10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

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

      ended June 30, 2019

OR

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

Commission File Number 0-21719

Steel Dynamics, Inc.

(Exact name of registrant as specified in its charter)

Indiana	35-1929476
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
7575 West Jefferson Blvd, Fort Wayne, IN	46804
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (260) 969-3500

Securities registered pursuant to Section 12(b) of the Act.

Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock voting, $0.025 par value	STLD	NASDAQ Global Select Market

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

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files).   Yes ⌧   No ◻

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

(Check one):	Large accelerated filer ⌧	Accelerated filer ◻	Non-accelerated filer ◻
	Smaller reporting company  ☐	Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ◻

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

As of August 1, 2019, Registrant had 219,613,147 outstanding shares of common stock.

STEEL DYNAMICS, INC.

Table of Contents

PART I. Financial Information
Item 1.	Financial Statements:	Page
	Consolidated Balance Sheets as of June 30, 2019 (unaudited) and December 31, 2018	3
	Consolidated Statements of Income for the three and six-month periods ended June 30, 2019 and 2018 (unaudited)	4
	Consolidated Statements of Comprehensive Income for the three and six-month periods ended June 30, 2019 and 2018 (unaudited)	5
	Consolidated Statements of Cash Flows for the three and six-month periods ended June 30, 2019 and 2018 (unaudited)	6
	Notes to Consolidated Financial Statements (unaudited)	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	29
Item 4.	Controls and Procedures	29
	PART II. Other Information	30
Item 1.	Legal Proceedings	30
Item 1A.	Risk Factors	30
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	30
Item 3.	Defaults Upon Senior Securities	30
Item 4.	Mine Safety Disclosures	30
Item 5.	Other Information	30
Item 6.	Exhibits	31
Exhibit Index		31
Signature		32

STEEL DYNAMICS, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

	June 30,		December 31,
	2019		2018
Assets	(unaudited)
Current assets
Cash and equivalents	$	972,561	$	828,220
Short-term investments		114,154		228,783
Accounts receivable, net		1,069,061		1,040,220
Accounts receivable-related parties		3,818		3,536
Inventories		1,802,759		1,859,168
Other current assets		61,248		72,730
Total current assets		4,023,601		4,032,657
Property, plant and equipment, net		2,947,243		2,945,767
Intangible assets, net		256,302		270,328
Goodwill		526,462		429,645
Other assets		104,306		25,166
Total assets	$	7,857,914	$	7,703,563
Liabilities and Equity
Current liabilities
Accounts payable	$	516,109	$	536,743
Accounts payable-related parties		9,047		14,011
Income taxes payable		3,032		7,468
Accrued payroll and benefits		148,747		264,542
Accrued interest		25,509		25,526
Accrued expenses		151,161		146,613
Current maturities of long-term debt		72,131		24,234
Total current liabilities		925,736		1,019,137
Long-term debt		2,355,917		2,352,489
Deferred income taxes		457,784		435,838
Other liabilities		70,196		8,870
Total liabilities		3,809,633		3,816,334
Commitments and contingencies
Redeemable noncontrolling interests		139,930		111,240
Equity
Common stock voting, $.0025 par value; 900,000,000 shares authorized;
265,553,499 and 265,822,402 shares issued; and 219,797,547 and 225,272,174
shares outstanding, as of June 30, 2019 and December 31, 2018, respectively		645		645
Treasury stock, at cost; 45,755,952 and 40,550,228 shares,
as of June 30, 2019 and December 31, 2018, respectively		(1,354,157)		(1,184,243)
Additional paid-in capital		1,167,505		1,160,048
Retained earnings		4,250,419		3,958,320
Accumulated other comprehensive income		78		301
Total Steel Dynamics, Inc. equity		4,064,490		3,935,071
Noncontrolling interests		(156,139)		(159,082)
Total equity		3,908,351		3,775,989
Total liabilities and equity	$	7,857,914	$	7,703,563

See notes to consolidated financial statements.

3

STEEL DYNAMICS, INC.

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(in thousands, except per share data)

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2019		2018		2019		2018
Net sales
Unrelated parties	$	2,766,364	$	3,083,822	$	5,580,850	$	5,681,134
Related parties		4,151		6,703		7,100		13,266
Total net sales		2,770,515		3,090,525		5,587,950		5,694,400
Costs of goods sold		2,349,349		2,438,443		4,733,214		4,578,902
Gross profit		421,166		652,082		854,736		1,115,498
Selling, general and administrative expenses		106,250		101,031		217,288		207,462
Profit sharing		22,871		42,335		46,548		68,997
Amortization of intangible assets		7,013		6,829		14,026		13,755
Operating income		285,032		501,887		576,874		825,284
Interest expense, net of capitalized interest		32,321		31,512		63,443		63,408
Other income, net		(4,249)		(5,035)		(10,592)		(9,498)
Income before income taxes		256,960		475,410		524,023		771,374
Income tax expense		60,214		112,838		122,450		183,327
Net income		196,746		362,572		401,573		588,047
Net (income) loss attributable to noncontrolling interests		(2,444)		(123)		(2,943)		1,953
Net income attributable to Steel Dynamics, Inc.	$	194,302	$	362,449	$	398,630	$	590,000
Basic earnings per share attributable to Steel Dynamics,
Inc. stockholders	$	0.88	$	1.54	$	1.79	$	2.50
Weighted average common shares outstanding		221,505		235,617		222,781		236,120
Diluted earnings per share attributable to Steel Dynamics, Inc.
stockholders, including the effect of assumed conversions
when dilutive	$	0.87	$	1.53	$	1.78	$	2.49
Weighted average common shares and share equivalents outstanding		222,519		236,945		223,741		237,334
Dividends declared per share	$	0.2400	$	0.1875	$	0.4800	$	0.3750

See notes to consolidated financial statements.

4

STEEL DYNAMICS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

(in thousands)

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2019		2018		2019		2018
Net income	$	196,746	$	362,572	$	401,573	$	588,047
Other comprehensive loss - net unrealized loss on cash flow
hedging derivatives, net of income tax benefit		(52)		(105)		(223)		(105)
Comprehensive income		196,694		362,467		401,350		587,942
Comprehensive (income) loss attributable to noncontrolling interests		(2,444)		(123)		(2,943)		1,953
Comprehensive income attributable to Steel Dynamics, Inc.	$	194,250	$	362,344	$	398,407	$	589,895

See notes to consolidated financial statements.

5

STEEL DYNAMICS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(in thousands)

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2019		2018		2019		2018
Operating activities:
Net income	$	196,746	$	362,572	$	401,573	$	588,047
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization		80,911		79,120		161,085		155,255
Equity-based compensation		9,080		8,041		24,388		20,882
Deferred income taxes		11,550		11,993		23,641		21,538
Other adjustments		(564)		(145)		164		(115)
Changes in certain assets and liabilities:
Accounts receivable		70,624		(163,465)		9,562		(282,283)
Inventories		64,941		(90,312)		104,410		(171,023)
Other assets		7,292		(630)		7,593		(735)
Accounts payable		(58,484)		48,919		(55,278)		115,251
Income taxes receivable/payable		(36,428)		22,579		13,422		86,541
Accrued expenses		15,805		47,361		(147,534)		(29,390)
Net cash provided by operating activities		361,473		326,033		543,026		503,968
Investing activities:
Purchases of property, plant and equipment		(85,120)		(55,203)		(139,556)		(105,809)
Purchases of short-term investments		(49,465)		(50,000)		(99,142)		(90,000)
Proceeds from maturities of short-term investments		109,034		-		213,771		-
Acquisition of business, net of cash and restricted cash acquired		-		(396,409)		(93,412)		(396,409)
Other investing activities		913		657		1,277		886
Net cash used in investing activities		(24,638)		(500,955)		(117,062)		(591,332)
Financing activities:
Issuance of current and long-term debt		125,222		124,571		246,456		217,629
Repayment of current and long-term debt		(133,875)		(118,089)		(249,146)		(231,123)
Dividends paid		(53,503)		(44,268)		(95,742)		(81,065)
Purchases of treasury stock		(93,136)		(49,145)		(177,444)		(118,414)
Other financing activities		(12)		(3,144)		(5,732)		(8,324)
Net cash used in financing activities		(155,304)		(90,075)		(281,608)		(221,297)
Increase (decrease) in cash, cash equivalents, and restricted cash		181,531		(264,997)		144,356		(308,661)
Cash, cash equivalents, and restricted cash at beginning of period		797,248		991,421		834,423		1,035,085
Cash, cash equivalents, and restricted cash at end of period	$	978,779	$	726,424	$	978,779	$	726,424
Supplemental disclosure information:
Cash paid for interest	$	53,981	$	53,226	$	62,587	$	61,855
Cash paid for income taxes, net	$	84,516	$	79,995	$	86,355	$	78,950

See notes to consolidated financial statements.

6

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 reportable segments: steel operations, metals recycling operations, and steel fabrication operations.

Steel Operations Segment. Steel operations include the company’s Butler Flat Roll Division, Columbus Flat Roll Division, The Techs galvanizing lines, Heartland Flat Roll Division, United Steel Supply (acquired 75% equity interest March 1, 2019), Structural and Rail Division, Engineered Bar Products Division, Vulcan Threaded Products, Inc., Roanoke Bar Division, Steel of West Virginia, and Iron Dynamics, a liquid pig iron (scrap substitute) production facility that supplies solely the Butler Flat Roll Division. These operations include electric arc furnace steel mills, producing steel from ferrous scrap and scrap substitutes, utilizing continuous casting, automated rolling mills, with several downstream coating and bar processing lines. Steel operations accounted for 76% and 75% of the company’s consolidated external net sales during the three and six-month periods ended June 30, 2019 and 2018, respectively.

Metals Recycling Operations Segment. Metals recycling operations consists solely of OmniSource, LLC (OmniSource), and includes both ferrous and nonferrous processing, transportation, marketing, brokerage, and scrap management services. Metals recycling operations accounted for 12% and 14% of the company’s consolidated external net sales during the three and six-month periods ended June 30, 2019 and 2018, respectively.

Steel Fabrication Operations Segment. Steel fabrication operations include the company’s New Millennium Building Systems’ joist and deck plants located throughout the United States, and in Northern Mexico. Revenues from these plants are generated from the fabrication of trusses, girders, steel joists and steel deck used within the non-residential construction industry. Steel fabrication operations accounted for 9% and 7% of the company’s consolidated external net sales during the three-month periods ended June 30, 2019 and 2018, respectively, and 8% and 7% of the company’s consolidated external net sales during the six-month periods ended June 30, 2019 and 2018, respectively.

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

Significant Accounting Policies

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

Use of Estimates. These consolidated 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 consolidated 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 consolidated 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, 2018.

7

STEEL DYNAMICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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

Cash and Equivalents, and Restricted Cash

Cash and equivalents include all highly liquid investments with a maturity of three months or less at the date of acquisition. Restricted cash is primarily funds held in escrow as required by various insurance and government organizations. The balance of cash, cash equivalents and restricted cash in the consolidated statements of cash flows includes restricted cash of $6.2 million, $5.8 million, $6.2 million, $6.0 million, $5.6 million, and $6.4 million at June 30, 2019, March 31, 2019, December 31, 2018, June 30, 2018, March 31, 2018 and December 31, 2017, respectively, which are recorded in Other Assets (noncurrent) in the company’s consolidated balance sheets.

Goodwill

The company’s goodwill consisted of the following reporting units at June 30, 2019, and December 31, 2018, (in thousands):

	June 30,		December 31,
	2019		2018
Steel Operations Segment
Columbus Flat Roll Division	$	19,682	$	19,682
The Techs		142,783		142,783
Heartland Flat Roll Division		46,143		46,143
United Steel Supply		98,512		-
Vulcan Threaded Products		7,824		7,824
Roanoke Bar Division		29,041		29,041
Metals Recycling Operations Segment – OmniSource		180,552		182,247
Steel Fabrication Operations Segment – New Millennium Building Systems		1,925		1,925
	$	526,462	$	429,645

The company acquired a 75% equity interest in United Steel Supply on March 1, 2019 (refer to Note 2 Acquisition – United Steel Supply, LLC), resulting in a preliminary purchase price allocation in which $98.5 million of goodwill has been recorded. OmniSource goodwill decreased $1.7 million from December 31, 2018 to June 30, 2019, in recognition of the 2019 tax benefit related to the normal amortization of the component of OmniSource tax-deductible goodwill in excess of book goodwill.

Recently Issued Accounting Standards

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses: which requires an entity to use a forward-looking expected loss model versus the current incurred loss model for most financial instruments, including accounts receivable. This new guidance is effective for annual and interim periods beginning after December 15, 2019, but can be early adopted. The company is currently evaluating the impact ASU 2016-13 will have in its consolidated financial statements and related disclosure.

Note 2. Acquisition – United Steel Supply, LLC

On March 1, 2019, the company purchased 75% of the equity interest of United Steel Supply, LLC (USS) for cash consideration of $93.4 million, subject to customary actual working capital purchase price adjustments. Additionally, the company has an option to purchase, and the sellers have the option to require the company to purchase, the remaining 25% equity interest of USS in the future. Headquartered in Austin, Texas, USS is a leading distributor of painted Galvalume^® flat roll steel used for roofing and siding applications, with distribution centers strategically located in Mississippi, Indiana, Arkansas, and Oregon. USS provides the company a new, complementary distribution channel and connects it to a rapidly growing industry segment with customers that do not traditionally purchase steel directly from a steel producer. USS’s operating results from and after March 1, 2019, are reflected in the company’s financial statements in the steel operations reporting segment.

8

STEEL DYNAMICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 2. Acquisition – United Steel Supply, LLC (Continued)

The aggregate purchase price was preliminarily allocated to the opening balance sheet of USS as of March 1, 2019. The following initial allocation of the purchase price (in thousands) is preliminary based on the information available as of the acquisition date to estimate the fair value of assets acquired and liabilities assumed. The accounting for the acquisition has not yet been completed because the company has not finalized the working capital purchase price adjustment or valuations of the acquired assets, assumed liabilities and identifiable intangible assets, if any, including goodwill.

p
	Current assets, net of cash acquired	$	94,156
	Property, plant & equipment		7,388
	Intangible assets and goodwill		98,512
	Total assets acquired		200,056
	Liabilities assumed		77,954
	Redeemable noncontrolling interest		28,690
	Net cash consideration	$	93,412

Note 3. Leases

In February 2016, the FASB issued ASU 2016-02, Leases (ASC 842) and its subsequent corresponding updates; which established a new lease accounting model that requires lessees to recognize a right-of-use asset and related lease liability for most leases having lease terms of more than 12 months. The company adopted ASC 842 effective January 1, 2019, using the optional transition method, thereby applying the new guidance at the effective date, without retrospective application to prior periods. The company elected practical expedients permitted under the transition guidance which allowed the company to not reassess under the new standard its prior conclusions regarding lease identification and classification. The company elected to use hindsight when determining the lease term. The company also elected the short-term lease exemption, and did not recognize right-of-use assets and lease liabilities for short-term leases, those with lease commencement date terms of 12 months or less. The company recognized right-of-use assets and lease liabilities of $76.3 million, with no impact on retained earnings, in the consolidated balance sheet on January 1, 2019, and the standard did not have a significant impact on the company’s operating results or cash flows for the three and six-month periods ended June 30, 2019.

The company has operating leases relating principally to transportation and other equipment, and some real estate. The company determines if an arrangement contains a lease at inception, which generally occurs when the arrangement identifies a specific asset that the company has the right to direct the use of and obtain substantially all of the economic benefit from use of the identified asset. Certain of our lease agreements contain rent escalation clauses (including fixed and index-based escalations), and options to extend or terminate the lease. For purposes of calculating operating lease obligations under the standard, the company’s lease terms include options to extend the lease when it is reasonably certain that the company will exercise such option. The company uses its incremental borrowing rate at lease commencement to determine the present value of lease payments. The incremental borrowing rate is the rate of interest the company could borrow on a collateralized basis over a similar term with similar payments. Operating lease expense is recognized on a straight-line basis over the lease term.

Operating lease right-of-use assets and lease obligations included in the consolidated balance sheet at June 30, 2019, are as follows (in thousands):

Right of use assets under operating leases:
Other assets - noncurrent	$	77,868
Lease obligations under operating leases:
Accrued liabilities	$	17,405
Other liabilities - noncurrent		60,751
	$	78,156

9

STEEL DYNAMICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 3. Leases (Continued)

The weighted average remaining lease term for our operating leases is 6.4 years and the weighted-average discount rate is 4.0% as of June 30, 2019. Future operating lease liabilities as of June 30, 2019, for the next five years and thereafter are as follows (in thousands):

2019 - for the remaining six months	$	10,285
2020		18,986
2021		16,086
2022		12,551
2023		9,494
Thereafter		21,809
Total undiscounted cash flows		89,211
Less imputed interest		(11,055)
Lease obligations under operating leases	$	78,156

Operating lease expense included in the consolidated statements of income was $5.1 million and $9.8 million for the three and six-month periods ended June 30, 2019, respectively. Cash paid related to operating lease obligations was $5.1 million and $9.9 million for the three and six-month periods ended June 30, 2019, respectively. Variable lease costs were not material for the three and six-month periods ended June 30, 2019. Short-term lease expense included in the consolidated statements of income was $5.4 million and $9.8 million for the three and six-month periods ended June 30, 2019, respectively. Right-of-use assets obtained in exchange for new operating lease liabilities during the three and six-month periods ended June 30, 2019 were $9.9 million.

Note 4. 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 restricted stock units, deferred stock units, restricted stock, and performance awards, and are excluded from the computation in periods in which they have an anti-dilutive effect. There were no anti-dilutive common share equivalents as of or for the three and six-month periods ended June 30, 2019 and 2018.

	Three Months Ended June 30,
	2019						2018
			Weighted						Weighted
			Average						Average
	Net Income		Shares		Per Share		Net Income		Shares		Per Share
	(Numerator)		(Denominator)		Amount		(Numerator)		(Denominator)		Amount
Basic earnings per share	$	194,302		221,505	$	0.88	$	362,449		235,617	$	1.54
Dilutive common share equivalents		-		1,014				-		1,328
Diluted earnings per share	$	194,302		222,519	$	0.87	$	362,449		236,945	$	1.53

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STEEL DYNAMICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 4. Earnings Per Share (Continued)

	Six Months Ended June 30,
	2019						2018
			Weighted						Weighted
			Average						Average
	Net Income		Shares		Per Share		Net Income		Shares		Per Share
	(Numerator)		(Denominator)		Amount		(Numerator)		(Denominator)		Amount
Basic earnings per share	$	398,630		222,781	$	1.79	$	590,000		236,120	$	2.50
Dilutive common share equivalents		-		960				-		1,214
Diluted earnings per share	$	398,630		223,741	$	1.78	$	590,000		237,334	$	2.49

Note 5. Inventories

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

	June 30,		December 31,
	2019		2018
Raw materials	$	784,415	$	810,766
Supplies		471,957		436,828
Work in progress		149,580		195,224
Finished goods		396,807		416,350
Total inventories	$	1,802,759	$	1,859,168

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STEEL DYNAMICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 6. Changes in Equity

The following tables provide 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 noncontrolling interests (in thousands) for the three and six-month periods ended June 30, 2019 and 2018:

	Stockholders of Steel Dynamics, Inc.
									Accumulated
					Additional				Other						Redeemable
	Common		Treasury		Paid-In		Retained		Comprehensive		Noncontrolling		Total		Noncontrolling
	Stock		Stock		Capital		Earnings		Loss		Interests		Equity		Interests
Balances at December 31, 2018	$	645	$	(1,184,243)	$	1,160,048	$	3,958,320	$	301	$	(159,082)	$	3,775,989	$	111,240
Dividends declared		-		-		-		(53,504)		-		-		(53,504)		-
Noncontrolling investors of USS		-		-		-		-		-		-		-		28,690
Share repurchases		-		(84,308)		-		-		-		-		(84,308)		-
Equity-based compensation		-		6,714		91		(110)		-		-		6,695		-
Net income		-		-		-		204,328		-		499		204,827		-
Other comprehensive loss, net of tax		-		-		-		-		(171)		-		(171)		-
Balances at March 31, 2019		645		(1,261,837)		1,160,139		4,109,034		130		(158,583)		3,849,528		139,930
Dividends declared		-		-		-		(52,751)		-		-		(52,751)		-
Share repurchases		-		(93,136)		-		-		-		-		(93,136)		-
Equity-based compensation		-		816		7,366		(166)		-		-		8,016		-
Net income		-		-		-		194,302		-		2,444		196,746		-
Other comprehensive loss, net of tax		-		-		-		-		(52)		-		(52)		-
Balances at June 30, 2019	$	645	$	(1,354,157)	$	1,167,505	$	4,250,419	$	78	$	(156,139)	$	3,908,351	$	139,930
	Stockholders of Steel Dynamics, Inc.
									Accumulated
					Additional				Other						Redeemable
	Common		Treasury		Paid-In		Retained		Comprehensive		Noncontrolling		Total		Noncontrolling
	Stock		Stock		Capital		Earnings		Loss		Interests		Equity		Interests
Balances at December 31, 2017	$	644	$	(665,297)	$	1,141,534	$	2,874,693	$	-	$	(156,506)	$	3,195,068	$	111,240
Dividends declared		-		-		-		(44,269)		-		-		(44,269)		-
Share repurchases		-		(69,269)		-		-		-		-		(69,269)		-
Equity-based compensation		-		3,866		1,337		(71)		-		-		5,132		-
Comprehensive and net income (loss)		-		-		-		227,551		-		(2,076)		225,475		-
Balances at March 31, 2018		644		(730,700)		1,142,871		3,057,904		-		(158,582)		3,312,137		111,240
Dividends declared		-		-		-		(44,080)		-		-		(44,080)		-
Noncontrolling investors, net		-		-		-		-		-		(3)		(3)		-
Share repurchases		-		(49,145)		-		-		-		-		(49,145)		-
Equity-based compensation		-		757		6,496		(110)		-		-		7,143		-
Net income		-		-		-		362,449		-		123		362,572		-
Other comprehensive loss, net of tax		-		-		-		-		(105)		-		(105)		-
Balances at June 30, 2018	$	644	$	(779,088)	$	1,149,367	$	3,376,163	$	(105)	$	(158,462)	$	3,588,519	$	111,240

12

STEEL DYNAMICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 7. Derivative Financial Instruments

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

Commodity Futures Contracts. If the company is “long” on futures contracts, it means the company has more futures contracts purchased than futures contracts sold for the underlying commodity. If the company is “short” on a futures contract, it means the company has more futures contracts sold than futures contracts purchased for the underlying commodity. The following summarizes the company’s futures contract commitments as of June 30, 2019:

Commodity Futures	Long/Short	Metric Tons
Aluminum	Long	2,450
Aluminum	Short	4,500
Copper	Long	17,758
Copper	Short	28,123

The following summarizes the location and amounts of the fair values reported on the company’s consolidated balance sheets as of June 30, 2019, and December 31, 2018, and gains and losses related to derivatives included in the company’s statement of income for the three and six-month periods ended June 30, 2019 and 2018 (in thousands):

		Asset Derivatives				Liability Derivatives
	Balance sheet	Fair Value				Fair Value
	location	June 30, 2019		December 31, 2018		June 30, 2019		December 31, 2018
Derivative instruments designated as hedges
Commodity futures	Other current assets	$	1,479	$	2,999	$	1,473	$	1,837
Derivative instruments not designated as hedges
Commodity futures	Other current assets		3,946		1,559		4,172		2,053
Total derivative instruments		$	5,425	$	4,558	$	5,645	$	3,890

The fair value of the above derivative instruments along with required margin deposit amounts with the same counterparty under master netting arrangements totaled $4.8 million at June 30, 2019, and $4.9 million at December 31, 2018, and are reflected in other current assets in the consolidated balance sheets.

