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, 2019

	OR

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

Commission File Number 0-21719



Steel Dynamics, Inc.
(Exact name of registrant as specified in its charter)

Indiana		35-1929476
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

7575 West Jefferson Blvd, Fort Wayne, IN		46804
(Address of principal executive offices)		(Zip Code)

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

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


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

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

Indicate by check mark whether the registrant has submitted electronically ~~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,~~2019, Registrant had ~~236,951,784~~222,245,142 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, 2019 (unaudited) and December 31, ~~2016~~2018	1

	Consolidated Statements of Income for the three ~~and nine-month~~month periods ended ~~September 30, 2017~~March 31, 2019 and ~~2016~~2018 (unaudited)	2

	Consolidated Statements of Comprehensive Income for the three month periods ended March 31, 2019 and 2018 (unaudited)	3

	Consolidated Statements of Cash Flows for the three ~~and nine-month~~month periods ended ~~September 30, 2017~~March 31, 2019 and ~~2016~~2018 (unaudited)	34

	Notes to Consolidated Financial Statements (unaudited)	45

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	2524

Item 4.	Controls and Procedures	2524



	PART II. Other Information

Item 1.	Legal Proceedings	2625

Item 1A.	Risk Factors	2625

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	2625

Item 3.	Defaults Upon Senior Securities	2625

Item 4.	Mine Safety Disclosures	2625

Item 5.	Other Information	2625

Item 6.	Exhibits	2725

	~~Signatures~~Exhibit Index	28	26

Signature		27

STEEL DYNAMICS, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)



	September 30,		December 31,		March 31,		December 31,
	2017		2016		2019		2018
Assets	(unaudited)				(unaudited)
Current assets
Cash and equivalents	$	1,101,964	$	841,483	$	791,444	$	828,220
Short-term investments						173,723		228,783
Accounts receivable, net		897,838		703,565		1,141,038		1,040,220
Accounts receivable-related parties		25,179		26,219		2,357		3,536
Inventories		1,487,516		1,275,211		1,867,700		1,859,168
Other current assets		59,648		83,197		52,628		72,730
Total current assets		3,572,145		2,929,675		4,028,890		4,032,657

Property, plant and equipment, net		2,708,777		2,787,215		2,936,893		2,945,767

Restricted cash		17,092		18,060
Intangible assets, net		263,357		283,977		263,315		270,328
Goodwill		388,518		393,351		530,716		429,645
Other assets		10,848		11,454		97,419		25,166
Total assets	$	6,960,737	$	6,423,732	$	7,857,233	$	7,703,563
Liabilities and Equity
Current liabilities
Accounts payable	$	512,290	$	382,126	$	582,284	$	536,743
Accounts payable-related parties		16,393		13,070		9,183		14,011
Income taxes payable		5,596		5,593		26,896		7,468
Accrued payroll and benefits		171,508		164,543		114,575		264,542
Accrued interest		49,380		30,295		47,955		25,526
Accrued expenses		128,701		113,556		141,239		146,613
Current maturities of long-term debt		182,661		3,632		80,958		24,234
Total current liabilities		1,066,529		712,815		1,003,090		1,019,137

Long-term debt		2,351,483		2,353,194		2,354,427		2,352,489
Deferred income taxes		461,399		448,375		447,087		435,838
Other liabilities		20,305		20,649		63,171		8,870
Total liabilities		3,899,716		3,535,033		3,867,775		3,816,334

Commitments and contingencies

Redeemable noncontrolling interests		111,240		111,240		139,930		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)
265,552,825 and 265,822,402 shares issued; and 222,931,285 and 225,272,174
shares outstanding, as of March 31, 2019 and December 31, 2018, respectively						645		645
Treasury stock, at cost; 42,621,540 and 40,550,228 shares,
as of March 31, 2019 and December 31, 2018, respectively						(1,261,837)		(1,184,243)
Additional paid-in capital		1,147,463		1,132,749		1,160,139		1,160,048
Retained earnings		2,606,831		2,210,459		4,109,034		3,958,320
Accumulated other comprehensive income						130		301
Total Steel Dynamics, Inc. equity		3,104,725		2,927,020		4,008,111		3,935,071
Noncontrolling interests		(154,944)		(149,561)		(158,583)		(159,082)
Total equity		2,949,781		2,777,459		3,849,528		3,775,989
Total liabilities and equity	$	6,960,737	$	6,423,732	$	7,857,233	$	7,703,563



	Three Months Ended				Nine Months Ended				Three Months Ended
	September 30,				September 30,				March 31,
	2017		2016		2017		2016		2019		2018

Net sales
Unrelated parties	$	2,399,116	$	2,060,596	$	7,066,083	$	5,737,584	$	2,814,486	$	2,597,312
Related parties		44,266		40,714		136,235		128,929		2,949		6,563
Total net sales		2,443,382		2,101,310		7,202,318		5,866,513		2,817,435		2,603,875

Costs of goods sold		2,046,864		1,692,807		5,941,128		4,841,591		2,383,865		2,140,459
Gross profit		396,518		408,503		1,261,190		1,024,922		433,570		463,416

Selling, general and administrative expenses		97,056		95,185		298,422		279,899		111,038		106,431
Profit sharing		21,175		22,255		69,714		51,722		23,677		26,662
Amortization of intangible assets		7,272		7,208		22,120		21,359		7,013		6,926
Operating income		271,015		283,855		870,934		671,942		291,842		323,397

Interest expense, net of capitalized interest		34,177		36,199		102,019		109,888		31,122		31,896
Other expense (income), net		2,526		4,351		(4,968)		741
Other (income) expense, net										(6,343)		(4,463)
Income before income taxes		234,312		243,305		773,883		561,313		267,063		295,964

Income tax expense		83,300		88,892		271,258		205,139		62,236		70,489
Net income		151,012		154,413		502,625		356,174		204,827		225,475

Net loss attributable to noncontrolling interests		2,246		2,984		5,383		5,929
Net (income) loss attributable to noncontrolling interests										(499)		2,076
Net income attributable to Steel Dynamics, Inc.	$	153,258	$	157,397	$	508,008	$	362,103	$	204,328	$	227,551



Basic earnings per share attributable to Steel Dynamics,
Inc. stockholders	$	0.64	$	0.65	$	2.11	$	1.49	$	0.91	$	0.96

Weighted average common shares outstanding		239,066		243,761		241,117		243,539		224,058		236,623

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	$	0.91	$	0.96

Weighted average common shares and share equivalents outstanding		240,880		245,682		242,816		245,227		224,962		237,723

Dividends declared per share	$	0.155	$	0.140	$	0.465	$	0.420	$	0.2400	$	0.1875



	Three Months Ended				Nine Months Ended				Three Months Ended
	September 30,				September 30,				March 31,
	2017		2016		2017		2016		2019		2018

Operating activities:
Net income	$	151,012	$	154,413	$	502,625	$	356,174	$	204,827	$	225,475

Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization		75,210		74,190		224,068		222,970		80,174		76,135
Equity-based compensation		6,875		5,946		24,558		23,716		15,308		12,841
Deferred income taxes		3,284		18,478		17,849		53,879		12,091		9,545
Other adjustments		8,202		161		8,055		1,376		728		30
Changes in certain assets and liabilities:
Accounts receivable		(36,123)		29,384		(193,233)		(149,810)		(61,062)		(118,818)
Inventories		(67,285)		(76,013)		(211,726)		(102,339)		39,469		(80,711)
Other assets		(9,234)		694		(1,703)		11,855		301		(105)
Accounts payable		44,887		(49,171)		133,251		117,220		3,206		66,332
Income taxes receivable/payable		(12,929)		(7,421)		5,803		40,960		49,850		63,962
Accrued expenses		62,249		45,701		38,058		69,361		(163,339)		(76,751)
Net cash provided by operating activities		226,148		196,362		547,605		645,362		181,553		177,935

Investing activities:
Purchases of property, plant and equipment		(42,795)		(59,774)		(127,746)		(123,168)		(54,436)		(50,606)
Acquisition of business, net of cash acquired		(5,518)		(109,065)		(5,518)		(109,065)
Purchases of short-term investments										(49,677)		(40,000)
Proceeds from maturities of short-term investments										104,737		-
Acquisition of business, net of cash and restricted cash acquired										(93,412)		-
Other investing activities		1,081		1,507		30,386		5,767		364		229
Net cash used in investing activities		(47,232)		(167,332)		(102,878)		(226,466)		(92,424)		(90,377)

