10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.  20549

FORM 10-Q

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

For the quarterly period ended March 31, 2014

OR

oTransition 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	46804
(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 x  No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, 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 x  No o

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 x Accelerated filer o Non-accelerated filer o Smaller reporting company o

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

As of April 30, 2014, Registrant had 223,375,430 outstanding shares of common stock.

STEEL DYNAMICS, INC.

Table of Contents

PART I.  Financial Information

		Page
Item 1.	Financial Statements:
	Consolidated Balance Sheets as of March 31, 2014 (unaudited) and December 31, 2013	1
	Consolidated Statements of Income for the three-month periods ended March 31, 2014 and 2013 (unaudited)	2
	Consolidated Statements of Cash Flows for the three-month periods ended March 31, 2014 and 2013 (unaudited)	3
	Notes to Consolidated Financial Statements (unaudited)	4
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	22
Item 4.	Controls and Procedures	22
	PART II. Other Information
Item 1.	Legal Proceedings	23
Item 1A.	Risk Factors	23
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	23
Item 3.	Defaults Upon Senior Securities	23
Item 4.	Mine Safety Disclosures	23
Item 5.	Other Information	23
Item 6.	Exhibits	24
	Signatures	25

STEEL DYNAMICS, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

	March 31,			December 31,
	2014			2013
	(unaudited)
Assets
Current assets
Cash and equivalents	$	342,919		$	395,156
Accounts receivable, net	760,654			664,208
Accounts receivable-related parties	50,446			56,392
Inventories	1,332,101			1,314,747
Deferred income taxes	17,871			17,964
Other current assets	24,363			25,167
Total current assets	2,528,354			2,473,634
Property, plant and equipment, net	2,197,503			2,226,134
Restricted cash	18,588			23,827
Intangible assets, net	379,488			386,159
Goodwill	730,360			731,996
Other assets	59,564			91,256
Total assets	$	5,913,857		$	5,933,006
Liabilities and Equity
Current liabilities
Accounts payable	$	401,539		$	404,605
Accounts payable-related parties	15,629			10,327
Income taxes payable	23,531			4,023
Accrued payroll and benefits	57,384			93,432
Accrued interest	21,911			31,363
Accrued expenses	87,715			89,884
Current maturities of long-term debt	343,722			341,544
Total current liabilities	951,431			975,178
Long-term debt
Term note	209,687			220,000
Senior notes	1,500,000			1,500,000
Other long-term debt	45,341			46,045
Total long-term debt	1,755,028			1,766,045
Deferred income taxes	550,225			556,038
Other liabilities	22,843			23,376
Commitments and contingencies
Redeemable noncontrolling interests	121,834			116,514
Equity
Common stock voting, $.0025 par value; 900,000,000 shares authorized; 259,046,646 and 258,840,350 shares issued; and 223,173,055 and 222,867,408 shares outstanding, as of March 31, 2014 and December 31, 2013, respectively	646			645
Treasury stock, at cost; 35,873,591 and 35,972,942 shares, as of March 31, 2014 and December 31, 2013, respectively	(716,545		)	(718,529		)
Additional paid-in capital	1,092,281			1,085,694
Retained earnings	2,192,413			2,179,513
Total Steel Dynamics, Inc. equity	2,568,795			2,547,323
Noncontrolling interests	(56,299		)	(51,468		)
Total equity	2,512,496			2,495,855
Total liabilities and equity	$	5,913,857		$	5,933,006

See notes to consolidated financial statements.

1

STEEL DYNAMICS, INC.

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(in thousands, except per share data)

	Three Months Ended
	March 31,
	2014			2013
Net sales
Unrelated parties	$	1,765,881		$	1,728,401
Related parties	64,201			67,295
Total net sales	1,830,082			1,795,696
Costs of goods sold	1,666,778			1,619,432
Gross profit	163,304			176,264
Selling, general and administrative expenses	70,042			65,262
Profit sharing	5,395			6,643
Amortization of intangible assets	6,935			8,127
Total selling, general and administrative expenses	82,372			80,032
Operating income	80,932			96,232
Interest expense, net of capitalized interest	30,569			34,629
Other expense (income), net	(631		)	(1,046		)
Income before income taxes	50,994			62,649
Income taxes	17,296			21,397
Net income	33,698			41,252
Net loss attributable to noncontrolling interests	4,881			6,963
Net income attributable to Steel Dynamics, Inc.	$	38,579		$	48,215
Basic earnings per share attributable to Steel Dynamics, Inc. stockholders	$	.17		$	.22
Weighted average common shares outstanding	223,011			219,995
Diluted earnings per share attributable to Steel Dynamics, Inc. stockholders, including the effect of assumed conversions when dilutive	$	.17		$	.21
Weighted average common shares and share equivalents outstanding	241,394			238,087
Dividends declared per share	$	.115		$	.11

See notes to consolidated financial statements.

2

STEEL DYNAMICS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(in thousands)

	Three Months Ended
	March 31,
	2014			2013
Operating activities:
Net income	$	33,698		$	41,252
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization	57,568			57,061
Equity-based compensation	5,768			4,753
Deferred income taxes	(4,091		)	10,935
(Gain) loss on disposal of property, plant and equipment	2,641			(1,383		)
Changes in certain assets and liabilities:
Accounts receivable	(88,950		)	(110,938		)
Inventories	(17,354		)	32,348
Other assets	7,359			3,358
Accounts payable	5,041			38,988
Income taxes receivable/payable	19,393			(3,022		)
Accrued expenses and liabilities	(48,320		)	(43,642		)
Net cash provided by (used in) operating activities	(27,247		)	29,710
Investing activities:
Purchases of property, plant and equipment	(24,841		)	(45,346		)
Other investing activities	28,884			33,934
Net cash provided by (used in) investing activities	4,043			(11,412		)
Financing activities:
Issuance of current and long-term debt	43,453			409,261
Repayment of current and long-term debt	(56,246		)	(305,691		)
Debt issuance costs	—			(5,997		)
Proceeds from exercise of stock options, including related tax effect	2,905			7,614
Contributions from noncontrolling investors, net	5,370			411
Dividends paid	(24,515		)	(21,952		)
Net cash provided by (used in) financing activities	(29,033		)	83,646
Increase (decrease) in cash and equivalents	(52,237		)	101,944
Cash and equivalents at beginning of period	395,156			375,917
Cash and equivalents at end of period	$	342,919		$	477,861
Supplemental disclosure information:
Cash paid for interest	$	39,663		$	49,732
Cash paid for federal and state income taxes, net	$	2,143		$	11,165

See notes to consolidated financial statements.

3

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 a domestic manufacturer of steel products and metals recycler. The company has three reporting segments: steel operations, metals recycling and ferrous resources operations, and steel fabrication operations.

Steel Operations.  Steel operations include the company’s Flat Roll Division, Structural and Rail Division, Engineered Bar Products Division, Roanoke Bar Division, Steel of West Virginia and The Techs operations. These operations consist of mini-mills, producing steel from steel scrap, using electric arc furnaces, continuous casting, automated rolling mills, and downstream finishing facilities. Steel operations accounted for 61% and 59% of the company’s external net sales during the three-month periods ended March 31, 2014 and 2013, respectively.

Metals Recycling and Ferrous Resources Operations. Metals recycling and ferrous resources operations primarily include OmniSource Corporation, the company’s metals recycling, steel scrap procurement, and processing locations, and our two ironmaking initiatives: Iron Dynamics, a liquid pig iron production facility; and our Minnesota iron operations, an iron nugget production facility and operations to supply the nugget facility with its primary raw material, iron concentrate. Metals recycling and ferrous resources operations accounted for 32% and 35% of the company’s external net sales during the three-month periods ended March 31, 2014 and 2013, respectively.

Steel Fabrication Operations.  Steel fabrication operations include the company’s six New Millennium Building Systems joist and deck plants located throughout the United States and Northern Mexico. Revenues from these plants are generated from the fabrication of trusses, girders, steel joists and steel decking used within the non-residential construction industry. Steel fabrication operations accounted for 6% and 5% of the company’s external net sales during the three-month periods ended March 31, 2014 and 2013, respectively.

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 significant 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, 2013.

Goodwill.  The company’s goodwill is allocated to the following reporting units at March 31, 2014, and December 31, 2013, (in thousands):

	March 31,		December 31,
	2014		2013
OmniSource — Metals Recycling/Ferrous Resources Segment	$	556,611	$	558,247
The Techs — Steel Segment	142,783		142,783
Roanoke Bar Division — Steel Segment	29,041		29,041
New Millennium Building Systems — Fabrication Segment	1,925		1,925
	$	730,360	$	731,996

OmniSource goodwill decreased $1.6 million from December 31, 2013 to March 31, 2014, in recognition of the 2014 tax benefit related to the amortization of the component of OmniSource tax-deductible goodwill in excess of book goodwill.

4

STEEL DYNAMICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 2.  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, deferred stock units, and dilutive shares related to the company’s 5.125% convertible senior notes, which mature in June 2014; and are excluded from the computation in periods in which they have an anti-dilutive effect. No options to purchase shares were anti-dilutive at March 31, 2014, while options to purchase 3.0 million shares were anti-dilutive at March 31, 2013.

The following table presents a reconciliation of the numerators and the denominators of the company’s basic and diluted earnings per share computations for net income attributable to Steel Dynamics, Inc. (in thousands, except per share data):

	Three Months Ended March 31,
	2014					2013
	Net Income (Numerator)		Shares (Denominator)	Per Share Amount		Net Income (Numerator)		Shares (Denominator)	Per Share Amount
Basic earnings per share	$	38,579	223,011	$	.17	$	48,215	219,995	$	0.22
Dilutive common share equivalents	—		1,608			—		1,460
5.125% convertible senior notes, net of tax	2,358		16,775			2,358		16,632
Diluted earnings per share	$	40,937	241,394	$	.17	$	50,573	238,087	$	0.21

Note 3.  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):

	March 31,		December 31,
	2014		2013
Raw materials	$	615,776	$	660,384
Supplies	292,119		293,533
Work in progress	112,504		84,710
Finished goods	311,702		276,120
Total inventories	$	1,332,101	$	1,314,747

Note 4.  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.
	Common		Additional Paid-In		Retained			Treasury			Noncontrolling			Total			RedeemableNoncontrolling
	Stock		Capital		Earnings			Stock			Interests			Equity			Interests
Balances at January 1, 2014	$	645	$	1,085,694	$	2,179,513		$	(718,529	)	$	(51,468	)	$	2,495,855		$	116,514
Proceeds from the exercise of stock options, including related tax effect	1		3,537		—			—			—			3,538			—
Dividends declared	—		—		(25,665		)	—			—			(25,665		)	—
Equity-based compensation and issuance of restricted stock	—		3,050		(14		)	1,984			—			5,020			—
Contributions from noncontrolling investors	—		—		—			—			89			89			5,320
Distributions to noncontrolling investors	—		—		—			—			(39		)	(39		)	—
Net income (loss)	—		—		38,579			—			(4,881		)	33,698			—
Balances at March 31, 2014	$	646	$	1,092,281	$	2,192,413		$	(716,545	)	$	(56,299	)	$	2,512,496		$	121,834

5

STEEL DYNAMICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 5.  Derivative Financial Instruments

The company is exposed to certain risks relating to its ongoing business operations. The company utilizes derivative instruments to mitigate interest rate risk, foreign currency exchange rate risk, and commodity margin risk. Interest rate swaps may be entered into to manage interest rate risk associated with the company’s fixed and floating-rate borrowings. Forward exchange contracts on various foreign currencies may be entered into to manage foreign currency exchange rate risk as necessary. No interest rate swaps or forward exchange contracts on foreign currency existed for the periods presented. 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 (specifically aluminum, copper, nickel and silver).  The company offsets fair value amounts recognized for derivative instruments executed with the same counterparty under master netting agreements. The company designates certain of its nonferrous metals, forward exchange futures contracts as fair value hedges of inventory and firm sales commitments.

Commodity Futures Contracts.  If the company is “long” on a futures contract, 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 March 31, 2014 (MT represents metric tons and Lbs represents pounds):

Commodity Futures	Long/Short	Total
Aluminum	Long	2,625	MT
Aluminum	Short	1,525	MT
Copper	Long	4,260	MT
Copper	Short	15,014	MT
Silver	Short	343	Lbs

The following summarizes the location and amounts of the fair values reported on the company’s balance sheets as of March 31, 2014, and December 31, 2013, and gains and losses related to derivatives included in the company’s statement of income for the three-month periods ended March 31, 2014 and 2013 (in thousands):

	Asset Derivatives					Liability Derivatives
		Fair Value				Fair Value
	Balance sheet location	March 31, 2014		December 31, 2013		March 31, 2014			December 31, 2013
Derivative instruments designated as fair value hedges - Commodity futures	Other current assets	$	2,154	$	658	$	(1,048	)	$	1,886
Derivative instruments not designated as hedges - Commodity futures	Other current assets	$	1,466	$	352	$	(478	)	2,601
Total derivative instruments		$	3,620	$	1,010	$	(1,526	)	$	4,487

The fair value of the above derivative instruments along with required margin deposit amounts with the same counterparty under master netting arrangements, which totaled $5.4 million at March 31, 2014 and $3.6 million at December 31, 2013, are reflected in other current assets in the consolidated balance sheet.

	Location of gain	Amount of gain recognized in income on derivatives for the three				Hedged items	Location of gain (loss)	Amount of gain (loss) recognized in income on related hedged items for
	recognized in income on	months ended				in fair value hedge	recognized in income on	the three months ended
	derivatives	March 31, 2014		March 31, 2013		relationships	related hedged item	March 31, 2014			March 31, 2013
Derivatives in fair value hedging relationships - Commodity futures	Costs of goods sold	$	1,617	$	8,046	Firm commitments	Costs of goods sold	$	984		$	1,316
						Inventory	Costs of goods sold	(2,488		)	(6,808		)
								$	(1,504	)	$	(5,492	)
Derivatives not designated as hedging instruments - Commodity futures	Costs of goods sold	$	7,956	$	2,401

6

STEEL DYNAMICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 5.  Derivative Financial Instruments (Continued)

Derivatives accounted for as fair value hedges had ineffectiveness resulting in gains of $296,000 and $221,000 during the three-month periods ended March 31, 2014 and 2013, respectively; and a loss excluded from hedge effectiveness testing of $183,000 that increased costs of goods sold during the three-month period ended March 31, 2014, and a gain excluded from hedge effectiveness testing of $2.3 million, that reduced cost of goods sold during the three-month period ended March 31, 2013.

Note 6.  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 in the consolidated balance sheets and the respective levels to which the fair value measurements are classified within the fair value hierarchy as of March 31, 2014, and December 31, 2013 (in thousands):

	Total			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
March 31, 2014
Commodity futures — financial assets	$	3,620		$	—	$	3,620		$	—
Commodity futures — financial liabilities	(1,526		)	—		(1,526		)	—
December 31, 2013
Commodity futures — financial assets	$	1,010		$	—	$	1,010		$	—
Commodity futures — financial liabilities	4,487			—		4,487			—

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 $2.2 billion and $2.3 billion (with a corresponding carrying amount in the consolidated balance sheets of $2.1 billion and $2.1 billion) at March 31, 2014 and December 31, 2013, respectively.

7

STEEL DYNAMICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 7.  Commitments and Contingencies

The company is 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.

