Condensed Consolidating Information

9 Months Ended

Sep. 30, 2019

Condensed Consolidating Information Disclosure Abstract

Condensed Consolidating Information

Note 11. Condensed Consolidating Information

Certain 100% owned subsidiaries of SDI fully and unconditionally guaranteed jointly and severally all of the indebtedness relating to the issuance of the company’s senior unsecured notes due 2021, 2023, 2024, 2025 and 2026, at September 30, 2019. 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. In October 2019, the Company’s corporate credit rating was upgraded to an investment grade credit level by all three credit rating agencies, resulting in all the referenced guarantees being automatically released pursuant to the applicable Indentures. 

Note 11. Condensed Consolidating Information (Continued)

Condensed Consolidating Balance Sheets (in thousands)
					Combined		Consolidating		Total
As of September 30, 2019	Parent		Guarantors		Non-Guarantors		Adjustments		Consolidated
Cash and equivalents	$	1,070,215	$	64,398	$	11,394	$	-	$	1,146,007
Short-term investments		69,529		-		-		-		69,529
Accounts receivable, net		303,259		1,675,521		63,962		(1,055,796)		986,946
Inventories		725,792		960,506		88,871		(8,149)		1,767,020
Other current assets		29,754		17,464		4,548		(948)		50,818
Total current assets		2,198,549		2,717,889		168,775		(1,064,893)		4,020,320
Property, plant and equipment, net		966,715		1,902,414		162,602		-		3,031,731
Intangible assets, net		-		249,598		-		-		249,598
Goodwill		-		427,103		113,810		-		540,913
Other assets, including investments in subs		2,723,786		61,910		6,420		(2,691,431)		100,685
Total assets	$	5,889,050	$	5,358,914	$	451,607	$	(3,756,324)	$	7,943,247
Accounts payable	$	177,308	$	332,299	$	99,162	$	(80,140)	$	528,629
Accrued expenses		228,600		316,684		16,694		(167,482)		394,496
Current maturities of long-term debt		843		517		103,551		(22,761)		82,150
Total current liabilities		406,751		649,500		219,407		(270,383)		1,005,275
Long-term debt		2,330,968		-		147,310		(123,035)		2,355,243
Other liabilities		(905,310)		1,087,758		34,290		321,636		538,374
Total liabilities		1,832,409		1,737,258		401,007		(71,782)		3,898,892
Redeemable noncontrolling interests		-		-		143,614		-		143,614
Common stock		645		1,727,859		15,016		(1,742,875)		645
Treasury stock		(1,469,078)		-		-		-		(1,469,078)
Additional paid-in-capital		1,175,512		683,048		804,625		(1,487,673)		1,175,512
Retained earnings (deficit)		4,349,523		1,210,749		(756,755)		(453,994)		4,349,523
Accumulated other comprehensive loss		39		-		-		-		39
Total Steel Dynamics, Inc. equity		4,056,641		3,621,656		62,886		(3,684,542)		4,056,641
Noncontrolling interests		-		-		(155,900)		-		(155,900)
Total equity		4,056,641		3,621,656		(93,014)		(3,684,542)		3,900,741
Total liabilities and equity	$	5,889,050	$	5,358,914	$	451,607	$	(3,756,324)	$	7,943,247

Note 11. Condensed Consolidating Information (Continued)