Financing activities:
Issuance of current and long-term debt		450,215		12,911		501,448		97,018		121,234		93,058
Repayment of current and long-term debt		(294,913)		(9,999)		(331,339)		(95,253)		(115,271)		(113,034)
Dividends paid		(37,180)		(34,124)		(108,837)		(101,639)		(42,239)		(36,797)
Purchases of treasury stock		(99,085)		-		(237,154)		-		(84,308)		(69,269)
Other financing activities		(4,832)		1,005		(8,364)		5,435		(5,720)		(5,180)
Net cash provided by (used in) financing activities		14,205		(30,207)		(184,246)		(94,439)
Net cash used in financing activities										(126,304)		(131,222)

Increase (decrease) in cash and equivalents		193,121		(1,177)		260,481		324,457
Cash and equivalents at beginning of period		908,843		1,052,666		841,483		727,032
Decrease in cash, cash equivalents, and restricted cash										(37,175)		(43,664)
Cash, cash equivalents, and restricted cash at beginning of period										834,423		1,035,085

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									$	797,248	$	991,421


Supplemental disclosure information:
Cash paid for interest	$	13,530	$	26,225	$	80,155	$	97,605	$	8,606	$	8,629
Cash paid for income taxes, net	$	93,123	$	75,860	$	246,793	$	104,124
Cash paid (received) for income taxes, net									$	1,839	$	(1,045)

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, Heartland Flat Roll Division, United Steel Supply (acquired 75% equity interest March 1, 2019), Structural and Rail Division, Engineered Bar Products Division, Vulcan Threaded Products, Inc. ~~– 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~~with several downstream coating and bar processing lines. Steel operations accounted for ~~73%~~75% and 74% of the company’s consolidated external net sales during the three months ended ~~September 30, 2017~~March 31, 2019 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,~~2018, 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~~scrap management services. Metals recycling operations accounted for ~~14%~~13% and 15% of the company’s consolidated external net sales during the three months ended ~~September 30, 2017~~March 31, 2019 and ~~2016, respectively, and 15% of the company’s consolidated external net sales for the nine months ended September 30, 2017 and 2016.~~2018, respectively.

Steel Fabrication Operations Segment. Steel fabrication operations include the company’s New Millennium Building Systems’ joist and deck plants located throughout the United States, and in Northern Mexico. Revenues from these plants are generated from the fabrication of trusses, girders, steel joists and steel deck used within the non-residential construction industry. Steel fabrication operations accounted for ~~9% and~~ 8% of the company’s consolidated external net sales during the three months ended ~~September 30, 2017~~March 31, 2019 and ~~2016, respectively, and 8% and 9% during the nine months ended September 30, 2017 and 2016, respectively.~~2018.

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

Significant Accounting Policies

Principles of Consolidation. The consolidated financial statements include the accounts of SDI, together with its ~~wholly~~wholly- and ~~majority-owned or~~majority-owned/ 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~~ majority-owned/controlled consolidated subsidiaries.

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

In the opinion of management, these financial statements reflect all normal recurring adjustments necessary for a fair presentation of the interim period results. These consolidated financial statements and notes should be read in conjunction with the audited financial statements and notes thereto included in the company’s Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2018.

Cash and Equivalents. And Restricted Cash

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

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~~consisted of the following reporting units at ~~September 30, 2017,~~March 31, 2019, and December 31, ~~2016,~~2018, (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,
	2019		2018
Steel Operations Segment
Columbus Flat Roll Division	$	19,682	$	19,682
The Techs		142,783		142,783
Heartland Flat Roll Division		46,143		46,143
United Steel Supply		101,918		-
Vulcan Threaded Products		7,824		7,824
Roanoke Bar Division		29,041		29,041
Metals Recycling Operations Segment – OmniSource		181,400		182,247
Steel Fabrication Operations Segment – New Millennium Building Systems		1,925		1,925
	$	530,716	$	429,645

The company acquired a 75% equity interest in United Steel Supply on March 1, 2019 (refer to Note 2 Acquisition – United Steel Supply, LLC), resulting in a preliminary purchase price allocation in which $101.9 million of goodwill was recorded. OmniSource goodwill decreased $~~4.8~~ ~~million~~$847,000 from December 31, ~~2016~~2018 to ~~September 30, 2017,~~March 31, 2019, in recognition of the ~~2017~~2019 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,~~June 2016, the FASB issued ASU ~~2015-11, Inventory (Topic 330):~~ ~~Simplifying the Measurement of Inventory~~ ~~(ASU 2015-11),~~2016-13, Financial Instruments - Credit Losses: which requires an entity to ~~measure inventory at~~use a forward-looking expected loss model versus 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 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 : 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. 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, using a full retrospective or 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 significant change in the amount or timing of revenue recognized under the new standard, or significant changes required to the company’s functions, processes or systems. The company intends to adopt ASU 2014-09 effective January 1, 2018, using the modified retrospective approach.

~~In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842): which establishes a new lease accounting~~incurred loss 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.~~financial instruments, including accounts receivable. This new guidance is effective for annual and interim periods beginning after December 15, ~~2018,~~2019, but can be early adopted. The company is currently evaluating the impact ~~of the provisions of~~ ASU ~~2016-02, including the timing of adoption.~~ 2016-13 will have in its consolidated financial statements and related disclosure.

~~Reclassifications~~

~~The~~Note 2. Acquisition – United Steel Supply, LLC

On March 1, 2019, the company ~~early adopted, effective December 31, 2016,~~ purchased 75% of the equity interest of United Steel Supply, LLC (USS) for cash consideration of $93.4 million, subject to customary actual working capital purchase price adjustments. Additionally, the company has an option to purchase, and the sellers have the option to require the company to purchase, the remaining 25% equity interest of USS in the future. Headquartered in Austin, Texas, USS is a leading distributor of painted Galvalume~~Improvement to Employee Share-based Payment Accounting~~® ~~(ASU 2016-09).~~ ~~Cash paid~~flat roll steel used for roofing and siding applications, with distribution centers strategically located in Mississippi, Indiana, Arkansas, and Oregon. USS provides the company a new, complementary distribution channel and connects it to ~~tax authorities~~a rapidly growing industry segment with customers that do not traditionally purchase steel directly from ~~shares withheld to satisfy~~a steel producer. USS’s operating results from and after March 1, 2019, are reflected in the company’s ~~statutory income tax withholding obligation of $2.~~2 ~~million were reclassified to financing activities from operating activities~~financial statements in the ~~nine-month period ended September 30, 2016, statement~~steel operations reporting segment.

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


Current assets, net of cash acquired	$	94,020
Property, plant & equipment		7,388
Intangible assets and goodwill		101,918
Total assets acquired		203,326
Liabilities assumed		81,224
Redeemable noncontrolling interest		28,690
Net cash consideration	$	93,412

STEEL DYNAMICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 3. Leases

In February 2016, the FASB issued ASU 2016-02, Leases (ASC 842) and its subsequent corresponding updates; which established a new lease accounting model that requires lessees to recognize a right-of-use asset and related lease liability for most leases having lease terms of more than 12 months. The company adopted ASC 842 effective January 1, 2019, using the optional transition method, thereby applying the new guidance at the effective date, without retrospective application to prior periods. The company elected practical expedients permitted under the transition guidance which allowed the company to not reassess under the new standard its prior conclusions regarding lease identification and classification. The company elected to use hindsight when determining the lease term. The company also elected the short-term lease exemption, and did not recognize right-of-use assets and lease liabilities for short-term leases, those with lease commencement date terms of 12 months or less. The company recognized right-of-use assets and lease liabilities of $76.3 million, with no impact on retained earnings, in the consolidated balance sheet on January 1, 2019, and the standard did not have a significant impact on the company’s operating results or cash flows for the three-month period ended March 31, 2019.

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

Operating lease right-of-use assets and lease obligations included in the consolidated balance sheet at March 31, 2019, are as follows (in thousands):


Right-of-use assets under operating leases:
Other assets - noncurrent	$	72,219
Lease obligations under operating leases:
Accrued liabilities	$	16,378
Other liabilities - noncurrent		56,215
	$	72,593

The weighted average remaining lease term for our operating leases is 6.3 years and the weighted-average discount rate is 4.00% as of

March 31, 2019. Future operating lease liabilities as of March 31, 2019, for the next five years and thereafter are as follows (in thousands):


2019 - for the remaining nine months	$	14,565
2020		17,316
2021		14,165
2022		10,891
2023		7,924
Thereafter		20,503
Total undiscounted cash flows		85,364
Less imputed interest		(12,771)
Lease obligations under operating leases	$	72,593

Operating and short-term lease expense included in the consolidated statement of income was $4.7 million and $4.4 million, respectively, for the three-month period ended March 31, 2019. Cash paid related to operating lease obligations was $4.8 million for the three-month period ended

March 31, 2019. Variable lease costs were not material for the three-month period ended March 31, 2019.

