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Table of Contents

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.  20549

 

FORM 10-Q

 

x           Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

For the quarterly period ended June 30, 2016

 

OR

 

o              Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Commission File Number 0-21719

 

Steel Dynamics, Inc.

(Exact name of registrant as specified in its charter)

 

Indiana

 

35-1929476

(State or other jurisdiction of incorporation or organization)

 

(I.R.S. Employer Identification No.)

 

 

 

7575 West Jefferson Blvd, Fort Wayne, IN

 

46804

(Address of principal executive offices)

 

(Zip Code)

 

Registrant’s telephone number, including area code:  (260) 969-3500

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes x  No o

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes x  No o

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company (see definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act).

 

(Check one):

Large accelerated filer x

Accelerated filer o

Non-accelerated filer o

Smaller reporting company o

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes o  No x

 

As of August 1, 2016, Registrant had 243,761,301 outstanding shares of common stock.

 

 

 



Table of Contents

 

STEEL DYNAMICS, INC.

Table of Contents

 

 

 

Page

 

 

 

PART I. Financial Information

 

 

 

Item 1.

Financial Statements:

 

 

 

 

 

Consolidated Balance Sheets as of June 30, 2016 (unaudited) and December 31, 2015

1

 

 

 

 

Consolidated Statements of Income for the three- and six-month periods ended June 30, 2016 and 2015 (unaudited)

2

 

 

 

 

Consolidated Statements of Cash Flows for the three- and six-month periods ended June 30, 2016 and 2015 (unaudited)

3

 

 

 

 

Notes to Consolidated Financial Statements (unaudited)

4

 

 

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

18

 

 

 

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

24

 

 

 

Item 4.

Controls and Procedures

25

 

 

 

PART II. Other Information

 

 

 

Item 1.

Legal Proceedings

26

 

 

 

Item 1A.

Risk Factors

26

 

 

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

26

 

 

 

Item 3.

Defaults Upon Senior Securities

26

 

 

 

Item 4.

Mine Safety Disclosures

26

 

 

 

Item 5.

Other Information

26

 

 

 

Item 6.

Exhibits

27

 

 

 

 

Signatures

28

 



Table of Contents

 

STEEL DYNAMICS, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

 

 

 

June 30,

 

December 31,

 

 

 

2016

 

2015

 

 

 

(unaudited)

 

 

 

Assets

 

 

 

 

 

Current assets

 

 

 

 

 

Cash and equivalents

 

$

1,052,666

 

$

727,032

 

Accounts receivable, net

 

758,145

 

579,333

 

Accounts receivable-related parties

 

35,858

 

34,272

 

Inventories

 

1,175,716

 

1,149,390

 

Other current assets

 

28,072

 

47,914

 

Total current assets

 

3,050,457

 

2,537,941

 

 

 

 

 

 

 

Property, plant and equipment, net

 

2,885,844

 

2,951,210

 

 

 

 

 

 

 

Restricted cash

 

19,555

 

19,565

 

Intangible assets, net

 

265,476

 

278,960

 

Goodwill

 

394,275

 

397,470

 

Other assets

 

14,069

 

16,936

 

Total assets

 

$

6,629,676

 

$

6,202,082

 

 

 

 

 

 

 

Liabilities and Equity

 

 

 

 

 

Current liabilities

 

 

 

 

 

Accounts payable

 

$

450,945

 

$

276,725

 

Accounts payable-related parties

 

10,322

 

6,630

 

Income taxes payable

 

43,367

 

2,023

 

Accrued payroll and benefits

 

112,625

 

94,906

 

Accrued interest

 

38,540

 

38,502

 

Accrued expenses

 

105,378

 

99,824

 

Current maturities of long-term debt

 

18,047

 

16,680

 

Total current liabilities

 

779,224

 

535,290

 

 

 

 

 

 

 

Long-term debt

 

2,573,186

 

2,577,976

 

Deferred income taxes

 

433,116

 

400,770

 

Other liabilities

 

19,544

 

16,595

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

Redeemable noncontrolling interests

 

126,340

 

126,340

 

 

 

 

 

 

 

Equity

 

 

 

 

 

Common stock voting, $.0025 par value; 900,000,000 shares authorized; 263,370,594, and 262,937,139 shares issued; and 243,745,023, and 243,089,514 shares outstanding, as of June 30, 2016 and December 31, 2015, respectively

 

639

 

638

 

Treasury stock, at cost; 19,625,571, and 19,847,625 shares, as of June 30, 2016 and December 31, 2015, respectively

 

(392,050

)

(396,455

)

Additional paid-in capital

 

1,125,519

 

1,110,253

 

Retained earnings

 

2,101,729

 

1,965,291

 

Total Steel Dynamics, Inc. equity

 

2,835,837

 

2,679,727

 

Noncontrolling interests

 

(137,571

)

(134,616

)

Total equity

 

2,698,266

 

2,545,111

 

Total liabilities and equity

 

$

6,629,676

 

$

6,202,082

 

 

See notes to consolidated financial statements.

 

1



Table of Contents

 

STEEL DYNAMICS, INC.

