Business Segments

12 Months Ended

Aug. 31, 2011

Business Segments [Abstract]

BUSINESS SEGMENTS

NOTE 19. BUSINESS SEGMENTS

The Company’s reportable segments are based on strategic business areas, which offer different products and services. These segments have different lines of management responsibility as each business requires different marketing strategies and management expertise.

Effective September 1, 2010, the Company’s scrap metal processing facilities, which directly support the domestic mills, are included as part of the Americas Mills segment. Prior to September 1, 2010, these facilities were included as part of the Americas Recycling segment. All prior period financial information has been recast to the current segment reporting structure.

The Company structures the business into the following five segments: Americas Recycling, Americas Mills, Americas Fabrication, International Mills and International Marketing and Distribution. The Americas Recycling segment consists of the scrap metal processing and sales operations primarily in Texas, Florida and the southern United States. The Americas Mills segment includes the Company’s domestic steel mills, including the scrap processing facilities which directly support these mills, and the copper tube minimill. The copper tube minimill is aggregated with the Company’s steel mills because it has similar economic characteristics. The Americas Fabrication segment consists of the Company’s rebar fabrication operations, fence post manufacturing plants, construction-related and other products facilities. The International Mills segment includes the minimills in Poland and Croatia, recycling operations in Poland and fabrication operations in Europe, which have been presented as a separate segment because the economic characteristics of their markets and the regulatory environment in which they operate are different from that of the Company’s domestic mills and rebar fabrication operations. International Marketing and Distribution includes international operations for the sales, distribution and processing of steel products, ferrous and nonferrous metals and other industrial products. Additionally, the International Marketing and Distribution segment includes the Company’s two U.S.-based trading and distribution divisions, CMC Cometals and CMC Cometals Steel. The international distribution operations consist only of physical transactions and not positions taken for speculation. Corporate contains expenses of the Company’s corporate headquarters and interest expense relating to its long-term public debt and commercial paper program.

The financial information presented for the Americas Fabrication segment excludes its joist and deck fabrication operations. This operation has been classified as discontinued operations in the consolidated statements of operations. See Note 8, Discontinued Operations, for more detailed information.

The Company uses adjusted operating profit (loss) to measure segment performance. Intersegment sales are generally priced at prevailing market prices. Certain corporate administrative expenses are allocated to segments based upon the nature of the expense. The accounting policies of the segments are the same as those described in the summary of significant accounting policies.

The following is a summary of certain financial information from continuing operations by reportable segment:

