Segment Information

9 Months Ended

Sep. 30, 2011

Segment Information

Segment Information

Note 9.  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 nine-month periods ended September 30, 2011 and 2010 are as follows (in thousands):

For the three months ended			Metals Recycling /			Steel Fabrication
September 30, 2011	Steel Operations		Ferrous Resources			Operations			Other			Eliminations		Consolidated
Net Sales
External	$	1,183,665	$	624,742		$	83,094		$	24,018		—		$	1,915,519
External Non-U.S.	44,345		83,296			—			295			—		127,936
Other segments	49,854		351,219			16			3,033			(404,122	)	—
	1,277,864		1,059,257			83,110			27,346			(404,122	)	2,043,455
Operating income (loss)	136,194		(3,388		)	(246		)	(28,437		)(1)	4,662	(2)	108,785
Income (loss) before income taxes	114,805		(14,697		)	(2,139		)	(35,025		)	4,662		67,606
Depreciation and amortization	27,320		25,164			1,847			1,682			(51	)	55,962
Capital expenditures	10,457		26,575			503			591			—		38,126
As of September 30, 2011
Assets	2,629,873		2,557,147			234,452			757,275		(3)	(175,266	)(4)	6,003,481
Liabilities	488,476		531,827			16,820			2,785,613		(5)	(166,285	)(6)	3,656,451

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

(1)	Corporate SG&A	$	(19.1	)
	Company-wide stock option expense	(3.6		)
	Profit sharing	(5.5		)
	Other, net	(0.2		)
	Total	$	(28.4	)
(2)	Gross profit increase from intra-company sales	$	4.7
(3)	Cash and equivalents	$	391.5
	Income taxes receivable	24.5
	Deferred income taxes	21.6
	Property, plant and equipment, net	72.1
	Debt issuance costs	25.6
	Intra-company debt	130.6
	Other	91.4
	Total	$	757.3
(4)	Elimination of intra-company receivables	$	(30.6	)
	Elimination of intra-company debt	(130.6		)
	Other	(14.1		)
	Total	$	(175.3	)
(5)	Accounts payable	32.6
	Income taxes payable	15.0
	Accrued interest	61.8
	Accrued profit sharing	31.4
	Debt	2,342.0
	Deferred income taxes	221.0
	Other	81.8
	Total	$	2,785.6
(6)	Elimination of intra-company payables	$	(35.9	)
	Elimination of intra-company debt	(130.6		)
	Other	0.2
	Total	$	(166.3	)

For the three months ended			Metals Recycling /			Steel Fabrication
September 30, 2010	Steel Operations		Ferrous Resources			Operations			Other			Eliminations			Consolidated
Net Sales
External	$	938,162	$	484,605		$	53,723		$	11,660		$	—		$	1,488,150
External Non-U.S.	21,509		74,265			—			240			—			96,014
Other segments	40,715		245,810			197			2,463			(289,185		)	—
	1,000,386		804,680			53,920			14,363			(289,185		)	1,584,164
Operating income (loss)	85,201		1,077			(494		)	(14,781		)(1)	(2,003		)(2)	69,000
Income (loss) before income taxes	65,666		(9,588		)	(1,919		)	(21,147		)	(2,083		)	30,929
Depreciation and amortization	28,596		26,224			1,404			1,105			(51		)	57,278
Capital expenditures	10,530		10,145			—			3,549			—			24,224
As of September 30, 2010
Assets (7)	2,513,562		2,476,032			198,314			718,304		(3)	(295,753		)(4)	5,610,459
Liabilities (7)	414,455		609,779			20,423			2,749,747		(5)	(287,621		)(6)	3,506,783

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

(1)	Corporate SG&A	$	(5.8	)
	Company-wide stock option expense	(3.6		)
	Profit sharing	(3.5		)
	Other, net	(1.9		)
	Total	$	(14.8	)
(2)	Gross profit reduction from intra-company sales	$	(2.0	)
(3)	Cash and equivalents	$	258.9
	Income taxes receivable	30.4
	Deferred income taxes	24.8
	Property, plant and equipment, net	57.7
	Debt issuance costs	25.1
	Intra-company debt	235.8
	Other	85.6
	Total	$	718.3
(4)	Elimination of intra-company receivables	$	(47.6	)
	Elimination of intra-company debt	(235.8		)
	Other	(12.4		)
	Total	$	(295.8	)
(5)	Accounts payable	$	36.0
	Income taxes payable	5.4
	Accrued interest	61.8
	Accrued profit sharing	19.2
	Debt	2,341.0
	Deferred income taxes	219.2
	Other	67.1
	Total	$	2,749.7
(6)	Elimination of intra-company payables	$	(47.7	)
	Elimination of intra-company debt	(235.8		)
	Other	(4.1		)
	Total	$	(287.6	)
(7)	Certain segment deferred tax asset and liability accounts have been reclassified at September 30, 2010, to conform to the September 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 nine months ended			Metals Recycling /		Steel Fabrication
September 30, 2011	Steel Operations		Ferrous Resources		Operations			Other			Eliminations			Consolidated
Net Sales
External	$	3,551,626	$	1,944,928	$	197,112		$	75,260		$	—		$	5,768,926
External Non-U.S.	138,723		230,954		—			552			—			370,229
Other segments	163,991		1,069,661		612			8,452			(1,242,716		)	—
	3,854,340		3,245,543		197,724			84,264			(1,242,716		)	6,139,155
Operating income (loss)	543,117		39,987		(4,764		)	(78,115		)(1)	2,105		(2)	502,330
Income (loss) before income taxes	480,296		8,033		(9,918		)	(97,105		)	1,999			383,305
Depreciation and amortization	82,164		75,784		4,969			4,201			(153		)	166,965
Capital expenditures	28,891		58,458		1,454			2,992			—			91,795

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

(1)	Corporate SG&A	$	(38.4	)
	Company-wide stock option expense	(11.0		)
	Profit sharing	(30.6		)
	Other, net	1.9
	Total	$	(78.1	)
(2)	Gross profit increase from intra-company sales	$	2.1

For the nine months ended			Metals Recycling /			Steel Fabrication
September 30, 2010	Steel Operations		Ferrous Resources			Operations			Other			Eliminations			Consolidated
Net Sales
External	$	2,835,969	$	1,497,542		$	119,949		$	62,519		$	—		$	4,515,979
External Non-U.S.	72,906		183,317			—			551			—			256,774
Other segments	123,936		728,491			236			7,182			(859,845		)	—
	3,032,811		2,409,350			120,185			70,252			(859,845		)	4,772,753
Operating income (loss)	351,085		32,150			(11,787		)	(50,476		)(1)	(3,040		)(2)	317,932
Income (loss) before income taxes	295,332		(3,413		)	(15,696		)	(66,886		)	(3,837		)	205,500
Depreciation and amortization	84,894		76,351			4,516			3,323			(136		)	168,948
Capital expenditures	39,747		41,503			150			15,106			(638		)	95,868

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

(1)	Corporate SG&A	$	(22.8	)
	Company-wide stock option expense	(8.8		)
	Profit sharing	(18.8		)
	Other, net	(0.1		)
	Total	$	(50.5	)
(2)	Gross profit reduction from intra-company sales	$	(3.0	)