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(in thousands, except per share data)

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

June 30,

 

June 30,

 

 

 

2016

 

2015

 

2016

 

2015

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

 

 

 

 

 

 

 

 

Unrelated parties

 

$

1,978,984

 

$

1,945,983

 

$

3,676,988

 

$

3,949,956

 

Related parties

 

44,918

 

59,024

 

88,215

 

102,486

 

Total net sales

 

2,023,902

 

2,005,007

 

3,765,203

 

4,052,442

 

 

 

 

 

 

 

 

 

 

 

Costs of goods sold

 

1,643,519

 

1,833,264

 

3,148,784

 

3,693,657

 

Gross profit

 

380,383

 

171,743

 

616,419

 

358,785

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

96,853

 

82,660

 

184,383

 

159,010

 

Profit sharing

 

20,176

 

5,031

 

29,467

 

9,629

 

Amortization of intangible assets

 

7,232

 

6,493

 

14,482

 

12,816

 

Operating income

 

256,122

 

77,559

 

388,087

 

177,330

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net of capitalized interest

 

36,646

 

37,163

 

73,689

 

80,250

 

Other expense (income), net

 

(1,818

)

(1,212

)

(3,610

)

14,980

 

Income before income taxes

 

221,294

 

41,608

 

318,008

 

82,100

 

 

 

 

 

 

 

 

 

 

 

Income taxes

 

80,851

 

16,283

 

116,247

 

29,821

 

 

 

 

 

 

 

 

 

 

 

Net income

 

140,443

 

25,325

 

201,761

 

52,279

 

 

 

 

 

 

 

 

 

 

 

Net loss attributable to noncontrolling interests

 

1,526

 

6,225

 

2,945

 

10,032

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to Steel Dynamics, Inc.

 

$

141,969

 

$

31,550

 

$

204,706

 

$

62,311

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share attributable to Steel Dynamics, Inc. stockholders

 

$

.58

 

$

.13

 

$

.84

 

$

.26

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding

 

243,655

 

241,900

 

243,429

 

241,718

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share attributable to Steel Dynamics, Inc. stockholders, including the effect of assumed conversions when dilutive

 

$

.58

 

.13

 

$

.84

 

$

.26

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares and share equivalents outstanding

 

245,392

 

243,491

 

245,000

 

243,179

 

 

 

 

 

 

 

 

 

 

 

Dividends declared per share

 

$

.1400

 

$

.1375

 

$

.2750

 

$

.2750

 

 

See notes to consolidated financial statements.

 

2



Table of Contents

 

STEEL DYNAMICS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(in thousands)

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

June 30,

 

June 30,

 

 

 

2016

 

2015

 

2016

 

2015

 

 

 

 

 

 

 

 

 

 

 

Operating activities:

 

 

 

 

 

 

 

 

 

Net income

 

$

140,443

 

$

25,325

 

$

201,761

 

$

52,279

 

 

 

 

 

 

 

 

 

 

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

74,795

 

74,273

 

148,780

 

147,095

 

Equity-based compensation

 

7,236

 

6,357

 

15,641

 

14,900

 

Deferred income taxes

 

18,314

 

16,367

 

35,401

 

33,084

 

Loss on disposal of assets

 

1,035

 

998

 

1,017

 

5,983

 

Changes in certain assets and liabilities:

 

 

 

 

 

 

 

 

 

Accounts receivable

 

(103,598

)

(47,149

)

(179,194

)

85,935

 

Inventories

 

(108,893

)

161,174

 

(26,326

)

326,173

 

Other assets

 

10,613

 

7,386

 

11,359

 

11,894

 

Accounts payable

 

53,732

 

62,735

 

166,391

 

(64,318

)

Income taxes receivable/payable

 

34,388

 

(6,844

)

48,381

 

9,421

 

Accrued expenses

 

29,907

 

8,590

 

23,660

 

(78,527

)

Net cash provided by operating activities

 

157,972

 

309,212

 

446,871

 

543,919

 

 

 

 

 

 

 

 

 

 

 

Investing activities:

 

 

 

 

 

 

 

 

 

Purchases of property, plant and equipment

 

(35,686

)

(22,821

)

(63,394

)

(56,172

)

Other investing activities

 

1,206

 

806

 

4,260

 

2,469

 

Net cash used in investing activities

 

(34,480

)

(22,015

)

(59,134

)

(53,703

)

 

 

 

 

 

 

 

 

 

 

Financing activities:

 

 

 

 

 

 

 

 

 

Issuance of current and long-term debt

 

63,655

 

60,941

 

84,107

 

111,034

 

Repayment of current and long-term debt

 

(81,022

)

(60,557

)

(85,254

)

(488,008

)

Debt issuance cost

 

(1

)

 

(6

)

 

Proceeds from exercise of stock options, including related tax effect

 

3,683

 

5,206

 

6,575

 

6,959

 

Distributions to noncontrolling investors, net

 

(2

)

(1,135

)

(10

)

(1,164

)

Dividends paid

 

(34,090

)

(33,233

)

(67,515

)

(60,999

)

Net cash used in financing activities

 

(47,777

)

(28,778

)

(62,103

)

(432,178

)

 

 

 

 

 

 

 

 

 

 

Increase in cash and equivalents

 

75,715

 

258,419

 

325,634

 

58,038

 

Cash and equivalents at beginning of period

 

976,951

 

160,982

 

727,032

 

361,363

 

 

 

 

 

 

 

 

 

 

 

Cash and equivalents at end of period

 

$

1,052,666

 

$

419,401

 

$

1,052,666

 

$

419,401

 

 

 

 

 

 

 

 

 

 

 

Supplemental disclosure information:

 

 

 

 

 

 

 

 

 

Cash paid for interest

 

$

45,094

 

$

48,550

 

$

71,380

 

$

88,644

 

Cash paid (received) for federal and state income taxes, net

 

$

27,565

 

$

7,046

 

$

28,264

 

$

(11,493

)

 

See notes to consolidated financial statements.

 

3



Table of Contents

 

STEEL DYNAMICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

 

Note 1.  Description of the Business and Significant Accounting Policies

 

Description of the Business

 

Steel Dynamics, Inc. (SDI), together with its subsidiaries (the company), is a domestic manufacturer of steel products and metals recycler. The company has three reportable segments, consistent with how it manages the business, representing three reporting segments: steel operations, metals recycling operations, and steel fabrication operations.

