Note 13. Condensed Consolidating Information

Certain 100%-owned subsidiaries of SDI have fully and unconditionally guaranteed all of the indebtedness relating to the issuance of the company's senior notes due 2014, 2015, 2019, 2020 and 2022. 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 notes thereto.

Condensed Consolidating Balance Sheets (in thousands)

As of December 31, 2012	Parent			Guarantors		Combined Non-Guarantors			Consolidating Adjustments			Total Consolidated

Cash and equivalents	$	322,707		$	41,675	$	11,535		$	—		$	375,917
Investments in short-term commercial paper		31,520			—		—			—			31,520
Accounts receivable, net		277,428			772,868		11,293			(419,226	)		642,363
Inventories		564,882			536,331		107,422			(6,128	)		1,202,507
Other current assets		51,268			7,253		4,006			(18,609	)		43,918

Total current assets		1,247,805			1,358,127		134,256			(443,963	)		2,296,225
Property, plant and equiment, net		1,017,587			664,332		551,903			(2,624	)		2,231,198
Intangible assets, net		—			416,635		—			—			416,635
Goodwill		—			738,542		—			—			738,542
Other assets, including investments in subs		2,768,360			30,862		9,189			(2,675,595	)		132,816

Total assets	$	5,033,752		$	3,208,498	$	695,348		$	(3,122,182	)	$	5,815,416

Accounts payable	$	150,191		$	219,415	$	56,472		$	(65,981	)	$	360,097
Accrued expenses		144,719			98,484		9,877			(33,131	)		219,949
Current maturities of long-term debt		14,237			300		52,595			(37,501	)		29,631

Total current liabilities		309,147			318,199		118,944			(136,613	)		609,677
Long-term debt		2,140,958			—		169,223			(137,575	)		2,172,606
Other liabilities		178,182			2,087,957		41,581			(1,751,243	)		556,477
Redeemable noncontrolling interest		—			—		98,814			—			98,814
Common stock		637			33,896		18,121			(52,017	)		637
Treasury stock		(720,479	)		—		—			—			(720,479	)
Additional paid-in-capital		1,037,687			117,737		476,677			(594,414	)		1,037,687
Retained earnings (deficit)		2,087,620			650,709		(200,389	)		(450,320	)		2,087,620

Total Steel Dynamics, Inc. equity		2,405,465			802,342		294,409			(1,096,751	)		2,405,465
Noncontrolling interests		—			—		(27,623	)		—			(27,623	)

Total equity		2,405,465			802,342		266,786			(1,096,751	)		2,377,842

Total liabilities and equity	$	5,033,752		$	3,208,498	$	695,348		$	(3,122,182	)	$	5,815,416

Condensed Consolidating Balance Sheets (in thousands)

As of December 31, 2011	Parent			Guarantors		Combined Non-Guarantors			Consolidating Adjustments			Total Consolidated

Cash and equivalents	$	301,073		$	58,699	$	30,989		$	—		$	390,761
Investments in short-term commercial paper		84,830			—		—			—			84,830
Accounts receivable, net		319,995			726,192		8,971			(332,367	)		722,791
Inventories		584,079			533,022		85,046			(2,563	)		1,199,584
Other current assets		83,116			4,119		2,304			(32,247	)		57,292

Total current assets		1,373,093			1,322,032		127,310			(367,177	)		2,455,258
Property, plant and equiment, net		1,059,011			660,048		477,514			(2,828	)		2,193,745
Intangible assets, net		—			450,893		—			—			450,893
Goodwill		—			745,066		—			—			745,066
Other assets, including investments in subs		2,791,718			33,507		9,853			(2,700,814	)		134,264

Total assets	$	5,223,822		$	3,211,546	$	614,677		$	(3,070,819	)	$	5,979,226

Accounts payable	$	155,220		$	273,049	$	23,195		$	(30,640	)	$	420,824
Accrued expenses		157,868			98,498		10,012			(30,863	)		235,515
Current maturities of long-term debt		439,199			300		53,551			(48,972	)		444,078

