UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q


☒	Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the ~~quarterly~~ period ended ~~September 30, 2017~~March 31, 2018

	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

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

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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 ~~November~~May 1, ~~2017,~~2018, Registrant had ~~236,951,784~~235,933,638 outstanding shares of common stock.


STEEL DYNAMICS, INC. Table of Contents

PART I. Financial Information

Item 1.	Financial Statements:	Page

	Consolidated Balance Sheets as of ~~September 30, 2017~~March 31, 2018 (unaudited) and December 31, ~~2016~~2017	1

	Consolidated Statements of Income for the ~~three and nine-month~~three-month periods ended ~~September 30,~~March 31, 2018 and 2017 ~~and 2016~~ (unaudited)	2

	Consolidated Statements of Cash Flows for the ~~three and nine-month~~three-month periods ended ~~September 30,~~March 31, 2018 and 2017 ~~and 2016~~ (unaudited)	3

	Notes to Consolidated Financial Statements (unaudited)	4

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1816

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	2522

Item 4.	Controls and Procedures	2522



	PART II. Other Information

Item 1.	Legal Proceedings	2623

Item 1A.	Risk Factors	2623

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	2623

Item 3.	Defaults Upon Senior Securities	2623

Item 4.	Mine Safety Disclosures	2623

Item 5.	Other Information	2623

Item 6.	Exhibits	2724

	~~Signatures~~Exhibit Index	28	25

Signature		26

STEEL DYNAMICS, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)



	September 30,		December 31,		March 31,		December 31,
	2017		2016		2018		2017
Assets	(unaudited)				(unaudited)
Current assets
Cash and equivalents	$	1,101,964	$	841,483	$	985,824	$	1,028,649
Short term investments						40,000		-
Accounts receivable, net		897,838		703,565		983,457		846,415
Accounts receivable-related parties		25,179		26,219		4,198		22,422
Inventories		1,487,516		1,275,211		1,600,058		1,519,347
Other current assets		59,648		83,197		38,705		91,509
Total current assets		3,572,145		2,929,675		3,652,242		3,508,342

Property, plant and equipment, net		2,708,777		2,787,215		2,657,937		2,675,904

Restricted cash		17,092		18,060
Intangible assets, net		263,357		283,977		249,983		256,909
Goodwill		388,518		393,351		386,045		386,893
Other assets		10,848		11,454		26,606		27,684
Total assets	$	6,960,737	$	6,423,732	$	6,972,813	$	6,855,732
Liabilities and Equity
Current liabilities
Accounts payable	$	512,290	$	382,126	$	544,419	$	473,765
Accounts payable-related parties		16,393		13,070		18,199		15,683
Income taxes payable		5,596		5,593		14,564		3,696
Accrued payroll and benefits		171,508		164,543		113,001		195,909
Accrued interest		49,380		30,295		47,936		25,533
Accrued expenses		128,701		113,556		112,975		125,138
Current maturities of long-term debt		182,661		3,632		9,646		28,795
Total current liabilities		1,066,529		712,815		860,740		868,519

Long-term debt		2,351,483		2,353,194		2,353,703		2,353,145
Deferred income taxes		461,399		448,375		314,736		305,949
Other liabilities		20,305		20,649		20,257		21,811
Total liabilities		3,899,716		3,535,033		3,549,436		3,549,424

Commitments and contingencies

Redeemable noncontrolling interests		111,240		111,240		111,240		111,240

Equity
Common stock voting, $.0025 par value; 900,000,000 shares authorized;
264,161,359 and 264,130,544 shares issued; and 236,951,784 and 243,785,485
shares outstanding, as of September 30, 2017 and December 31, 2016, respectively		641		641
Treasury stock, at cost; 27,209,575 and 20,345,059 shares,
as of September 30, 2017 and December 31, 2016 respectively		(650,210)		(416,829)
265,080,663 and 265,003,133 shares issued; and 236,095,748 and 237,396,839
shares outstanding, as of March 31, 2018 and December 31, 2017, respectively						644		644
Treasury stock, at cost; 28,984,915 and 27,606,294 shares,
as of March 31, 2018 and December 31, 2017 respectively						(730,700)		(665,297)
Additional paid-in capital		1,147,463		1,132,749		1,142,871		1,141,534
Retained earnings		2,606,831		2,210,459		3,057,904		2,874,693
Total Steel Dynamics, Inc. equity		3,104,725		2,927,020		3,470,719		3,351,574
Noncontrolling interests		(154,944)		(149,561)		(158,582)		(156,506)
Total equity		2,949,781		2,777,459		3,312,137		3,195,068
Total liabilities and equity	$	6,960,737	$	6,423,732	$	6,972,813	$	6,855,732



	Three Months Ended				Nine Months Ended				Three Months Ended
	September 30,				September 30,				March 31,
	2017		2016		2017		2016		2018		2017

Net sales
Unrelated parties	$	2,399,116	$	2,060,596	$	7,066,083	$	5,737,584	$	2,597,312	$	2,319,663
Related parties		44,266		40,714		136,235		128,929		6,563		48,553
Total net sales		2,443,382		2,101,310		7,202,318		5,866,513		2,603,875		2,368,216

Costs of goods sold		2,046,864		1,692,807		5,941,128		4,841,591		2,140,459		1,896,062
Gross profit		396,518		408,503		1,261,190		1,024,922		463,416		472,154

Selling, general and administrative expenses		97,056		95,185		298,422		279,899		106,431		102,933
Profit sharing		21,175		22,255		69,714		51,722		26,662		27,231
Amortization of intangible assets		7,272		7,208		22,120		21,359		6,926		7,424
Operating income		271,015		283,855		870,934		671,942		323,397		334,566

Interest expense, net of capitalized interest		34,177		36,199		102,019		109,888		31,896		33,973
Other expense (income), net		2,526		4,351		(4,968)		741		(4,463)		(3,659)
Income before income taxes		234,312		243,305		773,883		561,313		295,964		304,252

Income tax expense		83,300		88,892		271,258		205,139		70,489		105,586
Net income		151,012		154,413		502,625		356,174		225,475		198,666

Net loss attributable to noncontrolling interests		2,246		2,984		5,383		5,929		2,076		2,151
Net income attributable to Steel Dynamics, Inc.	$	153,258	$	157,397	$	508,008	$	362,103	$	227,551	$	200,817



Basic earnings per share attributable to Steel Dynamics,
Inc. stockholders	$	0.64	$	0.65	$	2.11	$	1.49	$	0.96	$	0.83

Weighted average common shares outstanding		239,066		243,761		241,117		243,539		236,623		242,943

Diluted earnings per share attributable to Steel Dynamics, Inc.
stockholders, including the effect of assumed conversions
when dilutive	$	0.64	$	0.64	$	2.09	$	1.48	$	0.96	$	0.82

Weighted average common shares and share equivalents outstanding		240,880		245,682		242,816		245,227		237,723		244,546

Dividends declared per share	$	0.155	$	0.140	$	0.465	$	0.420	$	0.1875	$	0.155



	Three Months Ended				Nine Months Ended				Three Months Ended
	September 30,				September 30,				March 31,
	2017		2016		2017		2016		2018		2017

Operating activities:
Net income	$	151,012	$	154,413	$	502,625	$	356,174	$	225,475	$	198,666

Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization		75,210		74,190		224,068		222,970		76,135		75,057
Equity-based compensation		6,875		5,946		24,558		23,716		12,841		11,303
Deferred income taxes		3,284		18,478		17,849		53,879		9,545		7,716
Other adjustments		8,202		161		8,055		1,376		30		(104)
Changes in certain assets and liabilities:
Accounts receivable		(36,123)		29,384		(193,233)		(149,810)		(118,818)		(153,364)
Inventories		(67,285)		(76,013)		(211,726)		(102,339)		(80,711)		(86,819)
Other assets		(9,234)		694		(1,703)		11,855		(105)		2,094
Accounts payable		44,887		(49,171)		133,251		117,220		66,332		133,809
Income taxes receivable/payable		(12,929)		(7,421)		5,803		40,960		63,962		96,319
Accrued expenses		62,249		45,701		38,058		69,361		(76,751)		(44,247)
Net cash provided by operating activities		226,148		196,362		547,605		645,362		177,935		240,430

Investing activities:
Purchases of property, plant and equipment		(42,795)		(59,774)		(127,746)		(123,168)		(50,606)		(41,677)
Acquisition of business, net of cash acquired		(5,518)		(109,065)		(5,518)		(109,065)
Purchases of short term investments										(40,000)		-
Other investing activities		1,081		1,507		30,386		5,767		229		26,918
Net cash used in investing activities		(47,232)		(167,332)		(102,878)		(226,466)		(90,377)		(14,759)

Financing activities:
Issuance of current and long-term debt		450,215		12,911		501,448		97,018		93,058		-
Repayment of current and long-term debt		(294,913)		(9,999)		(331,339)		(95,253)		(113,034)		(1,429)
Dividends paid		(37,180)		(34,124)		(108,837)		(101,639)		(36,797)		(34,130)
Purchases of treasury stock		(99,085)		-		(237,154)		-		(69,269)		(61,256)
Other financing activities		(4,832)		1,005		(8,364)		5,435		(5,180)		(3,532)
Net cash provided by (used in) financing activities		14,205		(30,207)		(184,246)		(94,439)
Net cash used in financing activities										(131,222)		(100,347)

Increase (decrease) in cash and equivalents		193,121		(1,177)		260,481		324,457		(43,664)		125,324
Cash and equivalents at beginning of period		908,843		1,052,666		841,483		727,032
Cash, cash equivalents, and restricted cash at beginning of period										1,035,085		848,105

Cash and equivalents at end of period	$	1,101,964	$	1,051,489	$	1,101,964	$	1,051,489
Cash, cash equivalents, and restricted cash at end of period									$	991,421	$	973,429


Supplemental disclosure information:
Cash paid for interest	$	13,530	$	26,225	$	80,155	$	97,605	$	8,629	$	12,649
Cash paid for income taxes, net	$	93,123	$	75,860	$	246,793	$	104,124
Cash paid (received) for income taxes, net									$	(1,045)	$	1,554

STEEL DYNAMICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 1. Description of the Business and Significant Accounting Policies

Description of the Business

Steel Dynamics, Inc. (SDI), together with its subsidiaries (the company), is a domestic manufacturer of steel products and metals recycler. The company has three ~~reporting~~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, Structural and Rail Division, Engineered Bar Products Division, Vulcan Threaded Products, Inc. ~~– acquired August 1, 2016,~~, Roanoke Bar Division, Steel of West Virginia, and Iron Dynamics, a liquid pig iron (scrap substitute) production facility that supplies solely the Butler Flat Roll Division. These operations include electric arc furnace steel mills, producing steel from ferrous scrap and scrap substitutes, utilizing continuous casting, automated rolling mills and numerous downstream coating and bar processing lines. Steel operations accounted for ~~73%~~74% and ~~74%~~73% of the company’s consolidated external net sales during the three months ended ~~September 30,~~March 31, 2018 and 2017, ~~and 2016, respectively, and 73% and 72% of the company’s consolidated external net sales during the nine months ended September 30, 2017 and 2016,~~ respectively.

