10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

___________________________________

FORM 10-Q 

___________________________________

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended February 29, 2020

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from             to            

Commission file number 1-4304

___________________________________

COMMERCIAL METALS COMPANY

(Exact Name of Registrant as Specified in Its Charter)

___________________________________ 

Delaware	75-0725338
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification Number)

6565 N. MacArthur Blvd.

Irving, Texas 75039

(Address of Principal Executive Offices) (Zip Code)

(214) 689-4300

(Registrant's Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Common Stock, $0.01 par value	CMC	New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 ("Exchange Act") during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒

As of March 24, 2020, 119,061,889 shares of the registrant's common stock, par value $0.01 per share, were outstanding.

COMMERCIAL METALS COMPANY AND SUBSIDIARIES

TABLE OF CONTENTS

PART I — FINANCIAL INFORMATION	3
Item 1. Financial Statements (Unaudited)	3
Condensed Consolidated Statements of Earnings - Three and six months ended February 29, 2020 and February 28, 2019	3
Condensed Consolidated Statements of Comprehensive Income - Three and six months ended February 29, 2020 and February 28, 2019	4
Condensed Consolidated Balance Sheets - February 29, 2020 and August 31, 2019	5
Condensed Consolidated Statements of Cash Flows - Six months ended February 29, 2020 and February 28, 2019	6
Condensed Consolidated Statements of Stockholders' Equity - Three and six months ended February 29, 2020 and February 28, 2019	7
Notes to Condensed Consolidated Financial Statements	9
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3. Quantitative and Qualitative Disclosures About Market Risk	30
Item 4. Controls and Procedures	30
PART II — OTHER INFORMATION	31
Item 1. Legal Proceedings	31
Item 1A. Risk Factors	31
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	32
Item 3. Defaults Upon Senior Securities	32
Item 4. Mine Safety Disclosures	32
Item 5. Other Information	32
Item 6. Exhibits	33
Signature	34

2

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

COMMERCIAL METALS COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)
	Three Months Ended				Six Months Ended
(in thousands, except share data)	February 29, 2020		February 28, 2019		February 29, 2020		February 28, 2019
Net sales	$	1,340,963	$	1,402,783	$	2,725,671	$	2,680,125
Costs and expenses:
Cost of goods sold	1,123,096		1,252,493		2,269,610		2,370,926
Selling, general and administrative expenses	115,538		98,726		227,067		215,943
Interest expense	15,888		18,495		32,466		35,158
	1,254,522		1,369,714		2,529,143		2,622,027
Earnings from continuing operations before income taxes	86,441		33,069		196,528		58,098
Income taxes	22,845		18,141		50,177		23,750
Earnings from continuing operations	63,596		14,928		146,351		34,348
Earnings (loss) from discontinued operations before income taxes	301		(1,075)		1,196		(618)
Income taxes	99		3		401		138
Earnings (loss) from discontinued operations	202		(1,078)		795		(756)
Net earnings	$	63,798	$	13,850	$	147,146	$	33,592
Basic earnings per share*
Earnings from continuing operations	$	0.53	$	0.13	$	1.23	$	0.29
Earnings (loss) from discontinued operations	—		(0.01)		0.01		(0.01)
Net earnings	$	0.54	$	0.12	$	1.24	$	0.29
Diluted earnings per share*
Earnings from continuing operations	$	0.53	$	0.13	$	1.22	$	0.29
Earnings (loss) from discontinued operations	—		(0.01)		0.01		(0.01)
Net earnings	$	0.53	$	0.12	$	1.22	$	0.28
Average basic shares outstanding	118,919,455		117,854,335		118,644,823		117,677,422
Average diluted shares outstanding	120,407,256		118,942,758		120,303,259		118,996,427

See notes to condensed consolidated financial statements.

 _________________

*Earnings Per Share ("EPS") is calculated independently for each component and may not sum to Net EPS due to rounding.

3

COMMERCIAL METALS COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
	Three Months Ended				Six Months Ended
(in thousands)	February 29, 2020		February 28, 2019		February 29, 2020		February 28, 2019
Net earnings	$	63,798	$	13,850	$	147,146	$	33,592
Other comprehensive income, net of income taxes:
Foreign currency translation adjustment	(1,066)		514		5,858		(9,143)
Reclassification for translation gain (loss) realized upon liquidation of investment in foreign entity	(2)		936		(2)		837
Foreign currency translation adjustment	(1,068)		1,450		5,856		(8,306)
Net unrealized loss on derivatives:
Unrealized holding loss	(3,646)		(86)		(2,932)		(121)
Reclassification for loss included in net earnings	(83)		(42)		(172)		(84)
Net unrealized loss on derivatives	(3,729)		(128)		(3,104)		(205)
Defined benefit obligation:
Amortization of prior services	(8)		(8)		(16)		(15)
Reclassification for settlement losses	—		—		—		1,316
Defined benefit obligation	(8)		(8)		(16)		1,301
Other comprehensive income (loss)	(4,805)		1,314		2,736		(7,210)
Comprehensive income	$	58,993	$	15,164	$	149,882	$	26,382

See notes to condensed consolidated financial statements.

4

COMMERCIAL METALS COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(in thousands, except share data)	February 29, 2020		August 31, 2019
Assets
Current assets:
Cash and cash equivalents	$	232,442	$	192,461
Accounts receivable (less allowance for doubtful accounts of $8,388 and $8,403)	961,694		1,016,088
Inventories, net	714,842		692,368
Other current assets	176,000		179,088
Total current assets	2,084,978		2,080,005
Property, plant and equipment, net	1,522,342		1,500,971
Goodwill	64,172		64,138
Other noncurrent assets	236,446		113,657
Total assets	$	3,907,938	$	3,758,771
Liabilities and stockholders' equity
Current liabilities:
Accounts payable	$	275,491	$	288,005
Accrued expenses and other payables	329,920		353,786
Acquired unfavorable contract backlog	21,008		35,360
Current maturities of long-term debt and short-term borrowings	22,715		17,439
Total current liabilities	649,134		694,590
Deferred income taxes	123,726		79,290
Other noncurrent liabilities	232,450		133,620
Long-term debt	1,144,573		1,227,214
Total liabilities	2,149,883		2,134,714
Commitments and contingencies (Note 13)
Stockholders' equity:
Common stock, par value $0.01 per share; authorized 200,000,000 shares; issued 129,060,664 shares; outstanding 119,061,889 and 117,924,938 shares	1,290		1,290
Additional paid-in capital	351,481		358,668
Accumulated other comprehensive loss	(121,390)		(124,126)
Retained earnings	1,704,045		1,585,379
Less treasury stock 9,998,775 and 11,135,726 shares at cost	(177,583)		(197,350)
Stockholders' equity	1,757,843		1,623,861
Stockholders' equity attributable to noncontrolling interests	212		196
Total stockholders' equity	1,758,055		1,624,057
Total liabilities and stockholders' equity	$	3,907,938	$	3,758,771

See notes to condensed consolidated financial statements.

5

COMMERCIAL METALS COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
	Six Months Ended
(in thousands)	February 29, 2020		February 28, 2019
Cash flows from (used by) operating activities:
Net earnings	$	147,146	$	33,592
Adjustments to reconcile net earnings to cash flows from (used by) operating activities:
Depreciation and amortization	82,338		76,430
Deferred income taxes and other long-term taxes	42,142		11,705
Stock-based compensation	15,805		10,007
Amortization of acquired unfavorable contract backlog	(14,328)		(34,808)
Net gain on disposals of subsidiaries, assets and other	(5,585)		(1,202)
Other	1,571		(281)
Changes in operating assets and liabilities	(15,673)		(80,809)
Beneficial interest in securitized accounts receivable	—		(367,521)
Net cash flows from (used by) operating activities	253,416		(352,887)
Cash flows from (used by) investing activities:
Capital expenditures	(96,592)		(67,497)
Proceeds from the sale of property, plant and equipment	14,004		2,042
Acquisitions, net of cash acquired	(9,850)		(700,982)
Proceeds from insurance, sale of discontinued operations and other	974		5,798
Beneficial interest in securitized accounts receivable	—		367,521
Net cash flows used by investing activities:	(91,464)		(393,118)
Cash flows from (used by) financing activities:
Proceeds from issuance of long-term debt	11,299		180,000
Repayments of long-term debt	(106,880)		(14,605)
Proceeds from accounts receivable programs	85,686		140,070
Repayments under accounts receivable programs	(81,314)		(92,664)
Dividends	(28,480)		(28,181)
Stock issued under incentive and purchase plans, net of forfeitures	(2,463)		(2,856)
Contribution from noncontrolling interests	16		10
Net cash flows from (used by) financing activities	(122,136)		181,774
Effect of exchange rate changes on cash	337		(221)
Increase (decrease) in cash, restricted cash and cash equivalents	40,153		(564,452)
Cash, restricted cash and cash equivalents at beginning of period	193,729		632,615
Cash, restricted cash and cash equivalents at end of period	$	233,882	$	68,163

See notes to condensed consolidated financial statements.

Supplemental information:	Six Months Ended
(in thousands)	February 29, 2020		February 28, 2019
Cash paid for income taxes	$	27,759	$	1,771
Cash paid for interest	29,484		31,518
Noncash activities:
Liabilities related to additions of property, plant and equipment	29,176		26,186
Cash and cash equivalents	$	232,442	$	66,742
Restricted cash	1,440		1,421
Total cash, restricted cash and cash equivalents	$	233,882	$	68,163

6

COMMERCIAL METALS COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED)
	Three Months Ended February 29, 2020
	Common Stock			Additional		Accumulated Other				Treasury Stock			Non-
(in thousands, except share data)	Number of Shares	Amount		Paid-In Capital		Comprehensive Loss		Retained Earnings		Number of Shares	Amount		controlling Interests		Total
Balance, November 30, 2019	129,060,664	$	1,290	$	347,192	$	(116,585)	$	1,654,489	(10,410,799)	$	(184,885)	$	196	$	1,701,697
Net earnings								63,798							63,798
Other comprehensive loss						(4,805)									(4,805)
Dividends ($0.12 per share)								(14,242)							(14,242)
Issuance of stock under incentive and purchase plans, net of forfeitures				(1,948)						412,024	7,302				5,354
Stock-based compensation				6,237											6,237
Contribution of noncontrolling interests													16		16
Balance, February 29, 2020	129,060,664	$	1,290	$	351,481	$	(121,390)	$	1,704,045	(9,998,775)	$	(177,583)	$	212	$	1,758,055
	Six Months Ended February 29, 2020
	Common Stock			Additional		Accumulated Other				Treasury Stock			Non-
(in thousands, except share data)	Number of Shares	Amount		Paid-In Capital		Comprehensive Loss		Retained Earnings		Number of Shares	Amount		controlling Interests		Total
Balance, September 1, 2019	129,060,664	$	1,290	$	358,668	$	(124,126)	$	1,585,379	(11,135,726)	$	(197,350)	$	196	$	1,624,057
Net earnings								147,146							147,146
Other comprehensive income						2,736									2,736
Dividends ($0.12 per share)								(28,480)							(28,480)
Issuance of stock under incentive and purchase plans, net of forfeitures				(22,230)						1,136,951	19,767				(2,463)
Stock-based compensation				15,043											15,043
Contribution of noncontrolling interests													16		16
Balance, February 29, 2020	129,060,664	$	1,290	$	351,481	$	(121,390)	$	1,704,045	(9,998,775)	$	(177,583)	$	212	$	1,758,055

7

	Three Months Ended February 28, 2019
	Common Stock			Additional		Accumulated Other				Treasury Stock			Non-
(in thousands, except share data)	Number of Shares	Amount		Paid-In Capital		Comprehensive Loss		Retained Earnings		Number of Shares	Amount		controlling Interests		Total
Balance, November 30, 2018	129,060,664	$	1,290	$	342,893	$	(102,201)	$	1,449,374	(11,426,463)	$	(202,515)	$	186	$	1,489,027
Net earnings								13,850							13,850
Other comprehensive income						1,314									1,314
Dividends ($0.12 per share)								(14,065)							(14,065)
Issuance of stock under incentive and purchase plans, net of forfeitures				(1,733)						286,869	5,097				3,364
Stock-based compensation				4,996											4,996
Contribution of noncontrolling interest													10		10
Balance, February 28, 2019	129,060,664	$	1,290	$	346,156	$	(100,887)	$	1,449,159	(11,139,594)	$	(197,418)	$	196	$	1,498,496
	Six Months Ended February 28, 2019
	Common Stock			Additional		Accumulated Other				Treasury Stock			Non-
(in thousands, except share data)	Number of Shares	Amount		Paid-In Capital		Comprehensive Loss		Retained Earnings		Number of Shares	Amount		controlling Interests		Total
Balance, September 1, 2018	129,060,664	$	1,290	$	352,674	$	(93,677)	$	1,446,495	(12,045,106)	$	(213,385)	$	186	$	1,493,583
Net earnings								33,592							33,592
Other comprehensive loss						(7,210)									(7,210)
Dividends ($0.12 per share)								(28,181)							(28,181)
Issuance of stock under incentive and purchase plans, net of forfeitures				(18,823)						905,512	15,967				(2,856)
Stock-based compensation				12,305											12,305
Contribution of noncontrolling interest													10		10
Adoption of ASC 606 adjustment								(2,747)							(2,747)
Balance, February 28, 2019	129,060,664	$	1,290	$	346,156	$	(100,887)	$	1,449,159	(11,139,594)	$	(197,418)	$	196	$	1,498,496

See notes to condensed consolidated financial statements.

8

COMMERCIAL METALS COMPANY AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 1. ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP") on a basis consistent with that used in the Annual Report on Form 10-K for the year ended August 31, 2019 ("2019 Form 10-K") filed by Commercial Metals Company ("CMC," and together with its consolidated subsidiaries, the "Company") with the Securities and Exchange Commission (the "SEC") and include all normal recurring adjustments necessary to present fairly the condensed consolidated balance sheets and the condensed consolidated statements of earnings, comprehensive income, cash flows and stockholders' equity for the periods indicated. These notes should be read in conjunction with the consolidated financial statements included in the 2019 Form 10-K. The results of operations for the three and six month periods are not necessarily indicative of the results to be expected for the full fiscal year. Any reference in this Form 10-Q to the "comparable period" or "corresponding period" relates to the relevant three-month or six-month period ended February 28, 2019.

Recently Adopted Accounting Pronouncements

On September 1, 2019, the Company adopted Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842), as amended, (“ASU 2016-02”), using the modified retrospective transition approach. ASU 2016-02 requires a lessee to recognize a right-of-use ("ROU") asset and a lease liability on its balance sheet for all leases with terms longer than twelve months. The Company’s financial statements for periods prior to September 1, 2019 were not modified for the application of this ASU. Upon adoption of ASU 2016-02, the Company recorded the following amounts associated with operating leases in its condensed consolidated balance sheet at September 1, 2019: $113.4 million of ROU assets, in other noncurrent assets, $30.9 million of lease liabilities in accrued expenses and other payables and $84.9 million of lease liabilities in other noncurrent liabilities. There was no impact to the opening balance of retained earnings as a result of implementing ASU 2016-02. The Company elected the package of three practical expedients available under the ASU. Additionally, the Company implemented appropriate changes to internal processes and controls to support recognition, subsequent measurement and disclosures.

The Company's leases are primarily for office space, land and equipment. The Company determines if an arrangement is a lease at inception of a contract if the terms state the Company has the right to direct the use of and obtain substantially all the economic benefits from a specific asset identified in the contract. The ROU assets represent the Company's right to use the underlying assets for the lease term, and the lease liabilities represent the obligation to make lease payments arising from the leases. ROU assets and lease liabilities are recognized at commencement date based on the present value of lease payments to be made over the lease term. Certain of the Company's lease agreements contain options to extend the lease. The Company evaluates these options on a lease-by-lease basis, and, if the Company determines it is reasonably certain to be exercised, the lease term includes the extension. The Company uses its incremental borrowing rate at lease commencement to determine the present value of lease payments, and lease expense is recognized on a straight-line basis over the lease term. The incremental borrowing rate is the rate of interest the Company could borrow on a collateralized basis over a similar term with similar payments. The Company does not record leases with an initial term of twelve months or less (“short-term leases”) in its condensed consolidated balance sheets.

Certain of the Company's lease agreements include payments for certain variable costs not determinable upon lease commencement including mileage, utilities, fuel and inflation adjustments. These variable lease payments are recognized in cost of goods sold and selling, general and administrative expenses, but are not included in the ROU asset or lease liability balances. The Company's lease agreements do not contain any material residual value guarantees, restrictions or covenants.

Recently Issued Accounting Pronouncements

In December 2019, the Financial Accounting Standards Board issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes ("ASU 2019-12"). ASU 2019-12 eliminates certain exceptions to the general principles in Accounting Standards Codification 740 and also clarifies and amends existing guidance to improve consistent application. This standard is effective for annual periods beginning after December 15, 2020, including interim periods therein. The Company currently does not expect ASU 2019-12 to have a material effect on its consolidated financial statements; however, the Company will continue to evaluate the impact of this guidance.

9

NOTE 2. CHANGES IN BUSINESS

Fiscal 2020 Acquisition

On February 3, 2020, the Company's subsidiary CMC Poland Sp. z.o.o. ("CMCP") acquired P.P.U. Ecosteel Sp. z.o.o. ("Ecosteel"), a steel mesh producer located in Zawiercie, Poland. This acquisition complements CMCP's existing mesh production and increases sales to other markets in Europe. The operating results of this facility are included in the International Mill reporting segment.

Facility Closure

In October 2019, the Company closed the melting operations at its Rancho Cucamonga facility and recorded $6.3 million of expense in the first quarter of 2020 related to severance, pension curtailment and vendor agreement terminations. At February 29, 2020, the remaining liability to be paid related to these expenses was $3.8 million and was included in accrued expenses and other payables on the Company's condensed consolidated balance sheets.

Fiscal 2019 Acquisition

On November 5, 2018 (the "Acquisition Date"), the Company completed the acquisition of 33 rebar fabrication facilities in the United States ("U.S."), as well as four electric arc furnace ("EAF") mini mills located in Knoxville, Tennessee; Jacksonville, Florida; Sayreville, New Jersey and Rancho Cucamonga, California from Gerdau S.A., hereinafter collectively referred to as the "Acquired Businesses." The total cash purchase price, including working capital adjustments, was $701.2 million, and was funded through a combination of domestic cash on-hand and borrowings under a term loan (the "Term Loan").

The purchase price paid was allocated between the acquired mills and fabrication facilities. The results of operations of the Acquired Businesses are reflected in the Company’s condensed consolidated financial statements from the Acquisition Date. The purchase price was allocated among assets acquired and liabilities assumed at fair value and was finalized on November 5, 2019.

Pro Forma Supplemental Information

Supplemental information on an unaudited pro forma basis is presented below as if the acquisition of the Acquired Businesses (the "Acquisition") occurred on September 1, 2017. The pro forma financial information is presented for comparative purposes only, based on significant estimates and assumptions, which the Company believes to be reasonable, but not necessarily indicative of future results of operations or the results that would have been reported if the Acquisition had been completed on September 1, 2017. These results were not used as part of management analysis of the financial results and performance of the Company or the Acquired Businesses. These results are adjusted, where possible, for transaction and integration-related costs.

	Three Months Ended February 28,				Six Months Ended February 28,
(in thousands)	2019		2018		2019		2018
Pro forma net sales*	$	1,379,033	$	1,470,603	$	2,925,007	$	2,914,292
Pro forma net earnings (loss)**	10,260		18,786		26,081		(2,187)

_________________ 

*Pro forma net sales for the three and six months ended February 28, 2018 includes estimated fair value adjustments related to amortization of unfavorable contract backlog. The impact of the amortization of unfavorable contract backlog has been removed from the pro forma net sales for the three and six months ended February 28, 2019.

** Pro forma net earnings (loss) for the three and six months ended February 28, 2018 reflects the impact of fair value adjustments related to the amortization of unfavorable contract backlog described above. Pro forma net loss for the six months ended February 28, 2018 includes estimated fair value adjustments related to inventory step-up, as well as non-recurring acquisition and integration costs of approximately $47.5 million.

10

NOTE 3. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The following tables reflect the changes in accumulated other comprehensive income (loss) ("AOCI"):

	Three Months Ended February 29, 2020
(in thousands)	Foreign Currency Translation		Unrealized Gain (Loss) on Derivatives		Defined Benefit Obligation		Total AOCI
Balance, November 30, 2019	$	(114,574)	$	1,731	$	(3,742)	$	(116,585)
Other comprehensive loss before reclassifications	(1,066)		(4,501)		(14)		(5,581)
Amounts reclassified from AOCI	(2)		(104)		—		(106)
Income taxes	—		876		6		882
Net other comprehensive income loss	(1,068)		(3,729)		(8)		(4,805)
Balance, February 29, 2020	$	(115,642)	$	(1,998)	$	(3,750)	$	(121,390)
	Six Months Ended February 29, 2020
(in thousands)	Foreign Currency Translation		Unrealized Gain (Loss) on Derivatives		Defined Benefit Obligation		Total AOCI
Balance, August 31, 2019	$	(121,498)	$	1,106	$	(3,734)	$	(124,126)
Other comprehensive income (loss) before reclassifications	5,858		(3,619)		(24)		2,215
Amounts reclassified from AOCI	(2)		(214)		—		(216)
Income taxes	—		729		8		737
Net other comprehensive income (loss)	5,856		(3,104)		(16)		2,736
Balance, February 29, 2020	$	(115,642)	$	(1,998)	$	(3,750)	$	(121,390)

	Three Months Ended February 28, 2019
(in thousands)	Foreign Currency Translation		Unrealized Gain (Loss) on Derivatives		Defined Benefit Obligation		Total AOCI
Balance, November 30, 2018	$	(102,393)	$	1,279	$	(1,087)	$	(102,201)
Other comprehensive income (loss) before reclassifications	514		(52)		(8)		454
Amounts reclassified from AOCI	936		(107)		—		829
Income taxes	—		31		—		31
Net other comprehensive income (loss)	1,450		(128)		(8)		1,314
Balance, February 28, 2019	$	(100,943)	$	1,151	$	(1,095)	$	(100,887)
	Six Months Ended February 28, 2019
(in thousands)	Foreign Currency Translation		Unrealized Gain (Loss) on Derivatives		Defined Benefit Obligation		Total AOCI
Balance, August 31, 2018	$	(92,637)	$	1,356	$	(2,396)	$	(93,677)
Other comprehensive loss before reclassifications	(9,143)		(104)		(19)		(9,266)
Amounts reclassified from AOCI	837		(149)		1,666		2,354
Income taxes (benefit)	—		48		(346)		(298)
Net other comprehensive income (loss)	(8,306)		(205)		1,301		(7,210)
Balance, February 28, 2019	$	(100,943)	$	1,151	$	(1,095)	$	(100,887)

Items reclassified out of AOCI were immaterial for the three and six months ended February 29, 2020 and the comparable periods. Thus, the corresponding line items in the condensed consolidated statements of earnings to which the items were reclassified are not presented.

11

NOTE 4. REVENUE RECOGNITION

In the Americas Mills, Americas Recycling, and International Mill segments, revenue is recognized at a point in time concurrent with the transfer of control, which usually occurs, depending on shipping terms, upon shipment or customer receipt.

In the Americas Fabrication segment, each contract represents a single performance obligation. Revenue is either recognized over time or equal to billing under an available practical expedient. For contracts where the Company provides fabricated product and installation services, revenue is recognized over time using an input method. For the three and six months ended February 29, 2020, these contracts represented approximately 27% and 26%, respectively, of net sales in the Americas Fabrication segment. For these contracts, the measure of progress is based on contract costs incurred to date compared to total estimated contract costs, which provides a reasonable depiction of the Company’s progress towards satisfaction of the performance obligation as there is a direct relationship between costs incurred by the Company and the transfer of the fabricated product and installation services. Revenue from contracts where the Company does not provide installation services is recognized over time using an output method. For the three and six months ended February 29, 2020, these contracts represented approximately 25% and 24%, respectively, of net sales in the Americas Fabrication segment. For these contracts, the Company uses tons shipped compared to total estimated tons, which provides a reasonable depiction of the transfer of contract value to the customer, as there is a direct relationship between the units shipped by the Company and the transfer of the fabricated product. Significant judgment is required to evaluate total estimated costs used in the input method and total estimated tons in the output method. If estimated total consolidated costs on any contract are greater than the net contract revenues, the Company recognizes the entire estimated loss in the period the loss becomes known. The cumulative effect of revisions to estimates related to net contract revenues, costs to complete or total planned quantity is recorded in the period in which such revisions are identified. The Company does not exercise significant judgment in determining the transaction price. For the three and six months ended February 29, 2020, the remaining 48% and 50%, respectively, of net sales in the Americas Fabrication segment was recognized as amounts were billed to the customer.

