taxes | ($2,102) | $21,106 |
Discontinued operations | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Net sales | 59,011 | 83,114 |
Earnings (loss) from discontinued operations before income taxes | ($2,102) | $21,106 |
CREDIT_ARRANGEMENTS_Narrative_
CREDIT ARRANGEMENTS (Narrative) (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||
Nov. 30, 2014 | Nov. 30, 2013 | Aug. 31, 2012 | Aug. 31, 2014 | |
Debt Instrument [Line Items] | ||||
Net Proceeds From Termination Of Interest Rate Swaps | $52,700,000 | |||
Unamortized deferred gain on termination of interest rate swaps | 24,900,000 | 26,800,000 | ||
Amortization of interest rate swaps termination gain | 1,899,000 | 1,900,000 | ||
Interest paid | 9,500,000 | 9,500,000 | ||
CMCP | ||||
Debt Instrument [Line Items] | ||||
Revolving credit facility current borrowing capacity | 64,000,000 | |||
Total borrowing | 19,000,000 | |||
Total payments | 19,000,000 | |||
$330 million notes at 4.875% due May 2023 | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, issuance date | 20-May-13 | |||
Debt instrument, face amount | 330,000,000 | 330,000,000 | ||
Debt instrument, interest rate, stated percentage | 4.88% | 4.88% | ||
Debt instrument, maturity date | 15-May-23 | |||
Redemption purchase price to principal amount, percentage | 100.00% | |||
Change of control triggering event | ||||
Debt Instrument [Line Items] | ||||
Redemption purchase price to principal amount, percentage | 101.00% | |||
$500 million notes at 7.35% due August 2018 | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, issuance date | 4-Aug-08 | |||
Debt instrument, face amount | 500,000,000 | 500,000,000 | ||
Debt instrument, interest rate, stated percentage | 7.35% | 7.35% | ||
Debt instrument, maturity date | 15-Aug-18 | |||
Debt instrument, effective interest rate | 6.40% | |||
$400 million notes at 6.50% due July 2017 | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, issuance date | 17-Jul-07 | |||
Debt instrument, face amount | 400,000,000 | 400,000,000 | ||
Debt instrument, interest rate, stated percentage | 6.50% | 6.50% | ||
Debt instrument, maturity date | 15-Jul-17 | |||
Debt instrument, effective interest rate | 5.74% | |||
Revolving credit facility | ||||
Debt Instrument [Line Items] | ||||
Revolving credit facility current borrowing capacity | 350,000,000 | |||
Revolving credit facility, maturity date | 26-Jun-19 | |||
Revolving credit facility, maximum borrowing capacity | 500,000,000 | |||
Minimum interest coverage ratio | 250.00% | |||
Maximum debt to capitalization ratio | 60.00% | |||
Minimum liquidity required | 150,000,000 | |||
Actual interest coverage ratio | 471.00% | |||
Actual debt to capitalization ratio | 49.00% | |||
Revolving credit facility, amount drawn | 0 | 0 | ||
Stand-by letters of credit | ||||
Debt Instrument [Line Items] | ||||
Revolving credit facility current borrowing capacity | 50,000,000 | |||
Stand by letters of credit outstanding amount | $25,300,000 | $28,100,000 |
CREDIT_ARRANGEMENTS_Longterm_D
CREDIT ARRANGEMENTS (Long-term Debt, Including the Deferred Gain from the Termination of the Interest Rate Swaps) (Details) (USD $) | 3 Months Ended | 12 Months Ended |
Nov. 30, 2014 | Aug. 31, 2014 | |
Debt Instrument [Line Items] | ||
Total long-term debt including current maturities | $1,291,739,000 | $1,289,047,000 |
Current maturities of long-term debt | 8,931,000 | 8,005,000 |
Long-term debt | 1,282,808,000 | 1,281,042,000 |
$400 million notes at 6.50% due July 2017 | ||
Debt Instrument [Line Items] | ||
Debt instrument, face amount | 400,000,000 | 400,000,000 |
Debt instrument, interest rate, stated percentage | 6.50% | 6.50% |
Debt instrument, maturity date | Jul-17 | Jul-17 |
Weighted average interest rate | 5.74% | |
Total long-term debt including current maturities | 407,803,000 | 408,546,000 |
$500 million notes at 7.35% due August 2018 | ||
Debt Instrument [Line Items] | ||
Debt instrument, face amount | 500,000,000 | 500,000,000 |
Debt instrument, interest rate, stated percentage | 7.35% | 7.35% |
Debt instrument, maturity date | Aug-18 | Aug-18 |
Weighted average interest rate | 6.40% | |
Total long-term debt including current maturities | 517,149,000 | 518,305,000 |
$330 million notes at 4.875% due May 2023 | ||
Debt Instrument [Line Items] | ||
Debt instrument, face amount | 330,000,000 | 330,000,000 |
Debt instrument, interest rate, stated percentage | 4.88% | 4.88% |
