| CONSOLIDATED BALANCE SHEETS (USD $) | ||
| In Thousands | Sep. 30, 2009
| Dec. 31, 2008
|
| Current assets | ||
| Cash and equivalents | $8,094 | $16,233 |
| Accounts receivable, net | 448,902 | 453,011 |
| Accounts receivable-related parties | 31,495 | 49,921 |
| Inventories | 835,079 | 1,023,235 |
| Deferred income taxes | 37,631 | 23,562 |
| Income taxes receivable | 92,755 | 86,321 |
| Other current assets | 14,820 | 57,632 |
| Total current assets | 1,468,776 | 1,709,915 |
| Property, plant and equipment, net | 2,214,998 | 2,072,857 |
| Restricted cash | 12,480 | 18,515 |
| Intangible assets, net | 545,327 | 614,786 |
| Goodwill | 759,983 | 770,438 |
| Other assets | 107,400 | 67,066 |
| Total assets | 5,108,964 | 5,253,577 |
| Current liabilities | ||
| Accounts payable | 353,122 | 259,742 |
| Accounts payable-related parties | 6,085 | 3,651 |
| Accrued expenses | 91,376 | 148,627 |
| Accrued interest | 63,067 | 30,874 |
| Accrued payroll and benefits | 38,585 | 34,303 |
| Accrued profit sharing | 507 | 62,561 |
| Senior secured revolving credit facility, due 2012 | 85,000 | 366,000 |
| Current maturities of long-term debt | 1,145 | 65,223 |
| Total current liabilities | 638,887 | 970,981 |
| Long-term debt | ||
| Senior secured term A loan | 503,800 | |
| 7 3/8% senior notes, due 2012 | 700,000 | 700,000 |
| 5.125% convertible senior notes, due 2014 | 287,500 | |
| 6 3/4% senior notes, due 2015 | 500,000 | 500,000 |
| 7 3/4% senior notes, due 2016 | 500,000 | 500,000 |
| Other long-term debt | 63,563 | 15,361 |
| Total long-term debt | 2,051,063 | 2,219,161 |
| Deferred income taxes | 362,520 | 365,496 |
| Other liabilities | 68,411 | 65,626 |
| Stockholders' equity | ||
| Common stock voting, $.0025 par value; 900,000,000 shares authorized; 252,148,525 and 218,733,363 shares issued; and 215,558,699 and 181,820,012 shares outstanding, as of September 30, 2009 and December 31, 2008, respectively | 628 | 545 |
| Treasury stock, at cost; 36,589,826 and 36,913,351 shares, as of September 30, 2009 and December 31, 2008, respectively | (730,857) | (737,319) |
| Additional paid-in capital | 967,103 | 541,686 |
| Other accumulated comprehensive loss | (1,411) | |
| Retained earnings | 1,735,060 | 1,820,385 |
| Total Steel Dynamics, Inc. stockholders' equity | 1,971,934 | 1,623,886 |
| Noncontrolling interests | 16,149 | 8,427 |
| Total stockholders' equity | 1,988,083 | 1,632,313 |
| Total liabilities and stockholders' equity | $5,108,964 | $5,253,577 |
| CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | ||
| Sep. 30, 2009
| Dec. 31, 2008
| |
| CONSOLIDATED BALANCE SHEETS | ||
| Common stock, par value (in dollars per share) | 0.0025 | 0.0025 |
| Common stock, shares authorized | 900,000,000 | 900,000,000 |
| Common stock, shares issued | 252,148,525 | 218,733,363 |
| Common stock, shares outstanding | 215,558,699 | 181,820,012 |
| Treasury stock, shares | 36,589,826 | 36,913,351 |
| CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | ||||
| In Thousands, except Per Share data | 3 Months Ended
Sep. 30, 2009 | 3 Months Ended
Sep. 30, 2008 | 9 Months Ended
Sep. 30, 2009 | 9 Months Ended
Sep. 30, 2008 |
| Net sales | ||||
| Unrelated parties | $1,129,024 | $2,479,655 | $2,689,971 | $6,582,741 |
| Related parties | 43,172 | 84,288 | 89,033 | 287,346 |
| Total net sales | 1,172,196 | 2,563,943 | 2,779,004 | 6,870,087 |
| Costs of goods sold | 955,503 | 2,118,737 | 2,534,101 | 5,597,917 |
| Gross profit | 216,693 | 445,206 | 244,903 | 1,272,170 |
| Selling, general and administrative expenses | 56,133 | 72,723 | 162,012 | 223,353 |
| Profit sharing | 451 | 30,800 | 409 | 76,204 |
| Amortization of intangible assets | 11,661 | 10,765 | 41,353 | 30,416 |
| Total selling, general and administrative expenses | 68,245 | 114,288 | 203,774 | 329,973 |
| Operating income | 148,448 | 330,918 | 41,129 | 942,197 |
| Interest expense, net capitalized interest | 34,520 | 37,446 | 107,814 | 102,728 |
| Other income, net | (2,167) | (8,342) | (2,129) | (33,048) |
| Income (loss) before income taxes | 116,095 | 301,814 | (64,556) | 872,517 |
| Income taxes (benefit) | 47,365 | 114,070 | (26,991) | 330,456 |
| Net income (loss) | 68,730 | 187,744 | (37,565) | 542,061 |
| Net loss attributable to noncontrolling interests | (288) | (5,264) | (2,730) | (3,998) |
| Net income (loss) attributable to Steel Dynamics, Inc. | $69,018 | $193,008 | ($34,835) | $546,059 |
| Basic earnings (loss) per share attributable to Steel Dynamics, Inc. stockholders (in dollars per share) | 0.32 | 0.99 | -0.18 | 2.85 |
