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ADD to BW0127, SCHNITZER-STEEL

Business Editors
ADD to BW0127, (SCHNITZER-STEEL), between CONSOLIDATED STATEMENT OF INCOME and Reconciliation of Notable Items,

                   SCHNITZER STEEL INDUSTRIES, INC.
                    Reconciliation of Notable Items
               (in thousands, except per share amounts)
             For the Three Months Ended   For the Three Months Ended
                  August 31, 2002             August 31, 2001
            ----------------------------- ----------------------------
            As        Notable    As       As       Notable    As
            Reported   Items    Adjusted  Reported  Items     Adjusted
            --------- -------   --------- -------- -------   ---------
                     (Unaudited)                 (Unaudited)
 Revenues   $100,089         (4) $100,089 $70,900        (4) $ 70,900
            ---------           --------- --------           ---------
 Costs and
  expenses:
    Cost of
  goods sold
  and other
  operating
    expenses  90,636         (4)  90,636   62,104         (4)  62,104
 Impairment
  and other
  non-
  recurring
  charges      4,840  (4,840)(1)       0       --                  --
 Selling and
  adminis-
  trative
  expenses     7,718               7,718    7,067               7,067
            --------- -------   --------- -------- -------   ---------
 Income from
  wholly-
  owned
  operations  (3,105) (4,840)      1,735    1,729               1,729
 Income from
  joint
  ventures     5,597  (1,205)(2)   5,902    4,060     900 (2)   3,160
                         900 (3)
            --------- -------   --------- -------- -------   ---------
 Income from
  operations   2,492  (5,145)      7,637    5,789     900       4,889
 Other
  income
  (expense):
 Interest
  expense       (452)               (452)  (1,062)             (1,062)
 Other
  income,
  net            162                 162     (442)               (442)
            --------- -------   --------- -------- -------   ---------
                (290)               (290)  (1,504)             (1,504)
            ---------           --------- --------           ---------
 Income
  before
  income
  taxes        2,202  (5,145)      7,347    4,285     900       3,385
 Income tax
  provision       (6)  1,045 (5)  (1,051)  (1,291)   (270)     (1,021)
            --------- -------   --------- -------- -------   ---------
 Net income $  2,196  (4,100)   $  6,296  $ 2,994     630    $  2,364
            ========= =======   ========= ======== =======   =========
 Basic
  earnings
  per share $   0.24   (0.45)   $   0.69  $  0.33    0.07    $   0.26
            ========= =======   ========= ======== =======   =========
 Diluted
  earnings
  per share $   0.23   (0.43)   $   0.67  $  0.32    0.07    $   0.25
            ========= =======   ========= ======== =======   =========
(1) Includes the cost to terminate an Alaska barge contract of
    affreightment, write-down costs associated with the termination of
    a car crushing business and an impairment charge to exit a metal
    recycling yard in Reno, Nevada.
(2) Year-end LIFO inventory adjustments
(3) Gain on sale of joint venture property
(4) In order to conform with recent accounting guidance, the Company
    reclassified the cost of freight and handling it incurs to sell
    products to its customers from a contra-revenue account to cost of
    goods sold and other operating expenses. This reclassification
    resulted in an increase in revenues from amounts previously
    reported. This reclassification has been made to all periods
    presented.
(5) During the year the Company estimates its annual effective tax
    rate and adjusts it quarterly based upon numerous assumptions. As
    of the end of the third quarter of fiscal 2002, the Company
    estimated its tax rate to be approximately 20%. The estimate was
    revised downward in the fourth quarter of 2002 to 14%.
CONTACT:          Schnitzer Steel Industries, Inc.
                  Barry Rosen, 503/323-2720 (Financial Contact)
                  Tom Zelenka, 503/323-2821 (Press Contact)

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