Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
May 31, 2019 | Jun. 25, 2019 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | COMMERCIAL METALS CO | |
Entity Central Index Key | 0000022444 | |
Document Type | 10-Q | |
Document Period End Date | May 31, 2019 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Current Fiscal Year End Date | --08-31 | |
Entity Tax Identification Number | 750725338 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Current Reporting Status | Yes | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 117,924,115 | |
Entity File Number | 75-0725338 | |
Entity Address, Address Line One | 6565 N. MacArthur Blvd. | |
Entity Address, City or Town | Irving | |
Entity Address, State or Province | Texas | |
Entity Address, Postal Zip Code | 75039 | |
City Area Code | 214 | |
Local Phone Number | 689-4300 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
May 31, 2019 | May 31, 2018 | May 31, 2019 | May 31, 2018 | ||
Income Statement [Abstract] | |||||
Net sales | $ 1,605,872 | $ 1,204,484 | $ 4,285,997 | $ 3,335,285 | |
Costs and expenses: | |||||
Cost of goods sold | 1,364,242 | 1,035,914 | 3,735,168 | 2,896,531 | |
Selling, general and administrative expenses | 115,461 | 101,422 | 331,404 | 306,009 | |
Interest expense | 18,513 | 11,511 | 53,671 | 25,303 | |
Total costs and expenses | 1,498,216 | 1,148,847 | 4,120,243 | 3,227,843 | |
Earnings from continuing operations before income taxes | 107,656 | 55,637 | 165,754 | 107,442 | |
Income taxes | 29,105 | 13,312 | 52,855 | 23,465 | |
Earnings from continuing operations | 78,551 | 42,325 | 112,899 | 83,977 | |
Earnings (loss) from discontinued operations before income taxes | (190) | (3,389) | (808) | 5,021 | |
Income taxes (benefit) | (29) | (1,029) | 109 | 2,052 | |
Earnings (loss) from discontinued operations | (161) | (2,360) | (917) | 2,969 | |
Net earnings | $ 78,390 | $ 39,965 | $ 111,982 | $ 86,946 | |
Basic earnings (loss) per share | |||||
Earnings from continuing operations (in USD per share) | [1] | $ 0.67 | $ 0.36 | $ 0.96 | $ 0.72 |
Earnings (loss) from discontinued operations (in USD per share) | [1] | 0 | (0.02) | (0.01) | 0.03 |
Net earnings (in USD per share) | [1] | 0.66 | 0.34 | 0.95 | 0.74 |
Diluted earnings (loss) per share | |||||
Earnings from continuing operations (in USD per share) | [1] | 0.66 | 0.36 | 0.95 | 0.71 |
Earnings (loss) from discontinued operations (in USD per share) | [1] | 0 | (0.02) | (0.01) | 0.03 |
Net earnings (in USD per share) | [1] | $ 0.66 | $ 0.34 | $ 0.94 | $ 0.74 |
Average basic shares outstanding | 118,045,362 | 117,111,799 | 117,762,945 | 116,722,504 | |
Average diluted shares outstanding | 119,145,566 | 118,254,791 | 119,013,014 | 118,050,864 | |
[1] | *Earnings Per Share ("EPS") is calculated independently for each component and may not sum to Net EPS due to rounding |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
May 31, 2019 | May 31, 2018 | May 31, 2019 | May 31, 2018 | |
Statement of Comprehensive Income [Abstract] | ||||
Net earnings | $ 78,390 | $ 39,965 | $ 111,982 | $ 86,946 |
Other comprehensive income (loss), net of income taxes: | ||||
Foreign currency translation adjustment | (5,135) | (26,434) | (14,278) | (11,656) |
Reclassification for translation loss realized upon liquidation of investment in foreign entity | 19 | 1,328 | 856 | 1,328 |
Foreign currency translation adjustment | (5,116) | (25,106) | (13,422) | (10,328) |
Net unrealized gain (loss) on derivatives: | ||||
Unrealized holding gain (loss) | (145) | 13 | (267) | 38 |
Reclassification for gain included in net earnings | (71) | (56) | (154) | (236) |
Net unrealized loss on derivatives | (216) | (43) | (421) | (198) |
Defined benefit obligation: | ||||
Amortization of prior services | (6) | (7) | (21) | (20) |
Reclassification for settlement losses | 0 | 0 | 1,316 | 437 |
Defined benefit obligation | (6) | (7) | 1,295 | 417 |
Other comprehensive loss | (5,338) | (25,156) | (12,548) | (10,109) |
Comprehensive income | $ 73,052 | $ 14,809 | $ 99,434 | $ 76,837 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Thousands | May 31, 2019 | Aug. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 120,315 | $ 622,473 |
Accounts receivable (less allowance for doubtful accounts of $8,584 and $4,489) | 1,014,157 | 749,484 |
Inventories, net | 807,593 | 589,005 |
Other current assets | 172,007 | 116,243 |
Total current assets | 2,114,072 | 2,077,205 |
Property, plant and equipment, Net | 1,473,568 | 1,075,038 |
Goodwill | 64,226 | 64,310 |
Other noncurrent assets | 115,144 | 111,751 |
Total assets | 3,767,010 | 3,328,304 |
Current liabilities: | ||
Accounts payable-trade | 278,390 | 261,258 |
Accrued expenses and other payables | 318,975 | 260,939 |
Acquired unfavorable contract backlog | 51,998 | 0 |
Current maturities of long-term debt and short-term borrowings | 54,895 | 19,746 |
Total current liabilities | 704,258 | 541,943 |
Deferred income taxes | 63,413 | 37,834 |
Other noncurrent liabilities | 128,281 | 116,325 |
Long-term debt | 1,306,863 | 1,138,619 |
Total liabilities | 2,202,815 | 1,834,721 |
Stockholders' equity: | ||
Common stock, par value $0.01 per share; authorized 200,000,000 shares; issued 129,060,664 shares; outstanding 117,924,115 and 117,015,558 shares | 1,290 | 1,290 |
Additional paid-in capital | 352,881 | 352,674 |
Accumulated other comprehensive loss | (106,225) | (93,677) |
Retained earnings | 1,513,418 | 1,446,495 |
Less treasury stock, 11,136,549 and 12,045,106 shares at cost | (197,365) | (213,385) |
Stockholders' equity | 1,563,999 | 1,493,397 |
Stockholders' equity attributable to noncontrolling interests | 196 | 186 |
Total stockholders' equity | 1,564,195 | 1,493,583 |
Commitments and contingencies (Note 16) | ||
Total liabilities and stockholders' equity | $ 3,767,010 | $ 3,328,304 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - USD ($) $ in Thousands | May 31, 2019 | Aug. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 8,584 | $ 4,489 |
Common stock, par value (in USD per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares outstanding | 117,924,115 | 117,015,558 |
Treasury stock, shares | 11,136,549 | 12,045,106 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands | 9 Months Ended | |
May 31, 2019 | May 31, 2018 | |
Cash flows from (used by) operating activities: | ||
Net earnings | $ 111,982 | $ 86,946 |
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | 111,982 | 86,946 |
Adjustments to reconcile net earnings to cash flows from (used by) operating activities: | ||
Depreciation and amortization | 117,617 | 99,443 |
Amortization of acquired unfavorable contract backlog | (58,202) | 0 |
Stock-based compensation | 17,350 | 18,247 |
Net gain on disposals of subsidiaries, assets and other | (1,334) | (1,578) |
Deferred income taxes and other long-term taxes | 36,367 | 5,829 |
Write-down of inventories | 551 | 1,358 |
Provision for losses on receivables, net | 100 | 2,193 |
Asset impairment | 15 | 14,265 |
Changes in operating assets and liabilities | (75,422) | (65,612) |
Beneficial interest in securitized accounts receivable | (367,521) | (491,577) |
Net cash flows used by operating activities | (218,497) | (330,486) |
Cash flows from (used by) investing activities: | ||
Acquisitions, net of cash acquired | (700,941) | (6,980) |
Capital expenditures | (91,753) | (144,268) |
Proceeds from insurance | 4,405 | 25,000 |
Proceeds from the sale of property, plant and equipment | 2,503 | 6,315 |
Proceeds from the sale of discontinued operations and other | 1,893 | 75,483 |
Advances under accounts receivable programs | 0 | 132,979 |
Repayments under accounts receivable programs | 0 | (202,423) |
Beneficial interest in securitized accounts receivable | 367,521 | 491,577 |
Net cash flows from (used by) investing activities: | (416,372) | 377,683 |
Cash flows from (used by) financing activities: | ||
Proceeds from issuance of long-term debt | 180,000 | 350,000 |
Repayments of long-term debt | (24,138) | (15,382) |
Proceeds from accounts receivable programs | 223,143 | 0 |
Repayments under accounts receivable programs | (209,363) | 0 |
Dividends | (42,387) | (42,036) |
Stock issued under incentive and purchase plans, net of forfeitures | (2,364) | (9,836) |
Debt issuance costs | 0 | (5,254) |
Other | 10 | 31 |
Net cash flows from financing activities | 124,901 | 277,523 |
Effect of exchange rate changes on cash | (341) | (461) |
Increase (decrease) in cash, restricted cash and cash equivalents | (510,309) | 324,259 |
Cash, restricted cash and cash equivalents at beginning of period | 122,306 | 610,140 |
Cash, restricted cash and cash equivalents at end of period | 122,306 | 610,140 |
Supplemental information: | ||
Cash paid for income taxes | 6,852 | 14,802 |
Cash paid for interest | 53,773 | 30,201 |
Noncash activities: | ||
Liabilities related to additions of property, plant and equipment | $ 37,602 | $ 28,252 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (Parenthetical) - USD ($) $ in Thousands | May 31, 2019 | May 31, 2018 |
Statement of Cash Flows [Abstract] | ||
Cash and cash equivalents | $ 120,315 | $ 600,444 |
Restricted cash | 1,991 | 9,696 |
Total cash, restricted cash and cash equivalents | $ 122,306 | $ 610,140 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED) - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Loss | Retained Earnings | Treasury Stock | Noncontrolling Interests |
Beginning balance at Aug. 31, 2017 | $ 1,400,930 | $ 1,290 | $ 349,258 | $ (81,513) | $ 1,363,806 | $ (232,084) | $ 173 |
Beginning balance, shares at Aug. 31, 2017 | 129,060,664 | ||||||
Beginning balance, treasury stock, shares at Aug. 31, 2017 | (13,266,928) | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net earnings | 86,946 | 86,946 | |||||
Other comprehensive income (loss) | (10,109) | (10,109) | |||||
Dividends | (42,037) | (42,037) | |||||
Stock-based compensation and other | (9,836) | (28,509) | $ 18,673 | ||||
Issuance of stock under incentive and purchase plans, net of forfeitures, shares | 1,220,283 | ||||||
Stock-based compensation and other | 11,747 | 11,747 | |||||
Noncontrolling Interest, Increase from Subsidiary Equity Issuance | 13 | 13 | |||||
Reclassification of share-based liability awards | 15,248 | 15,248 | |||||
Adoption of ASC 606 adjustment | (2,747) | ||||||
Ending balance at May. 31, 2018 | 1,452,902 | $ 1,290 | 347,744 | (91,622) | 1,408,715 | $ (213,411) | 186 |
Ending balance, shares at May. 31, 2018 | 129,060,664 | ||||||
Ending balance, treasury stock, shares at May. 31, 2018 | (12,046,645) | ||||||
Beginning balance at Feb. 28, 2018 | 1,451,473 | $ 1,290 | 349,454 | (66,466) | 1,382,791 | $ (215,782) | 186 |
Beginning balance, shares at Feb. 28, 2018 | 129,060,664 | ||||||
Beginning balance, treasury stock, shares at Feb. 28, 2018 | (12,234,996) | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net earnings | 39,965 | 39,965 | |||||
Other comprehensive income (loss) | (25,156) | (25,156) | |||||
Dividends | (14,041) | (14,041) | |||||
Stock-based compensation and other | (2,443) | (4,814) | $ 2,371 | ||||
Issuance of stock under incentive and purchase plans, net of forfeitures, shares | 188,351 | ||||||
Stock-based compensation and other | 3,104 | 3,104 | |||||
Ending balance at May. 31, 2018 | 1,452,902 | $ 1,290 | 347,744 | (91,622) | 1,408,715 | $ (213,411) | 186 |
Ending balance, shares at May. 31, 2018 | 129,060,664 | ||||||
Ending balance, treasury stock, shares at May. 31, 2018 | (12,046,645) | ||||||
Beginning balance at Aug. 31, 2018 | $ 1,493,583 | $ 1,290 | 352,674 | (93,677) | 1,446,495 | $ (213,385) | 186 |
Beginning balance, shares at Aug. 31, 2018 | 129,060,664 | ||||||
Beginning balance, treasury stock, shares at Aug. 31, 2018 | (12,045,106) | (12,045,106) | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net earnings | $ 111,982 | 111,982 | |||||
Other comprehensive income (loss) | (12,548) | (12,548) | |||||
Dividends | (42,387) | (42,387) | |||||
Stock-based compensation and other | (2,364) | (18,384) | $ 16,020 | ||||
Issuance of stock under incentive and purchase plans, net of forfeitures, shares | 908,557 | ||||||
Stock-based compensation and other | 18,666 | 18,591 | 75 | ||||
Noncontrolling Interest, Increase from Subsidiary Equity Issuance | 10 | 10 | |||||
Adoption of ASC 606 adjustment | 2,700 | (2,747) | |||||
Ending balance at May. 31, 2019 | $ 1,564,195 | $ 1,290 | 352,881 | (106,225) | 1,513,418 | $ (197,365) | 196 |
Ending balance, shares at May. 31, 2019 | 129,060,664 | ||||||
Ending balance, treasury stock, shares at May. 31, 2019 | (11,136,549) | (11,136,549) | |||||
Beginning balance at Feb. 28, 2019 | $ 1,498,496 | $ 1,290 | 346,156 | (100,887) | 1,449,159 | $ (197,418) | 196 |
Beginning balance, shares at Feb. 28, 2019 | 129,060,664 | ||||||
Beginning balance, treasury stock, shares at Feb. 28, 2019 | (11,139,594) | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net earnings | 78,390 | 78,390 | |||||
Other comprehensive income (loss) | (5,338) | (5,338) | |||||
Dividends | (14,206) | (14,206) | |||||
Stock-based compensation and other | 492 | 439 | $ 53 | ||||
Issuance of stock under incentive and purchase plans, net of forfeitures, shares | 3,045 | ||||||
Stock-based compensation and other | 6,361 | 6,286 | 75 | ||||
Ending balance at May. 31, 2019 | $ 1,564,195 | $ 1,290 | $ 352,881 | $ (106,225) | $ 1,513,418 | $ (197,365) | $ 196 |
Ending balance, shares at May. 31, 2019 | 129,060,664 | ||||||
Ending balance, treasury stock, shares at May. 31, 2019 | (11,136,549) | (11,136,549) |
CONDENSED CONSOLIDATED STATEM_6
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED) (Parenthetical) - $ / shares | 3 Months Ended | 9 Months Ended | ||
May 31, 2019 | May 31, 2018 | May 31, 2019 | May 31, 2018 | |
Statement of Stockholders' Equity [Abstract] | ||||
Cash dividends per share (in USD per share) | $ 0.12 | $ 0.12 | $ 0.36 | $ 0.36 |
ACCOUNTING POLICIES
ACCOUNTING POLICIES | 9 Months Ended |
May 31, 2019 | |
Accounting Policies [Abstract] | |
Accounting policies | NOTE 1. ACCOUNTING POLICIES Accounting Principles The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (" GAAP ") on a basis consistent with that used in the Annual Report on Form 10-K for the fiscal year ended August 31, 2018 (" 2018 Form 10-K ") filed by Commercial Metals Company (" CMC ," and together with its consolidated subsidiaries, the " Company ") with the Securities and Exchange Commission (the " SEC ") and include all normal recurring adjustments necessary to present fairly the condensed consolidated balance sheets and the condensed consolidated statements of earnings, comprehensive income, cash flows and stockholders' equity for the periods indicated. These notes should be read in conjunction with the consolidated financial statements included in the 2018 Form 10-K . The results of operations for the three and nine month periods are not necessarily indicative of the results to be expected for the full fiscal year. Recently Adopted Accounting Pronouncements In August 2016, the Financial Accounting Standards Board (the " FASB ") issued Accounting Standards Update (" ASU ") 2016-15, Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments (Topic 230). ASU 2016-15 is intended to reduce diversity in practice in how certain cash receipts and cash payments are presented in the statement of cash flows. The new standard provides guidance on eight specific cash flow issues, including the statement of cash flows treatment of beneficial interests in securitized financial transactions, which encompasses activities under the Company's accounts receivable programs in the U.S. and Poland. The Company adopted the standard, which requires retrospective application to all periods presented, in the first quarter of fiscal 2019. As a result of adoption, the Company reported reductions in operating cash flows of $367.5 million and $491.6 million , with offsetting increases in investing cash flows related to the collection of previously sold trade accounts receivable in the condensed consolidated statements of cash flows for the nine months ended May 31, 2019 and 2018 , respectively. Additionally, upon adoption, the $90.0 million repayment during the first quarter of fiscal 2018 of advances outstanding at August 31, 2017, originally recorded as an outflow from operating activities, was reclassified to investing activities. On September 1, 2018, the Company adopted Accounting Standards Codification (" ASC ") 606, Revenue from Contracts with Customers, including the related amendments. The Company adopted ASC 606 under the modified retrospective approach and applied the guidance only to contracts that were not completed as of the date of adoption. The Company recognized a total cumulative effect of $2.7 million , net of tax, as a reduction to the opening balance of retained earnings as of September 1, 2018. There was no impact to the condensed consolidated statement of cash flows or other comprehensive income. In accordance with ASC 606, the disclosure below reflects the impact of adoption to the condensed consolidated statement of earnings, as compared to what the results would have been under ASC 605, Revenue Recognition. The impact to the condensed consolidated balance sheet was immaterial. Three Months Ended May 31, 2019 (in thousands) As Reported Balances Without Adoption of ASC 606 Effect of Change - Higher (Lower) Net sales $ 1,605,872 $ 1,607,214 $ (1,342 ) Net earnings 78,390 79,506 (1,116 ) Nine Months Ended May 31, 2019 (in thousands) As Reported Balances Without Adoption of ASC 606 Effect of Change - Higher (Lower) Net sales $ 4,285,997 $ 4,291,986 $ (5,989 ) Net earnings 111,982 116,630 (4,648 ) Recently Issued Accounting Pronouncements In August 2018, the FASB issued ASU No. 2018-15, Intangibles - Goodwill and Other - Internal-Use Software. The amendments in this ASU align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). Accordingly, the amendments require a customer in a hosting arrangement that is a service contract to follow the internal-use software guidance in ASC 350-40, Internal-Use Software, to determine which implementation costs to capitalize or to expense as incurred. This ASU is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, and will be effective for the Company beginning September 1, 2020. The Company will apply this ASU prospectively to all implementation costs incurred after the date of adoption. The Company concluded the impact of this ASU on its consolidated financial statements and disclosures will be immaterial. In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815). The ASU better aligns accounting rules with a company's risk management activities, better reflects economic results of hedging in financial statements, and simplifies hedge accounting treatment. For public companies, this standard is effective for annual periods beginning after December 15, 2018, including interim periods. The standard must be applied to hedging relationships existing on the date of adoption, and the effect of adoption should be reflected as of the beginning of the fiscal year of adoption. The Company concluded the impact of this guidance on its consolidated financial statements and disclosures will be immaterial. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), and has modified the standard thereafter. The standard requires a lessee to recognize a right-of-use ("ROU") asset and a lease liability on its balance sheet for all leases with terms of twelve months or longer. The Company plans to apply the new standard using a modified retrospective approach that allows entities to recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption without restating prior periods, and to elect the three packaged transition practical expedients under ASC 842-10-65-1(f). This guidance is effective for fiscal years, and interim reporting periods therein, beginning after December 15, 2018 and will be effective for the Company |