Debt instrument, maturity date | 15-May-23 | 15-May-23 |
Weighted average interest rate | 4.88% | |
Total long-term debt including current maturities | 330,000,000 | 330,000,000 |
Other, including equipment notes | ||
Debt Instrument [Line Items] | ||
Total long-term debt including current maturities | $36,787,000 | $32,196,000 |
DERIVATIVES_AND_RISK_MANAGEMEN2
DERIVATIVES AND RISK MANAGEMENT (Narrative) (Details) (USD $) | Nov. 30, 2014 | Nov. 30, 2013 |
In Millions, unless otherwise specified | ||
Foreign exchange | ||
Derivative [Line Items] | ||
Derivative, Notional Amount | $423.60 | $433.30 |
Commodity | ||
Derivative [Line Items] | ||
Derivative, Notional Amount | $50.80 | $54.90 |
DERIVATIVES_AND_RISK_MANAGEMEN3
DERIVATIVES AND RISK MANAGEMENT (Commodity Contract Commitments) (Details) | 3 Months Ended |
Nov. 30, 2014 | |
t | |
Aluminum | Long | |
Derivative [Line Items] | |
Commodity contract commitments | 2,366 |
Aluminum | Short | |
Derivative [Line Items] | |
Commodity contract commitments | 100 |
Copper | Long | |
Derivative [Line Items] | |
Commodity contract commitments | 1,531 |
Copper | Short | |
Derivative [Line Items] | |
Commodity contract commitments | 5,012 |
Zinc | Long | |
Derivative [Line Items] | |
Commodity contract commitments | 7 |
Natural Gas | Long | |
Derivative [Line Items] | |
Energy contract commitments | 540,000 |
DERIVATIVES_AND_RISK_MANAGEMEN4
DERIVATIVES AND RISK MANAGEMENT (Derivatives Not Designated As Hedging Instruments) (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Nov. 30, 2014 | Nov. 30, 2013 |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) before income taxes for derivatives not designated as hedges | $19,942 | ($4,463) |
Commodity | Cost of goods sold | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) before income taxes for derivatives not designated as hedges | 3,435 | 510 |
Foreign exchange | Cost of goods sold | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) before income taxes for derivatives not designated as hedges | 1,871 | -121 |
Foreign exchange | Net sales | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) before income taxes for derivatives not designated as hedges | 2,436 | -159 |
Foreign exchange | SG&A expenses | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) before income taxes for derivatives not designated as hedges | $12,200 | ($4,693) |
DERIVATIVES_AND_RISK_MANAGEMEN5
DERIVATIVES AND RISK MANAGEMENT (Derivatives Designated As Fair Value Hedging Instruments) (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Nov. 30, 2014 | Nov. 30, 2013 |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) before income taxes for fair value hedges | $979 | ($240) |
Foreign exchange | Net sales | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) before income taxes for fair value hedges | -175 | -113 |
Foreign exchange | Cost of goods sold | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) before income taxes for fair value hedges | $1,154 | ($127) |
DERIVATIVES_AND_RISK_MANAGEMEN6
DERIVATIVES AND RISK MANAGEMENT (Hedged Items Designated As Fair Value Hedging Instruments) (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Nov. 30, 2014 | Nov. 30, 2013 |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) before income taxes for hedged items of fair value hedges | ($975) | $218 |
Foreign exchange | Net sales | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) before income taxes for hedged items of fair value hedges | 179 | 93 |
Foreign exchange | Cost of goods sold | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) before income taxes for hedged items of fair value hedges | ($1,154) | $125 |
DERIVATIVES_AND_RISK_MANAGEMEN7
DERIVATIVES AND RISK MANAGEMENT (Effective Portion Of Derivatives Designated As Cash Flow Hedging Instruments Recognized In Accumulated Other Comprehensive Income (Loss)) (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Nov. 30, 2014 | Nov. 30, 2013 |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss), net of income taxes, for cash flow hedges recognized in AOCI | ($525) | ($1,617) |
Commodity | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss), net of income taxes, for cash flow hedges recognized in AOCI | -68 | -89 |
Foreign exchange | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss), net of income taxes, for cash flow hedges recognized in AOCI | ($457) | ($1,528) |
DERIVATIVES_AND_RISK_MANAGEMEN8
