912603--10/27/2009--SCHNITZER_STEEL_INDUSTRIES

related topics

{cost, regulation, environmental}

{cost, contract, operation}

{operation, international, foreign}

{condition, economic, financial}

{gas, price, oil}

{operation, natural, condition}

{customer, product, revenue}

{personnel, key, retain}

{cost, operation, labor}

{competitive, industry, competition}

{system, service, information}

{acquisition, growth, future}

{tax, income, asset}

{product, liability, claim}

{loss, insurance, financial}

Risk Factors Relating to the Company s Business The Company operates in industries that are cyclical and where demand can be volatile, which could have a material adverse effect on the Company s results of operations and financial condition. The Company s businesses depend on adequate supply and availability of raw materials. The Company may be unable to pass on increases in the cost of steel scrap and other raw materials to its customers, which would negatively impact its profitability. MRB is affected by seasonal fluctuations. The principal markets served by the Company are highly competitive. During uncertain economic conditions customers may be unable to fulfill their contractual obligations Fluctuations in the value of the U.S. dollar relative to other currencies could adversely affect the Company s ability to price its products competitively. If foreign (primarily Chinese) steel production substantially exceeds domestic demand, it may result in the export of significant excess quantities of steel products to the U.S. The Company s ability to deliver products to customers and the cost of shipping and handling may be affected by circumstances over which the Company has no control. Equipment upgrades and equipment failures may lead to production curtailments or shutdowns. The cost and availability of electricity and natural gas are subject to volatile market conditions. If the goodwill on the Company s balance sheet becomes impaired, the Company may be required to recognize impairment charges. The Company may not be able to successfully integrate future acquisitions. Some of the Company s operations present significant risk of injury or death. The Company relies on information technology in critical areas of the Company s operations, and a disruption relating to such technology could harm the Company. The Company could be subject to product liability claims. Increases in fuel cost and decreases in mileage driven may decrease demand for the Company s auto parts. The Company s properties are located in areas that may be subject to potential natural or other disasters. Risk Factors Relating to the Regulatory Environment The Company is subject to environmental regulations and environmental risks which could result in significant environmental compliance costs and environmental liabilities. Risks associated with climate change and greenhouse gas emission limitations. Governmental agencies may refuse to grant or renew the Company s licenses and permits. Factors Relating to the Company s Employees The Company may not be able to negotiate future labor contracts on acceptable terms, which could result in strikes or other labor actions. If the Company loses its key management personnel, it may not be able to successfully manage its business or achieve its objectives. The multiemployer plan benefiting employees of SMB is underfunded, which may lead to contribution increases and benefit reductions. In addition, if the Company were to withdraw from the SMB plan, it would trigger a withdrawal liability that could be material. The Company may be required to make additional contributions to its defined benefit plans as a result of deterioration in funded status.

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912603--10/27/2009--SCHNITZER_STEEL_INDUSTRIES_INC