SEC Info - Commercial Metals Co. - ‘10-Q’ for 5/31/22

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		Alternative Formats (Word, et al.) Condensed Consolidated Balance Sheets (Unaudited) -- May 31, 2022 and August 31, 2021 Condensed Consolidated Statements of Cash Flows (Unaudited) -- Nine months ended May 31, 2022 and 2021 Condensed Consolidated Statements of Comprehensive Income (Unaudited) Condensed Consolidated Statements of Earnings (Unaudited) -- Three and nine months ended May 31, 2022 and 2021 Condensed Consolidated Statements of Stockholders' Equity (Unaudited) Contents Controls and Procedures Defaults Upon Senior Securities Exhibits Financial Information Financial Statements Legal Proceedings Management's Discussion and Analysis of Financial Condition and Results of Operations May 31, 2022 and August 31, 2021 Mine Safety Disclosures Nine months ended May 31, 2022 and 2021 Note 10. Derivatives Note 11. Fair Value Note 12. Stock-Based Compensation Plans Note 13. Employees' Retirement Plans Note 14. Stockholders' Equity and Earnings Per Share Note 15. Commitments and Contingencies Note 16. Business Segments Note 1. Accounting Policies Note 2. Acquisition Note 3. Changes in Business Note 4. Accumulated Other Comprehensive Income (Loss) Note 5. Revenue Recognition Note 6. Inventories, Net Note 7. Goodwill and Other Intangibles Note 8. Leases Note 9. Credit Arrangements Notes to Condensed Consolidated Financial Statements (Unaudited) Other Information Part I -- Financial Information Part Ii -- Other Information Quantitative and Qualitative Disclosures About Market Risk Risk Factors Signature Table of Table of Contents Three and nine months ended May 31, 2022 and 2021 Unregistered Sales of Equity Securities and Use of Proceeds
1	1st Page – Filing Submission
"	Table of Contents
"	Table of
"	Contents
"	Part I -- Financial Information
"	Item 1. Financial Statements
"	Condensed Consolidated Statements of Earnings (Unaudited) -- Three and nine months ended May 31, 2022 and 2021
"	Condensed Consolidated Statements of Comprehensive Income (Unaudited)
"	Condensed Consolidated Balance Sheets (Unaudited) -- May 31, 2022 and August 31, 2021
"	Condensed Consolidated Statements of Cash Flows (Unaudited) -- Nine months ended May 31, 2022 and 2021
"	Condensed Consolidated Statements of Stockholders' Equity (Unaudited)
"	Notes to Condensed Consolidated Financial Statements (Unaudited)
"	Note 1. Accounting Policies
"	Note 2. Acquisition
"	Note 3. Changes in Business
"	Note 4. Accumulated Other Comprehensive Income (Loss)
"	Note 5. Revenue Recognition
"	Note 6. Inventories, Net
"	Note 7. Goodwill and Other Intangibles
"	Note 8. Leases
"	Note 9. Credit Arrangements
"	Note 10. Derivatives
"	Note 11. Fair Value
"	Note 12. Stock-Based Compensation Plans
"	Note 13. Employees' Retirement Plans
"	Note 14. Stockholders' Equity and Earnings Per Share
"	Note 15. Commitments and Contingencies
"	Note 16. Business Segments
"	Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
"	Item 3. Quantitative and Qualitative Disclosures About Market Risk
"	Item 4. Controls and Procedures
"	Part Ii -- Other Information
"	Item 1. Legal Proceedings
"	Item 1A. Risk Factors
"	Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
"	Item 3. Defaults Upon Senior Securities
"	Item 4. Mine Safety Disclosures
"	Item 6. Exhibits
"	Signature

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SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

___________________________________

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

For the quarterly period ended i May 31, 2022

Commission file number i 1-4304

___________________________________

i COMMERCIAL METALS COMPANY

(Exact Name of Registrant as Specified in Its Charter)


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

(Address of Principal Executive Offices) (Zip Code)

(Registrant's Telephone Number, Including Area Code)

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. i 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). i 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.


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

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).

As of June 21, 2022, i 120,490,407 shares of the registrant's common stock, par value $0.01 per share, were outstanding.

COMMERCIAL METALS COMPANY AND SUBSIDIARIES

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

COMMERCIAL METALS COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)

Three Months Ended May 31,

Nine Months Ended May 31,

(in thousands, except share and per share data)

2022

2021

2022

2021

Net sales

i 2,515,727

i 1,845,041

i 6,506,416

i 4,699,114

Costs and operating expenses (income):

Cost of goods sold

i 1,956,459

i 1,533,768

i 5,157,834

i 3,936,930

Selling, general and administrative expenses

i 139,556

i 134,357

i 391,119

i 368,882

Interest expense

i 13,433

i 11,965

i 36,479

i 40,245

Loss on debt extinguishment

i 39

i —

i 16,091

i 16,841

Asset impairments

i 3,245

i 277

i 4,473

i 4,345

Gain on sale of assets

( i 2,024)

( i 3,909)

( i 276,106)

( i 9,390)

Net costs and operating expenses

i 2,110,708

i 1,676,458

i 5,329,890

i 4,357,853

Earnings before income taxes

i 405,019

i 168,583

i 1,176,526

i 341,261

Income taxes

i 92,590

i 38,175

i 247,894

i 80,709

Net earnings

i 312,429

i 130,408

i 928,632

i 260,552

Earnings per share:

Basic

i 2.58

i 1.08

i 7.66

i 2.17

Diluted

i 2.54

i 1.07

i 7.55

i 2.14

Average basic shares outstanding

i 121,247,105

i 120,613,652

i 121,277,553

i 120,241,579

Average diluted shares outstanding

i 122,799,869

i 122,193,655

i 122,927,291

i 121,852,144

See notes to condensed consolidated financial statements.

COMMERCIAL METALS COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

Three Months Ended May 31,

Nine Months Ended May 31,

(in thousands)

2022

2021

2022

2021

Net earnings

i 312,429

i 130,408

i 928,632

i 260,552

Other comprehensive income (loss), net of income taxes:

Foreign currency translation adjustment after reclassification

( i 14,668)

i 11,775

( i 68,817)

i 4,852

Derivatives:

Unrealized holding gain

i 25,927

i 12,145

i 81,378

i 21,032

Reclassification for realized gain

( i 5,107)

( i 616)

( i 13,453)

( i 929)

Net unrealized gain on derivatives

i 20,820

i 11,529

i 67,925

i 20,103

Defined benefit plans loss after amortization of prior service costs and net actuarial losses

( i 6)

( i 14)

( i 18)

( i 41)

Total other comprehensive income (loss), net of income taxes

i 6,146

i 23,290

( i 910)

i 24,914

Comprehensive income

i 318,575

i 153,698

i 927,722

i 285,466

See notes to condensed consolidated financial statements.

COMMERCIAL METALS COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(in thousands, except share and per share data)

May 31, 2022

August 31, 2021

Assets

Current assets:

Cash and cash equivalents

i 410,265

i 497,745

Restricted cash

i 126,264

i 3,384

Accounts receivable (less allowance for doubtful accounts of $ i 5,070 and $ i 5,553)

i 1,330,279

i 1,105,580

Inventories, net

i 1,346,286

i 935,387

Prepaid and other current assets

i 230,414

i 169,649

Assets held for sale

i 60

i 25,083

Total current assets

i 3,443,568

i 2,736,828

Property, plant and equipment, net

i 1,808,392

i 1,566,123

Intangible assets, net

i 266,440

i 10,101

Goodwill

i 253,563

i 66,137

Other noncurrent assets

i 331,739

i 259,482

Total assets

i 6,103,702

i 4,638,671

Liabilities and stockholders' equity

Current liabilities:

Accounts payable

i 492,947

i 450,723

Accrued expenses and other payables

i 474,653

i 475,384

Current maturities of long-term debt and short-term borrowings

i 423,091

i 54,366

Total current liabilities

i 1,390,691

i 980,473

Deferred income taxes

i 223,979

i 112,067

Other noncurrent liabilities

i 231,385

i 235,607

Long-term debt

i 1,115,478

i 1,015,415

Total liabilities

i 2,961,533

i 2,343,562

Commitments and contingencies (Note 15)

Stockholders' equity:

Common stock, par value $ i i 0.01 / per share; authorized i i 200,000,000 / shares; issued i i 129,060,664 / shares; outstanding i 120,490,407 and i 120,586,589 shares

i 1,290

Additional paid-in capital

i 375,386

i 368,064

Accumulated other comprehensive loss

( i 85,730)

( i 84,820)

Retained earnings

i 3,040,554

i 2,162,925

Less treasury stock i 8,570,257 and i 8,474,075 shares at cost

( i 189,563)

( i 152,582)

Stockholders' equity

i 3,141,937

i 2,294,877

Stockholders' equity attributable to non-controlling interests

i 232

Total stockholders' equity

i 3,142,169

i 2,295,109

Total liabilities and stockholders' equity

i 6,103,702

i 4,638,671

See notes to condensed consolidated financial statements.

