COMMERCIAL METALS Co
For the period ended Aug 31, 2025. Filed Oct 16, 2025.
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A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Oct 16, 2025
CMC$62.28+0.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-08-31; filed 2024-10-17.
0000022444-24-000140
Item 7. : Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-08-31; filed 2025-10-16.
0000022444-25-000138
Item 7. : Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
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A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (42)
Current report
Adjusted EBITDA is used by management to compare and evaluate the period-over-period underlying business operational performance of our reportable segments. Adjusted EBITDA is the sum of the Company's earnings before interest expense, income taxes, depreciation and amortization expense, impairment expense and unrealized gains and losses on undesignated commodity hedges. During the fourth quarter of 2025, the Company modified its method of calculating adjusted EBITDA to exclude the impact of unrealized gains and losses on undesignated commodity derivatives. This change was primarily driven by heightened volatility in copper forward markets, which introduced significant non-cash fluctuations unrelated to core operations. By removing this volatility, the revised metric provides a more representative view of operating performance and cash-generating capability. We evaluated the impact of this change on prior-period disclosures and have recast adjusted EBITDA for all periods presented in this Annual Report to conform to the new presentation. We did not revise the comparative analysis of results of operations for 2024 compared to 2023, as the change in methodology did not materially affect the comparability of adjusted EBITDA in earlier periods.
Current report
CP&P Acquisition
Current report
On September 17, 2025, we entered into the CP&P Purchase Agreement, pursuant to which we will acquire all of the issued and outstanding equity securities of CP&P (the "CP&P Acquisition"). Pursuant to the terms and conditions of the CP&P Purchase Agreement, at the closing of the CP&P Acquisition, we will pay a cash purchase price of $675.0 million, which is subject to a customary purchase price adjustment as described in the CP&P Purchase Agreement. The transaction will be funded with cash on hand and is not contingent on any financing arrangements. We expect the CP&P Acquisition to close in December 2025, subject to customary regulatory review and closing conditions. The CP&P Acquisition aligns with our strategy to pursue inorganic growth by expanding CMC’s portfolio of early-stage construction solutions through the addition of precast capabilities.
Current report
Foley Acquisition
Current report
On October 15, 2025, we entered into the Foley Purchase Agreement, pursuant to which we will acquire all of the issued and outstanding equity securities of entities that own Foley (the "Foley Acquisition"). Pursuant to the terms and conditions of the Foley Purchase Agreement, at the closing of the Foley Acquisition, we will pay a cash purchase price of approximately $1.84 billion, which is subject to customary purchase price adjustments as described in the Foley Purchase Agreement. We expect to finance the purchase price of the Foley Acquisition and related fees and expenses with cash on hand, through one or more capital markets transactions (subject to market conditions and other factors), through borrowings under the Credit Agreement or Backstop Facility (as defined below), and, only to the extent necessary, borrowings under the Bridge Facility (as defined below). We expect the Foley Acquisition to close by the end of calendar 2025, subject to customary regulatory review and closing conditions. The Foley Acquisition aligns with our strategy to pursue inorganic growth by adding scale, margin strength and regional leadership to our precast platform.
Current report
Transform, Advance and Grow Initiative
Current report
In 2024, we launched our Transform, Advance and Grow ("TAG") operational and commercial excellence program as a cornerstone of our long-term strategic growth plan. Through a disciplined and structured approach, the TAG program is designed to deliver meaningful and sustained enhancements to our margins, cash flow generation and return on capital. The TAG program has already delivered significant results through ongoing initiatives focused on melt shop and rolling mill yield, scrap cost optimization, logistics optimization and reduced alloy consumption.
Current report
In 2023, we entered into an agreement with the West Virginia Economic Development Authority (the "WVEDA") to permanently finance a portion of the costs to construct our fourth micro mill in Berkeley County, West Virginia. As of the date of this Annual Report, we have received $55.0 million in total government assistance from the WVEDA for meeting certain investment thresholds, including $50.0 million received during 2025. These amounts were recognized in the North America Steel Group segment as a reduction to property, plant and equipment, net, in theconsolidated balance sheet as of August 31, 2025. We expect our total investment in the micro mill to be between $550.0 million and $600.0 million, net of $75.0 million in total government assistance expected to be received from the WVEDA. The construction of the micro mill is also expected to qualify for a net federal tax credit under the Inflation Reduction Act of approximately $80 million. See Note 1, Nature of Operations and Summary of Significant Accounting Policies, in Part II, Item 8 of this Annual Report, for more information.
Current report
In May 2025, we announced the issuance of $150.0 million in original aggregate principal amount of tax-exempt bonds (the "Series 2025 Bonds") by the WVEDA. The Series 2025 Bonds were issued at par. The proceeds of the Series 2025 Bonds were loaned to the Company pursuant to a loan agreement with the WVEDA and partially offset the construction costs for facilities located in Berkeley County, West Virginia. We will make semiannual interest payments on the outstanding principal of the Series 2025 Bonds on April 15 and October 15 of each year, with the first such interest payment made in October 2025. Issuance costs of $2.9 million were recorded as a reduction of long-term debt in theconsolidated balance sheet as of August 31, 2025.
Current report
Macroeconomic Trends and Uncertainties
Current report
We are subject to risks and exposures from the evolving macroeconomic environment, including uncertainty and volatility in financial markets, efforts of governments to stimulate or stabilize the economy and other changes in economic conditions, such as an increase in trade tensions and related tariffs with U.S. trading partners. On February 10, 2025, President Trump issued an Executive Order to restore and expand Section 232's 25% tariffs on steel imports from all sources, effective March 12, 2025, ending country and product exemptions, and broadening the application of the tariffs to fabricated steel products. Effective June 4, 2025, the tariffs on steel imports were increased to 50% for all countries other than the U.K., which continues to be subject to 25% tariffs.
Current report
Although the elimination of Section 232 tariff exemptions is expected to provide a favorable backdrop to the domestic long steel market, there remains uncertainty regarding the duration and scope of this and other potential executive actions related to tariffs. If the Section 232 or other import tariffs, quotas or duties are relaxed, repealed, challenged legally or expire; if other countries are exempted, or if relatively higher U.S. steel prices make it attractive for foreign steelmakers to export their steel products to the U.S., despite the presence of import tariffs, quotas or duties, a resurgence of substantial imports of foreign steel could occur. This would put downward pressure on U.S. steel prices.
Current report
Recent developments illustrate how these risks may materialize. Countries such as Algeria, Bulgaria, Egypt, and Vietnam have also increased their steel exports, particularly of rebar, to the U.S. Excessive imports of steel into the U.S. have exerted, and may continue to exert, downward pressure on U.S. steel prices, which negatively affects our ability to increase our sales, margins and profitability. Further, excess capacity has also led to greater protectionism as is evident in raw material and finished product border tariffs put in place by China, Brazil and other countries. In response to these pressures, a petition was filed with the U.S. International Trade Commission ("ITC") in June 2025, alleging that exporters of steel concrete reinforcing bar from Algeria, Bulgaria, Egypt and Vietnam are dumping material into the U.S. market at prices below fair value. The petition seeks the imposition of significant antidumping duties on rebar imports from these countries. In July 2025, the ITC determined that the petition has merit and referred the case to the Department of Commerce for further investigation.
Current report
To date, heightened uncertainty has contributed to delays in the awarding of projects. From a longer-term perspective on demand, we see tariffs as a single component of a broader program that includes changes to tax, regulatory, energy and trade policy aimed at stimulating domestic investment, which could meaningfully benefit construction activity. With regard to operating costs, we anticipate the impact of tariffs to be modest, as we source primarily from domestic suppliers. We also anticipate the impact on capital costs to be modest.
Current report
One Big Beautiful Bill Act
Current report
On July 4, 2025, the One Big Beautiful Bill Act (the "OBBBA") was enacted into law, introducing significant amendments to U.S. tax legislation with varying effective dates. Key provisions that impact CMC include the expansion of bonus depreciation, accelerated expensing of research and development costs and revisions to international tax regimes. CMC has incorporated these amendments into its fiscal 2025 tax provision, as applicable, and there was no material impact to our income tax expense or effective tax rate. The Company continues to evaluate the legislation.
Current report
During 2025, we reported net earnings of $84.7 million, a decrease of $400.8 million, or 83%, compared to 2024. The year-over-year decrease in net earnings was primarily due to an expense of approximately $274 million, net of estimated tax, associated with a contingent litigation-related loss. Additionally, lower earnings from the North America Steel Group, driven by compression in steel and downstream products metal margins, contributed to the decrease in consolidated net earnings. These impacts were partially offset by higher earnings from the Europe Steel Group, primarily due to an increase in both steel products shipment volumes and steel products metal margin, as well as a $9.3 million increase in government assistance received in 2025 versus 2024.
Current report
SG&A expenses increased $31.8 million, or 5%, in 2025 compared to 2024. The year-over-year increase was primarily driven by $35.2 million of increased employee-related expenses, including labor, commissions and benefits. These increases were concentrated in Corporate and Other and the Emerging Businesses Group. Also contributing to the increase were higher information technology and supply costs, which rose $9.1 million year-over-year, due to investments in cloud-based software and other technology-related expenses. These increases were partially offset by a $2.8 million reduction in SG&A expenses in 2025 compared to 2024, due to foreign currency impacts from both non-functional currency transactions and forward contracts. The remaining change was attributable to multiple factors, none of which were material.
Current report
Interest expense remained relatively consistent in 2025 compared to 2024, as higher capitalized interest attributable to micro mill construction offset the impact of an increased long-term debt balance, driven by the issuance of the Series 2025 Bonds in May 2025, along with higher interest expense related to finance leases.
Current report
Litigation Expense
Current report
Litigation expense related to the PSG litigation of $362.3 million was recorded during 2025. The amount recorded includes interest accrued on the judgment amount. For more information about the contingent litigation-related loss, see Note 17, Commitments and Contingencies, in Part II, Item 8 of this Annual Report.
