BUSINESS SEGMENTS

12 Months Ended

Aug. 31, 2019

The Company's operating segments engage in business activities from which they may earn revenues and incur expenses and for which discrete financial information is available. Operating results for the operating segments are regularly reviewed by the Company's chief operating decision maker to make decisions about resources to be allocated to the segments and to assess performance. The Company's chief operating decision maker is identified as the Chief Executive Officer. Operating segments are aggregated for reporting purposes when the operating segments are identified as similar in accordance with the basic principles and aggregation criteria in the accounting standards. The Company's reporting segments are based primarily on product lines and secondarily on geographic area. The reporting segments have different lines of management responsibility as each business requires different marketing strategies and management expertise.

The Company structures its business into the following four reporting segments: Americas Recycling, Americas Mills, Americas Fabrication and International Mill. See Note 1, Nature of Operations, for more information about the reporting segments, including the types of products and services from which each reporting segment derives its net sales.

During 2018, the Company substantially completed the exit of the International Marketing and Distribution segment. See Note 4, Changes in Business, for further information. Certain components of the International Marketing and Distribution segment which were wound down in prior periods, including the Company's steel trading operations based in the United Kingdom, did not meet the criteria for discontinued operations, and thus, were included in continuing operations for all periods presented. These activities were included in the results of Corporate and Other, and were immaterial in 2018. Corporate and Other contains earnings or losses on assets and liabilities related to the Company's BRP and short-term investments, expenses of the Company's corporate headquarters, interest expense related to its long-term debt and intercompany eliminations.

The Company uses adjusted EBITDA from continuing operations to compare and evaluate the financial performance of its segments. Adjusted EBITDA is the sum of the Company's earnings from continuing operations before interest expense, income taxes, depreciation and amortization expense, and impairment expense. Intersegment sales are generally priced at prevailing market prices. Certain corporate administrative expenses are allocated to the segments based upon the nature of the expense. The accounting policies of the segments are the same as those described in Note 2, Summary of Significant Accounting Policies.

The following table summarizes certain financial information from continuing operations by reportable segment:



(in thousands)	Americas Recycling		Americas Mills			Americas Fabrication			International Mill		Corporate and Other			Continuing Operations
2019
Net sales-unaffiliated customers	$	908,451	$	1,882,994		$	2,209,671		$	815,723	$	12,163		$	5,829,002
Intersegment sales	238,095		1,185,280			13,708			1,325		(1,438,408		)	—
Net sales	1,146,546		3,068,274			2,223,379			817,048		(1,426,245		)	5,829,002
Adjusted EBITDA	42,124		545,215			(123,014		)	100,102		(140,342		)	424,085
Interest expense*	3,097		16,186			27,656			2,493		21,941			71,373
Capital expenditures	22,560		54,069			12,490			40,337		9,380			138,836
Depreciation and amortization	16,825		91,326			17,567			25,993		6,941			158,652
Impairment of assets	—		—			369			15		—			384
Total assets**	257,517		1,667,366			1,106,420			464,177		263,291			3,758,771
2018
Net sales-unaffiliated customers	$	1,117,714	$	1,204,181		$	1,416,572		$	885,919	$	19,337		$	4,643,723
Intersegment sales	247,715		792,722			11,310			1,119		(1,052,866		)	—
Net sales	1,365,429		1,996,903			1,427,882			887,038		(1,033,529		)	4,643,723
Adjusted EBITDA	68,694		301,805			(39,394		)	131,720		(110,604		)	352,221
Interest expense*	3,605		5,317			14,295			2,699		15,041			40,957
Capital expenditures	8,592		121,029			14,386			23,552		3,808			171,367
Depreciation and amortization	17,246		61,512			13,537			27,255		11,958			131,508
Impairment of assets	180		8			14,157			27		—			14,372
Total assets**	291,838		1,115,339			739,151			485,548		696,428			3,328,304
2017
Net sales-unaffiliated customers	$	865,462	$	917,689		$	1,364,826		$	636,402	$	59,690		$	3,844,069
Intersegment sales	146,038		647,765			11,102			871		(805,776		)	—
Net sales	1,011,500		1,565,454			1,375,928			637,273		(746,086		)	3,844,069
Adjusted EBITDA	33,541		224,183			27,259			76,068		(125,229		)	235,822
Interest expense*	2,979		(3,394		)	9,899			3,079		31,588			44,151
Capital expenditures	7,148		172,738			15,495			12,603		5,090			213,074
Depreciation and amortization	15,501		49,419			13,400			25,830		20,340			124,490
Impairment of assets	559		—			—			150		1,021			1,730
Total assets**	240,371		933,022			683,609			464,428		653,701			2,975,131

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* Includes intercompany interest expense (income) in the segments, which is eliminated within Corporate and Other.

** Total assets listed in Corporate and Other includes assets from discontinued operations.

The following table presents a reconciliation of earnings from continuing operations to adjusted EBITDA from continuing operations:



	Year Ended August 31,
(in thousands)	2019			2018		2017
Earnings from continuing operations	$	198,779		$	135,237	$	50,175
Interest expense	71,373			40,957		44,151
Income taxes	69,681			30,147		15,276
Depreciation and amortization	158,652			131,508		124,490
Amortization of acquired unfavorable contract backlog	(74,784		)	—		—
Impairment of assets	384			14,372		1,730
Adjusted EBITDA from continuing operations	$	424,085		$	352,221	$	235,822

The following table present the Company's external net sales from continuing operations by major geographic area:



	Year Ended August 31,
(in thousands)	2019		2018		2017
Geographic area:
North America	$	4,843,985	$	3,535,499	$	3,015,481
Europe	833,627		892,452		666,396
Asia and other	151,390		215,772		162,192
Net sales	$	5,829,002	$	4,643,723	$	3,844,069

The following table presents long-lived assets, net of accumulated depreciation and amortization, by geographic area:



	August 31,
(in thousands)	2019		2018		2017
United States	$	1,426,131	$	1,001,102	$	971,881
Europe and other	173,087		171,505		187,995
Total long-lived assets	$	1,599,218	$	1,172,607	$	1,159,876