UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period

ended ~~March 31,~~September 30, 2022

☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from _______ to _______

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

Not Applicable

(Former name, former address and former fiscal year, if changed since last report.)

Securities registered pursuant to Section 12(b) of the Act.


Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock voting, $0.0025 par value	STLD	NASDAQ Global Select Market

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 ⌧ No ◻

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes ⌧ No ◻

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

Large accelerated filer ⌧	Accelerated filer ◻	Non-accelerated filer ◻

Smaller reporting company ☐	Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ◻

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

As of ~~April 25,~~October 21, 2022, Registrant had ~~188,690,008~~175,571,409 outstanding shares of common stock.

Table of Contents

STEEL DYNAMICS, INC.

Table of Contents


PART I. Financial Information

Item 1.	Financial Statements:	Page

	Consolidated Balance Sheets as of ~~March 31,~~September 30, 2022 (unaudited) and December 31, 2021	1

	Consolidated Statements of Income for the ~~three-month~~three and nine-month periods ended ~~March 31,~~September 30, 2022 and 2021 (unaudited)	2

	Consolidated Statements of Comprehensive Income for the ~~three-month~~three and nine-month periods ended ~~March 31,~~September 30, 2022 and 2021 (unaudited)	3

	Consolidated Statements of Cash Flows for the ~~three-month~~three and nine-month periods ended ~~March 31,~~September 30, 2022 and 2021 (unaudited)	4

	Notes to Consolidated Financial Statements (unaudited)	5

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1416

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	2125

Item 4.	Controls and Procedures	2125



	PART II. Other Information

Item 1.	Legal Proceedings	2226

Item 1A.	Risk Factors	2226

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	2226

Item 3.	Defaults Upon Senior Securities	2226

Item 4.	Mine Safety Disclosures	2226

Item 5.	Other Information	2326

Item 6.	Exhibits	2427

Exhibit Index			2427

Signature			25
		28

Table of Contents

~~PART I. FINANCIAL INFORMATION~~

~~ITEM 1. FINANCIAL STATEMENTS~~

STEEL DYNAMICS, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

March 31,

December 31,

2022

2021
Assets
(unaudited)

Current assets

Cash and equivalents
$
1,189,528

$
1,243,868
Accounts receivable, net

2,285,245

1,911,385
Accounts receivable-related parties

78,423

5,049
Inventories

3,516,815

3,531,130
Other current assets

79,624

209,591
Total current assets

7,149,635

6,901,023

Property, plant and equipment, net

4,827,962

4,751,430

Intangible assets, net

288,183

295,345
Goodwill

453,088

453,835
Other assets

337,769

129,601
Total assets
$
13,056,637

$
12,531,234
Liabilities and Equity

Current liabilities

Accounts payable
$
1,202,033

$
1,266,833
Accounts payable-related parties

11,525

13,722
Income taxes payable

229,360

13,746
Accrued payroll and benefits

275,621

539,812
Accrued interest

33,539

17,533
Accrued expenses

270,178

278,549
Current maturities of long-term debt

68,390

97,174
Total current liabilities

2,090,646

2,227,369

Long-term debt

3,010,109

3,008,702
Deferred income taxes

856,790

854,905
Other liabilities

120,918

120,087
Total liabilities

6,078,463

6,211,063

Commitments and contingencies

Redeemable noncontrolling interests

227,914

211,414

Equity

Common stock voting, $0.0025 par value; 900,000,000 shares authorized;

267,224,622 and 267,224,622 shares issued; and 189,247,115 and 194,997,922

shares outstanding, as of March 31, 2022 and December 31, 2021, respectively

649

649
Treasury stock, at cost; 77,977,507 and 72,226,700 shares,

as of March 31, 2022 and December 31, 2021, respectively

(3,050,497)

(2,674,267)
Additional paid-in capital

1,204,023

1,218,933
Retained earnings

8,800,883

7,761,417
Accumulated other comprehensive income (loss)

9,296

(2,091)
Total Steel Dynamics, Inc. equity

6,964,354

6,304,641
Noncontrolling interests

(214,094)

(195,884)
Total equity

6,750,260

6,108,757
Total liabilities and equity
$
13,056,637

$
12,531,234


	September 30,		December 31,
	2022		2021
Assets	(unaudited)
Current assets
Cash and equivalents	$	1,420,497	$	1,243,868
Short-term investments		583,211		-
Accounts receivable, net		2,255,206		1,911,385
Accounts receivable-related parties		78,788		5,049
Inventories		3,376,532		3,531,130
Other current assets		99,210		209,591
Total current assets		7,813,444		6,901,023

Property, plant and equipment, net		5,146,606		4,751,430

Intangible assets, net		276,586		295,345
Goodwill		451,594		453,835
Other assets		359,468		129,601
Total assets	$	14,047,698	$	12,531,234
Liabilities and Equity
Current liabilities
Accounts payable	$	1,153,299	$	1,266,833
Accounts payable-related parties		11,848		13,722
Income taxes payable		41,121		13,746
Accrued payroll and benefits		545,311		539,812
Accrued interest		33,535		17,533
Accrued expenses		323,331		278,549
Current maturities of long-term debt		22,951		97,174
Total current liabilities		2,131,396		2,227,369

Long-term debt		3,012,120		3,008,702
Deferred income taxes		856,650		854,905
Other liabilities		112,327		120,087
Total liabilities		6,112,493		6,211,063

Commitments and contingencies

Redeemable noncontrolling interests		172,403		211,414

Equity
Common stock voting, $0.0025 par value; 900,000,000 shares authorized;
267,228,549 and 267,224,622 shares issued; and 176,563,632 and 194,997,922
shares outstanding, as of September 30, 2022 and December 31, 2021, respectively		649		649
Treasury stock, at cost; 90,664,917 and 72,226,700 shares,
as of September 30, 2022 and December 31, 2021, respectively		(4,046,555)		(2,674,267)
Additional paid-in capital		1,219,947		1,218,933
Retained earnings		10,799,863		7,761,417
Accumulated other comprehensive income (loss)		(2,748)		(2,091)
Total Steel Dynamics, Inc. equity		7,971,156		6,304,641
Noncontrolling interests		(208,354)		(195,884)
Total equity		7,762,802		6,108,757
Total liabilities and equity	$	14,047,698	$	12,531,234

See notes to consolidated financial statements.

Table of Contents

STEEL DYNAMICS, INC.

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(in thousands, except per share data)

Three-Month Periods Ended

March 31,

2022

2021

Net sales

Unrelated parties
$
5,410,801

$
3,537,625
Related parties

159,101

6,972
Total net sales

5,569,902

3,544,597

Costs of goods sold

3,787,389

2,744,331
Gross profit

1,782,513

800,266

Selling, general and administrative expenses

152,015

149,781
Profit sharing

128,469

48,848
Amortization of intangible assets

7,162

7,438
Operating income

1,494,867

594,199

Interest expense, net of capitalized interest

16,669

17,269
Other (income) expense, net

20,468

10,071
Income before income taxes

1,457,730

566,859

Income tax expense

350,376

128,104
Net income

1,107,354

438,755

Net income attributable to noncontrolling interests

(3,423)

(8,248)
Net income attributable to Steel Dynamics, Inc.
$
1,103,931

$
430,507

Basic earnings per share attributable to Steel

Dynamics, Inc. stockholders
$
5.74

$
2.04

Weighted average common shares outstanding

192,158

211,015

Diluted earnings per share attributable to Steel

Dynamics, Inc. stockholders, including the effect

of assumed conversions when dilutive
$
5.71

$
2.03

Weighted average common shares and share equivalents outstanding

193,241

212,254

Dividends declared per share
$
0.34

$
0.26



	Three-Month Periods Ended				Nine-Month Periods Ended
	September 30,				September 30,
	2022		2021		2022		2021

Net sales
Unrelated parties	$	5,438,747	$	5,081,476	$	16,814,051	$	13,072,657
Related parties		212,960		6,812		620,436		25,536
Total net sales		5,651,707		5,088,288		17,434,487		13,098,193

Costs of goods sold		4,187,278		3,487,659		12,304,203		9,497,606
Gross profit		1,464,429		1,600,629		5,130,284		3,600,587

Selling, general and administrative expenses		132,627		157,526		403,019		461,686
Profit sharing		105,122		113,880		373,333		244,868
Amortization of intangible assets		6,836		7,178		21,158		22,054
Operating income		1,219,844		1,322,045		4,332,774		2,871,979

Interest expense, net of capitalized interest		25,347		12,704		67,683		44,871
Other (income) expense, net		(13,975)		6,776		2,472		26,886
Income before income taxes		1,208,472		1,302,565		4,262,619		2,800,222

Income tax expense		289,997		302,406		1,022,138		649,105
Net income		918,475		1,000,159		3,240,481		2,151,117

Net income attributable to noncontrolling interests		(4,150)		(9,396)		(12,671)		(27,556)
Net income attributable to Steel Dynamics, Inc.	$	914,325	$	990,763	$	3,227,810	$	2,123,561



Basic earnings per share attributable to Steel
Dynamics, Inc. stockholders	$	5.07	$	4.89	$	17.33	$	10.22

Weighted average common shares outstanding		180,264		202,450		186,288		207,704

Diluted earnings per share attributable to Steel
Dynamics, Inc. stockholders, including the effect
of assumed conversions when dilutive	$	5.03	$	4.85	$	17.21	$	10.15

Weighted average common shares and share equivalents outstanding		181,613		204,167		187,531		209,222

Dividends declared per share	$	0.34	$	0.26	$	1.02	$	0.78

See notes to consolidated financial statements.

Table of Contents

STEEL DYNAMICS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

(in thousands)

Three-Month Periods Ended

March 31,

2022

2021

Net income
$
1,107,354

$
438,755
Other comprehensive income - net unrealized gain on cash

flow hedging derivatives, net of income tax of $3,557 and $1,176

for the three-month periods ended March 31, 2022 and 2021, respectively

11,387

3,765
Comprehensive income

1,118,741

442,520

Comprehensive income attributable to noncontrolling interests

(3,423)

(8,248)
Comprehensive income attributable to Steel Dynamics, Inc.
$
1,115,318

$
434,272



	Three-Month Periods Ended				Nine-Month Periods Ended
	September 30,				September 30,
	2022		2021		2022		2021

Net income	$	918,475	$	1,000,159	$	3,240,481	$	2,151,117
Other comprehensive income - net unrealized gain (loss) on cash
flow hedging derivatives, net of income tax (benefit) of $703,
($6,797), ($205), and $2,711 for the three and nine-month periods
ended September 30, 2022 and 2021, respectively		2,251		(21,761)		(657)		8,681
Comprehensive income		920,726		978,398		3,239,824		2,159,798

Comprehensive income attributable to noncontrolling interests		(4,150)		(9,396)		(12,671)		(27,556)
Comprehensive income attributable to Steel Dynamics, Inc.	$	916,576	$	969,002	$	3,227,153	$	2,132,242

See notes to consolidated financial statements.