| Weighted average common shares outstanding (in shares) | 215,218 | 195,347 | 195,689 | 191,579 |
| Diluted earnings (loss) per share attributable to Steel Dynamics, Inc. stockholders, including the effect of assumed conversions when dilutive (in dollars per share) | 0.3 | 0.98 | -0.18 | 2.75 |
| Weighted average common shares and share equivalents outstanding (in shares) | 234,080 | 196,859 | 195,689 | 198,840 |
| Dividends declared per share (in dollars per share) | 0.075 | 0.1 | 0.25 | 0.3 |
| CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | ||||
| In Thousands | 3 Months Ended
Sep. 30, 2009 | 3 Months Ended
Sep. 30, 2008 | 9 Months Ended
Sep. 30, 2009 | 9 Months Ended
Sep. 30, 2008 |
| Operating activities: | ||||
| Net income (loss) attributable to Steel Dynamics, Inc. | $69,018 | $193,008 | ($34,835) | $546,059 |
| Adjustments to reconcile net income (loss) attributable to Steel Dynamics, Inc. to net cash provided by operating activities | ||||
| Depreciation and amortization | 51,915 | 55,359 | 166,643 | 156,153 |
| Equity-based compensation | 2,887 | 3,293 | 14,779 | 9,976 |
| Deferred income taxes | 8,341 | (2,047) | 21,833 | (9,893) |
| (Gain) loss on disposal of property, plant and equipment | (276) | 27 | (1,023) | (208) |
| Noncontrolling interests | (288) | (3,365) | (2,730) | (2,099) |
| Changes in certain assets and liabilities: | ||||
| Accounts receivable | (117,442) | 89,664 | 18,354 | (307,540) |
| Inventories | (96,062) | (135,430) | 192,331 | (353,125) |
| Other assets | 40,052 | (33,670) | 43,296 | (46,719) |
| Accounts payable | 130,610 | (133,911) | 82,763 | 230,269 |
| Income taxes payable | 2,432 | (32,114) | 1,027 | 5,743 |
| Accrued expenses | 45,495 | 76,421 | (79,395) | 117,507 |
| Net cash provided by operating activities | 136,682 | 77,235 | 423,043 | 346,123 |
| Investing activities: | ||||
| Purchases of property, plant and equipment | (95,662) | (115,636) | (243,166) | (310,625) |
| Acquisition of businesses, net of cash acquired | (271,159) | |||
| Purchase of securities | (20,373) | |||
| Sale of securities | 32,533 | 32,758 | ||
| Investment in direct financing lease | (27,967) | (27,967) | ||
| Other investing activities | (2,857) | (1,753) | (13,370) | 2,176 |
| Net cash used in investing activities | (126,486) | (84,856) | (284,503) | (567,223) |
| Financing activities: | ||||
| Issuance of current and long-term debt | 240,586 | 1,186,000 | 949,330 | 2,190,900 |
| Repayment of current and long-term debt | (251,219) | (814,665) | (1,451,666) | (1,449,820) |
| Debt issuance costs | (221) | (28) | (13,972) | (7,544) |
| Issuance of common stock (net of expenses) and proceeds from exercise of stock options, including related tax effect | 6,645 | 2,029 | 417,134 | 19,483 |
| Purchase of treasury stock | (439,166) | (485,293) | ||
| Contribution from noncontrolling investor | 5,000 | |||
| Dividends paid | (16,110) | (19,819) | (52,505) | (52,977) |
| Net cash provided by (used in) financing activities | (20,319) | (85,649) | (146,679) | 214,749 |
| Decrease in cash and equivalents | (10,123) | (93,270) | (8,139) | (6,351) |
| Cash and equivalents at beginning of period | 18,217 | 115,405 | 16,233 | 28,486 |
| Cash and equivalents at end of period | 8,094 | 22,135 | 8,094 | 22,135 |
| Supplemental disclosure information: | ||||
| Cash paid for interest | 3,849 | 7,982 | 83,282 | 76,701 |
| Cash paid for federal and state income taxes, net of refunds | $228 | $153,938 | ($53,546) | $315,847 |
| Description of the Business, Significant Accounting Policies, and Recent Accounting Pronouncements | |
| 9 Months Ended
Sep. 30, 2009 USD / shares | |
| NOTES TO CONSOLIDATED FINANCIAL STATEMENTS | |
| Description of the Business, Significant Accounting Policies, and Recent Accounting Pronouncements | Note 1. Description of the Business, Significant Accounting Policies, and Recent Accounting Pronouncements Description of the Business Steel Dynamics,Inc. (SDI), together with its subsidiaries (the company), is a domestic manufacturer of steel products. The company has three reporting segments: steel operations, metals recycling and ferrous resources operations, and steel fabrication operations. Steel Operations. Steel operations include the companys Flat Roll Division, Structural and Rail Division, Engineered Bar Products Division, Roanoke Bar Division, Steel of West Virginia (SWVA) and The Techs operations. These operations consist of mini-mills, producing steel from steel scrap, using