ACQUISITION
ACQUISITION | 9 Months Ended |
May 31, 2019 | |
Business Combinations [Abstract] | |
Acquisition | NOTE 2. ACQUISITION On November 5, 2018 (the " Acquisition Date "), the Company completed the acquisition of 33 rebar fabrication facilities in the United States, as well as four electric arc furnace mini mills located in Knoxville, Tennessee ; Jacksonville, Florida ; Sayreville, New Jersey and Rancho Cucamonga, California from Gerdau S.A., hereinafter collectively referred to as the " Acquired Businesses ." The total cash purchase price, including working capital adjustments, was $701.2 million , subject to customary purchase price adjustments, and was funded through a combination of domestic cash on-hand and borrowings under the 2018 Term Loan , as defined in Note 9, Credit Arrangements . The Company accounts for business combinations by recognizing the assets acquired and liabilities assumed at the Acquisition Date fair value. In valuing acquired assets and liabilities, fair value estimates were determined using Level 3 inputs, including expected future cash flows and discount rates. While the Company uses its best estimates and assumptions as a part of the purchase price allocation process to accurately value assets acquired and liabilities assumed at the Acquisition Date , the Company ’s estimates are inherently uncertain and subject to refinement. The results of operations of the Acquired Businesses are reflected in the Company ’s condensed consolidated financial statements from the Acquisition Date . The financial statements were not retrospectively adjusted for any measurement-period adjustments that occurred in subsequent periods. Rather, any adjustments to provisional amounts identified during the allowable one year measurement period (the " Measurement Period ") are recorded in the reporting period in which the adjustment was determined. The table below presents the preliminary fair value that was allocated to the Acquired Businesses' assets and liabilities based upon fair values as determined by the Company , as well as any Measurement Period adjustments made during the third quarter of fiscal 2019 . Final determination of the fair values may result in further adjustments to the values presented in the following table: (in thousands) Estimated Fair Value * Cash and cash equivalents $ 6,399 Accounts receivable 301,740 Inventories 202,082 Other current assets 26,290 Property, plant and equipment 414,237 Deferred income taxes 11,606 Accounts payable-trade, accrued expenses and other payables (134,702 ) Acquired unfavorable contract backlog (110,166 ) Other long-term liabilities (9,920 ) Pension and other post retirement employment benefits (6,365 ) Total assets acquired and liabilities assumed $ 701,201 _________________ *As previously reported in the Company's Quarterly Report on Form 10-Q for the period ended February 28, 2019 . No measurement period adjustments occurred in the third quarter of fiscal 2019 . Inventories The acquired inventory is comprised of finished goods, work in process and raw materials. The fair value of finished goods was preliminarily calculated as the estimated selling price, adjusted for the selling costs and a reasonable profit margin. The fair value of semi-finished goods was preliminarily calculated as the estimated selling price, adjusted for estimated costs to complete manufacturing, estimated selling costs, and a reasonable profit margin. The fair value of raw materials was determined to approximate the historical carrying value as it represented market cost. The inventory step up recognized for the nine months ended May, 31, 2019 was $10.3 million , which has been reflected in the Company's Americas Mills segment as cost of goods sold as the related inventory has been sold. Property, Plant and Equipment The fair value of real property was preliminarily calculated using the cost approach for buildings and improvements and either a sales comparison or market approach for land. The fair value of personal property was preliminarily calculated using the cost approach. The cost approach measures the value by estimating the cost to acquire or construct comparable assets and adjusts for age and condition. The Company assigned real property a useful life ranging from 1 to 35 years and personal property a useful life ranging from 1 to 25 years. Deferred Income Taxes Deferred income tax assets include the expected future federal and state tax consequences associated with temporary differences between the preliminary fair values of the assets acquired and liabilities assumed and the respective tax bases. Tax rates utilized in calculating the deferred tax assets represent a preliminary consolidated tax rate which may be adjusted during the Measurement Period as the Company applies the appropriate tax rate for each legal entity. Pension and Other Postretirement Liabilities The Company recognized a net liability of $6.4 million , representing the unfunded portion of the acquired defined-benefit pension plan and other postretirement-benefit plan. Acquired Unfavorable Contract Backlog The Company determined that the backlog associated with existing contracts at the acquired fabrication facilities in which the selling price was less than estimated costs to fulfill using market participant assumptions represented a separable intangible liability. The unfavorable contract backlog was valued using the income approach. Amortization of the backlog will correspond with completion of the acquired contracts, which is estimated to be between 1 to 2 years. Other Assets Acquired and Liabilities Assumed The Company used historical carrying values for trade accounts receivable and payables, as well as certain other current and non-current assets and liabilities, as their carrying values represented the fair value of those items as of the Acquisition Date. Financial Results The following table summarizes the financial results of the Acquired Businesses from the Acquisition Date for the three and nine months ended May 31, 2019 included in the Company ’s condensed consolidated statement of earnings and condensed consolidated statement of comprehensive income. (in thousands) Three Months Ended May 31, 2019 Nine Months Ended May 31, 2019 Net sales $ 453,479 $ 958,550 Earnings before income taxes 42,951 78,047 Pro Forma Supplemental Information Supplemental information on an unaudited pro forma basis is presented below as if the acquisition of the Acquired Businesses occurred on September 1, 2017. The pro forma financial information is presented for comparative purposes only, based on certain estimates and assumptions, which the Company believes to be reasonable, but not necessarily indicative of future results of operations or the results that would have been reported if the acquisition of the Acquired Businesses had been completed on September 1, 2017. These results were not used as part of management analysis of the financial results and performance of the Company . These results are adjusted, where possible, for transaction and integration related costs. These results involve a significant amount of estimates. Three Months Ended May 31, Nine Months Ended May 31, (in thousands) 2019 2018 2019 2018 Pro forma net sales (1) $ 1,582,478 $ 1,648,962 $ 4,507,485 $ 4,560,929 Pro forma net earnings (2) 63,018 49,402 88,987 40,311 _________________ (1) Pro forma net sales for the three and nine months ended May 31, 2018 includes estimated fair value adjustments related to amortization of unfavorable contract backlog. The impact of the amortization of unfavorable contract backlog has been removed from the pro forma net sales for the three and nine months ended May 31, 2019 . (2) Pro forma net earnings for the three and nine months ended May 31, 2018 reflects the impact of fair value adjustments related to the amortization of unfavorable contract backlog described above. Pro forma net earnings for the nine months ended May 31, 2018 includes estimated fair value adjustments related to inventory step-up, as well as non-recurring acquisition and integration costs of approximately $49.8 million |
CHANGES IN BUSINESS
CHANGES IN BUSINESS | 9 Months Ended |
May 31, 2019 | |
Business Combinations [Abstract] | |
Changes in Business | NOTE 3. CHANGES IN BUSINESS During fiscal 2018, the Company completed the exit of its trading operations in the U.S., Asia, and Australia. The results of these activities are included in discontinued operations in the condensed consolidated statements of earnings for all periods presented. The major classes of line items constituting earnings from discontinued operations in the condensed consolidated statements of earnings are presented in the table below. Three Months Ended May 31, Nine Months Ended May 31, (in thousands) 2018 2018 Net sales $ 3,262 $ 304,384 Costs and expenses: Cost of goods sold 4,233 276,371 Selling, general and administrative expenses 2,418 23,078 Interest expense — (86 ) Earnings (loss) before income taxes (3,389 ) 5,021 Income taxes (benefit) (1,029 ) 2,052 Earnings (loss) from discontinued operations $ (2,360 ) $ 2,969 There were no material operating or investing non-cash items for discontinued operations for the three and nine months ended May 31, 2019 and 2018 . The assets and liabilities of the businesses classified as held for sale and discontinued operations were immaterial at both May 31, 2019 and August 31, 2018 |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | 9 Months Ended |
May 31, 2019 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated other comprehensive income (loss) | NOTE 4. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) The following tables reflect the changes in accumulated other comprehensive income (loss) (" AOCI "): Three Months Ended May 31, 2019 (in thousands) Foreign Currency Translation Unrealized Gain (Loss) on Derivatives Defined Benefit Obligation Total AOCI Balance, February 28, 2019 $ (100,943 ) $ 1,151 $ (1,095 ) $ (100,887 ) Other comprehensive loss before reclassifications (5,135 ) (86 ) (6 ) (5,227 ) Amounts reclassified from AOCI 19 (181 ) — (162 ) Income taxes — 51 — 51 Net other comprehensive loss (5,116 ) (216 ) (6 ) (5,338 ) Balance, May 31, 2019 $ (106,059 ) $ 935 $ (1,101 ) $ (106,225 ) Nine Months Ended May 31, 2019 (in thousands) Foreign Currency Translation Unrealized Gain (Loss) on Derivatives Defined Benefit Obligation Total AOCI Balance, August 31, 2018 $ (92,637 ) $ 1,356 $ (2,396 ) $ (93,677 ) Other comprehensive loss before reclassifications (14,278 ) (190 ) (25 ) (14,493 ) Amounts reclassified from AOCI 856 (330 ) 1,666 2,192 Income taxes (benefit) — 99 (346 ) (247 ) Net other comprehensive income (loss) (13,422 ) (421 ) 1,295 (12,548 ) Balance, May 31, 2019 $ (106,059 ) $ 935 $ (1,101 ) $ (106,225 ) Three Months Ended May 31, 2018 (in thousands) Foreign Currency Translation Unrealized Gain (Loss) on Derivatives Defined Benefit Obligation Total AOCI Balance, February 28, 2018 $ (66,000 ) $ 1,432 $ (1,898 ) $ (66,466 ) Other comprehensive income (loss) before reclassifications (26,434 ) 16 — (26,418 ) Amounts reclassified from AOCI 1,328 (70 ) (9 ) 1,249 Income taxes — 11 2 13 Net other comprehensive loss (25,106 ) (43 ) (7 ) (25,156 ) Balance, May 31, 2018 $ (91,106 ) $ 1,389 $ (1,905 ) $ (91,622 ) Nine Months Ended May 31, 2018 (in thousands) Foreign Currency Translation Unrealized Gain (Loss) on Derivatives Defined Benefit Obligation Total AOCI Balance, August 31, 2017 $ (80,778 ) $ 1,587 $ (2,322 ) $ (81,513 ) Other comprehensive income (loss) before reclassifications (11,656 ) 47 — (11,609 ) Amounts reclassified from AOCI 1,328 (314 ) 647 1,661 Income taxes (benefit) — 69 (230 ) (161 ) Net other comprehensive income (loss) (10,328 ) (198 ) 417 (10,109 ) Balance, May 31, 2018 $ (91,106 ) $ 1,389 $ (1,905 ) $ (91,622 ) Items reclassified out of AOCI were not material for the three and nine months ended May 31, 2019 and 2018 , thus the corresponding line items in the condensed consolidated statements of earnings to which the items were reclassified are not presented. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 9 Months Ended |
May 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | NOTE 5. REVENUE RECOGNITION Revenue from Contracts with Customers Revenue is recognized when control of the promised goods or services is transferred to the customer in an amount that reflects the consideration received or expected to be received in exchange for those goods or services. The Company 's performance obligations arise from (i) sales of steel products, ferrous and nonferrous scrap metals, and construction materials and (ii) services such as steel fabrication and installation. The shipment of products to customers is considered a fulfillment activity and amounts billed to customers for shipping and freight are included in net sales, and the related costs are included in cost of goods sold. Net sales is presented net of taxes. In the Americas Mills, Americas Recycling, and International Mill segments, revenue is recognized at a point in time concurrent with the transfer of control, which usually occurs, depending on shipping terms, upon shipment or customer receipt. In the Americas Fabrication segment, each contract represents a single performance obligation. Revenue is either recognized over time or equal to billing under an available practical expedient. When the Company provides fabricated product and installation services, revenue is recognized over time using an input method. For the three and nine months ended May 31, 2019 , these contracts represent approximately 27% of net sales in the Americas Fabrication segment. For these contracts, the measure of progress is based on contract costs incurred to date compared to total estimated contract costs, which provides a reasonable depiction of the Company ’s progress towards satisfaction of the performance obligation as there is a direct relationship between costs incurred by the Company and the transfer of the fabricated product and installation services. Revenue from contracts where the Company does not provide installation services is recognized over time using an output method. For the three and nine months ended May 31, 2019 , these contracts represent approximately 19% and 22% , respectively, of total revenue in the Americas Fabrication segment. For these contracts, the Company uses tons shipped compared to total estimated tons, which provides a reasonable depiction of the transfer of contract value to the customer, as there is a direct relationship between the units shipped by the Company and the transfer of the fabricated product. Significant judgment is required to evaluate total estimated costs used in the input method and total estimated tons in the output method. If estimated total consolidated costs on any contract are greater than the net contract revenues, the Company recognizes the entire estimated loss in the period the loss becomes known. The cumulative effect of revisions to estimates related to net contract revenues, costs to complete, or total planned quantity is recorded in the period in which such revisions are identified. The Company does not exercise significant judgment in determining the transaction price. For the three and nine months ended May 31, 2019 , the remaining 54% and 51% , respectively, of revenue in the Americas Fabrication segment is recognized as amounts are billed to the customer and control of the promised goods is transferred to the customer. The timing of revenue recognition may differ from the timing of invoicing to customers. The Company records an asset when revenue is recognized prior to invoicing and a liability when revenue is recognized subsequent to invoicing. Payment terms and conditions vary by contract type, although the Company generally requires customers to pay 30 days after the Company satisfies the performance obligations. In instances where the timing of revenue recognition differs from the timing of invoicing, the Company has determined the contracts do not include a significant financing component. The following table provides information about assets and liabilities from contracts with customers. (in thousands) May 31, 2019 August 31, 2018 Contract assets (included in other current assets) $ 96,842 $ 49,221 Contract liabilities (included in accrued expenses and other payables) 35,812 6,679 The majority of the increase in contract asset and liability balances was attributable to the acquisition of the Acquired Businesses. The entire contract liability as of August 31, 2018 was recognized as revenue during the nine months ended May 31, 2019 . Remaining Performance Obligations As of May 31, 2019 , a total of $853.1 million has been allocated to remaining performance obligations in the Americas Fabrication segment, excluding those contracts where revenue is recognized equal to billing under an available practical expedient. Of this amount, the Company estimates the remaining performance obligations will be recognized as revenue as follows: 40% in the first twelve months , 49% in the following twelve months , and 11% thereafter . The duration of contracts in the Americas Mills, Americas Recycling, and International Mill segments are typically less than one year. Disaggregation of Revenue The following tables display revenue by reportable segment from external customers, disaggregated by major source. The Company believes disaggregating by these categories depicts how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. Three Months Ended May 31, 2019 (in thousands) Americas Recycling Americas Mills Americas Fabrication International Mill Corporate and Other Total Steel products $ 238 $ 501,925 $ 554,672 $ 199,431 $ — $ 1,256,266 Ferrous scrap 106,404 8,916 2 525 — 115,847 Nonferrous scrap 121,581 4,080 — 3,212 — 128,873 Construction materials — — 71,228 — — 71,228 Other 563 21,114 3,608 5,854 2,519 33,658 Total $ 228,786 $ 536,035 $ 629,510 $ 209,022 $ 2,519 $ 1,605,872 Nine Months Ended May 31, 2019 (in thousands) Americas Recycling Americas Mills Americas Fabrication International Mill Corporate and Other Total Steel products $ 679 $ 1,294,217 $ 1,392,442 $ 584,735 $ — $ 3,272,073 Ferrous scrap 323,311 26,802 2 1,055 — 351,170 Nonferrous scrap 369,660 10,568 — 8,677 — 388,905 Construction materials — — 188,589 — — 188,589 Other 1,205 50,914 9,713 16,173 7,255 85,260 Total $ 694,855 $ 1,382,501 $ 1,590,746 $ 610,640 $ 7,255 $ 4,285,997 Three Months Ended May 31, 2018* (in thousands) Americas Recycling Americas Mills Americas Fabrication International Mill Corporate and Other Total Steel products $ 319 $ 305,390 $ 303,363 $ 193,114 $ — $ 802,186 Ferrous scrap 144,398 8,462 2 351 — 153,213 Nonferrous scrap 147,683 4,851 — 3,286 — 155,820 Construction materials — — 70,436 — — 70,436 Other 279 13,756 1,382 4,687 2,725 22,829 Total $ 292,679 $ 332,459 $ 375,183 $ 201,438 $ 2,725 $ 1,204,484 Nine Months Ended May 31, 2018* (in thousands) Americas Recycling Americas Mills Americas Fabrication International Mill Corporate and Other Total Steel products $ 894 $ 766,976 $ 830,172 $ 605,152 $ — $ 2,203,194 Ferrous scrap 383,358 24,605 2 970 — 408,935 Nonferrous scrap 447,060 12,734 — 10,427 — 470,221 Construction materials — — 180,641 — — 180,641 Other 1,136 37,580 5,119 16,585 11,874 72,294 Total $ 832,448 $ 841,895 $ 1,015,934 $ 633,134 $ 11,874 $ 3,335,285 _________________ * Prior period amounts have been reported under ASC 605. |
ACCOUNTS RECEIVABLE PROGRAMS
ACCOUNTS RECEIVABLE PROGRAMS | 9 Months Ended |
May 31, 2019 | |
Transfers and Servicing [Abstract] | |
Accounts Receivable Programs | NOTE 6. ACCOUNTS RECEIVABLE PROGRAMS As an additional source of liquidity, the Company sells certain trade accounts receivable both in the U.S. and Poland (hereinafter referred to as the “ Programs ”). For years prior to fiscal 2019 , the Company accounted for transfers of trade accounts receivable under the Programs as sales of financial assets, and the trade accounts receivable balances sold were removed from the consolidated balance sheets. On September 1, 2018, the Company amended certain terms of the Programs , disqualifying the sale of such receivables from being accounted for as sales of financial assets. For activity in the Programs occurring prior to the September 1, 2018 amendment, disclosures required under ASC 860-20-50 are provided below. See Note 9, Credit Arrangements , for further details regarding the Programs . Prior to September 1, 2018, in exchange for trade receivables transferred into the Programs , the Company received either cash (referred to as a cash purchase price or “ CPP ”) or a deferred purchase price (“ DPP ”). Upon adoption of ASU 2016-15, the CPP received was reflected as cash provided by operating activities in the Company 's consolidated statements of cash flows, and cash received to settle the DPP related to the transfer of receivables was included as part of investing activities in the Company 's consolidated statement of cash flows. For periods prior to fiscal 2019, DPP on the Programs was included in accounts receivable on the Company 's condensed consolidated balance sheets. Nine Months Ended May 31, 2018 (in thousands) Total U.S. Poland Deferred purchase price Balance, August 31, 2017 $ 215,123 $ 135,623 $ 79,500 Transfers of trade receivables 2,116,243 1,741,451 374,792 Less: CPP (1,576,579 ) (1,311,705 ) (264,874 ) Non-cash increase to DPP 539,664 429,746 109,918 Cash collections of DPP (491,577 ) (383,955 ) (107,622 ) Net repayments (advances) 69,444 90,000 (20,556 ) Net collections of DPP (422,133 ) (293,955 ) (128,178 ) Balance, May 31, 2018 $ 332,654 $ 271,414 $ 61,240 At May 31, 2018 , the Company transferred $352.2 million of trade accounts receivable to the financial institutions and had no advance payments outstanding under the U.S. Program and $18.1 million outstanding under the Polish Program. Discounts related to the Programs were immaterial for the three and nine months ended May 31, 2018 . |
INVENTORIES, NET
INVENTORIES, NET | 9 Months Ended |
May 31, 2019 | |
Inventory Disclosure [Abstract] | |
Inventories, net | NOTE 7. INVENTORIES, NET The majority of the Company 's inventories are in the form of semi-finished and finished goods. Under the Company ’s business model, products are sold to external customers in various stages, from semi-finished billets through fabricated steel, leading these categories to be combined as finished goods. Work in process inventories were not material at May 31, 2019 and August 31, 2018 . At May 31, 2019 and August 31, 2018 , $185.1 million and $177.7 million , respectively, of the Company 's inventories were in the form of raw materials. |
GOODWILL AND OTHER INTANGIBLES
GOODWILL AND OTHER INTANGIBLES | 9 Months Ended |
May 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and other intangibles | NOTE 8. GOODWILL AND OTHER INTANGIBLES Goodwill by reportable segment at May 31, 2019 is detailed in the following table: (in thousands) Americas Recycling Americas Mills Americas Fabrication International Mill Consolidated Goodwill, gross* $ 9,543 $ 4,970 $ 57,428 $ 2,478 $ 74,419 Accumulated impairment losses* (9,543 ) — (493 ) (157 ) (10,193 ) Goodwill, net* $ — $ 4,970 $ 56,935 $ 2,321 $ 64,226 _________________ * The change in balance from August 31, 2018 was immaterial. The total gross carrying amounts of the Company 's intangible assets subject to amortization were $21.8 million and $20.5 million at May 31, 2019 and August 31, 2018 , respectively, and were included in other noncurrent assets on the Company 's condensed consolidated balance sheets. Intangible amortization expense from continuing operations related to such intangible assets was $0.6 million for both the three months ended May 31, 2019 and May 31, 2018 , and $1.7 million and $1.6 million for the nine months ended May 31, 2019 and 2018 , respectively. Excluding goodwill, the Company did not have any significant intangible assets with indefinite lives as of May 31, 2019 . The amortizable intangible (liabilities) acquired consisted of: (in thousands, except life in years) Life in Years Estimated Fair Value Net unfavorable lease contracts Various $ (2,705 ) Unfavorable contract backlog 1-2 years* $ (110,166 ) _________________ * Amortization will correspond with completion of the acquired contracts, which is estimated to occur over the next 1 to 2 years. In connection with the acquisition of the Acquired Businesses , the Company recorded a preliminary unfavorable contract backlog liability of $110.2 million . Amortization of the backlog for the three and nine months ended May 31, 2019 was $23.4 million and $58.2 million , respectively, and was recorded as an increase to net sales in the Company 's condensed consolidated statement of earnings. |
CREDIT ARRANGEMENTS
CREDIT ARRANGEMENTS | 9 Months Ended |
May 31, 2019 | |
Debt Disclosure [Abstract] | |
Credit arrangements | NOTE 9. CREDIT ARRANGEMENTS Long-term debt as of May 31, 2019 and August 31, 2018 was as follows: (in thousands) Weighted Average Interest Rate as of May 31, 2019 May 31, 2019 August 31, 2018 2027 Notes 5.375% $ 300,000 $ 300,000 2026 Notes 5.750% 350,000 350,000 2023 Notes 4.875% 330,000 330,000 Term loans 4.115% 310,125 142,500 Short-term borrowings * 25,327 — Other, including equipment notes 56,996 47,629 Total debt 1,372,448 1,170,129 Less debt issuance costs 10,690 11,764 Total amounts outstanding 1,361,758 1,158,365 Less current maturities 29,568 19,746 Less short-term borrowings 25,327 — Current maturities of long-term debt and short-term borrowings 54,895 19,746 Long-term debt $ 1,306,863 $ 1,138,619 _________________ * As of May 31, 2019 , the weighted average interest rates associated with the U.S. Program and Poland Program were 3.120% and 2.410% , respectively. In July 2017 , the Company issued $300.0 million of 5.375% Senior Notes due July 2027 (the " 2027 Notes "). Interest on the 2027 Notes is payable semiannually. In May 2018 , the Company issued $350.0 million of 5.75% Senior Notes due April 2026 (the " 2026 Notes "). Interest on the 2026 Notes is payable semiannually. In May 2013 , the Company issued $330.0 million of 4.875% Senior Notes due May 2023 (the " 2023 Notes "). Interest on the 2023 Notes is payable semiannually. The Company has a $350.0 million revolving credit facility (the " Revolver ") pursuant to the Fourth Amended and Restated Credit Agreement (the " Credit Agreement "), and two senior secured term loans: one drawn on July 13, 2017 with an original principal amount of $150.0 million (the " 2022 Term Loan "), and one drawn on November 1, 2018 with an original principal amount of $180.0 million (the " 2018 Term Loan "). These term loans are hereinafter collectively referred to as the " Term Loans ." The Credit Agreement and the Term Loans are coterminous with a maturity date in June 2022 . The Company is required to make quarterly payments on the Term Loans equal to 1.25% of the original principal amount. The maximum availability under the Revolver can be increased to $600.0 million with bank approval. The Company 's obligations under the Credit Agreement are collateralized by its U.S. inventory and U.S. fabrication receivables. The Credit Agreement 's capacity includes a $50.0 million sub-limit for the issuance of stand-by letters of credit. The Company had no amounts drawn under the Revolver at May 31, 2019 and August 31, 2018 . The Company 's availability under the Revolver was reduced by outstanding letters of credit of $3.0 million and $3.3 million at May 31, 2019 and August 31, 2018 . Under the Credit Agreement , 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, each as 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, each as defined in the Credit Agreement ) that does not exceed 0.60 to 1.00. At May 31, 2019 , the Company 's interest coverage ratio was 5.53 to 1.00, and the Company 's debt to capitalization ratio was 0.47 to 1.00. Loans under the Credit Agreement bear interest based at the Eurocurrency rate, a base rate, or the London Interbank Offered Rate (" LIBOR "). At May 31, 2019 , the Company was in compliance with all covenants contained in its debt agreements. The Company also has credit facilities in Poland, primarily through its subsidiary, CMC Poland Sp. z.o.o. (" CMCP "), available to support global working capital, short-term cash needs, letters of credit, financial assurance and other trade finance-related matters. At May 31, 2019 , CMCP 's credit facilities totaled Polish zloty ("PLN") 275.0 million , or $71.7 million . These facilities will expire in March 2022. At May 31, 2019 and August 31, 2018 , no amounts were outstanding under these facilities. The available balance of these credit facilities was reduced by outstanding stand-by letters of credit, guarantees, and/or other financial assurance instruments, which totaled $1.3 million and $1.1 million at May 31, 2019 and August 31, 2018 , respectively. During the nine months ended May 31, 2019 and 2018 , CMCP had no borrowings and no repayments under its credit facilities. Accounts Receivable Programs CMC has a $200.0 million U.S. trade accounts receivable program (the " U.S. Program "), which expires in August 2020. Under the U.S. Program , CMC contributes, and certain of its subsidiaries transfer 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 formed for the sole purpose of facilitating transfers of trade accounts receivable generated by the Company . CMCRV transfers the trade accounts receivable in their entirety to two financial institutions. Under the U.S. Program , 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. 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 U.S. 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 Agreement . Advances taken under the U.S. Program incur interest based on LIBOR plus a margin. The Company had no advance payments outstanding under the U.S. Program at May 31, 2019 . In addition to the U.S. Program , the Company 's international subsidiary in Poland transfers trade accounts receivable to financial institutions without recourse (the " Poland Program "). The Poland Program has a facility limit of PLN 220.0 million ( $57.4 million as of May 31, 2019 ) and allows the Company 's Polish subsidiaries to obtain an advance of up to 90% of eligible trade accounts receivable transferred under the terms of the arrangement. Advances taken under the Poland Program incur interest based on the Warsaw Interbank Offered Rate (" WIBOR ") plus a margin. The Company had advance payments outstanding of $25.3 million and $12.1 million under the Poland Program at May 31, 2019 and August 31, 2018 , respectively. Prior to fiscal 2019, the Company accounted for transfers of trade accounts receivable as sales, and the trade accounts receivable balances transferred were removed from the condensed consolidated balance sheets. On September 1, 2018, the Company amended certain terms of both the U.S. and Poland Programs, disqualifying the accounting of the transfer of such receivables as sales. As a result of the amendments, beginning in fiscal 2019, any advances outstanding under the U.S. and Poland Programs are recorded as debt on the Company |
DERIVATIVES AND RISK MANAGEMENT
DERIVATIVES AND RISK MANAGEMENT | 9 Months Ended |
May 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives and risk management | NOTE 10. 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, and (ii) foreign currency forward contracts that match the expected settlements for purchases and sales denominated in foreign currencies. At May 31, 2019 , the notional values of the Company 's foreign currency contract commitments and its commodity contract commitments were $112.0 million and $49.7 million , respectively. At May 31, 2018 , the notional values of the Company 's foreign currency contract commitments and its commodity contract commitments were $140.4 million and $64.8 million , respectively. The following table provides information regarding the Company 's commodity contract commitments as of May 31, 2019 : Commodity Long/Short Total Aluminum Long 4,500 MT Aluminum Short 2,350 MT Copper Long 669 MT Copper Short 5,341 MT _________________ MT = Metric Ton 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 condensed consolidated statements of earnings, and there were no components excluded from the assessment of hedge effectiveness for the three and nine months ended May 31, 2019 and 2018 . 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 condensed consolidated statements of earnings (amounts in thousands): Three Months Ended May 31, Nine Months Ended May 31, Derivatives Not Designated as Hedging Instruments Location 2019 2018 2019 2018 Commodity Cost of goods sold $ 3,408 $ 1,498 $ 143 $ 2,071 Foreign exchange Cost of goods sold — — — (50 ) Foreign exchange SG&A expenses (72 ) 518 (472 ) 1,169 Gain (loss) before income taxes $ 3,336 $ 2,016 $ (329 ) $ 3,190 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 and capital expenditures. Location of Gain (Loss) Recognized in Income on Derivatives Amount of Gain (Loss) Recognized in Income on Derivatives for the Three Months Ended May 31, Location of Gain (Loss) Recognized in Income on Related Hedged Items Amount of Gain (Loss) Recognized in Income on Related Hedge Items for the Three Months Ended May 31, 2019 2018 2019 2018 Foreign exchange Net sales $ — $ 163 Net sales $ — $ (163 ) Foreign exchange Cost of goods sold — (429 ) Cost of goods sold — 429 Gain (loss) before income taxes $ — $ (266 ) $ — $ 266 Location of Gain (Loss) Recognized in Income on Derivatives Amount of Gain (Loss) Recognized in Income on Derivatives for the Nine Months Ended May 31, Location of Gain (Loss) Recognized in Income on Related Hedged Items Amount of Gain (Loss) Recognized in Income on Related Hedge Items for the Nine Months Ended May 31, 2019 2018 2019 2018 Foreign exchange Net sales $ — $ (66 ) Net sales $ — $ 66 Foreign exchange Cost of goods sold — 1,596 Cost of goods sold — (1,596 ) Gain (loss) before income taxes $ — $ 1,530 $ — $ (1,530 ) Effective Portion of Derivatives Designated as Cash Flow Hedging Instruments Recognized in AOCI Three Months Ended May 31, Nine Months Ended May 31, 2019 2018 2019 2018 Foreign exchange, net of income taxes $ (145 ) $ 13 $ (267 ) $ 38 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 condensed consolidated balance sheets. The asset and liability balances in the tables below reflect the gross amounts of derivative instruments at May 31, 2019 and August 31, 2018 . The fair value of the Company 's derivative instruments on the condensed consolidated balance sheets was as follows: Derivative Assets (in thousands) May 31, 2019 August 31, 2018 Commodity — not designated for hedge accounting $ 2,088 $ 1,881 Foreign exchange — designated for hedge accounting — — Foreign exchange — not designated for hedge accounting 221 407 Derivative assets (other current assets) (1) $ 2,309 $ 2,288 Derivative Liabilities (in thousands) May 31, 2019 August 31, 2018 Commodity — not designated for hedge accounting $ 322 $ 301 Foreign exchange — designated for hedge accounting 373 — Foreign exchange — not designated for hedge accounting 581 1,095 Derivative liabilities (accrued expenses and other payables) (1) $ 1,276 $ 1,396 _________________ (1) Derivative assets and liabilities do not include the hedged items designated as fair value hedges. As of May 31, 2019 , most 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 | 9 Months Ended |