Current report
North America Steel Group
Current report
Net sales to external customers in our North America Steel Group segment decreased $225.9 million, or 4%, in 2025 compared to 2024. The decrease in net sales to external customers was primarily due to a decrease in the average selling price per ton for steel products and downstream products of 5% and 9%, respectively, year-over-year, as well as lower shipment volumes for raw materials and downstream products. This decrease was partially offset by increased tons shipped of steel products, supported by resilient construction activity and demand in our end-use markets.
Current report
Emerging Businesses Group
Current report
Net sales to external customers in our Emerging Businesses Group segment increased $30.1 million, or 4%, in 2025 compared to 2024. The increase was primarily due to a $15.6 million increase in net sales to external customers of our proprietary performance reinforcing steel products, including Galvabar, ChromX and Cryosteel, and a $14.1 million increase in net sales to external customers by CMC Construction Services, reflecting robust demand in our target markets.
Current report
Adjusted EBITDA increased $8.2 million, or 6%, in 2025 compared to 2024. The year-over-year increase in adjusted EBITDA was primarily driven by a $22.6 million increase in adjusted EBITDA in our performance reinforcing steel offerings, resulting from both increased shipments and improved margin. This increase more than offset the $4.9 million year-over-year decline in adjusted EBITDA from our Tensar division, which was impacted by challenging conditions in the Eastern Hemisphere and delays in certain key projects, and the $4.2 million year-over-year decline in adjusted EBITDA from CMC Impact Metals, which was impacted by lower tons shipped due to persistently weak demand across truck, trailer and armor-related markets. Additionally, we incurred approximately $3 million of startup costs associated with CMC Bridge Systems in 2025.
Current report
Europe Steel Group
Current report
Net sales to external customers in our Europe Steel Group segment increased $69.8 million, or 8%, in 2025 compared to 2024. This increase was primarily due to a 10% year-over-year increase in steel products shipment volumes, reflecting a modest recovery in construction and industrial activity across key European markets following the slowdown that persisted in 2024. The increase also reflects lower import levels into Poland in 2025 compared to 2024, which supported heightened domestic demand for our products. Higher volumes were partially offset by a 2% reduction in steel products average selling price per ton in 2025 compared to 2024, driven by continued competitive pricing pressure. On average, the U.S. dollar weakened against the Polish zloty in 2025 compared to 2024, resulting in a foreign currency translation benefit of approximately $40 million on net sales to external customers.
Current report
Corporate and Other adjusted EBITDA loss increased by $381.0 million in 2025 compared to 2024 primarily due to a $362.3 million contingent litigation-related loss recorded in connection with the PSG litigation. Increased investment in information technology, as discussed above, also contributed to the year-over-year increase in adjusted EBITDA loss. For more information about the contingent litigation-related loss, see Note 17, Commitments and Contingencies, in Part II, Item 8 of this Annual Report.
Current report
(2) The Series 2025 Bonds accrue interest at a fixed rate of 4.625%, payable semiannually, for an initial period ending with a mandatory tender for purchase on May 15, 2032, at a purchase price equal to 100% of the principal amount. The Series 2025 Bonds mature in 2055. See Note 8, Credit Arrangements, in Part II, Item 8 of this Annual Report for additional information regarding the Series 2025 Bonds.
Current report
As described above under "Business Conditions and Developments," each of the CP&P and Foley Acquisitions are currently pending. The aggregate purchase price of the CP&P and Foley Acquisitions is $2.5 billion. We expect to fund the CP&P Acquisition with cash on hand. In connection with the Foley Acquisition, the Company entered into a commitment letter, dated October 15, 2025 (the "Commitment Letter"), with Bank of America, N.A. ("Bank of America"), BofA Securities, Inc. and Citigroup Global Markets Inc. ("Citi"), pursuant to which, subject to the terms and conditions set forth therein, Bank of America and Citi agreed to provide to the Company (i) a 364-day senior unsecured bridge facility in an aggregate principal amount of up to $1.85 billion (the "Bridge Loan Facility") and (ii) a senior secured revolving credit facility in an aggregate principal amount of $600.0 million (the "Backstop Facility"). We expect to finance the Foley Acquisition with cash on hand, through one or more capital markets transactions (subject to market conditions and other factors), through borrowings under our Credit Agreement or Backstop Facility and, only to the extent necessary, borrowings under the Bridge Facility. See Note 20, Subsequent Events, in Part II, Item 8 of this Annual Report for information regarding the Commitment Letter.
Current report
As described in Note 17, Commitments and Contingencies, in Part II, Item 8 of this Annual Report, on November 5, 2024, a jury returned a verdict in favor of PSG in the amount of $110.0 million, which the Northern District Court, in entering its judgment on the verdict, subsequently trebled as a matter of law. PSG will also be entitled to petition for and recover its attorneys' fees, costs and post-judgment interest. We are confident that we conducted our business appropriately and intend to vigorously pursue all reasonably available avenues to have the verdict and judgment overturned. Nonetheless, unless the verdict and judgment are overturned or the judgment is significantly reduced, the losses incurred in connection with this litigation would have a material adverse effect on our liquidity and financial condition.
Current report
Cash Flows
Current report
Changes in Operating Assets and Liabilities
Current report
During the year ended August 31, 2025, changes in operating assets and liabilities resulted in a $55.6 million reduction in cash from operating activities, compared to 2024, primarily due to a $104.3 million year-over-year decrease in cash provided by accounts receivable. The change in cash flows related to accounts receivable was driven by the timing of collections, due in part to strong sales at the end of 2025 compared to the end of 2024. Cash flows from inventories decreased $19.2 million year-over-year, driven primarily by significant inventory reductions in 2024 within our Europe Steel Group segment, which did not recur in 2025. These reductions were partially offset by a $72.2 million decrease in cash used by accounts payable, mainly driven by higher payroll related accruals at the end of 2025.
Current report
Capital Investments
Current report
For the year ended August 31, 2025, capital expenditures increased $78.6 million year-over-year, primarily driven by the construction of our fourth micro mill. This was partially offset by $50.0 million in government assistance received in 2025 pursuant to an agreement with the WVEDA. See Note 1, Nature of Operations and Summary of Significant Accounting Policies, in Part II, Item 8 of this Annual Report for more information about the government assistance received during 2025 in connection with the construction of our fourth micro mill.
Current report
For the year ended August 31, 2025, we received net proceeds of $147.7 million from the issuance of tax-exempt bonds (the "Series 2025 Bonds"). See Note 8, Credit Arrangements, in Part II, Item 8 of this Annual Report for more information regarding the Series 2025 Bonds.
Current report
Share Repurchases
Current report
For the year ended August 31, 2025 we repurchased $198.8 million of CMC common stock under our share repurchase program, an increase of $15.9 million compared to 2024. See Note 15, Capital Stock, in Part II, Item 8 of this Annual Report, for more information on the share repurchase program.
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Removed paragraphs (53)
Previous report
Change in Reportable Segments
Previous report
During the first quarter of 2024, we changed our reportable segments to reflect a change in the manner in which our business is managed. Based on changes to our organizational structure, the evolution of our solutions offerings outside of traditional steel products, the growing importance of non-steel solutions to our financial results and future outlook and how our chief operating decision maker, our President and Chief Executive Officer, reviews operating results and makes decisions about resource allocation, we now have three reportable segments that represent the primary businesses reported in our consolidated financial statements: North America Steel Group, Europe Steel Group and Emerging Businesses Group. See the section titled "Results of Operations Summary" below and Part I, Item 1, Business for further information regarding our business and reportable segments. As a result of this change in reportable segments, certain prior year amounts have been recast to conform to the current year presentation. Throughout this Form 10-K, unless otherwise indicated, amounts and activity affected by the change in reportable segments have been reclassified.
Previous report
2023 Acquisitions
Previous report
On September 15, 2022, we completed the acquisition of Advanced Steel Recovery, LLC ("ASR"), a supplier of recycled ferrous scrap metals located in Southern California. ASR's primary operations include processing and brokering capabilities that source material for sale into both the domestic and export markets.
Previous report
On November 14, 2022, we completed the acquisition of a Galveston, Texas area metals recycling facility and related assets (collectively, "Kodiak") from Kodiak Resources, Inc. and Kodiak Properties, L.L.C.
Previous report
On March 3, 2023, we completed the acquisition of all of the assets of Roane Metals Group, LLC ("Roane"), a supplier of recycled metals with two facilities located in eastern Tennessee.
Previous report
On March 17, 2023, we completed the acquisition of Tendon Systems, LLC ("Tendon"), a leading provider of post-tensioning, barrier cable and concrete restoration solutions to the southeastern U.S.
Previous report
On May 1, 2023, we completed the acquisition of all of the assets of BOSTD America, LLC ("BOSTD"), a geogrid manufacturing facility located in Blackwell, Oklahoma. Prior to the acquisition, BOSTD produced several product lines for our Tensar operations under a contract manufacturing arrangement.
Previous report
On July 12, 2023, we completed the acquisition of EDSCO Fasteners, LLC ("EDSCO"), a leading provider of anchoring solutions for the electrical transmission market, with four manufacturing facilities located in North Carolina, Tennessee, Texas and Utah. Following the acquisition, EDSCO was rebranded as CMC Anchoring Systems.
Previous report
Operating results for ASR, Kodiak, Roane and Tendon are presented within the North America Steel Group segment. Operating results for BOSTD and CMC Anchoring Systems are presented within the Emerging Businesses Group segment. The acquired operations of ASR, Kodiak, Roane, Tendon, BOSTD and CMC Anchoring Systems are collectively referred to as the "2023 Acquisitions."
Previous report
Tensar Acquisition
Previous report
On April 25, 2022 (the "Tensar Acquisition Date"), we 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 our existing concrete reinforcement product lines and broaden our ability to address multiple early phases of commercial and infrastructure construction, including subgrade, foundation and structures. 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 are presented within our Emerging Businesses Group segment. See Note 2, Changes in Business, in Part II, Item 8 of this Annual Report for more information about the Tensar acquisition.