DERIVATIVES AND RISK MANAGEMENT (Effective Portion of Derivatives Designated as Cash Flow Hedging Instruments Reclassified from Accumulated Other Comprehensive Income (Loss)) (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Nov. 30, 2014 | Nov. 30, 2013 |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss), net of income taxes, for cash flow hedges reclassified from AOCI | ($39) | ($980) |
Commodity | Cost of goods sold | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss), net of income taxes, for cash flow hedges reclassified from AOCI | -13 | -89 |
Foreign exchange | Cost of goods sold | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss), net of income taxes, for cash flow hedges reclassified from AOCI | -130 | -758 |
Foreign exchange | Net sales | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss), net of income taxes, for cash flow hedges reclassified from AOCI | 0 | -231 |
Foreign exchange | SG&A expenses | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss), net of income taxes, for cash flow hedges reclassified from AOCI | 17 | 12 |
Interest rate | Interest expense | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss), net of income taxes, for cash flow hedges reclassified from AOCI | $87 | $86 |
DERIVATIVES_AND_RISK_MANAGEMEN9
DERIVATIVES AND RISK MANAGEMENT (Derivative Assets) (Details) (USD $) | Nov. 30, 2014 | Aug. 31, 2014 | ||
In Thousands, unless otherwise specified | ||||
Derivatives, Fair Value [Line Items] | ||||
Derivative assets (other current assets) | $6,777 | [1] | $2,900 | [1] |
Commodity | Designated | ||||
Derivatives, Fair Value [Line Items] | ||||
Derivative assets (other current assets) | 5 | 42 | ||
Commodity | Not designated | ||||
Derivatives, Fair Value [Line Items] | ||||
Derivative assets (other current assets) | 2,132 | 869 | ||
Foreign exchange | Designated | ||||
Derivatives, Fair Value [Line Items] | ||||
Derivative assets (other current assets) | 1,111 | 136 | ||
Foreign exchange | Not designated | ||||
Derivatives, Fair Value [Line Items] | ||||
Derivative assets (other current assets) | $3,529 | $1,853 | ||
[1] | Derivative assets and liabilities do not include the hedged items designated as fair value hedges. |
Recovered_Sheet1
DERIVATIVES AND RISK MANAGEMENT (Derivative Liabilities) (Details) (USD $) | Nov. 30, 2014 | Aug. 31, 2014 | ||
In Thousands, unless otherwise specified | ||||
Derivatives, Fair Value [Line Items] | ||||
Derivative liabilities (accrued expenses and other payables) | $2,609 | [1] | $1,503 | [1] |
Commodity | Designated | ||||
Derivatives, Fair Value [Line Items] | ||||
Derivative liabilities (accrued expenses and other payables) | 97 | 6 | ||
Commodity | Not designated | ||||
Derivatives, Fair Value [Line Items] | ||||
Derivative liabilities (accrued expenses and other payables) | 467 | 162 | ||
Foreign exchange | Designated | ||||
Derivatives, Fair Value [Line Items] | ||||
Derivative liabilities (accrued expenses and other payables) | 774 | 325 | ||
Foreign exchange | Not designated | ||||
Derivatives, Fair Value [Line Items] | ||||
Derivative liabilities (accrued expenses and other payables) | $1,271 | $1,010 | ||
[1] | Derivative assets and liabilities do not include the hedged items designated as fair value hedges. |
FAIR_VALUE_Narrative_Details
FAIR VALUE (Narrative) (Details) | 3 Months Ended |
Nov. 30, 2014 | |
levels | |
Fair Value Disclosures [Abstract] | |
Number of fair value hierarchy | 3 |
FAIR_VALUE_Financial_Assets_an
FAIR VALUE (Financial Assets and Financial Liabilities Measured at Fair Value on Recurring Basis) (Details) (Fair value, measurements, recurring, USD $) | Nov. 30, 2014 | Aug. 31, 2014 | ||
In Thousands, unless otherwise specified | ||||
Money market investments | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Money market investments | $150,100 | [1] | $200,487 | [1] |
Commodity | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Derivative assets | 2,137 | [2] | 911 | [2] |
Derivative liabilities | 564 | [2] | 168 | [2] |
Foreign exchange | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Derivative assets | 4,640 | [2] | 1,989 | [2] |
Derivative liabilities | 2,045 | [2] | 1,335 | [2] |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Money market investments | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Money market investments | 150,100 | [1] | 200,487 | [1] |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Commodity | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Derivative assets | 2,132 | [2] | 911 | [2] |