Metals Recycling Operations Segment. Metals recycling operations consists solely of OmniSource Corporation (OmniSource), and includes both ferrous and nonferrous processing, transportation, marketing, brokerage, and consulting services. Metals recycling operations accounted for ~~14% and~~ 15% of the company’s consolidated external net sales during the three months ended ~~September 30, 2017~~March 31, 2018 and ~~2016, respectively, and 15% of the company’s consolidated external net sales for the nine months ended September 30, 2017 and 2016.~~2017.

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~~ 8% of the company’s consolidated external net sales during the three months ended ~~September 30, 2017~~March 31, 2018 and ~~2016, respectively, and 8% and 9% during the nine months ended September 30, 2017 and 2016, respectively.~~2017.

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

Significant Accounting Policies

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

Use of Estimates. These 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, ~~2016.~~2017.

STEEL DYNAMICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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

Goodwill. The company’s goodwill is allocated to the following reporting units at ~~September 30, 2017,~~March 31, 2018, and December 31, ~~2016,~~2017, (in thousands):

September 30,

December 31,

2017

2016

Steel Operations Segment:

     Columbus Flat Roll Division

$
19,682

$
19,682

     The Techs

142,783

142,783

     Vulcan Threaded Products

7,824

7,824

     Roanoke Bar Division

29,041

29,041

Metals Recycling Operations Segment:

     Butler Flat Roll Division, Structural and Rail Division, and

         Engineered Bar Division

95,000

��
95,000

     OmniSource

92,263

97,096

Steel Fabrication Operations Segment

1,925

1,925

$
388,518

$
393,351



	March 31,		December 31,
	2018		2017
Steel Operations Segment:
Columbus Flat Roll Division	$	19,682	$	19,682
The Techs		142,783		142,783
Vulcan Threaded Products		7,824		7,824
Roanoke Bar Division		29,041		29,041
Metals Recycling Operations Segment:
OmniSource		89,790		90,638
Indiana Steel Mills		95,000		95,000
Steel Fabrication Operations Segment		1,925		1,925
	$	386,045	$	386,893

OmniSource goodwill decreased $~~4.8~~ ~~million~~$848,000 from December 31, ~~2016~~2017 to ~~September 30, 2017,~~March 31, 2018, in recognition of the ~~2017~~2018 tax benefit related to the normal amortization of the component of OmniSource tax-deductible goodwill in excess of book goodwill.

Recently Adopted/Issued Accounting Standards

~~In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330):~~ ~~Simplifying the Measurement of Inventory~~ (ASU 2015-11), which requires an entity to measure inventory at the lower of cost and net realizable value, rather than at the lower of cost or market. The company adopted ASU 2015-11 as required in the first quarter of 2017 on a prospective basis, and the adoption had no impact on its financial condition, results of operations, or cash flow.

In May 2014, the FASB issued ASU 2014-09, which is codified in ASC 606, Revenue Recognition – Revenue from Contracts with Customers, which amends the guidance in former ASC 605, Revenue Recognition. FASB ~~has since~~later issued clarifying guidance in the form of ASU 2016-08, Revenue from Contracts with Customers: Principal versus Agent Consideration (Reporting Revenue Gross versus Net), ASU 2016-10, Revenue from Contract with ~~Customers :~~Customers: Identifying Performance Obligations and Licensing, and ASU 2016-12, Revenue from Contracts with Customers: Narrow-Scope Improvements and Practical Expedients, collectively (ASC 606). The core principle of ASC 606 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASC 606 also requires additional disclosures to help users of financial statements better understand the nature, amount, timing, and potential uncertainty of revenue that is recognized. The company adopted ASC 606 ~~guidance is~~ effective ~~for annual and interim periods beginning after December 15, 2017, but can be early adopted for annual and interim periods ending after December 15, 2016,~~January1, 2018 using ~~a full retrospective or~~the modified retrospective approach. The company is finalizing its adoption plan in which it has identified current revenue streams and analyzed those revenue streams pursuant to the new accounting requirements. The company will complete the adoption plan during the fourth quarter of 2017, including assessment of new required disclosures. Based on our analysis within the adoption plan completed to date, the company does not believe there will be significantThere was no change in the amount or timing of revenue recognized under ~~the new standard,~~ASC 606, or significant changes required to the company’s functions, processes or systems. See Note 2 – Revenue from Contracts with Customers for disclosure required by ASC 606 and the updated accounting policy for revenue recognition.

In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230); which requires amounts generally described as restricted cash to be included with cash and cash equivalents when reconciling the total beginning and ending amounts for the periods shown on the statement of cash flows. The company ~~intends to adopt~~adopted the provisions of ASU ~~2014-09 effective~~2016-18 as of January 1, 2018, ~~using~~retrospectively changed beginning and ending amounts reflected in the ~~modified retrospective approach.~~ consolidated statements of cash flows for the three months ended March 31, 2018 and 2017, to include restricted cash. The balance of cash, cash equivalents and restricted cash in the consolidated statements of cash flows includes restricted cash of $5.6 million at March 31, 2018, $6.4 million at January 1, 2018, and $6.6 million at March 31, 2017, and January 1, 2017, which are recorded in Other Assets (noncurrent) in the company’s consolidated balance sheets.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842):; which establishes a new lease accounting model that requires lessees to recognize a right of use asset and related lease liability for most leases having lease terms of more than 12 months (ASU 2016-02). ~~Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases.~~ This new guidance is effective for annual and interim periods beginning after December 15, 2018, but can be early adopted. The company is ~~currently evaluating~~working through an adoption plan to evaluate the lease portfolio, systems, processes and policies to determine the impact of the provisions of ASU 2016-02 ~~including~~to our financial statements and disclosures. The company anticipates adopting ASU 2016-02 on January 1, 2019.

Note 2. Revenue from Contracts with Customers

The company adopted ASC 606 effective January 1, 2018, using the ~~timing~~modified retrospective approach. We applied the standard to contracts that were not completed as of the adoption date, with no cumulative effect adjustment at date of adoption.

~~Reclassifications~~Accordingly, amounts and disclosures for reporting periods beginning after January 1, 2018 are presented under ASC 606, while comparative amounts and disclosures for prior periods have not been adjusted and continue to be reported in accordance with historical accounting policies for revenue recognition prior to the adoption of ASC 606. The new revenue standard requires recognition of revenue to depict the transfer of promised goods and services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services.

In the steel and metals recycling operations segments, revenue is recognized at the point in time the performance obligation is satisfied and control of the product is transferred to the customer upon shipment or delivery, at the amount of consideration the company expects to receive, including any variable consideration. The ~~company early adopted, effective December 31, 2016,~~ ~~Improvement to Employee Share-based Payment Accounting~~ ~~(ASU 2016-09).~~ ~~Cash paid to tax authorities from shares withheld to satisfy~~variable consideration included in the company’s ~~statutory income tax withholding obligation of $2.~~2 ~~million were reclassified to financing activities from operating activities in the nine-month period ended September 30, 2016, statement of cash flows.~~

steel operations segment contracts, which is not constrained, include estimated product returns and customer claims based on historical experience, and may include volume rebates which are

STEEL DYNAMICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 2. Revenue from Contracts with Customers (Continued)

recorded on an expected value basis. Revenue recognized is limited to the amount the company expects to receive. The company does not exercise significant judgements in determining the timing of satisfaction of performance obligations or the transaction price. Shipment of products to customers is considered a fulfillment activity with amounts billed to customers included in sales and costs associated with such included in cost of goods sold.

The company’s steel fabrication operations segment recognizes revenue over time at the amount of consideration the company expects to receive. Revenue is measured on an output method representing completed fabricated tons to date as a percentage of total tons required for each contract. Revenue from fabrication of tons remaining on partially fabricated customer contracts as of a reporting date, which are generally expected to be realized within the following fiscal quarter, and revenue from yet to be fabricated customer contracts, has not been disclosed under the practical expedient in paragraph ASC 606-10-50-14 related to customer contracts with expected duration of one year or less. The company does not exercise significant judgements in determining the timing of satisfaction of performance obligations or the transaction price. Shipment of products to customers, which occurs after control over the product has transferred to the customer and revenue is recognized, is considered a fulfillment activity with amounts billed to customers included in sales and costs associated with such included in cost of goods sold.

Payments from customers for all operating segments are generally due within 30 days of invoicing, which generally occurs upon shipment of the products. Shipment for the steel fabrication operations segment generally occurs within 30 days of satisfaction of the performance obligation and revenue recognition. The company does not have financing components. Payments from customers have historically generally been within these terms, however, payments for non-US sales may extend longer. The allowance for doubtful accounts for all operating segments is based on the company’s best estimate of probable credit losses, along with historical experience.

Refer to Note 9 Segment Information, for disaggregated revenue by segment to external, external non-United States, and other segment customers.

Note 2.3. Earnings Per Share

Basic earnings per share is based on the weighted average shares of common stock outstanding during the period. Diluted earnings per share assumes the weighted average dilutive effect of common share equivalents outstanding during the period applied to the company’s basic earnings per share. Common share equivalents represent potentially dilutive restricted stock units, deferred stock units, restricted stock, ~~options~~ and ~~other equity-based awards;~~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 atas of or for the three ~~and nine~~ months ended ~~September~~March 31, 2018 and March 30, ~~2017 and 2016.~~2017.

The following tables present a reconciliation of the numerators and the denominators of the company’s basic and diluted earnings per share computations for the three ~~and nine~~ months ended ~~September~~March 31, 2018 and March 30, 2017 ~~and 2016~~ (in thousands, except per share data):



	Three Months Ended September 30,										Three Months Ended March 31,
	2017					2016					2018					2017
	Net Income		Shares	Per Share		Net Income		Shares	Per Share		Net Income		Shares	Per Share		Net Income		Shares	Per Share
	(Numerator)		(Denominator)	Amount		(Numerator)		(Denominator)	Amount		(Numerator)		(Denominator)	Amount		(Numerator)		(Denominator)	Amount
Basic earnings per share	$	153,258	239,066	$	0.64	$	157,397	243,761	$	0.65	$	227,551	236,623	$	0.96	$	200,817	242,943	$	0.83
Dilutive common share equivalents		-	1,814				-	1,921				-	1,100				-	1,603
Diluted earnings per share	$	153,258	240,880	$	0.64	$	157,397	245,682	$	0.64	$	227,551	237,723	$	0.96	$	200,817	244,546	$	0.82

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):

In September 2017, the company issued $350.0 million of 4.125% senior notes due 2025 (the "2025 Notes"), the proceeds of which, along with available cash, were used to fund the September 2017 tender to purchase at a redemption price of 103.563%, $182.9 million principal amount, plus accrued and unpaid interest to, but not including, the date of repurchase, of the company's 6.375% senior notes due 2022 (the "2022 Notes"), and the October 2017 call and repayment at a redemption price of 103.188% of the $167.1 million remaining outstanding principal amount of the 2022 Notes, plus accrued and unpaid interest to, but not including, the date of repayment. The $167.1 remaining outstanding principal amount is included in current maturities of long-term debt in the company’s September 30, 2017, balance sheet. The company recorded expenses related to tender premiums, write off of unamortized debt issuance costs, and other expenses of $8.0 million, which are reflected in other expenses in the consolidated statements of income for the three- and nine-months ended September 30, 2017. Additional call premiums of $6.6 million related to the October 2017 call and repayment will be recorded as other expenses in the consolidated statements of income for the three months and year ended

