Segment Information

6 Months Ended

Jun. 30, 2011

Segment Information

Segment Information

Note 8.  Segment Information

The company has three reportable segments: steel operations, metals recycling and ferrous resources operations, and steel fabrication operations.  These operations are described in Note 1 to the financial statements.  Revenues included in the category “Other” are from subsidiary operations that are below the quantitative thresholds required for reportable segments and primarily consist of further processing, slitting, and sale of certain steel products and the resale of certain secondary and excess steel products.  In addition, “Other” also includes certain unallocated corporate accounts, such as the company’s senior secured credit facilities, senior notes and convertible senior notes, certain other investments, and certain profit sharing expenses.

The company’s operations are primarily organized and managed by operating segment.  Operating segment performance and resource allocations are primarily based on operating results before income taxes.  The accounting policies of the reportable segments are consistent with those described in Note 1 to the financial statements. Intra-segment and intra-company sales and any related profits are eliminated in consolidation. Refer to the company’s Annual Report on Form 10-K for the year ended December 31, 2010, for more information related to the company’s segment reporting.  The company’s segment results for the three and six-month periods ended June 30, 2011 and 2010 are as follows (in thousands):

For the three months ended			Metals Recycling /			Steel Fabrication
June 30, 2011	Steel Operations		Ferrous Resources			Operations			Other			Eliminations		Consolidated
Net Sales
External	$	1,221,472	$	647,845		$	61,939		$	25,718		—		$	1,956,974
External Non-U.S.	45,803		76,834			—			120			—		122,757
Other segments	62,191		353,192			23			2,948			(418,354	)	—
	1,329,466		1,077,871			61,962			28,786			(418,354	)	2,079,731
Operating income (loss)	213,968		3,885			(1,635		)	(25,422		)(1)	(2,577	)(2)	188,219
Income (loss) before income taxes	192,782		(6,354		)	(3,334		)	(31,338		)	(2,604	)	149,152
Depreciation and amortization	27,651		25,706			1,620			1,331			(51	)	56,257
Capital expenditures	11,155		21,632			419			1,770			—		34,976
As of June 30, 2011
Assets	2,712,461		2,536,751			229,988			632,242		(3)	(210,989	)(4)	5,900,453
Liabilities	467,195		563,908			16,715			2,740,245		(5)	(199,098	)(6)	3,588,965

Footnotes related to the three months ended June 30, 2011 segment results (in millions):

(1)	Corporate SG&A	$	(10.0	)
	Company-wide stock option expense	(3.7		)
	Profit sharing	(11.9		)
	Other, net	0.2
	Total	$	(25.4	)
(2)	Margin reduction from intra-company sales	$	(2.6	)
(3)	Cash and equivalents	$	265.6
	Income taxes receivable	15.3
	Deferred income taxes	21.1
	Property, plant and equipment, net	69.9
	Debt issuance costs	21.0
	Intra-company debt	153.7
	Other	85.6
	Total	$	632.2
(4)	Elimination of intra-company receivables	$	(42.3	)
	Elimination of intra-company debt	(153.7		)
	Other	(15.0		)
	Total	$	(211.0	)
(5)	Accounts payable	35.4
	Income taxes payable	11.6
	Accrued interest	33.7
	Accrued profit sharing	25.8
	Debt	2,340.9
	Deferred income taxes	227.0
	Other	65.8
	Total	$	2,740.2
(6)	Elimination of intra-company payables	$	(43.8	)
	Elimination of intra-company debt	(153.7		)
	Other	(1.6		)
	Total	$	(199.1	)

For the three months ended			Metals Recycling /			Steel Fabrication
June 30, 2010	Steel Operations		Ferrous Resources			Operations			Other			Eliminations			Consolidated
Net Sales
External	$	954,589	$	537,519		$	42,266		$	23,781		$	—		$	1,558,155
External Non-U.S.	22,048		52,406			—			190			—			74,644
Other segments	43,292		258,442			1			2,501			(304,236		)	—
	1,019,929		848,367			42,267			26,472			(304,236		)	1,632,799
Operating income (loss)	131,146		6,939			(4,713		)	(16,820		)(1)	83		(2)	116,635
Income (loss) before income taxes	111,778		(7,238		)	(6,021		)	(21,816		)	5			76,708
Depreciation and amortization	28,138		24,443			1,739			1,136			(58		)	55,398
Capital expenditures	17,146		13,682			43			10,089			—			40,960
As of June 30, 2010
Assets (7)	2,548,149		2,438,573			194,125			628,888		(3)	(263,930		)(4)	5,545,805
Liabilities (7)	409,311		569,956			20,957			2,705,058		(5)	(257,076		)(6)	3,448,206

