Hello, and welcome everyone to today's Commercial Metals Company's Full Year and Fourth Quarter Fiscal 2015 Earnings Call. Today's call is being recorded. After the company's remarks, we will have a question-and-answer session and we'll have a few instructions at that time. 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 economic conditions, U.S. steel import levels, U.S. construction activity, scrap metal pricing, the company's future operations, the company's future results of operations, the commissioning of the company's plant new steel micro mill in Oklahoma and capital spending. These statements are considered forward-looking and may involve speculation and are subject to risks and uncertainties that could cause actual results to differ materially from these expectations. These statements reflect the company's beliefs based on current conditions, but are subject to certain risks and uncertainties, including those that are described in the Risk Factors section of 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 these statements in connection with future events, new information or otherwise. Some numbers presented will be non-GAAP financial measures and reconciliations for such numbers can be found in the company's earnings release or on 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. Joseph Alvarado - Chairman, President & Chief Executive Officer: Thank you. Good morning and welcome to…

We will now begin the question-and-answer session. We request that you ask one initial question and one follow-up question. If you have additional questions, please re-enter the question queue. Follow up questions will be addressed if time permits. The first question comes from Evan Kurtz with Morgan Stanley. Please go ahead. Evan L. Kurtz - Morgan Stanley & Co. LLC: Hey. Good morning, guys. Joseph Alvarado - Chairman, President & Chief Executive Officer: Good morning, Evan. Barbara R. Smith - Senior Vice President & Chief Financial Officer: Good morning, Evan. Evan L. Kurtz - Morgan Stanley & Co. LLC: Just wanted to nail down the LIFO true-up in the quarter. I kind of calculate, it's coming out somewhere in the high-40s or so. Do you have that broken out anywhere? Barbara R. Smith - Senior Vice President & Chief Financial Officer: Broken out by segment or... Evan L. Kurtz - Morgan Stanley & Co. LLC: Or just overall, I mean, how much was earnings impacted by just a pure true-up portion of LIFO rather than just the underlying LIFO expense from the quarter? Barbara R. Smith - Senior Vice President & Chief Financial Officer: I guess, Evan, our method is to do an estimate for the full year and then each quarter we book based upon that estimate for the full year and the true up in the fourth quarter really reflected the scrap price estimate for the end of the year and the quantity estimates for the end of the year did not materialize as anticipated and so we then had to adjust. So it's – I guess, there's not really a way to break it down into separate pieces between what would have been booked in the fourth quarter versus – because we do an estimate for the…

The next question comes from Brain Yu with the Citi. Please go ahead.

Yeah. Hi, good morning Joe, Barbara. Joseph Alvarado - Chairman, President & Chief Executive Officer: Good morning, Brian.

I'm back of Evan – hey, Evan's comment, I think you are so disappointed that the LIFO charges are taken away from what is a pretty good quarter, I'm getting free cash flow generation before working capital changes of $0.70 per share in the fourth quarter and almost $1.60 for the full year which would actually put you guys pretty high amongst your price (21:48) to free cash generation. And you mentioned, Barbara, that you're looking to change the way you're going to account or try to account for a LIFO in 2016. Can you expand on that comment? Barbara R. Smith - Senior Vice President & Chief Financial Officer: Yeah, as I indicated earlier, LIFO creates a lot of variability and volatility in our earnings. It's very difficult to estimate and it's really historically been attack strategy and given the depletion of our LIFO reserve in 2015 and anticipated depletion potentially in 2016, the reserve is at a level where it may make sense for us to consider moving off the LIFO method to another method of inventory valuation. So we're doing the work on that. There is lot of work to be done and things to be analyzed, but it just might be an opportunistic time to evaluate that and I think it would eliminate a lot of volatility in our earnings and would be a better matching of revenue and expense.

Okay. And related to that, are there going to be any cash tax implications from moving off or potentially moving off of LIFO? Barbara R. Smith - Senior Vice President & Chief Financial Officer: We actually think it could be a positive because, as I indicated earlier, we booked $79 million of LIFO income this year and we had to pay the corresponding tax of roughly $30 million on that income and if you change methods you actually have the opportunity to spread that tax liability over four years. And so it would reduce the cash tax impact by our current estimates in fiscal 2016 and it would be spread, the balance would be spread over the coming four years.

Okay. Thanks, I'll drop back in the queue. Barbara R. Smith - Senior Vice President & Chief Financial Officer: Thanks, Brian. Joseph Alvarado - Chairman, President & Chief Executive Officer: Thanks, Brian.

