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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
___________________________________
FORM 10-Q 
___________________________________
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended May 31, 2022
OR
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from             to            
Commission file number 1-4304
___________________________________
COMMERCIAL METALS COMPANY
(Exact Name of Registrant as Specified in Its Charter)
cmc-20220531_g1.jpg 
Delaware75-0725338
(State or Other Jurisdiction of Incorporation or Organization)(I.R.S. Employer Identification Number)
6565 N. MacArthur Blvd., Irving, Texas 75039
(Address of Principal Executive Offices) (Zip Code)
(214) 689-4300
(Registrant's Telephone Number, Including Area Code)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each ClassTrading Symbol(s)Name of Each Exchange on Which Registered
Common Stock, $0.01 par valueCMCNew York Stock Exchange
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 ("Exchange Act") during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  x    No  ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filer  Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). 
Yes      No  
As of June 21, 2022, 120,490,407 shares of the registrant's common stock, par value $0.01 per share, were outstanding.



COMMERCIAL METALS COMPANY AND SUBSIDIARIES
TABLE OF CONTENTS
 



2

PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS

COMMERCIAL METALS COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)
Three Months Ended May 31,Nine Months Ended May 31,
(in thousands, except share and per share data)2022202120222021
Net sales$2,515,727 $1,845,041 $6,506,416 $4,699,114 
Costs and operating expenses (income):
Cost of goods sold1,956,459 1,533,768 5,157,834 3,936,930 
Selling, general and administrative expenses139,556 134,357 391,119 368,882 
Interest expense13,433 11,965 36,479 40,245 
Loss on debt extinguishment39  16,091 16,841 
Asset impairments3,245 277 4,473 4,345 
Gain on sale of assets(2,024)(3,909)(276,106)(9,390)
Net costs and operating expenses2,110,708 1,676,458 5,329,890 4,357,853 
Earnings before income taxes405,019 168,583 1,176,526 341,261 
Income taxes92,590 38,175 247,894 80,709 
Net earnings$312,429 $130,408 $928,632 $260,552 
Earnings per share:
Basic$2.58 $1.08 $7.66 $2.17 
Diluted$2.54 $1.07 $7.55 $2.14 
Average basic shares outstanding121,247,105 120,613,652 121,277,553 120,241,579 
Average diluted shares outstanding122,799,869 122,193,655 122,927,291 121,852,144 
See notes to condensed consolidated financial statements.


3

COMMERCIAL METALS COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
Three Months Ended May 31,Nine Months Ended May 31,
(in thousands)2022202120222021
Net earnings$312,429 $130,408 $928,632 $260,552 
Other comprehensive income (loss), net of income taxes:
Foreign currency translation adjustment after reclassification(14,668)11,775 (68,817)4,852 
Derivatives:
Unrealized holding gain
25,927 12,145 81,378 21,032 
Reclassification for realized gain
(5,107)(616)(13,453)(929)
Net unrealized gain on derivatives
20,820 11,529 67,925 20,103 
Defined benefit plans loss after amortization of prior service costs and net actuarial losses(6)(14)(18)(41)
Total other comprehensive income (loss), net of income taxes
6,146 23,290 (910)24,914 
Comprehensive income
$318,575 $153,698 $927,722 $285,466 
See notes to condensed consolidated financial statements.
4

COMMERCIAL METALS COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(in thousands, except share and per share data)May 31, 2022August 31, 2021
Assets
Current assets:
Cash and cash equivalents$410,265 $497,745 
Restricted cash126,264 3,384 
Accounts receivable (less allowance for doubtful accounts of $5,070 and $5,553)
1,330,279 1,105,580 
Inventories, net1,346,286 935,387 
Prepaid and other current assets230,414 169,649 
Assets held for sale60 25,083 
Total current assets3,443,568 2,736,828 
Property, plant and equipment, net1,808,392 1,566,123 
Intangible assets, net266,440 10,101 
Goodwill253,563 66,137 
Other noncurrent assets331,739 259,482 
Total assets$6,103,702 $4,638,671 
Liabilities and stockholders' equity
Current liabilities:
Accounts payable$492,947 $450,723 
Accrued expenses and other payables474,653 475,384 
Current maturities of long-term debt and short-term borrowings423,091 54,366 
Total current liabilities1,390,691 980,473 
Deferred income taxes223,979 112,067 
Other noncurrent liabilities231,385 235,607 
Long-term debt1,115,478 1,015,415 
Total liabilities2,961,533 2,343,562 
Commitments and contingencies (Note 15)
Stockholders' equity:
Common stock, par value $0.01 per share; authorized 200,000,000 shares; issued 129,060,664 shares; outstanding 120,490,407 and 120,586,589 shares
1,290 1,290 
Additional paid-in capital375,386 368,064 
Accumulated other comprehensive loss(85,730)(84,820)
Retained earnings3,040,554 2,162,925 
Less treasury stock 8,570,257 and 8,474,075 shares at cost
(189,563)(152,582)
Stockholders' equity3,141,937 2,294,877 
Stockholders' equity attributable to non-controlling interests232 232 
Total stockholders' equity3,142,169 2,295,109 
Total liabilities and stockholders' equity$6,103,702 $4,638,671 
See notes to condensed consolidated financial statements.
5