		Amount of gain (loss) recognized					Location of gain	Amount of gain (loss) recognized
	Location of gain	in income on derivatives					(loss) recognized	in income on related hedged items
	(loss) recognized	for the three months ended				Hedged items in	in income on	for the three months ended
	in income on	June 30,		June 30,		fair value hedge	related hedged	June 30,		June 30,
	derivatives	2019		2018		relationships	items	2019		2018
Derivatives in fair value
hedging relationships
Commodity futures	Costs of goods sold	$	591	$	1,540	Firm commitments	Costs of goods sold	$	1,415	$	(2,600)
						Inventory	Costs of goods sold		(294)		(816)
Derivatives not designated								$	1,121	$	(3,416)
as hedging instruments
Commodity futures	Costs of goods sold	$	5,487	$	2,969

13

STEEL DYNAMICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 7. Derivative Financial Instruments (Continued)

		Amount of gain (loss) recognized					Location of gain	Amount of gain (loss) recognized
	Location of gain	in income on derivatives					(loss) recognized	in income on related hedged items
	(loss) recognized	for the six months ended				Hedged items in	in income on	for the six months ended
	in income on	June 30,		June 30,		fair value hedge	related hedged	June 30,		June 30,
	derivatives	2019		2018		relationships	items	2019		2018
Derivatives in fair value
hedging relationships
Commodity futures	Costs of goods sold	$	(862)	$	10,056	Firm commitments	Costs of goods sold	$	(84)	$	(3,393)
						Inventory	Costs of goods sold		427		(3,412)
Derivatives not designated								$	343	$	(6,805)
as hedging instruments
Commodity futures	Costs of goods sold	$	1,410	$	5,720

Derivatives accounted for as fair value hedges had ineffectiveness resulting in gains of $1.2 million and losses of $117,000 during the three-month periods ended June 30, 2019, and 2018, respectively; and gains of $32,000 and losses of $16,000 during the six-month periods ended June 30, 2019, and 2018, respectively. Gains excluded from hedge effectiveness testing of $1.7 million decreased cost of goods sold during the three-month period ended June 30, 2019 and losses of $1.8 million increased the cost of goods sold during the three-month period ended June 30, 2018. Losses excluded from hedge effectiveness testing of $519,000 increased cost of goods sold during the six-month period ended June 30, 2019 and gains of $3.3 million decreased the cost of goods sold during the six-month period ended June 30, 2018.

Derivatives accounted for as cash flow hedges resulted in net gains of $88,000 and net losses of $138,000 recognized in other comprehensive income for the three-month periods ended June 30, 2019, and 2018, respectively; and net gains of $147,000 and net losses of $138,000 for the six-month periods ended June 30, 2019 and 2018, respectively. Net gains of $157,000 and $440,000 were reclassified from accumulated other comprehensive income for the three and six-month periods ended June 30, 2019. At June 30, 2019, the company expects to reclassify $102,000 of net gains on derivative instruments from accumulated other comprehensive income to earnings during the next 12 months due to the settlement of futures contracts.

Note 8. Fair Value Measurements

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

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

● Level 2—Quoted prices for similar assets and liabilities in active markets (other than those included in Level 1) which are observable for the asset or liability, either directly or indirectly; and

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

14

STEEL DYNAMICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 8. Fair Value Measurements (Continued)

The following table sets forth financial assets and liabilities measured at fair value on a recurring basis in the consolidated balance sheet and the respective levels to which the fair value measurements are classified within the fair value hierarchy as of June 30, 2019, and December 31, 2018 (in thousands):

			Quoted Prices		Significant
			in Active		Other		Significant
			Markets for		Observable		Unobservable
			Identical Assets		Inputs		Inputs
	Total		(Level 1)		(Level 2)		(Level 3)
June 30, 2019
Short-term investments	$	114,154	$		$	114,154	$
Commodity futures – financial assets		5,425		-		5,425		-
Commodity futures – financial liabilities		5,645		-		5,645		-
December 31, 2018
Short-term investments	$	228,783	$	-	$	228,783	$	-
Commodity futures – financial assets		4,558		-		4,558		-
Commodity futures – financial liabilities		3,890		-		3,890		-

The carrying amounts of financial instruments including cash and equivalents approximate fair value (Level 1). The fair values of short-term investments and the 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 (Level 2). The fair value of long-term debt, including current maturities, as determined by quoted market prices (Level 2), was approximately $2.5 billion and $2.4 billion at June 30, 2019 and December 31, 2018, respectively (with a corresponding carrying amount in the consolidated balance sheet of $2.5 billion at June 30, 2019 and $2.4 billion at December 31, 2018).

Note 9. 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.

Note 10. Segment Information

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

15

STEEL DYNAMICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 10. Segment Information (Continued)

The company’s segment results, including disaggregated revenue by segment to external, external non-United States, and other segment customers, are as follows (in thousands):

			Metals		Steel
For the three months ended	Steel		Recycling		Fabrication
June 30, 2019	Operations		Operations		Operations		Other			Eliminations			Consolidated
Net sales - disaggregated revenue
External	$	2,040,756	$	262,826	$	240,439	$	99,641		$	-		$	2,643,662
External Non-U.S.		65,595		60,273		985		-			-			126,853
Other segments		81,834		333,667		-		121			(415,622)			-
		2,188,185		656,766		241,424		99,762			(415,622)			2,770,515
Operating income (loss)		291,411		7,619		30,664		(49,153)	(1)		4,491	(2)		285,032
Income (loss) before income taxes		274,155		6,500		29,466		(57,438)			4,277			256,960
Depreciation and amortization		63,150		11,525		2,974		3,262			-			80,911
Capital expenditures		43,575		12,173		3,019		26,353			-			85,120
As of June 30, 2019
Assets	$	5,217,650	$	987,702	$	418,023	$	1,307,873	(3)	$	(73,334)	(4)	$	7,857,914

Footnotes related to the three months ended June 30, 2019, segment results (in millions):
(1)	Corporate SG&A	$	(18.0)	(2)	Gross profit increase from intra-company sales	$	4.5
	Company-wide equity-based compensation		(8.4)
	Profit sharing		(21.3)
	Other, net		(1.5)
		$	(49.2)
(3)	Cash and equivalents	$	916.5	(4)	Elimination of intra-company receivables	$	(57.2)
	Short-term investments		109.2		Elimination of intra-company debt		(8.3)
	Accounts receivable		6.0		Other		(7.8)
	Inventories		35.1			$	(73.3)
	Property, plant and equipment, net		176.5
	Intra-company debt		8.3
	Other		56.3
		$	1,307.9

			Metals		Steel
For the three months ended	Steel		Recycling		Fabrication
June 30, 2018	Operations		Operations		Operations		Other			Eliminations			Consolidated
Net sales - disaggregated revenue
External	$	2,127,545	$	347,784	$	217,438	$	122,956		$	-		$	2,815,723
External Non-U.S.		197,882		76,920		-		-			-			274,802
Other segments		110,261		459,391		458		124			(570,234)			-
		2,435,688		884,095		217,896		123,080			(570,234)			3,090,525
Operating income (loss)		533,494		22,638		14,144		(63,618)	(1)		(4,771)	(2)		501,887
Income (loss) before income taxes		516,399		20,965		12,640		(69,828)			(4,766)			475,410
Depreciation and amortization		61,769		11,553		2,946		2,852			-			79,120
Capital expenditures		42,008		8,947		2,054		2,194			-			55,203

16

STEEL DYNAMICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 10. Segment Information (Continued)

Footnotes related to the three months ended June 30, 2018, segment results (in millions):
(1)	Corporate SG&A	$	(14.5)	(2)	Gross profit decrease from intra-company sales	$	(4.8)
	Company-wide equity-based compensation		(8.5)
	Profit sharing		(40.6)
		$	(63.6)

			Metals		Steel
For the six months ended	Steel		Recycling		Fabrication
June 30, 2019	Operations		Operations		Operations		Other			Eliminations			Consolidated
Net sales - disaggregated revenue
External	$	4,085,247	$	548,551	$	468,868	$	212,889		$	-		$	5,315,555
External Non-U.S.		145,674		125,685		1,036		-			-			272,395
Other segments		157,429		719,575		189		369			(877,562)			-
		4,388,350		1,393,811		470,093		213,258			(877,562)			5,587,950
Operating income (loss)		600,489		24,581		51,287		(106,073)	(1)		6,590	(2)		576,874
Income (loss) before income taxes		567,174		22,005		48,817		(120,134)			6,161			524,023
Depreciation and amortization		125,662		22,964		5,941		6,518			-			161,085
Capital expenditures		87,251		18,815		5,012		28,478			-			139,556

Footnotes related to the six months ended June 30, 2019, segment results (in millions):
(1)	Corporate SG&A	$	(40.6)	(2)	Gross profit increase from intra-company sales	$	6.6
	Company-wide equity-based compensation		(17.4)
	Profit sharing		(44.3)
	Other, net		(3.8)
		$	(106.1)

			Metals		Steel
For the six months ended	Steel		Recycling		Fabrication
June 30, 2018	Operations		Operations		Operations		Other			Eliminations			Consolidated
Net sales - disaggregated revenue
External	$	3,959,848	$	677,656	$	418,875	$	215,427		$	-		$	5,271,806
External Non-U.S.		287,368		135,170		56		-			-			422,594
Other segments		170,246		824,035		668		271			(995,220)			-
		4,417,462		1,636,861		419,599		215,698			(995,220)			5,694,400
Operating income (loss)		868,056		47,353		33,935		(119,024)	(1)		(5,036)	(2)		825,284
Income (loss) before income taxes		832,204		43,970		31,097		(130,861)			(5,036)			771,374
Depreciation and amortization		120,910		23,111		5,844		5,390			-			155,255
Capital expenditures		80,410		15,893		4,131		5,375			-			105,809

Footnotes related to the six months ended June 30, 2018, segment results (in millions):
(1)	Corporate SG&A	$	(30.2)	(2)	Gross profit decrease from intra-company sales	$	(5.0)
	Company-wide equity-based compensation		(17.0)
	Profit sharing		(66.2)
	Other, net		(5.6)
		$	(119.0)

17

STEEL DYNAMICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 11. Condensed Consolidating Information

Certain 100% owned subsidiaries of SDI have fully and unconditionally guaranteed jointly and severally all of the indebtedness relating to the issuance of the company’s senior unsecured notes due 2021, 2023, 2024, 2025 and 2026. 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.

Condensed Consolidating Balance Sheets (in thousands)
					Combined		Consolidating		Total
As of June 30, 2019	Parent		Guarantors		Non-Guarantors		Adjustments		Consolidated
Cash and equivalents	$	914,541	$	50,670	$	7,350	$	-	$	972,561
Short-term investments		109,154		5,000		-		-		114,154
Accounts receivable, net		324,548		1,696,820		70,968		(1,019,457)		1,072,879
Inventories		748,921		977,754		87,342		(11,258)		1,802,759
Other current assets		46,197		18,698		3,754		(7,401)		61,248
Total current assets		2,143,361		2,748,942		169,414		(1,038,116)		4,023,601
Property, plant and equipment, net		883,970		1,902,632		160,641		-		2,947,243
Intangible assets, net		-		256,302		-		-		256,302
Goodwill		-		427,950		98,512		-		526,462
Other assets, including investments in subs		2,838,285		65,100		6,800		(2,805,879)		104,306
Total assets	$	5,865,616	$	5,400,926	$	435,367	$	(3,843,995)	$	7,857,914
Accounts payable	$	174,596	$	331,110	$	88,182	$	(68,732)	$	525,156
Accrued expenses		180,887		296,932		20,068		(169,438)		328,449
Current maturities of long-term debt		826		1,165		93,176		(23,036)		72,131
Total current liabilities		356,309		629,207		201,426		(261,206)		925,736
Long-term debt		2,329,916		-		170,842		(144,841)		2,355,917
Other liabilities		(885,161)		1,244,276		33,352		135,513		527,980
Total liabilities		1,801,064		1,873,483		405,620		(270,534)		3,809,633
Redeemable noncontrolling interests		-		-		139,930		-		139,930
Common stock		645		1,727,859		15,016		(1,742,875)		645
Treasury stock		(1,354,157)		-		-		-		(1,354,157)
Additional paid-in-capital		1,167,505		683,048		787,572		(1,470,620)		1,167,505
Retained earnings (deficit)		4,250,419		1,116,598		(756,632)		(359,966)		4,250,419
Accumulated other comprehensive loss		140		(62)		-		-		78
Total Steel Dynamics, Inc. equity		4,064,552		3,527,443		45,956		(3,573,461)		4,064,490
Noncontrolling interests		-		-		(156,139)		-		(156,139)
Total equity		4,064,552		3,527,443		(110,183)		(3,573,461)		3,908,351
Total liabilities and equity	$	5,865,616	$	5,400,926	$	435,367	$	(3,843,995)	$	7,857,914

18

STEEL DYNAMICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 11. Condensed Consolidating Information (Continued)

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

Condensed Consolidating Statements of Operations (in thousands)
For the three months ended,					Combined		Consolidating		Total
June 30, 2019	Parent		Guarantors		Non-Guarantors		Adjustments		Consolidated
Net sales	$	1,097,010	$	3,016,389	$	233,907	$	(1,576,791)	$	2,770,515
Costs of goods sold		908,232		2,772,874		214,487		(1,546,244)		2,349,349
Gross profit		188,778		243,515		19,420		(30,547)		421,166
Selling, general and administrative		61,028		72,576		8,134		(5,604)		136,134
Operating income		127,750		170,939		11,286		(24,943)		285,032
Interest expense, net of capitalized interest		19,448		11,805		3,623		(2,555)		32,321
Other income, net		(4,958)		(1,795)		(265)		2,769		(4,249)
Income before income taxes and
equity in net income of subsidiaries		113,260		160,929		7,928		(25,157)		256,960
Income taxes		27,033		38,885		264		(5,968)		60,214
		86,227		122,044		7,664		(19,189)		196,746
Equity in net income of subsidiaries		108,075		-		-		(108,075)		-
Net income attributable to noncontrolling interests		-		-		(2,444)		-		(2,444)
Net income attributable to Steel Dynamics, Inc.	$	194,302	$	122,044	$	5,220	$	(127,264)	$	194,302

19

STEEL DYNAMICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 11. Condensed Consolidating Information (Continued)

For the three months ended,					Combined		Consolidating		Total
June 30, 2018	Parent		Guarantors		Non-Guarantors		Adjustments		Consolidated
Net sales	$	1,294,096	$	3,405,216	$	156,308	$	(1,765,095)	$	3,090,525
Costs of goods sold		970,636		3,038,284		153,104		(1,723,581)		2,438,443
Gross profit		323,460		366,932		3,204		(41,514)		652,082
Selling, general and administrative		77,088		75,923		2,400		(5,216)		150,195
Operating income (loss)		246,372		291,009		804		(36,298)		501,887
Interest expense, net of capitalized interest		19,386		11,593		3,089		(2,556)		31,512
Other income, net		(5,975)		(1,595)		(13)		2,548		(5,035)
Income (loss) before income taxes and
equity in net income of subsidiaries		232,961		281,011		(2,272)		(36,290)		475,410
Income taxes (benefit)		51,738		69,910		(101)		(8,709)		112,838
		181,223		211,101		(2,171)		(27,581)		362,572
Equity in net income of subsidiaries		181,226		-		-		(181,226)		-
Net income attributable to noncontrolling interests		-		-		(123)		-		(123)
Net income (loss) attributable to Steel Dynamics, Inc.	$	362,449	$	211,101	$	(2,294)	$	(208,807)	$	362,449

For the six months ended,					Combined		Consolidating		Total
June 30, 2019	Parent		Guarantors		Non-Guarantors		Adjustments		Consolidated
Net sales	$	2,221,745	$	6,126,618	$	405,790	$	(3,166,203)	$	5,587,950
Costs of goods sold		1,814,227		5,638,863		379,947		(3,099,823)		4,733,214
Gross profit		407,518		487,755		25,843		(66,380)		854,736
Selling, general and administrative		130,034		147,159		12,064		(11,395)		277,862
Operating income		277,484		340,596		13,779		(54,985)		576,874
Interest expense, net of capitalized interest		38,102		23,571		6,837		(5,067)		63,443
Other income, net		(12,358)		(3,172)		(557)		5,495		(10,592)
Income before income taxes and
equity in net income of subsidiaries		251,740		320,197		7,499		(55,413)		524,023
Income taxes		57,797		77,419		367		(13,133)		122,450
		193,943		242,778		7,132		(42,280)		401,573
Equity in net income of subsidiaries		204,687		-		-		(204,687)		-
Net income attributable to noncontrolling interests		-		-		(2,943)		-		(2,943)
Net income attributable to Steel Dynamics, Inc.	$	398,630	$	242,778	$	4,189	$	(246,967)	$	398,630

For the six months ended,					Combined		Consolidating		Total
June 30, 2018	Parent		Guarantors		Non-Guarantors		Adjustments		Consolidated
Net sales	$	2,330,770	$	6,263,935	$	273,305	$	(3,173,610)	$	5,694,400
Costs of goods sold		1,789,781		5,620,035		271,602		(3,102,516)		4,578,902
Gross profit		540,989		643,900		1,703		(71,094)		1,115,498
Selling, general and administrative		140,015		155,295		5,576		(10,672)		290,214
Operating income (loss)		400,974		488,605		(3,873)		(60,422)		825,284
Interest expense, net of capitalized interest		38,009		24,304		6,355		(5,260)		63,408
Other income, net		(11,178)		(3,320)		(259)		5,259		(9,498)
Income (loss) before income taxes and
equity in net income of subsidiaries		374,143		467,621		(9,969)		(60,421)		771,374
Income taxes		81,484		116,328		110		(14,595)		183,327
		292,659		351,293		(10,079)		(45,826)		588,047
Equity in net income of subsidiaries		297,341		-		-		(297,341)		-
Net loss attributable to noncontrolling interests		-		-		1,953		-		1,953
Net income (loss) attributable to Steel Dynamics, Inc.	$	590,000	$	351,293	$	(8,126)	$	(343,167)	$	590,000

20

STEEL DYNAMICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 11. Condensed Consolidating Information (Continued

Condensed Consolidating Statements of Cash Flows (in thousands)
For the six months ended,					Combined		Consolidating		Total
June 30, 2019	Parent		Guarantors		Non-Guarantors		Adjustments		Consolidated
Net cash provided by operating activities	$	144,979	$	397,633	$	2,850	$	(2,436)	$	543,026
Net cash used in investing activities		(66,379)		(44,890)		(2,761)		(3,032)		(117,062)
Net cash provided by (used in) financing activities		26,178		(315,537)		2,283		5,468		(281,608)
Increase in cash, cash equivalents and
restricted cash		104,778		37,206		2,372		-		144,356
Cash, cash equivalents, and restricted cash
at beginning of period		809,763		14,368		10,292		-		834,423
Cash, cash equivalents, and restricted cash
at end of period	$	914,541	$	51,574	$	12,664	$	-	$	978,779

For the six months ended,					Combined		Consolidating		Total
June 30, 2018	Parent		Guarantors		Non-Guarantors		Adjustments		Consolidated
Net cash provided by operating activities	$	190,271	$	300,720	$	190	$	12,787	$	503,968
Net cash used in investing activities		(528,618)		(59,728)		(4,901)		1,915		(591,332)
Net cash provided by (used in) financing activities		45,037		(255,401)		3,769		(14,702)		(221,297)
Decrease in cash, cash equivalents and		(293,310)		(14,409)		(942)		-		(308,661)
restricted cash
Cash, cash equivalents, and restricted cash		1,002,230		20,748		12,107		-		1,035,085
at beginning of period
Cash, cash equivalents, and restricted cash
at end of period	$	708,920	$	6,339	$	11,165	$	-	$	726,424

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

Forward-Looking Statements

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

More specifically, we refer you to our more detailed explanation of these and other factors and risks that may cause such predictive statements to turn out differently, as set forth in our most recent Annual Report on Form 10-K under the headings Special Note Regarding Forward-Looking Statements and Risk Factors for the year ended December 31, 2018, in our quarterly reports on Form 10-Q, or in other reports which we from time to time file with the Securities and Exchange Commission. These reports are available publicly on the Securities and Exchange Commission website, www.sec.gov, and on our website, www.steeldynamics.com under “Investors – SEC Filings.”

