Hello, and welcome everyone to today's Commercial Metals Company First Quarter Fiscal 2015 Earnings Call. Today's call is being recorded. [Operator Instructions] I would like to remind all participants that during the course of this conference call, the company will make statements that provide information other than historical information and will include expectations regarding the company's future operation and capital spending. These statements are considered forward looking and may involve speculation and are subject to risk and uncertainties that could cause actual results to differ materially form these expectations. These statements reflect the company's beliefs based on current conditions, but are subject to certain risk and uncertainties, including those that are described in the company's latest 10-K. Although these statements are based on management's current expectations and assumptions, CMC offers no assurance that events or facts will happen as expected. All statements are made only as of this date, except as required by law, CMC does not assume any obligation to update them in connection with future events, new information or otherwise. Some numbers presented will be non-GAAP financial measures, and reconciliations can be found in the company's earnings release or the company's website. And now for opening remarks and introductions, I will turn the call over to the Chairman of the Board, President and Chief Executive Officer of Commercial Metals Company, Mr. Joe Alvarado.

Thank you. Good morning, everyone and Happy New Year. Thank you for joining us to review CMC's result for the first quarter of fiscal 2015. I'll first cover highlights from the first quarter. Barbara will then provide further financial details. And I will conclude our prepared remarks with comments on our outlook for the second quarter of fiscal 2015. After which we will open the call to questions. As described in our earnings release this morning, we reported net sales of $1.7 billion for the first quarter of fiscal 2015, which was 4% higher than our net sales for the first quarter of fiscal 2014 of $1.6 billion. Earnings from continuing operations for our first quarter fiscal 2015 was $38.3 million or $0.32 per diluted share. An increase of $0.03 per diluted share when compared to the same quarter in the prior fiscal year. Also noted in our earnings release this morning is that the Board of Directors declared a dividend of $0.12 per share for stockholders record on January 20, 2015. Dividend will be paid on February 3, 2015. I'll now highlight current trends and conditions in the market in which we operate as well as provide an update on a few strategic matters. First, we are encouraged by the steady growth of the U.S. economy. As new jobs are created, average hourly wages increased and the unemployment rate remains below 6% during last fiscal 2015 first quarter. Furthermore, the demand pattern for U.S. steel products remains solid as the nonresidential construction market continued its upward climb. With nonresidential construction spending up approximately 6% over the first quarter of our prior fiscal year. The continued improvement in nonresidential construction spending led to higher shipments in our Americas Mills and Americas Fabrication segment. Although volumes have strengthened over the same…

Thank you, Joe. Happy New Year and good morning, everyone. As Joe mentioned, for the first quarter of fiscal 2015, we reported earnings from continuing operations of $38.3 million or $0.32 per diluted share, which compares to earnings from continuing operations of $33.7 million or $0.29 per diluted share for the first quarter of the prior year. Results from continuing operations for this year's first quarter included after-tax LIFO income of $4 million or $0.03 per diluted share compared with after-tax LIFO expense from continuing operations of $2.8 million or $0.02 per diluted share for last year's first quarter. Turning to our results by segment, our Americas Recycling segment recorded adjusted operating loss of $1.1 million in the first quarter of fiscal 2015 compared to adjusted operating profit of $839,000 in the first quarter of fiscal 2014. Ferrous shipments declined 2% and average ferrous metal margins declined $1 per short ton compared to the same period in the prior fiscal year. Non-ferrous shipments increased 5%; however, average non-ferrous metal margins continued to be pressured compared to the first quarter of fiscal 2014. Furthermore, in the first quarter of fiscal 2014, this segment benefited from a pre-tax gain on real estate and facility relocation benefits of $3.7 million. In contrast, a favorable change in pre-tax LIFO of $3.2 million was recorded for the first quarter of fiscal 2015 compared to the first quarter of the prior fiscal year. Our Americas Mills segment recorded adjusted operating profit of $75.4 million for this year's first quarter making the highest adjusted operating profit recorded for this segment in any fiscal quarter since the onset of the global financial crisis. Our Americas Mills segment recorded adjusted operating profit of $65.8 million during the same period last year. This segment's strong result for the first quarter…

