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~~

	OR

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

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

ended June 30, 2019

OR

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

Commission File Number 0-21719

Steel Dynamics, Inc.

(Exact name of registrant as specified in its charter)

Indiana		35-1929476

~~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
~~Registrant’s telephone number, including area code: (260) 969-3500~~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 ◻
~~(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☒~~ No⌧

As of ~~November~~August 1, ~~2017,~~2019, Registrant had ~~236,951,784~~219,613,147 outstanding shares of common ~~stock.~~stock.

~~STEEL DYNAMICS, INC~~.

Table of Contents

STEEL DYNAMICS, INC.

Table of Contents


PART I. Financial Information

Item 1.	Financial ~~Statements~~Statements::	Page

	Consolidated Balance Sheets as of ~~September~~June 30, ~~2017~~2019 (unaudited) and December 31, ~~2016~~2018	13

	Consolidated Statements of Income for the three and ~~nine-month~~six-month periods ended ~~September~~June 30, ~~2017~~2019 and ~~2016 (unaudited~~2018 (unaudited))	24

	Consolidated Statements of Comprehensive Income for the three and six-month periods ended June 30, 2019 and 2018 (unaudited)	5

	Consolidated Statements of Cash Flows for the three and ~~nine-month~~six-month periods ended ~~September~~June 30, ~~2017~~2019 and ~~2016~~2018 (unaudited)	36

	Notes to Consolidated Financial Statements (unaudited)	47

Item 22..	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1822

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	2529

Item 4.	Controls and Procedures	2529



	PART II. Other Information	30

Item 1.	Legal Proceedings	2630

Item 1A1A..	Risk Factors	2630

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	2630

Item 33..	Defaults Upon Senior Securities	2630

Item 44..	Mine Safety Disclosures	2630

Item 55..	Other Information	2630

Item 6.	Exhibits	2731

	~~Signatures~~Exhibit Index	28	31

Signature		32

Table of Contents

STEEL DYNAMICS, INC.

CONSOLIDATED B~~ALANCE~~BALANCE SHEETS

(in thousands, except share data)



	June 30,		December 31,
	2019		2018
Assets	(unaudited)
Current assets
Cash and equivalents	$	972,561	$	828,220
Short-term investments		114,154		228,783
Accounts receivable, net		1,069,061		1,040,220
Accounts receivable-related parties		3,818		3,536
Inventories		1,802,759		1,859,168
Other current assets		61,248		72,730
Total current assets		4,023,601		4,032,657

Property, plant and equipment, net		2,947,243		2,945,767

Intangible assets, net		256,302		270,328
Goodwill		526,462		429,645
Other assets		104,306		25,166
Total assets	$	7,857,914	$	7,703,563
Liabilities and Equity
Current liabilities
Accounts payable	$	516,109	$	536,743
Accounts payable-related parties		9,047		14,011
Income taxes payable		3,032		7,468
Accrued payroll and benefits		148,747		264,542
Accrued interest		25,509		25,526
Accrued expenses		151,161		146,613
Current maturities of long-term debt		72,131		24,234
Total current liabilities		925,736		1,019,137

Long-term debt		2,355,917		2,352,489
Deferred income taxes		457,784		435,838
Other liabilities		70,196		8,870
Total liabilities		3,809,633		3,816,334

Commitments and contingencies

Redeemable noncontrolling interests		139,930		111,240

Equity
Common stock voting, $.0025 par value; 900,000,000 shares authorized;
265,553,499 and 265,822,402 shares issued; and 219,797,547 and 225,272,174
shares outstanding, as of June 30, 2019 and December 31, 2018, respectively		645		645
Treasury stock, at cost; 45,755,952 and 40,550,228 shares,
as of June 30, 2019 and December 31, 2018, respectively		(1,354,157)		(1,184,243)
Additional paid-in capital		1,167,505		1,160,048
Retained earnings		4,250,419		3,958,320
Accumulated other comprehensive income		78		301
Total Steel Dynamics, Inc. equity		4,064,490		3,935,071
Noncontrolling interests		(156,139)		(159,082)
Total equity		3,908,351		3,775,989
Total liabilities and equity	$	7,857,914	$	7,703,563

September 30,

December 31,

2017

2016
Assets
(unaudited)

Current assets

  Cash and equivalents
$
1,101,964

$
841,483
  Accounts receivable, net

897,838

703,565
  Accounts receivable-related parties

25,179

26,219
  Inventories

1,487,516

1,275,211
  Other current assets

59,648

83,197
     Total current assets

3,572,145

2,929,675

Property, plant and equipment, net

2,708,777

2,787,215

Restricted cash

17,092

18,060
Intangible assets, net

263,357

283,977
Goodwill

388,518

393,351
Other assets

10,848

11,454
     Total assets
$
6,960,737

$
6,423,732
Liabilities and Equity

Current liabilities

  Accounts payable
$
512,290

$
382,126
  Accounts payable-related parties

16,393

13,070
  Income taxes payable

5,596

5,593
  Accrued payroll and benefits

171,508

164,543
  Accrued interest

49,380

30,295
  Accrued expenses

128,701

113,556
  Current maturities of long-term debt

182,661

3,632
     Total current liabilities

1,066,529

712,815

Long-term debt

2,351,483

2,353,194
Deferred income taxes

461,399

448,375
Other liabilities

20,305

20,649
     Total liabilities

3,899,716

3,535,033

Commitments and contingencies

Redeemable noncontrolling interests

111,240

111,240

Equity

  Common stock voting, $.0025 par value; 900,000,000 shares authorized;

       264,161,359 and 264,130,544 shares issued; and 236,951,784 and 243,785,485

       shares outstanding, as of September 30, 2017 and December 31, 2016, respectively

641

641
  Treasury stock, at cost; 27,209,575 and 20,345,059 shares,

       as of September 30, 2017 and December 31, 2016 respectively

(650,210)

(416,829)
  Additional paid-in capital

1,147,463

1,132,749
  Retained earnings

2,606,831

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

3,104,725

2,927,020
  Noncontrolling interests

(154,944)

(149,561)
     Total equity

2,949,781

2,777,459
     Total liabilities and equity
$
6,960,737

$
6,423,732

See notes to consolidated financial ~~statements.~~statements.

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Table of Contents

STEEL DYNAMICS, INC.

CONSOLIDATED ~~STATEMENTS~~STATEMENTS OF INCOME (UNAUDITED)

(in thousands, except per share data)



	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2019		2018		2019		2018

Net sales
Unrelated parties	$	2,766,364	$	3,083,822	$	5,580,850	$	5,681,134
Related parties		4,151		6,703		7,100		13,266
Total net sales		2,770,515		3,090,525		5,587,950		5,694,400

Costs of goods sold		2,349,349		2,438,443		4,733,214		4,578,902
Gross profit		421,166		652,082		854,736		1,115,498

Selling, general and administrative expenses		106,250		101,031		217,288		207,462
Profit sharing		22,871		42,335		46,548		68,997
Amortization of intangible assets		7,013		6,829		14,026		13,755
Operating income		285,032		501,887		576,874		825,284

Interest expense, net of capitalized interest		32,321		31,512		63,443		63,408
Other income, net		(4,249)		(5,035)		(10,592)		(9,498)
Income before income taxes		256,960		475,410		524,023		771,374

Income tax expense		60,214		112,838		122,450		183,327
Net income		196,746		362,572		401,573		588,047

Net (income) loss attributable to noncontrolling interests		(2,444)		(123)		(2,943)		1,953
Net income attributable to Steel Dynamics, Inc.	$	194,302	$	362,449	$	398,630	$	590,000



Basic earnings per share attributable to Steel Dynamics,
Inc. stockholders	$	0.88	$	1.54	$	1.79	$	2.50

Weighted average common shares outstanding		221,505		235,617		222,781		236,120

Diluted earnings per share attributable to Steel Dynamics, Inc.
stockholders, including the effect of assumed conversions
when dilutive	$	0.87	$	1.53	$	1.78	$	2.49

Weighted average common shares and share equivalents outstanding		222,519		236,945		223,741		237,334

Dividends declared per share	$	0.2400	$	0.1875	$	0.4800	$	0.3750

Three Months Ended

Nine Months Ended

September 30,

September 30,

2017

2016

2017

2016

Net sales

  Unrelated parties
$
2,399,116

$
2,060,596

$
7,066,083

$
5,737,584
  Related parties

44,266

40,714

136,235

128,929
     Total net sales

2,443,382

2,101,310

7,202,318

5,866,513

Costs of goods sold

2,046,864

1,692,807

5,941,128

4,841,591
     Gross profit

396,518

408,503

1,261,190

1,024,922

Selling, general and administrative expenses

97,056

95,185

298,422

279,899
Profit sharing

21,175

22,255

69,714

51,722
Amortization of intangible assets

7,272

7,208

22,120

21,359
     Operating income

271,015

283,855

870,934

671,942

Interest expense, net of capitalized interest

34,177

36,199

102,019

109,888
Other expense (income), net

2,526

4,351

(4,968)

741
     Income before income taxes

234,312

243,305

773,883

561,313

Income tax expense

83,300

88,892

271,258

205,139
     Net income

151,012

154,413

502,625

356,174

Net loss attributable to noncontrolling interests

2,246

2,984

5,383

5,929
     Net income attributable to Steel Dynamics, Inc.
$
153,258

$
157,397

$
508,008

$
362,103

Basic earnings per share attributable to Steel Dynamics,

  Inc. stockholders
$
0.64

$
0.65

$
2.11

$
1.49

Weighted average common shares outstanding

239,066

243,761

241,117

243,539

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

Weighted average common shares and share equivalents outstanding

240,880

245,682

242,816

245,227

Dividends declared per share
$
0.155

$
0.140

$
0.465

$
0.420

See notes to consolidated financial ~~statements.~~statements.

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Table of Contents

STEEL DYNAMICS, INC.