COMMERCIAL METALS COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

Nine Months Ended May 31,

(in thousands)

2022

2021

Cash flows from (used by) operating activities:

Net earnings

i 928,632

i 260,552

Adjustments to reconcile net earnings to cash flows from (used by) operating activities:

Depreciation and amortization

i 125,943

i 125,176

Deferred income taxes and other long-term taxes

i 64,241

( i 17,175)

Stock-based compensation

i 37,856

i 35,558

Loss on debt extinguishment

i 16,052

i 16,841

Asset impairments

i 4,473

i 4,345

Other

i 1,449

i 243

Amortization of acquired unfavorable contract backlog

i —

( i 4,540)

Net gain on disposals of assets

( i 276,106)

( i 9,390)

Changes in operating assets and liabilities

( i 660,793)

( i 317,378)

Net cash flows from operating activities

i 241,747

i 94,232

Cash flows from (used by) investing activities:

Acquisitions, net of cash acquired

( i 552,449)

i —

Proceeds from the sale of property, plant and equipment and other

i 314,971

i 25,890

Capital expenditures

( i 294,346)

( i 127,395)

Proceeds from insurance

i 3,081

i —

Other

i —

( i 2,500)

Net cash flows used by investing activities

( i 528,743)

( i 104,005)

Cash flows from (used by) financing activities:

Proceeds from issuance of long-term debt, net

i 740,403

i 309,187

Repayments of long-term debt

( i 319,706)

( i 361,855)

Debt extinguishment costs

( i 13,642)

( i 13,128)

Debt issuance costs

( i 3,064)

( i 2,830)

Proceeds from accounts receivable facilities

i 327,665

i 145,864

Repayments under accounts receivable facilities

( i 290,666)

( i 118,312)

Treasury stock acquired

( i 55,597)

i —

Dividends

( i 51,003)

( i 43,295)

Stock issued under incentive and purchase plans, net of forfeitures

( i 10,132)

( i 3,807)

Contribution from non-controlling interest

i —

i 19

Net cash flows from (used by) financing activities

i 324,258

( i 88,157)

Effect of exchange rate changes on cash

( i 1,862)

( i 423)

Increase (decrease) in cash, restricted cash and cash equivalents

i 35,400

( i 98,353)

Cash, restricted cash and cash equivalents at beginning of period

i 501,129

i 544,964

Cash, restricted cash and cash equivalents at end of period

i 536,529

i 446,611

See notes to condensed consolidated financial statements.

Supplemental information:

Nine Months Ended May 31,

(in thousands)

2022

2021

Cash paid for income taxes

i 189,491

i 59,041

Cash paid for interest

i 34,394

i 43,403

Noncash activities:

Liabilities related to additions of property, plant and equipment

i 50,948

i 16,601

Cash and cash equivalents

i 410,265

i 443,120

Restricted cash

i 126,264

i 3,491

Total cash, restricted cash and cash equivalents

i 536,529

i 446,611

COMMERCIAL METALS COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED)

Three Months Ended May 31, 2022

Common Stock

Treasury Stock

(in thousands, except share and per share data)

Number of
Shares

Amount

Additional Paid-In
Capital

Accumulated
Other Comprehensive
Loss

Retained
Earnings

Number of
Shares

Amount

Non-controlling
Interest

Total

Balance, March 1, 2022

i 129,060,664

i 1,290

i 366,162

( i 91,876)

i 2,745,117

( i 7,564,796)

( i 150,978)

i 232

i 2,869,947

Net earnings

i 312,429

Other comprehensive income

i 6,146

Dividends ($ i 0.14 per share)

( i 16,992)

Treasury stock acquired

( i 1,006,387)

( i 38,587)

Issuance of stock under incentive and purchase plans, net of forfeitures

i 585

i 926

i 2

i 587

Stock-based compensation

i 8,639

Balance, May 31, 2022

i 129,060,664

i 1,290

i 375,386

( i 85,730)

i 3,040,554

( i 8,570,257)

( i 189,563)

i 232

i 3,142,169

Nine Months Ended May 31, 2022

Common Stock

Treasury Stock

(in thousands, except share and per share data)

Number of
Shares

Amount

Additional Paid-In
Capital

Accumulated
Other Comprehensive
Loss

Retained
Earnings

Number of
Shares

Amount

Non-controlling
Interest

Total

Balance, September 1, 2021

i 129,060,664

i 1,290

i 368,064

( i 84,820)

i 2,162,925

( i 8,474,075)

( i 152,582)

i 232

i 2,295,109

Net earnings

i 928,632

Other comprehensive loss

( i 910)

Dividends ($ i 0.42 per share)

( i 51,003)

Treasury stock acquired

( i 1,501,387)

( i 55,597)

Issuance of stock under incentive and purchase plans, net of forfeitures

( i 28,748)

i 1,405,205

i 18,616

( i 10,132)

Stock-based compensation

i 26,979

Reclassification of share-based liability awards

i 9,091

Balance, May 31, 2022

i 129,060,664

i 1,290

i 375,386

( i 85,730)

i 3,040,554

( i 8,570,257)

( i 189,563)

i 232

i 3,142,169

Three Months Ended May 31, 2021

Common Stock

Treasury Stock

(in thousands, except share and per share data)

Number of
Shares

Amount

Additional Paid-In
Capital

Accumulated
Other Comprehensive
Loss

Retained
Earnings

Number of
Shares

Amount

Non-controlling
Interest

Total

Balance, March 1, 2021

i 129,060,664

i 1,290

i 354,620

( i 102,140)

i 1,909,443

( i 8,552,449)

( i 153,952)

i 231

i 2,009,492

Net earnings

i 130,408

Other comprehensive income

i 23,290

Dividends ($ i 0.12 per share)

( i 14,768)

Issuance of stock under incentive and purchase plans, net of forfeitures

( i 633)

i 77,556

i 1,362

i 729

Stock-based compensation

i 7,446

Balance, May 31, 2021

i 129,060,664

i 1,290

i 361,433

( i 78,850)

i 2,025,083

( i 8,474,893)

( i 152,590)

i 231

i 2,156,597

Nine Months Ended May 31, 2021

Common Stock

Treasury Stock

(in thousands, except share and per share data)

Number of
Shares

Amount

Additional Paid-In
Capital

Accumulated
Other Comprehensive
Loss

Retained
Earnings

Number of
Shares

Amount

Non-controlling
Interest

Total

Balance, September 1, 2020

i 129,060,664

i 1,290

i 358,912

( i 103,764)

i 1,807,826

( i 9,839,759)

( i 175,063)

i 212

i 1,889,413

Net earnings

i 260,552

Other comprehensive income

i 24,914

Dividends ($ i 0.36 per share)

( i 43,295)

Issuance of stock under incentive and purchase plans, net of forfeitures

( i 26,280)

i 1,364,866

i 22,473

( i 3,807)

Stock-based compensation

i 23,381

Contribution of non-controlling interest

i 19

Reclassification of share-based liability awards

i 5,420

Balance, May 31, 2021

i 129,060,664

i 1,290

i 361,433

( i 78,850)

i 2,025,083

( i 8,474,893)

( i 152,590)

i 231

i 2,156,597

See notes to condensed consolidated financial statements.

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, 2021 (the "2021 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 and notes included in the 2021 Form 10-K. The results of operations for the three and nine 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 "corresponding period" relates to the relevant three or nine month period ended May 31, 2021.

Any reference in this Form 10-Q to a year refers to the fiscal year ended August 31st of that year, unless otherwise noted.

Recently Issued Accounting Pronouncements

i In October 2021, the Financial Accounting Standards Board issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. ASU 2021-08 requires that an acquirer recognize and measure contract assets and liabilities acquired in a business combination in accordance with ASU 2014-09, Revenue from Contracts with Customers (Topic 606). This standard is effective for annual periods beginning after December 15, 2022, including interim periods therein, with early adoption permitted. The guidance will be applied prospectively to acquisitions occurring on or after the effective date. The Company will continue to evaluate the impact of this guidance, which will depend on the contract assets and liabilities acquired in future business combinations.

In November 2021, the Financial Accounting Standards Board issued ASU 2021-10, Government Assistance (Topic 832): Disclosures by Business Entities About Government Assistance. ASU 2021-10 aims to increase the transparency of government assistance through the disclosure of the types of assistance, an entity's accounting for the assistance and the effect of the assistance on an entity's financial statements. This standard is effective for annual periods beginning after December 15, 2021, with early adoption permitted. The Company will continue to evaluate the impact of this guidance based on government assistance received.

