Segment Information

9 Months Ended

Sep. 30, 2016

Segment Information

Segment Information

Note 10.  Segment Information

The company’s operations are primarily organized and managed by operating segment, which are steel operations, metals recycling operations, and steel fabrication operations. The segment operations are more fully described in Note 1 to the financial statements. 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. Amounts included in the category “Other” are from subsidiary operations that are below the quantitative thresholds required for reportable segments and primarily consist of our Minnesota ironmaking operations and several small joint ventures. 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 months ended September 30, 2016 and 2015, each adjusted consistent with our current reportable segments presentation, are as follows (in thousands):

			Metals		Steel
For the three months ended	Steel		Recycling		Fabrication
September 30, 2016	Operations		Operations		Operations		Other			Eliminations			Consolidated
Net Sales
External	$	1,502,726	$	260,518	$	177,341	$	60,282		$	-		$	2,000,867
External Non-U.S.		54,776		45,574		88		5			-			100,443
Other segments		70,384		259,171		1,211		1,108			(331,874)			-
		1,627,886		565,263		178,640		61,395			(331,874)			2,101,310
Operating income (loss)		307,553		6,154		17,744		(47,687)	(1)		91	(2)		283,855
Income (loss) before income taxes		285,131		2,437		15,645		(59,999)			91			243,305
Depreciation and amortization		53,456		13,836		2,848		4,101			(51)			74,190
Capital expenditures		49,200		9,506		747		321			-			59,774
As of September 30, 2016
Assets	$	4,147,447	$	1,034,637	$	353,560	$	1,374,469	(3)	$	(122,551)	(4)	$	6,787,562

Footnotes related to the three months ended September 30, 2016 segment results (in millions):
(1)	Corporate SG&A	$	(12.6)	(2)	Gross profit increase from intra-company sales	$	-
	Company-wide equity-based compensation		(6.1)
	Profit sharing		(21.0)
	Minnesota ironmaking operations		(4.1)
	Other, net		(3.9)
		$	(47.7)
(3)	Cash and equivalents	$	982.2	(4)	Elimination of intra-company receivables	$	(98.0)
	Accounts receivable		14.7		Elimination of intra-company debt		(12.1)
	Inventories		36.2		Other		(12.5)
	Property, plant and equipment, net		295.7			$	(122.6)
	Intra-company debt		12.1
	Other		33.6
		$	1,374.5

Note 10.  Segment Information (Continued)

			Metals		Steel
For the three months ended	Steel		Recycling		Fabrication
September 30, 2015	Operations		Operations		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

Footnotes related to the three months ended September 30, 2015 segment results (in millions):
(1)	Corporate SG&A	$	(9.5)	(2)	Gross profit increase from intra-company sales	$	1.5
	Company-wide equity-based compensation		(5.3)
	Profit sharing		(7.5)
	Minnesota ironmaking operations		(4.1)
	Other, net		(2.0)
		$	(28.4)
(3)	Cash and equivalents	$	415.7	(4)	Elimination of intra-company receivables	$	(100.8)
	Accounts receivable		30.0		Elimination of intra-company debt		(6.5)
	Inventories		36.8		Other		(6.6)
	Property, plant and equipment, net		309.6			$	(113.9)
	Intra-company debt		6.5
	Other		100.2
		$	898.8

Note 10.  Segment Information (Continued)

			Metals		Steel
For the nine months ended	Steel		Recycling		Fabrication
September 30, 2016	Operations		Operations		Operations		Other			Eliminations			Consolidated
Net Sales
External	$	4,068,688	$	769,260	$	527,859	$	210,358		$	-		$	5,576,165
External Non-U.S.		172,694		117,299		167		188			-			290,348
Other segments		178,190		756,613		2,415		3,603			(940,821)			-
		4,419,572		1,643,172		530,441		214,149			(940,821)			5,866,513
Operating income (loss)		712,939		20,014		73,230		(125,186)	(1)		(9,055)	(2)		671,942
Income (loss) before income taxes		645,189		10,300		67,175		(152,296)			(9,055)			561,313
Depreciation and amortization		159,614		42,666		8,431		12,413			(154)			222,970
Capital expenditures		103,202		17,068		1,918		980			-			123,168

Footnotes related to the nine months ended September 30, 2016 segment results (in millions):
(1)	Corporate SG&A	$	(38.5)	(2)	Gross profit decrease from intra-company sales	$	(9.1)
	Company-wide equity-based compensation		(20.4)
	Profit sharing		(47.7)
	Minnesota ironmaking operations		(12.4)
	Other, net		(6.2)
		$	(125.2)

			Metals		Steel
For the nine months ended	Steel		Recycling		Fabrication
September 30, 2015	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)	(2)	Gross profit increase from intra-company sales	$	1.0
	Company-wide equity-based compensation		(17.5)
	Profit sharing		(14.4)
	Minnesota ironmaking operations		(50.3)
	Other, net		(8.0)
		$	(117.3)