COMMERCIAL METALS COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
 Nine Months Ended May 31,
(in thousands)20222021
Cash flows from (used by) operating activities:
Net earnings$928,632 $260,552 
Adjustments to reconcile net earnings to cash flows from (used by) operating activities:
Depreciation and amortization125,943 125,176 
Deferred income taxes and other long-term taxes64,241 (17,175)
Stock-based compensation37,856 35,558 
Loss on debt extinguishment16,052 16,841 
Asset impairments4,473 4,345 
Other1,449 243 
Amortization of acquired unfavorable contract backlog (4,540)
Net gain on disposals of assets(276,106)(9,390)
Changes in operating assets and liabilities(660,793)(317,378)
Net cash flows from operating activities
241,747 94,232 
Cash flows from (used by) investing activities:
Acquisitions, net of cash acquired(552,449) 
Proceeds from the sale of property, plant and equipment and other314,971 25,890 
Capital expenditures(294,346)(127,395)
Proceeds from insurance3,081  
Other (2,500)
Net cash flows used by investing activities
(528,743)(104,005)
Cash flows from (used by) financing activities:
Proceeds from issuance of long-term debt, net740,403 309,187 
Repayments of long-term debt(319,706)(361,855)
Debt extinguishment costs(13,642)(13,128)
Debt issuance costs(3,064)(2,830)
Proceeds from accounts receivable facilities327,665 145,864 
Repayments under accounts receivable facilities(290,666)(118,312)
Treasury stock acquired(55,597) 
Dividends(51,003)(43,295)
Stock issued under incentive and purchase plans, net of forfeitures(10,132)(3,807)
Contribution from non-controlling interest 19 
Net cash flows from (used by) financing activities
324,258 (88,157)
Effect of exchange rate changes on cash(1,862)(423)
Increase (decrease) in cash, restricted cash and cash equivalents
35,400 (98,353)
Cash, restricted cash and cash equivalents at beginning of period501,129 544,964 
Cash, restricted cash and cash equivalents at end of period$536,529 $446,611 
See notes to condensed consolidated financial statements.
Supplemental information:Nine Months Ended May 31,
(in thousands)20222021
Cash paid for income taxes$189,491 $59,041 
Cash paid for interest34,394 43,403 
Noncash activities:
Liabilities related to additions of property, plant and equipment$50,948 $16,601 
Cash and cash equivalents$410,265 $443,120 
Restricted cash126,264 3,491 
Total cash, restricted cash and cash equivalents$536,529 $446,611 
6

COMMERCIAL METALS COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED)
Three Months Ended May 31, 2022
 Common Stock Treasury Stock 
(in thousands, except share and per share data)Number of
Shares
AmountAdditional Paid-In
Capital
Accumulated
Other Comprehensive
Loss
Retained
Earnings
Number of
Shares
Amount Non-controlling
Interest
Total
Balance, March 1, 2022129,060,664 $1,290 $366,162 $(91,876)$2,745,117 (7,564,796)$(150,978)$232 $2,869,947 
Net earnings312,429 312,429 
Other comprehensive income6,146 6,146 
Dividends ($0.14 per share)
(16,992)(16,992)
Treasury stock acquired(1,006,387)(38,587)(38,587)
Issuance of stock under incentive and purchase plans, net of forfeitures585 926 2 587 
Stock-based compensation8,639 8,639 
Balance, May 31, 2022129,060,664 $1,290 $375,386 $(85,730)$3,040,554 (8,570,257)$(189,563)$232 $3,142,169 
Nine Months Ended May 31, 2022
 Common Stock Treasury Stock 
(in thousands, except share and per share data)Number of
Shares
AmountAdditional Paid-In
Capital
Accumulated
Other Comprehensive
Loss
Retained
Earnings
Number of
Shares
AmountNon-controlling
Interest
Total
Balance, September 1, 2021129,060,664 $1,290 $368,064 $(84,820)$2,162,925 (8,474,075)$(152,582)$232 $2,295,109 
Net earnings928,632 928,632 
Other comprehensive loss(910)(910)
Dividends ($0.42 per share)
(51,003)(51,003)
Treasury stock acquired(1,501,387)(55,597)(55,597)
Issuance of stock under incentive and purchase plans, net of forfeitures(28,748)1,405,205 18,616 (10,132)
Stock-based compensation26,979 26,979 
Reclassification of share-based liability awards9,091 9,091 
Balance, May 31, 2022129,060,664 $1,290 $375,386 $(85,730)$3,040,554 (8,570,257)$(189,563)$232 $3,142,169 
7

