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commercial metals Overview_06/08_2

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  • 1. CMC A Global Steel and Metals Company Over 14,000 Employees Worldwide in 14 Different Countries Steel Minimills Steel Fabrication Plants CMC Manufactures, Steel Joist & Deck Plants Recycles, Markets Heat Treating Plants and Distributes Steel Steel Fence Post Mfg. Plants and Metal Products and Steel Service Centers Related Materials and Construction-Related Product Services Through a Warehouses Network of Over 200 Copper Tube Minimill Locations Worldwide Metal Recycling Facilities Pipe & Tube Mill Marketing and Distribution Offices 6565 N. MacArthur Blvd. Suite 800 Irving, TX 75039 Strategic Investments Tel 214. 689.4300 Fax 214. 689.5886 www.cmc.com 2 CMC Overview June 2008 Effective 9/1/2007 CMC – Business Model • Locations Throughout the Sunbelt • Poland -- Main Products are • Significant Regional Processor Vertical Integration Rebar & Wire Rod; Mega Shredder of Ferrous and Nonferrous on Site; Captive Scrap Branches • Strategic Mill Support Product Diversification • Croatia Tubular Products Global Geographic Dispersion • Domestic Steel Minimills • Offices in 13 Countries (Long Products) • Physical Operations and Strategic Investments • Copper Tube Minimill ―11% Investment in Czech Mill ―Australian Service Centers ―Belgian Pickling & Oiling 24% Joint Venture • Downstream Operations: Rebar and • Consultants/Agents in 20 Countries Structural Fab, Joist, Deck, CRP, • Rebar Fab; 2 Locations; More Underway Domestic Steel Import, Fence Posts, • Wire Mesh; 2 locations in Poland 3 Heat Treating, Other CMC Overview June 2008
  • 2. How is CMC Different? Conservative Accounting Conservative Company with a Strong, Fast Depreciation Rates Experienced Management Team No Significant Post-Retirement Benefits High Correlation Between Hedging Strategy and Underlying Assets 30 Consecutive Years of Profitability Build Markets, then Build Manufacturing/ No Speculation or Position Taking Processing Operations No Esoteric Financial Instruments Vertically Integrated: Scrap Processing and Steel Very Cautionary Bad Debt Reserves / Use of Fabrication are Hedges for the Steel and Copper Tubing Mills Credit Insurance Marketing and Distribution – Consistently Profitable LIFO Inventory Valuation People Development Investment Grade Long-Term Debt and Commercial Paper 5 6 CMC Overview June 2008 CMC Overview June 2008 Financial Objectives CMC’s Peer Group Profitability Peer Companies Plus Private & International Players » Net Income Return on Beginning Equity 10 - 14% Bayou Steel Corporation Corus » Operating Profit ROA > 16% Gerdau AmeriSteel David J. Joseph (Nucor) Leverage Mueller Industries Duferco Nucor Corporation Glencore » Long-Term Debt/Total Capitalization 30 - 40% Oregon Steel Mills, Inc. Mittal Coverage Quanex Corporation Omnisource (Steel Dynamics) Schnitzer Steel Industries Sims (Metal Management) » EBITDA/Interest > 6x Steel Dynamics Stemcor Wolverine Tube Inc 7 8 CMC Overview June 2008 CMC Overview June 2008
  • 3. Liquidity Operating Profit by Segment FY 2007 FY 2006 FY 2005 $400 MM Commercial Paper Program $200 MM A/R Securitization Agreement 14% 13% 16% 11% 18% 14% Unsecured Bank Credit Lines 14% 15% Revolvers Have Never Been Called On 24% 42% Weighted Average Long-Term Interest 44% 49% 17% 9% Rate on Public Debt – 6.29% Domestic Domestic Marketing & CMCZ Recycling Mills Fabrication Distribution 9 10 CMC Overview June 2008 CMC Overview June 2008 Stock Repurchases Consolidated Net Sales ($ in Millions) ($ in Billions) $100 79 77 $10 8.3 $80 $9 59 7.2 $8 $60 6.3 $7 42 $6 4.6 $40 $5 15 15 $4 2.7 $20 7 7 5 $3 $2 $0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 $1 $0 2003 2004 2005 2006 2007 11 12 CMC Overview June 2008 CMC Overview June 2008
