Document and Entity Information
Document and Entity Information Document - shares | 6 Months Ended | |
Feb. 28, 2019 | Apr. 02, 2019 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Feb. 28, 2019 | |
Document Fiscal Year Focus | 2019 | |
Current Fiscal Year End Date | --08-31 | |
Entity Registrant Name | SCHNITZER STEEL INDUSTRIES, INC. | |
Entity Central Index Key | 0000912603 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Document Fiscal Period Focus | Q2 | |
Class A Common Stock | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 26,576,489 | |
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 | Feb. 28, 2019 | Aug. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 13,173 | $ 4,723 |
Accounts receivable, net of allowance for doubtful accounts of $2,560 and $2,586 | 165,307 | 169,418 |
Inventories | 198,565 | 205,877 |
Refundable income taxes | 5,184 | 4,668 |
Prepaid expenses and other current assets | 36,724 | 63,673 |
Total current assets | 418,953 | 448,359 |
Property, plant and equipment, net of accumulated depreciation of $750,949 and $731,561 | 428,777 | 415,711 |
Investments in joint ventures | 10,703 | 11,532 |
Goodwill | 169,439 | 168,065 |
Intangibles, net of accumulated amortization of $2,867 and $3,476 | 4,117 | 4,358 |
Deferred income taxes | 29,548 | 30,333 |
Other assets | 25,715 | 26,459 |
Total assets | 1,087,252 | 1,104,817 |
Current liabilities: | ||
Short-term borrowings | 1,215 | 1,139 |
Accounts payable | 95,730 | 128,495 |
Accrued payroll and related liabilities | 20,303 | 46,410 |
Environmental liabilities | 9,908 | 6,682 |
Other accrued liabilities | 43,794 | 71,951 |
Total current liabilities | 170,950 | 254,677 |
Deferred income taxes | 16,137 | 11,742 |
Long-term debt, net of current maturities | 161,866 | 106,237 |
Environmental liabilities, net of current portion | 43,306 | 47,150 |
Other long-term liabilities | 14,146 | 14,901 |
Total liabilities | 406,405 | 434,707 |
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 | 29,135 | 36,929 |
Retained earnings | 658,424 | 639,684 |
Accumulated other comprehensive loss | (37,727) | (37,237) |
Total SSI shareholders’ equity | 676,607 | 666,078 |
Noncontrolling interests | 4,240 | 4,032 |
Total equity | 680,847 | 670,110 |
Total liabilities and equity | 1,087,252 | 1,104,817 |
Class A Common Stock | ||
Schnitzer Steel Industries, Inc. (“SSI”) shareholders’ equity: | ||
Common stock, value | 26,575 | 26,502 |
Class B Common Stock | ||
Schnitzer Steel Industries, Inc. (“SSI”) shareholders’ equity: | ||
Common stock, value | $ 200 | $ 200 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Feb. 28, 2019 | Aug. 31, 2018 |
Current assets: | ||
Accounts receivable, allowance for doubtful accounts | $ 2,560 | $ 2,586 |
Property, plant and equipment, accumulated depreciation | 750,949 | 731,561 |
Intangibles, accumulated amortization | $ 2,867 | $ 3,476 |
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 | 26,575,000 | 26,502,000 |
Common stock, shares outstanding | 26,575,000 | 26,502,000 |
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 | 6 Months Ended | |||
Feb. 28, 2019 | Feb. 28, 2018 | Feb. 28, 2019 | Feb. 28, 2018 | ||
Income Statement [Abstract] | |||||
Revenues | $ 473,565 | $ 559,443 | $ 1,037,585 | $ 1,042,722 | |
Operating expense: | |||||
Cost of goods sold | 414,688 | 472,462 | 904,820 | 878,713 | |
Selling, general and administrative | 39,489 | 53,638 | 90,908 | 104,681 | |
(Income) from joint ventures | (184) | (106) | (669) | (556) | |
Asset impairment charges (recoveries), net | 0 | 0 | 63 | (88) | |
Restructuring charges and other exit-related activities | 536 | 91 | 738 | 191 | |
Operating income | 19,036 | 33,358 | 41,725 | 59,781 | |
Interest expense | (2,067) | (2,281) | (3,973) | (4,340) | |
Other income, net | 321 | 101 | 344 | 950 | |
Income from continuing operations before income taxes | 17,290 | 31,178 | 38,096 | 56,391 | |
Income tax (expense) benefit | (3,855) | 10,577 | (7,971) | 4,620 | |
Income from continuing operations | 13,435 | 41,755 | 30,125 | 61,011 | |
Income (loss) from discontinued operations, net of tax | (138) | 164 | (210) | 129 | |
Net income | 13,297 | 41,919 | 29,915 | 61,140 | |
Net income attributable to noncontrolling interests | (405) | (903) | (835) | (1,760) | |
Net income attributable to SSI | $ 12,892 | $ 41,016 | $ 29,080 | $ 59,380 | |
Net income per share attributable to SSI Basic: | |||||
Income per share from continuing operations attributable to SSI (in dollars per share) | $ 0.47 | $ 1.47 | $ 1.06 | $ 2.14 | |
Loss per share from discontinued operations attributable to SSI (in dollars per share) | 0 | 0.01 | (0.01) | 0 | |
Net income per share attributable to SSI (in dollars per share) | 0.47 | 1.48 | 1.05 | 2.14 | |
Net income per share attributable to SSI Diluted: | |||||
Income per share from continuing operations attributable to SSI (in dollars per share) | 0.46 | 1.42 | 1.04 | 2.06 | |
Loss per share from discontinued operations attributable to SSI (in dollars per share) | 0 | 0.01 | (0.01) | 0 | |
Net income per share attributable to SSI (in dollars per share) | [1] | $ 0.46 | $ 1.42 | $ 1.03 | $ 2.07 |
Weighted average number of common shares: | |||||
Basic (shares) | 27,630 | 27,797 | 27,568 | 27,745 | |
Diluted (Shares) | 28,114 | 28,805 | 28,239 | 28,737 | |
Dividends declared per common share (in dollars per share) | $ 0.1875 | $ 0.1875 | $ 0.3750 | $ 0.3750 | |
[1] | May not foot due to rounding. |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Feb. 28, 2019 | Feb. 28, 2018 | Feb. 28, 2019 | Feb. 28, 2018 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 13,297 | $ 41,919 | $ 29,915 | $ 61,140 |
Other comprehensive income (loss), net of tax: | ||||
Foreign currency translation adjustments | 632 | 117 | (732) | (1,592) |
Pension obligations, net | 40 | (226) | 242 | (144) |
Total other comprehensive income (loss), net of tax | 672 | (109) | (490) | (1,736) |
Comprehensive income | 13,969 | 41,810 | 29,425 | 59,404 |
Less comprehensive income attributable to noncontrolling interests | (405) | (903) | (835) | (1,760) |
Comprehensive income attributable to SSI | $ 13,564 | $ 40,907 | $ 28,590 | $ 57,644 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Equity - USD ($) shares in Thousands, $ in Thousands | Total | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Total SSI Shareholders’ Equity | Noncontrolling Interests | Class A Common Stock | Class A Common StockCommon Stock | Class B Common Stock | Class B Common StockCommon Stock |
Beginning balance (in shares) at Aug. 31, 2017 | 26,859 | 200 | ||||||||
Beginning balance at Aug. 31, 2017 | $ 537,493 | $ 38,050 | $ 503,770 | $ (35,293) | $ 533,586 | $ 3,907 | $ 26,859 | $ 200 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net income | 61,140 | 0 | 59,380 | 0 | 59,380 | 1,760 | 0 | 0 | ||
Other comprehensive loss, net of tax | (1,736) | 0 | 0 | (1,736) | (1,736) | 0 | 0 | 0 | ||
Reclassification of stranded tax effects of the Tax Cuts and Jobs Act | 517 | 0 | 517 | 0 | 517 | 0 | 0 | 0 | ||
Distributions to noncontrolling interests | (817) | 0 | 0 | 0 | 0 | 817 | $ 0 | $ 0 | ||
Share repurchase (in shares) | 100 | 0 | ||||||||
Share repurchases | (3,601) | 3,501 | 0 | 0 | (3,601) | 0 | $ 100 | $ 0 | ||
Issuance of restricted stock (in shares) | 244 | 0 | ||||||||
Issuance of restricted stock | 0 | (244) | 0 | 0 | 0 | 0 | $ 244 | $ 0 | ||
Restricted stock withheld for taxes (in shares) | 97 | 0 | ||||||||
Restricted stock withheld for taxes | (2,888) | 2,791 | 0 | 0 | (2,888) | 0 | $ 97 | $ 0 | ||
Share-based compensation expense | 8,095 | 8,095 | 0 | 0 | 8,095 | 0 | 0 | 0 | ||
Purchase of noncontrolling interest | (600) | 0 | 183 | 0 | (183) | 417 | 0 | 0 | ||
Cash dividends | (10,507) | 0 | 10,507 | 0 | (10,507) | 0 | $ 0 | $ 0 | ||
Ending balance (in shares) at Feb. 28, 2018 | 26,906 | 200 | ||||||||
Ending balance at Feb. 28, 2018 | 587,096 | 39,609 | 552,977 | (37,029) | 582,663 | 4,433 | $ 26,906 | $ 200 | ||
Beginning balance (in shares) at Nov. 30, 2017 | 27,003 | 200 | ||||||||
Beginning balance at Nov. 30, 2017 | 551,617 | 40,059 | 516,842 | (36,920) | 547,184 | 4,433 | $ 27,003 | $ 200 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net income | 41,919 | 41,016 | 41,016 | 903 | ||||||
Other comprehensive loss, net of tax | (109) | (109) | (109) | |||||||
Reclassification of stranded tax effects of the Tax Cuts and Jobs Act | 517 | 517 | 517 | |||||||
Distributions to noncontrolling interests | (486) | (486) | ||||||||
Share repurchase (in shares) | (100) | |||||||||
Share repurchases | (3,601) | (3,501) | (3,601) | $ (100) | ||||||
Issuance of restricted stock (in shares) | 3 | |||||||||
Issuance of restricted stock | (3) | $ 3 | ||||||||
Restricted stock withheld for taxes | (37) | (37) | (37) | |||||||
Share-based compensation expense | 3,091 | 3,091 | 3,091 | |||||||
Purchase of noncontrolling interest | (600) | (183) | (183) | (417) | ||||||
Cash dividends | (5,215) | (5,215) | (5,215) | |||||||
Ending balance (in shares) at Feb. 28, 2018 | 26,906 | 200 | ||||||||
Ending balance at Feb. 28, 2018 | 587,096 | 39,609 | 552,977 | (37,029) | 582,663 | 4,433 | $ 26,906 | $ 200 | ||
Beginning balance (in shares) at Aug. 31, 2018 | 26,502 | 26,502 | 200 | 200 | ||||||
Beginning balance at Aug. 31, 2018 | 670,110 | 36,929 | 639,684 | (37,237) | 666,078 | 4,032 | $ 26,502 | $ 200 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net income | 29,915 | 0 | 29,080 | 0 | 29,080 | 835 | 0 | 0 | ||
Other comprehensive loss, net of tax | (490) | 0 | 0 | (490) | (490) | 0 | 0 | 0 | ||
Reclassification of stranded tax effects of the Tax Cuts and Jobs Act | 0 | 0 | ||||||||
Distributions to noncontrolling interests | (627) | 0 | 0 | 0 | 0 | 627 | $ 0 | $ 0 | ||
Share repurchase (in shares) | 413 | 0 | ||||||||
Share repurchases | (10,087) | 9,674 | 0 | 0 | (10,087) | 0 | $ 413 | $ 0 | ||
Issuance of restricted stock (in shares) | 763 | 0 | ||||||||
Issuance of restricted stock | 0 | (763) | 0 | 0 | 0 | 0 | $ 763 | $ 0 | ||
Restricted stock withheld for taxes (in shares) | 277 | 0 | ||||||||
Restricted stock withheld for taxes | (7,442) | 7,165 | 0 | 0 | (7,442) | 0 | $ 277 | $ 0 | ||
Share-based compensation expense | 9,808 | 9,808 | 0 | 0 | 9,808 | 0 | 0 | 0 | ||
Cash dividends | (10,340) | 0 | 10,340 | 0 | (10,340) | 0 | $ 0 | $ 0 | ||
Ending balance (in shares) at Feb. 28, 2019 | 26,575 | 26,575 | 200 | 200 | ||||||
Ending balance at Feb. 28, 2019 | 680,847 | 29,135 | 658,424 | (37,727) | 676,607 | 4,240 | $ 26,575 | $ 200 | ||
Beginning balance (in shares) at Nov. 30, 2018 | 26,826 | 200 | ||||||||