CONSOLIDATED STATEMENTS OF ~~CASH FLOWS~~COMPREHENSIVE INCOME (UNAUDITED)

(in thousands)



	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2019		2018		2019		2018

Net income	$	196,746	$	362,572	$	401,573	$	588,047
Other comprehensive loss - net unrealized loss on cash flow
hedging derivatives, net of income tax benefit		(52)		(105)		(223)		(105)
Comprehensive income		196,694		362,467		401,350		587,942

Comprehensive (income) loss attributable to noncontrolling interests		(2,444)		(123)		(2,943)		1,953
Comprehensive income attributable to Steel Dynamics, Inc.	$	194,250	$	362,344	$	398,407	$	589,895

Three Months Ended

Nine Months Ended

September 30,

September 30,

2017

2016

2017

2016

Operating activities:

   Net income
$
151,012

$
154,413

$
502,625

$
356,174

   Adjustments to reconcile net income to net cash provided by

       operating activities:

       Depreciation and amortization

75,210

74,190

224,068

222,970
       Equity-based compensation

6,875

5,946

24,558

23,716
       Deferred income taxes

3,284

18,478

17,849

53,879
       Other adjustments

8,202

161

8,055

1,376
       Changes in certain assets and liabilities:

           Accounts receivable

(36,123)

29,384

(193,233)

(149,810)
           Inventories

(67,285)

(76,013)

(211,726)

(102,339)
           Other assets

(9,234)

694

(1,703)

11,855
           Accounts payable

44,887

(49,171)

133,251

117,220
           Income taxes receivable/payable

(12,929)

(7,421)

5,803

40,960
           Accrued expenses

62,249

45,701

38,058

69,361
       Net cash provided by operating activities

226,148

196,362

547,605

645,362

Investing activities:

   Purchases of property, plant and equipment

(42,795)

(59,774)

(127,746)

(123,168)
   Acquisition of business, net of cash acquired

(5,518)

(109,065)

(5,518)

(109,065)
   Other investing activities

1,081

1,507

30,386

5,767
       Net cash used in investing activities

(47,232)

(167,332)

(102,878)

(226,466)

Financing activities:

   Issuance of current and long-term debt

450,215

12,911

501,448

97,018
   Repayment of current and long-term debt

(294,913)

(9,999)

(331,339)

(95,253)
   Dividends paid

(37,180)

(34,124)

(108,837)

(101,639)
   Purchases of treasury stock

(99,085)

-

(237,154)

-
   Other financing activities

(4,832)

1,005

(8,364)

5,435
       Net cash provided by (used in) financing activities

14,205

(30,207)

(184,246)

(94,439)

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

Cash and equivalents at end of period
$
1,101,964

$
1,051,489

$
1,101,964

$
1,051,489

Supplemental disclosure information:

   Cash paid for interest
$
13,530

$
26,225

$
80,155

$
97,605
   Cash paid for income taxes, net
$
93,123

$
75,860

$
246,793

$
104,124

See notes to consolidated financial ~~statements.~~statements.

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Table of Contents

STEEL DYNAMICS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(in thousands)



	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2019		2018		2019		2018

Operating activities:
Net income	$	196,746	$	362,572	$	401,573	$	588,047

Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization		80,911		79,120		161,085		155,255
Equity-based compensation		9,080		8,041		24,388		20,882
Deferred income taxes		11,550		11,993		23,641		21,538
Other adjustments		(564)		(145)		164		(115)
Changes in certain assets and liabilities:
Accounts receivable		70,624		(163,465)		9,562		(282,283)
Inventories		64,941		(90,312)		104,410		(171,023)
Other assets		7,292		(630)		7,593		(735)
Accounts payable		(58,484)		48,919		(55,278)		115,251
Income taxes receivable/payable		(36,428)		22,579		13,422		86,541
Accrued expenses		15,805		47,361		(147,534)		(29,390)
Net cash provided by operating activities		361,473		326,033		543,026		503,968

Investing activities:
Purchases of property, plant and equipment		(85,120)		(55,203)		(139,556)		(105,809)
Purchases of short-term investments		(49,465)		(50,000)		(99,142)		(90,000)
Proceeds from maturities of short-term investments		109,034		-		213,771		-
Acquisition of business, net of cash and restricted cash acquired		-		(396,409)		(93,412)		(396,409)
Other investing activities		913		657		1,277		886
Net cash used in investing activities		(24,638)		(500,955)		(117,062)		(591,332)

Financing activities:
Issuance of current and long-term debt		125,222		124,571		246,456		217,629
Repayment of current and long-term debt		(133,875)		(118,089)		(249,146)		(231,123)
Dividends paid		(53,503)		(44,268)		(95,742)		(81,065)
Purchases of treasury stock		(93,136)		(49,145)		(177,444)		(118,414)
Other financing activities		(12)		(3,144)		(5,732)		(8,324)
Net cash used in financing activities		(155,304)		(90,075)		(281,608)		(221,297)

Increase (decrease) in cash, cash equivalents, and restricted cash		181,531		(264,997)		144,356		(308,661)
Cash, cash equivalents, and restricted cash at beginning of period		797,248		991,421		834,423		1,035,085

Cash, cash equivalents, and restricted cash at end of period	$	978,779	$	726,424	$	978,779	$	726,424


Supplemental disclosure information:
Cash paid for interest	$	53,981	$	53,226	$	62,587	$	61,855
Cash paid for income taxes, net	$	84,516	$	79,995	$	86,355	$	78,950

See notes to consolidated financial statements.

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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%~~76% and ~~74%~~75% of the company’s consolidated external net sales during the three ~~months~~and six-month periods ended ~~September~~June 30, ~~2017~~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~~LLC (OmniSource), and includes both ferrous and nonferrous processing, transportation, marketing, brokerage, and ~~consulting~~scrap management services. Metals recycling operations accounted for ~~14%~~12% and ~~15%~~14% of the company’s consolidated external net sales during the three ~~months~~and six-month periods ended ~~September~~June 30, ~~2017~~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%7% of the company’s consolidated external net sales during the ~~three months~~three-month periods ended ~~September~~June 30, ~~2017~~2019 and ~~2016,~~2018, respectively, and 8% and 9%7% of the company’s consolidated external net sales during the ~~nine months~~six-month periods ended ~~September~~June 30, ~~2017~~2019 and ~~2016,~~2018, respectively.

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.

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STEEL DYNAMICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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

Cash and Equivalents, and Restricted Cash

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

Goodwill.

The company’s goodwill ~~is allocated to~~consisted of the following reporting units at ~~September~~June 30, ~~2017,~~2019, and December 31, ~~2016,~~2018, (in thousands):



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

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

The company acquired a 75% equity interest in United Steel Supply on March 1, 2019 (refer to Note 2 Acquisition – United Steel Supply, LLC), resulting in a preliminary purchase price allocation in which $98.5 million of goodwill has been recorded. OmniSource goodwill decreased $~~4.8~~$1.7 million from December 31, ~~2016~~2018 to ~~September~~June 30, ~~2017,~~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 itscurrent incurred loss model for most 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 606instruments, including accounts receivable. This new guidance is effective for annual and interim periods beginning after December 15, ~~2017,~~2019, but can be early ~~adopted for annual and interim periods ending after December 15, 2016, using a full retrospective or modified retrospective approach.~~adopted. The company is ~~finalizing~~currently evaluating the impact ASU 2016-13 will have in its ~~adoption plan~~consolidated financial statements and related disclosure.

Note 2. Acquisition – United Steel Supply, LLC

On March 1, 2019, the company purchased 75% of the equity interest of United Steel Supply, LLC (USS) for cash consideration of $93.4 million, subject to customary actual working capital purchase price adjustments. Additionally, the company has an option to purchase, and the sellers have the option to require the company to purchase, the remaining 25% equity interest of USS in ~~which~~the future. Headquartered in Austin, Texas, USS is a leading distributor of painted Galvalume^® flat roll steel used for roofing and siding applications, with distribution centers strategically located in Mississippi, Indiana, Arkansas, and Oregon. USS provides the company a new, complementary distribution channel and connects it ~~has identified current revenue streams~~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 ~~analyzed those revenue streams pursuant~~after March 1, 2019, are reflected in the company’s financial statements in the steel operations reporting segment.

8

Table of Contents

STEEL DYNAMICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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

The aggregate purchase price was preliminarily allocated to the ~~new~~opening balance sheet of USS as of March 1, 2019. The following initial allocation of the purchase price (in thousands) is preliminary based on the information available as of the acquisition date to estimate the fair value of assets acquired and liabilities assumed. The accounting ~~requirements. The company will complete~~for the ~~adoption plan during the fourth quarter of 2017, including assessment of new required disclosures. Based on our analysis within the adoption plan~~acquisition has not yet been completed ~~to date,~~because the company ~~does~~has not ~~believe there will be significant change in~~finalized the ~~amount~~working capital purchase price adjustment or ~~timing~~valuations 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. acquired assets, assumed liabilities and identifiable intangible assets, if any, including goodwill.

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

Note 3. Leases

In February 2016, the FASB issued ASU 2016-02, Leases ~~(Topic~~(ASC 842): and its subsequent corresponding updates; which ~~establishes~~established a new lease accounting model that requires lessees to recognize a ~~right of use~~right-of-use asset and related lease liability for most leases having lease terms of more than 12 ~~months (ASU 2016-02). Leases~~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 ~~a term~~lease commencement date terms of 12 months or less will be accounted for similar to existing guidance for operating leases. This new guidance is effective for annual and interim periods beginning after December 15, 2018, but can be early adopted.less. The company ~~is currently evaluating~~recognized right-of-use assets and lease liabilities of $76.3 million, with no impact on retained earnings, in the consolidated balance sheet on January 1, 2019, and the standard did not have a significant impact on the company’s operating results or cash flows for the three and six-month periods ended June 30, 2019.

The company has operating leases relating principally to transportation and other equipment, and some real estate. The company determines if an arrangement contains a lease at inception, which generally occurs when the arrangement identifies a specific asset that the company has the right to direct the use of and obtain substantially all of the ~~provisions~~economic benefit from use of ~~ASU 2016-02, including~~ the ~~timing~~identified asset. Certain of ~~adoption.~~

~~Reclassifications~~

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 ~~early adopted, effective December 31, 2016,~~ ~~Improvement~~uses its incremental borrowing rate at lease commencement to ~~Employee Share-based Payment Accounting~~ ~~(ASU 2016-09).~~ ~~Cash paid to tax authorities from shares withheld to satisfy~~determine the ~~company’s statutory income tax withholding obligation~~present value of ~~$2.~~2 ~~million were reclassified to financing activities from operating activities~~lease payments. The incremental borrowing rate is the rate of interest the company could borrow on a collateralized basis over a similar term with similar payments. Operating lease expense is recognized on a straight-line basis over the lease term.

