Document and Entity Information
Document and Entity Information Document - shares | 9 Months Ended | |
May 31, 2018 | Jun. 22, 2018 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | May 31, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Entity Registrant Name | SCHNITZER STEEL INDUSTRIES INC | |
Entity Central Index Key | 912,603 | |
Current Fiscal Year End Date | --08-31 | |
Entity Filer Category | Accelerated Filer | |
Class A Common Stock | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 26,749,147 | |
Class B Common Stock | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 200,000 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | May 31, 2018 | Aug. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 10,090 | $ 7,287 |
Accounts receivable, net of allowance for doubtful accounts of $2,572 and $2,280 | 190,195 | 138,998 |
Inventories | 234,437 | 166,942 |
Refundable income taxes | 3,697 | 2,366 |
Prepaid expenses and other current assets | 38,303 | 22,357 |
Total current assets | 476,722 | 337,950 |
Property, plant and equipment, net of accumulated depreciation of $724,757 and $756,494 | 393,387 | 390,629 |
Investments in joint ventures | 11,635 | 11,204 |
Goodwill | 168,194 | 167,835 |
Intangibles, net of accumulated amortization of $3,621 and $3,913 | 4,507 | 4,424 |
Other assets | 22,825 | 21,713 |
Total assets | 1,077,270 | 933,755 |
Current liabilities: | ||
Short-term borrowings | 1,146 | 721 |
Accounts payable | 118,099 | 94,674 |
Accrued payroll and related liabilities | 43,881 | 41,593 |
Environmental liabilities | 6,684 | 2,007 |
Accrued income taxes | 0 | 9 |
Other accrued liabilities | 47,030 | 37,256 |
Total current liabilities | 216,840 | 176,260 |
Deferred income taxes | 9,337 | 19,147 |
Long-term debt, net of current maturities | 171,545 | 144,403 |
Environmental liabilities, net of current portion | 46,749 | 46,391 |
Other long-term liabilities | 13,237 | 10,061 |
Total liabilities | 457,708 | 396,262 |
Commitments and contingencies (Note 5) | ||
Schnitzer Steel Industries, Inc. (“SSI”) shareholders’ equity: | ||
Preferred stock – 20,000 shares $1.00 par value authorized, none issued | 0 | 0 |
Additional paid-in capital | 40,167 | 38,050 |
Retained earnings | 585,128 | 503,770 |
Accumulated other comprehensive loss | (37,269) | (35,293) |
Total SSI shareholders’ equity | 614,975 | 533,586 |
Noncontrolling interests | 4,587 | 3,907 |
Total equity | 619,562 | 537,493 |
Total liabilities and equity | 1,077,270 | 933,755 |
Class A Common Stock | ||
Schnitzer Steel Industries, Inc. (“SSI”) shareholders’ equity: | ||
Common stock, value | 26,749 | 26,859 |
Class B Common Stock | ||
Schnitzer Steel Industries, Inc. (“SSI”) shareholders’ equity: | ||
Common stock, value | $ 200 | $ 200 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | May 31, 2018 | Aug. 31, 2017 |
Current assets: | ||
Accounts receivable, allowance for doubtful accounts | $ 2,572 | $ 2,280 |
Property, plant and equipment, accumulated depreciation | 724,757 | 756,494 |
Intangibles, accumulated amortization | $ 3,621 | $ 3,913 |
Schnitzer Steel Industries, Inc. (“SSI”) shareholders’ equity: | ||
Preferred stock, par value (in dollars per share) | $ 1 | $ 1 |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 |
Preferred stock, shares issued | 0 | 0 |
Class A Common Stock | ||
Schnitzer Steel Industries, Inc. (“SSI”) shareholders’ equity: | ||
Common stock, par value (in dollars per share) | $ 1 | $ 1 |
Common stock, shares authorized | 75,000,000 | 75,000,000 |
Common stock, shares issued | 26,749,000 | 26,859,000 |
Common stock, shares outstanding | 26,749,000 | 26,859,000 |
Class B Common Stock | ||
Schnitzer Steel Industries, Inc. (“SSI”) shareholders’ equity: | ||
Common stock, par value (in dollars per share) | $ 1 | $ 1 |
Common stock, shares authorized | 25,000,000 | 25,000,000 |
Common stock, shares issued | 200,000 | 200,000 |
Common stock, shares outstanding | 200,000 | 200,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
May 31, 2018 | May 31, 2017 | May 31, 2018 | May 31, 2017 | |
Income Statement [Abstract] | ||||
Revenues | $ 652,416 | $ 477,088 | $ 1,695,138 | $ 1,193,333 |
Operating expense: | ||||
Cost of goods sold | 549,164 | 411,109 | 1,427,877 | 1,033,805 |
Selling, general and administrative | 54,185 | 48,451 | 158,866 | 129,766 |
(Income) from joint ventures | (772) | (668) | (1,328) | (3,300) |
Other asset impairment charges (recoveries), net | (1,465) | (1,044) | (1,553) | (643) |
Restructuring charges and other exit-related activities | 70 | 93 | 261 | (200) |
Operating income | 51,234 | 19,147 | 111,015 | 33,905 |
Interest expense | (2,483) | (2,131) | (6,823) | (5,969) |
Other income, net | 403 | 524 | 1,353 | 1,318 |
Income from continuing operations before income taxes | 49,154 | 17,540 | 105,545 | 29,254 |
Income tax expense | (10,650) | (161) | (6,030) | (736) |
Income from continuing operations | 38,504 | 17,379 | 99,515 | 28,518 |
Income (loss) from discontinued operations, net of tax | (56) | (127) | 72 | (275) |
Net income | 38,448 | 17,252 | 99,587 | 28,243 |
Net income attributable to noncontrolling interests | (1,046) | (687) | (2,806) | (1,967) |
Net income attributable to SSI | $ 37,402 | $ 16,565 | $ 96,781 | $ 26,276 |
Net income (loss) per share attributable to SSI Basic: | ||||
Income per share from continuing operations attributable to SSI (in dollars per share) | $ 1.35 | $ 0.60 | $ 3.49 | $ 0.97 |
Income (loss) per share from discontinued operations attributable to SSI (in dollars per share) | 0 | 0 | 0 | (0.01) |
Net income (loss) per share attributable to SSI (in dollars per share) | 1.35 | 0.60 | 3.49 | 0.96 |
Net income per share attributable to SSI Diluted: | ||||
Income per share from continuing operations attributable to SSI (in dollars per share) | 1.31 | 0.60 | 3.38 | 0.96 |
Income (loss) per share from discontinued operations attributable to SSI (in dollars per share) | 0 | 0 | 0 | (0.01) |
Net income per share attributable to SSI (in dollars per share) | $ 1.31 | $ 0.60 | $ 3.38 | $ 0.95 |
Weighted average number of common shares: | ||||
Basic (shares) | 27,676 | 27,601 | 27,719 | 27,499 |
Diluted (Shares) | 28,636 | 27,703 | 28,646 | 27,692 |
Dividends declared per common share (in dollars per share) | $ 0.1875 | $ 0.1875 | $ 0.5625 | $ 0.5625 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
May 31, 2018 | May 31, 2017 | May 31, 2018 | May 31, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 38,448 | $ 17,252 | $ 99,587 | $ 28,243 |
Other comprehensive income (loss), net of tax: | ||||
Foreign currency translation adjustments | (414) | (694) | (2,006) | (1,488) |
Pension obligations, net | 174 | 266 | 30 | 281 |
Total other comprehensive loss, net of tax | (240) | (428) | (1,976) | (1,207) |
Comprehensive income | 38,208 | 16,824 | 97,611 | 27,036 |
Less comprehensive income attributable to noncontrolling interests | (1,046) | (687) | (2,806) | (1,967) |
Comprehensive income attributable to SSI | $ 37,162 | $ 16,137 | $ 94,805 | $ 25,069 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
May 31, 2018 | May 31, 2017 | |
Cash flows from operating activities: | ||
Net income | $ 99,587 | $ 28,243 |
Adjustments to reconcile net income to cash provided by (used in) operating activities | ||
Depreciation and amortization | 37,009 | 37,459 |
Other asset impairment charges (recoveries), net | (1,553) | (643) |
Exit-related (gains), asset impairments and accelerated depreciation, net | 0 | (407) |
Inventory write-down | 38 | 0 |
Share-based compensation expense | 13,815 | 9,182 |
Deferred income taxes | (9,791) | 1,452 |
Undistributed equity in earnings of joint ventures | (1,328) | (3,300) |
Loss on disposal of assets, net | 203 | 194 |
Unrealized foreign exchange (gain) loss, net | (180) | 89 |
Bad debt expense, net | 307 | 35 |
Changes in assets and liabilities, net of acquisitions: | ||
Accounts receivable | (61,557) | (21,950) |
Inventories | (58,047) | (25,033) |
Income taxes | (998) | (935) |
Prepaid expenses and other current assets | (7,249) | (2,826) |
Other long-term assets | (1,512) | 421 |
Accounts payable | 26,257 | 13,365 |
Accrued payroll and related liabilities | 2,346 | 5,795 |
Other accrued liabilities | 9,328 | 5,866 |
Environmental liabilities | 2,634 | 1,936 |
Other long-term liabilities | 3,307 | (1,050) |
Distributed equity in earnings of joint ventures | 1,025 | 3,389 |
Net cash provided by operating activities | 53,641 | 51,282 |
Cash flows from investing activities: | ||
Capital expenditures | (46,096) | (31,508) |
Purchase of cost method investment | 0 | (6,017) |
Acquisition | (2,300) | 0 |
Joint venture receipts, net | 4 | 266 |
Proceeds from sale of assets | 3,397 | 2,753 |
Net cash used in investing activities | (44,995) | (34,506) |
Cash flows from financing activities: | ||
Borrowings from long-term debt | 426,480 | 360,626 |
Repayment of long-term debt | (402,153) | (368,843) |
Payment of debt issuance costs | 0 | (112) |
Repurchase of Class A common stock | (8,778) | 0 |
Taxes paid related to net share settlement of share-based payment awards | (3,030) | (3,300) |
Distributions to noncontrolling interests | (1,709) | (1,177) |
Purchase of noncontrolling interest | (600) | 0 |
Dividends paid | (15,721) | (15,322) |
Net cash used in financing activities | (5,511) | (28,128) |
Effect of exchange rate changes on cash | (332) | (258) |
Net increase (decrease) in cash and cash equivalents | 2,803 | (11,610) |
Cash and cash equivalents as of beginning of period | 7,287 | 26,819 |
Cash and cash equivalents as of end of period | $ 10,090 | $ 15,209 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
May 31, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation The accompanying Unaudited Condensed Consolidated Financial Statements of Schnitzer Steel Industries, Inc. (the “Company”) have been prepared pursuant to generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information and the rules and regulations of the United States Securities and Exchange Commission (the “SEC”) for Form 10-Q, including Article 10 of Regulation S-X. The year-end condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP. Certain information and note disclosures normally included in annual financial statements have been condensed or omitted pursuant to the rules and regulations of the SEC. In the opinion of management, all normal, recurring adjustments considered necessary for a fair statement have been included. Management suggests that these Unaudited Condensed Consolidated Financial Statements be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended August 31, 2017 . The results for the three and nine months ended May 31, 2018 and 2017 are not necessarily indicative of the results of operations for the entire fiscal year. Accounting Changes In July 2015, an accounting standards update was issued that requires an entity to measure certain types of inventory, including inventory that is measured using the first-in, first out (“FIFO”) or average cost method, at the lower of cost and net realizable value. The accounting standard in effect at the time of issuance of the update required an entity to measure inventory at the lower of cost or market, whereby market could be replacement cost, net realizable value, or net realizable value less an approximately normal profit margin. The amendments do not apply to inventory that is measured using the last-in, first-out (“LIFO”) or retail inventory method. The Company adopted the new requirement, which is to be applied prospectively, as of the beginning of the first quarter of fiscal 2018 with no impact to the Unaudited Condensed Consolidated Financial Statements. In March 2016, an accounting standards update was issued that amends several aspects of the accounting for share-based payments, including accounting for income taxes, forfeitures and statutory tax withholding requirements, and classification within the statement of cash flows. The Company adopted the new requirements as of the beginning of the first quarter of fiscal 2018 with no impact to the Unaudited Condensed Consolidated Financial Statements, including no cumulative-effect adjustments to retained earnings, as of the date of adoption. On a prospective basis beginning with the date of adoption, the Company records all of the tax effects related to share-based payments through the income statement, subject to normal valuation allowance considerations, and all tax-related cash flows resulting from share-based payments are reported as operating activities in the statement of cash flows. Cash payments to taxing authorities made on behalf of Company employees for withheld shares are reported as financing activities in the statement of cash flows, consistent with the Company’s practice prior to adopting the new requirements. The Company has elected to continue the practice of estimating the forfeiture rate for the purpose of recognizing estimated compensation cost over the requisite service period. In February 2018, an accounting standards update was issued that allows for a reclassification from accumulated other comprehensive income (“AOCI”) to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act (“Tax Act”) enacted on December 22, 2017. Stranded tax effects result from adjusting deferred tax liabilities and assets for the effect of a change in tax laws or rates to income from continuing operations, as required under existing accounting guidance, even in situations in which the adjustments relate to income tax effects reported within AOCI. If an entity elects to reclassify the stranded tax effects of the Tax Act, the amount of that reclassification shall include the effect of the change in the U.S. federal corporate income tax rate on the gross deferred tax amounts and related valuation allowances, if any, at