Beginning balance at Nov. 30, 2018 | 675,983 | 32,592 | 650,695 | (38,399) | 671,914 | 4,069 | $ 26,826 | $ 200 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net income | 13,297 | 12,892 | 12,892 | 405 | ||||||
Other comprehensive loss, net of tax | 672 | 672 | 672 | |||||||
Distributions to noncontrolling interests | (234) | (234) | ||||||||
Share repurchase (in shares) | (263) | |||||||||
Share repurchases | (5,992) | (5,729) | (5,992) | $ (263) | ||||||
Issuance of restricted stock (in shares) | 13 | |||||||||
Issuance of restricted stock | (13) | $ 13 | ||||||||
Restricted stock withheld for taxes (in shares) | (1) | |||||||||
Restricted stock withheld for taxes | (120) | (119) | (120) | $ (1) | ||||||
Share-based compensation expense | 2,404 | 2,404 | 2,404 | |||||||
Cash dividends | (5,163) | (5,163) | (5,163) | |||||||
Ending balance (in shares) at Feb. 28, 2019 | 26,575 | 26,575 | 200 | 200 | ||||||
Ending balance at Feb. 28, 2019 | $ 680,847 | $ 29,135 | $ 658,424 | $ (37,727) | $ 676,607 | $ 4,240 | $ 26,575 | $ 200 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Feb. 28, 2019 | Feb. 28, 2018 | |
Cash flows from operating activities: | ||
Net income | $ 29,915 | $ 61,140 |
Adjustments to reconcile net income to cash provided by (used in) operating activities: | ||
Depreciation and amortization | 26,490 | 24,682 |
Asset impairment charges (recoveries), net | 63 | (88) |
Exit-related asset impairments | 23 | 0 |
Inventory write-down | 0 | 38 |
Share-based compensation expense | 9,808 | 8,095 |
Deferred income taxes | 4,888 | (14,014) |
Undistributed equity in earnings of joint ventures | (669) | (556) |
Loss on disposal of assets, net | 24 | 252 |
Unrealized foreign exchange (gain) loss, net | 70 | (297) |
Bad debt expense (recoveries), net | (15) | 15 |
Changes in assets and liabilities, net of acquisitions: | ||
Accounts receivable | (3,324) | (62,049) |
Inventories | 15,795 | (49,432) |
Income taxes | (517) | 1,692 |
Prepaid expenses and other current assets | (2,503) | 2,947 |
Other long-term assets | 430 | (82) |
Accounts payable | (23,617) | 15,186 |
Accrued payroll and related liabilities | (26,091) | (8,507) |
Other accrued liabilities | (8,229) | 4,534 |
Environmental liabilities | (784) | 3,620 |
Other long-term liabilities | 78 | 1,673 |
Distributed equity in earnings of joint ventures | 1,492 | 520 |
Net cash provided by (used in) operating activities | 23,327 | (10,631) |
Cash flows from investing activities: | ||
Capital expenditures | (41,295) | (26,762) |
Acquisitions | (1,553) | (2,300) |
Joint venture receipts, net | 641 | 3 |
Proceeds from sale of assets | 1,396 | 1,639 |
Net cash used in investing activities | (40,811) | (27,420) |
Cash flows from financing activities: | ||
Borrowings from long-term debt | 245,770 | 314,483 |
Repayment of long-term debt | (190,892) | (249,916) |
Payment of debt issuance costs | (96) | 0 |
Repurchase of Class A common stock | (10,087) | (3,601) |
Taxes paid related to net share settlement of share-based payment awards | (7,442) | (2,888) |
Distributions to noncontrolling interests | (627) | (817) |
Purchase of noncontrolling interest | 0 | (600) |
Dividends paid | (10,574) | (10,633) |
Net cash provided by financing activities | 26,052 | 46,028 |
Effect of exchange rate changes on cash | (118) | (257) |
Net increase in cash and cash equivalents | 8,450 | 7,720 |
Cash and cash equivalents as of beginning of period | 4,723 | 7,287 |
Cash and cash equivalents as of end of period | 13,173 | 15,007 |
Cash paid during the year for: | ||
Interest | 3,384 | 3,703 |
Income taxes paid, net | 3,398 | 5,523 |
Schedule of noncash investing and financing transactions: | ||
Purchases of property, plant and equipment included in current liabilities | $ 9,652 | $ 8,176 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Feb. 28, 2019 | |
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, 2018 . The results for the three and six months ended February 28, 2019 and 2018 are not necessarily indicative of the results of operations for the entire fiscal year. Accounting Changes As of the beginning of the first quarter of fiscal 2019, the Company adopted an accounting standards update initially issued in May 2014 that clarifies the principles for recognizing revenue from contracts with customers. The core principle of the new guidance is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration the entity expects to be entitled to in exchange for those goods or services. The Company adopted the new revenue accounting standard using the modified retrospective approach, which requires recognition of the cumulative effect of initially applying the new requirements as an adjustment to the opening balance of retained earnings in the period of initial application. Adoption of the new requirements did not change the timing of revenue recognition for the Company compared to the previous guidance, and the Company recorded no cumulative-effect adjustment to the opening balance of retained earnings as of September 1, 2018. The Company identified certain scrap purchase and sale arrangements for which it recognized revenue for the gross amount of consideration it expected to be entitled to from the customer (as principal) under the previous revenue guidance, 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). The foregoing change in the classification of the cost of scrap metal purchased under such arrangements has the effect of reducing the amount of revenue and cost of goods sold reported in the financial statements, while having no impact on net income. If the Company had continued using the accounting guidance in effect before the adoption of the new revenue accounting standard, its consolidated revenues for the three and six months ended February 28, 2019 would have been higher by approximately $7 million and $13 million , respectively, or 1% for each period, and its consolidated cost of goods sold would have been higher by the same amounts, respectively. No other line items in the consolidated financial statements were materially impacted by adoption of the new requirements. Comparative prior period amounts and disclosures continue to be reported in accordance with guidance in effect prior to the date of adoption. See Note 7 - Revenue for the disclosures required under the new standard. As of the beginning of the first quarter of fiscal 2019, the Company adopted an accounting standards update that amends certain aspects of the reporting model for financial instruments. The most pertinent amendment to the Company is that an entity may choose to measure certain equity investments that do not have readily determinable fair values 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. Adoption of the requirements had no impact on the Company’s consolidated financial position, results of operations and cash flows. 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 $27 million and $28 million as of February 28, 2019 and August 31, 2018 , respectively. Accounts Receivable, net Accounts receivable represent amounts primarily due from customers on product and other sales. These accounts receivable, which are reduced by an allowance for doubtful accounts, are recorded at the invoiced amount and do not bear interest. The Company extends credit to customers under contracts containing customary and explicit payment terms, and payment is generally required within 30 days of shipment. Nonferrous export sales typically require a deposit prior to shipment. Historically, almost all of the Company’s ferrous export sales have been made with letters of credit. Domestic ferrous metal sales, nonferrous metal sales and finished steel sales are generally made on open account, and the majority of these sales are covered by credit insurance. The Company evaluates the collectibility of its accounts receivable based on a combination of factors, including whether sales were made pursuant to letters of credit or credit insurance is in place. In cases where management is aware of circumstances that may impair a customer’s ability to meet its financial obligations, management records a specific allowance against amounts due and reduces the receivable to the amount the Company believes will be collected. For all other customers, the Company maintains an allowance that considers the total receivables outstanding, historical collection rates and economic trends. Accounts are written off when all efforts to collect have been exhausted. Also included in accounts receivable are short-term advances to scrap metal suppliers used as a mechanism to acquire unprocessed scrap metal. The advances are generally repaid with scrap metal, as opposed to cash. Repayments of advances with scrap metal are treated as noncash operating activities in the Unaudited Condensed Consolidated Statements of Cash Flows and totaled $8 million and $6 million for the six months ended February 28, 2019 and 2018, respectively. Prepaid Expenses The Company’s prepaid expenses totaled $14 million and $22 million as of February 28, 2019 and August 31, 2018 , respectively, and consisted primarily of deposits on capital purchases, prepaid services and prepaid insurance. Other Assets The Company’s other assets, exclusive of prepaid expenses, consist primarily of receivables from insurers, an equity investment, debt issuance costs, and notes and other contractual receivables. Other assets are reported within either prepaid expenses and other current assets or other assets in the Unaudited Condensed Consolidated Balance Sheets based on their expected use either during or beyond the current operating cycle of one year from the reporting date. Receivables from insurers totaled $15 million and $36 million as of February 28, 2019 and August 31, 2018 , respectively, with the decrease in the first half of fiscal 2019 resulting from the settlement of a contingent loss recorded during fiscal 2018 in connection with lawsuits arising from a motor vehicle collision for which the Company had insurance coverage. See “Contingencies – Other” in Note 5 – Commitments and Contingencies for further discussion of the contingent loss and subsequent settlements in fiscal 2019 . The Company previously invested $6 million in a privately-held waste and recycling entity. The investment does not have a readily determinable fair value and, therefore, is carried at cost and adjusted for impairments and observable price changes. 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 carrying value of the investment was $6 million as of February 28, 2019 and August 31, 2018 . The Company has not recorded any impairments or upward or downward adjustments to the carrying value of the investment since acquisition. 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. 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 February 28, 2019 . 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 $60 million and $58 million of open letters of credit as of February 28, 2019 and August 31, 2018 |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 6 Months Ended |