May 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair value | NOTE 11. 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) May 31, 2019 Quoted Prices in Significant Other Significant Assets: Investment deposit accounts (1) $ 2,792 $ 2,792 $ — $ — Commodity derivative assets (2) 2,088 2,088 — — Foreign exchange derivative assets (2) 221 — 221 — Liabilities: Commodity derivative liabilities (2) 322 322 — — Foreign exchange derivative liabilities (2) 954 — 954 — Fair Value Measurements at Reporting Date Using (in thousands) August 31, 2018 Quoted Prices in Significant Other Significant Assets: Investment deposit accounts (1) $ 541,101 $ 541,101 $ — $ — Commodity derivative assets (2) 1,881 1,881 — — Foreign exchange derivative assets (2) 407 — 407 — Liabilities: Commodity derivative liabilities (2) 301 301 — — Foreign exchange derivative liabilities (2) 1,095 — 1,095 — _________________ (1) Investment deposit accounts are short-term in nature, and the value is determined by principal plus interest. The investment portfolio mix can change each period based on the Company 's assessment of investment options. (2) Derivative assets and liabilities classified as Level 1 are commodity futures contracts valued based on quoted market prices in the London Metal Exchange or New York Mercantile Exchange. Amounts in Level 2 are based on broker quotes in the over-the-counter market. Further discussion regarding the Company's use of derivative instruments and the classification of the assets and liabilities is included in Note 10, Derivatives and Risk Management . In connection with the sale of assets related to the Company 's structural steel fabrication operations, the Company recorded impairment charges of $0.9 million and $13.0 million for the three and nine months ended May 31, 2018 , respectively. The signed definitive asset sale agreement (Level 2) was the basis of the determination of fair value of these operations. There were no other material, non-recurring fair value remeasurements during the three and nine months ended May 31, 2019 and 2018 . The carrying values of the Company 's short-term items approximate fair value. The carrying values and estimated fair values of the Company 's financial assets and liabilities that are not required to be measured at fair value on the condensed consolidated balance sheets were as follows: May 31, 2019 August 31, 2018 (in thousands) Fair Value Hierarchy Carrying Value Fair Value Carrying Value Fair Value 2027 Notes (1) Level 2 $ 300,000 $ 279,195 $ 300,000 $ 281,655 2026 Notes (1) Level 2 350,000 345,769 350,000 339,238 2023 Notes (1) Level 2 330,000 328,964 330,000 326,090 Short-term borrowings (2) Level 2 25,327 25,327 — — Term loans (2) Level 2 310,125 310,125 142,500 142,500 _________________ (1) The fair value of the notes was determined based on indicated market values. (2) Contains variable interest rates and carrying value approximates fair value. |
INCOME TAX
INCOME TAX | 9 Months Ended |
May 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income tax | NOTE 12. INCOME TAX For the three and nine months ended May 31, 2019 , the Company 's effective tax rates from continuing operations were 27.0% and 31.9% , respectively, as compared to the U.S. statutory income tax rate of 21.0% . The effective tax rate is determined by computing the estimated annual effective tax rate, adjusted for discrete items, if any, which are taken into account in the appropriate period. Items that impacted the effective tax rates included: i. a global intangible low-taxed income (“ GILTI ”) tax; ii. a valuation allowance on foreign tax credits from the one-time toll charge on certain undistributed earnings of non-U.S. subsidiaries as a result of the Tax Cuts and Jobs Act (" TCJA "); iii. an uncertain tax position related to the one-time toll charge on certain undistributed earnings of non-U.S. subsidiaries as a result of the TCJA ; iv. non-deductible compensation expense; and v. state and local taxes. For the three and nine months ended May 31, 2018 , the Company 's effective tax rates from continuing operations were 23.9% and 21.8% , respectively, as compared to the blended U.S. statutory income tax rate of 25.7% . Items that impacted the effective tax rates included: i. the one-time toll charge on certain undistributed earnings of non-U.S. subsidiaries with associated foreign tax credits as a result of the TCJA ; ii. the remeasurement of the Company ’s deferred tax balances to the applicable reduced statutory income tax rates as a result of the TCJA ; iii. a permanent tax benefit related to a worthless stock deduction from the reorganization and exit of the steel trading business headquartered in the United Kingdom; iv. the proportion of the Company 's global income from operations in jurisdictions with lower statutory tax rates than the U.S., including Poland, which has a statutory income tax rate of 19.0% ; v. a permanent tax benefit recorded for stock awards that vested during the first nine months of fiscal 2018 ; and vi. a non-taxable gain on assets related to the Company 's non-qualified benefits restoration plan. For the three and nine months ended May 31, 2018 , the Company 's effective income tax rates from discontinued operations of 30.4% and 40.9% , respectively, were greater than the blended U.S. statutory income tax rate of 25.7% , primarily as a result of losses from operations in certain jurisdictions in which the Company maintains a valuation allowance, thus providing no benefit for such losses. Additionally, the effective income tax rates were unfavorably impacted by state taxes imposed on income earned by the Company ’s steel trading operations headquartered in the U.S. As of May 31, 2019 and August 31, 2018 , the reserve for unrecognized income tax benefits related to the accounting for uncertainty in income taxes was $6.2 million and $3.1 million , respectively, which, if recognized, would have decreased the Company ’s effective income tax rate at the end of each respective period. 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. For the three and nine months ended May 31, 2019 , the Company recorded immaterial amounts of accrued interest and penalties on unrecognized income tax benefits. The Company is subject to varying statutes of limitation in the U.S. and foreign jurisdictions. In the normal course of business, CMC and its subsidiaries are subject to examination by various taxing authorities. The following summarizes tax years subject to examination: U.S. Federal — 2016 and forward U.S. States — 2015 and forward Foreign — 2012 and forward In addition, the Company is under examination by certain state revenue authorities for fiscal years 2015 through 2017. The Company believes the recorded income tax liabilities as of May 31, 2019 reflect the anticipated outcome of these examinations. Beginning in fiscal 2019 , the Company is subject to the following provisions of the TCJA : (i) a new tax on GILTI ; (ii) a new deduction for foreign-derived intangible income (“ FDII ”); (iii) deductibility limitations on compensation for covered employees; and (iv) deductibility limitations on business interest expense. The U.S. Department of Treasury continues to release new and clarifying guidance with regard to interpretation of certain provisions of the TCJA, which the Company evaluates during the period of enactment. Based on enacted legislation through the third quarter of fiscal 2019 , the Company has included in the estimated annual effective tax rate estimates of the tax impacts related to GILTI and the deductibility limitations on compensation for covered employees. The Company has elected to treat the new GILTI tax as a current period cost. The Company ’s current assessment of FDII and the deductibility limitations on business interest expense did not result in an impact to the estimated annual effective tax rate. In general, it is the practice and intention of the Company to indefinitely reinvest earnings of non-U.S. subsidiaries. Based on the provisions of the TCJA , future distributions of earnings of non-U.S. subsidiaries are not expected to be subject to U.S. income tax. However, such distributions may be subject to other global income tax considerations, such as withholding taxes, but are not expected to materially impact the Company ’s financial statements. |
STOCK-BASED COMPENSATION PLANS
STOCK-BASED COMPENSATION PLANS | 9 Months Ended |
May 31, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-based compensation plans | NOTE 13. 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 2018 Form 10-K . In general, restricted stock units granted during fiscal 2019 vest ratably over a period of three years . However, certain restricted stock units granted during fiscal 2019 cliff vest after a period of three years. Subject to the achievement of performance targets established by the Compensation Committee of CMC 's Board of Directors, performance stock units granted during fiscal 2019 vest after a period of three years . During the nine months ended May 31, 2019 and 2018 , the Company granted the following awards under its stock-based compensation plans: May 31, 2019 May 31, 2018 (in thousands, except per share data) Shares Granted Weighted Average Grant Date Fair Value Shares Granted Weighted Average Grant Date Fair Value Equity method 1,505 $ 17.75 1,216 $ 20.69 Liability method 374 N/A 323 N/A During the three and nine months ended May 31, 2019 and 2018 , the Company recorded immaterial amounts for mark-to-market adjustments on liability awards. As of May 31, 2019 , the Company had outstanding 718,223 equivalent shares accounted for under the liability method. The Company expects 683,922 equivalent shares to vest. The following table summarizes total stock-based compensation expense, including fair value remeasurements, which was mainly included in selling, general and administrative expenses on the Company 's condensed consolidated statements of earnings: Three Months Ended May 31, Nine Months Ended May 31, (in thousands) 2019 2018 2019 2018 Stock-based compensation expense $ 7,342 $ 4,910 $ 17,350 $ 18,247 |
EMPLOYEES' RETIREMENT PLANS
EMPLOYEES' RETIREMENT PLANS | 9 Months Ended |
May 31, 2019 | |
Retirement Benefits [Abstract] | |
Employees' Retirement Plans | NOTE 14. EMPLOYEES' RETIREMENT PLANS Following the acquisition of the Acquired Businesses, the Company sponsors a single employer defined-benefit pension plan (“ Plan ”) covering certain hourly union employees. The Plan is closed to new entrants . The Plan provides benefits based on length of service. The Company ’s funding policy for the Plan is to contribute annually the amount necessary to provide for benefits based on accrued service and to contribute at least the minimum required by the Employee Retirement Income Security Act rules. Service cost is recorded in costs of goods sold, while other components of the net periodic benefit costs are recorded as selling, general and administrative expenses. Net periodic pension expense was immaterial for the three and nine months ended May 31, 2019 |
STOCKHOLDERS EQUITY AND EARNING
STOCKHOLDERS EQUITY AND EARNINGS PER SHARE | 9 Months Ended |
May 31, 2019 | |
Earnings Per Share [Abstract] | |
Stockholder's equity and earnings per share | NOTE 15. STOCKHOLDERS' EQUITY AND EARNINGS PER SHARE The calculations of basic and diluted earnings per share from continuing operations for the three and nine months ended May 31, 2019 and 2018 were as follows: Three Months Ended May 31, Nine Months Ended May 31, (in thousands, except share data) 2019 2018 2019 2018 Earnings from continuing operations $ 78,551 $ 42,325 $ 112,899 $ 83,977 Basic earnings per share: Shares outstanding for basic earnings per share 118,045,362 117,111,799 117,762,945 116,722,504 Basic earnings per share from continuing operations $ 0.67 $ 0.36 $ 0.96 $ 0.72 Diluted earnings per share: Shares outstanding for basic earnings per share 118,045,362 117,111,799 117,762,945 116,722,504 Effect of dilutive securities: Stock-based incentive/purchase plans 1,100,204 1,142,992 1,250,069 1,328,360 Shares outstanding for diluted earnings per share 119,145,566 118,254,791 119,013,014 118,050,864 Diluted earnings per share from continuing operations $ 0.66 $ 0.36 $ 0.95 $ 0.71 CMC had 32,623 and 26,886 shares that were anti-dilutive for the three months ended May 31, 2019 and 2018, respectively. There are no anti-dilutive shares for the other periods presented. 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. During the first quarter of fiscal 2015, CMC 's Board of Directors authorized a share repurchase program under which CMC may repurchase up to $100.0 million of shares of common stock. The timing and the amount of repurchases, if any, are determined by management based on an evaluation of market conditions, capital allocation alternatives and other factors. The share repurchase program does not require the Company to purchase any dollar amount or number of shares of common stock and may be modified, suspended, extended or terminated at any time without prior notice. During the nine months ended May 31, 2019 , CMC did not repurchase any shares of common stock. CMC had remaining authorization to repurchase $27.6 million shares of common stock at May 31, 2019 . |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
May 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and contingencies | NOTE 16. COMMITMENTS AND CONTINGENCIES Legal and Environmental Matters In the ordinary course of conducting its business, the Company becomes involved in litigation, administrative proceedings and governmental investigations, including environmental matters. See Note 18, Commitments and Contingencies , to the consolidated financial statements in the 2018 Form 10-K . The Company has received notices from the U.S. Environmental Protection Agency (" EPA ") or state agencies with similar responsibility that it is considered a potentially responsible party (" PRP ") at several sites (none of which are owned by the Company ) and may be obligated under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (" CERCLA ") or similar state statute to conduct remedial investigations, feasibility studies, remediation and/or removal of alleged releases of hazardous substances or to reimburse the EPA for such activities. The Company is involved in litigation or administrative proceedings with regard to several sites in which the Company is contesting, or at the appropriate time may contest, its liability at the sites. In addition, the Company has received information requests with regard to other sites which may be under consideration by the EPA as potential CERCLA sites. Some of these environmental matters or other proceedings may result in fines, penalties or judgments being assessed against the Company . At both May 31, 2019 and August 31, 2018 , the Company had accrued $0.7 million for estimated cleanup and remediation costs in connection with CERCLA sites. The estimation process is based on currently available information, which is in many cases preliminary and incomplete. As of May 31, 2019 and August 31, 2018 , total environmental liabilities with respect to CERCLA sites, were $3.8 million and $4.0 million , respectively, of which $1.9 million was classified as other long-term liabilities. These amounts have not been discounted to their present values. Due to evolving remediation technology, changing regulations, possible third-party contributions, the inherent shortcomings of the estimation process and other factors, amounts accrued could vary significantly from amounts paid. Historically, the amounts the Company has ultimately paid for such remediation activities have not been material. Management believes that adequate provisions have been made in the Company 's condensed consolidated financial statements for the potential impact of these contingencies and that the outcomes of the suits and proceedings described above, and other miscellaneous litigation and proceedings now pending, will not have a material adverse effect on the business, results of operations or financial condition of the Company . |
BUSINESS SEGMENTS
BUSINESS SEGMENTS | 9 Months Ended |
May 31, 2019 | |
Segment Reporting [Abstract] | |
