Segment Information

6 Months Ended

Jun. 30, 2012

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, 2011, 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, 2012 and 2011 are as follows (in thousands):

For the three months ended			Metals Recycling /			Steel Fabrication
June 30, 2012	Steel Operations		Ferrous Resources			Operations			Other			Eliminations			Consolidated
(in thousands)
Net Sales
External	$	1,157,908	$	533,841		$	95,767		$	16,183		$	—		$	1,803,699
External Non-U.S.	49,392		56,668			—			44			—			106,104
Other segments	52,923		329,947			—			4,164			(387,034		)	—
	1,260,223		920,456			95,767			20,391			(387,034		)	1,909,803
Operating income (loss)	136,597		(19,371		)	193			(14,673		)(1)	953		(2)	103,699
Income (loss) before income taxes	118,049		(28,830		)	(1,449		)	(24,238		)	953			64,485
Depreciation and amortization	26,384		25,591			2,059			1,519			(51		)	55,502
Capital expenditures	6,275		46,857			1,329			328			—			54,789
As of June 30, 2012
Assets	2,604,810		2,607,834			255,967			725,717		(3)	(222,948		)(4)	5,971,380
Liabilities	464,861		574,204			14,807			2,699,661		(5)	(213,713		)(6)	3,539,820

Footnotes related to the three months ended June 30, 2012 segment results (in millions):

(1)	Corporate SG&A	$	(7.2	)
	Company-wide stock option expense	(2.0		)
	Profit sharing	(5.9		)
	Other, net	0.4
		$	(14.7	)
(2)	Gross profit increase from intra-company sales	$	1.0
(3)	Cash and equivalents	$	309.2
	Investments in short-term commercial paper	10.0
	Income taxes receivable	17.1
	Deferred income taxes	26.9
	Property, plant and equipment, net	83.9
	Debt issuance costs, net	22.3
	Intra-company debt	170.6
	Other	85.7
		$	725.7
(4)	Elimination of intra-company receivables	$	(38.8	)
	Elimination of intra-company debt	(170.6		)
	Other	(13.5		)
		$	(222.9	)
(5)	Accounts payable	$	28.7
	Income taxes payable	2.9
	Accrued interest	31.0
	Accrued profit sharing	12.6
	Debt	2,330.0
	Deferred income taxes	213.0
	Other	81.5
		$	2,699.7
(6)	Elimination of intra-company payables	$	(41.2	)
	Elimination of intra-company debt	(170.6		)
	Other	(1.9		)
		$	(213.7	)

For the three months ended			Metals Recycling /			Steel Fabrication
June 30, 2011	Steel Operations		Ferrous Resources			Operations			Other			Eliminations			Consolidated
(in thousands)
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 six months ended			Metals Recycling /			Steel Fabrication
June 30, 2012	Steel Operations		Ferrous Resources			Operations			Other			Eliminations			Consolidated
(in thousands)
Net Sales
External	$	2,293,820	$	1,167,975		$	170,659		$	36,915		$	—		$	3,669,369
External Non-U.S.	100,200		122,134			—			140			—			222,474
Other segments	100,682		741,467			4			7,426			(849,579		)	—
	2,494,702		2,031,576			170,663			44,481			(849,579		)	3,891,843
Operating income (loss)	273,905		(15,208		)	(2,475		)	(31,535		)(1)	(1,172		)(2)	223,515
Income (loss) before income taxes	237,127		(33,103		)	(5,633		)	(64,278		)	(1,172		)	132,941
Depreciation and amortization	52,468		51,665			3,907			3,136			(102		)	111,074
Capital expenditures	12,223		84,763			2,497			861			—			100,344

Footnotes related to the six months ended June 30, 2012 segment results (in millions):

(1)	Corporate SG&A	$	(14.8	)
	Company-wide stock option expense	(5.7		)
	Profit sharing	(12.4		)
	Other, net	1.4
		$	(31.5	)
(2)	Gross profit reduction from intra-company sales	$	(1.2	)

For the six months ended			Metals Recycling /		Steel Fabrication
June 30, 2011	Steel Operations		Ferrous Resources		Operations			Other			Eliminations			Consolidated
(in thousands)
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	)