electric arc furnaces, continuous casting, automated rolling mills, and downstream finishing facilities. The companys steel operations sell directly to end users and service centers. These products are used in numerous industry sectors, including the automotive, construction, commercial, transportation and industrial machinery markets. Steel operations accounted for approximately 57% and 53% of the companys net sales during the three-month periods ended September30, 2009 and 2008, respectively, and 58% and 55% of the companys net sales during the nine-month periods ended September30, 2009 and 2008, respectively. Metals Recycling and Ferrous Resources Operations. Metals recycling and ferrous resources operations primarily are composed of the companys steel scrap procurement and processing locations, operated through the companys wholly-owned subsidiary, OmniSource Corporation (OmniSource), as well as Iron Dynamics (IDI), the companys iron-substitute production facility. In addition, the impact related to the construction of the Mesabi Nugget iron-making facility and future mining operations in Hoyt Lakes, Minnesota is also included in this segment. Metals recycling and ferrous resources operations accounted for approximately 40% and 42% of the companys net sales during the three-month periods ended September30, 2009 and 2008, respectively, and 37% and 40% of the companys net sales during the nine-month periods ended September30, 2009 and 2008, respectively. Steel Fabrication Operations. Steel fabrication operations represent the companys New Millennium Building Systems plants located in the eastern United States. Revenues from these plants are generated from the fabrication of trusses, girders, steel joists and steel decking used within the non-residential construction industry. Steel fabrication operations accounted for approximately 2% and 4% of the companys net sales during the three-month periods ended September30, 2009 and 2008, respectively, and 4% and 3% of the companys net sales during the nine-month periods ended September30, 2009 and 2008, respectively. Significant Accounting Policies Principles of Consolidation. The consolidated financial statements include the accounts of SDI, together with its subsidiaries, after elimination of significant intercompany accounts and transactions. Noncontrolling interest represents the minority shareholders proportionate share in the equity or income of the companys consolidated subs |
| Acquisition | |
| 9 Months Ended
Sep. 30, 2009 USD / shares | |
| NOTES TO CONSOLIDATED FINANCIAL STATEMENTS | |
| Acquisition | Note 2. Acquisition On June9, 2008, the company completed its acquisition of Recycle South, one of the nations largest, privately-held, regional scrap metal recycling companies, headquartered in Spartanburg, South Carolina. OmniSource (which already owned 25% of Recycle South), acquired the remaining 75% equity interest for a purchase price of approximately $376.3 million. The purchase price of $376.3 million for the remaining 75% equity interest in Recycle South, combined with the 25% interest owned pursuant to the OmniSource acquisition, results in an aggregate purchase price of $501.8 million. During 2009 the company adjusted the initial purchase price allocation to reflect additional refinement in the valuation of the acquisition. The final purchase price allocation below is based on actual acquisition costs and the fair value of the acquired assets, assumed liabilities and identifiable intangible assets (in thousands): December31,2008 Adjustments September 30, 2009 Current assets $ 213,513 $ (2,400 ) $ 211,113 Property, plant equipment 94,484 5,322 99,806 Intangible assets 155,000 (29,000 ) 126,000 Goodwill 272,355 28,978 301,333 Other assets 5,406 (926 ) 4,480 Total assets acquired 740,758 1,974 742,732 Current liabilities, excluding debt 94,015 1,974 95,989 Debt 144,947 144,947 Total liabilities assumed 238,962 1,974 240,936 Net assets acquired $ 501,796 $ $ 501,796 Goodwill and intangible assets of $301.3 million and $126.0 million, respectively, were recorded as a result of the acquisition. The goodwill is deductible for tax purposes. The identifiable intangible assets related to the acquisition consisted of the following (in thousands): Amount Useful Life Customer relationships $ 21,000 20years Scrap generator relationships 77,000 20 years Trademarks 16,000 3 years Covenants not to compete 12,000 5 years $ 126,000 The company utilizes an accelerated amortization methodology for customer and