6565 N. MacArthur Blvd. Suite 800 Irving, TX 75039 Tel 214. 689.4300 Fax 214. 689.5886 www.cmc.com 2 CMC Overview January 2009 CMC A Global Steel and Metals Company Metal Recycling Facilities Steel Minimills Steel Fabrication Plants Steel Joist & Deck Plants Heat Treating Plants Steel Fence Post Mfg. Plants Steel Service Centers Construction-Related Product Warehouses Copper Tube Minimill Pipe & Tube Mill Marketing and Distribution Offices Strategic Investments Over 15,000 Employees Worldwide in 14 Different Countries CMC Recycles, Manufactures, Markets and Distributes Steel and Metal Products and Related Materials and Services Through a Network of Over 250 Locations Worldwide 3 CMC Overview January 2009 Vertical Integration Product Diversification Global Geographic Dispersion CMC – Business Model • Domestic Steel Minimills (Long Products) • Copper Tube Minimill • Downstream Operations: Rebar and Structural Fab, Joist, Deck, CRP, Domestic Steel Import, Fence Posts, Heat Treating, Other • Locations Throughout the Sunbelt • Significant Regional Processor of Ferrous and Nonferrous • Strategic Mill Support • Poland -- Main Products are Rebar & Wire Rod; Mega Shredder on Site; Captive Scrap Branches • Croatia Tubular Products • Offices in 13 Countries • Physical Operations and Strategic Investments ―11% Investment in Czech Mill ―Australian Service Centers ―Belgian Pickling & Oiling 24% Joint Venture • Consultants/Agents in 20 Countries • Rebar Fab; 2 Locations; More Underway • Wire Mesh; 2 locations in Poland Effective 9/1/2007
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6565 N. MacArthur Blvd. Suite 800 Irving, TX 75039Tel 214. 689.4300 Fax 214. 689.5886
www.cmc.com 2CMC Overview January 2009
CMCA Global Steel and Metals Company
Metal Recycling FacilitiesSteel MinimillsSteel Fabrication PlantsSteel Joist & Deck PlantsHeat Treating PlantsSteel Fence Post Mfg. PlantsSteel Service CentersConstruction-Related Product WarehousesCopper Tube MinimillPipe & Tube MillMarketing and Distribution OfficesStrategic Investments
Over 15,000 Employees Worldwide in 14 Different Countries
CMC Recycles, Manufactures, Markets and Distributes Steel and Metal Products and Related Materials and Services Through a Network of Over 250 Locations Worldwide
• Locations Throughout the Sunbelt• Significant Regional Processor
of Ferrous and Nonferrous• Strategic Mill Support
• Poland -- Main Products are Rebar & Wire Rod; Mega Shredder on Site; Captive Scrap Branches
• Croatia Tubular Products
• Offices in 13 Countries• Physical Operations and Strategic Investments
―11% Investment in Czech Mill―Australian Service Centers―Belgian Pickling & Oiling 24%
Joint Venture• Consultants/Agents in 20 Countries• Rebar Fab; 2 Locations; More Underway• Wire Mesh; 2 locations in Poland
Effective 9/1/2007
5CMC Overview January 2009
How is CMC Different?
31 Consecutive Years of ProfitabilityBuild Markets, then Build Manufacturing/Processing OperationsVertically Integrated: Scrap Processing and Steel Fabrication are Hedges for the Steel and Copper Tubing MillsMarketing and Distribution – Consistently ProfitablePeople Development
Conservative Company with a Strong, Experienced Management Team
6CMC Overview January 2009
Conservative AccountingFast Depreciation RatesNo Significant Post-Retirement BenefitsHigh Correlation Between Hedging Strategy and Underlying AssetsNo Speculation or Position TakingNo Esoteric Financial InstrumentsVery Cautionary Bad Debt Reserves / Use of Credit InsuranceLIFO Inventory ValuationInvestment Grade Long-Term Debt and Commercial Paper
17 stand in-line continuousmill (all conventional)with quick change on all 17 stands160 tph capacity; 3,300 fpm finishing and In-line straightening/stacking/bundlingProfile gauge
MIL
LM
ILL
Americas Steel Mill Facilities
MEL
TM
ELT 120 NT
AC Fce80 MVAXfrmr
25 MVAXfrmr
24”
LMSInd Stir
17 stand in-line continuous mill (7 stand cantilever rougher) with quick change capability150 tph reheat furnace capacity3,000 fpm finishing speedIn-line bundlingProfile gauge
Melt Capacity:
130 tph
100NTAC Fce
80 MVAXfrmr
22”
LMSInd Stir
21.5 MVAXfrmr
Melt Capacity:
105 tph
CMC Steel South Carolina CMC Steel Texas
26CMC Overview January 2009
#1 Furnace #2 Furnace
Bar Mill18 stand in-line continuous mill with quick change capability on 6 stands; 120 metric tph reheat furnace capacity;16 meters per second finishing speed;In-line stacking and bundling
Wire Rod MillDual strand double rodblock 17 stand mill plus8 strand wire rod block;100 metric tph reheat furnace capacityMaximum speed 55 meters per second
Second Largest Steel Producer in PolandMinimill Capacity 1.1 Million TonsGoal is 70% Domestic and 30% Export SalesMain Products are Rebar, Wire Rod, and MerchantsNew Wire Rod Block October 2008Mega Shredder and Fab Shop in 2006FY 2008
International– Australia– China– Germany– Hong Kong– India– Poland– Russia – Singapore– Switzerland– United Kingdom
42CMC Overview January 2009
International Fabrication & Distribution Segment Strategic Investments