Derivative liabilities | 467 | [2] | 162 | [2] |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Foreign exchange | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Derivative assets | 0 | [2] | 0 | [2] |
Derivative liabilities | 0 | [2] | 0 | [2] |
Significant Other Observable Inputs (Level 2) | Money market investments | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Money market investments | 0 | [1] | 0 | [1] |
Significant Other Observable Inputs (Level 2) | Commodity | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Derivative assets | 5 | [2] | 0 | [2] |
Derivative liabilities | 97 | [2] | 6 | [2] |
Significant Other Observable Inputs (Level 2) | Foreign exchange | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Derivative assets | 4,640 | [2] | 1,989 | [2] |
Derivative liabilities | 2,045 | [2] | 1,335 | [2] |
Significant Unobservable Inputs (Level 3) | Money market investments | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Money market investments | 0 | [1] | 0 | [1] |
Significant Unobservable Inputs (Level 3) | Commodity | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Derivative assets | 0 | [2] | 0 | [2] |
Derivative liabilities | 0 | [2] | 0 | [2] |
Significant Unobservable Inputs (Level 3) | Foreign exchange | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Derivative assets | 0 | [2] | 0 | [2] |
Derivative liabilities | $0 | [2] | $0 | [2] |
[1] | Money market investments are short-term in nature, and the value is determined by broker quoted prices in active markets. 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 Commodity Exchange, Inc. Amounts in Level 2 are based on broker quotes in the over-the-counter market. Further discussion regarding the Company's use of derivative instruments and the classification of the assets and liabilities is included in Note 8, Derivatives and Risk Management. |
FAIR_VALUE_Financial_Assets_an1
FAIR VALUE (Financial Assets and Liabilities Not Required to Be Measured at Fair Value) (Details) (USD $) | Nov. 30, 2014 | Aug. 31, 2014 | ||
In Thousands, unless otherwise specified | ||||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||||
Financial liabilities | $1,291,739 | $1,289,047 | ||
$400 million notes at 6.50% due July 2017 | ||||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||||
Financial liabilities | 407,803 | 408,546 | ||
$400 million notes at 6.50% due July 2017 | Level 2 | Carrying Value | ||||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||||
Financial liabilities | 407,803 | 408,546 | ||
$400 million notes at 6.50% due July 2017 | Level 2 | Fair Value | ||||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||||
Financial liabilities | 435,528 | [1] | 438,200 | [1] |
$500 million notes at 7.35% due August 2018 | ||||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||||
Financial liabilities | 517,149 | 518,305 | ||
$500 million notes at 7.35% due August 2018 | Level 2 | Carrying Value | ||||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||||
Financial liabilities | 517,149 | 518,305 | ||
$500 million notes at 7.35% due August 2018 | Level 2 | Fair Value | ||||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||||
Financial liabilities | 553,125 | [1] | 567,560 | [1] |
$330 million notes at 4.875% due May 2023 | ||||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||||
Financial liabilities | 330,000 | 330,000 | ||
$330 million notes at 4.875% due May 2023 | Level 2 | Carrying Value | ||||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||||
Financial liabilities | 330,000 | 330,000 | ||
$330 million notes at 4.875% due May 2023 | Level 2 | Fair Value | ||||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||||
Financial liabilities | $322,080 | [1] | $325,050 | [1] |
[1] | (1) The fair values of the 2017 Notes, 2018 Notes and 2023 Notes are estimated based on readily available market prices of these notes at November 30, 2014 and August 31, 2014, or similar notes with the same maturities, rating and interest rates. |
INCOME_TAX_Narrative_Details
INCOME TAX (Narrative) (Details) (USD $) | 3 Months Ended | ||
In Millions, unless otherwise specified | Nov. 30, 2014 | Nov. 30, 2013 | Aug. 31, 2014 |
Effective income tax rate from continuing operations | 28.70% | 30.90% | |
Statutory income tax rate | 35.00% | 35.00% | |
Effective income tax rate from discontinued operations | 1.00% | 42.10% | |
