Segment Information

9 Months Ended

Sep. 30, 2015

Segment Information

Segment Information

Note 10.  Segment Information

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 sales and any related profits are eliminated in consolidation. Effective the third quarter 2015, the company changed its reportable segments, consistent with how it currently manages the business, in three reporting segments: steel operations (includes Columbus since its September 16, 2014 acquisition), metals recycling operations, and steel fabrication operations. The segment operations are described in Note 1 to the financial statements. Amounts included in the category “Other” are from subsidiary operations that are below the quantitative thresholds required for reportable segments.  In addition, “Other” also includes certain unallocated corporate accounts, such as the company’s senior secured credit facility, senior notes, certain other investments and certain profit sharing expenses.

The company’s segment results for the three- and nine-month periods ended September 30, 2015, and 2014, each adjusted consistent with our current reportable segments presentation, are as follows (in thousands):

For the three months ended September 30, 2015	Steel Operations		Metals Recycling Operations			Steel Fabrication Operations		Other			Eliminations			Consolidated
Net Sales
External	$	1,285,459	$	294,357		$	173,047	$	78,802		$	—		$	1,831,665
External Non-U.S.	65,928		51,215			1,907		208			—			119,258
Other segments	56,146		270,888			2		4,209			(331,245		)	—
	1,407,533		616,460			174,956		83,219			(331,245		)	1,950,923
Operating income (loss)	124,712		(3,555		)	36,733		(28,401		)(1)	1,540		(2)	131,029
Income (loss) before income taxes	102,566		(6,967		)	35,108		(38,541		)	1,540			93,706
Depreciation and amortization	52,404		15,913			2,300		3,645			(51		)	74,211
Capital expenditures	21,975		6,286			935		1,090			—			30,286
As of September 30, 2015
Assets	4,096,188		1,588,821			372,673		898,772		(3)	(113,913		)(4)	6,842,541
Liabilities	676,097		309,191			84,379		2,923,253		(5)	(106,164		)(6)	3,886,756

Footnotes related to the three months ended September 30, 2015 segment results (in millions):

(1)  Corporate SG&A	$	(9.5	)
Company-wide equity-based compensation	(5.3		)
Profit sharing	(7.5		)
Minnesota operations	(4.1		)
Other, net	(2.0		)
	$	(28.4	)

(2) Gross profit increase from intra-company sales $ 1.5 

(3) Cash and equivalents	$	415.7
Accounts receivable	30.0
Inventories	36.8
Deferred income taxes	28.8
Property, plant and equipment, net	309.6
Debt issuance costs	34.4
Intra-company debt	6.5
Other	37.0
	$	898.8

(4) Elimination of intra-company receivables	$	(100.8	)
Elimination of intra-company debt	(6.5		)
Other	(6.6		)
	$	(113.9	)

(5) Accounts payable	$	109.8
Income taxes payable	14.7
Accrued interest	47.8
Accrued profit sharing	14.5
Debt	2,641.3
Deferred income taxes	68.0
Other	27.2
	$	2,923.3

(6) Elimination of intra-company payables	$	(100.0	)
Elimination of intra-company debt	(6.5		)
Other	0.3
	$	(106.2	)

For the three months ended September 30, 2014	Steel Operations		Metals Recycling		Steel Fabrication Operations		Other			Eliminations			Consolidated
Net Sales
External	$	1,400,370	$	534,348	$	189,993	$	99,834		$	—		$	2,224,545
External Non-U.S.	50,841		63,300		—		330			—			114,471
Other segments	75,321		355,835		43		36,544			(467,743		)	—
	1,526,532		953,483		190,036		136,708			(467,743		)	2,339,016
Operating income (loss)	202,600		8,489		19,474		(42,960		)(1)	1,040		(2)	188,643
Income (loss) before income taxes	187,072		3,863		17,877		(75,185		)(7)	1,040			134,667
Depreciation and amortization	35,265		18,769		2,974		9,000			(51		)	65,957
Capital expenditures	12,506		7,769		477		3,779			—			24,531
As of September 30, 2014
Assets	4,663,142		1,842,485		315,381		929,041		(3)	(171,766		)(4)	7,578,283
Liabilities	830,172		401,111		34,386		3,436,135		(5)	(161,510		)(6)	4,540,294

