1. CMC
A Global Steel and Metals Company
Over 15,000 Employees Worldwide in 14 Different Countries
Metal Recycling Facilities
Steel Minimills
CMC Recycles, Steel Fabrication Plants
Manufactures, Markets Steel Joist & Deck Plants
and Distributes Steel Heat Treating Plants
and Metal Products and
Steel Fence Post Mfg. Plants
Related Materials and
Steel Service Centers
Services Through a
Network of Over 250 Construction-Related Product
Warehouses
Locations Worldwide
Copper Tube Minimill
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 January 2009
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 January 2009
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
31 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 January 2009 CMC Overview January 2009
Financial Objectives
CMC’s Peer Group
Profitability
Peer Companies Plus Private & International Players
» Net Income Return on Beginning Equity 10 - 14%
Bayou Steel (Arcelor) 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 January 2009 CMC Overview January 2009
3. Liquidity Operating Profit by Segment
FY 2007 FY 2008
FY 2006
$400 MM Commercial Paper Program
$200 MM A/R Securitization Agreement 9% 24%
17% 11%
9%
Unsecured Bank Credit Lines 18% 19%
17%
20%
Weighted Average Long-Term Interest 15% 29%
Rate on Public Debt – 6.73%
41%
44% 40% (13)%
Americas Fab
Americas International Fab
International
Americas
& Distribution
Mills & Distribution
Recycling Mills
9 10
CMC Overview January 2009 CMC Overview January 2009
Stock Repurchases
Consolidated Net Sales
($ in Millions)
($ in Billions)
$200 172
$180
$12 10.4
$160
$140
$10 8.3
$120
7.2
79
$8 $100 77
6.3
59
$80
$6 4.6 42
$60
$40 15
$4 7 5
7
$20
$0
$2
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
$0
2004 2005 2006 2007 2008
11 12
CMC Overview January 2009 CMC Overview January 2009
4. Capital Expenditures
Dividends Per Share
($ in Millions)
$400 355
$0.50 0.45
$0.45 $350
$0.40
$300
0.33
$0.35
206
$250
$0.30
$0.25 $200
0.171
131
$0.20
$150 110
0.115
$0.15 0.085
0.08
0.07 $100 52
$0.10
$0.05
$50
$0.00
2002 2003 2004 2005 2006 2007 2008 $0
2004 2005 2006 2007 2008
Note: Excludes Acquisitions
13 14
CMC Overview January 2009 CMC Overview January 2009
LIFO Reserve
United States End-Use Markets
($ in Millions)
562 Public
600 30%
Infrastructure
550
Heavy
500
15%
Commercial
450
400 15% Service Centers
350
Light
241
300 10%
Commercial
189
250
200 5% Agriculture
111
92
150
5% Residential
100
17
8
8
3 6
50
20% OEM’s and Other
0
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
At August 31 15 16
CMC Overview January 2009 CMC Overview January 2009
5. Americas Mills and
Fabrication & Distribution Locations
Americas Mills Net Sales
($ in Billions)
$2.4
2.0
$2.0
1.6 1.5
$1.6 1.3
1.1
$1.2
Steel Manufacturing
$0.8 Copper Tube Manufacturing
Steel Fabrication
$0.4 Steel Joist & Deck Plants
Fence Post Manufacturing
$0.0 Construction-Related Products Warehousing
2004 2005 2006 2007 2008 Heat Treating
Castellated & Cellular Beam Fabricator
Distribution
17
CMC Overview January 2009
Copper Tube Manufacturing Shipments
Copper Tube Manufacturing (in Millions of Pounds)
Copper Tube Minimill: Melt Scrap/Cast/Extrude/Draw
100
Located in New Market, Virginia
68.4
80 66.6 65.7