Feb. 28, 2019 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements 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. Additional updates have been issued since February 2016 amending aspects of the initial update, including providing an additional and optional transition method for adoption. This standard is effective for the Company beginning in fiscal 2020, including interim periods within that fiscal year. The Company expects to initially apply the requirements by recognizing a cumulative-effect adjustment, if any, to the opening balance of retained earnings in the period of adoption. The Company is in the process of analyzing its population of leases within the scope of the new accounting standard and documenting salient lease terms to support the initial |
Inventories
Inventories | 6 Months Ended |
Feb. 28, 2019 | |
Inventory, Net [Abstract] | |
Inventories | Inventories Inventories consisted of the following (in thousands): February 28, 2019 August 31, 2018 Processed and unprocessed scrap metal $ 86,120 $ 111,658 Semi-finished goods 16,948 15,551 Finished goods 52,886 39,809 Supplies 42,611 38,859 Inventories $ 198,565 $ 205,877 |
Goodwill
Goodwill | 6 Months Ended |
Feb. 28, 2019 | |
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 half of fiscal 2019 requiring an interim goodwill impairment test. As of February 28, 2019 and August 31, 2018 , all but $1 million of the Company’s goodwill was carried by a single reporting unit within AMR. The gross change in the carrying amount of goodwill for the six months ended February 28, 2019 was as follows (in thousands): Goodwill August 31, 2018 $ 168,065 Acquisition 1,575 Foreign currency translation adjustment (201 ) February 28, 2019 $ 169,439 In the second quarter of fiscal 2019, the Company acquired certain assets of an auto recycling business in northern California for $2 million . The acquisition qualified as a business combination under the accounting rules and resulted in the recognition of $2 million of goodwill during the second quarter of fiscal 2019. The Company allocated the acquired goodwill to the reporting unit within the AMR operating segment which carries nearly all of the Company’s goodwill. Accumulated goodwill impairment charges were $471 million as of February 28, 2019 and August 31, 2018 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Feb. 28, 2019 | |
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 six months ended February 28, 2019 were as follows (in thousands): Balance as of August 31, 2018 Liabilities Established (Released), Net Payments and Other Balance as of February 28, 2019 Short-Term Long-Term $ 53,832 $ 1,487 $ (2,105 ) $ 53,214 $ 9,908 $ 43,306 Recycling Operations As of February 28, 2019 and August 31, 2018 , the Company’s recycling operations had environmental liabilities of $53 million and $54 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 is proceeding with the process established by 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 parties have filed various motions to dismiss or stay this suit, which motions are pending. The Company intends to defend against the claims in this suit 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 ranging 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 that is 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 in that period. 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 February 28, 2019 and August 31, 2018 , the Company’s total liability for its estimated share of the costs of the investigation was $1 million and $2 million , respectively. 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 February 28, 2019 and August 31, 2018 , 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 quarter 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. As of February 28, 2019 and August 31, 2018 , the Company had $4 million accrued for this matter. 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 currently 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 related to this matter, if incurred, are covered by existing insurance coverage or may be offset by contributions from other responsible parties. In addition, the Company’s loss contingencies as of February 28, 2019 and August 31, 2018 include $8 million and $6 million , respectively, for the estimated costs related to remediation of soil and groundwater conditions, including penalties, in connection with a closed facility owned and previously operated by an indirect, 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 additional 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 February 28, 2019 and August 31, 2018 . 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 has since been renewed through February 1, 2018. The permit renewal process occurs every five years , and the renewal process is underway; however, the existing permit is extended by administrative rule until the current renewal process is finalized. Summary - Environmental Contingencies With respect to environmental contingencies other than the Portland Harbor Superfund site and the other 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, but there can be no assurance that such amounts paid will not be material in the future. 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 had been named as defendants in five separate wrongful death lawsuits filed in the State of Georgia arising from an accident in 2016 in Alabama involving a tractor trailer driven by the SSE employee and owned by SSE. In the first quarter of fiscal 2019, the Company settled two of the five lawsuits for a total of $20 million , which amount has been paid and was substantially covered by insurance. In addition to amounts accrued for the two lawsuits settled and paid in the first quarter of fiscal 2019, the Company accrued $10 million reflecting its estimate of the probable loss related to the three unresolved lawsuits and recorded a $10 million insurance receivable in fiscal 2018, resulting in no net impact to the Company’s consolidated results of operations. It is reasonably possible that the Company may recognize additional losses in connection with these unresolved lawsuits at the time such additional losses are probable and can be reasonably estimated. Such additional losses may be material to the Company’s consolidated financial statements. To the extent that circumstances change and the Company determines that an additional loss is reasonably possible, can be reasonably estimated, and is material, the Company would then disclose an estimate of the additional possible loss or range of loss. The Company believes that such additional losses, if incurred, would be substantially covered by existing insurance coverage. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 6 Months Ended |
Feb. 28, 2019 | |
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 February 28, 2019 Three Months Ended February 28, 2018 Foreign Currency Translation Adjustments Pension Obligations, Net Total Foreign Currency Translation Adjustments Pension Obligations, Net Total Balances - December 1 (Beginning of period) $ (35,493 ) $ (2,906 ) $ (38,399 ) $ (33,537 ) $ (3,383 ) $ (36,920 ) Other comprehensive income before reclassifications 632 — 632 117 — 117 Income tax (expense) benefit — — — — — — Other comprehensive income before reclassifications, net of tax 632 — 632 117 — 117 Amounts reclassified from accumulated other comprehensive loss — 52 52 — 77 77 Income tax benefit — (12 ) (12 ) — (303 ) (303 ) Amounts reclassified from accumulated other comprehensive loss, net of tax — 40 40 — (226 ) (226 ) Net periodic other comprehensive income (loss) 632 40 672 117 (226 ) (109 ) Balances - February 28 (End of period) $ (34,861 ) $ (2,866 ) $ (37,727 ) $ (33,420 ) $ (3,609 ) $ (37,029 ) Six Months Ended February 28, 2019 Six Months Ended February 28, 2018 Foreign Currency Translation Adjustments Pension Obligations, Net Total Foreign Currency Translation Adjustments Pension Obligations, Net Total Balances - September 1 (Beginning of period) $ (34,129 ) $ (3,108 ) $ (37,237 ) $ (31,828 ) $ (3,465 ) $ (35,293 ) Other comprehensive income (loss) before reclassifications (732 ) 208 (524 ) (1,592 ) (185 ) (1,777 ) Income tax (expense) benefit — (46 ) (46 ) — 227 227 Other comprehensive income (loss) before reclassifications, net of tax (732 ) 162 (570 ) (1,592 ) 42 (1,550 ) Amounts reclassified from accumulated other comprehensive loss — 104 104 — 140 140 Income tax benefit — (24 ) (24 ) — (326 ) (326 ) Amounts reclassified from accumulated other comprehensive loss, net of tax — 80 80 — (186 ) (186 ) Net periodic other comprehensive income (loss) (732 ) 242 (490 ) (1,592 ) (144 ) (1,736 ) Balances - February 28 (End of period) $ (34,861 ) $ (2,866 ) $ (37,727 ) $ (33,420 ) $ (3,609 ) $ (37,029 ) In the second quarter of fiscal 2018, the Company adopted an accounting standard update 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. 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, |
Revenue
Revenue | 6 Months Ended |