Table of Contents

STEEL DYNAMICS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(in thousands)

Three-Month Periods Ended

March 31,

2022

2021

Operating activities:

Net income
$
1,107,354

$
438,755

Adjustments to reconcile net income to net cash provided by

operating activities:

Depreciation and amortization

87,546

86,919
Equity-based compensation

16,519

17,040
Deferred income taxes

2,632

66,744
Other adjustments

11,157

(662)
Changes in certain assets and liabilities:

Accounts receivable

(447,234)

(394,545)
Inventories

14,315

(374,588)
Other assets

19,402

5,828
Accounts payable

(75,971)

360,681
Income taxes receivable/payable

341,905

59,593
Accrued expenses

(258,657)

(3,574)
Net cash provided by operating activities

818,968

262,191

Investing activities:

Purchases of property, plant and equipment

(159,330)

(309,863)
Investments in unconsolidated affiliates

(222,480)

-
Other investing activities

410

390
Net cash used in investing activities

(381,400)

(309,473)

Financing activities:

Issuance of current and long-term debt

319,779

297,441
Repayment of current and long-term debt

(349,272)

(304,284)
Dividends paid

(50,699)

(52,729)
Purchases of treasury stock

(389,190)

-
Other financing activities

(22,527)

(16,598)
Net cash used in financing activities

(491,909)

(76,170)

Decrease in cash, cash equivalents, and restricted cash

(54,341)

(123,452)
Cash, cash equivalents, and restricted cash at beginning of period

1,249,369

1,374,122

Cash, cash equivalents, and restricted cash at end of period
$
1,195,028

$
1,250,670

Supplemental disclosure information:

Cash paid for interest
$
9,168

$
11,315
Cash paid for income taxes, net
$
9,948

$
2,142



	Three-Month Periods Ended				Nine-Month Periods Ended
	September 30,				September 30,
	2022		2021		2022		2021

Operating activities:
Net income	$	918,475	$	1,000,159	$	3,240,481	$	2,151,117

Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization		98,714		87,407		281,961		261,373
Equity-based compensation		12,093		9,917		39,681		36,765
Deferred income taxes		3,990		71,008		3,986		188,474
Other adjustments		(12,409)		(781)		(1,892)		(2,915)
Changes in certain assets and liabilities:
Accounts receivable		326,731		(321,771)		(417,550)		(920,877)
Inventories		270,628		(412,952)		154,391		(1,052,475)
Other assets		(15,789)		(20,361)		(9,274)		(18,818)
Accounts payable		(264,313)		48,726		(152,763)		472,562
Income taxes receivable/payable		8,269		(353)		146,822		86,791
Accrued expenses		149,766		169,817		31,132		278,240
Net cash provided by operating activities		1,496,155		630,816		3,316,975		1,480,237

Investing activities:
Purchases of property, plant and equipment		(241,229)		(214,629)		(564,701)		(801,698)
Purchases of short-term investments		(283,188)		-		(634,698)		-
Proceeds from maturities of short-term investments		49,794		-		49,794		-
Business combination		(47,638)		-		(47,638)		-
Investments in unconsolidated affiliates		-		-		(222,480)		-
Other investing activities		4,113		1,024		9,340		3,273
Net cash used in investing activities		(518,148)		(213,605)		(1,410,383)		(798,425)

Financing activities:
Issuance of current and long-term debt		348,286		343,007		1,050,933		1,059,912
Repayment of current and long-term debt		(363,060)		(382,489)		(1,127,051)		(1,095,338)
Dividends paid		(62,088)		(53,380)		(177,131)		(161,025)
Purchases of treasury stock		(481,676)		(337,616)		(1,387,890)		(730,814)
Other financing activities		(6,057)		(4,776)		(88,825)		(27,468)
Net cash used in financing activities		(564,595)		(435,254)		(1,729,964)		(954,733)

Increase (decrease) in cash, cash equivalents, and restricted cash		413,412		(18,043)		176,628		(272,921)
Cash, cash equivalents, and restricted cash at beginning of period		1,012,585		1,119,244		1,249,369		1,374,122

Cash, cash equivalents, and restricted cash at end of period	$	1,425,997	$	1,101,201	$	1,425,997	$	1,101,201


Supplemental disclosure information:
Cash paid for interest	$	9,214	$	9,174	$	59,496	$	62,216
Cash paid for income taxes, net	$	276,948	$	222,691	$	867,350	$	370,835

See notes to consolidated financial statements.

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 one of the largest and most diversified domestic steel producers and metals recycler. The company has 3three reporting segments: steel operations, metals recycling operations, and steel fabrication operations.

Steel Operations Segment. Steel operations include the company’s electric arc furnace (EAF) steel mills, including Butler Flat Roll Division, Columbus Flat Roll Division, Southwest-Sinton Flat Roll Division, ~~(Sinton),~~ Structural and Rail Division, Engineered Bar Products Division, Roanoke Bar Division, and Steel of West Virginia; and steel coating and processing operations at The Techs, Heartland Flat Roll Division, United Steel Supply (USS), and Vulcan Threaded Products, Inc (Vulcan). Steel operations accounted for ~~68%~~66% and ~~71%~~72% of the company’s consolidated net sales during the three-month periods ended ~~March 31,~~September 30, 2022 and 2021, respectively, and 67% and 72% of the company’s consolidated net sales during the nine-month periods ended September 30, 2022 and 2021, respectively.

Metals Recycling Operations Segment. Metals recycling operations include the company’s OmniSource ferrous and nonferrous processing, transportation, marketing, brokerage, and scrap management services primarily throughout the United States and in Central and Northern Mexico. Metals recycling operations accounted for ~~10%~~8% and ~~13%~~12% of the company’s consolidated net sales during the three-month periods ended ~~March 31,~~September 30, 2022 and 2021, respectively, and 10% and 12% of the company’s consolidated net sales during the nine-month periods ended September 30, 2022 and 2021, respectively.

Steel Fabrication Operations Segment. Steel fabrication operations include the company’s New Millennium Building Systems’ joist and deck plants located throughout the United States, and in 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 ~~17%~~20% and 7%10% of the company’s consolidated net sales during the three-month periods ended ~~March 31,~~September 30, 2022 and 2021, respectively, and 18% and 8% of the company’s consolidated net sales during the nine-month periods ended September 30, 2022 and 2021, respectively.

Other. Other operations consist of subsidiary operations that are below the company’s quantitative thresholds required for reportable segments and primarily consist of joint ventures, and ~~our~~the company’s idle Minnesota ironmaking operations. Also included in “Other” are certain unallocated corporate accounts, such as the company’s senior unsecured credit facility, senior notes, certain other investments, and the company’s profit sharing ~~component.~~component, representing 8% of consolidated pretax income.

Significant Accounting Policies

Principles of Consolidation

The consolidated financial statements include the accounts of SDI, together with its wholly- and majority-owned or controlled consolidated subsidiaries, after elimination of intercompany accounts and transactions. Noncontrolling and redeemable noncontrolling interests represent the noncontrolling owners’ proportionate share in the equity, income, or losses of the company’s majority-owned or controlled consolidated subsidiaries. Redeemable noncontrolling interests related to USS (owned ~~75%~~87.5% by SDI) are ~~$116.7~~$61.2 million at ~~March 31,~~September 30, 2022 and $100.2 million at December 31, 2021. Noncontrolling members of USS exercised their put option to require the company to purchase an additional 12.5% of the equity interest of USS ~~increasing SDI’s ownership to 87.5%, on~~effective April 1, 2022. Redeemable noncontrolling interests related to Mesabi Nugget (owned 85% by SDI) are $111.2 million at ~~March 31,~~September 30, 2022, and December 31, 2021.

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STEEL DYNAMICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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

Use of Estimates

These consolidated 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 consolidated 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 consolidated 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, 2021.

Cash and Equivalents, and Restricted Cash

Cash and equivalents include all highly liquid investments with a maturity of three months or less at the date of acquisition. Restricted cash is primarily funds held in escrow as required by various insurance and government organizations. The balance of cash, cash equivalents and restricted cash in the consolidated statements of cash flows includes restricted cash of $5.5 million ~~at March 31, 2022, December 31, 2021, March 31, 2021, and December 31, 2020,~~for all periods presented, which are recorded in Other Assets (noncurrent) in the company’s consolidated balance sheets.

Goodwill

The company’s goodwill consisted of the following at ~~March 31,~~September 30, 2022, and December 31, 2021 (in thousands):



	March 31,		December 31,			September 30,		December 31,
	2022		2021			2022		2021

Steel Operations Segment	$	272,133	$	272,133	Steel Operations Segment	$	272,133	$	272,133
Metals Recycling Operations Segment		179,030		179,777	Metals Recycling Operations Segment		177,536		179,777
Steel Fabrication Operations Segment		1,925		1,925	Steel Fabrication Operations Segment		1,925		1,925
	$	453,088	$	453,835		$	451,594	$	453,835

Metals Recycling Operations Segment goodwill decreased ~~$747,000~~$2.2 million from December 31, 2021 to ~~March 31,~~September 30, 2022, in recognition of the 2022 tax benefit related to the normal amortization of the component of Metals Recycling Operations tax-deductible goodwill in excess of book goodwill.

Table of Contents

STEEL DYNAMICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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

Credit Losses

The company is exposed to credit risk in the event of nonpayment of accounts receivable by customers. The company mitigates its exposure to credit risk, which it generally extends on an unsecured basis, by performing ongoing credit evaluations and taking further action if necessary, such as requiring letters of credit or other security interests to support the customer receivable. The allowance for credit losses for accounts receivable is based on the company’s reasonable estimate of known credit risks and historical experience, adjusted for current and anticipated economic and other pertinent factors affecting the company’s customers, that may differ from historical experience. Customer accounts receivable are written off when all collection efforts have been exhausted and the amounts are deemed uncollectible.

At ~~March 31,~~September 30, 2022, the company reported ~~$2.4~~$2.3 billion of accounts receivable, net of allowances for credit losses of $6.3 million. Changes in the allowance were not material for each of the ~~three-month~~three and nine-month periods ended ~~March 31,~~September 30, 2022 and 2021.

Note 2. Investments in Unconsolidated Affiliates and Business Combinations

On January 31, 2022, the company purchased a 45% minority equity interest in New Process Steel, L.P. (NPS), a metals solutions and distribution supply-chain management company headquartered in Houston, Texas, with a focus toward growing its value-added manufacturing applications. On February 28, 2022, the company also purchased a minority equity interest in Aymium, a producer of renewable biocarbon products. As the company does not have power to control these entities, the company accounts for these investments using the equity method of accounting, which are recorded in Other Assets (noncurrent) in the company’s consolidated balance sheets.