the date of enactment of the Tax Act related to items remaining in AOCI, and other income tax effects of the Tax Act on items remaining in AOCI that an entity elects to reclassify. The Company early-adopted the foregoing accounting standard update in the second quarter of fiscal 2018 and elected to reclassify to retained earnings the effect of the change in the U.S. federal corporate income tax rate on items remaining in AOCI at the date of enactment of the Tax Act. The resulting aggregate reclassification from AOCI to retained earnings recorded in the second quarter of fiscal 2018 was $1 million . See Note 7 - Changes in Equity and Note 8 - Accumulated Other Comprehensive Loss for further detail. Cash and Cash Equivalents Cash and cash equivalents include short-term securities that are not restricted by third parties and have an original maturity date of 90 days or less. Included in accounts payable are book overdrafts representing outstanding checks in excess of funds on deposit of $29 million and $21 million as of May 31, 2018 and August 31, 2017 , respectively. Assets Held for Sale During the third quarter of fiscal 2017, the Company sold equipment assets that had been classified as held for sale prior to being fully impaired in fiscal 2015. The Company recorded a gain on the sale of $1 million , which is reported within other asset impairment charges (recoveries), net in the Unaudited Condensed Consolidated Statements of Income. Investments in Joint Ventures During the nine months ended May 31, 2017, one of the Company’s joint venture interests sold real estate resulting in recognition of a $6 million gain by the joint venture, $3 million of which was attributable to the Company’s investment. The Company’s share of the gain is reported within (income) from joint ventures in the Unaudited Condensed Consolidated Statements of Income for the nine months ended May 31, 2017. Cost Method Investment During the nine months ended May 31, 2017, the Company invested $6 million in a privately-held waste and recycling entity. The Company’s influence over the operating and financial policies of the entity is not significant and, thus, the investment is accounted for under the cost method. Under the cost method, the investment is carried at cost and adjusted only for other-than-temporary impairments, certain distributions and additional investments. The investment is presented as part of the Auto and Metals Recycling (“AMR”) reportable segment and reported within other assets in the Unaudited Condensed Consolidated Balance Sheets. The Company does not hold any other cost-method investments. The carrying value of the investment was $6 million as of May 31, 2018 and August 31, 2017 . As of May 31, 2018 , the Company had not identified any events or changes in circumstances that may have a significant adverse effect on the fair value of the investment or indicators of other-than-temporary impairment. Long-Lived Assets Changes in circumstances may merit a change in the estimated useful lives or salvage values of individual long-lived assets, which are accounted for prospectively in the period of change. For such assets, the useful life is shortened based on the Company’s plans to dispose of or abandon the asset before the end of its original useful life and depreciation is accelerated beginning when that determination is made. During the nine months ended May 31, 2018 and 2017 , the Company recognized accelerated depreciation of $1 million and less than $1 million , respectively, due to shortening the useful lives of decommissioned machinery and equipment assets in the Cascade Steel and Scrap (“CSS”) reportable segment, which are reported within other asset impairment charges (recoveries), net in the Unaudited Condensed Consolidated Statements of Income. Also, during the three and nine months ended May 31, 2018 , the Company sold previously impaired assets consisting primarily of machinery and equipment, recognizing a gain of $2 million and $3 million , respectively, which are reported within other asset impairment charges (recoveries), net in the Unaudited Condensed Consolidated Statements of Income. Concentration of Credit Risk Financial instruments that potentially subject the Company to significant concentration of credit risk consist primarily of cash and cash equivalents, accounts receivable, and notes and other contractual receivables from suppliers. The majority of cash and cash equivalents is maintained with major financial institutions. Balances with these and certain other institutions exceeded the Federal Deposit Insurance Corporation insured amount of $250,000 as of May 31, 2018 . Concentration of credit risk with respect to accounts receivable is limited because a large number of geographically diverse customers make up the Company’s customer base. The Company controls credit risk through credit approvals, limits, insurance, letters of credit or other collateral, cash deposits and monitoring procedures. The Company is exposed to a residual credit risk with respect to open letters of credit by virtue of the possibility of the failure of a bank providing a letter of credit. The Company had $81 million and $48 million of open letters of credit as of May 31, 2018 and August 31, 2017 , respectively. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 9 Months Ended |
May 31, 2018 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, an accounting standards update was issued that clarifies the principles for recognizing revenue from contracts with customers. The update supersedes the existing standard for recognizing revenue. Additional updates have been issued since May 2014 amending aspects of the initial update and providing implementation guidance. The guidance is applicable to all contracts with customers regardless of industry-specific or transaction-specific fact patterns. Further, the guidance requires improved disclosures to help users of financial statements better understand the nature, amount, timing, and uncertainty of revenue that is recognized. The standard is effective for the Company beginning in fiscal 2019, including interim periods within that fiscal year. The Company plans to adopt the standard using the modified retrospective approach with the cumulative effect of the initial application, if any, recognized as an adjustment to the opening balance of retained earnings. The Company has nearly completed the examination of its current revenue streams and significant contracts with customers under the requirements of the new standard and, based on the progress of this examination to date, does not believe the standard will have a material impact on its financial position, net income or cash flows. The Company has not identified any significant changes to its processes, systems and internal controls required to support the new standard. The Company has identified certain scrap metal purchase and sale arrangements for which it currently recognizes revenue for the gross amount of consideration it expects to be entitled from the customer (as principal), but for which under the new revenue standard it recognizes revenue as the net amount of consideration that it expects to retain after paying the scrap metal supplier (as agent). This change in the classification of the cost of scrap metal purchased under such arrangements will have the effect of reducing the amount of revenues reported in the financial statements, while having no impact on net income. Based on analysis performed to date and recent historical levels of such scrap metal purchase and sale arrangements, the Company estimates the decrease in its annual revenues as a result of implementing this change in fiscal 2019 will be between $30 million and $40 million with no impact on net income. In January 2016, an accounting standards update was issued that amends certain aspects of the reporting model for financial instruments. Most prominent among the amendments is the requirement for equity investments, with certain exceptions including those accounted for under the equity method of accounting, to be measured at fair value with changes in fair value recognized in net income. An entity may choose to measure equity investments that do not have readily determinable fair values, such as certain cost method investments, at cost minus impairment, plus or minus changes resulting from observable price changes. The amendments also require a qualitative assessment to identify impairment of equity investments without readily determinable fair values. The standard is effective for the Company beginning in fiscal 2019, including interim periods within that fiscal year. The Company is evaluating the impact of adopting this standard on its consolidated financial position, results of operations and cash flows. In February 2016, an accounting standard was issued that will supersede the existing lease standard and require a lessee to recognize a lease liability and a lease asset on its balance sheet for all leases, including those classified as operating leases under the existing lease standard. The update also expands the required quantitative and qualitative disclosures surrounding leases. This standard is effective for the Company beginning in fiscal 2020, including interim periods within that fiscal year. This standard will be applied using a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The Company is in the process of identifying its population of leases within the scope of the new accounting standard and documenting salient lease terms to support the initial and subsequent measurement of lease liabilities and lease assets. The Company is evaluating the impact of adopting this standard on its financial position, results of operations, cash flows and disclosures. |
Inventories
Inventories | 9 Months Ended |
May 31, 2018 | |
Inventory, Net [Abstract] | |
Inventories | Inventories Inventories consisted of the following (in thousands): May 31, 2018 August 31, 2017 Processed and unprocessed scrap metal $ 140,045 $ 88,441 Semi-finished goods 15,146 3,243 Finished goods 43,164 40,462 Supplies 36,082 34,796 Inventories $ 234,437 $ 166,942 |
Goodwill
Goodwill | 9 Months Ended |
May 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Goodwill The Company evaluates goodwill for impairment annually on July 1 and upon the occurrence of certain triggering events or substantive changes in circumstances that indicate that the fair value of goodwill may be impaired. There were no triggering events identified during the first nine months of fiscal 2018 requiring an interim goodwill impairment test. As of May 31, 2018 and August 31, 2017 , all of the Company’s goodwill was carried by the AMR reportable segment. The gross change in the carrying amount of goodwill for the nine months ended May 31, 2018 was as follows (in thousands): Goodwill August 31, 2017 $ 167,835 Acquisition 1,118 Foreign currency translation adjustment (759 ) May 31, 2018 $ 168,194 In the second quarter of fiscal 2018, the Company acquired certain assets of a metals recycling business in Columbus, Georgia for $2 million . The acquisition qualified as a business combination under the accounting rules and resulted in the recognition of $1 million of goodwill during the second quarter of fiscal 2018. The Company allocated the acquired goodwill to a reporting unit within the AMR operating segment. The reporting unit did not carry any goodwill immediately prior to the acquisition. Accumulated goodwill impairment charges were $471 million as of May 31, 2018 and August 31, 2017 . |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
May 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Contingencies - Environmental The Company evaluates the adequacy of its environmental liabilities on a quarterly basis. Adjustments to the liabilities are made when additional information becomes available that affects the estimated costs to study or remediate any environmental issues or expenditures are made for which liabilities were established. Changes in the Company’s environmental liabilities for the nine months ended May 31, 2018 were as follows (in thousands): Balance as of August 31, 2017 Liabilities Established (Released), Net Payments and Other Balance as of May 31, 2018 Short-Term Long-Term $ 48,398 $ 7,766 $ (2,731 ) $ 53,433 $ 6,684 $ 46,749 Recycling Operations As of May 31, 2018 and August 31, 2017 , the Company’s recycling operations had environmental liabilities of $53 million and $48 million , respectively, for the potential remediation of locations where it has conducted business or has environmental liabilities from historical or recent activities. The liabilities relate to the investigation and potential future remediation of soil contamination, groundwater contamination, storm water runoff issues and other natural resource damages. Except for Portland Harbor and certain liabilities discussed under Other Legacy Environmental Loss Contingencies immediately below, such liabilities were not individually material at any site. Portland Harbor In December 2000, the Company was notified by the United States Environmental Protection Agency (“EPA”) under the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”) that it is one of the potentially responsible parties (“PRPs”) that own or operate or formerly owned or operated sites which are part of or adjacent to the Portland Harbor Superfund site (the “Site”). The precise nature and extent of cleanup of any specific areas within the Site, the parties to be involved, the timing of any specific remedial action and the allocation of the costs for any cleanup among responsible parties have not yet been determined. The process of site investigation, remedy selection, identification of additional PRPs and allocation of costs has been underway for a number