Operating lease right-of-use assets and lease obligations included in the ~~nine-month period ended September~~consolidated balance sheet at June 30, ~~2016, statement~~2019, are as follows (in thousands):


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

9

Table of ~~cash flows.~~Contents

5

STEEL DYNAMICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 3. Leases (Continued)

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


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

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

Note 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~~six-month periods ended ~~September~~June 30, ~~2017~~2019 and ~~2016.~~2018.



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

~~The following tables present a reconciliation~~

10

Table 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 and 2016 (in thousands, except per share data):Contents

Three Months Ended September 30,

2017

2016

Net Income

Shares

Per Share

Net Income

Shares

Per Share

(Numerator)

(Denominator)

Amount

(Numerator)

(Denominator)

Amount
Basic earnings per share
$
153,258

239,066

$
0.64

$
157,397

243,761

$
0.65
Dilutive common share equivalents

-

1,814

-

1,921

Diluted earnings per share
$
153,258

240,880

$
0.64

$
157,397

245,682

$
0.64

STEEL DYNAMICS, INC.

Nine Months Ended September 30,

2017

2016

Net Income

Shares

Per Share

Net Income

Shares

Per Share

(Numerator)

(Denominator)

Amount

(Numerator)

(Denominator)

Amount
Basic earnings per share
$
508,008

241,117

$
2.11

$
362,103

243,539

$
1.49
Dilutive common share equivalents

-

1,699

-

1,688

Diluted earnings per share
$
508,008

242,816

$
2.09

$
362,103

245,227

$
1.48

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 3.4. Earnings Per Share (Continued)



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

Note 5. Inventories

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


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

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

6

11

Table of Contents

STEEL DYNAMICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

~~Note 4. Debt~~

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

~~December 31, 2017.~~

Note 5.6. Changes in Equity

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 and six-month periods ended June 30, 2019 and 2018:



	Stockholders of Steel Dynamics, Inc.
									Accumulated
					Additional				Other						Redeemable
	Common		Treasury		Paid-In		Retained		Comprehensive		Noncontrolling		Total		Noncontrolling
	Stock		Stock		Capital		Earnings		Loss		Interests		Equity		Interests
Balances at December 31, 2018	$	645	$	(1,184,243)	$	1,160,048	$	3,958,320	$	301	$	(159,082)	$	3,775,989	$	111,240
Dividends declared		-		-		-		(53,504)		-		-		(53,504)		-
Noncontrolling investors of USS		-		-		-		-		-		-		-		28,690
Share repurchases		-		(84,308)		-		-		-		-		(84,308)		-
Equity-based compensation		-		6,714		91		(110)		-		-		6,695		-
Net income		-		-		-		204,328		-		499		204,827		-
Other comprehensive loss, net of tax		-		-		-		-		(171)		-		(171)		-
Balances at March 31, 2019		645		(1,261,837)		1,160,139		4,109,034		130		(158,583)		3,849,528		139,930
Dividends declared		-		-		-		(52,751)		-		-		(52,751)		-
Share repurchases		-		(93,136)		-		-		-		-		(93,136)		-
Equity-based compensation		-		816		7,366		(166)		-		-		8,016		-
Net income		-		-		-		194,302		-		2,444		196,746		-
Other comprehensive loss, net of tax		-		-		-		-		(52)		-		(52)		-
Balances at June 30, 2019	$	645	$	(1,354,157)	$	1,167,505	$	4,250,419	$	78	$	(156,139)	$	3,908,351	$	139,930


	Stockholders of Steel Dynamics, Inc.
									Accumulated
					Additional				Other						Redeemable
	Common		Treasury		Paid-In		Retained		Comprehensive		Noncontrolling		Total		Noncontrolling
	Stock		Stock		Capital		Earnings		Loss		Interests		Equity		Interests
Balances at December 31, 2017	$	644	$	(665,297)	$	1,141,534	$	2,874,693	$	-	$	(156,506)	$	3,195,068	$	111,240
Dividends declared		-		-		-		(44,269)		-		-		(44,269)		-
Share repurchases		-		(69,269)		-		-		-		-		(69,269)		-
Equity-based compensation		-		3,866		1,337		(71)		-		-		5,132		-
Comprehensive and net income (loss)		-		-		-		227,551		-		(2,076)		225,475		-
Balances at March 31, 2018		644		(730,700)		1,142,871		3,057,904		-		(158,582)		3,312,137		111,240
Dividends declared		-		-		-		(44,080)		-		-		(44,080)		-
Noncontrolling investors, net		-		-		-		-		-		(3)		(3)		-
Share repurchases		-		(49,145)		-		-		-		-		(49,145)		-
Equity-based compensation		-		757		6,496		(110)		-		-		7,143		-
Net income		-		-		-		362,449		-		123		362,572		-
Other comprehensive loss, net of tax		-		-		-		-		(105)		-		(105)		-
Balances at June 30, 2018	$	644	$	(779,088)	$	1,149,367	$	3,376,163	$	(105)	$	(158,462)	$	3,588,519	$	111,240

Stockholders of Steel Dynamics, Inc.

Additional

Redeemable

Common

Treasury

Paid-In

Retained

Noncontrolling

Total

Noncontrolling

Stock

Stock

Capital

Earnings

Interests

Equity

Interests
Balances at December 31, 2016
$
641

$
(416,829)

$
1,132,749

$
2,210,459

$
(149,561)

$
2,777,459

$
111,240
Dividends declared

-

-

-

(111,435)

-

(111,435)

-
Share repurchases

-

(237,154)

-

-

-

(237,154)

-
Equity-based compensation

-

3,773

14,714

(201)

-

18,286

-
Comprehensive and net income (loss)

-

-

-

508,008

(5,383)

502,625

-
Balances at September 30, 2017
$
641

$
(650,210)

$
1,147,463

$
2,606,831

$
(154,944)

$
2,949,781

$
111,240

12

Table of Contents

STEEL DYNAMICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 6.7. Derivative Financial Instruments

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

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



Commodity Futures	Long/Short		Metric Tons
~~Commodity Futures~~	~~Long/Short~~	~~Metric Tons~~
Aluminum	Long	~~1,275~~	2,450
Aluminum	Short	~~2,250~~	4,500
Copper	Long	~~4,251~~	17,758
Copper	Short	~~21,727~~
			28,123

The following summarizes the location and amounts of the fair values reported on the company’s consolidated balance sheets as of ~~September~~June 30, ~~2017,~~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~~six-month periods ended ~~September~~June 30, ~~2017~~2019 and ~~2016~~2018 (in thousands):



		Asset Derivatives				Liability Derivatives
	Balance sheet	Fair Value				Fair Value
	location	June 30, 2019		December 31, 2018		June 30, 2019		December 31, 2018
Derivative instruments designated as hedges
Commodity futures	Other current assets	$	1,479	$	2,999	$	1,473	$	1,837

Derivative instruments not designated as hedges
Commodity futures	Other current assets		3,946		1,559		4,172		2,053
Total derivative instruments		$	5,425	$	4,558	$	5,645	$	3,890

7

~~STEEL DYNAMICS, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)~~

~~Note 6. Derivative Financial Instruments (Continued)~~

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

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~~$4.8 million at ~~September~~June 30, ~~2017,~~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

June 30,

fair value hedge

related hedged

June 30,

derivatives

2019

2018

relationships

items

2019

2018

Derivatives in fair value

hedging relationships

Commodity futures

Costs of goods sold

$

591

$

1,540

Firm commitments

Costs of goods sold

$

1,415

$

(2,600)

Inventory

Costs of goods sold

(294)

(816)

Derivatives not designated

$

1,121

$

(3,416)

as hedging instruments

Commodity futures

Costs of goods sold

$

5,487

$

2,969

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

Location of gain

in income on derivatives

(loss) recognized

in income on related hedged items

(loss) recognized

for the nine months ended

Hedged items in

in income on

for the nine months ended

in income on

September 30,

September 30,

fair value hedge

on related

September 30,

September 30,

derivatives

2017

2016

relationships

hedged items

2017

2016
Derivatives in fair value

hedging relationships

Commodity futures

Costs of goods sold

$
571

$
1,281

Firm commitments

Costs of goods sold

$
995

$
(2,223)

Inventory

Costs of goods sold

179

642
Derivatives not designated

$
1,174

$
(1,581)
as hedging instruments

Commodity futures

Costs of goods sold

$
(12,528)

$
(394)

13

Table of Contents

STEEL DYNAMICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 7. Derivative Financial Instruments (Continued)

Amount of gain (loss) recognized

Location of gain

Amount of gain (loss) recognized

Location of gain

in income on derivatives

(loss) recognized

in income on related hedged items

(loss) recognized

for the six months ended

Hedged items in

in income on

for the six months ended

in income on

June 30,

fair value hedge

related hedged

June 30,

derivatives

2019

2018

relationships

items

2019

2018

Derivatives in fair value

hedging relationships

Commodity futures

Costs of goods sold

$

(862)

$

10,056

Firm commitments

Costs of goods sold

$

(84)

$

(3,393)

Inventory

Costs of goods sold

427

(3,412)

Derivatives not designated

$

343

$

(6,805)

as hedging instruments

Commodity futures

Costs of goods sold

$

1,410

$

5,720

Derivatives accounted for as fair value hedges had ineffectiveness resulting in gains of $1.2 million and losses of ~~$35,000 and $84,000~~$117,000 during the three-month periods ended ~~September~~June 30, ~~2017~~2019, and ~~2016,~~2018, respectively; and ~~a gain~~gains of ~~$62,000~~$32,000 and ~~loss~~losses of ~~$175,000~~$16,000 during the ~~nine-month~~six-month periods ended ~~September~~June 30, ~~2017~~2019, and ~~2016,~~2018, respectively. Gains excluded from hedge effectiveness testing of ~~$1.1~~$1.7 million decreased cost of goods sold during the three-month period ended ~~September~~June 30, ~~201~~7, 2019 and losses ~~excluded from hedge effectiveness testing~~ of ~~$60,000~~$1.8 million increased ~~costs~~the cost of goods sold during the three-month period ended ~~September~~June 30, ~~2016. Gains~~2018. Losses excluded from hedge effectiveness testing of ~~$1.7 million decreased costs~~$519,000 increased cost of goods sold during the ~~nine-month~~six-month period ended ~~September~~June 30, ~~2017,~~2019 and ~~losses~~gains of ~~$125,000 increased costs~~$3.3 million decreased the cost of goods sold during the ~~nine month~~six-month period ended ~~September~~June 30, ~~2016.~~ 2018.