Feb. 28, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue The Company recognizes revenue upon satisfying its promises to transfer goods or services to customers under the terms of its contracts. Nearly all of these promises, referred to as performance obligations, consist of the transfer of physical goods, including ferrous and nonferrous recycled scrap metal, autobodies, auto parts, and finished steel products, to customers. These performance obligations are satisfied at the point in time the Company transfers control of the goods to the customer, which in nearly all cases is when title to and risk of loss of the goods transfer to the customer. The timing of transfer of title and risk of loss is dictated by customary or explicitly stated contract terms. For example, the Company recognizes revenue on partially loaded bulk shipments of ferrous recycled scrap metal when contractual terms support revenue recognition based on transfer of title and risk of loss. The significant majority of the Company’s sales involve transfer of control to the customer, and thus revenue recognition, before delivery to the customer’s destination; for example, upon release of the goods to the shipper. Shipping and handling activities that occur after a customer has obtained control of a good are accounted for as fulfillment costs rather than an additional promise in a contract. As such, shipping and handling consideration (freight revenue) is recognized when control of the goods transfers to the customer, and freight expense is accrued when the related revenue is recognized. In certain regional markets, the Company enters into contracts whereby it arranges for, or brokers, the transfer of scrap material between scrap suppliers and end customers. For transactions in which the Company obtains substantive control of the scrap material before the goods are transferred to the end customer, for example by arranging for the processing or warehousing of the material, the Company recognizes revenue equal to the gross amount of the consideration it expects to receive from the customer (as principal). Alternatively, for transactions in which the Company does not obtain substantive control of the scrap material before the product is transferred to the end customer, the Company recognizes revenue equal to the net amount of the consideration it expects to retain after paying the supplier for the purchase of the scrap metal (as agent). The Company is the agent in the transaction for the substantial majority of brokerage arrangements. Nearly all of the Company’s sales contracts reflect market pricing at the time the contract is executed, are one year or less, and generally provide for shipment within 30 to 60 days after the price has been agreed upon with the customer. The Company’s retail auto parts sales are at listed prices and are recognized at the point of sale. The Company recognizes revenue based on contractually stated selling prices and quantities shipped, adjusted for estimated claims and discounts. Claims are customary in the recycled scrap metal industry and arise from variances in the quantity or quality of delivered products. Revenue adjustments may be required if the settlement of claims exceeds original estimates. Discounts offered to certain finished steel customers qualify as variable consideration as the discounts are contingent upon future events. Variable consideration arising from discounts is recognized upon the transfer of finished steel products to customers based upon either the expected value or the most likely amount and was not material for the three and six months ended February 28, 2019 . The Company experiences very few sales returns and, therefore, no material provisions for returns have been made when sales are recognized. During the three and six months ended February 28, 2019 , revenue adjustments related to performance obligations that were satisfied in previous periods were not material. Disaggregation of Revenues The table below illustrates the Company’s revenues disaggregated by major product and sales destination for each reportable segment (in thousands): Three Months Ended February 28, 2019 AMR CSS Intersegment Revenues Total Revenues by major product: Ferrous $ 257,488 $ 7,120 $ (2,641 ) $ 261,967 Nonferrous 99,484 9,115 (257 ) 108,342 Steel — 74,025 — 74,025 Retail and other 29,093 138 — 29,231 Total revenues $ 386,065 $ 90,398 $ (2,898 ) $ 473,565 Revenues based on sales destination: Foreign $ 217,057 $ 16,023 $ — $ 233,080 Domestic 169,008 74,375 (2,898 ) 240,485 Total revenues $ 386,065 $ 90,398 $ (2,898 ) $ 473,565 Six Months Ended February 28, 2019 AMR CSS Intersegment Revenues Total Revenues by major product: Ferrous $ 556,300 $ 26,863 $ (5,149 ) $ 578,014 Nonferrous 203,665 18,146 (527 ) 221,284 Steel — 175,362 — 175,362 Retail and other 62,512 413 — 62,925 Total revenues $ 822,477 $ 220,784 $ (5,676 ) $ 1,037,585 Revenues based on sales destination: Foreign $ 480,568 $ 44,154 $ — $ 524,722 Domestic 341,909 176,630 (5,676 ) 512,863 Total revenues $ 822,477 $ 220,784 $ (5,676 ) $ 1,037,585 Receivables from Contracts with Customers The revenue accounting standard defines a receivable as an entity’s right to consideration that is unconditional, meaning that only the passage of time is required before payment is due. As of February 28, 2019 and August 31, 2018 , receivables from contracts with customers, net of an allowance for doubtful accounts, totaled $161 million and $164 million , respectively, representing 98% and 97% , respectively, of total accounts receivable reported on the Unaudited Condensed Consolidated Balance Sheets. Contract Liabilities Contract consideration received from a customer prior to revenue recognition is recorded as a contract liability and is recognized as revenue when the Company satisfies the related performance obligation under the terms of the contract. The Company’s contract liabilities consist almost entirely of customer deposits for recycled scrap metal sales contracts, which are reported within accounts payable on the Unaudited Condensed Consolidated Balance Sheets and totaled $4 million and $9 million as of February 28, 2019 and August 31, 2018 , respectively. Unsatisfied performance obligations reflected in these contract liabilities relate to contracts with original expected durations of one year or less. During the three and six months ended February 28, 2019 , the Company reclassified $1 million and $8 million , respectively, in customer deposits as of August 31, 2018 |
Share-Based Compensation
Share-Based Compensation | 6 Months Ended |
Feb. 28, 2019 | |
Share-based Compensation [Abstract] | |
Share-based Compensation | Share-Based Compensation In the first quarter of fiscal 2019, 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 261,642 restricted stock units (“RSUs”) and 254,620 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 on October 31, 2019. 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, or to the date retirement eligibility is achieved (if before the end of the service period). The performance share awards comprise two separate and distinct awards with different vesting conditions. The Compensation Committee granted 123,812 performance share awards based on a relative Total Shareholder Return (“TSR”) metric over a performance period spanning November 15, 2018 to August 31, 2021. 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 $4 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 130,808 performance share awards have a three-year performance period consisting of the Company’s 2019, 2020 and 2021 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 $4 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, 2021. In the second quarter of fiscal 2019, 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 31,218 shares that will vest in full on the day before the Company’s 2020 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 | 6 Months Ended |
Feb. 28, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes On December 22, 2017, the President of the United States signed and enacted into law comprehensive tax legislation commonly referred to as the 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 and a full reduction to 21% for fiscal 2019. 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 second quarter and first six months of fiscal 2018 also reflected application of the Tax Act’s lower federal statutory corporate tax rate to fiscal 2018 projected taxable income at the time. The Company’s accounting for the impacts of the Tax Act was complete as of November 30, 2018. Effective Tax Rate The Company’s effective tax rate from continuing operations for the second quarter and first six months of fiscal 2019 was an expense of 22.3% and 20.9% , respectively, compared to a benefit of 33.9% and 8.2% , respectively, for the comparable prior year periods. The Company reported a tax benefit on pre-tax income for the second quarter and first six months of fiscal 2018 primarily due to the discrete benefits recorded in the second quarter of fiscal 2018 comprising $7 million resulting from enactment of the Tax Act and $7 million from the release of valuation allowances against certain deferred tax assets. 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. As discussed above in this section, in the second quarter of fiscal 2018, the Company released valuation allowances against certain U.S. federal 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. federal, state, Canadian and all Puerto Rican deferred tax assets. |
Net Income Per Share
Net Income Per Share | 6 Months Ended |
Feb. 28, 2019 | |
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 February 28, Six Months Ended February 28, 2019 2018 2019 2018 Income from continuing operations $ 13,435 $ 41,755 $ 30,125 $ 61,011 Net income attributable to noncontrolling interests (405 ) (903 ) (835 ) (1,760 ) Income from continuing operations attributable to SSI 13,030 40,852 29,290 59,251 Income (loss) from discontinued operations, net of tax (138 ) 164 (210 ) 129 Net income attributable to SSI $ 12,892 $ 41,016 $ 29,080 $ 59,380 Computation of shares: Weighted average common shares outstanding, basic 27,630 27,797 27,568 27,745 Incremental common shares attributable to dilutive performance share, RSU and DSU awards 484 1,008 671 992 Weighted average common shares outstanding, diluted 28,114 28,805 28,239 28,737 Common stock equivalent shares of 313,956 and 159,417 were considered antidilutive and were excluded from the calculation of diluted net income per share for the three and six months ended February 28, 2019 , respectively. An insignificant number of common stock equivalent shares were considered antidilutive for the three and six months ended February 28, 2018 |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Feb. 28, 2019 | |
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 $3 million and $4 million for the three months ended February 28, 2019 and 2018 , respectively, and $7 million for the six months ended February 28, 2019 and 2018 |
Segment Information
Segment Information | 6 Months Ended |
Feb. 28, 2019 | |