of years, but significant uncertainties remain. It is unclear to what extent the Company will be liable for environmental costs or natural resource damage claims or third party contribution or damage claims with respect to the Site. While the Company participated in certain preliminary Site study efforts, it was not party to the consent order entered into by the EPA with certain other PRPs, referred to as the “Lower Willamette Group” (“LWG”), for a remedial investigation/feasibility study (“RI/FS”). During fiscal 2007, the Company and certain other parties agreed to an interim settlement with the LWG under which the Company made a cash contribution to the LWG RI/FS. The LWG has indicated that it had incurred over $115 million in investigation-related costs over an approximately 10 year period working on the RI/FS. Following submittal of draft RI and FS documents which the EPA largely rejected, the EPA took over the RI/FS process. The Company has joined with approximately 100 other PRPs, including the LWG members, in a voluntary process to establish an allocation of costs at the Site, including the costs incurred by the LWG in the RI/FS process. The LWG members have also commenced federal court litigation, which has been stayed, seeking to bring additional parties into the allocation process. In January 2008, the Portland Harbor Natural Resource Trustee Council (“Trustee Council”) invited the Company and other PRPs to participate in funding and implementing the Natural Resource Injury Assessment for the Site. Following meetings among the Trustee Council and the PRPs, funding and participation agreements were negotiated under which the participating PRPs, including the Company, agreed to fund the first phase of the three-phase natural resource damage assessment. Phase 1, which included the development of the Natural Resource Damage Assessment Plan (“AP”) and implementation of several early studies, was substantially completed in 2010. In December 2017, the Company joined with other participating PRPs in agreeing to fund Phase 2 of the natural resource damage assessment, which includes the implementation of the AP to develop information sufficient to facilitate early settlements between the Trustee Council and Phase 2 participants and the identification of restoration projects to be funded by the settlements. In late May 2018, the Trustee Council published notice of its intent to proceed with Phase 3, which will involve the full implementation of the AP and the final injury and damage determination. The Company has commenced discussions with the Trustee Council regarding early settlements under Phase 2. It is uncertain whether the Company will enter into an early settlement for natural resource damages or what costs it may incur in any such early settlement. On January 30, 2017, one of the Trustees, the Confederated Tribes and Bands of the Yakama Nation, which withdrew from the council in 2009, filed a suit against approximately 30 parties, including the Company, seeking reimbursement of certain past and future response costs in connection with remedial action at the Site and recovery of assessment costs related to natural resources damages from releases at and from the Site to the Multnomah Channel and the Lower Columbia River. The Company intends to defend against such claims and does not have sufficient information to determine the likelihood of a loss in this matter or to estimate the amount of damages being sought or the amount of such damages that could be allocated to the Company. Estimates of the cost of remedial action for the cleanup of the in-river portion of the Site have varied widely in various drafts of the FS and in the EPA’s final FS issued in June 2016 from approximately $170 million to over $2.5 billion (net present value), depending on the remedial alternative and a number of other factors. In comments submitted to the EPA, the Company and certain other stakeholders identified a number of serious concerns regarding the EPA’s risk and remedial alternatives assessments, cost estimates, scheduling assumptions and conclusions regarding the feasibility and effectiveness of remediation technologies. In January 2017, the EPA issued a Record of Decision (“ROD”) that identified the selected remedy for the Site. The selected remedy is a modified version of one of the alternative remedies evaluated in the EPA’s FS that was expanded to include additional work at a greater cost. The EPA has estimated the total cost of the selected remedy at $1.7 billion with a net present value cost of $1.05 billion (at a 7% discount rate) and an estimated construction period of 13 years following completion of the remedial designs. In the ROD, the EPA stated that the cost estimate is an order-of-magnitude engineering estimate that is expected to be within + 50% to -30% of the actual project cost and that changes in the cost elements are likely to occur as a result of new information and data collected during the engineering design. The Company has identified a number of concerns regarding the remedy described in the ROD, which is based on data more than a decade old, and the EPA’s estimates for the costs and time required to implement the selected remedy. Because of ongoing questions regarding cost effectiveness, technical feasibility, and the use of stale data, it is uncertain whether the ROD will be implemented as issued. In addition, the ROD did not determine or allocate the responsibility for remediation costs among the PRPs. In the ROD, the EPA acknowledged that much of the data used in preparing the ROD was more than a decade old and would need to be updated with a new round of “baseline” sampling to be conducted prior to the remedial design phase. Accordingly, the ROD provided for additional pre-remedial design investigative work and baseline sampling to be conducted in order to provide a baseline of current conditions and delineate particular remedial actions for specific areas within the Site. This additional sampling needs to occur prior to proceeding with the next phase in the process which is the remedial design. The remedial design phase is an engineering phase during which additional technical information and data will be collected, identified and incorporated into technical drawings and specifications developed for the subsequent remedial action. Moreover, the ROD provided only Site-wide cost estimates and did not provide sufficient detail to estimate costs for specific sediment management areas within the Site. Following issuance of the ROD, EPA proposed that the PRPs, or a subgroup of PRPs, perform the additional investigative work identified in the ROD under a new consent order. In December 2017, the Company and three other PRPs entered into a new Administrative Settlement Agreement and Order on Consent with EPA to perform such pre-remedial design investigation and baseline sampling over a two -year period. The Company estimates that its share of the costs of performing such work will be approximately $2 million , which it recorded to environmental liabilities and selling, general and administrative expense in the consolidated financial statements in the first quarter of fiscal 2018. The Company believes that such costs will be fully covered by existing insurance coverage and, thus, also recorded an insurance receivable for $2 million in the first quarter of fiscal 2018, resulting in no net impact to the Company’s consolidated results of operations. Except for certain early action projects in which the Company is not involved, remediation activities are not expected to commence for a number of years. In addition, as discussed above, responsibility for implementing and funding the remedy will be determined in a separate allocation process. The Company does not expect the next major stage of the allocation process to proceed until after the additional pre-remedial design data is collected. Because there has not been a determination of the specific remediation actions that will be required, the amount of natural resource damages or the allocation of costs of the investigations and any remedy and natural resource damages among the PRPs, the Company believes it is not possible to reasonably estimate the amount or range of costs which it is likely to or which it is reasonably possible that it will incur in connection with the Site, although such costs could be material to the Company’s financial position, results of operations, cash flows and liquidity. Among the facts currently being developed are detailed information on the history of ownership of and the nature of the uses of and activities and operations performed on each property within the Site, which are factors that will play a substantial role in determining the allocation of investigation and remedy costs among the PRPs. The Company has insurance policies that it believes will provide reimbursement for costs it incurs for defense (including the pre-remedial design investigative activities), remediation and mitigation for natural resource damages claims in connection with the Site, although there is no assurance that those policies will cover all of the costs which the Company may incur. As of May 31, 2018 , the Company’s total liability for its estimated share of the costs of the investigation was $3 million . The Oregon Department of Environmental Quality is separately providing oversight of voluntary investigations by the Company involving the Company’s sites adjacent to the Portland Harbor which are focused on controlling any current “uplands” releases of contaminants into the Willamette River. No liabilities have been established in connection with these investigations because the extent of contamination (if any) and the Company’s responsibility for the contamination (if any) have not yet been determined. Other Legacy Environmental Loss Contingencies The Company’s environmental loss contingencies as of May 31, 2018 and August 31, 2017 , other than Portland Harbor, include actual or possible investigation and cleanup costs from historical contamination at sites currently or formerly owned or operated by the Company or at other sites where the Company may have responsibility for such costs due to past disposal or other activities (“legacy environmental loss contingencies”). These legacy environmental loss contingencies relate to the potential remediation of waterways and soil and groundwater contamination and may also involve natural resource damages, governmental fines and penalties and claims by third parties for personal injury and property damage. The Company has been notified that it is or may be a potentially responsible party at certain of these sites, and investigation and cleanup activities are ongoing or may be required in the future. The Company recognizes a liability for such matters when the loss is probable and can be reasonably estimated. Where investigation and cleanup activities are ongoing or where the Company has not yet been identified as having responsibility or the contamination has not yet been identified, it is reasonably possible that the Company may need to recognize additional liabilities in connection with such sites but the Company cannot currently reasonably estimate the possible loss or range of loss absent additional information or developments. Such additional liabilities, individually or in the aggregate, may have a material adverse effect on the Company’s results of operations, financial condition or cash flows. During the first nine months of fiscal 2018 , the Company accrued $4 million in expense at its Corporate division for the estimated costs related to remediation of shredder residue disposed of in or around the 1970s at third-party sites located near each other. Investigation activities have been conducted under oversight of the applicable state regulatory agency. It is reasonably possible that the Company may recognize additional liabilities in connection with this matter at the time such losses are probable and can be reasonably estimated. The Company estimates a range of reasonably possible losses related to this matter in excess of current accruals at between zero and $28 million based on a range of remedial alternatives and subject to development and approval by regulators of a specific remedy implementation plan. The Company is investigating whether a portion or all of the current and future losses, if incurred, are covered by existing insurance coverage or may be offset by contributions from other responsible parties. In addition, the Company’s environmental loss contingencies as of May 31, 2018 include $5 million for the estimated costs related to remediation of soil and groundwater conditions in connection with a closed facility owned and previously operated by an indirectly wholly-owned subsidiary. Investigation activities have been conducted under the oversight of the applicable state regulatory agency, and the Company has also been working with local officials with respect to the protection of public water supplies. It is reasonably possible that the Company may recognize additional liabilities, including penalties, in connection with this matter at the time such losses are probable and can be reasonably estimated. However, the Company cannot reasonably estimate at this time the possible loss or range of possible losses associated with this matter pending completion of on-going studies and determination of remediation plans and pending further negotiations to settle the related enforcement matter. Steel Manufacturing Operations The Company’s steel manufacturing operations had no known environmental liabilities as of May 31, 2018 and August 31, 2017 . The steel mill’s electric arc furnace generates dust (“EAF dust”) that is classified as hazardous waste by the EPA because of its zinc and