scrap generator relationships in order to follow the pattern in which the economic benefits of the intangible assets are anticipated to be consumed. Finite-lived trademarks and covenants not to compete are amortized using a straight line methodology. The related aggregate amortization expense recognized for the three and nine-month periods ended September30, 2009 were $4.1 and $17.2 million, respectively. The estimated intangible asset amortization expense related to the total acquisition of Recycle South for the next five years and thereafter follows (in thousands): 2009 (including January1 to September30) $ 21,366 2010 16,483 2011 12,802 2012 10,620 2013 8,492 Thereafter 51,233 Total $ 120,996 |
| Earnings Per Share | |
| 9 Months Ended
Sep. 30, 2009 USD / shares | |
| NOTES TO CONSOLIDATED FINANCIAL STATEMENTS | |
| Earnings Per Share | 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, in addition to the above, the weighted average dilutive effect of common share equivalents outstanding during the period. Common share equivalents represent dilutive stock options and dilutive shares related to the companys convertible senior notes and are excluded from the computation in periods in which they have an anti-dilutive effect. The following table presents a reconciliation of the numerators and the denominators of the companys basic and diluted earnings per share computations for net income (loss) attributable to Steel Dynamics,Inc. (in thousands, except per share data): Three Months Ended September 30, 2009 2008 Net Income(Numerator) Shares(Denominator) Per ShareAmount Net Income(Numerator) Shares(Denominator) Per ShareAmount Basic earnings per share $ 69,018 215,218 $ .32 $ 193,008 195,347 $ .99 Dilutive stock option effect 2,480 978 Convertible subordinated 4.0% notes 13 534 5.125% convertible senior notes 2,211 16,382 Diluted earnings per share $ 71,229 234,080 $ .30 $ 193,021 196,859 $ .98 Nine Months Ended September30 2009 2008 NetLoss(Numerator) Shares(Denominator) PerShareAmount NetIncome(Numerator) Shares(Denominator) PerShareAmount Basic earnings (loss) per share $ (34,835 ) 195,689 $ (.18 ) $ 546,059 191,579 $ 2.85 Dilutive stock option effect 1,370 Convertible subordinated 4.0% notes 429 5,891 5.125% convertible senior notes Diluted earnings (loss) per share $ (34,835 ) 195,689 $ (.18 ) $ 546,488 198,840 $ 2.75 As of September30, 2009, all of the companys convertible subordinated 4.0% notes have been converted. Options to purchase 1.3 million and 2.8 million shares were anti-dilutive for the three and nine-month periods ending September30, 2009, respectively. Options to purchase 580,000 were anti-dilutive and excluded for the three and nine-month periods ending September30, 2008. |
| Inventories | |
| 9 Months Ended
Sep. 30, 2009 USD / shares | |
| NOTES TO CONSOLIDATED FINANCIAL STATEMENTS | |
| Inventories | Note 4. Inventories Inventories are stated at lower of cost or market. Cost is determined principally on a first-in, first-out basis. The company recorded lower of cost or market adjustments of $36.6 million to certain inventories at December31, 2008. Inventory consisted of the following, of which all ferrous materials residing at both the steel and metals recycling and ferrous resources operations are included in raw materials (in thousands): September30, 2009 December31, 2008 Raw materials $ 395,926 $ 554,815 Supplies 220,431 224,710 Work-in-progress 62,254 57,489 Finished goods 156,468 186,221 Total inventories $ 835,079 $ 1,023,235 |
| Debt | |
| 9 Months Ended
Sep. 30, 2009 USD / shares | |
| NOTES TO CONSOLIDATED FINANCIAL STATEMENTS | |
| Debt | Note 5. Debt Senior Secured Credit Facility The companys senior secured credit agreement contains financial covenants and other covenants that limit or restrict the companys ability to make capital expenditures; incur indebtedness; permit liens on property; enter into transactions with affiliates; make restricted payments or investments; enter into mergers, acquisitions or consolidations; conduct asset sales; pay dividends or distributions and enter into other specified transactions and activities. The companys ability to borrow funds within the terms of the revolver is dependent upon its continued compliance with its financial covenants, and other covenants contained in the senior secured credit agreement. An amendment to the credit agreement was completed on June12, 2009. This amendment made certain adjustments to the covenant structure. The current financial covenants state that