Payment terms and conditions vary by contract type, although the Company generally requires customers to pay within 30 days of invoice date. The timing of revenue recognition for certain Americas Fabrication contracts, as described above, differ from the timing of invoicing to customers. The Company records an asset when revenue is recognized prior to invoicing and a liability when revenue is recognized after invoicing. In instances where the timing of revenue recognition differs from the timing of invoicing, the Company has determined the contracts do not include a significant financing component.

The following table provides information about assets and liabilities from contracts with customers.

(in thousands)	February 29, 2020		August 31, 2019
Contract assets (included in other current assets)	$	87,801	$	103,805
Contract liabilities (included in accrued expenses and other payables)	38,391		37,165

The amount of revenue reclassified from August 31, 2019 contract liabilities during the six months ended February 29, 2020 was approximately $20.2 million.

Remaining Performance Obligations

As of February 29, 2020, $819.4 million has been allocated to remaining performance obligations in the Americas Fabrication segment, excluding those contracts where revenue is recognized equal to billing. Of this amount, the Company estimates the remaining performance obligations will be recognized as revenue after February 29, 2020 as follows: 40% in the first twelve months, 48% in the following twelve months, and 12% thereafter. The duration of contracts in the Americas Mills, Americas Recycling, and International Mill segments are typically less than one year.

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Disaggregation of Revenue

The following tables display revenue by reportable segment from external customers, disaggregated by major source. The Company believes disaggregating by these categories depicts how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors.

	Three Months Ended February 29, 2020
(in thousands)	Americas Recycling		Americas Mills		Americas Fabrication		International Mill		Corporate and Other		Total
Steel products	$	140	$	437,648	$	441,765	$	171,283	$	—	$	1,050,836
Ferrous scrap	66,040		10,874		1		159		—		77,074
Nonferrous scrap	112,862		3,535		—		2,249		—		118,646
Construction materials	—		—		66,122		—		—		66,122
Other	493		19,310		2,493		5,965		24		28,285
Total	$	179,535	$	471,367	$	510,381	$	179,656	$	24	$	1,340,963
	Six Months Ended February 29, 2020
(in thousands)	Americas Recycling		Americas Mills		Americas Fabrication		International Mill		Corporate and Other		Total
Steel products	$	255	$	878,811	$	941,492	$	329,227	$	—	$	2,149,785
Ferrous scrap	124,342		17,622		1		371		—		142,336
Nonferrous scrap	226,080		6,890		—		4,242		—		237,212
Construction materials	—		—		133,588		—		—		133,588
Other	1,009		42,236		5,677		10,856		2,972		62,750
Total	$	351,686	$	945,559	$	1,080,758	$	344,696	$	2,972	$	2,725,671

	Three Months Ended February 28, 2019
(in thousands)	Americas Recycling		Americas Mills		Americas Fabrication		International Mill		Corporate and Other		Total
Steel products	$	202	$	444,327	$	462,963	$	167,534	$	—	$	1,075,026
Ferrous scrap	105,253		8,744		—		255		—		114,252
Nonferrous scrap	120,004		3,308		—		2,524		—		125,836
Construction materials	—		—		60,190		—		—		60,190
Other	429		16,416		3,525		4,632		2,477		27,479
Total	$	225,888	$	472,795	$	526,678	$	174,945	$	2,477	$	1,402,783
	Six Months Ended February 28, 2019
(in thousands)	Americas Recycling		Americas Mills		Americas Fabrication		International Mill		Corporate and Other		Total
Steel products	$	441	$	792,292	$	837,770	$	385,304	$	—	$	2,015,807
Ferrous scrap	216,907		17,886		—		530		—		235,323
Nonferrous scrap	248,079		6,488		—		5,465		—		260,032
Construction materials	—		—		117,361		—		—		117,361
Other	642		29,800		6,105		10,319		4,736		51,602
Total	$	466,069	$	846,466	$	961,236	$	401,618	$	4,736	$	2,680,125

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NOTE 5. INVENTORIES, NET

The majority of the Company's inventories are in the form of semi-finished and finished goods. Under the Company’s business model, products are sold to external customers in various stages, from semi-finished billets through fabricated steel, leading these categories to be combined. As such, at February 29, 2020 and August 31, 2019, work in process inventories were immaterial. At February 29, 2020 and August 31, 2019, the Company's raw materials inventories were $169.4 million and $143.7 million, respectively.

NOTE 6. GOODWILL AND OTHER INTANGIBLES

Goodwill by reportable segment at February 29, 2020 is detailed in the following table:

(in thousands)	Americas Recycling		Americas Mills		Americas Fabrication		International Mill		Consolidated
Goodwill, gross*	$	9,543	$	4,970	$	57,428	$	2,420	$	74,361
Accumulated impairment losses*	(9,543)		—		(493)		(153)		(10,189)
Goodwill, net*	$	—	$	4,970	$	56,935	$	2,267	$	64,172

_________________ 

* The change in balance from August 31, 2019 was immaterial.

The total gross carrying amounts of the Company's intangible assets subject to amortization were $20.7 million and $20.8 million, respectively, and the total net carrying amounts were $12.2 million and $13.3 million at February 29, 2020 and August 31, 2019, respectively. These assets were included in other noncurrent assets on the Company's condensed consolidated balance sheets. Intangible amortization expense from continuing operations related to such intangible assets was $0.6 million and $1.1 million for the three and six months ended February 29, 2020, respectively, and for the comparable periods. Excluding goodwill, the Company did not have any significant intangible assets with indefinite lives at February 29, 2020.

In connection with the Acquisition, the Company recorded an unfavorable contract backlog liability of $110.2 million. At February 29, 2020 and August 31, 2019, the net carrying amount of the liability was $21.0 million and $35.4 million, respectively. Amortization of the unfavorable contract backlog was $6.0 million and $14.3 million for the three and six months ended February 29, 2020, respectively, and $23.5 million and $34.8 million for the comparable periods, and was recorded as an increase to net sales in the Company’s condensed consolidated statements of earnings.

NOTE 7. LEASES

The following table presents the components of the total leased assets and lease liabilities and their classification in the Company's condensed consolidated balance sheet at February 29, 2020:

(in thousands)	Classification in Condensed Consolidated Balance Sheet	February 29, 2020
Assets:
Operating assets	Other noncurrent assets	$	124,749
Finance assets	Property, plant and equipment, net	43,647
Total leased assets		$	168,396
Liabilities:
Operating lease liabilities:
Current	Accrued expenses and other payables	$	27,900
Long-term	Other noncurrent liabilities	99,283
Total operating lease liabilities		127,183
Finance lease liabilities:
Current	Current maturities of long-term debt and short-term borrowings	12,604
Long-term	Long-term debt	31,254
Total finance lease liabilities		43,858
Total lease liabilities		$	171,041

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The components of lease cost were as follows:

(in thousands)	Three Months Ended February 29, 2020		Six Months Ended February 29, 2020
Operating lease expense	$	8,815	$	17,605
Finance lease expense:
Amortization of assets	2,720		4,885
Interest on lease liabilities	465		866
Total finance lease expense	3,185		5,751
Variable and short term-lease expense	4,381		8,314
Total lease expense	$	16,381	$	31,670

The weighted-average remaining lease term and discount rate for operating and finance leases are presented in the following table:

	February 29, 2020
Weighted-average remaining lease term (years)
Operating leases	6.5
Finance leases	3.9
Weighted-average discount rate
Operating leases	4.160	%
Finance leases	4.216	%

Cash flow and other information related to leases is included in the following table:

(in thousands)	Six Months Ended February 29, 2020
Cash paid for amounts included in the measurement of lease liabilities
Operating cash outflows from operating leases	$	17,594
Operating cash outflows from finance leases	787
Financing cash outflows from finance leases	6,426
ROU assets obtained in exchange for lease obligations:
Operating leases	28,942
Finance leases	13,040

Maturities of lease liabilities at February 29, 2020 are presented in the following table:

(in thousands)	Operating Leases		Finance Leases
Year 1	$	32,620	$	14,189
Year 2	27,531		11,963
Year 3	22,156		9,521
Year 4	17,563		7,626
Year 5	12,455		4,277
Thereafter	34,680		74
Total lease payments	147,005		47,650
Less: Imputed interest	19,822		3,792
Present value of lease liabilities	$	127,183	$	43,858

Future maturities of lease liabilities at August 31, 2019, prior to adoption of ASU 2016-02, are presented in the following table:

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			Twelve Months Ended August 31,
(in thousands)	Total		2020	2021	2022	2023	2024	Thereafter
Capital lease obligations	$	41,331	13,104	10,004	7,758	5,831	3,904	$	730
Long-term non-cancelable operating leases	$	124,817	34,511	27,383	22,074	17,433	10,478	$	12,938

NOTE 8. CREDIT ARRANGEMENTS

Long-term debt at February 29, 2020 and August 31, 2019 was as follows: 

(in thousands)	Weighted Average Interest Rate at February 29, 2020	February 29, 2020		August 31, 2019
2027 Notes	5.375%	$	300,000	$	300,000
2026 Notes	5.750%	350,000		350,000
2023 Notes	4.875%	330,000		330,000
Term Loan	3.409%	110,125		210,125
Poland credit facilities	2.637%	11,290		—
Short-term borrowings	2.400%	8,272		3,929
Other	5.100%	23,168		23,168
Finance leases		43,858		37,699
Total debt		1,176,713		1,254,921
Less debt issuance costs		9,425		10,268
Total amounts outstanding		1,167,288		1,244,653
Less current maturities		14,443		13,510
Less short-term borrowings		8,272		3,929
Current maturities of long-term debt and short-term borrowings		22,715		17,439
Long-term debt		$	1,144,573	$	1,227,214

The Company had no amounts drawn under the $350.0 million revolving credit facility (the "Revolver") at February 29, 2020 and August 31, 2019. The availability under the Revolver was reduced by outstanding stand-by letters of credit of $3.0 million at February 29, 2020 and August 31, 2019.

The Company also has credit facilities in Poland through its subsidiary CMCP. At February 29, 2020, CMCP's credit facilities totaled Polish zloty ("PLN") 275.0 million, or $70.0 million. These facilities expire in March 2022. At February 29, 2020, $11.3 million was outstanding under these facilities. No amounts were outstanding as of August 31, 2019. The available balance of these credit facilities was further reduced by outstanding stand-by letters of credit, guarantees, and/or other financial assurance instruments, which totaled $0.8 million and $1.1 million at February 29, 2020 and August 31, 2019, respectively.

The Company's debt agreements require the Company to comply with certain non-financial and financial covenants, including an interest coverage ratio and a debt to capitalization ratio. At February 29, 2020, the Company was in compliance with all covenants contained in its debt agreements.

Accounts Receivable Facilities

The Company had no advance payments outstanding under the U.S. accounts receivable facility at February 29, 2020 or August 31, 2019.

The Poland accounts receivable facility has a limit of PLN 220.0 million ($56.0 million at February 29, 2020). The Company had $8.3 million of advance payments outstanding under the Poland accounts receivable facility at February 29, 2020, and $3.9 million at August 31, 2019.

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NOTE 9. DERIVATIVES

The Company's global operations and product lines expose it to risks from fluctuations in metal commodity prices, foreign currency exchange rates, interest rates and natural gas, electricity and other energy prices. One objective of the Company's risk management program is to mitigate these risks using derivative instruments. The Company enters into (i) metal commodity futures and forward contracts to mitigate the risk of unanticipated changes in gross margin due to price volatility in these commodities, (ii) foreign currency forward contracts that match the expected settlements for purchases and sales denominated in foreign currencies and (iii) energy derivatives to mitigate the risk related to price volatility of electricity and natural gas.

At February 29, 2020, the notional values of the Company's foreign currency and commodity commitments were $84.6 million and $42.0 million, respectively. At August 31, 2019, the notional values of the Company's foreign currency and commodity contract commitments were $94.1 million and $42.6 million, respectively.

The following table provides information regarding the Company's commodity contract commitments at February 29, 2020:

Commodity	Long/Short	Total
Aluminum	Long	2,100	MT
Copper	Long	318	MT
Copper	Short	5,454	MT
Electricity	Long	2,000,000	MW(h)

_________________

MT = Metric Ton

MW(h) = Megawatt hour

The Company designates only those contracts which closely match the terms of the underlying transaction as hedges for accounting purposes. Certain foreign currency and commodity contracts were not designated as hedges for accounting purposes, although management believes they are essential economic hedges.

The following table summarizes activity related to the Company's derivative instruments not designated as hedging instruments recognized in the condensed consolidated statements of earnings. All other activity related to the Company's derivative instruments and hedged items was immaterial for the periods presented. 

		Three Months Ended				Six Months Ended
Derivatives Not Designated as Hedging Instruments (in thousands)	Location	February 29, 2020		February 28, 2019		February 29, 2020		February 28, 2019
Commodity	Cost of goods sold	$	1,731	$	(2,425)	$	416	$	(3,265)
Foreign exchange	SG&A expenses	(21)		(526)		20		(400)
Gain (loss) before income taxes		$	1,710	$	(2,951)	$	436	$	(3,665)

NOTE 10. FAIR VALUE

The Company has established a fair value hierarchy which prioritizes the inputs to the valuation techniques used to measure fair value into three levels. These levels are determined based on the lowest level input that is significant to the fair value measurement. Levels within the hierarchy are defined as follows:

Level 1 - Unadjusted quoted prices in active markets for identical assets and liabilities;

Level 2 - Quoted prices for similar assets and liabilities in active markets (other than those included in Level 1) which are observable, either directly or indirectly; and

Level 3 - Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

The following tables summarize information regarding the Company's financial assets and financial liabilities that were measured at fair value on a recurring basis:

17

			Fair Value Measurements at Reporting Date Using
(in thousands)	February 29, 2020		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable  Inputs (Level 3)
Assets:
Investment deposit accounts (1)	$	191,424	$	191,424	$	—	$	—
Commodity derivative assets (2)	1,631		1,631		—		—
Foreign exchange derivative assets (2)	374		—		374		—
Liabilities:
Commodity derivative liabilities (2)	3,663		77		—		3,586
Foreign exchange derivative liabilities (2)	696		—		696		—

			Fair Value Measurements at Reporting Date Using
(in thousands)	August 31, 2019		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable  Inputs (Level 3)
Assets:
Investment deposit accounts (1)	$	66,240	$	66,240	$	—	$	—
Commodity derivative assets (2)	1,269		1,269		—		—
Foreign exchange derivative assets (2)	569		—		569		—
Liabilities:
Commodity derivative liabilities (2)	99		99		—		—
Foreign exchange derivative liabilities (2)	899		—		899		—

_________________ 

(1) Investment deposit accounts are short-term in nature, and the value is determined by principal plus interest. The investment portfolio mix can change each period based on the Company's assessment of investment options.

(2) Derivative assets and liabilities classified as Level 1 are commodity futures contracts valued based on quoted market prices in the London Metal Exchange or New York Mercantile Exchange. Amounts in Level 2 are based on broker quotes in the over-the-counter market. Fair value of Level 3 derivative liabilities is based on unobservable inputs in which there is little or no market data, which requires management’s own assumptions within an internally developed cash flow model. Further discussion regarding the Company's use of derivative instruments is included in Note 9, Derivatives.

There were no material non-recurring fair value remeasurements during the three and six months ended February 29, 2020.

The carrying values of the Company's short-term items approximate fair value.

The carrying values and estimated fair values of the Company's financial assets and liabilities that are not required to be measured at fair value on the condensed consolidated balance sheets were as follows:

		February 29, 2020				August 31, 2019
(in thousands)	Fair Value Hierarchy	Carrying Value		Fair Value		Carrying Value		Fair Value
2027 Notes (1)	Level 2	$	300,000	$	308,151	$	300,000	$	303,810
2026 Notes (1)	Level 2	350,000		365,215		350,000		363,444
2023 Notes (1)	Level 2	330,000		344,177		330,000		342,098
Term Loan (2)	Level 2	110,125		110,125		210,125		210,125
Poland credit facilities (2)	Level 2	11,290		11,290		—		—
Short-term borrowings (2)	Level 2	8,272		8,272		3,929		3,929

_________________

(1) The fair value of the notes was determined based on indicated market values.

(2) The Term Loan, Poland credit facilities and short-term borrowings contain variable interest rates and carrying value approximates fair value.

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NOTE 11. STOCK-BASED COMPENSATION PLANS

The Company's stock-based compensation plans are described in Note 15, Stock-Based Compensation Plans, to the consolidated financial statements in the 2019 Form 10-K. In general, restricted stock units granted during 2020 vest ratably over a period of three years. Subject to the achievement of performance targets established by the Compensation Committee of CMC's Board of Directors, performance stock units granted during 2020 vest after a period of three years.

During the six months ended February 29, 2020 and the comparable period, the Company granted the following awards under its stock-based compensation plans:

	February 29, 2020			February 28, 2019
(in thousands, except per share data)	Shares Granted	Weighted Average Grant Date Fair Value		Shares Granted	Weighted Average Grant Date Fair Value
Equity method	1,521	$	18.32	1,505	$	17.75
Liability method	426	N/A		374	N/A

During the three and six months ended February 29, 2020 and the comparable periods, the Company recorded immaterial mark-to-market adjustments on liability awards. At February 29, 2020, the Company had outstanding 835,546 equivalent shares accounted for under the liability method. The Company expects 793,769 equivalent shares to vest.

The following table summarizes total stock-based compensation expense, including fair value remeasurements, which was mainly included in selling, general and administrative expenses on the Company's condensed consolidated statements of earnings:

	Three Months Ended				Six Months Ended
(in thousands)	February 29, 2020		February 28, 2019		February 29, 2020		February 28, 2019
Stock-based compensation expense	$	7,536	$	5,790	$	15,805	$	10,007

NOTE 12. STOCKHOLDERS' EQUITY AND EARNINGS PER SHARE

The calculations of basic and diluted earnings per share from continuing operations were as follows: 

	Three Months Ended				Six Months Ended
(in thousands, except share data)	February 29, 2020		February 28, 2019		February 29, 2020		February 28, 2019
Earnings from continuing operations	$	63,596	$	14,928	$	146,351	$	34,348
Basic earnings per share:
Shares outstanding for basic earnings per share	118,919,455		117,854,335		118,644,823		117,677,422
Basic earnings per share from continuing operations	$	0.53	$	0.13	$	1.23	$	0.29
Diluted earnings per share:
Shares outstanding for basic earnings per share	118,919,455		117,854,335		118,644,823		117,677,422
Effect of dilutive securities:
Stock-based incentive/purchase plans	1,487,801		1,088,423		1,658,436		1,319,005
Shares outstanding for diluted earnings per share	120,407,256		118,942,758		120,303,259		118,996,427
Diluted earnings per share from continuing operations	$	0.53	$	0.13	$	1.22	$	0.29

Anti-dilutive shares not included above were immaterial for the three and six months ended February 29, 2020, respectively. There were no anti-dilutive shares for the three and six months ended February 28, 2019.

Restricted stock is included in the number of shares of common stock issued and outstanding but omitted from the basic earnings per share calculation until the shares vest.

During the first quarter of fiscal 2015, CMC's Board of Directors authorized a share repurchase program under which CMC may repurchase up to $100.0 million of shares of common stock. During the six months ended February 29, 2020, CMC did not

19

repurchase any shares of common stock. CMC had remaining authorization to repurchase $27.6 million of common stock at February 29, 2020.

NOTE 13. COMMITMENTS AND CONTINGENCIES

Legal and Environmental Matters

In the ordinary course of conducting its business, the Company becomes involved in litigation, administrative proceedings and governmental investigations, including environmental matters. See Note 19, Commitments and Contingencies, to the consolidated financial statements in the 2019 Form 10-K.

The Company has received notices from the U.S. Environmental Protection Agency ("EPA") or state agencies with similar responsibility that it is considered a potentially responsible party at several sites, none of which are owned by the Company, and may be obligated under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 ("CERCLA") or similar state statutes to conduct remedial investigations, feasibility studies, remediation and/or removal of alleged releases of hazardous substances or to reimburse the EPA for such activities. The Company is involved in litigation or administrative proceedings with regard to several of these sites in which the Company is contesting, or at the appropriate time may contest, its liability at the sites. In addition, the Company has received information requests with regard to other sites which may be under consideration by the EPA as potential CERCLA sites. Some of these environmental matters or other proceedings may result in fines, penalties or judgments being assessed against the Company. At February 29, 2020 and August 31, 2019, the Company had $0.7 million accrued for cleanup and remediation costs in connection with CERCLA sites. The estimation process is based on currently available information, which is in many cases preliminary and incomplete. Total environmental liabilities, including CERCLA sites, were $3.6 million at February 29, 2020 and August 31, 2019, of which $2.7 million and $1.8 million were classified as other long-term liabilities at February 29, 2020 and August 31, 2019, respectively. These amounts have not been discounted to their present values. Due to evolving remediation technology, changing regulations, possible third-party contributions, the inherent shortcomings of the estimation process and other factors, amounts accrued could vary significantly from amounts paid. Historically, the amounts the Company has ultimately paid for such remediation activities have not been material.

Management believes that adequate provisions have been made in the Company's condensed consolidated financial statements for the potential impact of these contingencies, and that the outcomes of the suits and proceedings described above, and other miscellaneous litigation and proceedings now pending, will not have a material adverse effect on the business, results of operations or financial condition of the Company.

NOTE 14. BUSINESS SEGMENTS

The Company structures its business into the following four reporting segments: Americas Recycling, Americas Mills, Americas Fabrication and International Mill. The Company's reporting segments are based primarily on product lines and secondarily on geographic area. See Note 1, Nature of Operations, of the consolidated financial statements included in the 2019 Form 10-K for more information about the reporting segments, including the types of products and services from which each reporting segment derives its net sales. Corporate and Other contains earnings or losses on assets and liabilities related to the Company's Benefit Restoration Plan assets and short-term investments, expenses of the Company's corporate headquarters, interest expense related to its long-term debt and intercompany eliminations.

The Company uses adjusted EBITDA from continuing operations to compare and evaluate the financial performance of its segments. Adjusted EBITDA is the sum of the Company's earnings from continuing operations before interest expense, income taxes, depreciation and amortization expense and impairment expense. Intersegment sales are generally priced at prevailing market prices. Certain corporate administrative expenses are allocated to the segments based upon the nature of the expense. The accounting policies of the segments are the same as those described in Note 2, Summary of Significant Accounting Policies, of the consolidated financial statements included in the 2019 Form 10-K.

The following is a summary of certain financial information from continuing operations by reportable segment:

20

	Three Months Ended February 29, 2020
(in thousands)	Americas Recycling		Americas Mills		Americas Fabrication		International Mill		Corporate and Other		Continuing Operations
Net sales-unaffiliated customers	$	179,535	$	471,367	$	510,381	$	179,656	$	24	$	1,340,963
Intersegment sales	68,549		260,673		1,367		423		(331,012)		—
Net sales	248,084		732,040		511,748		180,079		(330,988)		1,340,963
Adjusted EBITDA	5,754		125,691		16,060		13,451		(23,235)		137,721
	Six Months Ended February 29, 2020
(in thousands)	Americas Recycling		Americas Mills		Americas Fabrication		International Mill		Corporate and Other		Continuing Operations
Net sales-unaffiliated customers	$	351,686	$	945,559	$	1,080,758	$	344,696	$	2,972	$	2,725,671
Intersegment sales	118,659		555,374		2,837		772		(677,642)		—
Net sales	470,345		1,500,933		1,083,595		345,468		(674,670)		2,725,671
Adjusted EBITDA	9,171		280,716		33,541		24,810		(50,712)		297,526
Total assets at February 29, 2020*	261,611		1,680,295		1,065,676		521,678		378,678		3,907,938

_________________ 

*Total assets listed in Corporate and Other includes assets from discontinued operations.