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



	Stockholders of Steel Dynamics, Inc.														Stockholders of Steel Dynamics, Inc.
					Additional								Redeemable						Additional								Redeemable
	Common		Treasury		Paid-In		Retained		Noncontrolling		Total		Noncontrolling		Common		Treasury		Paid-In		Retained		Noncontrolling		Total		Noncontrolling
	Stock		Stock		Capital		Earnings		Interests		Equity		Interests		Stock		Stock		Capital		Earnings		Interests		Equity		Interests
Balances at December 31, 2016	$	641	$	(416,829)	$	1,132,749	$	2,210,459	$	(149,561)	$	2,777,459	$	111,240
Balances at December 31, 2017															$	644	$	(665,297)	$	1,141,534	$	2,874,693	$	(156,506)	$	3,195,068	$	111,240
Dividends declared		-		-		-		(111,435)		-		(111,435)		-		-		-		-		(44,269)		-		(44,269)		-
Share repurchases		-		(237,154)		-		-		-		(237,154)		-		-		(69,269)		-		-		-		(69,269)		-
Equity-based compensation		-		3,773		14,714		(201)		-		18,286		-		-		3,866		1,337		(71)		-		5,132		-
Comprehensive and net income (loss)		-		-		-		508,008		(5,383)		502,625		-		-		-		-		227,551		(2,076)		225,475		-
Balances at September 30, 2017	$	641	$	(650,210)	$	1,147,463	$	2,606,831	$	(154,944)	$	2,949,781	$	111,240
Balances at March 31, 2018															$	644	$	(730,700)	$	1,142,871	$	3,057,904	$	(158,582)	$	3,312,137	$	111,240

The company is exposed to certain risks relating to its ongoing business operations. The company utilizes derivative instruments to mitigate commodity margin risk, ~~interest~~occasionally to mitigate foreign currency exchange rate risk, and ~~foreign currency exchange~~have in the past to mitigate 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 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 ~~September 30, 2017:~~March 31, 2018:

The following summarizes the location and amounts of the fair values reported on the company’s balance sheets as of ~~September 30, 2017,~~March 31, 2018, and December 31, ~~2016,~~2017, and gains and losses related to derivatives included in the company’s statement of income for the three ~~and nine~~ months ended ~~September~~March 31, 2018, and March 30, 2017 ~~and 2016~~ (in thousands):

Asset Derivatives

Liability Derivatives

Balance sheet

Fair Value

Fair Value

location

September 30, 2017

December 31, 2016

September 30, 2017

December 31, 2016
Derivative instruments designated

as fair value hedges

Commodity futures
Other current assets

$
2,576

$
2,910

$
396

$
1,300

Derivative instruments not designated

as hedges

Commodity futures
Other current assets

1,573

1,150

497

783
Total derivative instruments

$
4,149

$
4,060

$
893

$
2,083



		Asset Derivatives				Liability Derivatives
	Balance sheet	Fair Value				Fair Value
	location	March 31, 2018		December 31, 2017		March 31, 2018		December 31, 2017
Derivative instruments designated as fair value hedges
Commodity futures	Other current assets	$	4,918	$	1,211	$	555	$	5,364

Derivative instruments not designated as hedges
Commodity futures	Other current assets		2,233		1,579		852		5,142
Total derivative instruments		$	7,151	$	2,790	$	1,407	$	10,506

The fair value of the above derivative instruments along with required margin deposit amounts with the same counterparty under master netting arrangements totaled ~~$6.0~~$3.5 million at ~~September 30, 2017,~~March 31, 2018, and ~~$3.2~~$5.6 million at December 31, ~~2016,~~2017, 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					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				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				(loss) recognized	for the three months ended				Hedged items in	in income on	for the three months ended
	in income on	September 30,		September 30,		fair value hedge	related hedged	September 30,		September 30,		in income on	March 31,		March 31,		fair value hedge	related hedged	March 31,		March 31,
	derivatives	2017		2016		relationships	items	2017		2016		derivatives	2018		2017		relationships	items	2018		2017
Derivatives in fair value
hedging relationships
Commodity futures	Costs of goods sold	$	4,122	$	826	Firm commitments	Costs of goods sold	$	(1,711)	$	(793)	Costs of goods sold	$	8,516	$	(153)	Firm commitments	Costs of goods sold	$	(793)	$	539
						Inventory	Costs of goods sold		(1,330)		(177)						Inventory	Costs of goods sold		(2,596)		495
Derivatives not designated								$	(3,041)	$	(970)								$	(3,389)	$	1,034
as hedging instruments
Commodity futures	Costs of goods sold	$	(10,566)	$	(638)							Costs of goods sold	$	2,756	$	(4,346)

Amount of gain (loss) recognized

Location of gain

Amount of gain (loss) recognized

Location of gain

in income on derivatives

(loss) recognized

in income on related hedged items

(loss) recognized

for the nine months ended

Hedged items in

in income on

for the nine months ended

in income on

September 30,

September 30,

fair value hedge

on related

September 30,

September 30,

derivatives

2017

2016

relationships

hedged items

2017

2016
Derivatives in fair value

hedging relationships

Commodity futures

Costs of goods sold

$
571

$
1,281

Firm commitments

Costs of goods sold

$
995

$
(2,223)

Inventory

Costs of goods sold

179

642
Derivatives not designated

$
1,174

$
(1,581)
as hedging instruments

Commodity futures

Costs of goods sold

$
(12,528)

$
(394)

Derivatives accounted for as fair value hedges had ineffectiveness resulting in losses of ~~$35,000 and $84,000~~$101,000 during the three-month periods ended ~~September 30, 2017~~March 31, 2018 and ~~2016, respectively; and a gain~~gains of ~~$62,000 and loss of $175,000 during~~$48,000 for the ~~nine-month periods~~three months ended ~~September 30, 2017 and 2016, respectively.~~March 31, 2017. Gains excluded from hedge effectiveness testing of ~~$1.1~~$5.0 million and $833,000 decreased cost of goods sold during the three-month period ended ~~September 30, 201~~7, March 31, 2018, and losses excluded from hedge effectiveness testing of $60,000 increased costs of goods sold during the three-month period ended September 30, 2016. Gains of $1.7 million decreased costs of goods sold during the nine-month period ended September 30, 2017, ~~and losses of $125,000 increased costs of goods sold during the nine month period ended September 30, 2016.~~ respectively.

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:

The following table sets forth financial assets and liabilities measured at fair value on a recurring basis in the consolidated balance sheet and the respective levels to which the fair value measurements are classified within the fair value hierarchy as of ~~September 30, 2017,~~March 31, 2018, and December 31, ~~2016~~2017 (in thousands):



			Quoted Prices		Significant						Quoted Prices		Significant
			in Active		Other		Significant				in Active		Other		Significant
			Markets for		Observable		Unobservable				Markets for		Observable		Unobservable
			Identical Assets		Inputs		Inputs				Identical Assets		Inputs		Inputs
	Total		(Level 1)		(Level 2)		(Level 3)		Total		(Level 1)		(Level 2)		(Level 3)
September 30, 2017
March 31, 2018
Commodity futures – financial assets	$	4,149	$	-	$	4,149	$	-	$	7,151	$	-	$	7,151	$	-
Commodity futures – financial liabilities		893		-		893		-		1,407		-		1,407		-

December 31, 2016
December 31, 2017
Commodity futures – financial assets	$	4,060	$	-	$	4,060	$	-	$	2,790	$	-	$	2,790	$	-
Commodity futures – financial liabilities		2,083		-		2,083		-		10,506		-		10,506		-

The carrying amounts of financial instruments including cash and equivalents, and short-term investments in certificates of deposit approximate fair value. The fair values of commodity futures contracts are estimated by the use of quoted market prices, estimates obtained from brokers, and other appropriate valuation techniques based on references available. The fair value of long-term debt, including current maturities, as determined by quoted market prices (Level 2), was approximately ~~$2.6~~$2.4 billion and $2.5 billion at ~~September 30, 2017~~March 31, 2018 and December 31, ~~2016,~~2017, respectively (with a corresponding carrying amount in the consolidated balance sheet of ~~$2.5 and~~ $2.4 billion at ~~September 30, 2017,~~March 31, 2018 and December 31, ~~2016, respectively)~~2017).

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

The company’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 ~~these~~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 ~~these~~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 our Minnesota ironmaking operations and several small joint ventures. In addition, “Other” also includes certain unallocated corporate accounts, such as the company’s senior secured credit facility, senior notes, certain other investments and certain profit sharing expenses.



			Metals			Steel												Metals		Steel
For the three months ended	Steel		Recycling			Fabrication										Steel		Recycling		Fabrication
September 30, 2017	Operations		Operations			Operations		Other			Eliminations			Consolidated
March 31, 2018																Operations		Operations		Operations		Other			Eliminations			Consolidated

Net Sales
Net Sales - disaggregated revenue
External	$	1,700,707	$	301,422		$	211,271	$	101,057		$	-		$	2,314,457	$	1,832,303	$	329,872	$	201,437	$	92,471		$	-		$	2,456,083
External Non-U.S.		82,098		46,793			34		-			-			128,925		89,486		58,250		56		-			-			147,792
Other segments		65,321		360,982			89		116			(426,508)			-		59,985		364,644		210		147			(424,986)			-
		1,848,126		709,197			211,394		101,173			(426,508)			2,443,382		1,981,774		752,766		201,703		92,618			(424,986)			2,603,875
Operating income (loss)		276,547		17,624			21,862		(44,326)	(1)		(692)			271,015		334,562		24,715		19,791		(55,406)	(1)		(265)			323,397
Income (loss) before income taxes		255,539		16,020			20,199		(56,754)			(692)			234,312		315,805		23,005		18,457		(61,033)			(270)			295,964
Depreciation and amortization		57,644		12,020			2,866		2,680			-			75,210		59,141		11,558		2,898		2,538			-			76,135
Capital expenditures		31,654		8,589			1,524		1,028			-			42,795		38,402		6,946		2,077		3,181			-			50,606

As of September 30, 2017					��
As of March 31, 2018
Assets	$	4,353,904	$	1,032,018		$	381,931	$	1,346,968	(2)	$	(154,084)	(3)	$	6,960,737	$	4,462,706	$	1,006,510	$	350,359	$	1,250,869	(2)	$	(97,631)	(3)	$	6,972,813


	Footnotes related to the three months ended September 30, 2017, segment results (in millions):
Footnotes related to the three months ended March 31, 2018, segment results (in millions):								Footnotes related to the three months ended March 31, 2018, segment results (in millions):

(1)	Corporate SG&A	$	(12.1)	(3)	Elimination of intra-company receivables	$	(130.4)	Corporate SG&A	$	(15.7)	(3)	Elimination of intra-company receivables	$	(72.4)
	Company-wide equity-based compensation		(6.8)		Elimination of intra-company debt		(10.7)	Company-wide equity-based compensation		(8.5)		Elimination of intra-company debt		(12.9)
	Profit sharing		(20.2)		Other		(13.0)	Profit sharing		(25.6)		Other		(12.3)
	Other, net		(5.2)			$	(154.1)	Other, net		(5.6)			$	(97.6)
		$	(44.3)						$	(55.4)