Total current liabilities		752,287			371,847		86,758			(110,475	)		1,100,417
Long-term debt		1,905,199			—		169,797			(138,974	)		1,936,022
Other liabilities		250,395			2,132,778		51,625			(1,862,605	)		572,193
Redeemable noncontrolling interest		—			—		70,694			—			70,694
Common stock		636			33,896		18,121			(52,017	)		636
Treasury stock		(722,653	)		—		—			—			(722,653	)
Additional paid-in-capital		1,026,157			117,737		347,151			(464,888	)		1,026,157
Retained earnings (deficit)		2,011,801			555,288		(113,428	)		(441,860	)		2,011,801

Total Steel Dynamics, Inc. equity		2,315,941			706,921		251,844			(958,765	)		2,315,941
Noncontrolling interests		—			—		(16,041	)		—			(16,041	)

Total equity		2,315,941			706,921		235,803			(958,765	)		2,299,900

Total liabilities and equity	$	5,223,822		$	3,211,546	$	614,677		$	(3,070,819	)	$	5,979,226

Condensed Consolidating Statements of Operations (in thousands)

For the Year Ended, December 31, 2012	Parent			Guarantors			Combined Non-Guarantors			Consolidating Adjustments			Total Consolidated

Net sales	$	3,431,978		$	8,322,995		$	177,527		$	(4,642,266	)	$	7,290,234
Costs of goods sold		2,977,756			7,906,392			257,604			(4,571,416	)		6,570,336

Gross profit (loss)		454,222			416,603			(80,077	)		(70,850	)		719,898
Selling, general and administrative		102,142			218,515			24,081			(16,005	)		328,733

Operating income (loss)		352,080			198,088			(104,158	)		(54,845	)		391,165
Interest expense, net of capitalized interest		104,058			53,186			6,630			(5,289	)		158,585
Other (income) expense, net		28,677			(1,531	)		(3,921	)		5,289			28,514

Income (loss) before income taxes and equity in net income of subsidiaries		219,345			146,433			(106,867	)		(54,845	)		204,066
Income taxes		26,611			51,011			247			(16,084	)		61,785

		192,734			95,422			(107,114	)		(38,761	)		142,281
Equity in net loss of subsidiaries		(29,183	)		—			—			29,183			—
Net loss attributable to noncontrolling interests		—			—			21,270			—			21,270

Net income (loss) attributable to Steel Dynamics, Inc.	$	163,551		$	95,422		$	(85,844	)	$	(9,578	)	$	163,551

For the Year Ended, December 31, 2011	Parent			Guarantors			Combined Non-Guarantors			Consolidating Adjustments			Total Consolidated

Net sales	$	3,701,928		$	9,062,305		$	190,739		$	(4,957,472	)	$	7,997,500
Costs of goods sold		3,099,941			8,604,620			251,528			(4,890,107	)		7,065,982

Gross profit (loss)		601,987			457,685			(60,789	)		(67,365	)		931,518
Selling, general and administrative		135,509			217,717			9,184			(15,712	)		346,698

Operating income (loss)		466,478			239,968			(69,973	)		(51,653	)		584,820
Interest expense, net of capitalized interest		104,008			71,487			8,784			(7,302	)		176,977
Other (income) expense, net		(12,663	)		(8,012	)		(3,209	)		7,408			(16,476	)

Income (loss) before income taxes and equity in net income of subsidiaries		375,133			176,493			(75,548	)		(51,759	)		424,319
Income taxes (benefit)		111,532			66,734			(151	)		(19,488	)		158,627

		263,601			109,759			(75,397	)		(32,271	)		265,692
Equity in net income of subsidiaries		14,519			—			—			(14,519	)		—
Net loss attributable to noncontrolling interests		—			—			12,428			—			12,428

Net income (loss) attributable to Steel Dynamics, Inc.	$	278,120		$	109,759		$	(62,969	)	$	(46,790	)	$	278,120

For the Year Ended, December 31, 2010	Parent			Guarantors			Combined Non-Guarantors			Consolidating Adjustments			Total Consolidated

Net sales	$	2,866,541		$	7,067,399		$	118,141		$	(3,751,194	)	$	6,300,887
Costs of goods sold		2,467,780			6,701,621			164,400			(3,708,580	)		5,625,221

