10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.  20549

FORM 10-Q

☒Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended

September 30, 2016

OR

☐Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Commission File Number 0-21719

Steel Dynamics, Inc.
(Exact name of registrant as specified in its charter)
Indiana	35-1929476
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
7575 West Jefferson Blvd, Fort Wayne, IN	46268
(Address of principal executive offices)	(Zip Code)
Registrant’s telephone number, including area code:  (260) 969-3500

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒  No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒  No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company (see definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act). 

(Check one):  Large accelerated filer ☒Accelerated filer ☐Non-accelerated filer ☐        Smaller reporting company  ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes ☐  No☒

As of November 1, 2016, Registrant had 243,815,236 outstanding shares of common stock.

STEEL DYNAMICS, INC. Table of Contents
PART I.  Financial Information
Item 1.	Financial Statements:	Page
	Consolidated Balance Sheets as of September 30, 2016 (unaudited) and December 31, 2015	1
	Consolidated Statements of Income for the three- and nine-month periods ended September 30, 2016 and 2015 (unaudited)	2
	Consolidated Statements of Cash Flows for the three- and nine-month periods ended  September 30, 2016 and 2015 (unaudited)	3
	Notes to Consolidated Financial Statements (unaudited)	4
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	25
Item 4.	Controls and Procedures	26
	PART II.  Other Information
Item 1.	Legal Proceedings	27
Item 1A.	Risk Factors	27
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	27
Item 3.	Defaults Upon Senior Securities	27
Item 4.	Mine Safety Disclosures	27
Item 5.	Other Information	27
Item 6.	Exhibits	28
	Signatures	29

STEEL DYNAMICS, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

	September 30,		December 31,
Assets	2016		2015
	(unaudited)
Current assets
Cash and equivalents	$	1,051,489	$	727,032
Accounts receivable, net		752,232		579,333
Accounts receivable-related parties		27,227		34,272
Inventories		1,275,575		1,149,390
Other current assets		30,121		47,914
Total current assets		3,136,644		2,537,941
Property, plant and equipment, net		2,928,226		2,951,210
Restricted cash		19,571		19,565
Intangible assets, net		291,814		278,960
Goodwill		399,867		397,470
Other assets		11,440		16,936
Total assets	$	6,787,562	$	6,202,082
Liabilities and Equity
Current liabilities
Accounts payable	$	427,790	$	276,725
Accounts payable-related parties		10,046		6,630
Income taxes payable		35,733		2,023
Accrued payroll and benefits		143,986		94,906
Accrued interest		47,882		38,502
Accrued expenses		112,521		99,824
Current maturities of long-term debt		16,155		16,680
Total current liabilities		794,113		535,290
Long-term debt		2,570,837		2,577,976
Deferred income taxes		450,159		400,770
Other liabilities		20,751		16,595
Commitments and contingencies
Redeemable noncontrolling interests		126,340		126,340
Equity
Common stock voting, $.0025 par value; 900,000,000 shares authorized;
263,396,348, and 262,937,139 shares issued; and 243,770,777, and 243,089,514
shares outstanding, as of September 30, 2016 and December 31, 2015, respectively		640		638
Treasury stock, at cost; 19,625,571, and 19,847,625 shares,
as of September 30, 2016 and December 31, 2015 respectively		(392,051)		(396,455)
Additional paid-in capital		1,132,365		1,110,253
Retained earnings		2,224,963		1,965,291
Total Steel Dynamics, Inc. equity		2,965,917		2,679,727
Noncontrolling interests		(140,555)		(134,616)
Total equity		2,825,362		2,545,111
Total liabilities and equity	$	6,787,562	$	6,202,082

See notes to consolidated financial statements.

1

STEEL DYNAMICS, INC.

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(in thousands, except per share data)

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2016		2015		2016		2015
Net sales
Unrelated parties	$	2,060,596	$	1,901,415	$	5,737,584	$	5,851,371
Related parties		40,714		49,508		128,929		151,994
Total net sales		2,101,310		1,950,923		5,866,513		6,003,365
Costs of goods sold		1,692,807		1,722,197		4,841,591		5,415,854
Gross profit		408,503		228,726		1,024,922		587,511
Selling, general and administrative expenses		95,185		82,648		279,899		242,207
Profit sharing		22,255		9,008		51,722		18,637
Amortization of intangible assets		7,208		6,041		21,359		18,308
Operating income		283,855		131,029		671,942		308,359
Interest expense, net of capitalized interest		36,199		37,084		109,888		117,334
Other expense, net		4,351		239		741		15,219
Income before income taxes		243,305		93,706		561,313		175,806
Income taxes		88,892		34,839		205,139		64,660
Net income		154,413		58,867		356,174		111,146
Net loss attributable to noncontrolling interests		2,984		1,750		5,929		11,782
Net income attributable to Steel Dynamics, Inc.	$	157,397	$	60,617	$	362,103	$	122,928
Basic earnings per share attributable to Steel Dynamics,
Inc. stockholders	$	0.65	$	0.25	$	1.49	$	0.51
Weighted average common shares outstanding		243,761		242,074		243,539		241,836
Diluted earnings per share attributable to Steel Dynamics, Inc.
stockholders, including the effect of assumed conversions
when dilutive	$	0.64	$	0.25	$	1.48	$	0.51
Weighted average common shares and share equivalents outstanding		245,682		243,822		245,227		243,393
Dividends declared per share	$	0.1400	$	0.1375	$	0.4200	$	0.4125

See notes to consolidated financial statements.

2

STEEL DYNAMICS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(in thousands)

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2016		2015		2016		2015
Operating activities:
Net income	$	154,413	$	58,867	$	356,174	$	111,146
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization		74,190		74,211		222,970		221,306
Equity-based compensation		5,924		5,332		21,565		20,232
Deferred income taxes		18,478		13,130		53,879		46,214
Loss on disposal of assets		161		655		1,178		6,638
Changes in certain assets and liabilities:
Accounts receivable		29,384		36,361		(149,810)		122,296
Inventories		(76,013)		(8,763)		(102,339)		317,410
Other assets		694		(3,100)		12,053		8,794
Accounts payable		(49,171)		(62,757)		117,220		(127,075)
Income taxes receivable/payable		(7,421)		19,888		40,960		29,309
Accrued expenses		45,701		30,554		69,361		(47,973)
Net cash provided by operating activities		196,340		164,378		643,211		708,297
Investing activities:
Purchases of property, plant and equipment		(59,774)		(30,286)		(123,168)		(86,458)
Acquisition of business, net of cash acquired		(109,065)		(45,000)		(109,065)		(45,000)
Other investing activities		1,507		3,715		5,767		6,184
Net cash used in investing activities		(167,332)		(71,571)		(226,466)		(125,274)
Financing activities:
Issuance of current and long-term debt		12,911		67,999		97,018		179,033
Repayment of current and long-term debt		(9,999)		(73,420)		(95,253)		(561,428)
Dividends paid		(34,124)		(33,282)		(101,639)		(94,281)
Stock option exercise proceeds, including related tax effect		1,027		302		7,602		7,261
Other financing activities		-		(17)		(16)		(1,181)
Net cash used in financing activities		(30,185)		(38,418)		(92,288)		(470,596)
Increase (decrease) in cash and equivalents		(1,177)		54,389		324,457		112,427
Cash and equivalents at beginning of period		1,052,666		419,401		727,032		361,363
Cash and equivalents at end of period	$	1,051,489	$	473,790	$	1,051,489	$	473,790
Supplemental disclosure information:
Cash paid for interest	$	26,225	$	26,701	$	97,605	$	115,345
Cash paid (received) for federal and state income taxes, net	$	75,860	$	1,172	$	104,124	$	(10,321)

See notes to consolidated financial statements.

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STEEL DYNAMICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 1.  Description of the Business and Significant Accounting Policies

Description of the Business

Steel Dynamics, Inc. (SDI), together with its subsidiaries (the company), is one of the largest domestic steel producers and metals recyclers. The company has three reportable segments, consistent with how it manages the business: steel operations, metals recycling operations, and steel fabrication operations.

Steel Operations Segment.  Steel operations include the company’s Butler Flat Roll Division, Columbus Flat Roll Division, The Techs galvanizing lines, Structural and Rail Division, Engineered Bar Products Division, Vulcan Threaded Products (since its acquisition on August 1, 2016), Roanoke Bar Division, Steel of West Virginia, and Iron Dynamics (IDI), a liquid pig iron (scrap substitute) production facility that supplies solely the Butler Flat Roll Division. These operations include electric arc furnace steel mills, producing steel from ferrous scrap and scrap substitutes, utilizing continuous casting, automated rolling mills, and ten downstream coating lines, and one downstream SBQ processing facility. Steel operations accounted for 74% and 69% of the company’s consolidated external net sales during the three months ended September 30, 2016 and 2015, and 72% and 69% of the company’s consolidated external net sales during the nine months ended September 30, 2016 and 2015, respectively.

Metals Recycling Operations Segment. Metals recycling operations include the company’s metals recycling processing locations, and ferrous scrap procurement operations, of OmniSource Corporation. Metals recycling operations accounted for 15% and 18% of the company’s consolidated external net sales during the three months ended September 30, 2016 and 2015, and 15% and 19% of the company’s consolidated external net sales during the nine months ended September 30, 2016 and 2015, respectively.

Steel Fabrication Operations Segment.  Steel fabrication operations include the company’s eight New Millennium Building Systems’ joist and deck plants located throughout the United States, and in Northern Mexico. Revenues from these plants are generated from the fabrication of trusses, girders, steel joists and steel deck used within the non-residential construction industry. Steel fabrication operations accounted for approximately 8% and 9% of the company’s consolidated external net sales during the three months ended September 30, 2016 and 2015, and 9% and 8% of the company’s consolidated external net sales during the nine months ended September 30, 2016 and 2015, respectively.

Other. The  “Other” category consists of subsidiary operations that are below the quantitative thresholds required for reportable segments and primarily consist of our Minnesota ironmaking operations that were indefinitely idled in May 2015, and several smaller joint ventures. Also included in “Other” are certain unallocated corporate accounts, such as the company’s senior secured credit facility, senior notes, certain other investments and certain profit sharing expenses.

Significant Accounting Policies

Principles of Consolidation.  The consolidated financial statements include the accounts of SDI, together with its wholly and majority-owned or controlled subsidiaries, after elimination of intercompany accounts and transactions. Noncontrolling interests represent the noncontrolling owner’s proportionate share in the equity, income, or losses of the company’s majority-owned or controlled consolidated subsidiaries. 

Use of Estimates. These financial statements are prepared in conformity with accounting principles generally accepted in the United States, and accordingly, include amounts that require management to make estimates and assumptions that affect the amounts reported in the financial statements and in the notes thereto. Significant items subject to such estimates and assumptions include the carrying value of property, plant and equipment, intangible assets, and goodwill; valuation allowances for trade receivables, inventories and deferred income tax assets; unrecognized tax benefits; potential environmental liabilities; and litigation claims and settlements. Actual results may differ from these estimates and assumptions. 

In the opinion of management, these financial statements reflect all normal recurring adjustments necessary for a fair presentation of the interim period results. These financial statements and notes should be read in conjunction with the audited financial statements and notes thereto included in the company’s Annual Report on Form 10-K for the year ended December 31, 2015.

4

STEEL DYNAMICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 1.  Description of the Business and Significant Accounting Policies (Continued)

Goodwill.  The company’s goodwill is allocated to the following reporting units at September 30, 2016, and December 31, 2015, (in thousands):

		September 30,		December 31,
		2016		2015
Metals Recycling Segment:	OmniSource	$	104,247	$	109,039
	Butler Flat Roll Division,  Structural and Rail Division,
	and Engineered Bar Division		95,000		95,000
Steel Segment:	The Techs		142,783		142,783
	Roanoke Bar Division		29,041		29,041
	Columbus Flat Roll Division		19,682		19,682
	Vulcan Threaded Products		7,189		-
Fabrication Segment:	New Millennium Building Systems		1,925		1,925
		$	399,867	$	397,470

OmniSource goodwill decreased $4.8 million from December 31, 2015 to September 30, 2016, in recognition of the 2016 tax benefit related to the normal amortization of the component of OmniSource tax-deductible goodwill in excess of book goodwill.

Recently Issued Accounting Standards

In May 2014, the FASB issued guidance codified in ASC 606, Revenue Recognition – Revenue from Contracts with Customers, which amends the guidance in former ASC 605, Revenue Recognition.  The core principle of ASC 606 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Because the guidance in ASC 606 is principles-based, it can be applied to all contracts with customers regardless of industry-specific or transaction-specific fact patterns. Additionally, ASC 606 requires additional disclosures to help users of financial statements better understand the nature, amount, timing, and potential uncertainty of revenue that is recognized. This guidance is effective for annual and interim periods beginning after December 15, 2017, but can be early adopted for annual and interim periods ending after December 15, 2016. The company is currently evaluating the impact of the provisions of ASC 606, including the timing and method of adoption.

In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory, which requires an entity to measure inventory at the lower of cost and net realizable value, rather than at the lower of cost or market.  This new guidance is effective for annual and interim periods beginning after December 15, 2016, but can be early adopted. The company is currently evaluating the impact of this ASU’s adoption.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842): which establishes a new lease accounting model that requires lessees to recognize a right of use asset and related lease liability for most leases having lease terms of more than 12 months.  Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases.  This new guidance is effective for annual and interim periods beginning after December 15, 2018, but can be early adopted.  The company is currently evaluating the impact of the provisions of ASU 2016-02, including the timing of adoption. 

In March 2016, the FASB issued ASU 2016-09, Improvement to Employee Share-based Payment Accounting, which simplifies several aspects of accounting for share-based payment transactions, including recognizing excess tax benefits and deficiencies as income tax expense or benefit in the income statement and as operating activities within the statement of cash flows, and an option to recognize gross stock compensation expense with actual forfeitures recognized as incurred. This new guidance is effective for annual and interim periods beginning after December 15, 2016, but can be early adopted.  The company is currently evaluating the impact of the provisions of ASU 2016-09, including the timing of adoption. 

Note 2.  Acquisitions

Vulcan Threaded Products, Inc.

On August 1, 2016, the company completed its acquisition of 100% of Vulcan Threaded Products, Inc. (Vulcan) for $113.0 million, inclusive of $29.2 million in working capital, which is subject to typical post-closing adjustments. The purchase price was paid in cash from available funds. Post-closing operating results of Vulcan are reflected in the steel operations reporting segment. Unaudited proforma operating results as if the acquisition had occurred on January 1, 2015, have not been presented as the effect to 2015 and 2016 consolidated operating results is not significant. Vulcan is the nation’s largest manufacturer and supplier of threaded rod products, and also cold drawn and heat treated steel bar. The acquisition of Vulcan is consistent with one of our target growth objectives – higher-margin downstream business opportunities that utilize our steel products in their manufacturing processes. Vulcan utilizes special-bar-quality products produced at our Engineered Bar Products Division.

5

STEEL DYNAMICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 2.  Acquisitions (Continued)

The aggregate purchase price was allocated on a preliminarily basis to the opening balance sheet of Vulcan as of the August 1, 2016, acquisition date. The following initial allocation of the purchase price (in thousands) is preliminary. The accounting for the acquisition has not yet been finalized based on the company’s valuation of the acquired assets, assumed liabilities and identifiable intangible assets, including goodwill, if any. The preliminary fair values were determined using various valuation techniques that in each case used Level 3 inputs as provided for under ASC 820.

Current assets, net of cash acquired	$	36,958
Property, plant & equipment		40,213
Intangible assets		32,930
Goodwill		7,189
Total assets acquired		117,290
Liabilities assumed		4,456
Net assets acquired	$	112,834

The preliminary assessment allocates $32.9 million of the purchase price to the following intangible assets, including customer relationships, trade name, and noncompete agreements. The company plans to utilize an accelerated amortization methodology to follow the pattern in which the economic benefits of the customer relationship intangible asset is anticipated to be consumed. The company plans to amortize the intangible assets related to the trade name and noncompete agreements using a straight line methodology. However, the expected lives and specific amortization methods are subject to finalization of the company’s valuation process. 

Consolidated Systems, Inc.

On September 14, 2015, the company purchased from CSi certain of its steel deck facilities (including associated assets) and net working capital of approximately $30.0 million, for a purchase price of $45.0 million in cash. Operating results of these facilities have been reflected in the company’s financial statements under the steel fabrication operations since the September 14, 2015, purchase date. The purchased assets include two deck facilities located in Memphis, Tennessee, and Phoenix, Arizona. Producing both standard and premium specialty deck profiles, the new locations will allow for enhanced geographic reach into the southwestern and western markets, and further diversify New Millennium Building Systems’ product offerings.

Note 3.  Earnings Per Share

Basic earnings per share is based on the weighted average shares of common stock outstanding during the period. Diluted earnings per share assumes the weighted average dilutive effect of common share equivalents outstanding during the period applied to the company’s basic earnings per share. Common share equivalents represent potentially dilutive stock options, restricted stock units and deferred stock units; and are excluded from the computation in periods in which they have an anti-dilutive effect. There were no anti-dilutive common share equivalents at or for the three- and nine- month periods ended September 30, 2016 and 2015.

The following table presents a reconciliation of the numerators and the denominators of the company’s basic and diluted earnings per share computations for the three and nine months ended September 30, 2016 and 2015 (in thousands, except per share data):

	Three Months Ended September 30,
	2016					2015
	Net Income		Shares	Per Share		Net Income		Shares	Per Share
	(Numerator)		(Denominator)	Amount		(Numerator)		(Denominator)	Amount
Basic earnings per share	$	157,397	243,761	$	0.65	$	60,617	242,074	$	0.25
Dilutive common share equivalents		-	1,921				-	1,748
Diluted earnings per share	$	157,397	245,682	$	0.64	$	60,617	243,822	$	0.25

	Nine Months Ended September 30,
	2016						2015
	Net Income		Shares		Per Share		Net Income		Shares		Per Share
	(Numerator)		(Denominator)		Amount		(Numerator)		(Denominator)		Amount
Basic earnings per share	$	362,103		243,539	$	1.49	$	122,928		241,836	$	0.51
Dilutive common share equivalents		-		1,688				-		1,557
Diluted earnings per share	$	362,103		245,227	$	1.48	$	122,928		243,393	$	0.51

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STEEL DYNAMICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 4.  Inventories

Inventories are stated at lower of cost or market. Cost is determined using a weighted average cost method for scrap, and on a first-in, first-out, basis for other inventory. Inventory consisted of the following (in thousands):

	September 30,		December 31,
	2016		2015
Raw materials	$	490,164	$	419,608
Supplies		392,433		396,349
Work in progress		124,428		90,486
Finished goods		268,550		242,947
Total inventories	$	1,275,575	$	1,149,390

Note 5.  Debt

On March 16, 2015, the company called and repaid all $350.0 million of its outstanding 7 5/8% Senior Notes due 2020 (the “Notes”) at a redemption price of 103.813% of the principal amount of the Notes, plus accrued and unpaid interest to, but not including, the date of redemption. Associated premiums and the write off of deferred financing costs of approximately $16.7 million were recorded in other expense in conjunction with the redemption.

Note 6.  Changes in Equity

The following table provides a reconciliation of the beginning and ending carrying amounts of total equity, equity attributable to stockholders of Steel Dynamics, Inc. and equity and redeemable amounts attributable to the noncontrolling interests (in thousands):

	Stockholders of Steel Dynamics, Inc.
			Additional										Redeemable
	Common		Paid-In		Retained		Treasury		Noncontrolling		Total		Noncontrolling
	Stock		Capital		Earnings		Stock		Interests		Equity		Interests
Balances at December 31, 2015	$	638	$	1,110,253	$	1,965,291	$	(396,455)	$	(134,616)	$	2,545,111	$	126,340
Exercise of stock options proceeds,
including related tax effect		2		7,874		-		-		-		7,876		-
Dividends declared		-		-		(102,342)		-		-		(102,342)		-
Distributions to noncontrolling
investors, net		-		-		-		-		(10)		(10)		-
Equity-based compensation		-		14,238		(89)		4,404		-		18,553		-
Comprehensive and net income (loss)		-		-		362,103		-		(5,929)		356,174		-
Balances at September 30, 2016	$	640	$	1,132,365	$	2,224,963	$	(392,051)	$	(140,555)	$	2,825,362	$	126,340

Note 7.  Derivative Financial Instruments

The company is exposed to certain risks relating to its ongoing business operations. The company utilizes derivative instruments to mitigate commodity margin risk, interest rate risk and foreign currency exchange rate risk. The company routinely enters into forward exchange traded futures and option contracts to manage the price risk associated with nonferrous metals inventory as well as purchases and sales of nonferrous metals (primarily aluminum and copper).  The company offsets fair value amounts recognized for derivative instruments executed with the same counterparty under master netting agreements. 

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STEEL DYNAMICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 7.  Derivative Financial Instruments (Continued)

Commodity Futures Contracts.  If the company is “long” on futures contracts, it means the company has more futures contracts purchased than futures contracts sold for the underlying commodity. If the company is “short” on a futures contract, it means the company has more futures contracts sold than futures contracts purchased for the underlying commodity. The following summarizes the company’s futures contract commitments as of September 30, 2016 (MT represents metric tons):

Commodity Futures	Long/Short	Total
Aluminum	Long	1,750	MT
Aluminum	Short	1,575	MT
Copper	Long	4,413	MT
Copper	Short	13,950	MT

The following summarizes the location and amounts of the fair values reported on the company’s balance sheets as of September 30, 2016, and December 31, 2015, and gains and losses related to derivatives included in the company’s statement of income for the three and nine months ended September 30, 2016 and 2015 (in thousands):

	Asset Derivatives					Liability Derivatives
	Balance sheet	Fair Value				Fair Value
	location	September 30, 2016		December 31, 2015		September 30, 2016		December 31, 2015
Derivative instruments designated
as fair value hedges -
Commodity futures	Other current assets	$	451	$	857	$	1,156	$	2,860
Derivative instruments not designated
as hedges -
Commodity futures	Other current assets		171		908		1,037		1,065
Total derivative instruments		$	622	$	1,765	$	2,193	$	3,925

The fair value of the above derivative instruments along with required margin deposit amounts with the same counterparty under master netting arrangements totaled $1.7 million at September 30, 2016, and $3.4 million at December 31, 2015, are reflected in other current assets in the consolidated balance sheets.

		Amount of gain (loss) recognized					Location of gain	Amount of gain (loss) recognized
	Location of gain	in income on derivatives					(loss) recognized	in income on related hedged items
	(loss) recognized	for the three months ended				Hedged items in	in income on	for the three months ended
	in income on	September 30,		September 30,		fair value hedge	related hedged	September 30,		September 30,
	derivatives	2016		2015		relationships	items	2016		2015
Derivatives in fair value
hedging relationships -
Commodity futures	Costs of goods sold	$	826	$	(2,825)	Firm commitments	Costs of goods sold	$	(793)	$	662
						Inventory	Costs of goods sold		(177)		800
Derivatives not designated								$	(970)	$	1,462
as hedging instruments -
Commodity futures	Costs of goods sold	$	(638)	$	6,707

8

STEEL DYNAMICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 7.  Derivative Financial Instruments (Continued)

		Amount of gain (loss) recognized					Location of gain	Amount of gain (loss) recognized
	Location of gain	in income on derivatives					(loss) recognized	in income on related hedged items
	(loss) recognized	for the nine months ended				Hedged items in	in income on	for the nine months ended
	in income on	September 30,		September 30,		fair value hedge	income on related	September 30,		September 30,
	derivatives	2016		2015		relationships	hedged items	2016		2015
Derivatives in fair value
hedging relationships -
Commodity futures	Costs of goods sold	$	1,281	$	(4,063)	Firm commitments	Costs of goods sold	$	(2,223)	$	1,518
						Inventory	Costs of goods sold		642		1,291
Derivatives not designated								$	(1,581)	$	2,809
as hedging instruments -
Commodity futures	Costs of goods sold	$	(394)	$	13,377

Derivatives accounted for as fair value hedges had ineffectiveness resulting in losses of $84,000 and $191,000 during the three months ended September 30, 2016 and 2015, respectively; and losses of $175,000 and $64,000 during the nine months ended September 30, 2016 and 2015, respectively. Losses excluded from hedge effectiveness testing of $60,000 and $1.2 million increased cost of goods sold during the three months ended September 30, 2016, and September 30, 2015.  Losses excluded from hedge effectiveness testing of $125,000 and $1.2 million increased costs of goods sold during the nine months ended September 30, 2016 and 2015, respectively. 

