Table of Contents

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.  20549

 

FORM 10-Q

 

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

 

For the quarterly period ended March 31, 2013

 

OR

 

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

 

Commission File Number 0-21719

 

Steel Dynamics, Inc.

(Exact name of registrant as specified in its charter)

 

Indiana

 

35-1929476

(State or other jurisdiction of incorporation or organization)

 

(I.R.S. Employer Identification No.)

 

 

 

7575 West Jefferson Blvd, Fort Wayne, IN

 

46804

(Address of principal executive offices)

 

(Zip Code)

 

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

 

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

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, 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 x  No o

 

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

 

(Check one):

Large accelerated filer x

Accelerated filer o

Non-accelerated filer o

Smaller reporting company o

 

 

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

 

As of April 30, 2013, Registrant had 220,400,174, outstanding shares of common stock.

 

 

 



Table of Contents

 

STEEL DYNAMICS, INC.

Table of Contents

 

 

 

Page

 

PART I. Financial Information

 

 

 

 

Item 1.

Financial Statements:

 

 

 

 

 

Consolidated Balance Sheets as of March 31, 2013 (unaudited) and December 31, 2012

1

 

 

 

 

Consolidated Statements of Income for the three-month periods ended March 31, 2013 and 2012 (unaudited)

2

 

 

 

 

Consolidated Statements of Cash Flows for the three-month periods ended March 31, 2013 and 2012 (unaudited)

3

 

 

 

 

Notes to Consolidated Financial Statements (unaudited)

4

 

 

 

Item 2.

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

15

 

 

 

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

22

 

 

 

Item 4.

Controls and Procedures

22

 

 

 

 

PART II. Other Information

 

 

 

 

Item 1.

Legal Proceedings

23

 

 

 

Item 1A.

Risk Factors

23

 

 

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

23

 

 

 

Item 3.

Defaults Upon Senior Securities

23

 

 

 

Item 4.

Mine Safety Disclosures

23

 

 

 

Item 5.

Other Information

23

 

 

 

Item 6.

Exhibits

24

 

 

 

 

Signature

25

 



Table of Contents

 

STEEL DYNAMICS, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

 

 

 

March 31,

 

December 31,

 

 

 

2013

 

2012

 

 

 

(unaudited)

 

 

 

Assets

 

 

 

 

 

Current assets

 

 

 

 

 

Cash and equivalents

 

$

477,861

 

$

375,917

 

Investments in short-term commercial paper

 

 

31,520

 

Accounts receivable, net

 

703,896

 

599,499

 

Accounts receivable-related parties

 

49,405

 

42,864

 

Inventories

 

1,170,159

 

1,202,507

 

Deferred income taxes

 

23,564

 

23,449

 

Other current assets

 

24,056

 

20,469

 

Total current assets

 

2,448,941

 

2,296,225

 

 

 

 

 

 

 

Property, plant and equipment, net

 

2,232,413

 

2,231,198

 

 

 

 

 

 

 

Restricted cash

 

23,400

 

27,749

 

Intangible assets, net

 

408,832

 

416,635

 

Goodwill

 

736,912

 

738,542

 

Other assets

 

106,076

 

105,067

 

Total assets

 

$

5,956,574

 

$

5,815,416

 

 

 

 

 

 

 

Liabilities and Equity

 

 

 

 

 

Current liabilities

 

 

 

 

 

Accounts payable

 

$

401,407

 

$

344,953

 

Accounts payable-related parties

 

9,225

 

15,144

 

Income taxes payable

 

13,438

 

16,941

 

Accrued payroll and benefits

 

59,488

 

85,802

 

Accrued interest

 

19,290

 

35,306

 

Accrued expenses

 

80,257

 

81,900

 

Current maturities of long-term debt

 

231,582

 

29,631

 

Total current liabilities

 

814,687

 

609,677

 

 

 

 

 

 

 

Long-term debt

 

 

 

 

 

Term note

 

240,625

 

247,500

 

Senior notes

 

1,500,000

 

1,600,000

 

Convertible senior notes

 

287,496

 

287,496

 

Other long-term debt

 

41,093

 

37,610

 

Total long-term debt

 

2,069,214

 

2,172,606

 

 

 

 

 

 

 

Deferred income taxes

 

546,722

 