Business segments | NOTE 17. BUSINESS SEGMENTS The Company 's operating segments earn revenues and incur expenses 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 four reporting segments: Americas Recycling , Americas Mills , Americas Fabrication , and International Mill . See Note 1, Nature of Operations , of the consolidated financial statements included in the 2018 Form 10-K for more information about the reporting segments, including the types of products and services from which each reporting segment derives its net sales. Corporate and Other contains earnings or losses on assets and liabilities related to the Company 's Benefit Restoration Plan assets and short-term investments, expenses of the Company 's corporate headquarters, interest expense related to its long-term debt and intercompany eliminations. The Company uses adjusted EBITDA from continuing operations to compare and evaluate the financial performance of its segments. Adjusted EBITDA is the sum of the Company 's earnings from continuing operations before interest expense, income taxes, depreciation and amortization, and impairment expense. 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 consolidated financial statements included in the 2018 Form 10-K . The following is a summary of certain financial information from continuing operations by reportable segment: Three Months Ended May 31, 2019 (in thousands) Americas Recycling Americas Mills Americas Fabrication International Mill Corporate and Other Continuing Operations Net sales-unaffiliated customers $ 228,786 $ 536,035 $ 629,510 $ 209,022 $ 2,519 $ 1,605,872 Intersegment sales 60,229 330,868 3,537 343 (394,977 ) — Net sales 289,015 866,903 633,047 209,365 (392,458 ) 1,605,872 Adjusted EBITDA 12,331 158,114 (23,289 ) 24,120 (27,305 ) 143,971 Nine Months Ended May 31, 2019 (in thousands) Americas Recycling Americas Mills Americas Fabrication International Mill Corporate and Other Continuing Operations Net sales-unaffiliated customers $ 694,855 $ 1,382,501 $ 1,590,746 $ 610,640 $ 7,255 $ 4,285,997 Intersegment sales 183,244 860,964 10,248 947 (1,055,403 ) — Net sales 878,099 2,243,465 1,600,994 611,587 (1,048,148 ) 4,285,997 Adjusted EBITDA 37,889 384,383 (109,863 ) 77,436 (111,005 ) 278,840 Total assets as of May 31, 2019 (1) 262,620 1,682,255 1,136,996 501,079 184,060 3,767,010 _________________ (1) Total assets listed in Corporate and Other includes assets from discontinued operations. Three Months Ended May 31, 2018 (in thousands) Americas Recycling Americas Mills Americas Fabrication International Mill Corporate and Other Continuing Operations Net sales-unaffiliated customers $ 292,679 $ 332,459 $ 375,183 $ 201,438 $ 2,725 $ 1,204,484 Intersegment sales 71,419 220,604 3,058 299 (295,380 ) — Net sales 364,098 553,063 378,241 201,737 (292,655 ) 1,204,484 Adjusted EBITDA 19,477 89,590 (8,208 ) 31,987 (31,814 ) 101,032 Nine Months Ended May 31, 2018 (in thousands) Americas Recycling Americas Mills Americas Fabrication International Mill Corporate and Other Continuing Operations Net sales-unaffiliated customers $ 832,448 $ 841,895 $ 1,015,934 $ 633,134 $ 11,874 $ 3,335,285 Intersegment sales 171,618 550,573 8,059 846 (731,096 ) — Net sales 1,004,066 1,392,468 1,023,993 633,980 (719,222 ) 3,335,285 Adjusted EBITDA 51,698 194,975 (14,787 ) 95,066 (81,777 ) 245,175 Total assets as of August 31, 2018 (1) 291,838 1,115,339 739,151 485,548 696,428 3,328,304 _________________ (1) Total assets listed in Corporate and Other includes assets from discontinued operations. The following table presents a reconciliation of earnings from continuing operations to adjusted EBITDA from continuing operations: Three Months Ended May 31, Nine Months Ended May 31, (in thousands) 2019 2018 2019 2018 Earnings from continuing operations $ 78,551 $ 42,325 $ 112,899 $ 83,977 Interest expense 18,513 11,511 53,671 25,303 Income taxes 29,105 13,312 52,855 23,465 Depreciation and amortization 41,181 32,949 117,602 98,898 Amortization of acquired unfavorable contract backlog (23,394 ) — (58,202 ) — Impairment of assets 15 935 15 13,532 Adjusted EBITDA from continuing operations $ 143,971 $ 101,032 $ 278,840 $ 245,175 |
ACCOUNTING POLICIES (Policies)
ACCOUNTING POLICIES (Policies) | 9 Months Ended |
May 31, 2019 | |
Accounting Policies [Abstract] | |
Accounting principles | Accounting Principles The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (" GAAP ") on a basis consistent with that used in the Annual Report on Form 10-K for the fiscal year ended August 31, 2018 (" 2018 Form 10-K ") filed by Commercial Metals Company (" CMC ," and together with its consolidated subsidiaries, the " Company ") with the Securities and Exchange Commission (the " SEC ") and include all normal recurring adjustments necessary to present fairly the condensed consolidated balance sheets and the condensed consolidated statements of earnings, comprehensive income, cash flows and stockholders' equity for the periods indicated. These notes should be read in conjunction with the consolidated financial statements included in the 2018 Form 10-K . The results of operations for the three and nine month periods are not necessarily indicative of the results to be expected for the full fiscal year. |
Recent accounting pronouncements | Recently Adopted Accounting Pronouncements In August 2016, the Financial Accounting Standards Board (the " FASB ") issued Accounting Standards Update (" ASU ") 2016-15, Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments (Topic 230). ASU 2016-15 is intended to reduce diversity in practice in how certain cash receipts and cash payments are presented in the statement of cash flows. The new standard provides guidance on eight specific cash flow issues, including the statement of cash flows treatment of beneficial interests in securitized financial transactions, which encompasses activities under the Company's accounts receivable programs in the U.S. and Poland. The Company adopted the standard, which requires retrospective application to all periods presented, in the first quarter of fiscal 2019. As a result of adoption, the Company reported reductions in operating cash flows of $367.5 million and $491.6 million , with offsetting increases in investing cash flows related to the collection of previously sold trade accounts receivable in the condensed consolidated statements of cash flows for the nine months ended May 31, 2019 and 2018 , respectively. Additionally, upon adoption, the $90.0 million repayment during the first quarter of fiscal 2018 of advances outstanding at August 31, 2017, originally recorded as an outflow from operating activities, was reclassified to investing activities. On September 1, 2018, the Company adopted Accounting Standards Codification (" ASC ") 606, Revenue from Contracts with Customers, including the related amendments. The Company adopted ASC 606 under the modified retrospective approach and applied the guidance only to contracts that were not completed as of the date of adoption. The Company recognized a total cumulative effect of $2.7 million , net of tax, as a reduction to the opening balance of retained earnings as of September 1, 2018. There was no impact to the condensed consolidated statement of cash flows or other comprehensive income. In accordance with ASC 606, the disclosure below reflects the impact of adoption to the condensed consolidated statement of earnings, as compared to what the results would have been under ASC 605, Revenue Recognition. The impact to the condensed consolidated balance sheet was immaterial. Three Months Ended May 31, 2019 (in thousands) As Reported Balances Without Adoption of ASC 606 Effect of Change - Higher (Lower) Net sales $ 1,605,872 $ 1,607,214 $ (1,342 ) Net earnings 78,390 79,506 (1,116 ) Nine Months Ended May 31, 2019 (in thousands) As Reported Balances Without Adoption of ASC 606 Effect of Change - Higher (Lower) Net sales $ 4,285,997 $ 4,291,986 $ (5,989 ) Net earnings 111,982 116,630 (4,648 ) Recently Issued Accounting Pronouncements In August 2018, the FASB issued ASU No. 2018-15, Intangibles - Goodwill and Other - Internal-Use Software. The amendments in this ASU align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). Accordingly, the amendments require a customer in a hosting arrangement that is a service contract to follow the internal-use software guidance in ASC 350-40, Internal-Use Software, to determine which implementation costs to capitalize or to expense as incurred. This ASU is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, and will be effective for the Company beginning September 1, 2020. The Company will apply this ASU prospectively to all implementation costs incurred after the date of adoption. The Company concluded the impact of this ASU on its consolidated financial statements and disclosures will be immaterial. In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815). The ASU better aligns accounting rules with a company's risk management activities, better reflects economic results of hedging in financial statements, and simplifies hedge accounting treatment. For public companies, this standard is effective for annual periods beginning after December 15, 2018, including interim periods. The standard must be applied to hedging relationships existing on the date of adoption, and the effect of adoption should be reflected as of the beginning of the fiscal year of adoption. The Company concluded the impact of this guidance on its consolidated financial statements and disclosures will be immaterial. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), and has modified the standard thereafter. The standard requires a lessee to recognize a right-of-use ("ROU") asset and a lease liability on its balance sheet for all leases with terms of twelve months or longer. The Company plans to apply the new standard using a modified retrospective approach that allows entities to recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption without restating prior periods, and to elect the three packaged transition practical expedients under ASC 842-10-65-1(f). This guidance is effective for fiscal years, and interim reporting periods therein, beginning after December 15, 2018 and will be effective for the Company |
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 | The Company |
ACCOUNTING POLICIES (Tables)
ACCOUNTING POLICIES (Tables) | 9 Months Ended |
May 31, 2019 | |
Accounting Policies [Abstract] | |
Impact of Adoption of ASC 606 | In accordance with ASC 606, the disclosure below reflects the impact of adoption to the condensed consolidated statement of earnings, as compared to what the results would have been under ASC 605, Revenue Recognition. The impact to the condensed consolidated balance sheet was immaterial. Three Months Ended May 31, 2019 (in thousands) As Reported Balances Without Adoption of ASC 606 Effect of Change - Higher (Lower) Net sales $ 1,605,872 $ 1,607,214 $ (1,342 ) Net earnings 78,390 79,506 (1,116 ) Nine Months Ended May 31, 2019 (in thousands) As Reported Balances Without Adoption of ASC 606 Effect of Change - Higher (Lower) Net sales $ 4,285,997 $ 4,291,986 $ (5,989 ) Net earnings 111,982 116,630 (4,648 ) |
ACQUISITION (Tables)
ACQUISITION (Tables) | 9 Months Ended |
May 31, 2019 | |
Business Combinations [Abstract] | |
Summary of Fair Value of Assets Acquired and Liabilities Assumed | The table below presents the preliminary fair value that was allocated to the Acquired Businesses' assets and liabilities based upon fair values as determined by the Company , as well as any Measurement Period adjustments made during the third quarter of fiscal 2019 . Final determination of the fair values may result in further adjustments to the values presented in the following table: (in thousands) Estimated Fair Value * Cash and cash equivalents $ 6,399 Accounts receivable 301,740 Inventories 202,082 Other current assets 26,290 Property, plant and equipment 414,237 Deferred income taxes 11,606 Accounts payable-trade, accrued expenses and other payables (134,702 ) Acquired unfavorable contract backlog (110,166 ) Other long-term liabilities (9,920 ) Pension and other post retirement employment benefits (6,365 ) Total assets acquired and liabilities assumed $ 701,201 _________________ *As previously reported in the Company's Quarterly Report on Form 10-Q for the period ended February 28, 2019 . No measurement period adjustments occurred in the third quarter of fiscal 2019 . |
Schedule of Pro Forma Information | Supplemental information on an unaudited pro forma basis is presented below as if the acquisition of the Acquired Businesses occurred on September 1, 2017. The pro forma financial information is presented for comparative purposes only, based on certain estimates and assumptions, which the Company believes to be reasonable, but not necessarily indicative of future results of operations or the results that would have been reported if the acquisition of the Acquired Businesses had been completed on September 1, 2017. These results were not used as part of management analysis of the financial results and performance of the Company . These results are adjusted, where possible, for transaction and integration related costs. These results involve a significant amount of estimates. Three Months Ended May 31, Nine Months Ended May 31, (in thousands) 2019 2018 2019 2018 Pro forma net sales (1) $ 1,582,478 $ 1,648,962 $ 4,507,485 $ 4,560,929 Pro forma net earnings (2) 63,018 49,402 88,987 40,311 _________________ (1) Pro forma net sales for the three and nine months ended May 31, 2018 includes estimated fair value adjustments related to amortization of unfavorable contract backlog. The impact of the amortization of unfavorable contract backlog has been removed from the pro forma net sales for the three and nine months ended May 31, 2019 . (2) Pro forma net earnings for the three and nine months ended May 31, 2018 reflects the impact of fair value adjustments related to the amortization of unfavorable contract backlog described above. Pro forma net earnings for the nine months ended May 31, 2018 includes estimated fair value adjustments related to inventory step-up, as well as non-recurring acquisition and integration costs of approximately $49.8 million . The following table summarizes the financial results of the Acquired Businesses from the Acquisition Date for the three and nine months ended May 31, 2019 included in the Company ’s condensed consolidated statement of earnings and condensed consolidated statement of comprehensive income. (in thousands) Three Months Ended May 31, 2019 Nine Months Ended May 31, 2019 Net sales $ 453,479 $ 958,550 Earnings before income taxes 42,951 78,047 |
CHANGES IN BUSINESS (Tables)
CHANGES IN BUSINESS (Tables) | 9 Months Ended |
May 31, 2019 | |
International Marketing and Distribution | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Financial information for discontinued operations | The major classes of line items constituting earnings from discontinued operations in the condensed consolidated statements of earnings are presented in the table below. Three Months Ended May 31, Nine Months Ended May 31, (in thousands) 2018 2018 Net sales $ 3,262 $ 304,384 Costs and expenses: Cost of goods sold 4,233 276,371 Selling, general and administrative expenses 2,418 23,078 Interest expense — (86 ) Earnings (loss) before income taxes (3,389 ) 5,021 Income taxes (benefit) (1,029 ) 2,052 Earnings (loss) from discontinued operations $ (2,360 ) $ 2,969 |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables) | 9 Months Ended |
May 31, 2019 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of accumulated other comprehensive income (loss) | The following tables reflect the changes in accumulated other comprehensive income (loss) (" AOCI "): Three Months Ended May 31, 2019 (in thousands) Foreign Currency Translation Unrealized Gain (Loss) on Derivatives Defined Benefit Obligation Total AOCI Balance, February 28, 2019 $ (100,943 ) $ 1,151 $ (1,095 ) $ (100,887 ) Other comprehensive loss before reclassifications (5,135 ) (86 ) (6 ) (5,227 ) Amounts reclassified from AOCI 19 (181 ) — (162 ) Income taxes — 51 — 51 Net other comprehensive loss (5,116 ) (216 ) (6 ) (5,338 ) Balance, May 31, 2019 $ (106,059 ) $ 935 $ (1,101 ) $ (106,225 ) Nine Months Ended May 31, 2019 (in thousands) Foreign Currency Translation Unrealized Gain (Loss) on Derivatives Defined Benefit Obligation Total AOCI Balance, August 31, 2018 $ (92,637 ) $ 1,356 $ (2,396 ) $ (93,677 ) Other comprehensive loss before reclassifications (14,278 ) (190 ) (25 ) (14,493 ) Amounts reclassified from AOCI 856 (330 ) 1,666 2,192 Income taxes (benefit) — 99 (346 ) (247 ) Net other comprehensive income (loss) (13,422 ) (421 ) 1,295 (12,548 ) Balance, May 31, 2019 $ (106,059 ) $ 935 $ (1,101 ) $ (106,225 ) Three Months Ended May 31, 2018 (in thousands) Foreign Currency Translation Unrealized Gain (Loss) on Derivatives Defined Benefit Obligation Total AOCI Balance, February 28, 2018 $ (66,000 ) $ 1,432 $ (1,898 ) $ (66,466 ) Other comprehensive income (loss) before reclassifications (26,434 ) 16 — (26,418 ) Amounts reclassified from AOCI 1,328 (70 ) (9 ) 1,249 Income taxes — 11 2 13 Net other comprehensive loss (25,106 ) (43 ) (7 ) (25,156 ) Balance, May 31, 2018 $ (91,106 ) $ 1,389 $ (1,905 ) $ (91,622 ) Nine Months Ended May 31, 2018 (in thousands) Foreign Currency Translation Unrealized Gain (Loss) on Derivatives Defined Benefit Obligation Total AOCI Balance, August 31, 2017 $ (80,778 ) $ 1,587 $ (2,322 ) $ (81,513 ) Other comprehensive income (loss) before reclassifications (11,656 ) 47 — (11,609 ) Amounts reclassified from AOCI 1,328 (314 ) 647 1,661 Income taxes (benefit) — 69 (230 ) (161 ) Net other comprehensive income (loss) (10,328 ) (198 ) 417 (10,109 ) Balance, May 31, 2018 $ (91,106 ) $ 1,389 $ (1,905 ) $ (91,622 ) |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 9 Months Ended |
May 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Information avout Assets and Liabilities from Contracts with Customers | The following table provides information about assets and liabilities from contracts with customers. (in thousands) May 31, 2019 August 31, 2018 Contract assets (included in other current assets) $ 96,842 $ 49,221 Contract liabilities (included in accrued expenses and other payables) 35,812 6,679 |