										International
													Marketing
	Americas												and
	Recycling			Mills			Fabrication			Mills			Distribution			Corporate			Eliminations			Consolidated
2011
Net sales-unaffiliated customers	$	1,692,824		$	1,308,055		$	1,208,823		$	1,098,352		$	2,603,494		$	6,882		$	—		$	7,918,430
Intersegment sales		136,713			728,270			16,899			42,193			47,405			—			(971,480	)		—
Net sales		1,829,537			2,036,325			1,225,722			1,140,545			2,650,899			6,882			(971,480	)		7,918,430
Adjusted operating profit (loss)		43,059			161,731			(129,141	)		(100,125	)		76,337			(84,729	)		(1,275	)		(34,143	)
Interest expense*		246			12,901			9,717			19,236			2,173			26,533			—			70,806
Capital expenditures		7,666			25,657			2,029			27,094			2,873			7,896			—			73,215
Depreciation and amortization**		12,860			52,048			48,299			136,648			4,600			23,916			—			278,371
Goodwill		7,267			295			57,144			3,092			9,840			—			—			77,638
Total assets		278,120			650,920			601,277			736,680			990,111			1,505,672			(1,079,649	)		3,683,131
2010
Net sales-unaffiliated customers	$	1,211,815		$	869,014		$	1,131,928		$	650,404		$	2,439,018		$	3,923		$	—		$	6,306,102
Intersegment sales		104,615			609,412			8,349			113,574			24,396			326			(860,672	)		—
Net sales		1,316,430			1,478,426			1,140,277			763,978			2,463,414			4,249			(860,672	)		6,306,102
Adjusted operating profit (loss)		11,416			37,251			(107,800	)		(73,484	)		74,689			(70,678	)		3,460			(125,146	)
Interest expense*		109			12,113			9,076			11,425			3,273			39,512			—			75,508
Capital expenditures		5,430			32,244			2,948			72,468			7,118			6,913			—			127,121
Depreciation and amortization**		15,802			55,315			42,777			31,010			5,021			18,512			—			168,437
Goodwill		7,267			295			57,144			2,820			4,054			—			—			71,580
Total assets		228,781			622,358			660,503			703,589			732,900			1,083,744			(325,722	)		3,706,153
2009
Net sales-unaffiliated customers	$	625,635		$	774,188		$	1,591,058		$	655,599		$	2,773,505		$	(10,609	)	$	—		$	6,409,376
Intersegment sales		83,627			511,017			5,424			98,360			53,179			—			(751,607	)		—
Net sales		709,262			1,285,205			1,596,482			753,959			2,826,684			(10,609	)		(751,607	)		6,409,376
Adjusted operating profit (loss)		(79,003	)		253,957			145,672			(96,030	)		(53,102	)		(94,813	)		7,081			83,762
Interest expense*		168			(6,964	)		(543	)		3,059			4,648			76,596			—			76,964
Capital expenditures		21,610			129,390			18,602			152,194			11,487			36,411			—			369,694
Depreciation and amortization**		16,248			43,647			46,837			25,793			3,271			15,570			—			151,366
Goodwill		7,267			295			58,878			2,920			4,876			—			—			74,236
Total assets		215,967			626,456			857,198			625,135			687,738			956,802			(281,740	)		3,687,556

*	Includes intercompany interest expense (income) in the segments.
**	Includes asset impairment charges.

The following table provides a reconciliation of consolidated adjusted operating profit to net earnings (loss) from continuing operations attributable to CMC:

	Year ended August 31,
(in thousands)	2011			2010			2009
Earnings (loss) from continuing operations	$	(129,427	)	$	(166,488	)	$	1,187
Income taxes (benefit)		19,328			(38,118	)		747
Interest expense		70,806			75,508			76,964
Discounts on sales of accounts receivable		5,150			3,952			4,864
Adjusted operating profit (loss) from continuing operations	$	(34,143	)	$	(125,146	)	$	83,762
Adjusted operating profit (loss) from discontinued operations		(2,959	)		(59,755	)		32,622
Adjusted operating profit (loss)	$	(37,102	)	$	(184,901	)	$	116,384

The following represents the Company’s external net sales by major product and geographic area:

	Year ended August 31,
(in thousands)	2011		2010		2009
Steel products	$	4,463,203	$	3,637,631	$	4,351,569
Industrial materials		1,134,819		913,019		885,333
Nonferrous scrap		997,771		702,467		411,490
Ferrous scrap		805,067		561,119		260,755
Construction materials		221,633		230,294		288,707
Nonferrous products		196,641		178,844		150,461
Other		99,296		82,728		61,061
Net sales*	$	7,918,430	$	6,306,102	$	6,409,376
Geographic area:
United States	$	4,362,629	$	3,215,337	$	3,678,447
Europe		1,622,269		1,290,907		1,272,621
Asia		1,133,150		1,059,673		727,681
Australia/New Zealand		564,084		531,595		533,528
Other		236,298		208,590		197,099
Net sales*	$	7,918,430	$	6,306,102	$	6,409,376

* Excludes divisions classified as discontinued operations. See Note 8.

The following table represents long-lived assets by geographic area:

	Year ended August 31,
(in thousands)	2011		2010		2009
United States	$	944,851	$	1,062,080	$	1,186,624
Europe		364,207		443,986		462,412
Australia/New Zealand		38,973		16,725		19,286
Other		8,847		8,156		21,682
Total long-lived assets	$	1,356,878	$	1,530,947	$	1,690,004