The next question comes from Brent Thielman with D.A. Davidson. Please go ahead. Brent Edward Thielman - D. A. Davidson & Co.: Hey, good morning. Joseph Alvarado - Chairman, President & Chief Executive Officer: Good morning. Barbara R. Smith - Senior Vice President & Chief Financial Officer: Good morning, Brent. Brent Edward Thielman - D. A. Davidson & Co.: Joe, when you take a step back and kind of look at the volume trends at the U.S. Mills and Fabrication businesses the last few quarters, you're sort of roughly flat to down year-on-year depending on the quarter. Can we kind of look at that lack of momentum and attribute that strictly to the import situation or does this sort of reflect the general momentum in domestic construction markets you're seeing? Joseph Alvarado - Chairman, President & Chief Executive Officer: Yeah. So there are a combination of things, obviously, with no simple answer to any of this Brent. But the most significant impact in our shipping volume really hasn't been on the rebar side, it's been more on merchant and billet. But you're right the rebar shipments have been fairly flat and merchant – I'm sorry and fabrication shipments have been strong, but over the course of the year that'll normalize itself especially as we go into next quarter. But where we've seen the most adjustment or impact on volume has been not in rebar but in billet and merchant product. And merchant inventories are still high on a relative basis. I think it's sort of long products 2.8 months inventory as compared to a year ago of 2.4 months. And certainly the distributors are very cautious about inventory and inventory positions really owing to demand I think more than anything else and availability of alternatives. So we're still pretty optimistic…

The next question comes from Phil Gibbs with KeyBanc Capital Markets. Please go ahead.

Good morning. Joseph Alvarado - Chairman, President & Chief Executive Officer: Good morning. Barbara R. Smith - Senior Vice President & Chief Financial Officer: Good morning, Phil.

As far as the capital spending, are we likely to see any carryover in 2017 from spending on the new mill or is the majority of that spend going to be taking place in fiscal 2016? Barbara R. Smith - Senior Vice President & Chief Financial Officer: Well, a good portion will occur in fiscal 2016 but, yes, there'll be some carryover, Phil, into 2017.

Okay. Any color on the magnitude just for our modeling for the share next? Barbara R. Smith - Senior Vice President & Chief Financial Officer: Of the $220 million that I guided, about $90 million of that is the new mill. And so I'd put another equivalent amount in the following year.

Okay. That's helpful. And then in terms of the severance inventory write-downs along with asset impairments that you bucketed as a $4 million after tax hit I think on my math it's probably $6 million to $6.5 million pre-tax. Any help on where that came through in the segments or corporate or just any sort of help there because I think you had bucketed the other charges pretty well of the segments? Barbara R. Smith - Senior Vice President & Chief Financial Officer: Yeah. And I think, well, the goodwill was in the recycling segment. And I think actually on the face of the financial statements, we break it out separately but some people are – will roll that into their SG&A line, I don't know how is that modeled, everyone keeps their models. Then I mentioned in my remarks that the – we took an impairment in the M&D segment for the exit of the Distribution portion of our activity there and I think that was like $4.5 million pre-tax. And then the balance, the severance is really spread throughout the business. We made comments about making some adjustments in recycling as that continues to be under a lot of pressure but we are really – it's really a company wide effort to continue to reduce overhead and SG&A and so it would spread throughout the segments.

Okay, that's helpful. And just lastly before I jump off, anything from a big picture strategic standpoint Joe that you can talk about as far as what you're focused on maybe in terms of goals for the next year to two and then what the goals for the company here for growth in the next three to five, I think that would be helpful? Thank you. Joseph Alvarado - Chairman, President & Chief Executive Officer: Yeah, Phil. We're committed to growing the business, that's always been our objective and improving the balance sheet had been our priority and as was pointed out, our balance sheet is in good order and there is good strong free cash flow from the business. And as we think about growing the business, we always think to about doing it ratably and doing it for the right reasons. The micro mill in Oklahoma is an example of that where we – we're adding capacity, but known capacity into market that can absorb that capacity as opposed to capacity for the sake of capacity. So while growth is our priority we want to be reasonable about it and that needs to be measured. The fact of the economy and where we are – we have been sitting in a pretty good economic situation for growth purposes, and so anything that allows us to improve our cash flow and our balance sheet is good for us and anything that allows us to improve the revenue and profitability stream is where we focus our energy and our time. The last thing I want to point out is that, we're in the recycling business. Recycling business is important to us. I know there's a lot of attention paid to that. It's also a critical input and times like this…

Thanks, Joe.