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. The Company’s internal organizational and reporting structure includes two operating and reportable segments: the Auto and Metals Recycling (“AMR”) business and the Cascade Steel and Scrap (“CSS”) business. AMR acquires and recycles ferrous and nonferrous scrap metal for sale to foreign and domestic metal producers, processors and brokers, 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 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. The Company’s allocable portion of the results of these joint ventures is reported within the segment results. As of February 28, 2019 and August 31, 2018 , the Company had two 50% -owned joint venture interests, one presented as part of AMR operations, and one presented as part of CSS operations. Income from joint ventures for the three and six months ended February 28, 2018 includes the results of two additional 50% joint venture interests presented as part of AMR operations which dissolved in the fourth quarter of fiscal 2018. Intersegment sales from AMR to CSS are made at prices that approximate local market rates. These intercompany sales tend to produce intercompany profit which is 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 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, activities related to legacy environmental matters, 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 February 28, Six Months Ended February 28, 2019 2018 2019 2018 Revenues: AMR: Revenues $ 386,065 $ 449,785 $ 822,477 $ 847,839 Less intersegment revenues (2,898 ) (7,056 ) (5,676 ) (11,815 ) AMR external customer revenues 383,167 442,729 816,801 836,024 CSS: Revenues 90,398 116,714 220,784 206,698 Total revenues $ 473,565 $ 559,443 $ 1,037,585 $ 1,042,722 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 February 28, Six Months Ended February 28, 2019 2018 2019 2018 AMR $ 21,741 $ 45,132 $ 44,758 $ 80,304 CSS 5,768 5,413 17,686 13,889 Segment operating income 27,509 50,545 62,444 94,193 Restructuring charges and other exit-related activities (536 ) (91 ) (738 ) (191 ) Corporate and eliminations (7,937 ) (17,096 ) (19,981 ) (34,221 ) Operating income 19,036 33,358 41,725 59,781 Interest expense (2,067 ) (2,281 ) (3,973 ) (4,340 ) Other income, net 321 101 344 950 Income from continuing operations before income taxes $ 17,290 $ 31,178 $ 38,096 $ 56,391 The following is a summary of the Company’s total assets by reportable segment (in thousands): February 28, 2019 August 31, 2018 AMR (1) $ 1,497,819 $ 1,485,626 CSS (1) 751,996 740,967 Total segment assets 2,249,815 2,226,593 Corporate and eliminations (2) (1,162,563 ) (1,121,776 ) Total assets $ 1,087,252 $ 1,104,817 _____________________________ (1) AMR total assets include $3 million and $4 million for an investment in a joint venture as of February 28, 2019 and August 31, 2018 , respectively. CSS total assets include $8 million for an investment in a joint venture as of February 28, 2019 and August 31, 2018 . (2) |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Feb. 28, 2019 | |
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, 2018 . The results for the three and six months ended February 28, 2019 and 2018 |
Accounting Changes | Accounting Changes As of the beginning of the first quarter of fiscal 2019, the Company adopted an accounting standards update initially issued in May 2014 that clarifies the principles for recognizing revenue from contracts with customers. The core principle of the new guidance is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration the entity expects to be entitled to in exchange for those goods or services. The Company adopted the new revenue accounting standard using the modified retrospective approach, which requires recognition of the cumulative effect of initially applying the new requirements as an adjustment to the opening balance of retained earnings in the period of initial application. Adoption of the new requirements did not change the timing of revenue recognition for the Company compared to the previous guidance, and the Company recorded no cumulative-effect adjustment to the opening balance of retained earnings as of September 1, 2018. The Company identified certain scrap purchase and sale arrangements for which it recognized revenue for the gross amount of consideration it expected to be entitled to from the customer (as principal) under the previous revenue guidance, 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). The foregoing change in the classification of the cost of scrap metal purchased under such arrangements has the effect of reducing the amount of revenue and cost of goods sold reported in the financial statements, while having no impact on net income. If the Company had continued using the accounting guidance in effect before the adoption of the new revenue accounting standard, its consolidated revenues for the three and six months ended February 28, 2019 would have been higher by approximately $7 million and $13 million , respectively, or 1% for each period, and its consolidated cost of goods sold would have been higher by the same amounts, respectively. No other line items in the consolidated financial statements were materially impacted by adoption of the new requirements. Comparative prior period amounts and disclosures continue to be reported in accordance with guidance in effect prior to the date of adoption. See Note 7 - Revenue for the disclosures required under the new standard. |
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 $27 million and $28 million as of February 28, 2019 and August 31, 2018 |
Accounts Receivable, net | Accounts Receivable, net Accounts receivable represent amounts primarily due from customers on product and other sales. These accounts receivable, which are reduced by an allowance for doubtful accounts, are recorded at the invoiced amount and do not bear interest. The Company extends credit to customers under contracts containing customary and explicit payment terms, and payment is generally required within 30 days of shipment. Nonferrous export sales typically require a deposit prior to shipment. Historically, almost all of the Company’s ferrous export sales have been made with letters of credit. Domestic ferrous metal sales, nonferrous metal sales and finished steel sales are generally made on open account, and the majority of these sales are covered by credit insurance. The Company evaluates the collectibility of its accounts receivable based on a combination of factors, including whether sales were made pursuant to letters of credit or credit insurance is in place. In cases where management is aware of circumstances that may impair a customer’s ability to meet its financial obligations, management records a specific allowance against amounts due and reduces the receivable to the amount the Company believes will be collected. For all other customers, the Company maintains an allowance that considers the total receivables outstanding, historical collection rates and economic trends. Accounts are written off when all efforts to collect have been exhausted. Also included in accounts receivable are short-term advances to scrap metal suppliers used as a mechanism to acquire unprocessed scrap metal. The advances are generally repaid with scrap metal, as opposed to cash. Repayments of advances with scrap metal are treated as noncash operating activities in the Unaudited Condensed Consolidated Statements of Cash Flows and totaled $8 million and $6 million for the six months ended February 28, 2019 |
Other Assets | Prepaid Expenses The Company’s prepaid expenses totaled $14 million and $22 million as of February 28, 2019 and August 31, 2018 , respectively, and consisted primarily of deposits on capital purchases, prepaid services and prepaid insurance. Other Assets The Company’s other assets, exclusive of prepaid expenses, consist primarily of receivables from insurers, an equity investment, debt issuance costs, and notes and other contractual receivables. Other assets are reported within either prepaid expenses and other current assets or other assets in the Unaudited Condensed Consolidated Balance Sheets based on their expected use either during or beyond the current operating cycle of one year from the reporting date. Receivables from insurers totaled $15 million and $36 million as of February 28, 2019 and August 31, 2018 , respectively, with the decrease in the first half of fiscal 2019 resulting from the settlement of a contingent loss recorded during fiscal 2018 in connection with lawsuits arising from a motor vehicle collision for which the Company had insurance coverage. See “Contingencies – Other” in Note 5 – Commitments and Contingencies for further discussion of the contingent loss and subsequent settlements in fiscal 2019 . The Company previously invested $6 million in a privately-held waste and recycling entity. The investment does not have a readily determinable fair value and, therefore, is carried at cost and adjusted for impairments and observable price changes. 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 carrying value of the investment was $6 million as of February 28, 2019 and August 31, 2018 |
Investment | The Company previously invested $6 million in a privately-held waste and recycling entity. The investment does not have a readily determinable fair value and, therefore, is carried at cost and adjusted for impairments and observable price changes. 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 carrying value of the investment was $6 million as of February 28, 2019 and August 31, 2018 |
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. 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 February 28, 2019 . 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 $60 million and $58 million of open letters of credit as of February 28, 2019 and August 31, 2018 |
Recent Accounting Pronouncements | Recent Accounting Pronouncements 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. Additional updates have been issued since February 2016 amending aspects of the initial update, including providing an additional and optional transition method for adoption. This standard is effective for the Company beginning in fiscal 2020, including interim periods within that fiscal year. The Company expects to initially apply the requirements by recognizing a cumulative-effect adjustment, if any, to the opening balance of retained earnings in the period of adoption. The Company is in the process of analyzing its population of leases within the scope of the new accounting standard and documenting salient lease terms to support the initial |
