NOTE 5. SALES OF ACCOUNTS RECEIVABLE

During the fourth quarter of fiscal 2014, the Company entered into a third amended $200 million U.S. sale of accounts receivable program which expires on August 15, 2017. Under the program, Commercial Metals Company contributes, and several of its subsidiaries sell without recourse, certain eligible trade accounts receivable to CMC Receivables, Inc. ("CMCRV"), a wholly owned subsidiary of CMC. CMCRV is structured to be a bankruptcy-remote entity and was formed for the sole purpose of buying and selling trade accounts receivable generated by the Company. CMCRV sells the trade accounts receivable in their entirety to three financial institutions. Under the amended U.S. sale of accounts receivable program, with the consent of both CMCRV and the program's administrative agent, the amount advanced by the financial institutions can be increased to a maximum of $300 million for all trade accounts receivable sold. The remaining portion of the purchase price of the trade accounts receivable takes the form of subordinated notes from the respective financial institutions, these notes will be satisfied from the ultimate collection of the trade accounts receivable after payment of certain fees and other costs. The Company accounts for sales of the trade accounts receivable as true sales, and the trade accounts receivable balances that are sold are removed from the consolidated balance sheets. The cash advances received are reflected as cash provided by operating activities on the Company's consolidated statements of cash flows. Additionally, the U.S. sale of accounts receivable program contains certain cross-default provisions whereby a termination event could occur if the Company defaulted under certain of its credit arrangements. The covenants contained in the receivables purchase agreement are consistent with the credit facility described in Note 11, Credit Arrangements.

At August 31, 2014 and 2013, under its U.S. sale of accounts receivable program, the Company had sold $389.6 million and $358.8 million of trade accounts receivable, respectively, to the financial institutions. At August 31, 2014, the Company had $55.0 million in advance payments outstanding on the sale of its trade accounts receivable. The Company had no advance payments outstanding on the sale of its trade accounts receivable at August 31, 2013.

In addition to the U.S. sale of accounts receivable program described above, the Company's international subsidiaries in Europe and Australia sell trade accounts receivable to financial institutions without recourse. These arrangements constitute true sales, and once the trade accounts receivable are sold, they are no longer available to the Company's creditors in the event of bankruptcy. The European program allows the Company's European subsidiaries to obtain an advance of up to 90% of eligible trade accounts receivable sold under the terms of the arrangement. During the first quarter of fiscal 2014, the Company phased out its existing Australian program and entered into a new, one year renewable, trade accounts receivable sales program with a different financial institution. Under the new Australian program, trade accounts receivable balances are sold to a special purpose vehicle, which in turn sells 100% of the eligible trade accounts receivable of Commercial Metals Pty. Ltd., CMC Steel Distribution Pty. Ltd. and G.A.M. Steel Pty. Ltd. to the financial institution. Under the new Australian program, the financial institution will fund up to A$75.0 million for all trade accounts receivable sold, and the remaining portion of the purchase price of the trade accounts receivable is in the form of a subordinated note from the financial institution. This note will be satisfied from the ultimate collection of the trade accounts receivable after payment of certain fees and other costs. The Company accounts for sales of the trade accounts receivable as true sales, and the trade accounts receivable balances that are sold are removed from the consolidated balance sheets. The cash advances received are reflected as cash provided by operating activities on the Company's consolidated statements of cash flows.

In October 2014, the Company entered into a first amendment to its Australian program which extended the maturity date to October 2016.

At August 31, 2014 and 2013, under its European and Australian programs, the Company had sold $147.3 million and $121.2 million of trade accounts receivable, respectively, to third-party financial institutions and received advance payments of $90.5 million and $24.5 million, respectively.

For the years ended August 31, 2014, 2013 and 2012, cash proceeds from the U.S. and international sale of accounts receivable programs were $688.2 million, $1.0 billion and $1.9 billion, respectively, and cash payments to the owners of accounts receivable were $567.2 million, $1.1 billion and $1.9 billion, respectively. For a nominal servicing fee, the Company is responsible for servicing the accounts receivable for the U.S. and Australian programs. Discounts on U.S. and international sales of trade accounts receivable were $3.9 million, $3.9 million and $6.4 million for the years ended August 31, 2014, 2013 and 2012, respectively, and are included in selling, general and administrative expenses in the Company's consolidated statements of operations.

The deferred purchase price on the Company's U.S. and international sale of trade accounts receivable programs are included in accounts receivable on the Company's consolidated balance sheets. The following tables summarize the activity of the deferred purchase price receivables for the U.S. and international sale of accounts receivable programs:



(in thousands)	Total			U.S.			Australia			Europe
Balance at September 1, 2011	$	604,003		$	510,136		$	80,821		$	13,046
Transfers of accounts receivable	5,558,246			4,388,366			509,691			660,189
Collections	(5,646,768		)	(4,501,583		)	(520,439		)	(624,746		)
Balance at August 31, 2012	$	515,481		$	396,919		$	70,073		$	48,489
Transfers of accounts receivable	4,423,952			3,570,922			408,530			444,500
Collections	(4,486,181		)	(3,609,019		)	(413,607		)	(463,555		)
Balance at August 31, 2013	$	453,252		$	358,822		$	64,996		$	29,434
Transfers of accounts receivable	4,243,471			3,347,103			487,583			408,785
Collections	(4,239,242		)	(3,376,128		)	(446,196		)	(416,918		)
Program termination	(72,312		)	—			(72,312		)	—
Balance at August 31, 2014	$	385,169		$	329,797		$	34,071		$	21,301