Schnitzer Steel, Hugo Neu Corp. Separation Has Been Completed

"We not only received very attractive scrap metal franchises, but an excellent team of motivated people that have helped build these quality businesses," John D. Carter, president and CEO, says. "We are making good progress toward integrating these businesses into our existing operations. It's been our pleasure to begin to become better acquainted with the managers and employees who operate these businesses. We believe these businesses combined with our existing wholly-owned operations will produce significant benefits in making Schnitzer an even greater company in the years ahead."

Carter adds, "In particular, we would like to thank John Neu, the rest of the Hugo Neu team and the joint venture personnel remaining with Hugo Neu for their hard work in helping us build the many joint venture businesses. Many of these people were instrumental in the growth and success of the joint ventures, and we sincerely wish them the very best in operating the excellent businesses Hugo Neu received as part of the separation."

Under the joint venture Master Agreement, Schnitzer received:

• The assets and related liabilities of Hugo Neu Schnitzer Global Trade related to the trading business in Russia, Poland, Denmark, Finland, Norway and Sweden, and a non-compete agreement from Hugo Neu that bars the company from buying scrap metal in certain areas in Russia and the Baltic region for a five-year period ending June 8, 2010;
• The joint ventures' various interests in the New England operations that primarily operate in Massachusetts, New Hampshire, Rhode Island and Maine;
• Full ownership in the Hawaii operations that was previously completely owned by Hugo Neu; and
• A payment of $52.3 million in cash, subject to post-closing adjustments.

 Hugo Neu, in exchange, assumed total ownership of:

• The joint venture operations in New York, New Jersey and California, including the scrap processing facilities, marine terminals and related ancillary satellite sites, the interim New York City Recycling Contract, and other miscellaneous assets; and
• The portions of Hugo Neu Schnitzer Global Trade, a joint venture engaged primarily in scrap metal trading, that is not related to the Russian and Baltic trading business. This was split with HNS Global Trade redeeming its 50 percent membership interest from Schnitzer.

The objective of the separation was to provide each partner with an equitable portion of the various joint operations.

Schnitzer will hold a conference call Oct. 6, 2005, to discuss its fourth quarter 2005 earnings release and to briefly discuss the joint venture separation. The conference call will be broadcast over the Internet Oct. 6, 2005, at 11:30 a.m. EDT with President and Chief Executive Officer John Carter, Chairman of the Board Kenneth Novack, Interim Chief Financial Officer Greg Witherspoon and Vice President of Asset and Business Integration Kelly Lang. The call is being Web cast by CCBN and can be accessed on Schnitzer Steel's web site at www.schnitzersteel.com.