  • 4. Capital Expenditures Dividends Per Share ($ in Millions) $250 $0.40 206 0.33 $0.35 $200 $0.30 131 $0.25 $150 0.171 110 $0.20 0.115 $100 $0.15 63 0.085 0.08 0.07 52 $0.10 $50 $0.05 $0.00 $0 2002 2003 2004 2005 2006 2007 2003 2004 2005 2006 2007 Note: Excludes Acquisitions 13 14 CMC Overview June 2008 CMC Overview June 2008 LIFO Reserve Domestic Mills Net Sales ($ in Millions) ($ in Billions) 241 250 189 $2.0 200 1.6 1.6 $1.6 1.3 150 1.1 111 $1.2 92 0.8 100 $0.8 50 22 $0.4 17 8 8 6 3 $0.0 0 2003 2004 2005 2006 2007 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 At August 31 15 16 CMC Overview June 2008 CMC Overview June 2008
  • 5. Domestic Minimill and Fabrication Locations Copper Tube Manufacturing Copper Tube Minimill: Melt Scrap/Cast/Extrude/Draw Located in New Market, Virginia Markets: More than 30 States 80 Million Pound Capacity Water Tubing for Plumbing, Air Conditioning and Steel Manufacturing Refrigeration Steel Fabrication Steel Joist & Deck Plants Value-Added Products – Line Sets Heat Treating Copper Tube Manufacturing Fence Post Manufacturing Construction-Related Products Warehousing Castellated & Cellular Beam Fabrication 18 CMC Overview June 2008 Domestic Steel Mill Shipments Copper Tube Manufacturing Shipments (Tons 000’s) (in Millions of Pounds) CMC-TX CMC-AL CMC-AR CMC-SC 2,800 2,492 100 2,401 2,600 2,284 2,266 2,250 2,171 2,400 68.4 2,008 80 65.7 66.6 2,200 61.9 1,903 1,853 2,000 1,685 52.5 1,800 60 1,600 1,400 40 1,200 1,000 20 800 600 400 0 200 2003 2004 2005 2006 2007 0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 19 20 CMC Overview June 2008 CMC Overview June 2008
  • 6. Steel Minimills Domestic Steel Mill Shipments by Region Fiscal 2007 Capacity (Tons 000’s) Melting Rolling CMC Steel Alabama: Birmingham, AL 650 575 (mid-size structural products) 18% CMC Steel Arkansas: Magnolia, AR 0 150 (posts, rebar, flats, angles, squares) CMC Steel South Carolina: Cayce, SC 700 800 (full line bar size products) CMC Steel Texas: Seguin, TX 900 900 34% (full line bar size products) CMC Zawiercie: Zawiercie, Poland 1,500 1,100 (rebar and wire rod) 48% Total 3,750 3,525 21 22 CMC Overview June 2008 CMC Overview June 2008 Domestic Steel Mill Facilities Domestic Steel Mill Facilities CMC Steel South Carolina CMC Steel Texas CMC Steel Alabama CMC Steel Arkansas 22” 24” 28” Melt 84NT 120 NT 80 MVA Capacity: 80 MVA Melt MELT 90 NT 72 MVA AC Fce AC Fce Xfrmr Melt MELT Xfrmr Capacity: DC Fce Xfrmr 100 tph Capacity: 130 tph 90 tph 21.5 MVA 25 MVA 21 MVA Xfrmr LMS Xfrmr LMS Xfrmr Ind Stir LMS Ind Stir Ind Stir 17 stand in-line continuous 17 stand in-line continuous 14 stand in-line continuous Rail slitting & re-rolling; mill (7 stand cantilever mill (all conventional) mill with quick change billet rolling rougher) with quick change MILL capability on 9 stands with quick change on all 17 stands 12 stand in-line mill capability MILL (12 passes continuous; 100 tph reheat furnace capacity 160 tph capacity; 3,300 fpm finishing and 150 tph reheat furnace capacity 14 passes using 3 hi) In-line straightening/stacking/bundling In-line straightening & stacking 3,000 fpm finishing speed 40 tph reheat furnace Profile gauge In-line bundling In-line bundling Profile gauge 2000 fpm finishing speed 23 24 CMC Overview June 2008 CMC Overview June 2008