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

8

~~STEEL DYNAMICS, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)~~

Note 7.8. Fair Value Measurements

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

·

●

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

·

●

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

·

●

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

14

Table of Contents

STEEL DYNAMICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 8. Fair Value Measurements (Continued)

The following table sets forth financial assets and liabilities measured at fair value on a recurring basis in the consolidated balance sheet and the respective levels to which the fair value measurements are classified within the fair value hierarchy as of ~~September~~June 30, ~~2017,~~2019, and December 31, ~~2016~~2018 (in thousands):



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

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

Quoted Prices

Significant

in Active

Other

Significant

Markets for

Observable

Unobservable

Identical Assets

Inputs

Inputs

Total

(Level 1)

(Level 2)

(Level 3)
September 30, 2017

Commodity futures – financial assets
$
4,149

$
-

$
4,149

$
-
Commodity futures – financial liabilities

893

-

893

-

December 31, 2016

Commodity futures – financial assets
$
4,060

$
-

$
4,060

$
-
Commodity futures – financial liabilities

2,083

-

2,083

-

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~~June 30, ~~2017~~2019 and December 31, ~~2016,~~2018, respectively (with a corresponding carrying amount in the consolidated balance sheet of $2.5 billion at June 30, 2019 and $2.4 billion at ~~September 30, 2017, and~~ December 31, ~~2016, respectively)~~2018).

Note 8.9. Commitments and Contingencies

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

Note 9.10. Segment Information

The company’s operations are primarily organized and managed by reportable operating segments, which are steel operations, metals recycling operations, and steel fabrication operations. The segment operations are more fully described in Note 1 to ~~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~~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.

9

15

Table of Contents

STEEL DYNAMICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 9.10. Segment Information (Continued)

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



			Metals		Steel
For the three months ended	Steel		Recycling		Fabrication
June 30, 2019	Operations		Operations		Operations		Other			Eliminations			Consolidated

Net sales - disaggregated revenue
External	$	2,040,756	$	262,826	$	240,439	$	99,641		$	-		$	2,643,662
External Non-U.S.		65,595		60,273		985		-			-			126,853
Other segments		81,834		333,667		-		121			(415,622)			-
		2,188,185		656,766		241,424		99,762			(415,622)			2,770,515
Operating income (loss)		291,411		7,619		30,664		(49,153)	⁽¹⁾		4,491	⁽²⁾		285,032
Income (loss) before income taxes		274,155		6,500		29,466		(57,438)			4,277			256,960
Depreciation and amortization		63,150		11,525		2,974		3,262			-			80,911
Capital expenditures		43,575		12,173		3,019		26,353			-			85,120

As of June 30, 2019
Assets	$	5,217,650	$	987,702	$	418,023	$	1,307,873	⁽³⁾	$	(73,334)	⁽⁴⁾	$	7,857,914

Metals

Steel

For the three months ended

Steel

Recycling

Fabrication

September 30, 2017

Operations

Operations

Operations

Other

Eliminations

Consolidated

Net Sales

  External

$
1,700,707

$
301,422

$
211,271

$
101,057

$
-

$
2,314,457
  External Non-U.S.

82,098

46,793

34

-

-

128,925
  Other segments

65,321

360,982

89

116

(426,508)

-

1,848,126

709,197

211,394

101,173

(426,508)

2,443,382
Operating income (loss)

276,547

17,624

21,862

(44,326)
(1)

(692)

271,015
Income (loss) before income taxes

255,539

16,020

20,199

(56,754)

(692)

234,312
Depreciation and amortization

57,644

12,020

2,866

2,680

-

75,210
Capital expenditures

31,654

8,589

1,524

1,028

-

42,795

As of September 30, 2017

��

Assets

$
4,353,904

$
1,032,018

$
381,931

$
1,346,968
(2)
$
(154,084)
(3)
$
6,960,737


Footnotes related to the three months ended June 30, 2019, segment results (in millions):

(1)	Corporate SG&A	$	(18.0)	(2)	Gross profit increase from intra-company sales	$	4.5
	Company-wide equity-based compensation		(8.4)
	Profit sharing		(21.3)
	Other, net		(1.5)
		$	(49.2)

(3)	Cash and equivalents	$	916.5	(4)	Elimination of intra-company receivables	$	(57.2)
	Short-term investments		109.2		Elimination of intra-company debt		(8.3)
	Accounts receivable		6.0		Other		(7.8)
	Inventories		35.1			$	(73.3)
	Property, plant and equipment, net		176.5
	Intra-company debt		8.3
	Other		56.3
		$	1,307.9



			Metals		Steel
For the three months ended	Steel		Recycling		Fabrication
June 30, 2018	Operations		Operations		Operations		Other			Eliminations			Consolidated

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

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

(1)
Corporate SG&A
$
(12.1)

(3)
Elimination of intra-company receivables
$
(130.4)

Company-wide equity-based compensation

(6.8)

Elimination of intra-company debt

(10.7)

Profit sharing

(20.2)

Other

(13.0)

Other, net

(5.2)

$
(154.1)

$
(44.3)

(2)
Cash and equivalents
$
1,065.9

Accounts receivable

14.0

Inventories

42.8

Property, plant and equipment, net

162.4

Intra-company debt

10.7

Other

51.2

$
1,347.0

10

16

Table of Contents

STEEL DYNAMICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 9.10. Segment Information (Continued)

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


Footnotes related to the three months ended June 30, 2018, segment results (in millions):

(1)	Corporate SG&A	$	(14.5)	(2)	Gross profit decrease from intra-company sales	$	(4.8)
	Company-wide equity-based compensation		(8.5)
	Profit sharing		(40.6)
		$	(63.6)



			Metals		Steel
For the six months ended	Steel		Recycling		Fabrication
June 30, 2019	Operations		Operations		Operations		Other			Eliminations			Consolidated

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


Footnotes related to the six months ended June 30, 2019, segment results (in millions):

(1)	Corporate SG&A	$	(40.6)	(2)	Gross profit increase from intra-company sales	$	6.6
	Company-wide equity-based compensation		(17.4)
	Profit sharing		(44.3)
	Other, net		(3.8)
		$	(106.1)



			Metals		Steel
For the six months ended	Steel		Recycling		Fabrication
June 30, 2018	Operations		Operations		Operations		Other			Eliminations			Consolidated

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


Footnotes related to the six months ended June 30, 2018, segment results (in millions):

(1)	Corporate SG&A	$	(30.2)	(2)	Gross profit decrease from intra-company sales	$	(5.0)
	Company-wide equity-based compensation		(17.0)
	Profit sharing		(66.2)
	Other, net		(5.6)
		$	(119.0)

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)

Metals

Steel

For the nine months ended

Steel

Recycling

Fabrication

September 30, 2017

Operations

Operations

Operations

Other

Eliminations

Consolidated

Net Sales

  External

$
5,025,310

$
910,830

$
603,140

$
281,091

$
-

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

237,070

144,750

127

-

-

381,947
  Other segments

183,374

1,067,770

244

1,065

(1,252,453)

-

5,445,754

2,123,350

603,511

282,156

(1,252,453)

7,202,318
Operating income (loss)

895,008

51,968

65,735

(141,406)
(1)

(371)

870,934
Income (loss) before income taxes

830,865

46,674

61,171

(164,456)

(371)

773,883
Depreciation and amortization

170,125

37,048

8,743

8,152

-

224,068
Capital expenditures

101,939

18,539

5,748

1,520

-

127,746

Footnotes related to the nine months ended September 30, 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)

11

17

Table of Contents

STEEL DYNAMICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

~~Note 9. Segment Information (Continued)~~

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

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)

12

~~STEEL DYNAMICS, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)~~

Note ~~10.~~11. Condensed Consolidating Information

Certain 100% owned subsidiaries of SDI have fully and unconditionally guaranteed jointly and severally all of the indebtedness relating to the issuance of the company’s senior unsecured notes due 2021, 2023, 2024, 2025 and 2026. Following are the company’s condensed consolidating financial statements, including the guarantors, which present the financial position, results of operations, and cash flows of (i) SDI (in each case, reflecting investments in its consolidated subsidiaries under the equity method of accounting), (ii) the guarantor subsidiaries of SDI, (iii) the non-guarantor subsidiaries of SDI, and (iv) the eliminations necessary to arrive at the information on a consolidated basis. ~~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)
					Combined		Consolidating		Total
As of June 30, 2019	Parent		Guarantors		Non-Guarantors		Adjustments		Consolidated
Cash and equivalents	$	914,541	$	50,670	$	7,350	$	-	$	972,561
Short-term investments		109,154		5,000		-		-		114,154
Accounts receivable, net		324,548		1,696,820		70,968		(1,019,457)		1,072,879
Inventories		748,921		977,754		87,342		(11,258)		1,802,759
Other current assets		46,197		18,698		3,754		(7,401)		61,248
Total current assets		2,143,361		2,748,942		169,414		(1,038,116)		4,023,601
Property, plant and equipment, net		883,970		1,902,632		160,641		-		2,947,243
Intangible assets, net		-		256,302		-		-		256,302
Goodwill		-		427,950		98,512		-		526,462
Other assets, including investments in subs		2,838,285		65,100		6,800		(2,805,879)		104,306
Total assets	$	5,865,616	$	5,400,926	$	435,367	$	(3,843,995)	$	7,857,914