STEEL DYNAMICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 2.4. Earnings Per Share

Basic earnings per share is based on the weighted average shares of common stock outstanding during the period. Diluted earnings per share assumes the weighted average dilutive effect of common share equivalents outstanding during the period applied to the company’s basic earnings per share. Common share equivalents represent potentially dilutive restricted stock units, deferred stock units, restricted stock, ~~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 30, 2017~~March 31, 2019 and ~~2016.~~2018.

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 30, 2017~~March 31, 2019 and ~~2016~~2018 (in thousands, except per share data):



											Three Months Ended March 31,
											2019						2018
	Three Months Ended September 30,												Weighted						Weighted
	2017					2016							Average						Average
	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	$	204,328		224,058	$	0.91	$	227,551		236,623	$	0.96
Dilutive common share equivalents		-	1,814				-	1,921				-		904				-		1,100
Diluted earnings per share	$	153,258	240,880	$	0.64	$	157,397	245,682	$	0.64	$	204,328		224,962	$	0.91	$	227,551		237,723	$	0.96

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~~tables provide a reconciliation of the beginning and ending carrying amounts of total equity, equity attributable to stockholders of Steel Dynamics, Inc., and equity and redeemable amounts attributable to ~~the~~ noncontrolling interests (in thousands): for the three months ended



	Stockholders of Steel Dynamics, Inc.														Stockholders of Steel Dynamics, Inc.
					Additional								Redeemable										Accumulated
	Common		Treasury		Paid-In		Retained		Noncontrolling		Total		Noncontrolling						Additional				Other						Redeemable
	Stock		Stock		Capital		Earnings		Interests		Equity		Interests		Common		Treasury		Paid-In		Retained		Comprehensive		Noncontrolling		Total		Noncontrolling
Balances at December 31, 2016	$	641	$	(416,829)	$	1,132,749	$	2,210,459	$	(149,561)	$	2,777,459	$	111,240
															Stock		Stock		Capital		Earnings		Loss		Interests		Equity		Interests
Balances at December 31, 2018															$	645	$	(1,184,243)	$	1,160,048	$	3,958,320	$	301	$	(159,082)	$	3,775,989	$	111,240
Dividends declared																-		-		-		(53,504)		-		-		(53,504)		-
Noncontrolling investors of USS																-		-		-		-		-		-		-		28,690
Share repurchases																-		(84,308)		-		-		-		-		(84,308)		-
Equity-based compensation																-		6,714		91		(110)		-		-		6,695		-
Net income																-		-		-		204,328		-		499		204,827		-
Other comprehensive loss, net of tax																-		-		-		-		(171)		-		(171)		-
Balances at March 31, 2019															$	645	$	(1,261,837)	$	1,160,139	$	4,109,034	$	130	$	(158,583)	$	3,849,528	$	139,930


															Stockholders of Steel Dynamics, Inc.
																							Accumulated
																			Additional				Other						Redeemable
															Common		Treasury		Paid-In		Retained		Comprehensive		Noncontrolling		Total		Noncontrolling
															Stock		Stock		Capital		Earnings		Loss		Interests		Equity		Interests
Balances at December 31, 2017															$	644	$	(665,297)	$	1,141,534	$	2,874,693	$	-	$	(156,506)	$	3,195,068	$	111,240
Dividends declared		-		-		-		(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 and ferrous metals (primarily aluminum and copper). The company offsets fair value amounts recognized for derivative instruments executed with the same counterparty under master netting agreements.

Commodity Futures Contracts. If the company is “long” on futures contracts, it means the company has more futures contracts purchased than futures contracts sold for the underlying commodity. If the company is “short” on a futures contract, it means the company has more futures contracts sold than futures contracts purchased for the underlying commodity. The following summarizes the company’s futures contract commitments as of ~~September 30, 2017:~~March 31, 2019:

The following summarizes the location and amounts of the fair values reported on the company’s consolidated balance sheets as of ~~September 30, 2017,~~March 31, 2019, and December 31, ~~2016,~~2018, and gains and losses related to derivatives included in the company’s statement of income for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2019 and ~~2016~~2018 (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, 2019		December 31, 2018		March 31, 2019		December 31, 2018
Derivative instruments designated as hedges
Commodity futures	Other current assets	$	552	$	2,999	$	1,068	$	1,837

Derivative instruments not designated as hedges
Commodity futures	Other current assets		1,480		1,559		1,752		2,053
Total derivative instruments		$	2,032	$	4,558	$	2,820	$	3,890

The fair value of the above derivative instruments along with required margin deposit amounts with the same counterparty under master netting arrangements totaled ~~$6.0~~$3.7 million at ~~September 30, 2017,~~March 31, 2019, and ~~$3.2~~$4.9 million at December 31, ~~2016,~~2018, and are reflected in other current assets in the consolidated balance sheets.

Amount of gain (loss) recognized

Location of gain

Amount of gain (loss) recognized

Location of gain

in income on derivatives

(loss) recognized

in income on related hedged items

(loss) recognized

for the three months ended

Hedged items in

in income on

for the three months ended

in income on

September 30,

September 30,

fair value hedge

related hedged

September 30,

September 30,

derivatives

2017

2016

relationships

items

2017

2016
Derivatives in fair value

hedging relationships

Commodity futures

Costs of goods sold

$
4,122

$
826

Firm commitments

Costs of goods sold

$
(1,711)

$
(793)

Inventory

Costs of goods sold

(1,330)

(177)
Derivatives not designated

$
(3,041)

$
(970)
as hedging instruments

Commodity futures

Costs of goods sold

$
(10,566)

$
(638)



		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 nine months ended				Hedged items in	in income on	for the nine 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	on related	September 30,		September 30,		in income on	March 31,		March 31,		fair value hedge	related hedged	March 31,		March 31,
	derivatives	2017		2016		relationships	hedged items	2017		2016		derivatives	2019		2018		relationships	items	2019		2018
Derivatives in fair value
hedging relationships
Commodity futures	Costs of goods sold	$	571	$	1,281	Firm commitments	Costs of goods sold	$	995	$	(2,223)	Costs of goods sold	$	(1,453)	$	8,516	Firm commitments	Costs of goods sold	$	(1,499)	$	(793)
						Inventory	Costs of goods sold		179		642						Inventory	Costs of goods sold		721		(2,596)
Derivatives not designated								$	1,174	$	(1,581)								$	(778)	$	(3,389)
as hedging instruments
Commodity futures	Costs of goods sold	$	(12,528)	$	(394)							Costs of goods sold	$	(4,077)	$	2,756

Derivatives accounted for as fair value hedges had ineffectiveness resulting in losses of ~~$35,000~~$1.1 million and ~~$84,000~~$101,000 during the three-month periods ended ~~September 30, 2017~~March 31, 2019, and ~~2016, respectively; and a gain~~2018, respectively. Losses excluded from hedge effectiveness testing of ~~$62,000 and loss~~$2.2 million increased cost of ~~$175,000~~goods sold during the ~~nine-month periods~~three-month period ended ~~September 30, 2017 and 2016, respectively.~~March 31, 2019. Gains excluded from hedge effectiveness testing of ~~$1.1~~$5.0 million decreased cost of goods sold during the three-month period ended ~~September 30, 201~~March 31, 2018.7, ~~and losses excluded from hedge effectiveness testing~~

Derivatives accounted for as cash flow hedges resulted in net gains of ~~$60,000 increased costs of goods sold during~~$58,000 recognized in other comprehensive income for the three-month period ended ~~September 30, 2016. Gains~~March 31, 2019. Net gains of ~~$1.7 million decreased costs~~$283,000 were reclassified from accumulated other comprehensive three-month period ended March 31, 2019. At March 31, 2019, the company expects to reclassify $170,000 of ~~goods sold~~net gains on derivative instruments from accumulated other comprehensive income to earnings during the ~~nine-month period ended September 30, 2017, and losses~~next 12 months due to the settlement of ~~$125,000 increased costs of goods sold during the nine month period ended September 30, 2016.~~ futures contracts.

