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CREDIT ARRANGEMENTS | 12 Months Ended
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Aug. 31, 2022
Debt Disclosure [Abstract] |
CREDIT ARRANGEMENTS | NOTE 9. CREDIT ARRANGEMENTS Long-term debt was as follows:
|  | Weighted Average Interest Rate as of August 31, 2022 |  | Year Ended August 31,
(in thousands) |  |  | 2022 |  | 2021
2032 Notes |  | 4.375% |  | $ | 300,000 |  |  | $ | — |
2031 Notes |  | 3.875% |  | 300,000 |  |  | 300,000 |
2030 Notes |  | 4.125% |  | 300,000 |  |  | — |
2027 Notes |  | 5.375% |  | — |  |  | 300,000 |
2023 Notes |  | 4.875% |  | 330,000 |  |  | 330,000 |
Series 2022 Bonds, due 2047 |  | 4.000% |  | 145,060 |  |  | — |
Poland Term Loan |  | 8.530% |  | 32,439 |  |  | 49,726 |
Short-term borrowings |  | 7.260% |  | 26,390 |  |  | 26,560 |
Other |  | 4.560% |  | 21,278 |  |  | 19,492 |
Finance leases |  |  |  | 58,536 |  |  | 52,144 |
Total debt |  |  |  | 1,513,703 |  |  | 1,077,922 |
Less unamortized debt issuance costs |  |  |  | (16,496) |  |  | (8,141) |
Plus unamortized bond premium |  |  |  | 4,838 |  |  | — |
Total amounts outstanding |  |  |  | 1,502,045 |  |  | 1,069,781 |
Less current maturities of long-term debt and short-term borrowings |  |  |  | (388,796) |  |  | (54,366) |
Long-term debt |  |  |  | $ | 1,113,249 |  |  | $ | 1,015,415 |
Senior Notes In February 2022, the Company redeemed all of the $300.0 million of 5.375% Senior Notes due July 2027 (the "2027 Notes") and recognized a $16.1 million loss on debt extinguishment. In January 2022, the Company issued $300.0 million of 4.125% Senior Notes due January 2030 (the "2030 Notes") and $300.0 million of 4.375% Senior Notes due March 2032 (the "2032 Notes"). Aggregate issuance costs associated with the 2030 Notes and 2032 Notes were approximately $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 February 2021, the Company issued $300.0 million of 3.875% Senior Notes due February 2031 (the "2031 Notes") and accepted for purchase all of the previously outstanding $350.0 million of 5.750% Senior Notes due April 2026 (the "2026 Notes") through a cash tender offer. Issuance costs associated with the 2031 Notes and loss on debt extinguishment recognized related to the retirement of the 2026 Notes were $4.9 million and $16.8 million, respectively, in 2021. Interest on the 2031 Notes is payable semiannually on February 15 and August 15. In May 2013, the Company issued $330.0 million of 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 consolidated balance sheet as of August 31, 2022. Interest on the 2023 Notes is payable semiannually on November 30 and May 31. Series 2022 Bonds In February 2022, the Company announced the issuance of $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 3.5% and provided gross proceeds of $150.0 million. The proceeds were loaned to the Company pursuant to a loan agreement between the Company and the MCIDA. During 2022, the full amount of the proceeds was used to fund a portion of the acquisition, construction and equipping of the Company’s third micro mill, which is under construction in Mesa, Arizona. Issuance costs associated with the Series 2022 Bonds were $3.1 million. The Series 2022 Bonds accrue interest at 4.0%, payable semiannually on April 15 and October 15, and have a maturity date in October 2047. Credit Facilities The Company has a $400.0 million revolving credit facility (the "Revolver"), pursuant to the Fifth Amended and Restated Credit Agreement (as amended, the "Credit Agreement"). The Credit Agreement has a maturity date in March 2026. The maximum availability under the Revolver can be increased to $650.0 million with bank approval. The Company's obligations under the Credit Agreement are collateralized by its North America inventory. 