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 2014, 2019, 2020, 2022 and 2023. 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, 2012.

Condensed Consolidating Balance Sheets (in thousands)

						Combined			Consolidating			Total
As of June 30, 2013	Parent			Guarantors		Non-Guarantors			Adjustments			Consolidated
Cash and equivalents	$	213,717		$	14,726	$	15,310		$	—		$	243,753
Investments in short-term commercial paper	—			—		—			—			—
Accounts receivable, net	328,445			847,046		43,406			(445,770		)	773,127
Inventories	610,160			470,759		90,197			(2,617		)	1,168,499
Other current assets	63,513			6,012		5,860			(18,675		)	56,710
Total current assets	1,215,835			1,338,543		154,773			(467,062		)	2,242,089
Property, plant and equipment, net	1,029,669			649,739		555,965			(2,521		)	2,232,852
Intangible assets, net	—			401,104		—			—			401,104
Goodwill	—			735,281		—			—			735,281
Other assets, including investments in subs	2,672,022			25,627		8,516			(2,581,581		)	124,584
Total assets	$	4,917,526		$	3,150,294	$	719,254		$	(3,051,164	)	$	5,735,910

Accounts payable	$	143,874		$	208,660	$	79,910		$	(68,114	)	$	364,330
Accrued expenses	111,890			96,622		8,741			(35,975		)	181,278
Current maturities of long-term debt	308,628			300		41,163			(25,850		)	324,241
Total current liabilities	564,392			305,582		129,814			(129,939		)	869,849
Long-term debt	1,739,453			—		196,806			(162,016		)	1,774,243
Other liabilities	164,682			1,999,617		51,957			(1,639,909		)	576,347

Redeemable noncontrolling interests	—			—		104,734			—			104,734

Common stock	640			33,896		18,121			(52,017		)	640
Treasury stock	(718,373		)	—		—			—			(718,373		)
Additional paid-in-capital	1,050,470			117,737		502,450			(620,187		)	1,050,470
Retained earnings (deficit)	2,116,262			693,462		(246,366		)	(447,096		)	2,116,262
Total Steel Dynamics, Inc. equity	2,448,999			845,095		274,205			(1,119,300		)	2,448,999
Noncontrolling interests	—			—		(38,262		)	—			(38,262		)
Total equity	2,448,999			845,095		235,943			(1,119,300		)	2,410,737
Total liabilities and equity	$	4,917,526		$	3,150,294	$	719,254		$	(3,051,164	)	$	5,735,910

						Combined			Consolidating			Total
As of December 31, 2012	Parent			Guarantors		Non-Guarantors			Adjustments			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 equipment, 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 interests	—			—		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 Statements of Operations (in thousands)

For the three months ended,						Combined			Consolidating			Total
June 30, 2013	Parent			Guarantors		Non-Guarantors			Adjustments			Consolidated
Net sales	$	836,805		$	1,998,513	$	88,039		$	(1,122,017	)	$	1,801,340
Costs of goods sold	753,761			1,900,497		107,814			(1,108,424		)	1,653,648
Gross profit (loss)	83,044			98,016		(19,775		)	(13,593		)	147,692
Selling, general and administrative	24,916			54,764		2,673			(3,859		)	78,494
Operating income (loss)	58,128			43,252		(22,448		)	(9,734		)	69,198
Interest expense, net of capitalized interest	20,148			10,751		1,789			(1,223		)	31,465
Other (income) expense, net	(1,533		)	214		(1,149		)	1,222			(1,246		)
Income (loss) before income taxes and equity in net loss of subsidiaries	39,513			32,287		(23,088		)	(9,733		)	38,979
Income taxes (benefit)	5,621			12,214		1,382			(3,511		)	15,706
	33,892			20,073		(24,470		)	(6,222		)	23,273
Equity in net loss of subsidiaries	(4,934		)	—		—			4,934			—
Net loss attributable to noncontrolling interests	—			—		5,685			—			5,685
Net income (loss) attributable to Steel Dynamics, Inc.	$	28,958		$	20,073	$	(18,785	)	$	(1,288	)	$	28,958

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 loss 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 loss 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 six months ended,						Combined			Consolidating			Total
June 30, 2013	Parent			Guarantors		Non-Guarantors			Adjustments			Consolidated
Net sales	$	1,664,006		$	4,014,000	$	154,409		$	(2,235,379	)	$	3,597,036
Costs of goods sold	1,460,148			3,814,555		203,755			(2,205,378		)	3,273,080
Gross profit (loss)	203,858			199,445		(49,346		)	(30,001		)	323,956
Selling, general and administrative	53,602			108,756		4,811			(8,643		)	158,526
Operating income (loss)	150,256			90,689		(54,157		)	(21,358		)	165,430
Interest expense, net of capitalized interest	42,194			22,790		3,490			(2,380		)	66,094
Other (income) expense, net	(2,353		)	14		(2,332		)	2,379			(2,292		)
Income (loss) before income taxes and equity in net loss of subsidiaries	110,415			67,885		(55,315		)	(21,357		)	101,628
Income taxes (benefit)	17,015			25,133		2,081			(7,126		)	37,103
	93,400			42,752		(57,396		)	(14,231		)	64,525
Equity in net loss of subsidiaries	(16,227		)	—		—			16,227			—
Net loss attributable to noncontrolling interests	—			—		12,648			—			12,648
Net income (loss) attributable to Steel Dynamics, Inc.	$	77,173		$	42,752	$	(44,748	)	$	1,996		$	77,173

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 loss 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 loss 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

Condensed Consolidating Statements of Cash Flows (in thousands)

For the six months ended,							Combined			Consolidating			Total
June 30, 2013	Parent			Guarantors			Non-Guarantors			Adjustments			Consolidated
Net cash provided by (used in) operating activities	$	(6,011	)	$	98,049		$	(39,730	)	$	10,117		$	62,425
Net cash used in investing activities	(62,083		)	(24,118		)	(9,484		)	35,900			(59,785		)
Net cash provided by (used in) financing activities	(40,896		)	(100,880		)	52,989			(46,017		)	(134,804		)
Increase (decrease) in cash and equivalents	(108,990		)	(26,949		)	3,775			—			(132,164		)
Cash and equivalents at beginning of period	322,707			41,675			11,535			—			375,917
Cash and equivalents at end of period	$	213,717		$	14,726		$	15,310		$	—		$	243,753

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