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, 2019, and December 31, ~~2016~~2018 (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, 2019
Short-term investments									$	173,723	$		$	173,723	$
Commodity futures – financial assets	$	4,149	$	-	$	4,149	$	-		2,032		-		2,032		-
Commodity futures – financial liabilities		893		-		893		-		2,820		-		2,820		-

December 31, 2016
December 31, 2018
Short-term investments									$	228,783	$	-	$	228,783	$	-
Commodity futures – financial assets	$	4,060	$	-	$	4,060	$	-		4,558		-		4,558		-
Commodity futures – financial liabilities		2,083		-		2,083		-		3,890		-		3,890		-

The carrying amounts of financial instruments including cash and equivalents approximate fair ~~value.~~value (Level 1). The fair values of short-term investments and the commodity futures contracts are estimated by the use of quoted market prices, estimates obtained from brokers, and other appropriate valuation techniques based on references ~~available.~~available (Level 2). The fair value of long-term debt, including current maturities, as determined by quoted market prices (Level 2), was approximately ~~$2.6~~$2.5 billion and ~~$2.5~~$2.4 billion at ~~September 30, 2017~~March 31, 2019 and December 31, ~~2016,~~2018, respectively (with a corresponding carrying amount in the consolidated balance sheet of $2.5 billion at March 31, 2019 and $2.4 billion at ~~September 30, 2017, and~~ December 31, ~~2016, respectively)~~2018).

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

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



			Metals			Steel												Metals		Steel
For the three months ended	Steel		Recycling			Fabrication										Steel		Recycling		Fabrication
September 30, 2017	Operations		Operations			Operations		Other			Eliminations			Consolidated
March 31, 2019																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	$	2,044,491	$	285,725	$	228,429	$	113,248		$	-		$	2,671,893
External Non-U.S.		82,098		46,793			34		-			-			128,925		80,079		65,412		51		-			-			145,542
Other segments		65,321		360,982			89		116			(426,508)			-		75,595		385,908		189		248			(461,940)			-
		1,848,126		709,197			211,394		101,173			(426,508)			2,443,382		2,200,165		737,045		228,669		113,496			(461,940)			2,817,435
Operating income (loss)		276,547		17,624			21,862		(44,326)	(1)		(692)			271,015		309,078		16,962		20,623		(56,920)	(1)		2,099			291,842
Income (loss) before income taxes		255,539		16,020			20,199		(56,754)			(692)			234,312		293,019		15,505		19,351		(62,696)			1,884			267,063
Depreciation and amortization		57,644		12,020			2,866		2,680			-			75,210		62,512		11,439		2,967		3,256			-			80,174
Capital expenditures		31,654		8,589			1,524		1,028			-			42,795		43,676		6,642		1,993		2,125			-			54,436

As of September 30, 2017					��
As of March 31, 2019
Assets	$	4,353,904	$	1,032,018		$	381,931	$	1,346,968	(2)	$	(154,084)	(3)	$	6,960,737	$	5,378,536	$	982,844	$	407,576	$	1,170,832	(2)	$	(82,555)	(3)	$	7,857,233

Metals

Steel

For the three months ended

Steel

Recycling

Fabrication

September 30, 2016

Operations

Operations

Operations

Other

Eliminations

Consolidated

Net Sales

  External

$
1,502,726

$
260,518

$
177,341

$
60,282

$
-

$
2,000,867
  External Non-U.S.

54,776

45,574

88

5

-

100,443
  Other segments

70,384

259,171

1,211

1,108

(331,874)

-

1,627,886

565,263

178,640

61,395

(331,874)

2,101,310
Operating income (loss)

307,553

6,154

17,744

(47,687)
(1)

91

283,855
Income (loss) before income taxes

285,131

2,437

15,645

(59,999)

91

243,305
Depreciation and amortization

53,456

13,836

2,848

4,101

(51)

74,190
Capital expenditures

49,200

9,506

747

321

-

59,774

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



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

Net sales - disaggregated revenue
External	$	1,832,303	$	329,872	$	201,437	$	92,471		$	-	$	2,456,083
External Non-U.S.		89,486		58,250		56		-			-		147,792
Other segments		59,985		364,644		210		147			(424,986)		-
		1,981,774		752,766		201,703		92,618			(424,986)		2,603,875
Operating income (loss)		334,562		24,715		19,791		(55,406)	(1)		(265)		323,397
Income (loss) before income taxes		315,805		23,005		18,457		(61,033)			(270)		295,964
Depreciation and amortization		59,141		11,558		2,898		2,538			-		76,135
Capital expenditures		38,402		6,946		2,077		3,181			-		50,606

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.~~



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, 2019													Parent		Guarantors		Non-Guarantors		Adjustments		Consolidated
Cash and equivalents		$	1,064,499	$	32,968	$	4,497	$	-	$	1,101,964		$	755,014	$	26,067	$	10,363	$	-	$	791,444
Short-term investments														153,723		20,000		-		-		173,723
Accounts receivable, net			294,753		1,450,968		48,082		(870,786)		923,017			344,209		1,727,028		71,953		(999,795)		1,143,395
Inventories			669,076		754,526		72,990		(9,076)		1,487,516			786,300		1,010,636		84,420		(13,656)		1,867,700
Other current assets			36,828		21,404		5,124		(3,708)		59,648			38,977		17,243		3,331		(6,923)		52,628
Total current assets			2,065,156		2,259,866		130,693		(883,570)		3,572,145			2,078,223		2,800,974		170,067		(1,020,374)		4,028,890
Property, plant and equipment, net			873,015		1,634,215		201,547		-		2,708,777			870,626		1,905,151		161,116		-		2,936,893
Intangible assets, net			-		231,838		31,519		-		263,357			-		263,315		-		-		263,315
Goodwill			-		380,695		7,823		-		388,518			-		428,798		101,918		-		530,716
Other assets, including investments in subs			2,611,965		7,060		5,578		(2,596,663)		27,940			2,934,875		59,075		5,850		(2,902,381)		97,419
Total assets		$	5,550,136	$	4,513,674	$	377,160	$	(3,480,233)	$	6,960,737		$	5,883,724	$	5,457,313	$	438,951	$	(3,922,755)	$	7,857,233

Accounts payable		$	196,177	$	348,347	$	106,208	$	(122,049)	$	528,683		$	197,481	$	376,400	$	94,697	$	(77,111)	$	591,467
Accrued expenses			224,156		251,694		9,437		(130,102)		355,185			200,512		275,807		17,763		(163,417)		330,665
Current maturities of long-term debt			167,840		-		40,482		(25,661)		182,661			809		1,116		104,574		(25,541)		80,958
Total current liabilities			588,173		600,041		156,127		(277,812)		1,066,529			398,802		653,323		217,034		(266,069)		1,003,090
Long-term debt			2,324,240		-		172,243		(145,000)		2,351,483			2,328,859		-		166,353		(140,785)		2,354,427
Other liabilities			(467,002)		983,737		27,238		(62,269)		481,704			(852,048)		1,398,528		33,483		(69,705)		510,258
Total liabilities			2,445,411		1,583,778		355,608		(485,081)		3,899,716			1,875,613		2,051,851		416,870		(476,559)		3,867,775

Redeemable noncontrolling interests			-		-		111,240		-		111,240			-		-		139,930		-		139,930

Common stock			641		1,727,859		14,908		(1,742,767)		641			645		1,727,859		15,016		(1,742,875)		645
Treasury stock			(650,210)		-		-		-		(650,210)			(1,261,837)		-		-		-		(1,261,837)
Additional paid-in-capital			1,147,463		128,076		791,196		(919,272)		1,147,463			1,160,139		683,048		787,572		(1,470,620)		1,160,139
Retained earnings (deficit)			2,606,831		1,073,961		(740,848)		(333,113)		2,606,831			4,109,034		994,555		(761,854)		(232,701)		4,109,034
Accumulated other comprehensive loss														130		-		-		-		130
Total Steel Dynamics, Inc. equity			3,104,725		2,929,896		65,256		(2,995,152)		3,104,725			4,008,111		3,405,462		40,734		(3,446,196)		4,008,111
Noncontrolling interests			-		-		(154,944)		-		(154,944)			-		-		(158,583)		-		(158,583)
Total equity			3,104,725		2,929,896		(89,688)		(2,995,152)		2,949,781			4,008,111		3,405,462		(117,849)		(3,446,196)		3,849,528
Total liabilities and equity		$	5,550,136	$	4,513,674	$	377,160	$	(3,480,233)	$	6,960,737		$	5,883,724	$	5,457,313	$	438,951	$	(3,922,755)	$	7,857,233

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
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