Markets: More than 44 States
52.5 52.3
80 Million Pound Capacity 60
Water Tubing for Plumbing, Air Conditioning and 40
Refrigeration
20
Value-Added Products – Line Sets
0
2004 2005 2006 2007 2008
19 20
CMC Overview January 2009 CMC Overview January 2009
6. Americas Steel Mill Shipments Americas Steel Mill Shipments by Region
Fiscal 2008
(Tons 000’s)
CMC-TX CMC-AL CMC-AR CMC-SC
2,528
2,800 2,492
2,401
2,600 2,284 2,266 2,250
2,171
2,400
20%
2,200 1,903
1,853
2,000 1,685
1,800
1,600
1,400
1,200
1,000
34%
800
600
400
200
0
46%
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
21 22
CMC Overview January 2009 CMC Overview January 2009
CMC Steel Minimills
Americas Steel Mill Facilities
Capacity (Tons 000’s)
CMC Steel Alabama CMC Steel Arkansas
Melting Rolling
28”
CMC Steel Alabama: Birmingham, AL 700 575
(mid-size structural products) 90 NT
72 MVA
Melt
MELT
DC Fce
Xfrmr
Capacity:
CMC Steel Arkansas: Magnolia, AR 0 150
(posts, rebar, flats, angles, squares) 90 tph
21 MVA
CMC Steel South Carolina: Cayce, SC 750 800 Xfrmr LMS
(full line bar size products) Ind Stir
CMC Steel Texas: Seguin, TX 1,000 1,000 14 stand in-line continuous Rail slitting & re-rolling;
(full line bar size products) mill with quick change billet rolling
capability on 9 stands 12 stand in-line mill
MILL
CMC Zawiercie: Zawiercie, Poland 1,870 1,100 (12 passes continuous;
120 tph reheat furnace capacity
(rebar and wire rod) 14 passes using 3 hi)
In-line straightening & stacking
40 tph reheat furnace
In-line bundling
CMC Sisak: Sisak, Croatia 80 330
2000 fpm finishing speed
(pipe and tube)
Total 4,400 3,955
23 24
CMC Overview January 2009 CMC Overview January 2009
7. Americas Steel Mill Facilities
CMCZ Steel Mill Facility
CMC Steel South Carolina CMC Steel Texas
#1 Furnace #2 Furnace
22” 24”
22” 22”
Melt
100NT 120 NT
80 MVA Melt Melt
Capacity: 80 MVA Melt
MELT
135 NT 135 NT
AC Fce AC Fce 105 MVA 105 MVA
Xfrmr Capacity: Capacity:
MELT
Xfrmr Capacity:
105 tph AC Fce AC Fce
Xfrmr Xfrmr
117 mtph 84 mtph
130 tph
21.5 MVA 25 MVA
60 MVA 60 MVA
Xfrmr LMS Xfrmr LMS
Ind Stir Xfrmr Xfrmr
Ind Stir LMS Porous Plug LMS Porous Plug
Stirring Stirring
17 stand in-line continuous
17 stand in-line continuous Bar Mill Wire Rod Mill
mill (7 stand cantilever
mill (all conventional) 18 stand in-line continuous Dual strand double rod
rougher) with quick change
MILL
mill with quick change
with quick change on all 17 stands capability block 17 stand mill plus
MILL
capability on 6 stands;
160 tph capacity; 3,300 fpm finishing and 150 tph reheat furnace capacity 8 strand wire rod block;
120 metric tph reheat furnace capacity;
In-line straightening/stacking/bundling 3,000 fpm finishing speed 100 metric tph reheat furnace capacity
16 meters per second finishing speed;
Profile gauge In-line bundling Maximum speed 55 meters per second
In-line stacking and bundling
Profile gauge
25 26
CMC Overview January 2009 CMC Overview January 2009
CMC Steel Alabama CMC Steel Arkansas
Medium Section Mill USA’s Leading Fence Post Provider
Continuous Cost / Productivity/Quality
Modern, Efficient Rail Reroller
Improvements
– Posts/Rebar/Bed Angles/Earth Bar
New Reheat Furnace in 2008
Low Cost Producer of Posts
Growth in South Central U.S.A.