	Three Months Ended February 28, 2019
(in thousands)	Americas Recycling		Americas Mills		Americas Fabrication		International Mill		Corporate and Other		Continuing Operations
Net sales-unaffiliated customers	$	225,888	$	472,795	$	526,678	$	174,945	$	2,477	$	1,402,783
Intersegment sales	61,187		301,914		4,158		253		(367,512)		—
Net sales	287,075		774,709		530,836		175,198		(365,035)		1,402,783
Adjusted EBITDA	10,124		112,396		(49,578)		20,537		(24,146)		69,333
	Six Months Ended February 28, 2019
(in thousands)	Americas Recycling		Americas Mills		Americas Fabrication		International Mill		Corporate and Other		Continuing Operations
Net sales-unaffiliated customers	$	466,069	$	846,466	$	961,236	$	401,618	$	4,736	$	2,680,125
Intersegment sales	123,015		530,096		6,711		604		(660,426)		—
Net sales	589,084		1,376,562		967,947		402,222		(655,690)		2,680,125
Adjusted EBITDA	25,558		226,269		(86,574)		53,316		(83,700)		134,869
Total assets at August 31, 2019*	257,517		1,667,366		1,106,420		464,177		263,291		3,758,771

_________________ 

*Total assets listed in Corporate and Other includes assets from discontinued operations.

The following table presents a reconciliation of earnings from continuing operations to adjusted EBITDA from continuing operations:

	Three Months Ended				Six Months Ended
(in thousands)	February 29, 2020		February 28, 2019		February 29, 2020		February 28, 2019
Earnings from continuing operations	$	63,596	$	14,928	$	146,351	$	34,348
Interest expense	15,888		18,495		32,466		35,158
Income taxes	22,845		18,141		50,177		23,750
Depreciation and amortization	41,389		41,245		82,330		76,421
Amortization of acquired unfavorable contract backlog	(5,997)		(23,476)		(14,328)		(34,808)
Impairment of assets	—		—		530		—
Adjusted EBITDA from continuing operations	$	137,721	$	69,333	$	297,526	$	134,869

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

In the following discussion, references to "we," "us," "our" or the "Company" mean Commercial Metals Company ("CMC") and its consolidated subsidiaries, unless the context otherwise requires. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and the notes thereto, which are included in this Quarterly Report on Form 10-Q (the "Form 10-Q"), and our consolidated financial statements and the notes thereto, which are included in our Annual Report on Form 10-K for the year ended August 31, 2019 (the "2019 Form 10-K"). This discussion contains or incorporates by reference "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the Private Securities Litigation Reform Act of 1995. These forward-looking statements are not historical facts, but rather are based on expectations, estimates, assumptions and projections about our industry, business and future financial results, based on information available at the time this Form 10-Q is filed with the Securities and Exchange Commission ("SEC") or, with respect to any document incorporated by reference, available at the time that such document was prepared. Our actual results could differ materially from the results contemplated by these forward-looking statements due to a number of factors, including those identified in the section entitled "Forward-Looking Statements" at the end of this Item 2 of this Form 10-Q and in the section entitled "Risk Factors" in Item 1A of the 2019 Form 10-K and this Form 10-Q. We do not undertake any obligation to update, amend or clarify any forward-looking statements to reflect changed assumptions, the occurrence of anticipated or unanticipated events, new information or circumstances or otherwise, except as required by law.

Any reference in this Form 10-Q to the "comparable period" or "corresponding period" relates to the relevant three-month or six-month period ended February 28, 2019.

CRITICAL ACCOUNTING POLICIES

There have been no material changes to our critical accounting policies as set forth in Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations, included in the 2019 Form 10-K.

RESULTS OF OPERATIONS SUMMARY

Business Overview

As a vertically integrated organization, we manufacture, recycle and market steel and metal products, related materials and services through a network including seven electric arc furnace ("EAF") mini mills, two EAF micro mills, two rerolling mills, steel fabrication and processing plants, construction-related product warehouses, and metal recycling facilities in the United States ("U.S.") and Poland. On November 5, 2018, the Company completed the acquisition (the "Acquisition") of 33 rebar fabrication facilities in the U.S., as well as four EAF mini mills located in Knoxville, Tennessee; Jacksonville, Florida; Sayreville, New Jersey and Rancho Cucamonga, California from Gerdau S.A., hereinafter collectively referred to as the "Acquired Businesses." Our operations are conducted through four reportable segments: Americas Recycling, Americas Mills, Americas Fabrication and International Mill.

Financial Results Overview

The following discussion of our results of operations is based on our continuing operations and excludes any results of our discontinued operations.

	Three Months Ended				Six Months Ended
(in thousands, except per share data)	February 29, 2020		February 28, 2019		February 29, 2020		February 28, 2019
Net sales	$	1,340,963	$	1,402,783	$	2,725,671	$	2,680,125
Earnings from continuing operations	63,596		14,928		146,351		34,348
Diluted earnings per share	$	0.53	$	0.13	$	1.22	$	0.29

Net sales for the three and six months ended February 29, 2020 decreased $61.8 million, or 4%, and increased $45.5 million, or 2%, respectively, compared to the corresponding periods in 2019. For the three months ended February 29, 2020, net sales decreased year-over-year in our Americas Recycling, Americas Mills and Americas Fabrication segments primarily due to a reduction in the ferrous scrap pricing environment, a decrease in average selling prices per ton and a decrease in tons shipped, respectively. These decreases were partially offset by an increase in year-over-year net sales in our International Mill segment due to an increase in tons shipped. Year-to-date net sales increased year-over-year in our Americas Mills and Americas

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Fabrication segments primarily due to an increase in tons shipped in both segments, coupled with an increase in average selling prices per ton in our Americas Fabrication segment, as a result of strong demand in our core markets and two additional months of shipments from the Acquired Businesses. These increases were partially offset by decreases in year-over-year net sales in our Americas Recycling segment, due to continued reductions in the ferrous scrap pricing environment and constrained scrap flow, and in our International Mill segment due to a decrease in average selling prices per ton.

Earnings from continuing operations for the three and six months ended February 29, 2020 increased $48.7 million and $112.0 million, respectively, from the comparable periods in 2019. The increase was primarily driven by year-over-year expansion in second quarter and year-to-date metal margins in our Americas Fabrication segment, an increase in second quarter tons shipped in our Americas Mills segment and an increase in year-to-date tons shipped in our Americas Fabrication and Americas Mills segments.

Selling, General and Administrative Expenses

Selling, general and administrative expenses for the three and six months ended February 29, 2020 increased $16.8 million and $11.1 million, respectively, from the comparable periods in 2019. For the three months ended February 29, 2020, the year-over-year increase primarily related to a $24.2 million increase in employee-related expenses, partially offset by $1.5 million, $1.3 million and $1.2 million decreases in professional services, rent, and insurance expense, respectively. The year-to-date increase was driven primarily by a $46.6 million year-over-year increase in employee-related expenses, partially offset by a $26.1 million year-over-year decrease in professional fees and legal expenses, primarily related to the Acquisition. In addition, there was a $4.9 million increase in gains on the sale of fixed assets in the six months ended February 29, 2020, compared to the corresponding period.

Interest Expense

Interest expense for the three and six months ended February 29, 2020 decreased $2.6 million and $2.7 million, respectively, compared to the corresponding periods in 2019. The year-over-year decreases were the result of a decrease in interest payable on long-term debt due to a decline in the floating LIBOR market, coupled with total prepayments of $200 million on the Term Loan (as defined in Note 8, Credit Arrangements) over the past four quarters.

Income Taxes

Our effective income tax rate from continuing operations for the three and six months ended February 29, 2020 was 26.4% and 25.5%, respectively, compared with 54.9% and 40.9% in the corresponding periods in 2019. The decrease in the effective income tax rate is primarily attributable to discrete tax expense recorded during the second quarter of 2019 as a result of the Tax Cuts and Jobs Act.

SEGMENT OPERATING DATA

Unless otherwise indicated, all dollar amounts below are from continuing operations and calculated before income taxes. See Note 14, Business Segments. The operational data presented in the tables below is calculated using averages and, therefore, it is not meaningful to quantify the effect that any individual component had on the segment's net sales or adjusted EBITDA.

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Americas Recycling

	Three Months Ended				Six Months Ended
(in thousands)	February 29, 2020		February 28, 2019		February 29, 2020		February 28, 2019
Net sales	$	248,084	$	287,075	$	470,345	$	589,084
Adjusted EBITDA	5,754		10,124		9,171		25,558
Average selling price (per ton)
Ferrous	$	226	$	266	$	204	$	269
Nonferrous	2,044		1,998		2,014		1,990
Tons shipped (in thousands)
Ferrous	519		570		1,011		1,149
Nonferrous	58		59		115		122
Total	577		629		1,126		1,271

Net sales for the three and six months ended February 29, 2020 decreased $39.0 million, or 14%, and $118.7 million, or 20%, respectively, as compared to the corresponding periods in 2019. For the three and six months ended February 29, 2020, the primary drivers for the year-over-year decreases in net sales were lower average ferrous selling prices and ferrous tons shipped due to a declining price environment which also constrained scrap flows as there was less scrap available to purchase while prices were falling. Average ferrous selling prices per ton decreased approximately 15% and 24%, respectively, and ferrous tons shipped decreased approximately 9% and 12%, respectively, for the three and six months ended February 29, 2020, in relation to the comparable periods.

Adjusted EBITDA for the three and six months ended February 29, 2020 decreased $4.4 million and $16.4 million, respectively, as compared to the corresponding periods in 2019, as the declining price environment compressed margins and constrained scrap flows, as discussed above. Conversion costs increased approximately $4 and $7 per ton in the three and six months ended February 29, 2020, respectively, as compared to the corresponding periods in 2019, due to decreased production levels. Adjusted EBITDA included non-cash stock compensation expense of $0.4 million and $0.8 million for the three and six months ended February 29, 2020, respectively, and $0.3 million and $0.6 million for the comparable periods.

Americas Mills

	Three Months Ended				Six Months Ended
(in thousands)	February 29, 2020		February 28, 2019		February 29, 2020		February 28, 2019
Net sales	$	732,040	$	774,709	$	1,500,933	$	1,376,562
Adjusted EBITDA	125,691		112,396		280,716		226,269
Average price (per ton)
Total selling price	$	606	$	677	$	608	$	677
Cost of ferrous scrap utilized	256		303		238		305
Metal margin	350		374		370		372
Tons (in thousands)
Melted	1,117		1,126		2,299		2,035
Rolled	1,084		1,045		2,239		1,889
Shipped	1,147		1,095		2,353		1,942

Net sales for the three and six months ended February 29, 2020 decreased $42.7 million, or 6%, and increased $124.4 million, or 9%, respectively, as compared to the corresponding periods in 2019. For the three months ended February 29, 2020, the decrease in year-over-year net sales was due to a 10% decrease in average selling prices per ton, partially offset by an increase of 52 thousand tons shipped. Despite a 10% decrease in year-over-year average selling prices per ton in the six months ended February 29, 2020, year-to-date net sales increased due to an increase of 411 thousand tons shipped as a result of continued

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strength in our core markets and two additional months of shipments from the Acquired Businesses, as well as targeted merchant bar growth opportunities.

Adjusted EBITDA for the three and six months ended February 29, 2020 increased $13.3 million and $54.4 million, respectively, as compared to the corresponding periods in 2019. The year-over-year increases in adjusted EBITDA for the three and six months ended February 29, 2020 were due, in part, to increased shipments in both periods year-over-year. Although there were metal margin compressions of 6% and 1% during the three and six months ended February 29, 2020, respectively, the impact was offset by 6% and 4% year-over-year decreases, respectively, in conversion costs as a result of increased production levels and synergies from the integration of the Acquired Businesses. Adjusted EBITDA included non-cash stock compensation expense of $1.7 million and $3.5 million for the three and six months ended February 29, 2020, respectively, and $1.1 million and $2.3 million for the comparable periods.

Americas Fabrication

	Three Months Ended				Six Months Ended
(in thousands)	February 29, 2020		February 28, 2019		February 29, 2020		February 28, 2019
Net sales	$	511,748	$	530,836	$	1,083,595	$	967,947
Adjusted EBITDA	16,060		(49,578)		33,541		(86,574)
Average selling price (excluding stock and buyout sales) (per ton)
Rebar and other	$	984	$	845	$	979	$	856
Tons shipped (in thousands)
Rebar and other	366		396		779		715

Net sales for the three and six months ended February 29, 2020 decreased $19.1 million, or 4%, and increased $115.6 million, or 12%, respectively, as compared to the corresponding periods in 2019. The year-over-year decrease in net sales for the three months ended February 29, 2020 was driven by an approximately 8% decrease in tons shipped, partially offset by a 16% increase in average selling prices per ton. The year-over-year increase in net sales for the six months ended February 29, 2020 was driven by 9% and 14% year-over-year increases in tons shipped and average selling prices per ton, respectively. Tons shipped increased year-over-year due, in part, to two additional months of shipments related to the Acquired Businesses. Net sales included amortization benefit of $6.0 million and $14.3 million for the three and six months ended February 29, 2020, respectively, and $23.5 million and $34.8 million for the comparable periods, respectively, related to the unfavorable contract backlog of the Acquired Businesses.

Adjusted EBITDA for the three and six months ended February 29, 2020 increased $65.6 million and $120.1 million, respectively, as compared to the corresponding periods in 2019. The primary driver for the year-over-year increases in adjusted EBITDA for the three and six months ended February 29, 2020 was metal margin expansion due to increased average selling prices per ton, as discussed above, and decreased input and conversion costs. Adjusted EBITDA does not include the $6.0 million or $14.3 million benefit of the amortization of the unfavorable contract backlog reserve described above. Adjusted EBITDA included non-cash stock compensation expense of $0.6 million and $1.3 million for the three and six months ended February 29, 2020, respectively, and $0.4 million and $1.1 million for the comparable periods.

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International Mill

	Three Months Ended				Six Months Ended
(in thousands)	February 29, 2020		February 28, 2019		February 29, 2020		February 28, 2019
Net sales	$	180,079	$	175,198	$	345,468	$	402,222
Adjusted EBITDA	13,451		20,537		24,810		53,316
Average price (per ton)
Total selling price	$	449	$	545	$	455	$	546
Cost of ferrous scrap utilized	251		301		248		298
Metal margin	198		244		207		248
Tons (in thousands)
Melted	393		375		738		767
Rolled	333		298		675		561
Shipped	380		304		718		696

Net sales for the three and six months ended February 29, 2020 increased $4.9 million, or 3%, and decreased $56.8 million, or 14%, respectively, as compared to the corresponding periods in 2019. For the three months ended February 29, 2020, the year-over-year increase in net sales was driven by an approximately 25% year-over-year increase in tons shipped due to strong demand in the Polish construction sector, partially offset by an approximately 18% year-over-year decrease in average selling prices per ton primarily due to elevated import levels. The year-over-year decrease in year-to-date net sales was primarily driven by an approximately 17% year-over-year decrease in average selling prices per ton. Net sales for the three and six months ended February 29, 2020 were also impacted by unfavorable foreign currency translation adjustments of approximately $4.2 million and $11.5 million, respectively, due to the increase in the average value of the U.S. dollar relative to the Polish zloty.

Adjusted EBITDA for the three and six months ended February 29, 2020 decreased $7.1 million and $28.5 million, respectively, as compared to the corresponding periods in 2019, primarily driven by $46 per ton, or 19%, and $41 per ton, or 17%, year-over-year decreases in metal margins, respectively. Elevated import levels in the third quarter of calendar 2019 saturated the market, resulting in lower average selling prices per ton and compressed margins. Adjusted EBITDA included non-cash stock compensation expense of $0.3 million and $0.8 million for the three and six months ended February 29, 2020, respectively, and $0.2 million and $0.3 million for the comparable periods. Foreign currency translation impact to adjusted EBITDA for the three and six months ended February 29, 2020 was immaterial.

Corporate and Other

Corporate and Other reported adjusted EBITDA losses of $23.2 million and $50.7 million for the three and six months ended February 29, 2020, respectively, as compared to adjusted EBITDA losses of $24.1 million and $83.7 million in the corresponding periods. For the three months ended February 29, 2020, adjusted EBITDA was relatively flat on a year-over-year basis. For the six months ended February 29, 2020, the decrease in adjusted EBITDA loss was primarily driven by a $27.9 million year-over-year decrease in professional fees and legal expenses incurred primarily due to the Acquisition in 2019. Adjusted EBITDA included non-cash stock compensation expense of $4.6 million and $9.4 million for the three and six months ended February 29, 2020, respectively, and $3.7 million and $5.7 million for the comparable periods.

LIQUIDITY AND CAPITAL RESOURCES

Sources of Liquidity and Capital Resources

We actively monitor our accounts receivable and, based on market conditions and customers' financial condition, we record allowances as soon as we believe accounts are uncollectible. We use credit insurance in Poland to mitigate the risk of customer insolvency. We estimate that the amount of credit insured receivables (and those covered by export letters of credit) was approximately 13% of total trade receivables at February 29, 2020.

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The table below reflects our sources, facilities and available liquidity at February 29, 2020:

(in thousands)	Total Facility		Availability
Cash and cash equivalents	$	232,442	$	232,442
Notes due from 2023 to 2027	980,000		*
Revolver	350,000		346,962
U.S. accounts receivable facility	200,000		169,009
Term Loan	110,125		—
Poland credit facilities	70,046		58,005
Poland accounts receivable facility	56,037		42,670

_________________

* We believe we have access to additional financing and refinancing, if needed.

Cash Flows

Operating Activities

Our cash flows from operating activities result primarily from the sale of steel, nonferrous metals and related products. We have a diverse and generally stable customer base. From time to time, we use futures or forward contracts to mitigate the risks from fluctuations in commodity prices, foreign currency exchange rates, interest rates and natural gas, electricity and other energy prices. See Note 9, Derivatives, for further information.

Net cash flows from operating activities were $253.4 million for the six months ended February 29, 2020 compared to $352.9 million of net cash flows used by operating activities for the comparable period in 2019. Due to the adoption of Accounting Standards Update 2016-15 on September 1, 2018 as described in Note 7, Accounts Receivable Programs of the 2019 Form 10-K, $367.5 million of cash collections of the U.S. and Poland accounts receivable facilities were reflected in investing activities in 2019. In addition, for the six months ended February 29, 2020, the Company had a $113.6 million year-over-year increase in net earnings, a $30.4 million year-over-year increase in deferred income taxes and a $65.1 million year-over-year decrease in cash used by operating assets and liabilities ("working capital"). For continuing operations, operating working capital days decreased five days year-over-year.

Investing Activities

Net cash flows used by investing activities were $91.5 million and $393.1 million for the six months ended February 29, 2020 and the comparable period in 2019, respectively. Cash used by investing activities in the six months ended February 29, 2020 was lower than the comparable period primarily due to cash used for the Acquisition in 2019 of $701.2 million, as described in Note 2, Changes in Business, partially offset by $367.5 million in cash collections of the U.S. and Poland accounts receivable facilities in 2019, as described above.

We estimate that our 2020 capital spending will range from $160 million to $185 million. We regularly assess our capital spending based on current and expected results.

Financing Activities

Net cash flows used by financing activities were $122.1 million for the six months ended February 29, 2020 compared to net cash flows from financing activities of $181.8 million for the comparable period in 2019. During the six months ended February 29, 2020, we had net debt repayments of $91.2 million, as compared to net borrowings of $212.8 million in the corresponding period which was used to fund the Acquisition.

At this time, the coronavirus (“COVID-19”) has not had a material impact on our operations, and we anticipate our current cash balances, cash flows from operations and our available sources of liquidity will be sufficient to meet our cash requirements. However, as the impact of COVID-19 on the economy and our operations evolves, we will continue to assess our liquidity needs. In the event of a sustained market deterioration, we may need additional liquidity, which would require us to evaluate available alternatives and take appropriate actions.

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CONTRACTUAL OBLIGATIONS

Our contractual obligations at February 29, 2020 decreased by approximately $157.8 million from August 31, 2019, primarily due to decreases in long-term debt, unconditional purchase obligations and interest obligations. Our estimated contractual obligations for the twelve months ending February 28, 2021 are approximately $391.7 million and primarily consist of expenditures incurred in connection with normal business operations.

Other Commercial Commitments

We maintain stand-by letters of credit to provide support for certain transactions that governmental agencies, our insurance providers and suppliers request. At February 29, 2020, we had committed $27.4 million under these arrangements, of which $3.0 million reduced availability under the Revolver.

OFF-BALANCE SHEET ARRANGEMENTS

We have no off-balance sheet arrangements that may have a current or future material effect on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

CONTINGENCIES

In the ordinary course of conducting our business, we become involved in litigation, administrative proceedings and governmental investigations, including environmental matters. We may incur settlements, fines, penalties or judgments because of some of these matters. Liabilities and costs associated with litigation-related loss contingencies require estimates and judgments based on our knowledge of the facts and circumstances surrounding each matter and the advice of our legal counsel. We record liabilities for litigation-related losses when a loss is probable and we can reasonably estimate the amount of the loss. We evaluate the measurement of recorded liabilities each reporting period based on the current facts and circumstances specific to each matter. The ultimate losses incurred upon final resolution of litigation-related loss contingencies may differ materially from the estimated liability recorded at a particular balance sheet date. Changes in estimates are recorded in earnings in the period in which such changes occur. We do not believe that any currently pending legal proceedings to which we are a party will have a material adverse effect, individually or in the aggregate, on our results of operations, cash flows or financial condition. See Note 13, Commitments and Contingencies, for more information.

FORWARD-LOOKING STATEMENTS

This Form 10-Q contains or incorporates by reference a number of "forward-looking statements" within the meaning of the federal securities laws with respect to general economic conditions, key macro-economic drivers that impact our business, the effects of ongoing trade actions, the effects of continued pressure on the liquidity of our customers, potential synergies provided by our recent acquisitions, demand for our products, steel margins, the effect of COVID-19 and related governmental and economic responses thereto, the ability to operate our mills at full capacity, future supplies of raw materials and energy for our operations, share repurchases, legal proceedings, the undistributed earnings of our non-U.S. subsidiaries, U.S. non-residential construction activity, international trade, capital expenditures, our liquidity and our ability to satisfy future liquidity requirements, estimated contractual obligations and our expectations or beliefs concerning future events. These forward-looking statements can generally be identified by phrases such as we or our management "expects," "anticipates," "believes," "estimates," "intends," "plans to," "ought," "could," "will," "should," "likely," "appears," "projects," "forecasts," "outlook" or other similar words or phrases. There are inherent risks and uncertainties in any forward-looking statements. We caution readers not to place undue reliance on any forward-looking statements.

Our forward-looking statements are based on management's expectations and beliefs as of the time this Form 10-Q is filed with the SEC or, with respect to any document incorporated by reference, as of the time such document was prepared. Although we believe that our expectations are reasonable, we can give no assurance that these expectations will prove to have been correct, and actual results may vary materially. Except as required by law, we undertake no obligation to update, amend or clarify any forward-looking statements to reflect changed assumptions, the occurrence of anticipated or unanticipated events, new information or circumstances or any other changes. Important factors that could cause actual results to differ materially from our expectations include those described in Part I, Item 1A, Risk Factors, of the 2019 Form 10-K as well as the following:

•changes in economic conditions which affect demand for our products or construction activity generally, and the impact of such changes on the highly cyclical steel industry;

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•rapid and significant changes in the price of metals, potentially impairing our inventory values due to declines in commodity prices or reducing the profitability of our fabrication contracts due to rising commodity pricing;

•impacts from COVID-19 on the economy, demand for our products or our operations, including the responses of governmental authorities to contain COVID-19;

•excess capacity in our industry, particularly in China, and product availability from competing steel mills and other steel suppliers including import quantities and pricing;

•compliance with and changes in environmental laws and regulations, including increased regulation associated with climate change and greenhouse gas emissions;

•involvement in various environmental matters that may result in fines, penalties or judgments;

•potential limitations in our or our customers' abilities to access credit and non-compliance by our customers with our contracts;

•activity in repurchasing shares of our common stock under our repurchase program;

•financial covenants and restrictions on the operation of our business contained in agreements governing our debt;

•our ability to successfully identify, consummate and integrate acquisitions and the effects that acquisitions may have on our financial leverage;

•risks associated with acquisitions generally, such as the inability to obtain, or delays in obtaining, required approvals under applicable antitrust legislation and other regulatory and third party consents and approvals;

•lower than expected future levels of revenues and higher than expected future costs;

•failure or inability to implement growth strategies in a timely manner;

•impact of goodwill impairment charges;

•impact of long-lived asset impairment charges;

•currency fluctuations;

•global factors, including trade measures, political uncertainties and military conflicts;

•availability and pricing of electricity, electrodes and natural gas for mill operations;

•ability to hire and retain key executives and other employees;

•competition from other materials or from competitors that have a lower cost structure or access to greater financial resources;

•information technology interruptions and breaches in security;

•ability to make necessary capital expenditures;

•availability and pricing of raw materials and other items over which we exert little influence, including scrap metal, energy and insurance;

•unexpected equipment failures;

•losses or limited potential gains due to hedging transactions;

•litigation claims and settlements, court decisions, regulatory rulings and legal compliance risks;

•risk of injury or death to employees, customers or other visitors to our operations;

•new and clarifying guidance with regard to interpretation of certain provisions of the Tax Cuts and Jobs Act that could impact our assessment; and

•increased costs related to health care reform legislation.