Previous report
Chief Executive Officer Transition
Previous report
Effective September 1, 2023, our Board appointed Peter R. Matt, our then President, as President and Chief Executive Officer, immediately following the retirement of Barbara R. Smith, our then Chief Executive Officer and Chairman of the Board. The Chief Executive Officer transition from Ms. Smith to Mr. Matt followed our formal succession planning process. Mr. Matt has served as our President since April 9, 2023 and continues to serve as a member of the Board, which he joined in June 2020. Ms. Smith was appointed Executive Chairman of the Board, effective September 1, 2023, and retired from such position and from the Board effective August 31, 2024.
Previous report
Russian Invasion of Ukraine
Previous report
The Russian invasion of Ukraine did not have a direct material adverse impact on our business, financial condition or results of operations during 2024, 2023 or 2022. Our Europe Steel Group segment has not experienced an interruption in energy supply and was able to identify alternate sources for a limited number of materials previously procured through Russia. However, the Russian invasion of Ukraine has led to economic slowdowns in Europe, including significant volatility in commodity prices and credit markets, reductions in demand, supply chain interruptions and higher global inflation. We will continue to monitor disruptions in supply of energy and materials and the indirect effects on our operations of inflationary pressures, reductions in demand, foreign exchange rate fluctuations, commodity pricing, potential cybersecurity risks and sanctions resulting from the invasion.
Previous report
During 2024, we achieved net earnings of $485.5 million, a decrease of $374.3 million, or 44%, compared to 2023. The year-over-year change in net earnings was primarily due to compression in steel products metal margins in both our North America Steel Group and Europe Steel Group segments during 2024 driven by declining steel products average selling prices per ton, while the cost of ferrous scrap utilized per ton decreased at a lesser rate. Net earnings includes $69.4 million of government assistance recognized in the Europe Steel Group segment during 2024, compared to $13.8 million of government assistance recognized in 2023.
Previous report
SG&A expenses increased $21.5 million in 2024 compared to 2023. Contributing to the year-over-year increase was $10.3 million of incremental SG&A expenses attributable to the 2023 Acquisitions incurred during 2024 compared to a partial year of expenses recorded during 2023 following their respective acquisition dates. The remaining increase in SG&A expenses in 2024 compared to 2023 was primarily due to $10.2 million of increased professional services expenses, $5.9 million of increased benefit restoration plan ("BRP") expenses and $6.1 million of increased information technology expenses. These increases were partially offset by $11.2 million of decreased labor-related expenses in 2024 compared to 2023. Additionally, the results for 2023 included a $4.2 million pension plan settlement charge, with no such settlement charge in 2024. See Note 2, Changes in Business, in Part II, Item 8 of this Annual Report for more information about the 2023 Acquisitions and Note 14, Employees' Retirement Plans, in Part II, Item 8 of this Annual Report for more information on the pension plan termination activity.
Previous report
Interest expense increased $7.8 million in 2024 compared to 2023. Although lower average balances of long-term debt outstanding resulted in a $9.2 million decrease in interest expense during 2024 compared to 2023, this decrease was offset by $16.1 million of reduced capitalized interest during 2024 compared to 2023. The decrease in capitalized interest was attributable to the timing of micro mill construction activities, as construction of our third micro mill was nearing completion during 2023 and placed into service at the end of 2023, whereas construction of our fourth micro mill was in the beginning stages during most of 2024.
Previous report
During 2023, we achieved net earnings of $859.8 million, a decrease of $357.5 million, or 29%, compared to 2022. Included in net earnings during 2022 was a $273.3 million gain on the sale of the Rancho Cucamonga facilities. The remaining year-over-year change in net earnings was primarily due to compression in steel products metal margins in our Europe Steel Group segment during 2023, contrasted by significant expansion in downstream products metal margins over scrap in our North America Steel Group segment during 2023 compared to 2022. See Note 2, Changes in Business, in Part II, Item 8 of this Annual Report for more information on the sale of the Rancho Cucamonga facilities.
Previous report
Selling, General and Administrative Expenses
Previous report
SG&A expenses increased $98.6 million in 2023 compared to 2022. Contributing to the year-over-year increase was $60.5 million of incremental SG&A expenses from Tensar operations' commercial and engineering support incurred during 2023, compared to the expenses recorded in the period following the Tensar Acquisition Date to August 31, 2022, as well as $12.8 million of SG&A expenses from the 2023 Acquisitions, with no such expenses in 2022. The remaining increase in SG&A expenses in 2023 compared to 2022 was primarily due to an $11.1 million increase in professional services expenses, a $10.7 million increase in expenses for our BRP and a $4.2 million pension plan settlement charge, with no such settlement charge in the corresponding period. These fluctuations were partially offset by a $16.6 million decrease in labor-related expenses during 2023 compared to 2022. See Note 2, Changes in Business, in Part II, Item 8 of this Annual Report for more information about the Tensar acquisition and the 2023 Acquisitions and Note 14, Employees' Retirement Plans, in Part II, Item 8 of this Annual Report for more information on the pension plan termination activity.
Previous report
Interest Expense
Previous report
Interest expense decreased $10.6 million in 2023 compared to 2022, which can be attributed primarily to an increase in capitalized interest of $9.6 million in 2023 compared to 2022 due to construction of our third micro mill, as well as lower average interest rates on the long-term debt outstanding during 2023 compared to 2022.
Previous report
Our effective income tax rate for 2023 was 23.4% compared to 19.7% for 2022. The year-over-year increase was primarily due to a tax benefit recorded during 2022 from a capital loss on a restructuring transaction that did not recur in 2023, as well as a reduction in research and development tax credits in 2023 compared to 2022. See Note 12, Income Tax, in Part II, Item 8 of this Annual Report for further discussion of our effective tax rate.
Previous report
Net sales to external customers in our North America Steel Group segment decreased $394.6 million, or 6%, in 2024 compared to 2023. Raw materials average selling price per ton increased slightly due to increases in the sales prices of both ferrous and nonferrous scrap metals, and raw materials tons shipped increased, in part, due to a full year of sales from the recycling operations acquired during 2023. See Note 2, Changes in Business, in Part II, Item 8 of this Annual Report for more information about the acquired recycling operations. However, this increase in net sales to external customers from sales of raw materials was offset by decreases in net sales to external customers of steel products and downstream products, primarily due to reductions in steel products and downstream products average selling prices per ton of 10% and 6%, respectively, in 2024 compared to 2023. For both steel products and downstream products, the reductions in selling prices were due to increased competitive pricing in our key markets. Furthermore, the downstream products average selling price per ton during 2023 reflected contracts that were awarded during periods of heightened steel commodity pricing, which has since declined.
Previous report
Net sales to external customers in our Europe Steel Group segment decreased $480.2 million, or 36%, in 2024 compared to 2023. This decrease was primarily due to a 29% year-over-year reduction in steel products shipment volumes and a reduction in steel products average selling price per ton of 11% in 2024 as compared to 2023. The slowdown in demand was driven by the sustained indirect impacts of macroeconomic factors affecting the business climate in European end markets, which resulted in lower construction and industrial activity. Additionally, increased imports from neighboring countries contributed to the reduced steel products average selling price per ton in 2024 as compared to 2023. During 2024, overall, the U.S. dollar weakened compared to the Polish zloty. The effect of foreign currency translation was an increase in net sales to external customers of approximately $64.0 million for 2024, determined by using actual results for 2024 measured at the average currency rate during 2023.
Previous report
Net sales to external customers in our Emerging Businesses Group segment remained relatively flat in 2024 compared to 2023. The acquired CMC Anchoring Systems operations provided $38.5 million of incremental net sales to external customers during 2024 compared to the net sales to external customers in 2023 following the acquisition date. See Note 2, Changes in Business, in Part II, Item 8 of this Annual Report for more information on the acquisition of CMC Anchoring Systems. CMC Construction Services' operations experienced a decline in net sales to external customers of $42.6 million, or 13%, in 2024 compared to 2023, due to reduced selling prices across many product lines.
Previous report
Adjusted EBITDA decreased $9.5 million, or 7%, in 2024 compared to 2023. The year-over-year decrease in adjusted EBITDA was primarily a result of the decline in net sales to external customers for CMC Construction Services caused by reduced selling prices as described above, which impacted fixed cost leverage, and more than offset the positive contribution from the acquired CMC Anchoring Systems operations.
Previous report
Corporate and Other adjusted EBITDA loss decreased by $3.4 million in 2024 compared to 2023. Contributing to the decrease in adjusted EBITDA loss during 2024 compared to 2023 was $13.5 million of increased interest income on short-term investments and $7.7 million of decreased labor-related expenses. Additionally, in 2023 we recognized a $4.2 million pension plan settlement charge, with no such settlement charge in 2024. In contrast to these reductions to adjusted EBITDA loss, we incurred $12.4 million of increased professional services expenses and recognized $6.7 million of other revenue from our New Markets Tax Credit (“NMTC”) transactions in 2024, compared to $17.7 million of other revenue from NMTC transactions in 2023. See Note 9, New Markets Tax Credit Transactions, in Part II, Item 8 of this Annual Report, for more information on the NMTC transactions and Note 14, Employees' Retirement Plans, in Part II, Item 8 of this Annual Report, for more information on the pension plan termination activity.
Previous report
Net sales to external customers in our North America Steel Group segment remained relatively flat in 2023 compared to 2022. While downstream products average selling prices experienced a significant increase of $207 per ton, or 17%, year-over-year, this fluctuation was offset by decreases in steel products average selling prices and raw materials average selling prices due to a falling scrap price environment. The increases in average selling prices for downstream products, many of which are fixed at the beginning of the project, reflected the increased input costs from rising scrap and energy prices during 2022 when we entered into the contracts. Additionally, the 2023 Acquisitions that are reported in the North America Steel Group segment contributed $152.1 million to net sales to external customers in 2023.
Previous report
During 2023, we achieved adjusted EBITDA of $1.3 billion compared to $1.5 billion in 2022. Included in adjusted EBITDA during 2022 was a $273.3 million gain on the sale of the Rancho Cucamonga facilities. The remaining year-over-year change was an increase in adjusted EBITDA due to significant expansion in downstream products margin over scrap per ton, driven by a combination of the high downstream products average selling prices mentioned above and sharp decreases in the cost of ferrous scrap utilized per ton. Additionally, the 2023 Acquisitions that are reported in the North America Steel Group segment contributed $13.2 million to adjusted EBITDA in 2023. See Note 2, Changes in Business, in Part II, Item 8 of this Annual Report for more information about the sale of the Rancho Cucamonga facilities.