On July 29, 2022, the company attained a 94.4% equity interest in a joint venture concurrently formed with Unity Aluminum, Inc., for the construction and operation of a new state-of-the-art low-carbon aluminum flat rolled mill. Operating results from and after July 29, 2022, are reflected in the company’s consolidated financial statements, in other operations. On October 1, 2022, the company acquired 100% of ROCA ACERO, S.A. de C.V. (“ROCA”), as part of its North American raw material procurement strategy. ROCA is headquartered in Monterrey, Mexico, and operates five ferrous and nonferrous scrap facilities strategically positioned near high-volume industrial scrap sources located throughout Central and Northern Mexico. Both transactions were funded with available cash.

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 restricted stock units, deferred stock units, restricted stock, and performance awards, and are excluded from the computation in periods in which they have an anti-dilutive effect. There were 0no anti-dilutive common share equivalents as of or for the ~~three-month~~three and nine-month periods ended ~~March 31,~~September 30, 2022 and 2021.

Three-Month Periods Ended March 31,

2022

2021

Weighted

Weighted

Average

Average

Net Income

Shares

Per Share

Net Income

Shares

Per Share

(Numerator)

(Denominator)

Amount

(Numerator)

(Denominator)

Amount
Basic earnings per share
$
1,103,931

192,158

$
5.74

$
430,507

211,015

$
2.04
Dilutive common share equivalents

-

1,083

-

1,239

Diluted earnings per share
$
1,103,931

193,241

$
5.71

$
430,507

212,254

$
2.03



	Three-Month Periods Ended September 30,
	2022						2021
			Weighted						Weighted
			Average						Average
	Net Income		Shares		Per Share		Net Income		Shares		Per Share
	(Numerator)		(Denominator)		Amount		(Numerator)		(Denominator)		Amount
Basic earnings per share	$	914,325		180,264	$	5.07	$	990,763		202,450	$	4.89
Dilutive common share equivalents		-		1,349				-		1,717
Diluted earnings per share	$	914,325		181,613	$	5.03	$	990,763		204,167	$	4.85

Table of Contents

STEEL DYNAMICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 3. Earnings Per Share (Continued)



	Nine-Month Periods Ended September 30,
	2022						2021
			Weighted						Weighted
			Average						Average
	Net Income		Shares		Per Share		Net Income		Shares		Per Share
	(Numerator)		(Denominator)		Amount		(Numerator)		(Denominator)		Amount
Basic earnings per share	$	3,227,810		186,288	$	17.33	$	2,123,561		207,704	$	10.22
Dilutive common share equivalents		-		1,243				-		1,518
Diluted earnings per share	$	3,227,810		187,531	$	17.21	$	2,123,561		209,222	$	10.15

Note 4. Inventories

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


		March 31,		December 31,		September 30,		December 31,
		2022		2021		2022		2021
	Raw materials	$	1,871,749	$	1,870,300
	Supplies		562,204		552,616
	Work in progress		435,896		402,207
	Finished goods		646,966		706,007
	Total inventories	$	3,516,815	$	3,531,130
Raw materials						$	1,797,858	$	1,870,300
Supplies							601,480		552,616
Work in progress							314,658		402,207
Finished goods							662,536		706,007
Total inventories						$	3,376,532	$	3,531,130

Table of Contents

STEEL DYNAMICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 5. Changes in Equity

The following tables provide 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 noncontrolling interests (in thousands) for each of the ~~three-month~~three and nine-month periods ended ~~March 31,~~September 30, 2022 and 2021:

Stockholders of Steel Dynamics, Inc.

Accumulated

Additional

Other

Redeemable

Common

Treasury

Paid-In

Retained

Comprehensive

Noncontrolling

Total

Noncontrolling


Stock

Stock

Capital

Earnings

Income (Loss)

Interests

Equity

Interests
Balances at December 31, 2021

$
649

$
(2,674,267)

$
1,218,933

$
7,761,417

$
(2,091)

$
(195,884)

$
6,108,757

$
211,414
Dividends declared

-

-

-

(64,344)

-

-

(64,344)

-
Noncontrolling investors, net

-

-

-

-

-

(21,633)

(21,633)

16,500
Share repurchases

-

(389,190)

-

-

-

-

(389,190)

-
Equity-based compensation

-

12,960

(14,910)

(121)

-

-

(2,071)

-
Net income

-

-

-

1,103,931

-

3,423

1,107,354

-
Other comprehensive income,

-

-

-

-

11,387

-

11,387

-
net of tax

Balances at March 31, 2022

$
649

$
(3,050,497)

$
1,204,023

$
8,800,883

$
9,296

$
(214,094)

$
6,750,260

$
227,914



	Stockholders of Steel Dynamics, Inc.																Stockholders of Steel Dynamics, Inc.
									Accumulated																Accumulated
					Additional				Other						Redeemable						Additional				Other						Redeemable
	Common		Treasury		Paid-In		Retained		Comprehensive		Noncontrolling		Total		Noncontrolling		Common		Treasury		Paid-In		Retained		Comprehensive		Noncontrolling		Total		Noncontrolling
	Stock		Stock		Capital		Earnings		Income		Interests		Equity		Interests		Stock		Stock		Capital		Earnings		Income (Loss)		Interests		Equity		Interests
Balances at December 31, 2020	$	648	$	(1,623,747)	$	1,207,392	$	4,758,969	$	1,902	$	(155,552)	$	4,189,612	$	158,614
Balances at December 31, 2021																	$	649	$	(2,674,267)	$	1,218,933	$	7,761,417	$	(2,091)	$	(195,884)	$	6,108,757	$	211,414
Dividends declared		-		-		-		(54,917)		-		-		(54,917)		-		-		-		-		(64,344)		-		-		(64,344)		-
Noncontrolling investors, net		-		-		-		-		-		(9,905)		(9,905)		5,000		-		-		-		-		-		(21,633)		(21,633)		16,500
Share repurchases																		-		(389,190)		-		-		-		-		(389,190)		-
Equity-based compensation		-		8,881		(4,447)		(161)		-		-		4,273		-		-		12,960		(14,910)		(121)		-		-		(2,071)		-
Net income		-		-		-		430,507		-		8,248		438,755		-		-		-		-		1,103,931		-		3,423		1,107,354		-
Other comprehensive income,		-		-		-		-		3,765		-		3,765		-
net of tax
Balances at March 31, 2021	$	648	$	(1,614,866)	$	1,202,945	$	5,134,398	$	5,667	$	(157,209)	$	4,571,583	$	163,614
Other comprehensive income, net of tax																		-		-		-		-		11,387		-		11,387		-
Balances at March 31, 2022																		649		(3,050,497)		1,204,023		8,800,883		9,296		(214,094)		6,750,260		227,914
Dividends declared																		-		-		-		(62,088)		-		-		(62,088)		-
Noncontrolling investors, net																		-		-		630		(2,495)		-		1,235		(630)		(59,611)
Share repurchases																		-		(517,024)		-		-		-		-		(517,024)		-
Equity-based compensation																		-		1,028		8,828		(144)		-		-		9,712		-
Net income																		-		-		-		1,209,554		-		5,098		1,214,652		-
Other comprehensive income, net of tax																		-		-		-		-		(14,295)		-		(14,295)		-
Balances at June 30, 2022																		649		(3,566,493)		1,213,481		9,945,710		(4,999)		(207,761)		7,380,587		168,303
Dividends declared																		-		-		-		(60,031)		-		-		(60,031)		-
Noncontrolling investors, net																		-		-		-		-		-		(4,743)		(4,743)		4,100
Share repurchases																		-		(481,676)		-		-		-		-		(481,676)		-
Equity-based compensation																		-		1,614		6,466		(141)		-		-		7,939		-
Net income																		-		-		-		914,325		-		4,150		918,475		-
Other comprehensive income, net of tax																		-		-		-		-		2,251		-		2,251		-
Balances at September 30, 2022																	$	649	$	(4,046,555)	$	1,219,947	$	10,799,863	$	(2,748)	$	(208,354)	$	7,762,802	$	172,403



	Stockholders of Steel Dynamics, Inc.
									Accumulated
					Additional				Other						Redeemable
	Common		Treasury		Paid-In		Retained		Comprehensive		Noncontrolling		Total		Noncontrolling
	Stock		Stock		Capital		Earnings		Income (Loss)		Interests		Equity		Interests
Balances at December 31, 2020	$	648	$	(1,623,747)	$	1,207,392	$	4,758,969	$	1,902	$	(155,552)	$	4,189,612	$	158,614
Dividends declared		-		-		-		(54,917)		-		-		(54,917)		-
Noncontrolling investors, net		-		-		-		-		-		(9,905)		(9,905)		5,000
Share repurchases		-		-		-		-		-		-		-		-
Equity-based compensation		-		8,881		(4,447)		(161)		-		-		4,273		-
Net income		-		-		-		430,507		-		8,248		438,755		-
Other comprehensive income, net of tax		-		-		-		-		3,765		-		3,765		-
Balances at March 31, 2021		648		(1,614,866)		1,202,945		5,134,398		5,667		(157,209)		4,571,583		163,614
Dividends declared		-		-		-		(53,380)		-		-		(53,380)		-
Noncontrolling investors, net		-		-		-		-		-		(18,879)		(18,879)		12,800
Share repurchases		-		(393,198)		-		-		-		-		(393,198)		-
Equity-based compensation		-		1,169		7,888		(125)		-		-		8,932		-
Net income		-		-		-		702,291		-		9,912		712,203		-
Other comprehensive income, net of tax		-		-		-		-		26,677		-		26,677		-
Balances at June 30, 2021		648		(2,006,895)		1,210,833		5,783,184		32,344		(166,176)		4,853,938		176,414
Dividends declared		-		-		-		(51,942)		-		-		(51,942)		-
Noncontrolling investors, net		-		-		-		(150)		-		(15,026)		(15,176)		10,400
Share repurchases		-		(337,616)		-		-		-		-		(337,616)		-
Equity-based compensation		-		34		8,605		(121)		-		-		8,518		-
Net income		-		-		-		990,763		-		9,396		1,000,159		-
Other comprehensive income, net of tax		-		-		-		-		(21,761)		-		(21,761)		-
Balances at September 30, 2021	$	648	$	(2,344,477)	$	1,219,438	$	6,721,734	$	10,583	$	(171,806)	$	5,436,120	$	186,814

Table of Contents

STEEL DYNAMICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 6. 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, and occasionally to mitigate foreign currency exchange rate risk, and have in the past to mitigate interest rate fluctuation 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 and ferrous 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 significant futures contract commitments as of ~~March 31,~~September 30, 2022:



Commodity Futures	Long/Short	Metric Tons
Aluminum	Long	~~6,220~~12,150
Aluminum	Short	~~12,225~~17,975
Copper	Long	~~14,855~~13,144
Copper	Short	~~27,940~~25,997

The following summarizes the location and amounts of the fair values reported on the company’s consolidated balance sheets as of ~~March 31,~~September 30, 2022, and December 31, 2021, and gains and losses related to derivatives included in the company’s statement of income for each of the ~~three-month~~three and nine-month periods ended ~~March 31,~~September 30, 2022 and 2021 (in thousands):



		Asset Derivatives				Liability Derivatives					Asset Derivatives				Liability Derivatives
	Balance sheet	Fair Value				Fair Value				Balance sheet	Fair Value				Fair Value
	location	March 31, 2022		December 31, 2021		March 31, 2022		December 31, 2021		location	September 30, 2022		December 31, 2021		September 30, 2022		December 31, 2021
Derivative instruments designated as hedges
Commodity futures	Other current assets	$	13,920	$	1,278	$	3,802	$	7,430	Other current assets	$	4,357	$	1,278	$	5,753	$	7,430

Derivative instruments not designated as
hedges
Derivative instruments not designated as hedges
Commodity futures	Other current assets		6,968		4,319		9,416		6,171	Other current assets		8,399		4,319		4,069		6,171
Total derivative instruments		$	20,888	$	5,597	$	13,218	$	13,601		$	12,756	$	5,597	$	9,822	$	13,601

910

Table of Contents

STEEL DYNAMICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 6. Derivative Financial Instruments ~~(continued)~~(Continued)

The fair value of the above derivative instruments along with required margin deposit amounts with the same counterparty under master netting arrangements totaled ~~$17.5~~$13.0 million at ~~March 31,~~September 30, 2022, and $24.9 million at December 31, 2021, and are reflected in other current assets in the consolidated balance sheets.