Gross profit (loss)		398,761			365,778			(46,259	)		(42,614	)		675,666
Selling, general and administrative		98,410			215,723			8,724			(11,944	)		310,913

Operating income (loss)		300,351			150,055			(54,983	)		(30,670	)		364,753
Interest expense, net of capitalized interest		99,639			67,659			13,168			(10,237	)		170,229
Other (income) expense, net		(14,629	)		(15,123	)		(296	)		11,113			(18,935	)

Income (loss) before income taxes and equity in net income of subsidiaries		215,341			97,519			(67,855	)		(31,546	)		213,459
Income taxes (benefit)		84,718			36,325			(26,477	)		(10,706	)		83,860

		130,623			61,194			(41,378	)		(20,840	)		129,599
Equity in net income of subsidiaries		10,086			—			—			(10,086	)		—
Net loss attributable to noncontrolling interests		—			—			11,110			—			11,110

Net income (loss) attributable to Steel Dynamics, Inc.	$	140,709		$	61,194		$	(30,268	)	$	(30,926	)	$	140,709

Condensed Consolidating Statements of Cash Flows (in thousands)

For the Year Ended, December 31, 2012	Parent			Guarantors			Combined Non-Guarantors			Consolidating Adjustments			Total Consolidated

Net cash provided by (used in) operating activities	$	306,613		$	209,579		$	(76,363	)	$	5,865		$	445,694
Net cash used in investing activities		(104,242	)		(107,274	)		(95,314	)		115,229			(191,601	)
Financing activities
Issuance of long term debt		1,025,257			—			111,085			(86,373	)		1,049,969
Repayments of long term debt		(1,213,022	)		(29,901	)		(115,162	)		99,243			(1,258,842	)
Other		7,028			(89,428	)		156,300			(133,964	)		(60,064	)

Net cash provided by (used in) financing activities		(180,737	)		(119,329	)		152,223			(121,094	)		(268,937	)

Increase (decrease) in cash and equivalents		21,634			(17,024	)		(19,454	)		—			(14,844	)
Cash and equivalents at beginning of period		301,073			58,699			30,989			—			390,761

Cash and equivalents at end of period	$	322,707		$	41,675		$	11,535		$	—		$	375,917

For the Year Ended, December 31, 2011	Parent			Guarantors			Combined Non-Guarantors			Consolidating Adjustments			Total Consolidated

Net cash provided by (used in) operating activities	$	380,171		$	173,574		$	(68,110	)	$	720		$	486,355
Net cash used in investing activities		(230,314	)		(50,576	)		(65,144	)		110,197			(235,837	)
Financing activities
Issuance of long term debt		—			10,103			101,686			(101,686	)		10,103
Repayments of long term debt		(6,505	)		(1,075	)		(82,241	)		82,081			(7,740	)
Other		(15,842	)		(83,955	)		142,476			(91,312	)		(48,633	)

Net cash provided by (used in) financing activities		(22,347	)		(74,927	)		161,921			(110,917	)		(46,270	)

Increase in cash and equivalents		127,510			48,071			28,667			—			204,248
Cash and equivalents at beginning of period		173,563			10,628			2,322			—			186,513

Cash and equivalents at end of period	$	301,073		$	58,699		$	30,989		$	—		$	390,761

For the Year Ended, December 31, 2010	Parent			Guarantors			Combined Non-Guarantors			Consolidating Adjustments			Total Consolidated

Net cash provided by (used in) operating activities	$	262,155		$	17,011		$	(109,221	)	$	(638	)	$	169,307
Net cash used in investing activities		(38,811	)		(51,414	)		(59,491	)		638			(149,078	)
Financing activities
Issuance of long term debt		554,001			—			110,743			(108,191	)		556,553
Repayments of long term debt		(361,383	)		14,979			(559	)		—			(346,963	)
Other		(242,829	)		23,690			58,634			108,191			(52,314	)

Net cash provided by (used in) financing activities		(50,211	)		38,669			168,818			—			157,276

Increase in cash and equivalents		173,133			4,266			106			—			177,505
Cash and equivalents at beginning of period		430			6,362			2,216			—			9,008

Cash and equivalents at end of period	$	173,563		$	10,628		$	2,322		$	—		$	186,513