Previous report
Net sales to external customers in our Europe Steel Group segment decreased $263.5 million, or 17%, in 2023 compared to 2022. This decrease was primarily due to a $147 per ton, or 16%, year-over-year decrease in steel products average selling price per ton, while volumes remained relatively flat year-over-year, as well as unfavorable impacts of foreign currency translation described below. The decrease in steel products average selling price per ton was driven by the indirect impacts of macroeconomic factors affecting the overall business climate in Europe, such as inflation and rising interest rates, which resulted in consumer uncertainties and delayed construction starts across our European end markets near the end of 2023. During 2023, overall, the U.S. dollar strengthened compared to the Polish zloty. The effect of foreign currency translation was a decrease in net sales to external customers of approximately $75.7 million during 2024, determined by using actual results for 2023 measured at the average currency rate during 2022.
Previous report
Adjusted EBITDA decreased $296.2 million, or 86%, in 2023 compared to 2022, primarily driven by a contraction in steel products metal margin per ton, increased energy costs used in production and unfavorable impacts of foreign currency translation. Steel products metal margin per ton decreased $79 per ton, or 18%, in 2023 compared to 2022, due to the decline in steel products average selling prices per ton described above, which outpaced the decrease in cost of ferrous scrap utilized per ton. In addition to the change in steel products metal margin per ton, our Europe Steel Group segment continued to face an environment of heightened energy costs. The cost of energy increased $51 per ton during 2023 compared to 2022, net of the benefit from our electricity commodity derivative. The electricity commodidty derivative resulted in an $11.8 million realized gain in 2023, recorded as a reduction to cost of goods sold, compared to a $21.7 million realized gain in 2022. See Note 10, Derivatives, in Part II, Item 8 of this Annual Report for further information on the electricity commodity derivative. The effect of foreign currency translation was a decrease in adjusted EBITDA of approximately $18.2 million during 2024.
Previous report
Net sales to external customers in our Emerging Businesses Group segment increased $196.2 million in 2023 compared to 2022. The acquired Tensar operations provided $159.3 million of incremental net sales to external customers during 2023 compared to the net sales to external customers in 2022 following the Tensar Acquisition Date, and CMC Anchoring Systems' operations contributed $7.6 million of net sales to external customers following their acquisition during 2023. See Note 2, Changes in Business, in Part II, Item 8, of this Annual Report for more information on the acquisitions of Tensar and CMC Anchoring Systems. The remaining increase in net sales to external customers included a $17.0 million increase from CMC Impact Metals in 2023 compared to 2022, due to favorable market conditions that led to both increased shipments and selling prices.
Previous report
Adjusted EBITDA increased $66.4 million in 2023 compared to 2022. The acquired Tensar operations provided $44.9 million of incremental adjusted EBITDA during 2023 compared to the adjusted EBITDA in 2022 following the Tensar Acquisition Date. Additionally, CMC Anchoring Systems' operations contributed to the year-over-year changes by providing $1.1 million of adjusted EBITDA during 2023, with no such activity in the corresponding period. The remaining growth in adjusted EBITDA in 2023 compared to 2022 was experienced across all product offerings in the Emerging Businesses Group segment, including CMC Impact Metals, which provided an adjusted EBITDA increase of $7.5 million, or 47%, during 2023 compared to 2022.
Previous report
Corporate and Other
Previous report
Corporate and Other adjusted EBITDA loss decreased by $22.9 million in 2023 compared to 2022. Contributing to the year-over-year decrease in adjusted EBITDA loss was $18.9 million of increased interest income on short-term investments, compared to 2022, $17.7 million in other revenue from our NMTC transactions, with no such activity in 2022, and $16.1 million in debt extinguishment costs incurred during 2022, compared to immaterial activity in 2023. In contrast to these reductions to adjusted EBITDA loss, during 2023 compared to 2022 we incurred $12.1 million of increased labor-related expenses, $10.6 million of increased professional services expenses and $3.0 million of increased information technology expenses. Additionally, in 2023 we recognized a $4.2 million pension plan settlement charge, with no such settlement charge in 2022. See Note 9, New Markets Tax Credit Transactions, in Part II, Item 8 of this Annual Report, for more information on the NMTC transactions and Note 14, Employees' Retirement Plans, in Part II, Item 8 of this Annual Report, for more information on the pension plan termination activity.
Previous report
Operating Activities
Previous report
Net cash flows from operating activities were $899.7 million and $1.3 billion in 2024 and 2023, respectively. Contributing to the year-over-year change was a $374.3 million decrease in net earnings and a $55.7 million decrease in cash from operating assets and liabilities. In general, the fluctuations in cash flows from accounts receivable and inventory were largely driven by continued decreases in the pricing and scrap cost environment during 2024 compared to 2023 as described in the Segment Operating Data section above. Partially offsetting the decreases in cash flows from accounts receivable and inventory was a reduction in cash flows used by accounts payable, accrued expenses and other payables in 2024 compared to 2023. While both periods were affected by declining inventory values and reductions in accrued labor-related expenses, the fluctuations in accounts payable, accrued expenses and other payables were greater in 2023 compared to 2024. Additional changes include a $67.2 million decrease in deferred income taxes and other long-term taxes, partially offset by $61.5 million of additional depreciation and amortization expense. The additional depreciation and amortization expense in 2024 compared to 2023 was largely attributable to placing our third micro mill into service during the fourth quarter of 2023. Lastly, we recorded $6.7 million of non-cash other revenue from the settlement of NMTC transactions during 2024, compared to $17.7 million in 2023. See Note 12, Income Tax, in Part II, Item 8 of this Annual Report for more information on the change in deferred income taxes and Note 9, New Markets Tax Credit Transactions, in Part II, Item 8 of this Annual Report for more information on the NMTC transactions.
Showing the first 40 of 53 passages. Open the source sections for the rest.
Reworded paragraphs (38)
Previous wording
Our discussion and analysis of cash flows due to and from operating, investing and financing activities during 2023 as compared to 2022 can be found in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, in our Annual Report on Form 10-K for the year ended August 31, 2023, which was filed with the SEC on October 12, 2023. The change in reportable segments during the first quarter of 2024 did not alter the discussion previously provided.
Current wording
This Management's Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with our consolidated financial statements and the accompanying notes contained in this Annual Report. Our discussion and analysis of fiscal year 2025 compared to fiscal year 2024 is included herein. Our discussion and analysis of fiscal year 2024 compared to fiscal year 2023 can be found in Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations, in our Annual Report on Form 10-K for the year ended August 31, 2024, which was filed with the SEC on October 17, 2024.
Previous wording
CMC is an innovative solutions provider helping build a stronger, safer and more sustainable world. Through an extensive manufacturing network principally located in the U.S. and Central Europe, the Company offers products and technologies to meet the critical reinforcement needs of the global construction sector. CMC’s solutions support construction across a wide variety of applications, including infrastructure, non-residential, residential, industrial and energy generation and transmission. Our operations are conducted through three reportable segments: North America Steel Group, Europe Steel Group and the Emerging Businesses Group. See Part I, Item 1, Business, of this Annual Report for further information regarding our business and reportable segments.
Current wording
CMC has grown into an innovative solutions provider helping build a stronger, safer and more sustainable world. Today, through an extensive manufacturing network principally located in the U.S. and Central Europe, the Company offers products and technologies to meet the critical reinforcement needs of the global construction sector. CMC’s solutions support early-stage construction across a wide variety of applications, including infrastructure, non-residential, residential, industrial and energy generation and transmission. Our operations are conducted through three reportable segments: North America Steel Group, Emerging Businesses Group and Europe Steel Group. See Part I, Item 1, Business, of this Annual Report for further information regarding our business and reportable segments.
Previous wording
When evaluating our results for the period, we compare net sales, in the aggregate and for each of our reportable segments, in the current period to net sales in the corresponding period of the prior year. Specifically, for the North America Steel Group segment and the Europe Steel Group segment we focus on changes in average selling price per ton and tons shipped compared to the prior year period for each of our vertically integrated product categories as these are the two variables that typically have the greatest impact on our net sales for these reportable segments. Of the products evaluated based on changes in average selling price per ton and tons shipped within the North America Steel Group and Europe Steel Group segments, raw materials include ferrous and nonferrous scrap, steel products include rebar, merchant bar and other steel products, such as billets and wire rod, and downstream products include fabricated rebar, steel fence posts and wire mesh. The evaluations of average selling price per ton and tons shipped for downstream products exclude post-tension cable, which is not measured on a per ton basis.
Current wording
When evaluating our results, we compare net sales, in the aggregate and for each of our reportable segments, in the current period to net sales in the corresponding period. For the North America Steel Group and the Europe Steel Group segments, we focus on changes in average selling price per ton and tons shipped compared to the corresponding period for each of our vertically integrated product categories as these are the two variables that typically have the greatest impact on our net sales for those reportable segments. Of the products evaluated by changes in average selling price per ton and tons shipped within the North America Steel Group and Europe Steel Group segments, raw materials include ferrous and nonferrous scrap, steel products include rebar, merchant bar, light structural and other special sections and other steel products, such as billets and wire rod, and downstream products include fabricated rebar, steel fence posts and wire mesh. Evaluations of average selling price per ton and tons shipped for downstream products exclude post-tension cable, which is not measured on a per ton basis.
Previous wording
Adjusted EBITDA is used by management to compare and evaluate the period-over-period underlying business operational performance of our reportable 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 metal margins of our steel products and downstream products period-over-period in the North America Steel Group and Europe Steel Group segments are a consistent area of focus for our Company and industry. Metal margin is a metric used by management to monitor the results of our vertically integrated organization. For our steel products, metal margin is the difference between the average selling price per ton of rebar, merchant bar 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. The metal margin for the North America Steel Group and Europe Steel Group segments' downstream products is the difference between the average selling price per ton of our downstream products and the scrap input costs to produce these products. The majority of the North America Steel Group and Europe Steel Group segments' 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.