(2)	Cash and equivalents	$	1,065.9					Cash and equivalents	$	970.5
	Accounts receivable		14.0					Short-term investments		40.0
	Inventories		42.8					Inventories		28.4
	Property, plant and equipment, net		162.4					Property, plant and equipment, net		161.7
	Intra-company debt		10.7					Intra-company debt		12.9
	Other		51.2					Other		37.4
		$	1,347.0						$	1,250.9



			Metals		Steel											Metals		Steel
For the three months ended	Steel		Recycling		Fabrication									Steel		Recycling		Fabrication
September 30, 2016	Operations		Operations		Operations		Other			Eliminations		Consolidated
March 31, 2017														Operations		Operations		Operations		Other			Eliminations			Consolidated

Net Sales
Net Sales - disaggregated revenue
External	$	1,502,726	$	260,518	$	177,341	$	60,282		$	-	$	2,000,867	$	1,633,630	$	310,951	$	194,035	$	88,951		$	-		$	2,227,567
External Non-U.S.		54,776		45,574		88		5			-		100,443		87,703		52,885		61		-			-			140,649
Other segments		70,384		259,171		1,211		1,108			(331,874)		-		54,343		356,301		12		334			(410,990)			-
		1,627,886		565,263		178,640		61,395			(331,874)		2,101,310		1,775,676		720,137		194,108		89,285			(410,990)			2,368,216
Operating income (loss)		307,553		6,154		17,744		(47,687)	(1)		91		283,855		348,532		17,849		23,726		(53,970)	(1)		(1,571)	(2)		334,566
Income (loss) before income taxes		285,131		2,437		15,645		(59,999)			91		243,305		326,764		16,072		22,339		(59,352)			(1,571)			304,252
Depreciation and amortization		53,456		13,836		2,848		4,101			(51)		74,190		56,331		13,035		2,971		2,720			-			75,057
Capital expenditures		49,200		9,506		747		321			-		59,774		33,578		6,776		1,151		172			-			41,677

Metals

Steel

For the nine months ended

Steel

Recycling

Fabrication

September 30, 2017

Operations

Operations

Operations

Other

Eliminations

Consolidated

Net Sales

  External

$
5,025,310

$
910,830

$
603,140

$
281,091

$
-

$
6,820,371
  External Non-U.S.

237,070

144,750

127

-

-

381,947
  Other segments

183,374

1,067,770

244

1,065

(1,252,453)

-

5,445,754

2,123,350

603,511

282,156

(1,252,453)

7,202,318
Operating income (loss)

895,008

51,968

65,735

(141,406)
(1)

(371)

870,934
Income (loss) before income taxes

830,865

46,674

61,171

(164,456)

(371)

773,883
Depreciation and amortization

170,125

37,048

8,743

8,152

-

224,068
Capital expenditures

101,939

18,539

5,748

1,520

-

127,746

Metals

Steel

For the nine months ended

Steel

Recycling

Fabrication

September 30, 2016

Operations

Operations

Operations

Other

Eliminations

Consolidated

Net Sales

  External

$
4,068,688

$
769,260

$
527,859

$
210,358

$
-

$
5,576,165
  External Non-U.S.

172,694

117,299

167

188

-

290,348
  Other segments

178,190

756,613

2,415

3,603

(940,821)

-

4,419,572

1,643,172

530,441

214,149

(940,821)

5,866,513
Operating income (loss)

712,939

20,014

73,230

(125,186)
(1)

(9,055)
(2)

671,942
Income (loss) before income taxes

645,189

10,300

67,175

(152,296)

(9,055)

561,313
Depreciation and amortization

159,614

42,666

8,431

12,413

(154)

222,970
Capital expenditures

103,202

17,068

1,918

980

-

123,168

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. The following statements should be read in conjunction with the accompanying consolidated financial statements and the company’s Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2017.



Condensed Consolidating Balance Sheets (in thousands)	Condensed Consolidating Balance Sheets (in thousands)											Condensed Consolidating Balance Sheets (in thousands)
						Combined		Consolidating		Total							Combined		Consolidating		Total
As of September 30, 2017		Parent		Guarantors		Non-Guarantors		Adjustments		Consolidated
As of March 31, 2018													Parent		Guarantors		Non-Guarantors		Adjustments		Consolidated
Cash and equivalents		$	1,064,499	$	32,968	$	4,497	$	-	$	1,101,964		$	969,240	$	9,294	$	7,290	$	-	$	985,824
Short term investments														40,000		-		-		-		40,000
Accounts receivable, net			294,753		1,450,968		48,082		(870,786)		923,017			349,276		1,475,249		33,922		(870,792)		987,655
Inventories			669,076		754,526		72,990		(9,076)		1,487,516			743,939		804,504		59,192		(7,577)		1,600,058
Other current assets			36,828		21,404		5,124		(3,708)		59,648			23,717		14,814		5,095		(4,921)		38,705
Total current assets			2,065,156		2,259,866		130,693		(883,570)		3,572,145			2,126,172		2,303,861		105,499		(883,290)		3,652,242
Property, plant and equipment, net			873,015		1,634,215		201,547		-		2,708,777			854,685		1,605,485		197,767		-		2,657,937
Intangible assets, net			-		231,838		31,519		-		263,357			-		219,374		30,609		-		249,983
Goodwill			-		380,695		7,823		-		388,518			-		378,221		7,824		-		386,045
Other assets, including investments in subs			2,611,965		7,060		5,578		(2,596,663)		27,940			2,486,756		6,081		5,588		(2,471,819)		26,606
Total assets		$	5,550,136	$	4,513,674	$	377,160	$	(3,480,233)	$	6,960,737		$	5,467,613	$	4,513,022	$	347,287	$	(3,355,109)	$	6,972,813

Accounts payable		$	196,177	$	348,347	$	106,208	$	(122,049)	$	528,683		$	185,459	$	363,178	$	87,276	$	(73,295)	$	562,618
Accrued expenses			224,156		251,694		9,437		(130,102)		355,185			185,020		232,542		11,103		(140,189)		288,476
Current maturities of long-term debt			167,840		-		40,482		(25,661)		182,661			746		-		36,761		(27,861)		9,646
Total current liabilities			588,173		600,041		156,127		(277,812)		1,066,529			371,225		595,720		135,140		(241,345)		860,740
Long-term debt			2,324,240		-		172,243		(145,000)		2,351,483			2,327,621		-		167,787		(141,705)		2,353,703
Other liabilities			(467,002)		983,737		27,238		(62,269)		481,704			(701,952)		775,007		22,547		239,391		334,993
Total liabilities			2,445,411		1,583,778		355,608		(485,081)		3,899,716			1,996,894		1,370,727		325,474		(143,659)		3,549,436

Redeemable noncontrolling interests			-		-		111,240		-		111,240			-		-		111,240		-		111,240

Common stock			641		1,727,859		14,908		(1,742,767)		641			644		1,727,859		15,016		(1,742,875)		644
Treasury stock			(650,210)		-		-		-		(650,210)			(730,700)		-		-		-		(730,700)
Additional paid-in-capital			1,147,463		128,076		791,196		(919,272)		1,147,463			1,142,871		128,076		803,204		(931,280)		1,142,871
Retained earnings (deficit)			2,606,831		1,073,961		(740,848)		(333,113)		2,606,831			3,057,904		1,286,360		(749,065)		(537,295)		3,057,904
Total Steel Dynamics, Inc. equity			3,104,725		2,929,896		65,256		(2,995,152)		3,104,725			3,470,719		3,142,295		69,155		(3,211,450)		3,470,719
Noncontrolling interests			-		-		(154,944)		-		(154,944)			-		-		(158,582)		-		(158,582)
Total equity			3,104,725		2,929,896		(89,688)		(2,995,152)		2,949,781			3,470,719		3,142,295		(89,427)		(3,211,450)		3,312,137
Total liabilities and equity		$	5,550,136	$	4,513,674	$	377,160	$	(3,480,233)	$	6,960,737		$	5,467,613	$	4,513,022	$	347,287	$	(3,355,109)	$	6,972,813



					Combined		Consolidating		Total
As of December 31, 2017	Parent		Guarantors		Non-Guarantors		Adjustments		Consolidated
Cash and equivalents	$	1,001,405	$	20,441	$	6,803	$	-	$	1,028,649
Accounts receivable, net		274,968		1,426,036		37,387		(869,554)		868,837
Inventories		685,103		752,151		91,890		(9,797)		1,519,347
Other current assets		73,748		16,005		5,962		(4,206)		91,509
Total current assets		2,035,224		2,214,633		142,042		(883,557)		3,508,342
Property, plant and equipment, net		859,419		1,618,438		198,047		-		2,675,904
Intangible assets, net		-		225,503		31,406		-		256,909
Goodwill		-		379,069		7,824		-		386,893
Other assets, including investments in subs		2,512,594		6,622		5,505		(2,497,037)		27,684
Total assets	$	5,407,237	$	4,444,265	$	384,824	$	(3,380,594)	$	6,855,732

Accounts payable	$	168,282	$	316,676	$	101,948	$	(97,458)	$	489,448
Accrued expenses		222,023		254,196		10,243		(136,186)		350,276
Current maturities of long-term debt		731		-		56,454		(28,390)		28,795
Total current liabilities		391,036		570,872		168,645		(262,034)		868,519
Long-term debt		2,326,466		-		169,799		(143,120)		2,353,145
Other liabilities		(661,839)		869,196		24,868		95,535		327,760
Total liabilities		2,055,663		1,440,068		363,312		(309,619)		3,549,424

Redeemable noncontrolling interests		-		-		111,240		-		111,240

Common stock		644		1,727,859		14,908		(1,742,767)		644
Treasury stock		(665,297)		-		-		-		(665,297)
Additional paid-in-capital		1,141,534		128,076		797,196		(925,272)		1,141,534
Retained earnings (deficit)		2,874,693		1,148,262		(745,326)		(402,936)		2,874,693
Total Steel Dynamics, Inc. equity		3,351,574		3,004,197		66,778		(3,070,975)		3,351,574
Noncontrolling interests		-		-		(156,506)		-		(156,506)
Total equity		3,351,574		3,004,197		(89,728)		(3,070,975)		3,195,068
Total liabilities and equity	$	5,407,237	$	4,444,265	$	384,824	$	(3,380,594)	$	6,855,732

Combined

Consolidating

Total
As of December 31, 2016

Parent

Guarantors

Non-Guarantors

Adjustments

Consolidated
Cash and equivalents

$
766,685

$
54,677

$
20,121

$
-

$
841,483
Accounts receivable, net

229,148

1,257,245

23,689

(780,298)

729,784
Inventories

587,319

639,148

58,696

(9,952)

1,275,211
Other current assets

45,049

36,062

4,447

(2,361)

83,197
  Total current assets

1,628,201

1,987,132

106,953

(792,611)

2,929,675
Property, plant and equipment, net

899,370

1,679,751

208,094

-

2,787,215
Intangible assets, net

-

251,919

32,058

-

283,977
Goodwill

-

385,527

7,824

-

393,351
Other assets, including investments in subs

2,769,884

7,335

5,832

(2,753,537)

29,514
  Total assets

$
5,297,455

$
4,311,664

$
360,761

$
(3,546,148)

$
6,423,732

Accounts payable

$
141,089

$
265,764

$
89,659

$
(101,316)

