Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | May 01, 2018 | |
Document and Entity Information | ||
Entity Registrant Name | STEEL DYNAMICS INC | |
Entity Central Index Key | 1,022,671 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 235,933,638 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Current assets | ||
Cash and equivalents | $ 985,824 | $ 1,028,649 |
Short-term investments | 40,000 | |
Accounts receivable, net | 983,457 | 846,415 |
Accounts receivable-related parties | 4,198 | 22,422 |
Inventories | 1,600,058 | 1,519,347 |
Other current assets | 38,705 | 91,509 |
Total current assets | 3,652,242 | 3,508,342 |
Property, plant and equipment, net | 2,657,937 | 2,675,904 |
Intangible assets, net | 249,983 | 256,909 |
Goodwill | 386,045 | 386,893 |
Other assets | 26,606 | 27,684 |
Total assets | 6,972,813 | 6,855,732 |
Current liabilities | ||
Accounts payable | 544,419 | 473,765 |
Accounts payable-related parties | 18,199 | 15,683 |
Income taxes payable | 14,564 | 3,696 |
Accrued payroll and benefits | 113,001 | 195,909 |
Accrued interest | 47,936 | 25,533 |
Accrued expenses | 112,975 | 125,138 |
Current maturities of long-term debt | 9,646 | 28,795 |
Total current liabilities | 860,740 | 868,519 |
Long-term debt | 2,353,703 | 2,353,145 |
Deferred income taxes | 314,736 | 305,949 |
Other liabilities | 20,257 | 21,811 |
Total liabilities | 3,549,436 | 3,549,424 |
Commitments and contingencies | ||
Redeemable noncontrolling interests | 111,240 | 111,240 |
Equity | ||
Common stock voting, $.0025 par value; 900,000,000 shares authorized; 264,161,359 and 264,130,544 shares issued; and 236,951,784 and 243,785,4 shares outstanding, as of September 30, 2017 and December 31, 2016, respectively | 644 | 644 |
Treasury stock, at cost; 27,209,575 and 20,345,059 shares, as of September 30, 2017 and December 31, 2016 respectively | (730,700) | (665,297) |
Additional paid-in capital | 1,142,871 | 1,141,534 |
Retained earnings | 3,057,904 | 2,874,693 |
Total Steel Dynamics, Inc. equity | 3,470,719 | 3,351,574 |
Noncontrolling interests | (158,582) | (156,506) |
Total equity | 3,312,137 | 3,195,068 |
Total liabilities and equity | $ 6,972,813 | $ 6,855,732 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2018 | Dec. 31, 2017 |
CONSOLIDATED BALANCE SHEETS | ||
Common stock voting, par value (in dollars per share) | $ 0.0025 | $ 0.0025 |
Common stock voting, shares authorized (in shares) | 900,000,000 | 900,000,000 |
Common stock voting, shares issued (in shares) | 265,080,663 | 265,003,133 |
Common stock voting, shares outstanding (in shares) | 236,095,748 | 237,396,839 |
Treasury stock, shares (in shares) | 28,984,915 | 27,606,294 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Net sales | ||
Unrelated parties | $ 2,597,312 | $ 2,319,663 |
Related parties | 6,563 | 48,553 |
Total net sales | 2,603,875 | 2,368,216 |
Costs of goods sold | 2,140,459 | 1,896,062 |
Gross profit | 463,416 | 472,154 |
Selling, general and administrative expenses | 106,431 | 102,933 |
Profit sharing | 26,662 | 27,231 |
Amortization of intangible assets | 6,926 | 7,424 |
Operating income | 323,397 | 334,566 |
Interest expense, net of capitalized interest | 31,896 | 33,973 |
Other expense (income), net | (4,463) | (3,659) |
Income before income taxes | 295,964 | 304,252 |
Income tax expense | 70,489 | 105,586 |
Net income | 225,475 | 198,666 |
Net loss attributable to noncontrolling interests | 2,076 | 2,151 |
Net income attributable to Steel Dynamics, Inc. | $ 227,551 | $ 200,817 |
Basic earnings per share attributable to Steel Dynamics, Inc. stockholders | $ 0.96 | $ 0.83 |
Weighted average common shares outstanding - basic (in shares) | 236,623 | 242,943 |
Diluted earnings per share attributable to Steel Dynamics, Inc. stockholders, including the effect of assumed conversions when dilutive (in dollars per share) | $ 0.96 | $ 0.82 |
Weighted average common shares and share equivalents outstanding (in shares) | 237,723 | 244,546 |
Dividends declared per share (in dollars per share) | $ 0.1875 | $ 0.155 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Operating activities: | ||
Net income | $ 225,475 | $ 198,666 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 76,135 | 75,057 |
Equity-based compensation | 12,841 | 11,303 |
Deferred income taxes | 9,545 | 7,716 |
Other adjustments | 30 | (104) |
Changes in certain assets and liabilities: | ||
Accounts receivable | (118,818) | (153,364) |
Inventories | (80,711) | (86,819) |
Other assets | (105) | 2,094 |
Accounts payable | 66,332 | 133,809 |
Income taxes receivable/payable | 63,962 | 96,319 |
Accrued expenses | (76,751) | (44,247) |
Net cash provided by operating activities | 177,935 | 240,430 |
Investing activities: | ||
Purchases of property, plant and equipment | (50,606) | (41,677) |
Purchase of short term investments | (40,000) | |
Other investing activities | 229 | 26,918 |
Net cash used in investing activities | (90,377) | (14,759) |
Financing activities: | ||
Issuance of current and long-term debt | 93,058 | |
Repayment of current and long-term debt | (113,034) | (1,429) |
Dividends paid | (36,797) | (34,130) |
Purchases of treasury stock | (69,269) | (61,256) |
Other financing activities | (5,180) | (3,532) |
Net cash provided by (used in) financing activities | (131,222) | (100,347) |
Increase (decrease) in cash and equivalents | (43,664) | 125,324 |
Cash and equivalents at beginning of period | 1,035,085 | 848,105 |
Cash and equivalents at end of period | 991,421 | 973,429 |
Supplemental disclosure information: | ||
Cash paid for interest | 8,629 | 12,649 |
Cash paid for income taxes, net | $ (1,045) | $ 1,554 |
Description of the Business and
Description of the Business and Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2018 | |
Description of the Business and Significant Accounting Policies | |
Description of the Business and Significant Accounting Policies | Note 1. Description of the Business and Significant Accounting Policies Description of the Business Steel Dynamics, Inc. (SDI), together with its subsidiaries (the company), is a domestic manufacturer of steel products and metals recycler. The company has three reportable segments: steel operations, metals recycling operations, and steel fabrication operations. Steel Operations Segment. Steel operations include the company’s Butler Flat Roll Division, Columbus Flat Roll Division, The Techs galvanizing lines, Structural and Rail Division, Engineered Bar Products Division, Vulcan Threaded Products, Inc., Roanoke Bar Division, Steel of West Virginia, and Iron Dynamics, a liquid pig iron (scrap substitute) production facility that supplies solely the Butler Flat Roll Division. These operations include electric arc furnace steel mills, producing steel from ferrous scrap and scrap substitutes, utilizing continuous casting, automated rolling mills and numerous downstream coating and bar processing lines. Steel operations accounted for 74% and 73% of the company’s consolidated external net sales during the three months ended March 31, 2018 and 2017 , respectively. Metals Recycling Operations Segment. Metals recycling operations consists solely of OmniSource Corporation (OmniSource), and includes both ferrous and nonferrous processing, transportation, marketing, brokerage, and consulting services. Metals recycling operations accounted for 15% of the company’s consolidated external net sales during the three months ended March 31, 2018 and 2017 . 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 8% of the company’s consolidated external net sales during the three months ended March 31, 2018 and 2017 . Other. Other operations consists of subsidiary operations that are below the quantitative thresholds required for reportable segments and primarily consist of our Minnesota ironmaking operations that have been idle since May 2015, and other smaller joint ventures. Also included in “Other” are certain unallocated corporate accounts, such as the company’s senior secured credit facility, senior notes, certain other investments and certain profit sharing expenses . Significant Accounting Policies Principles of Consolidation . The consolidated financial statements include the accounts of SDI, together with its wholly and majority-owned or controlled subsidiaries, after elimination of significant intercompany accounts and transactions. Noncontrolling interests represent the noncontrolling owner’s proportionate share in the equity, income, or losses of the company’s majority-owned or controlled consolidated subsidiaries. Use of Estimates. These 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, 2017 . Note 1. Description of the Business and Significant Accounting Policies (Continued) Goodwill . The company’s goodwill is allocated to the following reporting units at March 31, 2018 , and December 31, 2017 , (in thousands): March 31, December 31, 2018 2017 Steel Operations Segment: Columbus Flat Roll Division $ 19,682 $ 19,682 The Techs 142,783 142,783 Vulcan Threaded Products 7,824 7,824 Roanoke Bar Division 29,041 29,041 Metals Recycling Operations Segment: OmniSource 89,790 90,638 Indiana Steel Mills 95,000 95,000 Steel Fabrication Operations Segment 1,925 1,925 $ 386,045 $ 386,893 OmniSource goodwill decreased $848,000 from December 31, 2017 to March 31, 2018 , in recognition of the 2018 tax benefit related to the normal amortization of the component of OmniSource tax-deductible goodwill in excess of book goodwill. Recently Adopted/Issued Accounting Standards In May 2014, the FASB issued ASU 2014-09, which is codified in ASC 606, Revenue Recognition – Revenue from Contracts with Customers, which amends the guidance in former ASC 605, Revenue Recognition . FASB later issued clarifying guidance in the form of ASU 2016-08, Revenue from Contracts with Customers: Principal versus Agent Consideration (Reporting Revenue Gross versus Net) , ASU 2016-10, Revenue from Contract with Customers: Identifying Performance Obligations and Licensing , and ASU 2016-12, Revenue from Contracts with Customers: Narrow-Scope Improvements and Practical Expedients, collectively (ASC 606). The core principle of ASC 606 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASC 606 also requires additional disclosures to help users of financial statements better understand the nature, amount, timing, and potential uncertainty of revenue that is recognized. The company adopted ASC 606 effective January1, 2018 using the modified retrospective approach. There was no change in the amount or timing of revenue recognized under ASC 606, or significant changes required to the company’s functions, processes or systems. See Note 2 – Revenue from Contracts with Customers for disclosure required by ASC 606 and the updated accounting policy for revenue recognition. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230); which requires amounts generally described as restricted cash to be included with cash and cash equivalents when reconciling the total beginning and ending amounts for the periods shown on the statement of cash flows. The company adopted the provisions of ASU 2016-18 as of January 1, 2018, retrospectively changed beginning and ending amounts reflected in the consolidated statements of cash flows for the three months ended March 31, 2018 and 2017, to include restricted cash. The balance of cash, cash equivalents and restricted cash in the consolidated statements of cash flows includes restricted cash of $5.6 million at March 31, 2018, $6.4 million at January 1, 2018, and $6.6 million at March 31, 2017, and January 1, 2017, which are recorded in Other Assets (noncurrent) in the company’s consolidated balance sheets. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842); which establishes a new lease accounting model that requires lessees to recognize a right of use asset and related lease liability for most leases having lease terms of more than 12 months (ASU 2016-02). This new guidance is effective for annual and interim periods beginning after December 15, 2018, but can be early adopted. The company is working through an adoption plan to evaluate the lease portfolio, systems, processes and policies to determine the impact of the provisions of ASU 2016-02 to our financial statements and disclosures. The company anticipates adopting ASU 2016-02 on January 1, 2019. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 3 Months Ended |
Mar. 31, 2018 | |
Revenue From Contract With Customer [Abstract] | |
Revenue from Contracts with Customers | Note 2. Revenue from Contracts with Customers The company adopted ASC 606 effective January 1, 2018, using the modified retrospective approach. We applied the standard to contracts that were not completed as of the adoption date, with no cumulative effect adjustment at date of adoption. Accordingly, amounts and disclosures for reporting periods beginning after January 1, 2018 are presented under ASC 606, while comparative amounts and disclosures for prior periods have not been adjusted and continue to be reported in accordance with historical accounting policies for revenue recognition prior to the adoption of ASC 606. The new revenue standard requires recognition of revenue to depict the transfer of promised goods and services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In the steel and metals recycling operations segments, revenue is recognized at the point in time the performance obligation is satisfied and control of the product is transferred to the customer upon shipment or delivery, at the amount of consideration the company expects to receive, including any variable consideration. The variable consideration included in the company’s steel operations segment contracts, which is not constrained, include estimated product returns and customer claims based on historical experience, and may include volume rebates which are Note 2. Revenue from Contracts with Customers (Continued) recorded on an expected value basis. Revenue recognized is limited to the amount the company expects to receive. The company does not exercise significant judgements in determining the timing of satisfaction of performance obligations or the transaction price. Shipment of products to customers is considered a fulfillment activity with amounts billed to customers included in sales and costs associated with such included in cost of goods sold. The company’s steel fabrication operations segment recognizes revenue over time at the amount of consideration the company expects to receive. Revenue is measured on an output method representing completed fabricated tons to date as a percentage of total tons required for each contract. Revenue from fabrication of tons remaining on partially fabricated customer contracts as of a reporting date, which are generally expected to be realized within the following fiscal quarter, and revenue from yet to be fabricated customer contracts, has not been disclosed under the practical expedient in paragraph ASC 606-10-50-14 related to customer contracts with expected duration of one year or less. The company does not exercise significant judgements in determining the timing of satisfaction of performance obligations or the transaction price. Shipment of products to customers, which occurs after control over the product has transferred to the customer and revenue is recognized, is considered a fulfillment activity with amounts billed to customers included in sales and costs associated with such included in cost of goods sold. Payments from customers for all operating segments are generally due within 30 days of invoicing, which generally occurs upon shipment of the products. Shipment for the steel fabrication operations segment generally occurs within 30 days of satisfaction of the performance obligation and revenue recognition. The company does not have financing components. Payments from customers have historically generally been within these terms, however, payments for non-US sales may extend longer. The allowance for doubtful accounts for all operating segments is based on the company’s best estimate of probable credit losses, along with historical experience. Refer to Note 9 Segment Information , for disaggregated revenue by segment to external, external non-United States, and other segment customers. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share | |
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 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 no anti-dilutive common share equivalents as of or for the three months ended March 31, 2018 and March 30, 2017 . The following tables present a reconciliation of the numerators and the denominators of the company’s basic and diluted earnings per share computations for the three months ended March 31, 2018 and March 30, 2017 (in thousands, except per share data): Three Months Ended March 31, 2018 2017 Net Income Shares Per Share Net Income Shares Per Share (Numerator) (Denominator) Amount (Numerator) (Denominator) Amount Basic earnings per share $ 227,551 236,623 $ 0.96 $ 200,817 242,943 $ 0.83 Dilutive common share equivalents - 1,100 - 1,603 Diluted earnings per share $ 227,551 237,723 $ 0.96 $ 200,817 244,546 $ 0.82 |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2018 | |
Inventories | |
Inventories | 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, 2018 2017 Raw materials $ 725,748 $ 675,715 Supplies 386,123 374,515 Work in progress 169,441 128,565 Finished goods 318,746 340,552 Total inventories $ 1,600,058 $ 1,519,347 |
Changes in Equity
Changes in Equity | 3 Months Ended |
Mar. 31, 2018 | |
Changes in Equity | |
Changes in Equity | Note 5. Changes in Equity The following table provides a reconciliation of the beginning and ending carrying amounts of total equity, equity attributable to stockholders of Steel Dynamics, Inc., and equity and redeemable amounts attributable to noncontrolling interests (in thousands): Stockholders of Steel Dynamics, Inc. Additional Redeemable Common Treasury Paid-In Retained Noncontrolling Total Noncontrolling Stock Stock Capital Earnings Interests Equity Interests Balances at December 31, 2017 $ 644 $ (665,297) $ 1,141,534 $ 2,874,693 $ (156,506) $ 3,195,068 $ 111,240 Dividends declared - - - (44,269) - (44,269) - Share repurchases - (69,269) - - - (69,269) - Equity-based compensation - 3,866 1,337 (71) - 5,132 - Comprehensive and net income (loss) - - - 227,551 (2,076) 225,475 - Balances at March 31, 2018 $ 644 $ (730,700) $ 1,142,871 $ 3,057,904 $ (158,582) $ 3,312,137 $ 111,240 |
Derivative Financial Instrument
Derivative Financial Instruments | 3 Months Ended |
Mar. 31, 2018 | |
Derivative Financial Instruments | |
