• absence of global economic recovery or possible recession relapse;

• solvency of financial institutions and their ability or willingness to lend;

• success or failure of governmental efforts to stimulate the economy including restoring credit availability and confidence in a recovery;

• continued sovereign debt problems in Greece and other countries within the Euro zone;

• customer non-compliance with contracts;

• construction activity or lack thereof;

• decisions by governments affecting the level of steel imports, including tariffs and duties;

• litigation claims and settlements;

• difficulties or delays in the execution of construction contracts resulting in cost overruns or contract disputes;

• metals pricing over which we exert little influence;

• increased capacity and product availability from competing steel minimills and other steel suppliers including import quantities and pricing;

• execution of cost reduction strategies;

• ability to retain key executives;

• court decisions and regulatory rulings;

• industry consolidation or changes in production capacity or utilization;

• global factors including political and military uncertainties;

• currency fluctuations;

• interest rate changes;

• availability and pricing of raw materials, including scrap metal, energy, insurance and supply prices;

• passage of new, or interpretation of existing, environmental laws and regulations;

• the pace of overall economic activity, particularly in China; and

• business disruptions, costs and future events related to any tender offers and proxy contests initiated by an activist shareholder.

Our forward-looking statements are based on our expectations and beliefs as of the time this report is filed with the Securities and Exchange Commission or, with respect to any documents incorporated by reference, as of the time such document was prepared. Although we believe that these statements are based on reasonable assumptions, they are subject to numerous factors, risk and uncertainties that could cause actual outcomes and results to be materially different from those indicated in such statements. These factors include those described in Item 1A of this Annual Report on Form 10-K. Except as required by law, we, undertake no obligation to update or revise any forward-looking statements, to reflect changed assumptions, the occurrence of anticipated or unanticipated events, new information or changes to future results over time or otherwise. We caution readers not to place undue reliance on any forward-looking statements.
This Management's Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with our consolidated financial statements and the accompanying notes contained in this Annual Report on Form 10-K.
Overview
Our business is organized into the following five segments: Americas Recycling, Americas Mills, Americas Fabrication, International Mill and International Marketing and Distribution. Our domestic and international distribution business activities consist only of physical transactions and not market speculation. Americas Recycling Operations
We conduct our recycling operations through metal processing facilities located in the states of Arkansas, Florida, Georgia, Kansas, Louisiana, Missouri, North Carolina, Oklahoma, Tennessee and Texas. Americas Mills Operations
We conduct our domestic mills operations through a network of:

• five steel mills, commonly referred to as "minimills," that produce one or more of reinforcing bar, angles, flats, rounds, small beams, fence-post sections and other shapes;

• two scrap metal shredders and processing facilities that directly support the steel minimills;

• a railroad salvage company; and

• a copper tube minimill which is aggregated with the Company's steel minimills because it has similar economic characteristics.

Americas Fabrication Operations
We conduct our domestic fabrication operations through a network of:

• steel plants that bend, weld, cut and fabricate steel, primarily reinforcing bar;

• warehouses that sell or rent products for the installation of concrete;

• plants that produce steel fence posts; and

• plants that treat steel with heat to strengthen and provide flexibility.

International Mill Operations
Our International Mill operations include CMC Zawiercie S.A. ("CMCZ"), which owns a steel minimill and conducts its operations at Zawiercie, Poland, and recycling and fabrication operations in Poland. We conduct our International Mill operations through:

• two rolling mills that produce primarily reinforcing bar and high quality merchant products;

• a rolling mill that produces primarily wire rod;

• a specialty rod finishing mill;

• our scrap processing facilities that directly support the minimill; and

• four steel fabrication plants primarily for reinforcing bar and mesh.

International Marketing and Distribution Operations We market and distribute steel, copper and aluminum coil, sheet and tubing, ores, metal concentrates, industrial minerals, ferroalloys and chemicals through our network of marketing and distribution offices, processing facilities and joint ventures domestically and internationally. Our customers use these products in a variety of industries.

Consolidated Results of Operations
                                                              Year ended August 31,
(in thousands except per share data)                  2012            2011            2010
Net sales*                                        $ 7,828,440     $ 7,863,345     $ 6,276,928
Earnings (loss) from continuing operations            208,983          19,278         (99,447 )
Per diluted share                                        1.79            0.16           (0.88 )
Adjusted EBITDA                                       364,235         237,250          14,879
International net sales*                            3,153,736       3,500,716       3,061,591
As % of total sales                                        40 %            45 %            49 %
LIFO income (expense)** effect on net earnings
(loss) attributable to CMC                        $    29,604     $   (50,049 )   $     7,385
Per diluted share                                        0.25           (0.43 )          0.07