$
395,196
Accrued expenses

198,085

220,917

8,793

(113,808)

313,987
Current maturities of long-term debt

674

700

29,347

(27,089)

3,632
  Total current liabilities

339,848

487,381

127,799

(242,213)

712,815
Long-term debt

2,324,298

-

168,566

(139,670)

2,353,194
Other liabilities

(293,711)

1,219,444

42,482

(499,191)

469,024
  Total liabilities

2,370,435

1,706,825

338,847

(881,074)

3,535,033

Redeemable noncontrolling interests

-

-

111,240

-

111,240

Common stock

641

1,727,859

14,908

(1,742,767)

641
Treasury stock

(416,829)

-

-

-

(416,829)
Additional paid-in-capital

1,132,749

128,076

779,678

(907,754)

1,132,749
Retained earnings (deficit)

2,210,459

748,904

(734,351)

(14,553)

2,210,459
  Total Steel Dynamics, Inc. equity

2,927,020

2,604,839

60,235

(2,665,074)

2,927,020
Noncontrolling interests

-

-

(149,561)

-

(149,561)
  Total equity

2,927,020

2,604,839

(89,326)

(2,665,074)

2,777,459
  Total liabilities and equity

$
5,297,455

$
4,311,664

$
360,761

$
(3,546,148)

$
6,423,732



Condensed Consolidating Statements of Operations (in thousands)

For the three months ended,					Combined		Consolidating		Total
March 31, 2018	Parent		Guarantors		Non-Guarantors		Adjustments		Consolidated
Net sales	$	1,036,674	$	2,823,129	$	152,587	$	(1,408,515)	$	2,603,875
Costs of goods sold		819,145		2,551,620		148,630		(1,378,936)		2,140,459
Gross profit		217,529		271,509		3,957		(29,579)		463,416
Selling, general and administrative		62,927		76,952		5,597		(5,457)		140,019
Operating income (loss)		154,602		194,557		(1,640)		(24,122)		323,397
Interest expense, net of capitalized interest		18,623		12,437		3,540		(2,704)		31,896
Other expense (income), net		(5,203)		(1,697)		(273)		2,710		(4,463)
Income (loss) before income taxes and
equity in net income of subsidiaries		141,182		183,817		(4,907)		(24,128)		295,964
Income taxes		29,746		45,720		909		(5,886)		70,489
		111,436		138,097		(5,816)		(18,242)		225,475
Equity in net income of subsidiaries		116,115		-		-		(116,115)		-
Net loss attributable to noncontrolling interests		-		-		2,076		-		2,076
Net income (loss) attributable to Steel Dynamics, Inc.	$	227,551	$	138,097	$	(3,740)	$	(134,357)	$	227,551



For the three months ended,					Combined		Consolidating		Total
March 31, 2017	Parent		Guarantors		Non-Guarantors		Adjustments		Consolidated
Net sales	$	924,566	$	2,572,238	$	143,408	$	(1,271,996)	$	2,368,216
Costs of goods sold		711,579		2,289,664		138,041		(1,243,222)		1,896,062
Gross profit		212,987		282,574		5,367		(28,774)		472,154
Selling, general and administrative		61,655		76,282		5,053		(5,402)		137,588
Operating income		151,332		206,292		314		(23,372)		334,566
Interest expense, net of capitalized interest		18,081		15,123		3,266		(2,497)		33,973
Other expense (income), net		(3,254)		(2,667)		(236)		2,498		(3,659)
Income (loss) before income taxes and
equity in net income of subsidiaries		136,505		193,836		(2,716)		(23,373)		304,252
Income taxes		41,585		70,311		1,790		(8,100)		105,586
		94,920		123,525		(4,506)		(15,273)		198,666
Equity in net income of subsidiaries		105,897		-		-		(105,897)		-
Net loss attributable to noncontrolling interests		-		-		2,151		-		2,151
Net income (loss) attributable to Steel Dynamics, Inc.	$	200,817	$	123,525	$	(2,355)	$	(121,170)	$	200,817

Condensed Consolidating Statements of Operations (in thousands)

For the three months ended,

Combined

Consolidating

Total
September 30, 2017

Parent

Guarantors

Non-Guarantors

Adjustments

Consolidated
Net sales

$
946,136

$
2,641,067

$
161,556

$
(1,305,377)

$
2,443,382
Costs of goods sold

763,310

2,402,670

157,564

(1,276,680)

2,046,864
  Gross profit

182,826

238,397

3,992

(28,697)

396,518
Selling, general and administrative

51,464

74,151

4,896

(5,008)

125,503
  Operating income (loss)

131,362

164,246

(904)

(23,689)

271,015
Interest expense, net of capitalized interest

18,831

14,481

3,181

(2,316)

34,177
Other (income) expense, net

2,660

(2,492)

42

2,316

2,526
Income (loss) before income taxes and

  equity in net income of subsidiaries

109,871

152,257

(4,127)

(23,689)

234,312
Income taxes

35,309

55,183

1,169

(8,361)

83,300

74,562

97,074

(5,296)

(15,328)

151,012
Equity in net income of subsidiaries

78,696

-

-

(78,696)

-
Net loss attributable to noncontrolling interests

-

-

2,246

-

2,246
Net income (loss) attributable to Steel Dynamics, Inc.

$
153,258

$
97,074

$
(3,050)

$
(94,024)

$
153,258

For the three months ended,

Combined

Consolidating

Total
September 30, 2016

Parent

Guarantors

Non-Guarantors

Adjustments

Consolidated
Net sales

$
845,585

$
2,258,466

$
96,409

$
(1,099,150)

$
2,101,310
Costs of goods sold

647,983

2,016,874

100,470

(1,072,520)

1,692,807
  Gross profit (loss)

197,602

241,592

(4,061)

(26,630)

408,503
Selling, general and administrative

52,995

72,605

4,134

(5,086)

124,648
  Operating income (loss)

144,607

168,987

(8,195)

(21,544)

283,855
Interest expense, net of capitalized interest

17,818

17,741

2,847

(2,207)

36,199
Other (income) expense, net

2,342

3,937

(4,135)

2,207

4,351
Income (loss) before income taxes and

  equity in net income of subsidiaries

124,447

147,309

(6,907)

(21,544)

243,305
Income taxes

40,242

55,684

797

(7,831)

88,892

84,205

91,625

(7,704)

(13,713)

154,413
Equity in net income of subsidiaries

73,192

-

-

(73,192)

-
Net loss attributable to noncontrolling interests

-

-

2,984

-

2,984
Net income (loss) attributable to Steel Dynamics, Inc.

$
157,397

$
91,625

$
(4,720)

$
(86,905)

$
157,397

For the nine months ended,

Combined

Consolidating

Total
September 30, 2017

Parent

Guarantors

Non-Guarantors

Adjustments

Consolidated
Net sales

$
2,797,557

$
7,827,981

$
449,902

$
(3,873,122)

$
7,202,318
Costs of goods sold

2,241,936

7,054,938

432,657

(3,788,403)

5,941,128
  Gross profit (loss)

555,621

773,043

17,245

(84,719)

1,261,190
Selling, general and administrative

164,061

226,153

15,253

(15,211)

390,256
  Operating income (loss)

391,560

546,890

1,992

(69,508)

870,934
Interest expense, net of capitalized interest

55,353

44,245

9,494

(7,073)

102,019
Other (income) expense, net

(4,463)

(7,305)

(273)

7,073

(4,968)
Income (loss) before income taxes and

  equity in net income of subsidiaries

340,670

509,950

(7,229)

(69,508)

773,883
Income taxes

106,036

184,891

4,651

(24,320)

271,258

234,634

325,059

(11,880)

(45,188)

502,625
Equity in net income of subsidiaries

273,374

-

-

(273,374)

-
Net loss attributable to noncontrolling interests

-

-

5,383

-

5,383
Net income (loss) attributable to Steel Dynamics, Inc.

$
508,008

$
325,059

$
(6,497)

$
(318,562)

$
508,008

For the nine months ended,

Combined

Consolidating

Total
September 30, 2016

Parent

Guarantors

Non-Guarantors

Adjustments

Consolidated
Net sales

$
2,297,389

$
6,322,158

$
271,694

$
(3,024,728)

$
5,866,513
Costs of goods sold

1,823,408

5,676,265

286,486

(2,944,568)

4,841,591
  Gross profit (loss)

473,981

645,893

(14,792)

(80,160)

1,024,922
Selling, general and administrative

145,596

212,613

9,352

(14,581)

352,980
  Operating income (loss)

328,385

433,280

(24,144)

(65,579)

671,942
Interest expense, net of capitalized interest

53,842

54,493

7,558

(6,005)

109,888
Other (income) expense, net

(2,137)

8,012

(11,139)

6,005

741
Income (loss) before income taxes and

  equity in net income of subsidiaries

276,680

370,775

(20,563)

(65,579)

561,313
Income taxes (benefit)

89,210

139,958

(63)

(23,966)

205,139

187,470

230,817

(20,500)

(41,613)

356,174
Equity in net income of subsidiaries

174,633

-

-

(174,633)

-
Net loss attributable to noncontrolling interests

5,929

5,929
Net income (loss) attributable to Steel Dynamics, Inc.

$
362,103

$
230,817

$
(14,571)

$
(216,246)

$
362,103

Condensed Consolidating Statements of Cash Flows (in thousands)

For the nine months ended,

Combined

Consolidating

Total
September 30, 2017

Parent

Guarantors

Non-Guarantors

Adjustments

Consolidated

Net cash provided (used in) by operating activities

$
126,267

$
434,450

$
(17,762)

$
4,650

$
547,605
Net cash used in investing activities

(48,799)

(50,975)

(7,006)

3,902

(102,878)
Net cash provided by (used in) financing activities

220,346

(405,184)

9,144

(8,552)

(184,246)
Increase (decrease) in cash and equivalents

297,814

(21,709)

(15,624)

-

260,481
Cash and equivalents at beginning of period

766,685

54,677

20,121

-

841,483
Cash and equivalents at end of period

$
1,064,499

$
32,968

$
4,497

$
-

$
1,101,964


Condensed Consolidating Statements of Cash Flows (in thousands)

For the three months ended,					Combined		Consolidating		Total
March 31, 2018	Parent		Guarantors		Non-Guarantors		Adjustments		Consolidated
Net cash provided by operating activities	$	9,009	$	149,336	$	21,283	$	(1,693)	$	177,935
Net cash used in investing activities		(60,919)		(24,517)		(2,997)		(1,944)		(90,377)
Net cash provided by (used in) financing activities		18,920		(135,966)		(17,813)		3,637		(131,222)
Increase (decrease) in cash and equivalents		(32,990)		(11,147)		473		-		(43,664)
Cash, cash equivalents, and restricted cash at beginning of
period		1,002,230		20,740		12,115		-		1,035,085
Cash, cash equivalents, and restricted cash at end of period	$	969,240	$	9,593	$	12,588	$	-	$	991,421

For the nine months ended,

Combined

Consolidating

Total
September 30, 2016

Parent

Guarantors

Non-Guarantors

Adjustments

Consolidated

Net cash provided by operating activities

$
282,918

$
358,657

$
52

$
3,735

$
645,362
Net cash used in investing activities

(143,427)

(81,983)

(3,935)

2,879

(226,466)
Net cash provided by (used in) financing activities

196,242

(297,596)

13,529

(6,614)

(94,439)
Increase (decrease) in cash and equivalents

335,733

(20,922)

9,646

-

324,457
Cash and equivalents at beginning of period

636,877

81,976

8,179

-

727,032
Cash and equivalents at end of period

$
972,610

$
61,054

$
17,825

$
-

$
1,051,489



For the three months ended,					Combined		Consolidating		Total
March 31, 2017	Parent		Guarantors		Non-Guarantors		Adjustments		Consolidated
Net cash provided by (used in) operating activities	$	102,209	$	132,733	$	(877)	$	6,365	$	240,430
Net cash used in investing activities		(19,409)		(1,510)		(192)		6,352		(14,759)
Net cash provided by (used in) financing activities		86,776		(174,914)		508		(12,717)		(100,347)
Increase (decrease) in cash and equivalents		169,576		(43,691)		(561)		-		125,324
Cash, cash equivalents, and restricted cash at beginning of
period		767,594		54,859		25,652		-		848,105
Cash, cash equivalents, and restricted cash at end of period	$	937,170	$	11,168	$	25,091	$	-	$	973,429

1715

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, and energy costs) and our ability to pass on any cost increases; (5) the impact of domestic and foreign import price competition; (6) unanticipated difficulties in integrating or starting up new or acquired businesses; (7) risks and uncertainties involving product and/or technology development; and (8) occurrences of unexpected plant outages or equipment failures.