Thank you, Barbara. We are encouraged by the continued improvement in the U.S. economy with job growth and rising wages. U.S. manufacturing activity expanded for the eighteenth consecutive month in November 2014 and U.S. nonresidential construction spending increased during the first three months of our fiscal 2015. In November, the Architecture Billings Index, a leading indicator of construction activity, reported the seventh consecutive month of greater than 50 at 50.9. Our second fiscal quarter has historically been slower as a result of a seasonal downturn in construction activity due to the holidays and the onset of winter weather. Consistent with prior years, we’ve planned outages for routine maintenance and equipment enhancements during the slower business activity over the winter months. These activities allow us prepare for stronger anticipated demand in our fiscal second half. That completes our commentary in the first quarter results. Thank you for your attention. We will now open the call to questions.

[Operator Instructions] Our first question comes from Luke Folta at Jefferies LLC.

Good morning, Joe, Barbara. I guess the first question I had was on the fabrication business. We are seeing -- this is another quarter of very solid volume growth, but with the business still generating losses and clearly there are margin issues there, you have talked about improving mix towards more private work as of late as the backlog has grown. Can you just maybe give us some more detail on what's going on with the margins on that business? And you touched on imports being a factor in the remarks, but I'd think that with this sort of volume increase that we should start to see some positive pricing momentum at some point here. Just any thoughts on that would be very helpful.

Well, Luke, it's not just a factor. It's the most significant factor that we face on the fab side of the business with imported product being brought in at significantly below market prices causes us to have to be competitive and quoting on our fab business. So we've seen an overall strength in metal margins in the steel mill side of the business and the deterioration on the fab side mostly owing to the imported product, so it's not a small factor. It is the most significant factor that we are seeing really across the board.

I am surprised you see that more so on the fabrication side of the business than the mill side of the business. Is that because you've got competing fabricators who are buying imported product at much lower price so they can charge a lot less? And why isn't that showing up on that rebar price from the mill segment?

Our fab businesses are dependent on sourcing material competitively, and we compete against independents who also have access to imported product, and with the significant pricing differential that we are seeing in rebar pricing and anticipated pricing of those products causes the independents to be more aggressive in their pricing to secure business at less than attractive margins or the kinds of margin that we'd liked to book at, so the battle there is really in the independent fab business or against independent fabricators as opposed to into the mill segment itself.

Okay. And then just as a follow up on M&D, another very strong quarter there, there continues to be a bit of black box from an outsider's perspective looking in -- can you give us some sense of what the moving parts were -- we've definitely seen what looks like an inflection over the last couple of quarters and profitability in that business. I know Australia being out of it is a factor, but anything that you can help us think about in terms of what should be monitoring or how should we think about that -- the profitability in particularly margins in that business over the looking forward year.

Well, I’d attribute it to a couple things. One, it's not only steel trading but our raw materials trading business that has been – that’s improved on year-on-year basis and has steadily improved from the summer into the first quarter. There is no doubt that taking Australian business and putting it in disc op is also a factor, but more it is about better trading activities particularly in North America, but also in Europe and our UK operations. And the steady flow of volume in Southeast Asia out of our Singapore office albeit at smaller margins.

Are you going to talk about what products, though, in the international trading businesses are your biggest? And what's improved?

Well, yes, I mentioned tubular product is one example. We trade in a whole range of long and flat products, long products including tubular products and we do that really everywhere. It will vary from market to market which products are most attractive for us to trade. In North America, it is a combination of flat and long products including tubular and some SBQ as well as other products, so it isn't just one thing, Luke.