__________________________________________

Reconciliations from net earnings (loss) from continuing operations to adjusted EBITDA are provided below for the years ended August 31:

(in thousands)                                                  2012          2011          2010
Earnings (loss) from continuing operations                   $ 208,983     $  19,278     $ (99,447 )
Less net earnings attributable to noncontrolling interests          (6 )        (213 )        (236 )
Interest expense                                                69,496        69,821        74,181
Income taxes (benefit)                                         (46,190 )      19,328       (61,942 )
Depreciation, amortization and impairment charges              137,289       178,251       165,316
Adjusted EBITDA from continuing operations                   $ 369,572     $ 286,465     $  77,872
Adjusted EBITDA from discontinued operations                    (5,337 )     (49,215 )     (62,993 )
Adjusted EBITDA                                              $ 364,235     $ 237,250     $  14,879

Our adjusted EBITDA does not include interest expense, income taxes, depreciation, amortization and impairment charges. Because we have borrowed money in order to finance our operations, interest expense is a necessary element of our costs and our ability to generate revenues. Because we use capital assets, depreciation and amortization are also necessary elements of our costs. Impairment charges, when necessary, accelerate the write-off of fixed assets that would otherwise have been accomplished by periodic depreciation charges. Also, the payment of income taxes is a necessary element of our operations. Therefore, any measures that exclude these elements have material limitations. To compensate for these limitations, we believe that it is appropriate to consider both net earnings (loss) determined in accordance with GAAP, as well as adjusted EBITDA, to evaluate our performance. Also, we separately analyze any significant fluctuations in interest expense, depreciation, amortization, impairment charges and income taxes.
The following events and performances had a significant financial impact to the Company's performance during 2012 as compared to 2011 or are expected to be significant for our future operations:

1. Net sales of the Americas Recycling segment decreased 12% and adjusted operating profit decreased $3.6 million during 2012 as compared to the prior year primarily due to lower nonferrous volumes and average selling prices and ferrous margin compression offset by a swing of $20.0 million to LIFO income.

2. Net sales of the Americas Mills segment increased 6% and adjusted operating profit increased $72.2 million from the prior year. The results were primarily impacted by a change of $74.1 million from LIFO expense to income.

3. Net sales of the Americas Fabrication segment increased 13% and the segment reported an improvement in adjusted operating results of $113.4 million due to stable material pricing and improved market conditions in commercial construction markets resulting in stronger volume and pricing. The results were impacted by a change of $21.9 million from LIFO expense to income.

4. Net sales of the International Mill segment were consistent and adjusted operating profit decreased $24.6 million from the prior year primarily due to margin compression and deteriorating economic conditions in Europe. Although the results were unfavorable, CMCZ set record volumes for the year ended August 31, 2012.

5. Net sales of the International Marketing and Distribution segment increased 3% and adjusted operating profit decreased $29.1 million from the prior year primarily due to losses on iron ore contracts, reduced demand in some of our key products and uncertainty concerning economic stimulus in China. The results were impacted by a change of $7.1 million from LIFO expense to income.

6. During the third quarter 2012, we terminated our interest rate swap transactions and received cash proceeds of approximately $53 million.

7. During the first quarter of 2012, we announced the exit of our steel pipe manufacturing operation in Croatia ("CMCS"). Effective June 1, 2012, the Company completed the sale of all of the outstanding shares of CMCS for $30.6 million, of which $3.1 million will be paid when certain conditions are met. As part of the share sale, certain assets were excluded from the transaction. On June 13, 2012, the Company completed the sale of a portion of the excluded assets for $6.7 million. In the fourth quarter of 2012, the Company recorded a $13.8 million pre-tax gain for these transactions, including a foreign currency translation gain of $7.5 million. The remaining CMCS assets excluded from these transactions were sold on September 21, 2012 for $3.9 million.

8. During the first quarter of 2012, we recognized a tax benefit of $102.1 million in continuing operations related to ordinary worthless stock and bad debt deductions from our investment in CMCS. The Company recorded a tax benefit of $11.5 million during the year ended August 31, 2012 related to federal and state research and experimentation expenditures.

9. We recorded consolidated pre-tax LIFO income of $45.5 million for 2012 compared to pre-tax LIFO expense of $77.0 for 2011.

Segments

Unless otherwise indicated, all dollar amounts below are calculated before income taxes. Financial results for our reportable segments are consistent with the basis and manner in which we internally disaggregate financial information for the purpose of making operating decisions. See Note 20, Business Segments, to the consolidated financial statements included in this report.

