Thank you, Jamie. Good morning, everyone.

I'm Alexandra Deignan, the company's Vice President of Investor Relations. Welcome to Schnitzer Steel's second quarter 2015 earnings presentation.

Thank you for joining us today. In addition to today's audio comments, we've prepared a set of slides that you can access on our website at www.schnitzersteel.com or www.schn.com.

Before we get started, let me call your attention to the detailed Safe Harbor statements on Slide 2, which are also included in our press release of today and in the company's Form 10-Q, which will be filed later today. These statements, in summary, say that in spite of management's good faith current opinions on various forward-looking matters, circumstances can change, and not everything we think will happen always happens.

Please note that we will be discussing some non-GAAP measures during our presentation today. We've included a reconciliation of those metrics to GAAP in the appendix to our slide presentation.

Now let me turn the call over to Tamara Lundgren, our Chief Executive Officer. She will host the call today with Richard Peach, our Chief Financial Officer.

Thanks, Ally. Good morning, everyone, and welcome to our fiscal 2015 second quarter review.

We have a number of agenda items today, which we look forward to discussing with you. We'll start this morning with a review of our second quarter financial results.

I'll take you through an overview of the market trends and the summary of our consolidated performance. I'll then review 2 major strategic actions that we have underway: the consolidation of our Auto Parts and Metals Recycling Businesses into one division and a new cost-reduction initiative.

Both of these actions are designed to create material and sustainable improvements to our bottom line. After my remarks, Richard will provide further details on our cost-reduction initiative as well as a summary of our segment operating performance and our capital structure.

And then, we'll open up the call for questions.

Let's turn to Slide 4 and begin with an overview of the market. Market conditions for ferrous scrap in the second quarter were the toughest that we have experienced since 2008.

In the month of February, we saw ferrous sales prices drop as much as $100 per ton, roughly 30% below first quarter levels. This steep price drop was a continuation of the price decline that began in our first quarter, when ferrous sales prices dropped to approximately 20%.

These significantly lower prices have been driven by excess global steel production, historically low iron ore prices, the strengthening dollar and weaker demand.

In addition, in the Northeast and Midwest, our business activity was impacted by unusually harsh winter weather, which affected retail sales in our Auto Parts Business and supply flows in our Metals Recycling Business. Our business was also impacted by the labor slowdown at the West Coast port, which affected the timing of both ferrous and nonferrous shipments.

In summary, the scrap market conditions we experienced in the second quarter and the trends we've seen over the last 6 months have been severe. Despite this market deterioration, however, we've generated positive cash flow, and we continued to reduce debt and to fund our dividend.

During March and so far through April, we've seen prices move sideways to slightly up. Export and domestic prices have reset at close to parity, and while absolute prices are weaker versus a year ago, demand appears to be stabilizing.

Let's turn to Slide 5 to review our second quarter financial results. As you will have seen in the press release that we issued this morning, we reported an adjusted loss per share from continuing operations of $0.33.

This excludes goodwill and other asset impairments and restructuring-related charges. Richard will go through the financial analysis in more detail, but there are a couple of takeaways that I'd like to highlight up front.

First, the severe drop in ferrous prices resulted in an estimated adverse impact from average inventory accounting of $0.39 per share. About 80% of the adverse impact affected MRB and the remainder affected APB.

Excluding the adverse inventory effect, the Metals Recycling Business would have reported positive adjusted operating income per ton of $16, which as you'll see on the next slide, would be the sixth consecutive quarter of steady improvement by this measure due to benefits from the productivity and cost-reduction initiatives undertaken over the last 2 years.

Second, in our Steel Manufacturing Business, sales volumes, utilization and operating income were up versus Q2 of fiscal '14, primarily as a result of the stronger West Coast construction market and continuing benefits from productivity improvements. Average prices, however, were down due to lower raw material costs and increased competition from imports.

And third, in terms of cash flow, we generated positive operating cash flow of $32 million and reduced our total debt by $27 million to the lowest level since fiscal '11. We achieved this debt reduction while maintaining our quarterly dividend.

We've paid a quarterly dividend every quarter since going public 21 years ago. Our positive cash flow reflected, in particular, our disciplined focus on cash metal spreads and working capital management.