You should refer to the “Risk Factors” disclosed in our periodic and current reports filed with the SEC for specific risks which would cause actual results to be significantly different from those expressed or implied by these forward-looking statements. It is not possible to identify all of the risks, uncertainties and other factors that may affect future results. In light of these risks and uncertainties, the forward-looking events and circumstances discussed herein may not occur and actual results could differ materially from those anticipated or implied in the forward-looking statements. Accordingly, readers of this Form 10-Q are cautioned not to place undue reliance on the forward-looking statements.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

During the six months ended February 29, 2020, the U.S. dollar equivalent of the Company's total gross foreign currency exchange contract commitments decreased $9.5 million, or 10%, compared to August 31, 2019. This decrease was primarily due to forward contracts denominated in euro with a Polish zloty functional currency, which decreased $6.1 million compared to August 31, 2019.

During the six months ended February 29, 2020, the change in the Company's total commodity contract commitments was relatively flat compared to August 31, 2019.

There were no other material changes to the information set forth in Item 7A, Quantitative and Qualitative Disclosures about Market Risk, included in the 2019 Form 10-K.

ITEM 4. CONTROLS AND PROCEDURES

The term "disclosure controls and procedures" is defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act. This term refers to the controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within required time periods, and includes controls and procedures designed to ensure that such information is accumulated and communicated to the company's management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure. Our Chief Executive Officer and our Chief Financial Officer have evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Form 10-Q, and they have concluded that as of that date, our disclosure controls and procedures were effective.

There were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) that occurred during our quarter ended February 29, 2020 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

30

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The Company is a defendant in lawsuits associated with the normal conduct of its businesses and operations. It is not possible to predict the outcome of the pending actions, and as with any litigation, it is possible that these actions could be decided unfavorably to the Company. We believe that there are meritorious defenses to these actions and that these actions will not have a material adverse effect upon our results of operations, cash flows or financial condition, and where appropriate, these actions are being vigorously contested.

We are the subject of civil actions, or have received notices from the U.S. Environmental Protection Agency ("EPA") or state agencies with similar responsibility, that we and numerous other parties are considered a potentially responsible party ("PRP") and may be obligated under the Comprehensive Environmental Response, Compensation and Liability Act of 1980 ("CERCLA"), or similar state statutes, to pay for the cost of remedial investigation, feasibility studies and ultimately remediation to correct alleged releases of hazardous substances at eleven locations. The actions and notices refer to the following locations, none of which involve real estate we ever owned or upon which we ever conducted operations: the Sapp Battery Site in Cottondale, Florida, the Interstate Lead Company Site in Leeds, Alabama, the Ross Metals Site in Rossville, Tennessee, the Li Tungsten Site in Glen Cove, New York, the Peak Oil Site in Tampa, Florida, the R&H Oil Site in San Antonio, Texas, the SoGreen/Parramore Site in Tifton, Georgia, the Jensen Drive site in Houston, Texas, the Industrial Salvage site in Corpus Christi, Texas, the Chemetco site in Hartford, Illinois and the Ward Transformer site in Raleigh, North Carolina. We may contest our designation as a PRP with regard to certain sites, while at other sites we are participating with other named PRPs in agreements or negotiations that have resulted or that we expect will result in agreements to remediate the sites. During 2010, we acquired a 70% interest in the real property at Jensen Drive as part of the remediation of that site. We have periodically received information requests from government environmental agencies with regard to other sites that are apparently under consideration for designation as listed sites under CERCLA or similar state statutes. Often we do not receive any further communication with regard to these sites, and as of the date of this Form 10-Q, we do not know if any of these inquiries will ultimately result in a demand for payment from us.

The EPA notified us and other alleged PRPs that under Section 106 of CERCLA, we and the other PRPs could be subject to a maximum fine of $25,000 per day and the imposition of treble damages if we and the other PRPs refuse to clean up the Peak Oil, Sapp Battery and SoGreen/Parramore sites as ordered by the EPA. We are presently participating in PRP organizations at these sites, which are paying for certain site remediation expenses. We do not believe that the EPA will pursue any fines against us if we continue to participate in the PRP groups or if we have adequate defenses to the EPA's imposition of fines against us in these matters.

We believe that adequate provisions have been made in the financial statements for the potential impact of any loss in connection with the above-described legal proceedings and environmental matters. Management believes that the outcome of the proceedings mentioned, and other miscellaneous litigation and proceedings now pending, will not have a material adverse effect on our business, results of operations or financial condition.

ITEM 1A. RISK FACTORS

Except as set forth below, there were no material changes to the risk factors previously disclosed in Part I, Item 1A, Risk Factors, of the 2019 Form 10-K and Part II, Item 1A, Risk Factors, of the Quarterly Report on Form 10-Q for the period ended November 30, 2019:

Our business, financial condition and results of operations may be adversely affected by global public health epidemics, including the recent COVID-19 outbreak.

Our business, financial condition and results of operations may be adversely affected if a global public health epidemic, including the recent COVID-19 outbreak, interferes with the ability of our employees, suppliers, customers, financing sources or others to conduct business or negatively affects consumer confidence or the global economy. In December 2019, COVID-19 was reported to have surfaced in Wuhan, China. In January 2020, COVID-19 spread to other countries, including the United States, and efforts to contain the spread of COVID-19 intensified. The outbreak is a widespread health crisis that has affected large segments of the global economy. The outbreak and any preventative or protective actions that governments or we may take with respect to COVID-19 may have a material adverse effect on our business or our suppliers, distribution channels, and customers, including business shutdowns or disruptions for an indefinite period of time, reduced operations, restrictions on shipping, fabricating or installing products or reduced consumer demand. Any resulting financial impact cannot be estimated reasonably at this time, but may materially affect our business, financial condition or results of operations. The extent to which

31

COVID-19 affects our results will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of COVID-19 and the actions to contain the outbreak or treat its impact, among others.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

There were no purchases of equity securities registered by the Company pursuant to Section 12 of the Exchange Act during the quarter ended February 29, 2020.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

Not applicable.

32

ITEM 6. EXHIBITS

3.1(a)	Restated Certificate of Incorporation dated March 2, 1989 (filed as Exhibit 3(i) to Commercial Metals Company's Annual Report on Form 10-K for the fiscal year ended August 31, 2009 and incorporated herein by reference).
3.1(b)	Certificate of Amendment of Restated Certificate of Incorporation dated February 1, 1994 (filed as Exhibit 3(i)(a) to Commercial Metals Company's Annual Report on Form 10-K for the fiscal year ended August 31, 2009 and incorporated herein by reference).
3.1(c)	Certificate of Amendment of Restated Certificate of Incorporation dated February 17, 1995 (filed as Exhibit 3(i)(b) to Commercial Metals Company's Annual Report on Form 10-K for the fiscal year ended August 31, 2009 and incorporated herein by reference).
3.1(d)	Certificate of Amendment of Restated Certificate of Incorporation dated January 30, 2004 (filed as Exhibit 3(i)(d) to Commercial Metals Company's Quarterly Report on Form 10-Q for the quarter ended February 29, 2004 and incorporated herein by reference).
3.1(e)	Certificate of Amendment of Restated Certificate of Incorporation dated January 26, 2006 (filed as Exhibit 3(i) to Commercial Metals Company's Quarterly Report on Form 10-Q for the quarter ended February 28, 2006 and incorporated herein by reference).
3.1(f)	Certificate of Designation, Preferences and Rights of Series A Preferred Stock (filed as Exhibit 2 to Commercial Metals Company's Form 8-A filed August 3, 1999 and incorporated herein by reference).
3.2	Fourth Amended and Restated Bylaws (filed as Exhibit 3.1 to Commercial Metals Company's Current Report on Form 8-K dated September 23, 2019 and incorporated herein by reference).
10.1	Consulting Agreement, dated as of March 1, 2020, by and between Mary A. Lindsey and Commercial Metals Company (filed as Exhibit 10.1 to Commercial Metals Company's Current Report on Form 8-K dated March 2, 2020 and incorporated herein by reference).
10.2	Separation and Release Agreement, dated as of February 28, 2020, by and between Commercial Metals Company and Paul K. Kirkpatrick (filed as Exhibit 10.1 to Commercial Metals Company's Current Report on Form 8-K dated March 3, 2020 and incorporated herein by reference).
31.1	Certification of Barbara R. Smith, President and Chief Executive Officer of Commercial Metals Company, pursuant to Section 302 to the Sarbanes-Oxley Act of 2002 (filed herewith).
31.2	Certification of Paul J. Lawrence, Vice President and Chief Financial Officer of Commercial Metals Company, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
32.1	Certification of Barbara R. Smith, President and Chief Executive Officer of Commercial Metals Company, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).
32.2	Certification of Paul J. Lawrence, Vice President and Chief Financial Officer of Commercial Metals Company, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).
101.INS	Inline XBRL Instance Document (filed herewith).
101.SCH	Inline XBRL Taxonomy Extension Schema Document (filed herewith).
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document (filed herewith).
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document (filed herewith).
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document (filed herewith).
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document (filed herewith).
104	Cover Page Interactive Data File

33

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	COMMERCIAL METALS COMPANY
March 25, 2020	/s/ Paul J. Lawrence
	Paul J. Lawrence
	Vice President and Chief Financial Officer
	(Duly authorized officer and principal financial officer of the registrant)

34

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

I, Barbara R. Smith, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Commercial Metals Company;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: March 25, 2020

/s/ Barbara R. Smith

Barbara R. Smith

President and Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

I, Paul J. Lawrence, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Commercial Metals Company;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: March 25, 2020

/s/ Paul J. Lawrence

Paul J. Lawrence

Vice President and Chief Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Commercial Metals Company (the “Company”) on Form 10-Q for the period ended February 29, 2020 (the “Report”), I, Barbara R. Smith, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Barbara R. Smith

Barbara R. Smith

President and Chief Executive Officer

Date: March 25, 2020

EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Commercial Metals Company (the “Company”) on Form 10-Q for the period ended February 29, 2020 (the “Report”), I, Paul J. Lawrence, Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Paul J. Lawrence

Paul J. Lawrence

Vice President and Chief Financial Officer

Date: March 25, 2020

XML

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables)

6 Months Ended

Feb. 29, 2020

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

Schedule of accumulated other comprehensive income (loss)

The following tables reflect the changes in accumulated other comprehensive income (loss) ("AOCI"):

	Three Months Ended February 29, 2020
(in thousands)	Foreign Currency Translation		Unrealized Gain (Loss) on Derivatives		Defined Benefit Obligation		Total AOCI
Balance, November 30, 2019	$	(114,574)	$	1,731	$	(3,742)	$	(116,585)
Other comprehensive loss before reclassifications	(1,066)		(4,501)		(14)		(5,581)
Amounts reclassified from AOCI	(2)		(104)		—		(106)
Income taxes	—		876		6		882
Net other comprehensive income loss	(1,068)		(3,729)		(8)		(4,805)
Balance, February 29, 2020	$	(115,642)	$	(1,998)	$	(3,750)	$	(121,390)
	Six Months Ended February 29, 2020
(in thousands)	Foreign Currency Translation		Unrealized Gain (Loss) on Derivatives		Defined Benefit Obligation		Total AOCI
Balance, August 31, 2019	$	(121,498)	$	1,106	$	(3,734)	$	(124,126)
Other comprehensive income (loss) before reclassifications	5,858		(3,619)		(24)		2,215
Amounts reclassified from AOCI	(2)		(214)		—		(216)
Income taxes	—		729		8		737
Net other comprehensive income (loss)	5,856		(3,104)		(16)		2,736
Balance, February 29, 2020	$	(115,642)	$	(1,998)	$	(3,750)	$	(121,390)

	Three Months Ended February 28, 2019
(in thousands)	Foreign Currency Translation		Unrealized Gain (Loss) on Derivatives		Defined Benefit Obligation		Total AOCI
Balance, November 30, 2018	$	(102,393)	$	1,279	$	(1,087)	$	(102,201)
Other comprehensive income (loss) before reclassifications	514		(52)		(8)		454
Amounts reclassified from AOCI	936		(107)		—		829
Income taxes	—		31		—		31
Net other comprehensive income (loss)	1,450		(128)		(8)		1,314
Balance, February 28, 2019	$	(100,943)	$	1,151	$	(1,095)	$	(100,887)
	Six Months Ended February 28, 2019
(in thousands)	Foreign Currency Translation		Unrealized Gain (Loss) on Derivatives		Defined Benefit Obligation		Total AOCI
Balance, August 31, 2018	$	(92,637)	$	1,356	$	(2,396)	$	(93,677)
Other comprehensive loss before reclassifications	(9,143)		(104)		(19)		(9,266)
Amounts reclassified from AOCI	837		(149)		1,666		2,354
Income taxes (benefit)	—		48		(346)		(298)
Net other comprehensive income (loss)	(8,306)		(205)		1,301		(7,210)
Balance, February 28, 2019	$	(100,943)	$	1,151	$	(1,095)	$	(100,887)

XML

COMMITMENTS AND CONTINGENCIES

6 Months Ended

Feb. 29, 2020

Commitments and Contingencies Disclosure [Abstract]

Commitments and contingencies

NOTE 13. COMMITMENTS AND CONTINGENCIES

Legal and Environmental Matters

In the ordinary course of conducting its business, the Company becomes involved in litigation, administrative proceedings and governmental investigations, including environmental matters. See Note 19, Commitments and Contingencies, to the consolidated financial statements in the 2019 Form 10-K.

The Company has received notices from the U.S. Environmental Protection Agency ("EPA") or state agencies with similar responsibility that it is considered a potentially responsible party at several sites, none of which are owned by the Company, and may be obligated under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 ("CERCLA") or similar state statutes to conduct remedial investigations, feasibility studies, remediation and/or removal of alleged releases of hazardous substances or to reimburse the EPA for such activities. The Company is involved in litigation or administrative proceedings with regard to several of these sites in which the Company is contesting, or at the appropriate time may contest, its liability at the sites. In addition, the Company has received information requests with regard to other sites which may be under consideration by the EPA as potential CERCLA sites. Some of these environmental matters or other proceedings may result in fines, penalties or judgments being assessed against the Company. At February 29, 2020 and August 31, 2019, the Company had $0.7 million accrued for cleanup and remediation costs in connection with CERCLA sites. The estimation process is based on currently available information, which is in many cases preliminary and incomplete. Total environmental liabilities, including CERCLA sites, were $3.6 million at February 29, 2020 and August 31, 2019, of which $2.7 million and $1.8 million were classified as other long-term liabilities at February 29, 2020 and August 31, 2019, respectively. These amounts have not been discounted to their present values. Due to evolving remediation technology, changing regulations, possible third-party contributions, the inherent shortcomings of the estimation process and other factors, amounts accrued could vary significantly from amounts paid. Historically, the amounts the Company has ultimately paid for such remediation activities have not been material.

Management believes that adequate provisions have been made in the Company's condensed consolidated financial statements for the potential impact of these contingencies, and that the outcomes of the suits and proceedings described above, and other miscellaneous litigation and proceedings now pending, will not have a material adverse effect on the business, results of operations or financial condition of the Company.

XML

INVENTORIES, NET (Narrative) (Details) - USD ($) $ in Millions	Feb. 29, 2020	Aug. 31, 2019
Inventory Disclosure [Abstract]
Raw materials	$ 169.4	$ 143.7

XML

LEASES - Lease Cost (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Feb. 29, 2020	Feb. 29, 2020
Leases [Abstract]
Operating lease expense	$ 8,815	$ 17,605
Finance lease expense:
Amortization of assets	2,720	4,885
Interest on lease liabilities	465	866
Total finance lease expense	3,185	5,751
Variable and short term-lease expense	4,381	8,314
Total lease expense	$ 16,381	$ 31,670

XML

BUSINESS SEGMENTS (Narrative) (Details)	6 Months Ended
	Feb. 29, 2020 segments
Segment Reporting [Abstract]
Number of reporting segments	4

XML

STOCK-BASED COMPENSATION PLANS (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Feb. 29, 2020	Feb. 28, 2019	Feb. 29, 2020	Feb. 28, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	$ 7,536	$ 5,790	$ 15,805	$ 10,007
Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period in years			3 years
Performance Stock Units (PSU)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period in years			3 years
Equity method awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares granted			1,521,000	1,505,000
Weighted average grant-date fair value			$ 18.32	$ 17.75
Liability method awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares granted			426,000	374,000
Equivalent shares outstanding	835,546		835,546
Equivalent shares expected to vest	793,769		793,769
Fiscal 2020 | Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period in years			3 years
Fiscal 2020 | Performance Stock Units (PSU)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period in years			3 years

XML

DERIVATIVES (Derivatives Not Designated as Hedging Instruments) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Feb. 29, 2020	Feb. 28, 2019	Feb. 29, 2020	Feb. 28, 2019
Derivative Instruments, Gain (Loss) [Line Items]
Gain (loss) before income taxes for derivatives not designated as hedges	$ 1,710	$ (2,951)	$ 436	$ (3,665)
Commodity | Cost of goods sold
Derivative Instruments, Gain (Loss) [Line Items]
Gain (loss) before income taxes for derivatives not designated as hedges	1,731	(2,425)	416	(3,265)
Foreign exchange | SG&A expenses
Derivative Instruments, Gain (Loss) [Line Items]
Gain (loss) before income taxes for derivatives not designated as hedges	$ (21)	$ (526)	$ 20	$ (400)

XML

CREDIT ARRANGEMENTS (Long-term Debt, Including the Deferred Gain from the Termination of the Interest Rate Swaps) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Feb. 29, 2020	Feb. 28, 2019	Feb. 29, 2020	Feb. 28, 2019	Aug. 31, 2019
Debt Instrument [Line Items]
Total debt	$ 1,176,713		$ 1,176,713		$ 1,254,921
Less debt issuance costs	9,425		9,425		10,268
Total amounts outstanding	1,167,288		1,167,288		1,244,653
Less current maturities	14,443		14,443		13,510
Less short-term borrowings	8,272		8,272		3,929
Current maturities of long-term debt and short-term borrowings	22,715		22,715		17,439
Long-term debt	1,144,573		1,144,573		1,227,214
Depreciation and amortization	$ 41,389	$ 41,245	$ 82,330	$ 76,421
2027 Notes
Debt Instrument [Line Items]
Weighted average interest rate	5.375%		5.375%
Total debt	$ 300,000		$ 300,000		300,000
2026 Notes
Debt Instrument [Line Items]
Weighted average interest rate	5.75%		5.75%
Total debt	$ 350,000		$ 350,000		350,000
2023 Notes
Debt Instrument [Line Items]
Weighted average interest rate	4.875%		4.875%
Total debt	$ 330,000		$ 330,000		330,000
Term Loan | Revolving credit facility
Debt Instrument [Line Items]
Weighted average interest rate	3.409%		3.409%
Total debt	$ 110,125		$ 110,125		210,125
Poland credit facilities | Revolving credit facility
Debt Instrument [Line Items]
Weighted average interest rate	2.637%		2.637%
Total debt	$ 11,290		$ 11,290		0
Short-term borrowings
Debt Instrument [Line Items]
Weighted average interest rate, short term	2.40%		2.40%
Total debt	$ 8,272		$ 8,272		3,929
Other
Debt Instrument [Line Items]
Weighted average interest rate, short term	5.10%		5.10%
Total debt	$ 23,168		$ 23,168		23,168
Finance leases
Debt Instrument [Line Items]
Total debt	$ 43,858		$ 43,858		$ 37,699

XML

DERIVATIVES

6 Months Ended

Feb. 29, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives

NOTE 9. DERIVATIVES

The Company's global operations and product lines expose it to risks from fluctuations in metal commodity prices, foreign currency exchange rates, interest rates and natural gas, electricity and other energy prices. One objective of the Company's risk management program is to mitigate these risks using derivative instruments. The Company enters into (i) metal commodity futures and forward contracts to mitigate the risk of unanticipated changes in gross margin due to price volatility in these commodities, (ii) foreign currency forward contracts that match the expected settlements for purchases and sales denominated in foreign currencies and (iii) energy derivatives to mitigate the risk related to price volatility of electricity and natural gas.

At February 29, 2020, the notional values of the Company's foreign currency and commodity commitments were $84.6 million and $42.0 million, respectively. At August 31, 2019, the notional values of the Company's foreign currency and commodity contract commitments were $94.1 million and $42.6 million, respectively.

The following table provides information regarding the Company's commodity contract commitments at February 29, 2020:

Commodity	Long/Short	Total
Aluminum	Long	2,100	MT
Copper	Long	318	MT
Copper	Short	5,454	MT
Electricity	Long	2,000,000	MW(h)

_________________

MT = Metric Ton

MW(h) = Megawatt hour

The Company designates only those contracts which closely match the terms of the underlying transaction as hedges for accounting purposes. Certain foreign currency and commodity contracts were not designated as hedges for accounting purposes, although management believes they are essential economic hedges.

The following table summarizes activity related to the Company's derivative instruments not designated as hedging instruments recognized in the condensed consolidated statements of earnings. All other activity related to the Company's derivative instruments and hedged items was immaterial for the periods presented. 

