Note 9. 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, 2013.

Condensed Consolidating Balance Sheets (in thousands)

						Combined			Consolidating			Total
	Parent			Guarantors		Non-Guarantors			Adjustments			Consolidated
As of March 31, 2014
Cash and equivalents	$	281,376		$	48,071	$	13,472		$	—		$	342,919
Accounts receivable, net	320,996			1,012,562		42,095			(564,553		)	811,100
Inventories	728,638			502,339		105,553			(4,429		)	1,332,101
Other current assets	48,969			6,968		5,048			(18,751		)	42,234
Total current assets	1,379,979			1,569,940		166,168			(587,733		)	2,528,354
Property, plant and equipment, net	1,042,424			598,946		558,500			(2,367		)	2,197,503
Intangible assets, net	—			379,488		—			—			379,488
Goodwill	—			730,360		—			—			730,360
Other assets, including investments in subs	2,604,100			21,572		7,352			(2,554,872		)	78,152
Total assets	$	5,026,503		$	3,300,306	$	732,020		$	(3,144,972	)	$	5,913,857

Accounts payable	$	178,731		$	266,205	$	89,012		$	(116,780	)	$	417,168
Accrued expenses	124,762			107,284		10,050			(51,555		)	190,541
Current maturities of long-term debt	318,969			300		66,580			(42,127		)	343,722
Total current liabilities	622,462			373,789		165,642			(210,462		)	951,431
Long-term debt	1,714,982			—		182,506			(142,460		)	1,755,028
Other liabilities	120,264			2,004,584		30,844			(1,582,624		)	573,068

Redeemable noncontrolling interests	—			—		121,834			—			121,834

Common stock	646			33,896		18,121			(52,017		)	646
Treasury stock	(716,545		)	—		—			—			(716,545		)
Additional paid-in-capital	1,092,281			117,737		575,877			(693,614		)	1,092,281
Retained earnings (deficit)	2,192,413			770,300		(306,505		)	(463,795		)	2,192,413
Total Steel Dynamics, Inc. equity	2,568,795			921,933		287,493			(1,209,426		)	2,568,795
Noncontrolling interests	—			—		(56,299		)	—			(56,299		)
Total equity	2,568,795			921,933		231,194			(1,209,426		)	2,512,496
Total liabilities and equity	$	5,026,503		$	3,300,306	$	732,020		$	(3,144,972	)	$	5,913,857

						Combined			Consolidating			Total
	Parent			Guarantors		Non-Guarantors			Adjustments			Consolidated
As of December 31, 2013
Cash and equivalents	$	320,866		$	61,148	$	13,142		$	—		$	395,156
Accounts receivable, net	309,691			874,707		32,018			(495,816		)	720,600
Inventories	673,763			557,640		91,199			(7,855		)	1,314,747
Other current assets	50,228			8,399		3,259			(18,755		)	43,131
Total current assets	1,354,548			1,501,894		139,618			(522,426		)	2,473,634
Property, plant and equipment, net	1,046,093			619,617		562,843			(2,419		)	2,226,134
Intangible assets, net	—			386,159		—			—			386,159
Goodwill	—			731,996		—			—			731,996
Other assets, including investments in subs	2,630,411			21,789		8,092			(2,545,209		)	115,083
Total assets	$	5,031,052		$	3,261,455	$	710,553		$	(3,070,054	)	$	5,933,006

Accounts payable	$	160,255		$	258,406	$	60,987		$	(64,716	)	$	414,932
Accrued expenses	142,055			115,182		10,694			(49,229		)	218,702
Current maturities of long-term debt	315,521			300		52,163			(26,440		)	341,544
Total current liabilities	617,831			373,888		123,844			(140,385		)	975,178
Long-term debt	1,725,433			—		204,385			(163,773		)	1,766,045
Other liabilities	140,465			1,986,260		34,895			(1,582,206		)	579,414

Redeemable noncontrolling interest	—			—		116,514			—			116,514

Common stock	645			33,896		18,121			(52,017		)	645
Treasury stock	(718,529		)	—		—			—			(718,529		)
Additional paid-in-capital	1,085,694			117,737		552,946			(670,683		)	1,085,694
Retained earnings (deficit)	2,179,513			749,674		(288,684		)	(460,990		)	2,179,513
Total Steel Dynamics, Inc. equity	2,547,323			901,307		282,383			(1,183,690		)	2,547,323
Noncontrolling interests	—			—		(51,468		)	—			(51,468		)
Total equity	2,547,323			901,307		230,915			(1,183,690		)	2,495,855
Total liabilities and equity	$	5,031,052		$	3,261,455	$	710,553		$	(3,070,054	)	$	5,933,006

