Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company,, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The registrant had ~~27,433,470~~27,247,009 shares of Class A common stock, par value of $1.00 per share, and 200,000 shares of Class B common stock, par value of $1.00 per share, outstanding as of June 27, 2022.

Statements and information included in this Quarterly Report on Form 10-Q by Schnitzer Steel Industries, Inc. that are not purely historical are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 and are made pursuant to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Except as noted herein or as the context may otherwise require, all references to “we,” “our,” “us,” “the Company,” and “SSI” refer to Schnitzer Steel Industries, Inc. and its consolidated subsidiaries.

Forward-looking statements in this Quarterly Report on Form 10-Q include statements regarding future events or our expectations, intentions, beliefs, and strategies regarding the future, which may include statements regarding the impact of pandemics, epidemics, or other public health emergencies, such as the coronavirus disease 2019 (“COVID-19”) pandemic; the impact of equipment upgrades, equipment failures, and facility damage on production, including timing of repairs and resumption of operations; the realization of insurance recoveries; the Company’s outlook, growth initiatives, or expected results or objectives, including pricing, margins, sales volumes, and profitability; completion of acquisitions and integration of acquired businesses; the impacts of supply chain disruptions and inflation; liquidity positions; our ability to generate cash from continuing operations; trends, cyclicality, and changes in the markets we sell into; strategic direction or goals; targets; changes to manufacturing and production processes; the realization of deferred tax assets; planned capital expenditures; the cost of and the status of any agreements or actions related to our compliance with environmental and other laws; expected tax rates, deductions, and credits; the impact of sanctions and tariffs, quotas, and other trade actions and import restrictions; the potential impact of adopting new accounting pronouncements; the impact of labor shortages or increased labor costs; obligations under our retirement plans; benefits, savings, or additional costs from business realignment, cost containment, and productivity improvement programs; and the adequacy of accruals.

Forward-looking statements by their nature address matters that are, to different degrees, uncertain, and often contain words such as “outlook,” “target,” “aim,” “believes,” “expects,” “anticipates,” “intends,” “assumes,” “estimates,” “evaluates,” “may,” “will,” “should,” “could,” “opinions,” “forecasts,” “projects,” “plans,” “future,” “forward,” “potential,” “probable,” and similar expressions. However, the absence of these words or similar expressions does not mean that a statement is not forward-looking.

We may make other forward-looking statements from time to time, including in reports filed with the Securities and Exchange Commission, press releases, presentations, and on public conference calls. All forward-looking statements we make are based on information available to us at the time the statements are made, and we assume no obligation to update any forward-looking statements, except as may be required by law. Our business is subject to the effects of changes in domestic and global economic conditions and a number of other risks and uncertainties that could cause actual results to differ materially from those included in, or implied by, such forward-looking statements. Some of these risks and uncertainties are discussed in “Item 1A. Risk Factors” of Part I of our most recent Annual Report on Form 10-K, as supplemented by our subsequently filed Quarterly Reports on Form 10-Q. Examples of these risks include: the impact of pandemics, epidemics, or other public health emergencies, such as the COVID-19 pandemic; the impact of equipment upgrades, equipment failures, and facility damage on production; potential environmental cleanup costs related to the Portland Harbor Superfund site or other locations; the cyclicality and impact of general economic conditions; changing conditions in global markets including the impact of sanctions and tariffs, quotas, and other trade actions and import restrictions; economic and geopolitical instability including as a result of military conflict; volatile supply and demand conditions affecting prices and volumes in the markets for raw materials and other inputs we purchase; significant decreases in recycled metal prices; imbalances in supply and demand conditions in the global steel industry; difficulties associated with acquisitions and integration of acquired businesses; supply chain disruptions; reliance on third-party shipping companies, including with respect to freight rates and the availability of transportation; inability to obtain or renew business licenses and permits; the impact of goodwill impairment charges; the impact of long-lived asset and equity investment impairment charges; failure to realize or delays in realizing expected benefits from investments in processing and manufacturing technology improvements; inability to achieve or sustain the benefits from productivity, cost savings, and restructuring initiatives; inability to renew facility leases; customer fulfillment of their contractual obligations; increases in the relative value of the U.S. dollar; the impact of inflation and foreign currency fluctuations; potential limitations on our ability to access capital resources and existing credit facilities; restrictions on our business and financial covenants under the agreement governing our bank credit facilities; the impact of consolidation in the steel industry; product liability claims; the impact of legal proceedings and legal compliance; the adverse impact of climate change; the impact of not realizing deferred tax assets; the impact of tax increases and changes in tax rules; the impact of one or more cybersecurity incidents; environmental compliance costs and potential environmental liabilities; increased environmental regulations and enforcement; compliance with climate change and greenhouse gas emission laws and regulations; the impact of labor shortages or increased labor costs; reliance on employees subject to collective bargaining agreements; and the impact of the underfunded status of multiemployer plans in which we participate.


	February 28, 2022				August 31, 2021			May 31, 2022			August 31, 2021
Assets
Current assets:
Cash and cash equivalents	$	17,823			$	27,818			$	16,125		$	27,818
Accounts receivable, net of allowance for credit losses of $1,579 and $1,566		280,254				214,098
Accounts receivable, net of allowance for credit losses of $1,556 and $1,566									283,819			214,098
Inventories		323,931				256,427			439,704			256,427
Refundable income taxes		1,193				837			1,285			837
Prepaid expenses and other current assets		36,104		��		43,934			46,992			43,934
Total current assets		659,305				543,114			787,925			543,114
Property, plant and equipment, net of accumulated depreciation of $841,296 and $837,293		597,262				562,674
Property, plant and equipment, net of accumulated depreciation of $847,366 and $837,293									629,104			562,674
Operating lease right-of-use assets		126,155				131,221			127,311			131,221
Investments in joint ventures		13,009				12,844			13,461			12,844
Goodwill		232,537				170,304			254,511			170,304
Intangibles, net of accumulated amortization of $5,323 and $3,846		23,220				3,980
Intangibles, net of accumulated amortization of $6,219 and $3,846									26,199			3,980
Deferred income taxes		25,982				27,561			24,988			27,561
Other assets		46,859				42,665			48,942			42,665
Total assets	$	1,724,329			$	1,494,363		$	1,912,441		$	1,494,363
Liabilities and Equity
Current liabilities:
Short-term borrowings	$	7,451			$	3,654		$	5,764		$	3,654
Accounts payable		191,418				179,917			223,816			179,917
Accrued payroll and related liabilities		33,693				69,622			56,681			69,622
Environmental liabilities		12,987				24,743			11,600			24,743
Operating lease liabilities		21,869				21,417			21,964			21,417
Accrued income taxes		2,436				3,521			10,140			3,521
Other accrued liabilities		59,317				49,976			50,898			49,976
Total current liabilities		329,171				352,850			380,863			352,850
Deferred income taxes		53,291				40,593			62,133			40,593
Long-term debt, net of current maturities		254,126				71,299			316,108			71,299
Environmental liabilities, net of current portion		54,844				52,385			54,950			52,385
Operating lease liabilities, net of current maturities		106,803				113,165			106,745			113,165
Other long-term liabilities		21,445				24,292			23,772			24,292
Total liabilities		819,680				654,584			944,571			654,584
Commitments and contingencies (Note 5)
Schnitzer Steel Industries, Inc. (“SSI”) shareholders’ equity:
Preferred stock – 20,000 shares $1.00 par value authorized, NaN issued		0				0
Class A common stock – 75,000 shares $1.00 par value authorized, 27,433 and 27,332 shares issued and outstanding		27,433				27,332
Class B common stock – 25,000 shares $1.00 par value authorized, 200 and 200 shares issued and outstanding		200				200
Preferred stock – 20,000 shares $1.00 par value authorized, NaN issued									0			0
Class A common stock – 75,000 shares $1.00 par value authorized, 27,247 and 27,332 shares issued and outstanding									27,247			27,332
Class B common stock – 25,000 shares $1.00 par value authorized, 200 and 200 shares issued and outstanding									200			200
Additional paid-in capital		40,821				49,074			34,426			49,074
Retained earnings		866,776				793,712			936,060			793,712
Accumulated other comprehensive loss		(34,438	)			(34,554	)		(34,245	)		(34,554	)
Total SSI shareholders’ equity		900,792				835,764			963,688			835,764
Noncontrolling interests		3,857				4,015			4,182			4,015
Total equity		904,649				839,779			967,870			839,779
Total liabilities and equity	$	1,724,329			$	1,494,363		$	1,912,441		$	1,494,363

The accompanying Notes to the Unaudited Condensed Consolidated Financial Statement are an integral part of these statements.


	Three Months Ended February 28,						Six Months Ended February 28,						Three Months Ended May 31,						Nine Months Ended May 31,
	2022			2021			2022			2021			2022			2021			2022			2021
Revenues	$	783,198		$	600,111		$	1,581,316		$	1,092,218		$	1,010,087		$	820,718		$	2,591,403		$	1,912,936
Operating expense:
Cost of goods sold		670,539			487,025			1,353,783			907,119			834,375			678,297			2,188,158			1,585,416
Selling, general and administrative		61,081			54,142			116,348			104,048			77,672			61,887			194,020			165,935
(Income) from joint ventures		(591	)		(454	)		(827	)		(1,181	)		(762	)		(950	)		(1,589	)		(2,131	)
Asset impairment charges														932			—			932			—
Restructuring charges and other exit-related activities		4			814			26			878			26			104			52			982
Operating income		52,165			58,584			111,986			81,354			97,844			81,380			209,830			162,734
Interest expense		(1,901	)		(1,224	)		(3,273	)		(3,004	)		(2,223	)		(1,383	)		(5,496	)		(4,387	)
Other loss, net		(55	)		(242	)		(102	)		(407	)		(34	)		(114	)		(136	)		(521	)
Income from continuing operations before income taxes		50,209			57,118			108,611			77,943			95,587			79,883			204,198			157,826
Income tax expense		(12,073	)		(11,469	)		(23,170	)		(17,188	)		(20,037	)		(14,401	)		(43,207	)		(31,589	)
Income from continuing operations		38,136			45,649			85,441			60,755			75,550			65,482			160,991			126,237
Income (loss) from discontinued operations, net of tax		29			30			—			(12	)
Loss from discontinued operations, net of tax														(46	)		(46	)		(46	)		(58	)
Net income		38,165			45,679			85,441			60,743			75,504			65,436			160,945			126,179
Net income attributable to noncontrolling interests		(550	)		(1,091	)		(1,627	)		(2,051	)		(870	)		(1,801	)		(2,497	)		(3,852	)
Net income attributable to SSI shareholders	$	37,615		$	44,588		$	83,814		$	58,692		$	74,634		$	63,635		$	158,448		$	122,327

Net income per share attributable to SSI shareholders:
Basic:
Income per share from continuing operations	$	1.33		$	1.59		$	2.97		$	2.10		$	2.65		$	2.27		$	5.63		$	4.38
Net income per share	$	1.33		$	1.59		$	2.97		$	2.10		$	2.65		$	2.27		$	5.63		$	4.38
Diluted:
Income per share from continuing operations	$	1.27		$	1.54		$	2.81		$	2.05		$	2.52		$	2.16		$	5.33		$	4.23
Net income per share	$	1.27		$	1.54		$	2.81		$	2.05		$	2.52		$	2.15		$	5.33		$	4.22
Weighted average number of common shares:
Basic		28,231			27,991			28,195			27,899			28,143			28,047			28,161			27,948
Diluted		29,712			28,862			29,798			28,673			29,625			29,543			29,741			28,963

The accompanying Notes to the Unaudited Condensed Consolidated Financial Statements are an integral part of these statements.


	Three Months Ended February 28,						Six Months Ended February 28,						Three Months Ended May 31,						Nine Months Ended May 31,
	2022			2021			2022			2021			2022			2021			2022			2021
Net income	$	38,165		$	45,679		$	85,441		$	60,743		$	75,504		$	65,436		$	160,945		$	126,179
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments		722			1,572			(393	)		1,811			153			4,514			(240	)		6,325
Pension obligations, net		119			38			509			(222	)		40			37			549			(185	)
Total other comprehensive income, net of tax		841			1,610			116			1,589			193			4,551			309			6,140
Comprehensive income		39,006			47,289			85,557			62,332			75,697			69,987			161,254			132,319
Less comprehensive income attributable to noncontrolling interests		(550	)		(1,091	)		(1,627	)		(2,051	)		(870	)		(1,801	)		(2,497	)		(3,852	)
Comprehensive income attributable to SSI shareholders	$	38,456		$	46,198		$	83,930		$	60,281		$	74,827		$	68,186		$	158,757		$	128,467

The accompanying Notes to the Unaudited Condensed Consolidated Financial Statements are an integral part of these statements.

	Common Stock																Accumulated
	Class A						Class B				Additional						Other			Total SSI									Common Stock																Accumulated
Three Months Ended February 28, 2021	Shares			Amount			Shares		Amount		Paid-in Capital			Retained Earnings			Comprehensive Loss			Shareholders’ Equity			Noncontrolling Interests			Total Equity
Balance as of December 1, 2020		27,254		$	27,254			200	$	200	$	35,310		$	658,710		$	(36,892	)	$	684,582		$	3,966		$	688,548
																													Class A						Class B				Additional						Other			Total SSI
Three Months Ended May 31, 2022																													Shares			Amount			Shares		Amount		Paid-in Capital			Retained Earnings			Comprehensive Loss			Shareholders' Equity			Noncontrolling Interests			Total Equity
Balance as of March 1, 2022																														27,433		$	27,433			200	$	200	$	40,821		$	866,776		$	(34,438	)	$	900,792		$	3,857		$	904,649
Net income		—			—			—		—		—			44,588			—			44,588			1,091			45,679			—			—			—		—		—			74,634			—			74,634			870			75,504
Other comprehensive income, net of tax		—			—			—		—		—			—			1,610			1,610			—			1,610			—			—			—		—		—			—			193			193			—			193
Distributions to noncontrolling interests		—			—			—		—		—			—			—			—			(860	)		(860	)		—			—			—		—		—			—			—			—			(545	)		(545	)
Share repurchases																														(244	)		(244	)		—		—		(9,749	)		—			—			(9,993	)		—			(9,993	)
Issuance of restricted stock		10			10			—		—		(10	)		—			—			—			—			—			89			89			—		—		(89	)		—			—			—			—			—
Restricted stock withheld for taxes		(1	)		(1	)		—		—		—			—			—			(1	)		—			(1	)		(31	)		(31	)		—		—		(1,395	)		—			—			(1,426	)		—			(1,426	)
Share-based compensation cost		—			—			—		—		4,395			—			—			4,395			—			4,395			—			—			—		—		4,838			—			—			4,838			—			4,838
Dividends ($0.1875 per common share)		—			—			—		—		—			(5,332	)		—			(5,332	)		—			(5,332	)
Balance as of February 28, 2021		27,263		$	27,263			200	$	200	$	39,695		$	697,966		$	(35,282	)	$	729,842		$	4,197		$	734,039
Dividends ($0.1875 per common share)																														—			—			—		—		—			(5,350	)		—			(5,350	)		—			(5,350	)
Balance as of May 31, 2022																														27,247		$	27,247			200	$	200	$	34,426		$	936,060		$	(34,245	)	$	963,688		$	4,182		$	967,870

Common Stock

Accumulated

Class A

Class B

Additional

Other

Total SSI

Three Months Ended February 28, 2022

Shares

Amount

Shares

Amount

Paid-in
Capital

Retained
Earnings

Comprehensive
Loss

Shareholders'
Equity

Noncontrolling
Interests

Total
Equity

Balance as of December 1, 2021

27,624

$
27,624

200

$
200

$
43,641

$
834,504

$
(35,279
)

$
870,690

$
4,066

$
874,756

Net income

—

—

—

—

—

37,615

—

37,615

550

38,165

Other comprehensive income, net of tax

—

—

—

—

—

—

841

841

—

841

Distributions to noncontrolling interests

—

—

—

—

—

—

—

—

(759
)

(759
)
Share repurchases

(200
)

(200
)

—

—

(7,665
)

—

—

(7,865
)

—

(7,865
)
Issuance of restricted stock

9

9

—

—

(9
)

—

—

—

—

—

Restricted stock withheld for taxes

—

—

—

—

—

—

—

—

—

—

Share-based compensation cost

—

—

—

—

4,854

—

—

4,854

—

4,854

Dividends ($0.1875 per common share)

—

—

—

—

—

(5,343
)

—

(5,343
)

—

(5,343
)
Balance as of February 28, 2022

27,433

$
27,433

200

$
200

$
40,821

$
866,776

$
(34,438
)

$
900,792

$
3,857

$
904,649

The accompanying Notes to the Unaudited Condensed Consolidated Financial Statements are an integral part of these statements.