If we turn to Slide 6, I'll review the strategic actions we have underway to further reduce our cost base, improve our productivity levels and deliver significant and sustainable improvements in earnings. The strategic actions we have underway are intended to deliver $60 million in annual benefits over the next 18 months through a combination of cost reductions, capacity reductions and productivity initiatives.

As you can see on this slide, over the past 2 years, we've delivered approximately $65 million in cost savings and productivity benefits. These cost savings and benefits have occurred in all 3 of our operating businesses and in our corporate shared services division.

At the bottom of the slide, you can see examples of the benefits we've realized from some of the initiatives we undertook in fiscal '13 and '14. In MRB, we have reduced SG&A by 22%.

In the middle chart on the bottom of this slide, you can see the 6-quarter trend of increased adjusted operating income per ton before the positive or negative impact of average inventory accounting. And what's important to note here is that when we exclude both these positive and negative impacts, we can see that MRB has been able to more than offset the impact of lower volumes through benefits from their productivity and cost-reduction programs.

In SMB, as a result of efficiencies, we've been able to improve operating leverage as volumes have increased.

So let's turn to Slide 7 for a deeper dive into the sources of our $60 million of targeted savings. As you can see on this slide, we anticipate that MRB will deliver approximately half of the targeted savings through a combination of equipment idling and SG&A reductions.

We expect that APB will deliver approximately 40% of the savings by closing certain stores and from the results of productivity improvement initiatives and SG&A reductions. And our corporate shared services division should deliver the balance of the savings by reducing organizational layers and leveraging support functions across our operating platform.

We expect about 25% of the savings to be achieved in the fourth quarter of fiscal '15, with the remainder to be delivered by the end of fiscal '16.

Let's turn now to Slide 8 to review the integration of our Auto Parts and Metals Recycling Businesses into one division. During the past 2 years, we've increasingly focused on generating synergies within our Auto Parts and Metals Recycling Businesses on both an operational and geographic basis.

These 2 divisions have benefited from the cross-divisional functions that we have integrated to date, such as safety and environmental, and from certain joint sales and commercial activities. In order to achieve the next level of synergies, we are integrating APB and MRB into a single division.

Operationally, this integration will enhance our flexibility and enable us to more effectively adjust to market changes across our platform. It will improve our capital investment planning, and it will generate efficiencies by consolidating our finance, IT and HR functions into a single enterprise-wide shared services platform.

We plan to begin reporting APB and MRB performance as a single segment by Q4 of fiscal '15.

In addition, as the new organization evolves over time, we believe we can achieve further benefits beyond what's reflected in the $60 million of targeted savings.

Now I'll turn it over to Richard for a more detailed discussion on the anticipated financial impact and timing of our strategic actions as well as an update on our operating segment performance and our capital structure. Richard?

Thank you, Tamara. Good morning.

I'll begin on Slide 9. As discussed, the strategic actions we have announced today are anticipated to generate annual run rate benefits of approximately $60 million.

The benefits consist of 3 primary components as follows. First, we are taking further steps to significantly lower our cost base by $28 million, which will result in a reduction to SG&A of approximately $25 million and to production cost by the remainder.

These actions represent a necessary step to ensure we are operating with the most efficient support infrastructure in these challenging market conditions.

The savings will be achieved through a variety of initiatives, which includes further integration of support functions, reducing management layers, reengineering business processes and lowering costs associated with outside services. The efficiencies will result from savings in both APB and MRB, which together total approximately 75% of the annual benefits, and from savings in our corporate shared services of approximately 25%.

The second major component of the improvement is expected to come from the idling of 2 MRB shredders and other MRB assets and from the planned closure of 7 stores in APB, which together will provide future annual benefits of approximately $18 million. 2/3 of this total will arise from reductions in operating cost and the balance from reduced depreciation as a result of the related asset impairment.

Approximately, 80% of this $18 million improvement will be in Metals Recycling and the other 20% in Auto Parts.

And finally, the third component is APB's productivity initiatives and SG&A cost reductions announced earlier this fiscal year, which together are expected to generate an annual benefit of approximately $14 million.

Taking all 3 components together, the overall $60 million of expected annual benefits in fiscal '16 will be split approximately 50% from SG&A, 40% in improved gross margins and 10% in lower depreciation. We expect to realize approximately 25% of the overall total in the fourth quarter of this fiscal year.