 

Steel Operations Segment.  Steel operations include the company’s Butler Flat Roll Division, Columbus Flat Roll Division, The Techs galvanizing lines, Structural and Rail Division, Engineered Bar Products Division, Roanoke Bar Division, Steel of West Virginia, and  Iron Dynamics (IDI), a liquid pig iron (scrap substitute) production facility that supplies solely the Butler Flat Roll Division. These operations include electric arc furnace steel mills, producing steel from ferrous scrap and scrap substitutes, utilizing continuous casting, automated rolling mills, and ten downstream coating facilities. Steel operations accounted for 72% and 69% of the company’s consolidated external net sales during the three-month periods ended June 30, 2016 and 2015, and 71% and 68% of the company’s consolidated external net sales during the six-month periods ended June 30, 2016 and 2015, respectively.

 

Metals Recycling Operations Segment. Metals recycling operations include the company’s metals recycling processing locations, and ferrous scrap procurement operations, of OmniSource Corporation. Metals recycling operations accounted for 15% and 20% of the company’s consolidated external net sales during the three- and six-month periods ended June 30, 2016, and 2015, respectively.

 

Steel Fabrication Operations Segment.  Steel fabrication operations include the company’s eight New Millennium Building Systems’ joist and deck plants located throughout the United States and Northern Mexico. Revenues from these plants are generated from the fabrication of trusses, girders, steel joists and steel deck used within the non-residential construction industry. Steel fabrication operations accounted for approximately 8% of the company’s consolidated external net sales during the three-month periods ended June 30, 2016, and 2015, and 9% and 8% of the company’s consolidated external net sales during the six-month periods ended June 30, 2016 and 2015, respectively.

 

Other. TheOther” category consists of subsidiary operations that are below the quantitative thresholds required for reportable segments and primarily consist of our Minnesota ironmaking operations that were indefinitely idled in May 2015, and several smaller joint ventures. Also included in “Other” are certain unallocated corporate accounts, such as the company’s senior secured credit facility, senior notes, certain other investments and certain profit sharing expenses.

 

Significant Accounting Policies

 

Principles of Consolidation. The consolidated financial statements include the accounts of SDI, together with its wholly and majority-owned or controlled subsidiaries, after elimination of intercompany accounts and transactions. Noncontrolling interests represent the noncontrolling owner’s proportionate share in the equity, income, or losses of the company’s majority-owned or controlled consolidated subsidiaries.

 

Use of Estimates.  These financial statements are prepared in conformity with accounting principles generally accepted in the United States, and accordingly, include amounts that require management to make estimates and assumptions that affect the amounts reported in the financial statements and in the notes thereto. Significant items subject to such estimates and assumptions include the carrying value of property, plant and equipment, intangible assets, and goodwill; valuation allowances for trade receivables, inventories and deferred income tax assets; unrecognized tax benefits; potential environmental liabilities; and litigation claims and settlements. Actual results may differ from these estimates and assumptions.

 

In the opinion of management, these financial statements reflect all normal recurring adjustments necessary for a fair presentation of the interim period results. These financial statements and notes should be read in conjunction with the audited financial statements and notes thereto included in the company’s Annual Report on Form 10-K for the year ended December 31, 2015.

 

4



Table of Contents

 

STEEL DYNAMICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

 

Note 1.  Description of the Business and Significant Accounting Policies (Continued)

 

Goodwill.  The company’s goodwill is allocated to the following reporting units at June 30, 2016, and December 31, 2015, (in thousands):

 

 

 

 

 

June 30,

 

December 31,

 

 

 

 

 

2016

 

2015

 

Metals Recycling Segment:

 

OmniSource

 

$

105,844

 

$

109,039

 

 

 

Butler Flat Roll Division, Structural and Rail Division, and Engineered Bar Division

 

95,000

 

95,000

 

Steel Segment:

 

The Techs

 

142,783

 

142,783

 

 

 

Roanoke Bar Division

 

29,041

 

29,041

 

 

 

Columbus Flat Roll Division

 

19,682

 

19,682

 

Fabrication Segment:

 

New Millennium Building Systems

 

1,925

 

1,925

 

 

 

 

 

$

394,275

 

$

397,470

 

 

OmniSource goodwill decreased $3.2 million from December 31, 2015 to June 30, 2016, in recognition of the 2016 tax benefit related to the normal amortization of the component of OmniSource tax-deductible goodwill in excess of book goodwill.

 

Recently Issued Accounting Standards

 

In May 2014, the FASB issued guidance codified in ASC 606, Revenue Recognition — Revenue from Contracts with Customers, which amends the guidance in former ASC 605, Revenue Recognition.  The core principle of ASC 606 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Because the guidance in ASC 606 is principles-based, it can be applied to all contracts with customers regardless of industry-specific or transaction-specific fact patterns. Additionally, ASC 606 requires additional disclosures to help users of financial statements better understand the nature, amount, timing, and potential uncertainty of revenue that is recognized. This guidance is effective for annual and interim periods beginning after December 15, 2017, but can be early adopted for annual and interim periods ending after December 15, 2016. The company is currently evaluating the impact of the provisions of ASC 606, including the timing and method of adoption.

 

In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory, which requires an entity to measure inventory at the lower of cost and net realizable value, rather than at the lower of cost or market.  This new guidance is effective for annual and interim periods beginning after December 15, 2016, but can be early adopted. The company is currently evaluating the impact of this ASU’s adoption.

 

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842): which establishes a new lease accounting model that requires lessees to recognize a right of use asset and related lease liability for most leases having lease terms of more than 12 months.  Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases.  This new guidance is effective for annual and interim periods beginning after December 15, 2018, but can be early adopted.  The company is currently evaluating the impact of the provisions of ASU 2016-02, including the timing of adoption.

 

In March 2016, the FASB issued ASU 2016-09, Improvement to Employee Share-based Payment Accounting, which simplifies several aspects of accounting for share-based payment transactions, including recognizing excess tax benefits and deficiencies as income tax expense or benefit in the income statement and as operating activities within the statement of cash flows, and an option to recognize gross stock compensation expense with actual forfeitures recognized as incurred. This new guidance is effective for annual and interim periods beginning after December 15, 2016, but can be early adopted.  The company is currently evaluating the impact of the provisions of ASU 2016-09, including the timing of adoption.

