Annual Report 2007 - Severstal

OAO Severstal and subsidiaries
Notes to the consolidated financial statements
for the year ended December 31, 2007
(Amounts expressed in thousands of US dollars, except as otherwise stated)
Segmental income statements for the year ended December 31, 2005:
Russian Severstal Inter
Mining Steel Lucchini North Metalware Financing segment
segment segment segment America IPM segment segment transactions Consolidated
Sales
Sales – external 420,314 5,174,637 1,805,903 1,822,573 – 562,630 – – 9,786,057
Sales – to related parties 971,229 789,677 41,630 – – 56,200 – (1,193,147) 665,589
1,391,543 5,964,314 1,847,533 1,822,573 – 618,830 – (1,193,147) 10,451,646
Cost of sales (745,429) (3,405,374) (1,569,239) (1,716,332) (2,251) (556,963) – 1,164,450 (6,831,138)
Gross profit 646,114 2,558,940 278,294 106,241 (2,251) 61,867 – (28,697) 3,620,508
General and
administrative expenses (105,158) (225,159) (125,434) (29,539) (2,490) (36,882) – – (524,662)
Distribution expenses (55,935) (509,943) (63,958) – – (27,848) – – (657,684)
Indirect taxes and contributions (41,968) (26,380) (23,492) – (59) (3,444) – – (95,343)
Share of associates’ (losses)/profits – (4,969) 77 2,749 – (2,047) – – (4,190)
Net income/(loss) from
securities operations 3,728 20,841 1,761 505 (4) 470 – (2,858) 24,443
(Loss)/gain on disposal of
property, plant and equipment (3,931) (29,668) (1,169) (184) 57 (1,885) – – (36,780)
Net other operating
(expenses)/income (4,966) (3,868) (12,868) 1,981 462 (273) – (812) (20,344)
Profit from operations 437,884 1,779,794 53,211 81,753 (4,285) (10,042) – (32,367) 2,305,948
Impairment of property,
plant and equipment, net (10,624) (91,139) (8,552) – (155) (914) – – (111,384)
Net gain on restructuring
of tax liabilities 174,178 – – – – – – – 174,178
Negative goodwill, net – 4,830 – – – – – 2,800 7,630
Net other non-operating expenses (8,378) (30,428) – – (16) (4,142) – (9,789) (52,753)
Profit before financing
and taxation 593,060 1,663,057 44,659 81,753 (4,456) (15,098) – (39,356) 2,323,619
Interest income 2,848 62,959 6,524 718 127 1,601 – (9,643) 65,134
Interest expense (25,146) (127,274) (41,787) (13,242) (5) (1,514) – 5,911 (203,057)
Foreign exchange difference (1,385) (64,457) 7,404 – (881) 111 – (1,023) (60,231)
Profit before income tax 569,377 1,534,285 16,800 69,229 (5,215) (14,900) – (44,111) 2,125,465
Income tax (expense)/benefit (117,377) (372,111) 9,166 (27,088) 306 (2,819) – 9,016 (500,907)
Profit from continuing
operations 452,000 1,162,174 25,966 42,141 (4,909) (17,719) – (35,095) 1,624,558
Profit/(loss) from
discontinued operations – – (10,784) – – – 6,842 4,544 602
Profit for the year 452,000 1,162,174 15,182 42,141 (4,909) (17,719) 6,842 (30,551) 1,625,160
Additional information:
Depreciation expense 156,048 233,939 74,659 7,159 263 19,550 – – 491,618
Capital expenditures 349,788 705,131 62,946 13,059 100,541 37,248 33 (19,549) 1,249,197
Intersegment sales
(incl. in sales to related parties) 805,523 338,440 35,961 – – 13,223 – (1,193,147) –
Severstal Annual Report 2007 107