NOTE 2. i ACQUISITION

On April 25, 2022 (the "Acquisition Date"), the Company completed the acquisition of TAC Acquisition Corp. ("Tensar"). The total cash purchase price, net of $ i 19.6 million cash acquired, was approximately $ i 550 million, subject to customary purchase price adjustments, and was funded through domestic cash on-hand.

Tensar is a leading global provider of innovative ground stabilization and soil reinforcement solutions through two major product lines: Tensar® geogrids and Geopier® foundation systems, which are complementary to the Company's existing concrete reinforcement product lines within North America and Europe. Geogrids are polymer-based products used for ground stabilization, soil reinforcement, and asphalt optimization in construction applications, including roadways, public infrastructure, and industrial facilities. Geopier foundation systems are ground improvement solutions that increase the load-bearing characteristics of ground structures and working surfaces and can be applied in soil types and construction situations in which traditional support methods are impractical or would make a project infeasible.

Tensar’s end customers include commercial, industrial and residential site developers, mining and oil and gas companies, transportation authorities, coastal and waterway authorities and waste management companies. Tensar serves customers in more than 80 national markets through its manufacturing facilities, the largest of which are located in Morrow, Georgia and Blackburn, England. The acquired operations in North America are presented within our North America reportable segment, and the remaining acquired operations are presented within our Europe reportable segment.

The Company accounts for business combinations by recognizing the assets acquired and liabilities assumed at the Acquisition Date fair value. In valuing acquired assets and liabilities, fair value estimates were determined using Level 3 inputs, including expected future cash flows and discount rates. While the Company uses its best estimates and assumptions as a part of the purchase price allocation process to accurately value assets acquired and liabilities assumed at the Acquisition Date, the Company’s estimates are inherently uncertain and subject to refinement. The results of operations of Tensar are reflected in the Company’s condensed consolidated financial statements from the Acquisition Date. The financial statements are not retrospectively adjusted for any adjustments that occur during the allowable one-year measurement period (the "Measurement Period"). Rather, any adjustments to provisional amounts identified during the Measurement Period will be recorded in the reporting period in which the adjustment is determined.

The table below presents the preliminary fair value that was allocated to Tensar's assets and liabilities based upon fair values as determined by the Company as of the Acquisition Date:


(in thousands)	Estimated Fair Value
Cash and cash equivalents	$	i 19,551
Accounts receivable	i 38,188
Inventories	i 38,810
Prepaid and other current assets	i 14,143
Defined benefit pension plan	i 14,620
Property, plant and equipment	i 88,541
Intangible assets	i 260,500
Goodwill	i 187,861
Other noncurrent assets	i 19,430
Accounts payable	( i 12,468)
Accrued expenses and other payables	( i 23,307)
Current maturities of long-term debt	( i 3,277)
Deferred income taxes	( i 48,683)
Other noncurrent liabilities	( i 17,597)
Long-term debt	( i 4,312)
Total assets acquired and liabilities assumed	$	i 572,000

The acquired inventory is comprised of finished goods, work in process and raw materials. The fair value of finished goods was calculated as the estimated selling price, adjusted for the selling costs, economic rents for use of intangibles assets involved with the disposal process and a reasonable profit margin. The fair value of work in process was calculated as the estimated selling price, adjusted for estimated costs to complete manufacturing, estimated selling costs and a reasonable profit margin. The fair value of raw materials approximates the historical carrying value or was calculated based on the estimated replacement cost. The portion of the total purchase accounting inventory adjustment recognized during the three and nine months ended May 31, 2022 was $ i 2.2 million, which was reflected as cost of goods sold as the related inventory was sold.

Defined Benefit Pension Plan

The Company recognized a net asset of $ i 14.6 million, representing the overfunded status of the acquired defined benefit pension plan. See Note 13, Employees' Retirement Plans, for more information on the acquired plan.

Property, Plant and Equipment

The fair value of real property was calculated using the cost approach for buildings and improvements and the sales comparison approach for land. The fair value of personal property was calculated using the cost approach. The cost approach measures the value by estimating the cost to acquire or construct comparable assets and adjusts for age and condition. The Company assigned real property a useful life ranging from i 5 to i 25 years and personal property a useful life ranging from i 1 to i 15 years.

Goodwill from acquisitions represents the excess of the purchase price over the fair value of net assets acquired. The factors contributing to the amount of goodwill are based on strategic and synergistic benefits that are expected to be realized from the acquisition, due in part to the complementing markets for engineered construction ground reinforcement and concrete reinforcement. For the period ended May 31, 2022, the Company added $ i 187.9 million of goodwill related to the Tensar acquisition. The recognized goodwill is not deductible for tax purposes.

The acquired intangible assets consist of:

(in thousands, except life in years)

Life in Years

Preliminary Fair Value

Developed technologies

i 1 to i 11 years

i 147,900

Trade names

i 8 to i 9 years or indefinite

i 57,000

Customer relationships

i 12 to i 17 years

i 53,200

In-process research and development

Indefinite

i 2,400

The fair value of developed technology was calculated using the income approach under the excess earnings method and considers selling and marketing and research and development costs, which were allocated based on patent lifecycles.

The fair value of trade names was calculated using the income approach, under the relief from royalty method. The relief from royalty method considers revenue derived from the corporate and product-specific trade names, the strength and relevance of the trade names in the marketplace and management’s plans to utilize the trade names going forward.

The fair value of customer relationships was calculated using the income approach, under the with-and-without method. The with-and-without method considers opportunity costs associated with lost profits in the absence of the existing customer base.

The fair value of in-process research and development was calculated using the cost approach and considers development costs, profit mark-up and opportunity cost.

Deferred Income Taxes

Deferred income tax liabilities include the expected future U.S. federal, state and foreign tax consequences associated with temporary differences between the preliminary fair values of the assets acquired and liabilities assumed and the respective tax bases. Tax rates utilized in calculating the deferred tax liabilities represent the appropriate tax rate for each respective jurisdiction. Deferred tax liabilities may be adjusted during the Measurement Period as the Company finalizes tax returns for periods prior to the Acquisition Date.

Other Assets Acquired and Liabilities Assumed

The Company used historical carrying values for trade accounts receivable and payables, as well as certain other current and noncurrent assets and liabilities, as their carrying values represented the fair value of those items as of the Acquisition Date.

The following table summarizes the financial results of Tensar from the Acquisition Date through the end of the third quarter of fiscal 2022 that are included in the Company’s condensed consolidated statement of earnings and condensed consolidated statement of comprehensive income.


(in thousands)	From the Acquisition Date to May 31, 2022
Net sales	$	i 27,962
Earnings before income taxes	i 1,656

Pro Forma Supplemental Information

Supplemental information on an unaudited pro forma basis is presented below as if the acquisition of Tensar occurred on September 1, 2020. The pro forma financial information is presented for comparative purposes only, based on certain factually supported 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, 2020. These results were not used as part of management's analysis of the financial results and performance of the Company. The pro forma adjustments do not reflect anticipated synergies, but rather include the nonrecurring impact of additional cost of sales from revalued inventory and the recurring income statement effects of fair value adjustments, such as depreciation and amortization. Further adjustments were made to remove the impact of Tensar's prior management fees, acquisition and integration expenses and interest on debt not assumed in the acquisition. The resulting tax effects of the business combination are also reflected below.

Three Months Ended May 31,

Nine Months Ended May 31,

(in thousands)

2022

2021

2022

2021

Pro forma net sales

i 2,554,295

i 1,908,133

i 6,657,257

i 4,854,727

Pro forma net earnings

i 318,736

i 134,854

i 942,369

i 261,218

The pro forma results presented above include, but are not limited to, adjustments to remove the impact of $ i 4.5 million and $ i 7.6 million of acquisition and integration expenses from the three and nine months ended May 31, 2022, respectively. Results also reflect increased amortization expense from revalued intangible assets of $ i 1.9 million and $ i 8.1 million in the three and nine months ended May 31, 2022, respectively, and $ i 3.1 million and $ i 9.3 million in the three and nine months ended May 31, 2021, respectively. The three and nine months ended May 31, 2022 include adjustments to remove $ i i 2.2 / million of increased cost of goods sold as a result of the revaluation of inventory, which similarly resulted in an $ i 8.7 million increase to cost of goods sold in the nine months ended May 31, 2021.

NOTE 3. CHANGES IN BUSINESS

Facility Closure and Disposition

In October 2019, the Company closed the melting operations at its Rancho Cucamonga facility, which was part of the North America segment, and in August 2020, the Company announced plans to sell the facility. Additionally, in September 2021, the Company ceased operations at a rebar fabrication facility adjacent to the Rancho Cucamonga facility. Due to these closures, the Company recorded $ i 13.4 million of expenses in the nine months ended May 31, 2021, all of which were recorded in the first two quarters of 2021, related to asset impairments, severance, pension curtailment, environmental obligations and vendor agreement terminations. Expenses recorded in the three and nine months ended May 31, 2022 were immaterial. The closures did not meet the criteria for discontinued operations.

