BROADENING OUR HORIZONS - Arrium

OneSteel Annual Report 20113. SEGMENT INFORMATION (continued)762010Iron Ore$mRecycling$mManufacturing$mMiningConsumables$mAustralianDistribution$mNew ZealandDistribution$mUnallocated$mEliminations$mCONSOLIDATED$mSegment revenuesSales to external customers 770.0 731.4 1,308.9 599.4 2,490.6 304.3 — — 6,204.6Intersegment revenue — 390.4 1,133.0 81.1 19.1 — 9.3 (1,632.9) —Other revenue/income fromexternal customers 12.3 1.9 31.0 (0.4) 10.9 (0.5) 1.1 — 56.3Total income 782.3 1,123.7 2,472.9 680.1 2,520.6 303.8 10.4 (1,632.9) 6,260.9Share of net loss ofinvestments accounted forusing the equity method — (0.2) — — — — (0.6) — (0.8)Earnings before interest, tax,depreciation and amortisation 361.2 22.9 120.8 81.4 91.8 18.2 (47.6) (10.4) 638.3Depreciation and amortisation (27.8) (15.2) (111.1) (20.9) (31.6) (5.2) (3.3) — (215.1)Earnings before interestand tax 333.4 7.7 9.7 60.5 60.2 13.0 (50.9) (10.4) 423.2Finance costs (89.2)Income tax expense (73.3)Profit after tax 260.7Segment assets 816.7 709.2 2,623.9 1,158.5 1,509.0 175.2 120.2 (182.8) 6,929.9Investments accounted forusing the equity method — 1.5 — — — — 5.1 — 6.6Tax assets 131.2Consolidated assets 7,067.7Segment liabilities 99.3 92.3 569.5 104.8 380.5 60.3 1,222.4 (167.0) 2,362.1Tax liabilities 212.9Consolidated liabilities 2,575.0Other segment informationCapital expenditure 40.1 13.9 50.1 13.8 48.2 3.8 4.4 — 174.3Identification of reportable segmentsThe Group has identified its operating segments based on internal reporting that is reviewed and used by the MD & CEO and theexecutive management team in assessing performance and in determining the allocation of resources.The operating segments are identified by management based on the nature of the products provided, with each operating segmentrepresenting a strategic business unit that offers different products and serves different markets.The reportable segments are based on aggregated operating segments determined by the similarity of the products produced and soldas these are the sources of the Group’s major risks and have the most effect on the rates of return.Due to the acquisition of the Moly-Cop Group and a change in the management structure of OneSteel Limited during the year ended30 June 2011, the composition of the segments has changed. A new segment, Mining Consumables, has been identified, which includesthe Moly-Cop Group and OneSteel’s existing Waratah, Newcastle facilities, which include the grinding media and rail wheel businesses,OneSteel’s grinding media businesses in the United States and Indonesia, and the wire ropery business at Newcastle previously reportedas part of the Manufacturing segment. The June 2010 comparatives have been restated to reflect the change in segment structure.Iron OreThe Iron Ore segment supplies pelletised iron ore to OneSteel’s integrated steelworks at Whyalla sourced from OneSteel’s mines locatedin the South Middleback Ranges, approximately 60km from Whyalla, South Australia. The Whyalla steelworks uses magnetite iron orefeed and hematite iron ore is sold externally.RecyclingThe Recycling segment operates in 11 countries through a combination of physical operations and trading offices, supplying steel makingraw materials to steel mills operated in Australia and across the globe.ManufacturingOneSteel’s Manufacturing segment combines the activities of steel production and the product mills. The Whyalla Steelworks producesbillet as feedstock for OneSteel’s Market Mills operations together with rail products, structural steels and slabs for external sale.Within Market Mills, the Sydney and Laverton steel mills produce steel billets for the manufacture of reinforcing and bar products on itsown rolling mills as well as steel billet to be used as feed in OneSteel’s other rolling facilities.Market Mills manufacture products which are used in a range of applications such as manufacturing, construction, mining andautomotive industries.