Revenue | Revenue The Company recognizes revenue upon satisfying its promises to transfer goods or services to customers under the terms of its contracts. Nearly all of these promises, referred to as performance obligations, consist of the transfer of physical goods, including ferrous and nonferrous recycled scrap metal, autobodies, auto parts, and finished steel products, to customers. These performance obligations are satisfied at the point in time the Company transfers control of the goods to the customer, which in nearly all cases is when title to and risk of loss of the goods transfer to the customer. The timing of transfer of title and risk of loss is dictated by customary or explicitly stated contract terms. For example, the Company recognizes revenue on partially loaded bulk shipments of ferrous recycled scrap metal when contractual terms support revenue recognition based on transfer of title and risk of loss. The significant majority of the Company’s sales involve transfer of control to the customer, and thus revenue recognition, before delivery to the customer’s destination; for example, upon release of the goods to the shipper. Shipping and handling activities that occur after a customer has obtained control of a good are accounted for as fulfillment costs rather than an additional promise in a contract. As such, shipping and handling consideration (freight revenue) is recognized when control of the goods transfers to the customer, and freight expense is accrued when the related revenue is recognized. In certain regional markets, the Company enters into contracts whereby it arranges for, or brokers, the transfer of scrap material between scrap suppliers and end customers. For transactions in which the Company obtains substantive control of the scrap material before the goods are transferred to the end customer, for example by arranging for the processing or warehousing of the material, the Company recognizes revenue equal to the gross amount of the consideration it expects to receive from the customer (as principal). Alternatively, for transactions in which the Company does not obtain substantive control of the scrap material before the product is transferred to the end customer, the Company recognizes revenue equal to the net amount of the consideration it expects to retain after paying the supplier for the purchase of the scrap metal (as agent). The Company is the agent in the transaction for the substantial majority of brokerage arrangements. Nearly all of the Company’s sales contracts reflect market pricing at the time the contract is executed, are one year or less, and generally provide for shipment within 30 to 60 days after the price has been agreed upon with the customer. The Company’s retail auto parts sales are at listed prices and are recognized at the point of sale. The Company recognizes revenue based on contractually stated selling prices and quantities shipped, adjusted for estimated claims and discounts. Claims are customary in the recycled scrap metal industry and arise from variances in the quantity or quality of delivered products. Revenue adjustments may be required if the settlement of claims exceeds original estimates. Discounts offered to certain finished steel customers qualify as variable consideration as the discounts are contingent upon future events. Variable consideration arising from discounts is recognized upon the transfer of finished steel products to customers based upon either the expected value or the most likely amount and was not material for the three and six months ended February 28, 2019 . The Company experiences very few sales returns and, therefore, no material provisions for returns have been made when sales are recognized. During the three and six months ended February 28, 2019 |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Feb. 28, 2019 | |
Inventory, Net [Abstract] | |
Inventories | Inventories consisted of the following (in thousands): February 28, 2019 August 31, 2018 Processed and unprocessed scrap metal $ 86,120 $ 111,658 Semi-finished goods 16,948 15,551 Finished goods 52,886 39,809 Supplies 42,611 38,859 Inventories $ 198,565 $ 205,877 |
Goodwill (Tables)
Goodwill (Tables) | 6 Months Ended |
Feb. 28, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The gross change in the carrying amount of goodwill for the six months ended February 28, 2019 was as follows (in thousands): Goodwill August 31, 2018 $ 168,065 Acquisition 1,575 Foreign currency translation adjustment (201 ) February 28, 2019 $ 169,439 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Feb. 28, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule Of Reserves For Environmental Liabilities | Changes in the Company’s environmental liabilities for the six months ended February 28, 2019 were as follows (in thousands): Balance as of August 31, 2018 Liabilities Established (Released), Net Payments and Other Balance as of February 28, 2019 Short-Term Long-Term $ 53,832 $ 1,487 $ (2,105 ) $ 53,214 $ 9,908 $ 43,306 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 6 Months Ended |
Feb. 28, 2019 | |
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 February 28, 2019 Three Months Ended February 28, 2018 Foreign Currency Translation Adjustments Pension Obligations, Net Total Foreign Currency Translation Adjustments Pension Obligations, Net Total Balances - December 1 (Beginning of period) $ (35,493 ) $ (2,906 ) $ (38,399 ) $ (33,537 ) $ (3,383 ) $ (36,920 ) Other comprehensive income before reclassifications 632 — 632 117 — 117 Income tax (expense) benefit — — — — — — Other comprehensive income before reclassifications, net of tax 632 — 632 117 — 117 Amounts reclassified from accumulated other comprehensive loss — 52 52 — 77 77 Income tax benefit — (12 ) (12 ) — (303 ) (303 ) Amounts reclassified from accumulated other comprehensive loss, net of tax — 40 40 — (226 ) (226 ) Net periodic other comprehensive income (loss) 632 40 672 117 (226 ) (109 ) Balances - February 28 (End of period) $ (34,861 ) $ (2,866 ) $ (37,727 ) $ (33,420 ) $ (3,609 ) $ (37,029 ) Six Months Ended February 28, 2019 Six Months Ended February 28, 2018 Foreign Currency Translation Adjustments Pension Obligations, Net Total Foreign Currency Translation Adjustments Pension Obligations, Net Total Balances - September 1 (Beginning of period) $ (34,129 ) $ (3,108 ) $ (37,237 ) $ (31,828 ) $ (3,465 ) $ (35,293 ) Other comprehensive income (loss) before reclassifications (732 ) 208 (524 ) (1,592 ) (185 ) (1,777 ) Income tax (expense) benefit — (46 ) (46 ) — 227 227 Other comprehensive income (loss) before reclassifications, net of tax (732 ) 162 (570 ) (1,592 ) 42 (1,550 ) Amounts reclassified from accumulated other comprehensive loss — 104 104 — 140 140 Income tax benefit — (24 ) (24 ) — (326 ) (326 ) Amounts reclassified from accumulated other comprehensive loss, net of tax — 80 80 — (186 ) (186 ) Net periodic other comprehensive income (loss) (732 ) 242 (490 ) (1,592 ) (144 ) (1,736 ) Balances - February 28 (End of period) $ (34,861 ) $ (2,866 ) $ (37,727 ) $ (33,420 ) $ (3,609 ) $ (37,029 ) |
Revenue (Tables)
Revenue (Tables) | 6 Months Ended |
Feb. 28, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The table below illustrates the Company’s revenues disaggregated by major product and sales destination for each reportable segment (in thousands): Three Months Ended February 28, 2019 AMR CSS Intersegment Revenues Total Revenues by major product: Ferrous $ 257,488 $ 7,120 $ (2,641 ) $ 261,967 Nonferrous 99,484 9,115 (257 ) 108,342 Steel — 74,025 — 74,025 Retail and other 29,093 138 — 29,231 Total revenues $ 386,065 $ 90,398 $ (2,898 ) $ 473,565 Revenues based on sales destination: Foreign $ 217,057 $ 16,023 $ — $ 233,080 Domestic 169,008 74,375 (2,898 ) 240,485 Total revenues $ 386,065 $ 90,398 $ (2,898 ) $ 473,565 Six Months Ended February 28, 2019 AMR CSS Intersegment Revenues Total Revenues by major product: Ferrous $ 556,300 $ 26,863 $ (5,149 ) $ 578,014 Nonferrous 203,665 18,146 (527 ) 221,284 Steel — 175,362 — 175,362 Retail and other 62,512 413 — 62,925 Total revenues $ 822,477 $ 220,784 $ (5,676 ) $ 1,037,585 Revenues based on sales destination: Foreign $ 480,568 $ 44,154 $ — $ 524,722 Domestic 341,909 176,630 (5,676 ) 512,863 Total revenues $ 822,477 $ 220,784 $ (5,676 ) $ 1,037,585 |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 6 Months Ended |
Feb. 28, 2019 | |
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 February 28, Six Months Ended February 28, 2019 2018 2019 2018 Income from continuing operations $ 13,435 $ 41,755 $ 30,125 $ 61,011 Net income attributable to noncontrolling interests (405 ) (903 ) (835 ) (1,760 ) Income from continuing operations attributable to SSI 13,030 40,852 29,290 59,251 Income (loss) from discontinued operations, net of tax (138 ) 164 (210 ) 129 Net income attributable to SSI $ 12,892 $ 41,016 $ 29,080 $ 59,380 Computation of shares: Weighted average common shares outstanding, basic 27,630 27,797 27,568 27,745 Incremental common shares attributable to dilutive performance share, RSU and DSU awards 484 1,008 671 992 Weighted average common shares outstanding, diluted 28,114 28,805 28,239 28,737 |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Feb. 28, 2019 | |
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 February 28, Six Months Ended February 28, 2019 2018 2019 2018 Revenues: AMR: Revenues $ 386,065 $ 449,785 $ 822,477 $ 847,839 Less intersegment revenues (2,898 ) (7,056 ) (5,676 ) (11,815 ) AMR external customer revenues 383,167 442,729 816,801 836,024 CSS: Revenues 90,398 116,714 220,784 206,698 Total revenues $ 473,565 $ 559,443 $ 1,037,585 $ 1,042,722 |
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 February 28, Six Months Ended February 28, 2019 2018 2019 2018 AMR $ 21,741 $ 45,132 $ 44,758 $ 80,304 CSS 5,768 5,413 17,686 13,889 Segment operating income 27,509 50,545 62,444 94,193 Restructuring charges and other exit-related activities (536 ) (91 ) (738 ) (191 ) Corporate and eliminations (7,937 ) (17,096 ) (19,981 ) (34,221 ) Operating income 19,036 33,358 41,725 59,781 Interest expense (2,067 ) (2,281 ) (3,973 ) (4,340 ) Other income, net 321 101 344 950 Income from continuing operations before income taxes $ 17,290 $ 31,178 $ 38,096 $ 56,391 |
Reconciliation of Assets from Segment to Consolidated | The following is a summary of the Company’s total assets by reportable segment (in thousands): February 28, 2019 August 31, 2018 AMR (1) $ 1,497,819 $ 1,485,626 CSS (1) 751,996 740,967 Total segment assets 2,249,815 2,226,593 Corporate and eliminations (2) (1,162,563 ) (1,121,776 ) Total assets $ 1,087,252 $ 1,104,817 _____________________________ (1) AMR total assets include $3 million and $4 million for an investment in a joint venture as of February 28, 2019 and August 31, 2018 , respectively. CSS total assets include $8 million for an investment in a joint venture as of February 28, 2019 and August 31, 2018 . (2) |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Revenue, Initial Application Period Cumulative Effect Transition (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Feb. 28, 2019 | Feb. 28, 2018 | Feb. 28, 2019 | Feb. 28, 2018 | Sep. 01, 2018 | Aug. 31, 2018 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||||