		Three Months Ended				Six Months Ended
Derivatives Not Designated as Hedging Instruments (in thousands)	Location	February 29, 2020		February 28, 2019		February 29, 2020		February 28, 2019
Commodity	Cost of goods sold	$	1,731	$	(2,425)	$	416	$	(3,265)
Foreign exchange	SG&A expenses	(21)		(526)		20		(400)
Gain (loss) before income taxes		$	1,710	$	(2,951)	$	436	$	(3,665)

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands	6 Months Ended
	Feb. 29, 2020	Feb. 28, 2019
Cash flows from (used by) operating activities:
Net earnings	$ 147,146	$ 33,592
Adjustments to reconcile net earnings to cash flows from (used by) operating activities:
Depreciation and amortization	82,338	76,430
Deferred income taxes and other long-term taxes	42,142	11,705
Amortization of acquired unfavorable contract backlog	(14,328)	(34,808)
Stock-based compensation	15,805	10,007
Net gain on disposals of subsidiaries, assets and other	(5,585)	(1,202)
Other	1,571	(281)
Changes in operating assets and liabilities	(15,673)	(80,809)
Beneficial interest in securitized accounts receivable	0	(367,521)
Net cash flows from (used by) operating activities	253,416	(352,887)
Cash flows from (used by) investing activities:
Capital expenditures	(96,592)	(67,497)
Proceeds from the sale of property, plant and equipment	14,004	2,042
Proceeds from insurance, sale of discontinued operations and other	974	5,798
Acquisitions, net of cash acquired	(9,850)	(700,982)
Beneficial interest in securitized accounts receivable	0	367,521
Net cash flows used by investing activities:	(91,464)	(393,118)
Cash flows from (used by) financing activities:
Proceeds from issuance of long-term debt	11,299	180,000
Repayments of long-term debt	(106,880)	(14,605)
Proceeds from accounts receivable programs	85,686	140,070
Repayments under accounts receivable programs	(81,314)	(92,664)
Dividends	(28,480)	(28,181)
Stock issued under incentive and purchase plans, net of forfeitures	(2,463)	(2,856)
Contribution from noncontrolling interests	16	10
Net cash flows from (used by) financing activities	(122,136)	181,774
Effect of exchange rate changes on cash	337	(221)
Increase (decrease) in cash, restricted cash and cash equivalents	40,153	(564,452)
Cash, restricted cash and cash equivalents at beginning of period	233,882	68,163
Cash, restricted cash and cash equivalents at end of period	233,882	68,163
Supplemental information:
Cash paid for income taxes	27,759	1,771
Cash paid for interest	29,484	31,518
Noncash activities:
Liabilities related to additions of property, plant and equipment	$ 29,176	$ 26,186

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CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED) - USD ($) $ in Thousands		3 Months Ended		6 Months Ended
		Feb. 29, 2020	Feb. 28, 2019	Feb. 29, 2020		Feb. 28, 2019
Income Statement [Abstract]
Net sales		$ 1,340,963	$ 1,402,783	$ 2,725,671		$ 2,680,125
Costs and expenses:
Cost of goods sold		1,123,096	1,252,493	2,269,610		2,370,926
Selling, general and administrative expenses		115,538	98,726	227,067		215,943
Interest expense		15,888	18,495	32,466		35,158
Total costs and expenses		1,254,522	1,369,714	2,529,143		2,622,027
Earnings from continuing operations before income taxes		86,441	33,069	196,528		58,098
Income taxes		22,845	18,141	50,177		23,750
Earnings from continuing operations		63,596	14,928	146,351		34,348
Earnings (loss) from discontinued operations before income taxes		301	(1,075)	1,196		(618)
Income taxes		99	3	401		138
Earnings (loss) from discontinued operations		202	(1,078)	795		(756)
Net earnings		$ 63,798	$ 13,850	$ 147,146		$ 33,592
Basic earnings per share*
Earnings from continuing operations (in USD per share)	[1]	$ 0.53	$ 0.13	$ 1.23		$ 0.29
Earnings (loss) from discontinued operations (in USD per share)		0	(0.01)	0.01	[1]	(0.01)	[1]
Net earnings (in USD per share)		0.54	0.12	1.24	[1]	0.29	[1]
Diluted earnings per share*
Earnings from continuing operations (in USD per share)	[1]	0.53	0.13	1.22		0.29
Earnings (loss) from discontinued operations (in USD per share)		0	(0.01)	0.01	[1]	(0.01)	[1]
Net earnings (in USD per share)		$ 0.53	$ 0.12	$ 1.22	[1]	$ 0.28	[1]
Average basic shares outstanding		118,919,455	117,854,335	118,644,823		117,677,422
Average diluted shares outstanding		120,407,256	118,942,758	120,303,259		118,996,427

[1] *Earnings Per Share ("EPS") is calculated independently for each component and may not sum to Net EPS due to rounding

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INVENTORIES, NET

6 Months Ended

Feb. 29, 2020

Inventory Disclosure [Abstract]

Inventories, net

NOTE 5. INVENTORIES, NET

The majority of the Company's inventories are in the form of semi-finished and finished goods. Under the Company’s business model, products are sold to external customers in various stages, from semi-finished billets through fabricated steel, leading these categories to be combined. As such, at February 29, 2020 and August 31, 2019, work in process inventories were immaterial. At February 29, 2020 and August 31, 2019, the Company's raw materials inventories were $169.4 million and $143.7 million, respectively.

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ACCOUNTING POLICIES

6 Months Ended

Feb. 29, 2020

Accounting Policies [Abstract]

Accounting policies

NOTE 1. ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP") on a basis consistent with that used in the Annual Report on Form 10-K for the year ended August 31, 2019 ("2019 Form 10-K") filed by Commercial Metals Company ("CMC," and together with its consolidated subsidiaries, the "Company") with the Securities and Exchange Commission (the "SEC") and include all normal recurring adjustments necessary to present fairly the condensed consolidated balance sheets and the condensed consolidated statements of earnings, comprehensive income, cash flows and stockholders' equity for the periods indicated. These notes should be read in conjunction with the consolidated financial statements included in the 2019 Form 10-K. The results of operations for the three and six month periods are not necessarily indicative of the results to be expected for the full fiscal year. Any reference in this Form 10-Q to the "comparable period" or "corresponding period" relates to the relevant three-month or six-month period ended February 28, 2019.

Recently Adopted Accounting Pronouncements

On September 1, 2019, the Company adopted Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842), as amended, (“ASU 2016-02”), using the modified retrospective transition approach. ASU 2016-02 requires a lessee to recognize a right-of-use ("ROU") asset and a lease liability on its balance sheet for all leases with terms longer than twelve months. The Company’s financial statements for periods prior to September 1, 2019 were not modified for the application of this ASU. Upon adoption of ASU 2016-02, the Company recorded the following amounts associated with operating leases in its condensed consolidated balance sheet at September 1, 2019: $113.4 million of ROU assets, in other noncurrent assets, $30.9 million of lease liabilities in accrued expenses and other payables and $84.9 million of lease liabilities in other noncurrent liabilities. There was no impact to the opening balance of retained earnings as a result of implementing ASU 2016-02. The Company elected the package of three practical expedients available under the ASU. Additionally, the Company implemented appropriate changes to internal processes and controls to support recognition, subsequent measurement and disclosures.

The Company's leases are primarily for office space, land and equipment. The Company determines if an arrangement is a lease at inception of a contract if the terms state the Company has the right to direct the use of and obtain substantially all the economic benefits from a specific asset identified in the contract. The ROU assets represent the Company's right to use the underlying assets for the lease term, and the lease liabilities represent the obligation to make lease payments arising from the leases. ROU assets and lease liabilities are recognized at commencement date based on the present value of lease payments to be made over the lease term. Certain of the Company's lease agreements contain options to extend the lease. The Company evaluates these options on a lease-by-lease basis, and, if the Company determines it is reasonably certain to be exercised, the lease term includes the extension. The Company uses its incremental borrowing rate at lease commencement to determine the present value of lease payments, and lease expense is recognized on a straight-line basis over the lease term. The incremental borrowing rate is the rate of interest the Company could borrow on a collateralized basis over a similar term with similar payments. The Company does not record leases with an initial term of twelve months or less (“short-term leases”) in its condensed consolidated balance sheets.

Certain of the Company's lease agreements include payments for certain variable costs not determinable upon lease commencement including mileage, utilities, fuel and inflation adjustments. These variable lease payments are recognized in cost of goods sold and selling, general and administrative expenses, but are not included in the ROU asset or lease liability balances. The Company's lease agreements do not contain any material residual value guarantees, restrictions or covenants.

Recently Issued Accounting Pronouncements

In December 2019, the Financial Accounting Standards Board issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes ("ASU 2019-12"). ASU 2019-12 eliminates certain exceptions to the general principles in Accounting Standards Codification 740 and also clarifies and amends existing guidance to improve consistent application. This standard is effective for annual periods beginning after December 15, 2020, including interim periods therein. The Company currently does not expect ASU 2019-12 to have a material effect on its consolidated financial statements; however, the Company will continue to evaluate the impact of this guidance.

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STOCK-BASED COMPENSATION PLANS (Tables)

6 Months Ended

Feb. 29, 2020

Share-based Payment Arrangement [Abstract]

Schedule of Stock Based Awards Granted

During the six months ended February 29, 2020 and the comparable period, the Company granted the following awards under its stock-based compensation plans:

	February 29, 2020			February 28, 2019
(in thousands, except per share data)	Shares Granted	Weighted Average Grant Date Fair Value		Shares Granted	Weighted Average Grant Date Fair Value
Equity method	1,521	$	18.32	1,505	$	17.75
Liability method	426	N/A		374	N/A

Schedule of Stock-based Compensation Expense

The following table summarizes total stock-based compensation expense, including fair value remeasurements, which was mainly included in selling, general and administrative expenses on the Company's condensed consolidated statements of earnings:

	Three Months Ended				Six Months Ended
(in thousands)	February 29, 2020		February 28, 2019		February 29, 2020		February 28, 2019
Stock-based compensation expense	$	7,536	$	5,790	$	15,805	$	10,007

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CHANGES IN BUSINESS (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Feb. 28, 2019 USD ($)	Feb. 28, 2018 USD ($)	Feb. 29, 2020 USD ($)	Feb. 28, 2019 USD ($)	Feb. 28, 2018 USD ($)	Nov. 05, 2018 USD ($) fabrication_facility
Business Combinations [Abstract]
Number of rebar fabrication facilities acquired | fabrication_facility						33
Cash purchase price						$ 701,200
Pro forma net sales	$ 1,379,033	$ 1,470,603		$ 2,925,007	$ 2,914,292
Pro forma net earnings (loss)	$ 10,260	$ 18,786		$ 26,081	(2,187)
Non-recurring acquisition and integration costs					$ 47,500
Facility closure costs			$ 6,300
Remaining liability for facility closure			$ 3,800

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FAIR VALUE (Narrative) (Details)	6 Months Ended
	Feb. 29, 2020 levels
Fair Value Disclosures [Abstract]
Number of fair value hierarchy	3

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CREDIT ARRANGEMENTS (Narrative) (Details)	Feb. 29, 2020 USD ($)	Feb. 29, 2020 PLN (zł)	Aug. 31, 2019 USD ($)
CMCP
Debt Instrument [Line Items]
Revolving credit facility current borrowing capacity	$ 70,000,000.0	zł 275,000,000.0
Revolving credit facility, amount drawn	11,300,000		$ 0
Stand by letters of credit outstanding amount	800,000		1,100,000
Revolving credit facility
Debt Instrument [Line Items]
Revolving credit facility current borrowing capacity	350,000,000.0		350,000,000.0
Revolving credit facility, amount drawn	0		0
Stand-by letters of credit
Debt Instrument [Line Items]
Stand by letters of credit outstanding amount	3,000,000.0		3,000,000.0
U.S. Program
Debt Instrument [Line Items]
Advances outstanding under transfer of receivables programs	0		0
Poland Program
Debt Instrument [Line Items]
Transfer of accounts receivable program limit	56,000,000.0	zł 220,000,000.0
Advances outstanding under transfer of receivables programs	$ 8,300,000		$ 3,900,000

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GOODWILL AND OTHER INTANGIBLES

6 Months Ended

Feb. 29, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and other intangibles

NOTE 6. GOODWILL AND OTHER INTANGIBLES

Goodwill by reportable segment at February 29, 2020 is detailed in the following table:

(in thousands)	Americas Recycling		Americas Mills		Americas Fabrication		International Mill		Consolidated
Goodwill, gross*	$	9,543	$	4,970	$	57,428	$	2,420	$	74,361
Accumulated impairment losses*	(9,543)		—		(493)		(153)		(10,189)
Goodwill, net*	$	—	$	4,970	$	56,935	$	2,267	$	64,172

_________________ 

* The change in balance from August 31, 2019 was immaterial.

The total gross carrying amounts of the Company's intangible assets subject to amortization were $20.7 million and $20.8 million, respectively, and the total net carrying amounts were $12.2 million and $13.3 million at February 29, 2020 and August 31, 2019, respectively. These assets were included in other noncurrent assets on the Company's condensed consolidated balance sheets. Intangible amortization expense from continuing operations related to such intangible assets was $0.6 million and $1.1 million for the three and six months ended February 29, 2020, respectively, and for the comparable periods. Excluding goodwill, the Company did not have any significant intangible assets with indefinite lives at February 29, 2020.

In connection with the Acquisition, the Company recorded an unfavorable contract backlog liability of $110.2 million. At February 29, 2020 and August 31, 2019, the net carrying amount of the liability was $21.0 million and $35.4 million, respectively. Amortization of the unfavorable contract backlog was $6.0 million and $14.3 million for the three and six months ended February 29, 2020, respectively, and $23.5 million and $34.8 million for the comparable periods, and was recorded as an increase to net sales in the Company’s condensed consolidated statements of earnings.

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CHANGES IN BUSINESS

6 Months Ended

Feb. 29, 2020

Business Combinations [Abstract]

Changes in Business

NOTE 2. CHANGES IN BUSINESS

Fiscal 2020 Acquisition

On February 3, 2020, the Company's subsidiary CMC Poland Sp. z.o.o. ("CMCP") acquired P.P.U. Ecosteel Sp. z.o.o. ("Ecosteel"), a steel mesh producer located in Zawiercie, Poland. This acquisition complements CMCP's existing mesh production and increases sales to other markets in Europe. The operating results of this facility are included in the International Mill reporting segment.

Facility Closure

In October 2019, the Company closed the melting operations at its Rancho Cucamonga facility and recorded $6.3 million of expense in the first quarter of 2020 related to severance, pension curtailment and vendor agreement terminations. At February 29, 2020, the remaining liability to be paid related to these expenses was $3.8 million and was included in accrued expenses and other payables on the Company's condensed consolidated balance sheets.

Fiscal 2019 Acquisition

On November 5, 2018 (the "Acquisition Date"), the Company completed the acquisition of 33 rebar fabrication facilities in the United States ("U.S."), as well as four electric arc furnace ("EAF") mini mills located in Knoxville, Tennessee; Jacksonville, Florida; Sayreville, New Jersey and Rancho Cucamonga, California from Gerdau S.A., hereinafter collectively referred to as the "Acquired Businesses." The total cash purchase price, including working capital adjustments, was $701.2 million, and was funded through a combination of domestic cash on-hand and borrowings under a term loan (the "Term Loan").

The purchase price paid was allocated between the acquired mills and fabrication facilities. The results of operations of the Acquired Businesses are reflected in the Company’s condensed consolidated financial statements from the Acquisition Date. The purchase price was allocated among assets acquired and liabilities assumed at fair value and was finalized on November 5, 2019.

Pro Forma Supplemental Information

Supplemental information on an unaudited pro forma basis is presented below as if the acquisition of the Acquired Businesses (the "Acquisition") occurred on September 1, 2017. The pro forma financial information is presented for comparative purposes only, based on significant estimates and assumptions, which the Company believes to be reasonable, but not necessarily indicative of future results of operations or the results that would have been reported if the Acquisition had been completed on September 1, 2017. These results were not used as part of management analysis of the financial results and performance of the Company or the Acquired Businesses. These results are adjusted, where possible, for transaction and integration-related costs.

	Three Months Ended February 28,				Six Months Ended February 28,
(in thousands)	2019		2018		2019		2018
Pro forma net sales*	$	1,379,033	$	1,470,603	$	2,925,007	$	2,914,292
Pro forma net earnings (loss)**	10,260		18,786		26,081		(2,187)

_________________ 

*Pro forma net sales for the three and six months ended February 28, 2018 includes estimated fair value adjustments related to amortization of unfavorable contract backlog. The impact of the amortization of unfavorable contract backlog has been removed from the pro forma net sales for the three and six months ended February 28, 2019.

** Pro forma net earnings (loss) for the three and six months ended February 28, 2018 reflects the impact of fair value adjustments related to the amortization of unfavorable contract backlog described above. Pro forma net loss for the six months ended February 28, 2018 includes estimated fair value adjustments related to inventory step-up, as well as non-recurring acquisition and integration costs of approximately $47.5 million.

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FAIR VALUE

6 Months Ended

Feb. 29, 2020

Fair Value Disclosures [Abstract]

Fair value

NOTE 10. FAIR VALUE

The Company has established a fair value hierarchy which prioritizes the inputs to the valuation techniques used to measure fair value into three levels. These levels are determined based on the lowest level input that is significant to the fair value measurement. Levels within the hierarchy are defined as follows:

Level 1 - Unadjusted quoted prices in active markets for identical assets and liabilities;

Level 2 - Quoted prices for similar assets and liabilities in active markets (other than those included in Level 1) which are observable, either directly or indirectly; and

Level 3 - Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

The following tables summarize information regarding the Company's financial assets and financial liabilities that were measured at fair value on a recurring basis:

			Fair Value Measurements at Reporting Date Using
(in thousands)	February 29, 2020		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable  Inputs (Level 3)
Assets:
Investment deposit accounts (1)	$	191,424	$	191,424	$	—	$	—
Commodity derivative assets (2)	1,631		1,631		—		—
Foreign exchange derivative assets (2)	374		—		374		—
Liabilities:
Commodity derivative liabilities (2)	3,663		77		—		3,586
Foreign exchange derivative liabilities (2)	696		—		696		—

			Fair Value Measurements at Reporting Date Using
(in thousands)	August 31, 2019		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable  Inputs (Level 3)
Assets:
Investment deposit accounts (1)	$	66,240	$	66,240	$	—	$	—
Commodity derivative assets (2)	1,269		1,269		—		—
Foreign exchange derivative assets (2)	569		—		569		—
Liabilities:
Commodity derivative liabilities (2)	99		99		—		—
Foreign exchange derivative liabilities (2)	899		—		899		—

_________________ 

(1) Investment deposit accounts are short-term in nature, and the value is determined by principal plus interest. The investment portfolio mix can change each period based on the Company's assessment of investment options.

(2) Derivative assets and liabilities classified as Level 1 are commodity futures contracts valued based on quoted market prices in the London Metal Exchange or New York Mercantile Exchange. Amounts in Level 2 are based on broker quotes in the over-the-counter market. Fair value of Level 3 derivative liabilities is based on unobservable inputs in which there is little or no market data, which requires management’s own assumptions within an internally developed cash flow model. Further discussion regarding the Company's use of derivative instruments is included in Note 9, Derivatives.

There were no material non-recurring fair value remeasurements during the three and six months ended February 29, 2020.

The carrying values of the Company's short-term items approximate fair value.

The carrying values and estimated fair values of the Company's financial assets and liabilities that are not required to be measured at fair value on the condensed consolidated balance sheets were as follows:

		February 29, 2020				August 31, 2019
(in thousands)	Fair Value Hierarchy	Carrying Value		Fair Value		Carrying Value		Fair Value
2027 Notes (1)	Level 2	$	300,000	$	308,151	$	300,000	$	303,810
2026 Notes (1)	Level 2	350,000		365,215		350,000		363,444
2023 Notes (1)	Level 2	330,000		344,177		330,000		342,098
Term Loan (2)	Level 2	110,125		110,125		210,125		210,125
Poland credit facilities (2)	Level 2	11,290		11,290		—		—
Short-term borrowings (2)	Level 2	8,272		8,272		3,929		3,929

_________________

(1) The fair value of the notes was determined based on indicated market values.

(2) The Term Loan, Poland credit facilities and short-term borrowings contain variable interest rates and carrying value approximates fair value.

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (Parenthetical) - USD ($) $ in Thousands	Feb. 29, 2020	Feb. 28, 2019
Statement of Cash Flows [Abstract]
Cash and cash equivalents	$ 232,442	$ 66,742
Restricted cash	1,440	1,421
Total cash, restricted cash and cash equivalents	$ 233,882	$ 68,163

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Feb. 29, 2020	Feb. 28, 2019	Feb. 29, 2020	Feb. 28, 2019
Statement of Comprehensive Income [Abstract]
Net earnings	$ 63,798	$ 13,850	$ 147,146	$ 33,592
Other comprehensive income, net of income taxes:
Foreign currency translation adjustment	(1,066)	514
Reclassification for translation loss realized upon liquidation of investment in foreign entity	(2)	936
Foreign currency translation adjustment	(1,068)	1,450	5,856	(8,306)
Net unrealized gain (loss) on derivatives:
Unrealized holding gain (loss)	(3,646)	(86)	(2,932)	(121)
Reclassification for loss included in net earnings	(83)	(42)	(172)	(84)
Net unrealized gain (loss) on derivatives	(3,729)	(128)	(3,104)	(205)
Defined benefit obligation:
Amortization of prior services	(8)	(8)	(16)	(15)
Reclassification for settlement losses	0	0	0	1,316
Defined benefit obligation	(8)	(8)	(16)	1,301
Other comprehensive income (loss)	(4,805)	1,314	2,736	(7,210)
Comprehensive income	$ 58,993	$ 15,164	$ 149,882	$ 26,382

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FAIR VALUE (Tables)

6 Months Ended

Feb. 29, 2020

Fair Value Disclosures [Abstract]

Financial assets and financial liabilities measured at fair value on a recurring basis

The following tables summarize information regarding the Company's financial assets and financial liabilities that were measured at fair value on a recurring basis:

			Fair Value Measurements at Reporting Date Using
(in thousands)	February 29, 2020		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable  Inputs (Level 3)
Assets:
Investment deposit accounts (1)	$	191,424	$	191,424	$	—	$	—
Commodity derivative assets (2)	1,631		1,631		—		—
Foreign exchange derivative assets (2)	374		—		374		—
Liabilities:
Commodity derivative liabilities (2)	3,663		77		—		3,586
Foreign exchange derivative liabilities (2)	696		—		696		—

			Fair Value Measurements at Reporting Date Using
(in thousands)	August 31, 2019		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable  Inputs (Level 3)
Assets:
Investment deposit accounts (1)	$	66,240	$	66,240	$	—	$	—
Commodity derivative assets (2)	1,269		1,269		—		—
Foreign exchange derivative assets (2)	569		—		569		—
Liabilities:
Commodity derivative liabilities (2)	99		99		—		—
Foreign exchange derivative liabilities (2)	899		—		899		—

_________________ 

(1) Investment deposit accounts are short-term in nature, and the value is determined by principal plus interest. The investment portfolio mix can change each period based on the Company's assessment of investment options.

(2) Derivative assets and liabilities classified as Level 1 are commodity futures contracts valued based on quoted market prices in the London Metal Exchange or New York Mercantile Exchange. Amounts in Level 2 are based on broker quotes in the over-the-counter market. Fair value of Level 3 derivative liabilities is based on unobservable inputs in which there is little or no market data, which requires management’s own assumptions within an internally developed cash flow model. Further discussion regarding the Company's use of derivative instruments is included in Note 9, Derivatives.

Financial assets and liabilities not required to be measured at fair value

The carrying values and estimated fair values of the Company's financial assets and liabilities that are not required to be measured at fair value on the condensed consolidated balance sheets were as follows:

		February 29, 2020				August 31, 2019
(in thousands)	Fair Value Hierarchy	Carrying Value		Fair Value		Carrying Value		Fair Value
2027 Notes (1)	Level 2	$	300,000	$	308,151	$	300,000	$	303,810
2026 Notes (1)	Level 2	350,000		365,215		350,000		363,444
2023 Notes (1)	Level 2	330,000		344,177		330,000		342,098
Term Loan (2)	Level 2	110,125		110,125		210,125		210,125
Poland credit facilities (2)	Level 2	11,290		11,290		—		—
Short-term borrowings (2)	Level 2	8,272		8,272		3,929		3,929

_________________

(1) The fair value of the notes was determined based on indicated market values.

(2) The Term Loan, Poland credit facilities and short-term borrowings contain variable interest rates and carrying value approximates fair value.

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ACCOUNTING POLICIES - Recently Adopted Accounting Pronouncements (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Feb. 29, 2020	Feb. 28, 2019	Sep. 01, 2019
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating assets	$ 124,749
Current	27,900
Long-term	99,283
Cumulative effect on retained earnings of adoption of ASU 2016-02		$ (2,747)
Accounting Standards Update 2016-02
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Cumulative effect on retained earnings of adoption of ASU 2016-02	$ 0
Other Noncurrent Assets | Accounting Standards Update 2016-02
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating assets			$ 113,400
Accrued Expenses and Other Payables | Accounting Standards Update 2016-02
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Current			30,900
Other Noncurrent Liabilities | Accounting Standards Update 2016-02
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Long-term			$ 84,900

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REVENUE RECOGNITION (Tables)

6 Months Ended

Feb. 29, 2020

Revenue from Contract with Customer [Abstract]

Information avout Assets and Liabilities from Contracts with Customers

The following table provides information about assets and liabilities from contracts with customers.

(in thousands)	February 29, 2020		August 31, 2019
Contract assets (included in other current assets)	$	87,801	$	103,805
Contract liabilities (included in accrued expenses and other payables)	38,391		37,165

Disaggregation of Revenue

The following tables display revenue by reportable segment from external customers, disaggregated by major source. The Company believes disaggregating by these categories depicts how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors.