Derivative Financial Instruments | 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, 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 metals (primarily aluminum and copper). The company offsets fair value amounts recognized for derivative instruments executed with the same counterparty under master netting agreements. Commodity Futures Contracts . If the company is “long” on futures contracts, it means the company has more futures contracts purchased than futures contracts sold for the underlying commodity. If the company is “short” on a futures contract, it means the company has more futures contracts sold than futures contracts purchased for the underlying commodity . The following summarizes the company’s futures contract commitments as of March 31, 2018 : Commodity Futures Long/Short Metric Tons Aluminum Long 1,950 Aluminum Short 2,450 Copper Long 6,078 Copper Short 16,704 The following summarizes the location and amounts of the fair values reported on the company’s balance sheets as of March 31, 2018 , and December 31, 2017 , and gains and losses related to derivatives included in the company’s statement of income for the three months ended March 31, 2018, and March 30, 2017 (in thousands): Note 6. Derivative Financial Instruments (Continued) Asset Derivatives Liability Derivatives Balance sheet Fair Value Fair Value location March 31, 2018 December 31, 2017 March 31, 2018 December 31, 2017 Derivative instruments designated as fair value hedges Commodity futures Other current assets $ 4,918 $ 1,211 $ 555 $ 5,364 Derivative instruments not designated as hedges Commodity futures Other current assets 2,233 1,579 852 5,142 Total derivative instruments $ 7,151 $ 2,790 $ 1,407 $ 10,506 The fair value of the above derivative instruments along with required margin deposit amounts with the same counterparty under master netting arrangements totaled $3.5 million at March 31, 2018 , and $5.6 million at December 31, 2017 , and are reflected in other current assets in the consolidated balance sheets. Amount of gain (loss) recognized Location of gain Amount of gain (loss) recognized Location of gain in income on derivatives (loss) recognized in income on related hedged items (loss) recognized for the three months ended Hedged items in in income on for the three months ended in income on March 31, March 31, fair value hedge related hedged March 31, March 31, derivatives 2018 2017 relationships items 2018 2017 Derivatives in fair value hedging relationships Commodity futures Costs of goods sold $ 8,516 $ (153) Firm commitments Costs of goods sold $ (793) $ 539 Inventory Costs of goods sold (2,596) 495 Derivatives not designated $ (3,389) $ 1,034 as hedging instruments Commodity futures Costs of goods sold $ 2,756 $ (4,346) Derivatives accounted for as fair value hedges had ineffectiveness resulting in losses of $101,000 during the three-month periods ended March 31, 2018 and gains of $48,000 for the three months ended March 31, 2017. Gains excluded from hedge effectiveness testing of $5 .0 million and $833,000 decreased cost of goods sold during the three-month period ended March 31, 2018, and 2017, respectively. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Measurements | |
Fair Value Measurements | Note 7. Fair Value Measurements FASB accounting standards provide a comprehensive framework for measuring fair value and sets forth a definition of fair value and establishes a hierarchy prioritizing the inputs to valuation techniques, giving the highest priority to quoted prices in active markets for identical assets and liabilities and the lowest priority to unobservable value inputs. Levels within the hierarchy are defined as follows: · Level 1—Unadjusted quoted prices for identical assets and liabilities in active markets; · Level 2—Quoted prices for similar assets and liabilities in active markets (other than those included in Level 1) which are observable for the asset or liability, either directly or indirectly; and · Level 3—Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. 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, 2018 , and December 31, 2017 (in thousands): Quoted Prices Significant in Active Other Significant Markets for Observable Unobservable Identical Assets Inputs Inputs Total (Level 1) (Level 2) (Level 3) March 31, 2018 Commodity futures – financial assets $ 7,151 $ - $ 7,151 $ - Commodity futures – financial liabilities 1,407 - 1,407 - December 31, 2017 Commodity futures – financial assets $ 2,790 $ - $ 2,790 $ - Commodity futures – financial liabilities 10,506 - 10,506 - Note 7. Fair Value Measurements (Continued) The carrying amounts of financial instruments including cash and equivalents, and short-term investments in certificates of deposit approximate fair value. The fair values of commodity futures contracts are estimated by the use of quoted market prices, estimates obtained from brokers, and other appropriate valuation techniques based on references available. The fair value of long-term debt, including current maturities, as determined by quoted market prices (Level 2), was approximately $2.4 billion and $2.5 billion at March 31, 2018 and December 31, 2017, respectively (with a corresponding carrying amount in the consolidated balance sheet of $2.4 billion at March 31, 2018 and December 31, 2017 ). |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies | |
Commitments and Contingencies | 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 our financial condition, results of operations, or liquidity . |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2018 | |
Segment Information | |
Segment Information | 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 our Minnesota ironmaking operations and several small joint ventures. In addition, “Other” also includes certain unallocated corporate accounts, such as the company’s senior secured credit facility, senior notes, certain other investments and certain profit sharing expenses. Note 9 . Segment Information (Continued) The company’s segment results are as follows (in thousands): Metals Steel For the three months ended Steel Recycling Fabrication March 31, 2018 Operations Operations Operations Other Eliminations Consolidated Net Sales - disaggregated revenue External $ 1,832,303 $ 329,872 $ 201,437 $ 92,471 $ - $ 2,456,083 External Non-U.S. 89,486 58,250 56 - - 147,792 Other segments 59,985 364,644 210 147 (424,986) - 1,981,774 752,766 201,703 92,618 (424,986) 2,603,875 Operating income (loss) 334,562 24,715 19,791 (55,406) (1) (265) 323,397 Income (loss) before income taxes 315,805 23,005 18,457 (61,033) (270) 295,964 Depreciation and amortization 59,141 11,558 2,898 2,538 - 76,135 Capital expenditures 38,402 6,946 2,077 3,181 - 50,606 As of March 31, 2018 Assets $ 4,462,706 $ 1,006,510 $ 350,359 $ 1,250,869 (2) $ (97,631) (3) $ 6,972,813 Footnotes related to the three months ended March 31, 2018, segment results (in millions): (1) Corporate SG&A $ (15.7) (3) Elimination of intra-company receivables $ (72.4) Company-wide equity-based compensation (8.5) Elimination of intra-company debt (12.9) Profit sharing (25.6) Other (12.3) Other, net (5.6) $ (97.6) $ (55.4) (2) Cash and equivalents $ 970.5 Short-term investments 40.0 Inventories 28.4 Property, plant and equipment, net 161.7 Intra-company debt 12.9 Other 37.4 $ 1,250.9 Note 9 . Segment Information (Continued) Metals Steel For the three months ended Steel Recycling Fabrication March 31, 2017 Operations Operations Operations Other Eliminations Consolidated Net Sales - disaggregated revenue External $ 1,633,630 $ 310,951 $ 194,035 $ 88,951 $ - $ 2,227,567 External Non-U.S. 87,703 52,885 61 - - 140,649 Other segments 54,343 356,301 12 334 (410,990) - 1,775,676 720,137 194,108 89,285 (410,990) 2,368,216 Operating income (loss) 348,532 17,849 23,726 (53,970) (1) (1,571) (2) 334,566 Income (loss) before income taxes 326,764 16,072 22,339 (59,352) (1,571) 304,252 Depreciation and amortization 56,331 13,035 2,971 2,720 - 75,057 Capital expenditures 33,578 6,776 1,151 172 - 41,677 Footnotes related to the three months ended March 31, 2017, segment results (in millions): (1) Corporate SG&A $ (12.4) (2) Gross profit decrease from intra-company sales $ (1.6) Company-wide equity-based compensation (9.6) Profit sharing (26.5) Other, net (5.5) $ (54.0) |
Condensed Consolidating Informa
Condensed Consolidating Information | 3 Months Ended |
Mar. 31, 2018 | |
Condensed Consolidating Information | |
Condensed Consolidating Information | Note 10. Condensed Consolidating Information Certain 100% owned subsidiaries of SDI have fully and unconditionally guaranteed jointly and severally all of the indebtedness relating to the issuance of the company’s senior unsecured notes due 2021, 2023, 2024, 2025 and 2026. Following are the company’s condensed consolidating financial statements, including the guarantors, which present the financial position, results of operations, and cash flows of (i) SDI (in each case, reflecting investments in its consolidated subsidiaries under the equity method of accounting), (ii) the guarantor subsidiaries of SDI, (iii) the non-guarantor subsidiaries of SDI, and (iv) the eliminations necessary to arrive at the information on a consolidated basis. The following statements should be read in conjunction with the accompanying consolidated financial statements and the company’s Annual Report on Form 10-K for the year ended December 31, 2017 . Condensed Consolidating Balance Sheets (in thousands) Combined Consolidating Total As of March 31, 2018 Parent Guarantors Non-Guarantors Adjustments Consolidated Cash and equivalents $ 969,240 $ 9,294 $ 7,290 $ - $ 985,824 Short term investments 40,000 - - - 40,000 Accounts receivable, net 349,276 1,475,249 33,922 (870,792) 987,655 Inventories 743,939 804,504 59,192 (7,577) 1,600,058 Other current assets 23,717 14,814 5,095 (4,921) 38,705 Total current assets 2,126,172 2,303,861 105,499 (883,290) 3,652,242 Property, plant and equipment, net 854,685 1,605,485 197,767 - 2,657,937 Intangible assets, net - 219,374 30,609 - 249,983 Goodwill - 378,221 7,824 - 386,045 Other assets, including investments in subs 2,486,756 6,081 5,588 (2,471,819) 26,606 Total assets $ 5,467,613 $ 4,513,022 $ 347,287 $ (3,355,109) $ 6,972,813 Accounts payable $ 185,459 $ 363,178 $ 87,276 $ (73,295) $ 562,618 Accrued expenses 185,020 232,542 11,103 (140,189) 288,476 Current maturities of long-term debt 746 - 36,761 (27,861) 9,646 Total current liabilities 371,225 595,720 135,140 (241,345) 860,740 Long-term debt 2,327,621 - 167,787 (141,705) 2,353,703 Other liabilities (701,952) 775,007 22,547 239,391 334,993 Total liabilities 1,996,894 1,370,727 325,474 (143,659) 3,549,436 Redeemable noncontrolling interests - - 111,240 - 111,240 Common stock 644 1,727,859 15,016 (1,742,875) 644 Treasury stock (730,700) - - - (730,700) Additional paid-in-capital 1,142,871 128,076 803,204 (931,280) 1,142,871 Retained earnings (deficit) 3,057,904 1,286,360 (749,065) (537,295) 3,057,904 Total Steel Dynamics, Inc. equity 3,470,719 3,142,295 69,155 (3,211,450) 3,470,719 Noncontrolling interests - - (158,582) - (158,582) Total equity 3,470,719 3,142,295 (89,427) (3,211,450) 3,312,137 Total liabilities