The company is involved, along with other steel manufacturing companies, in a class action antitrust complaint filed in federal court in Chicago, Illinois in September 2008, which alleges a conspiracy to fix, raise, maintain and stabilize the price at which steel products were sold in the United States during a period between 2005 and 2007, by artificially restricting the supply of such steel products. All but one of the complaints were brought on behalf of a purported class consisting of all direct purchasers of steel products.  The other complaint was brought on behalf of a purported class consisting of all indirect purchasers of steel products within the same time period.  A ninth complaint, in December 2010, was brought on behalf of indirect purchasers of steel products in Tennessee and has been consolidated with the original complaints.  All complaints seek treble damages and costs, including reasonable attorney fees, pre- and post-judgment interest and injunctive relief.  Following a period of discovery relating to class certification matters, plaintiffs’ motion for class action certification filed in 2012, and briefing by both sides, the court, on March 5 – 7 and April 11, 2014, held a class certification hearing. At the conclusion of the hearing, the court took the class certification issue under advisement.

Due to the uncertain nature of litigation, the company cannot presently determine the ultimate outcome of this litigation.  However, we have determined, based on the information available at this time, that there is not presently a “reasonable possibility” (as that term is defined in ASC 450-20-20), that the outcome of these legal proceedings would 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 the above matter, we may in the future determine that a loss accrual is necessary. 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.

Note 8.  Segment Information

The company has three reportable segments: steel operations, metals recycling and ferrous resources operations, and steel fabrication operations.  These operations are described in Note 1 to the financial statements.  Revenues included in the category “Other” are from subsidiary operations that are below the quantitative thresholds required for reportable segments and primarily consist of further processing, slitting, and sale of certain steel products and the resale of certain secondary and excess steel products.  In addition, “Other” also includes certain unallocated corporate accounts, such as the company’s senior secured credit facility, senior notes, convertible senior notes, certain other investments, and certain profit sharing expenses.

8

STEEL DYNAMICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 8.  Segment Information (Continued)

The company’s operations are primarily organized and managed by operating segment.  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 and intra-company sales and any related profits are eliminated in consolidation. Refer to the company’s Annual Report on Form 10-K for the year ended December 31, 2013, for more information related to the company’s segment reporting.  The company’s segment results for the three-month periods ended March 31, 2014 and 2013 are as follows (in thousands):

For the three months ended			Metals Recycling /			Steel Fabrication
March 31, 2014	Steel Operations		Ferrous Resources			Operations		Other			Eliminations			Consolidated
Net Sales
External	$	1,061,079	$	517,957		$	115,861	$	20,621		$	—		$	1,715,518
External Non-U.S.	56,519		57,817			—		228			—			114,564
Other segments	43,732		343,928			—		6,673			(394,333		)	—
	1,161,330		919,702			115,861		27,522			(394,333		)	1,830,082
Operating income (loss)	105,643		(15,519		)	3,126		(16,545		)(1)	4,227		(2)	80,932
Income (loss) before income taxes	91,998		(22,696		)	1,652		(24,187		)	4,227			50,994
Depreciation and amortization	27,377		26,621			2,222		1,399			(51		)	57,568
Capital expenditures	18,606		5,779			311		145			—			24,841
As of March 31, 2014
Assets	2,731,246		2,537,892			263,688		609,206		(3)	(228,175		)(4)	5,913,857
Liabilities	576,643		613,611			17,022		2,290,332		(5)	(218,081		)(6)	3,279,527

Footnotes related to the three months ended March 31, 2014 segment results (in millions):

(1)	Corporate SG&A	$	(8.3	)
	Company-wide equity-based compensation	(4.6		)
	Profit sharing	(4.7		)
	Other, net	1.1
		$	(16.5	)

(2) Gross profit increase from intra-company sales $ 4.2

(3)	Cash and equivalents	$	285.6
	Accounts receivable	12.3
	Inventories	13.5
	Deferred income taxes	17.8
	Property, plant and equipment, net	71.6
	Debt issuance costs	24.4
	Intra-company debt	153.8
	Other	30.2
		$	609.2

(4)	Elimination of intra-company receivables	$	(65.1	)
	Elimination of intra-company debt	(153.8		)
	Other	(9.3		)
		$	(228.2	)

(5)	Accounts payable	$	44.1
	Income taxes payable	23.5
	Accrued interest	21.7
	Accrued profit sharing	4.8
	Debt	2,031.4
	Deferred income taxes	138.0
	Other	26.8
		$	2,290.3

(6)	Elimination of intra-company payables	$	(65.5	)
	Elimination of intra-company debt	(153.8		)
	Other	1.2
		$	(218.1	)

9

STEEL DYNAMICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 8.  Segment Information (Continued)

For the three months ended			Metals Recycling /			Steel Fabrication
March 31, 2013	Steel Operations		Ferrous Resources			Operations			Other			Eliminations			Consolidated
Net Sales
External	$	1,011,195	$	557,611		$	93,797		$	19,371		$	—		$	1,681,974
External Non-U.S.	50,117		63,517			—			88			—			113,722
Other segments	61,048		276,364			578			5,395			(343,385		)	—
	1,122,360		897,492			94,375			24,854			(343,385		)	1,795,696
Operating income (loss)	119,301		(9,824		)	1,530			(16,439		)(1)	1,664		(2)	96,232
Income (loss) before income taxes	105,007		(17,854		)	(76		)	(26,092		)	1,664			62,649
Depreciation and amortization	26,387		27,136			2,057			1,532			(51		)	57,061
Capital expenditures	24,726		19,069			881			670			—			45,346
As of March 31, 2013
Assets	2,566,642		2,529,951			254,176			822,064		(3)	(216,259		)(4)	5,956,574
Liabilities	557,404		526,457			15,646			2,556,590		(5)	(205,527		)(6)	3,450,570

Footnotes related to the three months ended March 31, 2013 segment results (in millions):

(1)	Corporate SG&A	$	(8.0	)
	Company-wide equity-based compensation	(3.2		)
	Profit sharing	(5.9		)
	Other, net	0.7
	Total	$	(16.4	)

(2) Gross profit increase from intra-company sales $ 1.7

(3)	Cash and equivalents	$	445.8
	Accounts receivable	11.6
	Inventories	13.2
	Deferred income taxes	23.5
	Property, plant and equipment, net	74.8
	Debt issuance costs, net	31.3
	Intra-company debt	156.0
	Other	65.9
	Total	$	822.1

(4)	Elimination of intra-company receivables	$	(49.4	)
	Elimination of intra-company debt	(156.0		)
	Other	(10.9		)
	Total	$	(216.3	)

(5)	Accounts payable	$	38.8
	Income taxes payable	13.4
	Accrued interest	19.1
	Accrued profit sharing	5.9
	Debt	2,247.1
	Deferred income taxes	213.8
	Other	18.5
	Total	$	2,556.6

(6)	Elimination of intra-company payables	$	(49.7	)
	Elimination of intra-company debt	(156.0		)
	Other	0.2
	Total	$	(205.5	)

10

STEEL DYNAMICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 9.  Condensed Consolidating Information

Certain 100%-owned subsidiaries of SDI have fully and unconditionally guaranteed all of the indebtedness relating to the issuance of the company’s senior notes due 2014, 2019, 2020, 2022 and 2023. Following are the company’s condensed consolidating financial statements, including the guarantors, which present the financial position, results of operations and cash flows of (i) SDI (in each case, reflecting investments in its consolidated subsidiaries under the equity method of accounting), (ii) the guarantor subsidiaries of SDI, (iii) the non-guarantor subsidiaries of SDI, and (iv) the eliminations necessary to arrive at the information on a consolidated basis. The following statements should be read in conjunction with the accompanying consolidated financial statements and the company’s Annual Report on Form 10-K for the year ended December 31, 2013.

Condensed Consolidating Balance Sheets (in thousands)

						Combined			Consolidating			Total
	Parent			Guarantors		Non-Guarantors			Adjustments			Consolidated
As of March 31, 2014
Cash and equivalents	$	281,376		$	48,071	$	13,472		$	—		$	342,919
Accounts receivable, net	320,996			1,012,562		42,095			(564,553		)	811,100
Inventories	728,638			502,339		105,553			(4,429		)	1,332,101
Other current assets	48,969			6,968		5,048			(18,751		)	42,234
Total current assets	1,379,979			1,569,940		166,168			(587,733		)	2,528,354
Property, plant and equipment, net	1,042,424			598,946		558,500			(2,367		)	2,197,503
Intangible assets, net	—			379,488		—			—			379,488
Goodwill	—			730,360		—			—			730,360
Other assets, including investments in subs	2,604,100			21,572		7,352			(2,554,872		)	78,152
Total assets	$	5,026,503		$	3,300,306	$	732,020		$	(3,144,972	)	$	5,913,857
Accounts payable	$	178,731		$	266,205	$	89,012		$	(116,780	)	$	417,168
Accrued expenses	124,762			107,284		10,050			(51,555		)	190,541
Current maturities of long-term debt	318,969			300		66,580			(42,127		)	343,722
Total current liabilities	622,462			373,789		165,642			(210,462		)	951,431
Long-term debt	1,714,982			—		182,506			(142,460		)	1,755,028
Other liabilities	120,264			2,004,584		30,844			(1,582,624		)	573,068
Redeemable noncontrolling interests	—			—		121,834			—			121,834
Common stock	646			33,896		18,121			(52,017		)	646
Treasury stock	(716,545		)	—		—			—			(716,545		)
Additional paid-in-capital	1,092,281			117,737		575,877			(693,614		)	1,092,281
Retained earnings (deficit)	2,192,413			770,300		(306,505		)	(463,795		)	2,192,413
Total Steel Dynamics, Inc. equity	2,568,795			921,933		287,493			(1,209,426		)	2,568,795
Noncontrolling interests	—			—		(56,299		)	—			(56,299		)
Total equity	2,568,795			921,933		231,194			(1,209,426		)	2,512,496
Total liabilities and equity	$	5,026,503		$	3,300,306	$	732,020		$	(3,144,972	)	$	5,913,857

11

STEEL DYNAMICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 9.  Condensed Consolidating Information (Continued)

						Combined			Consolidating			Total
	Parent			Guarantors		Non-Guarantors			Adjustments			Consolidated
As of December 31, 2013
Cash and equivalents	$	320,866		$	61,148	$	13,142		$	—		$	395,156
Accounts receivable, net	309,691			874,707		32,018			(495,816		)	720,600
Inventories	673,763			557,640		91,199			(7,855		)	1,314,747
Other current assets	50,228			8,399		3,259			(18,755		)	43,131
Total current assets	1,354,548			1,501,894		139,618			(522,426		)	2,473,634
Property, plant and equipment, net	1,046,093			619,617		562,843			(2,419		)	2,226,134
Intangible assets, net	—			386,159		—			—			386,159
Goodwill	—			731,996		—			—			731,996
Other assets, including investments in subs	2,630,411			21,789		8,092			(2,545,209		)	115,083
Total assets	$	5,031,052		$	3,261,455	$	710,553		$	(3,070,054	)	$	5,933,006
Accounts payable	$	160,255		$	258,406	$	60,987		$	(64,716	)	$	414,932
Accrued expenses	142,055			115,182		10,694			(49,229		)	218,702
Current maturities of long-term debt	315,521			300		52,163			(26,440		)	341,544
Total current liabilities	617,831			373,888		123,844			(140,385		)	975,178
Long-term debt	1,725,433			—		204,385			(163,773		)	1,766,045
Other liabilities	140,465			1,986,260		34,895			(1,582,206		)	579,414
Redeemable noncontrolling interest	—			—		116,514			—			116,514
Common stock	645			33,896		18,121			(52,017		)	645
Treasury stock	(718,529		)	—		—			—			(718,529		)
Additional paid-in-capital	1,085,694			117,737		552,946			(670,683		)	1,085,694
Retained earnings (deficit)	2,179,513			749,674		(288,684		)	(460,990		)	2,179,513
Total Steel Dynamics, Inc. equity	2,547,323			901,307		282,383			(1,183,690		)	2,547,323
Noncontrolling interests	—			—		(51,468		)	—			(51,468		)
Total equity	2,547,323			901,307		230,915			(1,183,690		)	2,495,855
Total liabilities and equity	$	5,031,052		$	3,261,455	$	710,553		$	(3,070,054	)	$	5,933,006

12

STEEL DYNAMICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 9.  Condensed Consolidating Information (Continued)

Condensed Consolidating Statements of Operations (in thousands)

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

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

13

STEEL DYNAMICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 9.  Condensed Consolidating Information (Continued)

Condensed Consolidating Statements of Cash Flows (in thousands)

For the three months ended,							Combined			Consolidating			Total
March 31, 2014	Parent			Guarantors			Non-Guarantors			Adjustments			Consolidated
Net cash provided by (used in) operating activities	$	9,027		$	(17,195	)	$	(14,149	)	$	(4,930	)	$	(27,247	)
Net cash provided by (used in) investing activities	(12,430		)	(3,997		)	(1,625		)	22,095			4,043
Net cash provided by (used in) financing activities	(36,087		)	8,115			16,104			(17,165		)	(29,033		)
Increase (decrease) in cash and equivalents	(39,490		)	(13,077		)	330			—			(52,237		)
Cash and equivalents at beginning of period	320,866			61,148			13,142			—			395,156
Cash and equivalents at end of period	$	281,376		$	48,071		$	13,472		$	—		$	342,919

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

14

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 the steel and recycled metals markets, our revenues, costs of purchased materials, future profitability and earnings, and the operation of new or existing facilities. These statements 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. Some factors that could cause such forward-looking statements to turn out differently than anticipated include: (1) the effects of a recurrent slowing in industrial demand; (2) changes in economic conditions, either generally or in any of the steel or scrap-consuming sectors which affect demand for our products, including the strength of the non-residential and residential construction, automotive, manufacturing, appliance, and other steel-consuming industries; (3) 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; (4) the impact of domestic and foreign import price competition; (5) risks and uncertainties involving product and/or technology development; and (6) occurrences of unexpected plant outages or equipment failures.

More specifically, we refer you to the sections titled Special Note Regarding Forward-Looking Statements and Risk Factors in our annual report on Form 10-K for the year ended December 31, 2013, as well as in other reports which we file with the Securities and Exchange Commission, for a more detailed discussion of some of the many factors, variable risks and uncertainties that could cause actual results to differ materially from those we may have expected or anticipated. These reports are available publicly on the SEC web site, www.sec.gov, and on our web site, www.steeldynamics.com. Forward-looking or predictive statements we make are based upon information and assumptions, concerning our businesses and the environments in which they operate, which we consider reasonable as of the date on which these statements are made.  Due to the foregoing risks and uncertainties however, as well as, matters beyond our control which can affect forward-looking statements, you are cautioned not to place undue reliance on these predictive statements, which speak only as of the date of this report. We undertake no duty to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

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 segment, 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 method, which is based on the percentage of steel consumed to date as compared to the estimated total steel 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.

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

15

Overview

Net income was $38.6 million, or $0.17 per diluted share, during the first quarter of 2014, compared with net income of $48.2 million, or $0.21 per diluted share, during the first quarter of 2013, while comparative operating income decreased $15.3 million, or 16%, to $80.9 million. We experienced one of the most severe and prolonged winter periods in recent history, especially in the Midwest where a majority of our operations are located. This severe weather caused production disruptions and diminished availability of transportation, resulting in lower shipments and meaningful increases in energy costs, most notably within our steel segment at our Flat Roll and Structural and Rail Divisions.  As a result, despite a 4% increase in metal spread, our steel segment operating income decreased $13.7 million, or 11%. Underlying sheet steel demand remains good, and demand in structural and special bar quality long product steel increased as end-market demand continues to improve.