	Common Stock																Accumulated
	Class A						Class B				Additional						Other			Total SSI									Common Stock																Accumulated
Six Months Ended February 28, 2021	Shares			Amount			Shares		Amount		Paid-in Capital			Retained Earnings			Comprehensive Loss			Shareholders’ Equity			Noncontrolling Interests			Total Equity
																													Class A						Class B				Additional						Other			Total SSI
Nine Months Ended May 31, 2021																													Shares			Amount			Shares		Amount		Paid-in Capital			Retained Earnings			Comprehensive Loss			Shareholders' Equity			Noncontrolling Interests			Total Equity
Balance as of September 1, 2020		26,899		$	26,899			200	$	200	$	36,616		$	649,863		$	(36,871	)	$	676,707		$	3,729		$	680,436			26,899		$	26,899			200	$	200		36,616		$	649,863		$	(36,871	)	$	676,707		$	3,729		$	680,436
Net income		—			—			—		—		—			58,692			—			58,692			2,051			60,743			—			—			—		—		—			122,327			—			122,327			3,852			126,179
Other comprehensive income, net of tax		—			—			—		—		—			—			1,589			1,589			—			1,589			—			—			—		—		—			—			6,140			6,140			—			6,140
Distributions to noncontrolling interests		—			—			—		—		—			—			—			—			(1,583	)		(1,583	)		—			—			—		—		—			—			—			—			(3,029	)		(3,029	)
Share repurchases																														—			—			—		—		—			—			—			—			—			—
Issuance of restricted stock		553			553			—		—		(553	)		—			—			—			—			—			644			644			—		—		(644	)		—			—			—			—			—
Restricted stock withheld for taxes		(189	)		(189	)		—		—		(3,782	)		—			—			(3,971	)		—			(3,971	)		(220	)		(220	)		—		—		(5,215	)		—			—			(5,435	)		—			(5,435	)
Share-based compensation cost		—			—			—		—		7,414			—			—			7,414			—			7,414			—			—			—		—		14,220			—			—			14,220			—			14,220
Dividends ($0.375 per common share)		—			—			—		—		—			(10,589	)		—			(10,589	)		—			(10,589	)
Balance as of February 28, 2021		27,263		$	27,263			200	$	200	$	39,695		$	697,966		$	(35,282	)	$	729,842		$	4,197		$	734,039
Dividends ($0.5625 per common share)																														—			—			—		—		—			(15,928	)		—			(15,928	)		—			(15,928	)
Balance as of May 31, 2021																														27,323		$	27,323		200		$	200	$	44,977		$	756,262		$	(30,731	)	$	798,031		$	4,552		$	802,583


	Common Stock																Accumulated												Common Stock																Accumulated
	Class A						Class B				Additional						Other			Total SSI									Class A						Class B				Additional						Other			Total SSI
Six Months Ended February 28, 2022	Shares			Amount			Shares		Amount		Paid-in Capital			Retained Earnings			Comprehensive Loss			Shareholders' Equity			Noncontrolling Interests			Total Equity
Nine Months Ended May 31, 2022																													Shares			Amount			Shares		Amount		Paid-in Capital			Retained Earnings			Comprehensive Loss			Shareholders' Equity			Noncontrolling Interests			Total Equity
Balance as of September 1, 2021		27,332		$	27,332			200	$	200	$	49,074		$	793,712		$	(34,554	)	$	835,764		$	4,015		$	839,779			27,332		$	27,332			200	$	200	$	49,074		$	793,712		$	(34,554	)	$	835,764		$	4,015		$	839,779
Net income		—			—			—		—		—			83,814			—			83,814			1,627			85,441			—			—			—		—		—			158,448			—			158,448			2,497			160,945
Other comprehensive loss, net of tax		—			—			—		—		—			—			116			116			—			116
Other comprehensive income, net of tax																														—			—			—		—		—			—			309			309			—			309
Distributions to noncontrolling interests		—			—			—		—		—			—			—			—			(1,785	)		(1,785	)		—			—			—		—		—			—			—			—			(2,330	)		(2,330	)
Share repurchases		(200	)		(200	)		—		—		(7,665	)		—			—			(7,865	)		—			(7,865	)		(444	)		(444	)		—		—		(17,414	)		—			—			(17,858	)		—			(17,858	)
Issuance of restricted stock		479			479			—		—		(479	)		—			—			—			—			—			568			568			—		—		(568	)		—			—			—			—			—
Restricted stock withheld for taxes		(178	)		(178	)		—		—		(9,399	)		—			—			(9,577	)		—			(9,577	)		(209	)		(209	)		—		—		(10,794	)		—			—			(11,003	)		—			(11,003	)
Share-based compensation cost		—			—			—		—		9,290			—			—			9,290			—			9,290			—			—			—		—		14,128			—			—			14,128			—			14,128
Dividends ($0.375 per common share)		—			—			—		—		—			(10,750	)		—			(10,750	)		—			(10,750	)
Balance as of February 28, 2022		27,433		$	27,433			200	$	200	$	40,821		$	866,776		$	(34,438	)	$	900,792		$	3,857		$	904,649
Dividends ($0.5625 per common share)																														—			—			—		—		—			(16,100	)		—			(16,100	)		—			(16,100	)
Balance as of May 31, 2022																														27,247		$	27,247			200	$	200	$	34,426		$	936,060		$	(34,245	)	$	963,688		$	4,182		$	967,870

The accompanying Notes to the Unaudited Condensed Consolidated Financial Statements are an integral part of these statements.


	Six Months Ended February 28,						Nine Months Ended May 31,
	2022			2021			2022			2021
Cash flows from operating activities:
Net income	$	85,441		$	60,743		$	160,945		$	126,179
Adjustments to reconcile net income to cash used in operating activities:
Adjustments to reconcile net income to cash provided by operating activities:
Asset impairment charges								932			—
Depreciation and amortization		35,816			29,295			54,566			43,621
Inventory write-downs		304			—			3,199			—
Deferred income taxes		13,988			5,544			23,851			11,393
Undistributed equity in earnings of joint ventures		(827	)		(1,181	)		(1,589	)		(2,131	)
Share-based compensation expense		9,231			7,276			14,046			13,987
Loss (gain) on disposal of assets, net		1,345			(81	)		1,192			(48	)
Unrealized foreign exchange loss, net		121			93			193			137
Credit loss, net		16			66			17			21
Changes in assets and liabilities, net of acquisitions:
Accounts receivable		(47,762	)		(75,961	)		(43,340	)		(133,164	)
Inventories		(52,624	)		(90,151	)		(164,196	)		(92,114	)
Income taxes		(697	)		16,097			8,843			18,932
Prepaid expenses and other current assets		1,309			1,266			(14,771	)		(9,671	)
Other long-term assets		(651	)		(3,765	)		(1,068	)		(4,524	)
Operating lease assets and liabilities		(903	)		(430	)		(2,049	)		(696	)
Accounts payable		11,762			45,050			44,874			56,394
Accrued payroll and related liabilities		(39,711	)		(85	)		(16,890	)		14,269
Other accrued liabilities		7,583			(3,618	)		1,747			1,208
Environmental liabilities		(12,482	)		2,488			(14,744	)		2,055
Other long-term liabilities		455			3,494			650			3,496
Distributed equity in earnings of joint ventures		1,000			1,250			1,600			1,250
Net cash provided by (used in) operating activities		12,714			(2,610	)
Net cash provided by operating activities								58,008			50,594
Cash flows from investing activities:
Capital expenditures		(69,409	)		(55,084	)		(97,972	)		(76,730	)
Acquisitions, net of acquired cash		(113,939	)		—			(177,070	)		—
Proceeds from insurance and sale of assets		11,129			317			18,244			462
Purchase of equity investment								(5,000	)		—
Deposit on land option		(80	)		630			(80	)		630
Net cash used in investing activities		(172,299	)		(54,137	)		(261,878	)		(75,638	)
Cash flows from financing activities:
Borrowings from long-term debt		405,094			265,645			895,175			445,829
Repayment of long-term debt		(225,395	)		(199,229	)		(655,440	)		(396,810	)
Payment of debt issuance costs		—			(23	)		—			(23	)
Repurchase of Class A common stock		(7,865	)		—			(17,858	)		—
Taxes paid related to net share settlement of share-based payment awards		(9,577	)		(3,971	)		(11,003	)		(5,435	)
Distributions to noncontrolling interests		(1,785	)		(1,583	)		(2,330	)		(3,029	)
Dividends paid		(10,841	)		(10,828	)		(16,172	)		(16,067	)
Net cash provided by financing activities		149,631			50,011			192,372			24,465
Effect of exchange rate changes on cash		(41	)		175			(195	)		619
Net decrease in cash and cash equivalents		(9,995	)		(6,561	)
Net (decrease) increase in cash and cash equivalents								(11,693	)		40
Cash and cash equivalents as of beginning of period		27,818			17,887			27,818			17,887
Cash and cash equivalents as of end of period	$	17,823		$	11,326		$	16,125		$	17,927

The accompanying Notes to the Unaudited Condensed Consolidated Financial Statements are an integral part of these statements.


	Six Months Ended February 28,					Nine Months Ended May 31,
	2022		2021			2022		2021
SUPPLEMENTAL DISCLOSURES:
Cash paid during the period for:
Interest	$	1,748	$	1,827		$	3,249	$	2,454
Income taxes paid (refunded), net	$	9,829	$	(4,525	)
Income taxes paid, net						$	10,502	$	1,267
Schedule of noncash investing and financing transactions:
Purchases of property, plant and equipment included in liabilities	$	21,828	$	11,338		$	19,868	$	10,572

The accompanying Notes to the Unaudited Condensed Consolidated Financial Statements are an integral part of these statements.

Note 1 - Summary of Significant Accounting Policies

Basis of Presentation

The accompanying Unaudited Condensed Consolidated Financial Statements of Schnitzer Steel Industries, Inc. and its majority-owned and wholly-owned subsidiaries (the “Company”) have been prepared pursuant to generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information and the rules and regulations of the United States Securities and Exchange Commission (the “SEC”) for Form 10-Q, including Article 10 of Regulation S-X. The year-end condensed consolidated balance sheet data was derived from audited financial statements but does not include all disclosures required by U.S. GAAP. Certain information and note disclosures normally included in annual financial statements have been condensed or omitted pursuant to the rules and regulations of the SEC. In the opinion of management, all normal, recurring adjustments considered necessary for a fair statement have been included. Management suggests that these Unaudited Condensed Consolidated Financial Statements be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended August 31, 2021. The results for the three and ~~six~~nine months ended ~~February 28,~~May 31, 2022 and 2021 are not necessarily indicative of the results of operations for the entire fiscal year.

Segment Reporting

The Company acquires and recycles ferrous and nonferrous scrap metal for sale to foreign and domestic metal producers, processors, and brokers, and it procures salvaged vehicles and sells serviceable used auto parts from these vehicles through a network of self-service auto parts stores. Most of these auto parts stores supply the Company’s shredding facilities with auto bodies that are processed into saleable recycled metal products. In addition to the sale of recycled metal products processed at its facilities, the Company provides a variety of recycling and related services. The Company also produces a range of finished steel long products at its electric arc furnace (“EAF”) steel mill using recycled ferrous metal sourced internally from its recycling and joint venture operations and other raw ~~materials~~.materials.

The accounting standards for reporting information about operating segments define an operating segment as a component of an enterprise that engages in business activities from which it may earn revenues and incur expenses for which discrete financial information is available that is evaluated regularly by the chief operating decision-maker in deciding how to allocate resources and in assessing performance. The Company’s internal organizational and reporting structure includes a single operating and reportable ~~segment~~.segment.

Cash and Cash Equivalents

Cash and cash equivalents include short-term securities that are not restricted by third parties and have an original maturity date of 90 days or less. Included in accounts payable are book overdrafts representing outstanding checks in excess of funds on deposit of ~~$45~~$62 million and ~~$47~~$47 million as of ~~February 28,~~May 31, 2022 and August 31, 2021, respectively.

Accounts Receivable, net

Accounts receivable represent amounts primarily due from customers on product and other sales. These accounts receivable, which are reduced by an allowance for credit losses, are recorded at the invoiced amount and do not bear interest. The Company extends credit to customers under contracts containing customary and explicit payment terms, and payment is generally required within 30 to 60 days of shipment. Nonferrous export sales typically require a deposit prior to shipment. Historically, almost all the Company’s ferrous export sales have been made with letters of credit. Ferrous and nonferrous metal sales to domestic customers and finished steel sales are generally made on open account, and a portion of these sales are covered by credit insurance.

The Company evaluates the collectibility of its accounts receivable based on a combination of factors, including whether sales were made pursuant to letters of credit or required deposits prior to shipment,, the aging of customer receivable balances, the financial condition of the Company’s customers, historical collection rates, and economic trends. Management uses this evaluation to estimate the amount of customer receivables that may not be collected in the future and records a provision for expected credit losses. Accounts are written off when all efforts to collect have been exhausted.

Also included in accounts receivable are short-term advances to scrap metal suppliers used as a mechanism to acquire unprocessed scrap metal. The advances are generally repaid with scrap metal, as opposed to cash. Repayments of advances with scrap metal are treated as noncash operating activities in the Unaudited Condensed Consolidated Statements of Cash Flows and totaled $6 $9million and $5$7 million for the ~~six~~nine months ended ~~February 28,~~May 31, 2022 and 2021, respectively.

Table of Contents

SCHNITZER STEEL INDUSTRIES, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Prepaid Expenses

The Company’s prepaid expenses, reported within prepaid expenses and other current assets in the Unaudited Condensed Consolidated Balance Sheets, totaled ~~$16~~$33 million and ~~$22~~$22 million as of ~~February 28,~~May 31, 2022 and August 31, 2021, respectively, and consisted primarily of prepaid insurance, deposits on capital projects, prepaid services, ~~prepaid insurance,~~ and prepaid property taxes.

Other Assets

The Company’s other assets, exclusive of prepaid expenses and assets relating to certain employee benefit plans, consisted primarily of receivables from insurers, two equity investments, capitalized implementation costs for cloud computing arrangements, major spare parts and equipment, cash held in a client trust account relating to a legal settlement, ~~an equity investment,~~ debt issuance costs, and notes and other contractual receivables. Other assets are reported within either prepaid expenses and other current assets or other assets in the Unaudited Condensed Consolidated Balance Sheets based on their expected use either during or beyond the current operating cycle of one year from the reporting date.

Receivables from insurers represent the portion of insured losses expected to be recovered from the Company’s insurers. The receivable is recorded at an amount not to exceed the recorded loss and only if the terms of legally enforceable insurance contracts support that the insurance recovery will not be disputed and is deemed collectible. Receivables from insurers totaled ~~$20~~$14 million and ~~$21~~$21 million as of ~~February 28,~~May 31, 2022 and August 31, 2021, respectively. Receivables from insurers as of ~~February 28,~~May 31, 2022 comprised primarily ~~$10~~$4 million relating to property loss and damage and other claims in connection with the December 2021 fire at the Company’s shredder facility in Everett, Massachusetts, $6$5 million relating to environmental claims, and $4$4 million relating to workers’ compensation claims. Receivables from insurers as of August 31, 2021 comprised primarily ~~$10~~$10 million relating to property loss and damage and other claims in connection with the May 2021 fire at the Company’s melt shop operations in McMinnville, Oregon, $6$6 million relating to environmental claims, and $4$4 million relating to workers’ compensation claims. See “Accounting for Impacts of Involuntary Events” below in this Note for further discussion of receivables and advance payments from insurers relating to property damage and business interruption claims.

Other assets as of ~~both February 28,~~May 31, 2022 and August 31, 2021 also included approximately $8$7 million and $8 million, respectively, in connection with cash deposited into a client trust account in the second quarter of fiscal 2021 to fund the remediation of a site, a portion of which was previously leased to and operated by an indirect, wholly-owned subsidiary. The cash was deposited into the client trust account by other potentially liable parties in connection with settlement of a lawsuit relating to allocation of the remediation costs, including agreement by the Company’s subsidiary to perform certain remedial actions. See “Other Legacy Environmental Loss Contingencies” within “Contingencies – Environmental” in Note 5 - Commitments and Contingencies for further discussion of this matter.

The Company invested $6$6 million in the equity of a privately-held U.S. waste and recycling entity in fiscal ~~2017.~~2017, and in May 2022, the Company invested $5 million in the equity of an unrelated privately-held Canadian recycling entity. The Company's influence over the operating and financial policies of each entity is not significant, and, thus, the investments are accounted for under the guidance for investments in equity securities. The equity ~~investment does~~investments do not have a readily determinable fair ~~value~~values and, therefore, isare carried at cost and adjusted for impairments and observable price changes. The ~~investment is~~investments are reported within other assets in the Unaudited Condensed Consolidated Balance Sheets. TheAs of May 31, 2022 and August 31, 2021, the aggregate carrying value of the ~~investment~~investments was $6$11 million ~~as of February 28, 2022~~and ~~August 31, 2021.~~$6 million, respectively. The Company has not recorded any impairments or upward or downward adjustments to the carrying value of the ~~investment~~investments since their respective acquisition.

Accounting for Impacts of Involuntary Events

Assets destroyed or damaged as a result of involuntary events are written off or reduced in carrying value to their salvage value. When recovery of all or a portion of the amount of property damage loss or other covered expenses through insurance proceeds is demonstrated to be probable, a receivable is recorded and offsets the loss or expense up to the amount of the total loss or expense. No gain is recorded until all contingencies related to the insurance claim have been resolved.

Table of Contents

SCHNITZER STEEL INDUSTRIES, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

On May 22, 2021, the Company experienced a fire at its steel mill in McMinnville, Oregon. Direct physical loss or damage to property from the incident was limited to the mill’s melt shop, with no bodily injuries and no physical loss or damage to other buildings or equipment. As a result of the fire, the rolling mill production ceased in early June 2021. In August 2021, the steel mill began ramping up operations following the substantial completion of replacement and repairs of property and equipment in the melt shop that had been lost or damaged by the fire. The Company experienced the loss of business income during the shutdown of the steel mill and the subsequent ramp-up phase which was substantially completed during the second quarter of fiscal 2022. The Company filed initial insurance claims for the physical loss and damage experienced at the mill’s melt shop and business income losses resulting from the matter. As of August 31, 2021, prepaid expenses and other current assets in the Unaudited Condensed Consolidated Balance Sheets included an initial ~~$10~~$10 million insurance receivable recognized in the fourth quarter of fiscal 2021, primarily offsetting applicable losses including capital purchases of ~~$10~~$10 million that had been incurred by the Company as of August 31, 2021. In the first ~~half~~nine months of fiscal 2022, the Company increased the amount of this insurance receivable to ~~$25~~$25 million and recognized a related ~~$15~~$15 million insurance recovery gain, $3$3 million recorded in the first quarter and ~~$12~~$12 million recorded in the second quarter, within cost of goods sold in the Unaudited Condensed Consolidated Statements of Income, reflecting recovery of applicable losses incurred as a result of the fire to date. In addition, during the first ~~half~~nine months of fiscal 2022, the Company received advance payments from insurers totaling approximately ~~$30~~$30 million towards the Company’s claims, and not reflecting any final or full settlement of claims with the insurers, which amount reduced the ~~$25~~$25 million insurance receivable to 0with the remaining amount of advance payments of $5$5 million reported within other accrued liabilities in the Unaudited Condensed Consolidated Balance Sheets as of ~~February 28,~~May 31, 2022.