and equity $ 5,467,613 $ 4,513,022 $ 347,287 $ (3,355,109) $ 6,972,813 Note 10. Condensed Consolidating Information (Continued) Combined Consolidating Total As of December 31, 2017 Parent Guarantors Non-Guarantors Adjustments Consolidated Cash and equivalents $ 1,001,405 $ 20,441 $ 6,803 $ - $ 1,028,649 Accounts receivable, net 274,968 1,426,036 37,387 (869,554) 868,837 Inventories 685,103 752,151 91,890 (9,797) 1,519,347 Other current assets 73,748 16,005 5,962 (4,206) 91,509 Total current assets 2,035,224 2,214,633 142,042 (883,557) 3,508,342 Property, plant and equipment, net 859,419 1,618,438 198,047 - 2,675,904 Intangible assets, net - 225,503 31,406 - 256,909 Goodwill - 379,069 7,824 - 386,893 Other assets, including investments in subs 2,512,594 6,622 5,505 (2,497,037) 27,684 Total assets $ 5,407,237 $ 4,444,265 $ 384,824 $ (3,380,594) $ 6,855,732 Accounts payable $ 168,282 $ 316,676 $ 101,948 $ (97,458) $ 489,448 Accrued expenses 222,023 254,196 10,243 (136,186) 350,276 Current maturities of long-term debt 731 - 56,454 (28,390) 28,795 Total current liabilities 391,036 570,872 168,645 (262,034) 868,519 Long-term debt 2,326,466 - 169,799 (143,120) 2,353,145 Other liabilities (661,839) 869,196 24,868 95,535 327,760 Total liabilities 2,055,663 1,440,068 363,312 (309,619) 3,549,424 Redeemable noncontrolling interests - - 111,240 - 111,240 Common stock 644 1,727,859 14,908 (1,742,767) 644 Treasury stock (665,297) - - - (665,297) Additional paid-in-capital 1,141,534 128,076 797,196 (925,272) 1,141,534 Retained earnings (deficit) 2,874,693 1,148,262 (745,326) (402,936) 2,874,693 Total Steel Dynamics, Inc. equity 3,351,574 3,004,197 66,778 (3,070,975) 3,351,574 Noncontrolling interests - - (156,506) - (156,506) Total equity 3,351,574 3,004,197 (89,728) (3,070,975) 3,195,068 Total liabilities and equity $ 5,407,237 $ 4,444,265 $ 384,824 $ (3,380,594) $ 6,855,732 Note 10. Condensed Consolidating Information (Continued) Condensed Consolidating Statements of Operations (in thousands) For the three months ended, Combined Consolidating Total March 31, 2018 Parent Guarantors Non-Guarantors Adjustments Consolidated Net sales $ 1,036,674 $ 2,823,129 $ 152,587 $ (1,408,515) $ 2,603,875 Costs of goods sold 819,145 2,551,620 148,630 (1,378,936) 2,140,459 Gross profit 217,529 271,509 3,957 (29,579) 463,416 Selling, general and administrative 62,927 76,952 5,597 (5,457) 140,019 Operating income (loss) 154,602 194,557 (1,640) (24,122) 323,397 Interest expense, net of capitalized interest 18,623 12,437 3,540 (2,704) 31,896 Other expense (income), net (5,203) (1,697) (273) 2,710 (4,463) Income (loss) before income taxes and equity in net income of subsidiaries 141,182 183,817 (4,907) (24,128) 295,964 Income taxes 29,746 45,720 909 (5,886) 70,489 111,436 138,097 (5,816) (18,242) 225,475 Equity in net income of subsidiaries 116,115 - - (116,115) - Net loss attributable to noncontrolling interests - - 2,076 - 2,076 Net income (loss) attributable to Steel Dynamics, Inc. $ 227,551 $ 138,097 $ (3,740) $ (134,357) $ 227,551 For the three months ended, Combined Consolidating Total March 31, 2017 Parent Guarantors Non-Guarantors Adjustments Consolidated Net sales $ 924,566 $ 2,572,238 $ 143,408 $ (1,271,996) $ 2,368,216 Costs of goods sold 711,579 2,289,664 138,041 (1,243,222) 1,896,062 Gross profit 212,987 282,574 5,367 (28,774) 472,154 Selling, general and administrative 61,655 76,282 5,053 (5,402) 137,588 Operating income 151,332 206,292 314 (23,372) 334,566 Interest expense, net of capitalized interest 18,081 15,123 3,266 (2,497) 33,973 Other expense (income), net (3,254) (2,667) (236) 2,498 (3,659) Income (loss) before income taxes and equity in net income of subsidiaries 136,505 193,836 (2,716) (23,373) 304,252 Income taxes 41,585 70,311 1,790 (8,100) 105,586 94,920 123,525 (4,506) (15,273) 198,666 Equity in net income of subsidiaries 105,897 - - (105,897) - Net loss attributable to noncontrolling interests - - 2,151 - 2,151 Net income (loss) attributable to Steel Dynamics, Inc. $ 200,817 $ 123,525 $ (2,355) $ (121,170) $ 200,817 Note 10. Condensed Consolidating Information (Continued) Condensed Consolidating Statements of Cash Flows (in thousands) For the three months ended, Combined Consolidating Total March 31, 2018 Parent Guarantors Non-Guarantors Adjustments Consolidated Net cash provided by operating activities $ 9,009 $ 149,336 $ 21,283 $ (1,693) $ 177,935 Net cash used in investing activities (60,919) (24,517) (2,997) (1,944) (90,377) Net cash provided by (used in) financing activities 18,920 (135,966) (17,813) 3,637 (131,222) Increase (decrease) in cash and equivalents (32,990) (11,147) 473 - (43,664) Cash, cash equivalents, and restricted cash at beginning of period 1,002,230 20,740 12,115 - 1,035,085 Cash, cash equivalents, and restricted cash at end of period $ 969,240 $ 9,593 $ 12,588 $ - $ 991,421 For the three months ended, Combined Consolidating Total March 31, 2017 Parent Guarantors Non-Guarantors Adjustments Consolidated Net cash provided by (used in) operating activities $ 102,209 $ 132,733 $ (877) $ 6,365 $ 240,430 Net cash used in investing activities (19,409) (1,510) (192) 6,352 (14,759) Net cash provided by (used in) financing activities 86,776 (174,914) 508 (12,717) (100,347) Increase (decrease) in cash and equivalents 169,576 (43,691) (561) - 125,324 Cash, cash equivalents, and restricted cash at beginning of period 767,594 54,859 25,652 - 848,105 Cash, cash equivalents, and restricted cash at end of period $ 937,170 $ 11,168 $ 25,091 $ - $ 973,429 |
Description of the Business a16
Description of the Business and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Description of the Business and Significant Accounting Policies | |
Principles of Consolidation | Principles of Consolidation . The consolidated financial statements include the accounts of SDI, together with its wholly and majority-owned or controlled subsidiaries, after elimination of significant intercompany accounts and transactions. Noncontrolling interests represent the noncontrolling owner’s proportionate share in the equity, income, or losses of the company’s majority-owned or controlled consolidated subsidiaries. |
Use of Estimates | 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, 2017 . |
Goodwill | Goodwill . The company’s goodwill is allocated to the following reporting units at March 31, 2018 , and December 31, 2017 , (in thousands): March 31, December 31, 2018 2017 Steel Operations Segment: Columbus Flat Roll Division $ 19,682 $ 19,682 The Techs 142,783 142,783 Vulcan Threaded Products 7,824 7,824 Roanoke Bar Division 29,041 29,041 Metals Recycling Operations Segment: OmniSource 89,790 90,638 Indiana Steel Mills 95,000 95,000 Steel Fabrication Operations Segment 1,925 1,925 $ 386,045 $ 386,893 OmniSource goodwill decreased $848,000 from December 31, 2017 to March 31, 2018 , in recognition of the 2018 tax benefit related to the normal amortization of the component of OmniSource tax-deductible goodwill in excess of book goodwill. |
Recently Issued Accounting Standards | Recently Adopted/Issued Accounting Standards In May 2014, the FASB issued ASU 2014-09, which is codified in ASC 606, Revenue Recognition – Revenue from Contracts with Customers, which amends the guidance in former ASC 605, Revenue Recognition . FASB later issued clarifying guidance in the form of ASU 2016-08, Revenue from Contracts with Customers: Principal versus Agent Consideration (Reporting Revenue Gross versus Net) , ASU 2016-10, Revenue from Contract with Customers: Identifying Performance Obligations and Licensing , and ASU 2016-12, Revenue from Contracts with Customers: Narrow-Scope Improvements and Practical Expedients, collectively (ASC 606). The core principle of ASC 606 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASC 606 also requires additional disclosures to help users of financial statements better understand the nature, amount, timing, and potential uncertainty of revenue that is recognized. The company adopted ASC 606 effective January1, 2018 using the modified retrospective approach. There was no change in the amount or timing of revenue recognized under ASC 606, or significant changes required to the company’s functions, processes or systems. See Note 2 – Revenue from Contracts with Customers for disclosure required by ASC 606 and the updated accounting policy for revenue recognition. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230); which requires amounts generally described as restricted cash to be included with cash and cash equivalents when reconciling the total beginning and ending amounts for the periods shown on the statement of cash flows. The company adopted the provisions of ASU 2016-18 as of January 1, 2018, retrospectively changed beginning and ending amounts reflected in the consolidated statements of cash flows for the three months ended March 31, 2018 and 2017, to include restricted cash. The balance of cash, cash equivalents and restricted cash in the consolidated statements of cash flows includes restricted cash of $5.6 million at March 31, 2018, $6.4 million at January 1, 2018, and $6.6 million at March 31, 2017, and January 1, 2017, which are recorded in Other Assets (noncurrent) in the company’s consolidated balance sheets. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842); which establishes a new lease accounting model that requires lessees to recognize a right of use asset and related lease liability for most leases having lease terms of more than 12 months (ASU 2016-02). This new guidance is effective for annual and interim periods beginning after December 15, 2018, but can be early adopted. The company is working through an adoption plan to evaluate the lease portfolio, systems, processes and policies to determine the impact of the provisions of ASU 2016-02 to our financial statements and disclosures. The company anticipates adopting ASU 2016-02 on January 1, 2019. |
Description of the Business a17