Description of the Business

We are one of the largest domestic steel producers and metal recyclers in the United States based on current estimated steelmaking and coating capacity of approximately 13 million tons and actual metals recycling volumes. Our primary source of revenues is from the manufacture and sale of steel products, processing and sale of recycled ferrous and nonferrous metals, and fabrication and sale of steel joists and deck products. We have three reportable segments: steel operations, metals recycling operations, and steel fabrication operations.

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 our steel products. Except for the steel fabrication operations, we recognize revenues from sales and the allowance for estimated returns and claims from these sales at the point in time control of the product transfers to the customer, upon shipment or delivery. Our steel fabrication operations recognize revenues over time based on completed fabricated tons to date as a percentage of total tons required for each contract.

Costs of Goods Sold. Our costs of goods sold represent all direct and indirect costs associated with the manufacture of our products. The principal elements of these costs are scrap and scrap substitutes (which represent the most significant single component of our consolidated costs of goods sold), steel substrate, direct and indirect labor and related benefits, alloys, zinc, transportation and freight, repairs and maintenance, utilities such as 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, and property taxes. Company-wide profit sharing and amortization of intangible assets are each separately presented in the statement of income.

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 short-term investments; any other non-operating income activity, including income from non-consolidated investments accounted for under the equity method. Other expense consists of any non-operating costs, such as certain acquisition and financing expenses.

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Acquisition of United Steel Supply, LLC

On March 1, 2019, we purchased 75% of the equity interest of United Steel Supply, LLC (USS) for cash consideration of $93.4 million, subject to customary actual working capital purchase price adjustments. Additionally, we have an option to purchase, and the sellers have the option to require us to purchase, the remaining 25% equity interest of USS in the future. Headquartered in Austin, Texas, USS is a leading distributor of painted Galvalume^® flat roll steel used for roofing and siding applications, with distribution centers strategically located in Mississippi, Indiana, Arkansas, and Oregon. USS provides us a new, complementary distribution channel and connects us to a rapidly growing industry segment with customers that do not traditionally purchase steel directly from a steel producer. USS’s operating results from and after March 1, 2019, are reflected in our financial statements in the steel operations reporting segment.

Results Overview

Our consolidated results for the second quarter of 2019 were constrained by a challenging steel pricing environment, as well as sharply falling scrap prices. While underlying domestic steel demand remained intact, customers were hesitant to place orders in a falling price environment, resulting in inventory destocking, in conjunction with weakening scrap prices. Likewise, our metals recycling operations experienced decreased operating income in the second quarter of 2019 compared to 2018, largely due to this scrap pricing environment and resulting slower scrap flows. The non-residential construction market remained strong, with increased average selling prices outpacing higher steel input costs in our steel fabrication segment.

Consolidated operating income decreased $216.9 million, or 43%, to $285.0 million for the second quarter 2019, compared to the record levels in the second quarter 2018. Second quarter 2019 net income attributable to Steel Dynamics, Inc. decreased $168.1 million, or 46%, to $194.3 million, compared to the second quarter 2018, consistent with the decreased operating income.

Consolidated operating income decreased $248.4 million, or 30%, to $576.9 million for the first half of 2019, compared to the record levels in the first half of 2018. First half 2019 net income attributable to Steel Dynamics, Inc. decreased $191.4 million, or 32%, to $398.6 million, compared to the first half of 2018, consistent with the decreased operating income.

Segment Operating Results 2019 vs. 2018 (dollars in thousands)

	Three Months Ended June 30,					Six Months Ended June 30,
	2019		% Change		2018	2019		% Change	2018
Net sales:
Steel Operations Segment	$	2,188,185	(10)%	$	2,435,688	$	4,388,350	(1)%	$	4,417,462
Metals Recycling Operations Segment		656,766	(26)%		884,095		1,393,811	(15)%		1,636,861
Steel Fabrication Operations Segment		241,424	11%		217,896		470,093	12%		419,599
Other		99,762	(19)%		123,080		213,258	(1)%		215,698
		3,186,137			3,660,759		6,465,512			6,689,620
Intra-company		(415,622)			(570,234)		(877,562)			(995,220)
	$	2,770,515	(10)%	$	3,090,525	$	5,587,950	(2)%	$	5,694,400
Operating income (loss):
Steel Operations Segment	$	291,411	(45)%	$	533,494	$	600,489	(31)%	$	868,056
Metals Recycling Operations Segment		7,619	(66)%		22,638		24,581	(48)%		47,353
Steel Fabrication Operations Segment		30,664	117%		14,144		51,287	51%		33,935
Other		(49,153)	23%		(63,618)		(106,073)	11%		(119,024)
		280,541			506,658		570,284			830,320
Intra-company		4,491			(4,771)		6,590			(5,036)
	$	285,032	(43)%	$	501,887	$	576,874	(30)%	$	825,284

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Steel Operations Segment

Steel operations consist of our electric arc furnace steel mills, producing sheet and long products steel from ferrous scrap and scrap substitutes, utilizing continuous casting and automated rolling mills, with numerous downstream processing and coating lines, as well as IDI, our liquid pig iron production facility that supplies solely the Butler Flat Roll Division. Our steel operations sell a diverse portfolio of sheet and long products directly to end-users, steel fabricators, and service centers. These products are used in a wide variety of industry sectors, including the construction, automotive, manufacturing, transportation, heavy equipment and agriculture, and pipe and tube (including OCTG) markets. Steel operations accounted for 76% and 75% of our consolidated external net sales during the second quarter and first half of 2019 and 2018, respectively.

Steel Operations Segment Shipments (tons):

	Three Months Ended June 30,			Six Months Ended June 30,
	2019	% Change	2018	2019	% Change	2018
Total shipments	2,769,358	1%	2,733,936	5,453,769	4%	5,268,580
Intra-segment shipments	(280,024)		(145,998)	(527,427)		(267,651)
Steel Operations Segment shipments	2,489,334	(4)%	2,587,938	4,926,342	(1)%	5,000,929
External shipments	2,386,851	(4)%	2,480,223	4,734,060	(2)%	4,807,738

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Segment Results 2019 vs. 2018

Overall domestic steel demand remained steady during the second quarter of 2019, with continued strength in the automotive, energy and other industrial sectors. However, a challenging steel pricing environment, due to customer inventory destocking in conjunction with weakening scrap prices, led to decreasing steel selling prices during the first quarter, and more so the second quarter, of 2019. Steel operations segment shipments decreased 4% in the second quarter 2019, as compared to the same period in 2018. Net sales for the steel operations decreased 10% in the second quarter 2019 when compared to the same period in 2018, due to decreases in overall steel selling prices, particularly in the sheet products, and decreased steel mill shipments. Net sales for the steel operations decreased 1% in the first half of 2019 when compared to the same period in 2018, due to decreases in average steel selling prices, largely offset by the additional sales at our acquired Heartland Flat Roll Division (June 2018) and USS (March 2019) operations, which account for approximately 7% of steel segment shipments in the first half of 2019.

Metallic raw materials used in our electric arc furnaces represent our single most significant steel manufacturing cost, generally comprising approximately 50 to 60 percent of our steel mill operations’ manufacturing costs. Our metallic raw material cost per net ton consumed in our steel operations decreased $32, or 9%, in the second quarter 2019, compared to the same period in 2018, consistent with overall decreased domestic scrap pricing. In the first half of 2019, our metallic raw material cost per ton decreased $7, or 2% compared to the same period in 2018.

As a result of average selling prices decreasing more than scrap costs, metal spread (which we define as the difference between average steel mill selling prices and the cost of ferrous scrap consumed in our steel mills) decreased 9% in the second quarter 2019 compared to the second quarter 2018. Due to this metal spread contraction, most notably in sheet steel, operating income for the steel operations decreased 45%, to $291.4 million, in the second quarter 2019, compared to the record levels in the same period in 2018. First half 2019 operating income decreased 31%, to $600.5 million, compared to the first half of 2018 record levels, again due to decreased metal spreads and steel mill shipments.

Metals Recycling Operations Segment

Metals recycling operations consists solely of OmniSource and includes both ferrous and nonferrous scrap metal processing, transportation, marketing, and brokerage services, strategically located primarily in close proximity to our steel mills and other end-user scrap consumers throughout the eastern half of the United States. In addition, OmniSource designs, installs, and manages customized scrap management programs for industrial manufacturing companies at hundreds of locations throughout North America. Our steel mills utilize a large portion (ranging from 64% to 66% for the periods presented) of the ferrous scrap sold by OmniSource as raw material in our steelmaking operations, and the remainder is sold to other consumers, such as other steel manufacturers and foundries. Our metals recycling operations accounted for 12% and 14% of our consolidated external net sales during second quarter and first half of 2019 and 2018, respectively.

Metals Recycling Operations Shipments:

	Three Months Ended June 30,			Six Months Ended June 30,
	2019	% Change	2018	2019	% Change	2018
Ferrous metal (gross tons)
Total	1,189,679	(12)%	1,347,016	2,361,040	(9)%	2,603,915
Inter-company	(764,202)		(880,891)	(1,552,722)		(1,700,800)
External shipments	425,477	(9)%	466,125	808,318	(10)%	903,115
Nonferrous metals (thousands of pounds)
Total	266,222	(12)%	304,034	558,260	(3)%	575,662
Inter-company	(34,671)		(40,306)	(73,779)		(61,161)
External shipments	231,551	(12)%	263,728	484,481	(6)%	514,501

Segment Results 2019 vs. 2018

Our metals recycling operations were negatively impacted during the first half, and more so the second quarter of 2019 by rapidly falling ferrous and nonferrous scrap prices compared to 2018, and a somewhat soft steel market as customers were reluctant to purchase during a falling pricing environment, opting instead to defer purchases until prices reach an inflection point. Net sales decreased 26% during the second quarter of 2019 compared to the same period in 2018, driven primarily by decreased ferrous metals

25

shipments and average selling prices. Ferrous shipments to our own steel mills decreased by 13% in the second quarter 2019, compared to the same period in 2018, as our steel mill utilization percentage decreased from 99% to 89% year over year. Ferrous scrap average selling prices decreased 18% during the second quarter 2019 compared to the same period in 2018, while nonferrous average selling prices decreased 12%. Ferrous metal spread (which we define as the difference between average selling prices and the cost of purchased scrap) decreased 11%, as selling prices decreased more than unprocessed scrap procurement costs, while nonferrous metal spread increased 3%. Metals recycling operations operating income decreased 66% to $7.6 million in the second quarter 2019 compared to the second quarter 2018 operating income of $22.6 million, due to decreased ferrous and nonferrous shipments and ferrous metal spread contraction.

Net sales for our metals recycling operations decreased 15% in the first half of 2019 as compared to the same period in 2018, driven by decreased pricing and shipments. Ferrous scrap average selling prices decreased 11% during the first half of 2019 compared to the same period in 2018, while nonferrous average selling prices decreased 4%. Nonferrous metal spread was flat, while ferrous metal spread decreased 10% in the first half of 2019 compared to the first half of 2018. Metals recycling operations operating income in the first half of 2019 of $24.6 million decreased 48% from the first half of 2018 operating income of $47.4 million, due to decreased ferrous and nonferrous shipments, and ferrous metal spread contraction.

Steel Fabrication Operations Segment

Steel fabrication operations include our New Millennium Building Systems joist and deck plants located throughout the United States and in Northern Mexico. Revenues from these plants are generated from the fabrication of steel joists, trusses, girders and steel deck used within the non-residential construction industry. Steel fabrication operations accounted for 9% and 7% of our consolidated external net sales during the second quarters of 2019 and 2018, respectively, and 8% and 7% during the first half of 2019 and 2018, respectively.

Segment Results 2019 vs. 2018

Net sales for the steel fabrication operations increased $23.5 million, or 11%, during the second quarter 2019, compared to the same period in 2018, as average selling prices increased $158 per ton, or 11%, while shipments were comparable. Net sales for the segment increased $50.5 million, or 12%, during the first half of 2019, compared to the same period in 2018, as shipments decreased 2%, and average selling prices increased $192 per ton, or 14%. Our steel fabrication operations continue to leverage our national operating footprint to sustain market share. Market demand and orders continue to be strong for non-residential construction project

26

development; however, wet weather and other construction delays during the first half of 2019 somewhat restricted shipments compared to the same period in 2018.

The purchase of various steel products is the largest single cost of production for our steel fabrication operations, generally representing approximately two-thirds of the total cost of manufacturing. The average cost of steel consumed increased slightly in the second quarter 2019, as compared to the same period in 2018, but was more than offset by the 11% increase in average selling prices. As a result, metal spread (which we define as the difference between average selling prices and the cost of purchased steel) increased 28% in the second quarter 2019 compared to the same period in 2018. Operating income increased 117% to $30.7 million in the second quarter 2019 compared to the same period in 2018, due to the increases in metal spread. For the first half of 2019, operating income increased 51% to $51.3 million compared to the first half of 2018, due to increased average selling prices outpacing increases in steel input costs, as metal spread increased 17% period over period.

Other Operations

Second quarter Consolidated Results 2019 vs. 2018

Selling, General and Administrative Expenses. Selling, general and administrative expenses of $106.3 million during the second quarter 2019 increased 5% from $101.0 million during the second quarter 2018, representing 3.8% and 3.3% of net sales, respectively. Profit sharing expense during the second quarter of 2019 of $22.9 million was down 46% from the $42.3 million during the same period in 2018, consistent with decreases in pretax income from record levels in 2018.

Interest Expense, net of Capitalized Interest. During the second quarter 2019, interest expense of $32.3 million was comparable to the $31.5 million during the second quarter of 2018, on consistent debt levels.

Income Tax Expense. Second quarter 2019 income tax expense of $60.2 million, at an effective income tax rate of 23.4%, was down 47% from the $112.8 million, at an effective income tax rate of 23.7%, during the second quarter 2018, consistent with decreased pretax income.

First Six Months Consolidated Results 2019 vs. 2018

Selling, General and Administrative Expenses. Selling, general and administrative expenses of $217.3 million during the first half of 2019 increased 5% from $207.5 million during the first half of 2018, representing 3.9% and 3.6% of net sales, respectively. Profit sharing expense during the first half of 2019 of $46.5 million decreased 33% from the $69.0 million during the same period in 2018, consistent with decreases in pretax income from record levels in 2018.

Interest Expense, net of Capitalized Interest. During the first half of 2019 and 2018, interest expense was $63.4 million on consistent debt levels.

Income Tax Expense. First half 2019 income tax expense of $122.5 million, at an effective income tax rate of 23.4%, was down 33% from the $183.3 million, at an effective income tax rate of 23.8%, during the first half 2018, consistent with decreased pretax income.

Liquidity and Capital Resources

Capital Resources and Long-term Debt. Our business is capital intensive and requires substantial expenditures for, among other things, the purchase and maintenance of equipment used in our steel, metals recycling, and steel fabrication operations, and to remain in compliance with environmental laws. Our short-term and long-term liquidity needs arise primarily from working capital requirements, capital expenditures, principal and interest payments related to our outstanding indebtedness, dividends to our shareholders, stock repurchases, and acquisitions. We have met these liquidity requirements primarily with cash provided by operations and long-term borrowings, and we also have availability under our Revolver. Our liquidity at June 30, 2019, is as follows (in thousands):

Cash and equivalents	$	972,561
Short-term investments		114,154
Revolver availability		1,188,142
Total liquidity	$	2,274,857

27

Our total outstanding debt increased $51.3 million during the first half of 2019 primarily due to revolving debt assumed in conjunction with our acquisition of USS. Our total long-term debt to capitalization ratio (representing our long-term debt, including current maturities, divided by the sum of our long-term debt, redeemable noncontrolling interests, and our total stockholders’ equity) was 37.5% and 37.9% at June 30, 2019, and December 31, 2018, respectively.

Our senior secured credit facility (Facility), which provides a $1.2 billion Revolver, matures in June 2023. Subject to certain conditions, we have the opportunity to increase the Revolver size by at least $750.0 million. The Facility is guaranteed by certain of our subsidiaries; and is secured by substantially all of our and our wholly-owned subsidiaries’ receivables and inventories, and by pledges of all shares of our wholly-owned subsidiaries’ capital stock or other equity interests, and intercompany debt held by us as collateral. The Revolver is available to fund working capital, capital expenditures, and other general corporate purposes. The Facility contains financial covenants and other covenants pertaining to our ability (which may under certain circumstances be limited) to make capital expenditures; incur indebtedness; permit liens on property; enter into transactions with affiliates; make restricted payments or investments; enter into mergers, acquisitions or consolidations; conduct asset sales; pay dividends or distributions, or enter into other specified transactions and activities. Our ability to borrow funds within the terms of the Revolver is dependent upon our continued compliance with the financial and other covenants. At June 30, 2019, we had $1.2 billion of availability on the Revolver, $11.9 million of outstanding letters of credit and other obligations which reduce availability, and there were no borrowings outstanding.

The financial covenants under our Facility state that we must maintain an interest coverage ratio of not less than 2.50:1.00. Our interest coverage ratio is calculated by dividing our last-twelve-months (LTM) consolidated adjusted EBITDA (earnings before interest, taxes, depreciation, amortization, and certain other non-cash transactions as allowed in the Facility) by our LTM gross interest expense, less amortization of financing fees. In addition, a net debt (as defined in the Facility) to LTM consolidated adjusted EBITDA (net debt leverage ratio) of not more than 5.00:1.00 must be maintained. If the net debt leverage ratio exceeds 3.50:1:00 at any time, our ability to make certain payments as defined in the Facility (which includes cash dividends to stockholders and share purchases, among other things), is limited. At June 30, 2019, our interest coverage ratio and net debt leverage ratio were 14.80:1.00 and 0.98:1.00, respectively. We were, therefore, in compliance with these covenants at June 30, 2019, and we anticipate we will continue to be in compliance during the next twelve months.

Working Capital. We generated cash flow from operations of $543.0 million in the first half of 2019. Operational working capital (representing amounts invested in trade receivables and inventories, less current liabilities other than income taxes payable and debt) increased $60.8 million, excluding the effect of acquired USS working capital, to $2.0 billion at June 30, 2019, due primarily to decreased accrued expenses, as our 2018 accrued profit sharing was paid in the first quarter of 2019.

Capital Investments. During the first half of 2019, we invested $139.6 million in property, plant and equipment, primarily within our steel operations segment, compared with $105.8 million invested during the same period in 2018.

Cash Dividends. As a reflection of continued confidence in our current and future cash flow generation ability and financial position, we increased our quarterly cash dividend by 28% to $0.2400 per share in the first quarter 2019 (from $0.1875 per share in 2018), resulting in declared cash dividends of $106.3 million during the first half of 2019, compared to $88.3 million during the same period in 2018. We paid cash dividends of $95.7 million and $81.1 million during the first half of 2019 and 2018, respectively. Our board of directors, along with executive management, approves the payment of dividends on a quarterly basis. The determination to pay cash dividends in the future is at the discretion of our board of directors, after taking into account various factors, including our financial condition, results of operations, outstanding indebtedness, current and anticipated cash needs and growth plans. In addition, the terms of our Facility and the indentures relating to our senior notes may restrict the amount of cash dividends we can pay.

Other. In August 2018, our board of directors authorized a share repurchase program of up to $750 million of our common stock. Under the share repurchase program, purchases will take place, as and when, we determine in open market or private transactions made based upon the market price of our common stock, the nature of other investment opportunities or growth projects, our cash flows from operations, and general economic conditions. The share repurchase program does not require us to acquire any specific number of shares, and may be modified, suspended, extended or terminated by us at any time. We acquired 3.2 million shares of our common stock for $93.1 million in the second quarter of 2019 pursuant to this program. We acquired 5.5 million shares of our common stock for $177.4 million in the first half of 2019, leaving $221.7 million remaining available to purchase under the program. See Part II, Item 2. Unregistered Sales of Equity Securities and Use of Proceeds for additional information.

Our ability to meet our debt service obligations and reduce our total debt will depend upon our future performance which, in turn, will depend upon general economic, financial and business conditions, along with competition, legislation and regulatory factors that are largely beyond our control. In addition, we cannot assure that our operating results, cash flows, access to credit markets and capital resources will be sufficient for repayment of our indebtedness in the future. We believe that based upon current levels of operations

28

and anticipated growth, cash flows from operations, together with other available sources of funds, including if necessary borrowings under our Revolver through its term, will be adequate for the next twelve months for making required payments of principal and interest on our indebtedness, funding working capital requirements, and anticipated capital expenditures.

ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Commodity Risk

In the normal course of business, we are exposed to the market risk and price fluctuations related to the sale of our products and to the purchase of raw materials used in our operations, such as metallic raw materials, electricity, natural gas and its transportation services, fuel, air products, zinc, and electrodes. 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 some commodities such as electricity, natural gas and its transportation services, fuel, air products, zinc, and electrodes. Certain of these commitments contain provisions which require us to “take or pay” for specified quantities without regard to actual usage for periods of up to 5 years for physical commodity requirements and commodity transportation requirements, and for up to 13 years for air products. We utilized such “take or pay” requirements during the past three years under these contracts, except for certain air products at our idle Minnesota ironmaking operations. We believe that production requirements will be such that consumption of the products or services purchased under these commitments will occur in the normal production process, other than certain air products related to our Minnesota ironmaking operations during the idle period. We also purchase electricity consumed at our Butler Flat Roll Division pursuant to a contract which extends through December 2020, which establishes an agreed fixed-rate energy charge per Mill/kWh consumed for each year through the expiration of the agreement.

We have certain fixed price contracts with various customers and suppliers for future delivery of nonferrous metals. Our risk strategy has been to enter into base metal financial contracts with the goal to protect the profit margin, within certain parameters, that was contemplated when we entered into the transaction with the customer or vendor. At June 30, 2019, we had a cumulative unrealized loss associated with these financial contracts of $220,000, substantially all of which have a settlement date within the next twelve months. We believe the customer contracts associated with the financial contracts will be fully consummated.

