Transactions with Affiliated Companies

12 Months Ended

Dec. 31, 2014

Transactions with Affiliated Companies

Transactions with Affiliated Companies

Note 10. Transactions with Affiliated Companies

        The company sells flat roll products and occasionally purchases ferrous materials from Heidtman. The president and chief executive officer of Heidtman is a member of the company's board of directors and a stockholder of the company. Transactions with Heidtman for the years ended December 31, are as follows (in thousands):

	2014			2013			2012
Sales	$	234,608		$	236,075		$	244,531
Percentage of consolidated net sales		3	%		3	%		3	%
Accounts receivable		35,447			51,760			38,093
Purchases		7,639			5,562			11,372
Accounts payable		236			391			800

        On September 15, 2009, the company purchased from Heidtman a 32 acre tract of land adjacent to the company's Flat Roll Division, together with a 387,000 square foot building for a purchase price of $9.3 million. Contemporaneously the company purchased from Heidtman equipment located at this site for a purchase price of $18.6 million. Immediately following the acquisition of this property, the company leased the real estate and equipment back to Heidtman for a term of five years, which the company accounted for as a direct financing lease. Heidtman used the real estate and equipment in its steel processing operations, paying the company monthly rental of approximately $289,000. At any time during the lease term, Heidtman had the option to repurchase the real estate and equipment for $27.9 million, which they exercised in January 2014, satisfying the $27.9 million direct financing lease receivable, which was reflected in other non-current assets in the company's December 31, 2013, balance sheet.

        The company also purchases and sells recycled and scrap metal with other smaller affiliated companies. These transactions are as follows (in thousands):

	2014		2013		2012
Sales	$	39,777	$	49,748	$	38,286
Accounts receivable		7,543		4,632		4,771
Purchases		279,177		111,048		238,114
Accounts payable		21,029		9,936		14,344