Amount of gain (loss)

recognized in income

Location of gain

recognized in income

Location of gain

recognized in income

Location of gain

on derivatives for the

(loss) recognized

on derivatives for the

Location of gain

on derivatives for the

(loss) recognized

on derivatives for the

(loss) recognized

three-month periods

Hedged items in

in income on

three-month periods

(loss) recognized

three-month periods

Hedged items in

in income on

three-month periods

in income on

ended March 31,

fair value hedge

related hedged

ended March 31,

in income on

ended September 30,

fair value hedge

related hedged

ended September 30,

derivatives

2022

2021

relationships

items

2022

2021

derivatives

2022

2021

relationships

items

2022

2021

Derivatives in fair value

hedging relationships

Derivatives in fair value hedging relationships

Commodity futures

Costs of goods sold

1,326

7,786

Firm commitments

Costs of goods sold

(1,192)

(1,898)

Costs of goods sold

(7,663)

(5,205)

Firm commitments

Costs of goods sold

3,389

4,404

Inventory

Costs of goods sold

(384)

(498)

Inventory

Costs of goods sold

4,941

500

Derivatives not designated

(1,576)

(2,396)

as hedging instruments

8,330

4,904

Derivatives not designated as hedging instruments

Commodity futures

Costs of goods sold

(11,221)

(30,195)

Costs of goods sold

18,164

12,160

Amount of gain (loss)

recognized in income

Location of gain

recognized in income

Location of gain

on derivatives for the

(loss) recognized

on derivatives for the

(loss) recognized

nine-month periods

Hedged items in

in income on

nine-month periods

in income on

ended September 30,

fair value hedge

related hedged

ended September 30,

derivatives

2022

2021

relationships

items

2022

2021

Derivatives in fair value hedging relationships

Commodity futures

Costs of goods sold

5,618

4,765

Firm commitments

Costs of goods sold

(2,146)

187

Inventory

Costs of goods sold

(1,440)

(1,705)

(3,586)

(1,518)

Derivatives not designated as hedging instruments

Commodity futures

Costs of goods sold

34,333

(33,620)

Derivatives accounted for as fair value hedges had ineffectiveness resulting in ~~gains~~losses of ~~$285,000~~$151,000 and ~~$21,000~~$1.6 million during the three-month periods ended ~~March 31,~~September 30, 2022 and 2021, respectively, and gains of $145,000 and $17,000 during the nine-month periods ended September 30, 2022 and 2021, respectively. ~~Losses~~Gains excluded from hedge effectiveness testing of ~~$536,000 increased cost of goods sold during the three-month period ended March 31, 2022~~$817,000 and ~~gains excluded from hedge effectiveness testing of $5.4~~$1.3 million decreased cost of goods sold during the three-month ~~period~~periods ended ~~March 31, 2021.~~September 30, 2022 and 2021, respectively. Gains excluded from hedge effectiveness testing of $1.9 million and $3.2 million decreased cost of goods sold during the nine-month periods ended September 30, 2022 and 2021, respectively.

Derivatives accounted for as cash flow hedges resulted in net gains of ~~$18.1~~$10.0 million and ~~$9.3~~net losses of $2.3 million recognized in other comprehensive income for the three-month periods ended ~~March 31,~~September 30, 2022 and 2021, respectively, and net gains of $6.8 million and $41.8 million for the nine-month periods ended September 30, 2022 and 2021, respectively. Net losses of $7.1 million and net gains of ~~$3.2 million and $4.4~~$23.2 million were reclassified from accumulated other comprehensive income for the three-month periods ended ~~March 31,~~September 30, 2022 and 2021, respectively, and net losses of $7.7 million and net gains of $30.4 million for the nine-month periods ended September 30, 2022 and 2021, respectively. At ~~March 31,~~September 30, 2022, the company expects to reclassify all ~~$12.2~~$3.6 million of net ~~gains~~losses on derivative instruments from accumulated other comprehensive income to earnings during the next 12 months due to the settlement of futures contracts. The maximum term over which the company is hedging its exposure to the variability of future cash flows for forecasted transactions is less than 12 months.

1011

Table of Contents

STEEL DYNAMICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 7. Fair Value Measurements

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.

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 ~~March 31,~~September 30, 2022 and December 31, 2021 (in thousands):



			Quoted Prices		Significant						Quoted Prices		Significant
			in Active		Other		Significant				in Active		Other		Significant
			Markets for		Observable		Unobservable				Markets for		Observable		Unobservable
			Identical Assets		Inputs		Inputs				Identical Assets		Inputs		Inputs
	Total		(Level 1)		(Level 2)		(Level 3)		Total		(Level 1)		(Level 2)		(Level 3)
March 31, 2022
September 30, 2022
Short-term investments									$	583,211	$	-	$	583,211	$	-
Commodity futures – financial assets	$	20,888	$	-	$	20,888	$	-		12,756		-		12,756		-
Commodity futures – financial liabilities		13,218		-		13,218		-		9,822		-		9,822		-

December 31, 2021
Commodity futures – financial assets	$	5,597	$	-	$	5,597	$	-	$	5,597	$	-	$	5,597	$	-
Commodity futures – financial liabilities		13,601		-		13,601		-		13,601		-		13,601		-

The carrying amounts of financial instruments including cash and equivalents, and restricted cash approximate fair value (Level 1). The fair values of ~~the~~short-term investments and 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 (Level 2). The fair value of long-term debt, including current maturities, as determined by quoted market prices (Level 2), was approximately ~~$3.0~~$2.6 billion and $3.3 billion at ~~March 31,~~September 30, 2022 and December 31, 2021, respectively (with a corresponding carrying amount in the consolidated balance sheet of $3.1 billion at ~~March 31,~~September 30, 2022 and December 31, 2021).

Note 8. Commitments and Contingencies

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 the company’s financial condition, results of operations, or liquidity.

1112

Table of Contents

STEEL DYNAMICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 9. Segment Information

The company’s operations are primarily organized and managed by reportable operating segments, which are steel operations, metals recycling operations, and steel fabrication operations. The segment operations are more fully described in Note 1 to the consolidated 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 consolidated 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 joint ventures, and the idle Minnesota ironmaking operations. Also included in “Other” are certain unallocated corporate accounts, such as the company’s senior unsecured credit facility, senior notes, certain other investments and the company’s profit sharing component.

The company’s segment results, including disaggregated revenue by segment to external, external non-United States, and other segment customers, are as follows (in thousands):



			Metals		Steel												Metals		Steel
For the three-month period ended	Steel		Recycling		Fabrication										Steel		Recycling		Fabrication
March 31, 2022	Operations		Operations		Operations		Other			Eliminations			Consolidated
September 30, 2022															Operations		Operations		Operations		Other			Eliminations			Consolidated

Net sales - disaggregated revenue
External	$	3,573,202	$	448,043	$	929,842	$	297,121		$	-		$	5,248,208	$	3,512,202	$	328,187	$	1,140,272	$	314,104		$	-		$	5,294,765
External Non-U.S.		189,294		131,582		139		679			-			321,694		208,623		143,879		-		4,440			-			356,942
Other segments		169,157		563,592		119		658			(733,526)			-		152,719		512,559		5,554		-			(670,832)			-
		3,931,653		1,143,217		930,100		298,458			(733,526)			5,569,902		3,873,544		984,625		1,145,826		318,544			(670,832)			5,651,707
Operating income (loss)		1,163,010		44,960		466,875		(174,535)	⁽¹⁾		(5,443)			1,494,867		654,677		6,735		676,726		(137,160)	⁽¹⁾		18,866			1,219,844
Income (loss) before income taxes		1,152,216		45,730		465,199		(199,629)			(5,786)			1,457,730		646,426		5,415		674,718		(136,613)			18,526			1,208,472
Depreciation and amortization		66,682		13,254		2,430		5,180			-			87,546		76,453		12,932		2,454		6,875			-			98,714
Capital expenditures		136,190		11,557		3,690		7,893			-			159,330		131,753		11,137		4,975		93,364			-			241,229

As of March 31, 2022
As of September 30, 2022
Assets	$	8,841,330	$	1,365,134	$	1,457,882	$	1,540,817	⁽²⁾	$	(148,526)	⁽³⁾	$	13,056,637	$	9,011,489	$	1,201,017	$	1,446,405	$	2,511,506	⁽²⁾	$	(122,719)	⁽³⁾	$	14,047,698


Footnotes related to the three-month period ended March 31, 2022, segment results (in millions):
Footnotes related to the three-month period ended September 30, 2022, segment results (in millions):								Footnotes related to the three-month period ended September 30, 2022, segment results (in millions):

(1)	Corporate SG&A	$	(19.6)	(2)	Cash and equivalents	$	1,014.4	Corporate SG&A	$	(15.5)	(2)	Cash and equivalents	$	1,230.8
								Companywide equity-based compensation		(14.6)		Short-term investments		583.2
	Companywide equity-based compensation		(15.9)		Accounts receivable		42.7	Company profit sharing component		(103.8)		Accounts receivable		28.1
	Company profit sharing component		(125.6)		Inventories		78.4	Other, net		(3.3)		Inventories		58.0
	Other, net		(13.4)		Property, plant and equipment, net		132.1		$	(137.2)		Property, plant and equipment, net		280.8
		$	(174.5)		Intra-company debt		22.7					Intra-company debt		35.8
					Other		250.5					Other		294.8
						$	1,540.8						$	2,511.5