ITEM 4.    CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures

As required, we carried out an evaluation, under the supervision and with the participation of our principal executive officer and principal financial officer, of the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act). Based on this evaluation, our principal executive officer and principal financial officer concluded that, as of June 30, 2019, the end of the period covered by this quarterly report, our disclosure controls and procedures were designed to provide and were effective to provide reasonable assurance that the information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the applicable rules and forms, and that it is accumulated and communicated to our management, including our principal executive and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

(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 June 30, 2019, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

29

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, none of which are expected to have a material impact on our financial condition, results of operations, or liquidity.

We may also be involved from time to time in various governmental investigations, regulatory proceedings or judicial actions seeking penalties, injunctive relief, and/or remediation under federal, state and local environmental laws and regulations. The United States EPA has conducted such investigations and proceedings involving us, in some instances along with state environmental regulators, under various environmental laws, including RCRA, CERCLA, the Clean Water Act and the Clean Air Act. Some of these matters have resulted in fines or penalties, for which a total of $454,000 is recorded in our financial statements as of June 30, 2019.

ITEM 1A.    RISK FACTORS

No material changes have occurred to the indicated risk factors as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2018.

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

(c) Issuer Purchases of Equity Securities

We purchased the following equity securities registered by us pursuant to Section 12 of the Exchange Act during the three months ended June 30, 2019.

Period	Total Number of Shares Purchased	Average Price Paid per Share			Total Number of Shares Purchased as Part of Publicly Announced Program (1)		Maximum Dollar Value of Shares That May Yet be Purchased Under the Program (in thousands) (1)
Quarter ended June 30, 2019
April 1 - 30	749,819		$	32.03		749,819		$	290,825
May 1 - 31	1,611,047			29.81		1,611,047			242,794
June 1 - 30	801,038			26.33		801,038			221,704
	3,161,904					3,161,904

(1) On September 4, 2018, we announced that our board of directors had authorized a share purchase program of up to $750.0 million of our common stock.

ITEM 3.    DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.    MINE SAFETY DISCLOSURES

Information required to be furnished pursuant to Item 4 concerning mine safety disclosure matters, if applicable, by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K (17 CFR 229.104), is included in Exhibit 95 to this quarterly report. There are no mine safety disclosures to report for the three months ended June 30, 2019, therefore, no Exhibit 95 is required.

ITEM 5.    OTHER INFORMATION

None.

30

ITEM 6.    EXHIBITS

Reference is made to the Exhibit Index preceding the signature page hereto, which Exhibit Index is hereby incorporated into this item.

EXHIBIT INDEX

Articles of Incorporation
3.1	Amended and Restated Articles of Incorporation of Steel Dynamics, Inc., reflecting all amendments thereto through May 17, 2018, incorporated herein by reference from Exhibit 3.1e to our Form 10Q filed August 9, 2018.
3.2	Amended and Restated Bylaws of Steel Dynamics, Inc., reflecting all amendments thereto through October 17, 2018, incorporated herein by reference from Exhibit 3.2d to our Form 10Q filed November 7, 2018.
Executive Officer Certifications
31.1*	Certification of Chief 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 SarbanesOxley Act of 2002.
31.2*	Certification of Chief 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 SarbanesOxley 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 SarbanesOxley 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 SarbanesOxley Act of 2002.
Other
95**	Mine Safety Disclosures.
XBRL Documents
101.INS*	XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH*	XBRL Taxonomy Extension Schema Document
101.CAL*	XBRL Taxonomy Extension Calculation Document
101.DEF*	XBRL Taxonomy Definition Document
101.LAB*	XBRL Taxonomy Extension Label Document
101.PRE*	XBRL Taxonomy Presentation Document

* Filed concurrently herewith

** Inapplicable for purposes of this report

31

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.

August 9, 2019
		STEEL DYNAMICS, INC.
	By:	/s/ Theresa E. Wagler
		Theresa E. Wagler
		Executive Vice President and Chief Financial Officer
		(Principal Financial Officer and Principal Accounting Officer)

32

EX-31.1

EXHIBIT 31.1

CERTIFICATION PURSUANT TO SECTION 302 OF THE

SARBANES-OXLEY ACT OF 2002

I, Mark D. Millett, certify that:

1.    I have reviewed this quarterly report for the period ended June 30, 2019, 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)

August 9, 2019

EX-31.2

EXHIBIT 31.2

CERTIFICATION PURSUANT TO SECTION 302 OF THE

SARBANES-OXLEY ACT OF 2002

I, Theresa E. Wagler, certify that:

1.    I have reviewed this quarterly report for the period ended June 30, 2019, 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)

August 9, 2019

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 June 30, 2019 (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)

August 9, 2019

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

Chief 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 June 30, 2019 (the “Report”), as filed with the Securities and Exchange Commission on the date hereof, I, Theresa E. Wagler, Executive Vice President and Chief Financial Officer of Steel Dynamics, Inc., certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

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

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

/s/ Theresa E. Wagler

Theresa E. Wagler

Executive Vice President and Chief Financial Officer

(Principal Financial Officer and Principal Accounting Officer)

August 9, 2019

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

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2019	Aug. 01, 2019
Document And Entity Information Abstract
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2019
Document Transition Report	false
Entity File Number	0-21719
Entity Registrant Name	Steel Dynamics, Inc
Entity Incorporation, State or Country Code	IN
Entity Tax Identification Number	35-1929476
Entity Address, Address Line One	7575 West Jefferson Blvd
Entity Address, City or Town	Fort Wayne
Entity Address, State or Province	IN
Entity Address, Postal Zip Code	46804
City Area Code	260
Local Phone Number	969-3500
Title of 12(b) Security	Common Stock
Trading Symbol	STLD
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		219,613,147
Entity Central Index Key	0001022671
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q2
Amendment Flag	false

XML

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Current assets
Cash and equivalents	$ 972,561	$ 828,220
Short-term investments	114,154	228,783
Accounts receivable, net	1,069,061	1,040,220
Accounts receivable-related parties	3,818	3,536
Inventories	1,802,759	1,859,168
Other current assets	61,248	72,730
Total current assets	4,023,601	4,032,657
Property, plant and equipment, net	2,947,243	2,945,767
Intangible assets, net	256,302	270,328
Goodwill	526,462	429,645
Other assets	104,306	25,166
Total assets	7,857,914	7,703,563
Current liabilities
Accounts payable	516,109	536,743
Accounts payable-related parties	9,047	14,011
Income taxes payable	3,032	7,468
Accrued payroll and benefits	148,747	264,542
Accrued interest	25,509	25,526
Accrued expenses	151,161	146,613
Current maturities of long-term debt	72,131	24,234
Total current liabilities	925,736	1,019,137
Long-term debt	2,355,917	2,352,489
Deferred income taxes	457,784	435,838
Other liabilities	70,196	8,870
Total liabilities	3,809,633	3,816,334
Commitments and contingencies
Redeemable noncontrolling interests	139,930	111,240
Equity
Common stock voting, $.0025 par value; 900,000,000 shares authorized; 265,553,499 and 265,822,402 shares issued; and 219,797,547 and 225,272,174 shares outstanding, as of June 30, 2019 and December 31, 2018, respectively	645	645
Treasury stock, at cost; 45,755,952 and 40,550,228 shares, as of June 30, 2019 and December 31, 2018, respectively	(1,354,157)	(1,184,243)
Additional paid-in capital	1,167,505	1,160,048
Retained earnings	4,250,419	3,958,320
Accumulated other comprehensive income	78	301
Total Steel Dynamics, Inc. equity	4,064,490	3,935,071
Noncontrolling interests	(156,139)	(159,082)
Total equity	3,908,351	3,775,989
Total liabilities and equity	$ 7,857,914	$ 7,703,563

XML

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Jun. 30, 2019	Dec. 31, 2018
CONSOLIDATED BALANCE SHEETS
Common stock voting, par value (in dollars per share)	$ 0.0025	$ 0.0025
Common stock voting, shares authorized (in shares)	900,000,000	900,000,000
Common stock voting, shares issued (in shares)	265,553,499	265,822,402
Common stock voting, shares outstanding (in shares)	219,797,547	225,272,174
Treasury stock, shares (in shares)	45,755,952	40,550,228

XML

CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Net sales
Unrelated parties	$ 2,766,364	$ 3,083,822	$ 5,580,850	$ 5,681,134
Related parties	4,151	6,703	7,100	13,266
Total net sales	2,770,515	3,090,525	5,587,950	5,694,400
Costs of goods sold	2,349,349	2,438,443	4,733,214	4,578,902
Gross profit	421,166	652,082	854,736	1,115,498
Selling, general and administrative expenses	106,250	101,031	217,288	207,462
Profit sharing	22,871	42,335	46,548	68,997
Amortization of intangible assets	7,013	6,829	14,026	13,755
Operating income	285,032	501,887	576,874	825,284
Interest expense, net of capitalized interest	32,321	31,512	63,443	63,408
Other income, net	(4,249)	(5,035)	(10,592)	(9,498)
Income before income taxes	256,960	475,410	524,023	771,374
Income tax expense	60,214	112,838	122,450	183,327
Net income	196,746	362,572	401,573	588,047
Net (income) loss attributable to noncontrolling interests	(2,444)	(123)	(2,943)	1,953
Net income attributable to Steel Dynamics, Inc.	$ 194,302	$ 362,449	$ 398,630	$ 590,000
Basic earnings per share attributable to Steel Dynamics, Inc. stockholders	$ 0.88	$ 1.54	$ 1.79	$ 2.50
Weighted average common shares outstanding (in shares)	221,505	235,617	222,781	236,120
Diluted earnings per share attributable to Steel Dynamics, Inc. stockholders, including the effect of assumed conversions when dilutive (in dollars per share)	$ 0.87	$ 1.53	$ 1.78	$ 2.49
Weighted average common shares and share equivalents outstanding (in shares)	222,519	236,945	223,741	237,334
Dividends declared per share (in dollars per share)	$ 0.2400	$ 0.1875	$ 0.4800	$ 0.3750

XML

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Net income	$ 196,746	$ 362,572	$ 401,573	$ 588,047
Other comprehensive loss - net unrealized loss on cash flow hedging derivatives, net of income tax benefit	(52)	(105)	(223)	(105)
Comprehensive income	196,694	362,467	401,350	587,942
Comprehensive (income) loss attributable to noncontrolling interests	(2,444)	(123)	(2,943)	1,953
Comprehensive income attributable to Steel Dynamics, Inc.	$ 194,250	$ 362,344	$ 398,407	$ 589,895

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Operating activities:
Net income	$ 196,746	$ 362,572	$ 401,573	$ 588,047
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	80,911	79,120	161,085	155,255
Equity-based compensation	9,080	8,041	24,388	20,882
Deferred income taxes	11,550	11,993	23,641	21,538
Other adjustments	(564)	(145)	164	(115)
Changes in certain assets and liabilities:
Accounts receivable	70,624	(163,465)	9,562	(282,283)
Inventories	64,941	(90,312)	104,410	(171,023)
Other assets	7,292	(630)	7,593	(735)
Accounts payable	(58,484)	48,919	(55,278)	115,251
Income taxes receivable/payable	(36,428)	22,579	13,422	86,541
Accrued expenses	15,805	47,361	(147,534)	(29,390)
Net cash provided by operating activities	361,473	326,033	543,026	503,968
Investing activities:
Purchases of property, plant and equipment	(85,120)	(55,203)	(139,556)	(105,809)
Purchases of short-term investments	(49,465)	(50,000)	(99,142)	(90,000)
Proceeds from maturities of short-term investments	109,034		213,771
Acquisition of business, net of cash and restricted cash acquired		(396,409)	(93,412)	(396,409)
Other investing activities	913	657	1,277	886
Net cash used in investing activities	(24,638)	(500,955)	(117,062)	(591,332)
Financing activities:
Issuance of current and long-term debt	125,222	124,571	246,456	217,629
Repayment of current and long-term debt	(133,875)	(118,089)	(249,146)	(231,123)
Dividends paid	(53,503)	(44,268)	(95,742)	(81,065)
Purchases of treasury stock	(93,136)	(49,145)	(177,444)	(118,414)
Other financing activities	(12)	(3,144)	(5,732)	(8,324)
Net cash used in financing activities	(155,304)	(90,075)	(281,608)	(221,297)
Increase (decrease) in cash, cash equivalents, and restricted cash	181,531	(264,997)	144,356	(308,661)
Cash, cash equivalents, and restricted cash at beginning of period	797,248	991,421	834,423	1,035,085
Cash, cash equivalents, and restricted cash at end of period	978,779	726,424	978,779	726,424
Supplemental disclosure information:
Cash paid for interest	53,981	53,226	62,587	61,855
Cash paid for income taxes, net	$ 84,516	$ 79,995	$ 86,355	$ 78,950

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Description of the Business and Significant Accounting Policies

6 Months Ended

Jun. 30, 2019

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 reportable segments: steel operations, metals recycling operations, and steel fabrication operations.

Steel Operations Segment. Steel operations include the company’s Butler Flat Roll Division, Columbus Flat Roll Division, The Techs galvanizing lines, Heartland Flat Roll Division, United Steel Supply (acquired 75% equity interest March 1, 2019), Structural and Rail Division, Engineered Bar Products Division, Vulcan Threaded Products, Inc., Roanoke Bar Division, Steel of West Virginia, and Iron Dynamics, a liquid pig iron (scrap substitute) production facility that supplies solely the Butler Flat Roll Division. These operations include electric arc furnace steel mills, producing steel from ferrous scrap and scrap substitutes, utilizing continuous casting, automated rolling mills, with several downstream coating and bar processing lines. Steel operations accounted for 76% and 75% of the company’s consolidated external net sales during the three and six-month periods ended June 30, 2019 and 2018, respectively.

Metals Recycling Operations Segment. Metals recycling operations consists solely of OmniSource, LLC (OmniSource), and includes both ferrous and nonferrous processing, transportation, marketing, brokerage, and scrap management services. Metals recycling operations accounted for 12% and 14% of the company’s consolidated external net sales during the three and six-month periods ended June 30, 2019 and 2018, respectively.

Steel Fabrication Operations Segment. Steel fabrication operations include the company’s New Millennium Building Systems’ joist and deck plants located throughout the United States, and in Northern Mexico. Revenues from these plants are generated from the fabrication of trusses, girders, steel joists and steel deck used within the non-residential construction industry. Steel fabrication operations accounted for 9% and 7% of the company’s consolidated external net sales during the three-month periods ended June 30, 2019 and 2018, respectively, and 8% and 7% of the company’s consolidated external net sales during the six-month periods ended June 30, 2019 and 2018, respectively.

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

Significant Accounting Policies

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

Use of Estimates. These consolidated 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 consolidated 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 consolidated 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, 2018.

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

Cash and Equivalents, and Restricted Cash

Cash and equivalents include all highly liquid investments with a maturity of three months or less at the date of acquisition. Restricted cash is primarily funds held in escrow as required by various insurance and government organizations. The balance of cash, cash equivalents and restricted cash in the consolidated statements of cash flows includes restricted cash of $6.2 million, $5.8 million, $6.2 million, $6.0 million, $5.6 million, and $6.4 million at June 30, 2019, March 31, 2019, December 31, 2018, June 30, 2018, March 31, 2018 and December 31, 2017, respectively, which are recorded in Other Assets (noncurrent) in the company’s consolidated balance sheets.

Goodwill

The company’s goodwill consisted of the following reporting units at June 30, 2019, and December 31, 2018, (in thousands):

	June 30,		December 31,
	2019		2018
Steel Operations Segment
Columbus Flat Roll Division	$	19,682	$	19,682
The Techs		142,783		142,783
Heartland Flat Roll Division		46,143		46,143
United Steel Supply		98,512		-
Vulcan Threaded Products		7,824		7,824
Roanoke Bar Division		29,041		29,041
Metals Recycling Operations Segment – OmniSource		180,552		182,247
Steel Fabrication Operations Segment – New Millennium Building Systems		1,925		1,925
	$	526,462	$	429,645

The company acquired a 75% equity interest in United Steel Supply on March 1, 2019 (refer to Note 2 Acquisition – United Steel Supply, LLC), resulting in a preliminary purchase price allocation in which $98.5 million of goodwill has been recorded. OmniSource goodwill decreased $1.7 million from December 31, 2018 to June 30, 2019, in recognition of the 2019 tax benefit related to the normal amortization of the component of OmniSource tax-deductible goodwill in excess of book goodwill.

Recently Issued Accounting Standards

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses: which requires an entity to use a forward-looking expected loss model versus the current incurred loss model for most financial instruments, including accounts receivable. This new guidance is effective for annual and interim periods beginning after December 15, 2019, but can be early adopted. The company is currently evaluating the impact ASU 2016-13 will have in its consolidated financial statements and related disclosure.

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Acquisition - United Steel Supply

6 Months Ended

Jun. 30, 2019

Acquisition - United Steel Supply

Acquisition - United Steel Supply

Note 2. Acquisition – United Steel Supply, LLC

On March 1, 2019, the company purchased 75% of the equity interest of United Steel Supply, LLC (USS) for cash consideration of $93.4 million, subject to customary actual working capital purchase price adjustments. Additionally, the company has an option to purchase, and the sellers have the option to require the company to purchase, the remaining 25% equity interest of USS in the future. Headquartered in Austin, Texas, USS is a leading distributor of painted Galvalume^® flat roll steel used for roofing and siding applications, with distribution centers strategically located in Mississippi, Indiana, Arkansas, and Oregon. USS provides the company a new, complementary distribution channel and connects it to a rapidly growing industry segment with customers that do not traditionally purchase steel directly from a steel producer. USS’s operating results from and after March 1, 2019, are reflected in the company’s financial statements in the steel operations reporting segment.

Note 2. Acquisition – United Steel Supply, LLC (Continued)

The aggregate purchase price was preliminarily allocated to the opening balance sheet of USS as of March 1, 2019. The following initial allocation of the purchase price (in thousands) is preliminary based on the information available as of the acquisition date to estimate the fair value of assets acquired and liabilities assumed. The accounting for the acquisition has not yet been completed because the company has not finalized the working capital purchase price adjustment or valuations of the acquired assets, assumed liabilities and identifiable intangible assets, if any, including goodwill.

p
	Current assets, net of cash acquired	$	94,156
	Property, plant & equipment		7,388
	Intangible assets and goodwill		98,512
	Total assets acquired		200,056
	Liabilities assumed		77,954
	Redeemable noncontrolling interest		28,690
	Net cash consideration	$	93,412

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Leases

6 Months Ended

Jun. 30, 2019

Leases

Leases

Note 3. Leases

In February 2016, the FASB issued ASU 2016-02, Leases (ASC 842) and its subsequent corresponding updates; which established a new lease accounting model that requires lessees to recognize a right-of-use asset and related lease liability for most leases having lease terms of more than 12 months. The company adopted ASC 842 effective January 1, 2019, using the optional transition method, thereby applying the new guidance at the effective date, without retrospective application to prior periods. The company elected practical expedients permitted under the transition guidance which allowed the company to not reassess under the new standard its prior conclusions regarding lease identification and classification. The company elected to use hindsight when determining the lease term. The company also elected the short-term lease exemption, and did not recognize right-of-use assets and lease liabilities for short-term leases, those with lease commencement date terms of 12 months or less. The company recognized right-of-use assets and lease liabilities of $76.3 million, with no impact on retained earnings, in the consolidated balance sheet on January 1, 2019, and the standard did not have a significant impact on the company’s operating results or cash flows for the three and six-month periods ended June 30, 2019.

The company has operating leases relating principally to transportation and other equipment, and some real estate. The company determines if an arrangement contains a lease at inception, which generally occurs when the arrangement identifies a specific asset that the company has the right to direct the use of and obtain substantially all of the economic benefit from use of the identified asset. Certain of our lease agreements contain rent escalation clauses (including fixed and index-based escalations), and options to extend or terminate the lease. For purposes of calculating operating lease obligations under the standard, the company’s lease terms include options to extend the lease when it is reasonably certain that the company will exercise such option. The company uses its incremental borrowing rate at lease commencement to determine the present value of lease payments. The incremental borrowing rate is the rate of interest the company could borrow on a collateralized basis over a similar term with similar payments. Operating lease expense is recognized on a straight-line basis over the lease term.

Operating lease right-of-use assets and lease obligations included in the consolidated balance sheet at June 30, 2019, are as follows (in thousands):

Right of use assets under operating leases:
Other assets - noncurrent	$	77,868
Lease obligations under operating leases:
Accrued liabilities	$	17,405
Other liabilities - noncurrent		60,751
	$	78,156

Note 3. Leases (Continued)

The weighted average remaining lease term for our operating leases is 6.4 years and the weighted-average discount rate is 4.0% as of June 30, 2019. Future operating lease liabilities as of June 30, 2019, for the next five years and thereafter are as follows (in thousands):

2019 - for the remaining six months	$	10,285
2020		18,986
2021		16,086
2022		12,551
2023		9,494
Thereafter		21,809
Total undiscounted cash flows		89,211
Less imputed interest		(11,055)
Lease obligations under operating leases	$	78,156

Operating lease expense included in the consolidated statements of income was $5.1 million and $9.8 million for the three and six-month periods ended June 30, 2019, respectively. Cash paid related to operating lease obligations was $5.1 million and $9.9 million for the three and six-month periods ended June 30, 2019, respectively. Variable lease costs were not material for the three and six-month periods ended June 30, 2019. Short-term lease expense included in the consolidated statements of income was $5.4 million and $9.8 million for the three and six-month periods ended June 30, 2019, respectively. Right-of-use assets obtained in exchange for new operating lease liabilities during the three and six-month periods ended June 30, 2019 were $9.9 million.