					Combined		Consolidating		Total
As of December 31, 2018	Parent		Guarantors		Non-Guarantors		Adjustments		Consolidated
Cash and equivalents	$	809,763	$	13,491	$	4,966	$	-	$	828,220
Short-term investments		198,783		30,000		-		-		228,783
Accounts receivable, net		340,439		1,635,168		26,655		(958,506)		1,043,756
Inventories		793,174		1,038,702		39,214		(11,922)		1,859,168
Other current assets		56,578		18,627		3,994		(6,469)		72,730
Total current assets		2,198,737		2,735,988		74,829		(976,897)		4,032,657
Property, plant and equipment, net		871,482		1,918,198		156,087		-		2,945,767
Intangible assets, net		-		270,328		-		-		270,328
Goodwill		-		429,645		-		-		429,645
Other assets, including investments in subs		2,862,556		5,593		5,557		(2,848,540)		25,166
Total assets	$	5,932,775	$	5,359,752	$	236,473	$	(3,825,437)	$	7,703,563

Accounts payable	$	209,156	$	330,156	$	74,353	$	(62,911)	$	550,754
Accrued expenses		296,528		295,668		11,171		(159,218)		444,149
Current maturities of long-term debt		793		1,355		51,079		(28,993)		24,234
Total current liabilities		506,477		627,179		136,603		(251,122)		1,019,137
Long-term debt		2,327,798		381		166,226		(141,916)		2,352,489
Other liabilities		(836,571)		1,447,464		31,791		(197,976)		444,708
Total liabilities		1,997,704		2,075,024		334,620		(591,014)		3,816,334

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

Common stock		645		1,727,859		15,016		(1,742,875)		645
Treasury stock		(1,184,243)		-		-		-		(1,184,243)
Additional paid-in-capital		1,160,048		683,048		695,502		(1,378,550)		1,160,048
Retained earnings (deficit)		3,958,320		873,821		(760,823)		(112,998)		3,958,320
Accumulated other comprehensive income		301		-		-		-		301
Total Steel Dynamics, Inc. equity		3,935,071		3,284,728		(50,305)		(3,234,423)		3,935,071
Noncontrolling interests		-		-		(159,082)		-		(159,082)
Total equity		3,935,071		3,284,728		(209,387)		(3,234,423)		3,775,989
Total liabilities and equity	$	5,932,775	$	5,359,752	$	236,473	$	(3,825,437)	$	7,703,563



For the nine months ended,					Combined		Consolidating		Total
September 30, 2017	Parent		Guarantors		Non-Guarantors		Adjustments		Consolidated
Condensed Consolidating Statements of Operations (in thousands)											Condensed Consolidating Statements of Operations (in thousands)

For the three months ended,																Combined		Consolidating		Total
March 31, 2019												Parent		Guarantors		Non-Guarantors		Adjustments		Consolidated
Net sales	$	2,797,557	$	7,827,981	$	449,902	$	(3,873,122)	$	7,202,318		$	1,124,735	$	3,110,229	$	171,883	$	(1,589,412)	$	2,817,435
Costs of goods sold		2,241,936		7,054,938		432,657		(3,788,403)		5,941,128			905,995		2,865,989		165,460		(1,553,579)		2,383,865
Gross profit (loss)		555,621		773,043		17,245		(84,719)		1,261,190
Gross profit													218,740		244,240		6,423		(35,833)		433,570
Selling, general and administrative		164,061		226,153		15,253		(15,211)		390,256			69,006		74,583		3,930		(5,791)		141,728
Operating income (loss)		391,560		546,890		1,992		(69,508)		870,934
Operating income													149,734		169,657		2,493		(30,042)		291,842
Interest expense, net of capitalized interest		55,353		44,245		9,494		(7,073)		102,019			18,654		11,766		3,214		(2,512)		31,122
Other (income) expense, net		(4,463)		(7,305)		(273)		7,073		(4,968)			(7,400)		(1,377)		(292)		2,726		(6,343)
Income (loss) before income taxes and
equity in net income of subsidiaries		340,670		509,950		(7,229)		(69,508)		773,883			138,480		159,268		(429)		(30,256)		267,063
Income taxes		106,036		184,891		4,651		(24,320)		271,258			30,764		38,534		103		(7,165)		62,236
		234,634		325,059		(11,880)		(45,188)		502,625			107,716		120,734		(532)		(23,091)		204,827
Equity in net income of subsidiaries		273,374		-		-		(273,374)		-			96,612		-		-		(96,612)		-
Net loss attributable to noncontrolling interests		-		-		5,383		-		5,383
Net income attributable to noncontrolling interests													-		-		(499)		-		(499)
Net income (loss) attributable to Steel Dynamics, Inc.	$	508,008	$	325,059	$	(6,497)	$	(318,562)	$	508,008		$	204,328	$	120,734	$	(1,031)	$	(119,703)	$	204,328



For the nine months ended,					Combined		Consolidating		Total
September 30, 2016	Parent		Guarantors		Non-Guarantors		Adjustments		Consolidated
For the three months ended,															Combined		Consolidating		Total
March 31, 2018											Parent		Guarantors		Non-Guarantors		Adjustments		Consolidated
Net sales	$	2,297,389	$	6,322,158	$	271,694	$	(3,024,728)	$	5,866,513	$	1,036,674	$	2,823,129	$	152,587	$	(1,408,515)	$	2,603,875
Costs of goods sold		1,823,408		5,676,265		286,486		(2,944,568)		4,841,591		819,145		2,551,620		148,630		(1,378,936)		2,140,459
Gross profit (loss)		473,981		645,893		(14,792)		(80,160)		1,024,922
Gross profit												217,529		271,509		3,957		(29,579)		463,416
Selling, general and administrative		145,596		212,613		9,352		(14,581)		352,980		62,927		76,952		5,597		(5,457)		140,019
Operating income (loss)		328,385		433,280		(24,144)		(65,579)		671,942		154,602		194,557		(1,640)		(24,122)		323,397
Interest expense, net of capitalized interest		53,842		54,493		7,558		(6,005)		109,888		18,623		12,437		3,540		(2,704)		31,896
Other (income) expense, net		(2,137)		8,012		(11,139)		6,005		741		(5,203)		(1,697)		(273)		2,710		(4,463)
Income (loss) before income taxes and
equity in net income of subsidiaries		276,680		370,775		(20,563)		(65,579)		561,313		141,182		183,817		(4,907)		(24,128)		295,964
Income taxes (benefit)		89,210		139,958		(63)		(23,966)		205,139
Income taxes												29,746		45,720		909		(5,886)		70,489
		187,470		230,817		(20,500)		(41,613)		356,174		111,436		138,097		(5,816)		(18,242)		225,475
Equity in net income of subsidiaries		174,633		-		-		(174,633)		-		116,115		-		-		(116,115)		-
Net loss attributable to noncontrolling interests						5,929				5,929		-		-		2,076		-		2,076
Net income (loss) attributable to Steel Dynamics, Inc.	$	362,103	$	230,817	$	(14,571)	$	(216,246)	$	362,103	$	227,551	$	138,097	$	(3,740)	$	(134,357)	$	227,551

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, 2019	Parent		Guarantors		Non-Guarantors		Adjustments		Consolidated
Net cash provided by (used in) operating activities	$	38,735	$	151,815	$	(4,520)	$	(4,477)	$	181,553
Net cash used in investing activities		(71,294)		(16,183)		(365)		(4,582)		(92,424)
Net cash provided by (used in) financing activities		(22,190)		(123,429)		10,256		9,059		(126,304)
Increase (decrease) in cash, cash equivalents and
restricted cash		(54,749)		12,203		5,371		-		(37,175)
Cash, cash equivalents, and restricted cash
at beginning of period		809,763		14,368		10,292		-		834,423
Cash, cash equivalents, and restricted cash
at end of period	$	755,014	$	26,571	$	15,663	$	-	$	797,248

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, 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, cash equivalents and
restricted cash		(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

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

Forward-Looking Statements

This report contains some predictive statements about future events, including statements related to conditions in the steel and metallic scrap markets, Steel Dynamics’ revenues, costs of purchased materials, future profitability and earnings, and the operation of new or existing facilities. These statements, which we generally precede or accompany by such typical conditional words as "anticipate," "intend," "believe," "estimate," "plan," "seek," "project" or "expect," or by the words "may," "will," or "should," are intended to be made as “forward-looking,” subject to many risks and uncertainties, within the safe harbor protections of the Private Securities Litigation Reform Act of 1995. These statements speak only as of this date and are based upon information and assumptions, which we consider reasonable as of this date, concerning our businesses and the environments in which they operate. Such predictive statements are not guarantees of future performance, and we undertake no duty to update or revise any such statements. Some factors that could cause such forward-looking statements to turn out differently than anticipated include: (1) the effects of uncertain economic conditions; (2) cyclical and changing industrial demand; (3) changes in conditions in any of the steel or scrap-consuming sectors of the economy which affect demand for our products, including the strength of the non-residential and residential construction, automotive, manufacturing, appliance, pipe and tube, and other steel-consuming industries; (4) fluctuations in the cost of key raw materials and supplies (including steel scrap, iron units, zinc, graphite electrodes, and energy costs) and our ability to pass on any cost increases; (5) the impact of domestic and foreign import price competition; (6) unanticipated difficulties in integrating or starting up new or acquired ~~businesses;~~businesses or assets; (7) risks and uncertainties involving product and/or technology development; and (8) occurrences of unexpected plant outages or equipment ~~failures.~~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,~~2018, in our quarterly reports on Form 10-Q, or in other reports which we from time to time file with the Securities and Exchange Commission. These reports are available publicly on the Securities and Exchange Commission website, www.sec.gov, and on our website, www.steeldynamics.com under “Investors – SEC Filings.”