Metals Recycling and Ferrous Resources operating losses increased $5.7 million, as metals recycling ferrous and nonferrous metal spreads each decreased, operating costs increased due to the severe weather, and weather-related damages to several of our buildings resulted in $2.6 million in losses.  Fabrication segment operating income more than doubled in the first quarter of 2014, as compared to the first quarter of 2013, to $3.1 million. Fabrication realized growth in shipments as a result of the improving non-residential construction market as well as increases in market penetration, and achieved reduced operating costs from manufacturing efficiencies and increased production rates.

Our March/April 2013 debt repayments and refinancing activities resulted in decreased interest expense for the first quarter of 2014 of $4.1 million compared to the first quarter of 2013.  These activities also elongated our debt maturities profile.

Segment Operating Results 2014 vs. 2013 (dollars in thousands)

	Three Months Ended March 31,
				%
	2014			Change	2013
Net sales
Steel	$	1,161,330		3%	$	1,122,360
Metals recycling and ferrous resources	919,702			2%	897,492
Steel fabrication	115,861			23%	94,375
Other	27,522			11%	24,854
	2,224,415				2,139,081
Intra-company	(394,333		)		(343,385		)
Consolidated	$	1,830,082		2%	$	1,795,696
Operating income (loss)
Steel	$	105,643		(11)%	$	119,301
Metals recycling and ferrous resources	(15,519		)	(58)%	(9,824		)
Steel fabrication	3,126			104%	1,530
Other	(16,545		)	(1)%	(16,439		)
	76,705				94,568
Intra-company	4,227				1,664
Consolidated	$	80,932		(16)%	$	96,232

Steel Operations

Steel Operations.  Steel operations consist of our five electric arc furnace mini-mills, producing steel from steel scrap, utilizing continuous casting, automated rolling mills, and various downstream finishing facilities, including The Techs operations. Collectively, our steel operations sell directly to end users and service centers. These products are used in numerous industry sectors, including the automotive, construction, commercial, transportation, agriculture and industrial machinery markets. In the first quarter of 2014 and 2013, our steel operations accounted for 61% and 59% of our external net sales, respectively.

Sheet Products.  Our Flat Roll Division sells a broad range of sheet steel products, such as hot rolled, cold rolled and coated steel products, including a large variety of specialty products such as light gauge hot rolled, galvanized, Galvalume® and painted products. The Techs operations, comprised of three galvanizing lines, also sells 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. Our Roanoke Bar Division primarily sells merchant steel products, including angles, plain rounds, flats and channels. Steel of West Virginia primarily sells merchant beams, channels and specialty structural steel sections.

16

Steel Operations Shipments (net tons):

	Three Months Ended
	March 31,
	2014		% Change	2013
Shipments
Flat Roll Division	641,520		(9)%	704,290
The Techs	153,237		1%	151,137
Sheet products	794,757		(7)%	855,427
Structural and Rail Division	292,316		4%	280,897
Engineered Bar Products Division	144,303		28%	112,821
Roanoke Bar Division	143,782		3%	139,950
Steel of West Virginia	75,574		(6)%	80,707
Long products	655,975		7%	614,375
Total shipments	1,450,732		(1)%	1,469,802
Intra-segment shipments	(45,508	)		(32,090	)
Segment shipments	1,405,224		(2)%	1,437,712
External shipments	1,338,573		—%	1,344,432

Net sales for the steel segment increased 3% in the first quarter of 2014 when compared to the first quarter of 2013, as a 2% decrease in segment shipments was more than offset by an increase of 6%, or $45 per ton, in average selling prices. The lower segment shipments, primarily at the Flat Roll Division, was largely driven by the historically significant severe winter weather conditions during the first quarter of 2014 which adversely impacted production volumes and limited shipments due to the diminished availability of rail cars and trucks during the period. The fundamental overall demand for sheet steel did not diminish, and demand for long products, most notably structural beams and special bar quality long product steel, improved as end-market demand continues to improve.

Metallic raw materials used in our electric arc furnaces represent our single most significant manufacturing cost. Our metallic raw material cost per net ton consumed in our steel operations increased $29 in the first quarter of 2014, compared with the first quarter of 2013. During the first quarter of 2014 and 2013, our metallic raw material costs represented 65% of our steel operations’ manufacturing costs, excluding the operations of The Techs, which purchases, rather than produces, the steel it further processes.

Despite the increased metal spread, operating income for the steel segment decreased 11%, to $105.6 million in the first quarter of 2014, compared to the same period of 2013, as the impact of the severe and prolonged winter weather during the first quarter of 2014 hindered production and shipments, and resulted in meaningfully higher electricity and natural gas cost, primarily at our Midwest operations.

17

Metals Recycling and Ferrous Resources Operations

Metals Recycling and Ferrous Resources Operations.  This operating segment primarily includes our metals recycling operations (OmniSource); our liquid pig iron production facility, Iron Dynamics (IDI); and our Minnesota iron operations. Our metals recycling and ferrous resources operations segment accounted for 32% and 35% of our external net sales in the first quarter of 2014 and 2013, respectively. Operating loss for the metals recycling and ferrous resources operations segment of $15.5 million, increased $5.7 million compared to the first quarter of 2013, due primarily to decreased ferrous and nonferrous metal spreads and increased operating costs in metals recycling, while operating losses in our Minnesota iron operations decreased.

Metals Recycling and Ferrous Resources Shipments:

	Three Months Ended
	March 31,
	2014		% Change	2013
Ferrous metal shipments (gross tons)
Total	1,364,533		2%	1,342,929
Intra-segment	(300	)		(1,969	)
Segment shipments	1,364,233		2%	1,340,960
External shipments	649,552		(18)%	789,039
Nonferrous metals shipments (thousands of pounds)
Total	270,978		(3)%	279,656
Intra-segment	(18,343	)		(1,431	)
Segment shipments	252,635		(9)%	278,225
External shipments	251,588		(9)%	276,127
Mesabi Nugget shipments (metric tons) — intra-company	37,488		(37)%	59,685
Iron Dynamics (metric tons) — intra-company	57,122		(12)%	64,685

Metals Recycling.  Our metals recycling operations (OmniSource) represent our metals sourcing and processing operations and are the most significant source of net sales in this segment. These operations sell 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 represented 90% and 93% of this segment’s net sales during the first quarter of 2014 and 2013, respectively. Metals recycling operations sales were $880.6 million and $835.0 million, and operating income was $5.0 million and $19.5 million, during the first quarter 2014 and 2013, respectively.

Net sales for metals recycling increased 5% overall in the first quarter of 2014 when compared to the first quarter of 2013, as sales prices of ferrous metals increased 11% on 2% higher volumes, while nonferrous metals sales volumes decreased 3%, coupled with a 4% decrease in average selling prices. In spite of increased net sales, operating income for the first quarter of 2014 decreased 74% when compared to the first quarter of 2013, due to decreased metal margins in both ferrous – 6%, and nonferrous – 12% metals. The severe and prolonged winter weather hampered the flow of scrap metals during the first quarter of 2014 and increased operating and maintenance costs. Additionally, we incurred $2.6 million of costs associated with building damage related to excessive snow accumulation.

Ferrous Resources.  Our ferrous resource operations consist of our two ironmaking initiatives: Iron Dynamics (IDI), a liquid pig iron production facility, and our Minnesota iron operations, consisting of an iron nugget production facility and operations to supply the nugget facility with its primary raw material, iron concentrate. IDI primarily produces liquid pig iron, which is used as a scrap substitute raw material input exclusively at our Flat Roll Division. Our Minnesota iron operations consists of Mesabi Nugget, (owned 81% by us); our potential future iron mining operations, Mesabi Mining; and, our iron tailings operations, Mining Resources (owned 80% by us). The impact of losses from our Minnesota iron operations on first quarter 2014 net income was approximately $8.9 million, as compared to approximately $13.8 million during the first quarter of 2013. The iron nugget production facility utilizes a pioneering production process, which has experienced operational, quality control and production cost challenges. The facility commenced initial production of iron nuggets in 2010. We have continued to modify, re-engineer and further refine this production process and have changed or modified equipment configurations with resulting improvement in plant availability, production, and quality. Certain meaningful adjunct trials related to product yield and cost of production that began in the latter half of the fourth quarter of 2013 were scheduled to be completed during the first quarter of 2014.  Due to the unanticipated severe winter weather, not all of these trials were able to be completed: however meaningful progress was made. The remaining trials are expected to be completed before the end of the second quarter of 2014. In the first quarter of 2014, Mesabi Nugget shipped 37,000 metric tons of iron-nuggets for use by our own steel mills, compared to 60,000 during the same period in 2013. Weather had a negative impact on our operations during the first quarter of 2014, limiting production and shipments, and increasing natural gas costs.

18

Steel Fabrication Operations

Our steel fabrication operations represent the company’s six New Millennium Building Systems’ plants located throughout the United States and Northern Mexico. Revenues from these plants are generated from the fabrication of trusses, girders, steel joists and steel decking used within the non-residential construction industry. Steel fabrication operations accounted for 6% and 5% of our external net sales during the first quarter of 2014 and 2013, respectively.

Net sales for the steel fabrication operations segment increased 23% in the first quarter of 2014 compared to the first quarter of 2013, as volumes increased 22%. Our steel fabrication operations continue to increase market share with our expanded geographic footprint and penetration into new markets, and benefit from the improving demand in the non-residential construction industry.

The purchase of various steel products is the largest single cost of production for our steel fabrication operations. During the first quarter of 2014 and 2013, the cost of steel products purchased represented 73% and 71%, respectively, of the total cost of manufacturing for our steel fabrication operations. The average cost of steel consumed increased in the first quarter of 2014, as compared to the same period in 2013, by $31 per ton.

Operating income for the steel fabrication segment of $3.0 million in the first quarter of 2014 more than doubled compared to the same period in 2013 due to the increased selling volumes and related cost compression, in addition to decreases in conversion costs realized from manufacturing efficiencies.

First Quarter Consolidated Results 2014 vs. 2013

Selling, General and Administrative Expenses. Selling, general and administrative expenses (including profit sharing, and amortization of intangible assets) were $82.4 million during the first quarter of 2014, as compared to $80.0 million during the first quarter of 2013, comparable in that they represented 4.5% of our total net sales during each period.

Interest Expense, net of Capitalized Interest.  During the first quarter of 2014, gross interest expense decreased $3.5 million to $31.9 million, and capitalized interest increased $538,000 to $1.3 million, when compared to the same period in 2013. The interest capitalized during these periods relates to construction activities at our various operating segments. The decrease in gross interest expense is due to refinancing activities during March/April of 2013 that reduced outstanding debt by $100.0 million and decreased the effective interest rate on $400.0 million of senior notes that were refinanced.

Income Taxes.  During the first quarter of 2014, our income tax expense was $17.3 million with an effective tax rate of 33.9%, as compared to $21.4 million with an effective tax rate of 34.2% during the same period in 2013. First quarter 2014 income tax expense includes a benefit related to a change in Indiana’s corporate income tax rate which resulted in the reduction of our deferred income tax.  The effective tax rate in the first quarter of 2013 includes a favorable adjustment related to 2012 research and development tax credits that were enacted into the tax code in January 2013.

19

Liquidity and Capital Resources

Our business is capital intensive and requires substantial expenditures for, among other things, the purchase and maintenance of equipment used in our steelmaking and finishing operations and to remain in compliance with environmental laws. Our short-term and long-term liquidity needs arise primarily from capital expenditures, working capital requirements and principal and interest payments related to our outstanding indebtedness. We have met these liquidity requirements primarily with cash provided by operations, long-term borrowings and issuances of common stock. Our liquidity at March 31, 2014 is as follows:

Cash and equivalents	$	342,919
Revolver availability	1,086,264
Total liquidity	$	1,429,183

Working Capital. We used $27.2 million of cash flow in operating activities during the first quarter 2014, due to increased working capital requirements, based on increases in trade receivables and inventory, which used $89.0 and $17.4 million of cash, respectively, and decreases in accrued expenses, which utilized $48.3 million of cash.  Accounts receivable increased primarily due to increased sales late in the first quarter of 2014, as compared to late in the fourth quarter of 2013, while days sales outstanding remained consistent. The increase in inventory is primarily the result of builds in steel segment work in process and finished goods inventory due to strong demand related production outpacing the shipments we were able to make during the difficult first quarter 2014 winter weather. This increase was partially offset by reductions in scrap and other raw material inventory used in production. Accrued expenses decreased primarily due to payments of 2013 accrued profit sharing and incentive compensation, as well as semiannual payments of interest on our senior notes.

Capital Investments.  During the first three months of 2014, we invested $24.8 million in property, plant and equipment, as compared to $45.3 million during the same period in 2013.  Approximately 50% of the 2014 capital investment related to announced growth or expansion projects at two of our steel mills, which are near completion. We estimate total capital expenditures for 2014 to be in the range of $125 million to $150 million.

Capital Resources and Long-term Debt.

During the first three months of 2014, our total outstanding debt of $2.1 billion remained relatively unchanged, decreasing by $8.8 million due to required payments. 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) decreased to 44.3% at March 31, 2014, from 44.7% at December 31, 2013.

We have a senior secured credit facility (Facility) that matures in September 2016 which provides for a $1.1 billion Revolver. Subject to certain conditions, we have the opportunity to increase the Revolver capacity by an additional $125.0 million. The Facility is guaranteed by certain of our subsidiaries and is secured by substantially all of our accounts receivable and inventories and pledges of shares of our wholly owned subsidiaries’ capital stock. The Revolver is available to fund working capital, capital expenditures, and other general corporate purposes.

The outstanding balance on the Revolver must be the lesser of $1.1 billion less other applicable commitments such as letters of credit and other secured debt, as defined within the Facility or the sum of 85% of our eligible accounts receivable and 65% of our eligible inventories, less other applicable commitments. At March 31, 2014, we had $1.1 billion of availability on the Revolver, excluding the $13.7 million of outstanding letters of credit and other obligations.

The Facility contains financial and other covenants that limit or restrict our ability 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.

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. In addition, a net debt (as defined in the Facility) to consolidated LTM adjusted EBITDA ratio (leverage ratio) of not more than 5.00:1.00 must be maintained. If the leverage ratio exceeds 3.50:1:00 at any time, our ability to make restricted payments as defined in the credit agreement (which includes cash dividends to stockholders and share purchases, among other things), is limited. At March 31, 2014, our interest coverage ratio and net debt leverage ratio were 5.27:1.00 and 2.76:1.00, respectively. We were therefore in compliance with these covenants at March 31, 2014, and we anticipate we will continue to be in compliance during the remainder of the year.

Cash Dividends.  As a reflection of confidence in our current and future strength regarding our cash flow generation ability and financial position, we increased our quarterly cash dividend by 5% to $0.115 per share (from $0.110 per share during 2013), resulting in declared cash dividends of $25.7 million during the first quarter of 2014. We paid cash dividends of $24.5 million and $22.0 million during the first three months of 2014 and 2013, respectively. Our board of directors, along with management, approves the payment of dividends on a quarterly basis. During the remainder of 2014, we anticipate maintaining our current level of quarterly dividends; however, 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 revolving credit agreement and the indenture relating to our senior notes may restrict the amount of cash dividends we can pay.

20

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 you 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 senior secured credit agreement through its term, which expires in September 2016, 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.

Other Matters

Inflation.  We believe that inflation has not had a material effect on our results of operations.

Environmental and Other Contingencies. We have incurred, and in the future will continue to incur, capital expenditures and operating expenses for matters relating to environmental control, remediation, monitoring, and compliance. We believe, apart from our dependence on environmental construction and operating permits for our existing and proposed manufacturing facilities, that compliance with current environmental laws and regulations is not likely to have a materially adverse effect on our financial condition, results of operations or liquidity; however, environmental laws and regulations have changed rapidly in recent years, and we may become subject to more stringent environmental laws and regulations in the future, such as the impact of United States government or various governmental agencies introducing regulatory changes in response to the potential of climate change.