	Three Months Ended February 29, 2020
(in thousands)	Americas Recycling		Americas Mills		Americas Fabrication		International Mill		Corporate and Other		Total
Steel products	$	140	$	437,648	$	441,765	$	171,283	$	—	$	1,050,836
Ferrous scrap	66,040		10,874		1		159		—		77,074
Nonferrous scrap	112,862		3,535		—		2,249		—		118,646
Construction materials	—		—		66,122		—		—		66,122
Other	493		19,310		2,493		5,965		24		28,285
Total	$	179,535	$	471,367	$	510,381	$	179,656	$	24	$	1,340,963
	Six Months Ended February 29, 2020
(in thousands)	Americas Recycling		Americas Mills		Americas Fabrication		International Mill		Corporate and Other		Total
Steel products	$	255	$	878,811	$	941,492	$	329,227	$	—	$	2,149,785
Ferrous scrap	124,342		17,622		1		371		—		142,336
Nonferrous scrap	226,080		6,890		—		4,242		—		237,212
Construction materials	—		—		133,588		—		—		133,588
Other	1,009		42,236		5,677		10,856		2,972		62,750
Total	$	351,686	$	945,559	$	1,080,758	$	344,696	$	2,972	$	2,725,671

	Three Months Ended February 28, 2019
(in thousands)	Americas Recycling		Americas Mills		Americas Fabrication		International Mill		Corporate and Other		Total
Steel products	$	202	$	444,327	$	462,963	$	167,534	$	—	$	1,075,026
Ferrous scrap	105,253		8,744		—		255		—		114,252
Nonferrous scrap	120,004		3,308		—		2,524		—		125,836
Construction materials	—		—		60,190		—		—		60,190
Other	429		16,416		3,525		4,632		2,477		27,479
Total	$	225,888	$	472,795	$	526,678	$	174,945	$	2,477	$	1,402,783
	Six Months Ended February 28, 2019
(in thousands)	Americas Recycling		Americas Mills		Americas Fabrication		International Mill		Corporate and Other		Total
Steel products	$	441	$	792,292	$	837,770	$	385,304	$	—	$	2,015,807
Ferrous scrap	216,907		17,886		—		530		—		235,323
Nonferrous scrap	248,079		6,488		—		5,465		—		260,032
Construction materials	—		—		117,361		—		—		117,361
Other	642		29,800		6,105		10,319		4,736		51,602
Total	$	466,069	$	846,466	$	961,236	$	401,618	$	4,736	$	2,680,125

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BUSINESS SEGMENTS

6 Months Ended

Feb. 29, 2020

Segment Reporting [Abstract]

Business segments

NOTE 14. BUSINESS SEGMENTS

The Company structures its business into the following four reporting segments: Americas Recycling, Americas Mills, Americas Fabrication and International Mill. The Company's reporting segments are based primarily on product lines and secondarily on geographic area. See Note 1, Nature of Operations, of the consolidated financial statements included in the 2019 Form 10-K for more information about the reporting segments, including the types of products and services from which each reporting segment derives its net sales. Corporate and Other contains earnings or losses on assets and liabilities related to the Company's Benefit Restoration Plan assets and short-term investments, expenses of the Company's corporate headquarters, interest expense related to its long-term debt and intercompany eliminations.

The Company uses adjusted EBITDA from continuing operations to compare and evaluate the financial performance of its segments. Adjusted EBITDA is the sum of the Company's earnings from continuing operations before interest expense, income taxes, depreciation and amortization expense and impairment expense. Intersegment sales are generally priced at prevailing market prices. Certain corporate administrative expenses are allocated to the segments based upon the nature of the expense. The accounting policies of the segments are the same as those described in Note 2, Summary of Significant Accounting Policies, of the consolidated financial statements included in the 2019 Form 10-K.

The following is a summary of certain financial information from continuing operations by reportable segment:

	Three Months Ended February 29, 2020
(in thousands)	Americas Recycling		Americas Mills		Americas Fabrication		International Mill		Corporate and Other		Continuing Operations
Net sales-unaffiliated customers	$	179,535	$	471,367	$	510,381	$	179,656	$	24	$	1,340,963
Intersegment sales	68,549		260,673		1,367		423		(331,012)		—
Net sales	248,084		732,040		511,748		180,079		(330,988)		1,340,963
Adjusted EBITDA	5,754		125,691		16,060		13,451		(23,235)		137,721
	Six Months Ended February 29, 2020
(in thousands)	Americas Recycling		Americas Mills		Americas Fabrication		International Mill		Corporate and Other		Continuing Operations
Net sales-unaffiliated customers	$	351,686	$	945,559	$	1,080,758	$	344,696	$	2,972	$	2,725,671
Intersegment sales	118,659		555,374		2,837		772		(677,642)		—
Net sales	470,345		1,500,933		1,083,595		345,468		(674,670)		2,725,671
Adjusted EBITDA	9,171		280,716		33,541		24,810		(50,712)		297,526
Total assets at February 29, 2020*	261,611		1,680,295		1,065,676		521,678		378,678		3,907,938

_________________ 

*Total assets listed in Corporate and Other includes assets from discontinued operations.

	Three Months Ended February 28, 2019
(in thousands)	Americas Recycling		Americas Mills		Americas Fabrication		International Mill		Corporate and Other		Continuing Operations
Net sales-unaffiliated customers	$	225,888	$	472,795	$	526,678	$	174,945	$	2,477	$	1,402,783
Intersegment sales	61,187		301,914		4,158		253		(367,512)		—
Net sales	287,075		774,709		530,836		175,198		(365,035)		1,402,783
Adjusted EBITDA	10,124		112,396		(49,578)		20,537		(24,146)		69,333
	Six Months Ended February 28, 2019
(in thousands)	Americas Recycling		Americas Mills		Americas Fabrication		International Mill		Corporate and Other		Continuing Operations
Net sales-unaffiliated customers	$	466,069	$	846,466	$	961,236	$	401,618	$	4,736	$	2,680,125
Intersegment sales	123,015		530,096		6,711		604		(660,426)		—
Net sales	589,084		1,376,562		967,947		402,222		(655,690)		2,680,125
Adjusted EBITDA	25,558		226,269		(86,574)		53,316		(83,700)		134,869
Total assets at August 31, 2019*	257,517		1,667,366		1,106,420		464,177		263,291		3,758,771

_________________ 

*Total assets listed in Corporate and Other includes assets from discontinued operations.

The following table presents a reconciliation of earnings from continuing operations to adjusted EBITDA from continuing operations:

	Three Months Ended				Six Months Ended
(in thousands)	February 29, 2020		February 28, 2019		February 29, 2020		February 28, 2019
Earnings from continuing operations	$	63,596	$	14,928	$	146,351	$	34,348
Interest expense	15,888		18,495		32,466		35,158
Income taxes	22,845		18,141		50,177		23,750
Depreciation and amortization	41,389		41,245		82,330		76,421
Amortization of acquired unfavorable contract backlog	(5,997)		(23,476)		(14,328)		(34,808)
Impairment of assets	—		—		530		—
Adjusted EBITDA from continuing operations	$	137,721	$	69,333	$	297,526	$	134,869

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REVENUE RECOGNITION - Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Feb. 29, 2020	Feb. 28, 2019	Feb. 29, 2020	Feb. 28, 2019
Disaggregation of Revenue [Line Items]
Net sales	$ 1,340,963	$ 1,402,783	$ 2,725,671	$ 2,680,125
Steel Products
Disaggregation of Revenue [Line Items]
Net sales	1,050,836	1,075,026	2,149,785	2,015,807
Ferrous Scrap
Disaggregation of Revenue [Line Items]
Net sales	77,074	114,252	142,336	235,323
Nonferrous Scrap
Disaggregation of Revenue [Line Items]
Net sales	118,646	125,836	237,212	260,032
Construction Materials
Disaggregation of Revenue [Line Items]
Net sales	66,122	60,190	133,588	117,361
Other
Disaggregation of Revenue [Line Items]
Net sales	28,285	27,479	62,750	51,602
Americas Recycling
Disaggregation of Revenue [Line Items]
Net sales	179,535	225,888	351,686	466,069
Americas Recycling | Steel Products
Disaggregation of Revenue [Line Items]
Net sales	140	202	255	441
Americas Recycling | Ferrous Scrap
Disaggregation of Revenue [Line Items]
Net sales	66,040	105,253	124,342	216,907
Americas Recycling | Nonferrous Scrap
Disaggregation of Revenue [Line Items]
Net sales	112,862	120,004	226,080	248,079
Americas Recycling | Construction Materials
Disaggregation of Revenue [Line Items]
Net sales	0	0	0	0
Americas Recycling | Other
Disaggregation of Revenue [Line Items]
Net sales	493	429	1,009	642
Americas Mills
Disaggregation of Revenue [Line Items]
Net sales	471,367	472,795	945,559	846,466
Americas Mills | Steel Products
Disaggregation of Revenue [Line Items]
Net sales	437,648	444,327	878,811	792,292
Americas Mills | Ferrous Scrap
Disaggregation of Revenue [Line Items]
Net sales	10,874	8,744	17,622	17,886
Americas Mills | Nonferrous Scrap
Disaggregation of Revenue [Line Items]
Net sales	3,535	3,308	6,890	6,488
Americas Mills | Construction Materials
Disaggregation of Revenue [Line Items]
Net sales	0	0	0	0
Americas Mills | Other
Disaggregation of Revenue [Line Items]
Net sales	19,310	16,416	42,236	29,800
Americas Fabrication
Disaggregation of Revenue [Line Items]
Net sales	510,381	526,678	1,080,758	961,236
Americas Fabrication | Steel Products
Disaggregation of Revenue [Line Items]
Net sales	441,765	462,963	941,492	837,770
Americas Fabrication | Ferrous Scrap
Disaggregation of Revenue [Line Items]
Net sales	1	0	1	0
Americas Fabrication | Nonferrous Scrap
Disaggregation of Revenue [Line Items]
Net sales	0	0	0	0
Americas Fabrication | Construction Materials
Disaggregation of Revenue [Line Items]
Net sales	66,122	60,190	133,588	117,361
Americas Fabrication | Other
Disaggregation of Revenue [Line Items]
Net sales	2,493	3,525	5,677	6,105
International Mill
Disaggregation of Revenue [Line Items]
Net sales	179,656	174,945	344,696	401,618
International Mill | Steel Products
Disaggregation of Revenue [Line Items]
Net sales	171,283	167,534	329,227	385,304
International Mill | Ferrous Scrap
Disaggregation of Revenue [Line Items]
Net sales	159	255	371	530
International Mill | Nonferrous Scrap
Disaggregation of Revenue [Line Items]
Net sales	2,249	2,524	4,242	5,465
International Mill | Construction Materials
Disaggregation of Revenue [Line Items]
Net sales	0	0	0	0
International Mill | Other
Disaggregation of Revenue [Line Items]
Net sales	5,965	4,632	10,856	10,319
Corporate
Disaggregation of Revenue [Line Items]
Net sales	24	2,477	2,972	4,736
Corporate | Steel Products
Disaggregation of Revenue [Line Items]
Net sales	0	0	0	0
Corporate | Ferrous Scrap
Disaggregation of Revenue [Line Items]
Net sales	0	0	0	0
Corporate | Nonferrous Scrap
Disaggregation of Revenue [Line Items]
Net sales	0	0	0	0
Corporate | Construction Materials
Disaggregation of Revenue [Line Items]
Net sales	0	0	0	0
Corporate | Other
Disaggregation of Revenue [Line Items]
Net sales	$ 24	$ 2,477	$ 2,972	$ 4,736

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LEASES - Balance Sheet Components (Details) $ in Thousands	Feb. 29, 2020 USD ($)
Assets:
Operating assets	$ 124,749
Finance assets	43,647
Total leased assets	168,396
Operating lease liabilities:
Current	27,900
Long-term	99,283
Total operating lease liabilities	127,183
Finance lease liabilities:
Current	12,604
Long-term	31,254
Total finance lease liabilities	43,858
Total lease liabilities	$ 171,041

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BUSINESS SEGMENTS (Summary of Certain Financial Information from Continuing Operations by Reportable Segment) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Feb. 29, 2020	Feb. 28, 2019	Feb. 29, 2020	Feb. 28, 2019	Aug. 31, 2019
Segment Reporting Information [Line Items]
Net sales	$ 1,340,963	$ 1,402,783	$ 2,725,671	$ 2,680,125
Adjusted EBITDA from continuing operations	137,721	69,333	297,526	134,869
Total assets	3,907,938		3,907,938		$ 3,758,771
Continuing Operations
Segment Reporting Information [Line Items]
Net sales	1,340,963	1,402,783	2,725,671	2,680,125
Americas Recycling
Segment Reporting Information [Line Items]
Net sales	179,535	225,888	351,686	466,069
Americas Mills
Segment Reporting Information [Line Items]
Net sales	471,367	472,795	945,559	846,466
Americas Fabrication
Segment Reporting Information [Line Items]
Net sales	510,381	526,678	1,080,758	961,236
International Mill
Segment Reporting Information [Line Items]
Net sales	179,656	174,945	344,696	401,618
Corporate
Segment Reporting Information [Line Items]
Net sales	24	2,477	2,972	4,736
Intersegment | Continuing Operations
Segment Reporting Information [Line Items]
Net sales	0	0	0	0
Intersegment | Americas Recycling
Segment Reporting Information [Line Items]
Net sales	68,549	61,187	118,659	123,015
Intersegment | Americas Mills
Segment Reporting Information [Line Items]
Net sales	260,673	301,914	555,374	530,096
Intersegment | Americas Fabrication
Segment Reporting Information [Line Items]
Net sales	1,367	4,158	2,837	6,711
Intersegment | International Mill
Segment Reporting Information [Line Items]
Net sales	423	253	772	604
Intersegment | Corporate
Segment Reporting Information [Line Items]
Net sales	(331,012)	(367,512)	(677,642)	(660,426)
Segments | Continuing Operations
Segment Reporting Information [Line Items]
Net sales	1,340,963	1,402,783	2,725,671	2,680,125
Adjusted EBITDA from continuing operations	137,721	69,333	297,526	134,869
Total assets	3,907,938		3,907,938		3,758,771
Segments | Americas Recycling
Segment Reporting Information [Line Items]
Net sales	248,084	287,075	470,345	589,084
Adjusted EBITDA from continuing operations	5,754	10,124	9,171	25,558
Total assets	261,611		261,611		257,517
Segments | Americas Mills
Segment Reporting Information [Line Items]
Net sales	732,040	774,709	1,500,933	1,376,562
Adjusted EBITDA from continuing operations	125,691	112,396	280,716	226,269
Total assets	1,680,295		1,680,295		1,667,366
Segments | Americas Fabrication
Segment Reporting Information [Line Items]
Net sales	511,748	530,836	1,083,595	967,947
Adjusted EBITDA from continuing operations	16,060	(49,578)	33,541	(86,574)
Total assets	1,065,676		1,065,676		1,106,420
Segments | International Mill
Segment Reporting Information [Line Items]
Net sales	180,079	175,198	345,468	402,222
Adjusted EBITDA from continuing operations	13,451	20,537	24,810	53,316
Total assets	521,678		521,678		464,177
Segments | Corporate
Segment Reporting Information [Line Items]
Net sales	(330,988)	(365,035)	(674,670)	(655,690)
Adjusted EBITDA from continuing operations	(23,235)	$ (24,146)	(50,712)	$ (83,700)
Total assets	$ 378,678		$ 378,678		$ 263,291

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STOCKHOLDERS EQUITY AND EARNINGS PER SHARE (Narrative) (Details) - USD ($)	6 Months Ended
	Feb. 29, 2020	Nov. 30, 2014
Earnings Per Share [Abstract]
Stock repurchase program, authorized amount		$ 100,000,000.0
Stock repurchase program, shares purchased (shares)	0
Stock repurchase program, remaining authorized repurchase amount	$ 27,600,000

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FAIR VALUE (Financial Assets and Liabilities Not Required to Be Measured at Fair Value) (Details) - USD ($) $ in Thousands	Feb. 29, 2020	Aug. 31, 2019
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items]
Financial liabilities	$ 1,176,713	$ 1,254,921
2027 Notes
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items]
Financial liabilities	300,000	300,000
2027 Notes | Level 2 | Fair Value
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items]
Financial liabilities	308,151	303,810
2026 Notes
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items]
Financial liabilities	350,000	350,000
2026 Notes | Level 2 | Fair Value
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items]
Financial liabilities	365,215	363,444
2023 Notes
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items]
Financial liabilities	330,000	330,000
2023 Notes | Level 2 | Fair Value
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items]
Financial liabilities	344,177	342,098
Short-term borrowings
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items]
Financial liabilities	8,272	3,929
Short-term borrowings | Level 2 | Fair Value
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items]
Financial liabilities	8,272	3,929
Revolving credit facility | Term Loan
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items]
Financial liabilities	110,125	210,125
Revolving credit facility | Poland credit facilities
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items]
Financial liabilities	$ 11,290	$ 0

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DERIVATIVES (Commodity Contract Commitments) (Details) MWh in Millions	6 Months Ended
	Feb. 29, 2020 MWh t
Aluminum | Long
Derivative [Line Items]
Commodity contract commitments	2,100
Copper | Long
Derivative [Line Items]
Commodity contract commitments	318
Copper | Short
Derivative [Line Items]
Commodity contract commitments	5,454
Electricity | Long
Derivative [Line Items]
Commodity contract commitment, electricity | MWh	2

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LEASES - Future Lease Obligations Prior to Adoption of ASU 2016-02 (Details) $ in Thousands	Aug. 31, 2019 USD ($)
Capital lease obligations
Total	$ 41,331
2020	13,104
2021	10,004
2022	7,758
2023	5,831
2024	3,904
Thereafter	730
Long-term non-cancelable operating leases
Total	124,817
2020	34,511
2021	27,383
2022	22,074
2023	17,433
2024	10,478
Thereafter	$ 12,938

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CREDIT ARRANGEMENTS (Tables)

6 Months Ended

Feb. 29, 2020

Debt Disclosure [Abstract]

Long-term debt, including the deferred gain from the termination of the interest rate swaps

Long-term debt at February 29, 2020 and August 31, 2019 was as follows: 

(in thousands)	Weighted Average Interest Rate at February 29, 2020	February 29, 2020		August 31, 2019
2027 Notes	5.375%	$	300,000	$	300,000
2026 Notes	5.750%	350,000		350,000
2023 Notes	4.875%	330,000		330,000
Term Loan	3.409%	110,125		210,125
Poland credit facilities	2.637%	11,290		—
Short-term borrowings	2.400%	8,272		3,929
Other	5.100%	23,168		23,168
Finance leases		43,858		37,699
Total debt		1,176,713		1,254,921
Less debt issuance costs		9,425		10,268
Total amounts outstanding		1,167,288		1,244,653
Less current maturities		14,443		13,510
Less short-term borrowings		8,272		3,929
Current maturities of long-term debt and short-term borrowings		22,715		17,439
Long-term debt		$	1,144,573	$	1,227,214

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STOCKHOLDERS’ EQUITY AND EARNINGS PER SHARE (Tables)

6 Months Ended

Feb. 29, 2020

Earnings Per Share [Abstract]

Calculations of the basic and diluted earnings per share from continuing operations

The calculations of basic and diluted earnings per share from continuing operations were as follows: 

	Three Months Ended				Six Months Ended
(in thousands, except share data)	February 29, 2020		February 28, 2019		February 29, 2020		February 28, 2019
Earnings from continuing operations	$	63,596	$	14,928	$	146,351	$	34,348
Basic earnings per share:
Shares outstanding for basic earnings per share	118,919,455		117,854,335		118,644,823		117,677,422
Basic earnings per share from continuing operations	$	0.53	$	0.13	$	1.23	$	0.29
Diluted earnings per share:
Shares outstanding for basic earnings per share	118,919,455		117,854,335		118,644,823		117,677,422
Effect of dilutive securities:
Stock-based incentive/purchase plans	1,487,801		1,088,423		1,658,436		1,319,005
Shares outstanding for diluted earnings per share	120,407,256		118,942,758		120,303,259		118,996,427
Diluted earnings per share from continuing operations	$	0.53	$	0.13	$	1.22	$	0.29

Anti-dilutive shares not included above were immaterial for the three and six months ended February 29, 2020, respectively. There were no anti-dilutive shares for the three and six months ended February 28, 2019.

Restricted stock is included in the number of shares of common stock issued and outstanding but omitted from the basic earnings per share calculation until the shares vest.

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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (AOCI by Components) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Feb. 29, 2020	Feb. 28, 2019	Feb. 29, 2020	Feb. 28, 2019
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Beginning balance	$ (116,585)	$ (102,201)	$ (124,126)	$ (93,677)
Other comprehensive income before reclassifications	(5,581)	454	2,215	(9,266)
Amounts reclassified from AOCI	(106)	829	(216)	2,354
Income taxes	882	31	737	(298)
Other comprehensive income (loss)	(4,805)	1,314	2,736	(7,210)
Ending balance	(121,390)	(100,887)	(121,390)	(100,887)
Foreign Currency Translation
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Beginning balance	(114,574)	(102,393)	(121,498)	(92,637)
Other comprehensive income before reclassifications	(1,066)	514	5,858	(9,143)
Amounts reclassified from AOCI	(2)	936	(2)	837
Income taxes	0	0	0	0
Other comprehensive income (loss)	(1,068)	1,450	5,856	(8,306)
Ending balance	(115,642)	(100,943)	(115,642)	(100,943)
Unrealized Gain (Loss) on Derivatives
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Beginning balance	1,731	1,279	1,106	1,356
Other comprehensive income before reclassifications	(4,501)	(52)	(3,619)	(104)
Amounts reclassified from AOCI	(104)	(107)	(214)	(149)
Income taxes	876	31	729	48
Other comprehensive income (loss)	(3,729)	(128)	(3,104)	(205)
Ending balance	(1,998)	1,151	(1,998)	1,151
Defined Benefit Obligation
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Beginning balance	(3,742)	(1,087)	(3,734)	(2,396)
Other comprehensive income before reclassifications	(14)	(8)	(24)	(19)
Amounts reclassified from AOCI	0	0	0	1,666
Income taxes	6	0	8	(346)
Other comprehensive income (loss)	(8)	(8)	(16)	1,301
Ending balance	$ (3,750)	$ (1,095)	$ (3,750)	$ (1,095)

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CREDIT ARRANGEMENTS

6 Months Ended

Feb. 29, 2020

Debt Disclosure [Abstract]

Credit arrangements

NOTE 8. CREDIT ARRANGEMENTS

Long-term debt at February 29, 2020 and August 31, 2019 was as follows: 

(in thousands)	Weighted Average Interest Rate at February 29, 2020	February 29, 2020		August 31, 2019
2027 Notes	5.375%	$	300,000	$	300,000
2026 Notes	5.750%	350,000		350,000
2023 Notes	4.875%	330,000		330,000
Term Loan	3.409%	110,125		210,125
Poland credit facilities	2.637%	11,290		—
Short-term borrowings	2.400%	8,272		3,929
Other	5.100%	23,168		23,168
Finance leases		43,858		37,699
Total debt		1,176,713		1,254,921
Less debt issuance costs		9,425		10,268
Total amounts outstanding		1,167,288		1,244,653
Less current maturities		14,443		13,510
Less short-term borrowings		8,272		3,929
Current maturities of long-term debt and short-term borrowings		22,715		17,439
Long-term debt		$	1,144,573	$	1,227,214

The Company had no amounts drawn under the $350.0 million revolving credit facility (the "Revolver") at February 29, 2020 and August 31, 2019. The availability under the Revolver was reduced by outstanding stand-by letters of credit of $3.0 million at February 29, 2020 and August 31, 2019.

The Company also has credit facilities in Poland through its subsidiary CMCP. At February 29, 2020, CMCP's credit facilities totaled Polish zloty ("PLN") 275.0 million, or $70.0 million. These facilities expire in March 2022. At February 29, 2020, $11.3 million was outstanding under these facilities. No amounts were outstanding as of August 31, 2019. The available balance of these credit facilities was further reduced by outstanding stand-by letters of credit, guarantees, and/or other financial assurance instruments, which totaled $0.8 million and $1.1 million at February 29, 2020 and August 31, 2019, respectively.

The Company's debt agreements require the Company to comply with certain non-financial and financial covenants, including an interest coverage ratio and a debt to capitalization ratio. At February 29, 2020, the Company was in compliance with all covenants contained in its debt agreements.