Description of the Business

We are one of the largest domestic steel producers and metal recyclers in the United States based on current estimated steelmaking and coating capacity of 11approximately 13 million tons and actual metals recycling volumes. ~~The~~Our primary source of revenues ~~are~~is from the manufacture and sale of steel products, processing and sale of recycled ferrous and nonferrous metals, and fabrication and sale of steel joists and deck products. We have three reportable segments: steel operations, metals recycling operations, and steel fabrication operations.

Operating Statement Classifications

Net Sales. Net sales from our operations are a factor of volumes shipped, product mix and related pricing. We charge premium prices for certain grades of steel, product dimensions, certain smaller volumes, and for value-added processing or coating of ~~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~~recognize 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 substrate, direct and indirect labor and related benefits, alloys, zinc, transportation and freight, repairs and maintenance, utilities such as electricity and natural gas, and depreciation.

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

Acquisition of United Steel Supply, LLC

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

Results Overview

Our consolidated results for the first quarter of 2019 were constrained by a challenging market for our Butler and Columbus Flat Roll Divisions. While product pricing improved in the first quarter of 2019 compared to the same period in 2018, sheet steel shipments from our steel mills decreased, resulting in a decline in steel segment operating income. Likewise, our metals recycling operations experienced decreased operating income in the first quarter of 2019 compared to 2018 largely due to slightly lower utilization rates at our steel mills, which resulted in decreased shipments and product pricing for our ferrous metals. The non-residential construction market remained strong, with increased average selling prices outpacing higher steel input costs in our steel fabrication segment.

Consolidated operating income ~~increased $199.0~~decreased $31.6 million, or ~~30%~~10%, to ~~$870.9~~$291.8 million for the first ~~nine months of 2017,~~quarter 2019, compared to ~~$671.9 million for~~ the first ~~nine months of 2016.~~quarter 2018. First ~~nine months 2017~~quarter 2019 net income attributable to Steel Dynamics, Inc. ~~increased $145.9~~decreased $23.2 million, or ~~40%~~10%, to ~~$508.0~~$204.3 million, compared to the first ~~nine months of 2016.~~

~~Our consolidated results for the third~~ quarter and 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 prices2018, due 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 increaseddecreased 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. as described above.

Segment Operating Results ~~2017~~2019 vs. ~~2016~~2018 (dollars in thousands)



	Three Months Ended March 31,
	2019		% Change		2018
Net sales:
Steel Operations Segment	$	2,200,165	11%	$	1,981,774
Metals Recycling Operations Segment		737,045	(2)%		752,766
Steel Fabrication Operations Segment		228,669	13%		201,703
Other		113,496	23%		92,618
		3,279,375			3,028,861
Intra-company		(461,940)			(424,986)
	$	2,817,435	8%	$	2,603,875

Operating income (loss):
Steel Operations Segment	$	309,078	(8)%	$	334,562
Metals Recycling Operations Segment		16,962	(31)%		24,715
Steel Fabrication Operations Segment		20,623	4%		19,791
Other		(56,920)	(3)%		(55,406)
		289,743			323,662
Intra-company		2,099			(265)
	$	291,842	(10)%	$	323,397

Three Months Ended September 30,

Nine Months Ended September 30,

2017

% Change

2016

2017

% Change

2016
Net sales:

  Steel Operations Segment
$
1,848,126

14%

$
1,627,886

$
5,445,754

23%

$
4,419,572
  Metals Recycling Operations Segment

709,197

25%

565,263

2,123,350

29%

1,643,172
  Steel Fabrication Operations Segment

211,394

18%

178,640

603,511

14%

530,441
  Other

101,173

65%

61,395

282,156

32%

214,149

2,869,890

2,433,184

8,454,771

6,807,334
  Intra-company

(426,508)

(331,874)

(1,252,453)

(940,821)

$
2,443,382

16%

$
2,101,310

$
7,202,318

23%

$
5,866,513

Operating income (loss):

  Steel Operations Segment
$
276,547

(10)%

$
307,553

$
895,008

26%

$
712,939
  Metals Recycling Operations Segment

17,624

186%

6,154

51,968

160%

20,014
  Steel Fabrication Operations Segment

21,862

23%

17,744

65,735

(10)%

73,230
  Other

(44,326)

7%

(47,687)

(141,406)

(13)%

(125,186)

271,707

283,764

871,305

680,997
  Intra-company

(692)

91

(371)

(9,055)

$
271,015

(5)%

$
283,855

$
870,934

30%

$
671,942

Steel Operations Segment

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 and automated rolling mills, with numerous downstream processing and ~~eleven 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~~a wide variety of 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%~~75% and 74% of our consolidated external net sales during the ~~third~~first quarter of ~~2017~~2019 and ~~2016, respectively, and 73% and 72% of our consolidated external net sales during the first nine months of 2017 and 2016,~~2018, 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.

Steel Operations Segment Shipments (tons):



	Three Months Ended September 30,			Nine Months Ended September 30,			Three Months Ended March 31,
	2017	% Change	2016	2017	% Change	2016	2019	% Change	2018

Total shipments	2,458,992	8%	2,271,230	7,362,636	5%	7,039,801	2,684,411	6%	2,534,644
Intra-segment shipments	(88,211)		(65,438)	(279,567)		(216,217)	(247,403)		(121,653)
Steel Operations Segment Shipments	2,370,781	7%	2,205,792	7,083,069	4%	6,823,584
Steel Operations Segment shipments							2,437,008	1%	2,412,991

External shipments	2,279,228	8%	2,104,219	6,830,877	5%	6,517,253	2,347,209	1%	2,327,515

Overall domestic steel demand remained strong ~~but elevated levels of steel imports persisted~~ during the first quarter ~~hindering~~of 2019, with continued strength in the ~~ability for domestic steel prices to keep pace with raw material costs.~~automotive, energy and other industrial sectors. Steel operations segment shipments increased 7%1% in the ~~third~~first quarter ~~2017,~~2019, as compared to the same period in ~~2016, driven by improved flat roll~~2018, with the acquisitions of Heartland Flat Roll Division (June 29, 2018) and engineered bar shipments. Demand from the construction sector continues 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. ~~Our steel mill utilization rate averaged 92% for the third quarter 2017, 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%~~USS (March 1, 2019). Net sales for the steel operations increased ~~14%~~11% in the ~~third~~first quarter ~~2017,~~2019 when compared to the same period in ~~2016,~~2018, due primarily to anthe additions of Heartland and USS, and a 10% increase ~~of $39 per ton, or 5%,~~ in ~~average~~overall steel selling prices ~~combined with a 7% increase in~~to $899 per ton. Our steel ~~operations shipments. Net sales~~mill utilization rate averaged 90% for the ~~steel operations increased 23%~~first quarter 2019, as compared to 94% 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 2018.

Metallic raw materials used in our electric arc furnaces represent our single most significant steel manufacturing cost, generally comprising approximately 60% of our steel mill operations’ manufacturing ~~costs, excluding the operations of The Techs and Vulcan, which purchase, rather than produce, the steel they further process.~~costs. Our metallic raw material cost per net ton consumed in our steel operations increased ~~$55,~~$17, or ~~22%~~5%, in the ~~third~~first quarter ~~2017,~~2019, compared to the same period in ~~2016,~~2018, consistent with overall increased domestic scrap ~~pricing. In the first nine months of 2017, our metallic raw material cost per net ton consumed increased $70, or 32%, compared to the same period in 2016.~~pricing.