Net income tax payments | $11.60 | $1.40 | |
Unrecognized income tax benefits | 27.3 | 27.3 | |
Possible unrecognized income tax benefits decrease during the next twelve months | 16.9 | ||
Unrecognized income tax benefits that would reduce provisions for income taxes | 2.7 | ||
Howell | |||
Pre-tax gain | $23.80 | ||
POLAND | |||
Foreign income tax rate | 19.00% |
STOCKBASED_COMPENSATION_PLANS_
STOCK-BASED COMPENSATION PLANS (Narrative) (Details) (USD $) | 3 Months Ended | |
In Millions, except Share data, unless otherwise specified | Nov. 30, 2014 | Nov. 30, 2013 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense | $5.70 | $5.50 |
Restricted stock units and performance stock units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares granted | 1,000,000 | 1,100,000 |
Weighted average grant-date fair value | $16.08 | $16.75 |
Liability awards | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares granted | 392,517 | 376,265 |
Equivalent shares outstanding | 942,012 | |
Equivalent shares expected to vest | 894,910 | |
Fiscal 2015 | Restricted stock units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period in years | 3 years | |
Fiscal 2015 | Certain restricted stock units | Vesting on second anniversary | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting percentage | 33.00% | |
Fiscal 2015 | Certain restricted stock units | Vesting on third anniversary | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting percentage | 67.00% | |
Fiscal 2015 | Performance stock units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period in years | 3 years | |
Fiscal 2014 | Restricted stock units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period in years | 3 years | |
Fiscal 2014 | Certain restricted stock units | Vesting on second anniversary | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting percentage | 25.00% | |
Fiscal 2014 | Certain restricted stock units | Vesting on third anniversary | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting percentage | 25.00% | |
Fiscal 2014 | Certain restricted stock units | Vesting on fourth anniversary | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting percentage | 50.00% | |
Fiscal 2014 | Performance stock units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period in years | 3 years |
STOCKHOLDERS_EQUITY_AND_EARNIN2
STOCKHOLDERSb EQUITY AND EARNINGS PER SHARE ATTRIBUTABLE TO CMC (Narrative) (Details) (USD $) | 3 Months Ended | |
In Millions, except Share data, unless otherwise specified | Nov. 30, 2014 | Oct. 27, 2014 |
Earnings Per Share [Abstract] | ||
Stock repurchase program, authorized amount | $100 | |
Stock repurchase program, shares purchased | 560,493 | |
Stock repurchase program, average purchase price per share | $16.67 | |
Stock repurchase program, remaining authorized repurchase amount | $90.70 |
STOCKHOLDERS_EQUITY_AND_EARNIN3
STOCKHOLDERSb EQUITY AND EARNINGS PER SHARE ATTRIBUTABLE TO CMC (Calculations of the Basic and Diluted Earnings Per Share) (Details) (USD $) | 3 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Nov. 30, 2014 | Nov. 30, 2013 |
Earnings Per Share [Abstract] | ||
Earnings from continuing operations | $38,334 | $33,700 |
Basic earnings per share: | ||
Shares outstanding for basic earnings per share | 117,818,170 | 117,070,499 |
Basic earnings per share attributable to CMC: | $0.33 | $0.29 |
Diluted earnings per share: | ||
Shares outstanding for basic earnings per share | 117,818,170 | 117,070,499 |
Effect of dilutive securities: | ||
Stock-based incentive/purchase plans | 1,091,448 | 1,086,112 |
Shares outstanding for diluted earnings per share | 118,909,618 | 118,156,611 |
Diluted earnings per share attributable to CMC: | $0.32 | $0.29 |
Anti-dilutive shares not included above | 672,352 | 1,364,036 |
COMMITMENTS_AND_CONTINGENCIES_
COMMITMENTS AND CONTINGENCIES (Narrative) (Details) (Settled litigation, USD $) | 1 Months Ended | |
In Millions, unless otherwise specified | Apr. 30, 2014 | Sep. 18, 2008 |
entities | ||
Settled litigation | ||
Loss Contingencies [Line Items] | ||
Number of steel manufacturing companies | 9 | |
Legal settlement amount | $4 |
BUSINESS_SEGMENTS_Narrative_De
BUSINESS SEGMENTS (Narrative) (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Nov. 30, 2014 | Aug. 31, 2014 |
segments | ||
Number of operating segments | 5 | |
Discontinued operations | ||
Total assets | 102.3 | $7 |
BUSINESS_SEGMENTS_Summary_of_C