Now turning to Slide 10, I'll review MRB's Q2 performance. MRB's adjusted operating loss in the second quarter was $1 million or $2 per ton.

This included a significant adverse impact of average inventory accounting, which together with an inventory evaluation adjustment of $2 million and the effect on profitability of lower sales volumes, more than offset the ongoing contributions of productivity initiatives and cost reductions that we implemented earlier in this fiscal year. The lower sales volumes included the effects on scrap loss from the severe weather in the Northeast, and the West Coast labor slowdown adversely impacted shipments of both ferrous and nonferrous products.

During the quarter, we reduced the purchase prices for raw materials significantly to reflect the sharply lower selling prices. In light of such severe drops, average inventory costs were not able to decline as quickly as selling prices, which resulted in an adverse impact estimated at $17 per ton or $13 million.

As the top chart on this slide shows, Q2's adjusted operated income before average inventory accounting was down slightly on the previous 2 quarters due to the inventory evaluation adjustment and the effect of lower volumes. However, the run rate in recent quarters is better than earlier in the previous fiscal year due to benefits of productivity improvements and cost-saving initiatives showing through within the overall results.

As the recent severe market declines occurred in February, we anticipate that the third quarter will also include an adverse effect of average inventory accounting. On an absolute dollars basis, we expect slightly less than the $13 million in the second quarter that we -- as we anticipate an increase in sales volumes.

The dollars-per-ton effect could be around 2/3 of the Q2 amount of $17 per ton.

As highlighted in the bottom chart, in total, we expect our Metals Recycling Business to deliver future annual benefits from our new strategic actions of approximately $28 million. These benefits will result from a combination of mainly SG&A cost savings and the reduction of production costs, including some lower depreciation from the idling of shredders and other MRB assets in Canada, the Northeast and Puerto Rico.

Each of these 2 components will generate an equal share of the expected total annual improvement.

Finally, in Q2, we recognized a noncash MRB goodwill impairment of $141 million, as well as other impairment charges of $43 million in connection with the idled asset.

Now let's move to our Auto Parts Business on Slide 11. In APB, the significant impact of declining commodity prices and seasonally weaker part sales, exacerbated by unusually severe weather in the Northeast and Midwest, led to 9% lower revenues year-over-year and 15% lower revenues sequentially.

In addition, the weak price environment and severe weather resulted in lower car purchase volumes in Q2, down 2% year-over-year and down 14% sequentially.

lower car intake volumes associated with the sharp decline in commodity prices, seasonally weaker part sales, an estimated adverse impact of $3 million from average inventory accounting, and enabling costs of $1 million for our productivity initiatives. Compared to the prior-year quarter, cash spread compression from the lower commodity prices and the adverse impact of average inventory accounting were, in equal measure, the 2 main reasons for the lower operating income year-over-year.

We turn cars in a 2- to 3-month period, and as a result, we are still working through some higher-cost vehicles. This means our average cost of inventory is still adjusting down to the lower cash cost for cars.

As the severe decline in commodity prices happened in February, we anticipate the average inventory effect in the third quarter will be almost 2x the amount which impacted the second quarter. However, by the end of the third quarter, we expect to be through current average cost issues.

Following which, we expect the benefits from our strategic initiatives will better show through the bottom line results in the fourth quarter and beyond.

In total, we expect our Auto Parts Business to deliver future annual benefits of $25 million. These benefits will result from a combination of SG&A savings of $14 million, a productivity initiative of $7 million to improve gross margins and an additional $4 million of annual benefits from the closing of 7 stores.

The SG&A savings are coming from workforce efficiencies, reducing management layers, consolidating shared services and leveraging our procurement activities in purchasing, marketing and a range of outside services.

And just for clarification, earlier in this fiscal year, we announced an annual productivity and SG&A savings target of $14 million, but due to enabling cost, we will not see the benefits until the fourth quarter of this fiscal year. These benefits are included in the overall $25 million annual target for APB.

Now moving to Slide 12, let's turn to our Steel Manufacturing Business. SMB continued to deliver a strong performance year-over-year, primarily due to improving demand in West Coast construction markets and continued contributions from productivity initiatives, which offset the impact of lower average selling prices, driven by reduced cost of scrap and pressure from imports.