Accounts Receivable Facilities

The Company had no advance payments outstanding under the U.S. accounts receivable facility at February 29, 2020 or August 31, 2019.

The Poland accounts receivable facility has a limit of PLN 220.0 million ($56.0 million at February 29, 2020). The Company had $8.3 million of advance payments outstanding under the Poland accounts receivable facility at February 29, 2020, and $3.9 million at August 31, 2019.

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CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED) (Parenthetical) - $ / shares	3 Months Ended		6 Months Ended
	Feb. 29, 2020	Feb. 28, 2019	Feb. 29, 2020	Feb. 28, 2019
Statement of Stockholders' Equity [Abstract]
Cash dividends per share (in USD per share)	$ 0.12	$ 0.12	$ 0.12	$ 0.12

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REVENUE RECOGNITION

6 Months Ended

Feb. 29, 2020

Revenue from Contract with Customer [Abstract]

Revenue Recognition

NOTE 4. REVENUE RECOGNITION

In the Americas Mills, Americas Recycling, and International Mill segments, revenue is recognized at a point in time concurrent with the transfer of control, which usually occurs, depending on shipping terms, upon shipment or customer receipt.

In the Americas Fabrication segment, each contract represents a single performance obligation. Revenue is either recognized over time or equal to billing under an available practical expedient. For contracts where the Company provides fabricated product and installation services, revenue is recognized over time using an input method. For the three and six months ended February 29, 2020, these contracts represented approximately 27% and 26%, respectively, of net sales in the Americas Fabrication segment. For these contracts, the measure of progress is based on contract costs incurred to date compared to total estimated contract costs, which provides a reasonable depiction of the Company’s progress towards satisfaction of the performance obligation as there is a direct relationship between costs incurred by the Company and the transfer of the fabricated product and installation services. Revenue from contracts where the Company does not provide installation services is recognized over time using an output method. For the three and six months ended February 29, 2020, these contracts represented approximately 25% and 24%, respectively, of net sales in the Americas Fabrication segment. For these contracts, the Company uses tons shipped compared to total estimated tons, which provides a reasonable depiction of the transfer of contract value to the customer, as there is a direct relationship between the units shipped by the Company and the transfer of the fabricated product. Significant judgment is required to evaluate total estimated costs used in the input method and total estimated tons in the output method. If estimated total consolidated costs on any contract are greater than the net contract revenues, the Company recognizes the entire estimated loss in the period the loss becomes known. The cumulative effect of revisions to estimates related to net contract revenues, costs to complete or total planned quantity is recorded in the period in which such revisions are identified. The Company does not exercise significant judgment in determining the transaction price. For the three and six months ended February 29, 2020, the remaining 48% and 50%, respectively, of net sales in the Americas Fabrication segment was recognized as amounts were billed to the customer.

Payment terms and conditions vary by contract type, although the Company generally requires customers to pay within 30 days of invoice date. The timing of revenue recognition for certain Americas Fabrication contracts, as described above, differ from the timing of invoicing to customers. The Company records an asset when revenue is recognized prior to invoicing and a liability when revenue is recognized after invoicing. In instances where the timing of revenue recognition differs from the timing of invoicing, the Company has determined the contracts do not include a significant financing component.

The following table provides information about assets and liabilities from contracts with customers.

(in thousands)	February 29, 2020		August 31, 2019
Contract assets (included in other current assets)	$	87,801	$	103,805
Contract liabilities (included in accrued expenses and other payables)	38,391		37,165

The amount of revenue reclassified from August 31, 2019 contract liabilities during the six months ended February 29, 2020 was approximately $20.2 million.

Remaining Performance Obligations

As of February 29, 2020, $819.4 million has been allocated to remaining performance obligations in the Americas Fabrication segment, excluding those contracts where revenue is recognized equal to billing. Of this amount, the Company estimates the remaining performance obligations will be recognized as revenue after February 29, 2020 as follows: 40% in the first twelve months, 48% in the following twelve months, and 12% thereafter. The duration of contracts in the Americas Mills, Americas Recycling, and International Mill segments are typically less than one year.

Disaggregation of Revenue

The following tables display revenue by reportable segment from external customers, disaggregated by major source. The Company believes disaggregating by these categories depicts how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors.

	Three Months Ended February 29, 2020
(in thousands)	Americas Recycling		Americas Mills		Americas Fabrication		International Mill		Corporate and Other		Total
Steel products	$	140	$	437,648	$	441,765	$	171,283	$	—	$	1,050,836
Ferrous scrap	66,040		10,874		1		159		—		77,074
Nonferrous scrap	112,862		3,535		—		2,249		—		118,646
Construction materials	—		—		66,122		—		—		66,122
Other	493		19,310		2,493		5,965		24		28,285
Total	$	179,535	$	471,367	$	510,381	$	179,656	$	24	$	1,340,963
	Six Months Ended February 29, 2020
(in thousands)	Americas Recycling		Americas Mills		Americas Fabrication		International Mill		Corporate and Other		Total
Steel products	$	255	$	878,811	$	941,492	$	329,227	$	—	$	2,149,785
Ferrous scrap	124,342		17,622		1		371		—		142,336
Nonferrous scrap	226,080		6,890		—		4,242		—		237,212
Construction materials	—		—		133,588		—		—		133,588
Other	1,009		42,236		5,677		10,856		2,972		62,750
Total	$	351,686	$	945,559	$	1,080,758	$	344,696	$	2,972	$	2,725,671

	Three Months Ended February 28, 2019
(in thousands)	Americas Recycling		Americas Mills		Americas Fabrication		International Mill		Corporate and Other		Total
Steel products	$	202	$	444,327	$	462,963	$	167,534	$	—	$	1,075,026
Ferrous scrap	105,253		8,744		—		255		—		114,252
Nonferrous scrap	120,004		3,308		—		2,524		—		125,836
Construction materials	—		—		60,190		—		—		60,190
Other	429		16,416		3,525		4,632		2,477		27,479
Total	$	225,888	$	472,795	$	526,678	$	174,945	$	2,477	$	1,402,783
	Six Months Ended February 28, 2019
(in thousands)	Americas Recycling		Americas Mills		Americas Fabrication		International Mill		Corporate and Other		Total
Steel products	$	441	$	792,292	$	837,770	$	385,304	$	—	$	2,015,807
Ferrous scrap	216,907		17,886		—		530		—		235,323
Nonferrous scrap	248,079		6,488		—		5,465		—		260,032
Construction materials	—		—		117,361		—		—		117,361
Other	642		29,800		6,105		10,319		4,736		51,602
Total	$	466,069	$	846,466	$	961,236	$	401,618	$	4,736	$	2,680,125

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CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - USD ($) $ in Thousands	Feb. 29, 2020	Aug. 31, 2019
Statement of Financial Position [Abstract]
Allowance for doubtful accounts	$ 8,388	$ 8,403
Common stock, par value (in USD per share)	$ 0.01	$ 0.01
Common stock, shares authorized	200,000,000	200,000,000
Common stock, shares outstanding	119,061,889	117,924,938
Treasury stock, shares	9,998,775	11,135,726

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Cover Page - shares	6 Months Ended
	Feb. 29, 2020	Mar. 24, 2020
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Feb. 29, 2020
Document Transition Report	false
Entity File Number	1-4304
Entity Registrant Name	COMMERCIAL METALS COMPANY
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	75-0725338
Entity Address, Address Line One	6565 N. MacArthur Blvd.
Entity Address, City or Town	Irving
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	75039
City Area Code	214
Local Phone Number	689-4300
Title of 12(b) Security	Common Stock, $0.01 par value
Trading Symbol	CMC
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		119,061,889
Entity Central Index Key	0000022444
Amendment Flag	false
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q2
Current Fiscal Year End Date	--08-31

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LEASES (Tables)

6 Months Ended

Feb. 29, 2020

Leases [Abstract]

Schedule of Balance Sheet Components of Leases

The following table presents the components of the total leased assets and lease liabilities and their classification in the Company's condensed consolidated balance sheet at February 29, 2020:

(in thousands)	Classification in Condensed Consolidated Balance Sheet	February 29, 2020
Assets:
Operating assets	Other noncurrent assets	$	124,749
Finance assets	Property, plant and equipment, net	43,647
Total leased assets		$	168,396
Liabilities:
Operating lease liabilities:
Current	Accrued expenses and other payables	$	27,900
Long-term	Other noncurrent liabilities	99,283
Total operating lease liabilities		127,183
Finance lease liabilities:
Current	Current maturities of long-term debt and short-term borrowings	12,604
Long-term	Long-term debt	31,254
Total finance lease liabilities		43,858
Total lease liabilities		$	171,041

Lease Cost

The components of lease cost were as follows:

(in thousands)	Three Months Ended February 29, 2020		Six Months Ended February 29, 2020
Operating lease expense	$	8,815	$	17,605
Finance lease expense:
Amortization of assets	2,720		4,885
Interest on lease liabilities	465		866
Total finance lease expense	3,185		5,751
Variable and short term-lease expense	4,381		8,314
Total lease expense	$	16,381	$	31,670

The weighted-average remaining lease term and discount rate for operating and finance leases are presented in the following table:

	February 29, 2020
Weighted-average remaining lease term (years)
Operating leases	6.5
Finance leases	3.9
Weighted-average discount rate
Operating leases	4.160	%
Finance leases	4.216	%

Cash Flow and Other Information Related to Leases

Cash flow and other information related to leases is included in the following table:

(in thousands)	Six Months Ended February 29, 2020
Cash paid for amounts included in the measurement of lease liabilities
Operating cash outflows from operating leases	$	17,594
Operating cash outflows from finance leases	787
Financing cash outflows from finance leases	6,426
ROU assets obtained in exchange for lease obligations:
Operating leases	28,942
Finance leases	13,040

Maturity of Operating Lease Liabilities

Maturities of lease liabilities at February 29, 2020 are presented in the following table:

(in thousands)	Operating Leases		Finance Leases
Year 1	$	32,620	$	14,189
Year 2	27,531		11,963
Year 3	22,156		9,521
Year 4	17,563		7,626
Year 5	12,455		4,277
Thereafter	34,680		74
Total lease payments	147,005		47,650
Less: Imputed interest	19,822		3,792
Present value of lease liabilities	$	127,183	$	43,858

Maturity of Finance Lease Liabilities

Maturities of lease liabilities at February 29, 2020 are presented in the following table:

(in thousands)	Operating Leases		Finance Leases
Year 1	$	32,620	$	14,189
Year 2	27,531		11,963
Year 3	22,156		9,521
Year 4	17,563		7,626
Year 5	12,455		4,277
Thereafter	34,680		74
Total lease payments	147,005		47,650
Less: Imputed interest	19,822		3,792
Present value of lease liabilities	$	127,183	$	43,858

Future Maturity of Lease Obligations Prior to Adoption of ASU 2016-02

Future maturities of lease liabilities at August 31, 2019, prior to adoption of ASU 2016-02, are presented in the following table:

			Twelve Months Ended August 31,
(in thousands)	Total		2020	2021	2022	2023	2024	Thereafter
Capital lease obligations	$	41,331	13,104	10,004	7,758	5,831	3,904	$	730
Long-term non-cancelable operating leases	$	124,817	34,511	27,383	22,074	17,433	10,478	$	12,938

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CHANGES IN BUSINESS (Tables)

6 Months Ended

Feb. 29, 2020

Business Combinations [Abstract]

Schedule of Pro Forma Information

These results are adjusted, where possible, for transaction and integration-related costs.

	Three Months Ended February 28,				Six Months Ended February 28,
(in thousands)	2019		2018		2019		2018
Pro forma net sales*	$	1,379,033	$	1,470,603	$	2,925,007	$	2,914,292
Pro forma net earnings (loss)**	10,260		18,786		26,081		(2,187)

_________________ 

*Pro forma net sales for the three and six months ended February 28, 2018 includes estimated fair value adjustments related to amortization of unfavorable contract backlog. The impact of the amortization of unfavorable contract backlog has been removed from the pro forma net sales for the three and six months ended February 28, 2019.

** Pro forma net earnings (loss) for the three and six months ended February 28, 2018 reflects the impact of fair value adjustments related to the amortization of unfavorable contract backlog described above. Pro forma net loss for the six months ended February 28, 2018 includes estimated fair value adjustments related to inventory step-up, as well as non-recurring acquisition and integration costs of approximately $47.5 million.

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STOCKHOLDERS EQUITY AND EARNINGS PER SHARE

6 Months Ended

Feb. 29, 2020

Earnings Per Share [Abstract]

Stockholder's equity and earnings per share

NOTE 12. STOCKHOLDERS' EQUITY AND EARNINGS PER SHARE

The calculations of basic and diluted earnings per share from continuing operations were as follows: 

	Three Months Ended				Six Months Ended
(in thousands, except share data)	February 29, 2020		February 28, 2019		February 29, 2020		February 28, 2019
Earnings from continuing operations	$	63,596	$	14,928	$	146,351	$	34,348
Basic earnings per share:
Shares outstanding for basic earnings per share	118,919,455		117,854,335		118,644,823		117,677,422
Basic earnings per share from continuing operations	$	0.53	$	0.13	$	1.23	$	0.29
Diluted earnings per share:
Shares outstanding for basic earnings per share	118,919,455		117,854,335		118,644,823		117,677,422
Effect of dilutive securities:
Stock-based incentive/purchase plans	1,487,801		1,088,423		1,658,436		1,319,005
Shares outstanding for diluted earnings per share	120,407,256		118,942,758		120,303,259		118,996,427
Diluted earnings per share from continuing operations	$	0.53	$	0.13	$	1.22	$	0.29

Anti-dilutive shares not included above were immaterial for the three and six months ended February 29, 2020, respectively. There were no anti-dilutive shares for the three and six months ended February 28, 2019.

Restricted stock is included in the number of shares of common stock issued and outstanding but omitted from the basic earnings per share calculation until the shares vest.

During the first quarter of fiscal 2015, CMC's Board of Directors authorized a share repurchase program under which CMC may repurchase up to $100.0 million of shares of common stock. During the six months ended February 29, 2020, CMC did not

repurchase any shares of common stock. CMC had remaining authorization to repurchase $27.6 million of common stock at February 29, 2020.

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COMMITMENTS AND CONTINGENCIES (Narrative) (Details) - USD ($) $ in Millions	Feb. 29, 2020	Aug. 31, 2019
Loss Contingencies [Line Items]
Accrual for environmental loss contingencies	$ 3.6	$ 3.6
Accrued environmental loss contingencies, noncurrent	2.7	1.8
CERCLA sites
Loss Contingencies [Line Items]
Accrual for environmental loss contingencies	$ 0.7	$ 0.7

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REVENUE RECOGNITION - Contract Assets and Contract Liabilities (Details) - USD ($) $ in Thousands	6 Months Ended
	Feb. 29, 2020	Aug. 31, 2019
Revenue from Contract with Customer [Abstract]
Contract assets (included in other current assets)	$ 87,801	$ 103,805
Contract liabilities (included in accrued expenses and other payables)	38,391	$ 37,165
Revenue reclassified from contract liabilities	$ 20,200

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GOODWILL AND OTHER INTANGIBLES (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Feb. 29, 2020	Feb. 28, 2019	Feb. 29, 2020	Feb. 28, 2019	Aug. 31, 2019	Nov. 05, 2018
Goodwill and Intangible Assets Disclosure [Abstract]
Gross carrying amounts of the intangible assets subject to amortization	$ 20,700		$ 20,700		$ 20,800
Net carrying amount of intangible assets subject to amortization	12,200		12,200		13,300
Amortization expense for intangible assets	600	$ 600	1,100	$ 1,100
Acquired unfavorable contract backlog	(21,008)		(21,008)		$ (35,360)	$ (110,200)
Amortization of acquired unfavorable contract backlog	$ (5,997)	$ (23,476)	$ (14,328)	$ (34,808)

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LEASES - Weighted Average Lease Terms and Discount Rates (Details)	Feb. 29, 2020
Leases [Abstract]
Operating leases, remaining term	6 years 6 months
Finance leases, remaining term	3 years 10 months 24 days
Operating leases, weighted average discount rate	4.16%
Finance leases, weighted average discount rate	4.216%

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ACCOUNTING POLICIES (Policies)

6 Months Ended

Feb. 29, 2020

Accounting Policies [Abstract]

Accounting principles

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP") on a basis consistent with that used in the Annual Report on Form 10-K for the year ended August 31, 2019 ("2019 Form 10-K") filed by Commercial Metals Company ("CMC," and together with its consolidated subsidiaries, the "Company") with the Securities and Exchange Commission (the "SEC") and include all normal recurring adjustments necessary to present fairly the condensed consolidated balance sheets and the condensed consolidated statements of earnings, comprehensive income, cash flows and stockholders' equity for the periods indicated. These notes should be read in conjunction with the consolidated financial statements included in the 2019 Form 10-K. The results of operations for the three and six month periods are not necessarily indicative of the results to be expected for the full fiscal year. Any reference in this Form 10-Q to the "comparable period" or "corresponding period" relates to the relevant three-month or six-month period ended February 28, 2019.

Recent accounting pronouncements

Recently Adopted Accounting Pronouncements

On September 1, 2019, the Company adopted Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842), as amended, (“ASU 2016-02”), using the modified retrospective transition approach. ASU 2016-02 requires a lessee to recognize a right-of-use ("ROU") asset and a lease liability on its balance sheet for all leases with terms longer than twelve months. The Company’s financial statements for periods prior to September 1, 2019 were not modified for the application of this ASU. Upon adoption of ASU 2016-02, the Company recorded the following amounts associated with operating leases in its condensed consolidated balance sheet at September 1, 2019: $113.4 million of ROU assets, in other noncurrent assets, $30.9 million of lease liabilities in accrued expenses and other payables and $84.9 million of lease liabilities in other noncurrent liabilities. There was no impact to the opening balance of retained earnings as a result of implementing ASU 2016-02. The Company elected the package of three practical expedients available under the ASU. Additionally, the Company implemented appropriate changes to internal processes and controls to support recognition, subsequent measurement and disclosures.

The Company's leases are primarily for office space, land and equipment. The Company determines if an arrangement is a lease at inception of a contract if the terms state the Company has the right to direct the use of and obtain substantially all the economic benefits from a specific asset identified in the contract. The ROU assets represent the Company's right to use the underlying assets for the lease term, and the lease liabilities represent the obligation to make lease payments arising from the leases. ROU assets and lease liabilities are recognized at commencement date based on the present value of lease payments to be made over the lease term. Certain of the Company's lease agreements contain options to extend the lease. The Company evaluates these options on a lease-by-lease basis, and, if the Company determines it is reasonably certain to be exercised, the lease term includes the extension. The Company uses its incremental borrowing rate at lease commencement to determine the present value of lease payments, and lease expense is recognized on a straight-line basis over the lease term. The incremental borrowing rate is the rate of interest the Company could borrow on a collateralized basis over a similar term with similar payments. The Company does not record leases with an initial term of twelve months or less (“short-term leases”) in its condensed consolidated balance sheets.

Certain of the Company's lease agreements include payments for certain variable costs not determinable upon lease commencement including mileage, utilities, fuel and inflation adjustments. These variable lease payments are recognized in cost of goods sold and selling, general and administrative expenses, but are not included in the ROU asset or lease liability balances. The Company's lease agreements do not contain any material residual value guarantees, restrictions or covenants.

Recently Issued Accounting Pronouncements

In December 2019, the Financial Accounting Standards Board issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes ("ASU 2019-12"). ASU 2019-12 eliminates certain exceptions to the general principles in Accounting Standards Codification 740 and also clarifies and amends existing guidance to improve consistent application. This standard is effective for annual periods beginning after December 15, 2020, including interim periods therein. The Company currently does not expect ASU 2019-12 to have a material effect on its consolidated financial statements; however, the Company will continue to evaluate the impact of this guidance.

Fair value measurement

The Company has established a fair value hierarchy which prioritizes the inputs to the valuation techniques used to measure fair value into three levels. These levels are determined based on the lowest level input that is significant to the fair value measurement. Levels within the hierarchy are defined as follows:

Level 1 - Unadjusted quoted prices in active markets for identical assets and liabilities;

Level 2 - Quoted prices for similar assets and liabilities in active markets (other than those included in Level 1) which are observable, either directly or indirectly; and

Level 3 - Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

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STOCK-BASED COMPENSATION PLANS

6 Months Ended

Feb. 29, 2020

Share-based Payment Arrangement [Abstract]

Stock-based compensation plans

NOTE 11. STOCK-BASED COMPENSATION PLANS

The Company's stock-based compensation plans are described in Note 15, Stock-Based Compensation Plans, to the consolidated financial statements in the 2019 Form 10-K. In general, restricted stock units granted during 2020 vest ratably over a period of three years. Subject to the achievement of performance targets established by the Compensation Committee of CMC's Board of Directors, performance stock units granted during 2020 vest after a period of three years.

During the six months ended February 29, 2020 and the comparable period, the Company granted the following awards under its stock-based compensation plans:

	February 29, 2020			February 28, 2019
(in thousands, except per share data)	Shares Granted	Weighted Average Grant Date Fair Value		Shares Granted	Weighted Average Grant Date Fair Value
Equity method	1,521	$	18.32	1,505	$	17.75
Liability method	426	N/A		374	N/A

During the three and six months ended February 29, 2020 and the comparable periods, the Company recorded immaterial mark-to-market adjustments on liability awards. At February 29, 2020, the Company had outstanding 835,546 equivalent shares accounted for under the liability method. The Company expects 793,769 equivalent shares to vest.

The following table summarizes total stock-based compensation expense, including fair value remeasurements, which was mainly included in selling, general and administrative expenses on the Company's condensed consolidated statements of earnings:

	Three Months Ended				Six Months Ended
(in thousands)	February 29, 2020		February 28, 2019		February 29, 2020		February 28, 2019
Stock-based compensation expense	$	7,536	$	5,790	$	15,805	$	10,007

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GOODWILL AND OTHER INTANGIBLES (Tables)

6 Months Ended

Feb. 29, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Changes in the carrying amount of goodwill

Goodwill by reportable segment at February 29, 2020 is detailed in the following table:

(in thousands)	Americas Recycling		Americas Mills		Americas Fabrication		International Mill		Consolidated
Goodwill, gross*	$	9,543	$	4,970	$	57,428	$	2,420	$	74,361
Accumulated impairment losses*	(9,543)		—		(493)		(153)		(10,189)
Goodwill, net*	$	—	$	4,970	$	56,935	$	2,267	$	64,172

_________________ 

* The change in balance from August 31, 2019 was immaterial.