537,304

 

Other liabilities

 

19,947

 

19,173

 

Commitments and contingencies

 

 

 

 

 

Redeemable noncontrolling interest

 

99,414

 

98,814

 

 

 

 

 

 

 

Equity

 

 

 

 

 

Common stock voting, $.0025 par value; 900,000,000 shares authorized; 256,333,083 and 255,592,901 shares issued; and 220,333,057 and 219,522,655 shares outstanding, as of March 31, 2013 and December 31, 2012, respectively

 

639

 

637

 

Treasury stock, at cost; 36,000,026 and 36,070,246 shares, as of March 31, 2013 and December 31, 2012, respectively

 

(719,076

)

(720,479

)

Additional paid-in capital

 

1,045,973

 

1,037,687

 

Retained earnings

 

2,111,597

 

2,087,620

 

Total Steel Dynamics, Inc. equity

 

2,439,133

 

2,405,465

 

Noncontrolling interests

 

(32,543

)

(27,623

)

Total equity

 

2,406,590

 

2,377,842

 

Total liabilities and equity

 

$

5,956,574

 

$

5,815,416

 

 

See notes to consolidated financial statements.

 

1



Table of Contents

 

STEEL DYNAMICS, INC.

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(in thousands, except per share data)

 

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2013

 

2012

 

 

 

 

 

 

 

Net sales

 

 

 

 

 

Unrelated parties

 

$

1,728,401

 

$

1,905,075

 

Related parties

 

67,295

 

76,965

 

Total net sales

 

1,795,696

 

1,982,040

 

 

 

 

 

 

 

Costs of goods sold

 

1,619,432

 

1,780,776

 

Gross profit

 

176,264

 

201,264

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

65,262

 

64,384

 

Profit sharing

 

6,643

 

8,072

 

Amortization of intangible assets

 

8,127

 

8,992

 

Total selling, general and administrative expenses

 

80,032

 

81,448

 

 

 

 

 

 

 

Operating income

 

96,232

 

119,816

 

 

 

 

 

 

 

Interest expense, net of capitalized interest

 

34,629

 

41,112

 

Other expense (income), net

 

(1,046

)

10,248

 

Income before income taxes

 

62,649

 

68,456

 

 

 

 

 

 

 

Income taxes

 

21,397

 

26,679

 

 

 

 

 

 

 

Net income

 

41,252

 

41,777

 

 

 

 

 

 

 

Net loss attributable to noncontrolling interests

 

6,963

 

3,898

 

 

 

 

 

 

 

Net income attributable to Steel Dynamics, Inc.

 

$

48,215

 

$

45,675

 

 

 

 

 

 

 

Basic earnings per share attributable to Steel Dynamics, Inc. stockholders

 

$

.22

 

$

.21

 

 

 

 

 

 

 

Weighted average common shares outstanding

 

219,995

 

218,996

 

 

 

 

 

 

 

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

 

$

.21

 

$

.20

 

 

 

 

 

 

 

Weighted average common shares and share equivalents outstanding

 

238,087

 

236,526

 

 

 

 

 

 

 

Dividends declared per share

 

$

.11

 

$

.10

 

 

See notes to consolidated financial statements.

 

2



Table of Contents

 

STEEL DYNAMICS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(in thousands)

 

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2013

 

2012

 

 

 

 

 

 

 

Operating activities:

 

 

 

 

 

Net income

 

$

41,252

 

$

41,777

 

 

 

 

 

 

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

Depreciation and amortization

 

57,061

 

55,572

 

Equity-based compensation

 

4,753

 

6,123

 

Deferred income taxes

 

10,935

 

9,197

 

Gain on disposal of property, plant and equipment

 

(1,383

)

(739

)

Changes in certain assets and liabilities:

 

 

 

 

 

Accounts receivable

 

(110,938

)

(60,820

)

Inventories

 

32,348

 

(55,090

)

Other assets

 

3,358

 

2,963

 

Accounts payable

 

38,988

 

34,902

 

Income taxes receivable/payable

 

(3,022

)

17,392

 

Accrued expenses and liabilities

 

(43,642

)

(29,856

)

Net cash provided by operating activities

 

29,710

 

21,421

 

 

 

 

 

 

 

Investing activities:

 

 

 

 

 