As of August 31, 2021, the associated assets of the Rancho Cucamonga facility and the adjacent rebar fabrication facility ("the Rancho Cucamonga facilities"), comprised of property, plant and equipment, net, met the criteria for classification as held for sale. As such, the Company classified $ i i 24.9 / million within assets held for sale in the Company's consolidated balance sheet as of August 31, 2021.

On September 29, 2021, the Company entered into a definitive agreement to sell the assets associated with the Rancho Cucamonga facilities. On December 28, 2021, the sale of the Rancho Cucamonga facilities was completed for gross proceeds of $ i 313.0 million. A portion of the gross proceeds amounting to $ i 39.0 million were set aside in a restricted cash account to facilitate the purchase of like-kind assets. In January 2022, the Company used $ i 7.5 million of the restricted cash on a purchase of a like-kind asset. The remaining balance of $ i 31.5 million was included in restricted cash as of May 31, 2022.

NOTE 4. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

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

Three Months Ended May 31, 2022

(in thousands)

Foreign Currency Translation

Derivatives

Defined Benefit Obligation

Total AOCI

Balance, March 1, 2022

( i 159,829)

i 68,886

( i 933)

( i 91,876)

Other comprehensive income (loss) before reclassifications

( i 14,668)

i 32,302

( i 7)

i 17,627

Reclassification for gain (1)

i —

( i 6,342)

i —

( i 6,342)

Income tax (expense) benefit

i —

( i 5,140)

i 1

( i 5,139)

Net other comprehensive income (loss)

( i 14,668)

i 20,820

( i 6)

i 6,146

Balance, May 31, 2022

( i 174,497)

i 89,706

( i 939)

( i 85,730)

Nine Months Ended May 31, 2022

(in thousands)

Foreign Currency Translation

Derivatives

Defined Benefit Obligation

Total AOCI

Balance, September 1, 2021

( i 105,680)

i 21,781

( i 921)

( i 84,820)

Other comprehensive income (loss) before reclassifications

( i 68,817)

i 100,820

( i 23)

i 31,980

Reclassification for gain (1)

i —

( i 16,667)

i —

( i 16,667)

Income tax (expense) benefit

i —

( i 16,228)

i 5

( i 16,223)

Net other comprehensive income (loss)

( i 68,817)

i 67,925

( i 18)

( i 910)

Balance, May 31, 2022

( i 174,497)

i 89,706

( i 939)

( i 85,730)

Three Months Ended May 31, 2021

(in thousands)

Foreign Currency Translation

Derivatives

Defined Benefit Obligation

Total AOCI

Balance, March 1, 2021

( i 94,856)

( i 2,760)

( i 4,524)

( i 102,140)

Other comprehensive income (loss) before reclassifications

i 11,775

i 14,056

( i 14)

i 25,817

Reclassification for gain (1)

i —

( i 719)

i —

( i 719)

Income tax expense

i —

( i 1,808)

i —

( i 1,808)

Net other comprehensive income (loss)

i 11,775

i 11,529

( i 14)

i 23,290

Balance, May 31, 2021

( i 83,081)

i 8,769

( i 4,538)

( i 78,850)

Nine Months Ended May 31, 2021

(in thousands)

Foreign Currency Translation

Derivatives

Defined Benefit Obligation

Total AOCI

Balance, September 1, 2020

( i 87,933)

( i 11,334)

( i 4,497)

( i 103,764)

Other comprehensive income (loss) before reclassifications

i 4,852

i 25,028

( i 48)

i 29,832

Reclassification for gain (1)

i —

( i 1,106)

i —

( i 1,106)

Income tax (expense) benefit

i —

( i 3,819)

i 7

( i 3,812)

Net other comprehensive income (loss)

i 4,852

i 20,103

( i 41)

i 24,914

Balance, May 31, 2021

( i 83,081)

i 8,769

( i 4,538)

( i 78,850)

(1) Reclassifications for gains on derivatives included in net earnings are recorded in cost of goods sold in the condensed consolidated statements of earnings.

NOTE 5. REVENUE RECOGNITION

Each fabricated product contract sold by the North America segment represents a single performance obligation. Revenue from contracts where the Company provides fabricated product and installation services is recognized over time using an input measure, and these contracts represented i 7% and i 8% of net sales in the North America segment in the three and nine months ended May 31, 2022, respectively, and i 7% and i 10% of net sales in the North America segment in the three and nine months ended May 31, 2021, respectively. Revenue from contracts where the Company does not provide installation services is recognized over time using an output measure, and these contracts represented i 8% of net sales in the North America segment in both the three and nine months ended May 31, 2022, and i i 9 / % of net sales in the North America segment in both the three and nine months ended May 31, 2021. Remaining net sales in the North America segment were recognized at a point in time concurrent with the transfer of control, or as amounts were billed to the customer under an available practical expedient.

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

(in thousands)

May 31, 2022

August 31, 2021

Contract assets (included in accounts receivable)

i 58,350

i 64,168

Contract liabilities (included in accrued expenses and other payables)

i 23,214

i 23,948

The amount of revenue reclassified from August 31, 2021 contract liabilities during the nine months ended May 31, 2022 was approximately $ i 19.7 million.

Remaining Performance Obligations

Remaining performance obligations represent the transaction price of fabricated product contracts where revenue is recognized using an input or output measure for which work has not yet been performed. As of May 31, 2022, $ i 962.2 million was allocated to remaining performance obligations in the North America segment related to those contracts.

NOTE 6. INVENTORIES, NET

The majority of the Company's inventories are in the form of semi-finished and finished steel products. Under the Company’s vertically integrated business model, steel products are sold to external customers in various stages, from semi-finished billets through fabricated steel, leading these categories to be combined as finished goods.

The components of inventories were as follows:

(in thousands)

May 31, 2022

August 31, 2021

Raw materials

i 391,208

i 286,123

Work in process

i 9,488

i 6,881

Finished goods

i 945,590

i 642,383

Total

i 1,346,286

i 935,387

NOTE 7. GOODWILL AND OTHER INTANGIBLES

Goodwill by reportable segment is detailed in the following table:

(in thousands)

North America

Europe

Consolidated

Goodwill, gross

Balance at September 1, 2021

i 71,941

i 4,390

i 76,331

Foreign currency translation

i —

( i 451)

Acquisition

i 113,991

i 73,870

i 187,861

Balance at May 31, 2022

i 185,932

i 77,809

i 263,741

Accumulated impairment

Balance at September 1, 2021

( i 10,036)

( i 158)

( i 10,194)

Foreign currency translation

i —

i 16

Balance at May 31, 2022

( i 10,036)

( i 142)

( i 10,178)

Goodwill, net

Balance at September 1, 2021

i 61,905

i 4,232

i 66,137

Foreign currency translation

i —

( i 435)

Acquisition

i 113,991

i 73,870

i 187,861

Balance at May 31, 2022

i 175,896

i 77,667

i 253,563

Other intangible assets subject to amortization are detailed in the following table:

May 31, 2022

August 31, 2021

(in thousands)

Weighted Average Useful Lives

Gross
Carrying Amount

Accumulated Amortization

Net

Gross
Carrying Amount

Accumulated Amortization

Net

Patents

i 5 to i 7.5 years

i 7,203

i 4,352

i 2,851

i 7,203

i 3,621

i 3,582

Customer relationships

i 8 years

i 4,996

i —

i 6,079

i 5,629

i 450

Perpetual lease rights

i 80 years

i 3,943

i 807

i 3,136

i 4,395

i 860

i 3,535

Non-compete agreements

i 5 to i 7 years

i 3,050

i 1,046

i 2,004

i 3,050

i 778

i 2,272

Other

i 5 to i 15 years

i 939

i 745

i 194

i 939

i 677

i 262

Due to acquisition of Tensar:

Developed technologies

i 1 to i 11 years

i 147,900

i 1,902

i 145,998

i —

Customer relationships

i 12 to i 17 years

i 53,200

i 421

i 52,779

i —

Trade names

i 8 to i 9 years

i 2,406

i 28

i 2,378

i —

Total

i 223,637

i 14,297

i 209,340

i 21,666

i 11,565

i 10,101

Intangible assets with indefinite lives resulting from the acquisition of Tensar include trade names and in-process research and development with gross carrying amounts of $ i 54.7 million and $ i 2.4 million, respectively, at May 31, 2022. The Company did not have any significant intangible assets with indefinite lives at August 31, 2021.