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Earnings Per Share

6 Months Ended

Jun. 30, 2019

Earnings Per Share

Earnings Per Share

Note 4. 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 restricted stock units, deferred stock units, restricted stock, and performance awards, and are excluded from the computation in periods in which they have an anti-dilutive effect. There were no anti-dilutive common share equivalents as of or for the three and six-month periods ended June 30, 2019 and 2018.

	Three Months Ended June 30,
	2019						2018
			Weighted						Weighted
			Average						Average
	Net Income		Shares		Per Share		Net Income		Shares		Per Share
	(Numerator)		(Denominator)		Amount		(Numerator)		(Denominator)		Amount
Basic earnings per share	$	194,302		221,505	$	0.88	$	362,449		235,617	$	1.54
Dilutive common share equivalents		-		1,014				-		1,328
Diluted earnings per share	$	194,302		222,519	$	0.87	$	362,449		236,945	$	1.53

Note 4. Earnings Per Share (Continued)

	Six Months Ended June 30,
	2019						2018
			Weighted						Weighted
			Average						Average
	Net Income		Shares		Per Share		Net Income		Shares		Per Share
	(Numerator)		(Denominator)		Amount		(Numerator)		(Denominator)		Amount
Basic earnings per share	$	398,630		222,781	$	1.79	$	590,000		236,120	$	2.50
Dilutive common share equivalents		-		960				-		1,214
Diluted earnings per share	$	398,630		223,741	$	1.78	$	590,000		237,334	$	2.49

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Inventories

6 Months Ended

Jun. 30, 2019

Inventories

Inventories

Note 5. Inventories

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

	June 30,		December 31,
	2019		2018
Raw materials	$	784,415	$	810,766
Supplies		471,957		436,828
Work in progress		149,580		195,224
Finished goods		396,807		416,350
Total inventories	$	1,802,759	$	1,859,168

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Changes in Equity

6 Months Ended

Jun. 30, 2019

Changes in Equity

Changes in Equity

Note 6. Changes in Equity

The following tables provide 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 noncontrolling interests (in thousands) for the three and six-month periods ended June 30, 2019 and 2018:

	Stockholders of Steel Dynamics, Inc.
									Accumulated
					Additional				Other						Redeemable
	Common		Treasury		Paid-In		Retained		Comprehensive		Noncontrolling		Total		Noncontrolling
	Stock		Stock		Capital		Earnings		Loss		Interests		Equity		Interests
Balances at December 31, 2018	$	645	$	(1,184,243)	$	1,160,048	$	3,958,320	$	301	$	(159,082)	$	3,775,989	$	111,240
Dividends declared		-		-		-		(53,504)		-		-		(53,504)		-
Noncontrolling investors of USS		-		-		-		-		-		-		-		28,690
Share repurchases		-		(84,308)		-		-		-		-		(84,308)		-
Equity-based compensation		-		6,714		91		(110)		-		-		6,695		-
Net income		-		-		-		204,328		-		499		204,827		-
Other comprehensive loss, net of tax		-		-		-		-		(171)		-		(171)		-
Balances at March 31, 2019		645		(1,261,837)		1,160,139		4,109,034		130		(158,583)		3,849,528		139,930
Dividends declared		-		-		-		(52,751)		-		-		(52,751)		-
Share repurchases		-		(93,136)		-		-		-		-		(93,136)		-
Equity-based compensation		-		816		7,366		(166)		-		-		8,016		-
Net income		-		-		-		194,302		-		2,444		196,746		-
Other comprehensive loss, net of tax		-		-		-		-		(52)		-		(52)		-
Balances at June 30, 2019	$	645	$	(1,354,157)	$	1,167,505	$	4,250,419	$	78	$	(156,139)	$	3,908,351	$	139,930
	Stockholders of Steel Dynamics, Inc.
									Accumulated
					Additional				Other						Redeemable
	Common		Treasury		Paid-In		Retained		Comprehensive		Noncontrolling		Total		Noncontrolling
	Stock		Stock		Capital		Earnings		Loss		Interests		Equity		Interests
Balances at December 31, 2017	$	644	$	(665,297)	$	1,141,534	$	2,874,693	$	-	$	(156,506)	$	3,195,068	$	111,240
Dividends declared		-		-		-		(44,269)		-		-		(44,269)		-
Share repurchases		-		(69,269)		-		-		-		-		(69,269)		-
Equity-based compensation		-		3,866		1,337		(71)		-		-		5,132		-
Comprehensive and net income (loss)		-		-		-		227,551		-		(2,076)		225,475		-
Balances at March 31, 2018		644		(730,700)		1,142,871		3,057,904		-		(158,582)		3,312,137		111,240
Dividends declared		-		-		-		(44,080)		-		-		(44,080)		-
Noncontrolling investors, net		-		-		-		-		-		(3)		(3)		-
Share repurchases		-		(49,145)		-		-		-		-		(49,145)		-
Equity-based compensation		-		757		6,496		(110)		-		-		7,143		-
Net income		-		-		-		362,449		-		123		362,572		-
Other comprehensive loss, net of tax		-		-		-		-		(105)		-		(105)		-
Balances at June 30, 2018	$	644	$	(779,088)	$	1,149,367	$	3,376,163	$	(105)	$	(158,462)	$	3,588,519	$	111,240

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Derivative Financial Instruments

6 Months Ended

Jun. 30, 2019

Derivative Financial Instruments

Derivative Financial Instruments

Note 7. Derivative Financial Instruments

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

Commodity Futures Contracts. If the company is “long” on futures contracts, it means the company has more futures contracts purchased than futures contracts sold for the underlying commodity. If the company is “short” on a futures contract, it means the company has more futures contracts sold than futures contracts purchased for the underlying commodity. The following summarizes the company’s futures contract commitments as of June 30, 2019:

Commodity Futures	Long/Short	Metric Tons
Aluminum	Long	2,450
Aluminum	Short	4,500
Copper	Long	17,758
Copper	Short	28,123

The following summarizes the location and amounts of the fair values reported on the company’s consolidated balance sheets as of June 30, 2019, and December 31, 2018, and gains and losses related to derivatives included in the company’s statement of income for the three and six-month periods ended June 30, 2019 and 2018 (in thousands):

		Asset Derivatives				Liability Derivatives
	Balance sheet	Fair Value				Fair Value
	location	June 30, 2019		December 31, 2018		June 30, 2019		December 31, 2018
Derivative instruments designated as hedges
Commodity futures	Other current assets	$	1,479	$	2,999	$	1,473	$	1,837
Derivative instruments not designated as hedges
Commodity futures	Other current assets		3,946		1,559		4,172		2,053
Total derivative instruments		$	5,425	$	4,558	$	5,645	$	3,890

The fair value of the above derivative instruments along with required margin deposit amounts with the same counterparty under master netting arrangements totaled $4.8 million at June 30, 2019, and $4.9 million at December 31, 2018, and are reflected in other current assets in the consolidated balance sheets.

		Amount of gain (loss) recognized					Location of gain	Amount of gain (loss) recognized
	Location of gain	in income on derivatives					(loss) recognized	in income on related hedged items
	(loss) recognized	for the three months ended				Hedged items in	in income on	for the three months ended
	in income on	June 30,		June 30,		fair value hedge	related hedged	June 30,		June 30,
	derivatives	2019		2018		relationships	items	2019		2018
Derivatives in fair value
hedging relationships
Commodity futures	Costs of goods sold	$	591	$	1,540	Firm commitments	Costs of goods sold	$	1,415	$	(2,600)
						Inventory	Costs of goods sold		(294)		(816)
Derivatives not designated								$	1,121	$	(3,416)
as hedging instruments
Commodity futures	Costs of goods sold	$	5,487	$	2,969

Note 7. Derivative Financial Instruments (Continued)

		Amount of gain (loss) recognized					Location of gain	Amount of gain (loss) recognized
	Location of gain	in income on derivatives					(loss) recognized	in income on related hedged items
	(loss) recognized	for the six months ended				Hedged items in	in income on	for the six months ended
	in income on	June 30,		June 30,		fair value hedge	related hedged	June 30,		June 30,
	derivatives	2019		2018		relationships	items	2019		2018
Derivatives in fair value
hedging relationships
Commodity futures	Costs of goods sold	$	(862)	$	10,056	Firm commitments	Costs of goods sold	$	(84)	$	(3,393)
						Inventory	Costs of goods sold		427		(3,412)
Derivatives not designated								$	343	$	(6,805)
as hedging instruments
Commodity futures	Costs of goods sold	$	1,410	$	5,720

Derivatives accounted for as fair value hedges had ineffectiveness resulting in gains of $1.2 million and losses of $117,000 during the three-month periods ended June 30, 2019, and 2018, respectively; and gains of $32,000 and losses of $16,000 during the six-month periods ended June 30, 2019, and 2018, respectively. Gains excluded from hedge effectiveness testing of $1.7 million decreased cost of goods sold during the three-month period ended June 30, 2019 and losses of $1.8 million increased the cost of goods sold during the three-month period ended June 30, 2018. Losses excluded from hedge effectiveness testing of $519,000 increased cost of goods sold during the six-month period ended June 30, 2019 and gains of $3.3 million decreased the cost of goods sold during the six-month period ended June 30, 2018.

Derivatives accounted for as cash flow hedges resulted in net gains of $88,000 and net losses of $138,000 recognized in other comprehensive income for the three-month periods ended June 30, 2019, and 2018, respectively; and net gains of $147,000 and net losses of $138,000 for the six-month periods ended June 30, 2019 and 2018, respectively. Net gains of $157,000 and $440,000 were reclassified from accumulated other comprehensive income for the three and six-month periods ended June 30, 2019. At June 30, 2019, the company expects to reclassify $102,000 of net gains on derivative instruments from accumulated other comprehensive income to earnings during the next 12 months due to the settlement of futures contracts.

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Fair Value Measurements

6 Months Ended

Jun. 30, 2019

Fair Value Measurements

Fair Value Measurements

Note 8. Fair Value Measurements

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

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

● Level 2—Quoted prices for similar assets and liabilities in active markets (other than those included in Level 1) which are observable for the asset or liability, either directly or indirectly; and

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

Note 8. Fair Value Measurements (Continued)

The following table sets forth financial assets and liabilities measured at fair value on a recurring basis in the consolidated balance sheet and the respective levels to which the fair value measurements are classified within the fair value hierarchy as of June 30, 2019, and December 31, 2018 (in thousands):

			Quoted Prices		Significant
			in Active		Other		Significant
			Markets for		Observable		Unobservable
			Identical Assets		Inputs		Inputs
	Total		(Level 1)		(Level 2)		(Level 3)
June 30, 2019
Short-term investments	$	114,154	$		$	114,154	$
Commodity futures – financial assets		5,425		-		5,425		-
Commodity futures – financial liabilities		5,645		-		5,645		-
December 31, 2018
Short-term investments	$	228,783	$	-	$	228,783	$	-
Commodity futures – financial assets		4,558		-		4,558		-
Commodity futures – financial liabilities		3,890		-		3,890		-

The carrying amounts of financial instruments including cash and equivalents approximate fair value (Level 1). The fair values of short-term investments and the 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 (Level 2). The fair value of long-term debt, including current maturities, as determined by quoted market prices (Level 2), was approximately $2.5 billion and $2.4 billion at June 30, 2019 and December 31, 2018, respectively (with a corresponding carrying amount in the consolidated balance sheet of $2.5 billion at June 30, 2019 and $2.4 billion at December 31, 2018).

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2019

Commitments and Contingencies

Commitments and Contingencies

Note 9. 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.

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Segment Information

6 Months Ended

Jun. 30, 2019

Segment Information

Segment Information

Note 10. Segment Information

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

Note 10. Segment Information (Continued)

The company’s segment results, including disaggregated revenue by segment to external, external non-United States, and other segment customers, are as follows (in thousands):

			Metals		Steel
For the three months ended	Steel		Recycling		Fabrication
June 30, 2019	Operations		Operations		Operations		Other			Eliminations			Consolidated
Net sales - disaggregated revenue
External	$	2,040,756	$	262,826	$	240,439	$	99,641		$	-		$	2,643,662
External Non-U.S.		65,595		60,273		985		-			-			126,853
Other segments		81,834		333,667		-		121			(415,622)			-
		2,188,185		656,766		241,424		99,762			(415,622)			2,770,515
Operating income (loss)		291,411		7,619		30,664		(49,153)	(1)		4,491	(2)		285,032
Income (loss) before income taxes		274,155		6,500		29,466		(57,438)			4,277			256,960
Depreciation and amortization		63,150		11,525		2,974		3,262			-			80,911
Capital expenditures		43,575		12,173		3,019		26,353			-			85,120
As of June 30, 2019
Assets	$	5,217,650	$	987,702	$	418,023	$	1,307,873	(3)	$	(73,334)	(4)	$	7,857,914

Footnotes related to the three months ended June 30, 2019, segment results (in millions):
(1)	Corporate SG&A	$	(18.0)	(2)	Gross profit increase from intra-company sales	$	4.5
	Company-wide equity-based compensation		(8.4)
	Profit sharing		(21.3)
	Other, net		(1.5)
		$	(49.2)
(3)	Cash and equivalents	$	916.5	(4)	Elimination of intra-company receivables	$	(57.2)
	Short-term investments		109.2		Elimination of intra-company debt		(8.3)
	Accounts receivable		6.0		Other		(7.8)
	Inventories		35.1			$	(73.3)
	Property, plant and equipment, net		176.5
	Intra-company debt		8.3
	Other		56.3
		$	1,307.9

			Metals		Steel
For the three months ended	Steel		Recycling		Fabrication
June 30, 2018	Operations		Operations		Operations		Other			Eliminations			Consolidated
Net sales - disaggregated revenue
External	$	2,127,545	$	347,784	$	217,438	$	122,956		$	-		$	2,815,723
External Non-U.S.		197,882		76,920		-		-			-			274,802
Other segments		110,261		459,391		458		124			(570,234)			-
		2,435,688		884,095		217,896		123,080			(570,234)			3,090,525
Operating income (loss)		533,494		22,638		14,144		(63,618)	(1)		(4,771)	(2)		501,887
Income (loss) before income taxes		516,399		20,965		12,640		(69,828)			(4,766)			475,410
Depreciation and amortization		61,769		11,553		2,946		2,852			-			79,120
Capital expenditures		42,008		8,947		2,054		2,194			-			55,203

Note 10. Segment Information (Continued)

Footnotes related to the three months ended June 30, 2018, segment results (in millions):
(1)	Corporate SG&A	$	(14.5)	(2)	Gross profit decrease from intra-company sales	$	(4.8)
	Company-wide equity-based compensation		(8.5)
	Profit sharing		(40.6)
		$	(63.6)

			Metals		Steel
For the six months ended	Steel		Recycling		Fabrication
June 30, 2019	Operations		Operations		Operations		Other			Eliminations			Consolidated
Net sales - disaggregated revenue
External	$	4,085,247	$	548,551	$	468,868	$	212,889		$	-		$	5,315,555
External Non-U.S.		145,674		125,685		1,036		-			-			272,395
Other segments		157,429		719,575		189		369			(877,562)			-
		4,388,350		1,393,811		470,093		213,258			(877,562)			5,587,950
Operating income (loss)		600,489		24,581		51,287		(106,073)	(1)		6,590	(2)		576,874
Income (loss) before income taxes		567,174		22,005		48,817		(120,134)			6,161			524,023
Depreciation and amortization		125,662		22,964		5,941		6,518			-			161,085
Capital expenditures		87,251		18,815		5,012		28,478			-			139,556

Footnotes related to the six months ended June 30, 2019, segment results (in millions):
(1)	Corporate SG&A	$	(40.6)	(2)	Gross profit increase from intra-company sales	$	6.6
	Company-wide equity-based compensation		(17.4)
	Profit sharing		(44.3)
	Other, net		(3.8)
		$	(106.1)

			Metals		Steel
For the six months ended	Steel		Recycling		Fabrication
June 30, 2018	Operations		Operations		Operations		Other			Eliminations			Consolidated
Net sales - disaggregated revenue
External	$	3,959,848	$	677,656	$	418,875	$	215,427		$	-		$	5,271,806
External Non-U.S.		287,368		135,170		56		-			-			422,594
Other segments		170,246		824,035		668		271			(995,220)			-
		4,417,462		1,636,861		419,599		215,698			(995,220)			5,694,400
Operating income (loss)		868,056		47,353		33,935		(119,024)	(1)		(5,036)	(2)		825,284
Income (loss) before income taxes		832,204		43,970		31,097		(130,861)			(5,036)			771,374
Depreciation and amortization		120,910		23,111		5,844		5,390			-			155,255
Capital expenditures		80,410		15,893		4,131		5,375			-			105,809

Footnotes related to the six months ended June 30, 2018, segment results (in millions):
(1)	Corporate SG&A	$	(30.2)	(2)	Gross profit decrease from intra-company sales	$	(5.0)
	Company-wide equity-based compensation		(17.0)
	Profit sharing		(66.2)
	Other, net		(5.6)
		$	(119.0)

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Condensed Consolidating Information

6 Months Ended

Jun. 30, 2019

Condensed Consolidating Information Disclosure Abstract

Condensed Consolidating Information

Note 11. Condensed Consolidating Information

Certain 100% owned subsidiaries of SDI have fully and unconditionally guaranteed jointly and severally all of the indebtedness relating to the issuance of the company’s senior unsecured notes due 2021, 2023, 2024, 2025 and 2026. 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.

Condensed Consolidating Balance Sheets (in thousands)
					Combined		Consolidating		Total
As of June 30, 2019	Parent		Guarantors		Non-Guarantors		Adjustments		Consolidated
Cash and equivalents	$	914,541	$	50,670	$	7,350	$	-	$	972,561
Short-term investments		109,154		5,000		-		-		114,154
Accounts receivable, net		324,548		1,696,820		70,968		(1,019,457)		1,072,879
Inventories		748,921		977,754		87,342		(11,258)		1,802,759
Other current assets		46,197		18,698		3,754		(7,401)		61,248
Total current assets		2,143,361		2,748,942		169,414		(1,038,116)		4,023,601
Property, plant and equipment, net		883,970		1,902,632		160,641		-		2,947,243
Intangible assets, net		-		256,302		-		-		256,302
Goodwill		-		427,950		98,512		-		526,462
Other assets, including investments in subs		2,838,285		65,100		6,800		(2,805,879)		104,306
Total assets	$	5,865,616	$	5,400,926	$	435,367	$	(3,843,995)	$	7,857,914
Accounts payable	$	174,596	$	331,110	$	88,182	$	(68,732)	$	525,156
Accrued expenses		180,887		296,932		20,068		(169,438)		328,449
Current maturities of long-term debt		826		1,165		93,176		(23,036)		72,131
Total current liabilities		356,309		629,207		201,426		(261,206)		925,736
Long-term debt		2,329,916		-		170,842		(144,841)		2,355,917
Other liabilities		(885,161)		1,244,276		33,352		135,513		527,980
Total liabilities		1,801,064		1,873,483		405,620		(270,534)		3,809,633
Redeemable noncontrolling interests		-		-		139,930		-		139,930
Common stock		645		1,727,859		15,016		(1,742,875)		645
Treasury stock		(1,354,157)		-		-		-		(1,354,157)
Additional paid-in-capital		1,167,505		683,048		787,572		(1,470,620)		1,167,505
Retained earnings (deficit)		4,250,419		1,116,598		(756,632)		(359,966)		4,250,419
Accumulated other comprehensive loss		140		(62)		-		-		78
Total Steel Dynamics, Inc. equity		4,064,552		3,527,443		45,956		(3,573,461)		4,064,490
Noncontrolling interests		-		-		(156,139)		-		(156,139)
Total equity		4,064,552		3,527,443		(110,183)		(3,573,461)		3,908,351
Total liabilities and equity	$	5,865,616	$	5,400,926	$	435,367	$	(3,843,995)	$	7,857,914

Note 11. Condensed Consolidating Information (Continued)

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

Condensed Consolidating Statements of Operations (in thousands)
For the three months ended,					Combined		Consolidating		Total
June 30, 2019	Parent		Guarantors		Non-Guarantors		Adjustments		Consolidated
Net sales	$	1,097,010	$	3,016,389	$	233,907	$	(1,576,791)	$	2,770,515
Costs of goods sold		908,232		2,772,874		214,487		(1,546,244)		2,349,349
Gross profit		188,778		243,515		19,420		(30,547)		421,166
Selling, general and administrative		61,028		72,576		8,134		(5,604)		136,134
Operating income		127,750		170,939		11,286		(24,943)		285,032
Interest expense, net of capitalized interest		19,448		11,805		3,623		(2,555)		32,321
Other income, net		(4,958)		(1,795)		(265)		2,769		(4,249)
Income before income taxes and
equity in net income of subsidiaries		113,260		160,929		7,928		(25,157)		256,960
Income taxes		27,033		38,885		264		(5,968)		60,214
		86,227		122,044		7,664		(19,189)		196,746
Equity in net income of subsidiaries		108,075		-		-		(108,075)		-
Net income attributable to noncontrolling interests		-		-		(2,444)		-		(2,444)
Net income attributable to Steel Dynamics, Inc.	$	194,302	$	122,044	$	5,220	$	(127,264)	$	194,302

Note 11. Condensed Consolidating Information (Continued)

For the three months ended,					Combined		Consolidating		Total
June 30, 2018	Parent		Guarantors		Non-Guarantors		Adjustments		Consolidated
Net sales	$	1,294,096	$	3,405,216	$	156,308	$	(1,765,095)	$	3,090,525
Costs of goods sold		970,636		3,038,284		153,104		(1,723,581)		2,438,443
Gross profit		323,460		366,932		3,204		(41,514)		652,082
Selling, general and administrative		77,088		75,923		2,400		(5,216)		150,195
Operating income (loss)		246,372		291,009		804		(36,298)		501,887
Interest expense, net of capitalized interest		19,386		11,593		3,089		(2,556)		31,512
Other income, net		(5,975)		(1,595)		(13)		2,548		(5,035)
Income (loss) before income taxes and
equity in net income of subsidiaries		232,961		281,011		(2,272)		(36,290)		475,410
Income taxes (benefit)		51,738		69,910		(101)		(8,709)		112,838
		181,223		211,101		(2,171)		(27,581)		362,572
Equity in net income of subsidiaries		181,226		-		-		(181,226)		-
Net income attributable to noncontrolling interests		-		-		(123)		-		(123)
Net income (loss) attributable to Steel Dynamics, Inc.	$	362,449	$	211,101	$	(2,294)	$	(208,807)	$	362,449