Accounts payable	$	174,596	$	331,110	$	88,182	$	(68,732)	$	525,156
Accrued expenses		180,887		296,932		20,068		(169,438)		328,449
Current maturities of long-term debt		826		1,165		93,176		(23,036)		72,131
Total current liabilities		356,309		629,207		201,426		(261,206)		925,736
Long-term debt		2,329,916		-		170,842		(144,841)		2,355,917
Other liabilities		(885,161)		1,244,276		33,352		135,513		527,980
Total liabilities		1,801,064		1,873,483		405,620		(270,534)		3,809,633

Redeemable noncontrolling interests		-		-		139,930		-		139,930

Common stock		645		1,727,859		15,016		(1,742,875)		645
Treasury stock		(1,354,157)		-		-		-		(1,354,157)
Additional paid-in-capital		1,167,505		683,048		787,572		(1,470,620)		1,167,505
Retained earnings (deficit)		4,250,419		1,116,598		(756,632)		(359,966)		4,250,419
Accumulated other comprehensive loss		140		(62)		-		-		78
Total Steel Dynamics, Inc. equity		4,064,552		3,527,443		45,956		(3,573,461)		4,064,490
Noncontrolling interests		-		-		(156,139)		-		(156,139)
Total equity		4,064,552		3,527,443		(110,183)		(3,573,461)		3,908,351
Total liabilities and equity	$	5,865,616	$	5,400,926	$	435,367	$	(3,843,995)	$	7,857,914

Condensed Consolidating Balance Sheets (in thousands)

Combined

Consolidating

Total
As of September 30, 2017

Parent

Guarantors

Non-Guarantors

Adjustments

Consolidated
Cash and equivalents

$
1,064,499

$
32,968

$
4,497

$
-

$
1,101,964
Accounts receivable, net

294,753

1,450,968

48,082

(870,786)

923,017
Inventories

669,076

754,526

72,990

(9,076)

1,487,516
Other current assets

36,828

21,404

5,124

(3,708)

59,648
  Total current assets

2,065,156

2,259,866

130,693

(883,570)

3,572,145
Property, plant and equipment, net

873,015

1,634,215

201,547

-

2,708,777
Intangible assets, net

-

231,838

31,519

-

263,357
Goodwill

-

380,695

7,823

-

388,518
Other assets, including investments in subs

2,611,965

7,060

5,578

(2,596,663)

27,940
  Total assets

$
5,550,136

$
4,513,674

$
377,160

$
(3,480,233)

$
6,960,737

Accounts payable

$
196,177

$
348,347

$
106,208

$
(122,049)

$
528,683
Accrued expenses

224,156

251,694

9,437

(130,102)

355,185
Current maturities of long-term debt

167,840

-

40,482

(25,661)

182,661
  Total current liabilities

588,173

600,041

156,127

(277,812)

1,066,529
Long-term debt

2,324,240

-

172,243

(145,000)

2,351,483
Other liabilities

(467,002)

983,737

27,238

(62,269)

481,704
  Total liabilities

2,445,411

1,583,778

355,608

(485,081)

3,899,716

Redeemable noncontrolling interests

-

-

111,240

-

111,240

Common stock

641

1,727,859

14,908

(1,742,767)

641
Treasury stock

(650,210)

-

-

-

(650,210)
Additional paid-in-capital

1,147,463

128,076

791,196

(919,272)

1,147,463
Retained earnings (deficit)

2,606,831

1,073,961

(740,848)

(333,113)

2,606,831
  Total Steel Dynamics, Inc. equity

3,104,725

2,929,896

65,256

(2,995,152)

3,104,725
Noncontrolling interests

-

-

(154,944)

-

(154,944)
  Total equity

3,104,725

2,929,896

(89,688)

(2,995,152)

2,949,781
  Total liabilities and equity

$
5,550,136

$
4,513,674

$
377,160

$
(3,480,233)

$
6,960,737

13

18

Table of Contents

STEEL DYNAMICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note ~~10.~~11. Condensed Consolidating Information (Continued)



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

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

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

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



Condensed Consolidating Statements of Operations (in thousands)

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

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

14

19

Table of Contents

STEEL DYNAMICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note ~~10.~~11. Condensed Consolidating Information (Continued)



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



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



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

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

15

20

Table of Contents

STEEL DYNAMICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note ~~10.~~11. Condensed Consolidating Information ~~(Continued)~~(Continued

For the nine months ended,

Combined

Consolidating

Total
September 30, 2017

Parent

Guarantors

Non-Guarantors

Adjustments

Consolidated
Net sales

$
2,797,557

$
7,827,981

$
449,902

$
(3,873,122)

$
7,202,318
Costs of goods sold

2,241,936

7,054,938

432,657

(3,788,403)

5,941,128
  Gross profit (loss)

555,621

773,043

17,245

(84,719)

1,261,190
Selling, general and administrative

164,061

226,153

15,253

(15,211)

390,256
  Operating income (loss)

391,560

546,890

1,992

(69,508)

870,934
Interest expense, net of capitalized interest

55,353

44,245

9,494

(7,073)

102,019
Other (income) expense, net

(4,463)

(7,305)

(273)

7,073

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

  equity in net income of subsidiaries

340,670

509,950

(7,229)

(69,508)

773,883
Income taxes

106,036

184,891

4,651

(24,320)

271,258

234,634

325,059

(11,880)

(45,188)

502,625
Equity in net income of subsidiaries

273,374

-

-

(273,374)

-
Net loss attributable to noncontrolling interests

-

-

5,383

-

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

$
508,008

$
325,059

$
(6,497)

$
(318,562)

$
508,008


Condensed Consolidating Statements of Cash Flows (in thousands)

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



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

For the nine months ended,

Combined

Consolidating

Total
September 30, 2016

Parent

Guarantors

Non-Guarantors

Adjustments

Consolidated
Net sales

$
2,297,389

$
6,322,158

$
271,694

$
(3,024,728)

$
5,866,513
Costs of goods sold

1,823,408

5,676,265

286,486

(2,944,568)

4,841,591
  Gross profit (loss)

473,981

645,893

(14,792)

(80,160)

1,024,922
Selling, general and administrative

145,596

212,613

9,352

(14,581)

352,980
  Operating income (loss)

328,385

433,280

(24,144)

(65,579)

671,942
Interest expense, net of capitalized interest

53,842

54,493

7,558

(6,005)

109,888
Other (income) expense, net

(2,137)

8,012

(11,139)

6,005

741
Income (loss) before income taxes and

  equity in net income of subsidiaries

276,680

370,775

(20,563)

(65,579)

561,313
Income taxes (benefit)

89,210

139,958

(63)

(23,966)

205,139

187,470

230,817

(20,500)

(41,613)

356,174
Equity in net income of subsidiaries

174,633

-

-

(174,633)

-
Net loss attributable to noncontrolling interests

5,929

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

$
362,103

$
230,817

$
(14,571)

$
(216,246)

$
362,103

16

21

~~STEEL DYNAMICS, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)~~

~~Note 10. Condensed Consolidating Information (Continued)~~

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

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

Table of Contents

17

ITEM 2.~~MANAGEMENT’S~~ 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.

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 ~~under the headings~~ ~~Special Note Regarding Forward-Looking Statements~~ ~~and~~ ~~Risk Factors~~, in our most recent Annual Report on Form 10-K under the headings Special Note Regarding Forward-Looking Statements and Risk Factorsfor 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 income.

Interest Expense, net of Capitalized Interest. Interest expense consists of interest associated with our senior credit facilities and other debt net of interest costs that are required to be capitalized during the construction period of certain capital investment projects.

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

22

Table of Contents

Acquisition of United Steel Supply, LLC

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

Results Overview

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

Consolidated operating income decreased ~~$12.8~~$216.9 million, or 5%43%, to ~~$271.0~~$285.0 million for the ~~third~~second quarter ~~2017,~~2019, compared to the ~~third~~record levels in the second quarter ~~2016. Third~~2018. Second quarter ~~2017~~2019 net income attributable to Steel Dynamics, Inc. decreased ~~$4.1~~$168.1 million, or 3%46%, to ~~$153.3~~$194.3 million, compared to the ~~third~~second quarter ~~2016.~~2018, consistent with the decreased operating income.

18

Consolidated operating income ~~increased $199.0~~decreased $248.4 million, or 30%, to ~~$870.9~~$576.9 million for the first ~~nine months~~half of ~~2017,~~2019, compared to ~~$671.9 million for~~the record levels in the first ~~nine months~~half of ~~2016.~~2018. First ~~nine months 2017~~half 2019 net income attributable to Steel Dynamics, Inc. ~~increased $145.9~~decreased $191.4 million, or ~~40%~~32%, to ~~$508.0~~$398.6 million, compared to the first ~~nine months~~half of ~~2016.~~2018, consistent with the decreased operating income.

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 prices to keep pace with raw material costs. Decreased scrap volumes for our metals recycling operations were offset by improved pricing and ferrous metal spreads and reduced operating expenses, resulting in significantly increased operating income during the 2017 third quarter and year-to-date periods compared to the same periods in 2016. The non-residential construction market remained strong, resulting in record quarterly shipments for our steel fabrication operations for the third straight quarter.

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



	Three Months Ended June 30,					Six Months Ended June 30,
	2019		% Change		2018	2019		% Change	2018
Net sales:
Steel Operations Segment	$	2,188,185	(10)%	$	2,435,688	$	4,388,350	(1)%	$	4,417,462
Metals Recycling Operations Segment		656,766	(26)%		884,095		1,393,811	(15)%		1,636,861
Steel Fabrication Operations Segment		241,424	11%		217,896		470,093	12%		419,599
Other		99,762	(19)%		123,080		213,258	(1)%		215,698
		3,186,137			3,660,759		6,465,512			6,689,620
Intra-company		(415,622)			(570,234)		(877,562)			(995,220)
	$	2,770,515	(10)%	$	3,090,525	$	5,587,950	(2)%	$	5,694,400

Operating income (loss):
Steel Operations Segment	$	291,411	(45)%	$	533,494	$	600,489	(31)%	$	868,056
Metals Recycling Operations Segment		7,619	(66)%		22,638		24,581	(48)%		47,353
Steel Fabrication Operations Segment		30,664	117%		14,144		51,287	51%		33,935
Other		(49,153)	23%		(63,618)		(106,073)	11%		(119,024)
		280,541			506,658		570,284			830,320
Intra-company		4,491			(4,771)		6,590			(5,036)
	$	285,032	(43)%	$	501,887	$	576,874	(30)%	$	825,284

23

Table of Contents

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~~.markets. Steel operations accounted for ~~73%~~76% and ~~74%~~75% of our consolidated external net sales during the ~~third~~second quarter and first half 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.