					Combined		Consolidating		Total
As of December 31, 2018	Parent		Guarantors		Non-Guarantors		Adjustments		Consolidated
Cash and equivalents	$	809,763	$	13,491	$	4,966	$	-	$	828,220
Short-term investments		198,783		30,000		-		-		228,783
Accounts receivable, net		340,439		1,635,168		26,655		(958,506)		1,043,756
Inventories		793,174		1,038,702		39,214		(11,922)		1,859,168
Other current assets		56,578		18,627		3,994		(6,469)		72,730
Total current assets		2,198,737		2,735,988		74,829		(976,897)		4,032,657
Property, plant and equipment, net		871,482		1,918,198		156,087		-		2,945,767
Intangible assets, net		-		270,328		-		-		270,328
Goodwill		-		429,645		-		-		429,645
Other assets, including investments in subs		2,862,556		5,593		5,557		(2,848,540)		25,166
Total assets	$	5,932,775	$	5,359,752	$	236,473	$	(3,825,437)	$	7,703,563
Accounts payable	$	209,156	$	330,156	$	74,353	$	(62,911)	$	550,754
Accrued expenses		296,528		295,668		11,171		(159,218)		444,149
Current maturities of long-term debt		793		1,355		51,079		(28,993)		24,234
Total current liabilities		506,477		627,179		136,603		(251,122)		1,019,137
Long-term debt		2,327,798		381		166,226		(141,916)		2,352,489
Other liabilities		(836,571)		1,447,464		31,791		(197,976)		444,708
Total liabilities		1,997,704		2,075,024		334,620		(591,014)		3,816,334
Redeemable noncontrolling interests		-		-		111,240		-		111,240
Common stock		645		1,727,859		15,016		(1,742,875)		645
Treasury stock		(1,184,243)		-		-		-		(1,184,243)
Additional paid-in-capital		1,160,048		683,048		695,502		(1,378,550)		1,160,048
Retained earnings (deficit)		3,958,320		873,821		(760,823)		(112,998)		3,958,320
Accumulated other comprehensive income		301		-		-		-		301
Total Steel Dynamics, Inc. equity		3,935,071		3,284,728		(50,305)		(3,234,423)		3,935,071
Noncontrolling interests		-		-		(159,082)		-		(159,082)
Total equity		3,935,071		3,284,728		(209,387)		(3,234,423)		3,775,989
Total liabilities and equity	$	5,932,775	$	5,359,752	$	236,473	$	(3,825,437)	$	7,703,563

Condensed Consolidating Statements of Operations (in thousands)
For the three months ended,					Combined		Consolidating		Total
September 30, 2019	Parent		Guarantors		Non-Guarantors		Adjustments		Consolidated
Net sales	$	976,470	$	2,710,767	$	205,617	$	(1,366,009)	$	2,526,845
Costs of goods sold		814,622		2,502,257		188,967		(1,338,840)		2,167,006
Gross profit		161,848		208,510		16,650		(27,169)		359,839
Selling, general and administrative		55,613		74,433		7,827		(6,079)		131,794
Operating income		106,235		134,077		8,823		(21,090)		228,045
Interest expense, net of capitalized interest		18,716		11,536		3,490		(2,403)		31,339
Other income, net		(5,394)		(1,574)		(196)		2,619		(4,545)
Income before income taxes and
equity in net income of subsidiaries		92,913		124,115		5,529		(21,306)		201,251
Income taxes		23,625		29,965		128		(5,075)		48,643
		69,288		94,150		5,401		(16,231)		152,608
Equity in net income of subsidiaries		81,760		-		-		(81,760)		-
Net income attributable to noncontrolling interests		-		-		(1,560)		-		(1,560)
Net income attributable to Steel Dynamics, Inc.	$	151,048	$	94,150	$	3,841	$	(97,991)	$	151,048

Note 11. Condensed Consolidating Information (Continued)

For the three months ended,					Combined		Consolidating		Total
September 30, 2018	Parent		Guarantors		Non-Guarantors		Adjustments		Consolidated
Net sales	$	1,304,801	$	3,540,381	$	144,145	$	(1,765,780)	$	3,223,547
Costs of goods sold		956,735		3,163,110		142,005		(1,724,384)		2,537,466
Gross profit		348,066		377,271		2,140		(41,396)		686,081
Selling, general and administrative		78,824		78,694		2,974		(5,983)		154,509
Operating income (loss)		269,242		298,577		(834)		(35,413)		531,572
Interest expense, net of capitalized interest		18,559		12,489		3,134		(2,622)		31,560
Other income, net		(7,121)		(2,292)		(306)		2,616		(7,103)
Income (loss) before income taxes and
equity in net income of subsidiaries		257,804		288,380		(3,662)		(35,407)		507,115
Income taxes		45,599		71,466		420		(8,276)		109,209
		212,205		216,914		(4,082)		(27,131)		397,906
Equity in net income of subsidiaries		186,170		-		-		(186,170)		-
Net loss attributable to noncontrolling interests		-		-		469		-		469
Net income (loss) attributable to Steel Dynamics, Inc.	$	398,375	$	216,914	$	(3,613)	$	(213,301)	$	398,375