More specifically, we refer you to our more detailed explanation of these and other factors and risks that may cause such predictive statements to turn out differently, as set forth in our most recent Annual Report on Form 10-K under the headings Special Note Regarding Forward-Looking Statements and Risk Factors~~, in our most recent Annual Report on Form 10-K~~ for the year ended December 31, ~~2016,~~2017, 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 annual steelmaking and ~~coating capacity of 11 million tons and actual~~ metals recycling ~~volumes.~~capability, with facilities located throughout the United States, and in Mexico. The primary source of revenues are 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 ~~the~~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 ~~the title~~control of the product transfers to the customer, upon shipment. Provision is made for estimated product returns and customer claims based on historical experience. If the historical data used in the estimates does not reflect future returns and claims trends, additional provision may be necessary.shipment or delivery. Our steel fabrication operations recognizes revenues ~~from construction contracts utilizing a percentage of completion methodology~~over time based on ~~steel~~completed fabricated tons ~~used on completed units~~ to date as a percentage of ~~estimated~~ total ~~steel~~ tons required for each contract.

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

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.

~~Results Overview~~

Consolidated operating income decreased $12.8 million, or 5%, to $271.0 million for the third quarter 2017, compared to the third quarter 2016. Third quarter 2017 net income attributable to Steel Dynamics, Inc. decreased $4.1 million, or 3%, to $153.3 million, compared to the third quarter 2016.

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Results Overview

Our consolidated results for the first quarter of 2018 benefited from continued strong demand in each of our three operating segments. Steel operations achieved record shipments and increased average selling prices in first quarter 2018 compared to the same quarter in 2017, while our metals recycling operations benefited from increased average selling prices, more than offsetting the impact of lower shipments resulting from the mid-March 2017 sale of some non-core locations. The non-residential construction market remained strong, resulting in consistent year over year shipments for our steel fabrication operations, with average selling prices continuing to rise. While our metals recycling operations was able to achieve substantial growth in operating income, both steel and steel fabrication operations experienced slight decreases in operating income due to increases in operating expenses which outpaced modestly higher metal spreads in both segments.

Consolidated operating income ~~increased $199.0~~decreased $11.2 million, or ~~30%~~3%, to ~~$870.9~~$323.4 million for the first ~~nine months of 2017,~~quarter 2018, compared to ~~$671.9 million for~~ the first ~~nine months of 2016.~~quarter 2017. First ~~nine months 2017~~quarter 2018 net income attributable to Steel Dynamics, Inc. increased ~~$145.9~~$26.7 million, or ~~40%~~13%, to ~~$508.0~~$227.6 million, compared to the first ~~nine months of 2016.~~

~~Our consolidated results for~~quarter 2017, with the ~~third~~reduction in the effective income tax rate to 23.8% in the first quarter ~~and~~2018 from 34.7% in the first nine months of 2017 benefited from continued strong demand primarily for our sheet and special-bar-quality steel products coupled with continued low customer inventory levels. However, increased import levels continued hindering the ability of domestic steel prices to keep pace with raw material costs. Decreased scrap volumes for our metals recycling operations were offset by improved pricing and ferrous metal spreads and reduced operating expenses, resulting in significantly increased operating income during the 2017 third quarter and year-to-date periods compared to the same periods in 2016. The non-residential construction market remained strong, resulting in record quarterly shipments for our steel fabrication operations for the third straight quarter. 2017.

Segment Operating Results 2017 vs. 2016 (dollars in thousands)



	Three Months Ended September 30,					Nine Months Ended September 30,					Three Months Ended March 31,
	2017		% Change		2016	2017		% Change	2016		2018		% Change		2017
Net sales:
Steel Operations Segment	$	1,848,126	14%	$	1,627,886	$	5,445,754	23%	$	4,419,572	$	1,981,774	12%	$	1,775,676
Metals Recycling Operations Segment		709,197	25%		565,263		2,123,350	29%		1,643,172		752,766	5%		720,137
Steel Fabrication Operations Segment		211,394	18%		178,640		603,511	14%		530,441		201,703	4%		194,108
Other		101,173	65%		61,395		282,156	32%		214,149		92,618	4%		89,285
		2,869,890			2,433,184		8,454,771			6,807,334		3,028,861			2,779,206
Intra-company		(426,508)			(331,874)		(1,252,453)			(940,821)		(424,986)			(410,990)
	$	2,443,382	16%	$	2,101,310	$	7,202,318	23%	$	5,866,513	$	2,603,875	10%	$	2,368,216

Operating income (loss):
Steel Operations Segment	$	276,547	(10)%	$	307,553	$	895,008	26%	$	712,939	$	334,562	(4)%	$	348,532
Metals Recycling Operations Segment		17,624	186%		6,154		51,968	160%		20,014		24,715	38%		17,849
Steel Fabrication Operations Segment		21,862	23%		17,744		65,735	(10)%		73,230		19,791	(17)%		23,726
Other		(44,326)	7%		(47,687)		(141,406)	(13)%		(125,186)		(55,406)	(3)%		(53,970)
		271,707			283,764		871,305			680,997		323,662			336,137
Intra-company		(692)			91		(371)			(9,055)		(265)			(1,571)
	$	271,015	(5)%	$	283,855	$	870,934	30%	$	671,942	$	323,397	(3)%	$	334,566

Steel ~~Operations Segment~~. ~~Steel~~ operations consist of our ~~six~~ electric arc furnace steel mills, producing sheet and long products steel from ferrous scrap and scrap substitutes, utilizing continuous casting, automated rolling mills ~~and eleven~~with several downstream ~~steel~~ coating ~~lines,~~ and ~~several~~ bar processing lines, as well as ~~Iron Dynamics,~~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 numerous industry sectors, including the construction, automotive, manufacturing, transportation, heavy equipment and agriculture, ~~equipment,~~ and pipe and tube (including OCTG) markets. Steel operations accounted for ~~73%~~74% and ~~74% of our consolidated external net sales during the third quarter of 2017 and 2016, respectively, and~~ 73% ~~and 72%~~ of our consolidated external net sales during the first ~~nine months~~quarter of ~~2017~~2018 and ~~2016,~~2017, respectively.

~~Sheet Steel Products.~~ Our sheet steel products operations consist of Butler and Columbus Flat Roll Divisions, and downstream coating lines. These operations sell a broad range of sheet steel products, consisting of hot roll, cold roll and coated steel products, including a wide variety of specialty products, such as light gauge hot roll, galvanized, Galvalume®~~, and painted products. The Techs is comprised of three galvanizing lines which sell specialized galvanized sheet steels used in primarily non-automotive applications.~~

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

Overall domestic steel ~~demand~~consumption remained strong, ~~but elevated levels of steel imports persisted during~~particularly within the ~~quarter, hindering the ability for domestic steel prices~~automotive and construction sectors, while energy and general industrial demand continued to ~~keep pace with raw material costs.~~grow. Steel operations segment shipments ~~increased 7%~~remained relatively flat in the ~~third~~first quarter ~~2017,~~2018, as compared to the same period in ~~2016, driven by improved flat roll and engineered bar shipments. Demand from~~2017, with long products improving slightly. Net sales for the ~~construction sector continues~~steel operations increased 12% in the first quarter 2018 when compared to ~~improve, and energy has shown a continued positive demand trend. Demand has also improved for heavy off-road equipment and more general industrial manufacturing. Conversely, demand from~~ the ~~domestic automotive sectors has softened somewhat, but still remains near historically high levels.~~same period in 2017, due primarily to an increase of $74 per ton, or 10%, in average selling prices consistent with increased steel market pricing. Our steel mill utilization rate averaged ~~92%~~94% for the ~~third~~first quarter ~~2017,~~2018, as compared to ~~85% in the third quarter 2016.~~ Sheet steel average selling prices increased 4% in the third quarter 2017 compared to the same period in 2016, while long products rose 8%. Net sales for the steel operations increased 14% in the third quarter 2017, when compared to the same period in 2016, due to an increase of $39 per ton, or 5%, in average selling prices combined with a 7% increase in steel operations shipments. Net sales for the steel operations increased 23%95% in the first nine months of 2017, when compared to the same period in 2016, due to a 4% increase in steel operations segment shipments combined with an increase of $118 per ton, or 18%, in average selling prices. The increase in shipments and pricing for the first nine months of 2017 was the result of much stronger markets in the first and third quarters 2017, compared to the same periods in 2016.quarter 2017.

Metallic raw materials used in our electric arc furnaces represent our single most significant steel manufacturing cost, generally comprising approximately 60% of our steel operations’ manufacturing costs, excluding the operations of The Techs and Vulcan, which purchase, rather than produce, the steel they further process. Our metallic raw material cost per net ton consumed in our steel operations increased ~~$55,~~$56, or ~~22%~~21%, in the ~~third~~first quarter ~~2017,~~2018, compared to the same period in ~~2016,~~2017, consistent with overall increased domestic scrap pricing. ~~In the first nine months~~ As a result of ~~2017, our metallic raw material cost per net ton consumed increased $70, or 32%, compared to the same period in 2016.~~

~~Operating income for the steel operations decreased 10%, to $276.5 million, in the third quarter 2017, compared to the same period in 2016, due to a 3% decrease in~~selling prices increasing more than scrap costs, metal spread (which we define as the difference between average selling prices and the cost of ferrous scrap consumed) ~~more than offsetting~~ increased ~~steel shipments.~~ 4% in the first quarter 2018 compared to the first quarter 2017.

Operating income for the ~~first nine months 2017 increased 26%~~steel operations decreased 4%, to ~~$895.0~~$334.6 million, in the first quarter 2018, compared to the ~~first nine months of 2016,~~same period in 2017, due primarily to ~~an 11%~~ ~~expansion of steel segment operations metal spread, coupled with a 4% increase~~increases in ~~steel shipments.~~other manufacturing costs not related to metallic raw materials, including planned maintenance outages.