Okay. And then just one more if I could for Barbara. Inventories were pretty good use of cash this quarter, $100 million bucks or so turns a bit lower than where they had been historically. Is it something we should expect to reverse fairly soon?

Yes, you will see that start to unwind in the following three quarters. Typically, we see it unwind towards the end of our fiscal year. I think it's reflective of overall higher level business activity level on the M&D side as well as on the mill side. Some is a little bit of inventory build ahead of some of these outages to support these outages. So typically this is our highest level of working capital between first and second fiscal quarter.

Our next question comes from Evan Kurtz from Morgan Stanley.

Happy New Year Joe and Barbara. Question on energy exposure. I was hoping you guys could just kind of walk us through each of the segments and kind of talk about where you might have some exposure to weaker energy prices and any kind of quantification you can give us will be really helpful. Thanks.

Yes, so let me take a stab at that first. We've been getting lots of question about energy and the same way we’ve got lot of questions about iron ore. And I guess what I'd say Evan is it is an evolving situation. It will settle itself out. With what the decline in oil prices is doing is freeing up a lot of disposable income for people and stimulates spending a lot of different ways that ultimately could lead to nonresidential construction across the board. And remember that we are a nationally based, a broad based company with the footprint throughout the Southeast, so while the Texas market is really important to us, I think there is a tendency for there to be an association at lower oil prices may lower construction spending. And that may be the case that some project will be pulled. But generally speaking, we are still seeing positive growth and strong demand in construction markets. So it's hard to correlate an exact dollar value, and I think this will continue to settle itself out. And there will be an adjustment in drilling activity. So I'd say that the most significant impact -- this is now I'm talking from my own experience, will generally come on tubular products and other products to support the energy industry like SBQ products. So that's where we would see it in our order book more than anything else as well as a decline in demand for construction spending. Having said that, we still see a strong order book, a strong backlog. I think a more measured approach by some of those that are dependent on energy money for construction spending going forward, but it really hasn't sorted itself out in a negative way other than from an apprehension or anticipation. But the order book remains strong.

Do you have any visibility in your order book to which projects is energy related and what sort of percentage that might be of the total book?

Yes, we will take that as a follow up. We would including part of that-- winter-- in wind farm which taking above construction spending and energy prices even with oil coming down that still a desire and part of the government to stimulate spending on alternative forms of energy and that so far is continue so that's one example where we have a very direct impact -- as a result of energy pricing were so far there has been almost no reaction whatsoever.

I'd add and like to point out Evan that lower energy prices could be provides some positive momentum around the renewal of the transportation bill. And I think that discussion is only beginning but it might create an opportunity where they can find the funding mechanism and that could be a real positive that's right now not factored in anybody's outlook.

That's an interesting point. Thanks. I'll turn it over.

Our next question comes from Sal Tharani, Goldman Sachs.

Good morning, guys. I want to ask a couple of questions. You mentioned conversion costs in fabrication were up. Any particular reason? Is this a recurring stuff or was there some one-time item?

Well, due to the stronger order book in fab, we did incur some additional freight just to meet some of the commitment and we have done some staffing up in preparation of the busier time in year. So that will equal itself out as time goes forward.

Okay. And this next one on European demand. You mentioned obviously you had some down time but you also mentioned some weak demand. Just wondering what are you seeing as we exit the winter -- I know winter is going to be slow at Poland. Beyond that, what's your outlook over there?

Yes, growth in Poland is substantially stronger this year as compared to last year. And you might recall that last year in the first quarter was when the Latvian situation got resolved. We saw really, really strong order book in the first quarter. The European economy -- well, the economy in Poland particularly continues to grow and we expect strong demand. The pressure that we are seeing is a really function of imports. And not only weakness in the euro zone but some carryover from what's going on in Eastern Europe. So we've seen some imports coming from neighboring countries that we haven't seen before which is putting pressure on prices and margins. But we expect strong demand to continue. The Polish economy continues to do better than most of the rest of the European economies or the euros -- other countries in the euro zone. And we don't see any reason for that to tail off; we would like to see less influence from imports and stronger margins.