For the six months ended,					Combined		Consolidating		Total
June 30, 2019	Parent		Guarantors		Non-Guarantors		Adjustments		Consolidated
Net sales	$	2,221,745	$	6,126,618	$	405,790	$	(3,166,203)	$	5,587,950
Costs of goods sold		1,814,227		5,638,863		379,947		(3,099,823)		4,733,214
Gross profit		407,518		487,755		25,843		(66,380)		854,736
Selling, general and administrative		130,034		147,159		12,064		(11,395)		277,862
Operating income		277,484		340,596		13,779		(54,985)		576,874
Interest expense, net of capitalized interest		38,102		23,571		6,837		(5,067)		63,443
Other income, net		(12,358)		(3,172)		(557)		5,495		(10,592)
Income before income taxes and
equity in net income of subsidiaries		251,740		320,197		7,499		(55,413)		524,023
Income taxes		57,797		77,419		367		(13,133)		122,450
		193,943		242,778		7,132		(42,280)		401,573
Equity in net income of subsidiaries		204,687		-		-		(204,687)		-
Net income attributable to noncontrolling interests		-		-		(2,943)		-		(2,943)
Net income attributable to Steel Dynamics, Inc.	$	398,630	$	242,778	$	4,189	$	(246,967)	$	398,630

For the six months ended,					Combined		Consolidating		Total
June 30, 2018	Parent		Guarantors		Non-Guarantors		Adjustments		Consolidated
Net sales	$	2,330,770	$	6,263,935	$	273,305	$	(3,173,610)	$	5,694,400
Costs of goods sold		1,789,781		5,620,035		271,602		(3,102,516)		4,578,902
Gross profit		540,989		643,900		1,703		(71,094)		1,115,498
Selling, general and administrative		140,015		155,295		5,576		(10,672)		290,214
Operating income (loss)		400,974		488,605		(3,873)		(60,422)		825,284
Interest expense, net of capitalized interest		38,009		24,304		6,355		(5,260)		63,408
Other income, net		(11,178)		(3,320)		(259)		5,259		(9,498)
Income (loss) before income taxes and
equity in net income of subsidiaries		374,143		467,621		(9,969)		(60,421)		771,374
Income taxes		81,484		116,328		110		(14,595)		183,327
		292,659		351,293		(10,079)		(45,826)		588,047
Equity in net income of subsidiaries		297,341		-		-		(297,341)		-
Net loss attributable to noncontrolling interests		-		-		1,953		-		1,953
Net income (loss) attributable to Steel Dynamics, Inc.	$	590,000	$	351,293	$	(8,126)	$	(343,167)	$	590,000

Note 11. Condensed Consolidating Information (Continued

Condensed Consolidating Statements of Cash Flows (in thousands)
For the six months ended,					Combined		Consolidating		Total
June 30, 2019	Parent		Guarantors		Non-Guarantors		Adjustments		Consolidated
Net cash provided by operating activities	$	144,979	$	397,633	$	2,850	$	(2,436)	$	543,026
Net cash used in investing activities		(66,379)		(44,890)		(2,761)		(3,032)		(117,062)
Net cash provided by (used in) financing activities		26,178		(315,537)		2,283		5,468		(281,608)
Increase in cash, cash equivalents and
restricted cash		104,778		37,206		2,372		-		144,356
Cash, cash equivalents, and restricted cash
at beginning of period		809,763		14,368		10,292		-		834,423
Cash, cash equivalents, and restricted cash
at end of period	$	914,541	$	51,574	$	12,664	$	-	$	978,779

For the six months ended,					Combined		Consolidating		Total
June 30, 2018	Parent		Guarantors		Non-Guarantors		Adjustments		Consolidated
Net cash provided by operating activities	$	190,271	$	300,720	$	190	$	12,787	$	503,968
Net cash used in investing activities		(528,618)		(59,728)		(4,901)		1,915		(591,332)
Net cash provided by (used in) financing activities		45,037		(255,401)		3,769		(14,702)		(221,297)
Decrease in cash, cash equivalents and		(293,310)		(14,409)		(942)		-		(308,661)
restricted cash
Cash, cash equivalents, and restricted cash		1,002,230		20,748		12,107		-		1,035,085
at beginning of period
Cash, cash equivalents, and restricted cash
at end of period	$	708,920	$	6,339	$	11,165	$	-	$	726,424

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Description of the Business and Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2019

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/controlled subsidiaries, after elimination of intercompany accounts and transactions. Noncontrolling interests represent the noncontrolling owner’s proportionate share in the equity, income, or losses of the company’s majority-owned/controlled consolidated subsidiaries.

Use of Estimates

Use of Estimates. These consolidated 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 consolidated 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 consolidated 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, 2018.

Cash and Equivalents And Restricted Cash

Cash and Equivalents, and Restricted Cash

Cash and equivalents include all highly liquid investments with a maturity of three months or less at the date of acquisition. Restricted cash is primarily funds held in escrow as required by various insurance and government organizations. The balance of cash, cash equivalents and restricted cash in the consolidated statements of cash flows includes restricted cash of $6.2 million, $5.8 million, $6.2 million, $6.0 million, $5.6 million, and $6.4 million at June 30, 2019, March 31, 2019, December 31, 2018, June 30, 2018, March 31, 2018 and December 31, 2017, respectively, which are recorded in Other Assets (noncurrent) in the company’s consolidated balance sheets.

Goodwill

Goodwill

The company’s goodwill consisted of the following reporting units at June 30, 2019, and December 31, 2018, (in thousands):

	June 30,		December 31,
	2019		2018
Steel Operations Segment
Columbus Flat Roll Division	$	19,682	$	19,682
The Techs		142,783		142,783
Heartland Flat Roll Division		46,143		46,143
United Steel Supply		98,512		-
Vulcan Threaded Products		7,824		7,824
Roanoke Bar Division		29,041		29,041
Metals Recycling Operations Segment – OmniSource		180,552		182,247
Steel Fabrication Operations Segment – New Millennium Building Systems		1,925		1,925
	$	526,462	$	429,645

The company acquired a 75% equity interest in United Steel Supply on March 1, 2019 (refer to Note 2 Acquisition – United Steel Supply, LLC), resulting in a preliminary purchase price allocation in which $98.5 million of goodwill has been recorded. OmniSource goodwill decreased $1.7 million from December 31, 2018 to June 30, 2019, in recognition of the 2019 tax benefit related to the normal amortization of the component of OmniSource tax-deductible goodwill in excess of book goodwill.

Recently Issued Accounting Standards

Recently Issued Accounting Standards

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses: which requires an entity to use a forward-looking expected loss model versus the current incurred loss model for most financial instruments, including accounts receivable. This new guidance is effective for annual and interim periods beginning after December 15, 2019, but can be early adopted. The company is currently evaluating the impact ASU 2016-13 will have in its consolidated financial statements and related disclosure.

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Description of the Business and Significant Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2019

Description of the Business and Significant Accounting Policies

Schedule of Goodwill

The company’s goodwill consisted of the following reporting units at June 30, 2019, and December 31, 2018, (in thousands):

	June 30,		December 31,
	2019		2018
Steel Operations Segment
Columbus Flat Roll Division	$	19,682	$	19,682
The Techs		142,783		142,783
Heartland Flat Roll Division		46,143		46,143
United Steel Supply		98,512		-
Vulcan Threaded Products		7,824		7,824
Roanoke Bar Division		29,041		29,041
Metals Recycling Operations Segment – OmniSource		180,552		182,247
Steel Fabrication Operations Segment – New Millennium Building Systems		1,925		1,925
	$	526,462	$	429,645

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Acquisition - United Steel Supply (Tables)

6 Months Ended

Jun. 30, 2019

Acquisition - United Steel Supply

Schedule of Assets Acquired and Liabilities Assumed

The aggregate purchase price was preliminarily allocated to the opening balance sheet of USS as of March 1, 2019. The following initial allocation of the purchase price (in thousands) is preliminary based on the information available as of the acquisition date to estimate the fair value of assets acquired and liabilities assumed. The accounting for the acquisition has not yet been completed because the company has not finalized the working capital purchase price adjustment or valuations of the acquired assets, assumed liabilities and identifiable intangible assets, if any, including goodwill.

p
	Current assets, net of cash acquired	$	94,156
	Property, plant & equipment		7,388
	Intangible assets and goodwill		98,512
	Total assets acquired		200,056
	Liabilities assumed		77,954
	Redeemable noncontrolling interest		28,690
	Net cash consideration	$	93,412

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Leases (Tables)

6 Months Ended

Jun. 30, 2019

Leases

Schedule of operating lease right-of-use assets and lease obligations

Operating lease right-of-use assets and lease obligations included in the consolidated balance sheet at June 30, 2019, are as follows (in thousands):

Right of use assets under operating leases:
Other assets - noncurrent	$	77,868
Lease obligations under operating leases:
Accrued liabilities	$	17,405
Other liabilities - noncurrent		60,751
	$	78,156

Schedule of future operating lease liabilities

2019 - for the remaining six months	$	10,285
2020		18,986
2021		16,086
2022		12,551
2023		9,494
Thereafter		21,809
Total undiscounted cash flows		89,211
Less imputed interest		(11,055)
Lease obligations under operating leases	$	78,156

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Earnings Per Share (Tables)

6 Months Ended

Jun. 30, 2019

Earnings Per Share

Reconciliation of Basic and Diluted Earnings Per Share

	Three Months Ended June 30,
	2019						2018
			Weighted						Weighted
			Average						Average
	Net Income		Shares		Per Share		Net Income		Shares		Per Share
	(Numerator)		(Denominator)		Amount		(Numerator)		(Denominator)		Amount
Basic earnings per share	$	194,302		221,505	$	0.88	$	362,449		235,617	$	1.54
Dilutive common share equivalents		-		1,014				-		1,328
Diluted earnings per share	$	194,302		222,519	$	0.87	$	362,449		236,945	$	1.53

Note 4. Earnings Per Share (Continued)

	Six Months Ended June 30,
	2019						2018
			Weighted						Weighted
			Average						Average
	Net Income		Shares		Per Share		Net Income		Shares		Per Share
	(Numerator)		(Denominator)		Amount		(Numerator)		(Denominator)		Amount
Basic earnings per share	$	398,630		222,781	$	1.79	$	590,000		236,120	$	2.50
Dilutive common share equivalents		-		960				-		1,214
Diluted earnings per share	$	398,630		223,741	$	1.78	$	590,000		237,334	$	2.49

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Inventories (Tables)

6 Months Ended

Jun. 30, 2019

Inventories

Schedule of Inventories

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

	June 30,		December 31,
	2019		2018
Raw materials	$	784,415	$	810,766
Supplies		471,957		436,828
Work in progress		149,580		195,224
Finished goods		396,807		416,350
Total inventories	$	1,802,759	$	1,859,168

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Changes in Equity (Tables)

6 Months Ended

Jun. 30, 2019

Changes in Equity

Schedule of stockholders' equity

The following tables provide 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 noncontrolling interests (in thousands) for the three and six-month periods ended June 30, 2019 and 2018:

	Stockholders of Steel Dynamics, Inc.
									Accumulated
					Additional				Other						Redeemable
	Common		Treasury		Paid-In		Retained		Comprehensive		Noncontrolling		Total		Noncontrolling
	Stock		Stock		Capital		Earnings		Loss		Interests		Equity		Interests
Balances at December 31, 2018	$	645	$	(1,184,243)	$	1,160,048	$	3,958,320	$	301	$	(159,082)	$	3,775,989	$	111,240
Dividends declared		-		-		-		(53,504)		-		-		(53,504)		-
Noncontrolling investors of USS		-		-		-		-		-		-		-		28,690
Share repurchases		-		(84,308)		-		-		-		-		(84,308)		-
Equity-based compensation		-		6,714		91		(110)		-		-		6,695		-
Net income		-		-		-		204,328		-		499		204,827		-
Other comprehensive loss, net of tax		-		-		-		-		(171)		-		(171)		-
Balances at March 31, 2019		645		(1,261,837)		1,160,139		4,109,034		130		(158,583)		3,849,528		139,930
Dividends declared		-		-		-		(52,751)		-		-		(52,751)		-
Share repurchases		-		(93,136)		-		-		-		-		(93,136)		-
Equity-based compensation		-		816		7,366		(166)		-		-		8,016		-
Net income		-		-		-		194,302		-		2,444		196,746		-
Other comprehensive loss, net of tax		-		-		-		-		(52)		-		(52)		-
Balances at June 30, 2019	$	645	$	(1,354,157)	$	1,167,505	$	4,250,419	$	78	$	(156,139)	$	3,908,351	$	139,930
	Stockholders of Steel Dynamics, Inc.
									Accumulated
					Additional				Other						Redeemable
	Common		Treasury		Paid-In		Retained		Comprehensive		Noncontrolling		Total		Noncontrolling
	Stock		Stock		Capital		Earnings		Loss		Interests		Equity		Interests
Balances at December 31, 2017	$	644	$	(665,297)	$	1,141,534	$	2,874,693	$	-	$	(156,506)	$	3,195,068	$	111,240
Dividends declared		-		-		-		(44,269)		-		-		(44,269)		-
Share repurchases		-		(69,269)		-		-		-		-		(69,269)		-
Equity-based compensation		-		3,866		1,337		(71)		-		-		5,132		-
Comprehensive and net income (loss)		-		-		-		227,551		-		(2,076)		225,475		-
Balances at March 31, 2018		644		(730,700)		1,142,871		3,057,904		-		(158,582)		3,312,137		111,240
Dividends declared		-		-		-		(44,080)		-		-		(44,080)		-
Noncontrolling investors, net		-		-		-		-		-		(3)		(3)		-
Share repurchases		-		(49,145)		-		-		-		-		(49,145)		-
Equity-based compensation		-		757		6,496		(110)		-		-		7,143		-
Net income		-		-		-		362,449		-		123		362,572		-
Other comprehensive loss, net of tax		-		-		-		-		(105)		-		(105)		-
Balances at June 30, 2018	$	644	$	(779,088)	$	1,149,367	$	3,376,163	$	(105)	$	(158,462)	$	3,588,519	$	111,240

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Derivative Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2019

Derivative Financial Instruments

Schedule of Notional Amounts of Outstanding Derivative Positions

Commodity Futures	Long/Short	Metric Tons
Aluminum	Long	2,450
Aluminum	Short	4,500
Copper	Long	17,758
Copper	Short	28,123

Schedule of Derivative Instruments Statements of Financial Performance and Financial Position

The following summarizes the location and amounts of the fair values reported on the company’s consolidated balance sheets as of June 30, 2019, and December 31, 2018, and gains and losses related to derivatives included in the company’s statement of income for the three and six-month periods ended June 30, 2019 and 2018 (in thousands):

		Asset Derivatives				Liability Derivatives
	Balance sheet	Fair Value				Fair Value
	location	June 30, 2019		December 31, 2018		June 30, 2019		December 31, 2018
Derivative instruments designated as hedges
Commodity futures	Other current assets	$	1,479	$	2,999	$	1,473	$	1,837
Derivative instruments not designated as hedges
Commodity futures	Other current assets		3,946		1,559		4,172		2,053
Total derivative instruments		$	5,425	$	4,558	$	5,645	$	3,890

The fair value of the above derivative instruments along with required margin deposit amounts with the same counterparty under master netting arrangements totaled $4.8 million at June 30, 2019, and $4.9 million at December 31, 2018, and are reflected in other current assets in the consolidated balance sheets.

		Amount of gain (loss) recognized					Location of gain	Amount of gain (loss) recognized
	Location of gain	in income on derivatives					(loss) recognized	in income on related hedged items
	(loss) recognized	for the three months ended				Hedged items in	in income on	for the three months ended
	in income on	June 30,		June 30,		fair value hedge	related hedged	June 30,		June 30,
	derivatives	2019		2018		relationships	items	2019		2018
Derivatives in fair value
hedging relationships
Commodity futures	Costs of goods sold	$	591	$	1,540	Firm commitments	Costs of goods sold	$	1,415	$	(2,600)
						Inventory	Costs of goods sold		(294)		(816)
Derivatives not designated								$	1,121	$	(3,416)
as hedging instruments
Commodity futures	Costs of goods sold	$	5,487	$	2,969

Note 7. Derivative Financial Instruments (Continued)

		Amount of gain (loss) recognized					Location of gain	Amount of gain (loss) recognized
	Location of gain	in income on derivatives					(loss) recognized	in income on related hedged items
	(loss) recognized	for the six months ended				Hedged items in	in income on	for the six months ended
	in income on	June 30,		June 30,		fair value hedge	related hedged	June 30,		June 30,
	derivatives	2019		2018		relationships	items	2019		2018
Derivatives in fair value
hedging relationships
Commodity futures	Costs of goods sold	$	(862)	$	10,056	Firm commitments	Costs of goods sold	$	(84)	$	(3,393)
						Inventory	Costs of goods sold		427		(3,412)
Derivatives not designated								$	343	$	(6,805)
as hedging instruments
Commodity futures	Costs of goods sold	$	1,410	$	5,720

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Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2019

Fair Value Measurements

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

Note 8. Fair Value Measurements (Continued)

The following table sets forth financial assets and liabilities measured at fair value on a recurring basis in the consolidated balance sheet and the respective levels to which the fair value measurements are classified within the fair value hierarchy as of June 30, 2019, and December 31, 2018 (in thousands):

			Quoted Prices		Significant
			in Active		Other		Significant
			Markets for		Observable		Unobservable
			Identical Assets		Inputs		Inputs
	Total		(Level 1)		(Level 2)		(Level 3)
June 30, 2019
Short-term investments	$	114,154	$		$	114,154	$
Commodity futures – financial assets		5,425		-		5,425		-
Commodity futures – financial liabilities		5,645		-		5,645		-
December 31, 2018
Short-term investments	$	228,783	$	-	$	228,783	$	-
Commodity futures – financial assets		4,558		-		4,558		-
Commodity futures – financial liabilities		3,890		-		3,890		-

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Segment Information (Tables)

6 Months Ended

Jun. 30, 2019

Segment Information

Schedule of operating segment results

The company’s segment results, including disaggregated revenue by segment to external, external non-United States, and other segment customers, are as follows (in thousands):

			Metals		Steel
For the three months ended	Steel		Recycling		Fabrication
June 30, 2019	Operations		Operations		Operations		Other			Eliminations			Consolidated
Net sales - disaggregated revenue
External	$	2,040,756	$	262,826	$	240,439	$	99,641		$	-		$	2,643,662
External Non-U.S.		65,595		60,273		985		-			-			126,853
Other segments		81,834		333,667		-		121			(415,622)			-
		2,188,185		656,766		241,424		99,762			(415,622)			2,770,515
Operating income (loss)		291,411		7,619		30,664		(49,153)	(1)		4,491	(2)		285,032
Income (loss) before income taxes		274,155		6,500		29,466		(57,438)			4,277			256,960
Depreciation and amortization		63,150		11,525		2,974		3,262			-			80,911
Capital expenditures		43,575		12,173		3,019		26,353			-			85,120
As of June 30, 2019
Assets	$	5,217,650	$	987,702	$	418,023	$	1,307,873	(3)	$	(73,334)	(4)	$	7,857,914

Footnotes related to the three months ended June 30, 2019, segment results (in millions):
(1)	Corporate SG&A	$	(18.0)	(2)	Gross profit increase from intra-company sales	$	4.5
	Company-wide equity-based compensation		(8.4)
	Profit sharing		(21.3)
	Other, net		(1.5)
		$	(49.2)
(3)	Cash and equivalents	$	916.5	(4)	Elimination of intra-company receivables	$	(57.2)
	Short-term investments		109.2		Elimination of intra-company debt		(8.3)
	Accounts receivable		6.0		Other		(7.8)
	Inventories		35.1			$	(73.3)
	Property, plant and equipment, net		176.5
	Intra-company debt		8.3
	Other		56.3
		$	1,307.9

			Metals		Steel
For the three months ended	Steel		Recycling		Fabrication
June 30, 2018	Operations		Operations		Operations		Other			Eliminations			Consolidated
Net sales - disaggregated revenue
External	$	2,127,545	$	347,784	$	217,438	$	122,956		$	-		$	2,815,723
External Non-U.S.		197,882		76,920		-		-			-			274,802
Other segments		110,261		459,391		458		124			(570,234)			-
		2,435,688		884,095		217,896		123,080			(570,234)			3,090,525
Operating income (loss)		533,494		22,638		14,144		(63,618)	(1)		(4,771)	(2)		501,887
Income (loss) before income taxes		516,399		20,965		12,640		(69,828)			(4,766)			475,410
Depreciation and amortization		61,769		11,553		2,946		2,852			-			79,120
Capital expenditures		42,008		8,947		2,054		2,194			-			55,203

Note 10. Segment Information (Continued)

Footnotes related to the three months ended June 30, 2018, segment results (in millions):
(1)	Corporate SG&A	$	(14.5)	(2)	Gross profit decrease from intra-company sales	$	(4.8)
	Company-wide equity-based compensation		(8.5)
	Profit sharing		(40.6)
		$	(63.6)

			Metals		Steel
For the six months ended	Steel		Recycling		Fabrication
June 30, 2019	Operations		Operations		Operations		Other			Eliminations			Consolidated
Net sales - disaggregated revenue
External	$	4,085,247	$	548,551	$	468,868	$	212,889		$	-		$	5,315,555
External Non-U.S.		145,674		125,685		1,036		-			-			272,395
Other segments		157,429		719,575		189		369			(877,562)			-
		4,388,350		1,393,811		470,093		213,258			(877,562)			5,587,950
Operating income (loss)		600,489		24,581		51,287		(106,073)	(1)		6,590	(2)		576,874
Income (loss) before income taxes		567,174		22,005		48,817		(120,134)			6,161			524,023
Depreciation and amortization		125,662		22,964		5,941		6,518			-			161,085
Capital expenditures		87,251		18,815		5,012		28,478			-			139,556