Estimated amounts of amortization expense for the next five fiscal years are as follows:


	(in thousands)
Remainder of 2022	$	i 5,868
2023	i 23,363
2024	i 22,109
2025	i 20,551
2026	i 19,363

The following table presents the components of the total leased assets and lease liabilities and their classification in the Company's condensed consolidated balance sheets:

(in thousands)

Classification in Condensed Consolidated Balance Sheets

May 31, 2022

August 31, 2021

Assets:

Operating assets

Other noncurrent assets

i 134,321

i 112,202

Finance assets

Property, plant and equipment, net

i 59,791

i 55,308

Total leased assets

i 194,112

i 167,510

Liabilities:

Operating lease liabilities:

Current

Accrued expenses and other payables

i 31,185

i 26,433

Long-term

Other noncurrent liabilities

i 105,971

i 93,409

Total operating lease liabilities

i 137,156

i 119,842

Finance lease liabilities:

Current

Current maturities of long-term debt and short-term borrowings

i 18,060

i 16,040

Long-term

Long-term debt

i 36,905

i 36,104

Total finance lease liabilities

i 54,965

i 52,144

Total lease liabilities

i 192,121

i 171,986

The components of lease expense were as follows:

Three Months Ended May 31,

Nine Months Ended May 31,

(in thousands)

2022

2021

2022

2021

Operating lease expense

i 8,659

i 8,377

i 25,991

i 25,750

Finance lease expense:

Amortization of assets

i 3,268

i 3,270

i 9,722

i 9,729

Interest on lease liabilities

i 508

i 555

i 1,520

i 1,673

Total finance lease expense

i 3,776

i 3,825

i 11,242

i 11,402

Variable and short-term lease expense

i 6,046

i 4,584

i 16,197

i 13,871

Total lease expense

i 18,481

i 16,786

i 53,430

i 51,023

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

May 31, 2022

August 31, 2021

Weighted average remaining lease term (years):

Operating leases

i 5.4

i 6.2

Finance leases

i 3.4

i 3.6

Weighted average discount rate:

Operating leases

i 4.033

i 4.451

Finance leases

i 4.057

i 4.079

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

Nine Months Ended May 31,

(in thousands)

2022

2021

Cash paid for amounts included in the measurement of lease liabilities:

Operating cash outflows from operating leases

i 26,481

i 25,862

Operating cash outflows from finance leases

i 1,521

i 1,665

Financing cash outflows from finance leases

i 12,847

i 11,706

Right of use assets obtained in exchange for lease obligations:

Operating leases

i 45,949

i 23,019

Finance leases

i 15,670

i 14,002

Future maturities of lease liabilities at May 31, 2022 are presented in the following table:

(in thousands)

Operating Leases

Finance Leases

Year 1

i 36,496

i 19,890

Year 2

i 30,653

i 17,390

Year 3

i 24,942

i 12,538

Year 4

i 19,898

i 5,730

Year 5

i 13,750

i 2,467

Thereafter

i 28,500

i 331

Total lease payments

i 154,239

i 58,346

Less imputed interest

( i 17,083)

( i 3,381)

Present value of lease liabilities

i 137,156

i 54,965

NOTE 9. CREDIT ARRANGEMENTS

Long-term debt was as follows:

(in thousands)

Weighted Average Interest Rate as of May 31, 2022

May 31, 2022

August 31, 2021

2032 Notes

i 4.375%

i 300,000

i —

2031 Notes

i 3.875%

i 300,000

2030 Notes

i 4.125%

i 300,000

i —

2027 Notes

i 5.375%

i —

i 300,000

2023 Notes

i 4.875%

i 330,000

Series 2022 Bonds, due 2047

i 4.000%

i 145,060

i —

Poland Term Loan

i 7.890%

i 37,923

i 49,726

Short-term borrowings

i 6.180%

i 62,627

i 26,560

Other

i 4.560%

i 20,151

i 19,492

Finance leases

i 54,965

i 52,144

Total debt

i 1,550,726

i 1,077,922

Less unamortized debt issuance costs

( i 17,043)

( i 8,141)

Plus unamortized bond premium

i 4,886

i —

Total amounts outstanding

i 1,538,569

i 1,069,781

Less current maturities of long-term debt and short-term borrowings

( i 423,091)

( i 54,366)

Long-term debt

i 1,115,478

i 1,015,415

The Company's credit arrangements require compliance with certain non-financial and financial covenants, including an interest coverage ratio and a debt to capitalization ratio. At May 31, 2022, the Company believes it was in compliance with all covenants contained in its credit arrangements.

Senior Notes Activity

In January 2022, the Company issued $ i 300.0 million of i 4.125% Senior Notes due January 2030 (the "2030 Notes") and $ i 300.0 million of i 4.375% Senior Notes due March 2032 (the "2032 Notes"). Aggregate issuance costs associated with the 2030 Notes and 2032 Notes were approximately $ i 9.4 million. Interest on the 2030 Notes is payable semiannually on January 15 and July 15. Interest on the 2032 Notes is payable semiannually on March 15 and September 15.

In July 2017, the Company issued $ i 300.0 million of i 5.375% Senior Notes due July 2027 (the "2027 Notes"). In February 2022, the Company redeemed all of the 2027 Notes and recognized a $ i 16.1 million loss on debt extinguishment.

In May 2013, the Company issued $ i 330.0 million of i 4.875% Senior Notes due May 2023 (the "2023 Notes"). Accordingly, the 2023 Notes have been included within current maturities of long-term debt and short-term borrowings in the condensed consolidated balance sheet as of May 31, 2022.

In February 2022, the Company announced the issuance of $ i 145.1 million in original aggregate principal amount of tax-exempt bonds (the “Series 2022 Bonds”) by the Industrial Development Authority of the County of Maricopa (the "MCIDA"). The Series 2022 Bonds were priced to yield i 3.5% and provided gross proceeds of $ i 150.0 million. The proceeds were loaned to the Company pursuant to a loan agreement between the Company and the MCIDA and will be used to fund a portion of the acquisition, construction, equipping and/or operation, as applicable, of the Company’s third micro mill, which is under construction in Mesa, Arizona. Proceeds from the Series 2022 Bonds are being held in a trust account and will be disbursed as qualified expenditures are made for the construction of the micro mill. As of May 31, 2022, $ i 58.0 million of proceeds were disbursed from the trust account. Remaining proceeds from the Series 2022 Bonds were recorded as restricted cash in the condensed consolidated balance sheet as of May 31, 2022.

Issuance costs associated with the Series 2022 Bonds were $ i 3.1 million. The Series 2022 Bonds accrue interest at i 4.0%, payable semiannually, and have a maturity date in October 2047.

The Company had i i no / amounts drawn under its $ i 400.0 million revolving credit facility (the "Revolver") at May 31, 2022 or August 31, 2021. The availability under the Revolver was reduced by outstanding stand-by letters of credit totaling $ i 1.4 million and $ i 3.0 million at May 31, 2022 and August 31, 2021, respectively.

The Company has a Term Loan facility (the "Poland Term Loan") through its subsidiary, CMC Poland Sp. z.o.o. ("CMCP"). At May 31, 2022, PLN i 161.9 million, or $ i 37.9 million, was outstanding, compared to the maximum amount available under the facility, PLN i 190.5 million, or $ i 49.7 million, which was outstanding as of August 31, 2021.

The Company also has credit facilities in Poland through its subsidiary, CMCP. At May 31, 2022 and August 31, 2021, CMCP's credit facilities totaled PLN i 300.0 million, or $ i 70.3 million and $ i 78.3 million, respectively. There were i i no / amounts outstanding under these facilities as of May 31, 2022 or August 31, 2021. The available balance of these credit facilities was reduced by outstanding stand-by letters of credit, guarantees and/or other financial assurance instruments, which totaled $ i 0.9 million and $ i 5.7 million at May 31, 2022 and August 31, 2021, respectively.

Accounts Receivable Facilities

The Company had no advance payments outstanding under its U.S. trade accounts receivable facility at May 31, 2022 or August 31, 2021.

The Poland accounts receivable facility had a limit of PLN i 288.0 million, or $ i 67.5 million, at May 31, 2022. The Company had PLN i 267.4 million, or $ i 62.6 million, advance payments outstanding under the Poland accounts receivable facility at May 31, 2022, compared to PLN i 101.7 million, or $ i 26.6 million, advance payments outstanding at August 31, 2021.

NOTE 10. 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 net earnings 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) natural gas and electricity commodity derivatives to mitigate the risk related to price volatility of these commodities.

At May 31, 2022, the notional values of the Company's foreign currency and commodity contract commitments were $ i 377.2 million and $ i 228.8 million, respectively. At August 31, 2021, the notional values of the Company's foreign currency and commodity contract commitments were $ i 389.5 million and $ i 213.4 million, respectively.