Okay. Barbara, you touched upon the working capital. I was just wondering if I look at since the downturn, 2009 you generated quite a bit of cash from the working capital. You have spent almost $0.5 billion or sorry round about $600 million in terms of working capital as you're growing the business. I'm just wondering how we should look at because that doesn't -- your free cash flow, cash impact despite your earnings are improving. How should we look at this quarter I noticed that your revenue quarter-over-quarter was down $220 million. Year-over-year it was almost flattish but your working capital was a massive use of funds. How should we look at over the next couple of years in terms of having some of that reverse back?

Yes, well, another factor affecting the first quarter was AP, if you look at the balance sheet, our payable are much lower, reflective of moving into the slower period, inventory we did some building as I said to support higher business activity levels. I mean as we've indicated M&D had one of the strongest quarters in -- since the global financial crisis and a lot of the working capital is going to support the growth in M&D. And that will liquidate fairly quickly. But the other factor this specific quarter which is at lower accounts payable, and we have a number of schedule payment in the first quarter that affect that. We are still projecting that at some point that we will have a net working capital to support the growth -- market growth and then you're going to start to see that cash turn and we are still forecasting positive free cash flow going forward.

Our next question comes from the Nathan Littlewood with Credit Suisse.

Good morning, guys. Thanks for the opportunity. Just had a couple of questions. Good morning, morning. Just had a couple of questions for you, the first on your ferrous scrap purchase price for the Americas Mills. It was down I think $7 or $8 bucks a ton quarter- on - quarter. But if we look at the domestic assessment from CIU and the like they were down sort of $20, $25 a ton for your quarter. Just wondering I'm asking this as an engineer here, not an accountant, could you help me bridge the gap there? Was there something strange going on with scrap procurement costs?

Yes, I'll take quick shot at that, Nathan. When you think about the numbers that you are comparing, there is some regional numbers as well. That might be more reflective in comparative and start looking at gross averages of scrap and then mix within each of the region. I think you will get some significant divergence and you'd have to be able to compare that to what scrap purchase prices were before. They might be purchasing more competitively, so on a quarter-to-quarter basis, I don't get real concerned about that because there are lot of averaging that's going on. We are measuring our cost and need to be competitive in the market that we are buying and selling and feel like we are in a good place in that market. But you want to comment anything more? So I am not sure that I answered that as an engineer or an accountant, probably latter.

That's good. Thanks, Joe. The other one was just on International Marketing and Distribution. You indicated previously that your expectations for a quarterly run rate there were about $13 million. I guess I'm just curious about the sort of going forward impact there from Australia. You've shown us that for the November quarter that was worth about $2 million. So could we say that looking forward your expectations for M&D would be $13 million, plus the $2 million loss for 2015 total for that business? Does that math make sense?

Nathan, I think that I'd still at the current moment stay with the $13 million that we've guided. M&D has very lumpy quarters and we had really good quarter this quarter and this -- the nature of the business is to take advantage when the markets are available and hot and we certainly saw that in the first fiscal quarter. But right now I wouldn't be comfortable given all the global uncertainty with raising that, maybe with time we get more comfortable.

Our next question comes from Brian Yu at Citi.

Thanks and Happy New Year, Joe, Barbara. I had a question on rebar pricing. I know you touched on this earlier in the call and commented how rebar imports are coming in at a definitely healthy clip, and yet we've seen prices be fairly resilient which is very different than what we're seeing in hot rolled coil. Couple questions along these lines. One, any insight you could share with us on what's driving this divergence? And then two, going back to a question earlier about the fab, is there some cross subsidy between the two businesses or are these sales between the mills and your fab business occurring at market prices?

