Segment Information

12 Months Ended

Aug. 31, 2015

Segment Reporting [Abstract]

Segment Information

Segment Information

The accounting standards for reporting information about operating segments define an operating segment as a component of an enterprise that engages in business activities from which it may earn revenues and incur expenses for which discrete financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance.

Prior to the fourth quarter of fiscal 2015, our internal organizational and reporting structure supported three operating and reportable segments: the Metals Recycling Business ("MRB"), the Auto Parts Business ("APB") and the Steel Manufacturing Business ("SMB"). In the fourth quarter of fiscal 2015, in accordance with its plan announced in April 2015, the Company combined and integrated its auto parts and metals recycling businesses into a single operating platform. This resulted in a realignment of how the Chief Executive Officer, who is considered the Company's chief operating decision maker, reviews performance and makes decisions on resource allocation. The change in the Company's internal organizational and reporting structure resulted in the formation of a new operating and reportable segment, the Auto and Metals Recycling ("AMR") business, replacing the former MRB and APB segments. The Company began reporting on this new segment in the fourth quarter of fiscal 2015 as reflected in this Annual Report on Form 10-K. The segment data for the comparable periods presented has been revised to conform to the current period presentation for all activities of AMR. Recasting this historical information did not have an impact on the Company's consolidated financial performance for any of the periods presented.

Additionally, the Company is a noncontrolling partner in joint ventures, which are either in the metals recycling business or are suppliers of unprocessed metal.

AMR buys and processes ferrous and nonferrous metal for sale to foreign and other domestic steel producers or their representatives and to SMB. AMR also purchases ferrous metal from other processors for shipment directly to SMB. AMR also procures salvaged vehicles and sells serviceable used auto parts from these vehicles through a network of self-service auto parts stores.

SMB operates a steel mini-mill that produces a wide range of finished steel products using recycled metal and other raw materials.

Intersegment sales from AMR to SMB are made at rates that approximate market prices for shipments from the West Coast of the U.S. These intercompany sales tend to produce intercompany profits which are not recognized until the finished products are ultimately sold to third parties.

The information provided below is obtained from internal information that is provided to the Company’s chief operating decision maker for the purpose of corporate management. The Company uses segment operating income to measure segment performance. The Company does not allocate corporate interest income and expense, income taxes and other income to its reportable segments. Expenses related to shared services that support operational activities and transactions is allocated from Corporate to the segments. Unallocated Corporate expense consists primarily of expense for management and certain administrative services that benefit both reportable segments. In addition, the Company does not allocate restructuring charges and other exit-related costs to the segment operating income because management does not include this information in its measurement of the performance of the operating segments. The results of discontinued operations are excluded from segment operating income and are presented separately, net of tax, from the results of ongoing operations for all periods presented.

The following is a summary of the Company’s total assets as of August 31 (in thousands):

	2015			2014
Total assets:
Auto and Metals Recycling(1)	$	1,492,906		$	1,708,392
Steel Manufacturing Business	370,955			350,344
Total segment assets	1,863,861			2,058,736
Corporate and eliminations	(901,562		)	(703,526		)
Total assets	$	962,299		$	1,355,210
Property, plant and equipment, net (2)	$	427,554		$	523,433

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(1) AMR total assets include $15 million as of August 31, 2015 and 2014 for investments in joint ventures.

(2) Property, plant and equipment, net includes $29 million and $75 million as of August 31, 2015 and 2014, respectively, at our Canadian locations.

The table below illustrates the Company’s results from continuing operations by reportable segment for the years ended August 31 (in thousands):

	2015			2014			2013
Auto and Metals Recycling:
Revenues	$	1,716,296		$	2,334,389		$	2,442,679
Less: Intersegment revenues	(175,934		)	(188,103		)	(178,341		)
AMR external customer revenues	1,540,362			2,146,286			2,264,338
Steel Manufacturing Business:
Revenues	375,037			388,640			352,454
Total revenues	$	1,915,399		$	2,534,926		$	2,616,792
Depreciation and amortization:
Auto and Metals Recycling	$	56,767		$	66,894		$	69,896
Steel Manufacturing Business	7,523			8,256			9,072
Segment depreciation and amortization	64,290			75,150			78,968
Corporate	2,825			2,724			3,241
Total depreciation and amortization	$	67,115		$	77,874		$	82,209
Capital expenditures:
Auto and Metals Recycling	$	22,762		$	29,281		$	74,699
Steel Manufacturing Business	6,899			5,379			7,582
Segment capital expenditures	29,661			34,660			82,281
Corporate	2,636			4,487			8,100
Total capital expenditures	$	32,297		$	39,147		$	90,381
Reconciliation of the Company’s segment operating income (loss) to income (loss) from continuing operations before income taxes:
Auto and Metals Recycling(1)	$	(164,031	)	$	55,089		$	(281,812	)
Steel Manufacturing Business	20,378			18,538			6,541
Segment operating income (loss)	(143,653		)	73,627			(275,271		)
Restructuring charges and other exit-related costs	(13,008		)	(6,830		)	(7,906		)
Corporate and eliminations	(38,868		)	(42,433		)	(40,001		)
Operating income (loss)	(195,529		)	24,364			(323,178		)
Interest expense	(9,191		)	$	(10,597	)	(9,623		)
Other income, net	4,256			1,215			77
Income (loss) from continuing operations before income taxes	$	(200,464	)	$	14,982		$	(332,724	)

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(1) AMR operating income (loss) includes $2 million, $1 million and $1 million in income from joint ventures accounted for by the equity method in fiscal 2015, 2014 and 2013, respectively. The AMR operating income (loss) for fiscal 2015, 2014 and 2013 includes a goodwill impairment charge of $141 million, zero and $321 million , respectively, and other asset impairment charges of $44 million, $1 million and $13 million, respectively.

The following revenues from external customers are presented based on the sales destination and by major product for the years ended August 31 (in thousands):

	2015		2014		2013
Revenues based on sales destination:
Foreign	$	984,910	$	1,472,023	$	1,657,200
Domestic	930,489		1,062,903		959,592
Total revenues from external customers	$	1,915,399	$	2,534,926	$	2,616,792
Major product information:
Ferrous scrap metal	$	922,291	$	1,440,582	$	1,550,995
Nonferrous scrap metal	488,036		556,139		562,968
Retail and other	130,035		149,565		150,375
Finished steel products	363,795		377,678		346,982
Semi-finished steel products	11,242		10,962		5,472
Total revenues from external customers	$	1,915,399	$	2,534,926	$	2,616,792

In fiscal 2015, 2014 and 2013, there were no external customers that accounted for more than 10% of the Company’s consolidated revenues. Sales to customers in foreign countries are a significant part of the Company’s business. The schedule below identifies those foreign countries in which the Company’s sales exceeded 10% of consolidated revenues in any of the last three years ended August 31 (in thousands):

	2015		% of Revenue		2014		% of Revenue		2013		% of Revenue
China	$	240,279	12.5	%	$	390,634	15.4	%	$	562,558	21.5	%
Turkey	225,040		11.7	%	261,558		10.3	%	341,418		13.0	%
South Korea(1)	N/A		N/A		265,912		10.5	%	N/A		N/A

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(1) N/A - sales were less than the 10% threshold and, as such, disclosure is not applicable.