(3)	Elimination of intra-company receivables	$	(47.5)					Elimination of intra-company receivables	$	(50.5)
	Elimination of intra-company debt		(22.7)					Elimination of intra-company debt		(35.8)
	Other		(78.3)					Other		(36.4)
		$	(148.5)						$	(122.7)

1213

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STEEL DYNAMICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 9. Segment Information (Continued)



			Metals			Steel											Metals		Steel
For the three-month period ended	Steel		Recycling			Fabrication									Steel		Recycling		Fabrication
March 31, 2021	Operations		Operations			Operations		Other			Eliminations		Consolidated
September 30, 2021															Operations		Operations		Operations		Other			Eliminations		Consolidated
					��
Net sales - disaggregated revenue
External	$	2,400,916	$	363,878		$	256,962	$	304,251		$	-	$	3,326,007	$	3,503,964	$	430,087	$	493,452	$	337,011		$	-	$	4,764,514
External Non-U.S.		109,768		106,129			22		2,671			-		218,590		163,754		157,005		352		2,663			-		323,774
Other segments		132,163		609,905			2,036		559			(744,663)		-		243,455		625,025		122		453			(869,055)		-
		2,642,847		1,079,912			259,020		307,481			(744,663)		3,544,597		3,911,173		1,212,117		493,926		340,127			(869,055)		5,088,288
Operating income (loss)		637,411		50,563			9,854		(90,913)	⁽¹⁾		(12,716)		594,199		1,346,967		43,616		89,389		(138,576)	⁽¹⁾		(19,351)		1,322,045
Income (loss) before income taxes		626,059		49,339			9,064		(104,599)			(13,004)		566,859		1,341,051		43,328		88,892		(150,992)			(19,714)		1,302,565
Depreciation and amortization		66,178		13,870			2,675		4,196			-		86,919		65,852		14,054		2,263		5,238			-		87,407
Capital expenditures		282,598		23,918			2,621		726			-		309,863		200,721		6,870		3,458		3,580			-		214,629


Footnotes related to the three-month period ended March 31, 2021, segment results (in millions):
Footnotes related to the three-month period ended September 30, 2021, segment results (in millions):				Footnotes related to the three-month period ended September 30, 2021, segment results (in millions):

(1)	Corporate SG&A	$	(18.0)	Corporate SG&A	$	(17.0)
	Companywide equity-based compensation		(23.0)	Companywide equity-based compensation		(10.7)
	Company profit sharing component		(48.1)	Company profit sharing component		(111.1)
	Other, net		(1.8)	Other, net		0.2
		$	(90.9)		$	(138.6)



			Metals		Steel
For the nine-month period ended	Steel		Recycling		Fabrication
September 30, 2022	Operations		Operations		Operations		Other			Eliminations		Consolidated

Net sales - disaggregated revenue
External	$	11,015,050	$	1,252,323	$	3,155,824	$	941,799		$	-	$	16,364,996
External Non-U.S.		610,293		449,103		183		9,912			-		1,069,491
Other segments		426,470		1,782,398		10,117		1,030			(2,220,015)		-
		12,051,813		3,483,824		3,166,124		952,741			(2,220,015)		17,434,487
Operating income (loss)		2,920,412		106,138		1,742,792		(473,889)	⁽¹⁾		37,321		4,332,774
Income (loss) before income taxes		2,885,437		104,591		1,736,680		(500,385)			36,296		4,262,619
Depreciation and amortization		217,097		39,207		7,317		18,340			-		281,961
Capital expenditures		403,807		37,893		13,234		109,767			-		564,701


Footnotes related to the nine-month period ended September 30, 2022, segment results (in millions):

(1)	Corporate SG&A	$	(47.8)
	Companywide equity-based compensation		(39.3)
	Company profit sharing component		(366.1)
	Other, net		(20.7)
		$	(473.9)

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STEEL DYNAMICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 9. Segment Information (Continued)



			Metals		Steel
For the nine-month period ended	Steel		Recycling		Fabrication
September 30, 2021	Operations		Operations		Operations		Other			Eliminations		Consolidated

Net sales - disaggregated revenue
External	$	8,991,273	$	1,243,837	$	1,081,123	$	960,953		$	-	$	12,277,186
External Non-U.S.		421,648		388,961		518		9,880			-		821,007
Other segments		535,541		1,810,337		3,020		2,125			(2,351,023)		-
		9,948,462		3,443,135		1,084,661		972,958			(2,351,023)		13,098,193
Operating income (loss)		2,997,375		141,775		127,652		(357,183)	⁽¹⁾		(37,640)		2,871,979
Income (loss) before income taxes		2,970,465		141,063		125,827		(398,485)			(38,648)		2,800,222
Depreciation and amortization		198,170		41,994		7,344		13,865			-		261,373
Capital expenditures		740,569		38,112		9,156		13,861			-		801,698


Footnotes related to the nine-month period ended September 30, 2021, segment results (in millions):

(1)	Corporate SG&A	$	(53.2)
	Companywide equity-based compensation		(56.6)
	Company profit sharing component		(238.2)
	Other, net		(9.2)
		$	(357.2)

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Statements

This report contains some predictive statements about future events, including statements related to conditions in domestic or global economies, conditions in steel, aluminum, and recycled metals market places, Steel Dynamics' revenues, costs of purchased materials, future profitability and earnings, and the operation of new, existing or planned facilities. These statements, which we generally precede or accompany by such typical conditional words as "anticipate", "intend", "believe", "estimate", "plan", "seek", "project", or "expect", or by the words "may", "will", or "should", are intended to be made as "forward-looking", subject to many risks and uncertainties, within the safe harbor protections of the Private Securities Litigation Reform Act of 1995. These statements speak only as of this date and are based upon information and assumptions, which we consider reasonable as of this date, concerning our businesses and the environments in which they operate. Such predictive statements are not guarantees of future performance, and we undertake no duty to update or revise any such statements. Some factors that could cause such forward-looking statements to turn out differently than anticipated include: (1) domestic and global economic factors; (2) global steelmaking overcapacity and imports of steel and North American aluminum flat rolled supply deficit, together with increased scrap prices; (3) pandemics, epidemics, widespread illness or other health issues, such as the COVID-19 pandemic; (4) the cyclical nature of the steel industry and the industries we serve; (5) volatility and major fluctuations in prices and availability of scrap metal, scrap substitutes, and our potential inability to pass higher costs on to our customers; (6) cost and availability of electricity, natural gas, oil, or other energy resources are subject to volatile market conditions; (7) increased environmental, greenhouse gas emissions and sustainability considerations or regulations; (8) compliance with and changes in environmental and remediation requirements; (9) significant price and other forms of competition from other steel and aluminum producers, scrap processors and alternative materials; (10) availability of an adequate source of supply of scrap for our metals recycling operations; (11) cybersecurity threats and risks to the security of our sensitive data and information technology; (12) the implementation of our growth strategy; (13) litigation and legal compliance; (14) unexpected equipment downtime or shutdowns; (15) governmental agencies may refuse to grant or renew some of our licenses and permits; (16) our senior unsecured credit facility contains, and any future financing agreements may contain, restrictive covenants that may limit our flexibility; ~~and~~ (17) the impacts of impairment ~~charges.~~charges; (18) unanticipated difficulties in integrating or starting up new assets; and (19) risks and uncertainties involving product and/or technology development.

More specifically, we refer you to our more detailed explanation of these and other factors and risks that may cause such predictive statements to turn out differently, as set forth in our most recent Annual Report on Form 10-K under the headings Special Note Regarding Forward-Looking Statements and Risk Factors for the year ended December 31, 2021, in our quarterly reports on Form 10-Q, or in other reports which we from time to time file with the Securities and Exchange Commission. These reports are available publicly on the Securities and Exchange Commission website, www.sec.gov, and on our website, www.steeldynamics.com under “Investors – SEC Filings.”

Description of the Business

We are one of the largest domestic steel producers and metal recyclers in the United States, based on estimated steelmaking and steel coating capacity of approximately 1316 million tons, including 3 million tons related to our new Southwest-Sinton Flat Roll Division (Sinton), and actual metals recycling volumes, with one of the most diversified product and end-market portfolios in the domestic steel industry. ~~Annual steelmaking and steel coating capacity is expected to increase to approximately 16 million tons once our new Southwest-Sinton Flat Roll Division is fully operational.~~ Our primary sources of revenue are from the manufacture and sale of steel products, the processing and sale of recycled ferrous and nonferrous metals, and the fabrication and sale of steel joists and deck products. We have three reportable segments: steel operations, metals recycling operations, and steel fabrication operations.

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Operating Statement Classifications

Net Sales. Net sales from our operations are a factor of volumes shipped, product mix and related pricing. We charge premium prices for certain grades of steel, product dimensions, certain smaller volumes, and for value-added processing or coating of our steel products. Except for the steel fabrication operations, we recognize revenues from sales and the allowance for estimated returns and claims from these sales at the point in time control of the product transfers to the customer, upon shipment or delivery. Our steel fabrication operations recognize revenues over time based on completed fabricated tons to date as a percentage of total tons required for each contract.

~~Table of Contents~~

Costs of Goods Sold. Our costs of goods sold represent all direct and indirect costs associated with the manufacture of our products. The principal elements of these costs are scrap and scrap substitutes (which represent the most significant single component of our consolidated costs of goods sold), steel substrate, direct and indirect labor and related benefits, alloys, zinc, transportation and freight, repairs and maintenance, utilities such as electricity and natural gas, and depreciation.

Selling, General and Administrative Expenses. Selling, general and administrative expenses consist of all costs associated with our sales, finance and accounting, and administrative departments, including, among other items, labor and related benefits, and professional services.

Company-wide profit sharing and amortization of intangible assets are each separately presented in the statement of income.

Interest Expense, net of Capitalized Interest. Interest expense consists of interest associated with our senior credit facilities and other debt, net of interest costs that are required to be capitalized during the construction period of certain capital investment projects.

Other (Income) Expense, net. Other income consists of interest income earned on our temporary cash deposits; any other non-operating income activity, including income from investments in unconsolidated affiliates accounted for under the equity method. Other expense consists of any non-operating costs, such as certain acquisition and financing expenses.

Results Overview

~~Our consolidated results for~~In the ~~first~~third quarter of 2022 ~~were highlighted by~~we achieved record ~~net sales~~steel shipments of ~~$5.6 billion,~~3.2 million tons, record steel fabrication operating income of ~~$1.5 billion, record net income of $1.1 billion,~~$676.7 million, and record cash flow from operations of ~~$819.0 million.~~$1.5 billion. During the ~~first~~third quarter of 2022, steel demand remained strong, most notably in the construction industry, and complemented by the automotive, ~~construction,~~industrial, and ~~industrial sectors.~~energy sectors, resulting in record steel shipments. Our steel fabrication segment achieved record operating income inand record shipments during the quarter, ~~surpassing full-year 2021 results,~~ on robust non-residential construction demand and ~~historically high~~continued increasing record average selling prices.