Note 8.  Fair Value Measurements

FASB accounting standards provide a comprehensive framework for measuring fair value and sets forth a definition of fair value and establishes a hierarchy prioritizing the inputs to valuation techniques, giving the highest priority to quoted prices in active markets for identical assets and liabilities and the lowest priority to unobservable value inputs.  Levels within the hierarchy are defined as follows: 

· Level 1—Unadjusted quoted prices for identical assets and liabilities in active markets;

· Level 2—Quoted prices for similar assets and liabilities in active markets (other than those included in Level 1) which are observable for   

           the asset or liability, either directly or indirectly; and

· Level 3—Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are       

           unobservable.

The following table sets forth financial assets and liabilities measured at fair value on a recurring basis in the consolidated balance sheet and the respective levels to which the fair value measurements are classified within the fair value hierarchy as of September 30, 2016, and December 31, 2015 (in thousands):    

			Quoted Prices		Significant
			in Active		Other		Significant
			Markets for		Observable		Unobservable
			Identical Assets		Inputs		Inputs
	Total		(Level 1)		(Level 2)		(Level 3)
September 30, 2016
Commodity futures – financial assets	$	622	$	-	$	622	$	-
Commodity futures – financial liabilities		2,193		-		2,193		-
December 31, 2015
Commodity futures – financial assets	$	1,765	$	-	$	1,765	$	-
Commodity futures – financial liabilities		3,925		-		3,925		-

The carrying amounts of financial instruments including cash and equivalents approximate fair value. The fair values of commodity futures contracts are estimated by the use of quoted market prices, estimates obtained from brokers, and other appropriate valuation techniques based on references available. The fair value of long-term debt, including current maturities, as determined by quoted market prices (Level 2), was approximately $2.7 billion at September 30, 2016, and December 31, 2015, respectively, (with a corresponding carrying amount in the consolidated balance sheet of $2.6 billion at September 30, 2016, and December 31, 2015).

9

STEEL DYNAMICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 9.  Commitments and Contingencies

Although, as noted below, a tentative settlement has been reached in the case, the company has to date been involved, along with two other remaining non-settling defendant steel manufacturing companies, from an original group of eight, in a direct purchaser class action antitrust suit in federal court in Chicago, Illinois, under the caption of Standard Iron Works v Arcelor Mittal, et al.  Two other complaints, not yet settled, were brought on behalf of a purported class of indirect purchasers of steel products within the same time period. The company has a pending motion to dismiss in that case. The complaints allege a conspiracy to limit output on the part of the defendants, in order to fix, raise, maintain and stabilize the price at which steel products were sold in the United States during a specified period between 2005 and 2007. The complaints seek treble damages and costs, including reasonable attorney fees, pre- and post-judgment interest and injunctive relief. In September 2015, the Court denied class certification on the issue of antitrust impact and damages, but granted class certification on the limited issue of the alleged conspiracy.

In October 2016, the company announced that it had entered into an agreement to settle the direct purchaser case for a payment of $4.6 million. Preliminary approval was granted by the court on November 3, 2016, and final approval by the Court is also expected to be forthcoming. During the approval process, members of the class will be given an opportunity to opt-out of the class and retain their own individual rights.

Due to the uncertain nature of litigation, the company cannot presently predict either the final outcome of the proposed settlement process, including whether there may be opt-outs from the settlement, or the outcome of the remaining indirect purchaser case.  Based on the information available at this time, however, the company has determined that, apart from the proposed settlement amount in the direct case, there is not presently a “reasonable possibility” (as that term is defined in ASC 450-20-20), that the outcome of the remaining unresolved matters will have a material impact on the Company’s financial condition, results of operations, or liquidity. Although not presently necessary or appropriate to make a dollar estimate of exposure to loss, if any, in connection with these remaining matters, the company may in the future determine that a further loss accrual may be necessary. Further, although the company may make loss accruals, if and as warranted, any amounts that it may accrue from time to time could vary significantly from the amounts it actually pays, due to inherent uncertainties and the inherent shortcomings of the estimation process, the uncertainties involved in litigation and other factors. Additionally, an adverse result could have a material effect on the company’s financial condition, results of operations and liquidity.

The company is additionally involved in various routine litigation matters, including administrative proceedings, regulatory proceedings, governmental investigations, environmental matters, and commercial and construction contract disputes, none of which are expected to have a material impact on our financial condition, results of operations, or liquidity. 

10

STEEL DYNAMICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 10.  Segment Information

The company’s operations are primarily organized and managed by operating segment, which are steel operations, metals recycling operations, and steel fabrication operations. The segment operations are more fully described in Note 1 to the financial statements. Operating segment performance and resource allocations are primarily based on operating results before income taxes. The accounting policies of the reportable segments are consistent with those described in Note 1 to the financial statements. Intra‑segment sales and any related profits are eliminated in consolidation. Amounts included in the category “Other” are from subsidiary operations that are below the quantitative thresholds required for reportable segments and primarily consist of our Minnesota ironmaking operations and several small joint ventures. In addition, “Other” also includes certain unallocated corporate accounts, such as the company’s senior secured credit facility, senior notes, certain other investments and certain profit sharing expenses.

The company’s segment results for the three and nine months ended September 30, 2016 and 2015, each adjusted consistent with our current reportable segments presentation, are as follows (in thousands):

			Metals		Steel
For the three months ended	Steel		Recycling		Fabrication
September 30, 2016	Operations		Operations		Operations		Other			Eliminations			Consolidated
Net Sales
External	$	1,502,726	$	260,518	$	177,341	$	60,282		$	-		$	2,000,867
External Non-U.S.		54,776		45,574		88		5			-			100,443
Other segments		70,384		259,171		1,211		1,108			(331,874)			-
		1,627,886		565,263		178,640		61,395			(331,874)			2,101,310
Operating income (loss)		307,553		6,154		17,744		(47,687)	(1)		91	(2)		283,855
Income (loss) before income taxes		285,131		2,437		15,645		(59,999)			91			243,305
Depreciation and amortization		53,456		13,836		2,848		4,101			(51)			74,190
Capital expenditures		49,200		9,506		747		321			-			59,774
As of September 30, 2016
Assets	$	4,147,447	$	1,034,637	$	353,560	$	1,374,469	(3)	$	(122,551)	(4)	$	6,787,562

Footnotes related to the three months ended September 30, 2016 segment results (in millions):
(1)	Corporate SG&A	$	(12.6)	(2)	Gross profit increase from intra-company sales	$	-
	Company-wide equity-based compensation		(6.1)
	Profit sharing		(21.0)
	Minnesota ironmaking operations		(4.1)
	Other, net		(3.9)
		$	(47.7)
(3)	Cash and equivalents	$	982.2	(4)	Elimination of intra-company receivables	$	(98.0)
	Accounts receivable		14.7		Elimination of intra-company debt		(12.1)
	Inventories		36.2		Other		(12.5)
	Property, plant and equipment, net		295.7			$	(122.6)
	Intra-company debt		12.1
	Other		33.6
		$	1,374.5

11

STEEL DYNAMICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 10.  Segment Information (Continued)

			Metals		Steel
For the three months ended	Steel		Recycling		Fabrication
September 30, 2015	Operations		Operations		Operations		Other			Eliminations			Consolidated
Net Sales
External	$	1,285,459	$	294,357	$	173,047	$	78,802		$	-		$	1,831,665
External Non-U.S.		65,928		51,215		1,907		208			-			119,258
Other segments		56,146		270,888		2		4,209			(331,245)			-
		1,407,533		616,460		174,956		83,219			(331,245)			1,950,923
Operating income (loss)		124,712		(3,555)		36,733		(28,401)	(1)		1,540	(2)		131,029
Income (loss) before income taxes		102,566		(6,967)		35,108		(38,541)			1,540			93,706
Depreciation and amortization		52,404		15,913		2,300		3,645			(51)			74,211
Capital expenditures		21,975		6,286		935		1,090			-			30,286
As of September 30, 2015
Assets	$	4,096,188	$	1,588,821	$	372,673	$	898,772	(3)	$	(113,913)	(4)	$	6,842,541

Footnotes related to the three months ended September 30, 2015 segment results (in millions):
(1)	Corporate SG&A	$	(9.5)	(2)	Gross profit increase from intra-company sales	$	1.5
	Company-wide equity-based compensation		(5.3)
	Profit sharing		(7.5)
	Minnesota ironmaking operations		(4.1)
	Other, net		(2.0)
		$	(28.4)
(3)	Cash and equivalents	$	415.7	(4)	Elimination of intra-company receivables	$	(100.8)
	Accounts receivable		30.0		Elimination of intra-company debt		(6.5)
	Inventories		36.8		Other		(6.6)
	Property, plant and equipment, net		309.6			$	(113.9)
	Intra-company debt		6.5
	Other		100.2
		$	898.8

12

STEEL DYNAMICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 10.  Segment Information (Continued)

			Metals		Steel
For the nine months ended	Steel		Recycling		Fabrication
September 30, 2016	Operations		Operations		Operations		Other			Eliminations			Consolidated
Net Sales
External	$	4,068,688	$	769,260	$	527,859	$	210,358		$	-		$	5,576,165
External Non-U.S.		172,694		117,299		167		188			-			290,348
Other segments		178,190		756,613		2,415		3,603			(940,821)			-
		4,419,572		1,643,172		530,441		214,149			(940,821)			5,866,513
Operating income (loss)		712,939		20,014		73,230		(125,186)	(1)		(9,055)	(2)		671,942
Income (loss) before income taxes		645,189		10,300		67,175		(152,296)			(9,055)			561,313
Depreciation and amortization		159,614		42,666		8,431		12,413			(154)			222,970
Capital expenditures		103,202		17,068		1,918		980			-			123,168

Footnotes related to the nine months ended September 30, 2016 segment results (in millions):
(1)	Corporate SG&A	$	(38.5)	(2)	Gross profit decrease from intra-company sales	$	(9.1)
	Company-wide equity-based compensation		(20.4)
	Profit sharing		(47.7)
	Minnesota ironmaking operations		(12.4)
	Other, net		(6.2)
		$	(125.2)

			Metals		Steel
For the nine months ended	Steel		Recycling		Fabrication
September 30, 2015	Operations		Operations		Operations		Other			Eliminations			Consolidated
Net Sales
External	$	3,902,162	$	1,014,753	$	488,584	$	237,501		$	-		$	5,643,000
External Non-U.S.		210,320		147,626		1,907		512			-			360,365
Other segments		158,609		751,542		18		29,114			(939,283)			-
		4,271,091		1,913,921		490,509		267,127			(939,283)			6,003,365
Operating income (loss)		338,690		229		85,754		(117,273)	(1)		959	(2)		308,359
Income (loss) before income taxes		269,187		(12,780)		80,581		(162,141)			959			175,806
Depreciation and amortization		154,616		50,207		6,688		9,948			(153)			221,306
Capital expenditures		52,324		17,332		2,506		14,296			-			86,458

Footnotes related to the nine months ended September 30, 2015 segment results (in millions):
(1)	Corporate SG&A	$	(27.1)	(2)	Gross profit increase from intra-company sales	$	1.0
	Company-wide equity-based compensation		(17.5)
	Profit sharing		(14.4)
	Minnesota ironmaking operations		(50.3)
	Other, net		(8.0)
		$	(117.3)

13

STEEL DYNAMICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 11.  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 unsecured notes due 2019, 2021, 2022, 2023 and 2024. 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, 2015.

Condensed Consolidating Balance Sheets (in thousands)
					Combined		Consolidating		Total
As of September 30, 2016	Parent		Guarantors		Non-Guarantors		Adjustments		Consolidated
Cash and equivalents	$	972,610	$	61,054	$	17,825	$	-	$	1,051,489
Accounts receivable, net		238,290		1,248,565		41,667		(749,063)		779,459
Inventories		588,583		634,942		59,837		(7,787)		1,275,575
Other current assets		17,109		10,598		4,373		(1,959)		30,121
Total current assets		1,816,592		1,955,159		123,702		(758,809)		3,136,644
Property, plant and equipment, net		921,850		1,684,925		323,308		(1,857)		2,928,226
Intangible assets, net		-		259,231		32,583		-		291,814
Goodwill		-		392,678		7,189		-		399,867
Other assets, including investments in subs		2,916,319		8,023		6,411		(2,899,742)		31,011
Total assets	$	5,654,761	$	4,300,016	$	493,193	$	(3,660,408)	$	6,787,562
Accounts payable	$	171,302	$	274,873	$	80,690	$	(89,029)	$	437,836
Accrued expenses		229,039		212,493		8,068		(109,478)		340,122
Current maturities of long-term debt		13,161		700		32,248		(29,954)		16,155
Total current liabilities		413,502		488,066		121,006		(228,461)		794,113
Long-term debt		2,541,145		-		171,622		(141,930)		2,570,837
Other liabilities		(265,803)		1,155,611		61,932		(480,830)		470,910
Redeemable noncontrolling interests		-		-		126,340		-		126,340
Common stock		640		1,727,859		18,120		(1,745,979)		640
Treasury stock		(392,051)		-		-		-		(392,051)
Additional paid-in-capital		1,132,365		128,076		773,793		(901,869)		1,132,365
Retained earnings (deficit)		2,224,963		800,404		(639,065)		(161,339)		2,224,963
Total Steel Dynamics, Inc. equity		2,965,917		2,656,339		152,848		(2,809,187)		2,965,917
Noncontrolling interests		-		-		(140,555)		-		(140,555)
Total equity		2,965,917		2,656,339		12,293		(2,809,187)		2,825,362
Total liabilities and equity	$	5,654,761	$	4,300,016	$	493,193	$	(3,660,408)	$	6,787,562

14

STEEL DYNAMICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 11.  Condensed Consolidating Information (Continued)

					Combined		Consolidating		Total
As of December 31, 2015	Parent		Guarantors		Non-Guarantors		Adjustments		Consolidated
Cash and equivalents	$	636,877	$	81,976	$	8,179	$	-	$	727,032
Accounts receivable, net		200,094		1,056,285		29,775		(672,549)		613,605
Inventories		539,963		573,924		35,004		499		1,149,390
Other current assets		21,654		25,415		1,676		(831)		47,914
Total current assets		1,398,588		1,737,600		74,634		(672,881)		2,537,941
Property, plant and equipment, net		958,212		1,703,932		291,077		(2,011)		2,951,210
Intangible assets, net		-		278,960		-		-		278,960
Goodwill		-		397,470		-		-		397,470
Other assets, including investments in subs		2,941,710		10,040		6,137		(2,921,386)		36,501
Total assets	$	5,298,510	$	4,128,002	$	371,848	$	(3,596,278)	$	6,202,082
Accounts payable	$	100,751	$	183,344	$	68,948	$	(69,688)	$	283,355
Accrued expenses		141,552		185,873		4,779		(96,949)		235,255
Current maturities of long-term debt		13,122		700		24,975		(22,117)		16,680
Total current liabilities		255,425		369,917		98,702		(188,754)		535,290
Long-term debt		2,546,606		361		177,897		(146,888)		2,577,976
Other liabilities		(183,248)		1,342,541		63,020		(804,948)		417,365
Redeemable noncontrolling interests		-		-		126,340		-		126,340
Common stock		638		1,727,859		18,120		(1,745,979)		638
Treasury stock		(396,455)		-		-		-		(396,455)
Additional paid-in-capital		1,110,253		117,737		646,787		(764,524)		1,110,253
Retained earnings (deficit)		1,965,291		569,587		(624,402)		54,815		1,965,291
Total Steel Dynamics, Inc. equity		2,679,727		2,415,183		40,505		(2,455,688)		2,679,727
Noncontrolling interests		-		-		(134,616)		-		(134,616)
Total equity		2,679,727		2,415,183		(94,111)		(2,455,688)		2,545,111
Total liabilities and equity	$	5,298,510	$	4,128,002	$	371,848	$	(3,596,278)	$	6,202,082

15

STEEL DYNAMICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 11.  Condensed Consolidating Information (Continued)

Condensed Consolidating Statements of Operations (in thousands)
For the three months ended,					Combined		Consolidating		Total
September 30, 2016	Parent		Guarantors		Non-Guarantors		Adjustments		Consolidated
Net sales	$	845,585	$	2,258,466	$	96,409	$	(1,099,150)	$	2,101,310
Costs of goods sold		647,983		2,016,874		100,470		(1,072,520)		1,692,807
Gross profit (loss)		197,602		241,592		(4,061)		(26,630)		408,503
Selling, general and administrative		52,995		72,605		4,134		(5,086)		124,648
Operating income (loss)		144,607		168,987		(8,195)		(21,544)		283,855
Interest expense, net of capitalized interest		17,818		17,741		2,847		(2,207)		36,199
Other (income) expense, net		2,342		3,937		(4,135)		2,207		4,351
Income (loss) before income taxes and
equity in net income of subsidiaries		124,447		147,309		(6,907)		(21,544)		243,305
Income taxes		40,242		55,684		797		(7,831)		88,892
		84,205		91,625		(7,704)		(13,713)		154,413
Equity in net income of subsidiaries		73,192		-		-		(73,192)		-
Net loss attributable to noncontrolling interests		-		-		2,984		-		2,984
Net income (loss) attributable to Steel Dynamics, Inc.	$	157,397	$	91,625	$	(4,720)	$	(86,905)	$	157,397

For the three months ended,					Combined		Consolidating		Total
September 30, 2015	Parent		Guarantors		Non-Guarantors		Adjustments		Consolidated
Net sales	$	735,250	$	2,103,824	$	96,204	$	(984,355)	$	1,950,923
Costs of goods sold		619,833		1,965,364		99,864		(962,864)		1,722,197
Gross profit (loss)		115,417		138,460		(3,660)		(21,491)		228,726
Selling, general and administrative		35,235		64,259		2,845		(4,642)		97,697
Operating income (loss)		80,182		74,201		(6,505)		(16,849)		131,029
Interest expense, net of capitalized interest		18,312		18,138		1,692		(1,058)		37,084
Other (income) expense, net		252		(631)		(440)		1,058		239
Income (loss) before income taxes and
equity in net income of subsidiaries		61,618		56,694		(7,757)		(16,849)		93,706
Income taxes (benefit)		20,169		21,697		(421)		(6,606)		34,839
		41,449		34,997		(7,336)		(10,243)		58,867
Equity in net income of subsidiaries		19,168		-		-		(19,168)		-
Net loss attributable to noncontrolling interests		-		-		1,750		-		1,750
Net income (loss) attributable to Steel Dynamics, Inc.	$	60,617	$	34,997	$	(5,586)	$	(29,411)	$	60,617

16

STEEL DYNAMICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 11.  Condensed Consolidating Information (Continued)

For the nine months ended,					Combined		Consolidating		Total
September 30, 2016	Parent		Guarantors		Non-Guarantors		Adjustments		Consolidated
Net sales	$	2,297,389	$	6,322,158	$	271,694	$	(3,024,728)	$	5,866,513
Costs of goods sold		1,823,408		5,676,265		286,486		(2,944,568)		4,841,591
Gross profit (loss)		473,981		645,893		(14,792)		(80,160)		1,024,922
Selling, general and administrative		145,596		212,613		9,352		(14,581)		352,980
Operating income (loss)		328,385		433,280		(24,144)		(65,579)		671,942
Interest expense, net of capitalized interest		53,842		54,493		7,558		(6,005)		109,888
Other (income) expense, net		(2,137)		8,012		(11,139)		6,005		741
Income (loss) before income taxes and
equity in net income of subsidiaries		276,680		370,775		(20,563)		(65,579)		561,313
Income taxes (benefit)		89,210		139,958		(63)		(23,966)		205,139
		187,470		230,817		(20,500)		(41,613)		356,174
Equity in net income of subsidiaries		174,633		-		-		(174,633)		-
Net loss attributable to noncontrolling interests		-		-		5,929		-		5,929
Net income (loss) attributable to Steel Dynamics, Inc.	$	362,103	$	230,817	$	(14,571)	$	(216,246)	$	362,103

For the nine months ended,					Combined		Consolidating		Total
September 30, 2015	Parent		Guarantors		Non-Guarantors		Adjustments		Consolidated
Net sales	$	2,300,024	$	6,447,974	$	302,657	$	(3,047,290)	$	6,003,365
Costs of goods sold		1,982,667		6,056,514		352,980		(2,976,307)		5,415,854
Gross profit (loss)		317,357		391,460		(50,323)		(70,983)		587,511
Selling, general and administrative		95,883		188,028		8,878		(13,637)		279,152
Operating income (loss)		221,474		203,432		(59,201)		(57,346)		308,359
Interest expense, net of capitalized interest		57,015		58,354		5,084		(3,119)		117,334
Other (income) expense, net		15,131		(597)		(2,434)		3,119		15,219
Income (loss) before income taxes and
equity in net income of subsidiaries		149,328		145,675		(61,851)		(57,346)		175,806
Income taxes (benefit)		35,207		53,903		(4,047)		(20,403)		64,660
		114,121		91,772		(57,804)		(36,943)		111,146
Equity in net income of subsidiaries		8,807		-		-		(8,807)		-
Net loss attributable to noncontrolling interests		-		-		11,782		-		11,782
Net income (loss) attributable to Steel Dynamics, Inc.	$	122,928	$	91,772	$	(46,022)	$	(45,750)	$	122,928

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STEEL DYNAMICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 11.  Condensed Consolidating Information (Continued)

Condensed Consolidating Statements of Cash Flows (in thousands)
For the nine months ended,					Combined		Consolidating		Total
September 30, 2016	Parent		Guarantors		Non-Guarantors		Adjustments		Consolidated
Net cash provided by operating activities	$	280,767	$	358,657	$	52	$	3,735	$	643,211
Net cash used in investing activities		(143,427)		(81,983)		(3,935)		2,879		(226,466)
Net cash provided by (used in) financing activities		198,393		(297,596)		13,529		(6,614)		(92,288)
Increase (decrease) in cash and equivalents		335,733		(20,922)		9,646		-		324,457
Cash and equivalents at beginning of period		636,877		81,976		8,179		-		727,032
Cash and equivalents at end of period	$	972,610	$	61,054	$	17,825	$	-	$	1,051,489

For the nine months ended,					Combined		Consolidating		Total
September 30, 2015	Parent		Guarantors		Non-Guarantors		Adjustments		Consolidated
Net cash provided by (used in) operating activities	$	306,941	$	400,910	$	(4,302)	$	4,748	$	708,297
Net cash used in investing activities		(35,100)		(82,737)		(12,796)		5,359		(125,274)
Net cash provided by (used in) financing activities		(126,984)		(347,111)		13,606		(10,107)		(470,596)
Increase (decrease) in cash and equivalents		144,857		(28,938)		(3,492)		-		112,427
Cash and equivalents at beginning of period		265,313		81,690		14,360		-		361,363
Cash and equivalents at end of period	$	410,170	$	52,752	$	10,868	$	-	$	473,790

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ITEM 2.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Statements

This report contains some predictive statements about future events, including statements related to conditions in the steel and metallic scrap markets, our revenues, costs of purchased materials, future profitability and earnings, and the operation of new or existing facilities. These statements, which we generally precede or accompany by such typical conditional words as “anticipate,” “intend,” “believe,” “estimate,” “plan,” seek,” “project’” or “expect,” or by the words “may,” “will,” or “should,” are intended to be made as “forward-looking,” subject to many risks and uncertainties, within the safe harbor protections of the Private Securities Litigation Reform Act of 1995, incorporated in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements involve both known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These statements speak only as of this date and are based upon information and assumptions, which we consider reasonable as of this date, concerning our businesses and the environments in which they operate. Such predictive statements are not guarantees of future performance, and we undertake no duty to update or revise any such statements. Some factors that could cause such forward-looking statements to turn out differently than anticipated include: (1) the effects of uncertain economic conditions; (2) cyclical and changing industrial demand; (3) changes in conditions in any of the steel or scrap-consuming sectors of the economy which affect demand for our products, including the strength of the non-residential and residential construction, automotive, appliance, pipe and tube, and other steel-consuming industries; (4) fluctuations in the cost of key raw materials (including steel scrap, iron units, and energy costs) and our ability to pass-on any cost increases; (5) the impact of domestic and foreign import price competition; (6) unanticipated difficulties in integrating or starting up new or acquired businesses; (7) risks and uncertainties involving product and/or technology development; and (8) occurrences of unexpected plant outages or equipment failures.