Disaggregation of Revenue | The following tables display revenue by reportable segment from external customers, disaggregated by major source. The Company believes disaggregating by these categories depicts how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. Three Months Ended May 31, 2019 (in thousands) Americas Recycling Americas Mills Americas Fabrication International Mill Corporate and Other Total Steel products $ 238 $ 501,925 $ 554,672 $ 199,431 $ — $ 1,256,266 Ferrous scrap 106,404 8,916 2 525 — 115,847 Nonferrous scrap 121,581 4,080 — 3,212 — 128,873 Construction materials — — 71,228 — — 71,228 Other 563 21,114 3,608 5,854 2,519 33,658 Total $ 228,786 $ 536,035 $ 629,510 $ 209,022 $ 2,519 $ 1,605,872 Nine Months Ended May 31, 2019 (in thousands) Americas Recycling Americas Mills Americas Fabrication International Mill Corporate and Other Total Steel products $ 679 $ 1,294,217 $ 1,392,442 $ 584,735 $ — $ 3,272,073 Ferrous scrap 323,311 26,802 2 1,055 — 351,170 Nonferrous scrap 369,660 10,568 — 8,677 — 388,905 Construction materials — — 188,589 — — 188,589 Other 1,205 50,914 9,713 16,173 7,255 85,260 Total $ 694,855 $ 1,382,501 $ 1,590,746 $ 610,640 $ 7,255 $ 4,285,997 Three Months Ended May 31, 2018* (in thousands) Americas Recycling Americas Mills Americas Fabrication International Mill Corporate and Other Total Steel products $ 319 $ 305,390 $ 303,363 $ 193,114 $ — $ 802,186 Ferrous scrap 144,398 8,462 2 351 — 153,213 Nonferrous scrap 147,683 4,851 — 3,286 — 155,820 Construction materials — — 70,436 — — 70,436 Other 279 13,756 1,382 4,687 2,725 22,829 Total $ 292,679 $ 332,459 $ 375,183 $ 201,438 $ 2,725 $ 1,204,484 Nine Months Ended May 31, 2018* (in thousands) Americas Recycling Americas Mills Americas Fabrication International Mill Corporate and Other Total Steel products $ 894 $ 766,976 $ 830,172 $ 605,152 $ — $ 2,203,194 Ferrous scrap 383,358 24,605 2 970 — 408,935 Nonferrous scrap 447,060 12,734 — 10,427 — 470,221 Construction materials — — 180,641 — — 180,641 Other 1,136 37,580 5,119 16,585 11,874 72,294 Total $ 832,448 $ 841,895 $ 1,015,934 $ 633,134 $ 11,874 $ 3,335,285 _________________ * Prior period amounts have been reported under ASC 605. |
ACCOUNTS RECEIVABLE PROGRAMS (T
ACCOUNTS RECEIVABLE PROGRAMS (Tables) | 9 Months Ended |
May 31, 2019 | |
Transfers and Servicing [Abstract] | |
Activity of the deferred purchase price receivables | For periods prior to fiscal 2019, DPP on the Programs was included in accounts receivable on the Company 's condensed consolidated balance sheets. Nine Months Ended May 31, 2018 (in thousands) Total U.S. Poland Deferred purchase price Balance, August 31, 2017 $ 215,123 $ 135,623 $ 79,500 Transfers of trade receivables 2,116,243 1,741,451 374,792 Less: CPP (1,576,579 ) (1,311,705 ) (264,874 ) Non-cash increase to DPP 539,664 429,746 109,918 Cash collections of DPP (491,577 ) (383,955 ) (107,622 ) Net repayments (advances) 69,444 90,000 (20,556 ) Net collections of DPP (422,133 ) (293,955 ) (128,178 ) Balance, May 31, 2018 $ 332,654 $ 271,414 $ 61,240 |
GOODWILL AND OTHER INTANGIBLES
GOODWILL AND OTHER INTANGIBLES (Tables) | 9 Months Ended |
May 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Changes in the carrying amount of goodwill | Goodwill by reportable segment at May 31, 2019 is detailed in the following table: (in thousands) Americas Recycling Americas Mills Americas Fabrication International Mill Consolidated Goodwill, gross* $ 9,543 $ 4,970 $ 57,428 $ 2,478 $ 74,419 Accumulated impairment losses* (9,543 ) — (493 ) (157 ) (10,193 ) Goodwill, net* $ — $ 4,970 $ 56,935 $ 2,321 $ 64,226 _________________ * The change in balance from August 31, 2018 was immaterial. |
Amortizable intangible assets and liabilities | The amortizable intangible (liabilities) acquired consisted of: (in thousands, except life in years) Life in Years Estimated Fair Value Net unfavorable lease contracts Various $ (2,705 ) Unfavorable contract backlog 1-2 years* $ (110,166 ) _________________ * Amortization will correspond with completion of the acquired contracts, which is estimated to occur over the next 1 to 2 years. |
CREDIT ARRANGEMENTS (Tables)
CREDIT ARRANGEMENTS (Tables) | 9 Months Ended |
May 31, 2019 | |
Debt Disclosure [Abstract] | |
Long-term debt, including the deferred gain from the termination of the interest rate swaps | Long-term debt as of May 31, 2019 and August 31, 2018 was as follows: (in thousands) Weighted Average Interest Rate as of May 31, 2019 May 31, 2019 August 31, 2018 2027 Notes 5.375% $ 300,000 $ 300,000 2026 Notes 5.750% 350,000 350,000 2023 Notes 4.875% 330,000 330,000 Term loans 4.115% 310,125 142,500 Short-term borrowings * 25,327 — Other, including equipment notes 56,996 47,629 Total debt 1,372,448 1,170,129 Less debt issuance costs 10,690 11,764 Total amounts outstanding 1,361,758 1,158,365 Less current maturities 29,568 19,746 Less short-term borrowings 25,327 — Current maturities of long-term debt and short-term borrowings 54,895 19,746 Long-term debt $ 1,306,863 $ 1,138,619 _________________ * As of May 31, 2019 , the weighted average interest rates associated with the U.S. Program and Poland Program were 3.120% and 2.410% , respectively. |
DERIVATIVES AND RISK MANAGEME_2
DERIVATIVES AND RISK MANAGEMENT (Tables) | 9 Months Ended |
May 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Commodity contract commitments | The following table provides information regarding the Company 's commodity contract commitments as of May 31, 2019 : Commodity Long/Short Total Aluminum Long 4,500 MT Aluminum Short 2,350 MT Copper Long 669 MT Copper Short 5,341 MT _________________ MT = Metric Ton |
Derivatives not designated as hedging instruments | The following tables summarize activities related to the Company 's derivative instruments and hedged items recognized in the condensed consolidated statements of earnings (amounts in thousands): Three Months Ended May 31, Nine Months Ended May 31, Derivatives Not Designated as Hedging Instruments Location 2019 2018 2019 2018 Commodity Cost of goods sold $ 3,408 $ 1,498 $ 143 $ 2,071 Foreign exchange Cost of goods sold — — — (50 ) Foreign exchange SG&A expenses (72 ) 518 (472 ) 1,169 Gain (loss) before income taxes $ 3,336 $ 2,016 $ (329 ) $ 3,190 |
Derivatives designated as fair value hedging instruments | Hedged items relate to firm commitments on commercial sales and purchases and capital expenditures. Location of Gain (Loss) Recognized in Income on Derivatives Amount of Gain (Loss) Recognized in Income on Derivatives for the Three Months Ended May 31, Location of Gain (Loss) Recognized in Income on Related Hedged Items Amount of Gain (Loss) Recognized in Income on Related Hedge Items for the Three Months Ended May 31, 2019 2018 2019 2018 Foreign exchange Net sales $ — $ 163 Net sales $ — $ (163 ) Foreign exchange Cost of goods sold — (429 ) Cost of goods sold — 429 Gain (loss) before income taxes $ — $ (266 ) $ — $ 266 Location of Gain (Loss) Recognized in Income on Derivatives Amount of Gain (Loss) Recognized in Income on Derivatives for the Nine Months Ended May 31, Location of Gain (Loss) Recognized in Income on Related Hedged Items Amount of Gain (Loss) Recognized in Income on Related Hedge Items for the Nine Months Ended May 31, 2019 2018 2019 2018 Foreign exchange Net sales $ — $ (66 ) Net sales $ — $ 66 Foreign exchange Cost of goods sold — 1,596 Cost of goods sold — (1,596 ) Gain (loss) before income taxes $ — $ 1,530 $ — $ (1,530 ) |
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 AOCI Three Months Ended May 31, Nine Months Ended May 31, 2019 2018 2019 2018 Foreign exchange, net of income taxes $ (145 ) $ 13 $ (267 ) $ 38 |
Derivative assets | The fair value of the Company 's derivative instruments on the condensed consolidated balance sheets was as follows: Derivative Assets (in thousands) May 31, 2019 August 31, 2018 Commodity — not designated for hedge accounting $ 2,088 $ 1,881 Foreign exchange — designated for hedge accounting — — Foreign exchange — not designated for hedge accounting 221 407 Derivative assets (other current assets) (1) $ 2,309 $ 2,288 |
Derivative liabilities | Derivative Liabilities (in thousands) May 31, 2019 August 31, 2018 Commodity — not designated for hedge accounting $ 322 $ 301 Foreign exchange — designated for hedge accounting 373 — Foreign exchange — not designated for hedge accounting 581 1,095 Derivative liabilities (accrued expenses and other payables) (1) $ 1,276 $ 1,396 _________________ (1) Derivative assets and liabilities do not include the hedged items designated as fair value hedges. |
FAIR VALUE (Tables)
FAIR VALUE (Tables) | 9 Months Ended |
May 31, 2019 | |
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) May 31, 2019 Quoted Prices in Significant Other Significant Assets: Investment deposit accounts (1) $ 2,792 $ 2,792 $ — $ — Commodity derivative assets (2) 2,088 2,088 — — Foreign exchange derivative assets (2) 221 — 221 — Liabilities: Commodity derivative liabilities (2) 322 322 — — Foreign exchange derivative liabilities (2) 954 — 954 — Fair Value Measurements at Reporting Date Using (in thousands) August 31, 2018 Quoted Prices in Significant Other Significant Assets: Investment deposit accounts (1) $ 541,101 $ 541,101 $ — $ — Commodity derivative assets (2) 1,881 1,881 — — Foreign exchange derivative assets (2) 407 — 407 — Liabilities: Commodity derivative liabilities (2) 301 301 — — Foreign exchange derivative liabilities (2) 1,095 — 1,095 — _________________ (1) Investment deposit accounts are short-term in nature, and the value is determined by principal plus interest. The investment portfolio mix can change each period based on the Company 's assessment of investment options. (2) Derivative assets and liabilities classified as Level 1 are commodity futures contracts valued based on quoted market prices in the London Metal Exchange or New York Mercantile Exchange. Amounts in Level 2 are based on broker quotes in the over-the-counter market. Further discussion regarding the Company's use of derivative instruments and the classification of the assets and liabilities is included in Note 10, 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 condensed consolidated balance sheets were as follows: May 31, 2019 August 31, 2018 (in thousands) Fair Value Hierarchy Carrying Value Fair Value Carrying Value Fair Value 2027 Notes (1) Level 2 $ 300,000 $ 279,195 $ 300,000 $ 281,655 2026 Notes (1) Level 2 350,000 345,769 350,000 339,238 2023 Notes (1) Level 2 330,000 328,964 330,000 326,090 Short-term borrowings (2) Level 2 25,327 25,327 — — Term loans (2) Level 2 310,125 310,125 142,500 142,500 _________________ (1) The fair value of the notes was determined based on indicated market values. (2) Contains variable interest rates and carrying value approximates fair value. |
STOCK-BASED COMPENSATION PLANS
STOCK-BASED COMPENSATION PLANS (Tables) | 9 Months Ended |
May 31, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Stock Based Awards Granted | During the nine months ended May 31, 2019 and 2018 , the Company granted the following awards under its stock-based compensation plans: May 31, 2019 May 31, 2018 (in thousands, except per share data) Shares Granted Weighted Average Grant Date Fair Value Shares Granted Weighted Average Grant Date Fair Value Equity method 1,505 $ 17.75 1,216 $ 20.69 Liability method 374 N/A 323 N/A |
Schedule of Stock-based Compensation Expense | The following table summarizes total stock-based compensation expense, including fair value remeasurements, which was mainly included in selling, general and administrative expenses on the Company 's condensed consolidated statements of earnings: Three Months Ended May 31, Nine Months Ended May 31, (in thousands) 2019 2018 2019 2018 Stock-based compensation expense $ 7,342 $ 4,910 $ 17,350 $ 18,247 |
STOCKHOLDERS_ EQUITY AND EARNIN
STOCKHOLDERS’ EQUITY AND EARNINGS PER SHARE (Tables) | 9 Months Ended |
May 31, 2019 | |
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 and nine months ended May 31, 2019 and 2018 were as follows: Three Months Ended May 31, Nine Months Ended May 31, (in thousands, except share data) 2019 2018 2019 2018 Earnings from continuing operations $ 78,551 $ 42,325 $ 112,899 $ 83,977 Basic earnings per share: Shares outstanding for basic earnings per share 118,045,362 117,111,799 117,762,945 116,722,504 Basic earnings per share from continuing operations $ 0.67 $ 0.36 $ 0.96 $ 0.72 Diluted earnings per share: Shares outstanding for basic earnings per share 118,045,362 117,111,799 117,762,945 116,722,504 Effect of dilutive securities: Stock-based incentive/purchase plans 1,100,204 1,142,992 1,250,069 1,328,360 Shares outstanding for diluted earnings per share 119,145,566 118,254,791 119,013,014 118,050,864 Diluted earnings per share from continuing operations $ 0.66 $ 0.36 $ 0.95 $ 0.71 CMC had 32,623 and 26,886 shares that were anti-dilutive for the three months ended May 31, 2019 and 2018, respectively. There are no anti-dilutive shares for the other periods presented. 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) | 9 Months Ended |
May 31, 2019 | |
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 May 31, 2019 (in thousands) Americas Recycling Americas Mills Americas Fabrication International Mill Corporate and Other Continuing Operations Net sales-unaffiliated customers $ 228,786 $ 536,035 $ 629,510 $ 209,022 $ 2,519 $ 1,605,872 Intersegment sales 60,229 330,868 3,537 343 (394,977 ) — Net sales 289,015 866,903 633,047 209,365 (392,458 ) 1,605,872 Adjusted EBITDA 12,331 158,114 (23,289 ) 24,120 (27,305 ) 143,971 Nine Months Ended May 31, 2019 (in thousands) Americas Recycling Americas Mills Americas Fabrication International Mill Corporate and Other Continuing Operations Net sales-unaffiliated customers $ 694,855 $ 1,382,501 $ 1,590,746 $ 610,640 $ 7,255 $ 4,285,997 Intersegment sales 183,244 860,964 10,248 947 (1,055,403 ) — Net sales 878,099 2,243,465 1,600,994 611,587 (1,048,148 ) 4,285,997 Adjusted EBITDA 37,889 384,383 (109,863 ) 77,436 (111,005 ) 278,840 Total assets as of May 31, 2019 (1) 262,620 1,682,255 1,136,996 501,079 184,060 3,767,010 _________________ (1) Total assets listed in Corporate and Other includes assets from discontinued operations. Three Months Ended May 31, 2018 (in thousands) Americas Recycling Americas Mills Americas Fabrication International Mill Corporate and Other Continuing Operations Net sales-unaffiliated customers $ 292,679 $ 332,459 $ 375,183 $ 201,438 $ 2,725 $ 1,204,484 Intersegment sales 71,419 220,604 3,058 299 (295,380 ) — Net sales 364,098 553,063 378,241 201,737 (292,655 ) 1,204,484 Adjusted EBITDA 19,477 89,590 (8,208 ) 31,987 (31,814 ) 101,032 Nine Months Ended May 31, 2018 (in thousands) Americas Recycling Americas Mills Americas Fabrication International Mill Corporate and Other Continuing Operations Net sales-unaffiliated customers $ 832,448 $ 841,895 $ 1,015,934 $ 633,134 $ 11,874 $ 3,335,285 Intersegment sales 171,618 550,573 8,059 846 (731,096 ) — Net sales 1,004,066 1,392,468 1,023,993 633,980 (719,222 ) 3,335,285 Adjusted EBITDA 51,698 194,975 (14,787 ) 95,066 (81,777 ) 245,175 Total assets as of August 31, 2018 (1) 291,838 1,115,339 739,151 485,548 696,428 3,328,304 _________________ (1) Total assets listed in Corporate and Other includes assets from discontinued operations. |
Reconciliations of earnings from continuing operations to adjusted operating profit | The following table presents a reconciliation of earnings from continuing operations to adjusted EBITDA from continuing operations: Three Months Ended May 31, Nine Months Ended May 31, (in thousands) 2019 2018 2019 2018 Earnings from continuing operations $ 78,551 $ 42,325 $ 112,899 $ 83,977 Interest expense 18,513 11,511 53,671 25,303 Income taxes 29,105 13,312 52,855 23,465 Depreciation and amortization 41,181 32,949 117,602 98,898 Amortization of acquired unfavorable contract backlog (23,394 ) — (58,202 ) — Impairment of assets 15 935 15 13,532 Adjusted EBITDA from continuing operations $ 143,971 $ 101,032 $ 278,840 $ 245,175 |
ACCOUNTING POLICIES - Recently
ACCOUNTING POLICIES - Recently Adopted Accounting Pronouncements (Details) - USD ($) $ in Thousands | 9 Months Ended | |
May 31, 2019 | May 31, 2018 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Reductions in operating cash flows | $ 367,521 | $ 491,577 |
Increases in investing cash flows | (416,372) | 377,683 |
Reclassification of repayments of advances outstanding | 0 | 202,423 |
Cumulative effect on retained earnings of adoption of ASC 606 | 2,700 | (2,747) |
Accounting Standards Update 2016-15 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Increases in investing cash flows | $ 367,500 | 491,600 |
Reclassification of repayments of advances outstanding | $ 90,000 |
ACCOUNTING POLICIES - Adoption
ACCOUNTING POLICIES - Adoption of ASC 606 (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
May 31, 2019 | May 31, 2018 | May 31, 2019 | May 31, 2018 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Net sales | $ 1,605,872 | $ 1,204,484 | $ 4,285,997 | $ 3,335,285 |
Net earnings | 78,390 | 39,965 | 111,982 | 86,946 |
Net earnings | 78,390 | $ 39,965 | 111,982 | $ 86,946 |
Balances Without Adoption of ASC 606 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Net sales | 1,607,214 | 4,291,986 | ||
Net earnings | 79,506 | 116,630 | ||
Accounting Standards Update 2014-09 | Effect of Change - Higher (Lower) | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Net sales | (1,342) | (5,989) | ||
Net earnings | $ (1,116) | $ (4,648) |
ACQUISITION (Details)
ACQUISITION (Details) $ in Millions | Nov. 05, 2018USD ($)mini_millfabrication_facility |
Business Combinations [Abstract] | |
Number of rebar fabrication facilities acquired | fabrication_facility | 33 |
Number of electric arc furnace mini mills | mini_mill | 4,000 |
Cash purchase price | $ | $ 701.2 |
ACQUISITION - Assets Acquired a
ACQUISITION - Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
May 31, 2019 | Nov. 05, 2018 | Aug. 31, 2018 | |
Business Acquisition [Line Items] | |||
Acquired unfavorable contract backlog | $ (51,998) | $ (110,166) | $ 0 |
Total assets acquired and liabilities assumed | 701,200 | ||
Pension and other post-retirement liabilities | 6,400 | ||
Inventory Step-up | 10,300 | ||
2018 Acquisitions | |||
Business Acquisition [Line Items] | |||
Cash and cash equivalents | 6,399 | ||
Accounts receivable | 301,740 | ||
Inventories | 202,082 | ||
Other current assets | 26,290 | ||
Property, plant and equipment | 414,237 | ||
Deferred income taxes | 11,606 | ||
Accounts payable-trade, accrued expenses and other payables | (134,702) | ||
Acquired unfavorable contract backlog | (110,166) | ||
