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CREDIT ARRANGEMENTS | 9 Months Ended
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May 31, 2016
Debt Disclosure [Abstract] |
Credit arrangements | NOTE 7. CREDIT ARRANGEMENTS On June 26, 2014, the Company entered into a fourth amended and restated credit agreement (the "Credit Agreement") for a revolving credit facility of $350.0 million with a maturity date of June 26, 2019. The maximum availability under the Credit Agreement can be increased to $500.0 million with bank approval. The Company's obligation under its Credit Agreement is collateralized by its U.S. inventory. The Credit Agreement's capacity includes $50.0 million for the issuance of stand-by letters of credit and was reduced by outstanding stand-by letters of credit which totaled $1.7 million and $23.4 million at May 31, 2016 and August 31, 2015, respectively. Under the Credit Agreement, the Company is required to comply with certain financial and non-financial covenants, including covenants to maintain: (i) an interest coverage ratio (consolidated EBITDA to consolidated interest expense, as each is defined in the Credit Agreement) of not less than 2.50 to 1.00 and (ii) a debt to capitalization ratio (consolidated funded debt to total capitalization, as each is defined in the Credit Agreement) that does not exceed 0.60 to 1.00. In addition, beginning on the date three months prior to each maturity date of the Company's 2017 Notes and 2018 Notes, as defined below, and each day thereafter that the 2017 Notes and the 2018 Notes are outstanding, the Company will be required to maintain liquidity of at least $150.0 million in excess of each of the outstanding aggregate principal amounts of the 2017 Notes and 2018 Notes. Loans under the Credit Agreement bear interest based on the Eurocurrency rate, a base rate, or the LIBOR rate. At May 31, 2016, the Company's interest coverage ratio was 4.70 to 1.00, and the Company's debt to capitalization ratio was 0.44 to 1.00. The Company had no amount drawn under the Credit Agreement at May 31, 2016 and August 31, 2015. In May 2013, the Company issued $330.0 million of 4.875% Senior Notes due May 2023 (the "2023 Notes"). Interest on the 2023 Notes is payable semi-annually. In August 2008, the Company issued $500.0 million of 7.35% senior unsecured notes due in August 2018 (the "2018 Notes"). During the third quarter of fiscal 2010, the Company entered into hedge transactions which reduced the Company's effective interest rate on these notes to 6.40% per annum. Interest on these notes is payable semiannually. In February 2016, the Company accepted for purchase approximately $100.2 million of the outstanding principal amount of its 2018 Notes through a cash tender offer. The Company recognized expenses of approximately $6.1 million related to the early extinguishment of this debt, which are included in loss on debt extinguishment in the unaudited condensed consolidated statements of earnings for the nine months ended May 31, 2016. In July 2007, the Company issued $400.0 million of 6.50% senior unsecured notes due in July 2017 (the "2017 Notes"). During the third quarter of fiscal 2011, the Company entered into hedge transactions which reduced the Company's effective interest rate on these notes to 5.74% per annum. Interest on these notes is payable semiannually. In February 2016, the Company accepted for purchase $100.0 million of the outstanding principal amount of its 2017 Notes though a cash tender offer. The Company recognized expenses of approximately $5.4 million related to the early extinguishment of this debt, which are included in loss on debt extinguishment in the unaudited condensed consolidated statements of earnings for the nine months ended May 31, 2016. At May 31, 2016, the Company was in compliance with all covenants contained in its debt agreements. During fiscal 2012, the Company terminated its existing interest rate swap transactions and received cash proceeds of approximately $52.7 million, net of customary finance charges. The resulting gain was deferred and is being amortized as a reduction to interest expense over the remaining term of the respective debt tranches. At May 31, 2016 and August 31, 2015, the unamortized amounts were $13.6 million and $19.2 million, respectively. Amortization of the deferred gain for each of the three and nine months ended May 31, 2016 and 2015 was $1.9 million and $5.7 million, respectively. The Company has uncommitted credit facilities available from U.S. and international banks. In general, these credit facilities are used to support trade 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 deferred gain from the termination of the interest rate swaps, was as follows:
(in thousands) |  | Weighted Average Interest Rate as of May 31, 2016 |  | May 31, 2016 |  | August 31, 2015
2023 Notes |  | 4.875% |  | $ | 330,000 |  |  | $ | 330,000 |
2018 Notes |  | 6.40% |  | 410,030 |  |  | 513,680 |
2017 Notes |  | 5.74% |  | 303,344 |  |  | 405,573 |
Other, including equipment notes |  |  |  | 35,248 |  |  | 38,739 |
|  |  |  | 1,078,622 |  |  | 1,287,992 |
Less current maturities |  |  |  | 10,929 |  |  | 10,110 |
|  |  |  | $ | 1,067,693 |  |  | $ | 1,277,882 |
At May 31, 2016 and August 31, 2015, CMC Poland Sp. z.o.o. ("CMCP") had uncommitted credit facilities with several banks of PLN 175 million ($44.4 million) and PLN 215 million ($56.9 million), respectively. The uncommitted credit facilities as of May 31, 2016 have expiration dates ranging from November 2016 to March 2017, which CMCP intends to renew upon expiration. At May 31, 2016 and August 31, 2015, no material amounts were outstanding under these facilities. During the nine months ended May 31, 2016, CMCP had no borrowings and no repayments under its uncommitted credit facilities. During the nine months ended May 31, 2015, CMCP had total borrowings of $49.6 million and total repayments of $49.6 million under its uncommitted credit facilities. The Company had no material amounts of interest capitalized in the cost of property, plant and equipment during the three and nine months ended May 31, 2016 and 2015, respectively. Cash paid for interest during the three and nine months ended May 31, 2016 was $9.1 million and $50.0 million, respectively, and $10.6 million and $53.5 million during the three and nine months ended May 31, 2015, respectively.

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.19,20,22) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 + Details
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