Reflecting the strong demand, sales volumes of 131,000 tons increased 14% from the prior year second quarter and 3% from first quarter levels. Rolling mill utilization in the quarter was 76%, up significantly from 67% in the prior-year quarter and 72% in the first quarter.

Operating income of $4 million increased 6% from the prior year due to the higher sales volumes and increased utilization, which together more than offset the impact of lower average selling prices. Sequentially, operating income was down by $2 million as the decline in selling prices more than offset benefits from higher sales volumes and a lower manufacturing cost per ton from the increased utilization.

Moving to Slide 13, I'll discuss our cash flow, capital expenditures and net debt. In the second quarter of fiscal '15, operating cash flow of $32 million enabled the reduction of our net debt by $20 million and supported the payment of our quarterly dividend.

Despite the reduction in absolute debt levels to just over $300 million, our net debt leverage of 36% reflects a sequential increase of approximately 6 percentage points, due solely to the noncash impairments in the quarter, which reduced our total capitalization.

As we have noted in the past, we have established a track record of generating strong operating cash flow even in weak markets. The primary drivers are our strong focus on maximizing cash metal spreads and disciplined management of working capital, including both our inventories and our receivables.

Positive cash flow supports our balanced capital allocation strategy, including the maintenance of moderate debt leverage, funding of our capital investment and the return of capital to our shareholders. In addition, our $700 million bank facility provides us with flexibility and does not mature until 2017.

Capital expenditures in our second quarter were $7 million, covering mainly maintenance, environmental and safety-related projects. For fiscal '15, we expect total CapEx of approximately $35 million, which is around 10% lower than fiscal '14.

Now, I'd like to turn the presentation back over to Tamara for her summary remarks.

Thank you, Richard. In the face of rapid price declines and lower demand, we are taking substantial steps to improve our profitability and to continue our trend of positive cash flow.

Since fiscal '13, we have delivered approximately $65 million in cost savings and productivity benefits. Our new actions are expected to deliver additional annual benefits of $60 million by the end of fiscal '16.

lowering our costs, operating efficiently, meeting our customers' needs and generating synergies between our businesses. All of these actions should contribute to higher earnings.

In closing, I'd like to thank everyone on the Schnitzer team for the extraordinary commitment and dedication you bring to the job every day. Thank you for working safely and working together to serve our customers, our communities and our shareholders.

Operator, let's open up the call for questions.

I guess, first of all, as you integrate Auto Parts into MRB, are you also rethinking how you operate that business going forward? I'm thinking kind of specifically the self-service model.

Or is this integration strictly to kind of reduce duplicate functions and improve efficiency?

The integration of the 2 businesses is really driven because there is so much overlap between their purchase markets and their sales markets. It's really strategic.

We've got no plans to change the self-service model. It's a very strong model.

It has been very, very positive for us. This really is about enabling us to generate more transparency with respect to market information, to drive more efficiencies in what I would say back-of-the-house functions, IT, HR and finance.

And just to be able to look forward and grow the business more synergistically.

Okay, and the store closures associated with that, I assume these are maybe assets that are kind of outside of where your recycling facilities are operating. Is that fair?

No. The -- we proactively review our assets.

And we review them for profitability, returns, cash generation, strategic benefits. So the closure of the APB stores was part of that process.

We are not exiting any region that we operate in. We were just executing some stores in a few of the regions, one store in Massachusetts and one in Oregon and a few in Canada.

And -- but we'll still be in all of these regions.

Understood. And then with the various cost actions you're taking now, is there a way we can think about what level of scrap prices these initiatives can ultimately be successful?

I guess, in other words, is there a certain level where prices stay above MRB can generally sustain profitability as these actions are put in place?

I'm sorry, can you repeat that question?

Well, I guess I'm trying to figure out with the actions you're taking now, I mean, is there a floor here where scrap prices fall below, you're going to have to take further actions here to kind of get MRB back on a profitable track?

Well, we don't look at it in terms of absolute price levels because, as you know, Brent, we're a spread business at the end of the day. And I think that we've been able to operate profitably.