BUSINESS SEGMENTS (Summary of Certain Financial Information from Continuing Operations by Reportable Segment) (Details) (USD $) | 3 Months Ended | ||||
In Thousands, unless otherwise specified | Nov. 30, 2014 | Nov. 30, 2013 | Aug. 31, 2014 | ||
Segment Reporting Information [Line Items] | |||||
Net sales | $1,679,990 | $1,617,075 | |||
Adjusted operating profit (loss) | 73,289 | 68,728 | |||
Total assets | 3,616,300 | 3,688,520 | |||
Continuing Operations | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 1,679,990 | 1,617,075 | |||
Adjusted operating profit (loss) | 73,289 | 68,728 | |||
Total assets | 3,514,031 | [1] | 3,681,510 | [1] | |
Americas Recycling | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 269,802 | 293,475 | |||
Adjusted operating profit (loss) | -1,143 | 839 | |||
Total assets | 310,139 | [1] | 296,564 | [1] | |
Americas Mills | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 303,859 | 291,573 | |||
Adjusted operating profit (loss) | 75,382 | 65,814 | |||
Total assets | 665,388 | [1] | 647,437 | [1] | |
Americas Fabrication | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 408,237 | 353,992 | |||
Adjusted operating profit (loss) | -3,009 | 2,217 | |||
Total assets | 678,267 | [1] | 691,765 | [1] | |
International Mill | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 177,629 | 228,492 | |||
Adjusted operating profit (loss) | 4,223 | 15,268 | |||
Total assets | 454,143 | [1] | 466,449 | [1] | |
International Marketing and Distribution | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 519,631 | 443,358 | |||
Adjusted operating profit (loss) | 18,252 | 2,042 | |||
Total assets | 1,022,760 | [1] | 949,016 | [1] | |
Corporate | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 832 | 6,185 | |||
Adjusted operating profit (loss) | -19,611 | -18,049 | |||
Total assets | 1,035,764 | [1] | 1,100,995 | [1] | |
Eliminations | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 0 | 0 | |||
Adjusted operating profit (loss) | -805 | 597 | |||
Total assets | -652,430 | [1] | -470,716 | [1] | |
Segments | Continuing Operations | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 1,679,990 | 1,617,075 | |||
Segments | Americas Recycling | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 316,059 | 338,202 | |||
Segments | Americas Mills | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 524,851 | 481,151 | |||
Segments | Americas Fabrication | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 412,488 | 358,218 | |||
Segments | International Mill | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 177,629 | 229,150 | |||
Segments | International Marketing and Distribution | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 537,806 | 445,342 | |||
Segments | Corporate | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 832 | 6,185 | |||
Segments | Eliminations | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | -289,675 | -241,173 | |||
Intersegment | Continuing Operations | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 0 | 0 | |||
Intersegment | Americas Recycling | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 46,257 | 44,727 | |||
Intersegment | Americas Mills | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 220,992 | 189,578 | |||
Intersegment | Americas Fabrication | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 4,251 | 4,226 | |||
Intersegment | International Mill | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 0 | 658 | |||
Intersegment | International Marketing and Distribution | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 18,175 | 1,984 | |||
Intersegment | Corporate | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 0 | 0 | |||
Intersegment | Eliminations | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | ($289,675) | ($241,173) | |||
[1] | Excludes total assets from discontinued operations of $102.3 million at NovemberB 30, 2014 and $7.0 million at AugustB 31, 2014. |
BUSINESS_SEGMENTS_Reconciliati
BUSINESS SEGMENTS (Reconciliations of Earnings from Continuing Operations to Adjusted Operating Profit) (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Nov. 30, 2014 | Nov. 30, 2013 |
Segment Reporting [Abstract] | ||
Earnings from continuing operations | $38,334 | $33,700 |
Income taxes | 15,447 | 15,091 |
Interest expense | 19,057 | 19,408 |
Discounts on sales of accounts receivable | 451 | 529 |
Adjusted operating profit | $73,289 | $68,728 |