Roll Billets Into Niche Products
FY 2008
– Tons Melted 676,000 – Flats/Angles/Rounds
– Tons Rolled 430,000
FY 2008
– Tons Shipped 647,000
– Tons Rolled 147,000
– Tons Shipped 142,000
27 28
CMC Overview January 2009 CMC Overview January 2009
8. CMC Steel South Carolina CMC Steel Texas
Low Cost Producer
Growth in Southeast U.S.A.
Flexible, High Productivity Bar Mill
State-of-the-Art, Quick Change, High
Broad Product Range
Productivity Bar Mill
– Rebar, Merchant Bar, and SBQ
FY 2008
Strong Customer Base
– Tons Melted 723,000
– Tons Rolled 732,000 Trucking Fleet Backhauls Scrap
– Tons Shipped 711,000
Growth in Southwest U.S.A.
FY 2008
– Tons Melted 997,000
– Tons Rolled 792,000
– Tons Shipped 1,028,000
29 30
CMC Overview January 2009 CMC Overview January 2009
CMC Steel Mill Products
Inter-Segment Dealings
PRODUCTS CMC Steel AL CMC Steel AR CMC Steel SC CMC Steel TX CMCZ
Rebar #3–6 #3–18 #3–18 8.0 – 40.0 mm
Ferrous Scrap Purchased by Americas Steel Mills
from Americas Recycling 35%
Rounds
1/2” – 1” 1/2” – 3” 1/2” – 3-1/2” 12.0 – 75.0 mm
SBQ & MBQ
Ferrous Scrap Processed by Texas Shredder 13%
Flats 3” – 12” 1-1/2” – 3” 1-1/2” – 6” 2” – 6” 25.0 – 120.0 mm
Steel Produced by Americas Steel Mills and Sold to
Squares 1/2” – 2” 1/2” – 3-1/2” 10.0 – 52.0 mm Americas Fabrication & Distribution Segment 37%
Angles 3” – 7” 1” – 2” 1” – 4” 1” – 4” 25.0 – 50.0 mm Steel Purchased by Americas Fabrication & Distribution
Channels 3” – 8” 3” – 6” 3” – 6” Segment from Americas Steel Mills 46%
Fence Post All sizes .95#, 1.25#,
1.33#
Special Earth bar; Rail anchors;
Sections jail bars;
concrete
Other
form bar;
As % of Total Requirement
sign posts
Wire Rod 5.5 – 13.5 mm
Coiled Rebar 6.0 – 12.0 mm
32
CMC Overview January 2009
9. Americas Steel Mill Customers
Americas Steel Mill Competitors
CMC Steel AL CMC Steel AR CMC Steel SC CMC Steel TX
Fabricators Farm Co-Ops/ Fabricators Fabricators
CMC Steel AL CMC Steel AR CMC Steel SC CMC Steel TX
Distributors
Chicago Heights
Service Centers Lumber Yards Contractors Contractors Bayou Steel Bayou Steel Border Steel
Steel
Mobile Home Service Centers Service Centers Service Centers Gerdau Jersey Shore Gerdau Gerdau
Mfg. AmeriSteel Steel AmeriSteel AmeriSteel
Tower Mfg. Manufacturers Other OEM’s Forge Shops
Nucor Corp. W. Silver Inc. Nucor Corp. Nucor Corp.
Trailer Mfg. Sucker Rod Mfg.
