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CREDIT ARRANGEMENTS | 9 Months Ended
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May 31, 2019
Debt Disclosure [Abstract] |
Credit arrangements | NOTE 9. CREDIT ARRANGEMENTS Long-term debt as of May 31, 2019 and August 31, 2018 was as follows:
(in thousands) |  | Weighted Average Interest Rate as of May 31, 2019 |  | May 31, 2019 |  | August 31, 2018
2027 Notes |  | 5.375% |  | $ | 300,000 |  |  | $ | 300,000 |
2026 Notes |  | 5.750% |  | 350,000 |  |  | 350,000 |
2023 Notes |  | 4.875% |  | 330,000 |  |  | 330,000 |
Term loans |  | 4.115% |  | 310,125 |  |  | 142,500 |
Short-term borrowings |  | * |  | 25,327 |  |  | — |
Other, including equipment notes |  |  |  | 56,996 |  |  | 47,629 |
Total debt |  |  |  | 1,372,448 |  |  | 1,170,129 |
Less debt issuance costs |  |  |  | 10,690 |  |  | 11,764 |
Total amounts outstanding |  |  |  | 1,361,758 |  |  | 1,158,365 |
Less current maturities |  |  |  | 29,568 |  |  | 19,746 |
Less short-term borrowings |  |  |  | 25,327 |  |  | — |
Current maturities of long-term debt and short-term borrowings |  |  |  | 54,895 |  |  | 19,746 |
Long-term debt |  |  |  | $ | 1,306,863 |  |  | $ | 1,138,619 |
_________________ * As of May 31, 2019, the weighted average interest rates associated with the U.S. Program and Poland Program were 3.120% and 2.410%, respectively. In July 2017, the Company issued $300.0 million of 5.375% Senior Notes due July 2027 (the "2027 Notes"). Interest on the 2027 Notes is payable semiannually. In May 2018, the Company issued $350.0 million of 5.75% Senior Notes due April 2026 (the "2026 Notes"). Interest on the 2026 Notes is payable semiannually. 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 semiannually. The Company has a $350.0 million revolving credit facility (the "Revolver") pursuant to the Fourth Amended and Restated Credit Agreement (the "Credit Agreement"), and two senior secured term loans: one drawn on July 13, 2017 with an original principal amount of $150.0 million (the "2022 Term Loan"), and one drawn on November 1, 2018 with an original principal amount of $180.0 million (the "2018 Term Loan"). These term loans are hereinafter collectively referred to as the "Term Loans." The Credit Agreement and the Term Loans are coterminous with a maturity date in June 2022. The Company is required to make quarterly payments on the Term Loans equal to 1.25% of the original principal amount. The maximum availability under the Revolver can be increased to $600.0 million with bank approval. The Company's obligations under the Credit Agreement are collateralized by its U.S. inventory and U.S. fabrication receivables. The Credit Agreement's capacity includes a $50.0 million sub-limit for the issuance of stand-by letters of credit. The Company had no amounts drawn under the Revolver at May 31, 2019 and August 31, 2018. The Company's availability under the Revolver was reduced by outstanding letters of credit of $3.0 million and $3.3 million at May 31, 2019 and August 31, 2018. 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, each as 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, each as defined in the Credit Agreement) that does not exceed 0.60 to 1.00. At May 31, 2019, the Company's interest coverage ratio was 5.53 to 1.00, and the Company's debt to capitalization ratio was 0.47 to 1.00. Loans under the Credit Agreement bear interest based at the Eurocurrency rate, a base rate, or the London Interbank Offered Rate ("LIBOR"). At May 31, 2019, the Company was in compliance with all covenants contained in its debt agreements. The Company also has credit facilities in Poland, primarily through its subsidiary, CMC Poland Sp. z.o.o. ("CMCP"), available to support global working capital, short-term cash needs, letters of credit, financial assurance and other trade finance-related matters. At May 31, 2019, CMCP's credit facilities totaled Polish zloty ("PLN") 275.0 million, or $71.7 million. These facilities will expire in March 2022. At May 31, 2019 and August 31, 2018, no amounts were outstanding under these facilities. 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 $1.3 million and $1.1 million at May 31, 2019 and August 31, 2018, respectively. During the nine months ended May 31, 2019 and 2018, CMCP had no borrowings and no repayments under its credit facilities. Accounts Receivable Programs CMC has a $200.0 million U.S. trade accounts receivable program (the "U.S. Program"), which expires in August 2020. Under the U.S. Program, CMC contributes, and certain of its subsidiaries transfer without recourse, certain eligible trade accounts receivable to CMC Receivables, Inc. ("CMCRV"), a wholly-owned subsidiary of CMC. CMCRV is structured to be a bankruptcy-remote entity formed for the sole purpose of facilitating transfers of trade accounts receivable generated by the Company. CMCRV transfers the trade accounts receivable in their entirety to two financial institutions. Under the U.S. Program, with the consent of both CMCRV and the program's administrative agent, the amount advanced by the financial institutions can be increased to a maximum of $300.0 million for all trade accounts receivable. The remaining portion of the purchase price of the trade accounts receivable takes the form of subordinated notes from the respective financial institutions. These notes will be satisfied from the ultimate collection of the trade accounts receivable after payment of certain fees and other costs. The U.S. Program contains certain cross-default provisions whereby a termination event could occur if the Company defaulted under certain of its credit arrangements. The covenants contained in the receivables purchase agreement are consistent with the Credit Agreement. Advances taken under the U.S. Program incur interest based on LIBOR plus a margin. The Company had no advance payments outstanding under the U.S. Program at May 31, 2019. In addition to the U.S. Program, the Company's international subsidiary in Poland transfers trade accounts receivable to financial institutions without recourse (the "Poland Program"). The Poland Program has a facility limit of PLN 220.0 million ($57.4 million as of May 31, 2019) and allows the Company's Polish subsidiaries to obtain an advance of up to 90% of eligible trade accounts receivable transferred under the terms of the arrangement. Advances taken under the Poland Program incur interest based on the Warsaw Interbank Offered Rate ("WIBOR") plus a margin. The Company had advance payments outstanding of $25.3 million and $12.1 million under the Poland Program at May 31, 2019 and August 31, 2018, respectively. Prior to fiscal 2019, the Company accounted for transfers of trade accounts receivable as sales, and the trade accounts receivable balances transferred were removed from the condensed consolidated balance sheets. On September 1, 2018, the Company amended certain terms of both the U.S. and Poland Programs, disqualifying the accounting of the transfer of such receivables as sales. As a result of the amendments, beginning in fiscal 2019, any advances outstanding under the U.S. and Poland Programs are recorded as debt on the Company's condensed consolidated balance sheets.

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
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