Other long-term liabilities | (9,920) | ||
Pension and other post retirement employment benefits | $ (6,365) | ||
Total assets acquired and liabilities assumed | $ 701,201 |
ACQUISITION - Acquired Amortiza
ACQUISITION - Acquired Amortizable Intangible Assets (Liabilities) (Details) - USD ($) $ in Thousands | Nov. 05, 2018 | May 31, 2019 | Aug. 31, 2018 |
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Unfavorable contract backlog | $ (110,166) | $ (51,998) | $ 0 |
Minimum | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Life in years, unfavorable contract backlog | 1 year | 1 year | |
Maximum | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Life in years, unfavorable contract backlog | 2 years | 2 years | |
Real Property | Minimum | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Life in years, asset | 1 year | ||
Real Property | Maximum | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Life in years, asset | 35 years | ||
Personal Property | Minimum | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Life in years, asset | 1 year | ||
Personal Property | Maximum | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Life in years, asset | 25 years |
ACQUISITION - Financial Results
ACQUISITION - Financial Results and Pro Forma Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
May 31, 2019 | May 31, 2018 | May 31, 2019 | May 31, 2018 | |
Business Combinations [Abstract] | ||||
Net sales | $ 453,479 | $ 958,550 | ||
Earnings before income taxes | 42,951 | 78,047 | ||
Pro forma net sales (1) | 1,582,478 | $ 1,648,962 | 4,507,485 | $ 4,560,929 |
Pro forma net earnings (2) | $ 63,018 | 49,402 | $ 88,987 | $ 40,311 |
Non-recurring acquisition and integration costs | $ 49,800 |
CHANGES IN BUSINESS (Financial
CHANGES IN BUSINESS (Financial Information for Discontinued Operations) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
May 31, 2019 | May 31, 2018 | May 31, 2019 | May 31, 2018 | |
Income Statement Disclosures: | ||||
Earnings (loss) before income taxes | $ (190) | $ (3,389) | $ (808) | $ 5,021 |
Income taxes (benefit) | (29) | (1,029) | 109 | 2,052 |
Earnings (loss) from discontinued operations | $ (161) | (2,360) | $ (917) | 2,969 |
International Marketing and Distribution | ||||
Income Statement Disclosures: | ||||
Net sales | 3,262 | 304,384 | ||
Cost of goods sold | 4,233 | 276,371 | ||
Selling, general and administrative expenses | 2,418 | 23,078 | ||
Interest expense | 0 | (86) | ||
Earnings (loss) before income taxes | (3,389) | 5,021 | ||
Income taxes (benefit) | (1,029) | 2,052 | ||
Earnings (loss) from discontinued operations | $ (2,360) | $ 2,969 |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (AOCI by Components) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
May 31, 2019 | May 31, 2018 | May 31, 2019 | May 31, 2018 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||
Beginning balance | $ (100,887) | $ (66,466) | $ (93,677) | $ (81,513) |
Other comprehensive income before reclassifications | (5,227) | (26,418) | (14,493) | (11,609) |
Amounts reclassified from AOCI | (162) | 1,249 | 2,192 | 1,661 |
Income taxes | 51 | 13 | (247) | (161) |
Other comprehensive loss | (5,338) | (25,156) | (12,548) | (10,109) |
Ending balance | (106,225) | (91,622) | (106,225) | (91,622) |
Foreign Currency Translation | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||
Beginning balance | (100,943) | (66,000) | (92,637) | (80,778) |
Other comprehensive income before reclassifications | (5,135) | (26,434) | (14,278) | (11,656) |
Amounts reclassified from AOCI | 19 | 1,328 | 856 | 1,328 |
Income taxes | 0 | 0 | 0 | 0 |
Other comprehensive loss | (5,116) | (25,106) | (13,422) | (10,328) |
Ending balance | (106,059) | (91,106) | (106,059) | (91,106) |
Unrealized Gain (Loss) on Derivatives | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||
Beginning balance | 1,151 | 1,432 | 1,356 | 1,587 |
Other comprehensive income before reclassifications | (86) | 16 | (190) | 47 |
Amounts reclassified from AOCI | (181) | (70) | (330) | (314) |
Income taxes | 51 | 11 | 99 | 69 |
Other comprehensive loss | (216) | (43) | (421) | (198) |
Ending balance | 935 | 1,389 | 935 | 1,389 |
Defined Benefit Obligation | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||
Beginning balance | (1,095) | (1,898) | (2,396) | (2,322) |
Other comprehensive income before reclassifications | (6) | 0 | (25) | 0 |
Amounts reclassified from AOCI | 0 | (9) | 1,666 | 647 |
Income taxes | 0 | 2 | (346) | (230) |
Other comprehensive loss | (6) | (7) | 1,295 | 417 |
Ending balance | $ (1,101) | $ (1,905) | $ (1,101) | $ (1,905) |
REVENUE RECOGNITION - Revenue R
REVENUE RECOGNITION - Revenue Recognition Method (Details) - Americas Fabrication | 3 Months Ended | 9 Months Ended |
May 31, 2019 | May 31, 2019 | |
Recognized as Amounts are Billed | ||
Disaggregation of Revenue [Line Items] | ||
Contract as percent of total segment revenue (percent) | 54.00% | 51.00% |
Fabricated Product and Installation Services | Recognized over Time | ||
Disaggregation of Revenue [Line Items] | ||
Contract as percent of total segment revenue (percent) | 27.00% | 27.00% |
Fabricated Product without Installation Services | Recognized over Time | ||
Disaggregation of Revenue [Line Items] | ||
Contract as percent of total segment revenue (percent) | 19.00% | 22.00% |
REVENUE RECOGNITION - Contract
REVENUE RECOGNITION - Contract Assets and Contract Liabilities (Details) - USD ($) $ in Thousands | May 31, 2019 | Aug. 31, 2018 |
Revenue from Contract with Customer [Abstract] | ||
Contract assets (included in other current assets) | $ 96,842 | $ 49,221 |
Contract liabilities (included in accrued expenses and other payables) | $ 35,812 | $ 6,679 |
REVENUE RECOGNITION - Remaining
REVENUE RECOGNITION - Remaining Performance Obligations (Details) $ in Millions | May 31, 2019USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-12-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | $ 853.1 |
Remaining performance obligation (percent) | 49.00% |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-12-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation (percent) | 11.00% |
REVENUE RECOGNITION - Disaggreg
REVENUE RECOGNITION - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
May 31, 2019 | May 31, 2018 | May 31, 2019 | May 31, 2018 | |
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 1,605,872 | $ 1,204,484 | $ 4,285,997 | $ 3,335,285 |
Steel Products | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 1,256,266 | 802,186 | 3,272,073 | 2,203,194 |
Ferrous Scrap | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 115,847 | 153,213 | 351,170 | 408,935 |
Nonferrous Scrap | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 128,873 | 155,820 | 388,905 | 470,221 |
Construction Materials | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 71,228 | 70,436 | 188,589 | 180,641 |
Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 33,658 | 22,829 | 85,260 | 72,294 |
Americas Recycling | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 228,786 | 292,679 | 694,855 | 832,448 |
Americas Recycling | Steel Products | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 238 | 319 | 679 | 894 |
Americas Recycling | Ferrous Scrap | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 106,404 | 144,398 | 323,311 | 383,358 |
Americas Recycling | Nonferrous Scrap | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 121,581 | 147,683 | 369,660 | 447,060 |
Americas Recycling | Construction Materials | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 0 | 0 | 0 | 0 |
Americas Recycling | Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 563 | 279 | 1,205 | 1,136 |
Americas Mills | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 536,035 | 332,459 | 1,382,501 | 841,895 |
Americas Mills | Steel Products | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 501,925 | 305,390 | 1,294,217 | 766,976 |
Americas Mills | Ferrous Scrap | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 8,916 | 8,462 | 26,802 | 24,605 |
Americas Mills | Nonferrous Scrap | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 4,080 | 4,851 | 10,568 | 12,734 |
Americas Mills | Construction Materials | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 0 | 0 | 0 | 0 |
Americas Mills | Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 21,114 | 13,756 | 50,914 | 37,580 |
Americas Fabrication | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 629,510 | 375,183 | 1,590,746 | 1,015,934 |
Americas Fabrication | Steel Products | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 554,672 | 303,363 | 1,392,442 | 830,172 |
Americas Fabrication | Ferrous Scrap | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 2 | 2 | 2 | 2 |
Americas Fabrication | Nonferrous Scrap | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 0 | 0 | 0 | 0 |
Americas Fabrication | Construction Materials | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 71,228 | 70,436 | 188,589 | 180,641 |
Americas Fabrication | Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 3,608 | 1,382 | 9,713 | 5,119 |
International Mill | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 209,022 | 201,438 | 610,640 | 633,134 |
International Mill | Steel Products | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 199,431 | 193,114 | 584,735 | 605,152 |
International Mill | Ferrous Scrap | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 525 | 351 | 1,055 | 970 |
International Mill | Nonferrous Scrap | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 3,212 | 3,286 | 8,677 | 10,427 |
International Mill | Construction Materials | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 0 | 0 | 0 | 0 |
International Mill | Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 5,854 | 4,687 | 16,173 | 16,585 |
Corporate | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 2,519 | 2,725 | 7,255 | 11,874 |
Corporate | Steel Products | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 0 | 0 | 0 | 0 |
Corporate | Ferrous Scrap | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 0 | 0 | 0 | 0 |
Corporate | Nonferrous Scrap | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 0 | 0 | 0 | 0 |
Corporate | Construction Materials | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 0 | 0 | 0 | 0 |
Corporate | Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 2,519 | $ 2,725 | $ 7,255 | $ 11,874 |
ACCOUNTS RECEIVABLE PROGRAMS (N
ACCOUNTS RECEIVABLE PROGRAMS (Narrative) (Details) $ in Thousands | 9 Months Ended |
May 31, 2018USD ($) | |
Deferred purchase price receivables | |
Securitization or Asset-backed Financing Arrangement, Financial Asset for which Transfer is Accounted as Sale [Line Items] | |
Transfers of trade receivables | $ 2,116,243 |
Financial Institutions | Deferred purchase price receivables | |
Securitization or Asset-backed Financing Arrangement, Financial Asset for which Transfer is Accounted as Sale [Line Items] | |
Transfers of trade receivables | 352,200 |
UNITED STATES | Deferred purchase price receivables | |
Securitization or Asset-backed Financing Arrangement, Financial Asset for which Transfer is Accounted as Sale [Line Items] | |
Transfers of trade receivables | 1,741,451 |
Advance payment received on sale of accounts receivable | 0 |
Poland | |
Securitization or Asset-backed Financing Arrangement, Financial Asset for which Transfer is Accounted as Sale [Line Items] | |
Advance payment received on sale of accounts receivable | 18,100 |
Poland | Deferred purchase price receivables | |
Securitization or Asset-backed Financing Arrangement, Financial Asset for which Transfer is Accounted as Sale [Line Items] | |
Transfers of trade receivables | $ 374,792 |
ACCOUNTS RECEIVABLE PROGRAMS (A
ACCOUNTS RECEIVABLE PROGRAMS (Activity of Deferred Purchase Price Receivables) (Details) - USD ($) $ in Thousands | 9 Months Ended | |
May 31, 2019 | May 31, 2018 | |
Securitization or Asset-backed Financing Arrangement, Financial Asset for Which Transfer is Accounted as Sale [Roll Forward] | ||
Net repayments (advances) | $ 0 | $ 202,423 |
Deferred purchase price receivables | ||
Securitization or Asset-backed Financing Arrangement, Financial Asset for Which Transfer is Accounted as Sale [Roll Forward] | ||
Beginning balance | 215,123 | |
Transfers of trade receivables | 2,116,243 | |
Less: CPP | (1,576,579) | |
Non-cash increase to DPP | 539,664 | |
Cash collections of DPP | (491,577) | |
Net repayments (advances) | 69,444 | |
Net collections of DPP | (422,133) | |
Ending balance | 332,654 | |
UNITED STATES | Deferred purchase price receivables | ||
Securitization or Asset-backed Financing Arrangement, Financial Asset for Which Transfer is Accounted as Sale [Roll Forward] | ||
Beginning balance | 135,623 | |
Transfers of trade receivables | 1,741,451 | |
Less: CPP | (1,311,705) | |
Non-cash increase to DPP | 429,746 | |
Cash collections of DPP | (383,955) | |
Net repayments (advances) | 90,000 | |
Net collections of DPP | (293,955) | |
Ending balance | 271,414 | |
Poland | Deferred purchase price receivables | ||
Securitization or Asset-backed Financing Arrangement, Financial Asset for Which Transfer is Accounted as Sale [Roll Forward] | ||
Beginning balance | 79,500 | |
Transfers of trade receivables | 374,792 | |
Less: CPP | (264,874) | |
Non-cash increase to DPP | 109,918 | |
Cash collections of DPP | (107,622) | |
Net repayments (advances) | (20,556) | |
Net collections of DPP | (128,178) | |
Ending balance | $ 61,240 |
INVENTORIES, NET (Narrative) (D
INVENTORIES, NET (Narrative) (Details) - USD ($) $ in Millions | May 31, 2019 | Aug. 31, 2018 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 185.1 | $ 177.7 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLES (Narrative) (Details) - USD ($) $ in Thousands | Nov. 05, 2018 | May 31, 2019 | May 31, 2018 | May 31, 2019 | May 31, 2018 | Aug. 31, 2018 |
Finite-Lived Intangible Assets [Line Items] | ||||||
Gross carrying amounts of the intangible assets subject to amortization | $ 21,800 | $ 21,800 | $ 20,500 | |||
Amortization expense for intangible assets | 600 | $ 600 | 1,700 | $ 1,600 | ||
Net unfavorable lease contracts | $ (2,705) | |||||
Acquired unfavorable contract backlog | $ (110,166) | (51,998) | (51,998) | $ 0 | ||
Amortization of acquired unfavorable contract backlog | $ 23,394 | $ 0 | $ 58,202 | $ 0 | ||
Minimum | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Life in years, unfavorable contract backlog | 1 year | 1 year | ||||
Maximum | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Life in years, unfavorable contract backlog | 2 years | 2 years |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLES (Changes in the Carrying Amount of Goodwill) (Details) - USD ($) $ in Thousands | May 31, 2019 | Aug. 31, 2018 |
Goodwill [Line Items] | ||
Goodwill, gross | $ 74,419 | |
Accumulated impairment losses | (10,193) | |
Goodwill, net | 64,226 | $ 64,310 |
Americas Recycling | ||
Goodwill [Line Items] | ||
Goodwill, gross | 9,543 | |
Accumulated impairment losses | (9,543) | |
Goodwill, net | 0 | |
Americas Mills | ||
Goodwill [Line Items] | ||
Goodwill, gross | 4,970 | |
Accumulated impairment losses | 0 | |
Goodwill, net | 4,970 | |
Americas Fabrication | ||
Goodwill [Line Items] | ||
Goodwill, gross | 57,428 | |
Accumulated impairment losses | (493) | |
Goodwill, net | 56,935 | |
International Mill | ||
Goodwill [Line Items] | ||
Goodwill, gross | 2,478 | |
Accumulated impairment losses | (157) | |
Goodwill, net | $ 2,321 |
CREDIT ARRANGEMENTS (Long-term
CREDIT ARRANGEMENTS (Long-term Debt, Including the Deferred Gain from the Termination of the Interest Rate Swaps) (Details) - USD ($) $ in Thousands | May 31, 2019 | Aug. 31, 2018 | Jul. 31, 2017 | May 31, 2013 |
Debt Instrument [Line Items] | ||||
Total debt | $ 1,372,448 | $ 1,170,129 | ||
Less debt issuance costs | 10,690 | 11,764 | ||
Total amounts outstanding | 1,361,758 | 1,158,365 | ||
Less current maturities | 29,568 | 19,746 | ||
Less short-term borrowings | 25,327 | 0 | ||
Current maturities of long-term debt and short-term borrowings | 54,895 | 19,746 | ||
Long-term debt | $ 1,306,863 | 1,138,619 | ||
2027 Notes | ||||
Debt Instrument [Line Items] | ||||
Weighted average interest rate | 5.375% | 5.375% | ||
2026 Notes | ||||
Debt Instrument [Line Items] | ||||
Weighted average interest rate | 5.75% | |||
2023 Notes | ||||
Debt Instrument [Line Items] | ||||
Weighted average interest rate | 4.875% | 4.875% | ||
Other, including equipment notes | ||||
Debt Instrument [Line Items] | ||||
Total debt | $ 56,996 | $ 47,629 | ||
Revolving credit facility | Term Loans | ||||
Debt Instrument [Line Items] | ||||
Weighted average interest rate | 4.115% | |||
U.S. Program | Short-term borrowings | ||||
Debt Instrument [Line Items] | ||||
Weighted average interest rate | 3.12% | |||
Poland Program | Short-term borrowings | ||||
Debt Instrument [Line Items] | ||||
Weighted average interest rate | 2.41% |
CREDIT ARRANGEMENTS (Narrative)
CREDIT ARRANGEMENTS (Narrative) (Details) | 9 Months Ended | ||||
May 31, 2019USD ($) | May 31, 2019PLN (zł) | Aug. 31, 2018USD ($) | Jul. 31, 2017USD ($) | May 31, 2013USD ($) | |
CMCP | |||||
Debt Instrument [Line Items] | |||||
Revolving credit facility current borrowing capacity | $ 71,700,000 | zł 275,000,000 | |||
Revolving credit facility, amount drawn | 0 | $ 0 | |||
Stand by letters of credit outstanding amount | 1,300,000 | 1,100,000 | |||
Revolving credit facility | |||||
Debt Instrument [Line Items] | |||||
Revolving credit facility current borrowing capacity | 350,000,000 | ||||
Revolving credit facility, maximum borrowing capacity | 600,000,000 | ||||
Revolving credit facility, amount drawn | $ 0 | 0 | |||
Minimum interest coverage ratio | 2.50 | ||||
Maximum debt to capitalization ratio | 0.60 | ||||
Actual interest coverage ratio | 5.53 | 5.53 | |||
Actual debt to capitalization ratio | 0.47 | 0.47 | |||
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 | 3,000,000 | 3,300,000 | |||
U.S. Program | |||||
Debt Instrument [Line Items] | |||||
Transfer of accounts receivable program limit | 200,000,000 | ||||
U.S. Program with Consent of CMCRV and Program Administrative Agent | |||||