The next question is a follow-up from Brian Yu with Citi. Please go ahead.

Thanks for follow-up. Hey, Barbara, so on CapEx, if I'm reading this correctly and it looks like for the new Oklahoma mill, it's going to be somewhere around $180 million across next couple of years. Is that right? Barbara R. Smith - Senior Vice President & Chief Financial Officer: Yeah. For planning purposes, I think in that $180 million, $190 million is a good projection to use.

Okay. Are there any updates on the permitting for that project, or any other necessary permits that need to be achieved? Joseph Alvarado - Chairman, President & Chief Executive Officer: The air permit is the most essential and there were hearings and a little bit of public comment that needs to be addressed. So we feel like we're on track from, as I mentioned in my comments, on track from what we had anticipated. So that's the most essential permit that we still have to fulfill.

Okay. Joseph Alvarado - Chairman, President & Chief Executive Officer: And we're still shooting for completing that as quickly as possible.

Got it. And then last one just on the scrap side a bit, more for your purchasing costs and that the fiscal quarter. It looks like it was mostly stable quarter-on-quarter and obviously we've seen scrap prices drop quite a bit. Is there a bit of a lag effect that's causing your scrap input cost to basically not change? So we should expect that to drop in the fiscal first quarter? Joseph Alvarado - Chairman, President & Chief Executive Officer: Yeah, there are some regional differences, Brian that are going to be a little bit not reflective per se of what exactly happens in Chicago. Texas markets are different than the East Coast markets or West Coast markets. So there's a good deal of variability. I'm not sure what exact number you're looking at. Quarter-to-quarter it was flat, but it would vary significantly by region.

Okay. Barbara R. Smith - Senior Vice President & Chief Financial Officer: Yeah. And Brian remember last – I mentioned earlier in June, scrap prices went up and then they fell back in August. So we've really did see sort of flat net-net... Joseph Alvarado - Chairman, President & Chief Executive Officer: For the quarter. Barbara R. Smith - Senior Vice President & Chief Financial Officer: ...for the quarter and again that was one of the factors that drove the true up on the LIFO.

Yeah. Got it. Okay. Thank you.

The next question comes from Aldo Mazzaferro with Macquarie. Please go ahead. Aldo Mazzaferro - Macquarie Capital (USA), Inc.: Hi, good morning. Joseph Alvarado - Chairman, President & Chief Executive Officer: Good morning, Aldo. Barbara R. Smith - Senior Vice President & Chief Financial Officer: Good morning, Aldo. Aldo Mazzaferro - Macquarie Capital (USA), Inc.: Yeah. A couple of quick ones, Barbara, I was happy to hear you say on the LIFO swing there that that was such a big impact to the earnings, following my due diligence math on LIFO. I was estimating about a $0.20 income in the quarter, so $0.40 swing there is a big number. And I would wholeheartedly support the move to FIFO. So basically... Barbara R. Smith - Senior Vice President & Chief Financial Officer: Yeah. I... Aldo Mazzaferro - Macquarie Capital (USA), Inc.: Okay. Barbara R. Smith - Senior Vice President & Chief Financial Officer: We agree. Thank you. Aldo Mazzaferro - Macquarie Capital (USA), Inc.: Yeah. The other thing, why didn't the scrap consume decline in the mills in the quarter, sequentially, I see it was about flat? Barbara R. Smith - Senior Vice President & Chief Financial Officer: Are you talking, pricing or volume? Joseph Alvarado - Chairman, President & Chief Executive Officer: Volume. Aldo Mazzaferro - Macquarie Capital (USA), Inc.: No, no, the usage cost on the Americas Mills, it looked like it went sequentially flat. And I'm just wondering there was the lot of movement in the market I think around them. But that's – I understand that's August quarter, but don't you think you should have gotten more reduction in the scrap side? Barbara R. Smith - Senior Vice President & Chief Financial Officer: Yeah, I mean although, I think it – going into the fourth quarter of…

The next question comes from David Lipschitz with CLSA. Please go ahead.

Good morning. Joseph Alvarado - Chairman, President & Chief Executive Officer: Good morning, David.

Good morning. So I'm not that bright. So please go back, is your LIFO going forward or no? I'm confused. So in the first quarter..? Barbara R. Smith - Senior Vice President & Chief Financial Officer: So you sensed a little hedging there, David?

