Segment Information

6 Months Ended

Jun. 30, 2013

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, 2012, 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, 2013 and 2012 are as follows (in thousands):

For the three months ended			Metals Recycling /			Steel Fabrication
June 30, 2013	Steel Operations		Ferrous Resources			Operations		Other			Eliminations			Consolidated
Net Sales
External	$	1,038,868	$	538,599		$	103,595	$	20,828		$	—		$	1,701,890
External Non-U.S.	52,148		46,893			—		409			—			99,450
Other segments	52,897		275,666			564		6,885			(336,012		)	—
	1,143,913		861,158			104,159		28,122			(336,012		)	1,801,340
Operating income (loss)	85,545		(7,251		)	2,330		(14,434		)(1)	3,008		(2)	69,198
Income (loss) before income taxes	71,732		(14,439		)	800		(22,122		)	3,008			38,979
Depreciation and amortization	26,496		26,704			2,179		1,498			(51		)	56,826
Capital expenditures	34,533		13,545			822		336			—			49,236
As of June 30, 2013
Assets	2,582,168		2,490,215			261,556		604,195		(3)	(202,224		)(4)	5,735,910
Liabilities	512,634		522,306			16,136		2,362,721		(5)	(193,358		)(6)	3,220,439

Footnotes related to the three months ended June 30, 2013 segment results (in millions):

(1) Corporate SG&A	$	(9.1	)	(2) Gross profit increase from intra-company sales	$	3.0
Company-wide equity-based compensation	(2.0		)
Profit sharing	(3.2		)
Other, net	(0.1		)
Total	$	(14.4	)
(3) Cash and equivalents	$	218.2		(4) Elimination of intra-company receivables	$	(40.2	)
Deferred income taxes	23.6			Elimination of intra-company debt	(154.2		)
Property, plant and equipment, net	73.7			Other	(7.8		)
Debt issuance costs, net	29.3			Total	$	(202.2	)
Intra-company debt	154.2
Other	105.2
Total	$	604.2
(5) Accounts payable	$	43.5		(6) Elimination of intra-company payables	$	(40.5	)
Income taxes payable	2.9			Elimination of intra-company debt	(154.2		)
Accrued interest	32.3			Other	1.3
Debt	2,045.3			Total	$	(193.4	)
Deferred income taxes	205.1
Other	33.6
Total	$	2,362.7

For the three months ended			Metals Recycling /			Steel Fabrication
June 30, 2012	Steel Operations		Ferrous Resources			Operations			Other			Eliminations			Consolidated
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	)	(2)	Gross profit increase from intra-company sales	$	1.0
	Company-wide equity-based compensation	(2.0		)
	Profit sharing	(5.9		)
	Other, net	0.4
	Total	$	(14.7	)
(3)	Cash and equivalents	$	309.2		(4)	Elimination of intra-company receivables	$	(38.8	)
	Investments in short-term commercial paper	10.0				Elimination of intra-company debt	(170.6		)
	Income taxes receivable	17.1				Other	(13.5		)
	Deferred income taxes	26.9				Total	$	(222.9	)
	Property, plant and equipment, net	83.9
	Debt issuance costs, net	22.3
	Intra-company debt	170.6
	Other	85.7
	Total	$	725.7
(5)	Accounts payable	$	28.7		(6)	Elimination of intra-company payables	$	(41.2	)
	Income taxes payable	2.9				Elimination of intra-company debt	(170.6		)
	Accrued interest	31.0				Other	(1.9		)
	Accrued profit sharing	12.6				Total	$	(213.7	)
	Debt	2,330.0
	Deferred income taxes	213.0
	Other	81.5
	Total	$	2,699.7

For the six months ended			Metals Recycling /			Steel Fabrication
June 30, 2013	Steel Operations		Ferrous Resources			Operations		Other			Eliminations			Consolidated
Net Sales
External	$	2,050,063	$	1,096,210		$	197,392	$	40,199		$	—		$	3,383,864
External Non-U.S.	102,265		110,410			—		497			—			213,172
Other segments	113,945		552,030			1,142		12,280			(679,397		)	—
	2,266,273		1,758,650			198,534		52,976			(679,397		)	3,597,036
Operating income (loss)	204,846		(17,075		)	3,860		(30,873		)(1)	4,672		(2)	165,430
Income (loss) before income taxes	176,739		(32,293		)	724		(48,214		)	4,672			101,628
Depreciation and amortization	52,883		53,840			4,236		3,030			(102		)	113,887
Capital expenditures	59,259		32,614			1,703		1,006			—			94,582

Footnotes related to the six months ended June 30, 2013 segment results (in millions):

(1)	Corporate SG&A	$	(17.1	)	(2)	Gross profit increase from intra-company sales	$	4.7
	Company-wide equity-based compensation	(5.2		)
	Profit sharing	(9.1		)
	Other, net	0.5
	Total	$	(30.9	)

For the six months ended			Metals Recycling /			Steel Fabrication
June 30, 2012	Steel Operations		Ferrous Resources			Operations			Other			Eliminations			Consolidated
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	)	(2)	Gross profit reduction from intra-company sales	$	(1.2	)
	Company-wide equity-based compensation	(5.7		)
	Profit sharing	(12.4		)
	Other, net	1.4
	Total	$	(31.5	)