Footnotes related to the six months ended June 30, 2019, segment results (in millions):
(1)	Corporate SG&A	$	(40.6)	(2)	Gross profit increase from intra-company sales	$	6.6
	Company-wide equity-based compensation		(17.4)
	Profit sharing		(44.3)
	Other, net		(3.8)
		$	(106.1)

			Metals		Steel
For the six months ended	Steel		Recycling		Fabrication
June 30, 2018	Operations		Operations		Operations		Other			Eliminations			Consolidated
Net sales - disaggregated revenue
External	$	3,959,848	$	677,656	$	418,875	$	215,427		$	-		$	5,271,806
External Non-U.S.		287,368		135,170		56		-			-			422,594
Other segments		170,246		824,035		668		271			(995,220)			-
		4,417,462		1,636,861		419,599		215,698			(995,220)			5,694,400
Operating income (loss)		868,056		47,353		33,935		(119,024)	(1)		(5,036)	(2)		825,284
Income (loss) before income taxes		832,204		43,970		31,097		(130,861)			(5,036)			771,374
Depreciation and amortization		120,910		23,111		5,844		5,390			-			155,255
Capital expenditures		80,410		15,893		4,131		5,375			-			105,809

Footnotes related to the six months ended June 30, 2018, segment results (in millions):
(1)	Corporate SG&A	$	(30.2)	(2)	Gross profit decrease from intra-company sales	$	(5.0)
	Company-wide equity-based compensation		(17.0)
	Profit sharing		(66.2)
	Other, net		(5.6)
		$	(119.0)

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Condensed Consolidating Information (Tables)

6 Months Ended

Jun. 30, 2019

Condensed Consolidating Information Disclosure Abstract

Schedule of Condensed Consolidating Balance Sheets

Condensed Consolidating Balance Sheets (in thousands)
					Combined		Consolidating		Total
As of June 30, 2019	Parent		Guarantors		Non-Guarantors		Adjustments		Consolidated
Cash and equivalents	$	914,541	$	50,670	$	7,350	$	-	$	972,561
Short-term investments		109,154		5,000		-		-		114,154
Accounts receivable, net		324,548		1,696,820		70,968		(1,019,457)		1,072,879
Inventories		748,921		977,754		87,342		(11,258)		1,802,759
Other current assets		46,197		18,698		3,754		(7,401)		61,248
Total current assets		2,143,361		2,748,942		169,414		(1,038,116)		4,023,601
Property, plant and equipment, net		883,970		1,902,632		160,641		-		2,947,243
Intangible assets, net		-		256,302		-		-		256,302
Goodwill		-		427,950		98,512		-		526,462
Other assets, including investments in subs		2,838,285		65,100		6,800		(2,805,879)		104,306
Total assets	$	5,865,616	$	5,400,926	$	435,367	$	(3,843,995)	$	7,857,914
Accounts payable	$	174,596	$	331,110	$	88,182	$	(68,732)	$	525,156
Accrued expenses		180,887		296,932		20,068		(169,438)		328,449
Current maturities of long-term debt		826		1,165		93,176		(23,036)		72,131
Total current liabilities		356,309		629,207		201,426		(261,206)		925,736
Long-term debt		2,329,916		-		170,842		(144,841)		2,355,917
Other liabilities		(885,161)		1,244,276		33,352		135,513		527,980
Total liabilities		1,801,064		1,873,483		405,620		(270,534)		3,809,633
Redeemable noncontrolling interests		-		-		139,930		-		139,930
Common stock		645		1,727,859		15,016		(1,742,875)		645
Treasury stock		(1,354,157)		-		-		-		(1,354,157)
Additional paid-in-capital		1,167,505		683,048		787,572		(1,470,620)		1,167,505
Retained earnings (deficit)		4,250,419		1,116,598		(756,632)		(359,966)		4,250,419
Accumulated other comprehensive loss		140		(62)		-		-		78
Total Steel Dynamics, Inc. equity		4,064,552		3,527,443		45,956		(3,573,461)		4,064,490
Noncontrolling interests		-		-		(156,139)		-		(156,139)
Total equity		4,064,552		3,527,443		(110,183)		(3,573,461)		3,908,351
Total liabilities and equity	$	5,865,616	$	5,400,926	$	435,367	$	(3,843,995)	$	7,857,914

Note 11. Condensed Consolidating Information (Continued)

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

Schedule of Condensed Consolidating Statements of Operations

Condensed Consolidating Statements of Operations (in thousands)
For the three months ended,					Combined		Consolidating		Total
June 30, 2019	Parent		Guarantors		Non-Guarantors		Adjustments		Consolidated
Net sales	$	1,097,010	$	3,016,389	$	233,907	$	(1,576,791)	$	2,770,515
Costs of goods sold		908,232		2,772,874		214,487		(1,546,244)		2,349,349
Gross profit		188,778		243,515		19,420		(30,547)		421,166
Selling, general and administrative		61,028		72,576		8,134		(5,604)		136,134
Operating income		127,750		170,939		11,286		(24,943)		285,032
Interest expense, net of capitalized interest		19,448		11,805		3,623		(2,555)		32,321
Other income, net		(4,958)		(1,795)		(265)		2,769		(4,249)
Income before income taxes and
equity in net income of subsidiaries		113,260		160,929		7,928		(25,157)		256,960
Income taxes		27,033		38,885		264		(5,968)		60,214
		86,227		122,044		7,664		(19,189)		196,746
Equity in net income of subsidiaries		108,075		-		-		(108,075)		-
Net income attributable to noncontrolling interests		-		-		(2,444)		-		(2,444)
Net income attributable to Steel Dynamics, Inc.	$	194,302	$	122,044	$	5,220	$	(127,264)	$	194,302

Note 11. Condensed Consolidating Information (Continued)

For the three months ended,					Combined		Consolidating		Total
June 30, 2018	Parent		Guarantors		Non-Guarantors		Adjustments		Consolidated
Net sales	$	1,294,096	$	3,405,216	$	156,308	$	(1,765,095)	$	3,090,525
Costs of goods sold		970,636		3,038,284		153,104		(1,723,581)		2,438,443
Gross profit		323,460		366,932		3,204		(41,514)		652,082
Selling, general and administrative		77,088		75,923		2,400		(5,216)		150,195
Operating income (loss)		246,372		291,009		804		(36,298)		501,887
Interest expense, net of capitalized interest		19,386		11,593		3,089		(2,556)		31,512
Other income, net		(5,975)		(1,595)		(13)		2,548		(5,035)
Income (loss) before income taxes and
equity in net income of subsidiaries		232,961		281,011		(2,272)		(36,290)		475,410
Income taxes (benefit)		51,738		69,910		(101)		(8,709)		112,838
		181,223		211,101		(2,171)		(27,581)		362,572
Equity in net income of subsidiaries		181,226		-		-		(181,226)		-
Net income attributable to noncontrolling interests		-		-		(123)		-		(123)
Net income (loss) attributable to Steel Dynamics, Inc.	$	362,449	$	211,101	$	(2,294)	$	(208,807)	$	362,449

For the six months ended,					Combined		Consolidating		Total
June 30, 2019	Parent		Guarantors		Non-Guarantors		Adjustments		Consolidated
Net sales	$	2,221,745	$	6,126,618	$	405,790	$	(3,166,203)	$	5,587,950
Costs of goods sold		1,814,227		5,638,863		379,947		(3,099,823)		4,733,214
Gross profit		407,518		487,755		25,843		(66,380)		854,736
Selling, general and administrative		130,034		147,159		12,064		(11,395)		277,862
Operating income		277,484		340,596		13,779		(54,985)		576,874
Interest expense, net of capitalized interest		38,102		23,571		6,837		(5,067)		63,443
Other income, net		(12,358)		(3,172)		(557)		5,495		(10,592)
Income before income taxes and
equity in net income of subsidiaries		251,740		320,197		7,499		(55,413)		524,023
Income taxes		57,797		77,419		367		(13,133)		122,450
		193,943		242,778		7,132		(42,280)		401,573
Equity in net income of subsidiaries		204,687		-		-		(204,687)		-
Net income attributable to noncontrolling interests		-		-		(2,943)		-		(2,943)
Net income attributable to Steel Dynamics, Inc.	$	398,630	$	242,778	$	4,189	$	(246,967)	$	398,630

For the six months ended,					Combined		Consolidating		Total
June 30, 2018	Parent		Guarantors		Non-Guarantors		Adjustments		Consolidated
Net sales	$	2,330,770	$	6,263,935	$	273,305	$	(3,173,610)	$	5,694,400
Costs of goods sold		1,789,781		5,620,035		271,602		(3,102,516)		4,578,902
Gross profit		540,989		643,900		1,703		(71,094)		1,115,498
Selling, general and administrative		140,015		155,295		5,576		(10,672)		290,214
Operating income (loss)		400,974		488,605		(3,873)		(60,422)		825,284
Interest expense, net of capitalized interest		38,009		24,304		6,355		(5,260)		63,408
Other income, net		(11,178)		(3,320)		(259)		5,259		(9,498)
Income (loss) before income taxes and
equity in net income of subsidiaries		374,143		467,621		(9,969)		(60,421)		771,374
Income taxes		81,484		116,328		110		(14,595)		183,327
		292,659		351,293		(10,079)		(45,826)		588,047
Equity in net income of subsidiaries		297,341		-		-		(297,341)		-
Net loss attributable to noncontrolling interests		-		-		1,953		-		1,953
Net income (loss) attributable to Steel Dynamics, Inc.	$	590,000	$	351,293	$	(8,126)	$	(343,167)	$	590,000

Schedule of Condensed Consolidating Statements of Cash Flows

Condensed Consolidating Statements of Cash Flows (in thousands)
For the six months ended,					Combined		Consolidating		Total
June 30, 2019	Parent		Guarantors		Non-Guarantors		Adjustments		Consolidated
Net cash provided by operating activities	$	144,979	$	397,633	$	2,850	$	(2,436)	$	543,026
Net cash used in investing activities		(66,379)		(44,890)		(2,761)		(3,032)		(117,062)
Net cash provided by (used in) financing activities		26,178		(315,537)		2,283		5,468		(281,608)
Increase in cash, cash equivalents and
restricted cash		104,778		37,206		2,372		-		144,356
Cash, cash equivalents, and restricted cash
at beginning of period		809,763		14,368		10,292		-		834,423
Cash, cash equivalents, and restricted cash
at end of period	$	914,541	$	51,574	$	12,664	$	-	$	978,779

For the six months ended,					Combined		Consolidating		Total
June 30, 2018	Parent		Guarantors		Non-Guarantors		Adjustments		Consolidated
Net cash provided by operating activities	$	190,271	$	300,720	$	190	$	12,787	$	503,968
Net cash used in investing activities		(528,618)		(59,728)		(4,901)		1,915		(591,332)
Net cash provided by (used in) financing activities		45,037		(255,401)		3,769		(14,702)		(221,297)
Decrease in cash, cash equivalents and		(293,310)		(14,409)		(942)		-		(308,661)
restricted cash
Cash, cash equivalents, and restricted cash		1,002,230		20,748		12,107		-		1,035,085
at beginning of period
Cash, cash equivalents, and restricted cash
at end of period	$	708,920	$	6,339	$	11,165	$	-	$	726,424

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Description of the Business and Significant Accounting Policies (Segments) (Details) - segment	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Mar. 01, 2019
Segment Reporting Information
Number of reporting segments			3
Steel Operations
Segment Reporting Information
Percentage of external net sales	76.00%	75.00%	76.00%	75.00%
Metals Recycling Operations
Segment Reporting Information
Percentage of external net sales	12.00%	14.00%	12.00%	14.00%
Steel Fabrication Operations
Segment Reporting Information
Percentage of external net sales	9.00%	7.00%	8.00%	7.00%
United Steel Supply, LLC
Segment Reporting Information
Acquisition of interest (as a percent)					75.00%

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Description of the Business and Significant Accounting Policies (Cash and Equivalents And Restricted Cash) (Details) - USD ($) $ in Millions	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017
Cash and Cash Equivalents [Abstract]
Restricted Cash and Cash Equivalents	$ 6.2	$ 5.8	$ 6.2	$ 6.0	$ 5.6	$ 6.4
Restricted Cash and Cash Equivalents, Asset, Statement of Financial Position [Extensible List]	Other Assets, Noncurrent	Other Assets, Noncurrent	Other Assets, Noncurrent	Other Assets, Noncurrent	Other Assets, Noncurrent	Other Assets, Noncurrent

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Description of the Business and Significant Accounting Policies (Goodwill) (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2019	Mar. 01, 2019	Dec. 31, 2018
Goodwill
Goodwill	$ 526,462		$ 429,645
OmniSource
Goodwill
Goodwill decrease due to tax benefit related to the normal amortization of the component	1,700
Steel Operations | Columbus Flat Roll Division
Goodwill
Goodwill	19,682		19,682
Steel Operations | The Techs
Goodwill
Goodwill	142,783		142,783
Steel Operations | Heartland Flat Roll Division [Member]
Goodwill
Goodwill	46,143		46,143
Steel Operations | United Steel Supply, LLC
Goodwill
Goodwill	98,512	$ 98,500
Steel Operations | Vulcan Steel Products [Member]
Goodwill
Goodwill	7,824		7,824
Steel Operations | Roanoke Bar Division
Goodwill
Goodwill	29,041		29,041
Metals Recycling Operations | OmniSource
Goodwill
Goodwill	180,552		182,247
Steel Fabrication Operations | New Millennium Building Systems
Goodwill
Goodwill	$ 1,925		$ 1,925

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Acquisition - United Steel Supply (Narrative) (Details) - USD ($) $ in Thousands		3 Months Ended	6 Months Ended
	Mar. 01, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Acquisition
Purchase price paid in cash		$ 396,409	$ 93,412	$ 396,409
United Steel Supply, LLC
Acquisition
Business Acquisition, Percentage of Voting Interests Acquired	75.00%
Purchase price paid in cash	$ 93,400
Business Acquisition, Percentage of Voting Interests Available to be Acquired	25.00%

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Acquisition - United Steel Supply (Schedule of Assets Acquired and Liabilities Assumed) (Details) - United Steel Supply, LLC $ in Thousands	Mar. 01, 2019 USD ($)
Acquisition
Current assets, net of cash acquired	$ 94,156
Property, plant & equipment	7,388
Intangible assets and goodwill	98,512
Total assets acquired	200,056
Liabilities assumed	77,954
Redeemable noncontrolling interest	28,690
Net cash consideration	$ 93,412

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Leases (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2019	Jan. 01, 2019
Right of use asset	$ 77,868	$ 77,868
Lease liability	$ 78,156	$ 78,156
Option to extend operating lease		true
Option to terminate operating lease		true
Weighted average remaining lease term	6 years 4 months 24 days	6 years 4 months 24 days
Weighted average discount rate	4.00%	4.00%
Operating lease expenses	$ 5,100	$ 9,800
Short term lease expenses	5,400	9,800
Cash paid related to operating lease obligations	5,100	9,900
Right-of-use assets obtained in exchange for operating lease liabilities	$ 9,900	$ 9,900
Accounting Standards Update 2016-02 [Member] | Restatement Adjustment [Member]
Right of use asset			$ 76,300
Lease liability			$ 76,300

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Leases (Schedule of Operating lease right-of-use assets and lease obligations) (Details) $ in Thousands	Jun. 30, 2019 USD ($)
Leases
Right of use asset	$ 77,868
Right of use asset included in balance sheet	us-gaap:OtherAssetsNoncurrent
Current lease liability	$ 17,405
Current lease liability included in balance sheet	us-gaap:AccruedLiabilitiesCurrent
Non current lease liability	$ 60,751
Non current lease liability included in balance sheet	us-gaap:OtherLiabilitiesNoncurrent
Lease liability	$ 78,156

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Leases (Future operating lease liabilities) (Details) $ in Thousands	Jun. 30, 2019 USD ($)
Future operating lease liabilities
2019 - for the remaining six months	$ 10,285
2020	18,986
2021	16,086
2022	12,551
2023	9,494
Thereafter	21,809
Total undiscounted cash flows	89,211
Less imputed interest	(11,055)
Lease obligations under operating leases	$ 78,156

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Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Earnings Per Share
Antidilutive common share equivalents excluded from computation of earnings per share amount (in shares)	0	0	0	0
Net Income (Numerator)
Basic earnings per share (in dollars)	$ 194,302	$ 362,449	$ 398,630	$ 590,000
Diluted earnings per share (in dollars)	$ 194,302	$ 362,449	$ 398,630	$ 590,000
Weighted Average Shares (Denominator)
Basic earnings per share (in shares)	221,505,000	235,617,000	222,781,000	236,120,000
Dilutive common share equivalents (in shares)	1,014,000	1,328,000	960,000	1,214,000
Diluted earnings per share (in shares)	222,519,000	236,945,000	223,741,000	237,334,000
Per Share Amount
Basic (in dollars per share)	$ 0.88	$ 1.54	$ 1.79	$ 2.50
Diluted (in dollars per share)	$ 0.87	$ 1.53	$ 1.78	$ 2.49

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Inventories (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Inventories
Raw materials	$ 784,415	$ 810,766
Supplies	471,957	436,828
Work in progress	149,580	195,224
Finished goods	396,807	416,350
Total inventories	$ 1,802,759	$ 1,859,168

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Changes in Equity (Rollforward) (Details) - USD ($) $ in Thousands	3 Months Ended				6 Months Ended
	Jun. 30, 2019	Mar. 31, 2019	Jun. 30, 2018	Mar. 31, 2018	Jun. 30, 2019	Jun. 30, 2018
Balances	$ 3,849,528	$ 3,775,989	$ 3,312,137	$ 3,195,068	$ 3,775,989	$ 3,195,068
Dividends declared	(52,751)	(53,504)	(44,080)	(44,269)
Noncontrolling investors, net			(3)
Share repurchases	(93,136)	(84,308)	(49,145)	(69,269)
Equity-based compensation	8,016	6,695	7,143	5,132
Net income	196,746	204,827	362,572		401,573	588,047
Other comprehensive loss, net of tax	(52)	(171)	(105)		(223)	(105)
Comprehensive and net income (loss)	196,694		362,467	225,475	401,350	587,942
Balances	3,908,351	3,849,528	3,588,519	3,312,137	3,908,351	3,588,519
Common Stock
Balances	645	645	644	644	645	644
Balances	645	645	644	644	645	644
Treasury Stock
Balances	(1,261,837)	(1,184,243)	(730,700)	(665,297)	(1,184,243)	(665,297)
Share repurchases	(93,136)	(84,308)	(49,145)	(69,269)
Equity-based compensation	816	6,714	757	3,866
Balances	(1,354,157)	(1,261,837)	(779,088)	(730,700)	(1,354,157)	(779,088)
Additional Paid-In Capital
Balances	1,160,139	1,160,048	1,142,871	1,141,534	1,160,048	1,141,534
Equity-based compensation	7,366	91	6,496	1,337
Balances	1,167,505	1,160,139	1,149,367	1,142,871	1,167,505	1,149,367
Retained Earnings
Balances	4,109,034	3,958,320	3,057,904	2,874,693	3,958,320	2,874,693
Dividends declared	(52,751)	(53,504)	(44,080)	(44,269)
Equity-based compensation	(166)	(110)	(110)	(71)
Net income	194,302	204,328	362,449
Comprehensive and net income (loss)				227,551
Balances	4,250,419	4,109,034	3,376,163	3,057,904	4,250,419	3,376,163
AOCI Attributable to Parent [Member]
Balances	130	301			301
Other comprehensive loss, net of tax	(52)	(171)	(105)
Balances	78	130	(105)		78	(105)
Noncontrolling Interests
Balances	(158,583)	(159,082)	(158,582)	(156,506)	(159,082)	(156,506)
Noncontrolling investors, net			(3)
Net income	2,444	499	123
Comprehensive and net income (loss)				(2,076)
Balances	(156,139)	(158,583)	(158,462)	(158,582)	(156,139)	(158,462)
Redeemable Noncontrolling Interest
Balances	139,930	111,240	111,240	111,240	111,240	111,240
Noncontrolling investors of USS		(28,690)
Balances	$ 139,930	$ 139,930	$ 111,240	$ 111,240	$ 139,930	$ 111,240

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Derivative Financial Instruments (Narrative) (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018
Gains or losses on derivative instruments, statement of income
Ineffectiveness - amount of gain (loss) recognized in income on related hedged items	$ 1,200,000	$ (117,000)	$ 32,000	$ (16,000)
Gain (loss) excluded from hedge effectiveness testing	1,700,000	(1,800,000)	(519,000)	3,300,000
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, before Tax	88,000	$ (138,000)	147,000	$ (138,000)
Net gains reclassified	157,000		440,000
Price Risk Cash Flow Hedge Unrealized Gain (Loss) to be Reclassified During Next 12 Months	(102,000)		$ (102,000)
Period Within Which The Company Expects To Reclassify Net Gains On Derivative Instruments From A O C I to Earnings			12 months
Futures | Commodity contract | Other current assets
Commodity contract commitments
Fair value of derivatives including required margin deposits	$ 4,800,000		$ 4,800,000		$ 4,900,000

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Derivative Financial Instruments (Schedule of Notional Amounts of Outstanding Derivative Positions) (Details) - Futures	6 Months Ended
	Jun. 30, 2019 T
Aluminum | Long
Derivative [Line Items]
Commodity contract (in MT/Lbs)	2,450
Aluminum | Short
Derivative [Line Items]
Commodity contract (in MT/Lbs)	4,500
Copper | Long
Derivative [Line Items]
Commodity contract (in MT/Lbs)	17,758
Copper | Short
Derivative [Line Items]
Commodity contract (in MT/Lbs)	28,123