On December 8, 2021, the Company experienced a fire at its metals recycling facility in Everett, Massachusetts. Direct physical loss or damage to property from the incident was limited to the facility’s shredder building and equipment, with no bodily injuries and no physical loss or damage to property reported at other buildings or equipment. As a result of the fire, shredding operations ceased, while all non-shredding operations at the facility continued, including torching, shearing, separating, and sorting purchased non-shreddable recycled ferrous metals. On January 28, 2022, shredding operations at the facility began ramping up following the replacement and repairs to shredder equipment that had been damaged. Completion of the remainder of repair and replacement of property that experienced physical loss or damage, primarily buildings and improvements, will occur over a longer period and impacts on business income may continue. For example, as of June 18, 2022, shredder operations temporarily ceased at the facility pending completion of discussions with the Massachusetts Department of Environmental Protection and the Massachusetts Attorney General’s office regarding installation and operation of temporary emission capture and controls that would allow operation of the shredder prior to completion of the repair and replacement of the shredder enclosure building. Non-shredding operations at the facility continue. The Company filed initial insurance claims for the property that experienced physical loss or damage and anticipated business income losses resulting from the matter. In the second quarter of fiscal 2022, the Company recognized an initial ~~$10~~$10 million insurance receivable and related insurance recovery gain, reported within prepaid expenses and other current assets in the Unaudited Condensed Consolidated Balance Sheets and within cost of goods sold in the Unaudited Condensed Consolidated Statements of Income, respectively, reflecting recovery of applicable losses including impairment charges of $6$6 million related to the carrying value of plant and equipment assets lost in or damaged by the fire and initial capital purchases and other costs totaling $4$4 million that had been incurred by the Company as of February 28, 2022. In the third quarter of fiscal 2022, the Company increased the amount of this insurance receivable to $11 million and recognized a related $1 million insurance recovery gain, reflecting recovery of applicable losses incurred as a result of the fire to date. Also in the third quarter of fiscal 2022, the Company received advance payments from insurers totaling approximately $7 million towards the Company's claims, and not reflecting any final or full settlement of claims with the insurers, which amount reduced the insurance receivable to $4 million as of May 31, 2022.

Business Acquisitions

The Company recognizes the assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree at the acquisition date, measured at their fair values as of that date. Contingent purchase consideration is recorded at fair value at the date of acquisition. Any excess purchase price over the fair value of the net assets acquired is recorded as goodwill. Within one year from the date of acquisition, the Company may update the value allocated to the assets acquired and liabilities assumed, and the resulting goodwill balance, based on information received regarding the valuation of such assets and liabilities that was not available at the time of purchase. Measuring assets and liabilities at fair value requires the Company to determine the price that would be paid by a third-party market participant based on the highest and best use of the assets or interests acquired. Acquisition costs are expensed as incurred.

Table of Contents

SCHNITZER STEEL INDUSTRIES, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Concentration of Credit Risk

Financial instruments that potentially subject the Company to significant concentration of credit risk consist primarily of cash and cash equivalents and accounts receivable. The majority of cash and cash equivalents is maintained with major financial institutions. Balances with these and certain other institutions exceeded the Federal Deposit Insurance Corporation insured amount oof $~~f $250~~250 thousand as of ~~February 28,~~May 31, 2022. Concentration of credit risk with respect to accounts receivable is limited because a large number of geographically diverse customers make up the Company’s customer base. The Company controls credit risk through credit approvals, credit limits, credit insurance, letters of credit or other collateral, cash deposits, and monitoring procedures.

Recent Accounting Pronouncements

The Company does not expect that its adoption in the future of any recently issued accounting pronouncements will have a material impact on its consolidated financial statements.

On October 1, 2021, the Company used cash on hand and borrowings under existing credit facilities to acquire 8 metals recycling facilities across Mississippi, Tennessee, and Kentucky from Columbus Recycling, a provider of recycled ferrous and nonferrous metal products and recycling services. The transaction qualified as a business combination for accounting purposes, which involves application of the acquisition method described in Accounting Standards Codification Topic 805, Business Combinations, and summarized in “Business Acquisitions” in Note 1 –- Summary of Significant Accounting Policies. The cash purchase price was approximately ~~$107~~$107 million, subject to adjustment for acquired net working capital relative to an agreed-upon benchmark, as well as other adjustments. The Company paid at closing an additional $7$7 million for estimated net working capital in excess of the benchmark, which is still subject to adjustment as of the date of this report, resulting in total purchase consideration measured as of the end of the ~~second~~third quarter of fiscal 2022 of approximately ~~$114~~ $114million. As of the date of this report, measurement of actual acquired net working capital, as well as the fair values of certain other acquired assets and assumed liabilities, is still preliminary and subject to change based on the completion of valuation procedures. The acquired Columbus Recycling operations purchase and process scrap metal from industrial manufacturers, local recycling companies, and individuals, and sell the recycled products to regional foundries and steel mills. Combined with the Company’s ~~twelve existing~~ regional metals recycling facilities in Georgia, Alabama, and Tennessee, the acquired operations offer additional recycling products, services, and logistics solutions to customers and suppliers across the Southeast, giving rise to expected benefits supporting the amount of acquired goodwill.

The following table summarizes the provisional purchase price allocation to the identifiable intangible assets and their estimated useful lives as of the October 1, 2021 acquisition date (in thousands):

The results of operations for the acquired Columbus Recycling business beginning as of the October 1, 2021 acquisition date are included in the accompanying financial statements. For each of the three and ~~six~~nine months ended ~~February 28,~~May 31, 2022, ~~and 2021,~~ the ~~unaudited amount of~~ revenues of the acquired Columbus Recycling business ~~equaled 6%~~contributed 5% or less of the Company’s consolidated revenues reported in the Unaudited Condensed Consolidated Statements of Income, and the ~~unaudited~~ amount of net income ofcontributed by the acquired Columbus Recycling business was3% or less of the Company’s consolidated net income reported in the Unaudited Condensed Consolidated Statements of Income.

On April 29, 2022, the Company used cash on hand and borrowings under existing credit facilities to acquire 2 recycling facilities in the greater Atlanta, Georgia metropolitan area, including a metal shredding operation and recycled auto-parts center from the previous owners of Encore Recycling. The acquired Encore Recycling operations purchase and process scrap metal and end-of life vehicles from industrial manufacturers, local recycling companies, and individuals, and sell the recycled products to regional foundries and steel mills. Combined with the Company’s existing regional metals recycling facilities and recycled auto-parts centers, the acquired operations offer additional recycling products, services, and logistics solutions to customers and suppliers across portions of the Southeast, giving rise to expected benefits supporting the amount of acquired goodwill. The transaction qualified as a business combination for accounting purposes. The cash purchase price was approximately $55 million, subject to adjustment for acquired net working capital relative to an agreed-upon benchmark, as well as other adjustments. The Company paid at closing an additional $8 million for estimated net working capital in excess of the benchmark, which is still subject to adjustment as of the date of this report, resulting in total purchase consideration measured as of the end of the third quarter of fiscal 2022 of approximately $63 million. As of the date of this report, measurement of actual acquired net working capital, as well as the fair values of certain other acquired assets and assumed liabilities, is still preliminary and subject to change based on the completion of valuation procedures.

The Company is in the process of completing a fair valuation of the assets acquired and liabilities assumed by the Company as of the April 29, 2022 acquisition date. The following table summarizes the provisional fair values of the assets acquired and liabilities assumed by the Company as of the April 29, 2022 acquisition date (in thousands):

The results of operations for the acquired Encore Recycling business beginning as of the April 29, 2022 acquisition date are included in the accompanying financial statements. For each of the three and nine months ended May 31, 2022, the revenues and net income contributed by the acquired Encore Recycling business and reported in the Unaudited Condensed Consolidated Statements of Income were not material to the financial statements taken as a whole. ~~Because~~

There are no individually material, nonrecurring pro forma adjustments directly attributable to the business combinations included in these pro forma revenues and earnings.

The information included in the pro forma amounts is derived from historical information obtained from the sellers of the businesses. These pro forma results are not necessarily indicative of what actual results would have been had these acquisitions occurred for the periods presented. In addition, the pro forma results are not intended to be a projection of ~~operations of the Company for the periods presented in this report would~~future results and do not reflect any synergies that may be ~~materially different as a result of the acquisition, this information is not presented.~~achieved from combining operations.

Note 5 - Commitments and Contingencies

Contingencies - Environmental

The Company evaluates the adequacy of its environmental liabilities on a quarterly basis. Adjustments to the liabilities are made when additional information becomes available that affects the estimated costs to study or remediate any environmental issues or expenditures are made for which liabilities were established.

Changes in the Company’s environmental liabilities for the ~~six~~nine months ended ~~February 28,~~May 31, 2022 were as follows (in thousands):

Balance as of

September 1, 2021

Balance as of

September 1, 2021

Liabilities

Established

(Released), Net

Payments and

Other

Balance as of

February 28, 2022

Short-Term

Long-Term

Balance as of
September 1, 2021

Liabilities
Established
(Released), Net

Payments and
Other

Balance as of
May 31, 2022

Short-Term

Long-Term

77,128

6,986

(16,283

)

67,831

12,987

54,844

77,128

7,577

(18,155

)

66,550

11,600

54,950

The Company had environmental liabilities of $~~$68~~67 million and ~~$77~~$77 million as of ~~February 28,~~May 31, 2022 and August 31, 2021, respectively, for the potential remediation of locations where it has conducted business or has environmental liabilities from historical or recent activities. The liabilities relate to the investigation and potential future remediation of contaminated sediments and riverbanks, soil contamination, groundwater contamination, storm water runoff issues, and other natural resource damages. Except for Portland Harbor and certain liabilities discussed under “Other Legacy Environmental Loss Contingencies” below, such liabilities were not individually material at any site.

~~Table of Contents~~

~~SCHNITZER STEEL INDUSTRIES, INC.~~

~~NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

Portland Harbor

In December 2000, the Company was notified by the United States Environmental Protection Agency (“EPA”) under the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”) that it is one of the potentially responsible parties (“PRPs”) that own or operate or formerly owned or operated sites which are part of or adjacent to the Portland Harbor Superfund site (the “Site”).

The precise nature and extent of cleanup of any specific areas within the Site, the parties to be involved, the timing of any specific remedial action and the allocation of the costs for any cleanup among responsible parties have not yet been determined. The process of site investigation, remedy selection, identification of additional PRPs, and allocation of costs has been underway for a number of years, but significant uncertainties remain. It is unclear to what extent the Company will be liable for environmental costs or third-party contribution or damage claims with respect to the Site.

From 2000 to 2017, the EPA oversaw a remedial investigation/feasibility study (“RI/FS”) at the Site. The Company was not among the parties that performed the RI/FS, but it contributed to the costs through an interim settlement with the performing parties. The performing parties have indicated that they incurred more than ~~$155~~$155 million in that effort.

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SCHNITZER STEEL INDUSTRIES, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

In January 2017, the EPA issued a Record of Decision (“ROD”) that identified the selected remedy for the Site. The EPA has estimated the total cost of the selected remedy at ~~$1.7~~$1.7 billion with a net present value cost of ~~$1.05~~$1.05 billion (at a 7%7% discount rate) and an estimated construction period of 13 years following completion of the remedial designs. In the ROD, the EPA stated that the cost estimate is an order-of-magnitude engineering estimate that is expected to be within ~~+50%~~+50% to ~~-30%~~-30% of the actual project cost and that changes in the cost elements are likely to occur as a result of new information and data collected during the engineering design. The Company has identified a number of concerns regarding the remedy described in the ROD, which is based on data that is more than 15 years old, and the EPA’s estimates for the costs and time required to implement the selected remedy. Moreover, the ROD provided only Site-wide cost estimates and did not provide sufficient detail to estimate costs for specific sediment management areas within the Site. In addition, the ROD did not determine or allocate the responsibility for remediation costs among the PRPs.

In the ROD, the EPA acknowledged that much of the data was more than a decade old at that time and would need to be updated with a new round of “baseline” sampling to be conducted prior to the remedial design phase. The remedial design phase is an engineering phase during which additional technical information and data are collected, identified, and incorporated into technical drawings and specifications developed for the subsequent remedial action. Following issuance of the ROD, the EPA proposed that the PRPs, or a subgroup of PRPs, perform the additional investigative work in advance of remedial design.

In December 2017, the Company and 3 other PRPs entered into an Administrative Settlement Agreement and Order on Consent with the EPA to perform such pre-remedial design investigation and baseline sampling over a two-year period. The report analyzing the results concluded that Site conditions have improved substantially since the data forming the basis of the ROD was collected. The EPA found with a few limited corrections that the data is of suitable quality and stated that such data will be used, in addition to existing and forthcoming design-level data, to inform implementation of the ROD. However, the EPA did not agree that the data or the analysis warranted a change to the remedy at this time and reaffirmed its commitment to proceed with remedial design. The Company and other PRPs disagree with the EPA’s position on use of the more recent data and will continue to pursue limited, but critical, changes to the selected remedy for the Site during the remedial design phase.

~~Table of Contents~~

~~SCHNITZER STEEL INDUSTRIES, INC.~~

~~NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

The EPA encouraged PRPs to step forward (individually or in groups) to enter into consent agreements to perform remedial design in various project areas covering the entire Site. While certain PRPs executed consent agreements for remedial design work, because of the EPA’s refusal to date to modify the remedy to reflect the most current data on Site conditions and because of concerns with the terms of the consent agreement, the Company elected not to enter into a consent agreement. In April 2020, the EPA issued a unilateral administrative order (“UAO”) to the Company and MMGL, LLC (“MMGL”), an unaffiliated company, for the remedial design work in a portion of the Site designated as the River Mile 3.5 East Project Area. As required by the UAO, the Company notified the EPA of its intent to comply while reserving all of its sufficient cause defenses. Failure to comply with a UAO, without sufficient cause, could subject the Company to significant penalties or treble damages. Pursuant to the optimized remedial design timeline set forth in the UAO, the EPA’s expected schedule for completion of the remedial design work is four ~~years.~~years. The EPA has estimated the cost of the work at approximately $4$4 million. The Company has agreed with the other respondent to the UAO, MMGL, that the Company will lead the performance and be responsible for a portion of the costs of the work for remedial design under the UAO and also entered into an agreement with another PRP pursuant to which such other PRP has agreed to fund a portion of the costs of such work. These agreements are not an allocation of liability or claims associated with the Site as between the respondents or with respect to any third party. The Company estimated that its share of the costs of performing such work under the UAO would be approximately $3$3 million, which it recorded to environmental liabilities and selling, general, and administrative expense in the consolidated financial statements in the third quarter of fiscal 2020. The Company has insurance policies pursuant to which the Company is being reimbursed for the costs it has incurred for remedial design. In the second quarter of fiscal 2021, the Company recorded an insurance receivable and a related insurance recovery to selling, general, and administrative expense for approximately $3$3 million. See “Other Assets” in Note 1 –- Summary of Significant Accounting Policies for further discussion of receivables from insurers. The Company also expects to pursue in the future allocation or contribution from other PRPs for a portion of such remedial design costs. In February 2021, the EPA announced that 100 percent of the Site’s areas requiring active cleanup are in the remedial design phase of the process.

Except for certain early action projects in which the Company is not involved, remediation activities at the Site are not expected to commence for a number of years. Moreover, those activities are expected to be sequenced, and the order and timing of such sequencing has not been determined. In addition, as noted above, the ROD does not determine the allocation of costs among PRPs.

The Company has joined with approximately 100 other PRPs, including the RI/FS performing parties, in a voluntary process to establish an allocation of costs at the Site, including the costs incurred in the RI/FS, ongoing remedial design costs, and future remedial action costs. The Company expects the next major stage of the allocation process to proceed in parallel with the remedial design process.

Table of Contents

SCHNITZER STEEL INDUSTRIES, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

In addition to the remedial action process overseen by the EPA, the Portland Harbor Natural Resource Trustee Council (“Trustee Council”) is assessing natural resource damages at the Site. In 2008, the Trustee Council invited the Company and other PRPs to participate in funding and implementing the Natural Resource Injury Assessment for the Site. The Company and other participating PRPs ultimately agreed to fund the first two phases of the three-phase assessment, which included the development of the Natural Resource Damage Assessment Plan (“AP”) and implementation of the AP to develop information sufficient to facilitate early settlements between the Trustee Council and Phase 2 participants and the identification of restoration projects to be funded by the settlements. In late May 2018, the Trustee Council published notice of its intent to proceed with Phase 3, which will involve the full implementation of the AP and the final injury and damage determination. The Company is proceeding with the process established by the Trustee Council regarding early settlements under Phase 2. The Company has established an environmental reserve of approximately ~~$2.3~~$2.3 million for this alleged natural resource damages liability as it continues to work with the Trustee Council to finalize an early settlement. The Company has insurance policies that it believes will provide reimbursement for costs related to this matter. As of ~~February 28,~~May 31, 2022 and August 31, 2021, the Company had an insurance receivable in the same amount as the environmental reserve. See ~~“Other~~“Other Assets” in Note 1 –- Summary of Significant Accounting Policies for further discussion of receivables from insurers.

On January 30, 2017, one of the Trustees, the Confederated Tribes and Bands of the Yakama Nation, which withdrew from the council in 2009, filed a suit against approximately 30 parties, including the Company, seeking reimbursement of certain past and future response costs in connection with remedial action at the Site and recovery of assessment costs related to natural resources damages from releases at and from the Site to the Multnomah Channel and the Lower Columbia River. The parties filed various motions to dismiss or stay this suit, and in August 2019, the court issued an order denying the motions to dismiss and staying the action. The Company intends to defend against the claims in this suit and does not have sufficient information to determine the likelihood of a loss in this matter or to estimate the amount of damages being sought or the amount of such damages that could be allocated to the Company.

~~Table of Contents~~

~~SCHNITZER STEEL INDUSTRIES, INC.~~

~~NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

The Company’s environmental liabilities as of ~~February 28,~~May 31, 2022 and August 31, 2021 included $5 $4million and $6$6 million, respectively, relating to the Portland Harbor matters described above.