19

Steel Operations Segment Shipments (tons):



	Three Months Ended June 30,			Six Months Ended June 30,
	2019	% Change	2018	2019	% Change	2018

Total shipments	2,769,358	1%	2,733,936	5,453,769	4%	5,268,580
Intra-segment shipments	(280,024)		(145,998)	(527,427)		(267,651)
Steel Operations Segment shipments	2,489,334	(4)%	2,587,938	4,926,342	(1)%	5,000,929

External shipments	2,386,851	(4)%	2,480,223	4,734,060	(2)%	4,807,738

Three Months Ended September 30,

Nine Months Ended September 30,

2017

% Change

2016

2017

% Change

2016

Total shipments
2,458,992

8%

2,271,230

7,362,636

5%

7,039,801
Intra-segment shipments
(88,211)

(65,438)

(279,567)

(216,217)
Steel Operations Segment Shipments
2,370,781

7%

2,205,792

7,083,069

4%

6,823,584

External shipments
2,279,228

8%

2,104,219

6,830,877

5%

6,517,253

24

Table of Contents

Segment Results ~~2017~~2019 vs. ~~2016~~2018

Overall domestic steel demand remained ~~strong, but elevated levels of steel imports persisted~~steady during the second quarter ~~hindering~~of 2019, with continued strength in the ~~ability for domestic~~automotive, energy and other industrial sectors. However, a challenging steel pricing environment, due to customer inventory destocking in conjunction with weakening scrap prices, led to ~~keep pace with raw material costs.~~decreasing steel selling prices during the first quarter, and more so the second quarter, of 2019. Steel operations segment shipments ~~increased 7%~~decreased 4% in the ~~third~~second quarter ~~2017,~~2019, as compared to the same period in 2016, driven by improved flat roll 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%.~~2018. Net sales for the steel operations ~~increased 14%~~decreased 10% in the ~~third~~second quarter ~~2017,~~2019 when compared to the same period in ~~2016,~~2018, due to ~~an increase of $39 per ton, or 5%,~~decreases in ~~average~~overall steel selling prices, ~~combined with a 7% increase~~particularly in the sheet products, and decreased steel ~~operations~~mill shipments. Net sales for the steel operations ~~increased 23%~~decreased 1% in the first ~~nine months~~half of ~~2017,~~2019 when compared to the same period in ~~2016,~~2018, due to ~~a 4% increase in steel operations segment shipments combined with an increase of $118 per ton, or 18%,~~decreases in average steel selling ~~prices. The increase in~~prices, largely offset by the additional sales at our acquired Heartland Flat Roll Division (June 2018) and USS (March 2019) operations, which account for approximately 7% of steel segment shipments ~~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.~~half of 2019.

Metallic raw materials used in our electric arc furnaces represent our single most significant steel manufacturing cost, generally comprising approximately ~~60%~~50 to 60 percent 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,~~decreased $32, or ~~22%~~9%, in the ~~third~~second quarter ~~2017,~~2019, compared to the same period in ~~2016,~~2018, consistent with overall ~~increased~~decreased domestic scrap ~~pricing~~.pricing. In the first ~~nine months~~half of ~~2017,~~2019, our metallic raw material cost per ~~net~~ ton ~~consumed increased $70,~~decreased $7, or ~~32%,~~2% compared to the same period in ~~2016.~~2018.

20

~~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 decreasing more than scrap costs, metal spread (which we define as the difference between average steel mill selling prices and the cost of ferrous scrap ~~consumed) more than offsetting increased~~consumed in our steel ~~shipments.~~ ~~Operating~~mills) decreased 9% in the second quarter 2019 compared to the second quarter 2018. Due to this metal spread contraction, most notably in sheet steel, operating income for the ~~first nine months 2017 increased 26%~~steel operations decreased 45%, to ~~$895.0~~$291.4 million, in the second quarter 2019, compared to the record levels in the same period in 2018. First half 2019 operating income decreased 31%, to $600.5 million, compared to the first ~~nine months~~half of ~~2016,~~2018 record levels, again due to ~~an 11%~~ ~~expansion of~~decreased metal spreads and steel ~~segment operations metal spread, coupled with a 4% increase in steel~~mill shipments.

Metals Recycling Operations Segment

~~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%~~(ranging from 64% to 66% for the periods presented) of the ferrous scrap sold by OmniSource as raw material in our steelmaking operations, and the remainder is sold to other consumers, such as other steel manufacturers and foundries. Our metals recycling operations accounted for ~~14%~~12% and ~~15%~~14% of our consolidated external net sales during ~~the third~~second quarter and first half of ~~2017~~2019 and ~~2016, respectively, and 15% for each of the first nine months of 2017 and 2016.~~2018, respectively.

Metals Recycling Operations Shipments:



	Three Months Ended June 30,			Six Months Ended June 30,
	2019	% Change	2018	2019	% Change	2018
Ferrous metal (gross tons)
Total	1,189,679	(12)%	1,347,016	2,361,040	(9)%	2,603,915
Inter-company	(764,202)		(880,891)	(1,552,722)		(1,700,800)
External shipments	425,477	(9)%	466,125	808,318	(10)%	903,115

Nonferrous metals (thousands of pounds)
Total	266,222	(12)%	304,034	558,260	(3)%	575,662
Inter-company	(34,671)		(40,306)	(73,779)		(61,161)
External shipments	231,551	(12)%	263,728	484,481	(6)%	514,501

Three Months Ended September 30,

Nine Months Ended September 30,

2017

% Change

2016

2017

% Change

2016
Ferrous metal (gross tons)

  Total
1,219,582

(2)%

1,243,277

3,780,958

(3)%

3,894,755
  Inter-company
(756,899)

(774,779)

(2,366,355)

(2,383,223)
     External shipments
462,683

(1)%

468,498

1,414,603

(6)%

1,511,532

Nonferrous metals (thousands of pounds)

  Total
261,716

(7)%

280,107

815,763

(2)%

828,715
  Inter-company
(37,316)

(25,185)

(107,863)

(83,741)
     External shipments
224,400

(12)%

254,922

707,900

(5)%

744,974

Segment Results ~~2017~~2019 vs. ~~2016~~2018

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

25

Table of Contents

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

Net sales ~~increased 25%~~for our metals recycling operations decreased 15% in the ~~third quarter 2017~~first half of 2019 as compared to the same period in ~~2016,~~2018, driven by ~~increased~~decreased pricing ~~which more than offset~~and shipments. Ferrous scrap average selling prices decreased ~~shipments. Overall domestic steel mill utilization was 75% in~~11% during the ~~third quarter~~first half 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,~~2019 compared to the same period in ~~2016. Ferrous scrap average selling prices increased 30% during the third quarter 2017 compared to the same period in 2016,~~2018, while nonferrous average selling prices ~~increased 36%~~decreased 4%. Nonferrous metal spread was flat, while ferrous metal spread decreased 10% in the first half of 2019 compared to the ~~same period in 2016, resulting in ferrous metal spread increasing 11%, and nonferrous metal spread increasing 2%.~~

first half of 2018. Metals recycling operations operating income in the first ~~nine months~~half of ~~2017~~2019 of ~~$52.0~~$24.6 million ~~was 160% higher than~~decreased 48% from the first ~~nine months 2016~~half of 2018 operating income of ~~$20.0~~$47.4 million, due to ~~increased selling prices resulting in a 17% improvement in~~decreased ferrous and nonferrous shipments, and ferrous metal spread and reduced operating expenses. Net sales increased 29% in the first nine months of 2017 as compared to the same period in 2016, driven by increased pricing for both ferrous and nonferrous products, which increased 40% and 27%, respectively, during the first nine months of 2017 compared to the same period in 2016.contraction.

Steel Fabrication Operations Segment

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%7% of our consolidated external net sales during the ~~third quarter~~second quarters of ~~2017~~2019 and ~~2016,~~2018, respectively, and 8% and 9%7% during the first ~~nine months~~half of ~~2017~~2019 and ~~2016,~~2018, respectively.

21

Segment Results ~~2017~~2019 vs. ~~2016~~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~~$23.5 million, or ~~18%~~11%, during the ~~third~~second quarter ~~2017,~~ 2019, compared to the same period in ~~2016,~~2018, as ~~shipments increased 13%, while~~ average selling prices increased ~~$64~~$158 per ton, or ~~5%.~~ 11%, while shipments were comparable. Net sales for the segment increased ~~$73.1~~$50.5 million, or ~~14%~~12%, induring the first ~~nine months~~half of ~~2017,~~2019, compared to the ~~first nine months of 2016,~~same period in 2018, as ~~volumes increased 7%~~shipments decreased 2%, and average selling prices increased 6%$192 per ton, or 14%. 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,~~orders continue to be strong for non-residential construction project

26

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

The purchase of various steel products is the largest single cost of production for our steel fabrication operations, generally representing approximately two-thirds of the total cost of manufacturing. The average cost of steel consumed increased ~~by 12%~~slightly in the ~~third~~second quarter ~~2017,~~2019, as compared to the same period in ~~2016, while~~2018, but was more than offset by the 11% increase in average selling ~~prices increased only 5%, resulting in~~prices. 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~~28% in the ~~third~~second 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~~117% to $30.7 million in the ~~first nine months of 2017 decreased 10%, from $73.2 million~~second quarter 2019 compared to the same period in 2018, due to the increases in metal spread. For the first ~~nine months~~half of ~~2016, despite a 7% increase~~2019, operating income increased 51% to $51.3 million compared to the first half of 2018, due to increased average selling prices outpacing increases in ~~shipments,~~steel input costs, as metal ~~spreads decreased 7% year~~spread increased 17% period over ~~year.~~period.