More specifically, we refer you to our more detailed explanation of these and other factors and risks that may cause such predictive statements to turn out differently, as set forth under the headings Special Notes Regarding Forward-Looking Statements and Risk Factors, in our most recent Annual Report on Form 10-K for the year ended December 31, 2015, in our quarterly reports on Form 10-Q or in other reports which we from time to time file with the Securities and Exchange Commission. These reports are available publicly on the Securities and Exchange Commission website, www.sec.gov, and on our website, www.steeldynamics.com.

Description of the Business

We are a domestic manufacturer of steel products and metals recycler. We have three reportable segments: steel operations, metals recycling operations, and steel fabrication operations. Steel operations include our Butler Flat Roll Division, Columbus Flat Roll Division, The Techs galvanizing lines, Structural and Rail Division, Engineered Bar Products Division, Vulcan Threaded Products – acquired August 1, 2016 (Vulcan), Roanoke Bar Division, Steel of West Virginia, and  Iron Dynamics, a liquid pig iron (scrap substitute) production facility that supplies solely the Butler Flat Roll Division. These operations include electric arc furnace steel mills, producing steel from ferrous scrap and scrap substitutes, utilizing continuous casting, automated rolling mills, and ten downstream coating facilities, and one downstream SBQ processing facility.  Metals recycling operations include our metals recycling processing locations, and ferrous scrap procurement operations, of OmniSource Corporation. Steel fabrication operations include our eight New Millennium Building Systems’ joist and deck plants located throughout the United States, and in Northern Mexico. Revenues from these plants are generated from the fabrication of trusses, girders, steel joists and steel deck used within the non-residential construction industry. The  “Other” category consists of subsidiary operations that are below the quantitative thresholds required for reportable segments and primarily consist of our Minnesota ironmaking operations that were indefinitely idled in May 2015, and several smaller joint ventures. Also included in “Other” are certain unallocated corporate accounts, such as our senior secured credit facility, senior notes, certain other investments and certain profit sharing expenses.

Operating Statement Classifications

Net Sales.  Net sales from our operations are a factor of volumes shipped, product mix and related pricing. We charge premium prices for certain grades of steel, product dimensions, certain smaller volumes, and for value-added processing or coating of the steel products.  Except for our steel fabrication operations, we recognize revenue from sales and the allowance for estimated costs associated with returns from these sales at the time the title of the product is transferred to the customer. Provision is made for estimated product returns and customer claims based on estimates and actual historical experience. Net sales from steel fabrication operations are recognized from construction contracts utilizing a percentage of completion methodology based on steel tons used on completed units to date as a percentage of estimated total steel tons required for each contract.

Costs of Goods Sold.  Our costs of goods sold represent all direct and indirect costs associated with the manufacture of our products. The principal elements of these costs are scrap and scrap substitutes (which represent the most significant single component of our consolidated costs of goods sold), steel, direct and indirect labor and related benefits, alloys, zinc, transportation and freight, repairs and maintenance, utilities (most notably electricity and natural gas), and depreciation.

Selling, General and Administrative Expenses.  Selling, general and administrative expenses consist of all costs associated with our sales, finance and accounting, and administrative departments. These costs include, among other items, labor and related benefits, professional services, insurance premiums, property taxes, company-wide profit sharing, and amortization of intangible and other assets.

Interest Expense, net of Capitalized Interest.  Interest expense consists of interest associated with our senior credit facilities and other debt net of interest costs that are required to be capitalized during the construction period of certain capital investment projects. 

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Other (Income) Expense, net.  Other income consists of interest income earned on our temporary cash deposits and investments; any other non-operating income activity, including income from non-consolidated investments accounted for under the equity method. Other expense consists of any non-operating costs, such as certain acquisition and financing expenses.

Results Overview

Consolidated operating income increased $152.8 million, or 117%, to $283.9 million for the third quarter 2016, compared to $131.0 million for the third quarter 2015. Third quarter 2016 net income increased $96.8 million, or 160%, to $157.4 million, from $60.6 million for the third quarter 2015.

Consolidated operating income increased $363.6 million, or 118%, to $671.9 million for the first nine months of 2016, compared to $308.4 million for the first nine months of 2015. First nine months 2016 net income increased $239.2 million, or 195%, to $362.1 million, from $122.9 million for the first nine months of 2015.

Our consolidated results for the third quarter and first nine months of 2016 benefited from continued positive momentum in the sheet steel supply environment, driving improved sheet steel metal spreads, as well as increased metal spread and operating cost reductions in our metals recycling operations. Underlying domestic steel consumption remains relatively consistent, with the heavy equipment, agriculture and energy markets remaining weak, while automotive and non-residential construction markets remain steady. Sheet steel import levels declined approximately 20% during the first nine months of 2016 as compared to the first nine months of 2015, amidst the duties levied pursuant to the trade cases filed with the US International Trade Commission, and customer inventory levels remained low compared to historical averages. While domestic steel mill utilization rates have flattened in the first nine months of 2016 compared to the first nine months of 2015, resulting in lower ferrous volumes in our metals recycling operations, our metal spreads have improved, particularly in nonferrous materials, and we have benefited from continued operational cost cutting efforts. The non-residential construction market for our steel fabrication operations remains strong, resulting in increased shipments; however, average selling prices have contracted and rising steel input costs have resulted in compressed metal spread during 2016.

Segment Operating Results 2016 vs. 2015 (dollars in thousands)

	Three Months Ended September 30,					Nine Months Ended September 30,
	2016		% Change		2015	2016		% Change	2015
Net sales:
Steel Operations Segment	$	1,627,886	16%	$	1,407,533	$	4,419,572	3%	$	4,271,091
Metals Recycling Operations Segment		565,263	(8)%		616,460		1,643,172	(14)%		1,913,921
Steel Fabrication Operations Segment		178,640	2%		174,956		530,441	8%		490,509
Other		61,395	(26)%		83,219		214,149	(20)%		267,127
		2,433,184			2,282,168		6,807,334			6,942,648
Intra-company		(331,874)			(331,245)		(940,821)			(939,283)
	$	2,101,310	8%	$	1,950,923	$	5,866,513	(2)%	$	6,003,365
Operating income (loss):
Steel Operations Segment	$	307,553	147%	$	124,712	$	712,939	110%	$	338,690
Metals Recycling Operations Segment		6,154	273%		(3,555)		20,014	8640%		229
Steel Fabrication Operations Segment		17,744	(52)%		36,733		73,230	(15)%		85,754
Other		(47,687)	(68)%		(28,401)		(125,186)	(7)%		(117,273)
		283,764			129,489		680,997			307,400
Intra-company		91			1,540		(9,055)			959
	$	283,855	117%	$	131,029	$	671,942	118%	$	308,359

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                  Steel Operations Segment

Steel Operations Segment.  Steel operations consist of our six electric arc furnace steel mills, producing steel from ferrous scrap and scrap substitutes, utilizing continuous casting, automated rolling mills, and ten downstream coating lines, one downstream SBQ processing facility, and IDI, our liquid pig production facility that supplies solely our Butler Flat Roll Division mill. Our steel operations sell directly to end users and service centers. These products are used in numerous industry sectors, including the automotive, construction, manufacturing, transportation, heavy and agriculture equipment, and pipe and tube markets. Steel operations accounted for 74% and 69% of our consolidated external net sales during the third quarter of 2016 and 2015, and 72% and 69% of our consolidated external net sales during the first nine months of 2016 and 2015, respectively.

Sheet Products.  Our sheet products operations consist of Butler and Columbus Flat Roll Divisions, and our downstream coating lines, including The Techs. These operations sell a broad range of sheet steel products, such as hot roll, cold roll and coated steel products, including a wide variety of specialty products, such as light gauge hot roll, galvanized and Galvalume®. Butler Flat Roll Division currently sells painted products, while Columbus Flat Roll Division is in the final construction phase of a $100 million expansion to add painted capacity. The Techs is comprised of three galvanizing lines which sell specialized galvanized sheet steels used in non-automotive applications.  

Long Products.  Our Structural and Rail Division sells structural steel beams and pilings to the construction market, as well as standard‑grade and premium rail to the railroad industry. Our Engineered Bar Products Division primarily sells engineered, special-bar-quality and merchant-bar-quality rounds, round‑cornered squares, and smaller-diameter round engineered bars. Vulcan Steel Products manufactures threaded rod products, and also cold drawn and heat treated steel bar. Our Roanoke Bar Division primarily sells merchant steel products, including angles, merchant rounds, flats and channels, and reinforcing bar. Steel of West Virginia primarily sells beams, channels and specialty steel sections.

Steel Operations Segment Shipments (tons):

	Three Months Ended September 30,			Nine Months Ended September 30,
	2016	% Change	2015	2016	% Change	2015
Total shipments	2,271,230	4%	2,191,204	7,039,801	10%	6,382,632
Intra-segment shipments	(65,438)		(56,836)	(216,217)		(175,347)
Steel Operations Segment Shipments	2,205,792	3%	2,134,368	6,823,584	10%	6,207,285
External shipments	2,104,219	4%	2,031,096	6,517,253	10%	5,926,152

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Segment Results 2016 vs. 2015

Overall steel operations performance in the third quarter and first nine months of 2016 benefited from continued positive momentum in the sheet steel supply environment. Sheet steel import levels have declined approximately 20% during the first nine months of 2016 compared to the first nine months of 2015, amidst the duties levied pursuant to the trade case rulings from the US International Trade Commission, and customer inventory levels remained low compared to historical levels, supporting higher domestic shipments, and thus higher company steel mill utilization. Our sheet steel mill utilization rate averaged 97% for the third quarter 2016, as compared to 89% in the third quarter 2015. The domestic steel demand outlook remained relatively unchanged and steady, with the heavy equipment, agricultural and energy markets remaining weak, while automotive continues to be strong and construction continues to improve. Sheet steel selling prices dropped throughout 2015, before rebounding during the first nine months of 2016. Net sales for the steel operations increased 16% in the third quarter 2016, when compared to the same period in 2015, as a 3% increase in steel operations shipments combined with an increase of $78 per ton, or 12%, in average selling prices. Net sales for the steel operations increased 3% in the first nine months of 2016, when compared to the same period in 2015, as a 10% increase in steel operations shipments was more than offset by a decrease of $41 per ton, or 6%, in average selling prices.

Metallic raw materials used in our electric arc furnaces represent our single most significant steel manufacturing cost. During the third quarter 2016 and 2015, our metallic raw material costs represented 57% of our steel operations’ manufacturing costs, excluding the operations of The Techs and Vulcan, which purchase, rather than produce, the steel they further process. Our metallic raw material cost per net ton consumed in our steel operations decreased $2, or 1%, in the third quarter 2016, compared to the same period in 2015.  In the first nine months of 2016, our metallic raw material cost per net ton consumed decreased $50, or 19%, compared to the same period in 2015.

Operating income for the steel operations increased 147%, to $307.6 million, in the third quarter 2016, compared to the same period in 2015, due to increased steel shipments and overall steel operations metal spread (which we define as the difference between average selling prices and the cost of ferrous scrap consumed) expansion. Sheet steel metal spread expanded 37%, while long products metal spread contracted 7%. First nine months 2016 operating income increased 110%, to $712.9 million, compared to the first nine months of 2015, due to a 10% increase in steel shipments coupled with a 2% increase in overall steel operations metal spread. Sheet steel metal spread expanded 11%, while long products metal spread contracted 10%.

Metals Recycling Operations Segment

Metals Recycling Operations Segment.  Metals recycling operations include our metals recycling processing locations, and ferrous scrap procurement operations of OmniSource. OmniSource sells ferrous metals to steel mills and foundries, and nonferrous metals, such as copper, brass, aluminum and stainless steel to, among others, ingot manufacturers, copper refineries and mills, smelters, and specialty mills. Our metals recycling operations accounted for 15% and 18% of our consolidated external net sales during the third quarter of 2016 and 2015, and 15% and 19% of our consolidated external net sales during the first nine months of 2016 and 2015, respectively.

Metals Recycling Operations Shipments:

	Three Months Ended September 30,			Nine Months Ended September 30,
	2016	% Change	2015	2016	% Change	2015
Ferrous metal (gross tons)
Total	1,243,277	(8)%	1,354,339	3,894,755	(1)%	3,945,095
Inter-company	(774,779)		(803,263)	(2,383,223)		(2,125,675)
External shipments	468,498	(15)%	551,076	1,511,532	(17)%	1,819,420
Nonferrous metals (thousands of pounds)
Total	280,107	(3)%	287,898	828,715	1%	823,240
Inter-company	(25,185)		(26,826)	(83,741)		(67,315)
External shipments	254,922	(2)%	261,072	744,974	(1)%	755,925

Segment Results 2016 vs. 2015

Metals recycling operations operating income in the third quarter 2016 of $6.2 million was 273% higher than the third quarter 2015 operating loss of $3.6 million, due to significant improvements in metal spread (which we define as the difference between average selling prices and the cost of purchased scrap) that more than offset shipment declines in both ferrous and nonferrous metals. Net sales decreased 8% in the third quarter 2016 as compared to the same period in 2015, due primarily to decreased shipments. Ferrous metal spread increased 16%, more than offsetting an 8% decrease in ferrous shipments. Overall domestic steel mill utilization was slightly lower in the third quarter 2016 compared to the third quarter 2015, even as our own steel mill utilization improved. Ferrous shipments to our own steel mills increased to 62% of total ferrous shipments in the third quarter 2016, compared to 59% during the same period in 2015. Nonferrous scrap costs declined more than the 8% decline in average selling prices during the third quarter 2016 compared to the same period in 2015, resulting in  a 27% improvement in metal spread as nonferrous shipments declined slightly.

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Operating income for the metals recycling operations in the first nine months of 2016 of $20.0 million was $19.8 million higher than the first nine months of 2015, due to our continued focus on reduction of operating costs, along with improved nonferrous metal spread. Net sales decreased 14% in the first nine months of 2016 compared to the same period in 2015, with ferrous and nonferrous pricing decreasing 13% and 15%, respectively. While ferrous and nonferrous shipments were comparable during the first nine months of 2016 as compared to the same period in 2015, metal spreads for ferrous metal were flat year over year, while nonferrous materials metal spread improved 14%.

Steel Fabrication Operations Segment

Steel fabrication operations include our eight New Millennium Building Systems’ joist and deck plants located throughout the United States, and in Northern Mexico. Revenues from these plants are generated from the fabrication of trusses, girders, steel joists and steel deck used within the non-residential construction industry. Steel fabrication operations accounted for 8% and 9% of our consolidated external net sales during the third quarter of 2016 and 2015, and 9% and 8% of our consolidated external net sales during the first nine months of 2016 and 2015, respectively.  

Segment Results 2016 vs. 2015

The overall non-residential construction market has continued to remain strong; however, declines in selling prices coupled with increased steel input costs during the third quarter 2016 compared to the same period in 2015 resulted in metal spread (which we define as the difference between average selling prices and the cost of purchased steel) compression. Net sales for the steel fabrication operations increased $3.7 million, or 2%, during the third quarter 2016, compared to the same period in 2015, as shipments increased 11%, while average selling prices decreased $106 per ton, or 8%.  Net sales for the segment increased $39.9 million, or 8%, in the first nine months of 2016, compared to the first nine months of 2015, as shipments increased 23%, offsetting a 12% decrease in average selling prices. Our steel fabrication operations continue to leverage our national operating footprint to sustain market share, and market demand continues to be steady.

The purchase of various steel products is the largest single cost of production for our steel fabrication operations, generally representing approximately two-thirds of the total cost of manufacturing. The average cost of steel consumed increased by 5% in the third quarter 2016, as compared to the same period in 2015. In addition, selling prices declined 8% causing metal spread to decline 19%, resulting in a 52% decrease in operating income to $17.8 million in the third quarter 2016, as compared to $36.7 million in the same period in 2015. Segment operating income of $73.3 million in the first nine months of 2016 decreased 15%, from $85.8 million in the first nine months of 2015, as increased shipments of 23% were more than offset by an 11% decrease in metal spreads.

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Other Operations

Other operations consists of subsidiary operations that are below the quantitative thresholds required for reportable segments and primarily consist of our Minnesota ironmaking operations that were indefinitely idled in May 2015, and several smaller joint ventures. Also included in “Other” are certain unallocated corporate accounts, such as the company’s senior secured credit facility, senior notes, certain other investments and certain profit sharing expenses. Prior to being indefinitely idled, our Minnesota ironmaking operations experienced operating losses, which have been significantly curtailed post-idling. The second quarter 2015 Minnesota ironmaking operations operating losses included $21.0 million of inventory lower-of-cost or market charges associated with the idle decision.

Third Quarter Consolidated Results 2016 vs. 2015

Selling, General and Administrative Expenses. Selling, general and administrative expenses (including profit sharing and amortization of intangible assets) of $124.6 million during the third quarter 2016 increased 28% from $97.7 million during the third quarter 2015, representing approximately 5.9% and 5.0% of net sales, respectively. The increase in the third quarter 2016 compared to the same period in 2015 is due most notably to increased performance-based incentive compensation, including profit sharing, associated with our increased profitability.

Interest Expense, net of Capitalized Interest.  During the third quarter 2016, interest expense of $36.2 million was comparable to $37.1 million during the same period in 2015, on comparable debt levels.

Other Expense, net.  During the third quarter of 2016, net other expense was $4.4 million compared to $239,000 in the same period in 2015.The increase in 2016 was due to $4.6 million of estimated litigation settlement charges.

Income Tax Expense.  During the third quarter 2016, our income tax expense was $88.9 million at an effective income tax rate of 36.5%, as compared to $34.8 million at a comparable effective income tax rate of 37.2%, during the third quarter 2015.

First NineMonths Consolidated Results 2016 vs. 2015

Selling, General and Administrative Expenses. Selling, general and administrative expenses (including profit sharing and amortization of intangible assets) of $353.0 million during the first nine months of 2016 increased 26% from $279.2 million during the first nine months of 2015, representing approximately 6.0% and 4.6% of net sales, respectively. The increase in the first nine months 2016 compared to the same period in 2015 is due most notably to increased performance-based incentive compensation, including profit sharing, associated with our increased profitability.

Interest Expense, net of Capitalized Interest.  During the first nine months of 2016, interest expense decreased $7.4 million to $109.9 million, when compared to the same period in 2015. The decrease in interest expense is due primarily to the call and prepayment of our $350.0 million 7 5/₈% Senior Notes due 2020, in March 2015.

Other Expense, net.  During the first nine months of 2016, net other expense was $741,000 compared to $15.2 million in the same period in 2015, which included $16.7 million of call premium and other finance expenses associated with the March 2015 senior note call and prepayment.

Income Tax Expense.  During the first nine months of 2016, our income tax expense was $205.1 million at an effective income tax rate of 36.5%, as compared to $64.7 million at comparable effective income tax rate of 36.8%, during the first nine months of 2015.

Liquidity and Capital Resources

Capital Resources and Long‑term Debt. Our business is capital intensive and requires substantial expenditures for, among other things, the purchase and maintenance of equipment used in our steel, metals recycling, and steel fabrication operations, and to remain in compliance with environmental laws. Our short-term and long-term liquidity needs arise primarily from working capital requirements, capital expenditures, principal and interest payments related to our outstanding indebtedness, dividends to our shareholders, and acquisitions. We have met these liquidity requirements primarily with cash provided by operations and long-term borrowings, and we also have availability under our Revolver. Our liquidity at September 30, 2016, is as follows (in thousands):

Cash and equivalents	$	1,051,489
Revolver availability		1,187,513
Total liquidity	$	2,239,002

Our total outstanding debt remained relatively unchanged during the first nine months of 2016 at $2.6 billion. Our total long-term debt to capitalization ratio (representing our long-term debt, including current maturities, divided by the sum of our long-term debt, redeemable noncontrolling interests, and our total stockholders’ equity) was 46.7% at September 30, 2016, compared to 49.3% at December 31, 2015.

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We have a senior secured credit facility (Facility) that matures in November 2019 which provides for a $1.2 billion Revolver along with a term loan facility. Subject to certain conditions, we also have the ability to increase the combined facility size by a minimum of $750 million. The Facility contains financial and other covenants pertaining to our ability (which may under certain circumstances be limited) to make capital expenditures; incur indebtedness; permit liens on property; enter into transactions with affiliates; make restricted payments or investments; enter into mergers, acquisitions or consolidations; conduct asset sales; pay dividends or distributions and enter into other specified transactions and activities. Our ability to borrow funds within the terms of the Revolver is dependent upon our continued compliance with the financial and other covenants. At September 30, 2016, we had $1.2 billion of availability on the Revolver, $12.1 million of outstanding letters of credit and other obligations which reduce availability, and there were no borrowings outstanding.

The financial covenants under our Facility state that we must maintain an interest coverage ratio of not less than 2.50:1.00. Our interest coverage ratio is calculated by dividing our last-twelve trailing months (LTM) consolidated adjusted EBITDA (earnings before interest, taxes, depreciation, amortization, and certain other non-cash transactions as allowed in our Facility) by our LTM gross interest expense, less amortization of financing fees. In addition, a net debt (as defined in the Facility) to consolidated LTM adjusted EBITDA (net debt leverage ratio) of not more than 5.00:1.00 must be maintained. If the net debt leverage ratio exceeds 3.50:1:00 at any time, our ability to make certain payments as defined in the Facility (which includes cash dividends to stockholders and share purchases, among other things), is limited. At September 30, 2016, our interest coverage ratio and net debt leverage ratio were 7.36:1.00 and 2.01:1.00, respectively. We were, therefore, in compliance with these covenants at September 30, 2016, and we anticipate we will continue to be in compliance during the next twelve months.  