 

Note 2.  Acquisition

 

On June 30, 2016, the company entered into a definitive agreement to acquire 100% of Vulcan Threaded Products, Inc. (Vulcan) for $114.0 million, inclusive of $30.0 million in working capital, which is subject to typical post-closing adjustments. The acquisition closed on August 1, 2016, with the purchase price paid in cash from available funds. Post-closing operating results of Vulcan will be reflected in the steel operations reporting segment. Vulcan is the nation’s largest manufacturer and supplier of threaded rod products, and also cold draws and heat treats steel bar. The acquisition of Vulcan is consistent with one of our target growth objectives — higher-margin downstream business opportunities that utilize our steel products in their manufacturing processes. Vulcan utilizes special-bar-quality products produced at our Engineered Bar Products Division.

 

5



Table of Contents

 

STEEL DYNAMICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

 

Note 3.  Earnings Per Share

 

Basic earnings per share is based on the weighted average shares of common stock outstanding during the period. Diluted earnings per share assumes the weighted average dilutive effect of common share equivalents outstanding during the period applied to the company’s basic earnings per share. Common share equivalents represent potentially dilutive stock options, restricted stock units and deferred stock units; and are excluded from the computation in periods in which they have an anti-dilutive effect. There were no anti-dilutive common share equivalents at or for the three- and six-month periods ended June 30, 2016, and 2015.

 

The following table presents a reconciliation of the numerators and the denominators of the company’s basic and diluted earnings per share computations for the three- and six- month periods ended June 30, 2016, and 2015 (in thousands, except per share data):

 

 

 

 

Three Months Ended June 30,

 

 

 

2016

 

2015

 

 

 

Net Income
(Numerator)

 

Shares
(Denominator)

 

Per Share
Amount

 

Net Income
(Numerator)

 

Shares
(Denominator)

 

Per Share
Amount

 

Basic earnings per share

 

$

141,969

 

243,655

 

$

.58

 

$

31,550

 

241,900

 

$

.13

 

Dilutive common share equivalents

 

 

1,737

 

 

 

 

1,591

 

 

 

Diluted earnings per share

 

$

141,969

 

245,392

 

$

.58

 

$

31,550

 

243,491

 

$

.13

 

 

 

 

Six Months Ended June 30,

 

 

 

2016

 

2015

 

 

 

Net Income
(Numerator)

 

Shares
(Denominator)

 

Per Share
Amount

 

Net Income
(Numerator)

 

Shares
(Denominator)

 

Per Share
Amount

 

Basic earnings per share

 

$

204,706

 

243,429

 

$

.84

 

$

62,311

 

241,718

 

$

.26

 

Dilutive common share equivalents

 

 

1,571

 

 

 

 

1,461

 

 

 

Diluted earnings per share

 

$

204,706

 

245,000

 

$

.84

 

$

62,311

 

243,179

 

$

.26

 

 

Note 4.  Inventories

 

Inventories are stated at lower of cost or market. Cost is determined using a weighted average cost method for scrap, and on a first-in, first-out, basis for other inventory. Inventory consisted of the following (in thousands):

 

 

 

 

June 30,

 

December 31,

 

 

 

2016

 

2015

 

Raw materials

 

$

415,324

 

$

419,608

 

Supplies

 

388,350

 

396,349

 

Work in progress

 

119,241

 

90,486

 

Finished goods

 

252,801

 

242,947

 

Total inventories

 

$

1,175,716

 

$

1,149,390

 

 

Note 5.  Debt

 

On March 16, 2015, the company called and repaid all $350.0 million of its outstanding 7 5/8% Senior Notes due 2020 (the “Notes”) at a redemption price of 103.813% of the principal amount of the Notes, plus accrued and unpaid interest to, but not including, the date of redemption. Associated premiums and the write off of deferred financing costs of approximately $16.7 million were recorded in other expense in conjunction with the redemption.

 

6



Table of Contents

 

STEEL DYNAMICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

 

Note 6.  Changes in Equity

 

The following table provides a reconciliation of the beginning and ending carrying amounts of total equity, equity attributable to stockholders of Steel Dynamics, Inc. and equity and redeemable amounts attributable to the noncontrolling interests (in thousands):

 

 

 

Stockholders of Steel Dynamics, Inc.

 

 

 

 

 

 

 

 

 

Common

 

Additional
Paid-In

 

Retained

 

Treasury

 

Noncontrolling

 

Total

 

Redeemable
Noncontrolling

 

 

 

Stock

 

Capital

 

Earnings

 

Stock

 

Interests

 

Equity

 

Interests

 

Balances at December  31, 2015

 

$

638

 

$

1,110,253

 

$

1,965,291

 

$

(396,455

)

$

(134,616

)

$

2,545,111

 

$

126,340

 

Exercise of stock options proceeds, including related tax effect

 

1

 

6,847

 

 

 

 

6,848

 

 

Dividends declared

 

 

 

(68,214

)

 

 

(68,214

)

 

Distributions to noncontrolling investors, net

 

 

 

 

 

(10

)

(10

)

 

Equity-based compensation

 

 

8,419

 

(54

)

4,405

 

 

12,770

 

 

Comprehensive and net income (loss)

 

 

 

204,706

 

 

(2,945

)

201,761

 

 

Balances at June 30, 2016

 

$

639

 

$

1,125,519

 

$

2,101,729

 

$

(392,050

)

$

(137,571

)

$

2,698,266

 

$

126,340

 

 

Note 7.  Derivative Financial Instruments

 

The company is exposed to certain risks relating to its ongoing business operations. The company utilizes derivative instruments to mitigate commodity margin risk, interest rate risk and foreign currency exchange rate risk. The company routinely enters into forward exchange traded futures and option contracts to manage the price risk associated with nonferrous metals inventory as well as purchases and sales of nonferrous metals (primarily aluminum and copper).  The company offsets fair value amounts recognized for derivative instruments executed with the same counterparty under master netting agreements.