the company must maintain an interest coverage ratio of not less than 1.25:1.00 for June30, 2009 to December31, 2009; 2.00:1.00 for March31, 2010 to June30, 2010; and 2.50:1.00 for September30, 2010 through maturity. At September30, 2009 the companys interest coverage ratio was 1.90. The company must also maintain a first lien debt to consolidated last-twelve-months trailing adjusted EBITDA (earnings before interest, taxes, depreciation, amortization, and certain other non-cash transaction adjustments as defined in the credit agreement) ratio of not more than 2.50:1.00 for April1, 2009 to September30, 2010; and 3.00:1.00 for December31, 2010 through maturity. At September30, 2009 the companys first lien debt to consolidated last-twelve-months trailing adjusted EBITDA was 0.39:1.00. In addition, beginning with the twelve month period ending December31, 2010, and at all times through the maturity date, a total debt to consolidated adjusted EBITDA ratio of not more than 5.00:1.00 must be maintained. The company was in compliance with these covenants at September30, 2009, and expects to remain in compliance over the next twelve months. The amendment also activated a monthly borrowing base requirement on the revolving credit facility. The borrowing base is determined by 85% of eligible accounts receivable and 65% of eligible inventory. The borrowing base exceeded the revolving credit facilitys capacity at September30, 2009. In addition, if the total debt to EBITDA ratio exceeds 3.50:1.00, then the ability of the company to make restricted payments as defined in the credit agreement (which includes cash dividends to stockholders and share purchases, among other things), is limited to $25 million per quarter. 5.125% Convertible Senior Notes In June2009 the company issued $287.5 million of 5.125% convertible senior notes due 2014. Note holders can convert the notes into shares of the companys common stock at an initial conversion rate of 56.9801 per $1,000 principal amount of notes. The net proceeds from these notes along with the issuance of common stock was slightly more than $675 million and was used to prepay the term A loan as well as repay a portion of the companys revolving credit facility. |
| Changes in Stockholders Equity | |
| 1/1/2009 - 9/30/2009
USD / shares | |
| NOTES TO CONSOLIDATED FINANCIAL STATEMENTS | |
| Changes in Stockholders' Equity | Note 6. Changes in Stockholders Equity The following table provides a reconciliation of the beginning and ending carrying amounts of total stockholders equity, equity attributable to stockholders of Steel Dynamics,Inc. and equity attributable to the noncontrolling interests (in thousands): Stockholders of Steel Dynamics, Inc. Common Additional Paid-In Retained Other Accumulated Comprehensive Treasury Noncontrolling Total Stock Capital Earnings Income (Loss) Stock Interests Balances at January1, 2009 $ 1,632,313 $ 545 $ 541,686 $ 1,820,385 $ (1,411 ) $ (737,319 ) $ 8,427 Issuance of common stock (net of expenses) and proceeds from exercise of stock options, including related tax effect 417,134 83 417,051 Dividends declared (50,490 ) (50,490 ) Contributions from noncontrolling investors 5,000 5,000 Change in noncontrolling investment 2,366 2,366 Tax adjustment to noncontrolling interest 3,086 3,086 Equity-based compensation and issuance of restricted stock 14,828 8,366 6,462 Comprehensive income and net loss (36,154 ) (34,835 ) 1,411 (2,730 ) Balances at September30, 2009 $ 1,988,083 $ 628 $ 967,103 $ 1,735,060 $ $ (730,857 ) $ 16,149 In June2009 Steel Dynamics,Inc. completed a public offering of 31,050,000 shares of its common stock at a public offering price of $13.50. Net proceeds of the offering along with the issuance of the 5.125% convertible senior notes was slightly more than $675 million, after deducting underwriting discounts, commissions, and offering expenses. |
| Derivative Financial Instruments | |
| 9 Months Ended
Sep. 30, 2009 USD / shares | |
| NOTES TO CONSOLIDATED FINANCIAL STATEMENTS | |