Working Capital.We generated cash flow from operations of $643.2 million in the first nine months of 2016. Operational working capital (representing amounts invested in trade receivables and inventories, less current liabilities other than income taxes payable and debt) of $1.3 billion at September 30, 2016, was comparable to that at December 31, 2015. Increases in volumes, pricing and profitability have resulted in increased accounts receivable and inventory, which have been offset by increases in accounts payable and accrued expenses.  

Capital Investments.During the first nine months of 2016, we invested $123.2 million in property, plant and equipment, primarily within our steel operations segment, compared with $86.5 million invested during the same period in 2015. The increase in 2016 is primarily due to our Columbus Flat Roll Division’s $100 million expansion to add painted and Galvalume® capacity.

Cash Dividends.As a reflection of continued confidence in our current and future cash flow generation ability and financial position, we increased our quarterly cash dividend by 2% to $0.1400 per share in the first quarter 2016 (from $0.1375 per share in 2015), resulting in declared cash dividends of $102.3 million during the first nine months of 2016, compared to $99.8 million during the same period in 2015. We paid cash dividends of $101.6 million and $94.3 million during the first nine months of 2016 and 2015, respectively. Our board of directors, along with executive management, approves the payment of dividends on a quarterly basis. The determination to pay cash dividends in the future is at the discretion of our board of directors, after taking into account various factors, including our financial condition, results of operations, outstanding indebtedness, current and anticipated cash needs and growth plans. In addition, the terms of our senior secured credit facility and the indenture relating to our senior notes may restrict the amount of cash dividends we can pay.

Other.  Our ability to meet our debt service obligations and reduce our total debt will depend upon our future performance which, in turn, will depend upon general economic, financial and business conditions, along with competition, legislation and regulatory factors that are largely beyond our control. In addition, we cannot assure that our operating results, cash flows, access to credit markets and capital resources will be sufficient for repayment of our indebtedness in the future. We believe that based upon current levels of operations and anticipated growth, cash flows from operations, together with other available sources of funds, including additional borrowings under our Revolver through its term, will be adequate for the next twelve months for making required payments of principal and interest on our indebtedness, funding working capital requirements, and anticipated capital expenditures.

In October 2016, the board of directors authorized a share repurchase program of up to $450 million of our common stock. Under the share repurchase program, purchases will take place as and when we determine in open market or private transactions made based upon the market price of our common stock, the nature of other investment opportunities or growth projects, our cash flows from operations, and general economic conditions.  The share repurchase program does not require us to acquire any specific number of shares, and may be modified, suspended, extended or terminated by us at any time.

ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk

In the normal course of business, we are exposed to interest rate changes. Our objectives in managing exposure to interest rate changes are to limit the impact of these rate changes on earnings and cash flows and to lower overall borrowing costs. To achieve these objectives, we occasionally use interest rate swaps to manage net exposure to interest rate changes related to our portfolio of borrowings. We did not have any interest rate swaps during the three- and nine-month periods ended September 30, 2016 or 2015.

Commodity Risk

In the normal course of business we are exposed to the market risk and price fluctuations related to the sale of our products and to the purchase of raw materials used in our operations, such as metallic raw materials, electricity, natural gas and its transportation services, fuel, air products, and zinc. Our risk strategy associated with product sales has generally been to obtain competitive prices for our products and to allow operating results to reflect market price movements dictated by supply and demand.

25

Our risk strategy associated with the purchase of raw materials utilized within our operations has generally been to make some commitments with suppliers relating to future expected requirements for some commodities such as electricity, natural gas and its transportation services, fuel, air products, and zinc. Certain of these commitments contain provisions which require us to “take or pay” for specified quantities without regard to actual usage generally for periods of up to 24 months for physical commodity requirements (in certain cases up to 60 months), for up to 4 years for commodity transportation requirements, and for up to 12 years for air products. We utilized such “take or pay” requirements during the past three years under these contracts, except for certain air products at our Minnesota ironmaking operations which were idled in May 2015. We believe that production requirements will be such that consumption of the products or services purchased under these commitments will occur in the normal production process, other than certain air products related to our Minnesota ironmaking operations during the idle period. We also purchase electricity consumed at our Butler Flat Roll Division pursuant to a contract which extends through December 2017. The contract designates 160 hours annually as “interruptible service” and establishes an agreed fixed-rate energy charge per Mill/kWh consumed for each year through the expiration of the agreement.

In our metals recycling operations we have certain fixed price contracts with various customers and suppliers for future delivery of nonferrous metals. Our risk strategy has been to enter into base metal financial contracts with the goal to protect the profit margin, within certain parameters, that was contemplated when we entered into the transaction with the customer or vendor. At September 30, 2016, we had a cumulative unrealized loss associated with these financial contracts of $1.6 million, substantially all of which have a settlement date within the next twelve months. We believe the customer contracts associated with the financial contracts will be fully consummated.

ITEM 4.CONTROLS AND PROCEDURES

(a)  Evaluation of Disclosure Controls and Procedures.  Our management, with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures as of September 30, 2016. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Based on the evaluation of our disclosure controls and procedures as of September 30, 2016, our principal executive officer and principal financial officer concluded that, as of such date, our disclosure controls and procedures were effective.

(b)  Changes in Internal Controls Over Financial Reporting.  No change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the fiscal quarter ended September 30, 2016, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. 

26

PART II OTHER INFORMATION

ITEM 1.LEGAL PROCEEDINGS

Although, as noted below, a tentative settlement has been reached in the case, we have to date been involved, along with two other remaining non-settling defendant steel manufacturing companies, from an original group of eight, in a direct purchaser class action antitrust suit in federal court in Chicago, Illinois, under the caption of Standard Iron Works v Arcelor Mittal, et al.  Two other complaints, not yet settled, were brought on behalf of a purported class of indirect purchasers of steel products within the same time period. We have a pending motion to dismiss in that case. The complaints allege a conspiracy to limit output on the part of the defendants, in order to fix, raise, maintain and stabilize the price at which steel products were sold in the United States during a specified period between 2005 and 2007. The complaints seek treble damages and costs, including reasonable attorney fees, pre- and post-judgment interest and injunctive relief. In September 2015, the Court denied class certification on the issue of antitrust impact and damages, but granted class certification on the limited issue of the alleged conspiracy.

In October 2016, we announced that we have entered into an agreement to settle the direct purchaser case for a payment of $4.6 million. Preliminary approval was granted by the court on November 3, 2016, and final approval by the Court is also expected to be forthcoming. During the approval process, members of the class will be given an opportunity to opt-out of the class and retain their own individual rights.

Due to the uncertain nature of litigation, we cannot presently predict either the final outcome of the proposed settlement process, including whether there may be opt-outs from the settlement, or the outcome of the remaining indirect purchaser case.  Based on the information available at this time, however, we have determined that, apart from the proposed settlement amount in the direct case, there is not presently a “reasonable possibility” (as that term is defined in ASC 450-20-20), that the outcome of the remaining unresolved matters will have a material impact on our financial condition, results of operations, or liquidity. Although not presently necessary or appropriate to make a dollar estimate of exposure to loss, if any, in connection with these remaining matters, we may in the future determine that a further loss accrual may be necessary. Further, although we may make loss accruals, if and as warranted, any amounts that we may accrue from time to time could vary significantly from the amounts we actually pay, due to inherent uncertainties and the inherent shortcomings of the estimation process, the uncertainties involved in litigation and other factors. Additionally, an adverse result could have a material effect on our financial condition, results of operations and liquidity.

We are additionally involved in various routine litigation matters, including administrative proceedings, regulatory proceedings, governmental investigations, environmental matters, and commercial and construction contract disputes, none of which are expected to have a material impact on our financial condition, results of operations, or liquidity.

ITEM 1A.RISK FACTORS

No material changes have occurred to the indicated risk factors as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2015.

ITEM 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3.DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.MINE SAFETY DISCLOSURES

Information normally required to be furnished, in Exhibit 95 to this Quarterly Report, pursuant to Item 4 concerning mine safety disclosure matters, if applicable, by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K (17 CFR 229.104), is not included in this report, as there are no applicable mine safety disclosure matters to report for the three months ended September 30, 2016. Accordingly, there is no Exhibit 95 attached to this report.

ITEM 5.OTHER INFORMATION

None.

27

ITEM 6.EXHIBITS

Executive Officer Certifications

31.1*Certification of Principal Executive Officer required by Item 307 of Regulation S-K as promulgated by the

Securities and Exchange Commission and pursuant to Section 302 of the Sarbanes‑Oxley Act of 2002.

31.2*Certification of Principal Financial Officer required by Item 307 of Regulation S-K as promulgated by the

Securities and Exchange Commission and pursuant to Section 302 of the Sarbanes‑Oxley Act of 2002.

32.1*Certification of Chief Executive Officer Pursuant to 18 U.S.C Section 1350, as Adopted Pursuant to

Section 906 of the Sarbanes‑Oxley Act of 2002.

32.2*Certification of Chief Financial Officer Pursuant to 18 U.S.C Section 1350, as Adopted Pursuant to

Section 906 of the Sarbanes‑Oxley Act of 2002.

Other

95**Mine Safety Disclosures.

XBRL Documents

101.INS*XBRL Instance Document

101.SCH*XBRL Taxonomy Extension Schema Document

101.CAL*XBRL Taxonomy Extension Calculation Document

101.DEF*XBRL Taxonomy Definition Document

101.LAB*XBRL Taxonomy Extension Label Document

101.PRE*XBRL Taxonomy Presentation Document

_____________________________________________________________________________________________________________

*Filed concurrently herewith

**Inapplicable for purposes of this report

28

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

November 9, 2016

STEEL DYNAMICS, INC
By:	/s/ Theresa E. Wagler
	Theresa E. Wagler
	Executive Vice President and Chief Financial Officer
	(Principal Financial Officer and Principal Accounting Officer)

29

EX-31.1

EXHIBIT 31.1

CERTIFICATION

I, Mark D. Millett, certify that:

1.I have reviewed this quarterly report for the period ended September 30, 2016, on Form 10‑Q of Steel Dynamics, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ Mark D. Millett

Mark D. Millett

Chief Executive Officer

(Principal Executive Officer)

November 9, 2016

EX-31.2

EXHIBIT 31.2

CERTIFICATION

I, Theresa E. Wagler, certify that:

1.I have reviewed this quarterly report for the period ended September 30, 2016, on Form 10‑Q of Steel Dynamics, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ Theresa E. Wagler

Theresa E. Wagler

Executive Vice President and Chief Financial Officer

(Principal Financial Officer and Principal Accounting Officer)

November 9, 2016

EX-32.1

EXHIBIT 32.1

Chief Executive Officer Certification

Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of Steel Dynamics, Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2016 (the “Report”), as filed with the Securities and Exchange Commission on the date hereof, I, Mark D. Millett, Chief Executive Officer of Steel Dynamics, Inc., certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Mark D. Millett                        

Mark D. Millett

Chief Executive Officer

(Principal Executive Officer)

November 9, 2016

A signed original of this written statement required by Section 906 has been provided to Steel Dynamics, Inc. and will be retained by Steel Dynamics, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

EXHIBIT 32.2

Principal Financial Officer Certification

Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of Steel Dynamics, Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2016 (the “Report”), as filed with the Securities and Exchange Commission on the date hereof, I, Theresa E. Wagler, Executive Vice President and Chief Financial Officer of Steel Dynamics, Inc., certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Theresa E. Wagler                             

Theresa E. Wagler

Executive Vice President and Chief Financial Officer

(Principal Financial Officer and Principal Accounting Officer)

November 9, 2016

A signed original of this written statement required by Section 906 has been provided to Steel Dynamics, Inc. and will be retained by Steel Dynamics, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2016	Nov. 01, 2016
Document and Entity Information
Entity Registrant Name	STEEL DYNAMICS INC
Entity Central Index Key	0001022671
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q3
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		243,815,236

XML

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Current assets
Cash and equivalents	$ 1,051,489	$ 727,032
Accounts receivable, net	752,232	579,333
Accounts receivable-related parties	27,227	34,272
Inventories	1,275,575	1,149,390
Other current assets	30,121	47,914
Total current assets	3,136,644	2,537,941
Property, plant and equipment, net	2,928,226	2,951,210
Restricted cash	19,571	19,565
Intangible assets, net	291,814	278,960
Goodwill	399,867	397,470
Other assets	11,440	16,936
Total assets	6,787,562	6,202,082
Current liabilities
Accounts payable	427,790	276,725
Accounts payable-related parties	10,046	6,630
Income taxes payable	35,733	2,023
Accrued payroll and benefits	143,986	94,906
Accrued interest	47,882	38,502
Accrued expenses	112,521	99,824
Current maturities of long-term debt	16,155	16,680
Total current liabilities	794,113	535,290
Long-term debt	2,570,837	2,577,976
Deferred income taxes	450,159	400,770
Other liabilities	20,751	16,595
Commitments and contingencies
Redeemable noncontrolling interests	126,340	126,340
Equity
Common stock voting, $.0025 par value; 900,000,000 shares authorized; 263,396,348, and 262,937,139 shares issued; and 243,770,777, and 243,089,514 shares outstanding, as of September 30, 2016 and December 31, 2015, respectively	640	638
Treasury stock, at cost; 19,625,571, and 19,847,625 shares as of September 30, 2016 and December 31, 2015 respectively	(392,051)	(396,455)
Additional paid-in capital	1,132,365	1,110,253
Retained earnings	2,224,963	1,965,291
Total Steel Dynamics, Inc. equity	2,965,917	2,679,727
Noncontrolling interests	(140,555)	(134,616)
Total equity	2,825,362	2,545,111
Total liabilities and equity	$ 6,787,562	$ 6,202,082

XML

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Sep. 30, 2016	Dec. 31, 2015
CONSOLIDATED BALANCE SHEETS
Common stock voting, par value (in dollars per share)	$ 0.0025	$ 0.0025
Common stock voting, shares authorized (in shares)	900,000,000	900,000,000
Common stock voting, shares issued (in shares)	263,396,348	262,937,139
Common stock voting, shares outstanding (in shares)	243,770,777	243,089,514
Treasury stock, shares (in shares)	19,625,571	19,847,625

XML

CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Net sales
Unrelated parties	$ 2,060,596	$ 1,901,415	$ 5,737,584	$ 5,851,371
Related parties	40,714	49,508	128,929	151,994
Total net sales	2,101,310	1,950,923	5,866,513	6,003,365
Costs of goods sold	1,692,807	1,722,197	4,841,591	5,415,854
Gross profit	408,503	228,726	1,024,922	587,511
Selling, general and administrative expenses	95,185	82,648	279,899	242,207
Profit sharing	22,255	9,008	51,722	18,637
Amortization of intangible assets	7,208	6,041	21,359	18,308
Operating income	283,855	131,029	671,942	308,359
Interest expense, net of capitalized interest	36,199	37,084	109,888	117,334
Other expense, net	4,351	239	741	15,219
Income before income taxes	243,305	93,706	561,313	175,806
Income taxes	88,892	34,839	205,139	64,660
Net income	154,413	58,867	356,174	111,146
Net loss attributable to noncontrolling interests	2,984	1,750	5,929	11,782
Net income attributable to Steel Dynamics, Inc.	$ 157,397	$ 60,617	$ 362,103	$ 122,928
Basic earnings per share attributable to Steel Dynamics, Inc. stockholders	$ 0.65	$ 0.25	$ 1.49	$ 0.51
Weighted average common shares outstanding - basic (in shares)	243,761	242,074	243,539	241,836
Diluted earnings per share attributable to Steel Dynamics, Inc. stockholders, including the effect of assumed conversions when dilutive (in dollars per share)	$ 0.64	$ 0.25	$ 1.48	$ 0.51
Weighted average common shares and share equivalents outstanding (in shares)	245,682	243,822	245,227	243,393
Dividends declared per share (in dollars per share)	$ 0.1400	$ 0.1375	$ 0.4200	$ 0.4125

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Operating activities:
Net income	$ 154,413	$ 58,867	$ 356,174	$ 111,146
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	74,190	74,211	222,970	221,306
Equity-based compensation	5,924	5,332	21,565	20,232
Deferred income taxes	18,478	13,130	53,879	46,214
Loss on disposal of assets	161	655	1,178	6,638
Changes in certain assets and liabilities:
Accounts receivable	29,384	36,361	(149,810)	122,296
Inventories	(76,013)	(8,763)	(102,339)	317,410
Other assets	694	(3,100)	12,053	8,794
Accounts payable	(49,171)	(62,757)	117,220	(127,075)
Income taxes receivable/payable	(7,421)	19,888	40,960	29,309
Accrued expenses	45,701	30,554	69,361	(47,973)
Net cash provided by operating activities	196,340	164,378	643,211	708,297
Investing activities:
Purchases of property, plant and equipment	(59,774)	(30,286)	(123,168)	(86,458)
Acquisition of business, net of cash acquired	(109,065)	(45,000)	(109,065)	(45,000)
Other investing activities	1,507	3,715	5,767	6,184
Net cash used in investing activities	(167,332)	(71,571)	(226,466)	(125,274)
Financing activities:
Issuance of current and long-term debt	12,911	67,999	97,018	179,033
Repayment of current and long-term debt	(9,999)	(73,420)	(95,253)	(561,428)
Dividends paid	(34,124)	(33,282)	(101,639)	(94,281)
Stock option exercise proceeds, including related tax effect	1,027	302	7,602	7,261
Other financing activities		(17)	(16)	(1,181)
Net cash used in financing activities	(30,185)	(38,418)	(92,288)	(470,596)
Increase (decrease) in cash and equivalents	(1,177)	54,389	324,457	112,427
Cash and equivalents at beginning of period	1,052,666	419,401	727,032	361,363
Cash and equivalents at end of period	1,051,489	473,790	1,051,489	473,790
Supplemental disclosure information:
Cash paid for interest	26,225	26,701	97,605	115,345
Cash paid (received) for federal and state income taxes, net	$ 75,860	$ 1,172	$ 104,124	$ (10,321)

XML

Description of the Business and Significant Accounting Policies

9 Months Ended

Sep. 30, 2016

Description of the Business and Significant Accounting Policies

Description of the Business and Significant Accounting Policies

Note 1.  Description of the Business and Significant Accounting Policies

Description of the Business

Steel Dynamics, Inc. (SDI), together with its subsidiaries (the company), is one of the largest domestic steel producers and metals recyclers. The company has three reportable segments, consistent with how it manages the business: steel operations, metals recycling operations, and steel fabrication operations.

Steel Operations Segment.  Steel operations include the company’s Butler Flat Roll Division, Columbus Flat Roll Division, The Techs galvanizing lines, Structural and Rail Division, Engineered Bar Products Division, Vulcan Threaded Products (since its acquisition on August 1, 2016), Roanoke Bar Division, Steel of West Virginia, and Iron Dynamics (IDI), a liquid pig iron (scrap substitute) production facility that supplies solely the Butler Flat Roll Division. These operations include electric arc furnace steel mills, producing steel from ferrous scrap and scrap substitutes, utilizing continuous casting, automated rolling mills, and ten downstream coating lines, and one downstream SBQ processing facility. Steel operations accounted for 74% and 69% of the company’s consolidated external net sales during the three months ended September 30, 2016 and 2015, and 72% and 69% of the company’s consolidated external net sales during the nine months ended September 30, 2016 and 2015, respectively.

Metals Recycling Operations Segment. Metals recycling operations include the company’s metals recycling processing locations, and ferrous scrap procurement operations, of OmniSource Corporation. Metals recycling operations accounted for 15% and 18% of the company’s consolidated external net sales during the three months ended September 30, 2016 and 2015, and 15% and 19% of the company’s consolidated external net sales during the nine months ended September 30, 2016 and 2015, respectively.

Steel Fabrication Operations Segment.  Steel fabrication operations include the company’s eight New Millennium Building Systems’ joist and deck plants located throughout the United States, and in Northern Mexico. Revenues from these plants are generated from the fabrication of trusses, girders, steel joists and steel deck used within the non-residential construction industry. Steel fabrication operations accounted for approximately 8% and 9% of the company’s consolidated external net sales during the three months ended September 30, 2016 and 2015, and 9% and 8% of the company’s consolidated external net sales during the nine months ended September 30, 2016 and 2015, respectively.

Other. The  “Other” category consists of subsidiary operations that are below the quantitative thresholds required for reportable segments and primarily consist of our Minnesota ironmaking operations that were indefinitely idled in May 2015, and several smaller joint ventures. Also included in “Other” are certain unallocated corporate accounts, such as the company’s senior secured credit facility, senior notes, certain other investments and certain profit sharing expenses.

Significant Accounting Policies

Principles of Consolidation.  The consolidated financial statements include the accounts of SDI, together with its wholly and majority-owned or controlled subsidiaries, after elimination of intercompany accounts and transactions. Noncontrolling interests represent the noncontrolling owner’s proportionate share in the equity, income, or losses of the company’s majority-owned or controlled consolidated subsidiaries. 

Use of Estimates. These financial statements are prepared in conformity with accounting principles generally accepted in the United States, and accordingly, include amounts that require management to make estimates and assumptions that affect the amounts reported in the financial statements and in the notes thereto. Significant items subject to such estimates and assumptions include the carrying value of property, plant and equipment, intangible assets, and goodwill; valuation allowances for trade receivables, inventories and deferred income tax assets; unrecognized tax benefits; potential environmental liabilities; and litigation claims and settlements. Actual results may differ from these estimates and assumptions. 

In the opinion of management, these financial statements reflect all normal recurring adjustments necessary for a fair presentation of the interim period results. These financial statements and notes should be read in conjunction with the audited financial statements and notes thereto included in the company’s Annual Report on Form 10-K for the year ended December 31, 2015.

Note 1.  Description of the Business and Significant Accounting Policies (Continued)

Goodwill.  The company’s goodwill is allocated to the following reporting units at September 30, 2016, and December 31, 2015, (in thousands):

		September 30,		December 31,
		2016		2015
Metals Recycling Segment:	OmniSource	$	104,247	$	109,039
	Butler Flat Roll Division,  Structural and Rail Division,
	and Engineered Bar Division		95,000		95,000
Steel Segment:	The Techs		142,783		142,783
	Roanoke Bar Division		29,041		29,041
	Columbus Flat Roll Division		19,682		19,682
	Vulcan Threaded Products		7,189		-
Fabrication Segment:	New Millennium Building Systems		1,925		1,925
		$	399,867	$	397,470

OmniSource goodwill decreased $4.8 million from December 31, 2015 to September 30, 2016, in recognition of the 2016 tax benefit related to the normal amortization of the component of OmniSource tax-deductible goodwill in excess of book goodwill.

Recently Issued Accounting Standards

In May 2014, the FASB issued guidance codified in ASC 606, Revenue Recognition – Revenue from Contracts with Customers, which amends the guidance in former ASC 605, Revenue Recognition.  The core principle of ASC 606 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Because the guidance in ASC 606 is principles-based, it can be applied to all contracts with customers regardless of industry-specific or transaction-specific fact patterns. Additionally, ASC 606 requires additional disclosures to help users of financial statements better understand the nature, amount, timing, and potential uncertainty of revenue that is recognized. This guidance is effective for annual and interim periods beginning after December 15, 2017, but can be early adopted for annual and interim periods ending after December 15, 2016. The company is currently evaluating the impact of the provisions of ASC 606, including the timing and method of adoption.