lead content. As a result, the Company captures the EAF dust and ships it in specialized rail cars to firms that apply treatments that allow for the ultimate disposal of the EAF dust. The Company’s steel mill has an operating permit issued under Title V of the Clean Air Act Amendments of 1990, which governs certain air quality standards. The permit is based on an annual production capacity of 950 thousand tons. The Company’s permit was first issued in 1998 and renewed through February 1, 2018. The permit renewal process occurs every five years and is underway for the next renewal period, however, the existing permit is extended by administrative rule until the current renewal process is finalized. Summary - Environmental Contingencies Other than the Portland Harbor Superfund site and legacy environmental loss contingencies, which are discussed separately above, management currently believes that adequate provision has been made for the potential impact of these issues and that the ultimate outcomes will not have a material adverse effect on the Company’s consolidated financial statements as a whole. Historically, the amounts the Company has ultimately paid for such remediation activities have not been material in any given period. Contingencies - Other Schnitzer Southeast, LLC (a wholly-owned subsidiary of the Company, “SSE”), an SSE employee, the Company and one of the Company’s insurance carriers are named as defendants in five separate wrongful death lawsuits filed in the State of Georgia arising from an accident in 2016 involving a tractor trailer driven by the SSE employee and owned by SSE. Plaintiffs are seeking compensatory and punitive damages, which are unspecified at this stage of the proceedings. These cases are consolidated for discovery purposes but not for trial. On March 1, 2018, a trial date of October 22, 2018 was set in one of the cases. The Company is currently unable to reasonably estimate a range of loss that may be incurred in connection with these cases because a number of key issues remain uncertain. It is reasonably possible that the Company may recognize losses in connection with these lawsuits at the time such losses are probable and can be reasonably estimated. Such losses may be material to the Company’s consolidated financial statements. To the extent that circumstances change and the Company determines that a loss is reasonably possible, can be reasonably estimated, and is material, the Company would then disclose an estimate of the possible loss or range of loss. The Company believes that such losses, if incurred, would be substantially covered by existing insurance coverage. The Company is a party to various legal proceedings arising in the normal course of business. The Company recognizes a liability for such matters when the loss is probable and can be reasonably estimated. The Company does not anticipate that the resolution of legal proceedings arising in the normal course of business, after taking into consideration expected insurance recoveries, will have a material adverse effect on its results of operations, financial condition, or cash flows. |
Restructuring Charges and Other
Restructuring Charges and Other Exit-Related Activities | 9 Months Ended |
May 31, 2018 | |
Restructuring Charges, Asset Impairment and Accelerated Depreciation [Abstract] | |
Restructuring Charges and Other Exit-Related Activities | Restructuring Charges and Other Exit-Related Activities Restructuring charges primarily relate to initiatives announced in fiscal 2015 and expanded in subsequent periods. Charges related to these initiatives were substantially complete by the end of fiscal 2017. However, the Company incurred and may continue to incur additional restructuring charges primarily as a result of remeasuring lease contract termination liabilities to reflect changes in contractual lease rentals and estimated sublease rentals. In addition to the restructuring charges recorded related to these initiatives, the Company recognized a net gain from other exit related activities of less than $1 million during the nine months ended May 31, 2017 , primarily related to a gain recorded in the second quarter of fiscal 2017 in connection with the disposition of business assets upon the elimination of a metals recycling feeder yard operation. |
Changes in Equity
Changes in Equity | 9 Months Ended |
May 31, 2018 | |
Stockholders' Equity Note [Abstract] | |
Changes in Equity | Changes in Equity Changes in equity comprise the following (in thousands): Nine Months Ended May 31, 2018 Nine Months Ended May 31, 2017 SSI Shareholders’ Noncontrolling Interests Total Equity SSI Shareholders’ Noncontrolling Interests Total Equity Balance - September 1 (Beginning of period) $ 533,586 $ 3,907 $ 537,493 $ 497,721 $ 3,711 $ 501,432 Net income 96,781 2,806 99,587 26,276 1,967 28,243 Other comprehensive loss, net of tax (1,976 ) — (1,976 ) (1,207 ) — (1,207 ) Reclassification of stranded tax effects of the Tax Act 517 — 517 — — — Distributions to noncontrolling interests — (1,709 ) (1,709 ) — (1,177 ) (1,177 ) Share repurchases (8,778 ) — (8,778 ) — — — Restricted stock withheld for taxes (3,030 ) — (3,030 ) (3,300 ) — (3,300 ) Share-based compensation 13,815 — 13,815 9,182 — 9,182 Purchase of noncontrolling interest (183 ) (417 ) (600 ) — — — Dividends (15,757 ) — (15,757 ) (15,615 ) — (15,615 ) Balance - May 31 (End of period) $ 614,975 $ 4,587 $ 619,562 $ 513,057 $ 4,501 $ 517,558 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 9 Months Ended |
May 31, 2018 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss Changes in accumulated other comprehensive loss, net of tax, comprise the following (in thousands): Three Months Ended May 31, 2018 Three Months Ended May 31, 2017 Foreign Currency Translation Adjustments Pension Obligations, Net Total Foreign Currency Translation Adjustments Pension Obligations, Net Total Balances - March 1 (Beginning of period) $ (33,420 ) $ (3,609 ) $ (37,029 ) $ (35,333 ) $ (5,561 ) $ (40,894 ) Other comprehensive loss before reclassifications (414 ) — (414 ) (694 ) — (694 ) Income tax (expense) benefit — — — — — — Other comprehensive loss before reclassifications, net of tax (414 ) — (414 ) (694 ) — (694 ) Amounts reclassified from accumulated other comprehensive loss — 225 225 — 420 420 Income tax benefit — (51 ) (51 ) — (154 ) (154 ) Amounts reclassified from accumulated other comprehensive loss, net of tax — 174 174 — 266 266 Net periodic other comprehensive income (loss) (414 ) 174 (240 ) (694 ) 266 (428 ) Balances - May 31 (End of period) $ (33,834 ) $ (3,435 ) $ (37,269 ) $ (36,027 ) $ (5,295 ) $ (41,322 ) Nine Months Ended May 31, 2018 Nine Months Ended May 31, 2017 Foreign Currency Translation Adjustments Pension Obligations, Net Total Foreign Currency Translation Adjustments Pension Obligations, Net Total Balances - September 1 (Beginning of period) $ (31,828 ) $ (3,465 ) $ (35,293 ) $ (34,539 ) $ (5,576 ) $ (40,115 ) Other comprehensive income (loss) before reclassifications (2,006 ) (185 ) (2,191 ) (1,488 ) 49 (1,439 ) Income tax (expense) benefit — 227 227 — (194 ) (194 ) Other comprehensive income (loss) before reclassifications, net of tax (2,006 ) 42 (1,964 ) (1,488 ) (145 ) (1,633 ) Amounts reclassified from accumulated other comprehensive loss — 365 365 — 670 670 Income tax benefit — (377 ) (377 ) — (244 ) (244 ) Amounts reclassified from accumulated other comprehensive loss, net of tax — (12 ) (12 ) — 426 426 Net periodic other comprehensive income (loss) (2,006 ) 30 (1,976 ) (1,488 ) 281 (1,207 ) Balances - May 31 (End of period) $ (33,834 ) $ (3,435 ) $ (37,269 ) $ (36,027 ) $ (5,295 ) $ (41,322 ) In the second quarter of fiscal 2018, the Company adopted an accounting standard update that allowed for a reclassification from accumulated other comprehensive income (“AOCI”) to retained earnings for stranded tax effects resulting from the Tax Act enacted on December 22, 2017. Reclassifications from AOCI to retained earnings for stranded tax effects in the second quarter of fiscal 2018, both individually and in the aggregate, were not material. Reclassifications from AOCI to earnings, both individually and in the aggregate, were not material to the impacted captions in the Unaudited Condensed Consolidated Statements of Income for all periods presented. |
Share-Based Compensation
Share-Based Compensation | 9 Months Ended |
May 31, 2018 | |
Share-based Compensation [Abstract] | |
Share-based Compensation | Share-Based Compensation In the first quarter of fiscal 2018, as part of the annual awards under the Company’s Long-Term Incentive Plan, the Compensation Committee of the Company’s Board of Directors (“Compensation Committee”) granted 252,865 restricted stock units (“RSUs”) and 246,161 performance share awards to the Company’s key employees and officers under the Company’s 1993 Amended and Restated Stock Incentive Plan (“SIP”). The RSUs have a five -year term and vest 20% per year commencing October 31, 2018. The aggregate fair value of all of the RSUs granted was based on the market closing price of the underlying Class A common stock on the grant date and totaled $7 million . The compensation expense associated with the RSUs is recognized over the requisite service period of the awards, net of forfeitures. The performance share awards comprise two separate and distinct awards with different vesting conditions. The Compensation Committee granted 119,763 performance share awards based on a relative Total Shareholder Return (“TSR”) metric over a performance period spanning November 14, 2017 to August 31, 2020. Award share payouts range from a threshold of 50% to a maximum of 200% based on the relative ranking of the Company’s TSR among a designated peer group of 16 companies. The TSR award stipulates certain limitations to the payout in the event the payout reaches a defined ceiling level or the Company’s TSR is negative. The TSR awards contain a market condition and, therefore, once the award recipients complete the requisite service period, the related compensation expense based on the grant-date fair value is not changed, regardless of whether the market condition has been satisfied. The estimated fair value of the TSR awards at the date of grant was $3 million . The Company estimated the fair value of the TSR awards using a Monte-Carlo simulation model utilizing several key assumptions including expected Company and peer company share price volatility, correlation coefficients between peers, the risk-free rate of return, the expected dividend yield and other award design features. The remaining 126,398 performance share awards have a three -year performance period consisting of the Company’s 2018, 2019 and 2020 fiscal years. The performance targets are based on the Company’s return on capital employed over the three -year performance period, with award payouts ranging from a threshold of 50% to a maximum of 200% . The fair value of the awards granted was based on the market closing price of the underlying Class A common stock on the grant date and totaled $3 million . The compensation expense associated with performance share awards is recognized over the requisite service period, net of forfeitures. Performance share awards will be paid in Class A common stock as soon as practicable after the end of the requisite service period and vesting date of October 31, 2020. In the second quarter of fiscal 2018 , the Company granted deferred stock units (“DSUs”) to each of its non-employee directors under the Company’s SIP. Each DSU gives the director the right to receive one share of Class A common stock at a future date. The grant included an aggregate of 20,748 shares that will vest in full on the day before the Company’s 2019 annual meeting of shareholders, subject to continued Board service. The total value of these awards at the grant date was $1 million . |
Income Taxes
Income Taxes | 9 Months Ended |