~~Metals Recycling Operations Segment.~~ Metals recycling operations consists solely of OmniSource and includes both ferrous and nonferrous scrap metal processing, transportation, marketing, ~~brokerage,~~ and ~~consulting~~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 ~~(61% - 63%~~(65% and 64% 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 ~~14% and~~ 15% of our consolidated external net sales during the ~~third quarter~~first quarters of ~~2017~~2018 and ~~2016, respectively, and 15% for each of the first nine months of 2017 and 2016.~~2017.

Metals recycling operations operating income in the ~~third~~first quarter ~~2017~~2018 of ~~$17.6~~$24.7 million ~~was 186% higher than~~increased 38% from the ~~third~~first quarter ~~2016~~2017 operating income of ~~$6.2~~$17.8 million, due to ~~improvements~~a slight improvement in ferrous and a more pronounced improvement in nonferrous metal ~~spread~~spreads (which we define as the difference between average selling prices and the cost of purchased scrap)~~, and reduced operating costs.~~. Net sales increased ~~25%~~5% in the ~~third~~first quarter ~~2017~~2018 as compared to the same period in ~~2016,~~2017, driven by increased pricing, ~~which~~ more than ~~offset decreased shipments.~~offsetting the impact of lower shipments, resulting from the mid-March 2017 sale of some non-core locations. Ferrous scrap average selling prices increased 12% during the first quarter 2018 compared to the same period in 2017, while nonferrous average selling prices increased 6% compared to the same period in 2017, resulting in ferrous metal spread expansion of 3%, and nonferrous metal spread expansion of 24%. Overall domestic steel mill utilization was 76% in the first quarter of 2018, compared to 75% in the ~~third quarter of~~same 2017 ~~compared to 70% in the same 2016~~ period. Ferrous shipments to our own steel mills decreased by 2%4% in the ~~third~~first quarter ~~2017,~~2018, compared to the same period in 2016. Ferrous scrap average selling prices increased 30% during the third quarter 2017 compared to the same period in 2016, while nonferrous average selling prices increased 36% compared to the same period in 2016, resulting in ferrous metal spread increasing 11%, and nonferrous metal spread increasing 2%.

Metals recycling operations operating income in the first nine months of 2017 of $52.0 million was 160% higher than the first nine months 2016 operating income of $20.0 million, due to increased selling prices resulting in a 17% improvement in ferrous metal spread, and reduced operating expenses. Net sales increased 29% in the first nine months of 2017 as compared to the same period in 2016, driven by increased pricing for both ferrous and nonferrous products, which increased 40% and 27%, respectively, during the first nine months of 2017 compared to the same period in 2016.

Steel fabrication operations include our New Millennium Building ~~Systems’~~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~~ 8% of our consolidated external net sales during the ~~third quarter~~first quarters of ~~2017~~2018 and ~~2016, respectively, and 8% and 9% during the first nine months of 2017 and 2016, respectively.~~2017.

The overall non-residential construction market has continued to remain strong, demonstrating a positive growth profile, as our fabrication operations achieved a third consecutive quarterly shipments record in the third quarter of 2017. Net sales for the steel fabrication operations increased ~~$32.8~~$7.6 million, or ~~18%~~4%, during the ~~third~~first quarter ~~2017,~~2018, compared to the same period in ~~2016,~~2017, as shipments ~~increased 13%,~~remained consistent, while average selling prices increased ~~$64~~$54 per ton, or 5%4%.~~Net sales for the segment increased $73.1 million, or 14%, in the first nine months of 2017, compared to the first nine months of 2016, as volumes increased 7% and selling prices increased 6%.~~ Our steel fabrication operations ~~continue to realize strength in order activity and resulting shipments, as we~~ continue to leverage our national operating footprint to sustain and improve market ~~share,~~share. Market demand and order backlogs continue to be strong heading into the seasonally busier months ahead, indicating that the non-residential construction market ~~demand~~ continues to ~~improve.~~grow.

The purchase of various steel products is the largest single cost of production for our steel fabrication operations, generally representing approximately two-thirds of the total cost of manufacturing. The average cost of steel consumed increased by ~~12%~~7% in the ~~third~~first quarter ~~2017,~~2018, as compared to the same period in ~~2016,~~2017 consistent with increased selling prices discussed in the steel operations results, while average selling prices increased only 5%4%, with resulting in metal spread (which we define as the difference between average selling prices and the cost of purchased steel) ~~declining 2%~~remaining relatively steady on a per ton basis. However, operating income ~~increased 23%~~decreased $3.9 million, or 17%, to ~~$21.9~~$19.8 million in the ~~third~~first quarter ~~2017~~2018 compared to the same period in ~~2016, as increased shipments more than offset metal spread contraction. S~~2017, due primarily to increases in other non steel related costsegment operating income of $65.7 million in the first nine months of 2017 decreased 10%, from $73.2 million in the first nine months of 2016, despite a 7% increase in shipments, as metal spreads decreased 7% year over year..

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

Selling, General and Administrative Expenses. Selling, general and administrative expenses ~~(including profit sharing and amortization~~ of ~~intangible assets) of $125.5~~$106.4 million during the ~~third~~first quarter ~~2017 were consistent with the $124.6~~2018 increased 3% from $102.9 million during the ~~third~~first quarter ~~2016,~~2017, representing ~~approximately 5.1%~~a comparable 4.1% and ~~5.9%~~4.3% of net sales, respectively.

Interest Expense, net of Capitalized Interest. During the ~~third~~first quarter ~~2017,~~2018, interest expense decreased 6% to ~~$34.2~~$31.9 million from ~~$36.2~~$34.0 million during the same period in ~~2016,~~2017, due primarily to the ~~December 2016 refinancing~~call and repayment of ~~$400.0~~our $350.0 million ~~of 6.125%~~6.375% senior notes due ~~2019~~2022 with ~~5.000%~~4.125% senior notes due ~~2026. In addition, in December 2016 we repaid the remaining $228.1 million of outstanding Senior Term Loan debt, which was set to mature on November 14, 2019.~~

~~Income Tax Expense~~. During the third quarter 2017, our income tax expense was $83.3 million at an effective income tax rate of 35.6%, as compared to $88.9 million at an effective income tax rate of 36.5%, during the third quarter 2016. The lower effective tax rate in 2017 is due

~~primarily to additional permanent tax benefit items, most notably the 2017 domestic manufacturing deduction, resulting from increases in taxable income.~~

~~Selling, General and Administrative Expenses.~~ Selling, general and administrative expenses (including profit sharing and amortization of intangible assets) of $390.3 million during the first nine months of 2017 increased 11% from $353.0 million during the first nine months of 2016, representing approximately 5.4% and 6.0% of net sales, respectively. The increase2025 in the first nine months 2017 expenses compared to the same period in 2016 is due most notably to increased performance-based incentive compensation, including profit sharing, associated with our increased profitability.

~~Interest Expense, net~~latter half of ~~Capitalized Interest.~~ During the first nine months of 2017, interest expense decreased $7.9 million to $102.0 million, when compared to the same period in 2016. The decrease in interest expense is due primarily to the December 2016 refinancing of $400.0 million of 6.125% senior notes due 2019 with 5.000% senior notes due 2026. In addition, in December 2016 we repaid the remaining $228.1 million of outstanding Senior Term Loan debt, which was set to mature on November 14, 2019.2017.

Income Tax Expense. During the first ~~nine months of 2017,~~quarter 2018, our income tax expense was ~~$271.3~~$70.5 million at an effective income tax rate of ~~35.1%~~23.8%, as compared to ~~$205.1~~$105.6 million at an effective income tax rate of ~~36.5%~~34.7%, during the first ~~nine months of 2016.~~quarter 2017. The lower effective tax rate in ~~2017~~2018 is due primarily to ~~additional permanent~~the enacted Tax Cuts and Jobs Act of 2017, signed into law in December 2017, which lowered the federal income tax ~~benefit items, most notably the 2017 domestic manufacturing deduction, resulting~~rate from ~~increases~~35% to 21% in ~~taxable income.~~2018.

Capital Resources and Long‑term Debt. Our business is capital intensive and requires substantial expenditures for, among other things, the purchase and maintenance of equipment used in our steel, metals recycling, and steel fabrication operations, and to remain in compliance with environmental laws. Our short-term and long-term liquidity needs arise primarily from working capital requirements, capital expenditures, principal and interest payments related to our outstanding indebtedness, dividends to our shareholders, and acquisitions. We have met these liquidity requirements primarily with cash provided by operations and long-term borrowings, and we also have availability under our Revolver. Our liquidity at ~~September 30, 2017,~~March 31, 2018, is as follows (in thousands):

Our total outstanding debt ~~remained relatively unchanged~~decreased $18.6 million during the first ~~nine months~~quarter of ~~2017~~2018 due to decreased revolving credit facility borrowings at ~~$2.4 billion (adjusted to reflect the October 13, 2017, repayment~~one of ~~the remaining $167.1 million 6.375% Senior Notes due 2022).~~our controlled subsidiaries. Our total ~~adjusted~~ 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 43.9%~~decreased to 40.8% at ~~September 30, 2017,~~March 31, 2018, compared to ~~44.9%~~41.9% at December 31, ~~2016.~~

In September 2017, we issued $350.0 million of 4.125% senior notes due 2025 (the "2025 Notes"), the proceeds of which, along with available cash, were used to fund the September 2017 tender to purchase at a redemption price of 103.563%, $182.9 million principal amount, plus accrued and unpaid interest to, but not including, the date of repurchase, of our 6.375% senior notes due 2022 (the "2022 Notes"), and the October 2017 call and repayment at a redemption price of 103.188% of the $167.1 million remaining outstanding principal amount of the 2022 Notes, plus accrued and unpaid interest to, but not including, the date of repayment. The $167.1 remaining outstanding principal amount is included in current maturities of long-term debt in our September 30, 2017, balance sheet.2017.

Our November 2014 senior secured credit facility (Facility), which provides a $1.2 billion Revolver, matures November 2019. 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 ~~September 30, 2017,~~March 31, 2018, 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 consolidated LTM adjusted EBITDA (net debt leverage ratio) of not more than 5.00:1.00 must be maintained. If the net debt leverage ratio exceeds 3.50:1:00 at any time, our ability to make certain payments as defined in the Facility (which includes cash dividends to stockholders and share purchases, among other things), is limited. At ~~September 30, 2017,~~March 31, 2018, our interest coverage ratio and net debt leverage ratio were ~~10.22:~~10.76:1.00 and ~~1.49:~~1.36:1.00, respectively. We were, therefore, in compliance with these covenants at ~~September 30, 2017,~~March 31, 2018, and we anticipate we will continue to be in compliance during the next twelve months.

Working Capital. We generated cash flow from operations of ~~$547.6~~$177.9 million in the first ~~nine months~~quarter of ~~2017.~~2018. Operational working capital (representing amounts invested in trade receivables and inventories, less current liabilities other than income taxes payable and debt) increased ~~$230.9~~$199.0 million to ~~$1.5~~$1.7 billion at ~~September 30, 2017. Increases~~March 31, 2018, consistent with increases in volumes, pricing and profitability ~~resulted in increased accounts receivable, and related increases in inventory, which were only partially offset by related increases in accounts payable~~during the first quarter 2018.