The following table provides information regarding the Company's commodity contract commitments at May 31, 2022:

Commodity

Long/Short

Total

Aluminum

Long

i 3,300

Aluminum

Short

i 1,525

Copper

Long

i 975

Copper

Short

i 8,482

Electricity

Long

i 1,717,000

MW(h)

Natural Gas

Long

i 4,870,250

MMBtu

MW(h) = Megawatt hour

MMBtu = Metric Million British thermal unit

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 tables summarize activities related to the Company's derivative instruments and hedged items 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 May 31,

Nine Months Ended May 31,

Gain (Loss) on Derivatives Not Designated as Hedging Instruments (in thousands)

Primary Location

2022

2021

2022

2021

Commodity

Cost of goods sold

i 2,042

( i 7,921)

i 2,574

( i 24,535)

Foreign exchange

SG&A expenses

i 6,157

i 1,915

( i 2,886)

i 75


Effective Portion of Derivatives Designated as Cash Flow Hedging Instruments Recognized in Accumulated Other Comprehensive Loss (in thousands)	Three Months Ended May 31,				Nine Months Ended May 31,
	2022		2021		2022		2021
Commodity	$	i 25,920	$	i 12,167	$	i 81,285	$	i 20,971

The Company's natural gas and electricity commodity derivatives accounted for as cash flow hedging instruments have maturities extending to May 2025 and December 2030, respectively. Included in the AOCI balance as of May 31, 2022 was an estimated net gain of $ i 16.1 million from cash flow hedging instruments that is expected to be reclassified into earnings within the next twelve months. See Note 11, Fair Value, for the fair value of the Company's derivative instruments recorded in the condensed consolidated balance sheets.

i The Company has established a fair value hierarchy which prioritizes the inputs to the valuation techniques used to measure fair value into i 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 within the Nature of Operations and Summary of Significant Accounting Policies footnote in the 2021 Form 10-K. /

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)

May 31, 2022

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)

i 318,095

i —

Commodity derivative assets (2)

i 109,225

i 15,905

i —

i 93,320

Foreign exchange derivative assets (2)

i 5,998

i —

i 5,998

i —

Liabilities:

Commodity derivative liabilities (2)

i 1,305

i —

Foreign exchange derivative liabilities (2)

i 3,568

i —

i 3,568

i —

Fair Value Measurements at Reporting Date Using

(in thousands)

August 31, 2021

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)

i 441,297

i —

Commodity derivative assets (2)

i 27,323

i 910

i —

i 26,413

Foreign exchange derivative assets (2)

i 2,537

i —

i 2,537

i —

Liabilities:

Commodity derivative liabilities (2)

i 1,352

i —

Foreign exchange derivative liabilities (2)

i 1,880

i —

i 1,880

i —

(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. Derivatives classified as Level 3 are described below. Further discussion regarding the Company's use of derivative instruments is included in Note 10, Derivatives.

The fair value estimate of the Level 3 commodity derivative is based on an internally developed discounted cash flow model primarily utilizing unobservable inputs for which there is little or no market data. The Company forecasts future energy rates using a range of historical prices ("floating rate"). The floating rate is the only significant unobservable input used in the Company's discounted cash flow model. The following table summarizes the floating rate used to measure the fair value of the commodity derivative at May 31, 2022 and 2021:

Floating rate (PLN)

May 31,

Low

High

Average

2022

i 343.25

i 815.64

i 539.32

2021

i 217.38

i 296.36

i 251.10

i Below is a reconciliation of the beginning and ending balances of the Level 3 commodity derivative recognized in the condensed consolidated statements of comprehensive income. The fluctuation in energy rates over time causes volatility in the

fair value estimate and is the primary reason for unrealized gains included in other comprehensive income ("OCI") in the three and nine months ended May 31, 2022 and 2021.


(in thousands)	Three Months Ended May 31, 2022
Balance, March 1, 2022	$	i 78,879

Total gains, realized and unrealized:
Unrealized holding gain before reclassification (1)	i 19,201
Reclassification for gain included in net earnings (2)	( i 4,760)
Balance, May 31, 2022	$	i 93,320

(in thousands)	Nine Months Ended May 31, 2022
Balance, September 1, 2021	$	i 26,413

Total gains, realized and unrealized:
Unrealized holding gain before reclassification (1)	i 81,039
Reclassification for gain included in net earnings (2)	( i 14,132)
Balance, May 31, 2022	$	i 93,320

(in thousands)	Three Months Ended May 31, 2021
Balance, March 1, 2021	$	( i 4,285)

Total gains, realized and unrealized:
Unrealized holding gain before reclassification (1)	i 15,459
Reclassification for gain included in net earnings (2)	( i 693)
Balance, May 31, 2021	$	i 10,481

(in thousands)	Nine Months Ended May 31, 2021
Balance, September 1, 2020	$	( i 15,007)

Total gains, realized and unrealized:
Unrealized holding gain before reclassification (1)	i 26,434
Reclassification for gain included in net earnings (2)	( i 946)
Balance, May 31, 2021	$	i 10,481

(1) Unrealized holding gains, less amounts reclassified, are included in OCI in the condensed consolidated statements of comprehensive income.

(2) Gains included in net earnings are recorded in cost of goods sold in the condensed consolidated statements of earnings.

There were no material, non-recurring fair value remeasurements during the three and nine months ended May 31, 2022 or 2021.

The carrying values of the Company's short-term items, including documentary letters of credit and notes payable, 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 in the condensed consolidated balance sheets were as follows:

May 31, 2022

August 31, 2021

(in thousands)

Fair Value Hierarchy

Carrying Value

Fair Value

Carrying Value

Fair Value

2032 Notes (1)

Level 2

i 300,000

i 264,993

i —

2031 Notes (1)

Level 2

i 300,000

i 261,390

i 300,000

i 306,279

2030 Notes (1)

Level 2

i 300,000

i 271,815

i —

2027 Notes (1)

Level 2

i —

i 300,000

i 316,839

2023 Notes (1)

Level 2

i 330,000

i 333,736

i 330,000

i 348,071

Series 2022 Bonds, due 2047 (1)

Level 2

i 145,060

i 126,778

i —

Poland Term Loan (2)

Level 2

i 37,923

i 49,726

Short-term borrowings (2)

Level 2

i 62,627

i 26,560

(1) The fair values of the notes and the Series 2022 Bonds were determined based on indicated market values.

(2) The Poland Term Loan and short-term borrowings contain variable interest rates, and as a result, the carrying values approximate fair value.

NOTE 12. STOCK-BASED COMPENSATION PLANS

The Company's stock-based compensation plans are described in Note 13, Stock-Based Compensation Plans, to the consolidated financial statements in the 2021 Form 10-K. In general, restricted stock units vest ratably over a period of i three years. Subject to the achievement of performance targets established by the Compensation Committee of CMC's Board of Directors, performance stock units vest after a period of i three years.

During the nine months ended May 31, 2022 and 2021, the Company granted the following awards under its stock-based compensation plans:

May 31, 2022

May 31, 2021

(in thousands, except share and per share data)

Shares Granted

Weighted Average Grant Date Fair Value

Shares Granted

Weighted Average Grant Date Fair Value

Equity method

i 1,467

i 28.16

i 1,512

i 20.51

Liability method

i 261

N/A

i 324

N/A

The Company recorded i i immaterial / mark-to-market adjustments on liability awards for the three and nine months ended May 31, 2022, and recorded expense of $ i 3.2 million and $ i 5.0 million for the three and nine months in the corresponding periods. At May 31, 2022, the Company had outstanding i 591,483 equivalent shares accounted for under the liability method. The Company expects i 561,908 equivalent shares to vest.

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


	Three Months Ended May 31,				Nine Months Ended May 31,
(in thousands)	2022		2021		2022		2021
Stock-based compensation expense	$	i 11,986	$	i 13,800	$	i 37,856	$	i 35,558

NOTE 13. EMPLOYEES' RETIREMENT PLANS

Following the acquisition of Tensar, the Company assumed the TGL Pension Plan in the United Kingdom ("U.K.") ("U.K. Pension Plan"), a defined benefit pension plan. The U.K. Pension Plan provides retirement benefit payments for participating retired employees and their spouses, and was closed to new entrants prior to the acquisition. The Company’s funding policy for the U.K. Pension Plan is to contribute annually the amount necessary to provide for benefits based on accrued service and to contribute at least the minimum required by applicable regulations.

See Note 14, Employees' Retirement Plans, to the consolidated financial statements in the 2021 Form 10-K for information on the Company's other defined benefit pension plan and defined contribution retirement plan.

Net periodic benefit costs for the Company's defined benefit plans are recorded in selling, general and administrative expenses within the condensed consolidated statements of earnings. Net periodic pension expense was immaterial for the three and nine months ended May 31, 2022 and 2021.