May 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Tax Cuts and Jobs Act and SEC Staff Accounting Bulletin 118 On December 22, 2017, the President of the United States signed and enacted into law comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (“Tax Act”), which, except for certain provisions, is effective for tax years beginning on or after January 1, 2018. The Tax Act’s primary change is a reduction in the federal statutory corporate tax rate from 35% to 21% , resulting in a pro rata reduction for the Company from 35% to 25.7% for fiscal 2018. Other pertinent changes in the Tax Act effective for fiscal 2018 include, but are not limited to, acceleration of deductions for qualified property placed in service after September 27, 2017. In addition, effective for the Company’s fiscal 2019 year, the Tax Act also limits the deductibility of some executive compensation and eliminates the deduction for qualified domestic production activities. Changes in the Tax Act not significantly impacting the Company upon enactment include implementation of a modified territorial tax system and other modifications to how foreign earnings are subject to U.S. tax. As a change in tax law is accounted for in the period of enactment, the Company recognized a discrete benefit of $7 million in the second quarter of fiscal 2018 due to the revaluation of U.S. net deferred tax liabilities to reflect the lower statutory rate. The Company’s effective tax rate in the third quarter and first nine months of fiscal 2018 also reflects application of the Tax Act’s lower federal statutory corporate tax rate to fiscal 2018 projected taxable income. On December 22, 2017, the Securities and Exchange Commission issued Staff Accounting Bulletin 118 (“SAB 118”), which provides guidance on accounting for the impacts of the Tax Act. SAB 118 provides a measurement period, not to exceed one year from the Tax Act enactment date, for companies to complete the accounting under Accounting Standards Codification Topic 740, Income Taxes (“ASC 740”) . In accordance with SAB 118, a company must reflect the income tax effects of those aspects of the Tax Act for which the accounting under ASC 740 is complete. To the extent that a company’s accounting for certain income tax effects of the Tax Act is incomplete, but it is able to determine a reasonable estimate, it must record a provisional estimate in the financial statements. Provisional estimates are subject to adjustment during the measurement period until the accounting is complete. If a company cannot determine a provisional estimate to be included in the financial statements, it must continue to apply ASC 740 on the basis of the provisions of the tax laws that were in effect immediately before the enactment of the Tax Act. The Company’s accounting for the impacts of the Tax Act is incomplete, and the recorded amounts discussed above in this Note are provisional estimates as of May 31, 2018 . While the Company was able to reasonably estimate the impact of the reduction in the corporate rate on its U.S. net deferred tax liabilities, it may be affected by other analyses related to the Tax Act including, but not limited to, changes in the underlying accounts to which the respective deferred tax assets and liabilities relate and the state tax effects of adjustments made to federal temporary differences. The provisional benefit resulting from application of the Tax Act’s lower corporate tax rate to fiscal 2018 projected taxable income reflects reasonable estimates of the Company’s fiscal 2018 pre-tax income and effects of the Tax Act. These reasonable estimates include, but are not limited to, the amount of capital expenditures for qualified property that will be placed in service as of the end of fiscal 2018. The Company has not recorded any material adjustments to the provisional amounts recorded in the second quarter of fiscal 2018 related to the Tax Act. Valuation Allowances The Company assesses the realizability of its deferred tax assets on a quarterly basis through an analysis of potential sources of future taxable income, including prior year taxable income available to absorb a carryback of tax losses, reversals of existing taxable temporary differences, tax planning strategies, and forecasts of taxable income. The Company considers all negative and positive evidence, including the weight of the evidence, to determine if valuation allowances against deferred tax assets are required. In the second quarter of fiscal 2018, the Company released valuation allowances against certain U.S. and state deferred tax assets resulting in a discrete tax benefit of $7 million . The release of these valuation allowances was the result of sufficient positive evidence at the time, including cumulative income in recent years and projections of future taxable income based primarily on the Company’s improved financial performance, that it is more-likely-than-not that the deferred tax assets will be realized. The Company continues to maintain valuation allowances against certain U.S. and state and all Canadian and Puerto Rican deferred tax assets. Effective Tax Rate The effective tax rate from continuing operations for the third quarter and first nine months of fiscal 2018 was an expense of 21.7% and 5.7% , respectively, compared to 0.9% and 2.5% , respectively, for the comparable prior year periods. The effective tax rate from continuing operations for the third quarter and first nine months of fiscal 2018 was lower than the federal statutory rate of 25.7% primarily due to the lower projected annual effective tax rate applied to quarterly results and the discrete benefits recorded in the second quarter of fiscal 2018 resulting from enactment of the Tax Act and release of valuation allowances against certain deferred tax assets. The effective tax rate from continuing operations for the third quarter and first nine months of fiscal 2017 was lower than the federal statutory rate at the time of 35% primarily due to the lower projected annual effective tax rate applied to the quarterly results. The low projected annual effective tax rate in the third quarter and first nine months of fiscal 2017 was the result of the Company’s full valuation allowance positions partially offset by increases in deferred tax liabilities from indefinite-lived assets in all jurisdictions. The Company files federal and state income tax returns in the U.S. and foreign tax returns in Puerto Rico and Canada. For U.S. federal income tax returns, fiscal years 2013 to 2017 remain subject to examination under the statute of limitations. |
Net Income Per Share
Net Income Per Share | 9 Months Ended |
May 31, 2018 | |
Earnings Per Share [Abstract] | |
Net Income Per Share | Net Income Per Share The following table sets forth the information used to compute basic and diluted net income per share attributable to SSI (in thousands): Three Months Ended May 31, Nine Months Ended May 31, 2018 2017 2018 2017 Income from continuing operations $ 38,504 $ 17,379 $ 99,515 $ 28,518 Net income attributable to noncontrolling interests (1,046 ) (687 ) (2,806 ) (1,967 ) Income from continuing operations attributable to SSI 37,458 16,692 96,709 26,551 Income (loss) from discontinued operations, net of tax (56 ) (127 ) 72 (275 ) Net income attributable to SSI $ 37,402 $ 16,565 $ 96,781 $ 26,276 Computation of shares: Weighted average common shares outstanding, basic 27,676 27,601 27,719 27,499 Incremental common shares attributable to dilutive performance share, RSU and DSU awards 960 102 927 193 Weighted average common shares outstanding, diluted 28,636 27,703 28,646 27,692 Common stock equivalent shares of 375,653 and 309,476 were considered antidilutive and were excluded from the calculation of diluted net income per share for the three and nine months ended May 31, 2017 , respectively. No common stock equivalent shares were considered antidilutive for the three and nine months ended May 31, 2018 . |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
May 31, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions The Company purchases recycled metal from its joint venture operations at prices that approximate fair market value. These purchases totaled $5 million for each of the three months ended May 31, 2018 and 2017 , and $12 million and $11 million for the nine months ended May 31, 2018 and 2017 , respectively. |
Segment Information
Segment Information | 9 Months Ended |
May 31, 2018 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information The accounting standards for reporting information about operating segments define an operating segment as a component of an enterprise that engages in business activities from which it may earn revenues and incur expenses for which discrete financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. Prior to the fourth quarter of fiscal 2017, the Company’s internal organizational and reporting structure supported two operating and reportable segments: the Auto and Metals Recycling (“AMR”) business and the Steel Manufacturing Business (“SMB”). In the fourth quarter of fiscal 2017, in accordance with its plan announced in June 2017, the Company modified its internal organizational and reporting structure to combine its steel manufacturing operations, which had been reported as the SMB segment, with its Oregon metals recycling operations, which had been reported within the AMR segment, forming a new division named Cascade Steel and Scrap (“CSS”). This resulted in a realignment of how the Chief Executive Officer, who is considered the Company’s chief operating decision maker, reviews performance and makes decisions on resource allocation. The Company began reporting under this new segment structure in the fourth quarter of fiscal 2017 as reflected in its Annual Report on Form 10-K for the year ended August 31, 2017. The segment data for the comparable periods presented herein have been recast to conform to the current period presentation for all activities of the reorganized segments. Recasting this historical information did not have an impact on the Company’s consolidated financial performance for any of the periods presented. AMR buys and processes ferrous and nonferrous scrap metal for sale to foreign and domestic steel producers or their representatives and procures salvaged vehicles and sells serviceable used auto parts from these vehicles through a network of self-service auto parts stores. These auto parts stores also supply the Company’s shredding facilities with autobodies that are processed into saleable recycled scrap metal. CSS operates a steel mini-mill that produces a range of finished steel long products using recycled scrap metal and other raw materials. CSS’s steel mill obtains substantially all of its recycled scrap metal raw material requirements from its integrated metals recycling and joint venture operations. CSS’s metals recycling operations also sell recycled metal to external customers primarily in export markets. The Company holds noncontrolling ownership interests in joint ventures, which are either in the metals recycling business or are suppliers of unprocessed metal. The Company’s allocable portion of the results of these joint ventures is reported within the segment results. Three of the joint venture interests are presented as part of AMR operations, and one interest is presented as part of CSS operations. The joint ventures sell recycled scrap metal to AMR and to CSS at prices that approximate local market rates, which produces intercompany profit. This intercompany profit is eliminated while the products remain in inventory and is not recognized until the finished products are sold to third parties. Intersegment sales from AMR to CSS are made at prices that approximate local market rates. These intercompany sales tend to produce intercompany profits which are not recognized until the finished products are ultimately sold to third parties. The information provided below is obtained from internal information that is provided to the Company’s chief operating decision maker for the purpose of corporate management. The Company uses segment operating income to measure segment performance. The Company does not allocate corporate interest income and expense, income taxes and other income and expense to its reportable segments. Certain expenses related to shared services that support operational activities and transactions are allocated from Corporate to the segments. Unallocated Corporate expense consists primarily of expense for management and certain administrative services that benefit both reportable segments. In addition, the Company does not allocate certain items to the segment operating income because management does not include the information in its measurement of the performance of the operating segments. Such unallocated items include restructuring charges and other exit-related activities, charges related to certain legacy environmental liabilities, and provisions for certain legal matters. Because of the unallocated income and expense, the operating income of each reportable segment does not reflect the operating income the reportable segment would report as a stand-alone business. The results of discontinued operations are excluded from segment operating income and are presented separately, net of tax, from the results of ongoing operations for all periods presented. The table below illustrates the Company’s revenues from continuing operations by reportable segment (in thousands): Three Months Ended May 31, Nine Months Ended May 31, 2018 2017 2018 2017 Revenues: Auto and Metals Recycling: Revenues $ 529,611 $ 385,396 $ 1,377,450 $ 970,311 Less: Intersegment revenues (7,271 ) (4,533 ) (19,086 ) (11,349 ) AMR external customer revenues 522,340 380,863 1,358,364 958,962 Cascade Steel and Scrap: Revenues 130,076 96,225 336,774 234,371 Total revenues $ 652,416 $ 477,088 $ 1,695,138 $ 1,193,333 The table below illustrates the reconciliation of the Company’s segment operating income to income from continuing operations before income taxes (in thousands): Three Months Ended May 31, Nine Months Ended May 31, 2018 2017 2018 2017 Auto and Metals Recycling $ 54,980 $ 29,520 $ 135,284 $ 67,414 Cascade Steel and Scrap 10,793 1,163 24,682 (2,744 ) Segment operating income 65,773 30,683 159,966 64,670 Restructuring charges and other exit-related activities (70 ) (93 ) (261 ) 200 Corporate and eliminations (14,469 ) (11,443 ) (48,690 ) (30,965 ) Operating income 51,234 19,147 111,015 33,905 Interest expense (2,483 ) (2,131 ) (6,823 ) (5,969 ) Other income, net 403 524 1,353 1,318 Income from continuing operations before income taxes $ 49,154 $ 17,540 $ 105,545 $ 29,254 The following is a summary of the Company’s total assets by reportable segment (in thousands): May 31, 2018 August 31, 2017 Auto and Metals Recycling (1) $ 1,449,838 $ 1,298,757 Cascade Steel and Scrap (1) 725,081 696,269 Total segment assets 2,174,919 1,995,026 Corporate and eliminations (2) (1,097,649 ) (1,061,271 ) Total assets $ 1,077,270 $ 933,755 _____________________________ (1) AMR total assets included $4 million and $5 million for investments in joint ventures as of May 31, 2018 and August 31, 2017 , respectively. CSS total assets included $7 million for investments in joint ventures as of May 31, 2018 and August 31, 2017 . (2) The substantial majority of Corporate and eliminations total assets are composed of Corporate intercompany payables to the Company’s operating segments and intercompany eliminations. |
Summary of Significant Accoun20
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