Other Operations

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.

~~Third Quarter~~Second quarter Consolidated Results ~~2017~~2019 vs. ~~2016~~ 2018

Selling, General and Administrative Expenses. Selling, general and administrative expenses ~~(including profit sharing and amortization~~ of ~~intangible assets) of $125.5~~$106.3 million during the ~~third~~second quarter ~~2017 were consistent with the $124.6~~2019 increased 5% from $101.0 million during the ~~third~~second quarter ~~2016,~~2018, representing ~~approximately 5.1%~~3.8% and ~~5.9%~~3.3% of net sales, respectively.

~~Interest Expense, net~~ Profit sharing expense during the second quarter of ~~Capitalized Interest.~~ ~~During~~2019 of $22.9 million was down 46% from the ~~third quarter 2017, interest expense decreased 6% to $34.2 million from $36.2~~$42.3 million during the same period in ~~2016, due primarily~~2018, consistent with decreases in pretax income from record levels in 2018.

Interest Expense, net of Capitalized Interest. During the second quarter 2019, interest expense of $32.3 million was comparable to the ~~December 2016 refinancing~~$31.5 million during the second 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 third~~Expense. Second quarter ~~2017, our~~2019 income tax expense ~~was $83.3~~of $60.2 million, at an effective income tax rate of ~~35.6%~~23.4%, ~~as compared to $88.9~~was down 47% from the $112.8 million, at an effective income tax rate of ~~36.5%~~23.7%, during the ~~third~~second quarter ~~2016. The lower effective tax rate in 2017 is due~~

22

~~primarily to additional permanent tax benefit items, most notably the 2017 domestic manufacturing deduction, resulting from increases in taxable~~2018, consistent with decreased pretax income.

First ~~Nine~~Six Months Consolidated Results ~~2017~~2019 vs. ~~2016~~2018

Selling, General and Administrative Expenses. Selling, general and administrative expenses ~~(including profit sharing and amortization~~ of ~~intangible assets) of $390.3~~$217.3 million during the first ~~nine months~~half of ~~2017~~2019 increased ~~11%~~5% from ~~$353.0~~$207.5 million during the first ~~nine months~~half of ~~2016,~~2018, representing ~~approximately 5.4%~~3.9% and ~~6.0%~~3.6% of net sales, respectively. ~~The increase in~~Profit sharing expense during the first ~~nine months 2017 expenses compared to~~half of 2019 of $46.5 million decreased 33% from the $69.0 million during the same period in ~~2016 is due most notably to increased performance-based incentive compensation, including profit sharing, associated~~2018, consistent with ~~our increased profitability.~~decreases in pretax income from record levels in 2018.

Interest Expense, net of Capitalized Interest. During the first ~~nine months~~half of ~~2017,~~2019 and 2018, interest expense ~~decreased $7.9~~was $63.4 million to $102.0 million, when compared to the same period in 2016. The decrease in interest expense is due primarily to the December 2016 refinancing of $400.0 million of 6.125% senior notes due 2019 with 5.000% senior notes due 2026. In addition, in December 2016 we repaid the remaining $228.1 million of outstanding Senior Term Loanon consistent debt ~~which was set to mature on November 14, 2019.~~levels.

Income Tax ~~Expense~~. ~~During the first nine months of 2017, our~~Expense. First half 2019 income tax expense ~~was $271.3~~of $122.5 million, at an effective income tax rate of ~~35.1%~~23.4%, ~~as compared to $205.1~~was down 33% from the $183.3 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 taxablehalf 2018, consistent with decreased pretax income.

Liquidity and Capital Resources

Capital Resources and ~~Long‑term~~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~~June 30, ~~2017,~~2019, is as follows (in thousands):



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

27

		Cash and equivalents*	$	~~934,750~~
		~~Revolver availability~~		~~1,188,121~~
		~~Total liquidity~~	$	~~2,122,871~~

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

Table of Contents

Our total outstanding debt ~~remained relatively unchanged~~increased $51.3 million during the first ~~nine months~~half 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%~~37.5% and 37.9% at ~~September~~June 30, ~~2017, compared to 44.9% at~~2019, and December 31, ~~2016.~~

23

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, respectively.

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

The financial covenants under our Facility state that we must maintain an interest coverage ratio of not less than 2.50:1.00. Our interest coverage ratio is calculated by dividing our last-twelve-months (LTM) consolidated adjusted EBITDA (earnings before interest, taxes, depreciation, amortization, and certain other non-cash transactions as allowed in the Facility) by our LTM gross interest expense, less amortization of financing fees. In addition, a net debt (as defined in the Facility) to LTM consolidated ~~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~~June 30, ~~2017,~~2019, our interest coverage ratio and net debt leverage ratio were ~~10.22:~~14.80:1.00 and ~~1.49:~~0.98:1.00, respectively. We were, therefore, in compliance with these covenants at ~~September~~June 30, ~~2017,~~2019, and we anticipate we will continue to be in compliance during the next twelve ~~months~~. months.

Working Capital.We generated cash flow from operations of ~~$547.6~~$543.0 million in the first ~~nine months~~half 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~~$60.8 million, excluding the effect of acquired USS working capital, to ~~$1.5~~$2.0 billion at ~~September~~June 30, ~~2017. Increases~~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~~half of ~~2017,~~2019, we invested ~~$127.7~~$139.6 million in property, plant and equipment, primarily within our steel operations segment, compared with ~~$123.2~~$105.8 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~~$106.3 million during the first ~~nine months~~half of ~~2017,~~2019, compared to ~~$102.3~~$88.3 million during the same period in ~~2016.~~2018. We paid cash dividends of ~~$108.8~~$95.7 million and ~~$101.6~~$81.1 million during the first ~~nine months~~half 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~~.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~~3.2 million shares of our common stock for ~~$237.2~~$93.1 million in the second quarter of 2019 pursuant to this program. We acquired 5.5 million shares of our common stock for $177.4 million in the first ~~nine months~~half of ~~2017 pursuant~~2019, leaving $221.7 million remaining available to ~~this~~purchase under the program. See Part II, ~~Other Information,~~ Item 2 2. Unregistered Sales of Equity Securities and Use of Proceeds for additional information.

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

28

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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.~~ expenditures.

24

ITEM 3.~~QUANTITATIVE~~ QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Commodity Risk

In the normal course of business, we are exposed to the market risk and price fluctuations related to the sale of our products and to the purchase of raw materials used in our operations, such as metallic raw materials, electricity, natural gas and its transportation services, fuel, air products, zinc, and ~~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.

~~In our metals recycling operations, we~~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~~June 30, ~~2017,~~2019, we had a cumulative unrealized ~~gain~~loss associated with these financial contracts of ~~$3.3 million,~~$220,000, substantially all of which have a settlement date within the next twelve months. We believe the customer contracts associated with the financial contracts will be fully consummated.

ITEM 4.~~CONTROLS~~ CONTROLS AND PROCEDURES

(a)

Evaluation of Disclosure Controls and Procedures

~~(a)~~ ~~Evaluation of Disclosure Controls~~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 June 30, 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.

(b)

Changes in Internal Controls Over Financial Reporting

~~(b)~~ ~~Changes in Internal Controls Over Financial Reporting~~. No change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the fiscal quarter ended ~~September~~June 30, ~~2017,~~2019, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

25

29

Table of Contents

PART II OTHER INFORMATION

ITEM 1.~~LEG~~AL LEGAL PROCEEDINGS

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

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~~$454,000 is recorded in our financial statements as of ~~September~~June 30, ~~2017.~~2019.

ITEM 1A.RISK RISK FACTORS

No material changes have occurred to the indicated risk factors as disclosed in our Annual Report on Form 10-K for the year ended
December 31, ~~2016.~~2018.

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

(c)

Issuer Purchases of Equity Securities

~~(c) Issuer Purchases of Equity Securities~~

We purchased the following equity securities registered by us pursuant to Section 12 of the Exchange Act during the three months ended
~~September~~ June 30, ~~2017.~~2019.



Period	Total Number of Shares Purchased	Average Price Paid per Share			Total Number of Shares Purchased as Part of Publicly Announced Program ⁽¹⁾		Maximum Dollar Value of Shares That May Yet be Purchased Under the Program (in thousands)⁽¹⁾
Quarter ended June 30, 2019

April 1 - 30	749,819		$	32.03		749,819		$	290,825
May 1 - 31	1,611,047			29.81		1,611,047			242,794
June 1 - 30	801,038			26.33		801,038			221,704
	3,161,904					3,161,904

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

(1)

~~(1)~~

On ~~October 18, 2016,~~September 4, 2018, we announced that our board of directors had authorized a share ~~repurchase~~purchase program of up to ~~$450.0~~$750.0 million of our common stock. ~~Our board of directors cancelled the previously authorized program with respect to which no shares had been repurchased for a number of years.~~

ITEM 3.~~DEFAULTS~~ DEFAULTS UPON SENIOR SECURITIES

None.

~~None~~.

ITEM 4.MINE MINE SAFETY DISCLOSURES

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~~June 30, ~~2017. Accordingly, there is~~2019, therefore, no Exhibit 95 ~~attached~~is required.

ITEM 5. OTHER INFORMATION

None.

30

Table of Contents

ITEM 6. EXHIBITS

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

~~ITEM 5.~~OT~~HER INFORMATION~~

EXHIBIT INDEX

~~None~~.

26


Articles of Incorporation
~~ITEM 6.~~		~~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 10Q filed August 9, 2018.
	~~Articles of Incorporation~~

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 10Q filed November 7, 2018.

Executive Officer Certifications

31.1*		Certification of ~~Principal~~Chief Executive Officer required by Item 307 of Regulation S-K as promulgated by the Securities and Exchange Commission and pursuant to Section 302 of the ~~Sarbanes~~‑~~Oxley~~SarbanesOxley Act of 2002.