Over the course of 100 years, we've been in business at a number of different price points along the curve. What we -- what we're just very focused on is operating -- running our business in this low-price and low-volume environment profitably and successfully.

And so that's what these actions are about in terms of getting us back there. And I think that what I try to show on -- I think was Slide 5 or 6, when you take out the volatility of the pricing that we've been experiencing, and particularly, that we've been experiencing quite severely in the last 6 months, but you can look at it over the last 6 quarters, when you take that out, you can see that MRB's operating income per ton has been steadily increasing while volumes have been decreasing.

So we're seeing the operating leverage that we're trying to achieve. And the last time that we saw a stable market -- pricing market was not that long ago.

It was in Q4. And we were generating in the mid-teens or low-teens type of operating income per ton.

And that was when -- the quarter when we really had no impact from average inventory.

I want to understand what's your -- how you're thinking about the scrap price -- or it has stabilized the last 2 months, but if I look at the billet versus slab differential, or CIS, it's still $60. Do you think there's more downside to the scrap prices as iron ore has dropped the -- has helped the slab prices come down quite a bit?

Well, there's always been a relationship, and there will probably always be a relationship between scrap and iron ore. It's not clear that the historical ratio that we've seen previously will be maintained going forward, primarily due to the increase in EAF production.

So we've seen, for example, that scrap is much stickier. It does, over time, adjust, and it does find its natural level.

So what I was just saying in response to the previous question is that the prices do adjust. It's a spread business over time.

And the actions that we're taking are ones that we believe will enable us to increase over time our OI per ton, notwithstanding further changes in prices or -- up or down or volumes.

The 2 shredders, you're idling 2 shredders. Is that correct?

We idled a shredder in Rhode Island, and we idled a shredder in Canada. That's correct.

Okay. I was just wondering if I look at your mix of export versus local scrap, it used to be 80%, now it's 55%.

I was assuming is it -- does it make sense to actually go and increase your domestic business by buying some distressed scrap yards which cater to the local steel companies?

Well, we look at consolidation opportunities, and particularly in this market, we're seeing -- we are seeing signs of stress in a number of regions. So we look at consolidation opportunities as they come up and as they make sense for us from a synergistic and earnings perspective.

Okay. And lastly, I just want to confirm a couple of things which you mentioned about the sort of guidance so that you will have a higher inventory adjustment accounting for the APB next quarter and about 2/3 of -- has happened in the MRB.

Is that correct?

Yes. Sohail, it's Richard here.

On APB, we see the effects of average inventory accounting being nearly double what it was in Q2. It was negative $3 million in Q2, and, really, that's because the major price drops happened towards the end of the quarter.

And it takes 2 to 3 months to work through inventory in APB. So the effects will hit more so in the third quarter for APB.

But what we would also say is that, in the second quarter, there was a significant effect in APB of lower seasonal part sales. And we expect in the third quarter to get a normal uptick in part sales coming through, which to a great extent, should go towards offsetting the effects of the average inventory accounting effect.

In MRB, what we expect is, in absolute dollar terms, the impact of average inventory accounting in the third quarter to actually be slightly less than what we experienced in the second quarter, but still a significant amount. And on a dollars-per-ton basis, we expect it only to be around 2/3 of the total we experienced in the second quarter because in MRB, we're expecting our sales volumes to go up by a fair amount in the third quarter compared to what we saw in the second.

So hopefully, that answers your question.

A couple of questions. I guess, first one, maybe you can give some specific examples.

I'm still kind of a little fuzzy on some of the -- the first 3 bullets in particular that you gave on the slide that kind of explains the integration of APB and MRB, your broadened commercial flexibility. What does it mean exactly, because I thought kind of the supply and sales channels were different for those 2 businesses?

And then the ability to enhance or adjust to market changes and improve capital investment planning, just wondering how merging the 2 segments together actually helps you. Don't you already have that ability?

So let me give you an example. About 60%, give or take, in all market environments of APB's revenues are scrap and core revenues.

And so being able to set prices for car purchases in regions across the country with the same timeliness of information and with the same transparency in terms of the entire supply channels, from when you purchase the car to when that car is ultimately taken off the lot and scrapped and sold, that transparency timeliness is very, very important. And operating together as 1 P&L instead of trying to drive 2 P&Ls, 2 different points along the spectrum, is something that we will facilitate and enhance by merging the 2 divisions.