May 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying Unaudited Condensed Consolidated Financial Statements of Schnitzer Steel Industries, Inc. (the “Company”) have been prepared pursuant to generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information and the rules and regulations of the United States Securities and Exchange Commission (the “SEC”) for Form 10-Q, including Article 10 of Regulation S-X. The year-end condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP. Certain information and note disclosures normally included in annual financial statements have been condensed or omitted pursuant to the rules and regulations of the SEC. In the opinion of management, all normal, recurring adjustments considered necessary for a fair statement have been included. Management suggests that these Unaudited Condensed Consolidated Financial Statements be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended August 31, 2017 . The results for the three and nine months ended May 31, 2018 and 2017 are not necessarily indicative of the results of operations for the entire fiscal year. |
Accounting Changes | Accounting Changes In July 2015, an accounting standards update was issued that requires an entity to measure certain types of inventory, including inventory that is measured using the first-in, first out (“FIFO”) or average cost method, at the lower of cost and net realizable value. The accounting standard in effect at the time of issuance of the update required an entity to measure inventory at the lower of cost or market, whereby market could be replacement cost, net realizable value, or net realizable value less an approximately normal profit margin. The amendments do not apply to inventory that is measured using the last-in, first-out (“LIFO”) or retail inventory method. The Company adopted the new requirement, which is to be applied prospectively, as of the beginning of the first quarter of fiscal 2018 with no impact to the Unaudited Condensed Consolidated Financial Statements. In March 2016, an accounting standards update was issued that amends several aspects of the accounting for share-based payments, including accounting for income taxes, forfeitures and statutory tax withholding requirements, and classification within the statement of cash flows. The Company adopted the new requirements as of the beginning of the first quarter of fiscal 2018 with no impact to the Unaudited Condensed Consolidated Financial Statements, including no cumulative-effect adjustments to retained earnings, as of the date of adoption. On a prospective basis beginning with the date of adoption, the Company records all of the tax effects related to share-based payments through the income statement, subject to normal valuation allowance considerations, and all tax-related cash flows resulting from share-based payments are reported as operating activities in the statement of cash flows. Cash payments to taxing authorities made on behalf of Company employees for withheld shares are reported as financing activities in the statement of cash flows, consistent with the Company’s practice prior to adopting the new requirements. The Company has elected to continue the practice of estimating the forfeiture rate for the purpose of recognizing estimated compensation cost over the requisite service period. In February 2018, an accounting standards update was issued that allows for a reclassification from accumulated other comprehensive income (“AOCI”) to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act (“Tax Act”) enacted on December 22, 2017. Stranded tax effects result from adjusting deferred tax liabilities and assets for the effect of a change in tax laws or rates to income from continuing operations, as required under existing accounting guidance, even in situations in which the adjustments relate to income tax effects reported within AOCI. If an entity elects to reclassify the stranded tax effects of the Tax Act, the amount of that reclassification shall include the effect of the change in the U.S. federal corporate income tax rate on the gross deferred tax amounts and related valuation allowances, if any, at the date of enactment of the Tax Act related to items remaining in AOCI, and other income tax effects of the Tax Act on items remaining in AOCI that an entity elects to reclassify. The Company early-adopted the foregoing accounting standard update in the second quarter of fiscal 2018 and elected to reclassify to retained earnings the effect of the change in the U.S. federal corporate income tax rate on items remaining in AOCI at the date of enactment of the Tax Act. The resulting aggregate reclassification from AOCI to retained earnings recorded in the second quarter of fiscal 2018 was $1 million . See Note 7 - Changes in Equity and Note 8 - Accumulated Other Comprehensive Loss for further detail. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include short-term securities that are not restricted by third parties and have an original maturity date of 90 days or less. Included in accounts payable are book overdrafts representing outstanding checks in excess of funds on deposit of $29 million and $21 million as of May 31, 2018 and August 31, 2017 , respectively. |
Assets Held for Sale | Assets Held for Sale During the third quarter of fiscal 2017, the Company sold equipment assets that had been classified as held for sale prior to being fully impaired in fiscal 2015. The Company recorded a gain on the sale of $1 million , which is reported within other asset impairment charges (recoveries), net in the Unaudited Condensed Consolidated Statements of Income. |
Investments in Joint Ventures | Investments in Joint Ventures During the nine months ended May 31, 2017, one of the Company’s joint venture interests sold real estate resulting in recognition of a $6 million gain by the joint venture, $3 million of which was attributable to the Company’s investment. The Company’s share of the gain is reported within (income) from joint ventures in the Unaudited Condensed Consolidated Statements of Income for the nine months ended May 31, 2017. |
Cost Method Investment | Cost Method Investment During the nine months ended May 31, 2017, the Company invested $6 million in a privately-held waste and recycling entity. The Company’s influence over the operating and financial policies of the entity is not significant and, thus, the investment is accounted for under the cost method. Under the cost method, the investment is carried at cost and adjusted only for other-than-temporary impairments, certain distributions and additional investments. The investment is presented as part of the Auto and Metals Recycling (“AMR”) reportable segment and reported within other assets in the Unaudited Condensed Consolidated Balance Sheets. The Company does not hold any other cost-method investments. The carrying value of the investment was $6 million as of May 31, 2018 and August 31, 2017 . As of May 31, 2018 , the Company had not identified any events or changes in circumstances that may have a significant adverse effect on the fair value of the investment or indicators of other-than-temporary impairment. |
Long-Lived Assets | Long-Lived Assets Changes in circumstances may merit a change in the estimated useful lives or salvage values of individual long-lived assets, which are accounted for prospectively in the period of change. For such assets, the useful life is shortened based on the Company’s plans to dispose of or abandon the asset before the end of its original useful life and depreciation is accelerated beginning when that determination is made. During the nine months ended May 31, 2018 and 2017 , the Company recognized accelerated depreciation of $1 million and less than $1 million , respectively, due to shortening the useful lives of decommissioned machinery and equipment assets in the Cascade Steel and Scrap (“CSS”) reportable segment, which are reported within other asset impairment charges (recoveries), net in the Unaudited Condensed Consolidated Statements of Income. Also, during the three and nine months ended May 31, 2018 , the Company sold previously impaired assets consisting primarily of machinery and equipment, recognizing a gain of $2 million and $3 million , respectively, which are reported within other asset impairment charges (recoveries), net in the Unaudited Condensed Consolidated Statements of Income. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to significant concentration of credit risk consist primarily of cash and cash equivalents, accounts receivable, and notes and other contractual receivables from suppliers. The majority of cash and cash equivalents is maintained with major financial institutions. Balances with these and certain other institutions exceeded the Federal Deposit Insurance Corporation insured amount of $250,000 as of May 31, 2018 . Concentration of credit risk with respect to accounts receivable is limited because a large number of geographically diverse customers make up the Company’s customer base. The Company controls credit risk through credit approvals, limits, insurance, letters of credit or other collateral, cash deposits and monitoring procedures. The Company is exposed to a residual credit risk with respect to open letters of credit by virtue of the possibility of the failure of a bank providing a letter of credit. The Company had $81 million and $48 million of open letters of credit as of May 31, 2018 and August 31, 2017 , respectively. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, an accounting standards update was issued that clarifies the principles for recognizing revenue from contracts with customers. The update supersedes the existing standard for recognizing revenue. Additional updates have been issued since May 2014 amending aspects of the initial update and providing implementation guidance. The guidance is applicable to all contracts with customers regardless of industry-specific or transaction-specific fact patterns. Further, the guidance requires improved disclosures to help users of financial statements better understand the nature, amount, timing, and uncertainty of revenue that is recognized. The standard is effective for the Company beginning in fiscal 2019, including interim periods within that fiscal year. The Company plans to adopt the standard using the modified retrospective approach with the cumulative effect of the initial application, if any, recognized as an adjustment to the opening balance of retained earnings. The Company has nearly completed the examination of its current revenue streams and significant contracts with customers under the requirements of the new standard and, based on the progress of this examination to date, does not believe the standard will have a material impact on its financial position, net income or cash flows. The Company has not identified any significant changes to its processes, systems and internal controls required to support the new standard. The Company has identified certain scrap metal purchase and sale arrangements for which it currently recognizes revenue for the gross amount of consideration it expects to be entitled from the customer (as principal), but for which under the new revenue standard it recognizes revenue as the net amount of consideration that it expects to retain after paying the scrap metal supplier (as agent). This change in the classification of the cost of scrap metal purchased under such arrangements will have the effect of reducing the amount of revenues reported in the financial statements, while having no impact on net income. Based on analysis performed to date and recent historical levels of such scrap metal purchase and sale arrangements, the Company estimates the decrease in its annual revenues as a result of implementing this change in fiscal 2019 will be between $30 million and $40 million with no impact on net income. In January 2016, an accounting standards update was issued that amends certain aspects of the reporting model for financial instruments. Most prominent among the amendments is the requirement for equity investments, with certain exceptions including those accounted for under the equity method of accounting, to be measured at fair value with changes in fair value recognized in net income. An entity may choose to measure equity investments that do not have readily determinable fair values, such as certain cost method investments, at cost minus impairment, plus or minus changes resulting from observable price changes. The amendments also require a qualitative assessment to identify impairment of equity investments without readily determinable fair values. The standard is effective for the Company beginning in fiscal 2019, including interim periods within that fiscal year. The Company is evaluating the impact of adopting this standard on its consolidated financial position, results of operations and cash flows. In February 2016, an accounting standard was issued that will supersede the existing lease standard and require a lessee to recognize a lease liability and a lease asset on its balance sheet for all leases, including those classified as operating leases under the existing lease standard. The update also expands the required quantitative and qualitative disclosures surrounding leases. This standard is effective for the Company beginning in fiscal 2020, including interim periods within that fiscal year. This standard will be applied using a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The Company is in the process of identifying its population of leases within the scope of the new accounting standard and documenting salient lease terms to support the initial and subsequent measurement of lease liabilities and lease assets. The Company is evaluating the impact of adopting this standard on its financial position, results of operations, cash flows and disclosures. |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