Current wording
Although there are many factors that can impact a segment’s adjusted EBITDA and, therefore, our overall earnings or losses, changes in metal margins of our steel products and downstream products period-over-period in the North America Steel Group and Europe Steel Group segments are a consistent area of focus for our Company and industry. Metal margin is a metric used by management to monitor the results of ourvertically integrated organization. For our steel products, metal margin is the difference between the average selling price per ton of rebar, merchant bar and other steel products and the cost of ferrous scrap per ton utilized by our steel mills to produce these products. The metal margin for the North America Steel Group and Europe Steel Group segments' downstream products is the difference between the average selling price per ton of our downstream products and the scrap input costs to produce these products. An increase or decrease in input costs can impact profitability of steel products and downstream products when there is no corresponding change in selling prices. The majority of the North America Steel Group and Europe Steel Group segments' downstream products selling prices per ton are fixed at the beginning of a project and these projects last one to two years on average. The selling price generally remains fixed over the life of a project; therefore, changes in input costs over the life of the project can significantly impact profitability.
Previous wording
During the fourth quarter of 2023, our third micro mill was placed into service. The new facility, located in Mesa, Arizona, replaced the rebar capacity at our Rancho Cucamonga, California mill, which was sold during 2022, and allows us to meet underlying West Coast and Pacific Northwest demand for steel products. For further details on the sale of the Rancho Cucamonga, California mill, refer to Note 2, Changes in Business, in Part II, Item 8 of this Annual Report. Designed to produce both rebar and merchant bar, this micro mill is the first in the world to produce merchant bar quality products through a continuous production process. Initial commercial production of rebar commenced during commissioning, prior to the startup of merchant bar production, which commenced during the second quarter of 2024. The merchant bar products produced at this facility consist of a wide variety of shapes and sizes of long steel, and, combined with rebar production, the capacity of this micro mill is approximately 40% greater than that of the other micro mills we have constructed. The micro mill was designed with the latest technology in electric arc furnace ("EAF") power supply systems, which can allow us to directly connect the EAF and the ladle furnace to renewable energy sources such as solar and wind. Additionally, this micro mill is the Company’s first micro mill to utilize Q-ONE technology on an EAF, which provides energy efficiencies and precise electrical control during production, creating a stable and consistent output.
Current wording
During the fourth quarter of 2023, our third micro mill was placed into service, and we continued to increase production levels toward targeted run-rates for this mill during 2025. The new facility, located in Mesa, Arizona, allows us to meet underlying West Coast and Pacific Northwest demand for steel products. Designed to produce both rebar and merchant bar, this micro mill is one of the first in the world to produce merchant bar quality products through a continuous production process. Rebar production and merchant bar production commenced during the fourth quarter of 2023 and second quarter of 2024, respectively.
Previous wording
In December 2022, we announced that our planned fourth micro mill would be located in Berkeley County, West Virginia. This new micro mill will be geographically situated to serve the Northeast, Mid-Atlantic and Mid-Western U.S. markets and will be supported by our existing network of downstream fabrication plants. Site improvements and foundation work for the micro mill are complete, large portions of supporting infrastructure have been installed and equipment installation is underway. We expect an operational start-up in late calendar 2025.
Current wording
We are currently constructing our fourth micro mill, located in Berkeley County, West Virginia. This facility is strategically located to serve the Northeast, Mid-Atlantic and Mid-Western U.S. markets and will be supported by our existing network of downstream fabrication plants. Site improvements, foundation work and substantial portions of supporting infrastructure for the micro mill are complete. Construction of structural components for multiple process buildings and equipment is ongoing. We expect to begin melt shop production at this micro mill during 2026.
Previous wording
Net sales during 2024 decreased $873.6 million, or 10%, compared to 2023. See discussions below, labeled North America Steel Group, Europe Steel Group and Emerging Businesses Group within the Segment Operating Data section, for further information on our net sales results.
Current wording
Net sales during 2025 decreased $127.5 million, or 2%, compared to 2024. See discussions below, labeled North America Steel Group, Emerging Businesses Group and Europe Steel Group within the Segment Operating Data section, for further information on our net sales results.
Previous wording
Our effective income tax rate for 2024 was 23.6%, which was relatively consistent with our effective income tax rate of 23.4% for 2023. See Note 12, Income Tax, in Part II, Item 8 of this Annual Report for further discussion of our effective tax rate.
Current wording
Our effective income tax rate for 2025 was 21.3% compared to 23.6% for 2024. The year-over-year decrease was primarily driven by a reduction in pre-tax earnings, reflecting the contingent litigation-related loss recorded during 2025 in connection with the PSG litigation. See Note 12, Income Tax, in Part II, Item 8 of this Annual Report for further discussion of our effective tax rate. For more information about the contingent litigation-related loss, see Note 17, Commitments and Contingencies, in Part II, Item 8 of this Annual Report.
Previous wording
All amounts are computed and presented in a manner that is consistent with the basis in which we internally disaggregate financial information for the purpose of making operating decisions. See Note 19, Segment Information, in Part II, Item 8 of this Annual Report for further information on how we evaluate financial performance of our segments. The operational data by product category presented in the North America Steel Group and Europe Steel Group tables below is calculated using averages during each period presented.
Current wording
All amounts are computed and presented in a manner that is consistent with how we internally disaggregate financial information for the purpose of making operating decisions. See Note 19, Segment Information, in Part II, Item 8 of this Annual Report for further information on how we evaluate financial performance of our segments. The operational data by product category presented in the North America Steel Group and Europe Steel Group tables below is calculated using average values for each period presented.
Previous wording
During 2024, we achieved adjusted EBITDA of $946.4 million, a decrease of 29% compared to adjusted EBITDA of $1.3 billion in 2023. The decrease in adjusted EBITDA in 2024 compared to 2023 was caused by metal margin compression for both steel products and downstream products. The cost of ferrous scrap utilized per ton, the largest single driver of cost of goods sold for both steel products and downstream products, remained stable year-over-year. However, average selling prices decreased for both steel products and downstream products, as explained above.
Current wording
Adjusted EBITDA decreased$201.9 million, or 21%, in 2025 compared to 2024. The reduction in average selling prices per ton for steel and downstream products outpaced the 4% year-over-year decrease in the cost of ferrous scrap utilized per ton, the largest single driver of cost of goods sold for both steel and downstream products, resulting in metal margin compression compared to 2024. The impact of the decrease in steel and downstream products metal margins per ton was partially offset by improved steel products shipment volumes year-over-year.
Previous wording
Adjusted EBITDA decreased $26.0 million, or 54%, in 2024 compared to 2023, primarily driven by a contraction in steel products metal margin per ton of $74 per ton, or 21%, in 2024 compared to 2023, due to the decline in steel products average selling prices described above, which outpaced the decrease in the cost of ferrous scrap utilized per ton. Adjusted EBITDA was also negatively impacted by lower shipment volumes during 2024 compared to 2023, as described above. Offsetting the impact of the decrease in steel products metal margin per ton and lower shipment volumes, results during 2024 benefited from government assistance programs established to offset the rising costs of electricity and natural gas and the indirect costs of rising carbon emission rights included in energy costs. The government assistance recognized under the programs during 2024 was $69.4 million, compared to $13.8 million of government assistance recognized in 2023. The effect of foreign currency translation was an increase in adjusted EBITDA of approximately $3.8 million during 2024.
Current wording
Adjusted EBITDA increased $46.8 million, or 208%, in 2025 compared to 2024, primarily driven by the increase in steel products shipment volumes described above. Also contributing to the improvement in adjusted EBITDA was an expansion in steel products metal margin of $10 per ton, or 4%, in 2025 compared to 2024, due to the reduction in the cost of ferrous scrap utilized per ton outpacing the decline in steel products average selling prices per ton described above. Results in 2025 also benefited from government assistance programs established to offset rising costs of electricity and natural gas, due to the indirect costs of rising carbon emission rights included in energy costs. The government assistance recognized under these programs during 2025 was $78.7 million, compared to $69.4 million in 2024. The effect of foreign currency translation on adjusted EBITDA was immaterial in 2025.
Previous wording
Our cash flows from operating activities are our principal sources of liquidity and result primarily from sales of products offered by the vertically integrated operations in the North America Steel Group segment and the Europe Steel Group segment, products offered by our Emerging Businesses Group segment and related materials and services, as described in Part I, Item 1, Business, of this Annual Report. Historically, our U.S. operations have generated the majority of our cash. At August 31, 2024, cash and cash equivalents of $30.9 million were held by our non-U.S. subsidiaries. We use futures or forward contracts to mitigate the risks from fluctuations in metal commodity prices, foreign currency exchange rates, interest rates and natural gas, electricity and other energy commodity prices. See Note 10, Derivatives, in Part II, Item 8 of this Annual Report for further information.
Current wording
Our cash flows from operating activities are our principal sources of liquidity and result primarily from sales of products offered by the vertically integrated operations in our North America Steel Group and the Europe Steel Group segments, products and solutions offered by our Emerging Businesses Group segment and related materials and services that support these offerings, as described in Part I, Item 1, Business, of this Annual Report. Historically, our U.S. operations have generated the majority of our cash. At August 31, 2025, cash and cash equivalents of $41.9 million were held by our non-U.S. subsidiaries.
Previous wording
We have a diverse and generally stable customer base, and regularly maintain a substantial amount of accounts receivable. We actively monitor our accounts receivable and, based on market conditions and customers' financial condition, record allowances when we believe accounts are uncollectible. We use credit insurance internationally to mitigate the risk of customer insolvency. We estimate that the amount of credit-insured or financially assured receivables was approximately 13% of total receivables at August 31, 2024.
Current wording
We have a diverse and generally stable customer base, and regularly maintain a substantial amount of accounts receivable. We actively monitor our accounts receivable and, based on market conditions and customers' financial condition, record allowances when we believe accounts are uncollectible. We use credit insurance internationally to mitigate the risk of customer insolvency. We estimate that the amount of credit-insured or financially assured receivables was approximately 15% of total receivables as of August 31, 2025.