Because the final remedial actions have not yet been designed and there has not been a determination of the allocation among the PRPs of costs of the investigations or remedial action costs, the Company believes it is not possible to reasonably estimate the amount or range of costs which it is likely to or which it is reasonably possible that it will incur in connection with the Site, although such costs could be material to the Company’s financial position, results of operations, cash flows, and liquidity. Among the facts being evaluated are detailed information on the history of ownership of and the nature of the uses of and activities and operations performed on each property within the Site, which are factors that will play a substantial role in determining the allocation of investigation and remedy costs among the PRPs.

The Company has insurance policies that it believes will provide reimbursement for costs it incurs for defense, remedial design, remedial action, and mitigation for or settlement of natural resource damages claims in connection with the Site. Most of these policies jointly insure the Company and MMGL, as the successor to a former subsidiary of the Company. The Company and MMGL have negotiated the settlement with certain insurers of claims against them related to the Site, continue to seek settlements with other insurers, and formed a Qualified Settlement Fund (“QSF”) which became operative in fiscal 2020 to hold such settlement amounts until funds are needed to pay or reimburse costs incurred by the Company and MMGL in connection with the Site. These insurance policies and the funds in the QSF may not cover all of the costs which the Company may incur. The QSF is an unconsolidated variable interest entity (“VIE”) with no primary beneficiary. Two parties unrelated to each other, one appointed by the Company and one appointed by MMGL, share equally the power to direct the activities of the VIE that most significantly impact its economic performance. The Company’s appointee to co-manage the VIE is an executive officer of the Company. Neither MMGL nor its appointee to co-manage the VIE is a related party of the Company for the purpose of the primary beneficiary assessment or otherwise.

The Oregon Department of Environmental Quality is separately providing oversight of investigations and source control activities by the Company at various sites adjacent to Portland Harbor that are focused on controlling any current “uplands” releases of contaminants into the Willamette River. The Company has accrued liabilities for source control and related work at two sites, reflecting estimated costs of primarily investigation and design, which costs have not been material in the aggregate to date. No liabilities have been established in connection with these investigations ~~beyond the costs of investigation and design, which costs have not been material to date,~~for any other sites because the extent of contamination, required source control work, and the Company’s responsibility for the contamination and source control work, in each case if any, have not yet been determined. In addition, pursuant to its insurance policies, the Company is being reimbursed for the costs it incurs for required source control evaluation and remediation work. As of each of May 31, 2022 and August 31, 2021, the Company had an insurance receivable in the same amount as the environmental reserve for such source control work.

Table of Contents

SCHNITZER STEEL INDUSTRIES, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Other Legacy Environmental Loss Contingencies

The Company’s environmental loss contingencies as of ~~February 28,~~May 31, 2022 and August 31, 2021,, other than Portland Harbor, include actual or possible investigation and remediation costs from historical contamination at sites currently or formerly owned or formerly operated by the Company or at other sites where the Company may have responsibility for such costs due to past disposal or other activities (“legacy environmental loss contingencies”). These legacy environmental loss contingencies relate to the potential remediation of waterways and soil and groundwater contamination and may also involve natural resource damages, governmental fines and penalties, and claims by third parties for personal injury and property damage. The Company has been notified that it is or may be a potentially responsible party at certain of these sites, and investigation and remediation activities are ongoing or may be required in the future. The Company recognizes a liability for such matters when the loss is probable and can be reasonably estimated. When investigation, allocation, and remediation activities are ongoing or where the Company has not yet been identified as having responsibility or the contamination has not yet been identified, it is reasonably possible that the Company may need to recognize additional liabilities in connection with such sites but the Company cannot currently reasonably estimate the possible loss or range of loss absent additional information or developments. Such additional liabilities, individually or in the aggregate, may have a material adverse effect on the Company’s results of operations, financial condition, or cash flows.

~~Table of Contents~~

~~SCHNITZER STEEL INDUSTRIES, INC.~~

~~NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

In fiscal 2018, the Company accrued an initial $4$4 million for the estimated costs related to remediation of shredder residue disposed of in or around the 1970s at third-party sites located near each other. Investigation activities have been conducted under oversight of the applicable state regulatory agency. As of both ~~February 28,~~May 31, 2022 and August 31, 2021,, the Company had $4$4 million accrued for this matter. It is reasonably possible that the Company may recognize additional liabilities in connection with this matter at the time such losses are probable and can be reasonably estimated. The Company previously estimated a range of reasonably possible losses related to this matter in excess of current accruals at between 0 and ~~$28~~$28 million based on a range of remedial alternatives and subject to development and approval by regulators of specific remedy implementation plans. However, subsequent to the development of those remedial alternatives, the Company performed additional investigative activities under new state requirements that ~~have the potential~~are likely to impact the required remedial actions and associated cost estimates, ~~pending~~but the scope of such impacts and the amount or the range of the additional associated costs are not reasonably estimable at this time and are subject to further investigation, analysis, and discussion by the Company and regulators. The Company is investigating whether a portion or all of the current and future losses related to this matter, if incurred, are covered by existing insurance coverage or may be offset by contributions from other responsible parties.

In addition, the Company’s loss contingencies as of ~~February 28,~~May 31, 2022 and August 31, 2021 included $8$8 million and ~~$19~~$19 million, respectively, for the estimated costs related to environmental matters in connection with a closed facility owned and previously operated by an indirect, wholly-owned subsidiary, including monitoring and remediation of soil and groundwater conditions and funding for wellhead treatment facilities. In the ~~second quarter~~first nine months of fiscal 2022, the Company accrued $3$3 million for certain soil remediation activities based on additional information related to estimated costs to complete. Investigation and remediation activities have been conducted under the oversight of the applicable state regulatory agency and are on-going, and the Company’s subsidiary has also been working with state and local officials with respect to the protection of public and private water supplies. As part of its activities relating to the protection of public water supplies, the Company’s subsidiary agreed to reimburse the municipality for certain studies and plans and to provide funding for the construction and operation by the municipality of wellhead treatment facilities, which agreement resulted in payment by the Company to the municipality of ~~$11~~$11 million in the second quarter of fiscal 2022. It is reasonably possible that the Company may recognize additional liabilities in connection with this matter at the time such additional losses are probable and can be reasonably estimated. However, the Company cannot reasonably estimate at this time the possible additional loss or range of possible additional losses associated with this matter pending the on-going implementation of the approved remediation plan for soil and groundwater conditions and completion and operation of the wellhead treatment facilities.

In addition, the Company’s loss contingencies as of both ~~February 28,~~May 31, 2022 and August 31, 2021 included ~~included~~ $8 million for the estimated costs related to remediation of a site a portion of which was previously leased to and operated by an indirect, wholly-owned subsidiary. In connection with settlement of a lawsuit relating to allocation of the remediation costs, the Company’s subsidiary agreed to perform the remedial action related to metals contamination on the site estimated to cost approximately ~~$7.9~~$7.9 million, and another potentially liable party agreed to perform the remedial action related to creosote contamination at the site. As part of the settlement, other potentially liable parties agreed to make payments totaling approximately ~~$7.6~~$7.6 million to fund the remediation of the metals contamination at the site in exchange for a release and indemnity. This amount was fully funded into a client trust account for the Company’s subsidiary in December 2020. See “Other Assets” in Note 1 - Summary of Significant Accounting Policies for further discussion of this client trust account. It is reasonably possible that the Company may recognize additional liabilities in connection with this matter at the time such additional losses are probable and can be reasonably estimated. However, the Company cannot reasonably estimate at this time the possible additional loss or range of possible additional losses associated with this matter pending completion, approval, and implementation of the remediation action plan.

Table of Contents

SCHNITZER STEEL INDUSTRIES, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Summary - Environmental Contingencies

With respect to environmental contingencies other than the Portland Harbor Superfund site and the Other Legacy Environmental Loss Contingencies, which are discussed separately above, management currently believes that adequate provision has been made for the potential impact of its environmental contingencies. Historically, the amounts the Company has ultimately paid for such remediation activities have not been material in any given period, but there can be no assurance that such amounts paid will not be material in the future.

Contingencies – Other

In addition to legal proceedings relating to the contingencies described above, the Company is a party to various legal proceedings arising in the normal course of business. The Company recognizes a liability for such matters when the loss is probable and can be reasonably estimated. The Company does not anticipate that the liabilities arising from such legal proceedings in the normal course of business, after taking into consideration expected insurance recoveries, will have a material adverse effect on its results of operations, financial condition, or cash flows.

~~Table of Contents~~

~~SCHNITZER STEEL INDUSTRIES, INC.~~

~~NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

Note 6 - Accumulated Other Comprehensive Loss

Changes in accumulated other comprehensive loss, net of tax, comprise the following (in thousands):

	Three Months Ended February 28, 2022									Three Months Ended February 28, 2021
	Foreign Currency Translation Adjustments			Pension Obligations, Net			Total			Foreign Currency Translation Adjustments			Pension Obligations, Net			Total			Three Months Ended May 31, 2022									Three Months Ended May 31, 2021
Balances - December 1 (Beginning of period)	$	(32,724	)	$	(2,555	)	$	(35,279	)	$	(33,945	)	$	(2,947	)	$	(36,892	)
																			Foreign Currency Translation Adjustments			Pension Obligations, Net			Total			Foreign Currency Translation Adjustments			Pension Obligations, Net			Total
Balances - March 1 (Beginning of period)																			$	(32,002	)	$	(2,436	)	$	(34,438	)	$	(32,373	)	$	(2,909	)	$	(35,282	)
Other comprehensive income before reclassifications		722			0			722			1,572			0			1,572			153			0			153			4,514			0			4,514
Income tax (expense)		0			0			0			0			0			0			0			0			0			0			0			0
Other comprehensive income before reclassifications, net of tax		722			0			722			1,572			0			1,572			153			0			153			4,514			0			4,514
Amounts reclassified from accumulated other comprehensive loss		0			154			154			0			49			49			0			52			52			0			49			49
Income tax (benefit)		0			(35	)		(35	)		0			(11	)		(11	)		0			(12	)		(12	)		0			(12	)		(12	)
Amounts reclassified from accumulated other comprehensive loss, net of tax		0			119			119			0			38			38			0			40			40			0			37			37
Net periodic other comprehensive income		722			119			841			1,572			38			1,610			153			40			193			4,514			37			4,551
Balances - February 28 (End of period)	$	(32,002	)	$	(2,436	)	$	(34,438	)	$	(32,373	)	$	(2,909	)	$	(35,282	)
Balances - May 31 (End of period)																			$	(31,849	)	$	(2,396	)	$	(34,245	)	$	(27,859	)	$	(2,872	)	$	(30,731	)


	Nine Months Ended May 31, 2022									Nine Months Ended May 31, 2021
	Foreign Currency Translation Adjustments			Pension Obligations, Net			Total			Foreign Currency Translation Adjustments			Pension Obligations, Net			Total
Balances - September 1 (Beginning of period)	$	(31,609	)	$	(2,945	)	$	(34,554	)	$	(34,184	)	$	(2,687	)	$	(36,871	)
Other comprehensive (loss) income before reclassifications		(240	)		451			211			6,325			(385	)		5,940
Income tax (expense) benefit		0			(101	)		(101	)		0			87			87
Other comprehensive (loss) income before reclassifications, net of tax		(240	)		350			110			6,325			(298	)		6,027
Amounts reclassified from accumulated other comprehensive loss		0			257			257			0			147			147
Income tax (benefit)		0			(58	)		(58	)		0			(34	)		(34	)
Amounts reclassified from accumulated other comprehensive loss, net of tax		0			199			199			0			113			113
Net periodic other comprehensive (loss) income		(240	)		549			309			6,325			(185	)		6,140
Balances - May 31 (End of period)	$	(31,849	)	$	(2,396	)	$	(34,245	)	$	(27,859	)	$	(2,872	)	$	(30,731	)

Six Months Ended February 28, 2022

Six Months Ended February 28, 2021

Foreign
Currency
Translation
Adjustments

Pension
Obligations,
Net

Total

Foreign
Currency
Translation
Adjustments

Pension
Obligations,
Net

Total

Balances - September 1 (Beginning of period)

$
(31,609
)

$
(2,945
)

$
(34,554
)

$
(34,184
)

$
(2,687
)

$
(36,871
)
Other comprehensive (loss) income before reclassifications

(393
)

451

58

1,811

(385
)

1,426

Income tax (expense) benefit

0

(101
)

(101
)

0

87

87

Other comprehensive (loss) income before reclassifications, net of tax

(393
)

350

(43
)

1,811

(298
)

1,513

Amounts reclassified from accumulated other comprehensive loss

0

205

205

0

98

98

Income tax (benefit)

0

(46
)

(46
)

0

(22
)

(22
)
Amounts reclassified from accumulated other comprehensive loss, net of tax

0

159

159

0

76

76

Net periodic other comprehensive (loss) income

(393
)

509

116

1,811

(222
)

1,589

Balances - February 28 (End of period)

$
(32,002
)

$
(2,436
)

$
(34,438
)

$
(32,373
)

$
(2,909
)

$
(35,282
)

Table of Contents

SCHNITZER STEEL INDUSTRIES, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Reclassifications from accumulated other comprehensive loss to earnings, both individually and in the aggregate, were not material to the impacted captions in the Unaudited Condensed Consolidated Statements of Income in all periods presented.

~~Table of Contents~~

~~SCHNITZER STEEL INDUSTRIES, INC.~~

~~NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

Note 7 - Revenue

Disaggregation of Revenues

The table below illustrates the Company’s revenues disaggregated by major product and sales destination (in thousands):


	Three Months Ended May 31,				Nine Months Ended May 31,
	2022		2021		2022		2021
Major product information:
Ferrous revenues	$	530,303	$	448,684	$	1,434,473	$	1,023,569
Nonferrous revenues		272,208		204,512		662,779		471,543
Steel revenues(1)		165,210		129,057		384,644		316,662
Retail and other revenues		42,366		38,465		109,507		101,162
Total revenues	$	1,010,087	$	820,718	$	2,591,403	$	1,912,936
Revenues based on sales destination:
Foreign	$	533,087	$	466,739	$	1,439,731	$	1,067,335
Domestic		477,000		353,979		1,151,672		845,601
Total revenues	$	1,010,087	$	820,718	$	2,591,403	$	1,912,936

Three Months Ended February 28,

Six Months Ended February 28,

2022

2021

2022

2021

Major product information:

Ferrous revenues

$
438,314

$
322,679

$
904,170

$
574,885

Nonferrous revenues

196,142

147,322

390,571

267,031

Steel revenues⁽¹⁾

116,196

99,191

219,434

187,605

Retail and other revenues

32,546

30,919

67,141

62,697

Total revenues

$
783,198

$
600,111

$
1,581,316

$
1,092,218

Revenues based on sales destination:

Foreign

$
435,471

$
332,197

$
906,644

$
600,596

Domestic

347,727

267,914

674,672

491,622

Total revenues

$
783,198

$
600,111

$
1,581,316

$
1,092,218

(1)

Steel revenues include predominantly sales of finished steel products, in addition to sales of semi-finished goods (billets) and steel manufacturing scrap.

~~(1)~~

~~Steel revenues include predominantly sales of finished steel products, in addition to sales of semi-finished goods (billets) and steel manufacturing scrap.~~

Receivables from Contracts with Customers

The revenue accounting standard defines a receivable as an entity’s right to consideration that is unconditional, meaning that only the passage of time is required before payment is due. As of ~~February 28,~~May 31, 2022 and August 31, 2021, receivables from contracts with customers, net of an allowance for credit losses, totaled ~~$276~~$278 million and ~~$210~~$210 million, respectively, representing 98% of total accounts receivable reported on the Unaudited Condensed Consolidated Balance Sheets at each reporting date.

Contract Liabilities

Contract consideration received from a customer prior to revenue recognition is recorded as a contract liability and is recognized as revenue when the Company satisfies the related performance obligation under the terms of the contract. The Company’s contract liabilities, which consist almost entirely of customer deposits for recycled metal and finished steel sales contracts, are reported within accounts payable in the Unaudited Condensed Consolidated Balance Sheets and totaled ~~$11~~$10 million and $8$8 million as of ~~February 28,~~May 31, 2022 and August 31, 2021, respectively. Unsatisfied performance obligations reflected in these contract liabilities relate to contracts with original expected durations of one year or less and, therefore, are not disclosed. During the three and ~~six~~nine months ended ~~February 28,~~May 31, 2022, the Company reclassified less than $1$1 million and $7$7 million, respectively, in contract liabilities as of August 31, 2021 to revenues as a result of satisfying performance obligations during the period. During the three and ~~six~~nine months ended ~~February 28,~~May 31, 2021, the Company reclassified $1less than $1 million and $6 $7million, respectively, in contract liabilities as of August 31, 2020 to revenues as a result of satisfying performance obligations during the period.

Note 10 - Net Income Per Share

The following table sets forth the information used to compute basic and diluted net income per share attributable to SSI shareholders (in thousands):


	Three Months Ended February 28,						Six Months Ended February 28,						Three Months Ended May 31,						Nine Months Ended May 31,
	2022			2021			2022			2021			2022			2021			2022			2021
Income from continuing operations	$	38,136		$	45,649		$	85,441		$	60,755		$	75,550		$	65,482		$	160,991		$	126,237
Net income attributable to noncontrolling interests		(550	)		(1,091	)		(1,627	)		(2,051	)		(870	)		(1,801	)		(2,497	)		(3,852	)
Income from continuing operations attributable to SSI shareholders		37,586			44,558			83,814			58,704		$	74,680		$	63,681		$	158,494		$	122,385
Income (loss) from discontinued operations, net of tax		29			30			—			(12	)
(Loss) income from discontinued operations, net of tax														(46	)		(46	)		(46	)		(58	)
Net income attributable to SSI shareholders	$	37,615		$	44,588		$	83,814		$	58,692		$	74,634		$	63,635		$	158,448		$	122,327
Computation of shares:
Weighted average common shares outstanding, basic		28,231			27,991			28,195			27,899			28,143			28,047			28,161			27,948
Incremental common shares attributable to dilutive performance share awards, restricted stock units and deferred stock units		1,481			871			1,603			774			1,482			1,496			1,580			1,015
Weighted average common shares outstanding, diluted		29,712			28,862			29,798			28,673			29,625			29,543			29,741			28,963

Common stock equivalent shares of ~~311,736~~47,095 and ~~199,786~~172,288 were considered antidilutive and were excluded from the calculation of diluted net income per share for the three and ~~six~~nine months ended ~~February 28,~~May 31, 2022, respectively. NaN common stock equivalent shares were considered antidilutive for the three and nine months ended February 28, 2021, while 103,566 common stock equivalent shares were considered antidilutive and were excluded from the calculation of diluted net income per share for the six months ended February 28,May 31, 2021.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This section includes a discussion of our operations for the three and ~~six~~nine months ended ~~February 28,~~May 31, 2022 and 2021. The following discussion and analysis provide information which management believes is relevant to an assessment and understanding of our financial condition and results of operations. The discussion should be read in conjunction with our Annual Report on Form 10-K for the year ended August 31, 2021, and the Unaudited Condensed Consolidated Financial Statements and the related Notes thereto included in Part I, Item 1 of this report.