We use adjusted operating profit (loss) to compare and evaluate the financial performance of our segments. Adjusted operating profit (loss) is the sum of our earnings (loss) before income taxes and financing costs.
The following table shows net sales and adjusted operating profit (loss) by business segment:

                                                       Year ended August 31,
(in thousands)                                 2012            2011            2010
Net sales:
Americas Recycling                         $ 1,606,161     $ 1,829,537     $ 1,316,430
Americas Mills                               2,155,817       2,036,325       1,478,426
Americas Fabrication                         1,381,638       1,225,722       1,140,277
International Mill                           1,033,357       1,046,233         699,064
International Marketing and Distribution     2,727,319       2,650,899       2,463,414
Corporate                                        8,033           6,882           4,249
Eliminations                                (1,083,885 )      (932,253 )      (824,932 )
Adjusted operating profit (loss):
Americas Recycling                              39,446          43,059          11,416
Americas Mills                                 233,933         161,731          37,251
Americas Fabrication                           (15,697 )      (129,141 )      (107,800 )
International Mill                              23,044          47,594         (31,594 )
International Marketing and Distribution        47,287          76,337          74,689
Corporate                                      (83,035 )       (84,729 )       (70,678 )
Eliminations                                    (6,251 )        (1,275 )         3,460
Discontinued Operations                         (8,675 )      (150,678 )      (101,645 )

LIFO Impact on Adjusted Operating Profit (Loss) LIFO is an inventory costing method that assumes the most recent inventory purchases or goods manufactured are sold first. Therefore, current sales prices are offset against current inventory costs. In periods of rising prices, the LIFO inventory costing method has the effect of eliminating inflationary profits from operations. In periods of declining prices, this method has the effect of eliminating deflationary losses from operations. In either case the goal is to reflect economic profit of current market conditions. The table below reflects LIFO income or (expense) representing decreases or (increases) in the LIFO inventory reserve.

The International Mill segment exclusively uses the FIFO inventory valuation method and thus is not included in this table:

                                                Three Months Ended            Year Ended
                                                    August 31,                August 31,
(in thousands)                                  2012          2011        2012         2011
Americas Recycling                           $   4,056     $ (1,236 )   $  7,007    $ (12,980 )
Americas Mills                                  21,614       (5,781 )     20,405      (53,648 )
Americas Fabrication                             3,663       (1,724 )     15,248       (6,644 )
International Marketing and Distribution        (1,152 )       (902 )      2,884       (4,217 )
Discontinued Operations                              -            -            -          491
Consolidated pre-tax LIFO income (expense)   $  28,181     $ (9,643 )   $ 45,544    $ (76,998 )

Americas Recycling The decreased adjusted operating profit during 2012 resulted in part from lower nonferrous average selling prices and volumes primarily from reduced export demand within Asia coupled with ferrous margin compression . LIFO income was $7.0 million for 2012 as compared to LIFO expense of $13.0 million for 2011. We exported 6% of our ferrous scrap tonnage and 35% of our nonferrous scrap tonnage during 2012.
The following table reflects our Americas Recycling segment's average selling prices per ton and tons shipped (in thousands) for the years ended August 31:

                                                            Increase (Decrease)
                                     2012       2011        Amount           %
Average ferrous selling price      $   345    $   340    $        5           1  %
Average nonferrous selling price   $ 2,823    $ 3,292    $     (469 )       (14 )%
Ferrous tons shipped                 2,196      2,202            (6 )         -  %
Nonferrous tons shipped                243        267           (24 )        (9 )%

Americas Mills We include our five domestic steel mills, including the scrap locations which directly support the steel mills, and our copper tube minimill in our Americas Mills segment.
Within the segment, adjusted operating profit for our five domestic steel mills was $235.9 million for 2012 as compared to $149.2 million for 2011. The results were primarily impacted from the change in LIFO to income of $16.6 million in 2012 as compared to LIFO expense of $48.0 million in 2011. Results were also positively impacted from higher shipments and better margin. The Arizona mill in its third full year of operations has been profitable for the last two years. Our mills ran at 78% utilization during 2012 as compared to 74% during 2011. Rebar accounted for 51% of tonnage shipped, consistent with the prior year. Higher electrical and alloy rates resulted in an overall increase of $7.6 million in electrode, alloys and energy costs. Shipments included 410 thousand tons of billets in 2012 as compared to 430 thousand tons of billets in 2011.
The table below reflects our domestic steel mills' operating statistics (in thousands) and average prices per short ton for the year ended August 31:

                                                                     Increase
                                               2012      2011      Amount     %
Tons melted                                    2,568     2,470         98    4 %
Tons rolled                                    2,206     2,088        118    6 %
Tons shipped                                   2,682     2,518        164    7 %
Average mill selling price (finished goods)   $  730    $  696    $    34    5 %
Average mill selling price (total sales)         706       669         37    6 %
Average cost of ferrous scrap consumed           379       364         15    4 %
Average metal margin                             327       305         22    7 %
Average ferrous scrap purchase price             339       329         10    3 %

Our copper tube minimill recorded an adjusted operating loss of $2.0 million during 2012 as compared to an adjusted operating profit of $12.5 million in 2011. The decline in adjusted operating profit was primarily due to lower copper selling prices. The results were impacted positively by the change in LIFO to income of $3.8 million in 2012 as compared to LIFO expense of $5.6 million in 2011.