Steel Dynamics Steel Dynamics
Cold Drawers Other OEM’s
Other OEM’s Fabricators
33 34
CMC Overview January 2009 CMC Overview January 2009
CMC Zawiercie CMC Sisak
Established 1948; Acquired September 2007
Second Largest Steel Producer in Poland
Manufactures Seamless, Welded and Cold Processed Pipe
Minimill Capacity 1.1 Million Tons 1,250 Employees
Goal is 70% Domestic and 30% Export Sales 330,000 MT Rolling Capacity
– 187,000 Welded Tubes
Main Products are Rebar, Wire Rod, and Merchants – 77,000 Heavy Walled Seamless Pipe
– 39,000 Medium Section Seamless Pipe
New Wire Rod Block October 2008
– 27,000 Cold Drawn Tubes
Mega Shredder and Fab Shop in 2006 – Melt Shop – 77,000 Blooms
Turnaround; Manufacturing at Less Than 20% of Capacity at
FY 2008 Acquisition
– Tons Melted 1,502,000 FY 2008
– Tons Melted 34,000
– Tons Rolled 1,100,000
– Tons Rolled 67,000
– Tons Shipped 1,434,000 – Tons Shipped 57,000
35 36
CMC Overview January 2009 CMC Overview January 2009
10. Americas Mills and Recycling Tons Capacity
Americas Recycling Locations (000’s)
Ferrous 3,000
Nonferrous 525
Steel Minimills
Copper Tube Mill
Total 3,525
Recycling Locations
Recycling Shredders
37 38
CMC Overview January 2009 CMC Overview January 2009
International Mills and International
International Fabrication & Distribution
Fabrication & Distribution Locations
Strategy
Provide Niche Value-Added Physical Operations
in Special Situations
Marketing and Distribution Emphasized
–
Warehouses in Australia
–
Steel Minimill
Steel Service Centers in Australia (Processing)
–
Pipe & Tube Mill
Scrap Processing
Partnering with Suppliers and Customers
Processing
Pickling and Oiling Steel Coils in Belgium
Distribution –
Steel Fabrication Czech Marketing and Trading Agreement
–
Wire Mesh
Physical Marketers, Not Screen Traders
Representative Offices
Agents
Consistently Profitable
Investments and Joint Ventures
39 40
CMC Overview January 2009 CMC Overview January 2009
11. International Fabrication &
Distribution Segment Locations International Fabrication & Distribution
Segment Strategic Investments
Domestic
– CMC Commonwealth Metals (Fort Lee, NJ)
– CMC Cometals (Fort Lee, NJ)
International Trinecke (Czech Republic)
– Australia
Europickling (Belgium)
– China
– Germany
– Hong Kong
– India
– Poland
– Russia
– Singapore
– Switzerland
– United Kingdom
41 42
CMC Overview January 2009 CMC Overview January 2009
International Fabrication & Distribution
International Fabrication & Distribution
Services Provided
Products and Services
Aluminum, Brass and Copper Semis • • •
Integrity Hedging Insurance
Industrial Products for Steel, Refractory, • • •
Market Knowledge Foreign Exchange Customs Clearance
Foundry Industries • • •
Multiple Suppliers Production Monitoring Warehousing/JIT
and Inspection
New Steel, Long and Flat Products • •
Competitive Bids Technical Support
• L/C Arrangement
• •
Foreign Language
Steel and Aluminum Re-Rolling Stock Financing
•
Capability Re-Packaging/
• Claim Settlement
Processing, Heat Treating, Pickle and Oil Port Loading/Discharge
• Contract Documentation
• Marine and Inland
Transportation
43 44
CMC Overview January 2009 CMC Overview January 2009
12. Stock Performance Graph
International Fabrication & Distribution
Synergies Within CMC Fiscal Years
$700
CMC
$650 CMC
Sales of Rails / Alloys / Complementary Steel $600 S&P 500
S&P Stl Ind
and Copper Finished Goods to Domestic Mills $550
S&P Stl Ind
$500
Personnel Seconded to CMCZ $450
$400
$350
Import for Domestic Fab Stock $300
$250
Market Intelligence $200
S&P 500
$150
– World Metal Prices – Local $100
$50
– World Metal Prices – Import
2002 2003 2004 2005 2006 2007 2008
– Local Political/Economic Conditions
– Freight Markets 2003 2008
– Competitor Moves Commercial Metals Company $100.00 $556.39
S&P 500 $100.00 $139.75
– M&A Opportunities S&P Steel Industry Group $100.00 $534.21
– Joint China Strategy
45 46
CMC Overview January 2009 CMC Overview January 2009
Our Core Competencies
Acquisition Criteria
We Know How to Treat Our Employees,
Maintain Investment Grade Rating
Customers and Suppliers
Return on Capital Criteria Met
We Know How to Make Steel
Accretive to Shareholders Within One Year
We Know How to Fabricate Steel
Within Our Current Scope of Competency
We Know How to Process Scrap
Product Line Extension
We Know How to Market Worldwide
Geographic Expansion
– Buy
End-Use Market Attractive – Sell
International Assets Can Be Attractive – Transport
– Finance
Preference for Non-Union But Not an Absolute
We Do it the RIGHT Way!
