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 September 30, 2013	Parent			Guarantors		Non-Guarantors			Adjustments			Consolidated
Cash and equivalents	$	322,212		$	37,710	$	10,134		$	—		$	370,056
Investments in short-term commercial paper	—			—		—			—			—
Accounts receivable, net	311,333			900,928		35,210			(474,598		)	772,873
Inventories	622,008			471,537		102,803			(4,316		)	1,192,032
Other current assets	57,805			7,301		3,987			(18,739		)	50,354
Total current assets	1,313,358			1,417,476		152,134			(497,653		)	2,385,315
Property, plant and equipment, net	1,042,112			634,552		566,873			(2,470		)	2,241,067
Intangible assets, net	—			393,531		—			—			393,531
Goodwill	—			733,650		—			—			733,650
Other assets, including investments in subs	2,621,656			25,367		8,266			(2,534,547		)	120,742
Total assets	$	4,977,126		$	3,204,576	$	727,273		$	(3,034,670	)	$	5,874,305

Accounts payable	$	155,868		$	257,009	$	83,830		$	(70,301	)	$	426,406
Accrued expenses	119,919			105,444		10,014			(42,922		)	192,455
Current maturities of long-term debt	312,076			300		46,060			(23,095		)	335,341
Total current liabilities	587,863			362,753		139,904			(136,318		)	954,202
Long-term debt	1,732,445			—		202,825			(161,651		)	1,773,619
Other liabilities	164,381			1,968,990		44,567			(1,589,242		)	588,696

Redeemable noncontrolling interests	—			—		110,054			—			110,054

Common stock	641			33,896		18,121			(52,017		)	641
Treasury stock	(718,373		)	—		—			—			(718,373		)
Additional paid-in-capital	1,060,780			117,737		525,230			(642,967		)	1,060,780
Retained earnings (deficit)	2,149,389			721,200		(268,725		)	(452,475		)	2,149,389
Total Steel Dynamics, Inc. equity	2,492,437			872,833		274,626			(1,147,459		)	2,492,437
Noncontrolling interests	—			—		(44,703		)	—			(44,703		)
Total equity	2,492,437			872,833		229,923			(1,147,459		)	2,447,734
Total liabilities and equity	$	4,977,126		$	3,204,576	$	727,273		$	(3,034,670	)	$	5,874,305

						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
September 30, 2013	Parent			Guarantors		Non-Guarantors			Adjustments			Consolidated
Net sales	$	902,280		$	2,136,327	$	91,198		$	(1,218,067	)	$	1,911,738
Costs of goods sold	760,589			2,025,470		114,408			(1,185,921		)	1,714,546
Gross profit (loss)	141,691			110,857		(23,210		)	(32,146		)	197,192
Selling, general and administrative	30,073			55,348		2,622			(4,124		)	83,919
Operating income (loss)	111,618			55,509		(25,832		)	(28,022		)	113,273
Interest expense, net of capitalized interest	19,733			10,561		1,915			(1,239		)	30,970
Other (income) expense, net	(2,423		)	631		(1,301		)	1,241			(1,852		)
Income (loss) before income taxes and equity in net loss of subsidiaries	94,308			44,317		(26,446		)	(28,024		)	84,155
Income taxes (benefit)	24,930			16,579		2,004			(10,448		)	33,065
	69,378			27,738		(28,450		)	(17,576		)	51,090
Equity in net loss of subsidiaries	(11,892		)	—		—			11,892			—
Net loss attributable to noncontrolling interests	—			—		6,396			—			6,396
Net income (loss) attributable to Steel Dynamics, Inc.	$	57,486		$	27,738	$	(22,054	)	$	(5,684	)	$	57,486

For the three months ended,						Combined			Consolidating			Total
September 30, 2012	Parent			Guarantors		Non-Guarantors			Adjustments			Consolidated
Net sales	$	785,168		$	1,918,774	$	48,167		$	(1,058,719	)	$	1,693,390
Costs of goods sold	685,074			1,823,447		69,520			(1,041,052		)	1,536,989
Gross profit (loss)	100,094			95,327		(21,353		)	(17,667		)	156,401
Selling, general and administrative	19,927			53,023		14,032			(3,302		)	83,680
Operating income (loss)	80,167			42,304		(35,385		)	(14,365		)	72,721
Interest expense, net of capitalized interest	27,153			13,997		1,619			(1,279		)	41,490
Other (income) expense, net	23,345			434		(1,046		)	1,277			24,010
Income (loss) before income taxes and equity in net income of subsidiaries	29,669			27,873		(35,958		)	(14,363		)	7,221
Income taxes (benefit)	(2,771		)	8,668		73			(4,854		)	1,116
	32,440			19,205		(36,031		)	(9,509		)	6,105
Equity in net loss of subsidiaries	(19,607		)	—		—			19,607			—
Net loss attributable to noncontrolling interests	—			—		6,728			—			6,728
Net income (loss) attributable to Steel Dynamics, Inc.	$	12,833		$	19,205	$	(29,303	)	$	10,098		$	12,833