Yes, so let me take the step with at both the questions. The first is on the rebar pricing and the strength that we see. We priced according to what market will accept. And we also have a downstream fabrication business which is not subsidized by the mill operation. There isn't a subsidy going either way, it is basically all at market prices. So when we see initiatives from Turkey and particular to move a lot of product I think that's without regard to the market, that's more based on a cost plus pricing formula. That's my opinion. And so we don't understand why someone would come into the market well above the market pricing other than they are moving to dump steel. And we made our case. And the case was reviewed and they were found to be negligible or almost to minimums, so there is nothing we can do about that but we certainly don't understand the economies of buying scrap from North America taking it to Turkey and bring it back and selling at well below market prices. So it is what it is. So better to ask that question of them than ask-- we don't know how they price their product. But as far as that second component on subsidy, there is no subsidy. So and we see strong demand for construction products and consumption is up overall and the overhang is what I'd call marginally priced rebar in the market that come in flows, it ebbs and flows but it is not a nuisance.

I guess I'm still kind of confused why it's not having the same type of impact on the U.S. market like what we're seeing in hot rolled coil. We are seeing volumes coming in, especially with where you guys are located towards the south. I would figure that imports would have a greater impact. But obviously not the case. I'm not sure if you can shed any light on that.

Yes, I don't, this is much more I can share than what I just shared with you.

Okay. And then the other question I've got is just on the scrap market. It did seem like prices were weakening and now they're starting to tick up a bit. Would you attribute that just too typical seasonality, given the constraint on flows? And as we exit winter if you guys do any kind of trading on scrap backs towards the -- is the international market demand for U.S. material weak enough where we should see scrap prices begin to drop after the seasonal impact goes away?

Yes. As you know, Brian, this is a lot of seasonality in scrap and scrap purchasing. So we will see fluctuation just based on that. A bigger driver in scrap pricing I think these days is the influence of export product and I can only tell what I read is that there appears to be a bit more demand for export in scrap product. We ourselves don't heavily participate in that. We are impacted by it but we don't see it directly, so it is hard to comment on how good that market may or may not be. So we will see how the current month settles out. But it doesn't feel a lot different than what we've been seeing in the last few months.

Next question comes from Phil Gibbs with KeyBanc Capital Markets.

Good morning. Just had a general question on the backlog in the U.S. business, just how that may be looking relative to last year and maybe versus the August quarter?

Yes, let me take look here, Phil. Both the fab backlog if you look at compared to a year ago, it is up over 5% and it is up marginally over the fourth quarter which is a really good sign going into the seasonally slower period of the year.

What are you seeing from a regional perspective across the Sunbelt as far as Texas, California, et cetera? What's stronger? What's weaker? Sort of what's the picture look like to you guys right now?

I think if you -- if we were talking a year ago we would have said Texas continues to be strong and California was picking up and the Southeast was the weaker market for us. I think we are seeing good demand broadly across all three regions. At this point of time California continues to pick up momentum. We are now starting to see more activity in Southern California where it was previously being driven out as activity in Northern California. And we are seeing very good activity levels in the Southeast.

And continue to see stronger demand in the Texas market.

Okay, I appreciate that. And just a housekeeping question, Barbara, as far as what the -- I'm not going to ask you for LIFO by all the segments, just curious as to what it was in the Mills division in particular? And if you have a view on what the tax rate should look like here?

Okay. The Mills, Americas Mills had a LIFO income of $2.7 million for the quarter. And as far as the tax rate, it does depend somewhat on income in foreign jurisdiction where we enjoy a lower tax rate, but we are projecting a tax rate somewhere in the 30% to 32% for the year.

Next question comes from Aldo Mazzaferro at Macquarie Research.

Yes, good morning and Happy New Year. I was wondering, just a couple of questions on the production rate that you may have seen in the quarter for your rebar plants, Joe. Could you give us a ballpark? Are you 80% or above or below that or somewhere? Could you give us a little hint as to where you're operating at?