Critical Accounting Policies and Estimates

No material changes have occurred to the indicated critical accounting policies and estimates as disclosed in our 2013 Annual Report on Form 10-K.

21

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 primarily 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 periods ended March 31, 2014 or 2013.

Commodity Risk

In the normal course of business we are exposed to the market risk and price fluctuations related to the sale of steel products and to the purchase of raw materials used in our operations, such as metallic raw materials, electricity, natural gas, iron concentrate, fuel 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.

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 certain commodities such as electricity, natural gas and its transportation services, air products, fuel, and zinc. Certain commitments contain provisions which require us to “take or pay” for specified quantities without regard to actual usage for periods of up to 43 months for physical commodity requirements, for up to 7 years for commodity transportation requirements, and for up to 14 years for air products. We also purchase electricity consumed at our Flat Roll Division pursuant to a contract which extends through December 2014. 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. At March 31, 2014, no material changes had occurred related to these commodity risks from the information disclosed in our Annual Report on Form 10-K for the year ended December 31, 2013. We utilized such “take or pay” requirements during the past three years under these contracts. 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.

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 supplier. At March 31, 2014, we had a cumulative unrealized gain associated with these financial contracts of $2.1 million, substantially all of which have a settlement date within the next twelve months. We believe the customer and supplier 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 March 31, 2014. 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 Commissions 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 March 31, 2014, 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 March 31, 2014 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

22

PART II OTHER INFORMATION

ITEM 1.LEGAL PROCEEDINGS

We are involved in various routine litigation matters, including administrative proceedings, regulatory proceedings, governmental investigations, environmental matters, and commercial and construction contract disputes.

We are also involved, along with eight other steel manufacturing companies, in a class action antitrust complaint filed in federal court in Chicago, Illinois in March 2008, which alleges a conspiracy to fix, raise, maintain and stabilize the price at which steel products were sold in the United States starting in 2005, by artificially restricting the supply of such steel products. All but one of the Complaints were brought on behalf of a purported class consisting of all direct purchasers of steel products.  The other Complaint was brought on behalf of a purported class consisting of all indirect purchasers of steel products within the same time period.  In addition, in December 2010, we and the other co-defendants were served with a substantially similar complaint purporting to be on behalf of indirect purchasers of steel products in Tennessee and has been consolidated with the original complaint.  All Complaints seek treble damages and costs, including reasonable attorney fees, pre- and post-judgment interest and injunctive relief.  Following a period of discovery relating to class certification matters, plaintiffs’ motion for class certification filed in 2012, and briefing by both sides, the court, on March 5 – 7 and April 11, 2014, held a class certification hearing. At the conclusion of the hearing, the court took the class certification issue under advisement.

Although not presently necessary or appropriate to make a dollar estimate of exposure to loss, if any, in connection with the above matter, we may in the future determine that a loss accrual is necessary. 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.

ITEM 1A.RISK FACTORS

No material changes have occurred to the indicated risk factors as disclosed in our 2013 Annual Report on Form 10-K.

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

None.

ITEM 3.DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.MINE SAFETY DISCLOSURES

The information required to be furnished pursuant to Item 4 concerning mine safety disclosure matters required 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 included in Exhibit 95 to this Quarterly Report.

ITEM 5.OTHER INFORMATION

None.

23

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.LAB*	XBRL Taxonomy Extension Label Document
101.PRE*	XBRL Taxonomy Presentation Document
101.DEF*	XBRL Taxonomy Definition Document

*Filed concurrently herewith

24

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.

May 8, 2014
	STEEL DYNAMICS, INC.
	By:	/s/ Theresa E. Wagler
		Theresa E. Wagler
		Executive Vice President and Chief Financial Officer
		(Principal Accounting Officer)

25

EX-31.1

EXHIBIT 31.1

CERTIFICATION

I, Mark D. Millett, certify that:

1.I have reviewed this quarterly report for the period ended March 31, 2014, 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)

May 8, 2014

EX-31.2

EXHIBIT 31.2

CERTIFICATION

I, Theresa E. Wagler, certify that:

1.I have reviewed this quarterly report for the period ended March 31, 2014, 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)

May 8, 2014

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 March 31, 2014 (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)

May 8, 2014

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 March 31, 2014 (the “Report”), as filed with the Securities and Exchange Commission on the date hereof, I, Theresa E. Wagler, 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)

May 8, 2014

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-95

EXHIBIT 95

Mine Safety Disclosures

This exhibit contains information concerning mine safety matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act about certain citations, orders and notices issued under the Federal Mine Safety and Health Act of 1977 (Mine Act) by the federal Mine Safety and Health Administration (MSHA) for our operations for the three months ended March 31, 2014.

THREE MONTHS ENDED MARCH 31, 2014

										Legal
										Actions
			Section			Total Dollar		Legal	Legal	Pending
			104(d)			Value of		Actions	Actions	as of
	Section	Section	Citations	Section	Section	MSHA		Initiated	Resolved	Last
	104 S&S	104(b)	and	110(b)(2)	107(a)	Assessments		During	During	Day of
Mine or Operating Name /	Citations	Orders	Orders	Violations	Orders	Proposed		Period	Period	Period
MSHA Identification Number	(#)	(#)	(#)	(#)	(#)	($)		(#)	(#)	(#)
Mesabi Nugget Delaware, LLC	8	—	—	—	—	$	51,148	22	6	29
21-03689
Mining Resources, LLC	1	—	—	—	—	$	—	—	—	—
21-03775

Although Mesabi Nugget Delaware, LLC (Mesabi Nugget), an affiliate of Steel Dynamics, Inc., is not a mining operation, the MSHA claims jurisdiction over Mesabi Nugget’s operations regarding the production of iron nuggets via a production process that utilizes iron concentrate and coal as input raw materials. Similarly, Mining Resources, LLC (Mining Resources), an affiliate of Steel Dynamics, Inc., is not a mining operation; however MSHA claims jurisdiction over Mining Resources’ operations regarding the extraction of iron tailings from previously developed stockpiles or water-filled tailings basins, to be concentrated for use by Mesabi Nugget as a low-cost iron concentrate to the nugget production process.  Therefore, this disclosure relating to Mesabi Nugget and Mining Resources is being submitted by Steel Dynamics, Inc.

The MSHA citations and orders set forth in the table above are those that were issued by MSHA and received by Mesabi Nugget and Mining Resources during the three months ended March 31, 2014.  In addition, the table above sets forth the total dollar amount of assessments proposed by MSHA during the three months ended March 31, 2014. The dollar amount of MSHA assessments proposed does not include assessments on those citations or orders that were received by Mesabi Nugget or Mining Resources after March 31, 2014.

The information in the table above does not reflect any subsequent changes in the level of severity of a citation or order, or changes in the value of an assessment that occurred during the time period presented in the table above (or that may occur after the time period covered in the table above) as a result of proceedings conducted in accordance with MSHA rules. For purposes of legal actions disclosures in the table above, any citation contested in any form or manner with MSHA is considered a legal action for reporting purposes.

During the period covered by this report, no written notices were received from MSHA of a pattern, or the potential to have a pattern, of violations of mandatory health or safety standards that are of such a nature as could have significantly and substantially contributed to the cause and effect of mine health or safety hazards under Section 104(e) of the Mine Act, and there were no mining related fatalities.

XML

Segment Information (Details 2) (USD $)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Dec. 31, 2013	Dec. 31, 2012
Operating income (loss)
Corporate SG & A	$ (82,372,000)	$ (80,032,000)
Profit sharing	(5,395,000)	(6,643,000)
Operating income	80,932,000	96,232,000
Assets
Cash and equivalents	342,919,000	477,861,000	395,156,000	375,917,000
Accounts receivable	760,654,000		664,208,000
Inventories	1,332,101,000		1,314,747,000
Deferred income taxes	17,871,000		17,964,000
Property, plant and equipment, net	2,197,503,000		2,226,134,000
Other	78,152,000		115,083,000
Total assets	5,913,857,000	5,956,574,000	5,933,006,000
Liabilities
Accounts payable	417,168,000		414,932,000
Income taxes payable	23,531,000		4,023,000
Accrued interest	21,911,000		31,363,000
Deferred income taxes	550,225,000		556,038,000
Liabilities	3,279,527,000	3,450,570,000
Operating segment | Other
Operating income (loss)
Corporate SG & A	(8,300,000)	(8,000,000)
Company-wide equity- based compensation	(4,600,000)	(3,200,000)
Profit sharing	(4,700,000)	(5,900,000)
Other, net	1,100,000	700,000
Operating income	(16,545,000)	(16,439,000)
Assets
Cash and equivalents	285,600,000	445,800,000
Accounts receivable	12,300,000	11,600,000
Inventories	13,500,000	13,200,000
Deferred income taxes	17,800,000	23,500,000
Property, plant and equipment, net	71,600,000	74,800,000
Debt issuance costs, net	24,400,000	31,300,000
Intra-company debt	153,800,000	156,000,000
Other	30,200,000	65,900,000
Total assets	609,206,000	822,064,000
Liabilities
Accounts payable	44,100,000	38,800,000
Income taxes payable	23,500,000	13,400,000
Accrued interest	21,700,000	19,100,000
Accrued profit sharing	4,800,000	5,900,000
Debt	2,031,400,000	2,247,100,000
Deferred income taxes	138,000,000	213,800,000
Other	26,800,000	18,500,000
Liabilities	$ 2,290,332,000	$ 2,556,590,000

XML

Description of the Business and Significant Accounting Policies (Details 2) (USD $)	3 Months Ended
	Mar. 31, 2014	Dec. 31, 2013
Goodwill
Goodwill	$ 730,360,000	$ 731,996,000
Omni Source - Metals Recycling/Ferrous Resources Segment
Goodwill
Goodwill	556,611,000	558,247,000
Goodwill decrease due to tax benefit related to the amortization of the component	1,600,000
The Techs - Steel Segment
Goodwill
Goodwill	142,783,000	142,783,000
Roanoke Bar Division - Steel Segment
Goodwill
Goodwill	29,041,000	29,041,000
New Millennium Building Systems - Fabrication Segment
Goodwill
Goodwill	$ 1,925,000	$ 1,925,000

XML

Condensed Consolidating Information (Details 3) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Condensed Consolidating Statements of Cash Flows
Net cash provided by (used in) operating activities	$ (27,247)	$ 29,710
Net cash provided by (used in) investing activities	4,043	(11,412)
Net cash provided by (used in) financing activities	(29,033)	83,646
Increase (decrease) in cash and equivalents	(52,237)	101,944
Cash and equivalents at beginning of period	395,156	375,917
Cash and equivalents at end of period	342,919	477,861
Reportable legal entity | Parent
Condensed Consolidating Statements of Cash Flows
Net cash provided by (used in) operating activities	9,027	29,373
Net cash provided by (used in) investing activities	(12,430)	(8,837)
Net cash provided by (used in) financing activities	(36,087)	98,746
Increase (decrease) in cash and equivalents	(39,490)	119,282
Cash and equivalents at beginning of period	320,866	322,707
Cash and equivalents at end of period	281,376	441,989
Reportable legal entity | Guarantors
Condensed Consolidating Statements of Cash Flows
Net cash provided by (used in) operating activities	(17,195)	14,903
Net cash provided by (used in) investing activities	(3,997)	(11,985)
Net cash provided by (used in) financing activities	8,115	(22,047)
Increase (decrease) in cash and equivalents	(13,077)	(19,129)
Cash and equivalents at beginning of period	61,148	41,675
Cash and equivalents at end of period	48,071	22,546
Reportable legal entity | Combined Non-Guarantors
Condensed Consolidating Statements of Cash Flows
Net cash provided by (used in) operating activities	(14,149)	(17,530)
Net cash provided by (used in) investing activities	(1,625)	(6,805)
Net cash provided by (used in) financing activities	16,104	26,126
Increase (decrease) in cash and equivalents	330	1,791
Cash and equivalents at beginning of period	13,142	11,535
Cash and equivalents at end of period	13,472	13,326
Consolidating Adjustments
Condensed Consolidating Statements of Cash Flows
Net cash provided by (used in) operating activities	(4,930)	2,964
Net cash provided by (used in) investing activities	22,095	16,215
Net cash provided by (used in) financing activities	$ (17,165)	$ (19,179)

XML

Changes in Equity

3 Months Ended

Mar. 31, 2014

Changes in Equity

Changes in Equity

Note 4.  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.
	Common		Additional Paid-In		Retained			Treasury			Noncontrolling			Total			RedeemableNoncontrolling
	Stock		Capital		Earnings			Stock			Interests			Equity			Interests
Balances at January 1, 2014	$	645	$	1,085,694	$	2,179,513		$	(718,529	)	$	(51,468	)	$	2,495,855		$	116,514
Proceeds from the exercise of stock options, including related tax effect	1		3,537		—			—			—			3,538			—
Dividends declared	—		—		(25,665		)	—			—			(25,665		)	—
Equity-based compensation and issuance of restricted stock	—		3,050		(14		)	1,984			—			5,020			—
Contributions from noncontrolling investors	—		—		—			—			89			89			5,320
Distributions to noncontrolling investors	—		—		—			—			(39		)	(39		)	—
Net income (loss)	—		—		38,579			—			(4,881		)	33,698			—
Balances at March 31, 2014	$	646	$	1,092,281	$	2,192,413		$	(716,545	)	$	(56,299	)	$	2,512,496		$	121,834

XML

Derivative Financial Instruments (Details) (USD $)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Dec. 31, 2013
Fair values of derivative instruments, balance sheet
Commodity futures, asset derivatives (in dollars)	$ 3,620,000		$ 1,010,000
Commodity futures, liability derivatives (in dollars)	(1,526,000)		4,487,000
Gains or losses on derivative instruments, statement of income
Amount of gain recognized in income on related hedged items	296,000	221,000
Gain (loss) excluded from hedge effectiveness testing	(183,000)	2,300,000
Other current assets
Fair values of derivative instruments, balance sheet
Fair value of derivatives including required margin deposits	5,400,000		3,600,000
Designated
Gains or losses on derivative instruments, statement of income
Amount of gain (loss) recognized in income on related hedged items	(1,504,000)	(5,492,000)
Futures | Aluminum | Long
Commodity contract commitments
Commodity contract (in MT/Lbs)	2,625
Futures | Aluminum | Short
Commodity contract commitments
Commodity contract (in MT/Lbs)	1,525
Futures | Copper | Long
Commodity contract commitments
Commodity contract (in MT/Lbs)	4,260
Futures | Copper | Short
Commodity contract commitments
Commodity contract (in MT/Lbs)	15,014
Futures | Silver | Short
Commodity contract commitments
Commodity contract (in MT/Lbs)	343
Commodity contract | Futures | Designated | Costs of goods sold
Gains or losses on derivative instruments, statement of income
Amount of gain (loss) recognized in income on related hedged items	1,617,000	8,046,000
Commodity contract | Futures | Designated | Other current assets
Fair values of derivative instruments, balance sheet
Commodity futures, asset derivatives (in dollars)	2,154,000		658,000
Commodity futures, liability derivatives (in dollars)	(1,048,000)		1,886,000
Commodity contract | Futures | Not designated | Costs of goods sold
Gains or losses on derivative instruments, statement of income
Amount of gain recognized in income on derivatives	7,956,000	2,401,000
Commodity contract | Futures | Not designated | Other current assets
Fair values of derivative instruments, balance sheet
Commodity futures, asset derivatives (in dollars)	1,466,000		352,000
Commodity futures, liability derivatives (in dollars)	(478,000)		2,601,000
Interest rate swap
Commodity contract commitments
Number of derivative instruments	0
Forward exchange contracts on foreign currency
Commodity contract commitments
Number of derivative instruments	0
Firm commitments | Designated | Costs of goods sold
Gains or losses on derivative instruments, statement of income
Amount of gain (loss) recognized in income on related hedged items	984,000	1,316,000
Inventory | Designated | Costs of goods sold
Gains or losses on derivative instruments, statement of income
Amount of gain (loss) recognized in income on related hedged items	$ (2,488,000)	$ (6,808,000)