Three Months Ended May 31, 2021
 Common Stock Treasury Stock 
(in thousands, except share and per share data)Number of
Shares
AmountAdditional Paid-In
Capital
Accumulated
Other Comprehensive
Loss
Retained
Earnings
Number of
Shares
AmountNon-controlling
Interest
Total
Balance, March 1, 2021129,060,664 $1,290 $354,620 $(102,140)$1,909,443 (8,552,449)$(153,952)$231 $2,009,492 
Net earnings130,408 130,408 
Other comprehensive income23,290 23,290 
Dividends ($0.12 per share)
(14,768)(14,768)
Issuance of stock under incentive and purchase plans, net of forfeitures(633)77,556 1,362 729 
Stock-based compensation7,446 7,446 
Balance, May 31, 2021129,060,664 $1,290 $361,433 $(78,850)$2,025,083 (8,474,893)$(152,590)$231 $2,156,597 
Nine Months Ended May 31, 2021
 Common Stock Treasury Stock 
(in thousands, except share and per share data)Number of
Shares
AmountAdditional Paid-In
Capital
Accumulated
Other Comprehensive
Loss
Retained
Earnings
Number of
Shares
AmountNon-controlling
Interest
Total
Balance, September 1, 2020129,060,664 $1,290 $358,912 $(103,764)$1,807,826 (9,839,759)$(175,063)$212 $1,889,413 
Net earnings260,552 260,552 
Other comprehensive income24,914 24,914 
Dividends ($0.36 per share)
(43,295)(43,295)
Issuance of stock under incentive and purchase plans, net of forfeitures(26,280)1,364,866 22,473 (3,807)
Stock-based compensation23,381 23,381 
Contribution of non-controlling interest19 19 
Reclassification of share-based liability awards5,420 5,420 
Balance, May 31, 2021129,060,664 $1,290 $361,433 $(78,850)$2,025,083 (8,474,893)$(152,590)$231 $2,156,597 
See notes to condensed consolidated financial statements.

8

COMMERCIAL METALS COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1. ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP") on a basis consistent with that used in the Annual Report on Form 10-K for the year ended August 31, 2021 (the "2021 Form 10-K") filed by Commercial Metals Company ("CMC," and together with its consolidated subsidiaries, the "Company") with the Securities and Exchange Commission (the "SEC") and include all normal recurring adjustments necessary to present fairly the condensed consolidated balance sheets and the condensed consolidated statements of earnings, comprehensive income, cash flows and stockholders' equity for the periods indicated. These notes should be read in conjunction with the consolidated financial statements and notes included in the 2021 Form 10-K. The results of operations for the three and nine month periods are not necessarily indicative of the results to be expected for the full fiscal year. Any reference in this Form 10-Q to the "corresponding period" relates to the relevant three or nine month period ended May 31, 2021.

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

Recently Issued Accounting Pronouncements

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

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

NOTE 2. ACQUISITION

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

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

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

9

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

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

(in thousands)Estimated Fair Value
Cash and cash equivalents$19,551 
Accounts receivable38,188 
Inventories38,810 
Prepaid and other current assets14,143 
Defined benefit pension plan14,620 
Property, plant and equipment88,541 
Intangible assets260,500 
Goodwill187,861 
Other noncurrent assets19,430 
Accounts payable(12,468)
Accrued expenses and other payables(23,307)
Current maturities of long-term debt(3,277)
Deferred income taxes(48,683)
Other noncurrent liabilities(17,597)
Long-term debt(4,312)
Total assets acquired and liabilities assumed$572,000 

Inventories

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

Defined Benefit Pension Plan

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

Property, Plant and Equipment

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

10

Goodwill

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

Intangible Assets

The acquired intangible assets consist of:
(in thousands, except life in years)Life in YearsPreliminary Fair Value
Developed technologies
1 to 11 years
$147,900 
Trade names
8 to 9 years or indefinite
57,000 
Customer relationships
12 to 17 years
53,200 
In-process research and developmentIndefinite2,400 

