Steel Dynamics Q3 2024 10-Q Filed

TL;DR

**STLD Q3 10-Q is in! Financials and fair value details are out.**

AI Summary

Steel Dynamics Inc. (STLD) filed its 10-Q for the period ending September 30, 2024. The filing details financial performance and operational updates for the third quarter. Key financial metrics and disclosures related to fair value measurements are presented, reflecting the company's ongoing business activities and financial position.

Why It Matters

This filing provides investors with the latest financial performance data for Steel Dynamics, crucial for understanding the company's health and future prospects in the steel industry.

Risk Assessment

Risk Level: medium — The filing contains detailed financial information, including fair value measurements, which can be complex and subject to market fluctuations, indicating a medium level of risk for investors.

Key Numbers

• 2024-09-30 — Reporting Period End Date (Indicates the end of the fiscal quarter for which financial data is reported.)
• 2023-12-31 — Prior Year Period End Date (Provides a comparative point for financial performance analysis.)

Key Players & Entities

• STEEL DYNAMICS INC (company) — Filer
• 0001022671 (company) — Central Index Key
• 20240930 (date) — Period of Report
• 20241108 (date) — Filing Date

FAQ

Key Financial Figures

• $0.0025 — which registered Common Stock voting, $0.0025 par value STLD NASDAQ Global Select

Filing Documents

• stld-20240930x10q.htm (10-Q) — 2271KB
• stld-20240930xex31d1.htm (EX-31.1) — 10KB
• stld-20240930xex31d2.htm (EX-31.2) — 10KB
• stld-20240930xex32d1.htm (EX-32.1) — 6KB
• stld-20240930xex32d2.htm (EX-32.2) — 7KB
• stld-20240930x10q001.jpg (GRAPHIC) — 54KB
• stld-20240930x10q002.jpg (GRAPHIC) — 56KB
• 0001558370-24-015022.txt ( ) — 10117KB
• stld-20240930.xsd (EX-101.SCH) — 26KB
• stld-20240930_cal.xml (EX-101.CAL) — 46KB
• stld-20240930_def.xml (EX-101.DEF) — 129KB
• stld-20240930_lab.xml (EX-101.LAB) — 258KB
• stld-20240930_pre.xml (EX-101.PRE) — 196KB
• stld-20240930x10q_htm.xml (XML) — 2815KB

Financial Information

PART I. Financial Information Item 1.

Financial Statements

Financial Statements: Page Consolidated Balance Sheets as of September 30, 2024 (unaudited) and December 31, 2023 1 Consolidated Statements of Income for the three and nine-month periods ended September 30, 2024 and 2023 (unaudited) 2 Consolidated Statements of Comprehensive Income for the three and nine-month periods ended September 30, 2024 and 2023 (unaudited) 3 Consolidated Statements of Cash Flows for the three and nine-month periods ended September 30, 2024 and 2023 (unaudited) 4

Notes to Consolidated Financial Statements (unaudited)

Notes to Consolidated Financial Statements (unaudited) 5 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 15 Item 3.

Quantitative and Qualitative Disclosures about Market Risk

Quantitative and Qualitative Disclosures about Market Risk 24 Item 4.

Controls and Procedures

Controls and Procedures 24

Other Information

PART II. Other Information Item 1.

Legal Proceedings

Legal Proceedings 25 Item 1A.