XML

Changes in Equity (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Increase (Decrease) in Equity
Balances	$ 2,495,855
Proceeds from the exercise of stock options, including related tax effect	3,538
Dividends declared	(25,665)
Equity based compensation and issuance of restricted stock	5,020
Contributions from noncontrolling investors	89
Distributions to noncontrolling investors	(39)
Net income (loss)	33,698	41,252
Balances	2,512,496
Common Stock
Increase (Decrease) in Equity
Balances	645
Proceeds from the exercise of stock options, including related tax effect	1
Balances	646
Additional Paid-In Capital
Increase (Decrease) in Equity
Balances	1,085,694
Proceeds from the exercise of stock options, including related tax effect	3,537
Equity based compensation and issuance of restricted stock	3,050
Balances	1,092,281
Retained Earnings
Increase (Decrease) in Equity
Balances	2,179,513
Dividends declared	(25,665)
Equity based compensation and issuance of restricted stock	(14)
Net income (loss)	38,579
Balances	2,192,413
Treasury Stock
Increase (Decrease) in Equity
Balances	(718,529)
Equity based compensation and issuance of restricted stock	1,984
Balances	(716,545)
Noncontrolling Interests
Increase (Decrease) in Equity
Balances	(51,468)
Contributions from noncontrolling investors	89
Distributions to noncontrolling investors	(39)
Net income (loss)	(4,881)
Balances	(56,299)
Redeemable Noncontrolling Interests
Increase (Decrease) in Equity
Balances	116,514
Contributions from noncontrolling investors	5,320
Balances	$ 121,834

XML

Fair Value Measurements (Details) (Recurring basis, USD $)	Mar. 31, 2014	Dec. 31, 2013
Total
Assets and liabilities subject to fair value measurements
Carrying amount of long-term debt, including current maturities	$ 2,100,000,000	$ 2,100,000,000
Total | Commodity contract | Futures
Assets and liabilities subject to fair value measurements
Commodity futures and options - financial assets	3,620,000	1,010,000
Commodity futures - financial liabilities	(1,526,000)	4,487,000
Level 2
Assets and liabilities subject to fair value measurements
Fair value of long-term debt, including current maturities	2,200,000,000	2,300,000,000
Level 2 | Commodity contract | Futures
Assets and liabilities subject to fair value measurements
Commodity futures and options - financial assets	3,620,000	1,010,000
Commodity futures - financial liabilities	$ (1,526,000)	$ 4,487,000

XML

Commitments and Contingencies (Details)	Mar. 31, 2014 Complaint
Commitment and contingencies
Number of the complaints not brought on behalf of steel product purchasers	1

XML

Inventories

3 Months Ended

Mar. 31, 2014

Inventories

Inventories

Note 3.  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):

	March 31,		December 31,
	2014		2013
Raw materials	$	615,776	$	660,384
Supplies	292,119		293,533
Work in progress	112,504		84,710
Finished goods	311,702		276,120
Total inventories	$	1,332,101	$	1,314,747

XML

Segment Information (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014 segment	Mar. 31, 2013	Dec. 31, 2013
Segment Information
Number of reporting segments	3
Segment Reporting Information
Total net sales	$ 1,830,082	$ 1,795,696
Operating income (loss)	80,932	96,232
Income (loss) before income taxes	50,994	62,649
Depreciation and amortization	57,568	57,061
Capital expenditures	24,841	45,346
Assets	5,913,857	5,956,574	5,933,006
Liabilities	3,279,527	3,450,570
U.S.
Segment Reporting Information
Total net sales	1,715,518	1,681,974
Non-U.S.
Segment Reporting Information
Total net sales	114,564	113,722
Steel Operations | U.S.
Segment Reporting Information
Total net sales	1,061,079	1,011,195
Steel Operations | Non-U.S.
Segment Reporting Information
Total net sales	56,519	50,117
Metals Recycling/Ferrous Resources | U.S.
Segment Reporting Information
Total net sales	517,957	557,611
Metals Recycling/Ferrous Resources | Non-U.S.
Segment Reporting Information
Total net sales	57,817	63,517
Steel Fabrication Operations | U.S.
Segment Reporting Information
Total net sales	115,861	93,797
Other | U.S.
Segment Reporting Information
Total net sales	20,621	19,371
Other | Non-U.S.
Segment Reporting Information
Total net sales	228	88
Operating segment
Segment Reporting Information
Total net sales	1,830,082	1,795,696
Operating segment | Steel Operations
Segment Reporting Information
Total net sales	1,161,330	1,122,360
Operating income (loss)	105,643	119,301
Income (loss) before income taxes	91,998	105,007
Depreciation and amortization	27,377	26,387
Capital expenditures	18,606	24,726
Assets	2,731,246	2,566,642
Liabilities	576,643	557,404
Operating segment | Metals Recycling/Ferrous Resources
Segment Reporting Information
Total net sales	919,702	897,492
Operating income (loss)	(15,519)	(9,824)
Income (loss) before income taxes	(22,696)	(17,854)
Depreciation and amortization	26,621	27,136
Capital expenditures	5,779	19,069
Assets	2,537,892	2,529,951
Liabilities	613,611	526,457
Operating segment | Steel Fabrication Operations
Segment Reporting Information
Total net sales	115,861	94,375
Operating income (loss)	3,126	1,530
Income (loss) before income taxes	1,652	(76)
Depreciation and amortization	2,222	2,057
Capital expenditures	311	881
Assets	263,688	254,176
Liabilities	17,022	15,646
Operating segment | Other
Segment Reporting Information
Total net sales	27,522	24,854
Operating income (loss)	(16,545)	(16,439)
Income (loss) before income taxes	(24,187)	(26,092)
Depreciation and amortization	1,399	1,532
Capital expenditures	145	670
Assets	609,206	822,064
Liabilities	2,290,332	2,556,590
Eliminations
Segment Reporting Information
Total net sales	(394,333)	(343,385)
Operating income (loss)	4,227	1,664
Income (loss) before income taxes	4,277	1,664
Depreciation and amortization	(51)	(51)
Assets	(228,175)	(216,259)
Liabilities	(218,081)	(205,527)
Eliminations | Steel Operations
Segment Reporting Information
Total net sales	43,732	61,048
Eliminations | Metals Recycling/Ferrous Resources
Segment Reporting Information
Total net sales	343,928	276,364
Eliminations | Steel Fabrication Operations
Segment Reporting Information
Total net sales		578
Eliminations | Other
Segment Reporting Information
Total net sales	$ 6,673	$ 5,395

XML

CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Current assets
Cash and equivalents	$ 342,919	$ 395,156
Accounts receivable, net	760,654	664,208
Accounts receivable-related parties	50,446	56,392
Inventories	1,332,101	1,314,747
Deferred income taxes	17,871	17,964
Other current assets	24,363	25,167
Total current assets	2,528,354	2,473,634
Property, plant and equipment, net	2,197,503	2,226,134
Restricted cash	18,588	23,827
Intangible assets, net	379,488	386,159
Goodwill	730,360	731,996
Other assets	59,564	91,256
Total assets	5,913,857	5,933,006
Current liabilities
Accounts payable	401,539	404,605
Accounts payable-related parties	15,629	10,327
Income taxes payable	23,531	4,023
Accrued payroll and benefits	57,384	93,432
Accrued interest	21,911	31,363
Accrued expenses	87,715	89,884
Current maturities of long-term debt	343,722	341,544
Total current liabilities	951,431	975,178
Long-term debt
Term note	209,687	220,000
Senior notes	1,500,000	1,500,000
Other long-term debt	45,341	46,045
Total long-term debt	1,755,028	1,766,045
Deferred income taxes	550,225	556,038
Other liabilities	22,843	23,376
Commitments and contingencies
Redeemable noncontrolling interests	121,834	116,514
Equity
Common stock voting, $.0025 par value; 900,000,000 shares authorized; 259,046,646 and 258,840,350 shares issued; and 223,173,055 and 222,867,408 shares outstanding, as of March 31, 2014 and December 31, 2013, respectively	646	645
Treasury stock, at cost; 35,873,591 and 35,972,942 shares, as of March 31, 2014 and December 31, 2013, respectively	(716,545)	(718,529)
Additional paid-in capital	1,092,281	1,085,694
Retained earnings	2,192,413	2,179,513
Total Steel Dynamics, Inc. equity	2,568,795	2,547,323
Noncontrolling interests	(56,299)	(51,468)
Total equity	2,512,496	2,495,855
Total liabilities and equity	$ 5,913,857	$ 5,933,006

XML

Description of the Business and Significant Accounting Policies

3 Months Ended

Mar. 31, 2014

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 a domestic manufacturer of steel products and metals recycler. The company has three reporting segments: steel operations, metals recycling and ferrous resources operations, and steel fabrication operations.

Steel Operations.  Steel operations include the company’s Flat Roll Division, Structural and Rail Division, Engineered Bar Products Division, Roanoke Bar Division, Steel of West Virginia and The Techs operations. These operations consist of mini-mills, producing steel from steel scrap, using electric arc furnaces, continuous casting, automated rolling mills, and downstream finishing facilities. Steel operations accounted for 61% and 59% of the company’s external net sales during the three-month periods ended March 31, 2014 and 2013, respectively.

Metals Recycling and Ferrous Resources Operations. Metals recycling and ferrous resources operations primarily include OmniSource Corporation, the company’s metals recycling, steel scrap procurement, and processing locations, and our two ironmaking initiatives: Iron Dynamics, a liquid pig iron production facility; and our Minnesota iron operations, an iron nugget production facility and operations to supply the nugget facility with its primary raw material, iron concentrate. Metals recycling and ferrous resources operations accounted for 32% and 35% of the company’s external net sales during the three-month periods ended March 31, 2014 and 2013, respectively.

Steel Fabrication Operations.  Steel fabrication operations include the company’s six New Millennium Building Systems joist and deck plants located throughout the United States and Northern Mexico. Revenues from these plants are generated from the fabrication of trusses, girders, steel joists and steel decking used within the non-residential construction industry. Steel fabrication operations accounted for 6% and 5% of the company’s external net sales during the three-month periods ended March 31, 2014 and 2013, respectively.

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 significant 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, 2013.

Goodwill.  The company’s goodwill is allocated to the following reporting units at March 31, 2014, and December 31, 2013, (in thousands):

	March 31,		December 31,
	2014		2013
OmniSource — Metals Recycling/Ferrous Resources Segment	$	556,611	$	558,247
The Techs — Steel Segment	142,783		142,783
Roanoke Bar Division — Steel Segment	29,041		29,041
New Millennium Building Systems — Fabrication Segment	1,925		1,925
	$	730,360	$	731,996

OmniSource goodwill decreased $1.6 million from December 31, 2013 to March 31, 2014, in recognition of the 2014 tax benefit related to the amortization of the component of OmniSource tax-deductible goodwill in excess of book goodwill.

XML

Condensed Consolidating Information (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013	Mar. 31, 2013	Dec. 31, 2012
Condensed Consolidating Balance Sheets
Ownership interest in subsidiaries (as a percent)	100.00%
Cash and equivalents	$ 342,919	$ 395,156	$ 477,861	$ 375,917
Accounts receivable, net	811,100	720,600
Inventories	1,332,101	1,314,747
Other current assets	42,234	43,131
Total current assets	2,528,354	2,473,634
Property, plant and equipment, net	2,197,503	2,226,134
Intangible assets, net	379,488	386,159
Goodwill	730,360	731,996
Other assets, including investments in subs	78,152	115,083
Total assets	5,913,857	5,933,006	5,956,574
Accounts payable	417,168	414,932
Accrued expenses	190,541	218,702
Current maturities of long-term debt	343,722	341,544
Total current liabilities	951,431	975,178
Long-term debt	1,755,028	1,766,045
Other liabilities	573,068	579,414
Redeemable noncontrolling interests	121,834	116,514
Common stock	646	645
Treasury stock	(716,545)	(718,529)
Additional paid-in capital	1,092,281	1,085,694
Retained earnings (deficit)	2,192,413	2,179,513
Total Steel Dynamics, Inc. equity	2,568,795	2,547,323
Noncontrolling interests	(56,299)	(51,468)
Total equity	2,512,496	2,495,855
Total liabilities and equity	5,913,857	5,933,006
Reportable legal entity | Parent
Condensed Consolidating Balance Sheets
Cash and equivalents	281,376	320,866	441,989	322,707
Accounts receivable, net	320,996	309,691
Inventories	728,638	673,763
Other current assets	48,969	50,228
Total current assets	1,379,979	1,354,548
Property, plant and equipment, net	1,042,424	1,046,093
Other assets, including investments in subs	2,604,100	2,630,411
Total assets	5,026,503	5,031,052
Accounts payable	178,731	160,255
Accrued expenses	124,762	142,055
Current maturities of long-term debt	318,969	315,521
Total current liabilities	622,462	617,831
Long-term debt	1,714,982	1,725,433
Other liabilities	120,264	140,465
Common stock	646	645
Treasury stock	(716,545)	(718,529)
Additional paid-in capital	1,092,281	1,085,694
Retained earnings (deficit)	2,192,413	2,179,513
Total Steel Dynamics, Inc. equity	2,568,795	2,547,323
Total equity	2,568,795	2,547,323
Total liabilities and equity	5,026,503	5,031,052
Reportable legal entity | Guarantors
Condensed Consolidating Balance Sheets
Cash and equivalents	48,071	61,148	22,546	41,675
Accounts receivable, net	1,012,562	874,707
Inventories	502,339	557,640
Other current assets	6,968	8,399
Total current assets	1,569,940	1,501,894
Property, plant and equipment, net	598,946	619,617
Intangible assets, net	379,488	386,159
Goodwill	730,360	731,996
Other assets, including investments in subs	21,572	21,789
Total assets	3,300,306	3,261,455
Accounts payable	266,205	258,406
Accrued expenses	107,284	115,182
Current maturities of long-term debt	300	300
Total current liabilities	373,789	373,888
Other liabilities	2,004,584	1,986,260
Common stock	33,896	33,896
Additional paid-in capital	117,737	117,737
Retained earnings (deficit)	770,300	749,674
Total Steel Dynamics, Inc. equity	921,933	901,307
Total equity	921,933	901,307
Total liabilities and equity	3,300,306	3,261,455
Reportable legal entity | Combined Non-Guarantors
Condensed Consolidating Balance Sheets
Cash and equivalents	13,472	13,142	13,326	11,535
Accounts receivable, net	42,095	32,018
Inventories	105,553	91,199
Other current assets	5,048	3,259
Total current assets	166,168	139,618
Property, plant and equipment, net	558,500	562,843
Other assets, including investments in subs	7,352	8,092
Total assets	732,020	710,553
Accounts payable	89,012	60,987
Accrued expenses	10,050	10,694
Current maturities of long-term debt	66,580	52,163
Total current liabilities	165,642	123,844
Long-term debt	182,506	204,385
Other liabilities	30,844	34,895
Redeemable noncontrolling interests	121,834	116,514
Common stock	18,121	18,121
Additional paid-in capital	575,877	552,946
Retained earnings (deficit)	(306,505)	(288,684)
Total Steel Dynamics, Inc. equity	287,493	282,383
Noncontrolling interests	(56,299)	(51,468)
Total equity	231,194	230,915
Total liabilities and equity	732,020	710,553
Consolidating Adjustments
Condensed Consolidating Balance Sheets
Accounts receivable, net	(564,553)	(495,816)
Inventories	(4,429)	(7,855)
Other current assets	(18,751)	(18,755)
Total current assets	(587,733)	(522,426)
Property, plant and equipment, net	(2,367)	(2,419)
Other assets, including investments in subs	(2,554,872)	(2,545,209)
Total assets	(3,144,972)	(3,070,054)
Accounts payable	(116,780)	(64,716)
Accrued expenses	(51,555)	(49,229)
Current maturities of long-term debt	(42,127)	(26,440)
Total current liabilities	(210,462)	(140,385)
Long-term debt	(142,460)	(163,773)
Other liabilities	(1,582,624)	(1,582,206)
Common stock	(52,017)	(52,017)
Additional paid-in capital	(693,614)	(670,683)
Retained earnings (deficit)	(463,795)	(460,990)
Total Steel Dynamics, Inc. equity	(1,209,426)	(1,183,690)
Total equity	(1,209,426)	(1,183,690)
Total liabilities and equity	$ (3,144,972)	$ (3,070,054)