Founded in 1906, Schnitzer Steel Industries, Inc. is one of North America’s largest recyclers of ferrous and nonferrous metal, including end-of-life vehicles,, and a manufacturer of finished steel products. As a vertically integrated organization, we offer a range of products and services to meet global demand through our network that includes 50 retail self-service auto parts stores, 5254 metals recycling facilities, and an electric arc furnace (“EAF”) steel mill.

We sell recycled ferrous and nonferrous metal in both foreign and domestic markets. We also sell a range of finished steel long products produced at our steel mill. We acquire, process, and recycle end-of-life (salvaged) vehicles, rail cars, home appliances, industrial machinery, manufacturing scrap, and construction and demolition scrap through our facilities. Our retail self-service auto parts stores located across the United States (“U.S.”) and Western Canada, which operate under the commercial brand-name Pick-n-Pull, procure the significant majority of our salvaged vehicles and sell serviceable used auto parts from these vehicles. Upon acquiring a salvaged vehicle, we remove catalytic converters, aluminum wheels, and batteries for separate processing and sale prior to placing the vehicle in our retail lot. After retail customers have removed desired parts from a vehicle, we may remove remaining major component parts containing ferrous and nonferrous metals, which are primarily sold to wholesalers. The remaining auto bodies are crushed and shipped to our metals recycling facilities to be shredded or sold to third parties when geographically more economical. At our metals recycling facilities, we process mixed and large pieces of scrap metal into smaller pieces by crushing, torching, shearing, shredding, separating, and sorting, resulting in recycled ferrous, nonferrous, and mixed metal pieces of a size, density, and metal content required by customers to meet their production needs. Each of our shredding, nonferrous processing, and separation systems is designed to optimize the recovery of valuable recycled metal. We also purchase nonferrous metal directly from industrial vendors and other suppliers and aggregate and prepare this metal for shipment to customers by ship, rail, or truck. In addition to the sale of recycled metal processed at our facilities, we also provide a variety of recycling and related services including brokering the sale of ferrous and nonferrous scrap metal generated by industrial entities and demolition projects to customers in the domestic market, among other services. Our steel mill produces semi-finished goods (billets) and finished goods, consisting of rebar, coiled rebar, wire rod, merchant bar, and other specialty products, using recycled ferrous metal sourced internally from our recycling and joint venture operations and other raw materials.

We operate seven deepwater port locations, six of which are equipped with large-scale shredders. Our deepwater port facilities on both the East and West Coasts of the U.S. (in Everett, Massachusetts; Providence, Rhode Island; Oakland, California; Tacoma, Washington; and Portland, Oregon) and access to public deepwater port facilities (in Kapolei, Hawaii and Salinas, Puerto Rico) allow us to meet the global demand for recycled ferrous metal by enabling us to ship bulk cargoes to steel manufacturers located in Europe, Africa, the Middle East, Asia, North America, Central America, and South America. Our exports of nonferrous recycled metal are shipped in containers through various public docks to specialty steelmakers, foundries, aluminum sheet and ingot manufacturers, copper refineries and smelters, brass and bronze ingot manufacturers, wire and cable producers, wholesalers, and other recycled metal processors globally. We also transport both ferrous and nonferrous metals by truck, rail, and barge in order to transfer scrap metal between our facilities for further processing, to load shipments at our export facilities, and to meet regional domestic demand.

Our results of operations depend in large part on the demand and prices for recycled metal in foreign and domestic markets and on the supply of raw materials, including end-of-life vehicles, available to be processed at our facilities. Our results of operations also depend substantially on our operating leverage from processing and selling higher volumes of recycled metal as well as our ability to efficiently extract ferrous and nonferrous metals from the shredding process. We respond to changes in selling prices for processed metal by seeking to adjust purchase prices for unprocessed scrap metal in order to manage the impact on our operating results. We believe we generally benefit from sustained periods of stable or rising recycled metal selling prices, which allow us to better maintain or increase both operating results and unprocessed scrap metal flow into our facilities. When recycled metal selling prices decline, either sharply or for a sustained period, our operating margins typically compress. With respect to finished steel products produced at our steel mill, our results of operations are impacted by demand and prices for these products, which are sold to customers located primarily in the Western U.S. and Western Canada.

Our quarterly operating results fluctuate based on a variety of factors including, but not limited to, changes in market conditions for recycled ferrous and nonferrous metal and finished steel products, the supply of scrap metal in our domestic markets, varying demand for used auto parts from our self-service retail stores, the efficiency of our supply chain, and variations in production and other operating costs. Certain of these factors are influenced, to a degree, by the impact of seasonal changes including severe weather conditions, which can impact the timing of shipments and inhibit construction activity utilizing our products, scrap metal collection and production levels at our facilities, and retail admissions and parts sales at our auto parts stores. Further, sanctions, trade actions, and licensing, product quality, and inspection requirements can impact the level of profitability on sales of our products and, in certain cases, impede or restrict our ability to sell to certain export markets or require us to direct our sales to alternative market destinations, which can cause our quarterly operating results to fluctuate.

We continue to monitor the impact of COVID-19 on all aspects of our business. We are a company operating in a critical infrastructure industry, as defined by the U.S. Department of Homeland Security. Consistent with federal guidelines and with state and local orders to date, we have continued to operate across our footprint throughout the COVID-19 pandemic. Ensuring the health and safety of our employees, and all who visit our sites, is our top priority, and we are following all U.S. Centers for Disease Control and Prevention and state and local health department guidelines. Following the onset of COVID-19 and its negative effects on our business, most prominently reflected in our fiscal 2020 results, global economic conditions improved during fiscal 2021, resulting in increased demand for our products. Beginning in our second quarter of fiscal 2021 and continuing through the ~~second~~third quarter of fiscal 2022, there has been a trend in many parts of the world of increasing availability and administration of vaccines against COVID-19, as well as an easing of restrictions on individual, business, and government activities. The existence of new or enduring variant strains of COVID-19 may lead to a rise in infections, which could cause delays in the easing of restrictions previously in place and the implementation of new restrictions and mandates, and there are ongoing global impacts resulting directly or indirectly from the pandemic including labor shortages, logistical challenges such as increased port congestion, and increases in costs for certain goods and services, which have negatively impacted our sales volumes and operating results to varying degrees. While the ongoing effects of the COVID-19 pandemic could negatively impact our results of operations, cash flows, and financial position, the current level of uncertainty over the economic and operational impacts of COVID-19 means the related financial impact cannot be reasonably estimated at this time.

On May 22, 2021, we experienced a fire at our steel mill in McMinnville, Oregon. Direct physical loss or damage to property from the incident was limited to the mill’s melt shop, with no bodily injuries and no physical loss or damage to other buildings or equipment. As a result of the fire, the rolling mill production ceased in early June 2021. In August 2021, the steel mill began ramping up operations following the substantial completion of replacement and repairs of property and equipment in the melt shop that had been lost or damaged by the fire. We experienced the loss of business income during the shutdown of the steel mill and the subsequent ramp-up phase which was substantially completed during the second quarter of fiscal 2022. We have insurance that we believe is fully applicable to the losses and have filed initial insurance claims, which are subject to deductibles and various conditions, exclusions, and limits, for the property that experienced physical loss or damage and business income losses resulting from the matter. The property damage deductible under the policies insuring the Company’s assets in this matter is $1 million, while the deductible for lost business income is 10 times the Average Daily Gross Earnings which would have been earned had no interruption occurred, calculated subject to judgments and uncertainties. As of August 31, 2021, prepaid expenses and other current assets in the Unaudited Condensed Consolidated Balance Sheets included an initial $10 million insurance receivable recognized in the fourth quarter of fiscal 2021, primarily offsetting applicable losses including capital purchases of $10 million that we had incurred as of August 31, 2021. In the first ~~half~~nine months of fiscal 2022, we increased the amount of this insurance receivable to $25 million and recognized a related $15 million insurance recovery gain, $3 million recorded in the first quarter and $12 million recorded in the second quarter, within cost of goods sold in the Unaudited Condensed Consolidated Statements of Income, , reflecting recovery of applicable losses incurred as a result of the fire to date. In addition, during the first ~~half~~nine months of fiscal 2022, we received advance payments from insurers totaling approximately $30 million towards our claims, and not reflecting any final or full settlement of claims with the insurers, which amount reduced the $25 million insurance receivable to zero with the remaining amount of advance payments of $5 million reported within other accrued liabilities in the Unaudited Condensed Consolidated Balance Sheets as of ~~February 28,~~May 31, 2022. These amounts do not reflect potential additional recoveries of business income losses resulting from this matter that may be recognized in the future when settlements of the business interruption claims are resolved.

On December 8, 2021, we experienced a fire at our metals recycling facility in Everett, Massachusetts. Direct physical loss or damage to property from the incident was limited to the facility’s shredder building and equipment, with no bodily injuries and no physical loss or damage to property reported at other buildings or equipment. As a result of the fire, shredding operations ceased, while all non-shredding operations at the facility continued, including torching, shearing, separating, and sorting purchased non-shreddable recycled ferrous metals. On January 28, 2022, shredding operations at the facility began ramping up following the replacement and repairs to shredder equipment that had been damaged. Completion of the remainder of repair and replacement of property that experienced physical loss or damage, primarily buildings and improvements, will occur over a ~~long~~erlonger period and impacts on business income may ~~continue~~.continue. For example, as of June 18, 2022, shredder operations temporarily ceased at the facility pending completion of discussions with the Massachusetts Department of Environmental Protection and the Massachusetts Attorney General's office regarding installation and operation of temporary emission capture and controls that would allow operation of the shredder prior to completion of the repair and replacement of the shredder enclosure building. Non-shredding operations at the facility continue. We have insurance that we believe is fully applicable to the losses, including but not limited to the costs of installing the temporary capture and controls system and any associated loss of business income, and have filed initial insurance claims, which are subject to deductibles and various conditions, exclusions, and limits, for the property damage or loss and business income losses resulting from the matter. The property damage deductible under the policies insuring our assets in this matter is $0.5 million, while the deductible for lost business income is 10 times the Average Daily Gross Earnings which would have been earned had no interruption occurred, calculated subject to judgments and uncertainties. The insurance claims resolution process may extend significantly beyond completion of repair and replacement of the physical plant property that experienced physical loss or damage and the restart of production activities. In the second quarter of fiscal 2022, we recognized an initial $10 million insurance receivable and related insurance recovery gain, reported within prepaid expenses and other current assets in the Unaudited Condensed Consolidated Balance Sheets and within cost of goods sold in the Unaudited Condensed Consolidated Statements of Income, respectively, reflecting recovery of applicable losses including impairment charges of $6 million related to the carrying value of plant and equipment assets damaged by the fire and initial capital purchases and other costs totaling $4 million that we had incurred as of February 28, 2022. In the third quarter of fiscal 2022, we increased the amount of this insurance receivable to $11 million and recognized a related $1 million insurance recovery gain, reflecting recovery of applicable losses incurred as a result of the fire to date. Also in the third quarter of fiscal 2022, we received advance payments from insurers totaling approximately $7 million towards our claims, and not reflecting any final or full settlement of claims with the insurers, which amount reduced the insurance receivable to $4 million as of May 31, 2022. These amounts do not reflect potential additional recoveries of costs for the repair and replacement of property that experienced physical loss or damage or of business income losses resulting from this matter that may be recognized in the future when settlements of the claims are resolved.

In this management’s discussion and analysis, we use supplemental measures of our performance, liquidity, and capital structure which are derived from our consolidated financial information, but which are not presented in our consolidated financial statements prepared in accordance with GAAP. We believe that providing these non-GAAP financial measures adds a meaningful presentation of our operating and financial performance, liquidity, and capital structure. For example, we use adjusted EBITDA as one of the measures to compare and evaluate financial performance. Adjusted EBITDA is the sum of our net income before results from discontinued operations, interest expense, income taxes, depreciation and amortization, asset impairment charges, business development costs not related to ongoing operations including pre-acquisition expenses, charges related to non-ordinary course legal settlements, charges for legacy environmental matters (net of recoveries), restructuring charges and other exit-related activities, and other items which are not related to underlying business operational performance. See the reconciliations of supplemental financial measures, including adjusted EBITDA, in Non-GAAP Financial Measures at the end of this Item 2.

Our non-GAAP financial measures should be considered in addition to, but not as a substitute for, the most directly comparable GAAP measures. Although we find these non-GAAP financial measures useful in evaluating the performance of our business, our reliance on these measures is limited because they often materially differ from our consolidated financial statements presented in accordance with GAAP. Therefore, we typically use these adjusted amounts in conjunction with our GAAP results to address these limitations. Our non-GAAP financial measures may not be comparable to similarly titled measures of other companies. Other companies, including companies in our industry, may calculate non-GAAP financial measures differently than we do, limiting the usefulness of those measures for comparative purposes.

Financial Highlights of Results of Operations for the ~~Second~~Third Quarter of Fiscal 2022

Market demand for recycled metals was strong in the ~~second~~third quarter of fiscal 2022, leading to significantly higher average net selling prices ~~and increased sales volumes~~ for our ferrous and nonferrous ~~products compared to the prior year quarter.~~products. In the ~~second~~third quarter of fiscal 2022, the average net selling prices for our ferrous and nonferrous products increased by ~~15%~~35% and ~~33%, respectively, and sales volumes for these products increased by 10% and 8%~~15%, respectively, compared to the prior year quarter. ~~The~~Sales volumes for our nonferrous products in the third quarter of fiscal 2022 increased by 29% compared to the prior year quarter, while quarterly sales volumes for our ferrous products decreased by 7% year-over-year primarily due to the impact of slower export demand in the second half of the third quarter of fiscal 2022, which resulted in delays in contracting and shipping bulk cargoes. Our ferrous and nonferrous sales volumes in ~~part reflected~~the third quarter of fiscal 2022 included additional volumes arising from the Columbus Recycling business acquired on October 1, ~~2021.~~2021 and the Encore Recycling business acquired on April 29, 2022. Market demand for our finished steel products also improved in the ~~second~~third quarter of fiscal 2022, which contributed to finished steel average selling prices increasing by ~~51%~~41% compared to the prior year quarter. Finished steel sales volumes, however, were ~~22%~~12% lower in the ~~second~~third quarter of fiscal 2022 compared to the prior year quarter in part due to the impact of supply chain disruptions on current quarter volumes, including logistics constraints and delays to construction projects related to a four-month concrete industry strike in the Pacific ~~Northwest.~~Northwest that ended in April 2022. Our results for the ~~second~~third quarter of fiscal 2022 reflected benefits from the higher price environment for most of our products including a significant expansion in our ferrous and finished steel spreads and increased ~~ferrous and~~ nonferrous sales volumes driven by strong demand compared to the prior year ~~quarter, as well as recognition of insurance recoveries.~~quarter. Our results in the ~~second~~third quarter of fiscal 2022 also reflected ~~the impact of compressed metal spreads on contracted ferrous sales for February shipments due to~~ a ~~surge in market prices in the second half of the quarter, a less favorable impact~~lower benefit from average inventory accounting compared to the prior year quarter, ~~and~~ the effects of ongoing supply chain disruptions, lower year-over-year platinum group metals (PGM) prices, and the impact of inflation. Contributions from recent acquisitions and productivity initiatives helped to partially offset the effects of inflationary pressure on operating ~~costs, and the adverse impact of the Everett shredder downtime.~~costs.

Selling, general, and administrative expense in the ~~second~~third quarter of fiscal 2022 increased by ~~13%~~26% compared to the prior year quarter primarily due to higher ~~legacy environmental charges, employee salary and wage expenses, and outside and professional services~~employee-related expenses, including from ~~higher costs resulting from our acquisition and other growth-related activities,~~ increased competition for employees in a tight labor market and higher incentive compensation accruals aligned with business performance, increased outside and professional services and travel expenses, including from higher costs resulting from our acquisitions and other growth-related initiatives, as well as the ~~impacts~~impact of ~~inflation. These higher expenses in the second quarter of fiscal 2022 were~~inflation partially offset by ~~lower accruals in connection with our annual incentive compensation plans compared to the prior year quarter.~~benefits from productivity initiatives.

The following items further highlight selected liquidity and capital structure metrics:

See the reconciliations of adjusted diluted earnings per share from continuing operations attributable to SSI shareholders, adjusted EBITDA, and debt, net of cash in Non-GAAP Financial Measures at the end of this Item 2.