| Derivative Financial Instruments | Note 7. Derivative Financial Instruments The company is exposed to certain risks relating to its ongoing business operations. The primary risks mitigated by using derivative instruments by the company are commodity margin risk, interest rate risk, and foreign currency exchange rate risk. Forward contracts on various commodities are entered into to manage the price risk associated with forecasted purchases and sales of non-ferrous materials from the companys metals recycling and ferrous resources operations. Interest rate swaps are entered into to manage interest rate risk associated with the companys fixed and floating-rate borrowings. Forward exchange contracts on various foreign currencies are entered into to manage the foreign currency exchange rate risk as necessary. The company designated its interest rate swap, which was terminated in June2009, as a cash flow hedge of floating-rate borrowings. Forward contracts on various commodities and forward exchange contracts on various foreign currencies are not designated as hedging instruments. Cash Flow Hedging Strategy. For derivative instruments that are designated and qualify as a cash flow hedge (i.e., hedging the exposure to variability in expected future cash flows that is attributable to a particular risk), the effective portion of the gain or loss on the derivative instrument is reported as a component of other comprehensive income and reclassified into earnings in the same line item associated with the forecasted transaction and in the same period or periods during which the hedged transaction affects earnings (e.g., in interest expense when the hedged transactions are interest cash flows associated with floating-rate borrowings). The remaining gain or loss on the derivative instrument in excess of the cumulative change in the present value of future cash flows of the hedged item, if any (i.e., the ineffectiveness portion), or hedge components excluded from the assessment of effectiveness, are recognized in the statement of operations during the current period. Commodity futures contracts. The following summarizes the companys commodity futures contract commitments as of September30, 2009 (MT represents metric tons and Lbs represents pounds): Commodity Long/Short Total Aluminum Long 5,975 MT Aluminum Short 5,450 MT Copper Long 7,416 MT Copper Short 9,548 MT Nickel Long 582 MT Nickel Short 1,104 MT Silver Short 1,371 Lbs The following summarizes the location and amounts of the fair values and gains or losses related to derivatives included in the companys financial statements as of September30, 2009 and December31, 2008, and for the three and nine-month periods ended September30, 2009 and 2008 (in thousands): Location in Consolidated Balance Sheets Fair ValueSeptember30,2009 Fair ValueDecember31, 2008 Commodity futures net asset Other current assets $ 2,400 $ Commodity futures net liability Accrued expenses 38,371 Interest rate swap liability Accrued exp |
| Fair Value Measurements | |
| 9 Months Ended
Sep. 30, 2009 USD / shares | |
| NOTES TO CONSOLIDATED FINANCIAL STATEMENTS | |
| Fair Value Measurements | Note 8. Fair Value Measurements FASB accounting standards provide a comprehensive framework for measuring fair value, specifically setting forth a definition of fair value and establishing 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 1Unadjusted quoted prices for identical assets and liabilities in active markets; Level 2Quoted 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 3Valuations 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 in the consolidated balance sheets and the respective levels to which the fair value measurements are classified within the fair value hierarchy as of September30, 2009, and December31, 2008 (in thousands): September30, 2009 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs(Level 2) SignificantUnobservableInputs(Level 3) Commodity futures financial assets $ 5,728 $ $ 5,728 $ Commodity futures financial liabilities $ 3,328 $ $ 3,328 $ December31, 2008 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs(Level 2) SignificantUnobservableInputs(Level 3) Commodity futures financial assets $ 15,866 $ $ 15,866 $ Interest rate swap $ 2,294 $ $ 2,294 $ Commodity futures 54,237 54,237 Financial liabilities $ 56,531 $ $ 56,531 $ The carrying amounts of financial instruments including cash and equivalents, accounts receivable and accounts payable approximate fair value, because of the relatively short maturity of these instruments. The fair value of long-term debt, including current maturities, was approximately $2.2 billion and $2.1 billion at September30, 2009, and December31, 2008, respectively. |
| Commitments and Contingencies | |
| 9 Months Ended
Sep. 30, 2009 USD / shares | |
| NOTES TO CONSOLIDATED FINANCIAL STATEMENTS | |