Risk Factors

Risk Factors 25 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 25 Item 3. Defaults Upon Senior Securities 25 Item 4. Mine Safety Disclosures 25 Item 5. Other Information 25 Item 6. Exhibits 26 Exhibit Index 27 Signature 28 Table of Contents STEEL DYNAMICS, INC. CONSOLIDATED BALANCE SHEETS (in thousands, except share data) September 30, December 31, 2024 2023 Assets (unaudited) Current assets Cash and equivalents $ 1,015,210 $ 1,400,887 Short-term investments 645,343 721,210 Accounts receivable, net 1,500,685 1,535,062 Accounts receivable-related parties 64,272 73,245 Inventories 3,044,887 2,894,632 Other current assets 173,179 162,790 Total current assets 6,443,576 6,787,826 Property, plant and equipment, net 7,825,869 6,734,218 Intangible assets, net 234,806 257,759 Goodwill 477,471 477,471 Other assets 678,099 651,146 Total assets $ 15,659,821 $ 14,908,420 Liabilities and Equity Current liabilities Accounts payable $ 1,074,501 $ 1,078,645 Accounts payable-related parties 5,315 9,685 Income taxes payable 6,248 5,524 Accrued payroll and benefits 334,859 469,143 Accrued expenses 389,360 309,312 Current maturities of long-term debt 882,013 459,987 Total current liabilities 2,692,296 2,332,296 Long-term debt 2,801,871 2,611,069 Deferred income taxes 943,154 944,768 Other liabilities 143,200 180,760 Total liabilities 6,580,521 6,068,893 Commitments and contingencies Redeemable noncontrolling interests 171,212 171,212 Equity Common stock voting, $ 0.0025 par value; 900,000,000 shares authorized; 268,142,204 and 268,112,991 shares issued; and 153,042,184 and 160,018,100 shares outstanding, as of September 30, 2024 and December 31, 2023, respectively 651 651 Treasury stock, at cost; 115,100,020 and 108,094,891 shares, as of September 3

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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 one of the largest and most diversified domestic steel producers and metals recycler, combined with a meaningful steel fabrication manufacturing platform. Effective the fourth quarter 2023, the company changed its reportable segments, consistent with how it currently manages the business, representing four reporting segments: steel operations, metals recycling operations, steel fabrication operations, and aluminum operations. Segment information provided within this Form 10-Q, including within Note 8. Segment Information , has been recast for all prior periods consistent with the current reportable segment presentation. Steel Operations Segment. Steel operations include the company's electric arc furnace (EAF) steel mills, including Butler Flat Roll Division, Columbus Flat Roll Division, Southwest-Sinton Flat Roll Division, Structural and Rail Division, Engineered Bar Products Division, Roanoke Bar Division, Steel of West Virginia, steel coating and processing operations at The Techs, Heartland Flat Roll Division, United Steel Supply (USS), Vulcan Threaded Products, Inc., warehouse operations in Mexico, and SDI Biocarbon Solutions, LLC, a joint venture to construct and operate a biocarbon production facility. Metals Recycling Operations Segment. Metals recycling operations include the company's OmniSource ferrous and nonferrous processing, transportation, marketing, brokerage, and scrap management services primarily throughout the United States and in Central and Northern Mexico. Steel Fabrication Operations Segment. Steel fabrication operations include the company's New Millennium Building Systems' joist and deck plants located throughout the United States (US), and in Northern Mexico. Revenues from these plants are generated fr

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) Note 1. Description of the Business and Significant Accounting Policies (Continued) 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. 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, 2023. Cash and Equivalents, and Restricted Cash Cash and equivalents include all highly liquid investments with a maturity of three months or less at the date of acquisition. Restricted cash is primarily funds held in escrow as required by various insurance and government organizations. The balance of cash, cash equivalents and restricted cash in the consolidated statements of cash flows includes restricted cash of $ 5.5 million at September 30, 2024, $ 5.6 million at June 30, 2024, $ 5.6 million at December 31, 2023, and $ 5.5 million at June 30, 2023, September 30, 2023, and December 31, 2022, which are recorded in Other Assets (noncurrent) in the company's consolidated balance sheets. Short-Term Investments Short-term investments include investments with maturity dates of longer than three months but less than one year when purchased. The company's short-term investments are classified as trading securities. Interest income from invested cash and short-term investments was $ 25.1 million and $ 28.8 million for the three-month periods ended Se