Description of the Business and Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Description of the Business and Significant Accounting Policies | |
Schedule of Goodwill | The company’s goodwill is allocated to the following reporting units at March 31, 2018 , and December 31, 2017 , (in thousands): March 31, December 31, 2018 2017 Steel Operations Segment: Columbus Flat Roll Division $ 19,682 $ 19,682 The Techs 142,783 142,783 Vulcan Threaded Products 7,824 7,824 Roanoke Bar Division 29,041 29,041 Metals Recycling Operations Segment: OmniSource 89,790 90,638 Indiana Steel Mills 95,000 95,000 Steel Fabrication Operations Segment 1,925 1,925 $ 386,045 $ 386,893 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share | |
Reconciliation of Basic and Diluted Earnings Per Share | The following tables present a reconciliation of the numerators and the denominators of the company’s basic and diluted earnings per share computations for the three months ended March 31, 2018 and March 30, 2017 (in thousands, except per share data): Three Months Ended March 31, 2018 2017 Net Income Shares Per Share Net Income Shares Per Share (Numerator) (Denominator) Amount (Numerator) (Denominator) Amount Basic earnings per share $ 227,551 236,623 $ 0.96 $ 200,817 242,943 $ 0.83 Dilutive common share equivalents - 1,100 - 1,603 Diluted earnings per share $ 227,551 237,723 $ 0.96 $ 200,817 244,546 $ 0.82 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Inventories | |
Schedule of 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, 2018 2017 Raw materials $ 725,748 $ 675,715 Supplies 386,123 374,515 Work in progress 169,441 128,565 Finished goods 318,746 340,552 Total inventories $ 1,600,058 $ 1,519,347 |
Changes in Equity (Tables)
Changes in Equity (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Changes in Equity | |
Schedule of stockholders' equity | The following table provides a reconciliation of the beginning and ending carrying amounts of total equity, equity attributable to stockholders of Steel Dynamics, Inc., and equity and redeemable amounts attributable to noncontrolling interests (in thousands): Stockholders of Steel Dynamics, Inc. Additional Redeemable Common Treasury Paid-In Retained Noncontrolling Total Noncontrolling Stock Stock Capital Earnings Interests Equity Interests Balances at December 31, 2017 $ 644 $ (665,297) $ 1,141,534 $ 2,874,693 $ (156,506) $ 3,195,068 $ 111,240 Dividends declared - - - (44,269) - (44,269) - Share repurchases - (69,269) - - - (69,269) - Equity-based compensation - 3,866 1,337 (71) - 5,132 - Comprehensive and net income (loss) - - - 227,551 (2,076) 225,475 - Balances at March 31, 2018 $ 644 $ (730,700) $ 1,142,871 $ 3,057,904 $ (158,582) $ 3,312,137 $ 111,240 |
Derivative Financial Instrume21
Derivative Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Derivative Financial Instruments | |
Schedule of Notional Amounts of Outstanding Derivative Positions | . The following summarizes the company’s futures contract commitments as of March 31, 2018 : Commodity Futures Long/Short Metric Tons Aluminum Long 1,950 Aluminum Short 2,450 Copper Long 6,078 Copper Short 16,704 |
Schedule of Derivative Instruments Statements of Financial Performance and Financial Position | The following summarizes the location and amounts of the fair values reported on the company’s balance sheets as of March 31, 2018 , and December 31, 2017 , and gains and losses related to derivatives included in the company’s statement of income for the three months ended March 31, 2018, and March 30, 2017 (in thousands): Note 6. Derivative Financial Instruments (Continued) Asset Derivatives Liability Derivatives Balance sheet Fair Value Fair Value location March 31, 2018 December 31, 2017 March 31, 2018 December 31, 2017 Derivative instruments designated as fair value hedges Commodity futures Other current assets $ 4,918 $ 1,211 $ 555 $ 5,364 Derivative instruments not designated as hedges Commodity futures Other current assets 2,233 1,579 852 5,142 Total derivative instruments $ 7,151 $ 2,790 $ 1,407 $ 10,506 The fair value of the above derivative instruments along with required margin deposit amounts with the same counterparty under master netting arrangements totaled $3.5 million at March 31, 2018 , and $5.6 million at December 31, 2017 , and are reflected in other current assets in the consolidated balance sheets. Amount of gain (loss) recognized Location of gain Amount of gain (loss) recognized Location of gain in income on derivatives (loss) recognized in income on related hedged items (loss) recognized for the three months ended Hedged items in in income on for the three months ended in income on March 31, March 31, fair value hedge related hedged March 31, March 31, derivatives 2018 2017 relationships items 2018 2017 Derivatives in fair value hedging relationships Commodity futures Costs of goods sold $ 8,516 $ (153) Firm commitments Costs of goods sold $ (793) $ 539 Inventory Costs of goods sold (2,596) 495 Derivatives not designated $ (3,389) $ 1,034 as hedging instruments Commodity futures Costs of goods sold $ 2,756 $ (4,346) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Measurements | |
Schedule of assets and liabilities measured at fair value on a recurring basis | 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, 2018 , and December 31, 2017 (in thousands): Quoted Prices Significant in Active Other Significant Markets for Observable Unobservable Identical Assets Inputs Inputs Total (Level 1) (Level 2) (Level 3) March 31, 2018 Commodity futures – financial assets $ 7,151 $ - $ 7,151 $ - Commodity futures – financial liabilities 1,407 - 1,407 - December 31, 2017 Commodity futures – financial assets $ 2,790 $ - $ 2,790 $ - Commodity futures – financial liabilities 10,506 - 10,506 - |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Segment Information | |
Schedule of operating segment results | The company’s segment results are as follows (in thousands): Metals Steel For the three months ended Steel Recycling Fabrication March 31, 2018 Operations Operations Operations Other Eliminations Consolidated Net Sales - disaggregated revenue External $ 1,832,303 $ 329,872 $ 201,437 $ 92,471 $ - $ 2,456,083 External Non-U.S. 89,486 58,250 56 - - 147,792 Other segments 59,985 364,644 210 147 (424,986) - 1,981,774 752,766 201,703 92,618 (424,986) 2,603,875 Operating income (loss) 334,562 24,715 19,791 (55,406) (1) (265) 323,397 Income (loss) before income taxes 315,805 23,005 18,457 (61,033) (270) 295,964 Depreciation and amortization 59,141 11,558 2,898 2,538 - 76,135 Capital expenditures 38,402 6,946 2,077 3,181 - 50,606 As of March 31, 2018 Assets $ 4,462,706 $ 1,006,510 $ 350,359 $ 1,250,869 (2) $ (97,631) (3) $ 6,972,813 Footnotes related to the three months ended March 31, 2018, segment results (in millions): (1) Corporate SG&A $ (15.7) (3) Elimination of intra-company receivables $ (72.4) Company-wide equity-based compensation (8.5) Elimination of intra-company debt (12.9) Profit sharing (25.6) Other (12.3) Other, net (5.6) $ (97.6) $ (55.4) (2) Cash and equivalents $ 970.5 Short-term investments 40.0 Inventories 28.4 Property, plant and equipment, net 161.7 Intra-company debt 12.9 Other 37.4 $ 1,250.9 Note 9 . Segment Information (Continued) Metals Steel For the three months ended Steel Recycling Fabrication March 31, 2017 Operations Operations Operations Other Eliminations Consolidated Net Sales - disaggregated revenue External $ 1,633,630 $ 310,951 $ 194,035 $ 88,951 $ - $ 2,227,567 External Non-U.S. 87,703 52,885 61 - - 140,649 Other segments 54,343 356,301 12 334 (410,990) - 1,775,676 720,137 194,108 89,285 (410,990) 2,368,216 Operating income (loss) 348,532 17,849 23,726 (53,970) (1) (1,571) (2) 334,566 Income (loss) before income taxes 326,764 16,072 22,339 (59,352) (1,571) 304,252 Depreciation and amortization 56,331 13,035 2,971 2,720 - 75,057 Capital expenditures 33,578 6,776 1,151 172 - 41,677 Footnotes related to the three months ended March 31, 2017, segment results (in millions): (1) Corporate SG&A $ (12.4) (2) Gross profit decrease from intra-company sales $ (1.6) Company-wide equity-based compensation (9.6) Profit sharing (26.5) Other, net (5.5) $ (54.0) |
Condensed Consolidating Infor24
Condensed Consolidating Information (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Condensed Consolidating Information | |
Schedule of Condensed Consolidating Balance Sheets | Condensed Consolidating Balance Sheets (in thousands) Combined Consolidating Total As of March 31, 2018 Parent Guarantors Non-Guarantors Adjustments Consolidated Cash and equivalents $ 969,240 $ 9,294 $ 7,290 $ - $ 985,824 Short term investments 40,000 - - - 40,000 Accounts receivable, net 349,276 1,475,249 33,922 (870,792) 987,655 Inventories 743,939 804,504 59,192 (7,577) 1,600,058 Other current assets 23,717 14,814 5,095 (4,921) 38,705 Total current assets 2,126,172 2,303,861 105,499 (883,290) 3,652,242 Property, plant and equipment, net 854,685 1,605,485 197,767 - 2,657,937 Intangible assets, net - 219,374 30,609 - 249,983 Goodwill - 378,221 7,824 - 386,045 Other assets, including investments in subs 2,486,756 6,081 5,588 (2,471,819) 26,606 Total assets $ 5,467,613 $ 4,513,022 $ 347,287 $ (3,355,109) $ 6,972,813 Accounts payable $ 185,459 $ 363,178 $ 87,276 $ (73,295) $ 562,618 Accrued expenses 185,020 232,542 11,103 (140,189) 288,476 Current maturities of long-term debt 746 - 36,761 (27,861) 9,646 Total current liabilities 371,225 595,720 135,140 (241,345) 860,740 Long-term debt 2,327,621 - 167,787 (141,705) 2,353,703 Other liabilities (701,952) 775,007 22,547 239,391 334,993 Total liabilities 1,996,894 1,370,727 325,474 (143,659) 3,549,436 Redeemable noncontrolling interests - - 111,240 - 111,240 Common stock 644 1,727,859 15,016 (1,742,875) 644 Treasury stock (730,700) - - - (730,700) Additional paid-in-capital 1,142,871 128,076 803,204 (931,280) 1,142,871 Retained earnings (deficit) 3,057,904 