	Three Months Ended February 28,									Six Months Ended February 28,									Three Months Ended May 31,									Nine Months Ended May 31,
($ in thousands, except for prices and per share amounts)	2022			2021			%			2022			2021			%			2022			2021			%			2022			2021			%
Ferrous revenues	$	438,314		$	322,679			36	%	$	904,170		$	574,885			57	%	$	530,303		$	448,684			18	%	$	1,434,473		$	1,023,569			40	%
Nonferrous revenues		196,142			147,322			33	%		390,571			267,031			46	%		272,208			204,512			33	%		662,779			471,543			41	%
Steel revenues⁽¹⁾		116,196			99,191			17	%		219,434			187,605			17	%
Steel revenues(1)																				165,210			129,057			28	%		384,644			316,662			21	%
Retail and other revenues		32,546			30,919			5	%		67,141			62,697			7	%		42,366			38,465			10	%		109,507			101,162			8	%
Total revenues		783,198			600,111			31	%		1,581,316			1,092,218			45	%		1,010,087			820,718			23	%		2,591,403			1,912,936			35	%
Cost of goods sold		670,539			487,025			38	%		1,353,783			907,119			49	%		834,375			678,297			23	%		2,188,158			1,585,416			38	%
Gross margin (total revenues less cost of goods sold)	$	112,659		$	113,086			(—	)%	$	227,533		$	185,099			23	%	$	175,712		$	142,421			23	%	$	403,245		$	327,520			23	%
Gross margin (%)		14.4	%		18.8	%		(23	)%		14.4	%		16.9	%		(15	)%		17.4	%		17.4	%		(—	)%		15.6	%		17.1	%		(9	)%
Selling, general and administrative expense	$	61,081		$	54,142			13	%	$	116,348		$	104,048			12	%	$	77,672		$	61,887			26	%	$	194,020		$	165,935			17	%
Diluted earnings per share from continuing operations attributable to SSI shareholders:
Reported	$	1.27		$	1.54			(18	)%	$	2.81		$	2.05			37	%	$	2.52		$	2.16			17	%	$	5.33		$	4.23			26	%
Adjusted⁽²⁾	$	1.38		$	1.51			(9	)%	$	2.96		$	2.09			42	%
Adjusted(2)																			$	2.59		$	2.20			18	%	$	5.54		$	4.31			29	%
Net income	$	38,165		$	45,679			(16	)%	$	85,441		$	60,743			41	%	$	75,504		$	65,436			15	%	$	160,945		$	126,179			28	%
Adjusted EBITDA⁽²⁾	$	75,259		$	71,411			5	%	$	153,345		$	111,666			37	%
Average ferrous recycled metal sales prices ($/LT)⁽³⁾:
Adjusted EBITDA(2)																			$	119,090		$	97,254			22	%	$	272,435		$	208,920			30	%
Average ferrous recycled metal sales prices ($/LT)(3):
Domestic	$	418		$	349			20	%	$	424		$	297			43	%	$	516		$	395			31	%	$	458		$	332			38	%
Foreign	$	455		$	399			14	%	$	452		$	334			35	%	$	552		$	401			38	%	$	484		$	360			34	%
Average	$	445		$	387			15	%	$	446		$	326			37	%	$	541		$	400			35	%	$	477		$	354			35	%
Ferrous volumes (LT, in thousands):
Domestic⁽⁴⁾		408			391			4	%		839			779			8	%
Domestic(4)																				490			412			19	%		1,329			1,191			12	%
Foreign		663			586			13	%		1,381			1,251			10	%		639			803			(20	)%		2,020			2,054			(2	)%
Total ferrous volumes (LT, in thousands)⁽⁴⁾⁽⁸⁾		1,071			977			10	%		2,219			2,030			9	%
Average nonferrous sales price ($/pound)⁽³⁾⁽⁵⁾	$	1.10		$	0.83			33	%	$	1.08		$	0.74			46	%
Nonferrous volumes (pounds, in thousands)⁽⁴⁾⁽⁵⁾		147,145			135,899			8	%		300,373			274,135			10	%
Finished steel average sales price ($/ST)⁽³⁾	$	1,045		$	690			51	%	$	1,013		$	656			54	%
Total ferrous volumes (LT, in thousands)(4)(8)																				1,129			1,215			(7	)%		3,349			3,245			3	%
Average nonferrous sales price ($/pound)(3)(5)																			$	1.12		$	0.97			15	%	$	1.10		$	0.82			34	%
Nonferrous volumes (pounds, in thousands)(4)(5)																				201,413			155,657			29	%		501,785			429,792			17	%
Finished steel average sales price ($/ST)(3)																			$	1,129		$	802			41	%	$	1,059		$	709			49	%
Finished steel sales volumes (ST, in thousands)		106			136			(22	)%		205			270			(24	)%	135				153			(12	)%		340			423			(20	)%
Cars purchased (in thousands)⁽⁶⁾		73			80			(9	)%		153			158			(3	)%
Cars purchased (in thousands)(6)																			84				91			(8	)%		237			249			(5	)%
Number of auto parts stores at period end		50			50			(—	)%		50			50			(—	)%	50				50			(—	)%		50			50			(—	)%
Rolling mill utilization⁽⁷⁾		86	%		88	%		(2	)%		82	%		93	%		(12	)%
Rolling mill utilization(7)																				96	%		98	%		(2	)%		87	%		94	%		(7	)%

LT = Long Ton, which is equivalent to 2,240 pounds. ST = Short Ton, which is equivalent to 2,000 pounds.

Revenues in the ~~second~~third quarter and first ~~six~~nine months of fiscal 2022 increased by ~~31%~~23% and ~~45%~~35%, respectively, compared to the same periods in the prior year primarily due to significantly higher average net selling prices ~~and increased sales volumes~~ for our ferrous and nonferrous products driven by strong market demand for recycled metals globally. In each of the ~~second~~third quarter and first ~~six~~nine months of fiscal 2022, the average net selling prices for our ferrous products increased by ~~15% and 37%~~35%, ~~respectively,~~ and the average net selling prices for our nonferrous products increased by ~~33%~~15% and ~~46%~~34%, respectively, compared to the prior year periods. In the ~~second~~third quarter and first ~~six~~nine months of fiscal 2022, ~~ferrous sales volumes increased by 10% and 9%, respectively, and~~ nonferrous sales volumes increased by 8%29% and ~~10%~~17%, respectively, compared to the prior year ~~periods. The expansion~~periods, reflecting strong demand for these products globally. Ferrous sales volumes in ~~recycled metal sales volumes~~the third quarter of fiscal 2022 decreased by 7% compared to the prior year ~~periods reflected strong demand for these products globally, the effects of which were partially offset by~~quarter primarily due to the impact of ~~logistics constraints including ship~~slower export demand in the second half of the third quarter of fiscal 2022, which resulted in delays in contracting and ~~container delays for ferrous and nonferrous sales to customers. The increased~~shipping bulk cargoes. Our ferrous and nonferrous sales volumes in ~~part reflected~~the third quarter and first nine months of fiscal 2022 included additional volumes arising from the Columbus Recycling business acquired on October 1, ~~2021.~~2021 and the Encore Recycling business acquired on April 29, 2022. Finished steel average selling prices were significantly higher in the ~~second~~third quarter and first ~~six~~nine months of fiscal 2022 compared to the prior year periods, reflecting robust market demand for these products. The impact of ~~these~~the higher average selling prices on steel revenues in the ~~second~~third quarter and first ~~six~~nine months of fiscal 2022 was partially offset by lower sales volumes ~~and rolling mill utilization~~ compared to the prior year ~~periods, which~~periods. For the first nine months of fiscal 2022, finished steel sales volumes were lower compared to the same period in the prior year primarily due to the impact of the ramp-up of steel mill operations that began in August 2021 and which was substantially completed during the second quarter, as well as the impact of supply chain disruptions on current volumes, including logistics constraints and delays to construction projects related to a four-month concrete industry strike in the Pacific Northwest ~~experienced~~that ended in ~~the second quarter of fiscal~~April 2022. The ramp-up of steel mill operations followed completion of repair and replacement of damaged property arising from the May 2021 steel mill fire.

Net income in the ~~second~~third quarter and first ~~six~~nine months of fiscal 2022 was ~~$38~~$76 million and ~~$85~~$161 million, respectively, compared to ~~$46~~$65 million and ~~$61~~$126 million in the prior year periods. Adjusted EBITDA in the ~~second~~third quarter and first ~~six~~nine months of fiscal 2022 was ~~$75~~$119 million and ~~$153~~$272 million, respectively, compared to ~~$71~~$97 million and ~~$112~~$209 million, respectively, in the prior year periods. Our results for the ~~second~~third quarter and first nine months of fiscal 2022 reflected benefits from the higher price environment for most of our products and increased ~~ferrous and~~ nonferrous sales volumes supported by strong demand compared to the prior year periods. Ferrous metal spreads in the third quarter ~~as well as recognition~~and first nine months of ~~insurance recoveries.~~fiscal 2022 increased by approximately 45% and 30%, respectively, and average net selling prices for our nonferrous joint products that are recovered from the shredding process, comprising primarily zorba, increased by approximately 15% and 30%, respectively, compared to the prior year periods. The expansion in ferrous metal spreads compared to the prior year periods in part reflected higher spreads on certain ferrous sales contracted prior to a decline in market selling prices that occurred during the latter part of the third quarter of fiscal 2022. Finished steel spreads also expanded significantly in the third quarter and first nine months of fiscal 2022, compared to the prior year periods. Our results in the ~~second~~third quarter and first nine months of fiscal 2022 also reflected the adverse impact of ~~compressed metal spreads on contracted~~lower third quarter ferrous sales ~~for February shipments due to~~volumes year-over-year, a ~~surge in market prices in the second half of the quarter, a less favorable impact~~lower benefit from average inventory accounting compared to the prior year ~~quarter, and~~period, the effects of ongoing supply chain disruptions, lower year-over-year PGM prices, ~~inflationary pressure on operating costs,~~the impact of inflation, and the adverse impact of the Everett shredder ~~downtime. Our results for~~downtime in the first ~~six months~~half of fiscal ~~2022 benefited~~2022. Contributions from ~~a significant expansion in our ferrous metal spreads primarily during~~recent acquisitions and productivity initiatives helped to partially offset the effects of inflationary pressure on operating costs.

In the first quarter of fiscal 2022 and increased finished steel metal margins, greater contributions from sales of nonferrous products, and increased ferrous and nonferrous sales volumes driven by strong demand, compared to the prior year period.

~~In the second quarter and first six~~nine months of fiscal 2022, we recognized insurance recoveries of ~~$12 million and~~ $15 million ~~respectively,~~ in connection with the May 2021 fire at our steel mill in McMinnville, Oregon, reflecting recovery of applicable costs incurred by the mill operations following the incident. In the ~~second~~third quarter and first nine months of fiscal 2022, we also recognized insurance recoveries of ~~$10~~$1 million and $11 million, respectively, in connection with the December 2021 fire at our Everett shredder facility, reflecting recovery of applicable losses including asset impairment charges, initial capital purchases, and other costs incurred in the ~~period.~~periods. These amounts do not reflect potential additional recoveries of business income losses due to the interruptions that may be recognized in the future when settlements of the business interruption claims are resolved.

Selling, general, and administrative expense in the ~~second~~third quarter and first ~~six~~nine months of fiscal 2022 increased by ~~13%~~26% and ~~12%~~17%, respectively, compared to the prior year periods primarily due to higher ~~legacy environmental charges, employee salary and wage expenses, and outside and professional services~~employee-related expenses, including from ~~higher costs resulting from our acquisition and other growth-related activities,~~ increased competition for employees in a tight labor market, and increased outside and professional services and travel expenses, including from higher costs resulting from our acquisitions and other growth-related initiatives, as well as the ~~impacts~~impact of ~~inflation. These higher expenses in the second quarter and first six months of fiscal 2022 were~~inflation partially offset by ~~lower accruals~~benefits from productivity initiatives. Accruals in connection with our annual incentive compensation plans were higher in the third quarter of fiscal 2022, compared to the prior year ~~periods.~~quarter, but lower for the nine-month period year-over-year. We also incurred higher legacy environmental charges during the first nine months of fiscal 2022, compared to the prior year period.

See the reconciliation of adjusted EBITDA in Non-GAAP Financial Measures at the end of this Item 2.

Because of the sharp decline in market selling prices that occurred during the latter part of the third quarter of fiscal 2022, which has continued through the date of this report, we expect our net selling prices for primarily ferrous recycled metal products in the fourth quarter of fiscal 2022 to be lower than the average net selling prices for the third quarter of fiscal 2022. While we aim to respond to changes in selling prices by seeking to adjust purchase prices for unprocessed scrap metal, we may not be able to reduce our purchase prices to fully offset the reduction in selling prices, which may negatively impact our operating margins.

The effective tax rate from continuing operations for the ~~second~~third quarter and first ~~six~~nine months of fiscal 2022 was an expense on pre-tax income of ~~24.0%~~21.0% and ~~21.3%~~21.2%, respectively, compared to ~~20.1%~~18.0% and ~~22.1%~~20.0%, respectively, for the comparable prior year periods. ~~For the second quarter of fiscal 2022, the~~Our effective tax rate from continuing operations ~~was higher than~~for the third quarter and first nine months of fiscal 2022 approximated the U.S. federal statutory rate of 21%, reflecting primarily ~~due to~~ the aggregate impact of state taxes and permanent differences from non-deductible expenses on the projected annual effective tax rate applied to the quarterly ~~results.~~results, offset by discrete tax benefits resulting from vesting of share-based awards in the periods and the favorable effects of other discrete items. Our effective tax rate from continuing operations for the third quarter and first nine months of fiscal 2021 was lower than the U.S. federal statutory rate primarily due to the benefit from the foreign derived intangible income deduction in fiscal 2021 and the impacts of research and development credits and other discrete items.

We rely on cash provided by operating activities as a primary source of liquidity, supplemented by current cash on hand and borrowings under our existing credit facilities.

We had cash balances of ~~$18~~$16 million and $28 million as of ~~February 28,~~May 31, 2022 and August 31, 2021,, respectively. Cash balances are intended to be used primarily for working capital, capital expenditures, dividends, share repurchases, investments, and acquisitions. We use excess cash on hand to reduce amounts outstanding under our credit facilities. As of ~~February 28,~~May 31, 2022, debt was ~~$262~~$322 million compared to $75 million as of August 31, 2021, and debt, net of cash, was ~~$244~~$306 million as of ~~February 28,~~May 31, 2022, compared to $47 million as of August 31, 2021, which increases were primarily due to increased borrowings from our credit facilities to fund the ~~acquisition~~acquisitions of the assets of the Columbus Recycling business on October 1, 2021 and the Encore Recycling business on April 29, 2022, and higher net working capital needs. See the reconciliation of debt, net of cash, in Non-GAAP Financial Measures at the end of this Item 2.

Net cash provided by operating activities in the first ~~six~~nine months of fiscal 2022 was ~~$13~~$58 million, compared to net cash ~~used in~~provided by operating activities of $3$51 million in the first ~~six~~nine months of fiscal 2021.

Sources of cash other than from earnings in the first ~~six~~nine months of fiscal 2022 included a ~~$12~~$45 million increase in accounts payable primarily due to higher raw material purchase prices and the timing of purchases and payments and ~~an $8~~a $9 million increase in other accrued liabilities primarily reflecting the portion of advance payments from insurance carriers received in the period towards our claims arising from the May 2021 steel mill fire deemed attributable to operating activities.income tax accruals. Uses of cash in the first ~~six~~nine months of fiscal 2022 included a ~~$53~~$164 million increase in inventories due to higher raw material purchase costs and the timing of purchases and sales, a ~~$48~~$43 million increase in accounts receivable primarily due to higher selling prices ~~and higher sales volumes~~ for ~~recycled metals,~~most of our products, as well as the timing of sales and collections, a ~~$40~~$17 million decrease in accrued payroll and related liabilities primarily due to the payment of incentive compensation in the first quarter of fiscal 2022 previously accrued under our fiscal 2021 plans, and a ~~$12~~$15 million decrease in environmental liabilities primarily due to payments in connection with legacy environmental matters. The sources and uses of cash related to operating activities described above also reflect higher net working capital needs during the ramp-up of steel mill operations that began in August 2021 following completion of repair and replacement of damaged property arising from the May 2021 steel mill fire.

Sources of cash other than from earnings in the first nine months of fiscal 2021 included a $56 million increase in accounts payable primarily due to higher raw material purchase prices and the timing of payments, a $19 million increase in income tax accruals, and a $14 million increase in accrued payroll and related liabilities primarily due to increased incentive compensation liabilities. Uses of cash in the first ~~six~~nine months of fiscal 2021 included a ~~$90~~$133 million increase in accounts receivable primarily due to increases in selling prices for recycled metals and finished steel and higher sales volumes, as well as the timing of sales and collections, and a $92 million increase in inventories due to higher raw material purchase prices, higher volumes on hand and the timing of purchases and sales, and a $76 million increase in accounts receivable primarily due to increases in selling prices for recycled metals and finished steel as well as the timing of sales and collections. Sources of cash other than from earnings in the first six months of fiscal 2021 included a $45 million increase in accounts payable primarily due to higher raw material purchase prices and the timing of payments, and a $16 million increase in income tax accruals.sales.

Net cash used in investing activities was ~~$172~~$262 million in the first ~~six~~nine months of fiscal 2022, compared to ~~$54~~$76 million in the first ~~six~~nine months of fiscal 2021.

Cash used in investing activities in the first ~~six~~nine months of fiscal 2022 included $114 million paid to acquire the assets of the Columbus Recycling business on October 1, 2021, which amount included $7 million paid at closing for estimated net working capital in excess of an agreed-upon benchmark, and also included $63 million paid to acquire the assets of the Encore Recycling business on April 29, 2022, which amount included $8 million paid at closing for estimated net working capital in excess of an agreed-upon benchmark. We funded ~~the acquisition~~these acquisitions using cash on hand and borrowings under our existing credit facilities. See Note 3 - Business ~~Acquisition~~Acquisitions in the Notes to the Unaudited Condensed Consolidated Financial Statements in Part I, Item 1 of this report for further detail.

Cash used in investing activities in the first ~~six~~nine months of fiscal 2022 also included capital expenditures of ~~$69~~$98 million to upgrade our equipment and infrastructure and for investments in advanced metals recovery technology and environmental and safety-related assets, compared to ~~$55~~$77 million in the prior year period. Cash flows from investing activities in the first ~~six~~nine months of fiscal 2022 included proceeds of ~~$10~~ $17million representing the portion of advance payments from insurance carriers deemed a recovery of capital purchases incurred for repair and replacement of damaged property arising from the May 2021 steel mill fire and the December 2021 Everett facility shredder fire. Cash used in investing activities in the first nine months of fiscal 2022 also included the purchase of an investment in the equity of a privately-held Canadian recycling entity for $5 million.

Net cash provided by financing activities in the first ~~six~~nine months of fiscal 2022 was ~~$150~~$192 million,, compared to ~~$50~~$24 million in the first ~~six~~nine months of fiscal 2021.