Retained earnings | $ 658,424,000 | $ 658,424,000 | $ 639,684,000 | |||
Revenues | 473,565,000 | $ 559,443,000 | 1,037,585,000 | $ 1,042,722,000 | ||
Cost of goods sold | 414,688,000 | $ 472,462,000 | 904,820,000 | $ 878,713,000 | ||
Difference between Revenue Guidance in Effect before and after Topic 606 | Accounting Standards Update 2014-09 | ||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||||
Retained earnings | $ 0 | |||||
Revenues | $ 7,000,000 | $ 13,000,000 | ||||
Percentage of Total Revenue | 1.00% | 1.00% | ||||
Cost of goods sold | $ 7,000,000 | $ 13,000,000 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Narrative (Details) - USD ($) | 6 Months Ended | |||
Feb. 28, 2019 | Feb. 28, 2018 | Aug. 31, 2018 | Feb. 28, 2017 | |
Accounting Policies [Abstract] | ||||
Book Overdrafts | $ 27,000,000 | $ 28,000,000 | ||
Repayment of Advances with Scrap Metal | 8,000,000 | $ 6,000,000 | ||
Prepaid Expense | 14,000,000 | 22,000,000 | ||
Insurance Receivable | 15,000,000 | 36,000,000 | ||
Investment, Original Cost | $ 6,000,000 | |||
Cost Method Investments | 6,000,000 | |||
Investment, Carrying Value | 6,000,000 | |||
Cash, FDIC Insured Amount | 250,000 | |||
Customer Issued Letters Of Credit | $ 60,000,000 | $ 58,000,000 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Feb. 28, 2019 | Aug. 31, 2018 |
Inventory, Net [Abstract] | ||
Processed and unprocessed scrap metal | $ 86,120 | $ 111,658 |
Semi-finished goods | 16,948 | 15,551 |
Finished goods | 52,886 | 39,809 |
Supplies | 42,611 | 38,859 |
Inventories | $ 198,565 | $ 205,877 |
Goodwill - Schedule of Goodwill
Goodwill - Schedule of Goodwill (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Feb. 28, 2019 | Feb. 28, 2019 | |
Goodwill [Roll Forward] | ||
August 31, 2018 | $ 168,065 | |
February 28, 2019 | $ 169,439 | 169,439 |
Auto and Metals Recycling | ||
Goodwill [Roll Forward] | ||
August 31, 2018 | 168,065 | |
Acquisition | 2,000 | 1,575 |
Foreign currency translation adjustment | (201) | |
February 28, 2019 | $ 169,439 | $ 169,439 |
Goodwill - Narrative (Details)
Goodwill - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Feb. 28, 2019 | Feb. 28, 2019 | Aug. 31, 2018 | |
Goodwill [Line Items] | |||
Goodwill | $ 169,439 | $ 169,439 | $ 168,065 |
Goodwill, Impaired, Accumulated Impairment Loss | 471,000 | 471,000 | 471,000 |
Auto and Metals Recycling | |||
Goodwill [Line Items] | |||
Goodwill | 169,439 | 169,439 | 168,065 |
Business Combination, Consideration Transferred | 2,000 | ||
Goodwill, Acquired During Period | 2,000 | 1,575 | |
Reporting Unit | Auto and Metals Recycling | |||
Goodwill [Line Items] | |||
Goodwill | $ 1,000 | $ 1,000 | $ 1,000 |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of Environmental Liabilities (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Feb. 28, 2019 | Aug. 31, 2018 | |
Accrual for Environmental Loss Contingencies [Roll Forward] | ||
Beginning Balance | $ 53,832 | |
Liabilities Established (Released), Net | 1,487 | |
Payments and Other | (2,105) | |
Ending Balance | 53,214 | |
Short-Term | 9,908 | $ 6,682 |
Long-Term | $ 43,306 | $ 47,150 |
Commitments and Contingencies_2
Commitments and Contingencies - Recycling Operations and Other Legacy (Details) | Dec. 31, 2017potentially_responsible_party | Aug. 31, 2007USD ($) | Jan. 31, 2017USD ($) | Nov. 30, 2017USD ($) | Feb. 28, 2019USD ($) | Aug. 31, 2018USD ($) | Jan. 30, 2017potentially_responsible_partyparty | Aug. 31, 2016USD ($) |
Loss Contingencies [Line Items] | ||||||||
Accrual for Environmental Loss Contingencies | $ 53,214,000 | $ 53,832,000 | ||||||
Parties Liable in Litigation | party | 30 | |||||||
Liabilities Established | 1,487,000 | |||||||
Insurance Receivable | 15,000,000 | 36,000,000 | ||||||
Legacy Environmental Site 1 - Remediation of Shredder Residue | ||||||||
Loss Contingencies [Line Items] | ||||||||
Accrual for Environmental Loss Contingencies | 4,000,000 | 4,000,000 | ||||||
Environmental remediation expense accrued in the period | $ 4,000,000 | |||||||
Legacy Environmental Site 2 - Remediation of Soil and Groundwater Conditions | ||||||||
Loss Contingencies [Line Items] | ||||||||
Accrual for Environmental Loss Contingencies | 8,000,000 | 6,000,000 | ||||||
Portland Harbor Superfund Site | ||||||||
Loss Contingencies [Line Items] | ||||||||
Accrual for Environmental Loss Contingencies | 1,000,000 | 2,000,000 | ||||||
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 | |||||||
Insurance Receivable | $ 2,000,000 | |||||||
Other Auto and Metals Recycling Business Sites | ||||||||
Loss Contingencies [Line Items] | ||||||||
Accrual for Environmental Loss Contingencies | 53,000,000 | $ 54,000,000 | ||||||
Minimum | Legacy Environmental Site 1 - Remediation of Shredder Residue | ||||||||
Loss Contingencies [Line Items] | ||||||||
Loss contingency, range of possible loss | 0 | |||||||
Maximum | Legacy Environmental Site 1 - Remediation of Shredder Residue | ||||||||
Loss Contingencies [Line Items] | ||||||||
Loss contingency, range of possible loss | $ 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 Undiscounted | $ 1,700,000,000 | |||||||
Estimated Cost of Selected Remedy Discounted | $ 1,050,000,000 | |||||||
Estimated Cost of Selected Remedy, Discount Rate | 7.00% | |||||||
Site Contingency, Estimated Construction Time Frame | 13 years | |||||||
Potential Responsible Parties | Minimum | Portland Harbor Superfund Site | ||||||||
Loss Contingencies [Line Items] | ||||||||
Site Contingency, Least Costly Remediation Plan Discounted | $ 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 Discounted | $ 2,500,000,000 | |||||||
Estimated Cost of Selected Remedy, Range | 50.00% |
Commitments and Contingencies_3
Commitments and Contingencies - Steel Manufacturing Operations (Details) T in Thousands | 6 Months Ended | |
Feb. 28, 2019USD ($)T | Aug. 31, 2018USD ($) | |
Loss Contingencies [Line Items] | ||
Accrual for Environmental Loss Contingencies | $ 53,214,000 | $ 53,832,000 |
Steel Manufacturing Operations | ||
Loss Contingencies [Line Items] | ||
Accrual for Environmental Loss Contingencies | $ 0 | $ 0 |
Permitted Annual Production Capacity | T | 950 | |
Permit, Renewal Period | 5 years |
Commitments and Contingencies_4
Commitments and Contingencies - Other (Details) $ in Millions | 3 Months Ended | ||
Nov. 30, 2018USD ($)lawsuit | Feb. 28, 2019USD ($) | Aug. 31, 2018USD ($) | |
Loss Contingencies [Line Items] | |||
Insurance Receivable | $ 15 | $ 36 | |
GEORGIA | Wrongful Death Lawsuits | Settled Litigation | |||
Loss Contingencies [Line Items] | |||
Claims Settled | lawsuit | 2 | ||
Amount Awarded | $ 20 | ||
GEORGIA | Wrongful Death Lawsuits | Pending Litigation | |||
Loss Contingencies [Line Items] | |||
Claims Filed | lawsuit | 5 | ||
Accrual, Current | $ 10 | ||
Pending Claims | lawsuit | 3 | ||
Insurance Receivable | $ 10 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Feb. 28, 2019 | Feb. 28, 2018 | Feb. 28, 2019 | Feb. 28, 2018 | |
Increase (Decrease) In Accumulated Other Comprehensive Loss [Roll Forward} | ||||
Beginning balance | $ 675,983 | $ 551,617 | $ 670,110 | $ 537,493 |
Total other comprehensive income (loss), net of tax | 672 | (109) | (490) | (1,736) |
Ending balance | 680,847 | 587,096 | 680,847 | 587,096 |
Foreign Currency Translation Adjustments | ||||
Increase (Decrease) In Accumulated Other Comprehensive Loss [Roll Forward} | ||||
Beginning balance | (35,493) | (33,537) | (34,129) | (31,828) |
Other comprehensive income (loss) before reclassifications | 632 | 117 | (732) | (1,592) |
Income tax (expense) benefit | 0 | 0 | 0 | 0 |
Other comprehensive income before reclassifications, net of tax | 632 | 117 | (732) | (1,592) |
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 income (loss), net of tax | 632 | 117 | (732) | (1,592) |
Ending balance | (34,861) | (33,420) | (34,861) | (33,420) |
Pension Obligations, net | ||||
Increase (Decrease) In Accumulated Other Comprehensive Loss [Roll Forward} | ||||
Beginning balance | (2,906) | (3,383) | (3,108) | (3,465) |
Other comprehensive income (loss) before reclassifications | 0 | 0 | 208 | (185) |
Income tax (expense) benefit | 0 | 0 | (46) | 227 |
Other comprehensive income before reclassifications, net of tax | 0 | 0 | 162 | 42 |
Amounts reclassified from accumulated other comprehensive loss | 52 | 77 | 104 | 140 |
Income tax benefit | (12) | (303) | (24) | (326) |
Amounts reclassified from accumulated other comprehensive loss, net of tax | 40 | (226) | 80 | (186) |
Total other comprehensive income (loss), net of tax | 40 | (226) | 242 | (144) |
Ending balance | (2,866) | (3,609) | (2,866) | (3,609) |
Accumulated Other Comprehensive Loss | ||||
Increase (Decrease) In Accumulated Other Comprehensive Loss [Roll Forward} | ||||
Beginning balance | (38,399) | (36,920) | (37,237) | (35,293) |
Other comprehensive income (loss) before reclassifications | 632 | 117 | (524) | (1,777) |
Income tax (expense) benefit | 0 | 0 | (46) | 227 |
Other comprehensive income before reclassifications, net of tax | 632 | 117 | (570) | (1,550) |
Amounts reclassified from accumulated other comprehensive loss | 52 | 77 | 104 | 140 |
Income tax benefit | (12) | (303) | (24) | (326) |
Amounts reclassified from accumulated other comprehensive loss, net of tax | 40 | (226) | 80 | (186) |
Total other comprehensive income (loss), net of tax | 672 | (109) | (490) | (1,736) |
Ending balance | $ (37,727) | $ (37,029) | $ (37,727) | $ (37,029) |
Revenue - Disaggregation of Rev
Revenue - Disaggregation of Revenues (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Feb. 28, 2019 | Feb. 28, 2018 | Feb. 28, 2019 | Feb. 28, 2018 | |
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 473,565 | $ 559,443 | $ 1,037,585 | $ 1,042,722 |
Auto and Metals Recycling | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 386,065 | 822,477 | ||
Cascade Steel and Scrap | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 90,398 | 220,784 | ||
Intersegment Eliminations | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | (2,898) | (5,676) | ||
Foreign | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 233,080 | 524,722 | ||
Foreign | Auto and Metals Recycling | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 217,057 | 480,568 | ||
Foreign | Cascade Steel and Scrap | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 16,023 | 44,154 | ||
Foreign | Intersegment Eliminations | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 0 | ||
Domestic | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 240,485 | 512,863 | ||