XML

Segment Information (Tables)

3 Months Ended

Mar. 31, 2014

Segment Information

Schedule of operating segment results

The company’s segment results for the three-month periods ended March 31, 2014 and 2013 are as follows (in thousands):

For the three months ended			Metals Recycling /			Steel Fabrication
March 31, 2014	Steel Operations		Ferrous Resources			Operations		Other			Eliminations			Consolidated
Net Sales
External	$	1,061,079	$	517,957		$	115,861	$	20,621		$	—		$	1,715,518
External Non-U.S.	56,519		57,817			—		228			—			114,564
Other segments	43,732		343,928			—		6,673			(394,333		)	—
	1,161,330		919,702			115,861		27,522			(394,333		)	1,830,082
Operating income (loss)	105,643		(15,519		)	3,126		(16,545		)(1)	4,227		(2)	80,932
Income (loss) before income taxes	91,998		(22,696		)	1,652		(24,187		)	4,227			50,994
Depreciation and amortization	27,377		26,621			2,222		1,399			(51		)	57,568
Capital expenditures	18,606		5,779			311		145			—			24,841
As of March 31, 2014
Assets	2,731,246		2,537,892			263,688		609,206		(3)	(228,175		)(4)	5,913,857
Liabilities	576,643		613,611			17,022		2,290,332		(5)	(218,081		)(6)	3,279,527

Footnotes related to the three months ended March 31, 2014 segment results (in millions):

(1)	Corporate SG&A	$	(8.3	)
	Company-wide equity-based compensation	(4.6		)
	Profit sharing	(4.7		)
	Other, net	1.1
		$	(16.5	)

(2) Gross profit increase from intra-company sales $ 4.2

(3)	Cash and equivalents	$	285.6
	Accounts receivable	12.3
	Inventories	13.5
	Deferred income taxes	17.8
	Property, plant and equipment, net	71.6
	Debt issuance costs	24.4
	Intra-company debt	153.8
	Other	30.2
		$	609.2

(4)	Elimination of intra-company receivables	$	(65.1	)
	Elimination of intra-company debt	(153.8		)
	Other	(9.3		)
		$	(228.2	)

(5)	Accounts payable	$	44.1
	Income taxes payable	23.5
	Accrued interest	21.7
	Accrued profit sharing	4.8
	Debt	2,031.4
	Deferred income taxes	138.0
	Other	26.8
		$	2,290.3

(6)	Elimination of intra-company payables	$	(65.5	)
	Elimination of intra-company debt	(153.8		)
	Other	1.2
		$	(218.1	)

For the three months ended			Metals Recycling /			Steel Fabrication
March 31, 2013	Steel Operations		Ferrous Resources			Operations			Other			Eliminations			Consolidated
Net Sales
External	$	1,011,195	$	557,611		$	93,797		$	19,371		$	—		$	1,681,974
External Non-U.S.	50,117		63,517			—			88			—			113,722
Other segments	61,048		276,364			578			5,395			(343,385		)	—
	1,122,360		897,492			94,375			24,854			(343,385		)	1,795,696
Operating income (loss)	119,301		(9,824		)	1,530			(16,439		)(1)	1,664		(2)	96,232
Income (loss) before income taxes	105,007		(17,854		)	(76		)	(26,092		)	1,664			62,649
Depreciation and amortization	26,387		27,136			2,057			1,532			(51		)	57,061
Capital expenditures	24,726		19,069			881			670			—			45,346
As of March 31, 2013
Assets	2,566,642		2,529,951			254,176			822,064		(3)	(216,259		)(4)	5,956,574
Liabilities	557,404		526,457			15,646			2,556,590		(5)	(205,527		)(6)	3,450,570

Footnotes related to the three months ended March 31, 2013 segment results (in millions):

(1)	Corporate SG&A	$	(8.0	)
	Company-wide equity-based compensation	(3.2		)
	Profit sharing	(5.9		)
	Other, net	0.7
	Total	$	(16.4	)

(2) Gross profit increase from intra-company sales $ 1.7

(3)	Cash and equivalents	$	445.8
	Accounts receivable	11.6
	Inventories	13.2
	Deferred income taxes	23.5
	Property, plant and equipment, net	74.8
	Debt issuance costs, net	31.3
	Intra-company debt	156.0
	Other	65.9
	Total	$	822.1

(4)	Elimination of intra-company receivables	$	(49.4	)
	Elimination of intra-company debt	(156.0		)
	Other	(10.9		)
	Total	$	(216.3	)

(5)	Accounts payable	$	38.8
	Income taxes payable	13.4
	Accrued interest	19.1
	Accrued profit sharing	5.9
	Debt	2,247.1
	Deferred income taxes	213.8
	Other	18.5
	Total	$	2,556.6

(6)	Elimination of intra-company payables	$	(49.7	)
	Elimination of intra-company debt	(156.0		)
	Other	0.2
	Total	$	(205.5	)

XML

Condensed Consolidating Information (Details 2) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Condensed Consolidating Statements of Operations
Net sales	$ 1,830,082	$ 1,795,696
Costs of goods sold	1,666,778	1,619,432
Gross profit	163,304	176,264
Selling, general and administrative	82,372	80,032
Operating income	80,932	96,232
Interest expense, net of capitalized interest	30,569	34,629
Other (income) expense, net	(631)	(1,046)
Income before income taxes	50,994	62,649
Income taxes (benefit)	17,296	21,397
Net income	33,698	41,252
Net loss attributable to noncontrolling interests	4,881	6,963
Net income attributable to Steel Dynamics, Inc.	38,579	48,215
Reportable legal entity | Parent
Condensed Consolidating Statements of Operations
Net sales	863,563	827,201
Costs of goods sold	761,395	706,387
Gross profit	102,168	120,814
Selling, general and administrative	28,834	28,686
Operating income	73,334	92,128
Interest expense, net of capitalized interest	19,361	22,046
Other (income) expense, net	(976)	(820)
Income before income taxes	54,949	70,902
Income taxes (benefit)	9,925	11,394
Net income	45,024	59,508
Equity in net loss of subsidiaries	(6,445)	(11,293)
Net income attributable to Steel Dynamics, Inc.	38,579	48,215
Reportable legal entity | Guarantors
Condensed Consolidating Statements of Operations
Net sales	2,112,389	2,015,487
Costs of goods sold	2,015,576	1,914,058
Gross profit	96,813	101,429
Selling, general and administrative	54,289	53,992
Operating income	42,524	47,437
Interest expense, net of capitalized interest	10,561	12,039
Other (income) expense, net	395	(200)
Income before income taxes	31,568	35,598
Income taxes (benefit)	10,942	12,919
Net income	20,626	22,679
Net income attributable to Steel Dynamics, Inc.	20,626	22,679
Reportable legal entity | Combined Non-Guarantors
Condensed Consolidating Statements of Operations
Net sales	105,849	66,370
Costs of goods sold	123,573	95,941
Gross profit	(17,724)	(29,571)
Selling, general and administrative	3,408	2,138
Operating income	(21,132)	(31,709)
Interest expense, net of capitalized interest	1,880	1,701
Other (income) expense, net	(1,284)	(1,183)
Income before income taxes	(21,728)	(32,227)
Income taxes (benefit)	696	699
Net income	(22,424)	(32,926)
Net loss attributable to noncontrolling interests	4,881	6,963
Net income attributable to Steel Dynamics, Inc.	(17,543)	(25,963)
Consolidating Adjustments
Condensed Consolidating Statements of Operations
Net sales	(1,251,719)	(1,113,362)
Costs of goods sold	(1,233,766)	(1,096,954)
Gross profit	(17,953)	(16,408)
Selling, general and administrative	(4,159)	(4,784)
Operating income	(13,794)	(11,624)
Interest expense, net of capitalized interest	(1,233)	(1,157)
Other (income) expense, net	1,234	1,157
Income before income taxes	(13,795)	(11,624)
Income taxes (benefit)	(4,267)	(3,615)
Net income	(9,528)	(8,009)
Equity in net loss of subsidiaries	6,445	11,293
Net income attributable to Steel Dynamics, Inc.	$ (3,083)	$ 3,284

XML

Description of the Business and Significant Accounting Policies (Details)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Description of the Business and Significant Accounting Policies
Number of reporting segments	3
Steel Operations
Segment Reporting Information
Percentage of external net sales	61.00%	59.00%
Metals Recycling and Ferrous Resources Operations
Segment Reporting Information
Percentage of external net sales	32.00%	35.00%
Number of iron making initiatives	2
Steel Fabrication Operations
Segment Reporting Information
Percentage of external net sales	6.00%	5.00%
Number of New Millennium Building Systems joist and deck plants	6

XML

Earnings Per Share

3 Months Ended

Mar. 31, 2014

Earnings Per Share

Earnings Per Share

Note 2.  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, deferred stock units, and dilutive shares related to the company’s 5.125% convertible senior notes, which mature in June 2014; and are excluded from the computation in periods in which they have an anti-dilutive effect. No options to purchase shares were anti-dilutive at March 31, 2014, while options to purchase 3.0 million shares were anti-dilutive at March 31, 2013.

The following table presents a reconciliation of the numerators and the denominators of the company’s basic and diluted earnings per share computations for net income attributable to Steel Dynamics, Inc. (in thousands, except per share data):

	Three Months Ended March 31,
	2014					2013
	Net Income (Numerator)		Shares (Denominator)	Per Share Amount		Net Income (Numerator)		Shares (Denominator)	Per Share Amount
Basic earnings per share	$	38,579	223,011	$	.17	$	48,215	219,995	$	0.22
Dilutive common share equivalents	—		1,608			—		1,460
5.125% convertible senior notes, net of tax	2,358		16,775			2,358		16,632
Diluted earnings per share	$	40,937	241,394	$	.17	$	50,573	238,087	$	0.21

XML

CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)	Mar. 31, 2014	Dec. 31, 2013
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)	259,046,646	258,840,350
Common stock voting, shares outstanding (in shares)	223,173,055	222,867,408
Treasury stock, shares (in shares)	35,873,591	35,972,942

XML

Earnings Per Share (Tables)

3 Months Ended

Mar. 31, 2014

Earnings Per Share

Schedule of reconciliation of the numerators and denominators used in calculating 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 net income attributable to Steel Dynamics, Inc. (in thousands, except per share data):

	Three Months Ended March 31,
	2014					2013
	Net Income (Numerator)		Shares (Denominator)	Per Share Amount		Net Income (Numerator)		Shares (Denominator)	Per Share Amount
Basic earnings per share	$	38,579	223,011	$	.17	$	48,215	219,995	$	0.22
Dilutive common share equivalents	—		1,608			—		1,460
5.125% convertible senior notes, net of tax	2,358		16,775			2,358		16,632
Diluted earnings per share	$	40,937	241,394	$	.17	$	50,573	238,087	$	0.21

XML

Document and Entity Information	3 Months Ended
	Mar. 31, 2014	Apr. 30, 2014
Document and Entity Information
Entity Registrant Name	STEEL DYNAMICS INC
Entity Central Index Key	0001022671
Document Type	10-Q
Document Period End Date	Mar. 31, 2014
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		223,375,430
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q1

XML

Inventories (Tables)

3 Months Ended

Mar. 31, 2014

Inventories

Schedule of inventories

Inventory consisted of the following (in thousands):

	March 31,		December 31,
	2014		2013
Raw materials	$	615,776	$	660,384
Supplies	292,119		293,533
Work in progress	112,504		84,710
Finished goods	311,702		276,120
Total inventories	$	1,332,101	$	1,314,747

XML

CONSOLIDATED STATEMENTS OF INCOME (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Net sales
Unrelated parties	$ 1,765,881	$ 1,728,401
Related parties	64,201	67,295
Total net sales	1,830,082	1,795,696
Costs of goods sold	1,666,778	1,619,432
Gross profit	163,304	176,264
Selling, general and administrative expenses	70,042	65,262
Profit sharing	5,395	6,643
Amortization of intangible assets	6,935	8,127
Total selling, general and administrative expenses	82,372	80,032
Operating income	80,932	96,232
Interest expense, net of capitalized interest	30,569	34,629
Other expense (income), net	(631)	(1,046)
Income before income taxes	50,994	62,649
Income taxes	17,296	21,397
Net income	33,698	41,252
Net loss attributable to noncontrolling interests	4,881	6,963
Net income attributable to Steel Dynamics, Inc.	$ 38,579	$ 48,215
Basic earnings per share attributable to Steel Dynamics, Inc. stockholders (in dollars per share)	$ 0.17	$ 0.22
Weighted average common shares outstanding (in shares)	223,011	219,995
Diluted earnings per share attributable to Steel Dynamics, Inc. stockholders, including the effect of assumed conversions when dilutive (in dollars per share)	$ 0.17	$ 0.21
Weighted average common shares and share equivalents outstanding (in shares)	241,394	238,087
Dividends declared per share (in dollars per share)	$ 0.115	$ 0.11

XML

Commitments and Contingencies

3 Months Ended

Mar. 31, 2014

Commitments and Contingencies

Commitments and Contingencies

Note 7.  Commitments and Contingencies

The company is 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.

The company is involved, along with other steel manufacturing companies, in a class action antitrust complaint filed in federal court in Chicago, Illinois in September 2008, which alleges a conspiracy to fix, raise, maintain and stabilize the price at which steel products were sold in the United States during a period between 2005 and 2007, by artificially restricting the supply of such steel products. All but one of the complaints were brought on behalf of a purported class consisting of all direct purchasers of steel products.  The other complaint was brought on behalf of a purported class consisting of all indirect purchasers of steel products within the same time period.  A ninth complaint, in December 2010, was brought on behalf of indirect purchasers of steel products in Tennessee and has been consolidated with the original complaints.  All complaints seek treble damages and costs, including reasonable attorney fees, pre- and post-judgment interest and injunctive relief.  Following a period of discovery relating to class certification matters, plaintiffs’ motion for class action certification filed in 2012, and briefing by both sides, the court, on March 5 – 7 and April 11, 2014, held a class certification hearing. At the conclusion of the hearing, the court took the class certification issue under advisement.