In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory, which requires an entity to measure inventory at the lower of cost and net realizable value, rather than at the lower of cost or market.  This new guidance is effective for annual and interim periods beginning after December 15, 2016, but can be early adopted. The company is currently evaluating the impact of this ASU’s adoption.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842): which establishes a new lease accounting model that requires lessees to recognize a right of use asset and related lease liability for most leases having lease terms of more than 12 months.  Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases.  This new guidance is effective for annual and interim periods beginning after December 15, 2018, but can be early adopted.  The company is currently evaluating the impact of the provisions of ASU 2016-02, including the timing of adoption. 

In March 2016, the FASB issued ASU 2016-09, Improvement to Employee Share-based Payment Accounting, which simplifies several aspects of accounting for share-based payment transactions, including recognizing excess tax benefits and deficiencies as income tax expense or benefit in the income statement and as operating activities within the statement of cash flows, and an option to recognize gross stock compensation expense with actual forfeitures recognized as incurred. This new guidance is effective for annual and interim periods beginning after December 15, 2016, but can be early adopted.  The company is currently evaluating the impact of the provisions of ASU 2016-09, including the timing of adoption.

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Acquisitions

9 Months Ended

Sep. 30, 2016

Acquisitions

Acquisitions

Note 2.  Acquisitions

Vulcan Threaded Products, Inc.

On August 1, 2016, the company completed its acquisition of 100% of Vulcan Threaded Products, Inc. (Vulcan) for $113.0 million, inclusive of $29.2 million in working capital, which is subject to typical post-closing adjustments. The purchase price was paid in cash from available funds. Post-closing operating results of Vulcan are reflected in the steel operations reporting segment. Unaudited proforma operating results as if the acquisition had occurred on January 1, 2015, have not been presented as the effect to 2015 and 2016 consolidated operating results is not significant. Vulcan is the nation’s largest manufacturer and supplier of threaded rod products, and also cold drawn and heat treated steel bar. The acquisition of Vulcan is consistent with one of our target growth objectives – higher-margin downstream business opportunities that utilize our steel products in their manufacturing processes. Vulcan utilizes special-bar-quality products produced at our Engineered Bar Products Division.

Note 2.  Acquisitions (Continued)

The aggregate purchase price was allocated on a preliminarily basis to the opening balance sheet of Vulcan as of the August 1, 2016, acquisition date. The following initial allocation of the purchase price (in thousands) is preliminary. The accounting for the acquisition has not yet been finalized based on the company’s valuation of the acquired assets, assumed liabilities and identifiable intangible assets, including goodwill, if any. The preliminary fair values were determined using various valuation techniques that in each case used Level 3 inputs as provided for under ASC 820.

Current assets, net of cash acquired	$	36,958
Property, plant & equipment		40,213
Intangible assets		32,930
Goodwill		7,189
Total assets acquired		117,290
Liabilities assumed		4,456
Net assets acquired	$	112,834

The preliminary assessment allocates $32.9 million of the purchase price to the following intangible assets, including customer relationships, trade name, and noncompete agreements. The company plans to utilize an accelerated amortization methodology to follow the pattern in which the economic benefits of the customer relationship intangible asset is anticipated to be consumed. The company plans to amortize the intangible assets related to the trade name and noncompete agreements using a straight line methodology. However, the expected lives and specific amortization methods are subject to finalization of the company’s valuation process. 

Consolidated Systems, Inc.

On September 14, 2015, the company purchased from CSi certain of its steel deck facilities (including associated assets) and net working capital of approximately $30.0 million, for a purchase price of $45.0 million in cash. Operating results of these facilities have been reflected in the company’s financial statements under the steel fabrication operations since the September 14, 2015, purchase date. The purchased assets include two deck facilities located in Memphis, Tennessee, and Phoenix, Arizona. Producing both standard and premium specialty deck profiles, the new locations will allow for enhanced geographic reach into the southwestern and western markets, and further diversify New Millennium Building Systems’ product offerings.

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Earnings Per Share

9 Months Ended

Sep. 30, 2016

Earnings Per Share

Earnings Per Share

Note 3.  Earnings Per Share

Basic earnings per share is based on the weighted average shares of common stock outstanding during the period. Diluted earnings per share assumes the weighted average dilutive effect of common share equivalents outstanding during the period applied to the company’s basic earnings per share. Common share equivalents represent potentially dilutive stock options, restricted stock units and deferred stock units; and are excluded from the computation in periods in which they have an anti-dilutive effect. There were no anti-dilutive common share equivalents at or for the three- and nine- month periods ended September 30, 2016 and 2015.

The following table presents a reconciliation of the numerators and the denominators of the company’s basic and diluted earnings per share computations for the three and nine months ended September 30, 2016 and 2015 (in thousands, except per share data):

	Three Months Ended September 30,
	2016					2015
	Net Income		Shares	Per Share		Net Income		Shares	Per Share
	(Numerator)		(Denominator)	Amount		(Numerator)		(Denominator)	Amount
Basic earnings per share	$	157,397	243,761	$	0.65	$	60,617	242,074	$	0.25
Dilutive common share equivalents		-	1,921				-	1,748
Diluted earnings per share	$	157,397	245,682	$	0.64	$	60,617	243,822	$	0.25

	Nine Months Ended September 30,
	2016						2015
	Net Income		Shares		Per Share		Net Income		Shares		Per Share
	(Numerator)		(Denominator)		Amount		(Numerator)		(Denominator)		Amount
Basic earnings per share	$	362,103		243,539	$	1.49	$	122,928		241,836	$	0.51
Dilutive common share equivalents		-		1,688				-		1,557
Diluted earnings per share	$	362,103		245,227	$	1.48	$	122,928		243,393	$	0.51

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Inventories

9 Months Ended

Sep. 30, 2016

Inventories

Inventories

Note 4.  Inventories

Inventories are stated at lower of cost or market. Cost is determined using a weighted average cost method for scrap, and on a first-in, first-out, basis for other inventory. Inventory consisted of the following (in thousands):

	September 30,		December 31,
	2016		2015
Raw materials	$	490,164	$	419,608
Supplies		392,433		396,349
Work in progress		124,428		90,486
Finished goods		268,550		242,947
Total inventories	$	1,275,575	$	1,149,390

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Debt

9 Months Ended

Sep. 30, 2016

Debt

Debt

Note 5.  Debt

On March 16, 2015, the company called and repaid all $350.0 million of its outstanding 7 5/8% Senior Notes due 2020 (the “Notes”) at a redemption price of 103.813% of the principal amount of the Notes, plus accrued and unpaid interest to, but not including, the date of redemption. Associated premiums and the write off of deferred financing costs of approximately $16.7 million were recorded in other expense in conjunction with the redemption.

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Changes in Equity

9 Months Ended

Sep. 30, 2016

Changes in Equity

Changes in Equity

Note 6.  Changes in Equity

The following table provides a reconciliation of the beginning and ending carrying amounts of total equity, equity attributable to stockholders of Steel Dynamics, Inc. and equity and redeemable amounts attributable to the noncontrolling interests (in thousands):

	Stockholders of Steel Dynamics, Inc.
			Additional										Redeemable
	Common		Paid-In		Retained		Treasury		Noncontrolling		Total		Noncontrolling
	Stock		Capital		Earnings		Stock		Interests		Equity		Interests
Balances at December 31, 2015	$	638	$	1,110,253	$	1,965,291	$	(396,455)	$	(134,616)	$	2,545,111	$	126,340
Exercise of stock options proceeds,
including related tax effect		2		7,874		-		-		-		7,876		-
Dividends declared		-		-		(102,342)		-		-		(102,342)		-
Distributions to noncontrolling
investors, net		-		-		-		-		(10)		(10)		-
Equity-based compensation		-		14,238		(89)		4,404		-		18,553		-
Comprehensive and net income (loss)		-		-		362,103		-		(5,929)		356,174		-
Balances at September 30, 2016	$	640	$	1,132,365	$	2,224,963	$	(392,051)	$	(140,555)	$	2,825,362	$	126,340

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Derivative Financial Instruments

9 Months Ended

Sep. 30, 2016

Derivative Financial Instruments

Derivative Financial Instruments

Note 7.  Derivative Financial Instruments

The company is exposed to certain risks relating to its ongoing business operations. The company utilizes derivative instruments to mitigate commodity margin risk, interest rate risk and foreign currency exchange rate risk. The company routinely enters into forward exchange traded futures and option contracts to manage the price risk associated with nonferrous metals inventory as well as purchases and sales of nonferrous metals (primarily aluminum and copper).  The company offsets fair value amounts recognized for derivative instruments executed with the same counterparty under master netting agreements. 

Note 7.  Derivative Financial Instruments (Continued)

Commodity Futures Contracts.  If the company is “long” on futures contracts, it means the company has more futures contracts purchased than futures contracts sold for the underlying commodity. If the company is “short” on a futures contract, it means the company has more futures contracts sold than futures contracts purchased for the underlying commodity. The following summarizes the company’s futures contract commitments as of September 30, 2016 (MT represents metric tons):

Commodity Futures	Long/Short	Total
Aluminum	Long	1,750	MT
Aluminum	Short	1,575	MT
Copper	Long	4,413	MT
Copper	Short	13,950	MT

The following summarizes the location and amounts of the fair values reported on the company’s balance sheets as of September 30, 2016, and December 31, 2015, and gains and losses related to derivatives included in the company’s statement of income for the three and nine months ended September 30, 2016 and 2015 (in thousands):

	Asset Derivatives					Liability Derivatives
	Balance sheet	Fair Value				Fair Value
	location	September 30, 2016		December 31, 2015		September 30, 2016		December 31, 2015
Derivative instruments designated
as fair value hedges -
Commodity futures	Other current assets	$	451	$	857	$	1,156	$	2,860
Derivative instruments not designated
as hedges -
Commodity futures	Other current assets		171		908		1,037		1,065
Total derivative instruments		$	622	$	1,765	$	2,193	$	3,925

The fair value of the above derivative instruments along with required margin deposit amounts with the same counterparty under master netting arrangements totaled $1.7 million at September 30, 2016, and $3.4 million at December 31, 2015, are reflected in other current assets in the consolidated balance sheets.

		Amount of gain (loss) recognized					Location of gain	Amount of gain (loss) recognized
	Location of gain	in income on derivatives					(loss) recognized	in income on related hedged items
	(loss) recognized	for the three months ended				Hedged items in	in income on	for the three months ended
	in income on	September 30,		September 30,		fair value hedge	related hedged	September 30,		September 30,
	derivatives	2016		2015		relationships	items	2016		2015
Derivatives in fair value
hedging relationships -
Commodity futures	Costs of goods sold	$	826	$	(2,825)	Firm commitments	Costs of goods sold	$	(793)	$	662
						Inventory	Costs of goods sold		(177)		800
Derivatives not designated								$	(970)	$	1,462
as hedging instruments -
Commodity futures	Costs of goods sold	$	(638)	$	6,707

Note 7.  Derivative Financial Instruments (Continued)

		Amount of gain (loss) recognized					Location of gain	Amount of gain (loss) recognized
	Location of gain	in income on derivatives					(loss) recognized	in income on related hedged items
	(loss) recognized	for the nine months ended				Hedged items in	in income on	for the nine months ended
	in income on	September 30,		September 30,		fair value hedge	income on related	September 30,		September 30,
	derivatives	2016		2015		relationships	hedged items	2016		2015
Derivatives in fair value
hedging relationships -
Commodity futures	Costs of goods sold	$	1,281	$	(4,063)	Firm commitments	Costs of goods sold	$	(2,223)	$	1,518
						Inventory	Costs of goods sold		642		1,291
Derivatives not designated								$	(1,581)	$	2,809
as hedging instruments -
Commodity futures	Costs of goods sold	$	(394)	$	13,377

Derivatives accounted for as fair value hedges had ineffectiveness resulting in losses of $84,000 and $191,000 during the three months ended September 30, 2016 and 2015, respectively; and losses of $175,000 and $64,000 during the nine months ended September 30, 2016 and 2015, respectively. Losses excluded from hedge effectiveness testing of $60,000 and $1.2 million increased cost of goods sold during the three months ended September 30, 2016, and September 30, 2015.  Losses excluded from hedge effectiveness testing of $125,000 and $1.2 million increased costs of goods sold during the nine months ended September 30, 2016 and 2015, respectively. 

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Fair Value Measurements

9 Months Ended

Sep. 30, 2016

Fair Value Measurements

Fair Value Measurements

Note 8.  Fair Value Measurements

FASB accounting standards provide a comprehensive framework for measuring fair value and sets forth a definition of fair value and establishes a hierarchy prioritizing the inputs to valuation techniques, giving the highest priority to quoted prices in active markets for identical assets and liabilities and the lowest priority to unobservable value inputs.  Levels within the hierarchy are defined as follows: 

· Level 1—Unadjusted quoted prices for identical assets and liabilities in active markets;

· Level 2—Quoted prices for similar assets and liabilities in active markets (other than those included in Level 1) which are observable for   

           the asset or liability, either directly or indirectly; and

· Level 3—Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are       

           unobservable.

The following table sets forth financial assets and liabilities measured at fair value on a recurring basis in the consolidated balance sheet and the respective levels to which the fair value measurements are classified within the fair value hierarchy as of September 30, 2016, and December 31, 2015 (in thousands):    

			Quoted Prices		Significant
			in Active		Other		Significant
			Markets for		Observable		Unobservable
			Identical Assets		Inputs		Inputs
	Total		(Level 1)		(Level 2)		(Level 3)
September 30, 2016
Commodity futures – financial assets	$	622	$	-	$	622	$	-
Commodity futures – financial liabilities		2,193		-		2,193		-
December 31, 2015
Commodity futures – financial assets	$	1,765	$	-	$	1,765	$	-
Commodity futures – financial liabilities		3,925		-		3,925		-

The carrying amounts of financial instruments including cash and equivalents approximate fair value. The fair values of commodity futures contracts are estimated by the use of quoted market prices, estimates obtained from brokers, and other appropriate valuation techniques based on references available. The fair value of long-term debt, including current maturities, as determined by quoted market prices (Level 2), was approximately $2.7 billion at September 30, 2016, and December 31, 2015, respectively, (with a corresponding carrying amount in the consolidated balance sheet of $2.6 billion at September 30, 2016, and December 31, 2015).

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2016

Commitments and Contingencies

Commitments and Contingencies

Note 9.  Commitments and Contingencies

Although, as noted below, a tentative settlement has been reached in the case, the company has to date been involved, along with two other remaining non-settling defendant steel manufacturing companies, from an original group of eight, in a direct purchaser class action antitrust suit in federal court in Chicago, Illinois, under the caption of Standard Iron Works v Arcelor Mittal, et al.  Two other complaints, not yet settled, were brought on behalf of a purported class of indirect purchasers of steel products within the same time period. The company has a pending motion to dismiss in that case. The complaints allege a conspiracy to limit output on the part of the defendants, in order to fix, raise, maintain and stabilize the price at which steel products were sold in the United States during a specified period between 2005 and 2007. The complaints seek treble damages and costs, including reasonable attorney fees, pre- and post-judgment interest and injunctive relief. In September 2015, the Court denied class certification on the issue of antitrust impact and damages, but granted class certification on the limited issue of the alleged conspiracy.

In October 2016, the company announced that it had entered into an agreement to settle the direct purchaser case for a payment of $4.6 million. Preliminary approval was granted by the court on November 3, 2016, and final approval by the Court is also expected to be forthcoming. During the approval process, members of the class will be given an opportunity to opt-out of the class and retain their own individual rights.

Due to the uncertain nature of litigation, the company cannot presently predict either the final outcome of the proposed settlement process, including whether there may be opt-outs from the settlement, or the outcome of the remaining indirect purchaser case.  Based on the information available at this time, however, the company has determined that, apart from the proposed settlement amount in the direct case, there is not presently a “reasonable possibility” (as that term is defined in ASC 450-20-20), that the outcome of the remaining unresolved matters will have a material impact on the Company’s financial condition, results of operations, or liquidity. Although not presently necessary or appropriate to make a dollar estimate of exposure to loss, if any, in connection with these remaining matters, the company may in the future determine that a further loss accrual may be necessary. Further, although the company may make loss accruals, if and as warranted, any amounts that it may accrue from time to time could vary significantly from the amounts it actually pays, due to inherent uncertainties and the inherent shortcomings of the estimation process, the uncertainties involved in litigation and other factors. Additionally, an adverse result could have a material effect on the company’s financial condition, results of operations and liquidity.

The company is additionally involved in various routine litigation matters, including administrative proceedings, regulatory proceedings, governmental investigations, environmental matters, and commercial and construction contract disputes, none of which are expected to have a material impact on our financial condition, results of operations, or liquidity. 

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Segment Information

9 Months Ended

Sep. 30, 2016

Segment Information

Segment Information

Note 10.  Segment Information

The company’s operations are primarily organized and managed by operating segment, which are steel operations, metals recycling operations, and steel fabrication operations. The segment operations are more fully described in Note 1 to the financial statements. Operating segment performance and resource allocations are primarily based on operating results before income taxes. The accounting policies of the reportable segments are consistent with those described in Note 1 to the financial statements. Intra‑segment sales and any related profits are eliminated in consolidation. Amounts included in the category “Other” are from subsidiary operations that are below the quantitative thresholds required for reportable segments and primarily consist of our Minnesota ironmaking operations and several small joint ventures. In addition, “Other” also includes certain unallocated corporate accounts, such as the company’s senior secured credit facility, senior notes, certain other investments and certain profit sharing expenses.

The company’s segment results for the three and nine months ended September 30, 2016 and 2015, each adjusted consistent with our current reportable segments presentation, are as follows (in thousands):

			Metals		Steel
For the three months ended	Steel		Recycling		Fabrication
September 30, 2016	Operations		Operations		Operations		Other			Eliminations			Consolidated
Net Sales
External	$	1,502,726	$	260,518	$	177,341	$	60,282		$	-		$	2,000,867
External Non-U.S.		54,776		45,574		88		5			-			100,443
Other segments		70,384		259,171		1,211		1,108			(331,874)			-
		1,627,886		565,263		178,640		61,395			(331,874)			2,101,310
Operating income (loss)		307,553		6,154		17,744		(47,687)	(1)		91	(2)		283,855
Income (loss) before income taxes		285,131		2,437		15,645		(59,999)			91			243,305
Depreciation and amortization		53,456		13,836		2,848		4,101			(51)			74,190
Capital expenditures		49,200		9,506		747		321			-			59,774
As of September 30, 2016
Assets	$	4,147,447	$	1,034,637	$	353,560	$	1,374,469	(3)	$	(122,551)	(4)	$	6,787,562

Footnotes related to the three months ended September 30, 2016 segment results (in millions):
(1)	Corporate SG&A	$	(12.6)	(2)	Gross profit increase from intra-company sales	$	-
	Company-wide equity-based compensation		(6.1)
	Profit sharing		(21.0)
	Minnesota ironmaking operations		(4.1)
	Other, net		(3.9)
		$	(47.7)
(3)	Cash and equivalents	$	982.2	(4)	Elimination of intra-company receivables	$	(98.0)
	Accounts receivable		14.7		Elimination of intra-company debt		(12.1)
	Inventories		36.2		Other		(12.5)
	Property, plant and equipment, net		295.7			$	(122.6)
	Intra-company debt		12.1
	Other		33.6
		$	1,374.5

Note 10.  Segment Information (Continued)

			Metals		Steel
For the three months ended	Steel		Recycling		Fabrication
September 30, 2015	Operations		Operations		Operations		Other			Eliminations			Consolidated
Net Sales
External	$	1,285,459	$	294,357	$	173,047	$	78,802		$	-		$	1,831,665
External Non-U.S.		65,928		51,215		1,907		208			-			119,258
Other segments		56,146		270,888		2		4,209			(331,245)			-
		1,407,533		616,460		174,956		83,219			(331,245)			1,950,923
Operating income (loss)		124,712		(3,555)		36,733		(28,401)	(1)		1,540	(2)		131,029
Income (loss) before income taxes		102,566		(6,967)		35,108		(38,541)			1,540			93,706
Depreciation and amortization		52,404		15,913		2,300		3,645			(51)			74,211
Capital expenditures		21,975		6,286		935		1,090			-			30,286
As of September 30, 2015
Assets	$	4,096,188	$	1,588,821	$	372,673	$	898,772	(3)	$	(113,913)	(4)	$	6,842,541

Footnotes related to the three months ended September 30, 2015 segment results (in millions):
(1)	Corporate SG&A	$	(9.5)	(2)	Gross profit increase from intra-company sales	$	1.5
	Company-wide equity-based compensation		(5.3)
	Profit sharing		(7.5)
	Minnesota ironmaking operations		(4.1)
	Other, net		(2.0)
		$	(28.4)
(3)	Cash and equivalents	$	415.7	(4)	Elimination of intra-company receivables	$	(100.8)
	Accounts receivable		30.0		Elimination of intra-company debt		(6.5)
	Inventories		36.8		Other		(6.6)
	Property, plant and equipment, net		309.6			$	(113.9)
	Intra-company debt		6.5
	Other		100.2
		$	898.8

Note 10.  Segment Information (Continued)

			Metals		Steel
For the nine months ended	Steel		Recycling		Fabrication
September 30, 2016	Operations		Operations		Operations		Other			Eliminations			Consolidated
Net Sales
External	$	4,068,688	$	769,260	$	527,859	$	210,358		$	-		$	5,576,165
External Non-U.S.		172,694		117,299		167		188			-			290,348
Other segments		178,190		756,613		2,415		3,603			(940,821)			-
		4,419,572		1,643,172		530,441		214,149			(940,821)			5,866,513
Operating income (loss)		712,939		20,014		73,230		(125,186)	(1)		(9,055)	(2)		671,942
Income (loss) before income taxes		645,189		10,300		67,175		(152,296)			(9,055)			561,313
Depreciation and amortization		159,614		42,666		8,431		12,413			(154)			222,970
Capital expenditures		103,202		17,068		1,918		980			-			123,168

Footnotes related to the nine months ended September 30, 2016 segment results (in millions):
(1)	Corporate SG&A	$	(38.5)	(2)	Gross profit decrease from intra-company sales	$	(9.1)
	Company-wide equity-based compensation		(20.4)
	Profit sharing		(47.7)
	Minnesota ironmaking operations		(12.4)
	Other, net		(6.2)
		$	(125.2)

			Metals		Steel
For the nine months ended	Steel		Recycling		Fabrication
September 30, 2015	Operations		Operations		Operations		Other			Eliminations			Consolidated
Net Sales
External	$	3,902,162	$	1,014,753	$	488,584	$	237,501		$	-		$	5,643,000
External Non-U.S.		210,320		147,626		1,907		512			-			360,365
Other segments		158,609		751,542		18		29,114			(939,283)			-
		4,271,091		1,913,921		490,509		267,127			(939,283)			6,003,365
Operating income (loss)		338,690		229		85,754		(117,273)	(1)		959	(2)		308,359
Income (loss) before income taxes		269,187		(12,780)		80,581		(162,141)			959			175,806
Depreciation and amortization		154,616		50,207		6,688		9,948			(153)			221,306
Capital expenditures		52,324		17,332		2,506		14,296			-			86,458

Footnotes related to the nine months ended September 30, 2015 segment results (in millions):
(1)	Corporate SG&A	$	(27.1)	(2)	Gross profit increase from intra-company sales	$	1.0
	Company-wide equity-based compensation		(17.5)
	Profit sharing		(14.4)
	Minnesota ironmaking operations		(50.3)
	Other, net		(8.0)
		$	(117.3)

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Condensed Consolidating Information

9 Months Ended

Sep. 30, 2016

Condensed Consolidating Information

Condensed Consolidating Information

Note 11.  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 unsecured notes due 2019, 2021, 2022, 2023 and 2024. 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, 2015.