The table below reflects our copper tube minimill's operating statistics for the year ended August 31:

                                         Increase (Decrease)
(pounds in millions)   2012    2011      Amount           %
Pounds shipped         41.5    41.9        (0.4 )       (1 )%
Pounds produced        39.3    39.2         0.1          -  %

Americas Fabrication This segment recorded an improvement in 2012 adjusted operating results of $113.4 million as compared to 2011. Included in last year's result is impairment, severance and closure costs of $21.7 million for closing certain rebar fabrication and construction services locations. The segment benefited from stable material pricing and improved market conditions in commercial construction markets resulting in stronger volume and pricing. Backlogs increased in both prices and tonnage in 2012 as compared to 2011. We are continuing to see encouraging results of market recovery as this segment's backlogs continue to be near all-time highs in tonnage and total value. Additionally, LIFO changed to income of $15.2 million in 2012 as compared to LIFO expense of $6.6 million in 2011. The composite average fabrication selling price was $906 per ton in 2012, up from $817 per ton in 2011.
The tables below show our average fabrication selling prices per short ton and total fabrication plant shipments for the year ended August 31:

                                                                                  Increase
Average selling price (excluding stock and buyout sales)    2012      2011      Amount     %
Rebar                                                      $  864    $  773    $    91    12 %
Structural                                                  2,342     1,980        362    18 %
Post                                                          949       928         21     2 %


                                                 Increase (Decrease)
Tons shipped (in thousands)   2012    2011     Amount            %
Rebar                          911     851       60             7  %
Structural                      60      56        4             7  %

International Mill This segment had an adjusted operating profit of $23.0 million during 2012 as compared to an adjusted operating profit of $47.6 million during 2011. Included in this year's fourth quarter is a loss of $3.8 million on the sale of a rebar fabrication shop in Rosslau, Germany. As of the date of this report, market conditions in Europe continue to be soft and significant uncertainty remains. On the positive side, our Polish operations recorded improvement in fourth quarter results and set full year production and shipping records in the mill operation in 2012, primarily on the strength of rebar and billet demand. Our mill operated at 85% of capacity in 2012 and 2011. Shipments in 2012 included 205 thousand tons of billets compared to 203 thousand tons of billets in 2011.
The table below reflects our International Mill's operating statistics (in thousands) and average prices per short ton:

                                                                  Increase (Decrease)
                                            2012      2011        Amount           %
Tons melted                                 1,638     1,585           53            3  %
Tons rolled                                 1,395     1,334           61            5  %
Tons shipped                                1,584     1,494           90            6  %
Average mill selling price (total sales)   $  601    $  638    $     (37 )         (6 )%
Average ferrous scrap production cost         385       389           (4 )         (1 )%
Average metal margin                          216       249          (33 )        (13 )%
Average ferrous scrap purchase price          315       325          (10 )         (3 )%

International Marketing and Distribution This segment reported an increase in sales of 3% and reported an adjusted operating profit of $47.3 million for 2012 as compared to an adjusted operating profit of $76.3 million during 2011, primarily due to losses on iron ore contracts, reduced demand in some of our key products and uncertainty concerning economic stimulus in China. This segment recorded LIFO income of $2.9 million for 2012 compared to LIFO expense of $4.2 million for 2011.
Corporate Our corporate expenses decreased by $1.7 million in 2012 to $83.0 million primarily as a result of our cost containment initiatives, partially offset by $15.0 million in fees and expenses associated with a proxy contest and hostile tender offer.

CONTINUING OPERATIONS DATA
Consolidated Data The LIFO method of inventory valuation increased our net earnings from continuing operations by approximately $30 million for 2012 as compared to increasing our net loss by approximately $50 million for 2011. Selling, General and Administrative ("SG&A") Expenses Our overall SG&A expenses decreased by $30.2 million, or 6%, for 2012 as compared to 2011. The costs were down as a result of our cost containment initiatives offset by expenses associated with a proxy contest and hostile tender offer as discussed above. Impairment of Assets Our impairment of assets decreased by $23.9 million as a result of 2011 impairments related to closure of certain rebar fabrication and construction services locations. There were no significant impairments in 2012. Interest Expense Our interest expense decreased by $0.3 million to $69.5 million . . .