31.2*		Certification of ~~Principal~~Chief Financial Officer required by Item 307 of Regulation S-K as promulgated by the Securities and Exchange Commission and pursuant to Section 302 of the ~~Sarbanes~~‑~~Oxley~~SarbanesOxley Act of 2002.
��
32.1*		Certification of Chief Executive Officer Pursuant to 18 U.S.C Section 1350, as Adopted Pursuant to Section 906 of the ~~Sarbanes~~‑~~Oxley~~SarbanesOxley Act of ~~2002~~2002..

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

Other

95**		Mine Safety Disclosures.

XBRL Documents

101.INS*		XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH*		XBRL Taxonomy Extension Schema Document

101.CAL*		XBRL Taxonomy Extension Calculation Document

101.DEF*		XBRL Taxonomy Definition Document

101.LAB*		XBRL Taxonomy Extension Label Document

101.PRE*		XBRL Taxonomy Presentation Document

*~~Filed concurrently herewith~~

**

*	Filed concurrently herewith

**	Inapplicable for purposes of this report

31

Table of ~~this report~~

27

Contents

~~SIGNATURE~~

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

~~November 9, 2017~~

August 9, 2019

		STEEL DYNAMICS, INC.

~~By:~~	By:	/s/ Theresa E. Wagler
		Theresa E. Wagler
		Executive Vice President and Chief Financial Officer
		(Principal Financial Officer and Principal Accounting Officer)

28

32



	September 30,		December 31,
	2017		2016
Assets	(unaudited)
Current assets
Cash and equivalents	$	1,101,964	$	841,483
Accounts receivable, net		897,838		703,565
Accounts receivable-related parties		25,179		26,219
Inventories		1,487,516		1,275,211
Other current assets		59,648		83,197
Total current assets		3,572,145		2,929,675

Property, plant and equipment, net		2,708,777		2,787,215

Restricted cash		17,092		18,060
Intangible assets, net		263,357		283,977
Goodwill		388,518		393,351
Other assets		10,848		11,454
Total assets	$	6,960,737	$	6,423,732
Liabilities and Equity
Current liabilities
Accounts payable	$	512,290	$	382,126
Accounts payable-related parties		16,393		13,070
Income taxes payable		5,596		5,593
Accrued payroll and benefits		171,508		164,543
Accrued interest		49,380		30,295
Accrued expenses		128,701		113,556
Current maturities of long-term debt		182,661		3,632
Total current liabilities		1,066,529		712,815

Long-term debt		2,351,483		2,353,194
Deferred income taxes		461,399		448,375
Other liabilities		20,305		20,649
Total liabilities		3,899,716		3,535,033

Commitments and contingencies

Redeemable noncontrolling interests		111,240		111,240

Equity
Common stock voting, $.0025 par value; 900,000,000 shares authorized;
264,161,359 and 264,130,544 shares issued; and 236,951,784 and 243,785,485
shares outstanding, as of September 30, 2017 and December 31, 2016, respectively		641		641
Treasury stock, at cost; 27,209,575 and 20,345,059 shares,
as of September 30, 2017 and December 31, 2016 respectively		(650,210)		(416,829)
Additional paid-in capital		1,147,463		1,132,749
Retained earnings		2,606,831		2,210,459
Total Steel Dynamics, Inc. equity		3,104,725		2,927,020
Noncontrolling interests		(154,944)		(149,561)
Total equity		2,949,781		2,777,459
Total liabilities and equity	$	6,960,737	$	6,423,732



	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2017		2016		2017		2016

Net sales
Unrelated parties	$	2,399,116	$	2,060,596	$	7,066,083	$	5,737,584
Related parties		44,266		40,714		136,235		128,929
Total net sales		2,443,382		2,101,310		7,202,318		5,866,513

Costs of goods sold		2,046,864		1,692,807		5,941,128		4,841,591
Gross profit		396,518		408,503		1,261,190		1,024,922

Selling, general and administrative expenses		97,056		95,185		298,422		279,899
Profit sharing		21,175		22,255		69,714		51,722
Amortization of intangible assets		7,272		7,208		22,120		21,359
Operating income		271,015		283,855		870,934		671,942

Interest expense, net of capitalized interest		34,177		36,199		102,019		109,888
Other expense (income), net		2,526		4,351		(4,968)		741
Income before income taxes		234,312		243,305		773,883		561,313

Income tax expense		83,300		88,892		271,258		205,139
Net income		151,012		154,413		502,625		356,174

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



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

Weighted average common shares outstanding		239,066		243,761		241,117		243,539

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

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

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



	Three Months Ended September 30,
	2017					2016
	Net Income		Shares	Per Share		Net Income		Shares	Per Share
	(Numerator)		(Denominator)	Amount		(Numerator)		(Denominator)	Amount
Basic earnings per share	$	153,258	239,066	$	0.64	$	157,397	243,761	$	0.65
Dilutive common share equivalents		-	1,814				-	1,921
Diluted earnings per share	$	153,258	240,880	$	0.64	$	157,397	245,682	$	0.64



	Nine Months Ended September 30,
	2017						2016
	Net Income		Shares		Per Share		Net Income		Shares		Per Share
	(Numerator)		(Denominator)		Amount		(Numerator)		(Denominator)		Amount
Basic earnings per share	$	508,008		241,117	$	2.11	$	362,103		243,539	$	1.49
Dilutive common share equivalents		-		1,699				-		1,688
Diluted earnings per share	$	508,008		242,816	$	2.09	$	362,103		245,227	$	1.48



	Stockholders of Steel Dynamics, Inc.
					Additional								Redeemable
	Common		Treasury		Paid-In		Retained		Noncontrolling		Total		Noncontrolling
	Stock		Stock		Capital		Earnings		Interests		Equity		Interests
Balances at December 31, 2016	$	641	$	(416,829)	$	1,132,749	$	2,210,459	$	(149,561)	$	2,777,459	$	111,240
Dividends declared		-		-		-		(111,435)		-		(111,435)		-
Share repurchases		-		(237,154)		-		-		-		(237,154)		-
Equity-based compensation		-		3,773		14,714		(201)		-		18,286		-
Comprehensive and net income (loss)		-		-		-		508,008		(5,383)		502,625		-
Balances at September 30, 2017	$	641	$	(650,210)	$	1,147,463	$	2,606,831	$	(154,944)	$	2,949,781	$	111,240



	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



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

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



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

Net Sales
External	$	1,700,707	$	301,422		$	211,271	$	101,057		$	-		$	2,314,457
External Non-U.S.		82,098		46,793			34		-			-			128,925
Other segments		65,321		360,982			89		116			(426,508)			-
		1,848,126		709,197			211,394		101,173			(426,508)			2,443,382
Operating income (loss)		276,547		17,624			21,862		(44,326)	(1)		(692)			271,015
Income (loss) before income taxes		255,539		16,020			20,199		(56,754)			(692)			234,312
Depreciation and amortization		57,644		12,020			2,866		2,680			-			75,210
Capital expenditures		31,654		8,589			1,524		1,028			-			42,795

As of September 30, 2017					��
Assets	$	4,353,904	$	1,032,018		$	381,931	$	1,346,968	(2)	$	(154,084)	(3)	$	6,960,737


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

(1)	Corporate SG&A	$	(12.1)	(3)	Elimination of intra-company receivables	$	(130.4)
	Company-wide equity-based compensation		(6.8)		Elimination of intra-company debt		(10.7)
	Profit sharing		(20.2)		Other		(13.0)
	Other, net		(5.2)			$	(154.1)
		$	(44.3)

(2)	Cash and equivalents	$	1,065.9
	Accounts receivable		14.0
	Inventories		42.8
	Property, plant and equipment, net		162.4
	Intra-company debt		10.7
	Other		51.2
		$	1,347.0


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)



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

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


Footnotes related to the nine months ended September 30, 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)



Condensed Consolidating Balance Sheets (in thousands)
					Combined		Consolidating		Total
As of September 30, 2017	Parent		Guarantors		Non-Guarantors		Adjustments		Consolidated
Cash and equivalents	$	1,064,499	$	32,968	$	4,497	$	-	$	1,101,964
Accounts receivable, net		294,753		1,450,968		48,082		(870,786)		923,017
Inventories		669,076		754,526		72,990		(9,076)		1,487,516
Other current assets		36,828		21,404		5,124		(3,708)		59,648
Total current assets		2,065,156		2,259,866		130,693		(883,570)		3,572,145
Property, plant and equipment, net		873,015		1,634,215		201,547		-		2,708,777
Intangible assets, net		-		231,838		31,519		-		263,357
Goodwill		-		380,695		7,823		-		388,518
Other assets, including investments in subs		2,611,965		7,060		5,578		(2,596,663)		27,940
Total assets	$	5,550,136	$	4,513,674	$	377,160	$	(3,480,233)	$	6,960,737

Accounts payable	$	196,177	$	348,347	$	106,208	$	(122,049)	$	528,683
Accrued expenses		224,156		251,694		9,437		(130,102)		355,185
Current maturities of long-term debt		167,840		-		40,482		(25,661)		182,661
Total current liabilities		588,173		600,041		156,127		(277,812)		1,066,529
Long-term debt		2,324,240		-		172,243		(145,000)		2,351,483
Other liabilities		(467,002)		983,737		27,238		(62,269)		481,704
Total liabilities		2,445,411		1,583,778		355,608		(485,081)		3,899,716

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

Common stock		641		1,727,859		14,908		(1,742,767)		641
Treasury stock		(650,210)		-		-		-		(650,210)
Additional paid-in-capital		1,147,463		128,076		791,196		(919,272)		1,147,463
Retained earnings (deficit)		2,606,831		1,073,961		(740,848)		(333,113)		2,606,831
Total Steel Dynamics, Inc. equity		3,104,725		2,929,896		65,256		(2,995,152)		3,104,725
Noncontrolling interests		-		-		(154,944)		-		(154,944)
Total equity		3,104,725		2,929,896		(89,688)		(2,995,152)		2,949,781
Total liabilities and equity	$	5,550,136	$	4,513,674	$	377,160	$	(3,480,233)	$	6,960,737



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


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