Consolidated operating income ~~increased $900.7~~decreased $102.2 million, or ~~152%~~8%, to ~~$1.5~~$1.2 billion for the ~~first~~third quarter of 2022, compared to the ~~first~~third quarter of ~~2021. First~~2021, as record steel fabrication operating income was more than offset by lower steel operating income. Third quarter 2022 net income attributable to Steel Dynamics, Inc. ~~increased $673.4~~decreased $76.4 million, or ~~156%~~8%, to ~~$1.1~~$914.3 million, compared to the third quarter of 2021, consistent with the decreased operating income.

Consolidated operating income increased $1.5 billion, or 51%, to $4.3 billion for the first nine months of 2022, compared to the first nine months of 2021, due to a $1.6 billion increase in steel fabrication operating income. First nine months 2022 net income attributable to Steel Dynamics, Inc. increased 52% to $3.2 billion, compared to the first ~~quarter~~nine months of 2021, consistent with the increased operating income.

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Segment Operating Results 2022 vs. 2021 (dollars in thousands)



	Three Months Ended March 31,					Three Months Ended September 30,					Nine Months Ended September 30,
	2022		% Change		2021	2022		% Change		2021	2022		% Change	2021
Net sales:
Steel Operations Segment	$	3,931,653	49%	$	2,642,847	$	3,873,544	(1)%	$	3,911,173	$	12,051,813	21%	$	9,948,462
Metals Recycling Operations Segment		1,143,217	6%		1,079,912		984,625	(19)%		1,212,117		3,483,824	1%		3,443,135
Steel Fabrication Operations Segment		930,100	259%		259,020		1,145,826	132%		493,926		3,166,124	192%		1,084,661
Other		298,458	(3)%		307,481		318,544	(6)%		340,127		952,741	(2)%		972,958
		6,303,428			4,289,260		6,322,539			5,957,343		19,654,502			15,449,216
Intra-company		(733,526)			(744,663)		(670,832)			(869,055)		(2,220,015)			(2,351,023)
	$	5,569,902	57%	$	3,544,597	$	5,651,707	11%	$	5,088,288	$	17,434,487	33%	$	13,098,193

Operating income (loss):
Steel Operations Segment	$	1,163,010	82%	$	637,411	$	654,677	(51)%	$	1,346,967	$	2,920,412	(3)%	$	2,997,375
Metals Recycling Operations Segment		44,960	(11)%		50,563		6,735	(85)%		43,616		106,138	(25)%		141,775
Steel Fabrication Operations Segment		466,875	4638%		9,854		676,726	657%		89,389		1,742,792	1265%		127,652
Other		(174,535)	(92)%		(90,913)		(137,160)	1%		(138,576)		(473,889)	(33)%		(357,183)
		1,500,310			606,915		1,200,978			1,341,396		4,295,453			2,909,619
Intra-company		(5,443)			(12,716)		18,866			(19,351)		37,321			(37,640)
	$	1,494,867	152%	$	594,199	$	1,219,844	(8)%	$	1,322,045	$	4,332,774	51%	$	2,871,979

~~Table of Contents~~

Steel Operations Segment

Steel operations consist of our electric arc furnace steel mills, producing steel from ferrous scrap and scrap substitutes, utilizing continuous casting, automated rolling mills, and numerous value-added downstream steel coating and processing operations. Our steel operations sell directly to end-users, steel fabricators, and service centers. These products are used in numerous industry sectors, including the construction, automotive, manufacturing, transportation, heavy and agriculture equipment, and pipe and tube (including OCTG) markets. Steel operations accounted for ~~68%~~66% and ~~71%~~72% of our consolidated net sales during the ~~three months~~three-month periods ended ~~March 31,~~September 30, 2022 and 2021, respectively, and 67% and 72% of our consolidated net sales during the nine-month periods ended September 30, 2022 and 2021, respectively.

Steel Operations Segment Shipments (tons):



	Three Months Ended March 31,			Three Months Ended September 30,			Nine Months Ended September 30,
	2022	% Change	2021	2022	% Change	2021	2022	% Change	2021

Total shipments	2,894,828	3%	2,822,274	3,154,857	13%	2,803,571	9,163,930	8%	8,517,121
Intra-segment shipments	(385,289)		(286,296)	(339,980)		(291,868)	(1,080,989)		(841,743)
Steel Operations Segment shipments	2,509,539	(1)%	2,535,978	2,814,877	12%	2,511,703	8,082,941	5%	7,675,378

External shipments	2,409,763	(0)%	2,410,817	2,694,709	14%	2,366,928	7,796,390	7%	7,281,752

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Steel Operations Segment Results 2022 vs. 2021

During the ~~first~~third quarter of 2022, steel demand ~~dynamics~~ remained ~~strong,~~steady compared to the first half of 2022, with the construction, automotive, ~~construction,~~industrial and ~~industrial~~energy sectors continuing to lead steel demand. ~~We also started~~This continued strong demand resulted in record quarterly total shipments, including 268,000 tons from Sinton. Sheet steel pricing continued to ~~see an increase~~trend downward, as it had throughout the first half of 2022, resulting in ~~steel demand from~~lower realized selling values than in the ~~energy sector. Compared to the sequential fourth~~third quarter of ~~2021, sheet~~2021. Third quarter 2022 total steel ~~pricing moderated from the record fourth quarter levels, while long products~~segment average selling prices ~~increased slightly. However, first quarter 2022 average selling prices increased 50%~~decreased 12%, or ~~$525~~$181 per ton, compared to ~~first~~third quarter of 2021. Steel operations segment shipments, ~~decreased 1%~~including Sinton, increased 12% in the ~~first~~third quarter 2022, as compared to the same period in 2021. Net sales for the steel operations in the third quarter 2022 were ~~49% higher~~comparable to the same period in 2021, due to the decrease in average steel selling prices offsetting increased shipments. Net sales for the steel operations increased 21%, which included Sinton, in the first ~~quarter~~nine months of 2022 when compared to the same period in 2021, due to the ~~increased~~5% increase in steel shipments combined with a 15% increase in average ~~steel~~ selling prices.

Metallic raw materials used in our electric arc furnaces represent our single most significant steel manufacturing cost, generally comprising approximately 55% to 65% of our steel mill operations’ manufacturing costs. Our metallic raw material cost per net ton consumed in our steel operations ~~increased $102,~~decreased $17, or ~~27%~~3%, in the ~~first~~third quarter of 2022, compared to the same period in 2021, consistent with overall ~~increased~~decreased domestic scrap pricing noted below in the metals recycling operations segment discussion. In the first nine months of 2022, our metallic raw material cost per ton increased $62, or 14% compared to the same period in 2021.

As a result of average selling prices ~~increasing~~decreasing more than scrap costs, specifically for sheet steel products, metal spread (which we define as the difference between average steel mill selling prices and the cost of ferrous scrap consumed in our steel mills) ~~increased 63%~~decreased 14% in the ~~first~~third quarter of 2022 compared to the ~~first~~third quarter of 2021. ~~Primarily as~~As a result of this metal spread ~~expansion,~~compression and additional costs during start-up at Sinton, operating income for the steel operations ~~increased 82%~~decreased 51%, to ~~$1.2 billion,~~$657.4 million, in the ~~first~~third quarter of 2022, compared to the same period in 2021. First nine months 2022 operating income decreased 3%, to $2.9 billion, compared to the first nine months of 2021 due to additional costs during start-up at Sinton during 2022.

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Metals Recycling Operations Segment

Metals recycling operations includes both ferrous and nonferrous scrap metal processing, transportation, marketing, brokerage, and scrap management services. Our steel mills utilize a large portion of the ferrous scrap sold by our metals recycling operations as raw material in our steelmaking operations, and the remainder is sold to other consumers, such as other steel manufacturers and foundries. In the ~~first~~third quarters of 2022 and 2021, ~~65%~~68% and ~~69%~~65%, respectively, of metals recycling operations ferrous scrap was sold to our own steel mills, as our steel mills utilization was 93% in the ~~first~~third quarters of 2022 and 2021. Our metals recycling operations accounted for ~~10%~~8% and ~~13%~~12% of our consolidated net sales during the ~~three months~~three-month periods ended ~~March 31,~~September 30, 2022 and 2021, respectively, and 10% and 12% of our consolidated net sales during the nine-month periods ended September 30, 2022 and 2021, respectively.

Metals Recycling Operations Segment Shipments:



	Three Months Ended March 31,			Three Months Ended September 30,			Nine Months Ended September 30,
	2022	% Change	2021	2022	% Change	2021	2022	% Change	2021
Ferrous metal (gross tons)
Total	1,265,222	(9)%	1,395,843	1,320,117	(4)%	1,371,126	3,944,068	(5)%	4,167,416
Inter-company	(827,994)	(14)%	(958,661)	(896,933)	0%	(895,559)	(2,645,655)	(3)%	(2,733,941)
External shipments	437,228	0%	437,182	423,184	(11)%	475,567	1,298,413	(9)%	1,433,475

Nonferrous metals (thousands of pounds)
Total	260,890	(7)%	280,809	257,710	(5)%	271,325	785,381	(4)%	818,993
Inter-company	(24,761)		(43,552)	(37,523)		(31,840)	(98,183)		(103,324)
External shipments	236,129	(0)%	237,257	220,187	(8)%	239,485	687,198	(4)%	715,669

Metals Recycling Operations Segment Results 2022 vs. 2021

Our metals recycling operations ~~benefitted from strong steel market demand and increased~~were challenged by sharply decreasing selling prices for recycled scrap in the ~~first~~third quarter of 2022. ~~Domestic steel mill utilization rates were approximately 80% in the first quarter of 2022, as compared to approximately 77% in the first quarter of 2021.~~ Net sales ~~increased 6%~~decreased 19% during the ~~first~~third quarter of 2022 compared to the same period in 2021, driven by ~~higher~~lower average selling prices for both ferrous and nonferrous metals, ~~partially offset by~~and lower shipments as domestic steel mill utilization rates declined. Domestic steel mill utilization rates were approximately 78% in the ~~9% and 7% decrease~~third quarter of 2022, as compared to approximately 85% in ~~ferrous and nonferrous shipments, respectively.~~the third quarter of 2021. Ferrous scrap average selling prices ~~increased 16%~~decreased 20% during the ~~first~~third quarter of 2022 compared to the same period in 2021, while average nonferrous scrap prices ~~increased 15%~~decreased 7%. Ferrous metal spread (which we define as the difference between average selling prices and the cost of purchased scrap) decreased 22%, and nonferrous metal spread decreased 11% during the third quarter of 2022 compared to the same period in 2021. As a result of the lower shipments and compressed ferrous and nonferrous metals spreads, metals recycling operations operating income decreased 85% to $6.7 million in the third quarter of 2022 compared to the third quarter of 2021.

