XML 111 R30.htm IDEA: XBRL DOCUMENT v3.20.2
BUSINESS SEGMENTS
 12 Months Ended
Aug. 31, 2020
Segment Reporting [Abstract]  
BUSINESS SEGMENTS
NOTE 21. BUSINESS SEGMENTS

The Company's operating segments engage in business activities from which they may earn revenues and incur expenses and for which discrete financial information is available. Operating results for the operating segments are regularly reviewed by the Company's Chief Operating Decision Maker ("CODM") to make decisions about resources to be allocated to the segments and to assess performance. The Company's CODM is identified as the Chief Executive Officer, the Chief Operating Officer and the Chief Financial Officer. In the fourth quarter of 2020, the Company realigned its segment reporting structure to reflect: (i) its vertically integrated operating model in North America, which is now supported by a National Sales, Inventory and Operations Planning function created in 2020, (ii) changes to its operating model and geographic footprint following the full integration of the Acquired Businesses into its North America operations and (iii) the way the CODM now uses integrated North America data to manage the business, assess performance and allocate resources.

The Company structures its business into the following two operating and reportable segments: North America and Europe. The reportable segments have different lines of management responsibility, as each requires different marketing strategies and management expertise. Segment financial information has been retrospectively adjusted to reflect these changes. See Note 1, Nature of Operations, for more information about the reporting segments, including the types of products and services from which each reportable segment derives its net sales.

Corporate and Other contains earnings or losses on assets and liabilities related to the Company's BRP and short-term investments, expenses of the Company's corporate headquarters, interest expense related to its long-term debt and intercompany eliminations. 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.

The CODM uses adjusted EBITDA from continuing operations to evaluate segment performance and allocate resources. 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.
The following table summarizes certain financial information from continuing operations by reportable segment:
(in thousands)North AmericaEuropeCorporate and OtherContinuing Operations
2020    
Net sales$4,769,933 $699,140 $7,413 $5,476,486 
Adjusted EBITDA661,176 62,007 (146,575)576,608 
Interest expense(1)
48,413 982 12,442 61,837 
Capital expenditures127,982 48,895 10,741 187,618 
Depreciation and amortization132,492 25,674 7,583 165,749 
Asset impairments7,606 5 — 7,611 
Total assets(2)
2,862,805 532,850 686,073 4,081,728 
2019    
Net sales$5,001,116 $817,048 $10,838 $5,829,002 
Adjusted EBITDA456,296 100,102 (132,313)424,085 
Interest expense(1)
46,939 2,493 21,941 71,373 
Capital expenditures89,119 40,337 9,380 138,836 
Depreciation and amortization125,718 25,993 6,941 158,652 
Asset impairments369 15 — 384 
Total assets(2)
2,991,996 464,177 302,598 3,758,771 
2018    
Net sales$3,738,493 $887,038 $18,192 $4,643,723 
Adjusted EBITDA323,993 131,720 (103,492)352,221 
Interest expense(1)
23,217 2,699 15,041 40,957 
Capital expenditures144,007 23,552 3,808 171,367 
Depreciation and amortization92,295 27,255 11,958 131,508 
Asset impairments14,345 27 — 14,372 
Total assets(2)
2,115,049 485,548 727,707 3,328,304 
__________________________________
(1) Includes intercompany interest expense in the segments, which is eliminated within Corporate and Other.
(2) 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:
 Year Ended August 31,
(in thousands)202020192018
Earnings from continuing operations$278,302 $198,779 $135,237 
Interest expense61,837 71,373 40,957 
Income taxes92,476 69,681 30,147 
Depreciation and amortization165,749 158,652 131,508 
Amortization of acquired unfavorable contract backlog(29,367)(74,784)— 
Asset impairments7,611 384 14,372 
Adjusted EBITDA from continuing operations$576,608 $424,085 $352,221 
The following tables present net sales by reportable segment disaggregated by major product and geographic area:

Year Ended August 31, 2020
(in thousands)North AmericaEuropeCorporateTotal
Major product:
Raw material products$718,513 $9,692 $— $728,205 
Steel products1,738,556 547,047 — 2,285,603 
Downstream products1,943,126 119,232 — 2,062,358 
Other369,738 21,660 8,922 400,320 
Net sales-unaffiliated customers4,769,933 697,631 8,922 5,476,486 
Intersegment net sales, eliminated on consolidation— 1,509 (1,509)— 
Net sales$4,769,933 $699,140 $7,413 $5,476,486 

Year Ended August 31, 2019
(in thousands)North AmericaEuropeCorporateTotal
Major product:
Raw material products$953,858 $12,359 $— $966,217 
Steel products1,763,017 646,974 — 2,409,991 
Downstream products1,936,994 133,823 — 2,070,817 
Other347,247 22,567 12,163 381,977 
Net sales-unaffiliated customers5,001,116 815,723 12,163 5,829,002 
Intersegment net sales, eliminated on consolidation— 1,325 (1,325)— 
Net sales$5,001,116 $817,048 $10,838 $5,829,002 

Year Ended August 31, 2018*
(in thousands)North AmericaEuropeCorporateTotal
Major product:
Raw material products$1,165,998 $15,213 $— $1,181,211 
Steel products1,099,286 710,657 — 1,809,943 
Downstream products1,160,373 142,745 — 1,303,118 
Other312,810 17,304 19,337 349,451 
Net sales-unaffiliated customers3,738,467 885,919 19,337 4,643,723 
Intersegment net sales, eliminated on consolidation26 1,119 (1,145)— 
Net sales$3,738,493 $887,038 $18,192 $4,643,723 

 Year Ended August 31,
(in thousands)202020192018*
Geographic area:
United States$4,562,351 $4,771,164 $3,460,018 
Poland549,983 510,610 702,540 
China76,909 74,638 163,622 
Germany65,846 103,762 70,754 
Other221,397 368,828 246,789 
Net sales$5,476,486 $5,829,002 $4,643,723 
__________________________________
* Prior period amounts have been reported under ASC 605.
The following table presents long-lived assets, net of accumulated depreciation and amortization, by geographic area:
 August 31,
(in thousands)202020192018
United States$1,483,127 $1,426,131 $1,001,102 
Poland225,166 173,045 171,460 
Other51 42 45 
Total long-lived assets$1,708,344 $1,599,218 $1,172,607