Currently, I would say over the last 6 months or so, we have improved the way in which we buy as one integrated unit. And we have also jointly undertaken sales activities, whether in the domestic or export market, of the scrap and core, core being the nonferrous that comes out of the cars.

So this -- by merging the 2 divisions, it gives us a clear runway from point-to-point for both operations. On CapEx planning and the like, it just facilitates our priorities of everything from mobile equipment to the priorities of long-term capital investments and where we place them.

So instead of working 2 divisions with 2 P&Ls, combining it into 1 really does facilitate the operational activities. It allows us to broaden the skill set of the people within those divisions, so that they learn both businesses over the course of their careers.

And then finally, obviously, as we grow the business, we're able to see those synergies much more clearly when we're growing in regions in which we have both APB and MRB operations.

Got it. And my second question is just on the impact of scrap pricing on flows.

And I guess this maybe applies to both MRB and APB. When you get into the kind of the low 200s, I guess, we've seen flows kind of pull back quite a bit here this past month.

Is that something that you see consistently going forward? Do you think there'll be collectors that decide, okay, well, we're going to go out anyway and collect scrap at $200 a ton because we have nothing else to do.

Or will it be the people who exit that business and just see -- we'll just see lower volumes? And then same thing goes for cars.

I guess, you're lowering your purchase price of end-of-life vehicles. How is that impacting flows on that side as well?

Well, scrap collections are off, and car purchase volumes are off material, but I would say -- materially. But I would say that in looking at it over the last quarter, lower prices probably discouraged supply flows as much as the colder weather and the snowstorm.

So they probably had both very strong and probably pretty equal impacts. So over time, the flows -- the supplies should rebound with warmer weather, but that -- the low prices are testing that principle, and we'll have to see how that evolves over time.

Usually, with a sharp drop, like what we experienced in February, supplies do freeze up as dealers and collectors and the like hold back and -- to determine whether or not it is the new normal or whether prices will rebound. So we've got to watch this play out for the next couple of months to see whether supply flows come back significantly or not.

I'm interested in the U.S. net export levels for scrap on an industry-wide basis and how they have changed in recent quarters.

Could you provide some color as to the degree to which trade flows have reversed? And maybe how much the country's net export position for scrap has changed given the appreciation of the U.S.

dollar relative to the currencies of key export markets?

Well, we've definitely seen some change as a result of the strong dollar. If you look at calendar year 2014, total U.S.

exports for the industry were at their lowest levels since 2006. And interesting -- your question is quite interesting because if you look at the same period, calendar year 2014, it was also the highest level of scrap import since 2006.

They were up a little less than 15%. So that net was, obviously, the biggest shift that we've seen in quite a while.

But I think we're -- I think it's been driven by the strong currency, and I think in January, we saw a significant uptick in scrap imports that was driven, I think, by a combination of severe weather in a number of regions and by the -- by specific needs of one particular steel-mill company. But we haven't seen the activity that we saw in January, we haven't seen that continue.

With the strong dollar, what we've said in the past and continue to believe is, number one, as we all know, the U.S. is the biggest source of scrap, the biggest exporter.

And buyers need to come to the U.S. for quality and quantity.

So it's not whether or not the U.S. is in the queue, it's where we are in the queue.

And if this currency relationship is maintained for a long time, the way we maintain our competitiveness is by adjusting prices by maintaining and continuing to improve the quality of the scrap that we sell and through prompt delivery.

Okay, great. And then could you also just update us on the top export destinations by shipment volume in the last -- this quarter and the last couple quarters, please?

Well, this quarter, our top 3 were Turkey -- for ferrous were Turkey, Egypt and Peru, but we sold throughout Asia as well to our typical destinations: Korea, Malaysia, Taiwan, Thailand. So our top 3 shifts from quarter-to-quarter, as you've seen, but the major countries continue to import.

And as you look at those steel manufacturing countries or countries where steel manufacturing is increasing, such as the Mideast and Central and South America, you will see our sales be directed to those regions as well.

Thank you, everyone, for joining us on our call today and for your interest in our company. We look forward to speaking with you again when we announce our fiscal 2015 third quarter results.

Thank you very much.