Cash flows from financing activities in the first ~~six~~nine months of fiscal 2022 included ~~$180~~$240 million in net borrowings of debt, compared to ~~$66~~$49 million in the prior year period (refer to Non-GAAP Financial Measures at the end of this Item 2). Uses of cash in the first ~~six~~nine months of fiscal 2022 and 2021 included ~~$10~~$11 million and $4$5 million, respectively, for payment of employee tax withholdings resulting from vesting of share-based awards and ~~$11~~$16 million in each period for the payment of dividends. Cash used in financing activities for the first ~~six~~nine months of fiscal 2022 also included $8$18 million for share repurchases.

Our senior secured revolving credit facilities, which provide for revolving loans of $700 million and C$15 million, mature in August 2023 pursuant to a credit agreement with Bank of America, N.A., as administrative agent, and other lenders party thereto. Interest rates on outstanding indebtedness under the credit agreement are based, at our option, on either the London Interbank Offered Rate (“LIBOR”) (or the Canadian equivalent for C$ loans), plus a spread of between 1.25% and 3.50%, with the amount of the spread based on a pricing grid tied to our ratio of consolidated funded debt to EBITDA (as defined by the credit agreement), or the greater of (a) the prime rate, (b) the federal funds rate plus 0.50%, or (c) the daily rate equal to one-month LIBOR plus 1.75%, in each case, plus a spread of between 0.00% and 2.50% based on a pricing grid tied to our consolidated funded debt to EBITDA ratio. In addition, commitment fees are payable on the unused portion of the credit facilities at rates between 0.20% and 0.50% based on a pricing grid tied to our ratio of consolidated funded debt to EBITDA. The credit facility provides that LIBOR or any LIBOR successor rate is subject to a 0.50% floor and contains mechanics by which the parties may replace the benchmark interest rate used in the agreement from LIBOR to one or more rates based on the secured overnight financing rate administered by the Federal Reserve Bank of New York or another alternative benchmark rate.

We had borrowings outstanding under our credit facilities of ~~$240~~$303 million as of ~~February 28,~~May 31, 2022 and $60 million as of August 31, 2021. The weighted average interest rate on amounts outstanding under our credit facilities was ~~2.03%~~2.53% and 1.75% as of ~~February 28,~~May 31, 2022 and August 31, 2021, respectively.

We use the credit facilities to fund working capital, capital expenditures, dividends, share repurchases, investments, and acquisitions. Our credit agreement contains various representations and warranties, events of default, and financial and other customary covenants which limit (subject to certain exceptions) our ability to, among other things, incur or suffer to exist certain liens, make investments, incur or guaranty additional indebtedness, enter into consolidations, mergers, acquisitions, and sales of assets, make distributions and other restricted payments, change the nature of our business, engage in transactions with affiliates, and enter into restrictive agreements, including agreements that restrict the ability of our subsidiaries to make distributions. The financial covenants under the credit agreement include (a) a consolidated fixed charge coverage ratio, defined as the four-quarter rolling sum of consolidated EBITDA less defined maintenance capital expenditures and certain environmental expenditures divided by consolidated fixed charges, and (b) a consolidated leverage ratio, defined as consolidated funded indebtedness divided by the sum of consolidated net worth and consolidated funded indebtedness.

As of ~~February 28,~~May 31, 2022, we were in compliance with the financial covenants under our credit agreement. The consolidated fixed charge coverage ratio was required to be no less than 1.50 to 1.00 and was ~~5.84~~6.67 to 1.00 as of ~~February 28,~~May 31, 2022. The consolidated leverage ratio was required to be no more than 0.55 to 1.00 and was ~~0.23~~0.25 to 1.00 as of ~~February 28,~~May 31, 2022.

Our obligations under our credit agreement are guaranteed by substantially all of our subsidiaries. The credit facilities and the related guarantees are secured by senior first priority liens on certain of our and our subsidiaries’ assets, including equipment, inventory, and accounts receivable.

While we currently expect to remain in compliance with the financial covenants under the credit agreement, we may not be able to do so in the event market conditions, COVID-19, or other negative factors have a significant adverse impact on our results of operations and financial position. If we do not maintain compliance with our financial covenants and are unable to obtain an amendment or waiver from our lenders, a breach of a financial covenant would constitute an event of default and allow the lenders to exercise remedies under the agreements, the most severe of which is the termination of the credit facility under our committed bank credit agreement and acceleration of the amounts owed under the agreement. In such case, we would be required to evaluate available alternatives and take appropriate steps to obtain alternative funds. We cannot assure that any such alternative funds, if sought, could be obtained or, if obtained, would be adequate or on acceptable terms.

Other debt obligations, which totaled ~~$15~~$13 million and $8 million as of ~~February 28,~~May 31, 2022 and August 31, 2021, respectively, primarily relate to equipment purchases, the contract consideration for which includes an obligation to make future monthly payments to the vendor in the form of licensing fees. For accounting purposes, such obligations are treated as a partial financing of the purchase price by the equipment vendor. Monthly payments commence when the equipment is placed in service and achieves specified minimum operating metrics, with payments continuing for a period of four years thereafter. In the ~~second quarter~~first nine months of fiscal 2022, we recorded $7 million of additional debt obligations with these terms generally.

Capital expenditures totaled ~~$69~~$98 million for the first ~~six~~nine months of fiscal 2022, compared to ~~$55~~$77 million for the prior year period. Capital expenditures in the first ~~six~~nine months of fiscal 2022 included approximately ~~$21~~$34 million for investments in growth. We currently plan to invest in the range of $130 million to ~~$160~~$150 million in capital expenditures in fiscal 2022. These capital expenditures include investments in growth, including new nonferrous processing technologies, and to support volume initiatives as well as post-acquisition and other growth projects, and investments to upgrade our equipment and infrastructure and for environmental and safety-related assets, using cash generated from operations and available credit facilities. The COVID-19 pandemic has contributed to some delays in construction activities and equipment deliveries related to our capital projects, and to the time required to obtain permits from government agencies, resulting in the deferral of certain capital expenditures. Given the continually evolving nature of the COVID-19 pandemic and other factors impacting the timing of project completion, the extent to which forecasted capital expenditures could be deferred is uncertain.

Building on our commitment to recycling and operating our business in an environmentally responsible manner, we continue to invest in facilities that improve our environmental presence in the communities in which we operate. As part of our capital expenditures discussed in the prior paragraph, we invested approximately ~~$10~~$13 million in capital expenditures for environmental projects in the first ~~six~~nine months of fiscal 2022, and we currently plan to invest in the range of ~~$30~~$25 million to ~~$40~~$35 million for such projects in fiscal 2022. These projects include investments in equipment to ensure ongoing compliance with air quality and other en~~vironmental~~environmental regulations and storm water systems.

We have been identified by the United States Environmental Protection Agency as one of the potentially responsible parties that own or operate or formerly owned or operated sites which are part of or adjacent to the Portland Harbor Superfund site (the “Site”). See Note 5 - Commitments and Contingencies in the Notes to the Unaudited Condensed Consolidated Financial Statements in Part I, Item 1 of this report for a discussion of this matter, as well as other legacy environmental loss contingencies. We believe it is not possible to reasonably estimate the amount or range of costs which we are likely to or which it is reasonably possible that we will incur in connection with the Site, although such costs could be material to our financial position, results of operations, cash flows, and liquidity. We have insurance policies that we believe will provide reimbursement for costs we incur for defense, remediation, and mitigation for natural resource damages claims in connection with the Site, although there are no assurances that those policies will cover all of the costs which we may incur. Significant cash outflows in the future related to the Site, as well as related to other legacy environmental loss contingencies, could reduce the amounts available for borrowing that could otherwise be used for working capital, capital expenditures, dividends, share repurchases, investments, and acquisitions and could result in our failure to maintain compliance with certain covenants in our debt agreements, and could adversely impact our liquidity.

On ~~January~~ April 6, 2022, our Board of Directors declared a dividend for the ~~second~~third quarter of fiscal 2022 of $0.1875 per common share, which equates to an annual cash dividend of $0.75 per common share. The dividend was paid on ~~February 14, 2022~~May 2, 2022..

Pursuant to our share repurchase program as amended in 2001, 2006 and 2008, we were authorized to repurchase up to ~~nine~~9 million shares of our Class A common stock. As of ~~February 28,~~May 31, 2022, we had repurchased approximately 8.7 million shares under the program and had authorization to repurchase up to a remaining ~~506~~262 thousand shares of our Class A common stock when we deem such repurchases to be appropriate. On June 27, 2022, the Company's Board of Directors authorized the repurchase of up to an additional 3.0 million shares of our Class A common stock. We may repurchase our common stock for a variety of reasons, such as to optimize our capital structure and to offset dilution related to share-based compensation arrangements. We consider several factors in determining whether to make share repurchases including, among other things, our cash needs, the availability of funding, our future business plans and the market price of our stock. In the ~~second~~third quarter and first nine months of fiscal 2022, we repurchased ~~200~~244 thousand and 444 thousand shares, respectively, of our Class A common stock in open-market transactions for a total of ~~$8 million.~~$10 million and $18 million, respectively.

Historically, our available cash resources, internally generated funds, credit facilities, and equity offerings have financed our acquisitions, capital expenditures, working capital, and other financing needs.

We generally believe our current cash resources, internally generated funds, existing credit facilities, and access to the capital markets will provide adequate short-term and long-term liquidity needs for working capital, capital expenditures, dividends, share repurchases, investments and acquisitions, joint ventures, debt service requirements, environmental obligations, and other contingencies. However, in the event of a sustained market deterioration, we may need additional liquidity which would require us to evaluate available alternatives and take appropriate steps to obtain sufficient additional funds. There can be no assurances that any such supplemental funding, if sought, could be obtained or, if obtained, would be adequate or on acceptable terms.

There were no material changes related to contractual obligations and commitments from the information provided in our Annual Report on Form 10-K for the fiscal year ended August 31, 2021.

We maintain stand-by letters of credit to provide support for certain obligations, including workers’ compensation and performance bonds. As of ~~February 28,~~May 31, 2022, we had $8$9 million outstanding under these arrangements.

There were no material changes to our critical accounting estimates as described in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of our Annual Report on Form 10-K for the year ended August 31, 2021, other than the following.

We recognize the assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree at the acquisition date, measured at their fair values as of that date. Contingent purchase consideration is recorded at fair value at the date of acquisition. Any excess purchase price over the fair value of the net assets acquired is recorded as goodwill. Within one year from the date of acquisition, we may update the value allocated to the assets acquired and liabilities assumed, and the resulting goodwill balance, based on information received regarding the valuation of such assets and liabilities that was not available at the time of purchase. Measuring assets and liabilities at fair value requires us to determine the price that would be paid by a third-party market participant based on the highest and best use of the assets or interests acquired. See Note 3 - Business ~~Acquisition~~Acquisitions in the Notes to the Unaudited Condensed Consolidated Financial Statements in Part I, Item 1 of this report for disclosure of our acquisition of the assets of the Columbus Recycling business on October 1, ~~2021.~~ 2021 and our acquisition of the assets of the Encore Recycling business on April 29, 2022. As of the date of this report, measurement of actual acquired net working capital, as well as the fair values of certain other acquired assets and assumed liabilities for both acquisitions, is still preliminary and subject to change based on the completion of valuation procedures.

We have not identified any recent accounting pronouncements that are expected to have a material impact on our financial condition, results of operations, or cash flows upon adoption.

Debt, net of cash is the difference between (i) the sum of long-term debt and short-term borrowings (i.e., total debt) and (ii) cash and cash equivalents. We believe that presenting debt, net of cash is useful to investors as a measure of our leverage, as cash and cash equivalents can be used, among other things, to repay indebtedness.


	February 28, 2022		August 31, 2021		May 31, 2022		August 31, 2021
Short-term borrowings	$	7,451	$	3,654	$	5,764	$	3,654
Long-term debt, net of current maturities		254,126		71,299		316,108		71,299
Total debt		261,577		74,953		321,872		74,953
Less cash and cash equivalents		17,823		27,818		16,125		27,818
Total debt, net of cash	$	243,754	$	47,135	$	305,747	$	47,135

Net borrowings (repayments) of debt is the sum of borrowings from long-term debt and repayments of long-term debt. We present this amount as the net change in our borrowings (repayments) for the period because we believe it is useful for investors as a meaningful presentation of the change in debt.

The following is a reconciliation of net borrowings (repayments) of debt (in thousands):


	Six Months Ended February 28,						Nine Months Ended May 31,
	2022			2021			2022			2021
Borrowings from long-term debt	$	405,094		$	265,645		$	895,175		$	445,829
Repayments of long-term debt		(225,395	)		(199,229	)		(655,440	)		(396,810	)
Net borrowings (repayments) of debt	$	179,699		$	66,416		$	239,735		$	49,019

Adjusted EBITDA, adjusted income from continuing operations attributable to SSI shareholders, and adjusted diluted earnings per share from continuing operations attributable to SSI shareholders

Management believes that providing these non-GAAP financial measures adds a meaningful presentation of our results from business operations excluding adjustments for charges for asset impairment charges, business development costs not related to ongoing operations including pre-acquisition expenses, charges related to non-ordinary course legal settlements, legacy environmental matters (net of recoveries), restructuring charges and other exit-related activities, and the income tax benefit allocated to these adjustments, items which are not related to underlying business operational performance, and improves the period-to-period comparability of our results from business operations.

Following are reconciliations of adjusted income from continuing operations attributable to SSI shareholders and adjusted diluted earnings per share from continuing operations attributable to SSI shareholders (in thousands, except per share data):

Three Months Ended February 28,

Six Months Ended February 28,

2022

2021

2022

2021

Income from continuing operations attributable to SSI shareholders:

As reported

$
37,586

$
44,558

$
83,814

$
58,704

Charges (recoveries) for legacy environmental matters, net⁽¹⁾

4,004

(2,214
)

4,460

546

Business development costs

545

—

1,159

—

Restructuring charges and other exit-related activities

4

814

26

878

Income tax (benefit) expense allocated to adjustments⁽²⁾

(1,073
)

334

(1,322
)

(315
)
Adjusted

$
41,066

$
43,492

$
88,137

$
59,813

Diluted earnings per share from continuing operations attributable to SSI shareholders:

As reported

$
1.27

$
1.54

$
2.81

$
2.05

Charges (recoveries) for legacy environmental matters, net, per share⁽¹⁾

0.13

(0.08
)

0.15

0.02

Business development costs, per share

0.02

—

0.04

—

Restructuring charges and other exit-related activities, per share

—

0.03

—

0.03

Income tax (benefit) expense allocated to adjustments, per share⁽²⁾

(0.04
)

0.01

(0.04
)

(0.01
)
Adjusted⁽³⁾

$
1.38

$
1.51

$
2.96

$
2.09

(1)

Charges related to legal settlements in the three and nine months ended May 31, 2022 and 2021 relate to a claim with a utility provider for past charges.

We are exposed to commodity price risk, mainly associated with variations in the market price for ferrous and nonferrous metals, including scrap metal, finished steel products, auto bodies and other commodities. The timing and magnitude of industry cycles are difficult to predict and are impacted by general economic conditions as well as other factors including political and military events. We respond to increases and decreases in forward selling prices by adjusting purchase prices. We actively manage our exposure to commodity price risk and monitor the actual and expected spread between forward selling prices and purchase costs and processing and shipping expense. Sales contracts are based on prices negotiated with our customers, and generally orders are placed 30 to 60 days ahead of the shipment date. However, financial results may be negatively impacted when forward selling prices fall more quickly than we can adjust purchase prices or when customers fail to meet their contractual obligations. We assess the net realizable value of inventory (“NRV”) each quarter based upon contracted sales orders and estimated future selling prices. As a result of this assessment as of May 31, 2022, we recorded inventory write-downs of $3 million in the third quarter of fiscal 2022. Based on contracted sales and estimates of future selling prices, a 10% decrease in the estimated selling price of inventory would not have had a material NRV impact as of ~~February 28,~~May 31, 2022.

There have been no material changes to our disclosure regarding interest rate risk set forth in Item 7A. Quantitative and Qualitative Disclosures About Market Risk included in our Annual Report on Form 10-K for the year ended August 31, 2021.

Credit risk relates to the risk of loss that might occur as a result of non-performance by counterparties of their contractual obligations to take delivery of scrap metal and finished steel products and to make financial settlements of these obligations, or to provide sufficient quantities of scrap metal or payment to settle advances, loans and other contractual receivables in connection with demolition and scrap extraction projects. We manage our exposure to credit risk through a variety of methods, including shipping ferrous scrap metal exports under letters of credit, collection of deposits prior to shipment for certain nonferrous export customers, establishment of credit limits for certain sales on open terms, credit insurance and designation of collateral and financial guarantees securing advances, loans, and other contractual receivables. As a result of COVID-19, we have experienced reductions in the availability of credit insurance that we have historically used to cover a portion of our recycled metal and finished steel sales to domestic customers, which reduced availability may increase our exposure to customer credit risk. In addition, in higher or rising commodity price environments, we have experienced proportionately lower credit insurance coverage of applicable customer credit limits, which may increase our exposure to customer credit risk.

Historically, we have shipped almost all of our large shipments of ferrous scrap metal to foreign customers under contracts supported by letters of credit issued or confirmed by banks deemed creditworthy. The letters of credit ensure payment by the customer. As we generally sell export recycled ferrous metal under contracts or orders that generally provide for shipment within 30 to 60 days after the price is agreed, our customers typically do not have difficulty obtaining letters of credit from their banks in periods of rising ferrous prices, as the value of the letters of credit are collateralized by the value of the inventory on the ship. However, in periods of significantly declining prices, our customers may not be able to obtain letters of credit for the full sales value of the inventory to be shipped.

As of ~~February 28,~~May 31, 2022 and August 31, 2021,~~, 40%~~ 21% and 30%, respectively, of our accounts receivable balance was covered by letters of credit. Of the remaining balance, 99% and 97% was less than 60 days past due as of ~~February 28,~~May 31, 2022 and August 31, 2021, respectively.