 

Commodity Futures Contracts.  If the company is “long” on futures contracts, it means the company has more futures contracts purchased than futures contracts sold for the underlying commodity. If the company is “short” on a futures contract, it means the company has more futures contracts sold than futures contracts purchased for the underlying commodity. The following summarizes the company’s futures contract commitments as of June 30, 2016 (MT represents metric tons):

 

Commodity Futures

 

Long/Short

 

Total

 

 

 

Aluminum

 

Long

 

1,725

 

MT

 

Aluminum

 

Short

 

1,095

 

MT

 

Copper

 

Long

 

15,809

 

MT

 

Copper

 

Short

 

16,375

 

MT

 

 

The following summarizes the location and amounts of the fair values reported on the company’s balance sheets as of June 30, 2016, and December 31, 2015, and gains and losses related to derivatives included in the company’s statement of income for the three- and six- month periods ended June 30, 2016, and 2015 (in thousands):

 

 

 

Asset Derivatives

 

Liability Derivatives

 

 

 

 

 

Fair Value

 

Fair Value

 

 

 

Balance sheet location

 

June 30, 2016

 

December 31, 2015

 

June 30, 2016

 

December 31, 2015

 

Derivative instruments designated as fair value hedges -

 

 

 

 

 

 

 

 

 

 

 

Commodity futures

 

Other current assets

 

$

477

 

$

857

 

$

2,009

 

$

2,860

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivative instruments not designated as hedges -

 

 

 

 

 

 

 

 

 

 

 

Commodity futures

 

Other current assets

 

1,201

 

908

 

2,829

 

1,065

 

 

 

 

 

 

 

 

 

 

 

 

 

Total derivative instruments

 

 

 

$

1,678

 

$

1,765

 

$

4,838

 

$

3,925

 

 

7



Table of Contents

 

STEEL DYNAMICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

 

Note 7.  Derivative Financial Instruments (Continued)

 

The fair value of the above derivative instruments along with required margin deposit amounts with the same counterparty under master netting arrangements totaled $922,000 at June 30, 2016, and $3.4 million at December 31, 2015, are reflected in other current assets in the consolidated balance sheet.

 

 

 

Location of gain
(loss) recognized

 

Amount of gain (loss)
recognized in income on
derivatives for the three
months ended

 

Hedged items in

 

Location of gain
(loss) recognized

 

Amount of gain (loss)
recognized in income on
related hedged items for the
three months ended

 

 

 

in income on
derivatives

 

June 30,
2016

 

June 30,
2015

 

fair value hedge
relationships

 

in income on related
hedged items

 

June 30,
2016

 

June 30,
2015

 

Derivatives in fair value hedging relationships -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commodity futures

 

Costs of goods sold

 

$

(477

)

$

3,075

 

Firm commitments

 

Costs of goods sold

 

$

(208

)

$

362

 

 

 

 

 

 

 

 

 

Inventory

 

Costs of goods sold

 

541

 

(2,165

)

 

 

 

 

 

 

 

 

 

 

 

 

$

333

 

$

(1,803

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivatives not designated as hedging instruments -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commodity futures

 

Costs of goods sold

 

$

1,116

 

$

(326

)

 

 

 

 

 

 

 

 

 

 

 

Location of gain
(loss) recognized

 

Amount of gain (loss)
recognized in income on
derivatives for the six
months ended

 

Hedged items in

 

Location of gain
(loss) recognized in

 

Amount of gain (loss)
recognized in income on
related hedged items for the
six months ended

 

 

 

in income on
derivatives

 

June 30,
2016

 

June 30,
2015

 

fair value hedge
relationships

 

income on related
hedged items

 

June 30,
2016

 

June 30,
2015

 

Derivatives in fair value hedging relationships -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commodity futures

 

Costs of goods sold

 

$

455

 

$

(1,238

)

Firm commitments

 

Costs of goods sold

 

$

(1,430

)

$

856

 

 

 

 

 

 

 

 

 

Inventory

 

Costs of goods sold

 

819

 

491

 

 

 

 

 

 

 

 

 

 

 

 

 

$

(611

)

$

1,347

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivatives not designated as hedging instruments -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commodity futures

 

Costs of goods sold

 

$

244

 

$

6,670

 

 

 

 

 

 

 

 

 

 

Derivatives accounted for as fair value hedges had ineffectiveness resulting in losses of $47,000 and gains of $20,000 during the three-month periods ended June 30, 2016 and 2015, respectively; and losses of $91,000 and gains of  $127,000 during the six-month periods ended June 30, 2016 and 2015, respectively.  Losses excluded from hedge effectiveness testing of $97,000 increased cost of goods sold during the three-month period ended June 30, 2016, and gains of $1,252,000 reduced costs of goods sold during the three-month period ended June 30, 2015.  Losses of $65,000 and $18,000 increased costs of goods sold during the six-month periods ended June 30, 2016 and 2015, respectively.