Previous wording
The table below reflects our sources, facilities and availability of liquidity as of August 31, 2024. See Note 8, Credit Arrangements, in Part II, Item 8 of this Annual Report for additional information.
Current wording
The table below reflects our sources, facilities and availability of liquidity at August 31, 2025. See Note 8, Credit Arrangements, in Part II, Item 8 of this Annual Report for additional information.
Previous wording
We continually review our capital resources to determine whether we can meet our short and long-term goals. For at least the next twelve months, we anticipate our current cash balances, cash flows from operations and available sources of liquidity will be sufficient to maintain operations, make necessary capital expenditures, invest in the development of our fourth micro mill, pay dividends and opportunistically repurchase shares. Additionally, we expect our long-term liquidity position will be sufficient to meet our long-term liquidity needs with cash flows from operations and financing arrangements. However, in the event of changes in business conditions or other developments, including a sustained market deterioration, unanticipated regulatory developments, significant acquisitions, competitive pressures, or to the extent our liquidity needs prove to be greater than expected or cash generated from operations is less than anticipated, we may need additional liquidity. To the extent we elect to finance our long-term liquidity needs, we believe that the potential financing capital available to us in the future will be sufficient.
Current wording
We continually review our capital resources to determine whether we can meet our short and long-term goals. For at least the next twelve months, we anticipate our current cash balances, cash flows from operations and available sources of liquidity will be sufficient to maintain operations, make necessary capital expenditures, pay for litigation-related expenses, invest in the development of our fourth micro mill, pay dividends and opportunistically repurchase shares. Additionally, we expect our long-term liquidity position will be sufficient to meet our long-term liquidity needs with cash flows from oper ations and financing arrangements. However, in the event of changes in business conditions or other developments, including a sustained market deterioration, unanticipated regulatory or legal developments, significant acquisitions, competitive pressures, or to the extent our liquidity needs prove to be greater than expected or cash generated from operations is less than anticipated, we may need additional liquidity. To the extent we elect to finance our long-term liquidity needs, we believe that the potential financing capital available to us in the future will be sufficient.
Previous wording
We aim to execute a capital allocation strategy that prioritizes both value-accretive growth and competitive cash returns to stockholders. We estimate that our 2025 capital spending will range from $630 million to $680 million. We regularly assess our capital spending based on current and expected results and the amount is subject to change.
Current wording
We aim to execute a capital allocation strategy that prioritizes both value-accretive growth and competitive cash returns to stockholders. We estimate that our 2026 capital spending will be approximately $600 million, driven by the construction costs for facilities located in Berkeley Country, West Virginia. We regularly assess our capital spending based on current and expected results and the amount is subject to change.
Previous wording
In January 2024, our Board authorized an increase of $500.0 million to the existing share repurchase program. During 2024, 2023 and 2022, we repurchased $182.9 million, $101.4 million and $161.9 million, respectively, of shares of CMC common stock. We had remaining authorization to repurchase $403.8 million of shares of CMC common stock at August 31, 2024. See Note 15, Capital Stock, in Part II, Item 8, of this Annual Report for more information on the share repurchase program.
Current wording
During 2025, 2024 and 2023, we repurchased $198.8 million, $182.9 million and $101.4 million, respectively, of shares of CMC common stock. Under the share repurchase program, we had remaining authorization to repurchase $205.0 million of shares of CMC common stock as of August 31, 2025. See Note 15, Capital Stock, in Part II, Item 8, of this Annual Report for more information on the share repurchase program.
Previous wording
In March 2024, our Board authorized an increase of $0.02 to our quarterly cash dividend, resulting in a $0.18 per share cash dividend paid during the third and fourth quarters of 2024, compared to a $0.16 per share quarterly cash dividend paid during the first and second quarters of 2024 and during 2023. On October 15, 2024, our Board declared CMC's 240th quarterly cash dividend. The dividend was declared at the rate of $0.18 per share of CMC common stock and is payable on November 14, 2024 to stockholders of record as of the close of business on October 31, 2024. During 2024, 2023 and 2022 we paid $78.9 million, $74.9 million and $67.7 million, respectively, of cash dividends to our stockholders.
Current wording
In March 2024, our Board authorized a $0.02 increase to the quarterly cash dividend, raising it to $0.18 per share of CMC common stock. This increased dividend was paid during the third and fourth quarters of 2024 and throughout the year ended August 31, 2025. By comparison, a quarterly cash dividend of $0.16 per share of CMC common stock was paid during the first and second quarters of 2024. On October 15, 2025, our Board declared CMC's 244th quarterly cash dividend. The dividend was declared at $0.18 per share of CMC common stock, and is payable on November 13, 2025 to stockholders of record as of the close of business on October 30, 2025. During 2025, 2024 and 2023, we paid $81.4 million, $78.9 million and $74.9 million, respectively, of cash dividends to our stockholders.
Previous wording
Our material cash commitments from known contractual and other obligations primarily consist of obligations for long-term debt and related interest, leases for properties and equipment and purchase obligations as part of normal operations. See Note 8, Credit Arrangements, in Part II, Item 8 of this Annual Report for more information regarding scheduled maturities of our long-term debt. See Note 7, Leases, in Part II, Item 8 of this Annual Report for additional information on leases. Interest payable on our long-term debt was $43.4 million due in the twelve months following August 31, 2024 and $343.4 million due thereafter. Additionally, we have a U.S. federal repatriation tax obligation resulting from the repatriation tax provisions of the Tax Cuts and Jobs Act ("TCJA"), of which $5.5 million was due in the twelve months following August 31, 2024 and $6.9 million is due thereafter.
Current wording
Our material cash commitments from known contractual and other obligations primarily consist of obligations for long-term debt and related interest, leases for properties and equipment, construction of our fourth micro mill and other purchase obligations as part of normal operations. See Note 8, Credit Arrangements, in Part II, Item 8 of this Annual Report for more information regarding scheduled maturities of our long-term debt. See Note 7, Leases, in Part II, Item 8 of this Annual Report for additional information on leases. Interest payable on our long-term debt was $49.7 million due in the twelve months following August 31, 2025 and $342.3 million due thereafter. Additionally, we have a U.S. federal repatriation tax obligation resulting from the repatriation tax provisions of the Tax Cuts and Jobs Act ("TCJA"), of which the remaining $6.9 million is due in the twelve months following August 31, 2025.
Previous wording
As of August 31, 2024, our undiscounted purchase obligations were approximately $720 million due in the next twelve months and $340 million due thereafter under purchase orders and "take or pay" arrangements. These purchase obligations include all enforceable, legally binding agreements to purchase goods or services that specify all significant terms, regardless of the duration of the agreement, and exclude agreements with variable terms for which we are unable to estimate the minimum amounts. The "take or pay" arrangements are multi-year commitments with minimum annual purchase requirements and are entered into primarily for purchases of commodities used in operations such as electrodes and natural gas.
Current wording
As of August 31, 2025, our undiscounted purchase obligations were approximately $720 million due in the next twelve months and $370 million due thereafter under purchase orders and "take or pay" arrangements. These purchase obligations include all enforceable, legally binding agreements to purchase goods or services that specify all significant terms, regardless of the duration of the agreement, and exclude agreements with variable terms for which we are unable to estimate the minimum amounts. The "take or pay" arrangements are multi-year commitments with minimum annual purchase requirements and are entered into primarily for purchases of commodities used in operations such as electrodes and natural gas.
Previous wording
Of the purchase obligations due within the twelve months following August 31, 2024, approximately 23% were for consumable production inputs, such as alloys, 21% were for the construction of our fourth micro mill, 19% were for commodities and 14% were for capital expenditures in connection with normal business operations. Of the purchase obligations due thereafter, 69% were for commodities and 9% were for the construction of our fourth micro mill. The remainder of the purchase obligations are for goods and services in the normal course of business.
Current wording
Of the purchase obligations due within the twelve months following August 31, 2025, approximately 24% were for consumable production inputs, such as alloys, 23% were for the construction of our fourth micro mill, 15% were for commodities and 14% were for capital expenditures in connection with normal business operations. Of the purchase obligations due thereafter, 55% were for commodities, 15% were for the construction of our fourth micro mill and 14% were for investments in information technology. The remainder of the purchase obligations are for goods and services in the normal course of business.
Previous wording
We maintain stand-by letters of credit to provide support for certain transactions that governmental agencies, our insurance providers and suppliers require. At August 31, 2024, we had committed $44.8 million under these arrangements, of which $0.9 million reduced availability under the Revolver (as defined in Note 8, Credit Arrangements, in Part II, Item 8 of this Annual Report).
Current wording
We maintain stand-by letters of credit to provide support for certain transactions that governmental agencies, our insurance providers and suppliers require. At August 31, 2025, we had committed $38.5 million under these arrangements, of which $1.0 million reduced availability under the Revolver (as defined in Note 8, Credit Arrangements, in Part II, Item 8 of this Annual Report).
Previous wording
In the ordinary course of conducting our business, we become involved in litigation, administrative proceedings and governmental investigations, including environmental matters. We may incur settlements, fines, penalties or judgments because of some of these matters. Liabilities and costs associated with litigation-related loss contingencies require estimates and judgments based on our knowledge of the facts and circumstances surrounding each matter and the advice of our legal counsel. We record liabilities for litigation-related losses when a loss is probable and we can reasonably estimate the amount of the loss. We evaluate the measurement of recorded liabilities each reporting period based on the current facts and circumstances specific to each matter. The ultimate losses incurred upon final resolution of litigation-related loss contingencies may differ materially from the estimated liability recorded at a particular balance sheet date. Changes in estimates are recorded in earnings in the period in which such changes occur. See Note 17, Commitments and Contingencies, in Part II, Item 8 of this Annual Report for more information on pending litigation and other matters.