Condensed Consolidating Balance Sheets (in thousands)
					Combined		Consolidating		Total
As of September 30, 2016	Parent		Guarantors		Non-Guarantors		Adjustments		Consolidated
Cash and equivalents	$	972,610	$	61,054	$	17,825	$	-	$	1,051,489
Accounts receivable, net		238,290		1,248,565		41,667		(749,063)		779,459
Inventories		588,583		634,942		59,837		(7,787)		1,275,575
Other current assets		17,109		10,598		4,373		(1,959)		30,121
Total current assets		1,816,592		1,955,159		123,702		(758,809)		3,136,644
Property, plant and equipment, net		921,850		1,684,925		323,308		(1,857)		2,928,226
Intangible assets, net		-		259,231		32,583		-		291,814
Goodwill		-		392,678		7,189		-		399,867
Other assets, including investments in subs		2,916,319		8,023		6,411		(2,899,742)		31,011
Total assets	$	5,654,761	$	4,300,016	$	493,193	$	(3,660,408)	$	6,787,562
Accounts payable	$	171,302	$	274,873	$	80,690	$	(89,029)	$	437,836
Accrued expenses		229,039		212,493		8,068		(109,478)		340,122
Current maturities of long-term debt		13,161		700		32,248		(29,954)		16,155
Total current liabilities		413,502		488,066		121,006		(228,461)		794,113
Long-term debt		2,541,145		-		171,622		(141,930)		2,570,837
Other liabilities		(265,803)		1,155,611		61,932		(480,830)		470,910
Redeemable noncontrolling interests		-		-		126,340		-		126,340
Common stock		640		1,727,859		18,120		(1,745,979)		640
Treasury stock		(392,051)		-		-		-		(392,051)
Additional paid-in-capital		1,132,365		128,076		773,793		(901,869)		1,132,365
Retained earnings (deficit)		2,224,963		800,404		(639,065)		(161,339)		2,224,963
Total Steel Dynamics, Inc. equity		2,965,917		2,656,339		152,848		(2,809,187)		2,965,917
Noncontrolling interests		-		-		(140,555)		-		(140,555)
Total equity		2,965,917		2,656,339		12,293		(2,809,187)		2,825,362
Total liabilities and equity	$	5,654,761	$	4,300,016	$	493,193	$	(3,660,408)	$	6,787,562

Note 11.  Condensed Consolidating Information (Continued)

					Combined		Consolidating		Total
As of December 31, 2015	Parent		Guarantors		Non-Guarantors		Adjustments		Consolidated
Cash and equivalents	$	636,877	$	81,976	$	8,179	$	-	$	727,032
Accounts receivable, net		200,094		1,056,285		29,775		(672,549)		613,605
Inventories		539,963		573,924		35,004		499		1,149,390
Other current assets		21,654		25,415		1,676		(831)		47,914
Total current assets		1,398,588		1,737,600		74,634		(672,881)		2,537,941
Property, plant and equipment, net		958,212		1,703,932		291,077		(2,011)		2,951,210
Intangible assets, net		-		278,960		-		-		278,960
Goodwill		-		397,470		-		-		397,470
Other assets, including investments in subs		2,941,710		10,040		6,137		(2,921,386)		36,501
Total assets	$	5,298,510	$	4,128,002	$	371,848	$	(3,596,278)	$	6,202,082
Accounts payable	$	100,751	$	183,344	$	68,948	$	(69,688)	$	283,355
Accrued expenses		141,552		185,873		4,779		(96,949)		235,255
Current maturities of long-term debt		13,122		700		24,975		(22,117)		16,680
Total current liabilities		255,425		369,917		98,702		(188,754)		535,290
Long-term debt		2,546,606		361		177,897		(146,888)		2,577,976
Other liabilities		(183,248)		1,342,541		63,020		(804,948)		417,365
Redeemable noncontrolling interests		-		-		126,340		-		126,340
Common stock		638		1,727,859		18,120		(1,745,979)		638
Treasury stock		(396,455)		-		-		-		(396,455)
Additional paid-in-capital		1,110,253		117,737		646,787		(764,524)		1,110,253
Retained earnings (deficit)		1,965,291		569,587		(624,402)		54,815		1,965,291
Total Steel Dynamics, Inc. equity		2,679,727		2,415,183		40,505		(2,455,688)		2,679,727
Noncontrolling interests		-		-		(134,616)		-		(134,616)
Total equity		2,679,727		2,415,183		(94,111)		(2,455,688)		2,545,111
Total liabilities and equity	$	5,298,510	$	4,128,002	$	371,848	$	(3,596,278)	$	6,202,082

Note 11.  Condensed Consolidating Information (Continued)

Condensed Consolidating Statements of Operations (in thousands)
For the three months ended,					Combined		Consolidating		Total
September 30, 2016	Parent		Guarantors		Non-Guarantors		Adjustments		Consolidated
Net sales	$	845,585	$	2,258,466	$	96,409	$	(1,099,150)	$	2,101,310
Costs of goods sold		647,983		2,016,874		100,470		(1,072,520)		1,692,807
Gross profit (loss)		197,602		241,592		(4,061)		(26,630)		408,503
Selling, general and administrative		52,995		72,605		4,134		(5,086)		124,648
Operating income (loss)		144,607		168,987		(8,195)		(21,544)		283,855
Interest expense, net of capitalized interest		17,818		17,741		2,847		(2,207)		36,199
Other (income) expense, net		2,342		3,937		(4,135)		2,207		4,351
Income (loss) before income taxes and
equity in net income of subsidiaries		124,447		147,309		(6,907)		(21,544)		243,305
Income taxes		40,242		55,684		797		(7,831)		88,892
		84,205		91,625		(7,704)		(13,713)		154,413
Equity in net income of subsidiaries		73,192		-		-		(73,192)		-
Net loss attributable to noncontrolling interests		-		-		2,984		-		2,984
Net income (loss) attributable to Steel Dynamics, Inc.	$	157,397	$	91,625	$	(4,720)	$	(86,905)	$	157,397

For the three months ended,					Combined		Consolidating		Total
September 30, 2015	Parent		Guarantors		Non-Guarantors		Adjustments		Consolidated
Net sales	$	735,250	$	2,103,824	$	96,204	$	(984,355)	$	1,950,923
Costs of goods sold		619,833		1,965,364		99,864		(962,864)		1,722,197
Gross profit (loss)		115,417		138,460		(3,660)		(21,491)		228,726
Selling, general and administrative		35,235		64,259		2,845		(4,642)		97,697
Operating income (loss)		80,182		74,201		(6,505)		(16,849)		131,029
Interest expense, net of capitalized interest		18,312		18,138		1,692		(1,058)		37,084
Other (income) expense, net		252		(631)		(440)		1,058		239
Income (loss) before income taxes and
equity in net income of subsidiaries		61,618		56,694		(7,757)		(16,849)		93,706
Income taxes (benefit)		20,169		21,697		(421)		(6,606)		34,839
		41,449		34,997		(7,336)		(10,243)		58,867
Equity in net income of subsidiaries		19,168		-		-		(19,168)		-
Net loss attributable to noncontrolling interests		-		-		1,750		-		1,750
Net income (loss) attributable to Steel Dynamics, Inc.	$	60,617	$	34,997	$	(5,586)	$	(29,411)	$	60,617

Note 11.  Condensed Consolidating Information (Continued)

For the nine months ended,					Combined		Consolidating		Total
September 30, 2016	Parent		Guarantors		Non-Guarantors		Adjustments		Consolidated
Net sales	$	2,297,389	$	6,322,158	$	271,694	$	(3,024,728)	$	5,866,513
Costs of goods sold		1,823,408		5,676,265		286,486		(2,944,568)		4,841,591
Gross profit (loss)		473,981		645,893		(14,792)		(80,160)		1,024,922
Selling, general and administrative		145,596		212,613		9,352		(14,581)		352,980
Operating income (loss)		328,385		433,280		(24,144)		(65,579)		671,942
Interest expense, net of capitalized interest		53,842		54,493		7,558		(6,005)		109,888
Other (income) expense, net		(2,137)		8,012		(11,139)		6,005		741
Income (loss) before income taxes and
equity in net income of subsidiaries		276,680		370,775		(20,563)		(65,579)		561,313
Income taxes (benefit)		89,210		139,958		(63)		(23,966)		205,139
		187,470		230,817		(20,500)		(41,613)		356,174
Equity in net income of subsidiaries		174,633		-		-		(174,633)		-
Net loss attributable to noncontrolling interests		-		-		5,929		-		5,929
Net income (loss) attributable to Steel Dynamics, Inc.	$	362,103	$	230,817	$	(14,571)	$	(216,246)	$	362,103

For the nine months ended,					Combined		Consolidating		Total
September 30, 2015	Parent		Guarantors		Non-Guarantors		Adjustments		Consolidated
Net sales	$	2,300,024	$	6,447,974	$	302,657	$	(3,047,290)	$	6,003,365
Costs of goods sold		1,982,667		6,056,514		352,980		(2,976,307)		5,415,854
Gross profit (loss)		317,357		391,460		(50,323)		(70,983)		587,511
Selling, general and administrative		95,883		188,028		8,878		(13,637)		279,152
Operating income (loss)		221,474		203,432		(59,201)		(57,346)		308,359
Interest expense, net of capitalized interest		57,015		58,354		5,084		(3,119)		117,334
Other (income) expense, net		15,131		(597)		(2,434)		3,119		15,219
Income (loss) before income taxes and
equity in net income of subsidiaries		149,328		145,675		(61,851)		(57,346)		175,806
Income taxes (benefit)		35,207		53,903		(4,047)		(20,403)		64,660
		114,121		91,772		(57,804)		(36,943)		111,146
Equity in net income of subsidiaries		8,807		-		-		(8,807)		-
Net loss attributable to noncontrolling interests		-		-		11,782		-		11,782
Net income (loss) attributable to Steel Dynamics, Inc.	$	122,928	$	91,772	$	(46,022)	$	(45,750)	$	122,928

Note 11.  Condensed Consolidating Information (Continued)

Condensed Consolidating Statements of Cash Flows (in thousands)
For the nine months ended,					Combined		Consolidating		Total
September 30, 2016	Parent		Guarantors		Non-Guarantors		Adjustments		Consolidated
Net cash provided by operating activities	$	280,767	$	358,657	$	52	$	3,735	$	643,211
Net cash used in investing activities		(143,427)		(81,983)		(3,935)		2,879		(226,466)
Net cash provided by (used in) financing activities		198,393		(297,596)		13,529		(6,614)		(92,288)
Increase (decrease) in cash and equivalents		335,733		(20,922)		9,646		-		324,457
Cash and equivalents at beginning of period		636,877		81,976		8,179		-		727,032
Cash and equivalents at end of period	$	972,610	$	61,054	$	17,825	$	-	$	1,051,489

For the nine months ended,					Combined		Consolidating		Total
September 30, 2015	Parent		Guarantors		Non-Guarantors		Adjustments		Consolidated
Net cash provided by (used in) operating activities	$	306,941	$	400,910	$	(4,302)	$	4,748	$	708,297
Net cash used in investing activities		(35,100)		(82,737)		(12,796)		5,359		(125,274)
Net cash provided by (used in) financing activities		(126,984)		(347,111)		13,606		(10,107)		(470,596)
Increase (decrease) in cash and equivalents		144,857		(28,938)		(3,492)		-		112,427
Cash and equivalents at beginning of period		265,313		81,690		14,360		-		361,363
Cash and equivalents at end of period	$	410,170	$	52,752	$	10,868	$	-	$	473,790

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Description of the Business and Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2016

Description of the Business and Significant Accounting Policies

Principles of Consolidation

Principles of Consolidation.  The consolidated financial statements include the accounts of SDI, together with its wholly and majority-owned or controlled subsidiaries, after elimination of intercompany accounts and transactions. Noncontrolling interests represent the noncontrolling owner’s proportionate share in the equity, income, or losses of the company’s majority-owned or controlled consolidated subsidiaries. 

Use of Estimates

Use of Estimates. These financial statements are prepared in conformity with accounting principles generally accepted in the United States, and accordingly, include amounts that require management to make estimates and assumptions that affect the amounts reported in the financial statements and in the notes thereto. Significant items subject to such estimates and assumptions include the carrying value of property, plant and equipment, intangible assets, and goodwill; valuation allowances for trade receivables, inventories and deferred income tax assets; unrecognized tax benefits; potential environmental liabilities; and litigation claims and settlements. Actual results may differ from these estimates and assumptions. 

In the opinion of management, these financial statements reflect all normal recurring adjustments necessary for a fair presentation of the interim period results. These financial statements and notes should be read in conjunction with the audited financial statements and notes thereto included in the company’s Annual Report on Form 10-K for the year ended December 31, 2015.

Goodwill

Goodwill.  The company’s goodwill is allocated to the following reporting units at September 30, 2016, and December 31, 2015, (in thousands):

		September 30,		December 31,
		2016		2015
Metals Recycling Segment:	OmniSource	$	104,247	$	109,039
	Butler Flat Roll Division,  Structural and Rail Division,
	and Engineered Bar Division		95,000		95,000
Steel Segment:	The Techs		142,783		142,783
	Roanoke Bar Division		29,041		29,041
	Columbus Flat Roll Division		19,682		19,682
	Vulcan Threaded Products		7,189		-
Fabrication Segment:	New Millennium Building Systems		1,925		1,925
		$	399,867	$	397,470

OmniSource goodwill decreased $4.8 million from December 31, 2015 to September 30, 2016, in recognition of the 2016 tax benefit related to the normal amortization of the component of OmniSource tax-deductible goodwill in excess of book goodwill.

Recently Issued Accounting Standards

Recently Issued Accounting Standards

In May 2014, the FASB issued guidance codified in ASC 606, Revenue Recognition – Revenue from Contracts with Customers, which amends the guidance in former ASC 605, Revenue Recognition.  The core principle of ASC 606 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Because the guidance in ASC 606 is principles-based, it can be applied to all contracts with customers regardless of industry-specific or transaction-specific fact patterns. Additionally, ASC 606 requires additional disclosures to help users of financial statements better understand the nature, amount, timing, and potential uncertainty of revenue that is recognized. This guidance is effective for annual and interim periods beginning after December 15, 2017, but can be early adopted for annual and interim periods ending after December 15, 2016. The company is currently evaluating the impact of the provisions of ASC 606, including the timing and method of adoption.

In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory, which requires an entity to measure inventory at the lower of cost and net realizable value, rather than at the lower of cost or market.  This new guidance is effective for annual and interim periods beginning after December 15, 2016, but can be early adopted. The company is currently evaluating the impact of this ASU’s adoption.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842): which establishes a new lease accounting model that requires lessees to recognize a right of use asset and related lease liability for most leases having lease terms of more than 12 months.  Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases.  This new guidance is effective for annual and interim periods beginning after December 15, 2018, but can be early adopted.  The company is currently evaluating the impact of the provisions of ASU 2016-02, including the timing of adoption. 

In March 2016, the FASB issued ASU 2016-09, Improvement to Employee Share-based Payment Accounting, which simplifies several aspects of accounting for share-based payment transactions, including recognizing excess tax benefits and deficiencies as income tax expense or benefit in the income statement and as operating activities within the statement of cash flows, and an option to recognize gross stock compensation expense with actual forfeitures recognized as incurred. This new guidance is effective for annual and interim periods beginning after December 15, 2016, but can be early adopted.  The company is currently evaluating the impact of the provisions of ASU 2016-09, including the timing of adoption.

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Description of the Business and Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2016

Description of the Business and Significant Accounting Policies

Schedule of goodwill allocated to reporting units

The company’s goodwill is allocated to the following reporting units at September 30, 2016, and December 31, 2015, (in thousands):

		September 30,		December 31,
		2016		2015
Metals Recycling Segment:	OmniSource	$	104,247	$	109,039
	Butler Flat Roll Division,  Structural and Rail Division,
	and Engineered Bar Division		95,000		95,000
Steel Segment:	The Techs		142,783		142,783
	Roanoke Bar Division		29,041		29,041
	Columbus Flat Roll Division		19,682		19,682
	Vulcan Threaded Products		7,189		-
Fabrication Segment:	New Millennium Building Systems		1,925		1,925
		$	399,867	$	397,470

XML

Acquisitions (Tables)

9 Months Ended

Sep. 30, 2016

Acquisitions

Schedule of Assets Acquired and Liabilities Assumed

Current assets, net of cash acquired	$	36,958
Property, plant & equipment		40,213
Intangible assets		32,930
Goodwill		7,189
Total assets acquired		117,290
Liabilities assumed		4,456
Net assets acquired	$	112,834

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Earnings Per Share (Tables)

9 Months Ended

Sep. 30, 2016

Earnings Per Share

Reconciliation of Basic and Diluted Earnings Per Share

The following table presents a reconciliation of the numerators and the denominators of the company’s basic and diluted earnings per share computations for the three and nine months ended September 30, 2016 and 2015 (in thousands, except per share data):

	Three Months Ended September 30,
	2016					2015
	Net Income		Shares	Per Share		Net Income		Shares	Per Share
	(Numerator)		(Denominator)	Amount		(Numerator)		(Denominator)	Amount
Basic earnings per share	$	157,397	243,761	$	0.65	$	60,617	242,074	$	0.25
Dilutive common share equivalents		-	1,921				-	1,748
Diluted earnings per share	$	157,397	245,682	$	0.64	$	60,617	243,822	$	0.25

	Nine Months Ended September 30,
	2016						2015
	Net Income		Shares		Per Share		Net Income		Shares		Per Share
	(Numerator)		(Denominator)		Amount		(Numerator)		(Denominator)		Amount
Basic earnings per share	$	362,103		243,539	$	1.49	$	122,928		241,836	$	0.51
Dilutive common share equivalents		-		1,688				-		1,557
Diluted earnings per share	$	362,103		245,227	$	1.48	$	122,928		243,393	$	0.51

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Inventories (Tables)

9 Months Ended

Sep. 30, 2016

Inventories

Schedule of inventories

Inventories are stated at lower of cost or market. Cost is determined using a weighted average cost method for scrap, and on a first-in, first-out, basis for other inventory. Inventory consisted of the following (in thousands):

	September 30,		December 31,
	2016		2015
Raw materials	$	490,164	$	419,608
Supplies		392,433		396,349
Work in progress		124,428		90,486
Finished goods		268,550		242,947
Total inventories	$	1,275,575	$	1,149,390

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Changes in Equity (Tables)

9 Months Ended

Sep. 30, 2016

Changes in Equity

Schedule of stockholders' equity

The following table provides a reconciliation of the beginning and ending carrying amounts of total equity, equity attributable to stockholders of Steel Dynamics, Inc. and equity and redeemable amounts attributable to the noncontrolling interests (in thousands):

	Stockholders of Steel Dynamics, Inc.
			Additional										Redeemable
	Common		Paid-In		Retained		Treasury		Noncontrolling		Total		Noncontrolling
	Stock		Capital		Earnings		Stock		Interests		Equity		Interests
Balances at December 31, 2015	$	638	$	1,110,253	$	1,965,291	$	(396,455)	$	(134,616)	$	2,545,111	$	126,340
Exercise of stock options proceeds,
including related tax effect		2		7,874		-		-		-		7,876		-
Dividends declared		-		-		(102,342)		-		-		(102,342)		-
Distributions to noncontrolling
investors, net		-		-		-		-		(10)		(10)		-
Equity-based compensation		-		14,238		(89)		4,404		-		18,553		-
Comprehensive and net income (loss)		-		-		362,103		-		(5,929)		356,174		-
Balances at September 30, 2016	$	640	$	1,132,365	$	2,224,963	$	(392,051)	$	(140,555)	$	2,825,362	$	126,340

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Derivative Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2016

Derivative Financial Instruments

Schedule of Notional Amounts of Outstanding Derivative Positions

. The following summarizes the company’s futures contract commitments as of September 30, 2016 (MT represents metric tons):

Commodity Futures	Long/Short	Total
Aluminum	Long	1,750	MT
Aluminum	Short	1,575	MT
Copper	Long	4,413	MT
Copper	Short	13,950	MT

Schedule of Derivatives Instruments Statements of Financial Performance and Financial Position

The following summarizes the location and amounts of the fair values reported on the company’s balance sheets as of September 30, 2016, and December 31, 2015, and gains and losses related to derivatives included in the company’s statement of income for the three and nine months ended September 30, 2016 and 2015 (in thousands):

	Asset Derivatives					Liability Derivatives
	Balance sheet	Fair Value				Fair Value
	location	September 30, 2016		December 31, 2015		September 30, 2016		December 31, 2015
Derivative instruments designated
as fair value hedges -
Commodity futures	Other current assets	$	451	$	857	$	1,156	$	2,860
Derivative instruments not designated
as hedges -
Commodity futures	Other current assets		171		908		1,037		1,065
Total derivative instruments		$	622	$	1,765	$	2,193	$	3,925

The fair value of the above derivative instruments along with required margin deposit amounts with the same counterparty under master netting arrangements totaled $1.7 million at September 30, 2016, and $3.4 million at December 31, 2015, are reflected in other current assets in the consolidated balance sheets.