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

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

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

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

Deferred Income Taxes

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

Other Assets Acquired and Liabilities Assumed

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

Financial Results

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

(in thousands)From the Acquisition Date to May 31, 2022
Net sales$27,962 
Earnings before income taxes1,656 

11

Pro Forma Supplemental Information

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

Three Months Ended May 31,Nine Months Ended May 31,
(in thousands)2022202120222021
Pro forma net sales$2,554,295 $1,908,133 $6,657,257 $4,854,727 
Pro forma net earnings318,736 134,854 942,369 261,218 

The pro forma results presented above include, but are not limited to, adjustments to remove the impact of $4.5 million and $7.6 million of acquisition and integration expenses from the three and nine months ended May 31, 2022, respectively. Results also reflect increased amortization expense from revalued intangible assets of $1.9 million and $8.1 million in the three and nine months ended May 31, 2022, respectively, and $3.1 million and $9.3 million in the three and nine months ended May 31, 2021, respectively. The three and nine months ended May 31, 2022 include adjustments to remove $2.2 million of increased cost of goods sold as a result of the revaluation of inventory, which similarly resulted in an $8.7 million increase to cost of goods sold in the nine months ended May 31, 2021.
NOTE 3. CHANGES IN BUSINESS

Facility Closure and Disposition

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

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

On September 29, 2021, the Company entered into a definitive agreement to sell the assets associated with the Rancho Cucamonga facilities. On December 28, 2021, the sale of the Rancho Cucamonga facilities was completed for gross proceeds of $313.0 million. A portion of the gross proceeds amounting to $39.0 million were set aside in a restricted cash account to facilitate the purchase of like-kind assets. In January 2022, the Company used $7.5 million of the restricted cash on a purchase of a like-kind asset. The remaining balance of $31.5 million was included in restricted cash as of May 31, 2022.
12

NOTE 4. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The following tables reflect the changes in accumulated other comprehensive income (loss) ("AOCI"):
Three Months Ended May 31, 2022
(in thousands)Foreign Currency TranslationDerivativesDefined Benefit ObligationTotal AOCI
Balance, March 1, 2022$(159,829)$68,886 $(933)$(91,876)
Other comprehensive income (loss) before reclassifications
(14,668)32,302 (7)17,627 
Reclassification for gain (1)
 (6,342) (6,342)
Income tax (expense) benefit
 (5,140)1 (5,139)
Net other comprehensive income (loss)
(14,668)20,820 (6)6,146 
Balance, May 31, 2022$(174,497)$89,706 $(939)$(85,730)
Nine Months Ended May 31, 2022
(in thousands)Foreign Currency TranslationDerivativesDefined Benefit ObligationTotal AOCI
Balance, September 1, 2021$(105,680)$21,781 $(921)$(84,820)
Other comprehensive income (loss) before reclassifications
(68,817)100,820 (23)31,980 
Reclassification for gain (1)
 (16,667) (16,667)
Income tax (expense) benefit
 (16,228)5 (16,223)
Net other comprehensive income (loss)
(68,817)67,925 (18)(910)
Balance, May 31, 2022$(174,497)$89,706 $(939)$(85,730)
Three Months Ended May 31, 2021
(in thousands)Foreign Currency TranslationDerivativesDefined Benefit ObligationTotal AOCI
Balance, March 1, 2021$(94,856)$(2,760)$(4,524)$(102,140)
Other comprehensive income (loss) before reclassifications
11,775 14,056 (14)25,817 
Reclassification for gain (1)
 (719) (719)
Income tax expense
 (1,808) (1,808)
Net other comprehensive income (loss)
11,775 11,529 (14)23,290 
Balance, May 31, 2021$(83,081)$8,769 $(4,538)$(78,850)
Nine Months Ended May 31, 2021
(in thousands)Foreign Currency TranslationDerivativesDefined Benefit ObligationTotal AOCI
Balance, September 1, 2020$(87,933)$(11,334)$(4,497)$(103,764)
Other comprehensive income (loss) before reclassifications
4,852 25,028 (48)29,832 
Reclassification for gain (1)
 (1,106) (1,106)
Income tax (expense) benefit
 (3,819)7 (3,812)
Net other comprehensive income (loss)
4,852 20,103 (41)24,914 
Balance, May 31, 2021$(83,081)$8,769 $(4,538)$(78,850)
_________________ 
(1) Reclassifications for gains on derivatives included in net earnings are recorded in cost of goods sold in the condensed consolidated statements of earnings.

13

NOTE 5. REVENUE RECOGNITION

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

The following table provides information about assets and liabilities from contracts with customers:
(in thousands)May 31, 2022August 31, 2021