COMMERCIAL METALS Co (CMC)

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

In the following discussion, references to "we," "us," "our" or the "Company" mean Commercial Metals Company ("CMC") and its consolidated subsidiaries, unless the context otherwise requires. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and the notes thereto, which are included in this Quarterly Report on Form 10-Q (this "Form 10-Q"), and our consolidated financial statements and the notes thereto, which are included in our Annual Report on Form 10-K for the year ended August 31, 2025 (the "2025 Form 10-K"). This discussion contains or incorporates by reference "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the Private Securities Litigation Reform Act of 1995. These forward-looking statements are not historical facts, but rather are based on expectations, estimates, assumptions and projections about our industry, business and future financial results, based on information available at the time this Form 10-Q was filed with the United States ("U.S.") Securities and Exchange Commission (the "SEC") or, with respect to any document incorporated by reference, available at the time that such document was prepared. Our actual results could differ materially from the results contemplated by these forward-looking statements due to a number of factors, including those identified in the section entitled "Forward-Looking Statements" at the end of Item 2 of this Form 10-Q and in the section entitled "Risk Factors" in Part I, Item 1A of our 2025 Form 10-K. We do not undertake any obligation to update, amend or clarify any forward-looking statements to reflect changed assumptions, the occurrence of anticipated or unanticipated events, new information or circumstances or otherwise, except as required by law.

Any reference in this Form 10-Q to the "corresponding period" relates to the three or nine month period ended May 31, 2025, as applicable. Any reference in this Form 10-Q to the "current period" relates to the three or nine month period ended May 31,

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2026, as applicable. Any reference in this Form 10-Q to a year refers to the fiscal year ended August 31st of that year, unless otherwise stated.

Certain trademarks or service marks of CMC appearing in this Form 10-Q are the property of CMC and are protected under applicable intellectual property laws. Solely for convenience, our trademarks and tradenames referred to in this Form 10-Q may appear without the ® or ™ symbols, but such references are not intended to indicate in any way that we will not assert, to the fullest extent under applicable law, our rights to these trademarks and tradenames.

BUSINESS CONDITIONS AND DEVELOPMENTS

Senior Notes Activity

In November 2025, we issued $1.0 billion of 5.750% senior unsecured notes due November 2033 (the “2033 Notes”) and $1.0 billion of 6.000% senior unsecured notes due December 2035 (the “2035 Notes”). We will make semiannual interest payments on the outstanding principal of the 2033 Notes on May 15 and November 15 of each year. The first such interest payment was made on May 15, 2026. We will make semiannual interest payments on the outstanding principal of the 2035 Notes on June 15 and December 15 of each year, with the first such interest payment paid on June 15, 2026. Gross proceeds from the issuance of the 2033 Notes and the 2035 Notes were used to facilitate the closing of the Foley Acquisition (as defined below). Aggregate fees and issuance costs, including rating agency, legal, and other fees, associated with the 2033 Notes and the 2035 Notes were immaterial for the three months ended May 31, 2026, and were $21.3 million for the nine months ended May 31, 2026.

Foley Acquisition

On December 15, 2025, we completed the acquisition of all of the issued and outstanding equity securities of the holding companies that own Foley Products Company, LLC ("Foley" and such transaction, the “Foley Acquisition”), one of the largest regional suppliers of precast concrete solutions in the U.S. and a leader within the Southeastern U.S. Operating results for Foley are included within the Construction Solutions Group segment. The Foley Acquisition aligns with our strategy to pursue inorganic growth by adding scale, margin strength and regional leadership to our precast platform.

CP&P Acquisition

On December 1, 2025, we completed the acquisition of all of the issued and outstanding equity securities of Concrete Pipe and Precast, LLC ("CP&P" and such transaction, the “CP&P Acquisition”), a leading supplier of precast concrete solutions to the U.S. Mid-Atlantic and South Atlantic markets. Operating results for CP&P are included within the Construction Solutions Group segment. 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.

For more information on the Foley Acquisition and the CP&P Acquisition, refer to Note 2, Acquisitions, in Part I, Item 1, Financial Statements, of this Form 10-Q.

