Condensed Consolidating Information

3 Months Ended

Mar. 31, 2012

Condensed Consolidating Information

Condensed Consolidating Information

Note 10.  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 2012, 2014, 2015, 2016, and 2020. 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 for the company 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, 2011.

Condensed Consolidating Balance Sheets (in thousands)

						Combined			Consolidating			Total
As of March 31, 2012	Parent			Guarantors		Non-Guarantors			Adjustments			Consolidated
Cash and equivalents	$	273,952		$	67,989	$	15,868		$	—		$	357,809
Investments in short-term commercial paper	64,982			—		—			—			64,982
Accounts receivable, net	314,044			801,967		11,469			(338,306		)	789,174
Inventories	695,432			508,592		71,260			(4,343		)	1,270,941
Other current assets	53,772			6,271		1,944			(18,036		)	43,951
Total current assets	1,402,182			1,384,819		100,541			(360,685		)	2,526,857
Property, plant and equiment, net	1,043,186			663,035		496,065			(2,777		)	2,199,509
Intangible assets, net	—			442,277		—			—			442,277
Goodwill	—			743,441		—			—			743,441
Other assets, including investments in subs	2,788,045			32,191		9,555			(2,698,248		)	131,543
Total assets	$	5,233,413		$	3,265,763	$	606,161		$	(3,061,710	)	$	6,043,627
Accounts payable	$	158,774		$	314,741	$	22,117		$	(23,375	)	$	472,257
Accrued expenses	139,704			93,131		9,156			(32,013		)	209,978
Current maturities of long-term debt	434,489			300		42,072			(37,228		)	439,633
Total current liabilities	732,967			408,172		73,345			(92,616		)	1,121,868
Long-term debt	1,901,644			—		178,345			(147,970		)	1,932,019
Other liabilities	252,578			2,124,643		38,110			(1,832,076		)	583,255
Redeemable noncontrolling interest	—			—		73,924			—			73,924
Common stock	636			33,896		18,121			(52,017		)	636
Treasury stock	(721,024		)	—		—			—			(721,024		)
Additional paid-in-capital	1,031,043			117,737		368,598			(486,335		)	1,031,043
Retained earnings (deficit)	2,035,569			581,315		(130,619		)	(450,696		)	2,035,569
Total Steel Dynamics, Inc. equity	2,346,224			732,948		256,100			(989,048		)	2,346,224
Noncontrolling interests	—			—		(13,663		)	—			(13,663		)
Total equity	2,346,224			732,948		242,437			(989,048		)	2,332,561
Total liabilities and equity	$	5,233,413		$	3,265,763	$	606,161		$	(3,061,710	)	$	6,043,627

						Combined			Consolidating			Total
As of December 31, 2011	Parent			Guarantors		Non-Guarantors			Adjustments			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 three months ended,							Combined			Consolidating			Total
March 31, 2012	Parent			Guarantors			Non-Guarantors			Adjustments			Consolidated
Net sales	$	913,193		$	2,308,156		$	46,835		$	(1,286,144	)	$	1,982,040
Costs of goods sold	785,567			2,198,898			63,894			(1,267,583		)	1,780,776
Gross profit (loss)	127,626			109,258			(17,059		)	(18,561		)	201,264
Selling, general and administrative	27,566			54,555			2,459			(3,132		)	81,448
Operating income (loss)	100,060			54,703			(19,518		)	(15,429		)	119,816
Interest expense, net of capitalized interest	27,217			13,606			1,710			(1,421		)	41,112
Other (income) expense, net	10,769			(1,064		)	(877		)	1,420			10,248
Income (loss) before income taxes and equity in net income of subsidiaries	62,074			42,161			(20,351		)	(15,428		)	68,456
Income taxes (benefit)	15,870			16,134			353			(5,678		)	26,679
	46,204			26,027			(20,704		)	(9,750		)	41,777
Equity in net loss of subsidiaries	(4,427		)	—			—			4,427			—
Net loss attributable to noncontrolling interests	—			—			3,898			—			3,898
Net income (loss) attributable to Steel Dynamics, Inc.	$	41,777		$	26,027		$	(16,806	)	$	(5,323	)	$	45,675

For the three months ended,							Combined			Consolidating			Total
March 31, 2011	Parent			Guarantors			Non-Guarantors			Adjustments			Consolidated
Net sales	$	912,817		$	2,301,547		$	47,522		$	(1,245,917	)	$	2,015,969
Costs of goods sold	729,541			2,165,378			57,595			(1,232,299		)	1,720,215
Gross profit	183,276			136,169			(10,073		)	(13,618		)	295,754
Selling, general and administrative	36,664			55,893			2,122			(4,251		)	90,428
Operating income	146,612			80,276			(12,195		)	(9,367		)	205,326
Interest expense, net of capitalized interest	25,696			17,262			2,314			(1,926		)	43,346
Other (income) expense, net	(3,179		)	(2,675		)	(718		)	2,005			(4,567		)
Income before income taxes and equity in net income of subsidiaries	124,095			65,689			(13,791		)	(9,446		)	166,547
Income taxes	40,929			24,904			43			(3,559		)	62,317
	83,166			40,785			(13,834		)	(5,887		)	104,230
Equity in net loss of subsidiaries	22,737			—			—			(22,737		)	—
Net loss attributable to noncontrolling interests	—			—			1,673			—			1,673
Net income attributable to Steel Dynamics, Inc.	$	105,903		$	40,785		$	(12,161	)	$	(28,624	)	$	105,903

Condensed Consolidating Statements of Cash Flows (in thousands)

For the three months ended,							Combined			Consolidating			Total
March 31, 2012	Parent			Guarantors			Non-Guarantors			Adjustments			Consolidated
Net cash provided by (used in) operating activities	$	(31,015	)	$	58,900		$	(7,596	)	$	1,132		$	21,421
Net cash used in investing activities	(3,436		)	(40,889		)	(21,708		)	18,614			(47,419		)
Net cash provided by (used in) financing activities	7,330			(8,721		)	14,183			(19,746		)	(6,954		)
Increase (decrease) in cash and equivalents	(27,121		)	9,290			(15,121		)	—			(32,952		)
Cash and equivalents at beginning of period	301,073			58,699			30,989			—			390,761
Cash and equivalents at end of period	$	273,952		$	67,989		$	15,868		$	—		$	357,809

For the three months ended,							Combined			Consolidating		Total
March 31, 2011	Parent			Guarantors			Non-Guarantors			Adjustments		Consolidated
Net cash provided by (used in) operating activities	$	53,444		$	(39,355	)	$	(10,152	)	$	—	$	3,937
Net cash used in investing activities	(5,843		)	(10,554		)	(3,439		)	—		(19,836		)
Net cash provided by (used in) financing activities	(73,412		)	48,257			15,351			—		(9,804		)
Increase (decrease) in cash and equivalents	(25,811		)	(1,652		)	1,760			—		(25,703		)
Cash and equivalents at beginning of period	173,563			10,628			2,322			—		186,513
Cash and equivalents at end of period	$	147,752		$	8,976		$	4,082		$	—	$	160,810