  • 7. CMCZ Steel Mill Facility CMC Steel Alabama #1 Furnace #2 Furnace 22” 22” Medium Section Mill Melt Melt Routine Efficient DC Furnace Operation 135 NT 135 NT 105 MVA 105 MVA Capacity: Capacity: MELT AC Fce AC Fce Xfrmr Xfrmr Continuous Cost / Productivity/Quality 117 mtph 84 mtph Improvements 60 MVA 60 MVA Growth in South Central U.S.A. Xfrmr Xfrmr LMS Porous Plug LMS Porous Plug Stirring Stirring FY 2007 Bar Mill Wire Rod Mill – Tons Melted 614,000 18 stand in-line continuous Dual strand double rod – Tons Rolled 669,000 mill with quick change block 17 stand mill plus MILL capability on 6 stands; – Tons Shipped 654,000 8 strand wire rod block; 120 metric tph reheat furnace capacity; 100 metric tph reheat furnace capacity 16 meters per second finishing speed; Maximum speed 55 meters per second In-line stacking and bundling 25 26 CMC Overview June 2008 CMC Overview June 2008 CMC Steel Arkansas CMC Steel South Carolina Growth in Southeast U.S.A. USA’s Leading Fence Post Provider State-of-the-Art, Quick Change, High Modern, Efficient Rail Reroller Productivity Bar Mill – Posts/Rebar/Bed Angles/Earth Bar FY 2007 Low Cost Producer of Posts – Tons Melted 649,000 – Tons Rolled 669,000 Roll Billets Into Niche Products – Tons Shipped 654,000 – Flats/Angles/Rounds FY 2007 Tons Shipped – 130,000 27 28 CMC Overview June 2008 CMC Overview June 2008
  • 8. CMC Steel Mill Products CMC Steel Texas PRODUCTS CMC Steel AL CMC Steel AR CMC Steel SC CMC Steel TX CMCZ Low Cost Producer Rebar #3–6 #3–18 #3–18 10.0 – 40.0mm Flexible, High Productivity Bar Mill Rounds 1/2” – 1” 1/2” – 3” 1/2” – 3-1/2” 16.0 – 52.0mm Broad Product Range SBQ & MBQ – Rebar, Merchant Bar, and SBQ Flats 3” – 12” 1-1/2” – 3” 1-1/2” – 6” 2” – 6” 25.0 – 100.0mm New Caster Fiscal 2006 Squares 1/2” – 2” 1/2” – 3-1/2” 40.0 – 52.0mm Strong Customer Base Angles 3” – 7” 1” – 2” 1” – 4” 1” – 4” 25.0 – 51.0mm Channels 3” – 8” 3” – 6” 3” – 6” Trucking Fleet Backhauls Scrap Fence Post All sizes .95#, 1.25#, Growth in Southwest U.S.A. 1.33# Special Earth bar; Rail anchors; FY 2007 Sections jail bars; concrete Other – Tons Melted 859,000 form bar; sign posts – Tons Rolled 730,000 Wire Rod 5.5 – 11.0mm – Tons Shipped 869,000 29 30 CMC Overview June 2008 CMC Overview October 2007 Domestic Steel Mill Customers Inter-Segment Dealings CMC Steel AL CMC Steel AR CMC Steel SC CMC Steel TX Fabricators Farm Co-Ops/ Fabricators Fabricators Ferrous Scrap Purchased by Domestic Steel Mills Distributors from CMC Recycling 16% Service Centers Lumber Yards Contractors Contractors Ferrous Scrap and Rail Sourced by Domestic Steel Mills from Steel Scrap Yards 20% Mobile Home Service Centers Service Centers Service Centers Ferrous Scrap Processed by Texas/South Carolina Mfg. Shredders 31% Tower Mfg. Manufacturers Other OEM’s Forge Shops Steel Produced by Domestic Steel Mills and Sold to Domestic Fabrication 33% Trailer Mfg. Sucker Rod Mfg. Steel Purchased by Domestic Fabrication Segment from Cold Drawers Other OEM’s Domestic Steel Mills 46% Other OEM’s Fabricators As % of Total Requirement 31 32 CMC Overview June 2008 CMC Overview June 2008
  • 9. CMC Zawiercie Domestic Steel Mill Competitors Second Largest Steel Producer in Poland CMC Steel AL CMC Steel AR CMC Steel SC CMC Steel TX Minimill Capacity 1.1 Million Tons Chicago Heights Bayou Steel Bayou Steel Border Steel Goal is 70% Domestic and 30% Export Sales Steel Gerdau Jersey Shore Gerdau Gerdau Main Products are Rebar, Wire Rod, and Merchants AmeriSteel Steel AmeriSteel AmeriSteel Mega Shredder and Fab Shop in 2006 Nucor Corp. W. Silver Inc. Nucor Corp. Nucor Corp. FY 2007 Steel Dynamics Steel Dynamics – Tons Melted 1,458,000 – Tons Rolled 1,130,000 – Tons Shipped 1,366,000 33 34 CMC Overview June 2008 CMC Overview June 2008 Fabrication Shops CMC Sisak Rebar Structural Steel CRP Fab Fab Whsng. & Other CMC Alamo Steel, Waco, TX CMC Capitol City Steel, Buda, TX Established 1948; Acquired September 2007 CMC Capitol Steel Manufactures Seamless, Welded and Cold Processed Pipe Baton Rouge, Lumberton & Slidell, LA CMC Economy Steel, Las Vegas, NV 1,400 Employees