| Commitments and Contingencies | Note 9. Commitments and Contingencies On February1, 2008, the company was sued by Prime Eagle Group Limited (Plaintiff), a corporation with its principal place of business in Thailand, alleging damages in excess of $1.1 billion, arising out of Steel Dynamics activities in providing consulting services to a Thailand-based steel company, Nakornthai Strip Mill Public Company, Limited (NSM) in its operational start-up in 1998. On April30, 2008, Steel Dynamics filed a Motion to Dismiss the lawsuit, and on February23, 2009, the court dismissed the complaint with prejudice and denied the plaintiffs leave to amend their complaint.The Plaintiff has appealed this dismissal. All briefs have been filed and oral argument was held on October8, 2009. On September17, 2008, Steel Dynamics,Inc. and eight other steel manufacturing companies were served with a class action antitrust complaint, filed in the United States District Court for the Northern District of Illinois in Chicago by Standard Iron Works of Scranton, Pennsylvania, alleging violations of Section1 of the Sherman Act. The Complaint alleges that the defendants conspired to fix, raise, maintain and stabilize the price at which steel products were sold in the United States, starting in 2005, by artificially restricting the supply of such steel products. Six additional lawsuits, each of them materially similar to the original, have also been filed in the same federal court, each of them likewise seeking similar class certification. All but one of the Complaints purport to be brought on behalf of a class consisting of all direct purchasers of steel products between January1, 2005 and the present. The other Complaint purports to be brought on behalf of a class consisting of all indirect purchasers of steel products within the same time period. All Complaints seek treble damages and costs, including reasonable attorney fees, pre- and post-judgment interest and injunctive relief. On January2, 2009, Steel Dynamics and the other defendants filed a Joint Motion to Dismiss all of the direct purchaser lawsuits. On June12, 2009, however, the Court denied the Motion. Although the company believes that the lawsuits are without merit and plans to aggressively defend these actions, the company cannot presently predict the outcome of this litigation or make any judgment with respect to its potential exposure, if any. On March18, 2009, Steel Dynamics,Inc., together with its Chairman and Chief Executive Officer, Keith E. Busse, and John Bates, a member of its board of directors, were served with a complaint, captioned Panasuk v. Steel Dynamics,Inc., et al., Civil Action No.1109cv0066, filed in the United States District Court for the Northern District of Indiana, Fort Wayne Division, and purporting to represent a class of purchasers of Steel Dynamics common stock between January26, 2009 and March11, 2009. The complaint, which was amended on July13, 2009, alleges securities fraud in connection with the companys issuance of certain earnings guidance and seeks damages in an unspecified amount. On August31, 2009, the company and Messrs.Busse and Bates filed Motions to Dismiss the amended complaint. The co |
| Segment Information | |
| 9 Months Ended
Sep. 30, 2009 USD / shares | |
| NOTES TO CONSOLIDATED FINANCIAL STATEMENTS | |
| Segment Information | Note 10. Segment Information The company has three reportable segments: steel operations, metals recycling and ferrous resources operations, and steel fabrication operations. These operations are described in Note 1 to the financial statements. Revenues included in the category All Other are from subsidiary operations that are below the quantitative thresholds required for reportable segments and primarily consist of further processing, slitting, and sale of certain steel products and the resale of certain secondary and excess steel products. In addition, All Other also includes certain unallocated corporate accounts, such as the companys senior secured credit facilities, senior notes and other debt, certain other investments, and certain profit sharing expenses. The companys operations are primarily organized and managed by operating segment. Operating segment performance and resource allocations are primarily based on operating results before income taxes. The accounting policies of the reportable segments are consistent with those described in Note 1 to the financial statements. Refer to the companys Annual Report on Form10-K for the year ended December31, 2008, for more information related to the companys segment reporting. Inter-segment sales and any related profits are eliminated in consolidation. The companys segment results