Due to the uncertain nature of litigation, the company cannot presently determine the ultimate outcome of this litigation.  However, we have determined, based on the information available at this time, that there is not presently a “reasonable possibility” (as that term is defined in ASC 450-20-20), that the outcome of these legal proceedings would 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 the above matter, we may in the future determine that a loss accrual is necessary. 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.

XML

Fair Value Measurements

3 Months Ended

Mar. 31, 2014

Fair Value Measurements

Fair Value Measurements

Note 6.  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 in the consolidated balance sheets and the respective levels to which the fair value measurements are classified within the fair value hierarchy as of March 31, 2014, and December 31, 2013 (in thousands):

	Total			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
March 31, 2014
Commodity futures — financial assets	$	3,620		$	—	$	3,620		$	—
Commodity futures — financial liabilities	(1,526		)	—		(1,526		)	—
December 31, 2013
Commodity futures — financial assets	$	1,010		$	—	$	1,010		$	—
Commodity futures — financial liabilities	4,487			—		4,487			—

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 $2.2 billion and $2.3 billion (with a corresponding carrying amount in the consolidated balance sheets of $2.1 billion and $2.1 billion) at March 31, 2014 and December 31, 2013, respectively.

XML

Condensed Consolidating Information (Tables)

3 Months Ended

Mar. 31, 2014

Condensed Consolidating Information

Schedule of Condensed Consolidating Balance Sheets

Condensed Consolidating Balance Sheets (in thousands)

						Combined			Consolidating			Total
	Parent			Guarantors		Non-Guarantors			Adjustments			Consolidated
As of March 31, 2014
Cash and equivalents	$	281,376		$	48,071	$	13,472		$	—		$	342,919
Accounts receivable, net	320,996			1,012,562		42,095			(564,553		)	811,100
Inventories	728,638			502,339		105,553			(4,429		)	1,332,101
Other current assets	48,969			6,968		5,048			(18,751		)	42,234
Total current assets	1,379,979			1,569,940		166,168			(587,733		)	2,528,354
Property, plant and equipment, net	1,042,424			598,946		558,500			(2,367		)	2,197,503
Intangible assets, net	—			379,488		—			—			379,488
Goodwill	—			730,360		—			—			730,360
Other assets, including investments in subs	2,604,100			21,572		7,352			(2,554,872		)	78,152
Total assets	$	5,026,503		$	3,300,306	$	732,020		$	(3,144,972	)	$	5,913,857
Accounts payable	$	178,731		$	266,205	$	89,012		$	(116,780	)	$	417,168
Accrued expenses	124,762			107,284		10,050			(51,555		)	190,541
Current maturities of long-term debt	318,969			300		66,580			(42,127		)	343,722
Total current liabilities	622,462			373,789		165,642			(210,462		)	951,431
Long-term debt	1,714,982			—		182,506			(142,460		)	1,755,028
Other liabilities	120,264			2,004,584		30,844			(1,582,624		)	573,068
Redeemable noncontrolling interests	—			—		121,834			—			121,834
Common stock	646			33,896		18,121			(52,017		)	646
Treasury stock	(716,545		)	—		—			—			(716,545		)
Additional paid-in-capital	1,092,281			117,737		575,877			(693,614		)	1,092,281
Retained earnings (deficit)	2,192,413			770,300		(306,505		)	(463,795		)	2,192,413
Total Steel Dynamics, Inc. equity	2,568,795			921,933		287,493			(1,209,426		)	2,568,795
Noncontrolling interests	—			—		(56,299		)	—			(56,299		)
Total equity	2,568,795			921,933		231,194			(1,209,426		)	2,512,496
Total liabilities and equity	$	5,026,503		$	3,300,306	$	732,020		$	(3,144,972	)	$	5,913,857

						Combined			Consolidating			Total
	Parent			Guarantors		Non-Guarantors			Adjustments			Consolidated
As of December 31, 2013
Cash and equivalents	$	320,866		$	61,148	$	13,142		$	—		$	395,156
Accounts receivable, net	309,691			874,707		32,018			(495,816		)	720,600
Inventories	673,763			557,640		91,199			(7,855		)	1,314,747
Other current assets	50,228			8,399		3,259			(18,755		)	43,131
Total current assets	1,354,548			1,501,894		139,618			(522,426		)	2,473,634
Property, plant and equipment, net	1,046,093			619,617		562,843			(2,419		)	2,226,134
Intangible assets, net	—			386,159		—			—			386,159
Goodwill	—			731,996		—			—			731,996
Other assets, including investments in subs	2,630,411			21,789		8,092			(2,545,209		)	115,083
Total assets	$	5,031,052		$	3,261,455	$	710,553		$	(3,070,054	)	$	5,933,006
Accounts payable	$	160,255		$	258,406	$	60,987		$	(64,716	)	$	414,932
Accrued expenses	142,055			115,182		10,694			(49,229		)	218,702
Current maturities of long-term debt	315,521			300		52,163			(26,440		)	341,544
Total current liabilities	617,831			373,888		123,844			(140,385		)	975,178
Long-term debt	1,725,433			—		204,385			(163,773		)	1,766,045
Other liabilities	140,465			1,986,260		34,895			(1,582,206		)	579,414
Redeemable noncontrolling interest	—			—		116,514			—			116,514
Common stock	645			33,896		18,121			(52,017		)	645
Treasury stock	(718,529		)	—		—			—			(718,529		)
Additional paid-in-capital	1,085,694			117,737		552,946			(670,683		)	1,085,694
Retained earnings (deficit)	2,179,513			749,674		(288,684		)	(460,990		)	2,179,513
Total Steel Dynamics, Inc. equity	2,547,323			901,307		282,383			(1,183,690		)	2,547,323
Noncontrolling interests	—			—		(51,468		)	—			(51,468		)
Total equity	2,547,323			901,307		230,915			(1,183,690		)	2,495,855
Total liabilities and equity	$	5,031,052		$	3,261,455	$	710,553		$	(3,070,054	)	$	5,933,006

Schedule of Condensed Consolidating Statements of Operations

Condensed Consolidating Statements of Operations (in thousands)

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

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

Schedule of Condensed Consolidating Statements of Cash Flows

Condensed Consolidating Statements of Cash Flows (in thousands)

For the three months ended,							Combined			Consolidating			Total
March 31, 2014	Parent			Guarantors			Non-Guarantors			Adjustments			Consolidated
Net cash provided by (used in) operating activities	$	9,027		$	(17,195	)	$	(14,149	)	$	(4,930	)	$	(27,247	)
Net cash provided by (used in) investing activities	(12,430		)	(3,997		)	(1,625		)	22,095			4,043
Net cash provided by (used in) financing activities	(36,087		)	8,115			16,104			(17,165		)	(29,033		)
Increase (decrease) in cash and equivalents	(39,490		)	(13,077		)	330			—			(52,237		)
Cash and equivalents at beginning of period	320,866			61,148			13,142			—			395,156
Cash and equivalents at end of period	$	281,376		$	48,071		$	13,472		$	—		$	342,919

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

XML

Changes in Equity (Tables)

3 Months Ended

Mar. 31, 2014

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.
	Common		Additional Paid-In		Retained			Treasury			Noncontrolling			Total			RedeemableNoncontrolling
	Stock		Capital		Earnings			Stock			Interests			Equity			Interests
Balances at January 1, 2014	$	645	$	1,085,694	$	2,179,513		$	(718,529	)	$	(51,468	)	$	2,495,855		$	116,514
Proceeds from the exercise of stock options, including related tax effect	1		3,537		—			—			—			3,538			—
Dividends declared	—		—		(25,665		)	—			—			(25,665		)	—
Equity-based compensation and issuance of restricted stock	—		3,050		(14		)	1,984			—			5,020			—
Contributions from noncontrolling investors	—		—		—			—			89			89			5,320
Distributions to noncontrolling investors	—		—		—			—			(39		)	(39		)	—
Net income (loss)	—		—		38,579			—			(4,881		)	33,698			—
Balances at March 31, 2014	$	646	$	1,092,281	$	2,192,413		$	(716,545	)	$	(56,299	)	$	2,512,496		$	121,834

XML

Description of the Business and Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2014

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 significant 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, 2013.

Goodwill

Goodwill.  The company’s goodwill is allocated to the following reporting units at March 31, 2014, and December 31, 2013, (in thousands):

	March 31,		December 31,
	2014		2013
OmniSource — Metals Recycling/Ferrous Resources Segment	$	556,611	$	558,247
The Techs — Steel Segment	142,783		142,783
Roanoke Bar Division — Steel Segment	29,041		29,041
New Millennium Building Systems — Fabrication Segment	1,925		1,925
	$	730,360	$	731,996

OmniSource goodwill decreased $1.6 million from December 31, 2013 to March 31, 2014, in recognition of the 2014 tax benefit related to the amortization of the component of OmniSource tax-deductible goodwill in excess of book goodwill.

XML

Segment Information

3 Months Ended

Mar. 31, 2014

Segment Information

Segment Information

Note 8.  Segment Information

The company has three reportable segments: steel operations, metals recycling and ferrous resources operations, and steel fabrication operations.  These operations are described in Note 1 to the financial statements.  Revenues included in the category “Other” are from subsidiary operations that are below the quantitative thresholds required for reportable segments and primarily consist of further processing, slitting, and sale of certain steel products and the resale of certain secondary and excess steel products.  In addition, “Other” also includes certain unallocated corporate accounts, such as the company’s senior secured credit facility, senior notes, convertible senior notes, certain other investments, and certain profit sharing expenses.

The company’s operations are primarily organized and managed by operating segment.  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 and intra-company sales and any related profits are eliminated in consolidation. Refer to the company’s Annual Report on Form 10-K for the year ended December 31, 2013, for more information related to the company’s segment reporting.  The company’s segment results for the three-month periods ended March 31, 2014 and 2013 are as follows (in thousands):

For the three months ended			Metals Recycling /			Steel Fabrication
March 31, 2014	Steel Operations		Ferrous Resources			Operations		Other			Eliminations			Consolidated
Net Sales
External	$	1,061,079	$	517,957		$	115,861	$	20,621		$	—		$	1,715,518
External Non-U.S.	56,519		57,817			—		228			—			114,564
Other segments	43,732		343,928			—		6,673			(394,333		)	—
	1,161,330		919,702			115,861		27,522			(394,333		)	1,830,082
Operating income (loss)	105,643		(15,519		)	3,126		(16,545		)(1)	4,227		(2)	80,932
Income (loss) before income taxes	91,998		(22,696		)	1,652		(24,187		)	4,227			50,994
Depreciation and amortization	27,377		26,621			2,222		1,399			(51		)	57,568
Capital expenditures	18,606		5,779			311		145			—			24,841
As of March 31, 2014
Assets	2,731,246		2,537,892			263,688		609,206		(3)	(228,175		)(4)	5,913,857
Liabilities	576,643		613,611			17,022		2,290,332		(5)	(218,081		)(6)	3,279,527

Footnotes related to the three months ended March 31, 2014 segment results (in millions):

(1)	Corporate SG&A	$	(8.3	)
	Company-wide equity-based compensation	(4.6		)
	Profit sharing	(4.7		)
	Other, net	1.1
		$	(16.5	)

(2) Gross profit increase from intra-company sales $ 4.2

(3)	Cash and equivalents	$	285.6
	Accounts receivable	12.3
	Inventories	13.5
	Deferred income taxes	17.8
	Property, plant and equipment, net	71.6
	Debt issuance costs	24.4
	Intra-company debt	153.8
	Other	30.2
		$	609.2

(4)	Elimination of intra-company receivables	$	(65.1	)
	Elimination of intra-company debt	(153.8		)
	Other	(9.3		)
		$	(228.2	)

(5)	Accounts payable	$	44.1
	Income taxes payable	23.5
	Accrued interest	21.7
	Accrued profit sharing	4.8
	Debt	2,031.4
	Deferred income taxes	138.0
	Other	26.8
		$	2,290.3

(6)	Elimination of intra-company payables	$	(65.5	)
	Elimination of intra-company debt	(153.8		)
	Other	1.2
		$	(218.1	)

For the three months ended			Metals Recycling /			Steel Fabrication
March 31, 2013	Steel Operations		Ferrous Resources			Operations			Other			Eliminations			Consolidated
Net Sales
External	$	1,011,195	$	557,611		$	93,797		$	19,371		$	—		$	1,681,974
External Non-U.S.	50,117		63,517			—			88			—			113,722
Other segments	61,048		276,364			578			5,395			(343,385		)	—
	1,122,360		897,492			94,375			24,854			(343,385		)	1,795,696
Operating income (loss)	119,301		(9,824		)	1,530			(16,439		)(1)	1,664		(2)	96,232
Income (loss) before income taxes	105,007		(17,854		)	(76		)	(26,092		)	1,664			62,649
Depreciation and amortization	26,387		27,136			2,057			1,532			(51		)	57,061
Capital expenditures	24,726		19,069			881			670			—			45,346
As of March 31, 2013
Assets	2,566,642		2,529,951			254,176			822,064		(3)	(216,259		)(4)	5,956,574
Liabilities	557,404		526,457			15,646			2,556,590		(5)	(205,527		)(6)	3,450,570

Footnotes related to the three months ended March 31, 2013 segment results (in millions):

(1)	Corporate SG&A	$	(8.0	)
	Company-wide equity-based compensation	(3.2		)
	Profit sharing	(5.9		)
	Other, net	0.7
	Total	$	(16.4	)

(2) Gross profit increase from intra-company sales $ 1.7

(3)	Cash and equivalents	$	445.8
	Accounts receivable	11.6
	Inventories	13.2
	Deferred income taxes	23.5
	Property, plant and equipment, net	74.8
	Debt issuance costs, net	31.3
	Intra-company debt	156.0
	Other	65.9
	Total	$	822.1

(4)	Elimination of intra-company receivables	$	(49.4	)
	Elimination of intra-company debt	(156.0		)
	Other	(10.9		)
	Total	$	(216.3	)

(5)	Accounts payable	$	38.8
	Income taxes payable	13.4
	Accrued interest	19.1
	Accrued profit sharing	5.9
	Debt	2,247.1
	Deferred income taxes	213.8
	Other	18.5
	Total	$	2,556.6

(6)	Elimination of intra-company payables	$	(49.7	)
	Elimination of intra-company debt	(156.0		)
	Other	0.2
	Total	$	(205.5	)

XML

Condensed Consolidating Information

3 Months Ended

Mar. 31, 2014

Condensed Consolidating Information

Condensed Consolidating Information

Note 9.  Condensed Consolidating Information

Certain 100%-owned subsidiaries of SDI have fully and unconditionally guaranteed all of the indebtedness relating to the issuance of the company’s senior notes due 2014, 2019, 2020, 2022 and 2023. Following are the company’s condensed consolidating financial statements, including the guarantors, which present the financial position, results of operations and cash flows of (i) SDI (in each case, reflecting investments in its consolidated subsidiaries under the equity method of accounting), (ii) the guarantor subsidiaries of SDI, (iii) the non-guarantor subsidiaries of SDI, and (iv) the eliminations necessary to arrive at the information on a consolidated basis. The following statements should be read in conjunction with the accompanying consolidated financial statements and the company’s Annual Report on Form 10-K for the year ended December 31, 2013.