CMC Fontana Steel Etiwanda, San Marcos & Stockton, CA 300,000 MT Rolling Capacity CMC Houston Steel, Houston, TX – 170,000 Welded Tubes CMC Kilroy Steel, Cleveland, OH – 70,000 Heavy Walled Seamless Pipe CMC Rebar, Dallas, Ft. Worth, Melissa & Waxahachie, TX; Albuquerque, NM; Keithville, LA; Little Rock, AR; – 35,000 Medium Section Seamless Pipe Oklahoma City & Tulsa, OK – 25,000 Cold Drawn Tubes CMC Rebar Arizona, Chandler, AZ CMC Rebar Carolinas, Gastonia, NC & Columbia, SC – Melt Shop – 70,000 Blooms CMC Rebar Corpus Christi, Corpus Christi, TX Turnaround; Manufacturing at Less Than 20% of Capacity at CMC Rebar Fabricators, Bloomington, CA Acquisition 35 36 CMC Overview June 2008 CMC Overview June 2008
  • 10. Fabrication Shops Significant Other Fabrication Operations Rebar Structural Steel CRP Fab Fab Whsng. & Other CMC Rebar Florida Jacksonville, Ft. Myers & Kissimmee, FL Location Product Line CMC Rebar Fresno, Fresno, CA CMC Rebar Georgia, Atlanta & Lawrencville, GA CMC Impact Metals Heat Treating Steel CMC Rebar Golden Gate, Emeryville, CA Pell City, AL; Struthers, OH; Chicora, PA CMC Rebar San Antonio, Helotes, TX CMC Joist & Deck Shortspan and Longspan CMC Rebar Virginia, Farmville & Fredericksburg, VA Hope, AR; Starke, FL; Iowa Falls, IA; South Plainfield & Summit, NJ; Joists; Steel Decking Fallon, NV; New Columbia, PA; Eastover & Rock Hill, SC; Juarez, Mex. CMC Safety Steel Service, Victoria, TX CMC Metal Recycling CMC South Carolina Steel, Taylors & N. Charleston, SC Scrap Metal Recycling Alexander City & Birmingham, AL; Augusta, GA; Austin (2) & Seguin (2), CMC Southern States Steel, Beaumont, TX TX; Cayce, Florence, Gaston, Lexington, No. Augusta & Spartanburg, SC CMC Steel Fabricators, Seguin, TX CMC Rail CMC Sterling Steel, Houston, TX Railroad Track Dismantling Magnolia, AR CMC Texas Cold Finished Steel, Houston, TX CMC Steel Products Castellated & Cellular CMC Valley Steel, Harlington, TX Beams Hope, AR; Farmville, VA 37 38 CMC Overview June 2008 CMC Overview June 2008 Domestic Minimill and Scrap Significant Other Fabrication Operations Processing Locations Location Product Line CMC Construction Services N. Little Rock, Sherwood & Springdale, AR; Phoenix & Tucson, AZ; Riverside, CA; Denver & Rifle, CO; Jacksonville, Orlando, & Tampa, FL; Concrete Accessories; Boise, ID; Alexandria, Baton Rouge, Jefferson, Shreveport & Sulphur, LA; Highway Products; D’Iberville & Jackson, MS; Albuquerque, NM; Broken Arrow, OK; Forming Systems Charleston, Columbia & Greenville, SC; Amarillo, Austin, College Station, Conroe, Corpus Christi, Dallas, El Paso, Fort Worth, Houston (3), Lubbock, Melissa, Round Rock, San Antonio, & Texas City, TX; Salt Lake City, UT Steel Minimills Copper Tube Mill CMC Southern Post Studded “T” Steel CMC Recycling Locations Fence Posts Magnolia, AR; West Columbia, SC; San Marcos, TX; Brigham City, UT CMC Recycling Shredders CMC Steel Group Locations CMC Steel Group Shredders Rail Salvage Company 39 40 CMC Overview June 2008 CMC Overview June 2008
  • 11. Polish & Croatian Steel Minimills and Recycling Tons Capability Marketing and Distribution Locations (000’s) Domestic CMCR Total Processing Mills Marketing and Distribution Representative Offices Ferrous 2,000 1,000 3,000 Agents Investments and Joint Ventures Nonferrous 525 3 528 Steel Minimill Scrap Processing Total 2,525 1,003 3,528 Steel Fabrication Pipe & Tube Mill Wire Mesh 41 42 CMC Overview June 2008 CMC Overview June 2008 Marketing and Distribution Segment Marketing and Distribution Locations Strategy Domestic – CMC Commonwealth Metals (Fort Lee, NJ) Provide Niche Value-Added Physical Operations – CMC Cometals (Fort Lee, NJ) in Special Situations – CMC Dallas Trading (Irving, TX) Marketing and Distribution Emphasized – International Warehouses in Australia – – Australia Steel Service Centers in Australia (Processing) – – China – Germany Partnering with Suppliers and Customers – Hong Kong Pickling and Oiling Steel Coils in Belgium – – India Czech Marketing and Trading Agreement – – Russia – Singapore Physical Marketers, Not Screen Traders – Switzerland Consistently Profitable – United Kingdom 43 44 CMC Overview June 2008 CMC Overview June 2008