~~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~~As a ~~3% decrease in~~result of average 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~~consumed in our steel mills) increased ~~steel shipments.~~ ~~Operating income for~~13% in the first ~~nine months 2017 increased 26%, to $895.0 million,~~quarter 2019 compared to the first ~~nine months~~quarter 2018. In spite of ~~2016,~~this metal spread expansion, operating income for the steel operations decreased 8%, to $309.1 million, in the first quarter 2019, compared to the

same period in 2018, due primarily to decreased shipments at our Butler and Columbus Flat Roll Divisions. Imports of sheet steel into the United States began to increase in late 2018 and into the first quarter of 2019 due to ~~an 11%~~ ~~expansion of steel segment operations metal spread, coupled with~~historically high selling prices, presenting a ~~4% increase in steel shipments.~~headwind to our flat roll mills, as well as beginning to put downward pressure on average pricing.

~~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%~~(increasing from 65% to 67% 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%~~13% and 15% of our consolidated external net sales during ~~the third quarter~~first quarters of ~~2017~~2019 and ~~2016, respectively, and 15% for each of the first nine months of 2017 and 2016.~~2018, respectively.

~~Metals~~Our metals recycling operations ~~operating income~~net sales decreased 2% during the first quarter of 2019 compared to the same period in 2018, driven primarily by decreased ferrous metals shipments and average selling prices. Ferrous shipments to our own steel mills decreased by 4% in the ~~third~~first quarter ~~2017 of $17.6 million was 186% higher than~~2019, compared to the ~~third~~same period in 2018, as our steel mill utilization percentage decreased slightly from prior year. Ferrous scrap average selling prices decreased 3% during the first quarter ~~2016 operating income of $6.2 million, due~~2019 compared to ~~improvements~~the same period in ~~ferrous and~~2018, while nonferrous average selling prices increased 4%. Ferrous metal spread (which we define as the difference between average selling prices and the cost of purchased scrap) decreased 11%, ~~and reduced operating costs. Net sales increased 25% in the third quarter 2017~~ as ~~compared to the same period in 2016, driven by increased pricing, which~~selling prices decreased more than offset decreased shipments. Overall domestic steel mill utilization was 75% in the third quarter of 2017, compared to 70% in the same 2016 period. Ferrous shipments to our own steel mills decreased by 2% in the third quarter 2017, compared to the same period in 2016. Ferrousunprocessed scrap ~~average selling prices increased 30% during the third quarter 2017 compared to the same period in 2016,~~procurement costs, 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%~~decreased 3%.

Metals recycling operations operating income decreased 31% to $17.0 million in the first ~~nine months of 2017 of $52.0 million was 160% higher than~~quarter 2019 compared to the first ~~nine months 2016~~quarter 2018 operating income of ~~$20.0~~$24.7 million, due to ~~increased selling prices resulting in a 17% improvement in ferrous~~ metal spread contraction 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~~decreased ferrous ~~and nonferrous products, which increased 40% and 27%, respectively, during the first nine months of 2017 compared to the same period in 2016.~~shipments.

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~~2019 and ~~2016, respectively, and 8% and 9% during the first nine months of 2017 and 2016, respectively.~~2018.

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~~$27.0 million, or ~~18%~~13%, during the ~~third~~first quarter ~~2017,~~2019, compared to the same period in ~~2016,~~2018, as ~~shipments increased 13%, while~~ average selling prices increased ~~$64~~$230 per ton, or ~~5%.~~ ~~Net sales for the segment increased $73.1 million, or 14%~~17%, ~~in the first nine months of 2017, compared to the first nine months of 2016, as volumes increased 7% and selling prices increased 6%~~while shipments decreased 3%. 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 market share. Market demand and ~~improve market share,~~order backlogs continue to be strong for non-residential construction project development; however, severe weather and ~~market demand continues to improve.~~other construction delays during the first quarter 2019 restricted shipments somewhat.

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~~While the average cost of steel consumed increased ~~by 12%~~ in the ~~third~~first quarter ~~2017,~~2019, as compared to the same period in ~~2016, while~~2018 consistent with increased steel selling prices discussed in the steel operations results, the 17% average selling ~~prices increased only 5%, resulting in~~price increase was more significant. As a result, metal spread (which we define as the difference between average selling prices and the cost of purchased steel) ~~declining 2%~~. ~~However, operating income~~ increased ~~23% to $21.9 million~~7% in the ~~third~~first quarter ~~2017~~2019 compared to the same period in ~~2016, as~~2018. Operating income increased ~~shipments more than offset metal spread contraction. Segment operating income of $65.7~~4% to $20.6 million in the first ~~nine months of 2017 decreased 10%, from $73.2 million~~quarter 2019 compared to the same period in 2018, due to the ~~first nine months of 2016, despite a 7% increase~~increases in ~~shipments, as~~ metal ~~spreads decreased 7% year over year.~~spread more than offsetting the slight decrease in shipments.

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~~$111.0 million during the ~~third~~first quarter ~~2017 were consistent with the $124.6~~2019 increased 4% from $106.4 million during the ~~third~~first quarter ~~2016,~~2018, representing ~~approximately 5.1%~~3.9% and ~~5.9%~~4.1% of net sales, respectively.

~~Interest Expense, net~~ Profit sharing expense during the first quarter of ~~Capitalized Interest.~~ ~~During~~2019 of $23.7 million was down 11% from the ~~third quarter 2017, interest expense decreased 6% to $34.2 million from $36.2~~$26.7 million during the same period in ~~2016, due primarily to the December 2016 refinancing of $400.0 million of 6.125% senior notes due 2019~~2018, consistent with ~~5.000% senior notes due 2026. In addition,~~decreases 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~~before 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 increase 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.taxes.

Interest Expense, net of Capitalized Interest. During the first ~~nine months of 2017,~~quarter 2019, interest expense ~~decreased $7.9~~of $31.1 million ~~to $102.0 million, when compared~~was comparable to the ~~same period in 2016. The decrease in interest expense is due primarily to~~$31.9 million during the ~~December 2016 refinancing~~first quarter 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~~2018, on consistent debt ~~which was set to mature on November 14, 2019.~~levels.

Income Tax Expense. ~~During the first nine months of 2017, our~~First quarter 2019 income tax expense ~~was $271.3~~of $62.2 million at an effective income tax rate of ~~35.1%~~23.3%, ~~as compared~~is comparable to ~~$205.1~~the $70.5 million at an effective income tax rate of ~~36.5%,~~23.8% during the first nine months of 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.quarter 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, stock repurchases, and acquisitions. We have met these liquidity requirements primarily with cash provided by operations and long-term borrowings, and we also have availability under our ~~Revolver~~.Revolver. Our liquidity at ~~September 30, 2017,~~March 31, 2019, is as follows (in thousands):

Our total outstanding debt ~~remained relatively unchanged~~increased $58.7 million during the first ~~nine months~~quarter of ~~2017 at $2.4 billion (adjusted~~2019 primarily due to ~~reflect the October 13, 2017, repayment~~revolving debt assumed in conjunction with our acquisition of ~~the remaining $167.1 million 6.375% Senior Notes due 2022).~~USS. 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%~~37.9% at ~~September 30, 2017, compared to 44.9% at~~March 31, 2019, and 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.2018.

Our ~~November 2014~~ senior secured credit facility (Facility), which provides a $1.2 billion Revolver, ~~matures November 2019.~~was renewed and extended in June 2018 to extend maturity to June 2023. Subject to certain conditions, we have the opportunity to increase the Revolver size by at least $750.0 million. The Facility is guaranteed by certain of our subsidiaries; and is secured by substantially all of our and our wholly-owned subsidiaries’ receivables and inventories, and by pledges of all shares of our wholly-owned subsidiaries’ capital stock or other equity interests, and intercompany debt held by us as collateral. The Revolver is available to fund working capital, capital expenditures, and other general corporate purposes. The Facility contains financial covenants and other covenants pertaining to our ability (which may under certain circumstances be limited) to make capital expenditures; incur indebtedness; permit liens on property; enter into transactions with affiliates; make restricted payments or investments; enter into mergers, acquisitions or consolidations; conduct asset sales; pay dividends or distributions, or enter into other specified transactions and activities. Our ability to borrow funds within the terms of the Revolver is dependent upon our continued compliance with the financial and other covenants. At ~~September 30, 2017,~~March 31, 2019, we had $1.2 billion of availability on the Revolver, ~~$11.9~~$11.8 million of outstanding letters of credit and other obligations which reduce availability, and there were no borrowings outstanding.