That corollary is somewhat like Barbara just described in the fab side of the business where we've seen the softest demand in production rate in the East Coast and our South Carolina operation. And for that matter in Birmingham as well. They are operating at better rate. There is always opportunity for us to expand our production capability although with a better mix and shorter cycle or longer cycle, we haven't really gotten into that point. So that potentially exists across the board. So we are operating at 80% plus in each of our segments. Best way to describe it. Little bit less though still in the eastern region.

Great. And Joe, could you comment on how you see inventories, both in rebar. You made downstream of your mill and also inventories that you see in the scrap market, could you comment on how you see the levels there?

Well, on the rebar side of it, are you talking about rebar inventories in general or our own inventory levels?

No, in general. I am just -- it's very hard to get specific inventory numbers and with all the imports in here and a pretty good decent operating rate domestically and prices holding together, maybe there isn't a big inventory overhang. I am just wondering what you think in terms of is there more oversupply of rebar in the market or are we pretty balanced do you think despite the high imports?

Yes, I'd say that it's fairy balanced. There are months for example when things will flex and get a little bit out of whack. I think product moves through the system pretty quickly. In rebar, no one wants to be sitting and speculating when there's volatility like there has been. So I am not real concerned about downstream inventory and maybe that's -- maybe I'm being Pollyannish about it. We haven't seen real swings in inventory that concern us, other than when couple boats arrive at the same time. But that seems to be getting its way into the system and working its way through fairly quickly. On the scrap side of it, we --if the question is whether or not there's good of movement of scrap material, if that's what you're looking for or availability, we're not seeing huge flow problems but certainly lower prices ultimately will lead to some flow issues and ultimately will drive prices back up. There hasn't been a dearth of scrap or anything like that. Availability is good.

So the mills are not starving yet for scrap but the supplies have drifted down a little bit would you say in the last few months?

I expect they have a little bit, but there might be those that have sat on inventory and speculated on inventory expecting it to go up, for example, after the first of the year, which is seasonally what happens. So if that doesn't happen then maybe there will be some move to move inventory in the ensuing weeks or months. It's an interesting thing to watch right now, Aldo.

Oka, yes, and one final question, Joe. Can you categorize a little bit about how much of your overall backlog -- I know it's probably hard but with steel and fab and other operations, how much of it might be related to inventory -- energy related projects. I know fabrication could be energy, could be a lot of other things. But could you say a little bit about that, about how you're exposed to energy through fab and through steel bars and things?

Aldo, we took a look at that and our direct -- if you took a direct specific products, like tubular, SBQ, it's 10% or less. I think the question that we all wrestle is there a follow-on effect to a prolonged downturn in energy price that would then spill over into industrial and construction activity. And as Joe pointed out earlier, we see there's a positive side to this lower energy price and that's increase in disposable income which could fuel the economy in other ways that could be -- dilute the effect of what's going on. So right now we're looking at it carefully and studying it. But as far as specific products, it's not that great.

Aldo, I don't know that it's fact or not. Just report that I heard a penny in gasoline price reduction is equivalent to $1 billion in savings. That's a lot of money. And going back to normal patterns for what drives nonresidential construction demand, often times is led by residential. With more disposable income, that's the kind of growth that ultimately spurs nonresidential as infrastructure needs to be built to support those kinds of operations. I wouldn't lose sight of what Barbara said either about the ability to maybe negotiates something in the Congress that's trying to find a way to work together on the construction side of it and highway programs. So we'll see what happens after the Congress convenes today. But at some point what's been freed up in the way of energy prices could be an opening to raise taxes on energy consumption in order to fund the infrastructure that we all know is so badly needed.

The next question comes from Andrew Lane, Morningstar.

Good morning and happy New Year. Just one question here. You've discussed the impact of rising import volumes and I'd be curious to hear any comments you have on how the October rebar trade case determinations has changed the texture of import volumes. It looks like import volumes from Turkey were down significantly in November. Even he though Turkey's exporters were effectively given the green light. Are you seeing major upticks in rebar volumes from any other specific countries of note?