		Amount of gain (loss) recognized					Location of gain	Amount of gain (loss) recognized
	Location of gain	in income on derivatives					(loss) recognized	in income on related hedged items
	(loss) recognized	for the three months ended				Hedged items in	in income on	for the three months ended
	in income on	September 30,		September 30,		fair value hedge	related hedged	September 30,		September 30,
	derivatives	2016		2015		relationships	items	2016		2015
Derivatives in fair value
hedging relationships -
Commodity futures	Costs of goods sold	$	826	$	(2,825)	Firm commitments	Costs of goods sold	$	(793)	$	662
						Inventory	Costs of goods sold		(177)		800
Derivatives not designated								$	(970)	$	1,462
as hedging instruments -
Commodity futures	Costs of goods sold	$	(638)	$	6,707

Note 7.  Derivative Financial Instruments (Continued)

		Amount of gain (loss) recognized					Location of gain	Amount of gain (loss) recognized
	Location of gain	in income on derivatives					(loss) recognized	in income on related hedged items
	(loss) recognized	for the nine months ended				Hedged items in	in income on	for the nine months ended
	in income on	September 30,		September 30,		fair value hedge	income on related	September 30,		September 30,
	derivatives	2016		2015		relationships	hedged items	2016		2015
Derivatives in fair value
hedging relationships -
Commodity futures	Costs of goods sold	$	1,281	$	(4,063)	Firm commitments	Costs of goods sold	$	(2,223)	$	1,518
						Inventory	Costs of goods sold		642		1,291
Derivatives not designated								$	(1,581)	$	2,809
as hedging instruments -
Commodity futures	Costs of goods sold	$	(394)	$	13,377

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Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2016

Fair Value Measurements

Schedule of assets and liabilities measured at fair value on a recurring basis

The following table sets forth financial assets and liabilities measured at fair value on a recurring basis in the consolidated balance sheet and the respective levels to which the fair value measurements are classified within the fair value hierarchy as of September 30, 2016, and December 31, 2015 (in thousands):    

			Quoted Prices		Significant
			in Active		Other		Significant
			Markets for		Observable		Unobservable
			Identical Assets		Inputs		Inputs
	Total		(Level 1)		(Level 2)		(Level 3)
September 30, 2016
Commodity futures – financial assets	$	622	$	-	$	622	$	-
Commodity futures – financial liabilities		2,193		-		2,193		-
December 31, 2015
Commodity futures – financial assets	$	1,765	$	-	$	1,765	$	-
Commodity futures – financial liabilities		3,925		-		3,925		-

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Segment Information (Tables)

9 Months Ended

Sep. 30, 2016

Segment Information

Schedule of operating segment results

The company’s segment results for the three and nine months ended September 30, 2016 and 2015, each adjusted consistent with our current reportable segments presentation, are as follows (in thousands):

			Metals		Steel
For the three months ended	Steel		Recycling		Fabrication
September 30, 2016	Operations		Operations		Operations		Other			Eliminations			Consolidated
Net Sales
External	$	1,502,726	$	260,518	$	177,341	$	60,282		$	-		$	2,000,867
External Non-U.S.		54,776		45,574		88		5			-			100,443
Other segments		70,384		259,171		1,211		1,108			(331,874)			-
		1,627,886		565,263		178,640		61,395			(331,874)			2,101,310
Operating income (loss)		307,553		6,154		17,744		(47,687)	(1)		91	(2)		283,855
Income (loss) before income taxes		285,131		2,437		15,645		(59,999)			91			243,305
Depreciation and amortization		53,456		13,836		2,848		4,101			(51)			74,190
Capital expenditures		49,200		9,506		747		321			-			59,774
As of September 30, 2016
Assets	$	4,147,447	$	1,034,637	$	353,560	$	1,374,469	(3)	$	(122,551)	(4)	$	6,787,562

Footnotes related to the three months ended September 30, 2016 segment results (in millions):
(1)	Corporate SG&A	$	(12.6)	(2)	Gross profit increase from intra-company sales	$	-
	Company-wide equity-based compensation		(6.1)
	Profit sharing		(21.0)
	Minnesota ironmaking operations		(4.1)
	Other, net		(3.9)
		$	(47.7)
(3)	Cash and equivalents	$	982.2	(4)	Elimination of intra-company receivables	$	(98.0)
	Accounts receivable		14.7		Elimination of intra-company debt		(12.1)
	Inventories		36.2		Other		(12.5)
	Property, plant and equipment, net		295.7			$	(122.6)
	Intra-company debt		12.1
	Other		33.6
		$	1,374.5

Note 10.  Segment Information (Continued)

			Metals		Steel
For the three months ended	Steel		Recycling		Fabrication
September 30, 2015	Operations		Operations		Operations		Other			Eliminations			Consolidated
Net Sales
External	$	1,285,459	$	294,357	$	173,047	$	78,802		$	-		$	1,831,665
External Non-U.S.		65,928		51,215		1,907		208			-			119,258
Other segments		56,146		270,888		2		4,209			(331,245)			-
		1,407,533		616,460		174,956		83,219			(331,245)			1,950,923
Operating income (loss)		124,712		(3,555)		36,733		(28,401)	(1)		1,540	(2)		131,029
Income (loss) before income taxes		102,566		(6,967)		35,108		(38,541)			1,540			93,706
Depreciation and amortization		52,404		15,913		2,300		3,645			(51)			74,211
Capital expenditures		21,975		6,286		935		1,090			-			30,286
As of September 30, 2015
Assets	$	4,096,188	$	1,588,821	$	372,673	$	898,772	(3)	$	(113,913)	(4)	$	6,842,541

Footnotes related to the three months ended September 30, 2015 segment results (in millions):
(1)	Corporate SG&A	$	(9.5)	(2)	Gross profit increase from intra-company sales	$	1.5
	Company-wide equity-based compensation		(5.3)
	Profit sharing		(7.5)
	Minnesota ironmaking operations		(4.1)
	Other, net		(2.0)
		$	(28.4)
(3)	Cash and equivalents	$	415.7	(4)	Elimination of intra-company receivables	$	(100.8)
	Accounts receivable		30.0		Elimination of intra-company debt		(6.5)
	Inventories		36.8		Other		(6.6)
	Property, plant and equipment, net		309.6			$	(113.9)
	Intra-company debt		6.5
	Other		100.2
		$	898.8

Note 10.  Segment Information (Continued)

			Metals		Steel
For the nine months ended	Steel		Recycling		Fabrication
September 30, 2016	Operations		Operations		Operations		Other			Eliminations			Consolidated
Net Sales
External	$	4,068,688	$	769,260	$	527,859	$	210,358		$	-		$	5,576,165
External Non-U.S.		172,694		117,299		167		188			-			290,348
Other segments		178,190		756,613		2,415		3,603			(940,821)			-
		4,419,572		1,643,172		530,441		214,149			(940,821)			5,866,513
Operating income (loss)		712,939		20,014		73,230		(125,186)	(1)		(9,055)	(2)		671,942
Income (loss) before income taxes		645,189		10,300		67,175		(152,296)			(9,055)			561,313
Depreciation and amortization		159,614		42,666		8,431		12,413			(154)			222,970
Capital expenditures		103,202		17,068		1,918		980			-			123,168

Footnotes related to the nine months ended September 30, 2016 segment results (in millions):
(1)	Corporate SG&A	$	(38.5)	(2)	Gross profit decrease from intra-company sales	$	(9.1)
	Company-wide equity-based compensation		(20.4)
	Profit sharing		(47.7)
	Minnesota ironmaking operations		(12.4)
	Other, net		(6.2)
		$	(125.2)

			Metals		Steel
For the nine months ended	Steel		Recycling		Fabrication
September 30, 2015	Operations		Operations		Operations		Other			Eliminations			Consolidated
Net Sales
External	$	3,902,162	$	1,014,753	$	488,584	$	237,501		$	-		$	5,643,000
External Non-U.S.		210,320		147,626		1,907		512			-			360,365
Other segments		158,609		751,542		18		29,114			(939,283)			-
		4,271,091		1,913,921		490,509		267,127			(939,283)			6,003,365
Operating income (loss)		338,690		229		85,754		(117,273)	(1)		959	(2)		308,359
Income (loss) before income taxes		269,187		(12,780)		80,581		(162,141)			959			175,806
Depreciation and amortization		154,616		50,207		6,688		9,948			(153)			221,306
Capital expenditures		52,324		17,332		2,506		14,296			-			86,458

Footnotes related to the nine months ended September 30, 2015 segment results (in millions):
(1)	Corporate SG&A	$	(27.1)	(2)	Gross profit increase from intra-company sales	$	1.0
	Company-wide equity-based compensation		(17.5)
	Profit sharing		(14.4)
	Minnesota ironmaking operations		(50.3)
	Other, net		(8.0)
		$	(117.3)

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Condensed Consolidating Information (Tables)

9 Months Ended

Sep. 30, 2016

Condensed Consolidating Information

Schedule of Condensed Consolidating Balance Sheets

Condensed Consolidating Balance Sheets (in thousands)
					Combined		Consolidating		Total
As of September 30, 2016	Parent		Guarantors		Non-Guarantors		Adjustments		Consolidated
Cash and equivalents	$	972,610	$	61,054	$	17,825	$	-	$	1,051,489
Accounts receivable, net		238,290		1,248,565		41,667		(749,063)		779,459
Inventories		588,583		634,942		59,837		(7,787)		1,275,575
Other current assets		17,109		10,598		4,373		(1,959)		30,121
Total current assets		1,816,592		1,955,159		123,702		(758,809)		3,136,644
Property, plant and equipment, net		921,850		1,684,925		323,308		(1,857)		2,928,226
Intangible assets, net		-		259,231		32,583		-		291,814
Goodwill		-		392,678		7,189		-		399,867
Other assets, including investments in subs		2,916,319		8,023		6,411		(2,899,742)		31,011
Total assets	$	5,654,761	$	4,300,016	$	493,193	$	(3,660,408)	$	6,787,562
Accounts payable	$	171,302	$	274,873	$	80,690	$	(89,029)	$	437,836
Accrued expenses		229,039		212,493		8,068		(109,478)		340,122
Current maturities of long-term debt		13,161		700		32,248		(29,954)		16,155
Total current liabilities		413,502		488,066		121,006		(228,461)		794,113
Long-term debt		2,541,145		-		171,622		(141,930)		2,570,837
Other liabilities		(265,803)		1,155,611		61,932		(480,830)		470,910
Redeemable noncontrolling interests		-		-		126,340		-		126,340
Common stock		640		1,727,859		18,120		(1,745,979)		640
Treasury stock		(392,051)		-		-		-		(392,051)
Additional paid-in-capital		1,132,365		128,076		773,793		(901,869)		1,132,365
Retained earnings (deficit)		2,224,963		800,404		(639,065)		(161,339)		2,224,963
Total Steel Dynamics, Inc. equity		2,965,917		2,656,339		152,848		(2,809,187)		2,965,917
Noncontrolling interests		-		-		(140,555)		-		(140,555)
Total equity		2,965,917		2,656,339		12,293		(2,809,187)		2,825,362
Total liabilities and equity	$	5,654,761	$	4,300,016	$	493,193	$	(3,660,408)	$	6,787,562

Note 11.  Condensed Consolidating Information (Continued)

					Combined		Consolidating		Total
As of December 31, 2015	Parent		Guarantors		Non-Guarantors		Adjustments		Consolidated
Cash and equivalents	$	636,877	$	81,976	$	8,179	$	-	$	727,032
Accounts receivable, net		200,094		1,056,285		29,775		(672,549)		613,605
Inventories		539,963		573,924		35,004		499		1,149,390
Other current assets		21,654		25,415		1,676		(831)		47,914
Total current assets		1,398,588		1,737,600		74,634		(672,881)		2,537,941
Property, plant and equipment, net		958,212		1,703,932		291,077		(2,011)		2,951,210
Intangible assets, net		-		278,960		-		-		278,960
Goodwill		-		397,470		-		-		397,470
Other assets, including investments in subs		2,941,710		10,040		6,137		(2,921,386)		36,501
Total assets	$	5,298,510	$	4,128,002	$	371,848	$	(3,596,278)	$	6,202,082
Accounts payable	$	100,751	$	183,344	$	68,948	$	(69,688)	$	283,355
Accrued expenses		141,552		185,873		4,779		(96,949)		235,255
Current maturities of long-term debt		13,122		700		24,975		(22,117)		16,680
Total current liabilities		255,425		369,917		98,702		(188,754)		535,290
Long-term debt		2,546,606		361		177,897		(146,888)		2,577,976
Other liabilities		(183,248)		1,342,541		63,020		(804,948)		417,365
Redeemable noncontrolling interests		-		-		126,340		-		126,340
Common stock		638		1,727,859		18,120		(1,745,979)		638
Treasury stock		(396,455)		-		-		-		(396,455)
Additional paid-in-capital		1,110,253		117,737		646,787		(764,524)		1,110,253
Retained earnings (deficit)		1,965,291		569,587		(624,402)		54,815		1,965,291
Total Steel Dynamics, Inc. equity		2,679,727		2,415,183		40,505		(2,455,688)		2,679,727
Noncontrolling interests		-		-		(134,616)		-		(134,616)
Total equity		2,679,727		2,415,183		(94,111)		(2,455,688)		2,545,111
Total liabilities and equity	$	5,298,510	$	4,128,002	$	371,848	$	(3,596,278)	$	6,202,082

Schedule of Condensed Consolidating Statements of Operations

Condensed Consolidating Statements of Operations (in thousands)
For the three months ended,					Combined		Consolidating		Total
September 30, 2016	Parent		Guarantors		Non-Guarantors		Adjustments		Consolidated
Net sales	$	845,585	$	2,258,466	$	96,409	$	(1,099,150)	$	2,101,310
Costs of goods sold		647,983		2,016,874		100,470		(1,072,520)		1,692,807
Gross profit (loss)		197,602		241,592		(4,061)		(26,630)		408,503
Selling, general and administrative		52,995		72,605		4,134		(5,086)		124,648
Operating income (loss)		144,607		168,987		(8,195)		(21,544)		283,855
Interest expense, net of capitalized interest		17,818		17,741		2,847		(2,207)		36,199
Other (income) expense, net		2,342		3,937		(4,135)		2,207		4,351
Income (loss) before income taxes and
equity in net income of subsidiaries		124,447		147,309		(6,907)		(21,544)		243,305
Income taxes		40,242		55,684		797		(7,831)		88,892
		84,205		91,625		(7,704)		(13,713)		154,413
Equity in net income of subsidiaries		73,192		-		-		(73,192)		-
Net loss attributable to noncontrolling interests		-		-		2,984		-		2,984
Net income (loss) attributable to Steel Dynamics, Inc.	$	157,397	$	91,625	$	(4,720)	$	(86,905)	$	157,397

For the three months ended,					Combined		Consolidating		Total
September 30, 2015	Parent		Guarantors		Non-Guarantors		Adjustments		Consolidated
Net sales	$	735,250	$	2,103,824	$	96,204	$	(984,355)	$	1,950,923
Costs of goods sold		619,833		1,965,364		99,864		(962,864)		1,722,197
Gross profit (loss)		115,417		138,460		(3,660)		(21,491)		228,726
Selling, general and administrative		35,235		64,259		2,845		(4,642)		97,697
Operating income (loss)		80,182		74,201		(6,505)		(16,849)		131,029
Interest expense, net of capitalized interest		18,312		18,138		1,692		(1,058)		37,084
Other (income) expense, net		252		(631)		(440)		1,058		239
Income (loss) before income taxes and
equity in net income of subsidiaries		61,618		56,694		(7,757)		(16,849)		93,706
Income taxes (benefit)		20,169		21,697		(421)		(6,606)		34,839
		41,449		34,997		(7,336)		(10,243)		58,867
Equity in net income of subsidiaries		19,168		-		-		(19,168)		-
Net loss attributable to noncontrolling interests		-		-		1,750		-		1,750
Net income (loss) attributable to Steel Dynamics, Inc.	$	60,617	$	34,997	$	(5,586)	$	(29,411)	$	60,617

Note 11.  Condensed Consolidating Information (Continued)

For the nine months ended,					Combined		Consolidating		Total
September 30, 2016	Parent		Guarantors		Non-Guarantors		Adjustments		Consolidated
Net sales	$	2,297,389	$	6,322,158	$	271,694	$	(3,024,728)	$	5,866,513
Costs of goods sold		1,823,408		5,676,265		286,486		(2,944,568)		4,841,591
Gross profit (loss)		473,981		645,893		(14,792)		(80,160)		1,024,922
Selling, general and administrative		145,596		212,613		9,352		(14,581)		352,980
Operating income (loss)		328,385		433,280		(24,144)		(65,579)		671,942
Interest expense, net of capitalized interest		53,842		54,493		7,558		(6,005)		109,888
Other (income) expense, net		(2,137)		8,012		(11,139)		6,005		741
Income (loss) before income taxes and
equity in net income of subsidiaries		276,680		370,775		(20,563)		(65,579)		561,313
Income taxes (benefit)		89,210		139,958		(63)		(23,966)		205,139
		187,470		230,817		(20,500)		(41,613)		356,174
Equity in net income of subsidiaries		174,633		-		-		(174,633)		-
Net loss attributable to noncontrolling interests		-		-		5,929		-		5,929
Net income (loss) attributable to Steel Dynamics, Inc.	$	362,103	$	230,817	$	(14,571)	$	(216,246)	$	362,103

For the nine months ended,					Combined		Consolidating		Total
September 30, 2015	Parent		Guarantors		Non-Guarantors		Adjustments		Consolidated
Net sales	$	2,300,024	$	6,447,974	$	302,657	$	(3,047,290)	$	6,003,365
Costs of goods sold		1,982,667		6,056,514		352,980		(2,976,307)		5,415,854
Gross profit (loss)		317,357		391,460		(50,323)		(70,983)		587,511
Selling, general and administrative		95,883		188,028		8,878		(13,637)		279,152
Operating income (loss)		221,474		203,432		(59,201)		(57,346)		308,359
Interest expense, net of capitalized interest		57,015		58,354		5,084		(3,119)		117,334
Other (income) expense, net		15,131		(597)		(2,434)		3,119		15,219
Income (loss) before income taxes and
equity in net income of subsidiaries		149,328		145,675		(61,851)		(57,346)		175,806
Income taxes (benefit)		35,207		53,903		(4,047)		(20,403)		64,660
		114,121		91,772		(57,804)		(36,943)		111,146
Equity in net income of subsidiaries		8,807		-		-		(8,807)		-
Net loss attributable to noncontrolling interests		-		-		11,782		-		11,782
Net income (loss) attributable to Steel Dynamics, Inc.	$	122,928	$	91,772	$	(46,022)	$	(45,750)	$	122,928

Schedule of Condensed Consolidating Statements of Cash Flows

Condensed Consolidating Statements of Cash Flows (in thousands)
For the nine months ended,					Combined		Consolidating		Total
September 30, 2016	Parent		Guarantors		Non-Guarantors		Adjustments		Consolidated
Net cash provided by operating activities	$	280,767	$	358,657	$	52	$	3,735	$	643,211
Net cash used in investing activities		(143,427)		(81,983)		(3,935)		2,879		(226,466)
Net cash provided by (used in) financing activities		198,393		(297,596)		13,529		(6,614)		(92,288)
Increase (decrease) in cash and equivalents		335,733		(20,922)		9,646		-		324,457
Cash and equivalents at beginning of period		636,877		81,976		8,179		-		727,032
Cash and equivalents at end of period	$	972,610	$	61,054	$	17,825	$	-	$	1,051,489

For the nine months ended,					Combined		Consolidating		Total
September 30, 2015	Parent		Guarantors		Non-Guarantors		Adjustments		Consolidated
Net cash provided by (used in) operating activities	$	306,941	$	400,910	$	(4,302)	$	4,748	$	708,297
Net cash used in investing activities		(35,100)		(82,737)		(12,796)		5,359		(125,274)
Net cash provided by (used in) financing activities		(126,984)		(347,111)		13,606		(10,107)		(470,596)
Increase (decrease) in cash and equivalents		144,857		(28,938)		(3,492)		-		112,427
Cash and equivalents at beginning of period		265,313		81,690		14,360		-		361,363
Cash and equivalents at end of period	$	410,170	$	52,752	$	10,868	$	-	$	473,790

XML

Description of the Business and Significant Accounting Policies - Segments (Details)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016 segment item	Sep. 30, 2015
Segment Reporting Information
Number of reporting segments | segment			3
Steel Operations
Segment Reporting Information
Number of downstream coating facilities			10
Percentage of external net sales	74.00%	69.00%	72.00%	69.00%
Metals Recycling Operations
Segment Reporting Information
Percentage of external net sales	15.00%	18.00%	15.00%	19.00%
Steel Fabrication Operations
Segment Reporting Information
Percentage of external net sales	8.00%	9.00%	9.00%	8.00%
Number of New Millennium Building Systems' joist and deck plants			8

XML

Description of the Business and Significant Accounting Policies - Goodwill (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2016	Dec. 31, 2015
Goodwill
Goodwill	$ 399,867	$ 397,470
OmniSource
Goodwill
Goodwill decrease due to tax benefit related to the normal amortization of the component	4,800
Metals Recycling Operations | OmniSource
Goodwill
Goodwill	104,247	109,039
Metals Recycling Operations | Butler Flat Roll Division, Structural and Rail Division, and Engineered Bar Division
Goodwill
Goodwill	95,000	95,000
Steel Operations | The Techs
Goodwill
Goodwill	142,783	142,783
Steel Operations | Roanoke Bar Division
Goodwill
Goodwill	29,041	29,041
Steel Operations | Columbus Flat Roll Division
Goodwill
Goodwill	19,682	19,682
Steel Operations | Vulcan Steel Products [Member]
Goodwill
Goodwill	7,189
Steel Fabrication Operations | New Millennium Building Systems
Goodwill
Goodwill	$ 1,925	$ 1,925

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Acquisitions (Narrative) (Details) - USD ($) $ in Thousands	1 Months Ended		3 Months Ended		9 Months Ended
	Aug. 31, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Aug. 01, 2016
Acquisition
Purchase price paid in cash			$ 109,065	$ 45,000	$ 109,065	$ 45,000
Vulcan
Acquisition
Business Acquisition, Percentage of Voting Interests Acquired							100.00%
Purchase price paid in cash	$ 113,000
Working capital purchased	29,200
Intangible assets	$ 32,930
Consolidated Systems, Inc [Member]
Acquisition
Purchase price paid in cash		$ 45,000
Working capital purchased		$ 30,000

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Acquisitions (Schedule of Assets Acquired and Liabilities Assumed) (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Aug. 31, 2016	Dec. 31, 2015
Acquisition
Goodwill	$ 399,867		$ 397,470
Vulcan
Acquisition
Current assets, net of cash acquired		$ 36,958
Property, plant & equipment		40,213
Intangible assets		32,930
Goodwill		7,189
Total assets acquired		117,290
Liabilities assumed		4,456
Net assets acquired		$ 112,834

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Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Net Income (Loss) (Numerator)
Basic earnings per share - net income (in dollars)	$ 157,397	$ 60,617	$ 362,103	$ 122,928
Diluted earnings per share - net income (in dollars)	$ 157,397	$ 60,617	$ 362,103	$ 122,928
Weighted average common shares outstanding (in shares)
Weighted average common shares outstanding - basic (in shares)	243,761	242,074	243,539	241,836
Dilutive common share equivalents (in shares)	1,921	1,748	1,688	1,557
Weighted average common shares outstanding - diluted (in shares)	245,682	243,822	245,227	243,393
Per Share Amount
Basic (in dollars per share)	$ 0.65	$ 0.25	$ 1.49	$ 0.51
Diluted (in dollars per share)	$ 0.64	$ 0.25	$ 1.48	$ 0.51

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Inventories (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Inventories
Raw materials	$ 490,164	$ 419,608
Supplies	392,433	396,349
Work in progress	124,428	90,486
Finished goods	268,550	242,947
Total inventories	$ 1,275,575	$ 1,149,390

XML

Debt (Narrative) (Details) - USD ($)	3 Months Ended			9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Mar. 31, 2015	Sep. 30, 2016	Sep. 30, 2015
Debt
Repayments of debt	$ 9,999,000	$ 73,420,000		$ 95,253,000	$ 561,428,000
7 5/8% senior notes, due 2020
Debt
Repayments of debt			$ 350,000,000
Stated interest rate (as a percent)			7.625%
Redemption price of debt instrument (as a percent)			103.813%
Associated premiums and related expenses recorded			$ 16,700,000

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Changes in Equity (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2016 USD ($)
Increase (Decrease) in Equity
Balances	$ 2,545,111
Exercise of stock options proceeds, including related tax effect	7,876
Dividends declared	(102,342)
Distributions to noncontrolling investors, net	(10)
Equity-based compensation	18,553
Comprehensive and net income (loss)	356,174
Balances	2,825,362
Common Stock
Increase (Decrease) in Equity
Balances	638
Exercise of stock options proceeds, including related tax effect	2
Balances	640
Additional Paid-In Capital
Increase (Decrease) in Equity
Balances	1,110,253
Exercise of stock options proceeds, including related tax effect	7,874
Equity-based compensation	14,238
Balances	1,132,365
Retained Earnings
Increase (Decrease) in Equity
Balances	1,965,291
Dividends declared	(102,342)
Equity-based compensation	(89)
Comprehensive and net income (loss)	362,103
Balances	2,224,963
Treasury Stock
Increase (Decrease) in Equity
Balances	(396,455)
Equity-based compensation	4,404
Balances	(392,051)
Noncontrolling Interests
Increase (Decrease) in Equity
Balances	(134,616)
Distributions to noncontrolling investors, net	(10)
Comprehensive and net income (loss)	(5,929)
Balances	(140,555)
Redeemable Noncontrolling Interest
Increase (Decrease) in Equity
Balances	126,340
Balances	$ 126,340