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 August 31, 2022 or 2021. The availability under the Revolver was reduced by outstanding stand-by letters of credit of $1.4 million and $3.0 million at August 31, 2022 and 2021, 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. Loans under the Credit Agreement bear interest based on the Eurocurrency rate, a base rate, or the LIBOR rate. At August 31, 2022, the Company believes it was in compliance with all of the covenants contained in its credit arrangements. At August 31, 2022, the Company's interest coverage ratio was 34.48 to 1.00 and the Company's debt to capitalization ratio was 0.31 to 1.00. The Company has a Term Loan facility (the "Poland Term Loan") through its subsidiary, CMC Poland Sp. zo.o. ("CMCP"). At August 31, 2022, PLN 152.4 million, or $32.4 million, was outstanding, compared to the maximum amount available under the facility, PLN 190.5 million, or $49.7 million, which was outstanding as of August 31, 2021. CMCP is required to make quarterly interest and principal payments on the Poland Term Loan with interest based on the Warsaw Interbank Offer Rate ("WIBOR") plus a margin. The Poland Term Loan has a maturity date in August 2026. The Company also has credit facilities in Poland, through its subsidiary, CMCP, available to support working capital, short-term cash needs, letters of credit, financial assurance and other trade finance-related matters. At August 31, 2022 and 2021, CMCP's credit facilities totaled PLN 300.0 million, or $63.9 million and $78.3 million, respectively. The credit facilities have expiration dates ranging from March 2024 to March 2025. At August 31, 2022 and 2021, no amounts were outstanding under these facilities. CMCP had no borrowings or repayments under its credit facilities in 2022 and 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 $1.0 million and $5.7 million at August 31, 2022 and 2021, respectively. The scheduled maturities of the Company's long-term debt, excluding obligations related to finance leases, are included in the table below. See Note 8, Leases, for scheduled maturities of finance leases.
Year Ended August 31, |  | (in thousands)
2023 |  | $ | 369,819 |
2024 |  | 11,535 |
2025 |  | 9,288 |
2026 |  | 9,275 |
2027 |  | 3,653 |
Thereafter |  | 1,051,597 |
Total long-term debt, excluding finance leases |  | 1,455,167 |
Less debt issuance costs |  | (16,496) |
Plus unamortized bond premium |  | 4,838 |
Total long-term debt outstanding, excluding finance leases |  | $ | 1,443,509 |
The Company capitalized $11.9 million, $2.8 million and $2.5 million of interest in the cost of property, plant and equipment during 2022, 2021 and 2020, respectively. Accounts Receivable Facilities CMC has a $150.0 million U.S. trade accounts receivable facility (the "U.S. Facility"), which expires in March 2023. Under the U.S. Facility, 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. Facility, 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. Facility 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. Facility incur interest based on LIBOR plus a margin. The Company had no advance payments outstanding under the U.S. Facility at August 31, 2022 and 2021. In addition to the U.S. Facility, the Company's subsidiary in Poland transfers trade accounts receivable to financial institutions without recourse (the "Poland Facility"). The Poland Facility has a facility limit of PLN 288.0 million, or $61.3 million and $75.2 million as of August 31, 2022 and August 31, 2021, respectively. Advances taken under the Poland Facility incur interest based on the WIBOR plus a margin. The Company had PLN 124.0 million, or $26.4 million, advance payments outstanding under the Poland Facility at August 31, 2022 and PLN 101.7 million, or $26.6 million, at August 31, 2021. The transfer of receivables under the U.S. Facility and Poland Facility do not qualify to be accounted for as sales. Therefore, any advances outstanding under these programs are recorded as debt on the Company's 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 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1B -Subparagraph (h) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1C -Subparagraph (c) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1I -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1I -Subparagraph (d) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(c)) -URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1B -Subparagraph (g) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1C -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1C -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1E -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495348-112611 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1B -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1I -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1B -Subparagraph (i) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611 + Details
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