For the nine months ended,						Combined			Consolidating			Total
September 30, 2013	Parent			Guarantors		Non-Guarantors			Adjustments			Consolidated
Net sales	$	2,566,286		$	6,150,327	$	245,607		$	(3,453,446	)	$	5,508,774
Costs of goods sold	2,220,737			5,840,025		318,163			(3,391,299		)	4,987,626
Gross profit (loss)	345,549			310,302		(72,556		)	(62,147		)	521,148
Selling, general and administrative	83,675			164,104		7,433			(12,767		)	242,445
Operating income (loss)	261,874			146,198		(79,989		)	(49,380		)	278,703
Interest expense, net of capitalized interest	61,927			33,351		5,405			(3,619		)	97,064
Other (income) expense, net	(4,776		)	645		(3,633		)	3,620			(4,144		)
Income (loss) before income taxes and equity in net loss of subsidiaries	204,723			112,202		(81,761		)	(49,381		)	185,783
Income taxes (benefit)	41,945			41,712		4,085			(17,574		)	70,168
	162,778			70,490		(85,846		)	(31,807		)	115,615
Equity in net loss of subsidiaries	(28,119		)	—		—			28,119			—
Net loss attributable to noncontrolling interests	—			—		19,044			—			19,044
Net income (loss) attributable to Steel Dynamics, Inc.	$	134,659		$	70,490	$	(66,802	)	$	(3,688	)	$	134,659

For the nine months ended,							Combined			Consolidating			Total
September 30, 2012	Parent			Guarantors			Non-Guarantors			Adjustments			Consolidated
Net sales	$	2,625,152		$	6,408,166		$	131,024		$	(3,579,109	)	$	5,585,233
Costs of goods sold	2,275,227			6,106,504			189,477			(3,525,776		)	5,045,432
Gross profit (loss)	349,925			301,662			(58,453		)	(53,333		)	539,801
Selling, general and administrative	72,196			160,513			20,940			(10,084		)	243,565
Operating income (loss)	277,729			141,149			(79,393		)	(43,249		)	296,236
Interest expense, net of capitalized interest	81,583			41,208			5,068			(4,151		)	123,708
Other (income) expense, net	31,419			(436		)	(2,767		)	4,150			32,366
Income (loss) before income taxes and equity in net income of subsidiaries	164,727			100,377			(81,694		)	(43,248		)	140,162
Income taxes (benefit)	31,809			36,354			444			(15,632		)	52,975
	132,918			64,023			(82,138		)	(27,616		)	87,187
Equity in net loss of subsidiaries	(29,938		)	—			—			29,938			—
Net loss attributable to noncontrolling interests	—			—			15,793			—			15,793
Net income (loss) attributable to Steel Dynamics, Inc.	$	102,980		$	64,023		$	(66,345	)	$	2,322		$	102,980

Condensed Consolidating Statements of Cash Flows (in thousands)

For the nine months ended,							Combined			Consolidating			Total
September 30, 2013	Parent			Guarantors			Non-Guarantors			Adjustments			Consolidated
Net cash provided by (used in) operating activities	$	126,404		$	164,383		$	(56,636	)	$	11,540		$	245,691
Net cash used in investing activities	(115,979		)	(28,654		)	(20,230		)	53,760			(111,103		)
Net cash provided by (used in) financing activities	(10,920		)	(139,694		)	75,465			(65,300		)	(140,449		)
Decrease in cash and equivalents	(495		)	(3,965		)	(1,401		)	—			(5,861		)
Cash and equivalents at beginning of period	322,707			41,675			11,535			—			375,917
Cash and equivalents at end of period	$	322,212		$	37,710		$	10,134		$	—		$	370,056

For the nine months ended,							Combined			Consolidating			Total
September 30, 2012	Parent			Guarantors			Non-Guarantors			Adjustments			Consolidated
Net cash provided by (used in) operating activities	$	145,121		$	128,705		$	(39,928	)	$	5,488		$	239,386
Net cash used in investing activities	(19,249		)	(74,342		)	(81,123		)	80,479			(94,235		)
Net cash provided by (used in) financing activities	(183,982		)	(86,072		)	107,229			(85,967		)	(248,792		)
Decrease in cash and equivalents	(58,110		)	(31,709		)	(13,822		)	—			(103,641		)
Cash and equivalents at beginning of period	301,073			58,699			30,989			—			390,761
Cash and equivalents at end of period	$	242,963		$	26,990		$	17,167		$	—		$	287,120