NOTE 14. STOCKHOLDERS' EQUITY AND EARNINGS PER SHARE

Basic earnings per share ("EPS") is computed based on the weighted average shares of common stock outstanding during the period. Diluted EPS is computed based on the weighted average shares of common stock plus the effect of dilutive securities outstanding during the period using the treasury stock method. The effect of dilutive securities includes the impact of outstanding stock-based incentive awards and shares purchased by employees through participation in the Company's employee stock purchase plan.

The calculations of basic and diluted EPS were as follows:

Three Months Ended May 31,

Nine Months Ended May 31,

(in thousands, except share and per share data)

2022

2021

2022

2021

Net earnings

i 312,429

i 130,408

i 928,632

i 260,552

Average basic shares outstanding

i 121,247,105

i 120,613,652

i 121,277,553

i 120,241,579

Effect of dilutive securities

i 1,552,764

i 1,580,003

i 1,649,738

i 1,610,565

Average diluted shares outstanding

i 122,799,869

i 122,193,655

i 122,927,291

i 121,852,144

Earnings per share:

Basic

i 2.58

i 1.08

i 7.66

i 2.17

Diluted

i 2.54

i 1.07

i 7.55

i 2.14

Anti-dilutive shares not included above were immaterial for all periods presented.

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

In October 2021, CMC's Board of Directors authorized a share repurchase program under which CMC may repurchase up to $ i 350.0 million of shares of common stock. During the three and nine months ended May 31, 2022, the Company repurchased i 1,006,387 and i 1,501,387 shares of CMC common stock, respectively, at an average purchase price of $ i 38.34 and $ i 37.02 per share, respectively. CMC had remaining authorization to repurchase $ i 294.4 million of shares of common stock at May 31, 2022.

i NOTE 15. COMMITMENTS AND CONTINGENCIES

In the ordinary course of conducting its business, the Company becomes involved in litigation, administrative proceedings and governmental investigations, including environmental matters. At May 31, 2022 and August 31, 2021, the amounts accrued for cleanup and remediation costs at certain sites in response to statutes enforced by the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 ("CERCLA") were immaterial. Total accrued environmental liabilities, including CERCLA sites, were $ i 3.4 million and $ i 7.1 million at May 31, 2022 and August 31, 2021, respectively, of which $ i 2.2 million and $ i 2.3 million were classified as other long-term liabilities at May 31, 2022 and August 31, 2021, respectively. These amounts have not been discounted to their present values. Due to evolving remediation technology, changing regulations, possible third-party contributions, the inherent uncertainties of the estimation process and other factors, amounts accrued could vary significantly from amounts paid.

NOTE 16. BUSINESS SEGMENTS

The Company structures its business into i two reportable segments: North America and Europe. See Note 1, Nature of Operations and Summary of Significant Accounting Policies, to the consolidated financial statements in the 2021 Form 10-K and Note 2, Acquisition, for more information about the reportable 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 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 following is a summary of certain financial information by reportable segment and Corporate and Other:

Three Months Ended May 31, 2022

(in thousands)

North America

Europe

Corporate and Other

Total

Net sales

i 2,033,150

i 484,564

( i 1,987)

i 2,515,727

Adjusted EBITDA

i 379,355

i 120,974

( i 35,049)

i 465,280

Nine Months Ended May 31, 2022

(in thousands)

North America

Europe

Corporate and Other

Total

Net sales

i 5,300,996

i 1,209,378

( i 3,958)

i 6,506,416

Adjusted EBITDA

i 1,183,342

i 281,955

( i 121,876)

i 1,343,421

Total assets at May 31, 2022

i 4,297,473

i 1,164,918

i 641,311

i 6,103,702

Three Months Ended May 31, 2021

(in thousands)

North America

Europe

Corporate and Other

Total

Net sales

i 1,558,068

i 284,107

i 2,866

i 1,845,041

Adjusted EBITDA

i 207,330

i 50,005

( i 36,214)

i 221,121

Nine Months Ended May 31, 2021

(in thousands)

North America

Europe

Corporate and Other

Total

Net sales

i 4,010,567

i 680,769

i 7,778

i 4,699,114

Adjusted EBITDA

i 534,576

i 80,582

( i 108,671)

i 506,487

Total assets at August 31, 2021

i 3,221,465

i 729,766

i 687,440

i 4,638,671

i The following table presents a reconciliation of net earnings to adjusted EBITDA:

Three Months Ended May 31,

Nine Months Ended May 31,

(in thousands)

2022

2021

2022

2021

Net earnings

i 312,429

i 130,408

i 928,632

i 260,552

Interest expense

i 13,433

i 11,965

i 36,479

i 40,245

Income taxes

i 92,590

i 38,175

i 247,894

i 80,709

Depreciation and amortization

i 43,583

i 41,804

i 125,943

i 125,176

Asset impairments

i 3,245

i 277

i 4,473

i 4,345

Amortization of acquired unfavorable contract backlog

i —

( i 1,508)

i —

( i 4,540)

Adjusted EBITDA

i 465,280

i 221,121

i 1,343,421

i 506,487

Disaggregation of Revenue

i The following tables display revenue by reportable segment and Corporate and Other from external customers, disaggregated by major product. Construction-related solutions represents sales of ground stabilization and soil reinforcement solutions and sales from our Construction Services business, which sells and rents construction-related products and equipment to concrete installers and other companies in the construction industry:

Three Months Ended May 31, 2022

(in thousands)

North America

Europe

Corporate and Other

Total

Major product:

Raw materials

i 435,171

i 7,406

i —

i 442,577

Steel products

i 851,762

i 367,810

i —

i 1,219,572

Downstream products

i 587,568

i 88,667

i —

i 676,235

Construction-related solutions

i 121,285

i 9,481

i —

i 130,766

Other

i 37,356

i 10,641

( i 1,420)

i 46,577

Net sales from external customers

i 2,033,142

i 484,005

( i 1,420)

i 2,515,727

Intersegment net sales, eliminated on consolidation

i 8

i 559

( i 567)

i —

Net sales

i 2,033,150

i 484,564

( i 1,987)

i 2,515,727

Nine Months Ended May 31, 2022

(in thousands)

North America

Europe

Corporate and Other

Total

Major product:

Raw materials

i 1,155,204

i 20,230

i —

i 1,175,434

Steel products

i 2,192,851

i 931,369

i —

i 3,124,220

Downstream products

i 1,561,717

i 218,280

i —

i 1,779,997

Construction-related solutions

i 287,422

i 9,481

i —

i 296,903

Other

i 103,794

i 28,556

( i 2,488)

i 129,862

Net sales from external customers

i 5,300,988

i 1,207,916

( i 2,488)

i 6,506,416

Intersegment net sales, eliminated on consolidation

i 8

i 1,462

( i 1,470)

i —

Net sales

i 5,300,996

i 1,209,378

( i 3,958)

i 6,506,416

Three Months Ended May 31, 2021

(in thousands)

North America

Europe

Corporate and Other

Total

Major product:

Raw materials

i 346,614

i 5,904

i —

i 352,518

Steel products

i 626,084

i 215,088

i —

i 841,172

Downstream products

i 475,714

i 56,444

i —

i 532,158

Construction-related solutions

i 77,549

i —

i 77,549

Other

i 32,107

i 6,277

i 3,260

i 41,644

Net sales from external customers

i 1,558,068

i 283,713

i 3,260

i 1,845,041

Intersegment net sales, eliminated on consolidation

i —

i 394

( i 394)

i —

Net sales

i 1,558,068

i 284,107

i 2,866

i 1,845,041

Nine Months Ended May 31, 2021

(in thousands)

North America

Europe

Corporate and Other

Total

Major product:

Raw materials

i 811,863

i 13,509

i —

i 825,372

Steel products

i 1,597,942

i 524,025

i —

i 2,121,967

Downstream products

i 1,313,140

i 124,679

i —

i 1,437,819

Construction-related solutions

i 205,548

i —

i 205,548

Other

i 82,074

i 17,244

i 9,090

i 108,408

Net sales from external customers

i 4,010,567

i 679,457

i 9,090

i 4,699,114

Intersegment net sales, eliminated on consolidation

i —

i 1,312

( i 1,312)

i —

Net sales

i 4,010,567

i 680,769

i 7,778

i 4,699,114

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 (this "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, 2021 (the "2021 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 was 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 Item 2 of this Form 10-Q and in the sections entitled "Risk Factors" in Part I, Item 1A of our 2021 Form 10-K and Part II, Item 1A of 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 "corresponding period" relates to the relevant three or nine month period ended May 31, 2021.