1,286,360 (749,065) (537,295) 3,057,904 Total Steel Dynamics, Inc. equity 3,470,719 3,142,295 69,155 (3,211,450) 3,470,719 Noncontrolling interests - - (158,582) - (158,582) Total equity 3,470,719 3,142,295 (89,427) (3,211,450) 3,312,137 Total liabilities and equity $ 5,467,613 $ 4,513,022 $ 347,287 $ (3,355,109) $ 6,972,813 Note 10. Condensed Consolidating Information (Continued) Combined Consolidating Total As of December 31, 2017 Parent Guarantors Non-Guarantors Adjustments Consolidated Cash and equivalents $ 1,001,405 $ 20,441 $ 6,803 $ - $ 1,028,649 Accounts receivable, net 274,968 1,426,036 37,387 (869,554) 868,837 Inventories 685,103 752,151 91,890 (9,797) 1,519,347 Other current assets 73,748 16,005 5,962 (4,206) 91,509 Total current assets 2,035,224 2,214,633 142,042 (883,557) 3,508,342 Property, plant and equipment, net 859,419 1,618,438 198,047 - 2,675,904 Intangible assets, net - 225,503 31,406 - 256,909 Goodwill - 379,069 7,824 - 386,893 Other assets, including investments in subs 2,512,594 6,622 5,505 (2,497,037) 27,684 Total assets $ 5,407,237 $ 4,444,265 $ 384,824 $ (3,380,594) $ 6,855,732 Accounts payable $ 168,282 $ 316,676 $ 101,948 $ (97,458) $ 489,448 Accrued expenses 222,023 254,196 10,243 (136,186) 350,276 Current maturities of long-term debt 731 - 56,454 (28,390) 28,795 Total current liabilities 391,036 570,872 168,645 (262,034) 868,519 Long-term debt 2,326,466 - 169,799 (143,120) 2,353,145 Other liabilities (661,839) 869,196 24,868 95,535 327,760 Total liabilities 2,055,663 1,440,068 363,312 (309,619) 3,549,424 Redeemable noncontrolling interests - - 111,240 - 111,240 Common stock 644 1,727,859 14,908 (1,742,767) 644 Treasury stock (665,297) - - - (665,297) Additional paid-in-capital 1,141,534 128,076 797,196 (925,272) 1,141,534 Retained earnings (deficit) 2,874,693 1,148,262 (745,326) (402,936) 2,874,693 Total Steel Dynamics, Inc. equity 3,351,574 3,004,197 66,778 (3,070,975) 3,351,574 Noncontrolling interests - - (156,506) - (156,506) Total equity 3,351,574 3,004,197 (89,728) (3,070,975) 3,195,068 Total liabilities and equity $ 5,407,237 $ 4,444,265 $ 384,824 $ (3,380,594) $ 6,855,732 |
Schedule of Condensed Consolidating Statements of Operations | Condensed Consolidating Statements of Operations (in thousands) For the three months ended, Combined Consolidating Total March 31, 2018 Parent Guarantors Non-Guarantors Adjustments Consolidated Net sales $ 1,036,674 $ 2,823,129 $ 152,587 $ (1,408,515) $ 2,603,875 Costs of goods sold 819,145 2,551,620 148,630 (1,378,936) 2,140,459 Gross profit 217,529 271,509 3,957 (29,579) 463,416 Selling, general and administrative 62,927 76,952 5,597 (5,457) 140,019 Operating income (loss) 154,602 194,557 (1,640) (24,122) 323,397 Interest expense, net of capitalized interest 18,623 12,437 3,540 (2,704) 31,896 Other expense (income), net (5,203) (1,697) (273) 2,710 (4,463) Income (loss) before income taxes and equity in net income of subsidiaries 141,182 183,817 (4,907) (24,128) 295,964 Income taxes 29,746 45,720 909 (5,886) 70,489 111,436 138,097 (5,816) (18,242) 225,475 Equity in net income of subsidiaries 116,115 - - (116,115) - Net loss attributable to noncontrolling interests - - 2,076 - 2,076 Net income (loss) attributable to Steel Dynamics, Inc. $ 227,551 $ 138,097 $ (3,740) $ (134,357) $ 227,551 For the three months ended, Combined Consolidating Total March 31, 2017 Parent Guarantors Non-Guarantors Adjustments Consolidated Net sales $ 924,566 $ 2,572,238 $ 143,408 $ (1,271,996) $ 2,368,216 Costs of goods sold 711,579 2,289,664 138,041 (1,243,222) 1,896,062 Gross profit 212,987 282,574 5,367 (28,774) 472,154 Selling, general and administrative 61,655 76,282 5,053 (5,402) 137,588 Operating income 151,332 206,292 314 (23,372) 334,566 Interest expense, net of capitalized interest 18,081 15,123 3,266 (2,497) 33,973 Other expense (income), net (3,254) (2,667) (236) 2,498 (3,659) Income (loss) before income taxes and equity in net income of subsidiaries 136,505 193,836 (2,716) (23,373) 304,252 Income taxes 41,585 70,311 1,790 (8,100) 105,586 94,920 123,525 (4,506) (15,273) 198,666 Equity in net income of subsidiaries 105,897 - - (105,897) - Net loss attributable to noncontrolling interests - - 2,151 - 2,151 Net income (loss) attributable to Steel Dynamics, Inc. $ 200,817 $ 123,525 $ (2,355) $ (121,170) $ 200,817 Note 10. Condensed Consolidating Information (Continued) |
Schedule of Condensed Consolidating Statements of Cash Flows | Condensed Consolidating Statements of Cash Flows (in thousands) For the three months ended, Combined Consolidating Total March 31, 2018 Parent Guarantors Non-Guarantors Adjustments Consolidated Net cash provided by operating activities $ 9,009 $ 149,336 $ 21,283 $ (1,693) $ 177,935 Net cash used in investing activities (60,919) (24,517) (2,997) (1,944) (90,377) Net cash provided by (used in) financing activities 18,920 (135,966) (17,813) 3,637 (131,222) Increase (decrease) in cash and equivalents (32,990) (11,147) 473 - (43,664) Cash, cash equivalents, and restricted cash at beginning of period 1,002,230 20,740 12,115 - 1,035,085 Cash, cash equivalents, and restricted cash at end of period $ 969,240 $ 9,593 $ 12,588 $ - $ 991,421 For the three months ended, Combined Consolidating Total March 31, 2017 Parent Guarantors Non-Guarantors Adjustments Consolidated Net cash provided by (used in) operating activities $ 102,209 $ 132,733 $ (877) $ 6,365 $ 240,430 Net cash used in investing activities (19,409) (1,510) (192) 6,352 (14,759) Net cash provided by (used in) financing activities 86,776 (174,914) 508 (12,717) (100,347) Increase (decrease) in cash and equivalents 169,576 (43,691) (561) - 125,324 Cash, cash equivalents, and restricted cash at beginning of period 767,594 54,859 25,652 - 848,105 Cash, cash equivalents, and restricted cash at end of period $ 937,170 $ 11,168 $ 25,091 $ - $ 973,429 |
Description of the Business a25
Description of the Business and Significant Accounting Policies (Segments) (Details) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Steel Operations | ||
Segment Reporting Information | ||
Percentage of external net sales | 74.00% | 73.00% |
Metals Recycling Operations | ||
Segment Reporting Information | ||
Percentage of external net sales | 15.00% | 15.00% |
Steel Fabrication Operations | ||
Segment Reporting Information | ||
Percentage of external net sales | 8.00% | 8.00% |
Description of the Business a26
Description of the Business and Significant Accounting Policies (Goodwill) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
Goodwill | ||
Goodwill | $ 386,045 | $ 386,893 |
OmniSource | ||
Goodwill | ||
Goodwill decrease due to tax benefit related to the normal amortization of the component | 848 | |
Steel Operations | Columbus Flat Roll Division | ||
Goodwill | ||
Goodwill | 19,682 | 19,682 |
Steel Operations | The Techs | ||
Goodwill | ||
Goodwill | 142,783 | 142,783 |
Steel Operations | Vulcan Steel Products [Member] | ||
Goodwill | ||
Goodwill | 7,824 | 7,824 |
Steel Operations | Roanoke Bar Division | ||
Goodwill | ||
Goodwill | 29,041 | 29,041 |
Metals Recycling Operations | OmniSource | ||
Goodwill | ||
Goodwill | 89,790 | 90,638 |
Metals Recycling Operations | Indiana Steel Mills [Member] | ||
Goodwill | ||
Goodwill | 95,000 | 95,000 |
Steel Fabrication Operations | New Millennium Building Systems | ||
Goodwill | ||
Goodwill | $ 1,925 | $ 1,925 |
Description of the Business a27
Description of the Business and Significant Accounting Policies (Recently Adopted/Issued Accounting Standards) (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Jan. 01, 2018 | Mar. 31, 2017 | Jan. 01, 2017 |
Description of the Business and Significant Accounting Policies | ||||
Restricted cash | $ 5.6 | $ 6.4 | $ 6.6 | $ 6.6 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Net Income (Numerator) | ||
Basic earnings per share - net income (in dollars) | $ 227,551 | $ 200,817 |
Diluted earnings per share - net income (in dollars) | $ 227,551 | $ 200,817 |
Weighted average common shares outstanding (in shares) | ||
Weighted average common shares outstanding - basic (in shares) | 236,623 | 242,943 |
Dilutive common share equivalents (in shares) | 1,100 | 1,603 |
Weighted average common shares outstanding - diluted (in shares) | 237,723 | 244,546 |
Per Share Amount | ||
Basic (in dollars per share) | $ 0.96 | $ 0.83 |
Diluted (in dollars per share) | $ 0.96 | $ 0.82 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Inventories | ||
Raw materials | $ 725,748 | $ 675,715 |
Supplies | 386,123 | 374,515 |
Work in progress | 169,441 | 128,565 |
Finished goods | 318,746 | 340,552 |
Total inventories | $ 1,600,058 | $ 1,519,347 |
Changes in Equity (Rollforward)
Changes in Equity (Rollforward) (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Balances | $ 3,195,068 |
Dividends declared | (44,269) |
Share repurchases | (69,269) |
Equity-based compensation | 5,132 |
Comprehensive and net income (loss) | 225,475 |
Balances | 3,312,137 |
Common Stock | |
Balances | 644 |
Balances | 644 |
Treasury Stock | |
Balances | (665,297) |
Share repurchases | (69,269) |
Equity-based compensation | 3,866 |
Balances | (730,700) |
Additional Paid-In Capital | |
Balances | 1,141,534 |
Equity-based compensation | 1,337 |
Balances | 1,142,871 |
Retained Earnings | |
Balances | 2,874,693 |
Dividends declared | (44,269) |
Equity-based compensation | (71) |
Comprehensive and net income (loss) | 227,551 |
Balances | 3,057,904 |
Noncontrolling Interests | |
Balances | (156,506) |
Comprehensive and net income (loss) | (2,076) |
Balances | (158,582) |
Redeemable Noncontrolling Interest | |
Balances | 111,240 |
Balances | $ 111,240 |
Derivative Financial Instrume31
Derivative Financial Instruments (Narrative) (Details) - Futures - Commodity contract - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Other current assets | |||
Commodity contract commitments | |||
Fair value of derivatives including required margin deposits | $ 3,500 | $ 5,600 | |