Condensed Consolidating Balance Sheets (in thousands)

						Combined			Consolidating			Total
	Parent			Guarantors		Non-Guarantors			Adjustments			Consolidated
As of March 31, 2014
Cash and equivalents	$	281,376		$	48,071	$	13,472		$	—		$	342,919
Accounts receivable, net	320,996			1,012,562		42,095			(564,553		)	811,100
Inventories	728,638			502,339		105,553			(4,429		)	1,332,101
Other current assets	48,969			6,968		5,048			(18,751		)	42,234
Total current assets	1,379,979			1,569,940		166,168			(587,733		)	2,528,354
Property, plant and equipment, net	1,042,424			598,946		558,500			(2,367		)	2,197,503
Intangible assets, net	—			379,488		—			—			379,488
Goodwill	—			730,360		—			—			730,360
Other assets, including investments in subs	2,604,100			21,572		7,352			(2,554,872		)	78,152
Total assets	$	5,026,503		$	3,300,306	$	732,020		$	(3,144,972	)	$	5,913,857
Accounts payable	$	178,731		$	266,205	$	89,012		$	(116,780	)	$	417,168
Accrued expenses	124,762			107,284		10,050			(51,555		)	190,541
Current maturities of long-term debt	318,969			300		66,580			(42,127		)	343,722
Total current liabilities	622,462			373,789		165,642			(210,462		)	951,431
Long-term debt	1,714,982			—		182,506			(142,460		)	1,755,028
Other liabilities	120,264			2,004,584		30,844			(1,582,624		)	573,068
Redeemable noncontrolling interests	—			—		121,834			—			121,834
Common stock	646			33,896		18,121			(52,017		)	646
Treasury stock	(716,545		)	—		—			—			(716,545		)
Additional paid-in-capital	1,092,281			117,737		575,877			(693,614		)	1,092,281
Retained earnings (deficit)	2,192,413			770,300		(306,505		)	(463,795		)	2,192,413
Total Steel Dynamics, Inc. equity	2,568,795			921,933		287,493			(1,209,426		)	2,568,795
Noncontrolling interests	—			—		(56,299		)	—			(56,299		)
Total equity	2,568,795			921,933		231,194			(1,209,426		)	2,512,496
Total liabilities and equity	$	5,026,503		$	3,300,306	$	732,020		$	(3,144,972	)	$	5,913,857

						Combined			Consolidating			Total
	Parent			Guarantors		Non-Guarantors			Adjustments			Consolidated
As of December 31, 2013
Cash and equivalents	$	320,866		$	61,148	$	13,142		$	—		$	395,156
Accounts receivable, net	309,691			874,707		32,018			(495,816		)	720,600
Inventories	673,763			557,640		91,199			(7,855		)	1,314,747
Other current assets	50,228			8,399		3,259			(18,755		)	43,131
Total current assets	1,354,548			1,501,894		139,618			(522,426		)	2,473,634
Property, plant and equipment, net	1,046,093			619,617		562,843			(2,419		)	2,226,134
Intangible assets, net	—			386,159		—			—			386,159
Goodwill	—			731,996		—			—			731,996
Other assets, including investments in subs	2,630,411			21,789		8,092			(2,545,209		)	115,083
Total assets	$	5,031,052		$	3,261,455	$	710,553		$	(3,070,054	)	$	5,933,006
Accounts payable	$	160,255		$	258,406	$	60,987		$	(64,716	)	$	414,932
Accrued expenses	142,055			115,182		10,694			(49,229		)	218,702
Current maturities of long-term debt	315,521			300		52,163			(26,440		)	341,544
Total current liabilities	617,831			373,888		123,844			(140,385		)	975,178
Long-term debt	1,725,433			—		204,385			(163,773		)	1,766,045
Other liabilities	140,465			1,986,260		34,895			(1,582,206		)	579,414
Redeemable noncontrolling interest	—			—		116,514			—			116,514
Common stock	645			33,896		18,121			(52,017		)	645
Treasury stock	(718,529		)	—		—			—			(718,529		)
Additional paid-in-capital	1,085,694			117,737		552,946			(670,683		)	1,085,694
Retained earnings (deficit)	2,179,513			749,674		(288,684		)	(460,990		)	2,179,513
Total Steel Dynamics, Inc. equity	2,547,323			901,307		282,383			(1,183,690		)	2,547,323
Noncontrolling interests	—			—		(51,468		)	—			(51,468		)
Total equity	2,547,323			901,307		230,915			(1,183,690		)	2,495,855
Total liabilities and equity	$	5,031,052		$	3,261,455	$	710,553		$	(3,070,054	)	$	5,933,006

Condensed Consolidating Statements of Operations (in thousands)

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

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

Condensed Consolidating Statements of Cash Flows (in thousands)

For the three months ended,							Combined			Consolidating			Total
March 31, 2014	Parent			Guarantors			Non-Guarantors			Adjustments			Consolidated
Net cash provided by (used in) operating activities	$	9,027		$	(17,195	)	$	(14,149	)	$	(4,930	)	$	(27,247	)
Net cash provided by (used in) investing activities	(12,430		)	(3,997		)	(1,625		)	22,095			4,043
Net cash provided by (used in) financing activities	(36,087		)	8,115			16,104			(17,165		)	(29,033		)
Increase (decrease) in cash and equivalents	(39,490		)	(13,077		)	330			—			(52,237		)
Cash and equivalents at beginning of period	320,866			61,148			13,142			—			395,156
Cash and equivalents at end of period	$	281,376		$	48,071		$	13,472		$	—		$	342,919

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

XML

Description of the Business and Summary of Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2014

Description of the Business and Significant Accounting Policies

Schedule of allocation of goodwill to reporting units

The company’s goodwill is allocated to the following reporting units at March 31, 2014, and December 31, 2013, (in thousands):

	March 31,		December 31,
	2014		2013
OmniSource — Metals Recycling/Ferrous Resources Segment	$	556,611	$	558,247
The Techs — Steel Segment	142,783		142,783
Roanoke Bar Division — Steel Segment	29,041		29,041
New Millennium Building Systems — Fabrication Segment	1,925		1,925
	$	730,360	$	731,996

XML

Segment Information (Details 3) (USD $)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Dec. 31, 2013
Operating income (loss)
Gross profit increase from intra-company sales	$ 163,304,000	$ 176,264,000
Assets elimination
Elimination of intra-company receivables	811,100,000		720,600,000
Other	78,152,000		115,083,000
Total assets	5,913,857,000	5,956,574,000	5,933,006,000
Liabilities elimination
Elimination of intra-company payables	417,168,000		414,932,000
Liabilities	3,279,527,000	3,450,570,000
Eliminations
Operating income (loss)
Gross profit increase from intra-company sales	4,200,000	1,700,000
Assets elimination
Elimination of intra-company receivables	(65,100,000)	(49,400,000)
Elimination of intra-company debt	(153,800,000)	(156,000,000)
Other	(9,300,000)	(10,900,000)
Total assets	(228,175,000)	(216,259,000)
Liabilities elimination
Elimination of intra-company payables	(65,500,000)	(49,700,000)
Elimination of intra-company debt	(153,800,000)	(156,000,000)
Other liabilities	1,200,000	200,000
Liabilities	$ (218,081,000)	$ (205,527,000)

XML

Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2014

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 in the consolidated balance sheets and the respective levels to which the fair value measurements are classified within the fair value hierarchy as of March 31, 2014, and December 31, 2013 (in thousands):

	Total			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
March 31, 2014
Commodity futures — financial assets	$	3,620		$	—	$	3,620		$	—
Commodity futures — financial liabilities	(1,526		)	—		(1,526		)	—
December 31, 2013
Commodity futures — financial assets	$	1,010		$	—	$	1,010		$	—
Commodity futures — financial liabilities	4,487			—		4,487			—

XML

Earnings Per Share (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Net Income (Numerator)
Basic earnings - net income (loss) (in dollars)	$ 38,579	$ 48,215
5.125% convertible senior notes, net of tax (in dollars)	2,358	2,358
Diluted earnings - net income (loss) (in dollars)	$ 40,937	$ 50,573
Shares (Denominator)
Weighted average common shares outstanding (in shares)	223,011,000	219,995,000
Dilutive common share equivalents (in shares)	1,608,000	1,460,000
5.125% convertible senior notes, net of tax (in shares)	16,775,000	16,632,000
Weighted average common shares outstanding - diluted (in shares)	241,394,000	238,087,000
Per Share Amount
Basic earnings per share (in dollars per share)	$ 0.17	$ 0.22
Diluted earnings per share (in dollars per share)	$ 0.17	$ 0.21
5.125% convertible senior notes, due 2014
Antidilutive securities excluded from computation of earnings per share amount
Stated interest rate on convertible senior notes (as a percent)	5.125%
Options
Antidilutive securities excluded from computation of earnings per share amount
Antidilutive securities excluded from computation of earnings per share amount (in shares)	0	3,000,000

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Operating activities:
Net income	$ 33,698	$ 41,252
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization	57,568	57,061
Equity-based compensation	5,768	4,753
Deferred income taxes	(4,091)	10,935
(Gain) loss on disposal of property, plant and equipment	2,641	(1,383)
Changes in certain assets and liabilities:
Accounts receivable	(88,950)	(110,938)
Inventories	(17,354)	32,348
Other assets	7,359	3,358
Accounts payable	5,041	38,988
Income taxes receivable/payable	19,393	(3,022)
Accrued expenses and liabilities	(48,320)	(43,642)
Net cash provided by (used in) operating activities	(27,247)	29,710
Investing activities:
Purchases of property, plant and equipment	(24,841)	(45,346)
Other investing activities	28,884	33,934
Net cash provided by (used in) investing activities	4,043	(11,412)
Financing activities:
Issuance of current and long-term debt	43,453	409,261
Repayment of current and long-term debt	(56,246)	(305,691)
Debt issuance costs		(5,997)
Proceeds from exercise of stock options, including related tax effect	2,905	7,614
Contributions from noncontrolling investors, net	5,370	411
Dividends paid	(24,515)	(21,952)
Net cash provided by (used in) financing activities	(29,033)	83,646
Increase (decrease) in cash and equivalents	(52,237)	101,944
Cash and equivalents at beginning of period	395,156	375,917
Cash and equivalents at end of period	342,919	477,861
Supplemental disclosure information:
Cash paid for interest	39,663	49,732
Cash paid for federal and state income taxes, net	$ 2,143	$ 11,165

XML

Derivative Financial Instruments

3 Months Ended

Mar. 31, 2014

Derivative Financial Instruments

Derivative Financial Instruments

Note 5.  Derivative Financial Instruments

The company is exposed to certain risks relating to its ongoing business operations. The company utilizes derivative instruments to mitigate interest rate risk, foreign currency exchange rate risk, and commodity margin risk. Interest rate swaps may be entered into to manage interest rate risk associated with the company’s fixed and floating-rate borrowings. Forward exchange contracts on various foreign currencies may be entered into to manage foreign currency exchange rate risk as necessary. No interest rate swaps or forward exchange contracts on foreign currency existed for the periods presented. 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 (specifically aluminum, copper, nickel and silver).  The company offsets fair value amounts recognized for derivative instruments executed with the same counterparty under master netting agreements. The company designates certain of its nonferrous metals, forward exchange futures contracts as fair value hedges of inventory and firm sales commitments.

Commodity Futures Contracts.  If the company is “long” on a futures contract, 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 March 31, 2014 (MT represents metric tons and Lbs represents pounds):

Commodity Futures	Long/Short	Total
Aluminum	Long	2,625	MT
Aluminum	Short	1,525	MT
Copper	Long	4,260	MT
Copper	Short	15,014	MT
Silver	Short	343	Lbs

The following summarizes the location and amounts of the fair values reported on the company’s balance sheets as of March 31, 2014, and December 31, 2013, and gains and losses related to derivatives included in the company’s statement of income for the three-month periods ended March 31, 2014 and 2013 (in thousands):

	Asset Derivatives					Liability Derivatives
		Fair Value				Fair Value
	Balance sheet location	March 31, 2014		December 31, 2013		March 31, 2014			December 31, 2013
Derivative instruments designated as fair value hedges - Commodity futures	Other current assets	$	2,154	$	658	$	(1,048	)	$	1,886
Derivative instruments not designated as hedges - Commodity futures	Other current assets	$	1,466	$	352	$	(478	)	2,601
Total derivative instruments		$	3,620	$	1,010	$	(1,526	)	$	4,487

The fair value of the above derivative instruments along with required margin deposit amounts with the same counterparty under master netting arrangements, which totaled $5.4 million at March 31, 2014 and $3.6 million at December 31, 2013, are reflected in other current assets in the consolidated balance sheet.

	Location of gain	Amount of gain recognized in income on derivatives for the three				Hedged items	Location of gain (loss)	Amount of gain (loss) recognized in income on related hedged items for
	recognized in income on	months ended				in fair value hedge	recognized in income on	the three months ended
	derivatives	March 31, 2014		March 31, 2013		relationships	related hedged item	March 31, 2014			March 31, 2013
Derivatives in fair value hedging relationships - Commodity futures	Costs of goods sold	$	1,617	$	8,046	Firm commitments	Costs of goods sold	$	984		$	1,316
						Inventory	Costs of goods sold	(2,488		)	(6,808		)
								$	(1,504	)	$	(5,492	)
Derivatives not designated as hedging instruments - Commodity futures	Costs of goods sold	$	7,956	$	2,401

Derivatives accounted for as fair value hedges had ineffectiveness resulting in gains of $296,000 and $221,000 during the three-month periods ended March 31, 2014 and 2013, respectively; and a loss excluded from hedge effectiveness testing of $183,000 that increased costs of goods sold during the three-month period ended March 31, 2014, and a gain excluded from hedge effectiveness testing of $2.3 million, that reduced cost of goods sold during the three-month period ended March 31, 2013.

XML

Inventories (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Inventories
Raw materials	$ 615,776	$ 660,384
Supplies	292,119	293,533
Work in progress	112,504	84,710
Finished goods	311,702	276,120
Total inventories	$ 1,332,101	$ 1,314,747

XML

Derivative Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2014

Derivative Financial Instruments

Commodity option and futures contract commitments for non monetary notional amount

The following summarizes the company’s futures contract commitments as of March 31, 2014 (MT represents metric tons and Lbs represents pounds):

Commodity Futures	Long/Short	Total
Aluminum	Long	2,625	MT
Aluminum	Short	1,525	MT
Copper	Long	4,260	MT
Copper	Short	15,014	MT
Silver	Short	343	Lbs

Summary of the location and amounts of the fair values and gains or losses related to derivatives included in the entity's financial statements

The following summarizes the location and amounts of the fair values reported on the company’s balance sheets as of March 31, 2014, and December 31, 2013, and gains and losses related to derivatives included in the company’s statement of income for the three-month periods ended March 31, 2014 and 2013 (in thousands):

	Asset Derivatives					Liability Derivatives
		Fair Value				Fair Value
	Balance sheet location	March 31, 2014		December 31, 2013		March 31, 2014			December 31, 2013
Derivative instruments designated as fair value hedges - Commodity futures	Other current assets	$	2,154	$	658	$	(1,048	)	$	1,886
Derivative instruments not designated as hedges - Commodity futures	Other current assets	$	1,466	$	352	$	(478	)	2,601
Total derivative instruments		$	3,620	$	1,010	$	(1,526	)	$	4,487

	Location of gain	Amount of gain recognized in income on derivatives for the three				Hedged items	Location of gain (loss)	Amount of gain (loss) recognized in income on related hedged items for
	recognized in income on	months ended				in fair value hedge	recognized in income on	the three months ended
	derivatives	March 31, 2014		March 31, 2013		relationships	related hedged item	March 31, 2014			March 31, 2013
Derivatives in fair value hedging relationships - Commodity futures	Costs of goods sold	$	1,617	$	8,046	Firm commitments	Costs of goods sold	$	984		$	1,316
						Inventory	Costs of goods sold	(2,488		)	(6,808		)
								$	(1,504	)	$	(5,492	)
Derivatives not designated as hedging instruments - Commodity futures	Costs of goods sold	$	7,956	$	2,401