Purchases of property, plant and equipment

 

(45,346

)

(45,555

)

Other investing activities

 

33,934

 

(1,864

)

Net cash used in investing activities

 

(11,412

)

(47,419

)

 

 

 

 

 

 

Financing activities:

 

 

 

 

 

Issuance of current and long-term debt

 

409,261

 

289,969

 

Repayment of current and long-term debt

 

(305,691

)

(283,448

)

Debt issuance costs

 

(5,997

)

(2,191

)

Proceeds from exercise of stock options, including related tax effect

 

7,614

 

1,097

 

Contributions from noncontrolling investors, net

 

411

 

9,506

 

Dividends paid

 

(21,952

)

(21,887

)

Net cash provided by (used in) financing activities

 

83,646

 

(6,954

)

 

 

 

 

 

 

Increase (decrease) in cash and equivalents

 

101,944

 

(32,952

)

Cash and equivalents at beginning of period

 

375,917

 

390,761

 

 

 

 

 

 

 

Cash and equivalents at end of period

 

$

477,861

 

$

357,809

 

 

 

 

 

 

 

Supplemental disclosure information:

 

 

 

 

 

Cash paid for interest

 

$

49,732

 

$

18,753

 

Cash paid (received) for federal and state income taxes, net

 

$

11,165

 

$

(955

)

 

See notes to consolidated financial statements.

 

3



Table of Contents

 

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 segments: steel operations, metals recycling and ferrous resources operations, and steel fabrication operations.

 

Steel Operations.  Steel operations include the company’s Flat Roll Division, Structural and Rail Division, Engineered Bar Products Division, Roanoke Bar Division, Steel of West Virginia (SWVA) and The Techs operations. These operations consist of mini-mills, producing steel from steel scrap, using electric arc furnaces, continuous casting, automated rolling mills, and downstream finishing facilities. The company’s steel operations sell directly to end users and service centers. These products are used in numerous industry sectors, including the automotive, construction, commercial, transportation and industrial machinery markets. Steel operations accounted for approximately 59% and 60% of the company’s external net sales during the three-month periods ended March 31, 2013 and 2012, respectively.

 

Metals Recycling and Ferrous Resources Operations. Metals recycling and ferrous resources operations include OmniSource Corporation (OmniSource), the company’s metals recycling, steel scrap procurement, and processing locations, and our two ironmaking initiatives: Iron Dynamics (IDI), a liquid pig iron production facility; and our Minnesota iron operations, an iron nugget production facility and operations to supply the nugget facility with its primary raw material, iron concentrate. Metals recycling and ferrous resources operations accounted for approximately 35% of the company’s external net sales during each of the three-month periods ended March 31, 2013 and 2012, respectively.

 

Steel Fabrication Operations.  Steel fabrication operations include the company’s New Millennium Building Systems plants located throughout the United States and Northern Mexico. Revenues from these plants are generated from the fabrication of trusses, girders, steel joists and steel decking used within the non-residential construction industry. Steel fabrication operations accounted for approximately 5% and 4% of the company’s external net sales during the three-month periods ended March 31, 2013 and 2012, respectively.

 

Significant Accounting Policies

 

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

 

Use of Estimates.  These 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 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; income taxes; unrecognized income 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 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, 2012.

 

Goodwill.  The company’s goodwill is allocated to the following reporting units at March 31, 2013, and December 31, 2012, (in thousands):

 

 

 

March 31,
2013

 

December 31,
2012

 

OmniSource — Metals Recycling/Ferrous Resources Segment

 

$

563,163

 

$

564,793

 

The Techs — Steel Segment

 

142,783

 

142,783

 

Roanoke Bar Division — Steel Segment

 

29,041

 

29,041

 

New Millennium Building Systems — Fabrication Segment

 

1,925

 

1,925

 

 

 

$

736,912

 

$

738,542

 

 

OmniSource goodwill decreased $1.6 million from December 31, 2012 to March 31, 2013, in recognition of the 2013 tax benefit related to the amortization of the component of OmniSource tax-deductible goodwill in excess of book goodwill.