Designated as hedging instrument | |||
Gains or losses on derivative instruments, statement of income | |||
Ineffectiveness - amount of gain (loss) recognized in income on related hedged items | (101) | $ 48 | |
Gain (loss) excluded from hedge effectiveness testing | $ 5,000 | $ 833 |
Derivative Financial Instrume32
Derivative Financial Instruments (Schedule of Notional Amounts of Outstanding Derivative Positions) (Details) - Futures | 3 Months Ended |
Mar. 31, 2018T | |
Aluminum | Long | |
Derivative [Line Items] | |
Commodity contract (in MT/Lbs) | 1,950 |
Aluminum | Short | |
Derivative [Line Items] | |
Commodity contract (in MT/Lbs) | 2,450 |
Copper | Long | |
Derivative [Line Items] | |
Commodity contract (in MT/Lbs) | 6,078 |
Copper | Short | |
Derivative [Line Items] | |
Commodity contract (in MT/Lbs) | 16,704 |
Derivative Financial Instrume33
Derivative Financial Instruments (Schedule of Derivatives Instruments Statements of Financial Performance and Financial Position) (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Commodity futures, asset derivatives | $ 7,151 | $ 2,790 |
Commodity futures, liability derivatives | 1,407 | 10,506 |
Futures | Commodity contract | Designated as hedging instrument | Other current assets | ||
Commodity futures, asset derivatives | 4,918 | 1,211 |
Commodity futures, liability derivatives | 555 | 5,364 |
Futures | Commodity contract | Not designated as hedging instrument | Other current assets | ||
Commodity futures, asset derivatives | 2,233 | 1,579 |
Commodity futures, liability derivatives | $ 852 | $ 5,142 |
Derivative Financial Instrume34
Derivative Financial Instruments (Schedule of Derivatives Instruments Statements of Financial Position) (Details) - Cost of goods sold - Futures - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Designated as hedging instrument | ||
Amount of gain (loss) recognized in income on derivatives | $ 8,516 | $ (153) |
Amount of gain (loss) recognized in income on related hedged items | (3,389) | 1,034 |
Designated as hedging instrument | Firm commitments | ||
Amount of gain (loss) recognized in income on related hedged items | (793) | 539 |
Designated as hedging instrument | Inventory | ||
Amount of gain (loss) recognized in income on related hedged items | (2,596) | 495 |
Not designated as hedging instrument | ||
Amount of gain (loss) recognized in income on derivatives | $ 2,756 | $ (4,346) |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Assets and liabilities subject to fair value measurements | ||
Commodity futures - financial assets | $ 7,151 | $ 2,790 |
Commodity futures - financial liabilities | 1,407 | 10,506 |
Fair value of long-term debt, including current maturities | 2,400,000 | 2,500,000 |
Outstanding Balance | 2,400,000 | 2,400,000 |
Futures | Recurring | Commodity contract | ||
Assets and liabilities subject to fair value measurements | ||
Commodity futures - financial assets | 7,151 | 2,790 |
Commodity futures - financial liabilities | 1,407 | 10,506 |
Futures | Recurring | Fair Value, Inputs, Level 2 [Member] | Commodity contract | ||
Assets and liabilities subject to fair value measurements | ||
Commodity futures - financial assets | 7,151 | 2,790 |
Commodity futures - financial liabilities | $ 1,407 | $ 10,506 |
Segment Information - Results (
Segment Information - Results (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Segment Reporting Information | |||
Net sales | $ 2,603,875 | $ 2,368,216 | |
Operating income (loss) | 323,397 | 334,566 | |
Income (loss) before income taxes | 295,964 | 304,252 | |
Depreciation and amortization | 76,135 | 75,057 | |
Capital expenditures | 50,606 | 41,677 | |
Assets | 6,972,813 | $ 6,855,732 | |
U.S. | |||
Segment Reporting Information | |||
Net sales | 2,456,083 | 2,227,567 | |
Non-U.S. | |||
Segment Reporting Information | |||
Net sales | 147,792 | 140,649 | |
Steel Operations | |||
Segment Reporting Information | |||
Net sales | 1,981,774 | 1,775,676 | |
Operating income (loss) | 334,562 | 348,532 | |
Income (loss) before income taxes | 315,805 | 326,764 | |
Depreciation and amortization | 59,141 | 56,331 | |
Capital expenditures | 38,402 | 33,578 | |
Assets | 4,462,706 | ||
Steel Operations | Other segments | |||
Segment Reporting Information | |||
Net sales | 59,985 | 54,343 | |
Steel Operations | U.S. | |||
Segment Reporting Information | |||
Net sales | 1,832,303 | 1,633,630 | |
Steel Operations | Non-U.S. | |||
Segment Reporting Information | |||
Net sales | 89,486 | 87,703 | |
Metals Recycling Operations | |||
Segment Reporting Information | |||
Net sales | 752,766 | 720,137 | |
Operating income (loss) | 24,715 | 17,849 | |
Income (loss) before income taxes | 23,005 | 16,072 | |
Depreciation and amortization | 11,558 | 13,035 | |
Capital expenditures | 6,946 | 6,776 | |
Assets | 1,006,510 | ||
Metals Recycling Operations | Other segments | |||
Segment Reporting Information | |||
Net sales | 364,644 | 356,301 | |
Metals Recycling Operations | U.S. | |||
Segment Reporting Information | |||
Net sales | 329,872 | 310,951 | |
Metals Recycling Operations | Non-U.S. | |||
Segment Reporting Information | |||
Net sales | 58,250 | 52,885 | |
Steel Fabrication Operations | |||
Segment Reporting Information | |||
Net sales | 201,703 | 194,108 | |
Operating income (loss) | 19,791 | 23,726 | |
Income (loss) before income taxes | 18,457 | 22,339 | |
Depreciation and amortization | 2,898 | 2,971 | |
Capital expenditures | 2,077 | 1,151 | |
Assets | 350,359 | ||
Steel Fabrication Operations | Other segments | |||
Segment Reporting Information | |||
Net sales | 210 | 12 | |
Steel Fabrication Operations | U.S. | |||
Segment Reporting Information | |||
Net sales | 201,437 | 194,035 | |
Steel Fabrication Operations | Non-U.S. | |||
Segment Reporting Information | |||
Net sales | 56 | 61 | |
Other | |||
Segment Reporting Information | |||
Net sales | 92,618 | 89,285 | |
Operating income (loss) | (55,406) | (53,970) | |
Income (loss) before income taxes | (61,033) | (59,352) | |
Depreciation and amortization | 2,538 | 2,720 | |
Capital expenditures | 3,181 | 172 | |
Assets | 1,250,869 | ||
Other | Other segments | |||
Segment Reporting Information | |||
Net sales | 147 | 334 | |
Other | U.S. | |||
Segment Reporting Information | |||
Net sales | 92,471 | 88,951 | |
Eliminations | |||
Segment Reporting Information | |||
Net sales | (424,986) | (410,990) | |
Operating income (loss) | (265) | (1,571) | |
Income (loss) before income taxes | (270) | (1,571) | |
Assets | (97,631) | ||
Eliminations | Other segments | |||
Segment Reporting Information | |||
Net sales | $ (424,986) | $ (410,990) |
Segment Information - Other Foo
Segment Information - Other Footnote (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Operating income (loss) | |||
Corporate SG & A | $ (106,431) | $ (102,933) | |
Profit sharing | (26,662) | (27,231) | |
Operating income (loss) | 323,397 | 334,566 | |
Assets | |||
Cash and equivalents | 985,824 | $ 1,028,649 | |
Short-term Investments | 40,000 | ||
Inventories | 1,600,058 | 1,519,347 | |
Property, plant and equipment, net | 2,657,937 | 2,675,904 | |
Other | 26,606 | 27,684 | |
Total assets | 6,972,813 | $ 6,855,732 | |
Other | |||
Operating income (loss) | |||
Corporate SG & A | (15,700) | (12,400) | |
Company-wide equity-based compensation | (8,500) | (9,600) | |
Profit sharing | (25,600) | (26,500) | |
Other, net | (5,600) | (5,500) | |
Operating income (loss) | (55,406) | (53,970) | |
Assets | |||
Cash and equivalents | 970,500 | ||
Short-term Investments | 40,000 | ||
Inventories | 28,400 | ||
Property, plant and equipment, net | 161,700 | ||
Intra Company Debt | 12,900 | ||
Other | 37,400 | ||
Total assets | 1,250,869 | ||
Metals Recycling Operations | |||
Operating income (loss) | |||
Operating income (loss) | 24,715 | $ 17,849 | |
Assets | |||
Total assets | $ 1,006,510 |
Segment Information - Eliminati
Segment Information - Eliminations Footnote (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Operating income (loss) | |||
Operating income (loss) | $ 323,397 | $ 334,566 | |
Gross profit | 463,416 | 472,154 | |
Assets elimination | |||
Accounts receivable | 987,655 | $ 868,837 | |
Other | 26,606 | 27,684 | |
Total assets | 6,972,813 | $ 6,855,732 | |
Eliminations | |||
Operating income (loss) | |||
Operating income (loss) | (265) | (1,571) | |
Gross profit | $ (1,600) | ||
Assets elimination | |||
Accounts receivable | (72,400) | ||
Elimination of intra-company debt | (12,900) | ||
Other | (12,300) | ||
Total assets | $ (97,631) |
Condensed Consolidating Infor39
Condensed Consolidating Information - Balance Sheets (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Condensed Consolidating Balance Sheets | ||
Cash and equivalents | $ 985,824 | $ 1,028,649 |
Short-term Investments | 40,000 | |
Accounts receivable, net | 987,655 | 868,837 |
Inventories | 1,600,058 | 1,519,347 |
Other current assets | 38,705 | 91,509 |
Total current assets | 3,652,242 | 3,508,342 |
Property, plant and equipment, net | 2,657,937 | 2,675,904 |
Intangible assets, net | 249,983 | 256,909 |
Goodwill | 386,045 | 386,893 |
Other assets, including investments in subs | 26,606 | 27,684 |
Total assets | 6,972,813 | 6,855,732 |
Accounts payable | 562,618 | 489,448 |
Accrued expenses | 288,476 | 350,276 |
Current maturities of long-term debt | 9,646 | 28,795 |
Total current liabilities | 860,740 | 868,519 |
Long-term debt | 2,353,703 | 2,353,145 |
Other liabilities | 334,993 | 327,760 |
Total liabilities | 3,549,436 | 3,549,424 |
Redeemable noncontrolling interests | 111,240 | 111,240 |
Common stock | 644 | 644 |
Treasury stock | (730,700) | (665,297) |
Additional paid-in capital | 1,142,871 | 1,141,534 |
Retained earnings (deficit) | 3,057,904 | 2,874,693 |
Total Steel Dynamics, Inc. equity | 3,470,719 | 3,351,574 |
Noncontrolling interests | (158,582) | (156,506) |
Total equity | 3,312,137 | 3,195,068 |
Total liabilities and equity | 6,972,813 | 6,855,732 |