Net sales for our metals recycling operations in the first nine months of 2022 were comparable to the same period in 2021, driven by increased pricing while shipments decreased. Ferrous scrap average selling prices increased 5% during the first nine months of 2022 compared to the same period in 2021, while nonferrous average selling prices increased 9%. Ferrous pricing increased consistently during the first nine months of 2021, but has decreased at a slower pace during the first nine months of 2022. Ferrous and nonferrous shipments decreased 5% and 4%, respectively, in the first nine months of 2022 compared to the first nine months of 2021. Ferrous metal spread increased 4%, while nonferrous metal spread increased 2% in the first nine months of 2022 compared to the first nine months of 2021. Metals recycling operations operating income in the first nine months of 2022 of $106.1 million decreased 25% from the first nine months of 2021 operating income of $141.8 million, as increased ferrous and nonferrous metal spread, was more than offset by decreased shipments.

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average selling prices and the cost of purchased scrap) increased 11%, while nonferrous metal spread increased 24% during the first quarter of 2022 compared to the same period in 2021. In spite of these improved metal spreads, metals recycling operations operating income decreased 11% to $45.0 million in the first quarter of 2022 compared to the first quarter of 2021 due to the decreased ferrous and nonferrous shipments.

Steel Fabrication Operations Segment

Steel fabrication operations include seven New Millennium Building Systems joist and deck plants located throughout the United States, and in Northern Mexico. Revenues from these plants are generated from the fabrication of steel joists, trusses, girders and steel deck used within the non-residential construction industry. Steel fabrication operations accounted for ~~17%~~20% and 7%10% of our consolidated net sales during the ~~three months~~three-month periods ended ~~March 31,~~September 30, 2022 and 2021, respectively, and 18% and 8% of our consolidated net sales during the nine-month periods ended September 30, 2022 and 2021, respectively.

Steel Fabrication Operations Segment Results 2022 vs. 2021

Our steel fabrication operations continue to benefit from the strong non-residential construction market, resulting in continued ~~record~~historically high order backlog and ~~record~~ forward-pricing at the end of the ~~first~~third quarter of 2022. ~~This continuing robust order activity and broad customer optimism supports strong overall demand dynamics for the construction industry.~~We achieved record quarterly segment operating income of $676.7 million on record shipments of 218,000 tons. Net sales for the steel fabrication operations increased ~~259%~~132% during the ~~first~~third quarter of 2022 compared to the same period in 2021, as average selling prices significantly increased ~~$3,018~~$2,906 per ton, or ~~215%~~124%, while shipments increased ~~14%~~3%. Net sales for the segment increased 192% during the first nine months of 2022, compared to ~~210,000 tons.~~the same period in 2021, as shipments increased 11%, and average selling prices increased 164%, or $3,041 per ton.

The purchase of various steel products is the largest single cost of production for our steel fabrication operations, historically representing approximately two-thirds of the total cost of manufacturing, increasing to approximately three-fourths during 2021 and the first ~~quarter~~nine months of 2022 consistent with the increased steel costs. The average cost per ton of steel consumed increased ~~89%~~11% in the ~~first~~third quarter 2022, as compared to the same period in ~~2021, as evidenced by the increased steel selling prices in our steel operations segment.~~2021. As a result of selling prices per ton increasing significantly more than steel input costs per ton, metal spread (which we define as the difference between average selling prices and the cost of

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purchased steel) ~~increased~~ more than ~~fourfold~~quadrupled in the ~~first~~third quarter of 2022 compared to the same period in 2021. This expanded metal spread and increased shipments resulted in record operating income of ~~$466.9~~$676.7 million in the ~~first~~third quarter 2022, ~~compared to $9.9~~more than six times the $89.4 million in the same period in 2021. For the first nine months of 2022, operating income increased $1.6 billion to $1.7 billion compared to the first nine months of 2021, as a 369% increase in metal spread combined with the 11% increase in shipments resulted in record nine-month results.

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Other Operations

~~First~~Third Quarter Consolidated Results 2022 vs. 2021

Selling, General and Administrative Expenses. Selling, general and administrative expenses of ~~$152.0~~$132.6 million during the ~~first~~third quarter of 2022 ~~were comparable to~~decreased 16% from the ~~$149.8~~$157.5 million during the ~~first~~third quarter of 2021. Selling, general and administrative expenses represented ~~2.7%~~2.3% and ~~4.2%~~3.1% of net sales during ~~first~~third quarter 2022 and 2021, respectively. The decrease in third quarter 2022 compared to third quarter 2021 is due primarily to the costs associated with the construction of Sinton being reported in selling, general and administrative in 2021, prior to the completion of the mill’s construction and start-up in early 2022.

Profit sharing expense during the ~~first~~third quarter of 2022 of ~~$128.5~~$105.1 million ~~increased 163%~~decreased 8% from the ~~$48.8~~$113.9 million during the same period in 2021, consistent with ~~increased~~decreased pretax earnings. The company profit sharing component represents 8% of pretax earnings.

Interest Expense, net of Capitalized Interest. During the ~~first~~third quarter of 2022, interest expense was $25.3 million, an increase of ~~$16.7~~$12.6 million ~~was comparable~~compared to the ~~$17.3 million during the first~~third quarter of 2021. The higher interest expense in the third quarter 2022 compared to the same period in 2021 was due to higher capitalized interest in 2021 related to the construction of Sinton.

Income Tax Expense. ~~First~~Third quarter 2022 income tax expense of ~~$350.4~~$290.0 million, at an effective income tax rate of 24.0%, ~~increased 174%~~decreased 4% compared to the ~~$128.1~~$302.4 million, at an effective income tax rate of ~~22.6%~~23.2%, during the third quarter of 2021, consistent with decreased pretax earnings.

First Nine Months Consolidated Results 2022 vs. 2021

Selling, General and Administrative Expenses. Selling, general and administrative expenses of $403.0 million during the first nine months of 2022 decreased 13% compared to the $461.7 million during the first nine months of 2021, representing 2.3% and 3.5% of net sales during each period, respectively. The decrease in 2022 compared to 2021 is due primarily to a $27.9 million decrease in certain equity-based compensation expense, as well as $34.6 million more costs associated with the construction of Sinton being reported in selling, general and administrative in 2021, prior to the completion of the mill’s construction and start-up in early 2022.

Profit sharing expense during the first nine months of 2022 of $373.3 million increased 52% from the $244.9 million during the same period in 2021, consistent with increased pretax earnings.

Interest Expense, net of Capitalized Interest. During the first nine months of 2022, interest expense of $67.7 million increased 51% from $44.9 million during the first nine months of 2021. The higher interest expense in 2022 compared to 2021 was due to higher capitalized interest in 2021 related to the construction of Sinton.

Income Tax Expense. First nine months 2022 income tax expense of $1.0 billion, at an effective income tax rate of 24.0%, was up 57% from the $649.1 million, at an effective income tax rate of 23.2%, during the first ~~quarter~~nine months of 2021, consistent with increased pretax earnings.

Liquidity and Capital Resources

Capital Resources and Long-term Debt. Our business is capital intensive and requires substantial expenditures for, among other things, the purchase and maintenance of equipment used in our operations, and to remain in compliance with environmental laws. Our short-term and long-term liquidity needs arise primarily from working capital requirements, capital expenditures, including expansion projects, principal and interest payments related to our outstanding indebtedness (no significant principal payments until 2024), dividends to our shareholders, and potential stock repurchases and acquisitions or investments. We have met and intend to continue to meet these liquidity

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requirements primarily with available cash and cash provided by operations, and long-term borrowings, and we also have availability under our unsecured Revolver. Our liquidity at ~~March 31,~~September 30, 2022, is as follows (in thousands):

Cash and equivalents

$
1,189,528

Revolver availability

1,187,913

Total liquidity

$
2,377,441



Cash and equivalents	$	1,420,497
Short-term investments		583,211
Revolver availability		1,190,835
Total liquidity	$	3,194,543

Our total outstanding debt ~~remained consistent at $3.1~~of $3.0 billion decreased 2% during the first ~~quarter~~nine months of ~~2022.~~2022 from reductions in revolver borrowings at one of our controlled subsidiaries. Our total long-term debt to capitalization ratio (representing our long-term debt, including current maturities, divided by the sum of our long-term debt, redeemable noncontrolling interests, and our total stockholders’ equity) was ~~30.6%~~27.7% and 32.9% at ~~March 31,~~September 30, 2022, and December 31, 2021, respectively.

Our unsecured credit agreement has a senior unsecured revolving credit facility (Facility), which provides a $1.2 billion unsecured Revolver, and matures in December 2024. Subject to certain conditions, we have the opportunity to increase the Facility size by $500.0 million. The unsecured Revolver is available to fund working capital, capital expenditures, and other general corporate purposes. The Facility contains financial covenants and other covenants pertaining to our ability to incur indebtedness and permit liens on certain assets. Our ability to borrow funds within the terms of the unsecured Revolver is dependent upon our continued compliance with the financial and other covenants. At ~~March 31,~~September 30, 2022, we had $1.2 billion of availability on the Revolver, ~~$12.1~~$9.2 million of outstanding letters of credit and other obligations which reduce availability, and there were no borrowings outstanding.

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The financial covenants under our Facility state that we must maintain an interest coverage ratio of not less than 2.50:1.00. Our interest coverage ratio is calculated by dividing our last-twelve-months (LTM) consolidated Adjusted EBITDA (earnings before interest, taxes, depreciation, amortization, and certain other non-cash transactions as allowed in the Facility) by our LTM gross interest expense, less amortization of financing fees. In addition, a debt to capitalization ratio of not more than 0.60:1.00 must be maintained. At ~~March 31,~~September 30, 2022, our interest coverage ratio and debt to capitalization ratio were ~~54.22:~~60.45:1.00 and ~~0.31:~~0.28:1.00, respectively. We were, therefore, in compliance with these covenants at ~~March 31,~~September 30, 2022, and we anticipate we will continue to be in compliance during the next twelve months.

Working Capital. We generated cash flow from operations of ~~$819.0 million~~$3.3 billion in the first ~~quarter~~nine months of 2022 compared to ~~$262.2 million~~$1.5 billion in the same 2021 period. Operational working capital (representing amounts invested in trade receivables and inventories, less current liabilities other than income taxes payable and debt) increased ~~$757.2~~$313.2 million, or ~~23%~~9%, to ~~$4.1~~$3.7 billion at ~~March 31,~~September 30, 2022, due primarily to increased accounts receivable and inventory values, consistent with increased net sales and ~~funding~~selling prices, compared to an increase of $1.2 billion for the ~~$359.8 million~~same period in ~~2021 company-wide profit sharing.~~2021.