Trinecke (Czech Republic)
Europickling (Belgium)
43CMC Overview January 2009
International Fabrication & Distribution Products and Services
Aluminum, Brass and Copper SemisIndustrial Products for Steel, Refractory, Foundry IndustriesNew Steel, Long and Flat ProductsSteel and Aluminum Re-Rolling StockProcessing, Heat Treating, Pickle and Oil
44CMC Overview January 2009
International Fabrication & Distribution Services Provided
• Integrity
• Market Knowledge
• Multiple Suppliers
• Competitive Bids
• Foreign LanguageCapability
• Contract Documentation
• Hedging
• Foreign Exchange
• Production Monitoringand Inspection
• L/C Arrangement
• Re-Packaging/Port Loading/Discharge
• Marine and InlandTransportation
• Insurance
• Customs Clearance
• Warehousing/JIT
• Technical Support
• Financing
• Claim Settlement
45CMC Overview January 2009
International Fabrication & Distribution Synergies Within CMC
Sales of Rails / Alloys / Complementary Steel and Copper Finished Goods to Domestic MillsPersonnel Seconded to CMCZImport for Domestic Fab StockMarket Intelligence
– World Metal Prices – Local– World Metal Prices – Import– Local Political/Economic Conditions– Freight Markets– Competitor Moves– M&A Opportunities– Joint China Strategy
Commercial Metals Company $100.00 $556.39S&P 500 $100.00 $139.75S&P Steel Industry Group $100.00 $534.21
2003 2008
Stock Performance GraphFiscal Years
47CMC Overview January 2009
Maintain Investment Grade RatingReturn on Capital Criteria MetAccretive to Shareholders Within One YearWithin Our Current Scope of CompetencyProduct Line ExtensionGeographic ExpansionEnd-Use Market AttractiveInternational Assets Can Be AttractivePreference for Non-Union But Not an AbsoluteGreenfield Option
Acquisition Criteria
48CMC Overview January 2009
Our Core Competencies
We Know How to Treat Our Employees, Customers and SuppliersWe Know How to Make SteelWe Know How to Fabricate SteelWe Know How to Process ScrapWe Know How to Market Worldwide
– Buy– Sell– Transport– Finance
We Do it the RIGHT Way!
49CMC Overview January 2009
There is More to ComeSustainability
Macro Factors– Industry Consolidation Has Brought:
» Financially Stronger Companies with Longer-Term Outlooks
» Pricing Power Pendulum Swinging Towards Producers
» Greater Supply Discipline in Response to Demand Changes
» More Control Over Raw Material Inputs» Diversification of Sources of Earnings Power
50CMC Overview January 2009
There is More to ComeSustainability
Macro Factors– Historical Trend Has Developing Economies
More Metal Intensive» Industrialization is a Continuing Story
» Economic Development Drives Steel/Metals Consumption
– Global Infrastructure
51CMC Overview January 2009
0
100
200
300
400
500
600
700
0 10 20 30 40
Stee
l Con
sum
ptio
n K
G P
er C
apita
UK
France
Germany
Japan
ThailandChina
India
Australia
USA
Mexico
Source: IISI, World Bank, CMC EstimatesGDP is 2006, Steel Consumption Estimated 2005
Metal Consumption is the Driving Factor for Metal Pricing
Consumption Curve
0
200
400
600
800
1,000
1,200
1,400
USA U
K
Fran
ce
Ger
man
y
Japa
n
Thai
land
Mex
ico
Chi
na
Indi
a
Aus
tralia
Est. 2006 Population (in Millions)
US$ GDP Per Capita
52CMC Overview January 2009
Commercial Metals’ Factors– Diversification Limits Down Cycle Risk– Favorable Geography – Capital Assets in Sunbelt
Growth Areas and Central European Expansion Corridor
– Supply Chain Balance – Control Sufficient Scrap Capacity to Meet Mill Demand Which Has Sufficient Capacity to Meet Downstream Value-Added Operations’ Demand
– Vibrant End-Use Markets – Long Products for Construction, Service Centers, Agriculture, Non-Auto OEM’s
There is More to ComeSustainability
53CMC Overview January 2009
Commercial Metals’ Factors (Continued)– Profit Opportunities Long Cycle – Spot in
Recycling, Mid-Range in Mills, Longer Term in Fabricators/Distribution
– Market Upheavals Create Profit Opportunities for Worldwide Reach of Marketing & Distribution
– Proven Track Record – 31 Years of Annual Profitability; Only One Quarterly Loss OverThat Span
There is More to ComeSustainability
54CMC Overview January 2009
People
Markets
Sourcing
Why CMC Outperforms
55CMC Overview January 2009
Non-GAAP Financial Measuresand Regulation G
This written and verbal presentation may use financial statementmeasures considered non-GAAP financial measures by the Securities
and Exchange Commission (SEC). In compliance with the SEC’s Regulation G, we have
provided on our web site at
a reconciliation to the most comparable GAAP measure and other information that may be of interest to investors.
www.cmc.com
Investor Information
56CMC Overview January 2009
Forward Looking StatementsThis 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,”“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 solvency of financial institutions and their ability or willingness to lend, extent of government intervention and its effect on capital markets, 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.