Credit Arrangements

3 Months Ended

Nov. 30, 2011

Credit Arrangements [Abstract]

CREDIT ARRANGEMENTS

NOTE 8 — CREDIT ARRANGEMENTS

The Company’s revolving credit facility of $400 million has a maturity date of November 24, 2012. On December 27, 2011, the Company entered into a third amended and restated credit agreement which reduced the revolving credit facility to $300 million and extended the maturity date to December 27, 2016. The maximum facility can be increased to $400 million with the consent of all parties. Under the current credit facility, the Company is required to maintain a minimum interest coverage ratio of not less than 2.50 to 1.00 for the twelve month cumulative period ended November 30, 2011 and for each fiscal quarter on a rolling twelve month cumulative period thereafter. At November 30, 2011, the Company’s interest coverage ratio was 3.27 to 1.00. The agreement also requires the Company to maintain a debt to capitalization ratio covenant not greater than 0.60 to 1.00. At November 30, 2011, the Company’s debt to capitalization ratio was 0.53 to 1.00. The agreement provides for interest based on LIBOR, Eurodollar or Bank of America’s prime rate. The Company did not have any amounts outstanding on the revolving credit facility at November 30, 2011 or August 31, 2011.

The Company has numerous uncommitted credit facilities available from domestic and international banks. These credit facilities are used, in general, to support import letters of credit (including accounts payable settled under bankers’ acceptances), foreign exchange transactions and short-term advances which are priced at market rates.

Long-term debt, including the net effect of interest rate swap revaluation adjustments, was as follows:

(in thousands)	Weighted Average Interest Rate at November 30, 2011			November 30, 2011		August 31, 2011
5.625% notes due November 2013		3.8	%	$	206,177	$	207,752
6.50% notes due July 2017		5.0	%		413,375		414,198
7.35% notes due August 2018		5.6	%		526,077		526,699
Other, including equipment notes					10,937		10,632
CMCZ term note due May 2013					—		48,648
CMCS financing agreement due July 2014					—		18,476
					1,156,566		1,226,405
Less current maturities					3,697		58,908
				$	1,152,869	$	1,167,497

Interest on the notes is payable semiannually.

During the third quarter of 2011, the Company entered into an interest rate swap transaction to hedge the fair value changes on its 6.50% notes due July 2017 (“2017 Notes”). During the third quarter of 2010, the Company entered into interest rate swap transactions on its 5.625% notes due November 2013 (“2013 Notes”) and 7.35% notes due August 2018 (“2018 Notes”). The swap transactions were designated as fair value hedges at inception and effectively convert all fixed-rate interest to floating rate interest on the Company’s 2013 Notes, and effectively convert fixed-rate interest to floating rate interest with respect to $300 million in principal amount on each of the 2017 Notes and the 2018 Notes and have termination dates of November 15, 2013, July 15, 2017 and August 15, 2018, respectively. Under the terms of the swaps, the Company pays the floating LIBOR plus 303 basis points with respect to the 2013 Notes, LIBOR plus 374 basis points with respect to the 2017 Notes and LIBOR plus 367 basis points with respect to the 2018 Notes and receives payments identical to the hedged item fixed rates.

The CMCS financing agreement was used for capital expenditures and other uses. The note has scheduled principal and interest payments in semiannual installments. During the first quarter of 2012, the Company presented CMCS as a discontinued operation. As a result, the CMCS financing agreement was classified as held for sale and included in accrued expenses and other payables on the consolidated balance sheet. The outstanding balance at November 30, 2011 was $17.3 million. See Note 7, Discontinued Operations, for additional information.

The CMC Zawiercie (“CMCZ”) term note was repaid on October 20, 2011. Subsequently, CMCZ entered into current uncommitted credit facilities of $76.0 million with several banks, which expire in the first quarter of 2013. At November 30, 2011, $42.3 million was outstanding under these facilities and included in notes payable on the consolidated balance sheets. The weighted average interest rate on these facilities was approximately 5.5% at November 30, 2011.

Interest of $0.4 million and $0.2 million was capitalized in the cost of property, plant and equipment constructed for the three months ended November 30, 2011 and 2010, respectively. Interest of $4.4 million and $5.0 million was paid for the three months ended November 30, 2011 and 2010, respectively.