Footnotes related to the three months ended September 30, 2014 segment results (in millions):

(1)  Corporate SG&A	$	(12.4	)
Company-wide equity-based compensation	(5.1		)
Profit sharing	(11.6		)
Minnesota operations	(10.7		)
Other, net	(3.2		)
	$	(43.0	)

(2) Gross profit increase from intra-company sales $ 1.0 

(3) Cash and equivalents	$	82.9
Accounts receivable	51.3
Inventories	114.6
Deferred income taxes	18.3
Property, plant and equipment, net	572.9
Debt issuance costs	39.9
Intra-company debt	7.4
Other	41.7
	$	929.0

(4) Elimination of intra-company receivables	$	(155.6	)
Elimination of intra-company debt	(7.4		)
Other	(8.8		)
	$	(171.8	)

(5) Accounts payable	$	165.0
Income taxes payable	26.9
Accrued interest	21.1
Accrued profit sharing	25.2
Debt	3,054.9
Deferred income taxes	100.6
Other	42.4
	$	3,436.1

(6) Elimination of intra-company payables	$	(155.6	)
Elimination of intra-company debt	(7.4		)
Other	1.5
	$	(161.5	)

(7) Includes $25.0 million of acquisition and bridge financing costs associated with the acquisition of Columbus.

For the nine months ended			Metals Recycling			Steel Fabrication
September 30, 2015	Steel Operations		Operations			Operations		Other			Eliminations			Consolidated
Net Sales
External	$	3,902,162	$	1,014,753		$	488,584	$	237,501		$	—		$	5,643,000
External Non-U.S.	210,320		147,626			1,907		512			—			360,365
Other segments	158,609		751,542			18		29,114			(939,283		)	—
	4,271,091		1,913,921			490,509		267,127			(939,283		)	6,003,365
Operating income (loss)	338,690		229			85,754		(117,273		)(1)	959		(2)	308,359
Income (loss) before income taxes	269,187		(12,780		)	80,581		(162,141		)	959			175,806
Depreciation and amortization	154,616		50,207			6,688		9,948			(153		)	221,306
Capital expenditures	52,324		17,332			2,506		14,296			—			86,458

Footnotes related to the nine months ended September 30, 2015 segment results (in millions):

(1) Corporate SG&A	$	(27.1	)
Company-wide equity-based compensation	(17.5		)
Profit sharing	(14.4		)
Minnesota operations	(50.3		)
Other, net	(8.0		)
Total	$	(117.3	)

(2) Gross profit increase from intra-company sales $ 1.0 

For the nine months ended					Steel Fabrication
September 30, 2014	Steel Operations		Metals Recycling		Operations		Other			Eliminations			Consolidated
Net Sales
External	$	3,675,696	$	1,522,334	$	440,706	$	261,992		$	—		$	5,900,728
External Non-U.S.	158,218		178,947		—		966			—			338,131
Other segments	188,854		1,024,447		43		70,798			(1,284,142		)	—
	4,022,768		2,725,728		440,749		333,756			(1,284,142		)	6,238,859
Operating income (loss)	469,204		27,362		30,190		(129,260		)(1)	3,984		(2)	401,480
Income (loss) before income taxes	426,676		12,394		25,628		(179,412		)(3)	3,984			289,270
Depreciation and amortization	96,010		56,898		7,597		21,615			(154		)	181,966
Capital expenditures	48,209		16,242		1,324		17,131			—			82,906

Footnotes related to the nine months ended September 30, 2014 segment results (in millions):

(1) Corporate SG&A	$	(31.7	)
Company-wide equity-based compensation	(14.4		)
Profit sharing	(25.2		)
Minnesota operations	(49.8		)
Other, net	(8.2		)
Total	$	(129.3	)

(2) Gross profit increase from intra-company sales $ 4.0 

(3)  Includes $25.0 million of acquisition and bridge financing costs associated with the acquisition of Columbus.