Segment Information

3 Months Ended

Mar. 31, 2014

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 facility, senior notes, 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, 2013, for more information related to the company’s segment reporting.  The company’s segment results for the three-month periods ended March 31, 2014 and 2013 are as follows (in thousands):

For the three months ended			Metals Recycling /			Steel Fabrication
March 31, 2014	Steel Operations		Ferrous Resources			Operations		Other			Eliminations			Consolidated
Net Sales
External	$	1,061,079	$	517,957		$	115,861	$	20,621		$	—		$	1,715,518
External Non-U.S.	56,519		57,817			—		228			—			114,564
Other segments	43,732		343,928			—		6,673			(394,333		)	—
	1,161,330		919,702			115,861		27,522			(394,333		)	1,830,082
Operating income (loss)	105,643		(15,519		)	3,126		(16,545		)(1)	4,227		(2)	80,932
Income (loss) before income taxes	91,998		(22,696		)	1,652		(24,187		)	4,227			50,994
Depreciation and amortization	27,377		26,621			2,222		1,399			(51		)	57,568
Capital expenditures	18,606		5,779			311		145			—			24,841
As of March 31, 2014
Assets	2,731,246		2,537,892			263,688		609,206		(3)	(228,175		)(4)	5,913,857
Liabilities	576,643		613,611			17,022		2,290,332		(5)	(218,081		)(6)	3,279,527

Footnotes related to the three months ended March 31, 2014 segment results (in millions):

(1)	Corporate SG&A	$	(8.3	)
	Company-wide equity-based compensation	(4.6		)
	Profit sharing	(4.7		)
	Other, net	1.1
		$	(16.5	)

(2) Gross profit increase from intra-company sales $ 4.2

(3)	Cash and equivalents	$	285.6
	Accounts receivable	12.3
	Inventories	13.5
	Deferred income taxes	17.8
	Property, plant and equipment, net	71.6
	Debt issuance costs	24.4
	Intra-company debt	153.8
	Other	30.2
		$	609.2

(4)	Elimination of intra-company receivables	$	(65.1	)
	Elimination of intra-company debt	(153.8		)
	Other	(9.3		)
		$	(228.2	)

(5)	Accounts payable	$	44.1
	Income taxes payable	23.5
	Accrued interest	21.7
	Accrued profit sharing	4.8
	Debt	2,031.4
	Deferred income taxes	138.0
	Other	26.8
		$	2,290.3

(6)	Elimination of intra-company payables	$	(65.5	)
	Elimination of intra-company debt	(153.8		)
	Other	1.2
		$	(218.1	)

For the three months ended			Metals Recycling /			Steel Fabrication
March 31, 2013	Steel Operations		Ferrous Resources			Operations			Other			Eliminations			Consolidated
Net Sales
External	$	1,011,195	$	557,611		$	93,797		$	19,371		$	—		$	1,681,974
External Non-U.S.	50,117		63,517			—			88			—			113,722
Other segments	61,048		276,364			578			5,395			(343,385		)	—
	1,122,360		897,492			94,375			24,854			(343,385		)	1,795,696
Operating income (loss)	119,301		(9,824		)	1,530			(16,439		)(1)	1,664		(2)	96,232
Income (loss) before income taxes	105,007		(17,854		)	(76		)	(26,092		)	1,664			62,649
Depreciation and amortization	26,387		27,136			2,057			1,532			(51		)	57,061
Capital expenditures	24,726		19,069			881			670			—			45,346
As of March 31, 2013
Assets	2,566,642		2,529,951			254,176			822,064		(3)	(216,259		)(4)	5,956,574
Liabilities	557,404		526,457			15,646			2,556,590		(5)	(205,527		)(6)	3,450,570

Footnotes related to the three months ended March 31, 2013 segment results (in millions):

(1)	Corporate SG&A	$	(8.0	)
	Company-wide equity-based compensation	(3.2		)
	Profit sharing	(5.9		)
	Other, net	0.7
	Total	$	(16.4	)

(2) Gross profit increase from intra-company sales $ 1.7

(3)	Cash and equivalents	$	445.8
	Accounts receivable	11.6
	Inventories	13.2
	Deferred income taxes	23.5
	Property, plant and equipment, net	74.8
	Debt issuance costs, net	31.3
	Intra-company debt	156.0
	Other	65.9
	Total	$	822.1

(4)	Elimination of intra-company receivables	$	(49.4	)
	Elimination of intra-company debt	(156.0		)
	Other	(10.9		)
	Total	$	(216.3	)

(5)	Accounts payable	$	38.8
	Income taxes payable	13.4
	Accrued interest	19.1
	Accrued profit sharing	5.9
	Debt	2,247.1
	Deferred income taxes	213.8
	Other	18.5
	Total	$	2,556.6

(6)	Elimination of intra-company payables	$	(49.7	)
	Elimination of intra-company debt	(156.0		)
	Other	0.2
	Total	$	(205.5	)