Debt Instrument [Line Items] | |||||
Transfer of accounts receivable program limit | 300,000,000 | ||||
Poland Program | |||||
Debt Instrument [Line Items] | |||||
Transfer of accounts receivable program limit | $ 57,400,000 | zł 220,000,000 | |||
Advance limit as percent of eligible trade accounts receivable transferred (percent) | 90.00% | 90.00% | |||
Advances outstanding under transfer of receivables programs | $ 25,300,000 | $ 12,100,000 | |||
2027 Notes | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, face amount | $ 300,000,000 | ||||
Weighted average interest rate | 5.375% | 5.375% | 5.375% | ||
2026 Notes | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, face amount | $ 350,000,000 | ||||
Weighted average interest rate | 5.75% | 5.75% | |||
2023 Notes | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, face amount | $ 330,000,000 | ||||
Weighted average interest rate | 4.875% | 4.875% | 4.875% | ||
Term Loans | Revolving credit facility | |||||
Debt Instrument [Line Items] | |||||
Weighted average interest rate | 4.115% | 4.115% | |||
Periodic payments, as percent of original principal amount (percent) | 1.25% | ||||
Term Loans | 2022 Term Loan | Revolving credit facility | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, face amount | $ 150,000,000 | ||||
Term Loans | 2018 Term Loan | Revolving credit facility | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, face amount | $ 180,000,000 |
DERIVATIVES AND RISK MANAGEME_3
DERIVATIVES AND RISK MANAGEMENT (Narrative) (Details) - USD ($) $ in Millions | May 31, 2019 | May 31, 2018 |
Foreign exchange | ||
Derivative [Line Items] | ||
Derivative notional amount | $ 112 | $ 140.4 |
Commodity | ||
Derivative [Line Items] | ||
Derivative notional amount | $ 49.7 | $ 64.8 |
DERIVATIVES AND RISK MANAGEME_4
DERIVATIVES AND RISK MANAGEMENT (Commodity Contract Commitments) (Details) | 9 Months Ended |
May 31, 2019t | |
Aluminum | Long | |
Derivative [Line Items] | |
Commodity contract commitments | 4,500 |
Aluminum | Short | |
Derivative [Line Items] | |
Commodity contract commitments | 2,350 |
Copper | Long | |
Derivative [Line Items] | |
Commodity contract commitments | 669 |
Copper | Short | |
Derivative [Line Items] | |
Commodity contract commitments | 5,341 |
DERIVATIVES AND RISK MANAGEME_5
DERIVATIVES AND RISK MANAGEMENT (Derivatives Not Designated as Hedging Instruments) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
May 31, 2019 | May 31, 2018 | May 31, 2019 | May 31, 2018 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (loss) before income taxes for derivatives not designated as hedges | $ 3,336 | $ 2,016 | $ (329) | $ 3,190 |
Commodity | Cost of goods sold | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (loss) before income taxes for derivatives not designated as hedges | 3,408 | 1,498 | 143 | 2,071 |
Foreign exchange | Cost of goods sold | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (loss) before income taxes for derivatives not designated as hedges | 0 | 0 | 0 | (50) |
Foreign exchange | SG&A expenses | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (loss) before income taxes for derivatives not designated as hedges | $ (72) | $ 518 | $ (472) | $ 1,169 |
DERIVATIVES AND RISK MANAGEME_6
DERIVATIVES AND RISK MANAGEMENT (Derivatives and Hedged Items Designated as Fair Value Hedging Instruments) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
May 31, 2019 | May 31, 2018 | May 31, 2019 | May 31, 2018 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (loss) before income taxes for fair value hedges | $ 0 | $ (266) | $ 0 | $ 1,530 |
Gain (loss) before income taxes for hedged items of fair value hedges | 0 | 266 | 0 | (1,530) |
Foreign exchange | Net sales | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (loss) before income taxes for fair value hedges | 0 | 163 | 0 | (66) |
Gain (loss) before income taxes for hedged items of fair value hedges | 0 | (163) | 0 | 66 |
Foreign exchange | Cost of goods sold | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (loss) before income taxes for fair value hedges | 0 | (429) | 0 | 1,596 |
Gain (loss) before income taxes for hedged items of fair value hedges | $ 0 | $ 429 | $ 0 | $ (1,596) |
DERIVATIVES AND RISK MANAGEME_7
DERIVATIVES AND RISK MANAGEMENT (Effective Portion of Derivatives Designated as Cash Flow Hedging Instruments Recognized in Accumulated Other Comprehensive Income (Loss)) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
May 31, 2019 | May 31, 2018 | May 31, 2019 | May 31, 2018 | |
Foreign exchange | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (loss), net of income taxes, for cash flow hedges recognized in AOCI | $ (145) | $ 13 | $ (267) | $ 38 |
DERIVATIVES AND RISK MANAGEME_8
DERIVATIVES AND RISK MANAGEMENT (Derivative Assets) (Details) - USD ($) $ in Thousands | May 31, 2019 | Aug. 31, 2018 |
Derivatives, Fair Value [Line Items] | ||
Derivative assets (other current assets) | $ 2,309 | $ 2,288 |
Commodity | Not designated | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets (other current assets) | 2,088 | 1,881 |
Foreign exchange | Designated | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets (other current assets) | 0 | 0 |
Foreign exchange | Not designated | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets (other current assets) | $ 221 | $ 407 |
DERIVATIVES AND RISK MANAGEME_9
DERIVATIVES AND RISK MANAGEMENT (Derivative Liabilities) (Details) - USD ($) $ in Thousands | May 31, 2019 | Aug. 31, 2018 |
Derivatives, Fair Value [Line Items] | ||
Derivative liabilities (accrued expenses and other payables) | $ 1,276 | $ 1,396 |
Commodity | Not designated | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liabilities (accrued expenses and other payables) | 322 | 301 |
Foreign exchange | Designated | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liabilities (accrued expenses and other payables) | 373 | 0 |
Foreign exchange | Not designated | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liabilities (accrued expenses and other payables) | $ 581 | $ 1,095 |
FAIR VALUE (Narrative) (Details
FAIR VALUE (Narrative) (Details) $ in Millions | 3 Months Ended | 9 Months Ended | |
May 31, 2018USD ($) | May 31, 2019levels | May 31, 2018USD ($) | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Number of fair value hierarchy | levels | 3 | ||
Structural Steel Fabrication Operations | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Nonrecurring impairment charge | $ | $ 0.9 | $ 13 |
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 ($) $ in Thousands | May 31, 2019 | Aug. 31, 2018 |
Money market investments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money market investments | $ 2,792 | $ 541,101 |
Commodity | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | 2,088 | 1,881 |
Derivative liabilities | 322 | 301 |
Foreign exchange | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | 221 | 407 |
Derivative liabilities | 954 | 1,095 |
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 | 2,792 | 541,101 |
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 | 2,088 | 1,881 |
Derivative liabilities | 322 | 301 |
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 | 0 |
Derivative liabilities | 0 | 0 |
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 | 0 |
Significant Other Observable Inputs (Level 2) | Commodity | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | 0 | 0 |
Derivative liabilities | 0 | 0 |
Significant Other Observable Inputs (Level 2) | Foreign exchange | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | 221 | 407 |
Derivative liabilities | 954 | 1,095 |
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 | 0 |
Significant Unobservable Inputs (Level 3) | Commodity | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | 0 | 0 |
Derivative liabilities | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Foreign exchange | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | 0 | 0 |
Derivative liabilities | $ 0 | $ 0 |
FAIR VALUE (Financial Assets _2
FAIR VALUE (Financial Assets and Liabilities Not Required to Be Measured at Fair Value) (Details) - USD ($) $ in Thousands | May 31, 2019 | Aug. 31, 2018 |
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||
Financial liabilities | $ 1,372,448 | $ 1,170,129 |
2027 Notes | Level 2 | Carrying Value | ||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||
Financial liabilities | 300,000 | 300,000 |
2027 Notes | Level 2 | Fair Value | ||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||
Financial liabilities | 279,195 | 281,655 |
2026 Notes | Level 2 | Carrying Value | ||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||
Financial liabilities | 350,000 | 350,000 |
2026 Notes | Level 2 | Fair Value | ||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||
Financial liabilities | 345,769 | 339,238 |
2023 Notes | Level 2 | Carrying Value | ||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||
Financial liabilities | 330,000 | 330,000 |
2023 Notes | Level 2 | Fair Value | ||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||
Financial liabilities | 328,964 | 326,090 |
Short-term borrowings | Level 2 | Carrying Value | ||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||
Financial liabilities | 25,327 | 0 |
Short-term borrowings | Level 2 | Fair Value | ||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||
Financial liabilities | 25,327 | 0 |
Revolving credit facility | Term Loans | Level 2 | Carrying Value | ||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||
Financial liabilities | 310,125 | 142,500 |
Revolving credit facility | Term Loans | Level 2 | Fair Value | ||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||
Financial liabilities | $ 310,125 | $ 142,500 |
INCOME TAX (Narrative) (Details
INCOME TAX (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
May 31, 2019 | May 31, 2018 | May 31, 2019 | May 31, 2018 | Aug. 31, 2018 | |
Operating Loss Carryforwards [Line Items] | |||||
Effective income tax rate from continuing operations | 27.00% | 23.90% | 31.90% | 21.80% | |
Blended federal statutory income tax rate (percent) | 25.70% | ||||
Effective tax rate from discontinued operation (percent) | 30.40% | 40.90% | |||
Unrecognized income tax benefits | $ 6.2 | $ 6.2 | $ 3.1 | ||
Poland | |||||
Operating Loss Carryforwards [Line Items] | |||||
Statutory income tax rate | 19.00% |
STOCK-BASED COMPENSATION PLAN_2
STOCK-BASED COMPENSATION PLANS (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
May 31, 2019 | May 31, 2018 | May 31, 2019 | May 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation | $ 7,342 | $ 4,910 | $ 17,350 | $ 18,247 |
Equity method awards | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares granted | 1,505,000 | 1,216,000 | ||
Weighted average grant-date fair value | $ 17.75 | $ 20.69 | ||
Liability method awards | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares granted | 374,000 | 323,000 | ||
Equivalent shares outstanding | 718,223 | 718,223 | ||
Equivalent shares expected to vest | 683,922 | 683,922 | ||
Fiscal 2019 | Restricted Stock Units (RSUs) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period in years | 3 years | |||
Fiscal 2019 | Cliff vesting restricted stock units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period in years | 3 years | |||
Fiscal 2019 | Performance Stock Units (PSU) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period in years | 3 years |
STOCKHOLDERS EQUITY AND EARNI_2
STOCKHOLDERS EQUITY AND EARNINGS PER SHARE (Narrative) (Details) - USD ($) | 9 Months Ended | |
May 31, 2019 | Nov. 30, 2014 | |
Earnings Per Share [Abstract] | ||
Stock repurchase program, authorized amount | $ 100,000,000 | |
Stock repurchase program, shares purchased (shares) | 0 | |
Stock repurchase program, remaining authorized repurchase amount | $ 27,600,000 |
STOCKHOLDERS EQUITY AND EARNI_3
STOCKHOLDERS EQUITY AND EARNINGS PER SHARE (Calculations of the Basic and Diluted Earnings Per Share) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
May 31, 2019 | May 31, 2018 | May 31, 2019 | May 31, 2018 | ||
Earnings Per Share [Abstract] | |||||
Earnings from continuing operations | $ 78,551 | $ 42,325 | $ 112,899 | $ 83,977 | |
Basic earnings per share: | |||||
Shares outstanding for basic earnings per share (shares) | 118,045,362 | 117,111,799 | 117,762,945 | 116,722,504 | |
Basic earnings per share attributable to CMC: (in USD per share) | [1] | $ 0.67 | $ 0.36 | $ 0.96 | $ 0.72 |
Diluted earnings per share: | |||||
Shares outstanding for basic earnings per share (shares) | 118,045,362 | 117,111,799 | 117,762,945 | 116,722,504 | |
Effect of dilutive securities: | |||||
Stock-based incentive/purchase plans (shares) | 1,100,204 | 1,142,992 | 1,250,069 | 1,328,360 | |
Shares outstanding for diluted earnings per share (shares) | 119,145,566 | 118,254,791 | 119,013,014 | 118,050,864 | |
Diluted earnings per share attributable to CMC: (in USD per share) | [1] | $ 0.66 | $ 0.36 | $ 0.95 | $ 0.71 |
Antidilutive (shares) | 32,623 | 26,886 | |||
[1] | *Earnings Per Share ("EPS") is calculated independently for each component and may not sum to Net EPS due to rounding |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Narrative) (Details) - USD ($) $ in Millions | May 31, 2019 | Aug. 31, 2018 |
Loss Contingencies [Line Items] | ||
Accrual for environmental loss contingencies | $ 3.8 | $ 4 |
Accrued environmental loss contingencies, noncurrent | 1.9 | 1.9 |
CERCLA sites | ||
Loss Contingencies [Line Items] | ||
Accrual for environmental loss contingencies | $ 0.7 | $ 0.7 |
BUSINESS SEGMENTS (Narrative) (
BUSINESS SEGMENTS (Narrative) (Details) | 9 Months Ended |
May 31, 2019segments | |
Segment Reporting [Abstract] | |
Number of reporting segments | 4 |
BUSINESS SEGMENTS (Summary of C
BUSINESS SEGMENTS (Summary of Certain Financial Information from Continuing Operations by Reportable Segment) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
May 31, 2019 | May 31, 2018 | May 31, 2019 | May 31, 2018 | Aug. 31, 2018 | |
Segment Reporting Information [Line Items] | |||||
Net sales | $ 1,605,872 | $ 1,204,484 | $ 4,285,997 | $ 3,335,285 | |
Adjusted EBITDA from continuing operations | 143,971 | 101,032 | 278,840 | 245,175 | |
Total assets | 3,767,010 | 3,767,010 | $ 3,328,304 | ||
Continuing Operations | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 1,605,872 | 1,204,484 | 4,285,997 | 3,335,285 | |
Adjusted EBITDA from continuing operations | 143,971 | 101,032 | 278,840 | 245,175 | |
Total assets | 3,767,010 | 3,767,010 | 3,328,304 | ||
Americas Recycling | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 228,786 | 292,679 | 694,855 | 832,448 | |
Adjusted EBITDA from continuing operations | 12,331 | 19,477 | 37,889 | 51,698 | |
Total assets | 262,620 | 262,620 | 291,838 | ||
Americas Mills | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 536,035 | 332,459 | 1,382,501 | 841,895 | |
Adjusted EBITDA from continuing operations | 158,114 | 89,590 | 384,383 | 194,975 | |
Total assets | 1,682,255 | 1,682,255 | 1,115,339 | ||
Americas Fabrication | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 629,510 | 375,183 | 1,590,746 | 1,015,934 | |
Adjusted EBITDA from continuing operations | (23,289) | (8,208) | (109,863) | (14,787) | |
Total assets | 1,136,996 | 1,136,996 | 739,151 | ||
International Mill | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 209,022 | 201,438 | 610,640 | 633,134 | |
Adjusted EBITDA from continuing operations | 24,120 | 31,987 | 77,436 | 95,066 | |
Total assets | 501,079 | 501,079 | 485,548 | ||
Corporate | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 2,519 | 2,725 | 7,255 | 11,874 | |
Adjusted EBITDA from continuing operations | (27,305) | (31,814) | (111,005) | (81,777) | |
Total assets | 184,060 | 184,060 | $ 696,428 | ||
Intersegment | Continuing Operations | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 0 | 0 | 0 | 0 | |
Intersegment | Americas Recycling | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 60,229 | 71,419 | 183,244 | 171,618 | |
Intersegment | Americas Mills | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 330,868 | 220,604 | 860,964 | 550,573 | |
Intersegment | Americas Fabrication | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 3,537 | 3,058 | 10,248 | 8,059 | |
Intersegment | International Mill | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 343 | 299 | 947 | 846 | |
Intersegment | Corporate | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | (394,977) | (295,380) | (1,055,403) | (731,096) | |
Segments | Continuing Operations | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 1,605,872 | 1,204,484 | 4,285,997 | 3,335,285 | |
Segments | Americas Recycling | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 289,015 | 364,098 | 878,099 | 1,004,066 | |
Segments | Americas Mills | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 866,903 | 553,063 | 2,243,465 | 1,392,468 | |
Segments | Americas Fabrication | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 633,047 | 378,241 | 1,600,994 | 1,023,993 | |
Segments | International Mill | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 209,365 | 201,737 | 611,587 | 633,980 | |
Segments | Corporate | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | $ (392,458) | $ (292,655) | $ (1,048,148) | $ (719,222) |
BUSINESS SEGMENTS (Reconciliati
BUSINESS SEGMENTS (Reconciliations of Earnings from Continuing Operations to Adjusted Operating Profit) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
May 31, 2019 | May 31, 2018 | May 31, 2019 | May 31, 2018 | |
Segment Reporting [Abstract] | ||||
Earnings from continuing operations | $ 78,551 | $ 42,325 | $ 112,899 | $ 83,977 |
Interest expense | 18,513 | 11,511 | 53,671 | 25,303 |
Income taxes | 29,105 | 13,312 | 52,855 | 23,465 |
Depreciation and amortization | 41,181 | 32,949 | 117,602 | 98,898 |
Amortization of acquired unfavorable contract backlog | (23,394) | 0 | (58,202) | 0 |
Impairment of assets | 15 | 935 | 15 | 13,532 |
Adjusted EBITDA from continuing operations | $ 143,971 | $ 101,032 | $ 278,840 | $ 245,175 |