Third Amendment to Credit Agreement

On December 17, 2025, we entered into the Third Amendment and Commitment Increase to the Sixth Amended and Restated Credit Agreement (the “Third Amendment”), which increased the borrowing capacity under the revolving credit facility from $600.0 million to $1.0 billion and extended the maturity date to December 17, 2030.

Capital Expenditures

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. Construction of structural components for multiple process buildings is substantially complete and equipment installation is ongoing. Several key milestones for utility infrastructure have been reached. We expect to begin production at this micro mill during 2026.

Macroeconomic Trends and Uncertainties

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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 economies 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 re-imposing 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 United Kingdom, which continues to be subject to 25% tariffs.

Although the elimination of Section 232 tariff exemptions has provided 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.

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. 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, in June 2025, the Rebar Trade Action Coalition, which consists of several U.S. steel producers including CMC, filed petitions with the U.S. Department of Commerce (the “DOC”) and the U.S. International Trade Commission (“ITC”) 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, and that producers of rebar in Algeria, Egypt and Vietnam are benefitting from countervailable government subsidies. The petitions seek the imposition of significant antidumping and countervailing duties on rebar imports from these countries. In July 2025, the ITC preliminarily determined that there was a reasonable indication of material injury to the U.S. domestic rebar industry, and thus the DOC’s investigations were authorized to continue. The DOC subsequently issued preliminary affirmative determinations that the subject rebar had been sold in the U.S. at less than fair value in December 2025 with respect to Algeria and in March 2026 with respect to Bulgaria, Egypt and Vietnam. Additionally, the DOC determined in January 2026 that producers in Algeria, Egypt and Vietnam had received countervailable subsidies. In March 2026, the DOC issued final affirmative determinations with respect to Algeria, concluding that Algerian rebar had been dumped at a margin of 127.32% and had benefitted from countervailable subsidies at a rate of 72.94%. In April 2026, the ITC made a final affirmative determination of material injury with respect to dumped imports of rebar from Algeria, clearing the way for the DOC to issue an antidumping duty order on rebar from Algeria. The DOC’s final determinations in the antidumping investigations of Bulgaria, Egypt and Vietnam, and in the countervailing duty investigations of Egypt and Vietnam, are expected later in calendar 2026, with the ITC’s corresponding final injury determinations to follow. If affirmative final injury determinations are made by the ITC, the DOC will assess antidumping and/or countervailing duties on the subject steel concrete reinforcing bar.

From a longer-term perspective on demand, tariffs represent one component of broader economic and trade policies that may influence domestic investment and construction activity. However, the timing, magnitude and sustainability of any tariff impacts on demand remain uncertain. With regards to operating costs, we anticipate the direct impact of tariffs to be modest, as we source primarily from domestic suppliers, though, indirect effects from market pricing and supply dynamics remain uncertain. We also anticipate the impact on capital costs to be modest.

We have not yet experienced any material, direct impacts from the war in Iran. However, we have seen increases in fuel costs, energy costs in Europe have increased, and the broader geopolitical environment may result in demand variability and cost inflation. The Company continues to evaluate potential impacts, which will depend on the duration and severity of the conflict.

Tax Legislation Updates

On July 4, 2025, the One Big Beautiful Bill Act 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. We have incorporated these amendments into our 2026 tax provision, as applicable.

On January 10, 2025, the Internal Revenue Service awarded CMC with a Qualifying Advanced Energy Project Credit (as defined in Internal Revenue Code section 48C) based on qualifying expenditures related to the construction of the West

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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 2026 compared to fiscal year 2025 is included herein. Our discussion and analysis of fiscal year 2025 compared to fiscal year 2024 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, 2025, which was filed with the SEC on October 16, 2025.

OVERVIEW

CMC is a Fortune 500 company headquartered in Irving, Texas, and a leading provider of early-stage construction solutions that support the foundational phases of modern infrastructure and building projects. Founded in 1915, CMC has grown from a

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single-site recycling operation to one of the largest U.S. manufacturers of steel reinforcing bar ("rebar"), a leading producer of subgrade soil stabilization and foundation enhancement solutions and a major supplier of concrete pipe and precast products.