May 31, 2018 | |
Inventory, Net [Abstract] | |
Inventories | Inventories consisted of the following (in thousands): May 31, 2018 August 31, 2017 Processed and unprocessed scrap metal $ 140,045 $ 88,441 Semi-finished goods 15,146 3,243 Finished goods 43,164 40,462 Supplies 36,082 34,796 Inventories $ 234,437 $ 166,942 |
Goodwill (Tables)
Goodwill (Tables) | 9 Months Ended |
May 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The gross change in the carrying amount of goodwill for the nine months ended May 31, 2018 was as follows (in thousands): Goodwill August 31, 2017 $ 167,835 Acquisition 1,118 Foreign currency translation adjustment (759 ) May 31, 2018 $ 168,194 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
May 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule Of Reserves For Environmental Liabilities | Changes in the Company’s environmental liabilities for the nine months ended May 31, 2018 were as follows (in thousands): Balance as of August 31, 2017 Liabilities Established (Released), Net Payments and Other Balance as of May 31, 2018 Short-Term Long-Term $ 48,398 $ 7,766 $ (2,731 ) $ 53,433 $ 6,684 $ 46,749 |
Changes in Equity (Tables)
Changes in Equity (Tables) | 9 Months Ended |
May 31, 2018 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Stockholders' Equity | Changes in equity comprise the following (in thousands): Nine Months Ended May 31, 2018 Nine Months Ended May 31, 2017 SSI Shareholders’ Noncontrolling Interests Total Equity SSI Shareholders’ Noncontrolling Interests Total Equity Balance - September 1 (Beginning of period) $ 533,586 $ 3,907 $ 537,493 $ 497,721 $ 3,711 $ 501,432 Net income 96,781 2,806 99,587 26,276 1,967 28,243 Other comprehensive loss, net of tax (1,976 ) — (1,976 ) (1,207 ) — (1,207 ) Reclassification of stranded tax effects of the Tax Act 517 — 517 — — — Distributions to noncontrolling interests — (1,709 ) (1,709 ) — (1,177 ) (1,177 ) Share repurchases (8,778 ) — (8,778 ) — — — Restricted stock withheld for taxes (3,030 ) — (3,030 ) (3,300 ) — (3,300 ) Share-based compensation 13,815 — 13,815 9,182 — 9,182 Purchase of noncontrolling interest (183 ) (417 ) (600 ) — — — Dividends (15,757 ) — (15,757 ) (15,615 ) — (15,615 ) Balance - May 31 (End of period) $ 614,975 $ 4,587 $ 619,562 $ 513,057 $ 4,501 $ 517,558 |
Accumulated Other Comprehensi25
Accumulated Other Comprehensive Loss (Tables) | 9 Months Ended |
May 31, 2018 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of Accumulated Other Comprehensive Loss | Changes in accumulated other comprehensive loss, net of tax, comprise the following (in thousands): Three Months Ended May 31, 2018 Three Months Ended May 31, 2017 Foreign Currency Translation Adjustments Pension Obligations, Net Total Foreign Currency Translation Adjustments Pension Obligations, Net Total Balances - March 1 (Beginning of period) $ (33,420 ) $ (3,609 ) $ (37,029 ) $ (35,333 ) $ (5,561 ) $ (40,894 ) Other comprehensive loss before reclassifications (414 ) — (414 ) (694 ) — (694 ) Income tax (expense) benefit — — — — — — Other comprehensive loss before reclassifications, net of tax (414 ) — (414 ) (694 ) — (694 ) Amounts reclassified from accumulated other comprehensive loss — 225 225 — 420 420 Income tax benefit — (51 ) (51 ) — (154 ) (154 ) Amounts reclassified from accumulated other comprehensive loss, net of tax — 174 174 — 266 266 Net periodic other comprehensive income (loss) (414 ) 174 (240 ) (694 ) 266 (428 ) Balances - May 31 (End of period) $ (33,834 ) $ (3,435 ) $ (37,269 ) $ (36,027 ) $ (5,295 ) $ (41,322 ) Nine Months Ended May 31, 2018 Nine Months Ended May 31, 2017 Foreign Currency Translation Adjustments Pension Obligations, Net Total Foreign Currency Translation Adjustments Pension Obligations, Net Total Balances - September 1 (Beginning of period) $ (31,828 ) $ (3,465 ) $ (35,293 ) $ (34,539 ) $ (5,576 ) $ (40,115 ) Other comprehensive income (loss) before reclassifications (2,006 ) (185 ) (2,191 ) (1,488 ) 49 (1,439 ) Income tax (expense) benefit — 227 227 — (194 ) (194 ) Other comprehensive income (loss) before reclassifications, net of tax (2,006 ) 42 (1,964 ) (1,488 ) (145 ) (1,633 ) Amounts reclassified from accumulated other comprehensive loss — 365 365 — 670 670 Income tax benefit — (377 ) (377 ) — (244 ) (244 ) Amounts reclassified from accumulated other comprehensive loss, net of tax — (12 ) (12 ) — 426 426 Net periodic other comprehensive income (loss) (2,006 ) 30 (1,976 ) (1,488 ) 281 (1,207 ) Balances - May 31 (End of period) $ (33,834 ) $ (3,435 ) $ (37,269 ) $ (36,027 ) $ (5,295 ) $ (41,322 ) |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 9 Months Ended |
May 31, 2018 | |
Earnings Per Share [Abstract] | |
Net Income Per Share | The following table sets forth the information used to compute basic and diluted net income per share attributable to SSI (in thousands): Three Months Ended May 31, Nine Months Ended May 31, 2018 2017 2018 2017 Income from continuing operations $ 38,504 $ 17,379 $ 99,515 $ 28,518 Net income attributable to noncontrolling interests (1,046 ) (687 ) (2,806 ) (1,967 ) Income from continuing operations attributable to SSI 37,458 16,692 96,709 26,551 Income (loss) from discontinued operations, net of tax (56 ) (127 ) 72 (275 ) Net income attributable to SSI $ 37,402 $ 16,565 $ 96,781 $ 26,276 Computation of shares: Weighted average common shares outstanding, basic 27,676 27,601 27,719 27,499 Incremental common shares attributable to dilutive performance share, RSU and DSU awards 960 102 927 193 Weighted average common shares outstanding, diluted 28,636 27,703 28,646 27,692 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
May 31, 2018 | |
Segment Reporting [Abstract] | |
Reconciliation of Revenue from Segments to Consolidated | The table below illustrates the Company’s revenues from continuing operations by reportable segment (in thousands): Three Months Ended May 31, Nine Months Ended May 31, 2018 2017 2018 2017 Revenues: Auto and Metals Recycling: Revenues $ 529,611 $ 385,396 $ 1,377,450 $ 970,311 Less: Intersegment revenues (7,271 ) (4,533 ) (19,086 ) (11,349 ) AMR external customer revenues 522,340 380,863 1,358,364 958,962 Cascade Steel and Scrap: Revenues 130,076 96,225 336,774 234,371 Total revenues $ 652,416 $ 477,088 $ 1,695,138 $ 1,193,333 |
Reconciliation of Operating Income from Segments to Consolidated | The table below illustrates the reconciliation of the Company’s segment operating income to income from continuing operations before income taxes (in thousands): Three Months Ended May 31, Nine Months Ended May 31, 2018 2017 2018 2017 Auto and Metals Recycling $ 54,980 $ 29,520 $ 135,284 $ 67,414 Cascade Steel and Scrap 10,793 1,163 24,682 (2,744 ) Segment operating income 65,773 30,683 159,966 64,670 Restructuring charges and other exit-related activities (70 ) (93 ) (261 ) 200 Corporate and eliminations (14,469 ) (11,443 ) (48,690 ) (30,965 ) Operating income 51,234 19,147 111,015 33,905 Interest expense (2,483 ) (2,131 ) (6,823 ) (5,969 ) Other income, net 403 524 1,353 1,318 Income from continuing operations before income taxes $ 49,154 $ 17,540 $ 105,545 $ 29,254 |
Reconciliation of Assets from Segment to Consolidated | The following is a summary of the Company’s total assets by reportable segment (in thousands): May 31, 2018 August 31, 2017 Auto and Metals Recycling (1) $ 1,449,838 $ 1,298,757 Cascade Steel and Scrap (1) 725,081 696,269 Total segment assets 2,174,919 1,995,026 Corporate and eliminations (2) (1,097,649 ) (1,061,271 ) Total assets $ 1,077,270 $ 933,755 _____________________________ (1) AMR total assets included $4 million and $5 million for investments in joint ventures as of May 31, 2018 and August 31, 2017 , respectively. CSS total assets included $7 million for investments in joint ventures as of May 31, 2018 and August 31, 2017 . (2) The substantial majority of Corporate and eliminations total assets are composed of Corporate intercompany payables to the Company’s operating segments and intercompany eliminations. |
Summary of Significant Accoun28
Summary of Significant Accounting Policies (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
May 31, 2018 | Feb. 28, 2018 | May 31, 2017 | May 31, 2018 | May 31, 2017 | Aug. 31, 2017 | |
Summary of Significant Accounting Policies | ||||||
Stranded tax effects reclassified from AOCI to Retained Earnings, effects of Tax Act | $ 1,000,000 | $ 517,000 | $ 0 | |||
Book Overdrafts | $ 29,000,000 | 29,000,000 | $ 21,000,000 | |||
Gain on Sale of Previously Impaired Assets | 2,000,000 | $ 1,000,000 | 3,000,000 | |||
Cost Method Investment, Original Cost | 6,000,000 | 6,000,000 | ||||
Cost Method Investment, Carrying Value | 6,000,000 | 6,000,000 | 6,000,000 | |||
Cash, FDIC Insured Amount | 250,000 | 250,000 | ||||
Customer Issued Letters Of Credit | $ 81,000,000 | 81,000,000 | $ 48,000,000 | |||
Cascade Steel and Scrap | ||||||
Summary of Significant Accounting Policies | ||||||
Accelerated Depreciation (less than $1 million for 2017) | $ 1,000,000 | 1,000,000 | ||||
Corporate Joint Venture | ||||||
Summary of Significant Accounting Policies | ||||||
Joint Venture, Gain on Disposition of Assets | 6,000,000 | |||||
Gain on Disposition of Assets from Joint Venture | $ 3,000,000 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | May 31, 2018 | Aug. 31, 2017 |
Inventory, Net [Abstract] | ||
Processed and unprocessed scrap metal | $ 140,045 | $ 88,441 |
Semi-finished goods | 15,146 | 3,243 |
Finished goods | 43,164 | 40,462 |
Supplies | 36,082 | 34,796 |
Inventories | $ 234,437 | $ 166,942 |
Goodwill Schedule of Goodwill (
Goodwill Schedule of Goodwill (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Feb. 28, 2018 | May 31, 2018 | |
Goodwill [Roll Forward] | ||
August 31, 2017 | $ 167,835 | |
May 31, 2018 | 168,194 | |
Auto and Metals Recycling | ||
Goodwill [Roll Forward] | ||
August 31, 2017 | 167,835 | |
Acquisition | $ 1,000 | 1,118 |
Foreign currency translation adjustment | (759) | |
May 31, 2018 | $ 168,194 |
Goodwill (Details)
Goodwill (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Feb. 28, 2018 | May 31, 2018 | Aug. 31, 2017 | |
Goodwill [Line Items] | |||
Goodwill, Impaired, Accumulated Impairment Loss | $ 471,000 | $ 471,000 | |
Auto and Metals Recycling | |||
Goodwill [Line Items] | |||
Business Combination, Consideration Transferred | $ 2,000 | ||
Goodwill, Acquired During Period | $ 1,000 | $ 1,118 |
Commitments and Contingencies S
Commitments and Contingencies Schedule of Environmental Liabilities (Details) - USD ($) $ in Thousands | 9 Months Ended | |
May 31, 2018 | Aug. 31, 2017 | |
Accrual for Environmental Loss Contingencies [Roll Forward] | ||
Beginning Balance | $ 48,398 | |
Liabilities Established (Released), Net | 7,766 | |
Payments and Other | (2,731) | |
Ending Balance | 53,433 | |
Short-Term | 6,684 | $ 2,007 |
Long-Term | $ 46,749 | $ 46,391 |
Commitments and Contingencies N
Commitments and Contingencies Narrative (Details) T in Thousands | Dec. 31, 2017potentially_responsible_party | Aug. 31, 2007USD ($) | Jan. 31, 2017USD ($) | Nov. 30, 2017USD ($) | May 31, 2018USD ($)potentially_responsible_partylawsuitT | Aug. 31, 2017USD ($) | Jan. 30, 2017party |
Loss Contingencies [Line Items] | |||||||
Accrual for Environmental Loss Contingencies | $ 53,433,000 | $ 48,398,000 | |||||
Parties Liable in Litigation | party | 30 | ||||||
Liabilities Established | 7,766,000 | ||||||
Portland Harbor Superfund Site | |||||||
Loss Contingencies [Line Items] | |||||||
Accrual for Environmental Loss Contingencies | $ 3,000,000 | ||||||
Number Of Potentially Responsible Parties Joining Allocation Process | potentially_responsible_party | 100 | ||||||
Number Of Other Potentially Responsible Parties Signing Settlement Agreement and Order on Consent | potentially_responsible_party | 3 | ||||||
Number of Years for Pre-Remedial Design | 2 years | ||||||
Liabilities Established | $ 2,000,000 | ||||||
Loss Contingency, Receivable (Period Receivable Recorded) | $ 2,000,000 | ||||||
Legacy Environmental Site 1 - Remediation of Shredder Residue | |||||||
Loss Contingencies [Line Items] | |||||||
Environmental Remediation Expense Accrued in the Period | $ 4,000,000 | ||||||
Other Auto and Metals Recycling Business Sites | |||||||
Loss Contingencies [Line Items] | |||||||
Accrual for Environmental Loss Contingencies | 53,000,000 | 48,000,000 | |||||
Legacy Environmental Site 2 - Remediation of Soil and Groundwater Conditions | |||||||
Loss Contingencies [Line Items] | |||||||
Accrual for Environmental Loss Contingencies | $ 5,000,000 | ||||||
Wrongful Death Lawsuits | Pending Litigation | State of Georgia | |||||||
Loss Contingencies [Line Items] | |||||||
Number of Pending Wrongful Death Lawsuits | lawsuit | 5 | ||||||
Minimum | Legacy Environmental Site 1 - Remediation of Shredder Residue | |||||||
Loss Contingencies [Line Items] | |||||||
Loss Contingency, Range of Possible Loss, Portion Not Accrued | $ 0 | ||||||
Maximum | Legacy Environmental Site 1 - Remediation of Shredder Residue | |||||||
Loss Contingencies [Line Items] | |||||||
Loss Contingency, Range of Possible Loss, Portion Not Accrued | 28,000,000 | ||||||
Lower Willamette Group | Portland Harbor Superfund Site | |||||||
Loss Contingencies [Line Items] | |||||||
Remedial Investigation and Feasibility Study Costs | $ 115,000,000 | ||||||
Number of Years for Remedial Investigation and Feasibility Study | 10 years | ||||||
Potential Responsible Parties | Portland Harbor Superfund Site | |||||||
Loss Contingencies [Line Items] | |||||||
Estimated Cost of Selected Remedy | $ 1,700,000,000 | ||||||
Estimated Cost of Selected Remedy, Discount | $ 1,050,000,000 | ||||||
Estimated Cost of Selected Remedy, Discount Rate | 7.00% | ||||||
