SCHN 2017 Annual Report

SCHNITZER STEEL INDUSTRIES, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 90 / Schnitzer Steel Industries, Inc. Form 10-K 2017 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. Certain expenses related to shared services that support operational activities and transactions are allocated from Corporate to the segments. Unallocated Corporate expense consists primarily of expense for management and certain administrative services that benefit both reportable segments. Because of the unallocated income and expense, the operating income of each reportable segment does not reflect the operating income the reportable segment would report as a stand-alone business. In addition, the Company does not allocate restructuring charges and other exit-related activities to the segment operating income because management does not include this information in itsmeasurement 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): 2017 2016 Total assets: Auto and Metals Recycling (1) $ 1,298,757 $ 1,186,949 Cascade Steel and Scrap 696,269 696,031 Total segment assets 1,995,026 1,882,980 Corporate and eliminations (2) (1,061,271) (991,551) Total assets $ 933,755 $ 891,429 Property, plant and equipment, net (3) $ 390,629 $ 392,820 _____________________________ (1) AMR total assets include $5 million and $6 million as of August 31, 2017 and 2016, respectively, for investments in joint ventures. CSS total assets include $7 million and $8 million as of August 31, 2017 and 2016, respectively, for investment in joint ventures. (2) The substantial majority of Corporate and eliminations total assets is comprised of Corporate intercompany payables to the Company's operating segments and intercompany eliminations. (3) Property, plant and equipment, net includes $17 million and $19 million as of August 31, 2017 and 2016, respectively, at our Canadian locations.