No. The Turks are dominating. The import statistics as opposed to the market day that we have. And what's been negotiated and what's on the water, what's coming, it's mostly Turkish. Now there have been some other sources that have come into the market but it's dominated by the Turks.

So along those lines, is your -- are your operations in California a little better insulated from those volumes than the rest of your geographic exposure in the U.S.?

From Turkish in a manner of speaking, but sometimes the pricing is so aggressive on the Turks it does have a carryover effect but there are other source that connect the West Coast so I wouldn't call any of our market is completely insulated but certainly for the Turks it's a longer reach to get to the West Coast market.

The next question comes from Charles Bradford of Bradford research.

Good morning. Hi, couple questions. First of all, a year ago when we had that pretty bad winter weather the price of electricity and natural gas just soared. Have you seen any signs of that yet or is it just back to normal?

Yes, no signs of that whatsoever. Last year we were impacted particularly on the East Coast by some heavy storms and ice storms were impacted here in Texas as well in December. And the weather hasn't been that terribly bad. In fact, it's been pretty good. So far, no, but that doesn't mean that we won't see something before the quarter's out. I guess they're getting snow in the Midwest today. But otherwise it's been a pretty tame winter.

I'm more worried about frankly the price of electricity, because we can track the gas pretty easily. But we'll use a lot of electricity.

Yes, Chuck, but for us the electricity is availability. And utilities need to the take care of the private sector, the public sector that means that we get squeezed. That's what happened to us last year in South Carolina. We get curtailed. And so that's something that we're subjected to which affects our electricity cost and availability. So I wasn't talking about gas as much as I was about electricity and availability.

Understood. About a year and-a-half ago you gave a speech at a pipe distributors' conference with a pretty long list of new capacity coming online. Do you have any sense how much of that capacity has come online and whether U.S. Steel's announcement today of a big cutback at Lorraine is more to do with the price of energy as they said or is it just new supply?

I was going to decline anything that said a year and half ago. But as far as tubular capacity, there are all kinds of reports about those projects still coming on stream being strong, but as far as U.S. steel position to lay off, I think I read in March and May that's a better question for Mario and the U.S. steel people and what they are seeing in the market.

[Operator Instructions] And our next question comes from Phil Gibbs with KeyBanc Capital Markets.

Barbara, I just had a question on the SG&A side as it related to the Australian distribution assets, if you could give us an idea about how much of the SG&A was tied up in that line last year?

Phil, I'd probably have take that offline and get back to you because there will be some portion of the SG&A that will remain to support our trading operations in Southeast Asia, but we can -- and we are still candidly working through that. How much goes and how much is required to support the remaining activity in the region. So we haven't put the pen down yet on that. I'd be happy to look at it and give you some.

Okay. I wasn't sure if you addressed this or not because I missed a portion of the call, but did you talk about whether or not you were winding down those assets or whether or not you intended to sell them or is it still -- or is that still a bit up in the air?

Well, in order to drop it down to discontinued operations, we need to need certain criteria and we are holding them for sale. And we had started a process, that process pretty much came to a slow pace it is not shutdown as we approach the holidays and as you know in Australia they take extended holidays this time of year because it is their summer time. And so as soon as folks return to work, we expect to pick up process in earnest and so far there is interest level for those assets and it would definitely be our intent to sell those assets rather than wind down.

At this time, there appear to be no further questions. Mr. Alvarado, I will now turn the call back over to you.

Okay. Well, thank you everyone for joining us on today's conference call. We certainly look forward to speaking with many of you during our Investor visits in the coming weeks and look forward to reporting our second quarter results only two months from now in March. So look forward to talking with you all soon. Thank you very much.

This concludes today's Commercial Metals Company conference call. You may now disconnect.