The financial covenants under our Facility state that we must maintain an interest coverage ratio of not less than 2.50:1.00. Our interest coverage ratio is calculated by dividing our last-twelve-months (LTM) consolidated adjusted EBITDA (earnings before interest, taxes, depreciation, amortization, and certain other non-cash transactions as allowed in the Facility) by our LTM gross interest expense, less amortization of financing fees. In addition, a net debt (as defined in the Facility) to LTM consolidated ~~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, 2019, our interest coverage ratio and net debt leverage ratio were ~~10.22:~~16.81:1.00 and ~~1.49:~~0.87:1.00, respectively. We were, therefore, in compliance with these covenants at ~~September 30, 2017,~~March 31, 2019, and we anticipate we will continue to be in compliance during the next twelve months.

Working Capital. We generated cash flow from operations of ~~$547.6~~$181.6 million in the first ~~nine months~~quarter of ~~2017.~~2019. Operational working capital (representing amounts invested in trade receivables and inventories, less current liabilities other than income taxes payable and debt) increased ~~$230.9~~$181.7 million, excluding the effect of acquired USS working capital, to ~~$1.5~~$2.1 billion at ~~September 30, 2017. Increases~~March 31, 2019, due primarily to decreased accrued expenses, as our 2018 accrued profit sharing was paid 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~~the first quarter of 2019.

Capital Investments. During the first ~~nine months~~quarter of ~~2017,~~2019, we invested ~~$127.7~~$54.4 million in property, plant and equipment, primarily within our steel operations segment, compared with ~~$123.2~~$50.6 million invested during the same period in ~~2016.~~2018.

Cash Dividends. As a reflection of continued confidence in our current and future cash flow generation ability and financial position, we increased our quarterly cash dividend by ~~11%~~28% to ~~$0.155~~$0.2400 per share in the first quarter ~~2017~~2019 (from ~~$0.140~~$0.1875 per share in ~~2016)~~2018), resulting in declared cash dividends of ~~$111.4~~$53.5 million during the first ~~nine months~~quarter of ~~2017,~~2019, compared to ~~$102.3~~$44.3 million during the same period in ~~2016.~~2018. We paid cash dividends of ~~$108.8~~$42.2 million and ~~$101.6~~$36.8 million during the first ~~nine months~~quarters of ~~2017~~2019 and ~~2016,~~2018, respectively. Our board of directors, along with executive management, approves the payment of dividends on a quarterly basis. The determination to pay cash dividends in the future is at the discretion of our board of directors, after taking into account various factors, including our financial condition, results of operations, outstanding indebtedness, current and anticipated cash needs and growth plans. In addition, the terms of our Facility and the indentures relating to our senior notes may restrict the amount of cash dividends we can pay.

Other. In ~~2016, the~~August 2018 our board of directors authorized a share repurchase program of up to ~~$450~~$750 million of our common stock. Under the share repurchase program, purchases will take place, as and when, we determine in open market or private transactions made based upon the market price of our common stock, the nature of other investment opportunities or growth projects, our cash flows from operations, and general economic conditions. The share repurchase program does not require us to acquire any specific number of shares, and may be modified, suspended, extended or terminated by us at any time. We acquired ~~7.0~~2.3 million shares of our common stock for ~~$237.2~~$84.3 million in the first ~~nine months~~quarter of ~~2017~~2019 pursuant to this program, leaving $314.8 million remaining available to purchase under the program. See Part II, ~~Other Information,~~ Item 22. 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 1213 years for air products. We utilized such “take or pay” requirements during the past three years under these contracts, except for certain air products at our idle Minnesota ironmaking ~~operations which were idled in May 2015.~~operations. We believe that production requirements will be such that consumption of the products or services purchased under these commitments will occur in the normal production process, other than certain air products related to our Minnesota ironmaking operations during the idle period. We also purchase electricity consumed at our Butler Flat Roll Division pursuant to a contract which extends through December ~~2017. The contract designates 160 hours annually as “interruptible service” and~~2020, which establishes an agreed fixed-rate energy charge per Mill/kWh consumed for each year through the expiration of the agreement.

We have certain fixed price contracts with various customers and suppliers for future delivery of nonferrous metals. Our risk strategy has been to enter into base metal financial contracts with the goal to protect the profit margin, within certain parameters, that was contemplated when we entered into the transaction with the customer or vendor. At ~~September 30, 2017,~~March 31, 2019, we had a cumulative unrealized ~~gain~~loss associated with these financial contracts of ~~$3.3 million,~~$788,000, substantially all of which have a settlement date within the next twelve months. We believe the customer contracts associated with the financial contracts will be fully consummated.

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, 2019, 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, 2019, 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~~$451,000 is recorded in our financial statements as of ~~September 30, 2017.~~March 31, 2019.

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, 2019.

Period

Total Number of Shares Purchased

Average Price Paid per Share

Total Number of Shares Purchased as Part of Publicly Announced Program (1)

Maximum Dollar Value of Shares That May Yet be Purchased Under the Program (in thousands) (1)

Quarter ended 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)
Quarter ended March 31, 2019

January 1 - 31 (1)	234,274		$	30.19		234,274		$	392,075
February 1 - 28 (1)	1,469,445			37.58		1,469,445			336,852
March 1 - 31 (1)	595,422			36.97		595,422			314,840
	2,299,141					2,299,141

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, 2019, therefore, no Exhibit 95 ~~attached to this report.~~is required.

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

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.



	March 31,		December 31,
	2019		2018
Raw materials	$	828,733	$	810,766
Supplies		450,584		436,828
Work in progress		184,866		195,224
Finished goods		403,517		416,350
Total inventories	$	1,867,700	$	1,859,168



	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



Commodity Futures	Long/Short	Metric Tons
Aluminum	Long	~~1,275~~3,075
Aluminum	Short	~~2,250~~5,925
Copper	Long	~~4,251~~12,440
Copper	Short	~~21,727~~22,759


	Footnotes related to the three months ended September 30, 2017, segment results (in millions):
Footnotes related to the three months ended March 31, 2019, segment results (in millions):								Footnotes related to the three months ended March 31, 2019, segment results (in millions):

(1)	Corporate SG&A	$	(12.1)	(3)	Elimination of intra-company receivables	$	(130.4)	Corporate SG&A	$	(22.6)	(3)	Elimination of intra-company receivables	$	(59.5)
	Company-wide equity-based compensation		(6.8)		Elimination of intra-company debt		(10.7)	Company-wide equity-based compensation		(9.0)		Elimination of intra-company debt		(10.8)
	Profit sharing		(20.2)		Other		(13.0)	Profit sharing		(23.0)		Other		(12.3)
	Other, net		(5.2)			$	(154.1)	Other, net		(2.3)			$	(82.6)
		$	(44.3)						$	(56.9)

(2)	Cash and equivalents	$	1,065.9					Cash and equivalents	$	756.9
	Accounts receivable		14.0					Short-term investments		153.7
	Inventories		42.8					Accounts receivable		12.2
	Property, plant and equipment, net		162.4					Inventories		36.1
	Intra-company debt		10.7					Property, plant and equipment, net		152.6
	Other		51.2					Intra-company debt		10.8
		$	1,347.0					Other		48.5
									$	1,170.8


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

(1)	Corporate SG&A	$	(12.6)
	Company-wide equity-based compensation		(6.1)
	Profit sharing		(21.0)
	Other, net		(8.0)
		$	(47.7)


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)


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)


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

(1)	Corporate SG&A	$	(15.7)
	Company-wide equity-based compensation		(8.5)
	Profit sharing		(25.6)
	Other, net		(5.6)
		$	(55.4)



	Cash and equivalents*equivalents	$	~~934,750~~791,444
	Short-term investments		173,723
	Revolver availability		~~1,188,121~~1,188,161
	Total liquidity	$	~~2,122,871~~2,153,328

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

EXHIBIT INDEX

~~ITEM 6.~~Articles of Incorporation
		~~EXHIBITS~~

3.1		Amended and Restated Articles of Incorporation of Steel Dynamics, Inc., reflecting all amendments thereto through May 17, 2018, incorporated herein by reference from Exhibit 3.1e to our Form 10-Q filed August 9, 2018.

3.2c* 3.2		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~~all amendments thereto through October 17, 2018, incorporated herein by ~~stockholders, at the 2018 Annual Meeting of Stockholders, of a conforming amendment~~reference from Exhibit 3.2d to ~~the Amended and Restated Articles of Incorporation.~~our Form 10-Q filed November 7, 2018.

~~Executive Officer Certifications~~

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~~‑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~~‑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~~‑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~~‑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)