Site Contingency, Estimated Time Frame to Remediate | 13 years | ||||||
Potential Responsible Parties | Minimum | Portland Harbor Superfund Site | |||||||
Loss Contingencies [Line Items] | |||||||
Site Contingency, Least Costly Remediation Plan, Discount | 170,000,000 | ||||||
Estimated Cost of Selected Remedy, Range | (30.00%) | ||||||
Potential Responsible Parties | Maximum | Portland Harbor Superfund Site | |||||||
Loss Contingencies [Line Items] | |||||||
Site Contingency, Most Costly Remediation Plan, Discount | 2,500,000,000 | ||||||
Estimated Cost of Selected Remedy, Range | 50.00% | ||||||
Steel Manufacturing Operations | |||||||
Loss Contingencies [Line Items] | |||||||
Accrual for Environmental Loss Contingencies | $ 0 | $ 0 | |||||
Permitted Annual Production Capacity | T | 950 | ||||||
Title V Permit, Renewal Period | 5 years |
Restructuring Charges and Oth34
Restructuring Charges and Other Exit-Related Activities (Details) $ in Millions | 9 Months Ended |
May 31, 2017USD ($) | |
Other Exit-Related Activity | |
Restructuring Cost and Reserve [Line Items] | |
Other Exit-Related Activities, Net Gain (YTD less than $1 million) | $ 1 |
Changes in Equity (Details)
Changes in Equity (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
May 31, 2018 | Feb. 28, 2018 | May 31, 2017 | May 31, 2018 | May 31, 2017 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Balance - (Beginning of period) | $ 537,493 | $ 501,432 | |||
Net income | $ 38,448 | $ 17,252 | 99,587 | 28,243 | |
Other comprehensive loss, net of tax | (240) | (428) | (1,976) | (1,207) | |
Reclassification of stranded tax effects of the Tax Act | $ 1,000 | 517 | 0 | ||
Distributions to noncontrolling interests | (1,709) | (1,177) | |||
Share repurchases | 8,778 | 0 | |||
Restricted stock withheld for taxes | (3,030) | (3,300) | |||
Share-based compensation | 13,815 | 9,182 | |||
Purchase of noncontrolling interest | (600) | 0 | |||
Dividends | (15,757) | (15,615) | |||
Balance - May 31 (End of period) | 619,562 | 517,558 | 619,562 | 517,558 | |
SSI Shareholders’ Equity | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Balance - (Beginning of period) | 533,586 | 497,721 | |||
Net income | 96,781 | 26,276 | |||
Other comprehensive loss, net of tax | (1,976) | (1,207) | |||
Reclassification of stranded tax effects of the Tax Act | 517 | 0 | |||
Distributions to noncontrolling interests | 0 | 0 | |||
Share repurchases | 8,778 | 0 | |||
Restricted stock withheld for taxes | (3,030) | (3,300) | |||
Share-based compensation | 13,815 | 9,182 | |||
Purchase of noncontrolling interest | (183) | 0 | |||
Dividends | (15,757) | (15,615) | |||
Balance - May 31 (End of period) | 614,975 | 513,057 | 614,975 | 513,057 | |
Noncontrolling Interests | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Balance - (Beginning of period) | 3,907 | 3,711 | |||
Net income | 2,806 | 1,967 | |||
Other comprehensive loss, net of tax | 0 | 0 | |||
Reclassification of stranded tax effects of the Tax Act | 0 | 0 | |||
Distributions to noncontrolling interests | (1,709) | (1,177) | |||
Share repurchases | 0 | 0 | |||
Restricted stock withheld for taxes | 0 | 0 | |||
Share-based compensation | 0 | 0 | |||
Purchase of noncontrolling interest | (417) | 0 | |||
Dividends | 0 | 0 | |||
Balance - May 31 (End of period) | $ 4,587 | $ 4,501 | $ 4,587 | $ 4,501 |
Accumulated Other Comprehensi36
Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
May 31, 2018 | May 31, 2017 | May 31, 2018 | May 31, 2017 | |
Increase (Decrease) In Accumulated Other Comprehensive Loss [Roll Forward} | ||||
Balance - (Beginning of period) | $ 537,493 | $ 501,432 | ||
Other comprehensive income (loss) before reclassifications | $ (414) | $ (694) | (2,191) | (1,439) |
Income tax expense | 0 | 0 | 227 | (194) |
Other comprehensive income (loss) before reclassifications, net of tax | (414) | (694) | (1,964) | (1,633) |
Amounts reclassified from accumulated other comprehensive loss | 225 | 420 | 365 | 670 |
Income tax benefit | (51) | (154) | (377) | (244) |
Amounts reclassified from accumulated other comprehensive loss, net of tax | 174 | 266 | (12) | 426 |
Total other comprehensive loss, net of tax | (240) | (428) | (1,976) | (1,207) |
Balance - May 31 (End of period) | 619,562 | 517,558 | 619,562 | 517,558 |
Foreign Currency Translation Adjustments | ||||
Increase (Decrease) In Accumulated Other Comprehensive Loss [Roll Forward} | ||||
Balance - (Beginning of period) | (33,420) | (35,333) | (31,828) | (34,539) |
Other comprehensive income (loss) before reclassifications | (414) | (694) | (2,006) | (1,488) |
Income tax expense | 0 | 0 | 0 | 0 |
Other comprehensive income (loss) before reclassifications, net of tax | (414) | (694) | (2,006) | (1,488) |
Amounts reclassified from accumulated other comprehensive loss | 0 | 0 | 0 | 0 |
Income tax benefit | 0 | 0 | 0 | 0 |
Amounts reclassified from accumulated other comprehensive loss, net of tax | 0 | 0 | 0 | 0 |
Total other comprehensive loss, net of tax | (414) | (694) | (2,006) | (1,488) |
Balance - May 31 (End of period) | (33,834) | (36,027) | (33,834) | (36,027) |
Pension Obligations, net | ||||
Increase (Decrease) In Accumulated Other Comprehensive Loss [Roll Forward} | ||||
Balance - (Beginning of period) | (3,609) | (5,561) | (3,465) | (5,576) |
Other comprehensive income (loss) before reclassifications | 0 | 0 | (185) | 49 |
Income tax expense | 0 | 0 | 227 | (194) |
Other comprehensive income (loss) before reclassifications, net of tax | 0 | 0 | 42 | (145) |
Amounts reclassified from accumulated other comprehensive loss | 225 | 420 | 365 | 670 |
Income tax benefit | (51) | (154) | (377) | (244) |
Amounts reclassified from accumulated other comprehensive loss, net of tax | 174 | 266 | (12) | 426 |
Total other comprehensive loss, net of tax | 174 | 266 | 30 | 281 |
Balance - May 31 (End of period) | (3,435) | (5,295) | (3,435) | (5,295) |
AOCI Attributable to Parent | ||||
Increase (Decrease) In Accumulated Other Comprehensive Loss [Roll Forward} | ||||
Balance - (Beginning of period) | (37,029) | (40,894) | (35,293) | (40,115) |
Balance - May 31 (End of period) | $ (37,269) | $ (41,322) | $ (37,269) | $ (41,322) |
Share-Based Compensation (Detai
Share-Based Compensation (Details) $ in Millions | 3 Months Ended | |
Feb. 28, 2018USD ($)shares | Nov. 30, 2017USD ($)companyshares | |
Restricted Stock Units (RSUs) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares granted (in shares) | 252,865 | |
Vesting term | 5 years | |
Vesting percentage per year | 20.00% | |
Shares granted, fair value | $ | $ 7 | |
Performance Shares | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares granted (in shares) | 246,161 | |
Performance Shares | Total Shareholder Return (TSR) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares granted (in shares) | 119,763 | |
Shares granted, fair value | $ | $ 3 | |
Total Shareholder Return Designated Peer Group | company | 16 | |
Performance Shares | Total Shareholder Return (TSR) | Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Performance Based Awards Award Payouts Threshold | 50.00% | |
Performance Shares | Total Shareholder Return (TSR) | Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Performance Based Awards Award Payouts Threshold | 200.00% | |
Performance Shares | Return on Capital Employed (ROCE) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares granted (in shares) | 126,398 | |
Shares granted, fair value | $ | $ 3 | |
Performance period | 3 years | |
Performance Shares | Return on Capital Employed (ROCE) | Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Performance Based Awards Award Payouts Threshold | 50.00% | |
Performance Shares | Return on Capital Employed (ROCE) | Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Performance Based Awards Award Payouts Threshold | 200.00% | |
Non-employee Directors | Deferred Stock Units (DSUs) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares granted (in shares) | 20,748 | |
Shares granted, fair value | $ | $ 1 |
Income Taxes Narrative (Details
Income Taxes Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
May 31, 2018 | Feb. 28, 2018 | May 31, 2017 | May 31, 2018 | May 31, 2017 | Aug. 31, 2019 | Aug. 31, 2018 | |
Income Tax Contingency [Line Items] | |||||||
Federal statutory rate (35% Prior to Enactment of Tax Act) | 35.00% | 35.00% | |||||
Provisional benefit from Tax Act | $ (7) | ||||||
Benefit from release of valuation allowance | $ (7) | ||||||
Effective tax rate | 21.70% | 0.90% | 5.70% | 2.50% | |||
Forecast | |||||||
Income Tax Contingency [Line Items] | |||||||
Federal statutory rate (35% Prior to Enactment of Tax Act) | 21.00% | 25.70% |
Net Income Per Share (Details)
Net Income Per Share (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
May 31, 2018 | May 31, 2017 | May 31, 2018 | May 31, 2017 | |
Earnings Per Share [Abstract] | ||||
Income from continuing operations | $ 38,504 | $ 17,379 | $ 99,515 | $ 28,518 |
Net income attributable to noncontrolling interests | (1,046) | (687) | (2,806) | (1,967) |
Income from continuing operations attributable to SSI | 37,458 | 16,692 | 96,709 | 26,551 |
Income (loss) from discontinued operations, net of tax | (56) | (127) | 72 | (275) |
Net income attributable to SSI | $ 37,402 | $ 16,565 | $ 96,781 | $ 26,276 |
Computation of shares: | ||||
Weighted average common shares outstanding, basic (in shares) | 27,676,000 | 27,601,000 | 27,719,000 | 27,499,000 |
Incremental common shares attributable to dilutive performance share awards, DSUs, and RSUs (in shares) | 960,000 | 102,000 | 927,000 | 193,000 |
Weighted average common shares outstanding, diluted (in shares) | 28,636,000 | 27,703,000 | 28,646,000 | 27,692,000 |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in shares) | 0 | 375,653 | 0 | 309,476 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
May 31, 2018 | May 31, 2017 | May 31, 2018 | May 31, 2017 | |
Corporate Joint Venture | ||||
Related Party Transaction [Line Items] | ||||
Purchases from joint ventures | $ 5 | $ 5 | $ 12 | $ 11 |
Segment Information Segment Rev
Segment Information Segment Revenue Reconciliation to Consolidated (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
May 31, 2018 | May 31, 2017 | May 31, 2018 | May 31, 2017 | |
Segment Reporting Information [Line Items] | ||||
Revenues | $ 652,416 | $ 477,088 | $ 1,695,138 | $ 1,193,333 |
Auto and Metals Recycling | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 522,340 | 380,863 | 1,358,364 | 958,962 |
Operating Segments | Auto and Metals Recycling | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 529,611 | 385,396 | 1,377,450 | 970,311 |
Operating Segments | Cascade Steel and Scrap | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 130,076 | 96,225 | 336,774 | 234,371 |
Less: Intersegment revenues | Auto and Metals Recycling | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | $ (7,271) | $ (4,533) | $ (19,086) | $ (11,349) |
Segment Information Segment Ope
Segment Information Segment Operating Income Reconciliation to Consolidated (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
May 31, 2018 | May 31, 2017 | May 31, 2018 | May 31, 2017 | |
Segment Reporting Information [Line Items] | ||||
Operating income | $ 51,234 | $ 19,147 | $ 111,015 | $ 33,905 |
Restructuring charges and other exit-related activities | (70) | (93) | (261) | 200 |
Interest expense | (2,483) | (2,131) | (6,823) | (5,969) |
Other income, net | 403 | 524 | 1,353 | 1,318 |
Income from continuing operations before income taxes | 49,154 | 17,540 | 105,545 | 29,254 |
Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Operating income | 65,773 | 30,683 | 159,966 | 64,670 |
Operating Segments | Auto and Metals Recycling | ||||
Segment Reporting Information [Line Items] | ||||
Operating income | 54,980 | 29,520 | 135,284 | 67,414 |
Operating Segments | Cascade Steel and Scrap | ||||
Segment Reporting Information [Line Items] | ||||
Operating income | 10,793 | 1,163 | 24,682 | (2,744) |
Segment Reconciling Items | ||||
Segment Reporting Information [Line Items] | ||||
Restructuring charges and other exit-related activities | (70) | (93) | (261) | 200 |
Corporate and eliminations | ||||
Segment Reporting Information [Line Items] | ||||
Operating income | $ (14,469) | $ (11,443) | $ (48,690) | $ (30,965) |
Segment Information Segment Ass
Segment Information Segment Assets Reconciliation to Consolidated (Details) - USD ($) $ in Thousands | May 31, 2018 | Aug. 31, 2017 |
Segment Reporting Information [Line Items] | ||
Assets | $ 1,077,270 | $ 933,755 |
Investments in joint ventures | 11,635 | 11,204 |
Auto and Metals Recycling | ||
Segment Reporting Information [Line Items] | ||
Investments in joint ventures | 4,000 | 5,000 |
Cascade Steel and Scrap | ||
Segment Reporting Information [Line Items] | ||
Investments in joint ventures | 7,000 | 7,000 |
Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Assets | 2,174,919 | 1,995,026 |
Operating Segments | Auto and Metals Recycling | ||
Segment Reporting Information [Line Items] | ||
Assets | 1,449,838 | 1,298,757 |
Operating Segments | Cascade Steel and Scrap | ||
Segment Reporting Information [Line Items] | ||
Assets | 725,081 | 696,269 |
Corporate and eliminations | ||
Segment Reporting Information [Line Items] | ||
Assets | $ (1,097,649) | $ (1,061,271) |
Segment Information Segment Inf
Segment Information Segment Information (Details) | 9 Months Ended | |
May 31, 2017segment | May 31, 2018jointventureinterests | |
Segment Reporting Information [Line Items] | ||
Number of Operating Segments | segment | 2 | |
Auto and Metals Recycling | ||
Segment Reporting Information [Line Items] | ||
Number of Joint Venture Investments | 3 | |
Cascade Steel and Scrap | ||
Segment Reporting Information [Line Items] | ||
Number of Joint Venture Investments | 1 |