Domestic | Auto and Metals Recycling | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 169,008 | 341,909 | ||
Domestic | Cascade Steel and Scrap | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 74,375 | 176,630 | ||
Domestic | Intersegment Eliminations | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | (2,898) | (5,676) | ||
Ferrous | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 261,967 | 578,014 | ||
Ferrous | Auto and Metals Recycling | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 257,488 | 556,300 | ||
Ferrous | Cascade Steel and Scrap | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 7,120 | 26,863 | ||
Ferrous | Intersegment Eliminations | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | (2,641) | (5,149) | ||
Nonferrous | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 108,342 | 221,284 | ||
Nonferrous | Auto and Metals Recycling | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 99,484 | 203,665 | ||
Nonferrous | Cascade Steel and Scrap | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 9,115 | 18,146 | ||
Nonferrous | Intersegment Eliminations | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | (257) | (527) | ||
Steel | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 74,025 | 175,362 | ||
Steel | Auto and Metals Recycling | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 0 | ||
Steel | Cascade Steel and Scrap | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 74,025 | 175,362 | ||
Steel | Intersegment Eliminations | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 0 | ||
Retail and other | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 29,231 | 62,925 | ||
Retail and other | Auto and Metals Recycling | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 29,093 | 62,512 | ||
Retail and other | Cascade Steel and Scrap | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 138 | 413 | ||
Retail and other | Intersegment Eliminations | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 0 | $ 0 |
Revenue - Receivables from Cont
Revenue - Receivables from Contracts with Customers (Details) - USD ($) $ in Millions | Feb. 28, 2019 | Aug. 31, 2018 |
Revenue from Contract with Customer [Abstract] | ||
Receivables from Contracts with Customers, Net | $ 161 | $ 164 |
Percentage Receivables From Contracts With Customers of Accounts Receivable | 98.00% | 97.00% |
Revenue - Contract Liabilities
Revenue - Contract Liabilities (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |
Feb. 28, 2019 | Feb. 28, 2019 | Aug. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |||
Contract with Customer, Liability | $ 4 | $ 4 | $ 9 |
Contract with Customer, Liability, Revenue Recognized | $ 1 | $ 8 |
Share-Based Compensation (Detai
Share-Based Compensation (Details) $ in Millions | 3 Months Ended | |
Feb. 28, 2019USD ($)shares | Nov. 30, 2018USD ($)companyshares | |
Restricted Stock Units (RSUs) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares granted (in shares) | 261,642 | |
Vesting term | 5 years | |
Vesting percentage per year | 20.00% | |
Shares granted, fair value | $ | $ 7 | |
Performance Shares (PSUs) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares granted (in shares) | 254,620 | |
Performance Shares (PSUs) | Total Shareholder Return (TSR) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares granted (in shares) | 123,812 | |
Shares granted, fair value | $ | $ 4 | |
Total Shareholder Return Designated Peer Group | company | 16 | |
Performance period | 3 years | |
Performance Shares (PSUs) | 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 (PSUs) | 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 (PSUs) | Return on Capital Employed (ROCE) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares granted (in shares) | 130,808 | |
Shares granted, fair value | $ | $ 4 | |
Performance period | 3 years | |
Performance Shares (PSUs) | 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 (PSUs) | 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% | |
Deferred Stock Units (DSUs) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares granted, fair value | $ | $ 1 | |
Deferred Stock Units (DSUs) | Non-employee Directors | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares granted (in shares) | 31,218 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Feb. 28, 2019 | Feb. 28, 2018 | Nov. 30, 2017 | Feb. 28, 2019 | Feb. 28, 2018 | Aug. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||||||
Federal statutory rate (35% Prior to Enactment of Tax Act) | 35.00% | 21.00% | 25.70% | |||
Tax Cuts And Jobs Act Of 2017 Incomplete Accounting Provisional Income Tax Expense Benefit | $ (7) | |||||
Effective tax rate | 22.30% | (33.90%) | 20.90% | (8.20%) | ||
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount | $ (7) |
Net Income Per Share (Details)
Net Income Per Share (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Feb. 28, 2019 | Feb. 28, 2018 | Feb. 28, 2019 | Feb. 28, 2018 | |
Earnings Per Share [Abstract] | ||||
Income from continuing operations | $ 13,435 | $ 41,755 | $ 30,125 | $ 61,011 |
Net income attributable to noncontrolling interests | (405) | (903) | (835) | (1,760) |
Income from continuing operations attributable to SSI | 13,030 | 40,852 | 29,290 | 59,251 |
Income (loss) from discontinued operations, net of tax | (138) | 164 | (210) | 129 |
Net income attributable to SSI | $ 12,892 | $ 41,016 | $ 29,080 | $ 59,380 |
Computation of shares: | ||||
Weighted average common shares outstanding, basic (in shares) | 27,630,000 | 27,797,000 | 27,568,000 | 27,745,000 |
Incremental common shares attributable to dilutive performance share awards, DSUs, and RSUs (in shares) | 484,000 | 1,008,000 | 671,000 | 992,000 |
Weighted average common shares outstanding, diluted (in shares) | 28,114,000 | 28,805,000 | 28,239,000 | 28,737,000 |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in shares) | 313,956 | 159,417 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Feb. 28, 2019 | Feb. 28, 2018 | Feb. 28, 2019 | Feb. 28, 2018 | |
Corporate Joint Venture | ||||
Related Party Transaction [Line Items] | ||||
Purchases from joint ventures | $ 3 | $ 4 | $ 7 | $ 7 |
Segment Information - Segment I
Segment Information - Segment Information (Details) $ in Thousands | 3 Months Ended | 12 Months Ended |
Feb. 28, 2019USD ($)jointventureinterestssegment | Aug. 31, 2018USD ($)jointventureinterests | |
Segment Reporting Information [Line Items] | ||
Number of Operating Segments | segment | 2 | |
Number of Equity Method Investments | 2 | 2 |
Equity Method Investment, Ownership Percentage | 50.00% | 50.00% |
Investments in joint ventures | $ | $ 10,703 | $ 11,532 |
Auto and Metals Recycling | ||
Segment Reporting Information [Line Items] | ||
Number of Joint Venture Investments | 1 | 1 |
Number of Equity Method Investments, Divested in the Period | 2 | |
Investments in joint ventures | $ | $ 3,000 | $ 4,000 |
Cascade Steel and Scrap | ||
Segment Reporting Information [Line Items] | ||
Number of Joint Venture Investments | 1 | 1 |
Investments in joint ventures | $ | $ 8,000 | $ 8,000 |
Segment Information - Segment R
Segment Information - Segment Revenue Reconciliation to Consolidated (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Feb. 28, 2019 | Feb. 28, 2018 | Feb. 28, 2019 | Feb. 28, 2018 | |
Segment Reporting Information [Line Items] | ||||
Revenues | $ 473,565 | $ 559,443 | $ 1,037,585 | $ 1,042,722 |
Auto and Metals Recycling | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 386,065 | 822,477 | ||
Cascade Steel and Scrap | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 90,398 | 220,784 | ||
Operating Segments | Auto and Metals Recycling | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 386,065 | 449,785 | 822,477 | 847,839 |
Operating Segments | Cascade Steel and Scrap | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 90,398 | 116,714 | 220,784 | 206,698 |
Less: Intersegment revenues | Auto and Metals Recycling | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | (2,898) | (7,056) | (5,676) | (11,815) |
Segment Reconciling Items | Auto and Metals Recycling | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | $ 383,167 | $ 442,729 | $ 816,801 | $ 836,024 |
Segment Information - Segment O
Segment Information - Segment Operating Income Reconciliation to Consolidated (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Feb. 28, 2019 | Feb. 28, 2018 | Feb. 28, 2019 | Feb. 28, 2018 | |
Segment Reporting Information [Line Items] | ||||
Operating income | $ 19,036 | $ 33,358 | $ 41,725 | $ 59,781 |
Restructuring charges and other exit-related activities | (536) | (91) | (738) | (191) |
Interest expense | (2,067) | (2,281) | (3,973) | (4,340) |
Other income, net | 321 | 101 | 344 | 950 |
Income from continuing operations before income taxes | 17,290 | 31,178 | 38,096 | 56,391 |
Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Operating income | 27,509 | 50,545 | 62,444 | 94,193 |
Operating Segments | Auto and Metals Recycling | ||||
Segment Reporting Information [Line Items] | ||||
Operating income | 21,741 | 45,132 | 44,758 | 80,304 |
Operating Segments | Cascade Steel and Scrap | ||||
Segment Reporting Information [Line Items] | ||||
Operating income | 5,768 | 5,413 | 17,686 | 13,889 |
Segment Reconciling Items | ||||
Segment Reporting Information [Line Items] | ||||
Restructuring charges and other exit-related activities | (536) | (91) | (738) | (191) |
Corporate and eliminations | ||||
Segment Reporting Information [Line Items] | ||||
Operating income | $ (7,937) | $ (17,096) | $ (19,981) | $ (34,221) |
Segment Information - Segment A
Segment Information - Segment Assets Reconciliation to Consolidated (Details) - USD ($) $ in Thousands | Feb. 28, 2019 | Aug. 31, 2018 |
Segment Reporting Information [Line Items] | ||
Investments in joint ventures | $ 10,703 | $ 11,532 |
Assets | 1,087,252 | 1,104,817 |
Auto and Metals Recycling | ||
Segment Reporting Information [Line Items] | ||
Investments in joint ventures | 3,000 | 4,000 |
Cascade Steel and Scrap | ||
Segment Reporting Information [Line Items] | ||
Investments in joint ventures | 8,000 | 8,000 |
Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Assets | 2,249,815 | 2,226,593 |
Operating Segments | Auto and Metals Recycling | ||
Segment Reporting Information [Line Items] | ||
Assets | 1,497,819 | 1,485,626 |
Operating Segments | Cascade Steel and Scrap | ||
Segment Reporting Information [Line Items] | ||
Assets | 751,996 | 740,967 |
Corporate and eliminations | ||
Segment Reporting Information [Line Items] | ||
Assets | $ (1,162,563) | $ (1,121,776) |