Capital Investments. During the first ~~quarter~~nine months of 2022, we invested ~~$159.3~~$564.7 million in property, plant and equipment, primarily within our steel operations segment, compared with ~~$309.9~~$801.7 million invested during the same period in 2021. Spending on ~~the Southwest-Sinton Flat Roll Steel Division~~Sinton decreased in the first ~~quarter~~nine months of 2022 versus the same period in 2021 as we ~~near completion of~~completed the construction phase. We entered 2022 with ample liquidity of $2.4 billion and anticipated operating cash flow generation to provide for our ~~currently~~ planned 2022 capital ~~requirements.~~

requirements, including the four new flat roll coating lines at Sinton and Heartland. We announced in July our plans to invest $2.2 billion in a new state-of-the-art low-carbon aluminum flat rolled mill with two supporting satellite recycled aluminum slab centers, which will be funded by available cash and cash flow from operations. Expenditures began in the third quarter of 2022 and are expected to continue through 2026.

Cash Dividends. As a reflection of continued confidence in our current and future cash flow generation ability and financial position, we increased our quarterly cash dividend by 31% to $0.34 per share in the first quarter of 2022 (from $0.26 per share in 2021), resulting in declared cash dividends of ~~$64.3~~$186.5 million during the first ~~quarter~~nine months of 2022, compared to ~~$54.9~~$160.2 million during the same period in 2021. We paid cash dividends of ~~$50.7~~$177.1 million and ~~$52.7~~$161.0 million during the first ~~quarters~~nine months of 2022 and 2021, respectively. Our board of directors, along with executive

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management, approves the payment of dividends on a quarterly basis. The determination to pay cash dividends in the future is at the discretion of our board of directors, after taking into account various factors, including our financial condition, results of operations, outstanding indebtedness, current and anticipated cash needs and growth plans.

Other. In February 2020, our board of directors authorized a share repurchase program of up to $500.0 million of our common stock, which was fully utilized in July 2021. In July 2021, our board of directors authorized an additional share repurchase program of up to $1.0 billion of our common stock, which was fully utilized in March 2022. In February 2022, our board of directors authorized an additional share repurchase program of up to $1.25 billion of our common stock. Under the share repurchase programs, purchases take place as and when we determine in open market or private transactions made based upon the market price of our common stock, the nature of other investment opportunities or growth projects, our cash flows from operations, and general economic conditions. The share repurchase programs do not require us to acquire any specific number of shares, and may be modified, suspended, extended or terminated by us at any time. The share repurchase programs do not have an expiration date. There were ~~$389.2~~$1.4 billion and $730.8 million of share repurchases during the first ~~quarter~~nine months of 2022 and ~~none during the same period in 2021.~~2021, respectively. As of ~~March 31,~~September 30, 2022, we had ~~$1.24 billion~~$245.5 million remaining available to purchase under the 2022 share repurchase program.

Our ability to meet our debt service obligations and reduce our total debt will depend upon our future performance which, in turn, will depend upon general economic, financial, and business conditions, along with competition, legislation and regulatory factors that are largely beyond our control. In addition, we cannot assure that our operating results, cash flows, access to credit markets and capital resources will be sufficient for repayment of our indebtedness in the future. We believe that based upon current levels of operations and anticipated growth, cash flows from operations, together with other available sources of funds, including borrowings under our Revolver, if necessary, will be adequate for the next twelve months for making required payments of principal and interest on our indebtedness, funding working capital requirements, and funding anticipated capital expenditures.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Commodity Risk

In the normal course of business, we are exposed to the market risk and price fluctuations related to the sale of our products and to the purchase of raw materials used in our operations, such as metallic raw materials, electricity, natural gas and its transportation services, fuel, air products, zinc, and electrodes. Our risk strategy associated with product sales has generally been to obtain competitive prices for our products and to allow operating results to reflect market price movements dictated by supply and demand.

Our risk strategy associated with the purchase of raw materials utilized within our operations has generally been to make some commitments with suppliers relating to future expected requirements for some commodities such as electricity, water, natural gas and its transportation services, fuel, air products, zinc, and electrodes. Certain of these commitments contain provisions which require us to “take or pay” for specified quantities without regard to actual usage for periods of generally up to 5 years for physical commodity requirements and commodity transportation requirements, with some extending beyond, and for up to 16 years for air products and 30 years for water products. We utilized such “take or pay” requirements during the past three years under these contracts, except for certain air products at our idle Minnesota ironmaking operations. We believe that production requirements will be such that consumption of the products or services purchased under these commitments will occur in the normal production process, other than certain air products related to our idled Minnesota ironmaking operations.

In our metals recycling and steel operations, we have certain fixed price contracts with various customers and suppliers for future delivery of nonferrous and ferrous metals. Our risk strategy has been to enter into base metal financial contracts with the goal to protect the profit margin, within certain parameters, that was contemplated when we entered into the transaction with the customer or vendor. At ~~March 31,~~September 30, 2022, we had a cumulative unrealized gain associated with these financial contracts of ~~$7.7~~$2.9 million, substantially all of which have a settlement date within the next twelve months. We believe the customer contracts associated with the financial contracts will be fully consummated.

ITEM 4. CONTROLS AND PROCEDURES

(a)

Evaluation of Disclosure Controls and Procedures

As required, we carried out an evaluation, under the supervision and with the participation of our principal executive officer and principal financial officer, of the effectiveness of our disclosure controls and procedures, as defined in rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act). Based on this evaluation, our principal executive officer and principal financial officer concluded that, as of ~~March 31,~~September 30, 2022, the end of the period covered by this quarterly report, our disclosure controls and procedures were designed to provide and were effective to provide reasonable assurance that the information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the applicable rules and forms, and that it is accumulated and communicated to our management, including our principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

(b)

Changes in Internal Controls Over Financial Reporting

No changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the fiscal quarter ended ~~March 31,~~September 30, 2022, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

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

We may also be involved from time to time in various governmental investigations, regulatory proceedings or judicial actions seeking penalties, injunctive relief, and/or remediation under federal, state and local environmental laws and regulations. The United States EPA has conducted such investigations and proceedings involving us, in some instances along with state environmental regulators, under various environmental laws, including RCRA, CERCLA, the Clean Water Act and the Clean Air Act. Some of these matters have resulted in fines or penalties, exclusive of interest and costs, which did not exceed $1 million in aggregate, as of ~~March 31,~~September 30, 2022.

ITEM 1A. RISK FACTORS

No material changes have occurred to the indicated risk factors as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2021.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

We purchased the following equity securities registered by us pursuant to Section 12 of the Exchange Act during the three-month period ended ~~March 31,~~September 30, 2022.


Period	Total Number of Shares Purchased	Average Price Paid per Share			Total Number of Shares Purchased as Part of Publicly Announced Programs ^{(1) (2)}		Maximum Dollar Value of Shares That May Yet be Purchased Under the Programs (in thousands)^{(1) (2)}				Total Number of Shares Purchased	Average Price Paid per Share			Total Number of Shares Purchased as Part of Publicly Announced Programs ⁽¹⁾		Maximum Dollar Value of Shares That May Yet be Purchased Under the Programs (in thousands)⁽¹⁾
Quarter ended March 31, 2022
Quarter ended September 30, 2022										Quarter ended September 30, 2022

January 1 - 31	1,454,259		$	55.14		1,454,259		$	303,190
February 1 - 28	3,420,039			61.70		3,420,039			1,342,188
March 1 - 31	1,283,121			76.38		1,283,121			1,244,189
July 1 - 31											692,706		$	72.19		692,706		$	677,159
August 1 - 31											3,476,941			81.87		3,476,941			392,500
September 1 - 30											1,916,455			76.71		1,916,455			245,489
	6,157,419					6,157,419					6,086,102					6,086,102

(1)

~~On July 6, 2021, we announced that our board of directors had authorized a share purchase program of up to $1.0 billion of our common stock. This program was completed in March 2022.~~

~~(2)~~

On February 25, 2022, we announced that our board of directors had authorized an additional share purchase program of up to $1.25 billion of our common stock.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Information required to be furnished pursuant to Item 4 concerning mine safety disclosure matters by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K (17 CFR 229.104), is included in Exhibit 95 to this quarterly report.None.

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ITEM 5. OTHER INFORMATION

None.

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ITEM 6. EXHIBITS

Reference is made to the Exhibit Index preceding the signature page hereto, which Exhibit Index is hereby incorporated into this item.

EXHIBIT INDEX

~~HIDDEN_ROW~~
Articles of Incorporation

3.1	Amended and Restated Articles of Incorporation of Steel Dynamics, Inc., reflecting all amendments thereto through May 17, 2018, incorporated herein by reference from Exhibit 3.1e to our Form 10-Q filed August 9, 2018.

3.2	Amended and Restated Bylaws of Steel Dynamics, Inc., reflecting all amendments thereto through October 17, 2018, incorporated herein by reference from Exhibit 3.2d to our Form 10-Q filed November 7, 2018.

Executive Officer Certifications

31.1*	Certification of Chief Executive Officer required by Item 307 of Regulation S-K as promulgated by the Securities and Exchange Commission and pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*	Certification of Chief Financial Officer required by Item 307 of Regulation S-K as promulgated by the Securities and Exchange Commission and pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1*	Certification of Chief Executive Officer Pursuant to 18 U.S.C Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2*	Certification of Chief Financial Officer Pursuant to 18 U.S.C Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

~~Other~~

95*	~~Mine Safety Disclosures.~~

XBRL Documents

101.INS*	XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH*	Inline XBRL Taxonomy Extension Schema Document

101.CAL*	Inline XBRL Taxonomy Extension Calculation Document

101.DEF*	Inline XBRL Taxonomy Definition Document

101.LAB*	Inline XBRL Taxonomy Extension Label Document

101.PRE*	Inline XBRL Taxonomy Presentation Document

104*	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

Filed concurrently herewith

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

~~April 29,~~October 26, 2022

		STEEL DYNAMICS, INC.

	By:	/s/ Theresa E. Wagler
		Theresa E. Wagler
		Executive Vice President and Chief Financial Officer
		(Principal Financial Officer and Principal Accounting Officer)

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	Three-Month Periods Ended March 31,
	2022						2021
			Weighted						Weighted
			Average						Average
	Net Income		Shares		Per Share		Net Income		Shares		Per Share
	(Numerator)		(Denominator)		Amount		(Numerator)		(Denominator)		Amount
Basic earnings per share	$	1,103,931		192,158	$	5.74	$	430,507		211,015	$	2.04
Dilutive common share equivalents		-		1,083				-		1,239
Diluted earnings per share	$	1,103,931		193,241	$	5.71	$	430,507		212,254	$	2.03



Cash and equivalents	$	1,189,528
Revolver availability		1,187,913
Total liquidity	$	2,377,441