Through an extensive manufacturing network primarily located in the United States and Central Europe, with strategic operations in the United Kingdom, Europe and Asia, CMC serves infrastructure, non-residential, residential, industrial and energy markets. While often unseen, CMC’s products are essential to highways, bridges, airports, commercial buildings and other critical structures that support everyday life. Our operations are conducted through three reportable segments: North America Steel Group, Construction Solutions Group and Europe Steel Group. See Part I, Item 1, Business, of this Annual Report for further information regarding our business and reportable segments.

Key Performance Indicators

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.

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 equal to earnings before interest expense, income taxes, depreciation and amortization expense, impairment expense and unrealized gains and losses on undesignated commodity hedges.

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 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. 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.

BUSINESS CONDITIONS AND DEVELOPMENTS

Foley Acquisition

On December 15, 2025, we completed the acquisition of all of the issued and outstanding equity securities of the holding companies that owned Foley Products Company, LLC ("Foley" and such transaction, the “Foley Acquisition”), one of the largest regional suppliers of precast concrete solutions in the U.S. and a leader within the Southeastern U.S. Operating results for Foley are included within the Construction Solutions Group segment. The Foley Acquisition aligns with our strategy to pursue inorganic growth by adding scale, margin strength and regional leadership to our precast platform.

CP&P Acquisition

On December 1, 2025, we completed the acquisition of all of the issued and outstanding equity securities of Concrete Pipe & Precast, LLC ("CP&P" and such transaction, the “CP&P Acquisition”), a leading supplier of precast concrete solutions to the U.S. Mid-Atlantic and South Atlantic markets. Operating results for CP&P are included within the Construction Solutions Group segment. 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.

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For more information on the Foley Acquisition and the CP&P Acquisition, refer to Note 2, Acquisitions, in Part II, Item 8 of this Annual Report.

Third Amendment to Credit Agreement

On December 17, 2025, we entered into the Third Amendment and Commitment Increase to the Sixth Amended and Restated Credit Agreement (the “Third Amendment”), which increased the borrowing capacity under the revolving credit facility from $600.0 million to $1.0 billion and extended the maturity date to December 17, 2030.

Senior Notes Activity

In November 2025, we issued $1.0 billion of 5.750% senior unsecured notes due November 2033 (the “2033 Notes”) and $1.0 billion of 6.000% senior unsecured notes due December 2035 (the “2035 Notes”). We make semiannual interest payments on the outstanding principal of the 2033 Notes on May 15 and November 15 of each year. We make semiannual interest payments on the outstanding principal of the 2035 Notes on June 15 and December 15 of each year. Net proceeds from the issuance of the 2033 Notes and the 2035 Notes were used to fund the Foley Acquisition and related fees and expenses, with any remaining proceeds available for general corporate purposes. Aggregate fees and issuance costs, including rating agency, legal and other fees, associated with the 2033 Notes and the 2035 Notes were $21.3 million for the year ended August 31, 2026.

Capital Expenditures

During the fourth quarter of 2026, our fourth micro mill, located in Berkeley County, West Virginia was placed into service. This facility is strategically located to serve the Northeast, Mid-Atlantic and Mid-Western U.S. markets and is supported by our existing network of downstream fabrication plants. This facility expands our production capacity for straight-length and spooled rebar and advances our commitment to sustainable steelmaking. We intend to begin ramping up production immediately and expect sales to begin in the first quarter of fiscal 2027.

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 $70.0 million in total government assistance from the WVEDA for meeting certain investment thresholds, with $15.0 million received in 2026, $50.0 million received in 2025 and $5.0 million received in 2023. These amounts were recognized in the North America Steel Group segment as a reduction to property, plant and equipment, net, in the consolidated balance sheets as of August 31, 2026. 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. Based on qualifying construction costs incurred during 2026, the Company generated an estimated gross federal tax credit of approximately $145.4 million under the Inflation Reduction Act. See Note 1, Nature of Operations and Summary of Significant Accounting Policies, in Part II, Item 8 of this Annual Report for more information.

Transform, Advance and Grow Initiative

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. In addition, the program has identified manufacturing efficiencies in certain production processes as well as ongoing SG&A savings.

Macroeconomic Trends and Uncertainties

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 economies 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 re-imposing 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 United Kingdom, which continues to be subject to 25% tariffs.

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Although the elimination of Section 232 tariff exemptions has provided 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.

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. 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, in June 2025,

[Excerpt truncated for page length; the complete text is on the linked full-MD&A page.]