Capital Investments. During the first ~~nine months~~quarter of ~~2017,~~2018, we invested ~~$127.7~~$50.6 million in property, plant and equipment, primarily within our steel operations segment, compared with ~~$123.2~~$41.7 million invested during the same period in ~~2016.~~2017.

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 ~~11%~~21% to ~~$0.155~~$0.1875 per share in the first quarter ~~2017~~2018 (from ~~$0.140~~$0.155 per share in ~~2016)~~2017), resulting in declared cash dividends of ~~$111.4~~$44.3 million during the first ~~nine months~~quarter of ~~2017,~~2018, compared to ~~$102.3~~$37.5 million during the same period in ~~2016.~~2017. We paid cash dividends of ~~$108.8~~$36.8 million and ~~$101.6~~$34.1 million during the first ~~nine months~~quarter of ~~2017~~2018 and ~~2016,~~2017, 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 2016, the board of directors authorized a share repurchase program of up to $450 million of our common stock. Under the share repurchase program, purchases will take place, as and when, we determine in open market or private transactions made based upon the market price of our common stock, the nature of other investment opportunities or growth projects, our cash flows from operations, and general economic conditions. The share repurchase program does not require us to acquire any specific number of shares, and may be modified, suspended, extended or terminated by us at any time. We acquired ~~7.0~~1.5 million shares of our common stock for ~~$237.2~~$69.3 million in the first ~~nine months~~quarter of ~~2017~~2018 pursuant to this program. See Part II Other Information, 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 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.

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 ~~zinc.~~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~~.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 ~~zinc.~~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 45 years for physical commodity requirements and commodity transportation requirements, and for up to 1211 years for air products. We utilized such “take or pay” requirements during the past three years under these contracts, except for certain air products at our Minnesota ironmaking operations which ~~were idled in~~have been idle since May 2015. We believe that production requirements will be such that consumption of the products or services purchased under these commitments will occur in the normal production process, other than certain air products related to our Minnesota ironmaking operations during the idle period. We also purchase electricity consumed at our Butler Flat Roll Division pursuant to a contract which extends through December ~~2017. The contract designates 160 hours annually as “interruptible service” and~~2018, which establishes an agreed fixed-rate energy charge per Mill/kWh consumed for each year through the expiration of the agreement.

In our metals recycling operations, we have certain fixed price contracts with various customers and suppliers for future delivery of nonferrous metals. Our risk strategy has been to enter into base metal financial contracts with the goal to protect the profit margin, within certain parameters, that was contemplated when we entered into the transaction with the customer or vendor. At ~~September 30, 2017,~~March 31, 2018, we had a cumulative unrealized gain associated with these financial contracts of ~~$3.3~~$5.7 million, substantially all of which have a settlement date within the next twelve months. We believe the customer contracts associated with the financial contracts will be fully consummated.

As required, we carried out an evaluation, under the supervision and ~~Procedures. Our management,~~ with the participation of our principal executive officer and principal financial officer, ~~evaluated~~of the effectiveness of our disclosure controls and procedures, as ~~of September 30, 2017. The term “disclosure controls and procedures,” as~~ defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act ~~means~~of 1934, as amended (the Exchange Act). Based on this evaluation, our principal executive officer and principal financial officer concluded that, as of March 31, 2018, the end of the period covered by this quarterly report, our disclosure controls and ~~other~~ procedures ~~of a company that are~~were designed to ~~ensure~~ provide and were effective to provide reasonable assurance that the information required to be disclosed by ~~a company~~us in the reports ~~that it files~~we file or ~~submits~~submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the ~~Commission’s~~applicable rules and ~~forms. Disclosure controls~~forms, and ~~procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports~~ that it ~~files or submits under the Exchange Act~~ is accumulated and communicated to ~~the company’s~~our management, including ~~its~~our principal executive and principal financial ~~officers,~~officer, as appropriate to allow timely decisions regarding required disclosure. Based on the evaluation of our disclosure controls and procedures as of September 30, 2017, our principal executive officer and principal financial officer concluded that, as of such date, our disclosure controls and procedures were effective.

No change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the fiscal quarter ended ~~September 30, 2017,~~March 31, 2018, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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 ~~$420,000~~$432,000 is recorded in our financial statements as of ~~September 30, 2017.~~March 31, 2018.

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

We purchased the following equity securities registered by us pursuant to Section 12 of the Exchange Act during the three months ended
~~September 30, 2017.~~March 31, 2018.

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 September 30, 2017

    July 1 - 31

-

$
-

-

$
286,897

    August 1 - 31

947,396

34.41

947,396

254,296

    September 1 - 30

1,973,694

33.69

1,973,694

187,812

2,921,090

2,921,090


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 March 31, 2018

January 1 - 31	315,210		$	47.59		315,210		$	157,724
February 1 - 28	1,067,153			44.56		1,067,153			110,168
March 1 - 31	157,291			42.68		157,291			103,455
	1,539,654					1,539,654

Information ~~normally~~ required to be furnished ~~in Exhibit 95 to this Quarterly Report,~~ pursuant to Item 4 concerning mine safety disclosure matters, if applicable, by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K (17 CFR 229.104), is ~~not~~ included in Exhibit 95 to this ~~report, as there~~quarterly report. There are no ~~applicable~~ mine safety ~~disclosure matters~~disclosures to report for the three months ended ~~September 30, 2017. Accordingly, there is~~March 31, 2018, therefore, no Exhibit 95 ~~attached to this report.~~is required.

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.



	September 30,		December 31,
	2017		2016
Raw materials	$	677,187	$	515,924
Supplies		376,984		383,134
Work in progress		119,735		103,606
Finished goods		313,610		272,547
Total inventories	$	1,487,516	$	1,275,211



	March 31,		December 31,
	2018		2017
Raw materials	$	725,748	$	675,715
Supplies		386,123		374,515
Work in progress		169,441		128,565
Finished goods		318,746		340,552
Total inventories	$	1,600,058	$	1,519,347



Commodity Futures	Long/Short	Metric Tons
Aluminum	Long	~~1,275~~1,950
Aluminum	Short	~~2,250~~2,450
Copper	Long	~~4,251~~6,078
Copper	Short	~~21,727~~16,704


Footnotes related to the three months ended September 30, 2016, segment results (in millions):
Footnotes related to the three months ended March 31, 2017, segment results (in millions):				Footnotes related to the three months ended March 31, 2017, segment results (in millions):

(1)	Corporate SG&A	$	(12.6)	Corporate SG&A	$	(12.4)	(2)	Gross profit decrease from intra-company sales	$	(1.6)
	Company-wide equity-based compensation		(6.1)	Company-wide equity-based compensation		(9.6)
	Profit sharing		(21.0)	Profit sharing		(26.5)
	Other, net		(8.0)	Other, net		(5.5)
		$	(47.7)		$	(54.0)


Footnotes related to the nine months ended September 30, 2017, segment results (in millions):

(1)	Corporate SG&A	$	(37.9)
	Company-wide equity-based compensation		(23.5)
	Profit sharing		(66.8)
	Other, net		(13.2)
		$	(141.4)



			Metals		Steel
For the nine months ended	Steel		Recycling		Fabrication
September 30, 2017	Operations		Operations		Operations		Other			Eliminations		Consolidated

Net Sales
External	$	5,025,310	$	910,830	$	603,140	$	281,091		$	-	$	6,820,371
External Non-U.S.		237,070		144,750		127		-			-		381,947
Other segments		183,374		1,067,770		244		1,065			(1,252,453)		-
		5,445,754		2,123,350		603,511		282,156			(1,252,453)		7,202,318
Operating income (loss)		895,008		51,968		65,735		(141,406)	(1)		(371)		870,934
Income (loss) before income taxes		830,865		46,674		61,171		(164,456)			(371)		773,883
Depreciation and amortization		170,125		37,048		8,743		8,152			-		224,068
Capital expenditures		101,939		18,539		5,748		1,520			-		127,746


Footnotes related to the nine months ended September 30, 2016, segment results (in millions):

(1)	Corporate SG&A	$	(38.5)	(2)	Gross profit decrease from intra-company sales	$	(9.1)
	Company-wide equity-based compensation		(20.4)
	Profit sharing		(47.7)
	Other, net		(18.6)
		$	(125.2)



For the nine months ended,					Combined		Consolidating		Total
September 30, 2017	Parent		Guarantors		Non-Guarantors		Adjustments		Consolidated
Net sales	$	2,797,557	$	7,827,981	$	449,902	$	(3,873,122)	$	7,202,318
Costs of goods sold		2,241,936		7,054,938		432,657		(3,788,403)		5,941,128
Gross profit (loss)		555,621		773,043		17,245		(84,719)		1,261,190
Selling, general and administrative		164,061		226,153		15,253		(15,211)		390,256
Operating income (loss)		391,560		546,890		1,992		(69,508)		870,934
Interest expense, net of capitalized interest		55,353		44,245		9,494		(7,073)		102,019
Other (income) expense, net		(4,463)		(7,305)		(273)		7,073		(4,968)
Income (loss) before income taxes and
equity in net income of subsidiaries		340,670		509,950		(7,229)		(69,508)		773,883
Income taxes		106,036		184,891		4,651		(24,320)		271,258
		234,634		325,059		(11,880)		(45,188)		502,625
Equity in net income of subsidiaries		273,374		-		-		(273,374)		-
Net loss attributable to noncontrolling interests		-		-		5,383		-		5,383
Net income (loss) attributable to Steel Dynamics, Inc.	$	508,008	$	325,059	$	(6,497)	$	(318,562)	$	508,008



	Cash and equivalents*equivalents	$	~~934,750~~985,824
	Short term investments		40,000
	Revolver availability		~~1,188,121~~1,188,114
	Total liquidity	$	~~2,122,871~~2,213,938

* Adjusted to reflect the October 13, 2017, repayment of the remaining $167.1 million 6.375% Senior Notes due 2022.


ITEM 6.		~~EXHIBITS~~
EXHIBITS
~~Articles of Incorporation~~Reference is made to the Exhibit Index preceding the signature page hereto, which Exhibit Index is hereby incorporated into this item.

EXHIBIT INDEX
3.2c*		Amended and Restated Bylaws of Steel Dynamics, Inc., reflecting amended and replaced Article XI, made as of September 25, 2017, and effective only upon approval and adoption by stockholders, at the 2018 Annual Meeting of Stockholders, of a conforming amendment to the Amended and Restated Articles of Incorporation.

Executive Officer Certifications

31.1*		Certification of ~~Principal~~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 Sarbanes‑Oxley Act of 2002.

31.2*		Certification of ~~Principal~~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 Sarbanes‑Oxley Act of 2002.
��
32.1*		Certification of Chief Executive Officer Pursuant to 18 U.S.C Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes‑Oxley Act of ~~2002~~2002..

32.2*		Certification of Chief Financial Officer Pursuant to 18 U.S.C Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes‑Oxley Act of 2002.

Other

95**		Mine Safety Disclosures.

XBRL Documents

101.INS*		XBRL Instance Document

101.SCH*		XBRL Taxonomy Extension Schema Document

101.CAL*		XBRL Taxonomy Extension Calculation Document

101.DEF*		XBRL Taxonomy Definition Document

101.LAB*		XBRL Taxonomy Extension Label Document

101.PRE*		XBRL Taxonomy Presentation Document


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)