SCHN 2017 Annual Report

SCHNITZER STEEL INDUSTRIES, INC. 3 / Schnitzer Steel Industries, Inc. Form 10-K 2017 Tabular presentation of our active recycling and steel facilities by geographic region and segment is as follows: Auto Parts Stores Metals Recycling Facilities (1) Total Recycling Facilities Large-Scale Shredders (2) Deep Water Ports Steel Facilities (3) Segment Northwest WA, OR, MT 7 3 10 1 1 — AMR — 5 5 1 1 1 CSS Southwest and Hawaii CA, NV, UT, HI 22 7 29 2 2 — AMR — — — — — 1 CSS Midwest and South IL, IN, OH, MO, KS, TX, AR 15 — 15 — — — AMR Northeast MA, ME, NH, RI 2 9 11 1 2 — AMR Southeast and Puerto Rico GA, AL, TN, FL, VA, PR 3 16 19 1 1 — AMR Western Canada BC, AB 4 4 8 — — — AMR Total 53 44 97 6 7 2 _____________________ (1) Excludes joint venture facilities. (2) All large-scale shredding operations employ advanced nonferrous extraction and separation equipment. (3) Includes one steel mini-mill in Oregon and one distribution center in California. During the past five years, we implemented a number of cost reduction, productivity improvement, and restructuring initiatives to more closely align our business with market conditions. The combined benefit of the measures initiated since the beginning of fiscal 2015 represents a targeted annual improvement to operating performance of approximately $95 million. In fiscal 2017, we achieved approximately $95 million in combined benefits related to these measures, compared to approximately $78 million and $28 million of benefits in fiscal 2016 and 2015, respectively. In total, we have achieved approximately $160 million in combined annual benefits to operating performance since announcing the initial phase of these cost savings and productivity initiatives at the end of fiscal 2012. We incurred restructuring charges and other exit-related activities during fiscal 2017, 2016, and 2015 in connection with cost reduction, productivity improvement, and restructuring initiatives. See Management's Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7 of this report for further discussion of restructuring initiatives, benefits and costs. See Note 18 – Segment Information in the Notes to the Consolidated Financial Statements in Part II, Item 8 of this report for a discussion of the primary activities of each reportable segment, total assets by reportable segment, operating results fromcontinuing operations, revenues from external customers and concentration of sales to foreign countries. AMR Business AMR sells and brokers ferrous recycled scrap metal (containing iron) to foreign and domestic steel producers and nonferrous recycled scrap metal (not containing iron) to both foreign and domestic markets. AMR buys, collects, processes and recycles autobodies, rail cars, home appliances, industrial machinery, manufacturing scrap and construction and demolition scrap through its 92 auto and metals recycling facilities. Our largest source of autobodies is our own network of retail auto parts stores, which operate under the commercial brand-name Pick-n-Pull. AMR procures salvaged vehicles and sells serviceable used auto parts from these vehicles through its 53 self-service auto parts stores located across the U.S. and Western Canada. Upon acquiring a salvaged vehicle, we remove catalytic converters, aluminum wheels and batteries for separate processing and sale prior to placing the vehicle in our retail lot.After retail customers have removed desired parts froma vehicle, we remove remainingmajor component parts containing ferrous and nonferrous materials such as engines, transmissions and alternators, which are primarily sold to wholesalers. The remaining autobodies are crushed and shipped to our metals recycling facilities to be shredded, or sold to third parties where geographically more economical.