Condensed Consolidating Information

6 Months Ended

Jun. 30, 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 June 30, 2012	Parent			Guarantors		Non-Guarantors			Adjustments			Consolidated
Cash and equivalents	$	304,807		$	105,248	$	10,883		$	—		$	420,938
Investments in short-term commercial paper	9,998			—		—			—			9,998
Accounts receivable, net	302,173			767,638		11,230			(365,601		)	715,440
Inventories	648,242			522,961		84,899			(3,949		)	1,252,153
Other current assets	71,774			7,755		1,910			(21,624		)	59,815
Total current assets	1,336,994			1,403,602		108,922			(391,174		)	2,458,344
Property, plant and equiment, net	1,028,099			656,804		526,482			(2,725		)	2,208,660
Intangible assets, net	—			433,559		—			—			433,559
Goodwill	—			741,817		—			—			741,817
Other assets, including investments in subs	2,819,033			31,869		9,417			(2,731,319		)	129,000
Total assets	$	5,184,126		$	3,267,651	$	644,821		$	(3,125,218	)	$	5,971,380
Accounts payable	$	123,796		$	268,860	$	39,208		$	(38,690	)	$	393,174
Accrued expenses	110,034			100,385		11,665			(35,721		)	186,363
Current maturities of long-term debt	434,498			300		25,608			(20,494		)	439,912
Total current liabilities	668,328			369,545		76,481			(94,905		)	1,019,449
Long-term debt	1,898,084			—		215,034			(185,021		)	1,928,097
Other liabilities	246,365			2,146,367		41,360			(1,841,818		)	592,274
Redeemable noncontrolling interest	—			—		77,424			—			77,424
Common stock	636			33,896		18,121			(52,017		)	636
Treasury stock	(720,481		)	—		—			—			(720,481		)
Additional paid-in-capital	1,033,086			117,737		384,888			(502,625		)	1,033,086
Retained earnings (deficit)	2,058,108			600,106		(151,274		)	(448,832		)	2,058,108
Total Steel Dynamics, Inc. equity	2,371,349			751,739		251,735			(1,003,474		)	2,371,349
Noncontrolling interests	—			—		(17,213		)	—			(17,213		)
Total equity	2,371,349			751,739		234,522			(1,003,474		)	2,354,136
Total liabilities and equity	$	5,184,126		$	3,267,651	$	644,821		$	(3,125,218	)	$	5,971,380

						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
June 30, 2012	Parent			Guarantors		Non-Guarantors			Adjustments			Consolidated
Net sales	$	926,791		$	2,181,236	$	36,022		$	(1,234,246	)	$	1,909,803
Costs of goods sold	804,586			2,084,159		56,063			(1,217,141		)	1,727,667
Gross profit (loss)	122,205			97,077		(20,041		)	(17,105		)	182,136
Selling, general and administrative	24,703			52,935		4,449			(3,650		)	78,437
Operating income (loss)	97,502			44,142		(24,490		)	(13,455		)	103,699
Interest expense, net of capitalized interest	27,213			13,605		1,739			(1,451		)	41,106
Other (income) expense, net	(2,695		)	194		(844		)	1,453			(1,892		)
Income (loss) before income taxes and equity in net income of subsidiaries	72,984			30,343		(25,385		)	(13,457		)	64,485
Income taxes (benefit)	18,710			11,552		18			(5,100		)	25,180
	54,274			18,791		(25,403		)	(8,357		)	39,305
Equity in net income of subsidiaries	(9,802		)	—		—			9,802			—
Net loss attributable to noncontrolling interests	—			—		5,167			—			5,167
Net income (loss) attributable to Steel Dynamics, Inc.	$	44,472		$	18,791	$	(20,236	)	$	1,445		$	44,472

For the three months ended,							Combined			Consolidating			Total
June 30, 2011	Parent			Guarantors			Non-Guarantors			Adjustments			Consolidated
Net sales	$	952,487		$	2,344,958		$	50,943		$	(1,268,657	)	$	2,079,731
Costs of goods sold	754,436			2,239,226			66,156			(1,256,473		)	1,803,345
Gross profit (loss)	198,051			105,732			(15,213		)	(12,184		)	276,386
Selling, general and administrative	35,528			54,094			1,948			(3,403		)	88,167
Operating income (loss)	162,523			51,638			(17,161		)	(8,781		)	188,219
Interest expense, net of capitalized interest	26,125			18,264			2,413			(1,990		)	44,812
Other (income) expense, net	(3,704		)	(3,089		)	(968		)	2,016			(5,745		)
Income (loss) before income taxes and equity in net income of subsidiaries	140,102			36,463			(18,606		)	(8,807		)	149,152
Income taxes (benefit)	42,811			13,768			(56		)	(3,197		)	53,326
	97,291			22,695			(18,550		)	(5,610		)	95,826
Equity in net income of subsidiaries	1,419			—			—			(1,419		)	—
Net loss attributable to noncontrolling interests	—			—			2,884			—			2,884
Net income (loss) attributable to Steel Dynamics, Inc.	$	98,710		$	22,695		$	(15,666	)	$	(7,029	)	$	98,710