Footnotes related to the three months ended June 30, 2010 segment results (in millions):

(1)	Corporate SG&A	$	(7.5	)
	Company-wide stock option expense	(2.9		)
	Profit sharing	(6.8		)
	Other, net	0.4
	Total	$	(16.8	)
(2)	Margin improvement from intra-company sales	$	0.1
(3)	Cash and equivalents	$	182.8
	Income taxes receivable	35.8
	Deferred income taxes	21.7
	Property, plant and equipment, net	54.8
	Debt issuance costs	27.0
	Intra-company debt	224.8
	Other	82.0
	Total	$	628.9
(4)	Elimination of intra-company receivables	$	(29.6	)
	Elimination of intra-company debt	(224.8		)
	Other	(9.5		)
	Total	$	(263.9	)
(5)	Accounts payable	$	32.0
	Income taxes payable	2.0
	Accrued interest	33.7
	Accrued profit sharing	16.8
	Debt	2,341.1
	Deferred income taxes	213.6
	Other	65.9
	Total	$	2,705.1
(6)	Elimination of intra-company payables	$	(30.1	)
	Elimination of intra-company debt	(224.8		)
	Other	(2.2		)
	Total	$	(257.1	)

(7) Certain segment deferred tax asset and liability accounts have been reclassified at June 30, 2010, to conform to the June 30, 2011 presentation. These reclassifications had no impact to the previously reported segment income statement information or consolidated income statements as previously reported, nor did they impact previously reported consolidated total assets or liabilities.

For the six months ended			Metals Recycling /		Steel Fabrication
June 30, 2011	Steel Operations		Ferrous Resources		Operations			Other			Eliminations		Consolidated
Net Sales
External	$	2,367,961	$	1,320,186	$	114,018		$	51,242		—		$	3,853,407
External Non-U.S.	94,378		147,658		—			257			—		242,293
Other segments	114,137		718,442		596			5,419			(838,594	)	—
	2,576,476		2,186,286		114,614			56,918			(838,594	)	4,095,700
Operating income (loss)	406,923		43,375		(4,518		)	(49,678		)(1)	(2,557	)(2)	393,545
Income (loss) before income taxes	365,491		22,730		(7,779		)	(62,080		)	(2,663	)	315,699
Depreciation and amortization	54,844		50,620		3,122			2,519			(102	)	111,003
Capital expenditures	18,434		31,883		951			2,401			—		53,669

Footnotes related to the six months ended June 30, 2011 segment results (in millions):

(1)	Corporate SG&A	$	(19.3	)
	Company-wide stock option expense	(7.4		)
	Profit sharing	(25.2		)
	Other, net	2.2
	Total	$	(49.7	)
(2)	Margin reduction from intra-company sales	$	(2.6	)

For the six months ended			Metals Recycling /		Steel Fabrication
June 30, 2010	Steel Operations		Ferrous Resources		Operations			Other			Eliminations			Consolidated
Net Sales
External	$	1,897,807	$	1,012,936	$	66,227		$	50,859		$	—		$	3,027,829
External Non-U.S.	51,397		109,052		—			311			—			160,760
Other segments	83,221		482,682		38			4,720			(570,661		)	—
	2,032,425		1,604,670		66,265			55,890			(570,661		)	3,188,589
Operating income (loss)	265,884		31,073		(11,293		)	(35,695		)(1)	(1,037		)(2)	248,932
Income (loss) before income taxes	229,666		6,175		(13,777		)	(45,739		)	(1,754		)	174,571
Depreciation and amortization	56,298		50,127		3,112			2,218			(85		)	111,670
Capital expenditures	29,217		31,358		150			11,557			(638		)	71,644

Footnotes related to the six months ended June 30, 2010 segment results (in millions):

(1)	Corporate SG&A	$	(17.0	)
	Company-wide stock option expense	(5.2		)
	Profit sharing	(15.3		)
	Other, net	1.8
	Total	$	(35.7	)
(2)	Margin reduction from intra-company sales	$	(1.0	)