for the three and nine-month periods ended September30 are as follows (in thousands): Forthethreemonthsended MetalsRecycling/ SteelFabrication September30,2009 SteelOperations FerrousResources Operations Other Eliminations Consolidated Net Sales External $ 725,635 $ 351,788 $ 32,310 $ 12,871 $ $ 1,122,604 External Non-U.S. 17,455 32,094 43 49,592 Other segments 28,096 171,351 620 1,517 (201,584 ) 771,186 555,233 32,930 14,431 (201,584 ) 1,172,196 Operating income (loss) 125,178 36,915 (3,291 ) (6,279 )(1) (4,075 )(2) 148,448 Income (loss) before income taxes 110,085 27,516 (4,577 ) (12,854 ) (4,075 ) 116,095 Depreciation and amortization 26,455 23,079 1,449 932 51,915 Capital expenditures 13,701 81,743 (26 ) 244 95,662 As of September30, 2009 Assets 2,297,886 2,230,991 154,089 636,580 (3) (210,582 )(4) 5,108,964 Liabilities 279,415 323,227 8,682 2,717,413 (5) (207,856 )(6) 3,120,881 Footnotes related to September30, 2009 segment results (in millions): (1) Corporate SGA $ (7.8 ) Other income 1.5 $ (6.3 ) (2) Margin impact from inter-company sales $ (4.1 ) (3) Deferred tax asset $ 287.8 Income taxes receivable 92.8 Debt issuance costs 25.9 Fixed assets 30.3 Intercompany debt receivable 104.8 Other 95.0 |
| Condensed Consolidating Information | |
| 9 Months Ended
Sep. 30, 2009 USD / shares | |
| NOTES TO CONSOLIDATED FINANCIAL STATEMENTS | |
| Condensed Consolidating Information | Note 11. Condensed Consolidating Information Certain 100%-owned subsidiaries of SDI have fully and unconditionally guaranteed all of the indebtedness relating to the issuance of the companys senior notes due 2012, 2015, and 2016 and convertible senior notes due 2014. Following are the companys condensed consolidating financial statements, including the guarantors, which present the financial position, results of operations and cash flows of (i)SDI (in each case, reflecting investments in its consolidated subsidiaries under the equity method of accounting), (ii)the guarantor subsidiaries of SDI, (iii)the non-guarantor subsidiaries of SDI, and (iv)the eliminations necessary to arrive at the information for the company on a consolidated basis. The following statements should be read in conjunction with the accompanying consolidated financial statements and the companys Annual Report on Form10-K for the year ended December31, 2008. Condensed Consolidating Balance Sheets (in thousands) Combined Consolidating Total As of September30, 2009 Parent Guarantors Non-Guarantors Adjustments Consolidated Cash and equivalents $ 703 $ 6,351 $ 1,040 $ $ 8,094 Accounts receivable, net 208,099 511,526 6,868 (246,096 ) 480,397 Inventories 458,276 353,821 30,364 (7,382 ) 835,079 Other current assets 253,074 5,434 477 (113,779 ) 145,206 Total current assets 920,152 877,132 38,749 (367,257 ) 1,468,776 Property, plant and equiment, net 1,164,544 740,561 309,893 2,214,998 Intangible assets, net 545,327 545,327 Goodwill 759,983 759,983 Other assets, including investments in subs 2,325,222 316,370 8,918 (2,530,630 ) 119,880 Total assets $ 4,409,918 $ 3,239,373 $ 357,560 $ (2,897,887 ) $ 5,108,964 Accounts payable $ 147,555 $ 209,158 $ 32,498 $ (30,004 ) $ 359,207 Accured expenses 117,377 114,129 1,452 (39,423 ) 193,535 Current maturities of long-term debt 85,795 350 14,906 (14,906 ) 86,145 Total current liabilities 350,727 323,637 48,856 (84,333 ) 638,887 Long-term debt 2,002,501 38 161,807 (113,283 ) 2,051,063 Other liabilities 344,005 2,281,937 33,402 (2,228,413 ) 430,931 Common stock 628 19,753 7,713 (27,466 ) 628 Treasury stock (730,857 ) (730,857 ) Additional paid-in-capital 967,103 117,753 112,437 (230,190 ) 967,103 Retained earnings 1,475,811 496,255 (22,804 ) (214,202 ) 1,735,060 Total Steel Dynamics,Inc. stockholders equity 1,712,685 633,761 97,346 (471,858 ) 1,971,934 Noncontrolling interests 16,149 16,149 Total stockho |
| Document and Entity Information (USD $) | |||
| 9 Months Ended
Sep. 30, 2009 | Nov. 03, 2009
| Jun. 30, 2008
| |
| Document and Entity Information | |||
| Entity Registrant Name | Steel Dynamics Inc | ||
| Entity Central Index Key | 0001022671 | ||
| Document Type | 10-Q | ||
| Document Period End Date | 2009-09-30 | ||
| Amendment Flag | false | ||
| Current Fiscal Year End Date | --12-31 | ||
| Entity Well-known Seasoned Issuer | Yes | ||
| Entity Voluntary Filers | No | ||
| Entity Current Reporting Status | Yes | ||
| Entity Filer Category | Large Accelerated Filer | ||
| Entity Public Float | $6,663,729,977 | ||
| Entity Common Stock, Shares Outstanding | 215,626,562 |