We are exposed to foreign currency exchange rate risk, mainly associated with sales transactions and related accounts receivable denominated in the U.S. Dollar by our Canadian subsidiary with a functional currency of the Canadian Dollar. In certain instances, we may use derivatives to manage some portion of this risk. As of ~~February 28,~~May 31, 2022 and August 31, 2021, we did not have any derivative contracts.

We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”)) that are designed to ensure that information we are required to disclose in the reports we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified by the Securities and Exchange Commission’s rules and forms and that such information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures. Any controls and procedures, no matter how well designed and operated, can only provide reasonable assurance of achieving the desired control objectives. Our management, with the participation of the Chief Executive Officer and Chief Financial Officer, has completed an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures. Consistent with guidance issued by the Securities and Exchange Commission that an assessment of internal controls over financial reporting of a recently acquired business may be omitted from management's evaluation of disclosure controls and procedures, management is excluding an assessment of the internal controls of the acquired Columbus Recycling business, which we acquired on October 1, 2021, and the Encore Recycling business, which we acquired on April 29, 2022, from its evaluation of the effectiveness of our disclosure controls and procedures. ~~The~~Together, the Columbus Recycling ~~business~~and Encore Recycling businesses represented approximately 8%10% of our consolidated total assets and 4%5% of our consolidated total revenues as of and for the ~~six~~nine months ended ~~February 28, 2022~~. May 31, 2022. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of ~~February 28,~~May 31, 2022, our disclosure controls and procedures were effective at the reasonable assurance level.

There was no change in our internal control over financial reporting (as that term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended ~~February 28,~~May 31, 2022, that has materially affected,, or is reasonably likely to materially affect, our internal control over financial reporting.

Information regarding reportable legal proceedings is contained in Part I, “Item 3. Legal Proceedings” in our Annual Report on Form 10-K for the fiscal year ended August 31, 2021; and in Part II, “Item 1. Legal Proceedings” in our Quarterly Report on Form 10-Q for the quarterly period ended November 30, ~~2021.~~2021; and below in this Part II, “Item 1. Legal Proceedings” of this Quarterly Report on Form 10-Q. Also see Note 5 - Commitments and Contingencies in the Notes to the Unaudited Condensed Consolidated Financial Statements in Part I, Item 1, incorporated by reference herein.

As previously disclosed, the Company had reached agreement with the United States Environmental Protection Agency (USEPA) and the United States Department of Justice (USDOJ) to settle a 2018 finding of violation letter with respect to alleged violations of environmental requirements stemming from refrigerant recovery management program inspections at 12 of our facilities in the New England and Pacific Northwest regions in 2017. On April 21, 2022, the USDOJ on behalf of the USEPA filed a Complaint and lodged a proposed Consent Decree with the United States District Court for the District of Massachusetts. Pursuant to the proposed Consent Decree, without admitting any liability with respect to the allegations in the Complaint and as previously disclosed, the Company would settle this matter for a civil penalty of $1.55 million, implementation of an approved enhanced refrigerant recovery management program, and execution of a R-12 refrigerant destruction mitigation project. The proposed Consent Decree was published in the Federal Register on April 27, 2022 for a 30-day public comment period. No public comments were received, and the Court entered the Consent Decree as a final judgment on June 23, 2022 (Effective Date). The Company has implemented the USEPA approved enhanced refrigerant recovery management program at its metals recycling facilities, and payment of the civil penalty is due within 30 days after the Effective Date.

As previously disclosed, the Company had reached agreement with the District Attorneys for six counties in California to settle a joint investigation which had commenced in or prior to 2019 into the alleged mishandling of hazardous materials and hazardous waste, including the commingling of nonhazardous and hazardous wastes, as well as alleged water pollution violations, at various Pick-n-Pull locations within California. On March 10, 2022, the Superior Court of the State of California, County of Santa Clara issued a Final Stipulated Judgment resolving this matter. Pursuant to the Final Stipulated Judgment, without admitting any violation of law and as previously disclosed, Pick-n-Pull agreed to settle this matter for a civil penalty of $1.85 million, plus payments of $300,000 for supplemental environmental projects and $350,000 for reimbursement of investigation and enforcement costs, and to comply with injunctive terms relating to the facilities’ waste management activities. Pick-N-Pull has implemented additional compliance measures at all operating Pick-n-Pull locations in the state and on April 4, 2022 made the payments required under the Final Stipulated Judgment.

As previously disclosed, the Company had received a Pre-Enforcement Notice (PEN) in September 2021 from the Oregon Department of Environmental Quality (ODEQ) alleging that the Company’s metal shredder facility in Portland, Oregon is in violation of Title V of the Clean Air Act (CAA) and stating that ODEQ had referred the matter to USEPA for review and possible formal enforcement. On April 25, 2022, the Company received an Information Request from USEPA, Region 10 under Section 114 of the CAA with respect to both the Portland shredder facility and the Tacoma metal shredder facility owned and operated by a subsidiary of the Company. The Company is responding to the Information Request. In a response letter, we identified why Title V does not apply to the Portland and Tacoma facilities, explained that we had submitted an application to ODEQ in December 2018 for an Air Contaminant Discharge Permit with plant site emission limits that would limit emissions to less than Title V thresholds, noted that the Tacoma facility operates pursuant to an Order of Approval issued by the Puget Sound Clean Air Agency, described that we were proactively enclosing the shredders and installing particulate and volatile organic compound controls at both facilities, and included information on the permit applications that had been submitted in connection with the enclosure and emission control projects. The Company does not believe that any enforcement action is warranted in this matter.

As previously disclosed, the Company had reached agreement with the Alameda County District Attorney and the California Office of the Attorney General (COAG) to settle certain alleged violations of environmental requirements at our Oakland metals recycling facility pursuant to a Stipulation for Entry of Final Judgment and Order on Consent (Consent Order) issued by the Superior Court of the State of California, County of Alameda in February 2021. On March 30, 2022, the Company received a letter from the COAG alleging violations of the Consent Order and demanding that the Company take additional measures to address the off-site release and deposition of light fibrous material (LFM). The Company does not believe that it is in violation of the Consent Order and in a response letter detailed the additional control measures that the Company has implemented and continues to implement to reduce the potential for releases of LFM from its Oakland facility. The Company is in continuing discussions with the COAG, the Alameda County District Attorney’s office, and the California State Department of Toxic Substances Control (DTSC) regarding this matter and does not believe that enforcement action is warranted.

As previously disclosed in the matter filed by The Athletics Investment Group LLC (A’s) against the DTSC as Respondent and the Company as Real Party in Interest in the Superior Court of the State of California, County of Alameda, the A’s obtained an initial order requiring the DTSC to rescind the Company’s “f” letters pursuant to which DTSC classified treated shredder residue from the Company’s metal shredding facility in California as a “nonhazardous waste,” which among other things allows its use as alternative daily cover at municipal landfills. The DTSC rescinded the Company’s “f” letters on November 29, 2021 pursuant to such order. As an additional element of DTSC’s compliance with the order, DTSC adopted an emergency regulation (CTMSR Regulation) that allows metal shredding facilities to transport and dispose of treated shredder residue as non-hazardous waste under a conditional exclusion. The CTMSR Regulation became effective on December 10, 2021, and the Company resumed shipment of treated shredder residue for use as alternative daily cover at municipal landfills in California in late December 2021. On January 14, 2022, the A’s filed a motion to enforce the Court’s order, and on April 18, 2022, the Superior Court issued an order granting that motion and prohibiting the application of the CTMSR Regulation to the Company’s operations. Both the DTSC and the Company have filed a notice of appeal of the Superior Court’s most recent order to the California State Court of Appeals, First Appellate District, Division Three, which notice of appeal has the effect of automatically staying the order. On June 10, 2022, the A’s filed a “Second Motion to Enforce” the Superior Court’s order, effectively seeking to lift the automatic stay and seeking sanctions against the DTSC. In the meantime, the Company’s appeal of both the Superior Court’s initial order requiring rescission of the “f” letters and the Superior Court’s order lifting the initial stay remain pending before the same State Court of Appeals.

Following an inspection by the DTSC of the Company’s Oakland metal shredding facility on May 16 and 17, 2022, the Company in its compilation and review of records requested by the DTSC during that inspection discovered and promptly self-disclosed to the DTSC that it is unable to confirm that it was in compliance with certain aspects of the CTMSR Regulation for certain periods since the adoption of the emergency regulation. The Company reported the corrective actions it has taken and the numerous detailed procedures that are now in place to prevent recurrence. The Company is confident that any failure to comply with the CTMSR Regulation did not pose a risk to human health or the environment. On June 23, 2022, the DTSC issued an Amended Summary of Violations (SOV) alleging that the Company is treating and storing CTMSR without a permit or other grant of authorization in violation of the California Hazardous Waste Control Law and its implementing regulations and that without such authorization the Company cannot utilize the CTSMR Regulation. The Company had previously discussed with DTSC the various forms of authorization that would satisfy the CTMSR Regulation and had promptly obtained a Permit by Rule which it understood to be a satisfactory option. The Company disputes the allegations in the SOV and has filed an application for a different form of authorization (Interim Status) under a reservation of rights that allows the Company to continue treating, storing, transporting, and disposing of CTSMR.

On May 6, 2022, the A’s filed an action in the Superior Court of the State of California, County of Alameda against the Bay Area Air Quality Management District (BAAQMD) as Respondent and the Company as Real Party in Interest alleging that the BAAQMD has failed to properly regulate the Company’s Oakland shredder facility under the federal and California Clean Air Acts and seeking an order requiring the BAAQMD to revoke the Company’s Permit to Operate for the Oakland facility. On June 3, 2022, the BAAQMD with the consent of the Company removed this action to the United States District Court, Northern District of California, Oakland Division. The Company has filed a motion to relate this most recent A’s lawsuit to a substantially similar action filed by the A’s against the Company on July 7, 2021 in the United States District Court, Northern District of California, Oakland Division under the federal Clean Air Act’s citizen suit provision alleging violations by the Oakland facility of the federal Clean Air Act and permit conditions and seeking declaratory and injunctive relief, which action is currently in discovery with a trial, if any, currently scheduled for October 2023.

There have been no material changes to our risk factors reported or new risk factors identified since the filing of our Annual Report on Form 10-K for the year ended August 31, 2021,, except for the changes disclosed in the subsequent Quarterly ~~Report~~Reports on Form 10-Q for the quarterly ~~period~~periods ended November 30, 2021 and ~~the following.~~

~~Economic and geopolitical instability including as a result of military conflict could have a material adverse effect on our operating results, financial condition, and cash flows~~

~~In late~~ February 2022, Russian military forces launched significant military action against Ukraine, which has continued through the date of this report. We do not have operations in Russia or Ukraine. Nevertheless, the outbreak of war between Russia and Ukraine and the resulting sanctions by U.S. and European governments, together with any additional future sanctions by them, could have a larger impact that expands into other geographies where we do business, including our supply chain, business partners, and customers in those markets, which could result in lost sales, supply shortages, commodity price fluctuations, increased manufacturing costs, transportation logistics challenges, customer credit and liquidity issues, and lost efficiencies. In addition, the U.S. has commenced certain trade actions as a result of the Russia-Ukraine conflict, which are expected to result in retaliatory measures or actions, including tariffs, by Russia. While significant uncertainty exists with respect to this matter, the Russia-Ukraine conflict and its broader impacts, including any increased trade barriers or restrictions on global trade imposed by the U.S. or further retaliatory trade measures taken by Russia or other countries in response, could have a material adverse effect on our operating results, financial condition, and cash flows.28, 2022.

Pursuant to a share repurchase program, as amended in 2001, 2006, and 2008, our Board of Directors ~~has~~had previously authorized the repurchase of up to 9 million shares of our Class A common stock when management deems such repurchases to be appropriate. We repurchased ~~200~~244 thousand shares of our Class A common stock under the program in open-market transactions during the ~~second~~third quarter of fiscal 2022. As of ~~February 28,~~May 31, 2022, we had existing authorization remaining under the program to repurchase up to approximately ~~506~~262 thousand shares.

The table below presents a summary of our share repurchases during the quarter ended ~~February 28,~~May 31, 2022:

On June 27, 2022, our Board of Directors authorized a new share repurchase program of up to three million shares of our Class A common stock for a total repurchase authority as of the date of this filing of 3,262,206 shares, reflecting the additional 262,206 shares available for repurchase pursuant to our previously authorized share repurchase program to repurchase up to an aggregate of nine million shares. The share repurchase program does not require us to acquire any specific number of shares. The program does not have a stated expiration date, and we may suspend, extend, or terminate the program at any time without prior notice. The program may be executed through open-market purchases, privately negotiated transactions, or utilizing Rule 10b5-1 programs.

For information regarding the authorization of a new share repurchase program by our Board of Directors on June 27, 2022, see “Item 2. Unregistered Sales of Equity Securities and Use of Proceeds” above in Part II of this report, incorporated by reference herein.

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



Oregon		93-0341923
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

299 SW Clay Street, Suite 350, Portland, Oregon		97201
(Address of principal executive offices)		(Zip Code)


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A Common Stock, $1.00 par value	SCHN	The Nasdaq Stock Market LLC


	PAGE
FORWARD-LOOKING STATEMENTS	3

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)	4

Unaudited Condensed Consolidated Balance Sheets as of ~~February 28,~~May 31, 2022 and August 31, 2021	4

Unaudited Condensed Consolidated Statements of Income for the Three and ~~Six~~Nine Months Ended ~~February 28,~~May 31, 2022 and 2021	5

Unaudited Condensed Consolidated Statements of ComprehensiveIncome for the Three and ~~Six~~Nine Months Ended ~~February 28,~~May 31, 2022 and 2021	6

Unaudited Condensed Consolidated Statements of Equity for the Three and ~~Six~~Nine Months Ended ~~February 28,~~May 31, 2022 and 2021	7

Unaudited Condensed Consolidated Statements of Cash Flows for the ~~Six~~Nine Months Ended ~~February 28,~~May 31, 2022 and 2021	9

Notes to the Unaudited Condensed Consolidated Financial Statements	11

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	2425

Item 3. Quantitative and Qualitative Disclosures about Market Risk	3738

Item 4. Controls and Procedures	3839

PART II. OTHER INFORMATION

Item 1. Legal Proceedings	3940

Item 1A. Risk Factors	3942

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	3942

Item 5. Other Information	3942

Item 6. Exhibits	4043

SIGNATURES	4144


	May 31, 2022		August 31, 2021
Processed and unprocessed scrap metal	$	299,681	$	164,960
Semi-finished goods		18,457		7,671
Finished goods		69,949		39,368
Supplies		51,617		44,428
Inventories	$	439,704	$	256,427

	February 28, 2022		August 31, 2021
Processed and unprocessed scrap metal	$	198,058	$	164,960
Semi-finished goods		18,449		7,671
Finished goods		60,680		39,368
Supplies		46,744		44,428
Inventories	$	323,931	$	256,427


Large accelerated filer	☒	Accelerated filer	☐	Non-accelerated filer	☐


Cash	$	325
Accounts receivable		22,763
Inventories		10,060
Other current assets		255
Property, plant and equipment		13,491
Operating lease right-of-use assets		254
Goodwill(1)		62,552
Intangibles and other assets		19,741
Total assets acquired		129,441
Current liabilities		11,828
Other liabilities		3,350
Total liabilities assumed		15,178
Net assets acquired	$	114,263


Accounts receivable	$	10,464
Inventories		4,270
Other current assets		65
Property, plant and equipment		24,937
Operating lease right-of-use assets		402
Goodwill(1)		21,715
Intangibles and other assets(2)		3,816
Total assets acquired		65,669
Current liabilities		1,447
Other liabilities		1,091
Total liabilities assumed		2,538
Net assets acquired	$	63,131

	Six Months Ended February 28, 2022									Six Months Ended February 28, 2021
	Foreign Currency Translation Adjustments			Pension Obligations, Net			Total			Foreign Currency Translation Adjustments			Pension Obligations, Net			Total
Balances - September 1 (Beginning of period)	$	(31,609	)	$	(2,945	)	$	(34,554	)	$	(34,184	)	$	(2,687	)	$	(36,871	)
Other comprehensive (loss) income before reclassifications		(393	)		451			58			1,811			(385	)		1,426
Income tax (expense) benefit		0			(101	)		(101	)		0			87			87
Other comprehensive (loss) income before reclassifications, net of tax		(393	)		350			(43	)		1,811			(298	)		1,513
Amounts reclassified from accumulated other comprehensive loss		0			205			205			0			98			98
Income tax (benefit)		0			(46	)		(46	)		0			(22	)		(22	)
Amounts reclassified from accumulated other comprehensive loss, net of tax		0			159			159			0			76			76
Net periodic other comprehensive (loss) income		(393	)		509			116			1,811			(222	)		1,589
Balances - February 28 (End of period)	$	(32,002	)	$	(2,436	)	$	(34,438	)	$	(32,373	)	$	(2,909	)	$	(35,282	)


	Percentage
Expected share price volatility (SSI)		51.6	%
Expected share price volatility (Peer group)		58.5	%
Expected correlation to peer group companies		46.0	%
Risk-free rate of return		0.61	%

	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Maximum Number of Shares that may yet be Purchased under the Plans or Programs
December 1 - December 31, 2021		—	$	—		—		705,998
January 1 - January 30, 2022		200,000	$	39.33		200,000		505,998
February 1 - February 28, 2022		—	$	—		—		505,998
Total second quarter 2022		200,000				200,000


Exhibit Number		Exhibit Description

*10.1 31.1		~~Deferred Compensation Plan for Non-Employee Directors~~

*10.2		~~Summary Sheet of 2022 Non-Employee Director Compensation~~

~~31.1~~		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS		Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH		Inline XBRL Taxonomy Extension Schema Document

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document

104		Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)


		SCHNITZER STEEL INDUSTRIES, INC.
		(Registrant)

Date:	~~April 6,~~June 29, 2022	By:	/s/ Tamara L. Lundgren
			Tamara L. Lundgren
			Chairman, President and Chief Executive Officer

Date:	~~April 6,~~June 29, 2022	By:	/s/ Richard D. Peach
			Richard D. Peach
			Executive Vice President, Chief Financial Officer and Chief Strategy Officer

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