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Derivative Financial Instruments (Narrative) (Details) - Commodity contract - Futures - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Other current assets
Commodity contract commitments
Fair value of derivatives including required margin deposits	$ 1,700		$ 1,700		$ 3,400
Designated as hedging instrument
Gains or losses on derivative instruments, statement of income
Ineffectiveness - amount of gain (loss) recognized in income on related hedged items	(84)	$ (191)	(175)	$ (64)
Gain (loss) excluded from hedge effectiveness testing	$ (60)	$ (1,200)	$ (125)	$ (1,200)

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Derivative Financial Instruments (Schedule of Notional Amounts of Outstanding Derivative Positions) (Details) - Futures	9 Months Ended
	Sep. 30, 2016 T
Aluminum | Long
Derivative [Line Items]
Commodity contract (in MT/Lbs)	1,750
Aluminum | Short
Derivative [Line Items]
Commodity contract (in MT/Lbs)	1,575
Copper | Long
Derivative [Line Items]
Commodity contract (in MT/Lbs)	4,413
Copper | Short
Derivative [Line Items]
Commodity contract (in MT/Lbs)	13,950

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Derivative Financial Instruments (Schedule of Derivatives Instruments Statements of Financial Performance and Financial Position) (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Commodity futures, asset derivatives	$ 622	$ 1,765
Commodity futures, liability derivatives	2,193	3,925
Futures | Commodity contract | Designated as hedging instrument | Other current assets
Commodity futures, asset derivatives	451	857
Commodity futures, liability derivatives	1,156	2,860
Futures | Commodity contract | Not designated as hedging instrument | Other current assets
Commodity futures, asset derivatives	171	908
Commodity futures, liability derivatives	$ 1,037	$ 1,065

XML

Derivative Financial Instruments (Schedule of Derivatives Instruments Statements of Financial Position) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Designated as hedging instrument
Amount of gain (loss) recognized in income on related hedged items	$ (970)	$ 1,462
Designated as hedging instrument | Cost of goods sold
Amount of gain (loss) recognized in income on related hedged items			$ (1,581)	$ 2,809
Designated as hedging instrument | Firm commitments | Cost of goods sold
Amount of gain (loss) recognized in income on related hedged items	(793)	662	(2,223)	1,518
Designated as hedging instrument | Inventory | Cost of goods sold
Amount of gain (loss) recognized in income on related hedged items	(177)	800	642	1,291
Futures | Designated as hedging instrument | Commodity contract | Cost of goods sold
Amount of gain (loss) recognized in income on derivatives	826	(2,825)	1,281	(4,063)
Futures | Not designated as hedging instrument | Commodity contract | Cost of goods sold
Amount of gain (loss) recognized in income on derivatives	$ (638)	$ 6,707	$ (394)	$ 13,377

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Fair Value Measurements (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Assets and liabilities subject to fair value measurements
Commodity futures - financial assets	$ 622	$ 1,765
Commodity futures - financial liabilities	2,193	3,925
Fair value of long-term debt, including current maturities	2,700,000	2,700,000
Outstanding Balance	2,600,000	2,600,000
Recurring | Commodity contract | Futures
Assets and liabilities subject to fair value measurements
Commodity futures - financial assets	622	1,765
Commodity futures - financial liabilities	2,193	3,925
Recurring | Fair Value, Inputs, Level 2 [Member] | Commodity contract | Futures
Assets and liabilities subject to fair value measurements
Commodity futures - financial assets	622	1,765
Commodity futures - financial liabilities	$ 2,193	$ 3,925

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Commitments and Contingencies (Narrative) (Details) $ in Millions	1 Months Ended	9 Months Ended
	Oct. 31, 2016 USD ($)	Sep. 30, 2016 defendant
Subsequent Event [Member]
Loss Contingencies [Line Items]
Litigation Settlement, Amount | $	$ 4.6
Pending Litigation [Member]
Loss Contingencies [Line Items]
Number of other remaining steel manufacturing company defendants served with a class action antitrust complaint		2
Loss Contingency, Number of Defendants		8

XML

Segment Information - Results (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Segment Reporting Information
Net sales	$ 2,101,310	$ 1,950,923	$ 5,866,513	$ 6,003,365
Operating income (loss)	283,855	131,029	671,942	308,359
Income (loss) before income taxes	243,305	93,706	561,313	175,806
Depreciation and amortization	74,190	74,211	222,970	221,306
Capital expenditures	59,774	30,286	123,168	86,458
Assets	6,787,562	6,842,541	6,787,562	6,842,541	$ 6,202,082
U.S.
Segment Reporting Information
Net sales	2,000,867	1,831,665	5,576,165	5,643,000
Non-U.S.
Segment Reporting Information
Net sales	100,443	119,258	290,348	360,365
Steel Operations
Segment Reporting Information
Net sales	1,627,886	1,407,533	4,419,572	4,271,091
Operating income (loss)	307,553	124,712	712,939	338,690
Income (loss) before income taxes	285,131	102,566	645,189	269,187
Depreciation and amortization	53,456	52,404	159,614	154,616
Capital expenditures	49,200	21,975	103,202	52,324
Assets	4,147,447	4,096,188	4,147,447	4,096,188
Steel Operations | Other segments
Segment Reporting Information
Net sales	70,384	56,146	178,190	158,609
Steel Operations | U.S.
Segment Reporting Information
Net sales	1,502,726	1,285,459	4,068,688	3,902,162
Steel Operations | Non-U.S.
Segment Reporting Information
Net sales	54,776	65,928	172,694	210,320
Metals Recycling Operations
Segment Reporting Information
Net sales	565,263	616,460	1,643,172	1,913,921
Operating income (loss)	6,154	(3,555)	20,014	229
Income (loss) before income taxes	2,437	(6,967)	10,300	(12,780)
Depreciation and amortization	13,836	15,913	42,666	50,207
Capital expenditures	9,506	6,286	17,068	17,332
Assets	1,034,637	1,588,821	1,034,637	1,588,821
Metals Recycling Operations | Other segments
Segment Reporting Information
Net sales	259,171	270,888	756,613	751,542
Metals Recycling Operations | U.S.
Segment Reporting Information
Net sales	260,518	294,357	769,260	1,014,753
Metals Recycling Operations | Non-U.S.
Segment Reporting Information
Net sales	45,574	51,215	117,299	147,626
Steel Fabrication Operations
Segment Reporting Information
Net sales	178,640	174,956	530,441	490,509
Operating income (loss)	17,744	36,733	73,230	85,754
Income (loss) before income taxes	15,645	35,108	67,175	80,581
Depreciation and amortization	2,848	2,300	8,431	6,688
Capital expenditures	747	935	1,918	2,506
Assets	353,560	372,673	353,560	372,673
Steel Fabrication Operations | Other segments
Segment Reporting Information
Net sales	1,211	2	2,415	18
Steel Fabrication Operations | U.S.
Segment Reporting Information
Net sales	177,341	173,047	527,859	488,584
Steel Fabrication Operations | Non-U.S.
Segment Reporting Information
Net sales	88	1,907	167	1,907
Other
Segment Reporting Information
Net sales	61,395	83,219	214,149	267,127
Operating income (loss)	(47,687)	(28,401)	(125,186)	(117,273)
Income (loss) before income taxes	(59,999)	(38,541)	(152,296)	(162,141)
Depreciation and amortization	4,101	3,645	12,413	9,948
Capital expenditures	321	1,090	980	14,296
Assets	1,374,469	898,772	1,374,469	898,772
Other | Other segments
Segment Reporting Information
Net sales	1,108	4,209	3,603	29,114
Other | U.S.
Segment Reporting Information
Net sales	60,282	78,802	210,358	237,501
Other | Non-U.S.
Segment Reporting Information
Net sales	5	208	188	512
Eliminations
Segment Reporting Information
Net sales	(331,874)	(331,245)	(940,821)	(939,283)
Operating income (loss)	91	1,540	(9,055)	959
Income (loss) before income taxes	91	1,540	(9,055)	959
Depreciation and amortization	(51)	(51)	(154)	(153)
Assets	(122,551)	(113,913)	(122,551)	(113,913)
Eliminations | Other segments
Segment Reporting Information
Net sales	$ (331,874)	$ (331,245)	$ (940,821)	$ (939,283)

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Segment Information - Other Footnote (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Jun. 30, 2016	Dec. 31, 2015	Jun. 30, 2015	Dec. 31, 2014
Operating income (loss)
Corporate SG & A	$ (95,185)	$ (82,648)	$ (279,899)	$ (242,207)
Profit sharing	(22,255)	(9,008)	(51,722)	(18,637)
Operating income (loss)	283,855	131,029	671,942	308,359
Assets
Cash and equivalents	1,051,489	473,790	1,051,489	473,790	$ 1,052,666	$ 727,032	$ 419,401	$ 361,363
Accounts receivable	779,459		779,459			613,605
Inventories	1,275,575		1,275,575			1,149,390
Property, plant and equipment, net	2,928,226		2,928,226			2,951,210
Other	31,011		31,011			36,501
Total assets	6,787,562	6,842,541	6,787,562	6,842,541		$ 6,202,082
Other
Operating income (loss)
Corporate SG & A	(12,600)	(9,500)	(38,500)	(27,100)
Company-wide equity-based compensation	(6,100)	(5,300)	(20,400)	(17,500)
Profit sharing	(21,000)	(7,500)	(47,700)	(14,400)
Other, net	(3,900)	(2,000)	(6,200)	(8,000)
Operating income (loss)	(47,687)	(28,401)	(125,186)	(117,273)
Assets
Cash and equivalents	982,200	415,700	982,200	415,700
Accounts receivable	14,700	30,000	14,700	30,000
Inventories	36,200	36,800	36,200	36,800
Property, plant and equipment, net	295,700	309,600	295,700	309,600
Intra-company debt	12,100	6,500	12,100	6,500
Other	33,600	(100,200)	33,600	(100,200)
Total assets	1,374,469	898,772	1,374,469	898,772
Other | MINNESOTA | Minnesota ironmaking operations
Operating income (loss)
Operating income (loss)	$ (4,100)	$ (4,100)	$ (12,400)	$ (50,300)

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Segment Information - Eliminations Footnote (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Operating income (loss)
Operating income (loss)	$ 283,855	$ 131,029	$ 671,942	$ 308,359
Gross profit	408,503	228,726	1,024,922	587,511
Assets elimination
Accounts receivable	779,459		779,459		$ 613,605
Other	31,011		31,011		36,501
Total assets	6,787,562	6,842,541	6,787,562	6,842,541	$ 6,202,082
Eliminations
Operating income (loss)
Operating income (loss)	91	1,540	(9,055)	959
Assets elimination
Accounts receivable	(98,000)	(100,800)	(98,000)	(100,800)
Elimination of intra-company debt	(12,100)	(6,500)	(12,100)	(6,500)
Other	(12,500)	(6,600)	(12,500)	(6,600)
Total assets	$ (122,551)	$ (113,913)	$ (122,551)	$ (113,913)

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Condensed Consolidating Information - Balance Sheets (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Jun. 30, 2016	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Dec. 31, 2014
Condensed Consolidating Balance Sheets
Cash and equivalents	$ 1,051,489	$ 1,052,666	$ 727,032	$ 473,790	$ 419,401	$ 361,363
Accounts receivable, net	779,459		613,605
Inventories	1,275,575		1,149,390
Other current assets	30,121		47,914
Total current assets	3,136,644		2,537,941
Property, plant and equipment, net	2,928,226		2,951,210
Intangible assets, net	291,814		278,960
Goodwill	399,867		397,470
Other assets, including investments in subs	31,011		36,501
Total assets	6,787,562		6,202,082	6,842,541
Accounts payable	437,836		283,355
Accrued expenses	340,122		235,255
Current maturities of long-term debt	16,155		16,680
Total current liabilities	794,113		535,290
Long-term debt	2,570,837		2,577,976
Other liabilities	470,910		417,365
Redeemable noncontrolling interests	126,340		126,340
Common stock	640		638
Treasury stock	(392,051)		(396,455)
Additional paid-in capital	1,132,365		1,110,253
Retained earnings (deficit)	2,224,963		1,965,291
Total Steel Dynamics, Inc. equity	2,965,917		2,679,727
Noncontrolling interests	(140,555)		(134,616)
Total equity	2,825,362		2,545,111
Total liabilities and equity	6,787,562		6,202,082
Parent
Condensed Consolidating Balance Sheets
Cash and equivalents	972,610		636,877	410,170		265,313
Accounts receivable, net	238,290		200,094
Inventories	588,583		539,963
Other current assets	17,109		21,654
Total current assets	1,816,592		1,398,588
Property, plant and equipment, net	921,850		958,212
Other assets, including investments in subs	2,916,319		2,941,710
Total assets	5,654,761		5,298,510
Accounts payable	171,302		100,751
Accrued expenses	229,039		141,552
Current maturities of long-term debt	13,161		13,122
Total current liabilities	413,502		255,425
Long-term debt	2,541,145		2,546,606
Other liabilities	(265,803)		(183,248)
Common stock	640		638
Treasury stock	(392,051)		(396,455)
Additional paid-in capital	1,132,365		1,110,253
Retained earnings (deficit)	2,224,963		1,965,291
Total Steel Dynamics, Inc. equity	2,965,917		2,679,727
Total equity	2,965,917		2,679,727
Total liabilities and equity	5,654,761		5,298,510
Guarantors
Condensed Consolidating Balance Sheets
Cash and equivalents	61,054		81,976	52,752		81,690
Accounts receivable, net	1,248,565		1,056,285
Inventories	634,942		573,924
Other current assets	10,598		25,415
Total current assets	1,955,159		1,737,600
Property, plant and equipment, net	1,684,925		1,703,932
Intangible assets, net	259,231		278,960
Goodwill	392,678		397,470
Other assets, including investments in subs	8,023		10,040
Total assets	4,300,016		4,128,002
Accounts payable	274,873		183,344
Accrued expenses	212,493		185,873
Current maturities of long-term debt	700		700
Total current liabilities	488,066		369,917
Long-term debt			361
Other liabilities	1,155,611		1,342,541
Common stock	1,727,859		1,727,859
Additional paid-in capital	128,076		117,737
Retained earnings (deficit)	800,404		569,587
Total Steel Dynamics, Inc. equity	2,656,339		2,415,183
Total equity	2,656,339		2,415,183
Total liabilities and equity	4,300,016		4,128,002
Combined Non-Guarantors
Condensed Consolidating Balance Sheets
Cash and equivalents	17,825		8,179	$ 10,868		$ 14,360
Accounts receivable, net	41,667		29,775
Inventories	59,837		35,004
Other current assets	4,373		1,676
Total current assets	123,702		74,634
Property, plant and equipment, net	323,308		291,077
Intangible assets, net	32,583
Goodwill	7,189
Other assets, including investments in subs	6,411		6,137
Total assets	493,193		371,848
Accounts payable	80,690		68,948
Accrued expenses	8,068		4,779
Current maturities of long-term debt	32,248		24,975
Total current liabilities	121,006		98,702
Long-term debt	171,622		177,897
Other liabilities	61,932		63,020
Redeemable noncontrolling interests	126,340		126,340
Common stock	18,120		18,120
Additional paid-in capital	773,793		646,787
Retained earnings (deficit)	(639,065)		(624,402)
Total Steel Dynamics, Inc. equity	152,848		40,505
Noncontrolling interests	(140,555)		(134,616)
Total equity	12,293		(94,111)
Total liabilities and equity	493,193		371,848
Consolidating Adjustments
Condensed Consolidating Balance Sheets
Accounts receivable, net	(749,063)		(672,549)
Inventories	(7,787)		499
Other current assets	(1,959)		(831)
Total current assets	(758,809)		(672,881)
Property, plant and equipment, net	(1,857)		(2,011)
Other assets, including investments in subs	(2,899,742)		(2,921,386)
Total assets	(3,660,408)		(3,596,278)
Accounts payable	(89,029)		(69,688)
Accrued expenses	(109,478)		(96,949)
Current maturities of long-term debt	(29,954)		(22,117)
Total current liabilities	(228,461)		(188,754)
Long-term debt	(141,930)		(146,888)
Other liabilities	(480,830)		(804,948)
Common stock	(1,745,979)		(1,745,979)
Additional paid-in capital	(901,869)		(764,524)
Retained earnings (deficit)	(161,339)		54,815
Total Steel Dynamics, Inc. equity	(2,809,187)		(2,455,688)
Total equity	(2,809,187)		(2,455,688)
Total liabilities and equity	$ (3,660,408)		$ (3,596,278)

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Condensed Consolidating Information - Statements of Operations (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Condensed Consolidating Statements of Operations
Net sales	$ 2,101,310	$ 1,950,923	$ 5,866,513	$ 6,003,365
Costs of goods sold	1,692,807	1,722,197	4,841,591	5,415,854
Gross profit	408,503	228,726	1,024,922	587,511
Selling, general and administrative	124,648	97,697	352,980	279,152
Operating income	283,855	131,029	671,942	308,359
Interest expense, net of capitalized interest	36,199	37,084	109,888	117,334
Other (income) expense, net	4,351	239	741	15,219
Income before income taxes	243,305	93,706	561,313	175,806
Income taxes (benefit)	88,892	34,839	205,139	64,660
Net income	154,413	58,867	356,174	111,146
Net loss attributable to noncontrolling interests	2,984	1,750	5,929	11,782
Net income attributable to Steel Dynamics, Inc.	157,397	60,617	362,103	122,928
Parent
Condensed Consolidating Statements of Operations
Net sales	845,585	735,250	2,297,389	2,300,024
Costs of goods sold	647,983	619,833	1,823,408	1,982,667
Gross profit	197,602	115,417	473,981	317,357
Selling, general and administrative	52,995	35,235	145,596	95,883
Operating income	144,607	80,182	328,385	221,474
Interest expense, net of capitalized interest	17,818	18,312	53,842	57,015
Other (income) expense, net	2,342	252	(2,137)	15,131
Income before income taxes	124,447	61,618	276,680	149,328
Income taxes (benefit)	40,242	20,169	89,210	35,207
Net income	84,205	41,449	187,470	114,121
Equity in net income of subsidiaries	73,192	19,168	174,633	8,807
Net income attributable to Steel Dynamics, Inc.	157,397	60,617	362,103	122,928
Guarantors
Condensed Consolidating Statements of Operations
Net sales	2,258,466	2,103,824	6,322,158	6,447,974
Costs of goods sold	2,016,874	1,965,364	5,676,265	6,056,514
Gross profit	241,592	138,460	645,893	391,460
Selling, general and administrative	72,605	64,259	212,613	188,028
Operating income	168,987	74,201	433,280	203,432
Interest expense, net of capitalized interest	17,741	18,138	54,493	58,354
Other (income) expense, net	3,937	(631)	8,012	(597)
Income before income taxes	147,309	56,694	370,775	145,675
Income taxes (benefit)	55,684	21,697	139,958	53,903
Net income	91,625	34,997	230,817	91,772
Net income attributable to Steel Dynamics, Inc.	91,625	34,997	230,817	91,772
Combined Non-Guarantors
Condensed Consolidating Statements of Operations
Net sales	96,409	96,204	271,694	302,657
Costs of goods sold	100,470	99,864	286,486	352,980
Gross profit	(4,061)	(3,660)	(14,792)	(50,323)
Selling, general and administrative	4,134	2,845	9,352	8,878
Operating income	(8,195)	(6,505)	(24,144)	(59,201)
Interest expense, net of capitalized interest	2,847	1,692	7,558	5,084
Other (income) expense, net	(4,135)	(440)	(11,139)	(2,434)
Income before income taxes	(6,907)	(7,757)	(20,563)	(61,851)
Income taxes (benefit)	797	(421)	(63)	(4,047)
Net income	(7,704)	(7,336)	(20,500)	(57,804)
Net loss attributable to noncontrolling interests	2,984	1,750	5,929	11,782
Net income attributable to Steel Dynamics, Inc.	(4,720)	(5,586)	(14,571)	(46,022)
Consolidating Adjustments
Condensed Consolidating Statements of Operations
Net sales	(1,099,150)	(984,355)	(3,024,728)	(3,047,290)
Costs of goods sold	(1,072,520)	(962,864)	(2,944,568)	(2,976,307)
Gross profit	(26,630)	(21,491)	(80,160)	(70,983)
Selling, general and administrative	(5,086)	(4,642)	(14,581)	(13,637)
Operating income	(21,544)	(16,849)	(65,579)	(57,346)
Interest expense, net of capitalized interest	(2,207)	(1,058)	(6,005)	(3,119)
Other (income) expense, net	2,207	1,058	6,005	3,119
Income before income taxes	(21,544)	(16,849)	(65,579)	(57,346)
Income taxes (benefit)	(7,831)	(6,606)	(23,966)	(20,403)
Net income	(13,713)	(10,243)	(41,613)	(36,943)
Equity in net income of subsidiaries	(73,192)	(19,168)	(174,633)	(8,807)
Net income attributable to Steel Dynamics, Inc.	$ (86,905)	$ (29,411)	$ (216,246)	$ (45,750)

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Condensed Consolidating Information - Statements of Cash Flows (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Condensed Consolidating Statements of Cash Flows
Net cash provided by (used in) operating activities	$ 196,340	$ 164,378	$ 643,211	$ 708,297
Net cash used in investing activities	(167,332)	(71,571)	(226,466)	(125,274)
Net cash provided by (used in) financing activities	(30,185)	(38,418)	(92,288)	(470,596)
Increase (decrease) in cash and equivalents	(1,177)	54,389	324,457	112,427
Cash and equivalents at beginning of period	1,052,666	419,401	727,032	361,363
Cash and equivalents at end of period	1,051,489	473,790	1,051,489	473,790
Parent
Condensed Consolidating Statements of Cash Flows
Net cash provided by (used in) operating activities			280,767	306,941
Net cash used in investing activities			(143,427)	(35,100)
Net cash provided by (used in) financing activities			198,393	(126,984)
Increase (decrease) in cash and equivalents			335,733	144,857
Cash and equivalents at beginning of period			636,877	265,313
Cash and equivalents at end of period	972,610	410,170	972,610	410,170
Guarantors
Condensed Consolidating Statements of Cash Flows
Net cash provided by (used in) operating activities			358,657	400,910
Net cash used in investing activities			(81,983)	(82,737)
Net cash provided by (used in) financing activities			(297,596)	(347,111)
Increase (decrease) in cash and equivalents			(20,922)	(28,938)
Cash and equivalents at beginning of period			81,976	81,690
Cash and equivalents at end of period	61,054	52,752	61,054	52,752
Combined Non-Guarantors
Condensed Consolidating Statements of Cash Flows
Net cash provided by (used in) operating activities			52	(4,302)
Net cash used in investing activities			(3,935)	(12,796)
Net cash provided by (used in) financing activities			13,529	13,606
Increase (decrease) in cash and equivalents			9,646	(3,492)
Cash and equivalents at beginning of period			8,179	14,360
Cash and equivalents at end of period	$ 17,825	$ 10,868	17,825	10,868
Consolidating Adjustments
Condensed Consolidating Statements of Cash Flows
Net cash provided by (used in) operating activities			3,735	4,748
Net cash used in investing activities			2,879	5,359
Net cash provided by (used in) financing activities			$ (6,614)	$ (10,107)