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BUSINESS SEGMENTS (Reconciliations of Earnings from Continuing Operations to Adjusted Operating Profit) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Feb. 29, 2020	Feb. 28, 2019	Feb. 29, 2020	Feb. 28, 2019
Segment Reporting [Abstract]
Earnings from continuing operations	$ 63,596	$ 14,928	$ 146,351	$ 34,348
Interest expense	15,888	18,495	32,466	35,158
Income taxes	22,845	18,141	50,177	23,750
Depreciation and amortization	41,389	41,245	82,330	76,421
Amortization of acquired unfavorable contract backlog	(5,997)	(23,476)	(14,328)	(34,808)
Impairment of assets	0	0	530	0
Adjusted EBITDA from continuing operations	$ 137,721	$ 69,333	$ 297,526	$ 134,869

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STOCKHOLDERS EQUITY AND EARNINGS PER SHARE (Calculations of the Basic and Diluted Earnings Per Share) (Details) - USD ($) $ / shares in Units, $ in Thousands		3 Months Ended		6 Months Ended
		Feb. 29, 2020	Feb. 28, 2019	Feb. 29, 2020	Feb. 28, 2019
Earnings Per Share [Abstract]
Earnings from continuing operations		$ 63,596	$ 14,928	$ 146,351	$ 34,348
Basic earnings per share:
Shares outstanding for basic earnings per share (shares)		118,919,455	117,854,335	118,644,823	117,677,422
Basic earnings per share attributable to CMC: (in USD per share)	[1]	$ 0.53	$ 0.13	$ 1.23	$ 0.29
Diluted earnings per share:
Shares outstanding for basic earnings per share (shares)		118,919,455	117,854,335	118,644,823	117,677,422
Effect of dilutive securities:
Stock-based incentive/purchase plans (shares)		1,487,801	1,088,423	1,658,436	1,319,005
Shares outstanding for diluted earnings per share (shares)		120,407,256	118,942,758	120,303,259	118,996,427
Diluted earnings per share attributable to CMC: (in USD per share)	[1]	$ 0.53	$ 0.13	$ 1.22	$ 0.29
Antidilutive (shares)				0	0

[1] *Earnings Per Share ("EPS") is calculated independently for each component and may not sum to Net EPS due to rounding

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LEASES - Cash Flow and Other Information Related to Leases (Details) $ in Thousands	6 Months Ended
	Feb. 29, 2020 USD ($)
Cash paid for amounts included in the measurement of lease liabilities
Operating cash outflows from operating leases	$ 17,594
Operating cash outflows from finance leases	787
Financing cash outflows from finance leases	6,426
ROU assets obtained in exchange for lease obligations:
Operating leases	28,942
Finance leases	$ 13,040

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REVENUE RECOGNITION - Remaining Performance Obligations (Details) $ in Millions	Feb. 29, 2020 USD ($)
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation	$ 819.4
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-03-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation (percent)	40.00%
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-03-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation (percent)	48.00%
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-03-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation (percent)	12.00%
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period

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GOODWILL AND OTHER INTANGIBLES (Changes in the Carrying Amount of Goodwill) (Details) - USD ($) $ in Thousands	Feb. 29, 2020	Aug. 31, 2019
Goodwill [Line Items]
Goodwill, gross	$ 74,361
Accumulated impairment losses	(10,189)
Goodwill, net	64,172	$ 64,138
Americas Recycling
Goodwill [Line Items]
Goodwill, gross	9,543
Accumulated impairment losses	(9,543)
Goodwill, net	0
Americas Mills
Goodwill [Line Items]
Goodwill, gross	4,970
Accumulated impairment losses	0
Goodwill, net	4,970
Americas Fabrication
Goodwill [Line Items]
Goodwill, gross	57,428
Accumulated impairment losses	(493)
Goodwill, net	56,935
International Mill
Goodwill [Line Items]
Goodwill, gross	2,420
Accumulated impairment losses	(153)
Goodwill, net	$ 2,267

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DERIVATIVES (Narrative) (Details) - USD ($) $ in Millions	Feb. 29, 2020	Aug. 31, 2019
Foreign exchange
Derivative [Line Items]
Derivative notional amount	$ 84.6	$ 94.1
Commodity
Derivative [Line Items]
Derivative notional amount	$ 42.0	$ 42.6

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LEASES - Maturity of Lease Liabilities (Details) $ in Thousands	Feb. 29, 2020 USD ($)
Operating Leases
Year 1	$ 32,620
Year 2	27,531
Year 3	22,156
Year 5	12,455
Year 4	17,563
Thereafter	34,680
Total lease payments	147,005
Less: Imputed interest	19,822
Present value of lease liabilities	127,183
Finance Leases
Year 1	14,189
Year 2	11,963
Year 3	9,521
Year 4	7,626
Year 5	4,277
Thereafter	74
Total lease payments	47,650
Less: Imputed interest	3,792
Present value of lease liabilities	$ 43,858

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FAIR VALUE (Financial Assets and Financial Liabilities Measured at Fair Value on Recurring Basis) (Details) - Fair value, measurements, recurring - USD ($) $ in Thousands	Feb. 29, 2020	Aug. 31, 2019
Money market investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Money market investments	$ 191,424	$ 66,240
Commodity
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets	1,631	1,269
Derivative liabilities	3,663	99
Foreign exchange
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets	374	569
Derivative liabilities	696	899
Quoted Prices in Active Markets for Identical Assets (Level 1) | Money market investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Money market investments	191,424	66,240
Quoted Prices in Active Markets for Identical Assets (Level 1) | Commodity
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets	1,631	1,269
Derivative liabilities	77	99
Quoted Prices in Active Markets for Identical Assets (Level 1) | Foreign exchange
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets	0	0
Derivative liabilities	0	0
Significant Other Observable Inputs (Level 2) | Money market investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Money market investments	0	0
Significant Other Observable Inputs (Level 2) | Commodity
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets	0	0
Derivative liabilities	0	0
Significant Other Observable Inputs (Level 2) | Foreign exchange
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets	374	569
Derivative liabilities	696	899
Significant Unobservable Inputs (Level 3) | Money market investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Money market investments	0	0
Significant Unobservable Inputs (Level 3) | Commodity
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets	0	0
Derivative liabilities	3,586	0
Significant Unobservable Inputs (Level 3) | Foreign exchange
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets	0	0
Derivative liabilities	$ 0	$ 0

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REVENUE RECOGNITION - Revenue Recognition Method (Details) - Americas Fabrication	3 Months Ended	6 Months Ended
	Feb. 29, 2020	Feb. 29, 2020
Recognized as Amounts are Billed
Disaggregation of Revenue [Line Items]
Contract as percent of total segment revenue (percent)	48.00%	50.00%
Fabricated Product and Installation Services | Recognized over Time
Disaggregation of Revenue [Line Items]
Contract as percent of total segment revenue (percent)	27.00%	26.00%
Fabricated Product without Installation Services | Recognized over Time
Disaggregation of Revenue [Line Items]
Contract as percent of total segment revenue (percent)	25.00%	24.00%

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DERIVATIVES (Tables)

6 Months Ended

Feb. 29, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Commodity contract commitments

The following table provides information regarding the Company's commodity contract commitments at February 29, 2020:

Commodity	Long/Short	Total
Aluminum	Long	2,100	MT
Copper	Long	318	MT
Copper	Short	5,454	MT
Electricity	Long	2,000,000	MW(h)

_________________

MT = Metric Ton

MW(h) = Megawatt hour

Derivatives not designated as hedging instruments

The following table summarizes activity related to the Company's derivative instruments not designated as hedging instruments recognized in the condensed consolidated statements of earnings. All other activity related to the Company's derivative instruments and hedged items was immaterial for the periods presented. 

		Three Months Ended				Six Months Ended
Derivatives Not Designated as Hedging Instruments (in thousands)	Location	February 29, 2020		February 28, 2019		February 29, 2020		February 28, 2019
Commodity	Cost of goods sold	$	1,731	$	(2,425)	$	416	$	(3,265)
Foreign exchange	SG&A expenses	(21)		(526)		20		(400)
Gain (loss) before income taxes		$	1,710	$	(2,951)	$	436	$	(3,665)

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BUSINESS SEGMENTS (Tables)

6 Months Ended

Feb. 29, 2020

Segment Reporting [Abstract]

Summary of certain financial information from continuing operations by reportable segment

The following is a summary of certain financial information from continuing operations by reportable segment:

	Three Months Ended February 29, 2020
(in thousands)	Americas Recycling		Americas Mills		Americas Fabrication		International Mill		Corporate and Other		Continuing Operations
Net sales-unaffiliated customers	$	179,535	$	471,367	$	510,381	$	179,656	$	24	$	1,340,963
Intersegment sales	68,549		260,673		1,367		423		(331,012)		—
Net sales	248,084		732,040		511,748		180,079		(330,988)		1,340,963
Adjusted EBITDA	5,754		125,691		16,060		13,451		(23,235)		137,721
	Six Months Ended February 29, 2020
(in thousands)	Americas Recycling		Americas Mills		Americas Fabrication		International Mill		Corporate and Other		Continuing Operations
Net sales-unaffiliated customers	$	351,686	$	945,559	$	1,080,758	$	344,696	$	2,972	$	2,725,671
Intersegment sales	118,659		555,374		2,837		772		(677,642)		—
Net sales	470,345		1,500,933		1,083,595		345,468		(674,670)		2,725,671
Adjusted EBITDA	9,171		280,716		33,541		24,810		(50,712)		297,526
Total assets at February 29, 2020*	261,611		1,680,295		1,065,676		521,678		378,678		3,907,938

_________________ 

*Total assets listed in Corporate and Other includes assets from discontinued operations.

	Three Months Ended February 28, 2019
(in thousands)	Americas Recycling		Americas Mills		Americas Fabrication		International Mill		Corporate and Other		Continuing Operations
Net sales-unaffiliated customers	$	225,888	$	472,795	$	526,678	$	174,945	$	2,477	$	1,402,783
Intersegment sales	61,187		301,914		4,158		253		(367,512)		—
Net sales	287,075		774,709		530,836		175,198		(365,035)		1,402,783
Adjusted EBITDA	10,124		112,396		(49,578)		20,537		(24,146)		69,333
	Six Months Ended February 28, 2019
(in thousands)	Americas Recycling		Americas Mills		Americas Fabrication		International Mill		Corporate and Other		Continuing Operations
Net sales-unaffiliated customers	$	466,069	$	846,466	$	961,236	$	401,618	$	4,736	$	2,680,125
Intersegment sales	123,015		530,096		6,711		604		(660,426)		—
Net sales	589,084		1,376,562		967,947		402,222		(655,690)		2,680,125
Adjusted EBITDA	25,558		226,269		(86,574)		53,316		(83,700)		134,869
Total assets at August 31, 2019*	257,517		1,667,366		1,106,420		464,177		263,291		3,758,771

_________________ 

*Total assets listed in Corporate and Other includes assets from discontinued operations.

Reconciliations of earnings from continuing operations to adjusted operating profit

The following table presents a reconciliation of earnings from continuing operations to adjusted EBITDA from continuing operations:

	Three Months Ended				Six Months Ended
(in thousands)	February 29, 2020		February 28, 2019		February 29, 2020		February 28, 2019
Earnings from continuing operations	$	63,596	$	14,928	$	146,351	$	34,348
Interest expense	15,888		18,495		32,466		35,158
Income taxes	22,845		18,141		50,177		23,750
Depreciation and amortization	41,389		41,245		82,330		76,421
Amortization of acquired unfavorable contract backlog	(5,997)		(23,476)		(14,328)		(34,808)
Impairment of assets	—		—		530		—
Adjusted EBITDA from continuing operations	$	137,721	$	69,333	$	297,526	$	134,869

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CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Thousands	Feb. 29, 2020	Aug. 31, 2019
Current assets:
Cash and cash equivalents	$ 232,442	$ 192,461
Accounts receivable (less allowance for doubtful accounts of $8,388 and $8,403)	961,694	1,016,088
Inventories, net	714,842	692,368
Other current assets	176,000	179,088
Total current assets	2,084,978	2,080,005
Property, plant and equipment, net	1,522,342	1,500,971
Goodwill	64,172	64,138
Other noncurrent assets	236,446	113,657
Total assets	3,907,938	3,758,771
Current liabilities:
Accounts payable	275,491	288,005
Accrued expenses and other payables	329,920	353,786
Acquired unfavorable contract backlog	21,008	35,360
Current maturities of long-term debt and short-term borrowings	22,715	17,439
Total current liabilities	649,134	694,590
Deferred income taxes	123,726	79,290
Other noncurrent liabilities	232,450	133,620
Long-term debt	1,144,573	1,227,214
Total liabilities	2,149,883	2,134,714
Commitments and contingencies (Note 13)
Stockholders' equity:
Common stock	1,290	1,290
Additional paid-in capital	351,481	358,668
Accumulated other comprehensive loss	(121,390)	(124,126)
Retained earnings	1,704,045	1,585,379
Less treasury stock 9,998,775 and 11,135,726 shares at cost	(177,583)	(197,350)
Stockholders' equity	1,757,843	1,623,861
Stockholders' equity attributable to noncontrolling interests	212	196
Total stockholders' equity	1,758,055	1,624,057
Total liabilities and stockholders' equity	$ 3,907,938	$ 3,758,771
Common stock, par value (in USD per share)	$ 0.01	$ 0.01

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LEASES

6 Months Ended

Feb. 29, 2020

Leases [Abstract]

Operating Leases

NOTE 7. LEASES

The following table presents the components of the total leased assets and lease liabilities and their classification in the Company's condensed consolidated balance sheet at February 29, 2020:

(in thousands)	Classification in Condensed Consolidated Balance Sheet	February 29, 2020
Assets:
Operating assets	Other noncurrent assets	$	124,749
Finance assets	Property, plant and equipment, net	43,647
Total leased assets		$	168,396
Liabilities:
Operating lease liabilities:
Current	Accrued expenses and other payables	$	27,900
Long-term	Other noncurrent liabilities	99,283
Total operating lease liabilities		127,183
Finance lease liabilities:
Current	Current maturities of long-term debt and short-term borrowings	12,604
Long-term	Long-term debt	31,254
Total finance lease liabilities		43,858
Total lease liabilities		$	171,041

The components of lease cost were as follows:

(in thousands)	Three Months Ended February 29, 2020		Six Months Ended February 29, 2020
Operating lease expense	$	8,815	$	17,605
Finance lease expense:
Amortization of assets	2,720		4,885
Interest on lease liabilities	465		866
Total finance lease expense	3,185		5,751
Variable and short term-lease expense	4,381		8,314
Total lease expense	$	16,381	$	31,670

The weighted-average remaining lease term and discount rate for operating and finance leases are presented in the following table:

	February 29, 2020
Weighted-average remaining lease term (years)
Operating leases	6.5
Finance leases	3.9
Weighted-average discount rate
Operating leases	4.160	%
Finance leases	4.216	%

Cash flow and other information related to leases is included in the following table:

(in thousands)	Six Months Ended February 29, 2020
Cash paid for amounts included in the measurement of lease liabilities
Operating cash outflows from operating leases	$	17,594
Operating cash outflows from finance leases	787
Financing cash outflows from finance leases	6,426
ROU assets obtained in exchange for lease obligations:
Operating leases	28,942
Finance leases	13,040

Maturities of lease liabilities at February 29, 2020 are presented in the following table:

(in thousands)	Operating Leases		Finance Leases
Year 1	$	32,620	$	14,189
Year 2	27,531		11,963
Year 3	22,156		9,521
Year 4	17,563		7,626
Year 5	12,455		4,277
Thereafter	34,680		74
Total lease payments	147,005		47,650
Less: Imputed interest	19,822		3,792
Present value of lease liabilities	$	127,183	$	43,858

Future maturities of lease liabilities at August 31, 2019, prior to adoption of ASU 2016-02, are presented in the following table:

			Twelve Months Ended August 31,
(in thousands)	Total		2020	2021	2022	2023	2024	Thereafter
Capital lease obligations	$	41,331	13,104	10,004	7,758	5,831	3,904	$	730
Long-term non-cancelable operating leases	$	124,817	34,511	27,383	22,074	17,433	10,478	$	12,938

Finance Leases

NOTE 7. LEASES

The following table presents the components of the total leased assets and lease liabilities and their classification in the Company's condensed consolidated balance sheet at February 29, 2020:

(in thousands)	Classification in Condensed Consolidated Balance Sheet	February 29, 2020
Assets:
Operating assets	Other noncurrent assets	$	124,749
Finance assets	Property, plant and equipment, net	43,647
Total leased assets		$	168,396
Liabilities:
Operating lease liabilities:
Current	Accrued expenses and other payables	$	27,900
Long-term	Other noncurrent liabilities	99,283
Total operating lease liabilities		127,183
Finance lease liabilities:
Current	Current maturities of long-term debt and short-term borrowings	12,604
Long-term	Long-term debt	31,254
Total finance lease liabilities		43,858
Total lease liabilities		$	171,041

The components of lease cost were as follows:

(in thousands)	Three Months Ended February 29, 2020		Six Months Ended February 29, 2020
Operating lease expense	$	8,815	$	17,605
Finance lease expense:
Amortization of assets	2,720		4,885
Interest on lease liabilities	465		866
Total finance lease expense	3,185		5,751
Variable and short term-lease expense	4,381		8,314
Total lease expense	$	16,381	$	31,670

The weighted-average remaining lease term and discount rate for operating and finance leases are presented in the following table:

	February 29, 2020
Weighted-average remaining lease term (years)
Operating leases	6.5
Finance leases	3.9
Weighted-average discount rate
Operating leases	4.160	%
Finance leases	4.216	%

Cash flow and other information related to leases is included in the following table:

(in thousands)	Six Months Ended February 29, 2020
Cash paid for amounts included in the measurement of lease liabilities
Operating cash outflows from operating leases	$	17,594
Operating cash outflows from finance leases	787
Financing cash outflows from finance leases	6,426
ROU assets obtained in exchange for lease obligations:
Operating leases	28,942
Finance leases	13,040

Maturities of lease liabilities at February 29, 2020 are presented in the following table:

(in thousands)	Operating Leases		Finance Leases
Year 1	$	32,620	$	14,189
Year 2	27,531		11,963
Year 3	22,156		9,521
Year 4	17,563		7,626
Year 5	12,455		4,277
Thereafter	34,680		74
Total lease payments	147,005		47,650
Less: Imputed interest	19,822		3,792
Present value of lease liabilities	$	127,183	$	43,858

Future maturities of lease liabilities at August 31, 2019, prior to adoption of ASU 2016-02, are presented in the following table:

			Twelve Months Ended August 31,
(in thousands)	Total		2020	2021	2022	2023	2024	Thereafter
Capital lease obligations	$	41,331	13,104	10,004	7,758	5,831	3,904	$	730
Long-term non-cancelable operating leases	$	124,817	34,511	27,383	22,074	17,433	10,478	$	12,938

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CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED) - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-In Capital	Accumulated Other Comprehensive Loss	Retained Earnings	Treasury Stock	Noncontrolling Interests
Beginning balance at Aug. 31, 2018	$ 1,493,583	$ 1,290	$ 352,674	$ (93,677)	$ 1,446,495	$ (213,385)	$ 186
Beginning balance, shares at Aug. 31, 2018		129,060,664
Beginning balance, treasury stock, shares at Aug. 31, 2018						(12,045,106)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net earnings	33,592				33,592
Other comprehensive income (loss)	(7,210)			(7,210)
Dividends	(28,181)				(28,181)
Stock-based compensation	(2,856)		(18,823)			$ 15,967
Issuance of stock under incentive and purchase plans, net of forfeitures, shares						905,512
Stock-based compensation	12,305		12,305
Contribution of noncontrolling interests	10						10
Adoption of ASC 606 adjustment	(2,747)				(2,747)
Ending balance at Feb. 28, 2019	1,498,496	$ 1,290	346,156	(100,887)	1,449,159	$ (197,418)	196
Ending balance, shares at Feb. 28, 2019		129,060,664
Ending balance, treasury stock, shares at Feb. 28, 2019						(11,139,594)
Beginning balance at Nov. 30, 2018	1,489,027	$ 1,290	342,893	(102,201)	1,449,374	$ (202,515)	186
Beginning balance, shares at Nov. 30, 2018		129,060,664
Beginning balance, treasury stock, shares at Nov. 30, 2018						(11,426,463)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net earnings	13,850				13,850
Other comprehensive income (loss)	1,314			1,314
Dividends	(14,065)				(14,065)
Stock-based compensation	3,364		(1,733)			$ 5,097
Issuance of stock under incentive and purchase plans, net of forfeitures, shares						286,869
Stock-based compensation	4,996		4,996
Contribution of noncontrolling interests	10						10
Ending balance at Feb. 28, 2019	1,498,496	$ 1,290	346,156	(100,887)	1,449,159	$ (197,418)	196
Ending balance, shares at Feb. 28, 2019		129,060,664
Ending balance, treasury stock, shares at Feb. 28, 2019						(11,139,594)
Beginning balance at Aug. 31, 2019	$ 1,624,057	$ 1,290	358,668	(124,126)	1,585,379	$ (197,350)	196
Beginning balance, shares at Aug. 31, 2019		129,060,664
Beginning balance, treasury stock, shares at Aug. 31, 2019	(11,135,726)					(11,135,726)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net earnings	$ 147,146				147,146
Other comprehensive income (loss)	2,736			2,736
Dividends	(28,480)				(28,480)
Stock-based compensation	(2,463)		(22,230)			$ 19,767
Issuance of stock under incentive and purchase plans, net of forfeitures, shares						1,136,951
Stock-based compensation	15,043		15,043
Contribution of noncontrolling interests	16						16
Ending balance at Feb. 29, 2020	$ 1,758,055	$ 1,290	351,481	(121,390)	1,704,045	$ (177,583)	212
Ending balance, shares at Feb. 29, 2020		129,060,664
Ending balance, treasury stock, shares at Feb. 29, 2020	(9,998,775)					(9,998,775)
Beginning balance at Nov. 30, 2019	$ 1,701,697	$ 1,290	347,192	(116,585)	1,654,489	$ (184,885)	196
Beginning balance, shares at Nov. 30, 2019		129,060,664
Beginning balance, treasury stock, shares at Nov. 30, 2019						(10,410,799)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net earnings	63,798				63,798
Other comprehensive income (loss)	(4,805)			(4,805)
Dividends	(14,242)				(14,242)
Stock-based compensation	5,354		(1,948)			$ 7,302
Issuance of stock under incentive and purchase plans, net of forfeitures, shares						412,024
Stock-based compensation	6,237		6,237
Contribution of noncontrolling interests	16						16
Ending balance at Feb. 29, 2020	$ 1,758,055	$ 1,290	$ 351,481	$ (121,390)	$ 1,704,045	$ (177,583)	$ 212
Ending balance, shares at Feb. 29, 2020		129,060,664
Ending balance, treasury stock, shares at Feb. 29, 2020	(9,998,775)					(9,998,775)

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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

6 Months Ended

Feb. 29, 2020

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

Accumulated other comprehensive income (loss)

NOTE 3. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The following tables reflect the changes in accumulated other comprehensive income (loss) ("AOCI"):

	Three Months Ended February 29, 2020
(in thousands)	Foreign Currency Translation		Unrealized Gain (Loss) on Derivatives		Defined Benefit Obligation		Total AOCI
Balance, November 30, 2019	$	(114,574)	$	1,731	$	(3,742)	$	(116,585)
Other comprehensive loss before reclassifications	(1,066)		(4,501)		(14)		(5,581)
Amounts reclassified from AOCI	(2)		(104)		—		(106)
Income taxes	—		876		6		882
Net other comprehensive income loss	(1,068)		(3,729)		(8)		(4,805)
Balance, February 29, 2020	$	(115,642)	$	(1,998)	$	(3,750)	$	(121,390)
	Six Months Ended February 29, 2020
(in thousands)	Foreign Currency Translation		Unrealized Gain (Loss) on Derivatives		Defined Benefit Obligation		Total AOCI
Balance, August 31, 2019	$	(121,498)	$	1,106	$	(3,734)	$	(124,126)
Other comprehensive income (loss) before reclassifications	5,858		(3,619)		(24)		2,215
Amounts reclassified from AOCI	(2)		(214)		—		(216)
Income taxes	—		729		8		737
Net other comprehensive income (loss)	5,856		(3,104)		(16)		2,736
Balance, February 29, 2020	$	(115,642)	$	(1,998)	$	(3,750)	$	(121,390)

	Three Months Ended February 28, 2019
(in thousands)	Foreign Currency Translation		Unrealized Gain (Loss) on Derivatives		Defined Benefit Obligation		Total AOCI
Balance, November 30, 2018	$	(102,393)	$	1,279	$	(1,087)	$	(102,201)
Other comprehensive income (loss) before reclassifications	514		(52)		(8)		454
Amounts reclassified from AOCI	936		(107)		—		829
Income taxes	—		31		—		31
Net other comprehensive income (loss)	1,450		(128)		(8)		1,314
Balance, February 28, 2019	$	(100,943)	$	1,151	$	(1,095)	$	(100,887)
	Six Months Ended February 28, 2019
(in thousands)	Foreign Currency Translation		Unrealized Gain (Loss) on Derivatives		Defined Benefit Obligation		Total AOCI
Balance, August 31, 2018	$	(92,637)	$	1,356	$	(2,396)	$	(93,677)
Other comprehensive loss before reclassifications	(9,143)		(104)		(19)		(9,266)
Amounts reclassified from AOCI	837		(149)		1,666		2,354
Income taxes (benefit)	—		48		(346)		(298)
Net other comprehensive income (loss)	(8,306)		(205)		1,301		(7,210)
Balance, February 28, 2019	$	(100,943)	$	1,151	$	(1,095)	$	(100,887)

Items reclassified out of AOCI were immaterial for the three and six months ended February 29, 2020 and the comparable periods. Thus, the corresponding line items in the condensed consolidated statements of earnings to which the items were reclassified are not presented.