Parent | ||
Condensed Consolidating Balance Sheets | ||
Cash and equivalents | 969,240 | 1,001,405 |
Short-term Investments | 40,000 | |
Accounts receivable, net | 349,276 | 274,968 |
Inventories | 743,939 | 685,103 |
Other current assets | 23,717 | 73,748 |
Total current assets | 2,126,172 | 2,035,224 |
Property, plant and equipment, net | 854,685 | 859,419 |
Other assets, including investments in subs | 2,486,756 | 2,512,594 |
Total assets | 5,467,613 | 5,407,237 |
Accounts payable | 185,459 | 168,282 |
Accrued expenses | 185,020 | 222,023 |
Current maturities of long-term debt | 746 | 731 |
Total current liabilities | 371,225 | 391,036 |
Long-term debt | 2,327,621 | 2,326,466 |
Other liabilities | (701,952) | (661,839) |
Total liabilities | 1,996,894 | 2,055,663 |
Common stock | 644 | 644 |
Treasury stock | (730,700) | (665,297) |
Additional paid-in capital | 1,142,871 | 1,141,534 |
Retained earnings (deficit) | 3,057,904 | 2,874,693 |
Total Steel Dynamics, Inc. equity | 3,470,719 | 3,351,574 |
Total equity | 3,470,719 | 3,351,574 |
Total liabilities and equity | 5,467,613 | 5,407,237 |
Guarantors | ||
Condensed Consolidating Balance Sheets | ||
Cash and equivalents | 9,294 | 20,441 |
Accounts receivable, net | 1,475,249 | 1,426,036 |
Inventories | 804,504 | 752,151 |
Other current assets | 14,814 | 16,005 |
Total current assets | 2,303,861 | 2,214,633 |
Property, plant and equipment, net | 1,605,485 | 1,618,438 |
Intangible assets, net | 219,374 | 225,503 |
Goodwill | 378,221 | 379,069 |
Other assets, including investments in subs | 6,081 | 6,622 |
Total assets | 4,513,022 | 4,444,265 |
Accounts payable | 363,178 | 316,676 |
Accrued expenses | 232,542 | 254,196 |
Total current liabilities | 595,720 | 570,872 |
Other liabilities | 775,007 | 869,196 |
Total liabilities | 1,370,727 | 1,440,068 |
Common stock | 1,727,859 | 1,727,859 |
Additional paid-in capital | 128,076 | 128,076 |
Retained earnings (deficit) | 1,286,360 | 1,148,262 |
Total Steel Dynamics, Inc. equity | 3,142,295 | 3,004,197 |
Total equity | 3,142,295 | 3,004,197 |
Total liabilities and equity | 4,513,022 | 4,444,265 |
Combined Non-Guarantors | ||
Condensed Consolidating Balance Sheets | ||
Cash and equivalents | 7,290 | 6,803 |
Accounts receivable, net | 33,922 | 37,387 |
Inventories | 59,192 | 91,890 |
Other current assets | 5,095 | 5,962 |
Total current assets | 105,499 | 142,042 |
Property, plant and equipment, net | 197,767 | 198,047 |
Intangible assets, net | 30,609 | 31,406 |
Goodwill | 7,824 | 7,824 |
Other assets, including investments in subs | 5,588 | 5,505 |
Total assets | 347,287 | 384,824 |
Accounts payable | 87,276 | 101,948 |
Accrued expenses | 11,103 | 10,243 |
Current maturities of long-term debt | 36,761 | 56,454 |
Total current liabilities | 135,140 | 168,645 |
Long-term debt | 167,787 | 169,799 |
Other liabilities | 22,547 | 24,868 |
Total liabilities | 325,474 | 363,312 |
Redeemable noncontrolling interests | 111,240 | 111,240 |
Common stock | 15,016 | 14,908 |
Additional paid-in capital | 803,204 | 797,196 |
Retained earnings (deficit) | (749,065) | (745,326) |
Total Steel Dynamics, Inc. equity | 69,155 | 66,778 |
Noncontrolling interests | (158,582) | (156,506) |
Total equity | (89,427) | (89,728) |
Total liabilities and equity | 347,287 | 384,824 |
Consolidating Adjustments | ||
Condensed Consolidating Balance Sheets | ||
Accounts receivable, net | (870,792) | (869,554) |
Inventories | (7,577) | (9,797) |
Other current assets | (4,921) | (4,206) |
Total current assets | (883,290) | (883,557) |
Other assets, including investments in subs | (2,471,819) | (2,497,037) |
Total assets | (3,355,109) | (3,380,594) |
Accounts payable | (73,295) | (97,458) |
Accrued expenses | (140,189) | (136,186) |
Current maturities of long-term debt | (27,861) | (28,390) |
Total current liabilities | (241,345) | (262,034) |
Long-term debt | (141,705) | (143,120) |
Other liabilities | 239,391 | 95,535 |
Total liabilities | (143,659) | (309,619) |
Common stock | (1,742,875) | (1,742,767) |
Additional paid-in capital | (931,280) | (925,272) |
Retained earnings (deficit) | (537,295) | (402,936) |
Total Steel Dynamics, Inc. equity | (3,211,450) | (3,070,975) |
Total equity | (3,211,450) | (3,070,975) |
Total liabilities and equity | $ (3,355,109) | $ (3,380,594) |
Condensed Consolidating Infor40
Condensed Consolidating Information - Statements of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Condensed Consolidating Statements of Operations | ||
Net sales | $ 2,603,875 | $ 2,368,216 |
Costs of goods sold | 2,140,459 | 1,896,062 |
Gross profit | 463,416 | 472,154 |
Selling, general and administrative | 140,019 | 137,588 |
Operating income | 323,397 | 334,566 |
Interest expense, net of capitalized interest | 31,896 | 33,973 |
Other (income) expense, net | (4,463) | (3,659) |
Income before income taxes | 295,964 | 304,252 |
Income taxes (benefit) | 70,489 | 105,586 |
Net income | 225,475 | 198,666 |
Net loss attributable to noncontrolling interests | 2,076 | 2,151 |
Net income attributable to Steel Dynamics, Inc. | 227,551 | 200,817 |
Parent | ||
Condensed Consolidating Statements of Operations | ||
Net sales | 1,036,674 | 924,566 |
Costs of goods sold | 819,145 | 711,579 |
Gross profit | 217,529 | 212,987 |
Selling, general and administrative | 62,927 | 61,655 |
Operating income | 154,602 | 151,332 |
Interest expense, net of capitalized interest | 18,623 | 18,081 |
Other (income) expense, net | (5,203) | (3,254) |
Income before income taxes | 141,182 | 136,505 |
Income taxes (benefit) | 29,746 | 41,585 |
Net income | 111,436 | 94,920 |
Equity in net income of subsidiaries | 116,115 | 105,897 |
Net income attributable to Steel Dynamics, Inc. | 227,551 | 200,817 |
Guarantors | ||
Condensed Consolidating Statements of Operations | ||
Net sales | 2,823,129 | 2,572,238 |
Costs of goods sold | 2,551,620 | 2,289,664 |
Gross profit | 271,509 | 282,574 |
Selling, general and administrative | 76,952 | 76,282 |
Operating income | 194,557 | 206,292 |
Interest expense, net of capitalized interest | 12,437 | 15,123 |
Other (income) expense, net | (1,697) | (2,667) |
Income before income taxes | 183,817 | 193,836 |
Income taxes (benefit) | 45,720 | 70,311 |
Net income | 138,097 | 123,525 |
Net income attributable to Steel Dynamics, Inc. | 138,097 | 123,525 |
Combined Non-Guarantors | ||
Condensed Consolidating Statements of Operations | ||
Net sales | 152,587 | 143,408 |
Costs of goods sold | 148,630 | 138,041 |
Gross profit | 3,957 | 5,367 |
Selling, general and administrative | 5,597 | 5,053 |
Operating income | (1,640) | 314 |
Interest expense, net of capitalized interest | 3,540 | 3,266 |
Other (income) expense, net | (273) | (236) |
Income before income taxes | (4,907) | (2,716) |
Income taxes (benefit) | 909 | 1,790 |
Net income | (5,816) | (4,506) |
Net loss attributable to noncontrolling interests | 2,076 | 2,151 |
Net income attributable to Steel Dynamics, Inc. | (3,740) | (2,355) |
Consolidating Adjustments | ||
Condensed Consolidating Statements of Operations | ||
Net sales | (1,408,515) | (1,271,996) |
Costs of goods sold | (1,378,936) | (1,243,222) |
Gross profit | (29,579) | (28,774) |
Selling, general and administrative | (5,457) | (5,402) |
Operating income | (24,122) | (23,372) |
Interest expense, net of capitalized interest | (2,704) | (2,497) |
Other (income) expense, net | 2,710 | 2,498 |
Income before income taxes | (24,128) | (23,373) |
Income taxes (benefit) | (5,886) | (8,100) |
Net income | (18,242) | (15,273) |
Equity in net income of subsidiaries | (116,115) | (105,897) |
Net income attributable to Steel Dynamics, Inc. | $ (134,357) | $ (121,170) |
Condensed Consolidating Infor41
Condensed Consolidating Information - Statements of Cash Flows (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Condensed Consolidating Statements of Cash Flows | ||
Net cash provided by (used in) operating activities | $ 177,935 | $ 240,430 |
Net cash used in investing activities | (90,377) | (14,759) |
Net cash provided by (used in) financing activities | (131,222) | (100,347) |
Increase (decrease) in cash and equivalents | (43,664) | 125,324 |
Cash and equivalents at beginning of period | 1,035,085 | 848,105 |
Cash and equivalents at end of period | 991,421 | 973,429 |
Parent | ||
Condensed Consolidating Statements of Cash Flows | ||
Net cash provided by (used in) operating activities | 9,009 | 102,209 |
Net cash used in investing activities | (60,919) | (19,409) |
Net cash provided by (used in) financing activities | 18,920 | 86,776 |
Increase (decrease) in cash and equivalents | (32,990) | 169,576 |
Cash and equivalents at beginning of period | 1,002,230 | 767,594 |
Cash and equivalents at end of period | 969,240 | 937,170 |
Guarantors | ||
Condensed Consolidating Statements of Cash Flows | ||
Net cash provided by (used in) operating activities | 149,336 | 132,733 |
Net cash used in investing activities | (24,517) | (1,510) |
Net cash provided by (used in) financing activities | (135,966) | (174,914) |
Increase (decrease) in cash and equivalents | (11,147) | (43,691) |
Cash and equivalents at beginning of period | 20,740 | 54,859 |
Cash and equivalents at end of period | 9,593 | 11,168 |
Combined Non-Guarantors | ||
Condensed Consolidating Statements of Cash Flows | ||
Net cash provided by (used in) operating activities | 21,283 | (877) |
Net cash used in investing activities | (2,997) | (192) |
Net cash provided by (used in) financing activities | (17,813) | 508 |
Increase (decrease) in cash and equivalents | 473 | (561) |
Cash and equivalents at beginning of period | 12,115 | 25,652 |
Cash and equivalents at end of period | 12,588 | 25,091 |
Consolidating Adjustments | ||
Condensed Consolidating Statements of Cash Flows | ||
Net cash provided by (used in) operating activities | (1,693) | 6,365 |
Net cash used in investing activities | (1,944) | 6,352 |
Net cash provided by (used in) financing activities | $ 3,637 | $ (12,717) |