 

Note 8.  Fair Value Measurements

 

FASB accounting standards provide a comprehensive framework for measuring fair value and sets forth a definition of fair value and establishes a hierarchy prioritizing the inputs to valuation techniques, giving the highest priority to quoted prices in active markets for identical assets and liabilities and the lowest priority to unobservable value inputs.  Levels within the hierarchy are defined as follows:

 

· Level 1—Unadjusted quoted prices for identical assets and liabilities in active markets;

· Level 2—Quoted prices for similar assets and liabilities in active markets (other than those included in Level 1) which are observable for the asset or liability, either directly or indirectly; and

· Level 3—Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

 

8



Table of Contents

 

STEEL DYNAMICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

 

Note 8.  Fair Value Measurements (Continued)

 

The following table sets forth financial assets and liabilities measured at fair value on a recurring basis in the consolidated balance sheet and the respective levels to which the fair value measurements are classified within the fair value hierarchy as of June 30, 2016, and December 31, 2015 (in thousands):

 

 

 

Total

 

Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)

 

Significant
Other
Observable
Inputs
(Level 2)

 

Significant
Unobservable
Inputs
(Level 3)

 

June 30, 2016

 

 

 

 

 

 

 

 

 

Commodity futures — financial assets

 

$

1,678

 

$

 

$

1,678

 

$

 

Commodity futures — financial liabilities

 

4,838

 

 

4,838

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2015

 

 

 

 

 

 

 

 

 

Commodity futures — financial assets

 

$

1,765

 

$

 

$

1,765

 

$

 

Commodity futures — financial liabilities

 

3,925

 

 

3,925

 

 

 

The carrying amounts of financial instruments including cash and equivalents approximate fair value. The fair values of commodity futures contracts are estimated by the use of quoted market prices, estimates obtained from brokers, and other appropriate valuation techniques based on references available. The fair value of long-term debt, including current maturities, as determined by quoted market prices (Level 2), was approximately $2.7 billion and $2.5 billion at June 30, 2016, and December 31, 2015, respectively, (with a corresponding carrying amount in the consolidated balance sheet of $2.6 billion at June 30, 2016, and December 31, 2015).

 

Note 9.  Commitments and Contingencies

 

The company is involved, along with two other remaining steel manufacturing company defendants, in a class action antitrust suit in federal court in Chicago, Illinois, originally against eight companies. The Complaint alleges a conspiracy on the part of the original defendants to fix, raise, maintain and stabilize the price at which steel products were sold in the United States during a specified period between 2005 and 2007, by artificially restricting the supply of such steel products. All but one of the Complaints were brought on behalf of a purported class consisting of all direct purchasers of steel products. The other Complaint was brought on behalf of a purported class consisting of all indirect purchasers of steel products within the same time period.  In addition, another similar complaint was filed in December 2010 purporting to be on behalf of indirect purchasers of steel products in Tennessee. All Complaints have been consolidated in the Chicago action and seek treble damages and costs, including reasonable attorney fees, pre- and post-judgment interest and injunctive relief. Following an extensive period of discovery and related motions concerning class certification matters, the Court, on September 9, 2015, certified a class, limited, however, to the issue of the alleged conspiracy alone, and denied class certification on the issue of antitrust impact and damages.  As a result, some additional discovery is ongoing. The company has also filed a motion for summary judgment, as has one co-defendant, and this matter is currently pending.

 

Due, however, to the uncertain nature of litigation, the company cannot presently determine the ultimate outcome of this litigation. Based on the information available at this time, the company has determined that there is not presently a “reasonable possibility” (as that term is defined in ASC 450-20-20), that the outcome of these legal proceedings would have a material impact on the Company’s financial condition, results of operations, or liquidity. Although not presently necessary or appropriate to make a dollar estimate of exposure to loss, if any, in connection with the above matter, the company may in the future determine that a loss accrual is necessary. Although the company may make loss accruals, if and as warranted, any amounts that it may accrue from time to time could vary significantly from the amounts it actually pays, due to inherent uncertainties and the inherent shortcomings of the estimation process, the uncertainties involved in litigation and other factors. Additionally, an adverse result could have a material effect on the company’s financial condition, results of operations and liquidity.

 

The company is involved in various routine litigation matters, including administrative proceedings, regulatory proceedings, governmental investigations, environmental matters, and commercial and construction contract disputes, none of which are expected to have a material impact on our financial condition, results of operations, or liquidity.

 

9



Table of Contents

 

STEEL DYNAMICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

 

Note 10.  Segment Information

 

The company’s operations are primarily organized and managed by operating segment, which are steel operations, metals recycling operations, and steel fabrication operations. The segment operations are more fully described in Note 1 to the financial statements. Operating segment performance and resource allocations are primarily based on operating results before income taxes. The accounting policies of the reportable segments are consistent with those described in Note 1 to the financial statements. Intra-segment sales and any related profits are eliminated in consolidation. Amounts included in the category “Other” are from subsidiary operations that are below the quantitative thresholds required for reportable segments and primarily consist of our Minnesota ironmaking operations and several small joint ventures. In addition, “Other” also includes certain unallocated corporate accounts, such as the company’s senior secured credit facility, senior notes, certain other investments and certain profit sharing expenses.

 

The company’s segment results for the three- and six-month periods ended June 30, 2016, and 2015, each adjusted consistent with our current reportable segments presentation, are as follows (in thousands):

 

For the three months ended

 

 

 

Metals Recycling

 

Steel Fabrication

 

 

 

 

 

 

 

June 30, 2016

 

Steel Operations

 

Operations

 

Operations

 

Other

 

Eliminations

 

Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Sales

 

 

 

 

 

 

 

 

 

 

 

 

 

External

 

$

1,408,993

 

$

271,985

 

$

170,477

 

$

75,450

 

$

 

$

1,926,905

 

External Non-U.S.