Greenfield Option
47 48
CMC Overview January 2009 CMC Overview January 2009
13. There is More to Come There is More to Come
Sustainability Sustainability
Macro Factors Macro Factors
– Industry Consolidation Has Brought: – Historical Trend Has Developing Economies
» Financially Stronger Companies with More Metal Intensive
Longer-Term Outlooks
» Industrialization is a Continuing Story
» Pricing Power Pendulum Swinging Towards
Producers » Economic Development Drives Steel/Metals
Consumption
» Greater Supply Discipline in Response to
Demand Changes
– Global Infrastructure
» More Control Over Raw Material Inputs
» Diversification of Sources of Earnings Power
49 50
CMC Overview January 2009 CMC Overview January 2009
There is More to Come
Metal Consumption is the Driving Factor for Metal Pricing
Sustainability
Est. 2006 Population (in Millions)
700 1,400
Japan
Commercial Metals’ Factors
Steel C onsumption K G Per C apita
600 1,200
– Diversification Limits Down Cycle Risk
500 1,000
Germany
USA
– Favorable Geography – Capital Assets in Sunbelt
400 800
Growth Areas and Central European Expansion
Australia
300 600
Corridor
China France
Thailand
200 400
– Supply Chain Balance – Control Sufficient Scrap
UK
Mexico
100 Capacity to Meet Mill Demand Which Has Sufficient
200
India Capacity to Meet Downstream Value-Added
0 0
Operations’ Demand
USA
UK
C h in a
In d ia
A u s tra lia
Japan
F ra n c e
G e rm a n y
T h a ila n d
M e x ic o
0 10 20 30 40
US$ GDP Per Capita – Vibrant End-Use Markets – Long Products for
Consumption Curve Construction, Service Centers, Agriculture, Non-
Auto OEM’s
Source: IISI, World Bank, CMC Estimates
GDP is 2006, Steel Consumption Estimated 2005
51 52
CMC Overview January 2009 CMC Overview January 2009
14. There is More to Come Why CMC Outperforms
Sustainability
Commercial Metals’ Factors (Continued) People
– Profit Opportunities Long Cycle – Spot in
Markets
Recycling, Mid-Range in Mills, Longer Term in
Fabricators/Distribution
Sourcing
– Market Upheavals Create Profit Opportunities for
Worldwide Reach of Marketing & Distribution
– Proven Track Record – 31 Years of Annual
Profitability; Only One Quarterly Loss Over
That Span
53 54
CMC Overview January 2009 CMC Overview January 2009
Investor Information
Forward Looking Statements
Non-GAAP Financial Measures
and Regulation G 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, interest rates, inventory levels, impact of acquisitions
and general market conditions. These forward-looking statements generally can be
identified by phrases such as the company or its management “expect,” “anticipates,”
This written and verbal presentation may use financial statement “believe,” “ought,” “should,” “likely,” “appears,” “projected,” “forecast,” “outlook,”
measures considered non-GAAP financial measures by the Securities “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
and Exchange Commission (SEC). different from management's current opinion. Developments that could impact the
In compliance with the SEC’s Regulation G, we have Company's expectations include solvency of financial institutions and their ability or
willingness to lend, extent of government intervention and its effect on capital markets,
provided on our web site at construction activity, difficulties or delays in the execution of construction contracts
resulting in cost overruns or contract disputes, metals pricing over which the Company
www.cmc.com 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
a reconciliation to the most comparable GAAP measure and other political and military uncertainties, credit availability, currency fluctuations, energy and
information that may be of interest to investors. supply prices and decisions by governments impacting the level of steel imports and
pace of overall economic activity, particularly China.
55 56
CMC Overview January 2009 CMC Overview January 2009
