SCHN 2017 Annual Report

SCHNITZER STEEL INDUSTRIES, INC. 5 / Schnitzer Steel Industries, Inc. Form 10-K 2017 In fiscal 2017, the five countries from which AMR derived its largest revenues from external customers were the United States, China, Turkey, Bangladesh, and India, which collectively accounted for 81% of total AMR external revenues. In fiscal 2016 and 2015, the five countries from which AMR derived its largest revenues from external customers accounted for 85% and 81%, respectively, of total AMR external revenue. We attribute revenues from external customers to individual countries based on the country in which the customer takes delivery of the goods. AMR’s five largest external ferrous scrap metal customers accounted for 31% of external recycled ferrous metal revenues in fiscal 2017, compared to 37% and 33% in fiscal 2016 and 2015, respectively. AMR had no external customers that accounted for 10% or more of consolidated revenues in fiscal 2017, 2016 and 2015. Total sales volumes of ferrous scrap metal vary from year-to- year due to the level of demand, availability of supply, economic growth, infrastructure spending, relative currency values, availability of credit and other factors. Ferrous scrap metal sales are primarily denominated in U.S. dollars, and nearly all of the large shipments of ferrous scrap metal to foreign customers are supported by letters of credit. The table below sets forth, on a revenue and volume basis, the amount of recycled ferrous scrap metal sold by AMR to foreign and domestic customers, including sales to CSS, during the last three fiscal years ended August 31: Ferrous Recycled Metal 2017 2016 2015 Revenues (1) Volume (2) Revenues (1) Volume (2) Revenues (1) Volume (2) Foreign $ 608,339 2,197 $ 452,242 2,040 $ 653,440 2,183 Domestic 234,883 948 173,275 859 280,617 1,003 Total $ 843,222 3,145 $ 625,517 2,899 $ 934,057 3,186 _____________________________ (1) Revenues stated in thousands of dollars. (2) Volume stated in thousands of long tons (one long ton = 2,240 pounds). AMR sells nonferrous recycled scrap metal to specialty steelmakers, foundries, aluminum sheet and ingot manufacturers, copper refineries and smelters, brass and bronze ingot manufacturers, wholesalers, and wire and cable producers globally. AMR invests in advanced separation technologies in order to extract higher nonferrous yields from the shredding process and to enhance the separation of nonferrous metals in order to maximize the grade and value of the individual metals. The table below sets forth, on a revenue and volume basis, the amount of recycled nonferrous scrap metal sold by AMR to foreign and domestic customers during the last three fiscal years ended August 31: Nonferrous Recycled Metal 2017 2016 2015 Revenues (1) Volume (2) Revenues (1) Volume (2) Revenues (1) Volume (2) Foreign $ 216,362 319,629 $ 186,989 290,430 $ 260,209 326,059 Domestic 178,615 221,162 143,362 183,307 189,606 213,791 Total $ 394,977 540,791 $ 330,351 473,737 $ 449,815 539,850 ____________________________ (1) Revenues stated in thousands of dollars. (2) Volume stated in thousands of pounds and volume information excludes PGM metals in catalytic converters. AMR's retail auto parts sales account for less than 10% of SSI's consolidated revenues in all of the periods presented. Pricing Domestic and foreign prices for ferrous and nonferrous recycled scrap metal are generally based on prevailing market rates, which differ by region, and are subject to market cycles that are influenced by worldwide demand from steel and other metal producers as well as by the availability of materials that can be processed into saleable scrap metal, among other factors. Ferrous scrap metal export sales contracts generally provide for shipment within 30 to 60 days after the price is agreed to which, in most cases, includes freight. Nonferrous scrap metal sales contracts generally provide for shipment within 30 days after the price is agreed to, which also typically includes freight.