  • 12. Marketing and Distribution Marketing and Distribution Segment Products and Services Strategic Investments Aluminum, Brass and Copper Semis Industrial Products for Steel, Refractory, Trinecke (Czech Republic) Foundry Industries Europickling (Belgium) New Steel, Long and Flat Products Steel and Aluminum Re-Rolling Stock Processing, Heat Treating, Pickle and Oil 45 46 CMC Overview June 2008 CMC Overview June 2008 Marketing and Distribution Marketing and Distribution Services Provided Synergies Within CMC Sales of Rails / Alloys / Complementary Steel and Copper Finished Goods to Domestic Mills • • • Integrity Hedging Insurance • • • Market Knowledge Foreign Exchange Customs Clearance Personnel Seconded to CMCZ • • • Multiple Suppliers Production Monitoring Warehousing/JIT Import for Domestic Fab Stock and Inspection • • Competitive Bids Technical Support Market Intelligence • L/C Arrangement • • Foreign Language Financing – World Metal Prices – Local • Capability Re-Packaging/ • Claim Settlement – World Metal Prices – Import Port Loading/Discharge • Contract Documentation – Local Political/Economic Conditions • Marine and Inland – Freight Markets Transportation – Competitor Moves – M&A Opportunities – Joint China Strategy 47 48 CMC Overview June 2008 CMC Overview June 2008
  • 13. Stock Performance Graph Acquisition Criteria Fiscal Years $700 Maintain Investment Grade Rating CMC $650 CM C $600 S&P 500 Return on Capital Criteria Met S&P Stl Ind $550 S&P Stl Ind $500 Accretive to Shareholders Within One Year $450 $400 Within Our Current Scope of Competency $350 $300 Product Line Extension $250 $200 S&P 500 Geographic Expansion $150 $100 End-Use Market Attractive $50 2002 2003 2004 2005 2006 2007 International Assets Can Be Attractive 2002 2007 Preference for Non-Union But Not an Absolute Commercial Metals Company $100.00 $648.86 Greenfield Option S&P 500 $100.00 $176.25 S&P Steel Industry Group $100.00 $561.57 49 50 CMC Overview June 2008 CMC Overview June 2008 Our Core Competencies Opportunities We Know How to Treat Our Employees, Downstream Value-Added Operations Customers and Suppliers – Rebar Fabricating We Know How to Make Steel – Joist Manufacturing We Know How to Fabricate Steel – Heat Treating We Know How to Process Scrap – Expansion of Construction-Related Products We Know How to Market Worldwide – Small Structural Fabrication – Buy Steel Mills – Sell – Geography Must Work (Underserved Markets) – Transport – Synergies with Current Operations – Finance – Offer an Expanded Product Line We Do it the RIGHT Way! 51 52 CMC Overview June 2008 CMC Overview June 2008
  • 14. There is More to Come Opportunities Sustainability Copper/Brass Macro Factors – Mill Position to Complement CMC Howell Metal – Industry Consolidation Has Brought: Recycling » Financially Stronger Companies with – Regional Strengthening (e.g., Yonack) Longer-Term Outlooks » Pricing Power Pendulum Swinging Towards International Producers – Early Stage Asia Expansion » Greater Supply Discipline in Response to – More Physical Operations in Central Europe Demand Changes and Australia » More Control Over Raw Material Inputs – Complement CMCZ » Diversification of Sources of Earnings Power 53 54 CMC Overview June 2008 CMC Overview June 2008 There is More to Come Metal Consumption