NOTE 5. SALES OF ACCOUNTS RECEIVABLE

On July 29, 2016, the Company entered into a fifth amended $200.0 million U.S. sale of accounts receivable program which expires on August 15, 2019. 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 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 two 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 $300.0 million for all trade accounts receivable sold. The remaining portion of the purchase price of the trade accounts receivable takes the form of subordinated notes from the respective financial institutions. These notes will be satisfied from the ultimate collection of the trade accounts receivable after payment of certain fees and other costs. The Company accounts for sales of the trade accounts receivable as true sales, and the trade accounts receivable balances that are sold are removed from the consolidated balance sheets. The cash advances received are reflected as cash provided by operating activities on the Company's consolidated statements of cash flows. Additionally, the U.S. sale of accounts receivable program contains certain cross-default provisions whereby a termination event could occur if the Company defaulted under certain of its credit arrangements. The covenants contained in the receivables purchase agreement are consistent with the credit facility described in Note 11, Credit Arrangements.

At August 31, 2016 and 2015, under its U.S. sale of accounts receivable program, the Company had sold $215.9 million and $274.3 million of trade accounts receivable, respectively, to the financial institutions. At August 31, 2016 and 2015, the Company had no advance payments outstanding on the sale of its trade accounts receivable.

In addition to the U.S. sale of accounts receivable program described above, the Company's international subsidiaries in Europe and Australia sell, or have sold in the past, 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. In the third quarter of fiscal 2015, the Company phased out its existing European program and entered into a new, two year renewable, trade accounts receivable sales program with a different financial institution. The new agreement increased the facility limit from Polish zloty ("PLN") 200.0 million to PLN 220.0 million. The European program allows the Company's European subsidiaries to obtain an advance of up to 90% of eligible trade accounts receivable sold under the terms of the arrangement. In 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. Subsequently, through two amendments, the facility limit was reduced from A$75.0 million to A$40.0 million and the maturity extended for two years. Under the Australian program, trade accounts receivable balances are sold to a special purpose entity, which in turn sells 100% of the eligible trade accounts receivable of the Company's Australian entities to the financial institution. The financial institution will fund up to the facility limit 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 2016, the Company's existing Australian program expired and the Company currently does not plan to enter into a new program.

At August 31, 2016 and 2015, under its European and Australian programs, the Company had sold $85.7 million and $97.9 million of trade accounts receivable, respectively, to third-party financial institutions and received advance payments of $8.3 million and $27.7 million, respectively.

For the years ended August 31, 2016, 2015 and 2014, cash proceeds from the U.S. and international sale of accounts receivable programs were $400.8 million, $596.4 million and $688.2 million, respectively, and cash payments to the owners of accounts receivable were $420.3 million, $714.2 million and $567.2 million, 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 $1.7 million, $2.4 million and $3.9 million for the years ended August 31, 2016, 2015 and 2014, respectively, and are included in selling, general and administrative expenses in the Company's consolidated statements of earnings.

The deferred purchase price on the Company's U.S. and international sale of trade accounts receivable programs is included in accounts receivable on the Company's consolidated balance sheets, except at August 31, 2015. That year, the deferred purchase price on the G.A.M. Steel Pty. Ltd. sale of accounts receivable program was included in assets of businesses held for sale on the Company’s consolidated balance sheets. The following tables summarize the activity of the deferred purchase price receivables for the U.S. and international sale of accounts receivable programs:



(in thousands)	Total			U.S.			Australia*			Europe
Balance at September 1, 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
Transfers of accounts receivable	3,574,283			2,944,627			298,179			331,477
Collections	(3,619,905		)	(3,004,646		)	(314,212		)	(301,047		)
Balance at August 31, 2015	$	339,547		$	269,778		$	18,038		$	51,731
Transfers of accounts receivable	2,389,297			1,933,477			175,593			280,227
Collections	(2,439,096		)	(1,990,493		)	(166,969		)	(281,634		)
Balance at August 31, 2016	$	289,748		$	212,762		$	26,662		$	50,324

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* Includes the sale of accounts receivable activities related to discontinued operations and businesses sold. For the years ended August 31, 2016 and 2015, transfers of accounts receivable were $45.8 million and $180.0 million, respectively, and collections were $61.7 million and $209.2 million, respectively.