 

57,711

 

39,075

 

65

 

146

 

 

96,997

 

Other segments

 

66,594

 

279,664

 

1,178

 

1,269

 

(348,705

)

 

 

 

1,533,298

 

590,724

 

171,720

 

76,865

 

(348,705

)

2,023,902

 

Operating income (loss)

 

273,111

 

11,093

 

23,470

 

(45,569

)(1)

(5,983

)(2)

256,122

 

Income (loss) before income taxes

 

250,683

 

8,086

 

21,514

 

(53,006

)

(5,983

)

221,294

 

Depreciation and amortization

 

53,675

 

14,250

 

2,762

 

4,160

 

(52

)

74,795

 

Capital expenditures

 

30,098

 

4,482

 

567

 

539

 

 

35,686

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of June 30, 2016

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets

 

$

3,992,230

 

$

1,076,596

 

$

334,530

 

$

1,348,290

(3)

$

(121,970

)(4)

$

6,629,676

 

 


Footnotes related to the three months ended June 30, 2016 segment results (in millions):

 

(1)

 

Corporate SG&A

 

$

(14.8

)

 

 

Company-wide equity-based compensation

 

(7.3

)

 

 

Profit sharing

 

(18.5

)

 

 

Minnesota ironmaking operations

 

(4.0

)

 

 

Other, net

 

(1.0

)

 

 

 

 

$

(45.6

)

 

 

 

 

 

 

(2)

 

Gross profit decrease from intra-company sales

 

$

(6.0

)

 

 

 

 

 

 

(3)

 

Cash and equivalents

 

$

954.8

 

 

 

Accounts receivable

 

21.0

 

 

 

Inventories

 

33.2

 

 

 

Property, plant and equipment, net

 

299.2

 

 

 

Intra-company debt

 

6.3

 

 

 

Other

 

33.8

 

 

 

 

 

$

1,348.3

 

 

 

 

 

 

 

(4)

 

Elimination of intra-company receivables

 

$

(103.1

)

 

 

Elimination of intra-company debt

 

(6.3

)

 

 

Other

 

(12.6

)

 

 

 

 

$

(122.0

)

 

10



Table of Contents

 

STEEL DYNAMICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

 

Note 10.  Segment Information (Continued)

 

For the three months ended

 

 

 

Metals Recycling

 

Steel Fabrication

 

 

 

 

 

 

 

June 30, 2015

 

Steel Operations

 

Operations

 

Operations

 

Other

 

Eliminations

 

Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Sales

 

 

 

 

 

 

 

 

 

 

 

 

 

External

 

$

1,303,278

 

$

346,103

 

$

154,513

 

$

83,467

 

$

 

$

1,887,361

 

External Non-U.S.

 

72,399

 

45,108

 

 

139

 

 

117,646

 

Other segments

 

53,560

 

254,238

 

12

 

6,702

 

(314,512

)

 

 

 

1,429,237

 

645,449

 

154,525

 

90,308

 

(314,512

)

2,005,007

 

Operating income (loss)

 

99,013

 

8,282

 

27,660

 

(52,970

)(1)

(4,426

)(2)

77,559

 

Income (loss) before income taxes

 

77,290

 

4,723

 

25,879

 

(61,858

)

(4,426

)

41,608

 

Depreciation and amortization

 

51,242

 

17,014

 

2,158

 

3,910

 

(51

)

74,273

 

Capital expenditures

 

14,149

 

4,632

 

534

 

3,506

 

 

22,821

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of June 30, 2015

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets

 

$

4,127,487

 

$

1,666,384

 

$

295,642

 

$

869,929

(3)

$

(132,679

)(4)

$

6,826,763

 

 


Footnotes related to the three months ended June 30, 2015 segment results (in millions):

 

(1)

 

Corporate SG&A

 

$

(8.1

)

 

 

Company-wide equity-based compensation

 

(6.3

)

 

 

Profit sharing

 

(3.5

)

 

 

Minnesota ironmaking operations

 

(33.2

)

 

 

Other, net

 

(1.9

)

 

 

 

 

$

(53.0

)

 

 

 

 

 

 

(2)

 

Gross profit decrease from intra-company sales

 

$

(4.4

)

 

 

 

 

 

 

(3)

 

Cash and equivalents

 

$

356.9

 

 

 

Accounts receivable

 

29.0

 

 

 

Inventories

 

48.3

 

 

 

Property, plant and equipment, net

 

315.7

 

 

 

Intra-company debt

 

6.6

 

 

 

Other

 

113.4

 

 

 

 

 

$

869.9

 

 

 

 

 

 

 

(4)

 

Elimination of intra-company receivables

 

$

(117.1

)

 

 

Elimination of intra-company debt

 

(6.6

)

 

 

Other

 

(9.0

)

 

 

 

 

$

(132.7

)

 

For the six months ended

 

 

 

Metals Recycling

 

Steel Fabrication

 

 

 

 

 

 

 

June 30, 2016

 

Steel Operations

 

Operations

 

Operations

 

Other

 

Eliminations

 

Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Sales

 

 

 

 

 

 

 

 

 

 

 

 

 

External

 

$

2,565,962

 

$

508,742

 

$

350,518

 

$

150,076

 

$

 

$

3,575,298

 

External Non-U.S.

 

117,918

 

71,725

 

79

 

183

 

 

189,905

 

Other segments

 

107,806

 

497,442

 

1,204

 

2,495

 

(608,947

)

 

 

 

2,791,686

 

1,077,909

 

351,801

 

152,754

 

(608,947

)

3,765,203

 

Operating income (loss)

 

405,386

 

13,860

 

55,486

 

(77,499

)(1)

(9,146

)(2)

388,087

 

Income (loss) before income taxes

 

360,058

 

7,863

 

51,530

 

(92,297

)

(9,146

)

318,008

 

Depreciation and amortization

 

106,158

 

28,830

 

5,583

 

8,312

 

(103

)

148,780

 

Capital expenditures

 

54,002

 

7,562

 

1,171

 

659

 

 

63,394

 

 


Footnotes related to the six months ended June 30, 2016 segment results (in millions):

 

(1)

 

Corporate SG&A

 

$

(25.9

)

 

 

Company-wide equity-based compensation

 

(14.3

)

 

 

Profit sharing

 

(26.7

)

 

 

Minnesota ironmaking operations

 

(8.3

)

 

 

Other, net

 

(2.3

)

 

 

 

 

$

(77.5

)

 

 

 

 

 

 

(2)

 

Gross profit decrease from intra-company sales

 

$

(9.1

)

 

11



Table of Contents

 

STEEL DYNAMICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

 

Note 10.  Segment Information (Continued)

 

For the six months ended

 

 

 

Metals Recycling

 

Steel Fabrication

 

 

 

 

 

 

 

June 30, 2015

 

Steel Operations

 

Operations

 

Operations

 

Other

 

Eliminations

 

Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Sales

 

 

 

 

 

 

 

 

 

 

 

 

 

External

 

$

2,616,704

 

$

720,395

 

$

315,537

 

$

158,699

 

$

 

$

3,811,335

 

External Non-U.S.