is the Driving Factor for Metal Pricing Sustainability Est. 2006 Population (in Millions) 700 1,400 Japan Macro Factors 600 1,200 Steel Consumption KG Per C 500 1,000 – Historical Trend Has Developing Economies Germany USA 400 800 More Metal Intensive Australia 300 600 China France » Industrialization is a Continuing Story Thailand 200 400 UK Mexico » Economic Development Drives Steel/Metals 100 200 Consumption India 0 0 USA UK Japan China India Australia France Germany Thailand Mexico – Global Infrastructure 0 10 20 30 40 US$ GDP Per Capita Consumption Curve Source: IISI, World Bank, CMC Estimates GDP is 2006, Steel Consumption Estimated 2005 55 CMC Overview June 2008
  • 15. There is More to Come There is More to Come Sustainability Sustainability Commercial Metals’ Factors Commercial Metals’ Factors (Continued) – Diversification Limits Down Cycle Risk – Profit Opportunities Long Cycle – Spot in Recycling, Mid-Range in Mills, Longer Term in – Favorable Geography – Capital Assets in Sunbelt Fabricators/Distribution Growth Areas and Central European Expansion Corridor – Market Upheavals Create Profit Opportunities for Worldwide Reach of Marketing & Distribution – Supply Chain Balance – Control Sufficient Scrap Capacity to Meet Mill Demand Which Has Sufficient – Proven Track Record – 30 Years of Annual Capacity to Meet Downstream Value-Added Profitability; Only One Quarterly Loss Over Operations’ Demand That Span – Vibrant End-Use Markets – Long Products for Construction, Service Centers, Agriculture, Non- Auto OEM’s 57 58 CMC Overview June 2008 CMC Overview June 2008 Investor Information Why CMC Outperforms Non-GAAP Financial Measures and Regulation G People This written and verbal presentation may use financial statement Markets measures considered non-GAAP financial measures by the Securities and Exchange Commission (SEC). Sourcing In compliance with the SEC’s Regulation G, we have provided on our web site at www.cmc.com a reconciliation to the most comparable GAAP measure and other information that may be of interest to investors. 59 60 CMC Overview June 2008 CMC Overview June 2008
  • 16. Forward Looking Statements This written and verbal presentation may contain forward-looking statements regarding the outlook for the Company's financial results including net earnings, product pricing and demand, production rates, inventory levels, impact of acquisitions, credit conditions and general market conditions. These forward-looking statements generally can be identified by phrases such as the company or its management “expect,” “anticipates,” “believe,” “ought,” “should,” “likely,” “appears,” “projected,” “forecast,” “outlook,” “will” or other words or phrases of similar impact. There is inherent risk and uncertainty in any forward-looking statements. Variances will occur and some could be materially different from management's current opinion. Developments that could impact the Company's expectations include construction activity, difficulties or delays in the execution of construction contracts resulting in cost overruns or contract disputes, metals pricing over which the Company exerts little influence, interest rate changes, increased capacity and product availability from competing steel minimills and other steel suppliers including import quantities and pricing, court decisions, industry consolidation or changes in production capacity or utilization, the ability to integrate acquisitions into operations; global factors including political and military uncertainties, credit availability, currency fluctuations, energy and supply prices and decisions by governments impacting the level of steel imports and pace of overall economic activity, particularly China. 61 CMC Overview June 2008