On April 25, 2022 (the "Acquisition Date"), the Company completed the acquisition of TAC Acquisition Corp. ("Tensar") for approximately $550 million, net of cash acquired. Through its patented foundation systems, Tensar produces ground stabilization and soil reinforcement solutions that complement the Company’s existing concrete reinforcement product lines. End customers for these products include commercial, industrial and residential site developers, mining and oil and gas companies, transportation authorities, coastal and waterway authorities and waste management companies. The acquired operations within North America are presented within our North America reportable segment and the remaining acquired operations are presented within our Europe reportable segment. See Note 2, Acquisition, for more information about the Tensar acquisition.

Russian Invasion of Ukraine

The Russian invasion of Ukraine has not had a direct material adverse impact on our business, financial condition or results of operations during the nine months ended May 31, 2022. Our Europe segment identified alternate sources for a limited number of materials previously procured through Russia and has not had an interruption in energy supply; therefore, we do not believe there will be resulting disruptions in supply that would impede production meeting demand. However, we will continue to monitor the indirect effects on our operations of inflationary pressures, foreign exchange rate fluctuations, commodity pricing, potential cybersecurity risks and sanctions resulting from the invasion.

The impact of the COVID-19 pandemic ("COVID-19" or "pandemic") on our operations was limited during the nine months ended May 31, 2022 and 2021. We continue to evaluate the nature and extent of future impacts of the evolving pandemic on our operations and are complying with applicable U.S. federal, state and local law and considering relevant guidance, including the guidelines of the U.S. Centers for Disease Control and other authorities, to prioritize the health and safety of our employees, families, suppliers, customers and communities. Given the dynamic and uncertain nature and duration of the pandemic, we cannot reasonably estimate the long-term impact of COVID-19 on our business, results of operations and overall financial performance at this time.

See Part I, Item 1A, Risk Factors, of our 2021 Form 10-K and Part II, Item 1A, Risk Factors of this Form 10-Q for further discussion related to the above business conditions.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

There have been no material changes to our critical accounting policies and estimates as set forth in Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations, included in our 2021 Form 10-K.

RESULTS OF OPERATIONS SUMMARY

As a vertically integrated organization, we manufacture, recycle and fabricate steel and metal products and provide related materials and services through a network of facilities that includes seven electric arc furnace ("EAF") mini mills, two EAF micro mills, one rerolling mill, steel fabrication and processing plants, construction-related product warehouses and metal recycling facilities in the United States and Poland. Through our Tensar division, we are a leading global provider of innovative ground and soil stabilization solutions selling into more than 80 national markets through its two major product lines: Tensar® geogrids and Geopier® foundation systems. Our operations are conducted through two reportable segments: North America and Europe.

When considering our results for the period, we evaluate our operating performance by comparing net sales, in the aggregate and for both of our segments, in the current period to net sales in the corresponding period. In doing so, we focus on changes in average selling price per ton and tons shipped for each of our vertically integrated product categories (raw materials, steel products and downstream products) as these are the two variables that typically have the greatest impact on our results of operations. Raw materials include ferrous and nonferrous scrap, steel products include rebar, merchant and other steel products, such as billets and wire rod, and downstream products include fabricated rebar and steel fence post.

Key Performance Indicators

Adjusted EBITDA is used by management to compare and evaluate the period-over-period underlying business operational performance of our segments. Adjusted EBITDA is the sum of the Company's earnings before interest expense, income taxes, depreciation and amortization and impairment expense. Although there are many factors that can impact a segment’s adjusted EBITDA and, therefore, our overall earnings, changes in steel products metal margin and downstream products margin over scrap costs period-over-period are consistent areas of focus for our Company and industry. Steel products metal margin and downstream products margin over scrap costs are metrics used by management to monitor the results of our vertically integrated organization. Steel products metal margin is the difference between the average selling price per ton of rebar, merchant and other steel products and the cost of ferrous scrap per ton utilized by our steel mills to produce these products. An increase or decrease in input costs can impact profitability of these products when there is no corresponding change in selling prices due to competitive pressures on prices. Downstream products margin over scrap costs is the difference between the average selling price per ton of fabricated rebar and steel fence post products and the scrap input costs to produce these products. The majority of our downstream products selling prices per ton are fixed at the beginning of a project and these projects last one to two years on average. Because the selling price generally remains fixed over the life of a project, changes in input costs over the life of the project can significantly impact profitability.

Financial Results Overview


	Three Months Ended May 31,				Nine Months Ended May 31,
(in thousands, except per share data)	2022		2021		2022		2021
Net sales	$	2,515,727	$	1,845,041	$	6,506,416	$	4,699,114
Net earnings	312,429		130,408		928,632		260,552
Diluted earnings per share	$	2.54	$	1.07	$	7.55	$	2.14


(in thousands)	Liquidity Sources and Facilities		Availability
Cash and cash equivalents	$	410,265	$	410,265
Notes due from 2023 to 2032	1,230,000		*
Revolver	400,000		398,604
U.S. accounts receivable facility	150,000		150,000
Series 2022 Bonds, due 2047 **	145,060		—
Poland credit facilities	70,269		69,371
Poland accounts receivable facility	67,458		4,831
Poland Term Loan	37,923		—
Other	4,258		1,511


Issuer Purchases of Equity Securities(1)
Period	Total Number of Shares Purchased	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs as of the End of Period
March 1, 2022 - March 31, 2022	126,800	$	40.16	126,800	$	327,907,153
April 1, 2022 - April 30, 2022	122,256	42.15		122,256	322,754,443
May 1, 2022 - May 31, 2022	757,331	37.42		757,331	294,411,671
	1,006,387			1,006,387


			COMMERCIAL METALS COMPANY

June 22, 2022			/s/ *Paul J. Lawrence*
			Paul J. Lawrence
			Senior Vice President and Chief Financial Officer
			(Duly authorized officer and principal financial officer of the registrant)

This ‘10-Q’ Filing	Date	Other Filings

	12/15/22
Filed on:	6/22/22
	6/21/22	8-K
For Period end:	5/31/22
	5/1/22
	4/30/22
	4/25/22	8-K
	4/1/22	4
	3/31/22
	3/1/22
	12/28/21
	12/15/21
	10/13/21	4, 8-K
	9/29/21	8-K
	9/1/21
	8/31/21	10-K
	5/31/21	10-Q
	3/1/21	4
	9/1/20	4
		List all Filings

Commercial Metals Co. – ‘10-Q’ for 5/31/22

On: Wednesday, 6/22/22, at 1:16pm ET · For: 5/31/22 · Accession #: 22444-22-92 · File #: 1-04304

Previous ‘10-Q’: ‘10-Q’ on 3/23/22 for 2/28/22 · Next: ‘10-Q’ on 1/9/23 for 11/30/22 · Latest: ‘10-Q’ on 3/26/24 for 2/29/24 · 6 References:

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PART I — FINANCIAL INFORMATION			3

Item 1. Financial Statements			3
Condensed Consolidated Statements of Earnings (Unaudited) - Three and nine months ended May 31, 2022 and 2021			3
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - Three and nine months ended May 31, 2022 and 2021			4
Condensed Consolidated Balance Sheets (Unaudited) - May 31, 2022 and August 31, 2021			5
Condensed Consolidated Statements of Cash Flows (Unaudited) - Nine months ended May 31, 2022 and 2021			6
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - Three and nine months ended May 31, 2022 and 2021			7
Notes to Condensed Consolidated Financial Statements (Unaudited)			9
Note 1. Accounting Policies			9
Note 2. Acquisition			9
Note 3. Changes in Business			12
Note 4. Accumulated Other Comprehensive Income (Loss)			13
Note 5. Revenue Recognition			14
Note 6. Inventories, Net			14
Note 7. Goodwill and Other Intangibles			15
Note 8. Leases			16
Note 9. Credit Arrangements			17
Note 10. Derivatives			19
Note 11. Fair Value			20
Note 12. Stock-Based Compensation Plans			22
Note 13. Employees' Retirement Plans			22
Note 14. Stockholders' Equity and Earnings Per Share			23
Note 15. Commitments and Contingencies			23
Note 16. Business Segments			24
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations			26
Item 3. Quantitative and Qualitative Disclosures About Market Risk			36
Item 4. Controls and Procedures			37

PART II — OTHER INFORMATION			38

Item 1. Legal Proceedings			38
Item 1A. Risk Factors			38
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			38
Item 3. Defaults Upon Senior Securities			39
Item 4. Mine Safety Disclosures			39
Item 5. Other Information			39
Item 6. Exhibits			40
Signature			41

Commercial Metals Co. – ‘10-Q’ for 5/31/22

On: Wednesday, 6/22/22, at 1:16pm ET · For: 5/31/22 · Accession #: 22444-22-92 · File #: 1-04304

Quarterly Report — Form 10-QFiling Table of Contents

‘10-Q’ — Quarterly ReportDocument Table of Contents

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Quarterly Report — Form 10-Q

Filing Table of Contents

‘10-Q’ — Quarterly Report

Document Table of Contents