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Derivative Financial Instruments (Schedule of Derivatives Instruments Statements of Financial Performance and Financial Position) (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Commodity futures, asset derivatives	$ 5,425	$ 4,558
Commodity futures, liability derivatives	5,645	3,890
Designated as hedging instrument | Commodity contract | Futures | Other current assets
Commodity futures, asset derivatives	1,479	2,999
Commodity futures, liability derivatives	1,473	1,837
Not designated as hedging instrument | Commodity contract | Futures | Other current assets
Commodity futures, asset derivatives	3,946	1,559
Commodity futures, liability derivatives	$ 4,172	$ 2,053

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Derivative Financial Instruments (Schedule of Derivatives Instruments Statements of Financial Position) (Details) - Commodity contract - Futures - Cost of goods sold - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Designated as hedging instrument
Amount of gain (loss) recognized in income on derivatives	$ 591	$ 1,540	$ (862)	$ 10,056
Amount of gain (loss) recognized in income on related hedged items	1,121	(3,416)	343	(6,805)
Designated as hedging instrument | Firm commitments
Amount of gain (loss) recognized in income on related hedged items	1,415	(2,600)	(84)	(3,393)
Designated as hedging instrument | Inventory
Amount of gain (loss) recognized in income on related hedged items	(294)	(816)	427	(3,412)
Not designated as hedging instrument
Amount of gain (loss) recognized in income on derivatives	$ 5,487	$ 2,969	$ 1,410	$ 5,720

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Fair Value Measurements (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Assets and liabilities subject to fair value measurements
Short-term Investments	$ 114,154	$ 228,783
Commodity futures - financial assets	5,425	4,558
Commodity futures - financial liabilities	5,645	3,890
Outstanding Balance	2,500,000	2,400,000
Fair Value, Inputs, Level 2 [Member]
Assets and liabilities subject to fair value measurements
Short-term Investments	114,154	228,783
Fair value of long-term debt, including current maturities	2,500,000	2,400,000
Futures | Recurring | Commodity contract
Assets and liabilities subject to fair value measurements
Commodity futures - financial assets	5,425	4,558
Commodity futures - financial liabilities	5,645	3,890
Futures | Recurring | Fair Value, Inputs, Level 2 [Member] | Commodity contract
Assets and liabilities subject to fair value measurements
Commodity futures - financial assets	5,425	4,558
Commodity futures - financial liabilities	$ 5,645	$ 3,890

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Segment Information - Results (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018
Segment Reporting Information
Net sales	$ 2,770,515	$ 3,090,525	$ 5,587,950	$ 5,694,400
Operating income (loss)	285,032	501,887	576,874	825,284
Income (loss) before income taxes	256,960	475,410	524,023	771,374
Depreciation and amortization	80,911	79,120	161,085	155,255
Capital expenditures	85,120	55,203	139,556	105,809
Assets	7,857,914		7,857,914		$ 7,703,563
U.S.
Segment Reporting Information
Net sales		2,815,723	5,315,555	5,271,806
Non-U.S.
Segment Reporting Information
Net sales		274,802	272,395	422,594
Operating Segment | Other segments
Segment Reporting Information
Net sales	(415,622)
Operating Segment | U.S.
Segment Reporting Information
Net sales	2,643,662
Operating Segment | Non-U.S.
Segment Reporting Information
Net sales	126,853
Operating Segment | Steel Operations
Segment Reporting Information
Net sales	2,188,185	2,435,688	4,388,350	4,417,462
Operating income (loss)	291,411	533,494	600,489	868,056
Income (loss) before income taxes	274,155	516,399	567,174	832,204
Depreciation and amortization	63,150	61,769	125,662	120,910
Capital expenditures	43,575	42,008	87,251	80,410
Assets	5,217,650		5,217,650
Operating Segment | Steel Operations | Other segments
Segment Reporting Information
Net sales	81,834	110,261	157,429	170,246
Operating Segment | Steel Operations | U.S.
Segment Reporting Information
Net sales	2,040,756	2,127,545	4,085,247	3,959,848
Operating Segment | Steel Operations | Non-U.S.
Segment Reporting Information
Net sales	65,595	197,882	145,674	287,368
Operating Segment | Metals Recycling Operations
Segment Reporting Information
Net sales	656,766	884,095	1,393,811	1,636,861
Operating income (loss)	7,619	22,638	24,581	47,353
Income (loss) before income taxes	6,500	20,965	22,005	43,970
Depreciation and amortization	11,525	11,553	22,964	23,111
Capital expenditures	12,173	8,947	18,815	15,893
Assets	987,702		987,702
Operating Segment | Metals Recycling Operations | Other segments
Segment Reporting Information
Net sales	333,667	459,391	719,575	824,035
Operating Segment | Metals Recycling Operations | U.S.
Segment Reporting Information
Net sales	262,826	347,784	548,551	677,656
Operating Segment | Metals Recycling Operations | Non-U.S.
Segment Reporting Information
Net sales	60,273	76,920	125,685	135,170
Operating Segment | Steel Fabrication Operations
Segment Reporting Information
Net sales	241,424	217,896	470,093	419,599
Operating income (loss)	30,664	14,144	51,287	33,935
Income (loss) before income taxes	29,466	12,640	48,817	31,097
Depreciation and amortization	2,974	2,946	5,941	5,844
Capital expenditures	3,019	2,054	5,012	4,131
Assets	418,023		418,023
Operating Segment | Steel Fabrication Operations | Other segments
Segment Reporting Information
Net sales		458	189	668
Operating Segment | Steel Fabrication Operations | U.S.
Segment Reporting Information
Net sales	240,439	217,438	468,868	418,875
Operating Segment | Steel Fabrication Operations | Non-U.S.
Segment Reporting Information
Net sales	985		1,036	56
Operating Segment | Other
Segment Reporting Information
Net sales	99,762	123,080	213,258	215,698
Operating income (loss)	(49,153)	(63,618)	(106,073)	(119,024)
Income (loss) before income taxes	(57,438)	(69,828)	(120,134)	(130,861)
Depreciation and amortization	3,262	2,852	6,518	5,390
Capital expenditures	26,353	2,194	28,478	5,375
Assets	1,307,873		1,307,873
Operating Segment | Other | Other segments
Segment Reporting Information
Net sales	121	124	369	271
Operating Segment | Other | U.S.
Segment Reporting Information
Net sales	99,641	122,956	212,889	215,427
Eliminations
Segment Reporting Information
Net sales	(415,622)	(570,234)	(877,562)	(995,220)
Operating income (loss)	4,491	(4,771)	6,590	(5,036)
Income (loss) before income taxes	4,277	(4,766)	6,161	(5,036)
Assets	$ (73,334)		(73,334)
Eliminations | Other segments
Segment Reporting Information
Net sales		$ (570,234)	$ (877,562)	$ (995,220)

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Segment Information - Results Footnote (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018
Operating income (loss)
Corporate SG & A	$ (106,250)	$ (101,031)	$ (217,288)	$ (207,462)
Profit sharing	(22,871)	(42,335)	(46,548)	(68,997)
Operating income (loss)	285,032	501,887	576,874	825,284
Gross profit	421,166	652,082	854,736	1,115,498
Assets
Accounts receivable	1,072,879		1,072,879		$ 1,043,756
Cash and equivalents	972,561		972,561		828,220
Short-term Investments	114,154		114,154		228,783
Inventories	1,802,759		1,802,759		1,859,168
Property, plant and equipment, net	2,947,243		2,947,243		2,945,767
Other assets	104,306		104,306		25,166
Total assets	7,857,914		7,857,914		$ 7,703,563
Operating Segment | Other
Operating income (loss)
Corporate SG & A	(18,000)	(14,500)	(40,600)	(30,200)
Company-wide equity-based compensation	(8,400)	(8,500)	(17,400)	(17,000)
Profit sharing	(21,300)	(40,600)	(44,300)	(66,200)
Other, net	(1,500)		(3,800)	(5,600)
Operating income (loss)	(49,153)	(63,618)	(106,073)	(119,024)
Assets
Cash and equivalents	916,500		916,500
Short-term Investments	109,200		109,200
Accounts receivable	6,000		6,000
Inventories	35,100		35,100
Property, plant and equipment, net	176,500		176,500
Intra-company debt	8,300		8,300
Other assets	56,300		56,300
Total assets	1,307,873		1,307,873
Operating Segment | Metals Recycling Operations
Operating income (loss)
Operating income (loss)	7,619	22,638	24,581	47,353
Assets
Total assets	987,702		987,702
Eliminations
Operating income (loss)
Operating income (loss)	4,491	(4,771)	6,590	(5,036)
Gross profit	4,500	$ (4,800)	6,600	$ (5,000)
Assets
Accounts receivable	(57,200)		(57,200)
Intra-company debt	(8,300)		(8,300)
Other assets	(7,800)		(7,800)
Total assets	$ (73,334)		$ (73,334)

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Condensed Consolidating Information - Balance Sheets (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017
Condensed Consolidating Balance Sheets
Cash and equivalents	$ 972,561		$ 828,220
Short-term Investments	114,154		228,783
Accounts receivable, net	1,072,879		1,043,756
Inventories	1,802,759		1,859,168
Other current assets	61,248		72,730
Total current assets	4,023,601		4,032,657
Property, plant and equipment, net	2,947,243		2,945,767
Intangible assets, net	256,302		270,328
Goodwill	526,462		429,645
Other assets, including investments in subs	104,306		25,166
Total assets	7,857,914		7,703,563
Accounts payable	525,156		550,754
Accrued expenses	328,449		444,149
Current maturities of long-term debt	72,131		24,234
Total current liabilities	925,736		1,019,137
Long-term debt	2,355,917		2,352,489
Other liabilities	527,980		444,708
Total liabilities	3,809,633		3,816,334
Redeemable noncontrolling interests	139,930		111,240
Common stock	645		645
Treasury stock	(1,354,157)		(1,184,243)
Additional paid-in capital	1,167,505		1,160,048
Retained earnings (deficit)	4,250,419		3,958,320
Accumulated other comprehensive income (loss)	78		301
Total Steel Dynamics, Inc. equity	4,064,490		3,935,071
Noncontrolling interests	(156,139)		(159,082)
Total equity	3,908,351	$ 3,849,528	3,775,989	$ 3,588,519	$ 3,312,137	$ 3,195,068
Total liabilities and equity	7,857,914		7,703,563
Parent
Condensed Consolidating Balance Sheets
Cash and equivalents	914,541		809,763
Short-term Investments	109,154		198,783
Accounts receivable, net	324,548		340,439
Inventories	748,921		793,174
Other current assets	46,197		56,578
Total current assets	2,143,361		2,198,737
Property, plant and equipment, net	883,970		871,482
Other assets, including investments in subs	2,838,285		2,862,556
Total assets	5,865,616		5,932,775
Accounts payable	174,596		209,156
Accrued expenses	180,887		296,528
Current maturities of long-term debt	826		793
Total current liabilities	356,309		506,477
Long-term debt	2,329,916		2,327,798
Other liabilities	(885,161)		(836,571)
Total liabilities	1,801,064		1,997,704
Common stock	645		645
Treasury stock	(1,354,157)		(1,184,243)
Additional paid-in capital	1,167,505		1,160,048
Retained earnings (deficit)	4,250,419		3,958,320
Accumulated other comprehensive income (loss)	140		301
Total Steel Dynamics, Inc. equity	4,064,552		3,935,071
Total equity	4,064,552		3,935,071
Total liabilities and equity	5,865,616		5,932,775
Guarantors
Condensed Consolidating Balance Sheets
Cash and equivalents	50,670		13,491
Short-term Investments	5,000		30,000
Accounts receivable, net	1,696,820		1,635,168
Inventories	977,754		1,038,702
Other current assets	18,698		18,627
Total current assets	2,748,942		2,735,988
Property, plant and equipment, net	1,902,632		1,918,198
Intangible assets, net	256,302		270,328
Goodwill	427,950		429,645
Other assets, including investments in subs	65,100		5,593
Total assets	5,400,926		5,359,752
Accounts payable	331,110		330,156
Accrued expenses	296,932		295,668
Current maturities of long-term debt	1,165		1,355
Total current liabilities	629,207		627,179
Long-term debt			381
Other liabilities	1,244,276		1,447,464
Total liabilities	1,873,483		2,075,024
Common stock	1,727,859		1,727,859
Additional paid-in capital	683,048		683,048
Retained earnings (deficit)	1,116,598		873,821
Accumulated other comprehensive income (loss)	(62)
Total Steel Dynamics, Inc. equity	3,527,443		3,284,728
Total equity	3,527,443		3,284,728
Total liabilities and equity	5,400,926		5,359,752
Combined Non-Guarantors
Condensed Consolidating Balance Sheets
Cash and equivalents	7,350		4,966
Accounts receivable, net	70,968		26,655
Inventories	87,342		39,214
Other current assets	3,754		3,994
Total current assets	169,414		74,829
Property, plant and equipment, net	160,641		156,087
Goodwill	98,512
Other assets, including investments in subs	6,800		5,557
Total assets	435,367		236,473
Accounts payable	88,182		74,353
Accrued expenses	20,068		11,171
Current maturities of long-term debt	93,176		51,079
Total current liabilities	201,426		136,603
Long-term debt	170,842		166,226
Other liabilities	33,352		31,791
Total liabilities	405,620		334,620
Redeemable noncontrolling interests	139,930		111,240
Common stock	15,016		15,016
Additional paid-in capital	787,572		695,502
Retained earnings (deficit)	(756,632)		(760,823)
Total Steel Dynamics, Inc. equity	45,956		(50,305)
Noncontrolling interests	(156,139)		(159,082)
Total equity	(110,183)		(209,387)
Total liabilities and equity	435,367		236,473
Consolidating Adjustments
Condensed Consolidating Balance Sheets
Accounts receivable, net	(1,019,457)		(958,506)
Inventories	(11,258)		(11,922)
Other current assets	(7,401)		(6,469)
Total current assets	(1,038,116)		(976,897)
Other assets, including investments in subs	(2,805,879)		(2,848,540)
Total assets	(3,843,995)		(3,825,437)
Accounts payable	(68,732)		(62,911)
Accrued expenses	(169,438)		(159,218)
Current maturities of long-term debt	(23,036)		(28,993)
Total current liabilities	(261,206)		(251,122)
Long-term debt	(144,841)		(141,916)
Other liabilities	135,513		(197,976)
Total liabilities	(270,534)		(591,014)
Common stock	(1,742,875)		(1,742,875)
Additional paid-in capital	(1,470,620)		(1,378,550)
Retained earnings (deficit)	(359,966)		(112,998)
Total Steel Dynamics, Inc. equity	(3,573,461)		(3,234,423)
Total equity	(3,573,461)		(3,234,423)
Total liabilities and equity	$ (3,843,995)		$ (3,825,437)

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Condensed Consolidating Information - Statements of Operations (Details) - USD ($) $ in Thousands	3 Months Ended			6 Months Ended
	Jun. 30, 2019	Mar. 31, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Condensed Consolidating Statements of Operations
Net sales	$ 2,770,515		$ 3,090,525	$ 5,587,950	$ 5,694,400
Costs of goods sold	2,349,349		2,438,443	4,733,214	4,578,902
Gross profit	421,166		652,082	854,736	1,115,498
Selling, general and administrative	136,134		150,195	277,862	290,214
Operating income	285,032		501,887	576,874	825,284
Interest expense, net of capitalized interest	32,321		31,512	63,443	63,408
Other (income) expense, net	(4,249)		(5,035)	(10,592)	(9,498)
Income before income taxes	256,960		475,410	524,023	771,374
Income taxes (benefit)	60,214		112,838	122,450	183,327
Net income	196,746	$ 204,827	362,572	401,573	588,047
Net (income) loss attributable to noncontrolling interests	(2,444)		(123)	(2,943)	1,953
Net income attributable to Steel Dynamics, Inc.	194,302		362,449	398,630	590,000
Parent
Condensed Consolidating Statements of Operations
Net sales	1,097,010		1,294,096	2,221,745	2,330,770
Costs of goods sold	908,232		970,636	1,814,227	1,789,781
Gross profit	188,778		323,460	407,518	540,989
Selling, general and administrative	61,028		77,088	130,034	140,015
Operating income	127,750		246,372	277,484	400,974
Interest expense, net of capitalized interest	19,448		19,386	38,102	38,009
Other (income) expense, net	(4,958)		(5,975)	(12,358)	(11,178)
Income before income taxes	113,260		232,961	251,740	374,143
Income taxes (benefit)	27,033		51,738	57,797	81,484
Net income	86,227		181,223	193,943	292,659
Equity in net income of subsidiaries	108,075		181,226	204,687	297,341
Net income attributable to Steel Dynamics, Inc.	194,302		362,449	398,630	590,000
Guarantors
Condensed Consolidating Statements of Operations
Net sales	3,016,389		3,405,216	6,126,618	6,263,935
Costs of goods sold	2,772,874		3,038,284	5,638,863	5,620,035
Gross profit	243,515		366,932	487,755	643,900
Selling, general and administrative	72,576		75,923	147,159	155,295
Operating income	170,939		291,009	340,596	488,605
Interest expense, net of capitalized interest	11,805		11,593	23,571	24,304
Other (income) expense, net	(1,795)		(1,595)	(3,172)	(3,320)
Income before income taxes	160,929		281,011	320,197	467,621
Income taxes (benefit)	38,885		69,910	77,419	116,328
Net income	122,044		211,101	242,778	351,293
Net income attributable to Steel Dynamics, Inc.	122,044		211,101	242,778	351,293
Combined Non-Guarantors
Condensed Consolidating Statements of Operations
Net sales	233,907		156,308	405,790	273,305
Costs of goods sold	214,487		153,104	379,947	271,602
Gross profit	19,420		3,204	25,843	1,703
Selling, general and administrative	8,134		2,400	12,064	5,576
Operating income	11,286		804	13,779	(3,873)
Interest expense, net of capitalized interest	3,623		3,089	6,837	6,355
Other (income) expense, net	(265)		(13)	(557)	(259)
Income before income taxes	7,928		(2,272)	7,499	(9,969)
Income taxes (benefit)	264		(101)	367	110
Net income	7,664		(2,171)	7,132	(10,079)
Net (income) loss attributable to noncontrolling interests	(2,444)		(123)	(2,943)	1,953
Net income attributable to Steel Dynamics, Inc.	5,220		(2,294)	4,189	(8,126)
Consolidating Adjustments
Condensed Consolidating Statements of Operations
Net sales	(1,576,791)		(1,765,095)	(3,166,203)	(3,173,610)
Costs of goods sold	(1,546,244)		(1,723,581)	(3,099,823)	(3,102,516)
Gross profit	(30,547)		(41,514)	(66,380)	(71,094)
Selling, general and administrative	(5,604)		(5,216)	(11,395)	(10,672)
Operating income	(24,943)		(36,298)	(54,985)	(60,422)
Interest expense, net of capitalized interest	(2,555)		(2,556)	(5,067)	(5,260)
Other (income) expense, net	2,769		2,548	5,495	5,259
Income before income taxes	(25,157)		(36,290)	(55,413)	(60,421)
Income taxes (benefit)	(5,968)		(8,709)	(13,133)	(14,595)
Net income	(19,189)		(27,581)	(42,280)	(45,826)
Equity in net income of subsidiaries	(108,075)		(181,226)	(204,687)	(297,341)
Net income attributable to Steel Dynamics, Inc.	$ (127,264)		$ (208,807)	$ (246,967)	$ (343,167)

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Condensed Consolidating Information - Statements of Cash Flows (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Condensed Consolidating Statements of Cash Flows
Net cash provided by operating activities	$ 361,473	$ 326,033	$ 543,026	$ 503,968
Net cash used in investing activities	(24,638)	(500,955)	(117,062)	(591,332)
Accumulated other comprehensive loss	(155,304)	(90,075)	(281,608)	(221,297)
Increase (decrease) in cash, cash equivalents, and restricted cash	181,531	(264,997)	144,356	(308,661)
Cash, cash equivalents, and restricted cash at beginning of period	797,248	991,421	834,423	1,035,085
Cash, cash equivalents, and restricted cash at end of period	978,779	726,424	978,779	726,424
Parent
Condensed Consolidating Statements of Cash Flows
Net cash provided by operating activities			144,979	190,271
Net cash used in investing activities			(66,379)	(528,618)
Accumulated other comprehensive loss			26,178	45,037
Increase (decrease) in cash, cash equivalents, and restricted cash			104,778	(293,310)
Cash, cash equivalents, and restricted cash at beginning of period			809,763	1,002,230
Cash, cash equivalents, and restricted cash at end of period	914,541	708,920	914,541	708,920
Guarantors
Condensed Consolidating Statements of Cash Flows
Net cash provided by operating activities			397,633	300,720
Net cash used in investing activities			(44,890)	(59,728)
Accumulated other comprehensive loss			(315,537)	(255,401)
Increase (decrease) in cash, cash equivalents, and restricted cash			37,206	(14,409)
Cash, cash equivalents, and restricted cash at beginning of period			14,368	20,748
Cash, cash equivalents, and restricted cash at end of period	51,574	6,339	51,574	6,339
Combined Non-Guarantors
Condensed Consolidating Statements of Cash Flows
Net cash provided by operating activities			2,850	190
Net cash used in investing activities			(2,761)	(4,901)
Accumulated other comprehensive loss			2,283	3,769
Increase (decrease) in cash, cash equivalents, and restricted cash			2,372	(942)
Cash, cash equivalents, and restricted cash at beginning of period			10,292	12,107
Cash, cash equivalents, and restricted cash at end of period	$ 12,664	$ 11,165	12,664	11,165
Consolidating Adjustments
Condensed Consolidating Statements of Cash Flows
Net cash provided by operating activities			(2,436)	12,787
Net cash used in investing activities			(3,032)	1,915
Accumulated other comprehensive loss			$ 5,468	$ (14,702)