For the six months ended,							Combined			Consolidating			Total
June 30, 2012	Parent			Guarantors			Non-Guarantors			Adjustments			Consolidated
Net sales	$	1,839,984		$	4,489,392		$	82,857		$	(2,520,390	)	$	3,891,843
Costs of goods sold	1,590,153			4,283,057			119,957			(2,484,724		)	3,508,443
Gross profit (loss)	249,831			206,335			(37,100		)	(35,666		)	383,400
Selling, general and administrative	52,269			107,490			6,908			(6,782		)	159,885
Operating income (loss)	197,562			98,845			(44,008		)	(28,884		)	223,515
Interest expense, net of capitalized interest	54,430			27,211			3,449			(2,872		)	82,218
Other (income) expense, net	8,074			(870		)	(1,721		)	2,873			8,356
Income (loss) before income taxes and equity in net income of subsidiaries	135,058			72,504			(45,736		)	(28,885		)	132,941
Income taxes (benefit)	34,580			27,686			371			(10,778		)	51,859
	100,478			44,818			(46,107		)	(18,107		)	81,082
Equity in net income of subsidiaries	(10,331		)	—			—			10,331			—
Net loss attributable to noncontrolling interests	—			—			9,065			—			9,065
Net income (loss) attributable to Steel Dynamics, Inc.	$	90,147		$	44,818		$	(37,042	)	$	(7,776	)	$	90,147

For the six months ended,							Combined			Consolidating			Total
June 30, 2011	Parent			Guarantors			Non-Guarantors			Adjustments			Consolidated
Net sales	$	1,865,304		$	4,646,505		$	98,465		$	(2,514,574	)	$	4,095,700
Costs of goods sold	1,483,977			4,404,604			123,751			(2,488,772		)	3,523,560
Gross profit (loss)	381,327			241,901			(25,286		)	(25,802		)	572,140
Selling, general and administrative	72,192			109,987			4,070			(7,654		)	178,595
Operating income (loss)	309,135			131,914			(29,356		)	(18,148		)	393,545
Interest expense, net of capitalized interest	51,821			35,526			4,727			(3,916		)	88,158
Other (income) expense, net	(6,883		)	(5,764		)	(1,686		)	4,021			(10,312		)
Income (loss) before income taxes and equity in net income of subsidiaries	264,197			102,152			(32,397		)	(18,253		)	315,699
Income taxes (benefit)	83,740			38,672			(13		)	(6,756		)	115,643
	180,457			63,480			(32,384		)	(11,497		)	200,056
Equity in net income of subsidiaries	24,156			—			—			(24,156		)	—
Net loss attributable to noncontrolling interests	—			—			4,557			—			4,557
Net income (loss) attributable to Steel Dynamics, Inc.	$	204,613		$	63,480		$	(27,827	)	$	(35,653	)	$	204,613

Condensed Consolidating Statements of Cash Flows (in thousands)

For the six months ended,							Combined			Consolidating			Total
June 30, 2012	Parent			Guarantors			Non-Guarantors			Adjustments			Consolidated
Net cash provided by (used in) operating activities	$	24,722		$	116,105		$	(23,941	)	$	5,134		$	122,020
Net cash provided by (used in) investing activities	8,922			(55,747		)	(54,773		)	55,052			(46,546		)
Net cash provided by (used in) financing activities	(29,910		)	(13,809		)	58,608			(60,186		)	(45,297		)
Increase (decrease) in cash and equivalents	3,734			46,549			(20,106		)	—			30,177
Cash and equivalents at beginning of period	301,073			58,699			30,989			—			390,761
Cash and equivalents at end of period	$	304,807		$	105,248		$	10,883		$	—		$	420,938

For the six months ended,							Combined			Consolidating			Total
June 30, 2011	Parent			Guarantors			Non-Guarantors			Adjustments			Consolidated
Net cash provided by (used in) operating activities	$	158,937		$	34,056		$	(14,392	)	$	(8,667	)	$	169,934
Net cash used in investing activities	(14,734		)	(25,017		)	(12,919		)	—			(52,670		)
Net cash provided by (used in) financing activities	(53,645		)	(10,497		)	29,389			8,667			(26,086		)
Increase (decrease) in cash and equivalents	90,558			(1,458		)	2,078			—			91,178
Cash and equivalents at beginning of period	173,563			10,628			2,322			—			186,513
Cash and equivalents at end of period	$	264,121		$	9,170		$	4,400		$	—		$	277,691