Current wording
In the ordinary course of conducting our business, we become involved in litigation, administrative proceedings and governmental investigations, including environmental matters. We have in the past, and may in the future, incur settlements, fines, penalties or judgments in connection with some of these matters. Liabilities and costs associated with litigation-related loss contingencies require estimates and judgments based on our knowledge of the facts and circumstances surrounding each matter and the advice of our legal counsel. We record liabilities for litigation-related losses when a loss is probable, and we can reasonably estimate the amount of the loss. In the year ended August 31, 2025, the Company reported $362.3 million of litigation expense in the consolidated statement of earnings, which amount represents the Company's estimate based on its understanding of the PSG judgment, PSG's attorneys' fees and other related costs, including post-judgment interest. This amount was classified as a current liability in the consolidated balance sheet as of August 31, 2025 because the timing of the potential payment is uncertain. We evaluate the measurement of recorded liabilities each reporting period based on the current facts and circumstances specific to each matter. The ultimate losses incurred upon final resolution of litigation-related loss contingencies may differ materially from the estimated liability recorded at a particular balance sheet date. Changes in estimates are recorded in earnings in the period in which such changes occur. See Note 17, Commitments and Contingencies, in Part II, Item 8 of this Annual Report for more information on pending litigation and other matters.
Previous wording
We incurred environmental expenses of approximately $54.9 million, $49.3 million and $44.2 million for 2024, 2023 and 2022, respectively. The expenses included the cost of disposal, environmental personnel at various divisions, permit and license fees, accruals and payments for studies, tests, assessments, remediation, consultant fees, baghouse dust removal and various other expenses. In addition, during 2024, we spent approximately $5.0 million in capital expenditures related to costs directly associated with environmental compliance. Our accrued environmental liabilities were $3.4 million and $4.5 million as of August 31, 2024 and 2023, respectively, of which $1.9 million and $2.0 million were classified as other noncurrent liabilities within the Company's consolidated balance sheets as of August 31, 2024 and 2023, respectively.
Current wording
We incurred environmental expenses of $58.4 million, $54.9 million and $49.3 million for 2025, 2024 and 2023, respectively. The expenses included the cost of disposal, environmental personnel at various divisions, permit and license fees, accruals and payments for studies, tests, assessments, remediation, consultant fees, baghouse dust removal and various other expenses. In addition, during 2025, we spent $4.7 million in capital expenditures related to costs directly associated with environmental compliance. Our accrued environmental liabilities were $3.4 million as of August 31, 2025 and 2024, of which $1.9 million were classified as other noncurrent liabilities within the consolidated balance sheets as of August 31, 2025 and 2024.
Previous wording
The EPA, or an equivalent state agency, has notified us that we are considered a PRP at several sites, none of which involve real estate we ever owned or upon which we have ever conducted operations. We may be obligated under CERCLA, or similar state statutes, to conduct remedial investigation, feasibility studies, remediation and/or removal of alleged releases of hazardous substances or to reimburse the EPA or third parties for such activities and pay costs for associated damages to natural resources. We are involved in litigation or administrative proceedings with regard to several of these sites in which we are contesting, or at the appropriate time may contest, our liability. In addition, we have received information requests with regard to other sites which may be under consideration by the EPA as potential CERCLA sites. Because of various factors, including the ambiguity of the regulations, the difficulty of identifying the responsible parties for any particular site, the complexity of determining the relative liability among them, the uncertainty as to the most desirable remediation techniques and the amount of damages and cleanup costs, and the extended time periods over which such costs may be incurred, we cannot reasonably estimate our ultimate costs of compliance with CERCLA. Based on currently available information, which is in many cases preliminary and incomplete, we had immaterial amounts accrued as of both August 31, 2024 and 2023, in connection with CERCLA sites. We have accrued for these liabilities based upon our best estimates. The amounts paid and the expenses incurred on these sites for 2024, 2023 and 2022 were not material. Historically, the amounts that we have ultimately paid for such remediation activities have not been material.
Current wording
Based on currently available information, which is in many cases preliminary and incomplete, we had immaterial amounts accrued as of both August 31, 2025 and 2024, in connection with CERCLA sites. We have accrued for these liabilities based upon our best estimates. The amounts paid and the expenses incurred on these sites for 2025, 2024 and 2023 were not material. Historically, the amounts that we have ultimately paid for such remediation activities have not been material.
Previous wording
Revenue from contracts where the Company provides fabricated rebar and installation services is recognized over time using an input method based on costs incurred compared to total estimated costs. Revenue from contracts where the Company does not provide installation services is recognized over time using an output method based on tons shipped compared to total estimated tons. Significant judgment is required to evaluate total estimated costs used in the input method and total estimated tons in the output method. If total estimated costs on any contract are greater than the net contract revenues, the Company recognizes the entire estimated loss in the period the loss becomes known. The cumulative effect of revisions to estimates related to net contract revenues, costs to complete or total planned quantity is recorded in the period in which such revisions are identified. The Company does not exercise significant judgment in determining the transaction price. See Note 4, Revenue Recognition, in Part II, Item 8 of this Annual Report for further details.
Current wording
Revenue from contracts where the Company provides fabrication and installation services is recognized over time using an input method based on costs incurred compared to total estimated costs. Revenue from contracts where the Company does not provide installation services is recognized over time using an output method based on tons shipped compared to total estimated tons. Significant judgment is required to evaluate total estimated costs used in the input method and total estimated tons in the output method. If total estimated costs on any contract are greater than the net contract revenues, the Company recognizes the entire estimated loss in the period the loss becomes known. The cumulative effect of revisions to estimates related to net contract revenues, costs to complete or total planned quantity is recorded in the period in which such revisions are identified. The Company does not exercise significant judgment in determining the transaction price. See Note 4, Revenue Recognition, in Part II, Item 8 of this Annual Report for further details.
Previous wording
We periodically assess the likelihood of realizing our deferred tax assets and maintain a valuation allowance to reduce certain deferred tax assets to amounts that we believe are more likely than not to be realized. We base our judgment of the recoverability of our deferred tax assets primarily on historical earnings, our estimate of current and expected future earnings, prudent and feasible tax planning strategies and current and future ownership changes. At August 31, 2024 and 2023, we had valuation allowances of $256.8 million and $280.5 million, respectively, against our deferred tax assets. Of these amounts, $10.0 million and $13.3 million at August 31, 2024 and 2023, respectively, relate to net operating loss and credit carryforwards in certain state jurisdictions that are subject to estimation. The remaining valuation allowance primarily relates to net operating loss carryforwards in certain foreign jurisdictions, which the Company does not expect to realize.
Current wording
We periodically assess the likelihood of realizing our deferred tax assets and maintain a valuation allowance to reduce certain deferred tax assets to amounts that we believe are more likely than not to be realized. We base our judgment of the recoverability of our deferred tax assets primarily on historical earnings, our estimate of current and expected future earnings, prudent and feasible tax planning strategies and current and future ownership changes. At August 31, 2025 and 2024, we had valuation allowances of $253.2 million and $256.8 million, respectively, against our deferred tax assets. Of these amounts, $12.1 million and $10.0 million at August 31, 2025 and 2024, respectively, relate to net operating loss and credit carryforwards in certain state jurisdictions that are subject to estimation. The remaining valuation allowance primarily relates to net operating loss carryforwards in certain foreign jurisdictions, which the Company does not expect to realize.
Previous wording
We state inventories at the lower of cost or net realizable value, which is defined as estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. Adjustments to inventory may be due to changes in price levels, assumptions about market conditions, obsolescence, damage, physical deterioration and other causes. Any adjustments required to reduce the carrying value of inventory to net realizable value are recorded as a charge to cost of goods sold within the consolidated statements of earnings. In fiscal 2024, we recorded $5.1 million of inventory write-downs within our Europe Steel Group segment resulting from changes in future demand and market conditions impacting the vertically integrated operations in Poland. A hypothetical 10% decrease to the estimated selling prices used in the calculation of net realizable value of inventory within these operations in Poland would have resulted in a $3.9 million increase to the inventory write-downs recorded as of August 31, 2024.
Current wording
We state inventories at the lower of cost or net realizable value, which is defined as estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. Adjustments to inventory may be due to changes in price levels, assumptions about market conditions, obsolescence, damage, physical deterioration and other causes. Any adjustments required to reduce the carrying value of inventory to net realizable value are recorded as a charge to cost of goods sold within the consolidated statements of earnings. As of August 31, 2025, the inventory valuation reserve was immaterial.
Previous wording
The Company accounts for business combinations under the acquisition method of accounting, which requires assets acquired and liabilities assumed to be recorded at their estimated fair value at the date of acquisition. The fair value is estimated by the Company using valuation techniques and Level 3 inputs, including expected future cash flows and discount rates. The excess of purchase price over the fair value amounts assigned to the assets acquired and liabilities assumed, if any, is recorded as goodwill. Determining the fair value of assets acquired and liabilities assumed involves the use of significant estimates and assumptions. See Note 2, Changes in Business, in Part II, Item 8 of this Annual Report for more information about the Company's acquisitions.
Current wording
The Company accounts for business combinations under the acquisition method of accounting, which requires assets acquired and liabilities assumed to be recorded at their estimated fair value at the date of acquisition. The fair value is estimated by the Company using valuation techniques and Level 3 inputs, including expected future cash flows and discount rates. The excess of purchase price over the fair value amounts assigned to the assets acquired and liabilities assumed, if any, is recorded as goodwill. Determining the fair value of assets acquired and liabilities assumed involves the use of significant estimates and assumptions. See Note 2, Changes in Business, in Part II, Item 8 of this Annual Report for more information about the Company's prior acquisitions. See Note 20, Subsequent Events, in Part II, Item 8 of this Annual Report for information regarding the Company's pending acquisitions.
Previous wording
For 2024 and 2023, the annual goodwill impairment analyses did not result in impairment charges. As of the 2024 annual impairment test date, the Company had goodwill of $383.9 million related to three reporting units within the North America Steel Group segment, one reporting unit within the Europe Steel Group segment and four reporting units within the Emerging Businesses Group segment. Six reporting units, which, as of the 2024 annual impairment test date, comprised $5.0 million of goodwill within the North America Steel Group segment, $4.1 million of goodwill within the Europe Steel Group segment and $262.4 million of goodwill within the Emerging Businesses Group segment, were assessed for impairment using a qualitative approach. Management determined it was more likely than not that the fair values of the reporting units which were assessed using a qualitative approach exceeded their respective carrying values.