Yeah. So... Barbara R. Smith - Senior Vice President & Chief Financial Officer: So...

...if I am modeling forward, do I expect a LIFO credit because prices have fallen or there should be no – nothing because you are going to FIFO? Barbara R. Smith - Senior Vice President & Chief Financial Officer: Yeah. David, I think for the time being, one should assume we are still on the LIFO method until otherwise stated.

For the notice. Barbara R. Smith - Senior Vice President & Chief Financial Officer: Right, but I would say, in addition to that, we will make that determination within this first quarter. There is a lot of work that goes into that. It's a big accounting change. It requires a preferability letter from our auditors. We've got to restate prior years and quarters to reflect the change. So there is a massive amount of works. We have looked at it in some amount of depth and we feel like it makes a lot of sense for us. But we have to complete all of that work. And we expect to do that within this quarter and give you further input on that when we announce our results for the first quarter.

So let's say you don't do it. Would we expect a pretty big LIFO credit, because prices have dropped so much? If I were – would that be a correct assumption or...? Barbara R. Smith - Senior Vice President & Chief Financial Officer: We would do an estimate for the full year and book a fourth of that estimate based on the outlook, would be the way it would occur...

Right. Barbara R. Smith - Senior Vice President & Chief Financial Officer: ....if we were to...

So do we have an estimate though for the year as of this point? Barbara R. Smith - Senior Vice President & Chief Financial Officer: Well, as you know, we don't give specific guidance. So at this point, I would say we're not prepared to give you a specific estimate for LIFO for the full year.

Okay. (42:39) yeah. Okay. Perfect. Thank you. Joseph Alvarado - Chairman, President & Chief Executive Officer: Thank you, David.

The next question comes from Charles Bradford with Bradford Research. Please go ahead.

Good morning. Joseph Alvarado - Chairman, President & Chief Executive Officer: Good morning, Chuck. Barbara R. Smith - Senior Vice President & Chief Financial Officer: Good morning, Chuck.

Couple of questions. The land in Oklahoma, there are reports in some of the press that you actually got the land for free. Can you comment? Joseph Alvarado - Chairman, President & Chief Executive Officer: Chuck, there are a lot of different incentives that are offered to us by the state. That's one of the reasons why we are located in Oklahoma. So rather getting into all the details like – as it's done in the press, I'll let them keep reporting on that they can work through the paperwork. To me, that's not useful – good use of time for us.

There has been a report out of, I guess Japan that the Chinese exported 23.6 million tons or in the process of exporting this year, that would be a gigantic amount of billets, which the comment being made is, well maybe they really were reported as alloy bars, yet the U.S. data, we get from Department of Commerce and AISI doesn't show billet separately, do you know or have any idea what the number could be on the U.S. side? Joseph Alvarado - Chairman, President & Chief Executive Officer: On the billets, Chuck?

Yeah, on the billets imports. Joseph Alvarado - Chairman, President & Chief Executive Officer: Yeah. To my knowledge we haven't seen much in the way of billet imports here in North America, but certainly it's had a huge impact on Southeast Asia. Really throughout the region most electric arc furnace producers are relying on billets from China because they are priced so attractively. So electric arc furnace production in Southeast Asia has been severely impacted by the availability of cheap imported Chinese billets. So if you look to your numbers, you might want to look that way Chuck, and nearby regions have been particularly impacted by billet exports from China.

Does it make sense for you to import these cheap billets? Joseph Alvarado - Chairman, President & Chief Executive Officer: At this point Chuck, we haven't seen any offers, not aware of any of that, it really has been more isolated. It's hard for me to rationalize how that makes sense against our overall cost structure. We have a lot of mouths to feed. I think we're very competitive with the metallic price that we have and we're very competitive in our conversion costs on each of our melt shops. And I would suspect that it would quickly be found that there is dumping associated with that kind of activity. And you know as well as us the overall cost structure in China is highly subsidized, so to make a living off – to try to make a living off of the subsidized source while it might have short-term benefit and impact, long-term isn't really a viable strategy.

Thank you. Joseph Alvarado - Chairman, President & Chief Executive Officer: Okay. Thanks, Chuck.

At this time, there appear to be no further questions. Mr. Alvarado, I'll now turn the call back over to you. Joseph Alvarado - Chairman, President & Chief Executive Officer: Okay. Well, thank you. I appreciate that. Thank you all for joining us on today's conference call. We appreciate it very much and we look forward to speaking with many of you during our investor visits in the coming days and weeks. So thanks all and have a good day.

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