For the nine months ended,					Combined		Consolidating		Total
September 30, 2019	Parent		Guarantors		Non-Guarantors		Adjustments		Consolidated
Net sales	$	3,198,215	$	8,837,385	$	611,407	$	(4,532,212)	$	8,114,795
Costs of goods sold		2,628,849		8,141,120		568,914		(4,438,663)		6,900,220
Gross profit		569,366		696,265		42,493		(93,549)		1,214,575
Selling, general and administrative		185,647		221,592		19,891		(17,474)		409,656
Operating income		383,719		474,673		22,602		(76,075)		804,919
Interest expense, net of capitalized interest		56,818		35,107		10,327		(7,470)		94,782
Other income, net		(17,752)		(4,746)		(753)		8,114		(15,137)
Income before income taxes and
equity in net income of subsidiaries		344,653		444,312		13,028		(76,719)		725,274
Income taxes		81,422		107,384		495		(18,208)		171,093
		263,231		336,928		12,533		(58,511)		554,181
Equity in net income of subsidiaries		286,447		-		-		(286,447)		-
Net income attributable to noncontrolling interests		-		-		(4,503)		-		(4,503)
Net income attributable to Steel Dynamics, Inc.	$	549,678	$	336,928	$	8,030	$	(344,958)	$	549,678

For the nine months ended,					Combined		Consolidating		Total
September 30, 2018	Parent		Guarantors		Non-Guarantors		Adjustments		Consolidated
Net sales	$	3,635,571	$	9,804,316	$	417,450	$	(4,939,390)	$	8,917,947
Costs of goods sold		2,746,516		8,783,145		413,607		(4,826,900)		7,116,368
Gross profit		889,055		1,021,171		3,843		(112,490)		1,801,579
Selling, general and administrative		218,839		233,989		8,550		(16,655)		444,723
Operating income (loss)		670,216		787,182		(4,707)		(95,835)		1,356,856
Interest expense, net of capitalized interest		56,568		36,793		9,489		(7,882)		94,968
Other income, net		(18,299)		(5,612)		(565)		7,875		(16,601)
Income (loss) before income taxes and
equity in net income of subsidiaries		631,947		756,001		(13,631)		(95,828)		1,278,489
Income taxes		127,083		187,794		530		(22,871)		292,536
		504,864		568,207		(14,161)		(72,957)		985,953
Equity in net income of subsidiaries		483,511		-		-		(483,511)		-
Net loss attributable to noncontrolling interests		-		-		2,422		-		2,422
Net income (loss) attributable to Steel Dynamics, Inc.	$	988,375	$	568,207	$	(11,739)	$	(556,468)	$	988,375

Note 11. Condensed Consolidating Information (Continued)

Condensed Consolidating Statements of Cash Flows (in thousands)
For the nine months ended,					Combined		Consolidating		Total
September 30, 2019	Parent		Guarantors		Non-Guarantors		Adjustments		Consolidated
Net cash provided by operating activities	$	368,148	$	624,223	$	18,893	$	(24,036)	$	987,228
Net cash used in investing activities		(116,470)		(78,193)		(7,740)		(25,114)		(227,517)
Net cash provided by (used in) financing activities		8,774		(495,488)		(5,030)		49,150		(442,594)
Increase in cash, cash equivalents and
restricted cash		260,452		50,542		6,123		-		317,117
Cash, cash equivalents, and restricted cash
at beginning of period		809,763		14,368		10,292		-		834,423
Cash, cash equivalents, and restricted cash
at end of period	$	1,070,215	$	64,910	$	16,415	$	-	$	1,151,540

For the nine months ended,					Combined		Consolidating		Total
September 30, 2018	Parent		Guarantors		Non-Guarantors		Adjustments		Consolidated
Net cash provided by operating activities	$	401,680	$	505,175	$	2,101	$	15,452	$	924,408
Net cash used in investing activities		(617,158)		(106,230)		(4,920)		4,295		(724,013)
Net cash provided by (used in) financing activities		77,165		(405,499)		2,740		(19,747)		(345,341)
Decrease in cash, cash equivalents and		(138,313)		(6,554)		(79)		-		(144,946)
restricted cash
Cash, cash equivalents, and restricted cash		1,002,230		20,748		12,107		-		1,035,085
at beginning of period
Cash, cash equivalents, and restricted cash
at end of period	$	863,917	$	14,194	$	12,028	$	-	$	890,139