Current wording
For 2025 and 2024, the annual goodwill impairment analyses did not result in impairment charges. As of the 2025 annual impairment test date, the Company had goodwill of $386.5 million related to three reporting units within the North America Steel Group segment, five reporting units within the Emerging Businesses Group segment and one reporting unit within the Europe Steel Group segment. Seven reporting units, which, as of the 2025 annual impairment test date, comprised $45.7 million of goodwill within the North America Steel Group segment, $70.3 million of goodwill within the Emerging Businesses Group segment and $4.3 million of goodwill within the Europe Steel Group segment, were assessed for impairment using a qualitative approach. Management determined it was more likely than not that the fair values of the reporting units which were assessed using a qualitative approach exceeded their respective carrying values.
Previous wording
The remaining two reporting units, both within the North America Steel Group segment, were tested for impairment using a quantitative approach. The fair values of these two reporting units consisting of $71.7 million and $40.7 million of goodwill as of the 2024 annual impairment test date exceeded their carrying values by greater than 30%. The Company believes the fair values of the reporting units tested using a quantitative approach are substantially in excess of their carrying values. An increase or decrease of 2% to the discount rate or terminal growth rate used in the quantitative impairment tests for these reporting units would not result in impairment charges. The difference in the value of goodwill between the 2024 annual impairment test date and August 31, 2024 was due to the foreign currency translation adjustments.
Current wording
The remaining two reporting units, one within the North America Steel Group segment and one within the Emerging Businesses Group segment, were tested for impairment using a quantitative approach. The fair value of the reporting unit within the North America Steel Group segment with $71.7 million of goodwill as of the 2025 annual impairment test date exceeded its carrying value by greater than 50%. The fair value of the reporting unit within the Emerging Businesses Group segment with $194.5 million of goodwill as of the 2025 annual impairment test date exceeded its carrying value by greater than 15%. The difference in the value of goodwill between the 2025 annual impairment test date and August 31, 2025 was due to foreign currency translation adjustments.
Previous wording
As of the 2024 annual impairment test date, the Company had $57.3 million of other indefinite-lived intangible assets within the Emerging Businesses Group segment, of which $54.1 million were tested for impairment using a quantitative approach. To perform the quantitative impairment tests, the Company used an income approach to calculate the fair value of each intangible asset using a relief from royalty method. Significant inputs to measure the fair value of the indefinite-lived intangible assets included projected revenue growth rates, royalty rates and discount rates. The fair values of the indefinite-lived intangible assets exceeded their carrying values in excess of 30%. The difference in the value of indefinite-lived intangible assets between the 2024 annual impairment test date and August 31, 2024 was due to foreign currency translation adjustments. Based on the Company’s annual impairment testing of the indefinite-lived intangible assets, we concluded it was more likely than not that their fair values exceeded the respective carrying values.
Current wording
As of the 2025 annual impairment test date, the Company had $57.9 million of other indefinite-lived intangible assets within the Emerging Businesses Group segment, of which $54.7 million were tested for impairment using a quantitative approach. To perform the quantitative impairment tests, the Company used an income approach to calculate the fair value of each intangible asset using a relief from royalty method. Significant inputs to measure the fair value of the indefinite-lived intangible assets included projected revenue growth rates, royalty rates and discount rates. The fair values of the indefinite-lived intangible assets exceeded their carrying values by approximately 10%. The difference in the value of indefinite-lived intangible assets between the 2025 annual impairment test date and August 31, 2025 was due to foreign currency translation adjustments. Based on the
Previous wording
Based on the results of impairment tests performed in 2024, management does not believe that it is reasonably likely that our reporting units or indefinite-lived intangible assets will fail their respective impairment tests in the near term. See Note 6, Goodwill and Other Intangible Assets, in Part II, Item 8 of this Annual Report for additional information.
Current wording
Company’s annual impairment testing of the indefinite-lived intangible assets, no impairment charges were recognized. Further, based on the results of impairment tests performed in 2025, management does not believe that it is reasonably likely that our reporting units or indefinite-lived intangible assets will fail their respective impairment tests in the near term. See Note 6, Goodwill and Other Intangible Assets, in Part II, Item 8 of this Annual Report for additional information.
Previous wording
Our operations are capital intensive. The estimates of undiscounted future cash flows used during an impairment review of a long-lived asset or asset group require judgments and assumptions of future cash flows that are expected to arise as a direct result of the use and eventual disposition of the asset or asset group. If these assets were for sale, our estimates of their values could be significantly different because of market conditions, specific transaction terms and a buyer's perspective on future cash flows. During 2024, there were no events or circumstances that triggered an impairment review.
Current wording
Our operations are capital intensive. The estimates of undiscounted future cash flows used during an impairment review of a long-lived asset or asset group require judgments and assumptions of future cash flows that are expected to arise as a direct result of the use and eventual disposition of the asset or asset group. If these assets were for sale, our estimates of their values could be significantly different because of market conditions, specific transaction terms and a buyer's perspective on future cash flows. During 2025, the Company recorded an immaterial impairment charge related to specific equipment; however, no broader events or circumstances triggered a recoverability assessment for property, plant and equipment.
Previous wording
This Annual Report contains "forward-looking statements" within the meaning of the federal securities laws. The statements in this report that are not historical statements are forward-looking statements and address activities, events or developments that may occur in the future, including (without limitation) such matters as activities related to general economic conditions, key macro-economic drivers that impact our business, the effects of ongoing trade actions, the effects of continued pressure on the liquidity of our customers, potential synergies and growth provided by acquisitions and strategic investments, demand for our products, shipment volumes, metal margins, the ability to operate our steel mills at full capacity, future availability and cost of supplies of raw materials and energy for our operations, growth rates in certain reportable segments, product margins within our Emerging Businesses Group, share repurchases, legal proceedings, construction activity, international trade, the impact of geopolitical conditions, capital expenditures, tax credits, our liquidity and our ability to satisfy future liquidity requirements, estimated contractual obligations, the expected capabilities and benefits of new facilities, the timeline for execution of our growth plan and our expectations or beliefs concerning future events. These forward-looking statements can generally be identified by phrases such as we or our management "expects," "anticipates," "believes," "estimates," "future," "intends," "may," "plans to," "ought," "could," "will," "should," "likely," "appears," "projects," "forecasts," "outlook" or other similar words or phrases, as well as by discussions of strategy, plans or intentions.
Current wording
This Annual Report contains "forward-looking statements" within the meaning of the federal securities laws. The statements in this report that are not historical statements are forward-looking statements and address activities, events or developments that may occur in the future, including (without limitation) such matters as activities related to the proposed acquisitions of CP&P and Foley and the timing thereof, the ability to obtain regulatory approvals and meet other closing conditions for the proposed acquisitions, the expected benefits of the proposed acquisitions, general economic conditions, key macro-economic drivers that impact our business, the effects of ongoing trade actions, the effects of continued pressure on the liquidity of our customers, potential synergies and growth provided by acquisitions and strategic investments, demand for our products, shipment volumes, metal margins, the ability to operate our steel mills at full capacity, particularly during periods of domestic mill start-ups, the future availability and cost of supplies of raw materials and energy for our operations, growth rates in certain reportable segments, product margins within our Emerging Businesses Group segment, share repurchases, legal proceedings, construction activity, international trade, the impact of geopolitical conditions, capital expenditures, tax credits, our liquidity and our ability to satisfy future liquidity requirements, estimated contractual obligations, the expected capabilities and benefits of new facilities, the anticipated benefits and timeline for execution of our growth plan and initiatives, including our TAG operational and commercial excellence program, and our expectations or beliefs concerning future events. These forward-looking statements can generally be identified by phrases such as we or our management "expects," "anticipates," "believes," "estimates," "future," "intends," "may," "plans to," "ought," "could," "will," "should," "likely," "appears," "projects," "forecasts," "outlook" or other similar words or phrases, as well as by discussions of strategy, plans or intentions.
Previous wording
•increased attention to environmental, social and governance ("ESG") matters, including any targets or other ESG, environmental justice or regulatory initiatives;
Current wording
•increased attention to ESG matters, including any targets or other ESG, environmental justice or regulatory initiatives;
Previous wording
•litigation claims and settlements, court decisions, regulatory rulings and legal compliance risks;
Current wording
•litigation claims and settlements, court decisions, regulatory rulings and legal compliance risks, including those related to the PSG litigation and other legal proceedings discussed in Note 17, Commitments and Contingencies, in Part II, Item 8, and in Part I, Item 3, Legal Proceedings of this Annual Report;
Previous wording
Refer to the "Risk Factors" disclosed in our periodic and current reports filed with the SEC for information regarding additional risks which would cause actual results to be significantly different from those expressed or implied by these forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties, assumptions and other important factors that could cause actual results, performance or our achievements, or industry results, to differ materially from historical results, any future results, or performance or achievements expressed or implied by such forward-looking statements. Accordingly, readers of this Annual Report are cautioned not to place undue reliance on any forward-looking statements.
Current wording
Refer to the "Risk Factors" disclosed in Part I, Item 1A, Risk Factors in this Annual Report for information regarding additional risks which would cause actual results to be significantly different from those expressed or implied by these forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties, assumptions and other important factors that could cause actual results, performance or our achievements, or industry results, to differ materially from historical results, any future results, or performance or achievements expressed or implied by such forward-looking statements. Accordingly, readers of this Annual Report are cautioned not to place undue reliance on any forward-looking statements.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
We use futures and forward contracts to mitigate the risks from fluctuations in commodity prices, foreign currency exchange rates, interest rates and natural gas, electricity and other energy prices. See Note 10, Derivatives, in Part II, Item 8 of this Annual Report for further information.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
This Management's Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with our consolidated financial statements and the accompanying notes contained in this Annual Report.
Previous report — wording carried elsewhere
Net sales during 2023 remained relatively flat compared to 2022. See discussions below, labeled North America Steel Group, Europe Steel Group and Emerging Businesses Group within the Segment Operating Data section, for further information on our net sales results.