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) Note 1. Description of the Business and Significant Accounting Policies (Continued) Credit Losses The company is exposed to credit risk in the event of nonpayment of accounts receivable by customers. The company mitigates its exposure to credit risk, which it generally extends on an unsecured basis, by performing ongoing credit evaluations and taking further action if necessary, such as requiring letters of credit or other security interests to support the customer receivable. The allowance for credit losses for accounts receivable is based on the company's reasonable estimate of known credit risks and historical experience, adjusted for current and anticipated economic and other pertinent factors affecting the company's customers, that may differ from historical experience. Customer accounts receivable are written off when all collection efforts have been exhausted and the amounts are deemed uncollectible. At September 30, 2024, the company reported $ 1,565.0 million of accounts receivable, net of allowances for credit losses of $ 11.9 million. Changes in the allowance were not material for each of the three and nine-month periods ended September 30, 2024 and 2023. Derivative Financial Instruments The company routinely enters into forward exchange traded futures to manage price risk associated with nonferrous metal inventory, as well as purchases and sales of nonferrous (primarily aluminum and copper) and ferrous metals, to reduce exposure to commodity related price fluctuations. The company does not enter into these derivative financial instruments for speculative purposes. The company recognizes all derivatives as either assets or liabilities in the consolidated balance sheets and measures those instruments at fair value. Derivatives that are not designated as hedges must be adjusted to fair value through earnings. Changes in the fair value of derivatives that are designated as hedges, depending on t

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) Note 1. Description of the Business and Significant Accounting Policies (Continued) In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures , which modifies the rules on income tax disclosures to require entities to disclose specific categories in the rate reconciliation, the income or loss from continuing operations before income tax expense or benefit (separated between domestic and foreign) and income tax expense or benefit from continuing operations (separated by federal, state and foreign). ASU 2023-09 also requires entities to disclose their income tax payments to international, federal, state and local jurisdictions, among other changes. The guidance is effective for annual periods beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. ASU 2023-09 is to be applied on a prospective basis, but retrospective application is permitted. The company is currently evaluating the potential impact of adopting this new guidance on the consolidated financial statements and related disclosures. Note 2. Earnings Per Share Basic earnings per share is based on the weighted average shares of common stock outstanding during the period. Diluted earnings per share assumes the weighted average dilutive effect of common share equivalents outstanding during the period applied to the company's basic earnings per share. Common share equivalents represent potentially dilutive restricted stock units, deferred stock units, restricted stock, and performance awards, and are excluded from the computation in periods in which they have an anti-dilutive effect. There were no anti-dilutive common share equivalents as of or for the three and nine-month periods ended September 30, 2024 and 2023. Three-Month Periods Ended September 30, 2024 2023 Weighted Weighted Average

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) N ote 3. Long Term Debt (Continued) These notes are in equal right of payment with all existing and future senior unsecured indebtedness and are senior in right of payment to all subordinated indebtedness. Early redemption is permitted any time prior to May 15, 2034, at the greater of par or a make-whole price of the remaining payments to be made discounted at the applicable U.S. Treasury rate plus 0.20 %; and as of May 15, 2034, at 100.000 % . Note 4. Inventories Inventories are stated at lower of cost or net realizable value. Cost is determined using a weighted average cost method for raw materials (including scrap and purchased steel substrate) and supplies, and on a first-in, first-out basis for other inventory. Inventory consisted of the following (in thousands): September 30, December 31, 2024 2023 Raw materials $ 1,330,982 $ 1,226,272 Supplies 792,853 711,653 Work in progress 287,008 296,932 Finished goods 634,044 659,775 Total inventories $ 3,044,887 $ 2,894,632 Note 5. Changes in Equity The following tables provide a reconciliation of the beginning and ending carrying amounts of total equity, equity attributable to stockholders of Steel Dynamics, Inc., and equity and redeemable amounts attributable to noncontrolling interests for each of the three and nine-month periods ended September 30, 2024 and 2023 (in thousands). Stockholders of Steel Dynamics, Inc. Accumulated Additional Other Redeemable Common Treasury Paid-In Retained Comprehensive Noncontrolling Total Noncontrolling Stock Stock Capital Earnings Income (Loss) Interests Equity Interests Balances at December 31, 2023 $ 651 $ ( 5,897,606 ) $ 1,217,610 $ 13,545,590 $ 421 $ ( 198,351 ) $ 8,668,315 $ 171,212 Dividends declared - - - ( 72,624 ) - - ( 72,624 ) - Noncontrolling investors, net - - - - - ( 969 ) ( 969 )

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