 

144,392

 

96,411

 

 

304

 

 

241,107

 

Other segments

 

102,463

 

480,654

 

16

 

24,905

 

(608,038

)

 

 

 

2,863,559

 

1,297,460

 

315,553

 

183,908

 

(608,038

)

4,052,442

 

Operating income (loss)

 

213,978

 

3,784

 

49,021

 

(88,872

)(1)

(581

)(2)

177,330

 

Income (loss) before income taxes

 

166,621

 

(5,813

)

45,473

 

(123,600

)

(581

)

82,100

 

Depreciation and amortization

 

102,212

 

34,294

 

4,388

 

6,303

 

(102

)

147,095

 

Capital expenditures

 

30,349

 

11,047

 

1,571

 

13,205

 

 

56,172

 

 


Footnotes related to the six months ended June 30, 2015 segment results (in millions):

 

(1)

 

Corporate SG&A

 

$

(17.5

)

 

 

Company-wide equity-based compensation

 

(12.2

)

 

 

Profit sharing

 

(7.0

)

 

 

Minnesota ironmaking operations

 

(46.1

)

 

 

Other, net

 

(6.1

)

 

 

 

 

$

(88.9

)

 

 

 

 

 

 

(2)

 

Gross profit decrease from intra-company sales

 

$

(0.6

)

 

12



Table of Contents

 

STEEL DYNAMICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

 

Note 11.  Condensed Consolidating Information

 

Certain 100%-owned subsidiaries of SDI have fully and unconditionally guaranteed all of the indebtedness relating to the issuance of the company’s senior unsecured notes due 2019, 2021, 2022, 2023 and 2024. Following are the company’s condensed consolidating financial statements, including the guarantors, which present the financial position, results of operations, and cash flows of (i) SDI (in each case, reflecting investments in its consolidated subsidiaries under the equity method of accounting), (ii) the guarantor subsidiaries of SDI, (iii) the non-guarantor subsidiaries of SDI, and (iv) the eliminations necessary to arrive at the information on a consolidated basis. The following statements should be read in conjunction with the accompanying consolidated financial statements and the company’s Annual Report on Form 10-K for the year ended December 31, 2015.

 

Condensed Consolidating Balance Sheets (in thousands)

 

 

 

 

 

 

 

Combined

 

Consolidating

 

Total

 

As of June 30, 2016

 

Parent

 

Guarantors

 

Non-Guarantors

 

Adjustments

 

Consolidated

 

Cash and equivalents

 

$

947,018

 

$

88,893

 

$

16,755

 

$

 

$

1,052,666

 

Accounts receivable, net

 

263,090

 

1,228,150

 

30,318

 

(727,555

)

794,003

 

Inventories

 

561,567

 

583,995

 

37,484

 

(7,330

)

1,175,716

 

Other current assets

 

15,660

 

12,345

 

1,753

 

(1,686

)

28,072

 

Total current assets

 

1,787,335

 

1,913,383

 

86,310

 

(736,571

)

3,050,457

 

Property, plant and equipment, net

 

932,067

 

1,668,643

 

287,042

 

(1,908

)

2,885,844

 

Intangible assets, net

 

 

265,476

 

 

 

265,476

 

Goodwill

 

 

394,275

 

 

 

394,275

 

Other assets, including investments in subs

 

2,811,879

 

8,986

 

6,257

 

(2,793,498

)

33,624

 

Total assets

 

$

5,531,281

 

$

4,250,763

 

$

379,609

 

$

(3,531,977

)

$

6,629,676

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts payable

 

$

169,025

 

$

306,782

 

$

74,445

 

$

(88,985

)

$

461,267

 

Accrued expenses

 

198,810

 

199,976

 

5,257

 

(104,133

)

299,910

 

Current maturities of long-term debt

 

13,147

 

700

 

28,401

 

(24,201

)

18,047

 

Total current liabilities

 

380,982

 

507,458

 

108,103

 

(217,319

)

779,224

 

Long-term debt

 

2,542,969

 

 

174,689

 

(144,472

)

2,573,186

 

Other liabilities

 

(228,507

)

1,188,931

 

70,488

 

(578,252

)

452,660

 

 

 

 

 

 

 

 

 

 

 

 

 

Redeemable noncontrolling interests

 

 

 

126,340

 

 

126,340

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock

 

639

 

1,727,859

 

18,120

 

(1,745,979

)

639

 

Treasury stock

 

(392,050

)

 

 

 

(392,050

)

Additional paid-in-capital

 

1,125,519

 

117,737

 

653,787

 

(771,524

)

1,125,519

 

Retained earnings (deficit)

 

2,101,729

 

708,778

 

(634,347

)

(74,431

)

2,101,729

 

Total Steel Dynamics, Inc. equity

 

2,835,837

 

2,554,374

 

37,560

 

(2,591,934

)

2,835,837

 

Noncontrolling interests

 

 

 

(137,571

)

 

(137,571

)

Total equity

 

2,835,837

 

2,554,374

 

(100,011

)

(2,591,934

)

2,698,266

 

Total liabilities and equity

 

$

5,531,281

 

$

4,250,763

 

$

379,609

 

$

(3,531,977

)

$

6,629,676

 

 

13



Table of Contents

 

STEEL DYNAMICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

 

Note 11.  Condensed Consolidating Information (Continued)