Condensed Consolidating Statements of Operations (in thousands)

For the three months ended,						Combined			Consolidating			Total
March 31, 2014	Parent			Guarantors		Non-Guarantors			Adjustments			Consolidated
Net sales	$	863,563		$	2,112,389	$	105,849		$	(1,251,719	)	$	1,830,082
Costs of goods sold	761,395			2,015,576		123,573			(1,233,766		)	1,666,778
Gross profit (loss)	102,168			96,813		(17,724		)	(17,953		)	163,304
Selling, general and administrative	28,834			54,289		3,408			(4,159		)	82,372
Operating income (loss)	73,334			42,524		(21,132		)	(13,794		)	80,932
Interest expense, net of capitalized interest	19,361			10,561		1,880			(1,233		)	30,569
Other (income) expense, net	(976		)	395		(1,284		)	1,234			(631		)
Income (loss) before income taxes and equity in net income of subsidiaries	54,949			31,568		(21,728		)	(13,795		)	50,994
Income taxes (benefit)	9,925			10,942		696			(4,267		)	17,296
	45,024			20,626		(22,424		)	(9,528		)	33,698
Equity in net loss of subsidiaries	(6,445		)	—		—			6,445			—
Net loss attributable to noncontrolling interests	—			—		4,881			—			4,881
Net income (loss) attributable to Steel Dynamics, Inc.	$	38,579		$	20,626	$	(17,543	)	$	(3,083	)	$	38,579

For the three months ended,							Combined			Consolidating			Total
March 31, 2013	Parent			Guarantors			Non-Guarantors			Adjustments			Consolidated
Net sales	$	827,201		$	2,015,487		$	66,370		$	(1,113,362	)	$	1,795,696
Costs of goods sold	706,387			1,914,058			95,941			(1,096,954		)	1,619,432
Gross profit (loss)	120,814			101,429			(29,571		)	(16,408		)	176,264
Selling, general and administrative	28,686			53,992			2,138			(4,784		)	80,032
Operating income (loss)	92,128			47,437			(31,709		)	(11,624		)	96,232
Interest expense, net of capitalized interest	22,046			12,039			1,701			(1,157		)	34,629
Other (income) expense, net	(820		)	(200		)	(1,183		)	1,157			(1,046		)
Income (loss) before income taxes and equity in net income of subsidiaries	70,902			35,598			(32,227		)	(11,624		)	62,649
Income taxes (benefit)	11,394			12,919			699			(3,615		)	21,397
	59,508			22,679			(32,926		)	(8,009		)	41,252
Equity in net loss of subsidiaries	(11,293		)	—			—			11,293			—
Net loss attributable to noncontrolling interests	—			—			6,963			—			6,963
Net income (loss) attributable to Steel Dynamics, Inc.	$	48,215		$	22,679		$	(25,963	)	$	3,284		$	48,215

Condensed Consolidating Statements of Cash Flows (in thousands)

For the three months ended,							Combined			Consolidating			Total
March 31, 2014	Parent			Guarantors			Non-Guarantors			Adjustments			Consolidated

Net cash provided by (used in) operating activities	$	9,027		$	(17,195	)	$	(14,149	)	$	(4,930	)	$	(27,247	)
Net cash provided by (used in) investing activities	(12,430		)	(3,997		)	(1,625		)	22,095			4,043
Net cash provided by (used in) financing activities	(36,087		)	8,115			16,104			(17,165		)	(29,033		)
Increase (decrease) in cash and equivalents	(39,490		)	(13,077		)	330			—			(52,237		)
Cash and equivalents at beginning of period	320,866			61,148			13,142			—			395,156
Cash and equivalents at end of period	$	281,376		$	48,071		$	13,472		$	—		$	342,919

For the three months ended,							Combined			Consolidating			Total
March 31, 2013	Parent			Guarantors			Non-Guarantors			Adjustments			Consolidated
Net cash provided by (used in) operating activities	$	29,373		$	14,903		$	(17,530	)	$	2,964		$	29,710
Net cash used in investing activities	(8,837		)	(11,985		)	(6,805		)	16,215			(11,412		)
Net cash provided by (used in) financing activities	98,746			(22,047		)	26,126			(19,179		)	83,646
Increase (decrease) in cash and equivalents	119,282			(19,129		)	1,791			—			101,944
Cash and equivalents at beginning of period	322,707			41,675			11,535			—			375,917
Cash and equivalents at end of period	$	441,989		$	22,546		$	13,326		$	—		$	477,861