 

4



Table of Contents

 

STEEL DYNAMICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

 

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 stock options, restricted and deferred stock units, restricted shares, and dilutive shares related to the company’s 5.125% convertible senior notes. Common share equivalents are excluded from the computation in periods in which they have an anti-dilutive effect. Options to purchase 3.0 million and 3.9 million shares were anti-dilutive at March 31, 2013 and 2012, respectively.

 

The following table presents a reconciliation of the numerators and the denominators of the company’s basic and diluted earnings per share computations for net income attributable to Steel Dynamics, Inc. (in thousands, except per share data):

 

 

 

Three Months Ended March 31,

 

 

 

2013

 

2012

 

 

 

Net Income
(Numerator)

 

Shares
(Denominator)

 

Per Share
Amount

 

Net Income
(Numerator)

 

Shares
(Denominator)

 

Per Share
Amount

 

Basic earnings per share

 

$

48,215

 

219,995

 

$

0.22

 

$

45,675

 

218,996

 

$

0.21

 

Dilutive common share equivalents

 

 

1,460

 

 

 

 

1,148

 

 

 

5.125% convertible senior notes, net of tax

 

2,358

 

16,632

 

 

 

2,358

 

16,382

 

 

 

Diluted earnings per share

 

$

50,573

 

238,087

 

$

0.21

 

$

48,033

 

236,526

 

$

0.20

 

 

Note 3.  Inventories

 

Inventories are stated at lower of cost or market. Cost is determined using a weighted average method for scrap, and a first-in, first-out basis for all other inventory. Inventories consisted of the following (in thousands):

 

 

 

March 31, 

 

December 31,

 

 

 

2013

 

2012

 

Raw materials

 

$

526,280

 

$

594,388

 

Supplies

 

277,400

 

278,494

 

Work in progress

 

113,542

 

82,934

 

Finished goods

 

252,937

 

246,691

 

Total inventories

 

$

1,170,159

 

$

1,202,507

 

 

Note 4.  Debt

 

On March 25, 2013, the company issued $400.0 million of 51/4% Senior Notes due 2023 (2023 Notes). Interest on the 2023 Notes is due semiannually on April 15 and October 15, with the first payment due on October 15, 2013. The 2023 Notes are redeemable at any time after April 15, 2018. The redemption price (expressed as a percentage of principal amount) is 102.625% during the period April 15, 2018 to April 14, 2019; 101.750% during the period April 15, 2019 to April 14, 2020; 100.875% during the period April 15, 2020 to April 14, 2021; and 100% on and after April 15, 2021, plus accrued interest to the redemption date. In addition, at any time before April 15, 2016, the company may redeem up to 35% of the principal amount of the 2023 Notes with the net cash proceeds from one or more sales of the company’s common stock at a redemption price (expressed as a percentage of principal amount) of 105.250%, plus accrued interest to the redemption date. The 2023 Notes are unsecured and rank pari passu with all existing and future senior unsubordinated unsecured indebtedness and senior in right of payment to all subordinated indebtedness.

 

A portion of the proceeds from the issuance of the 2023 Notes was used to fund the March 25, 2013 purchase of $301.7 million (plus accrued interest) of the company’s 63/4% Senior Notes due 2015 (2015 Notes) pursuant to a tender offer. As a result of the tender offer to purchase the 2015 Notes, the company recorded expenses of $2.0 million related to tender premiums, unamortized debt issuance costs write-off, and tender expenses, which is reflected in other expenses in the consolidated statement of income for the three months ended March 31, 2013.  On April 9, 2013, the company used the remaining proceeds from the issuance of the 2023 Notes, along with available cash, to repay the remaining outstanding 2015 Notes due at a price of 100% of the principal amount of $198.3 million (plus accrued interest).

 

5



Table of Contents

 

STEEL DYNAMICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

 

Note 5.  Changes in Equity

 

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

 

 

 

Stockholders of Steel Dynamics, Inc.

 

 

 

 

 

 

 

 

 

Common

 

Additional
Paid-In

 

Retained

 

Treasury

 

Noncontrolling

 

Total

 

Redeemable
Noncontrolling

 

 

 

Stock

 

Capital

 

Earnings

 

Stock

 

Interests

 

Equity

 

Interests

 

Balances at January 1, 2013

 

$

637

 

$

1,037,687

 

$

2,087,620

 

$

(720,479

)

$

(27,623

)

$

2,377,842

 

$

98,814

 

Proceeds from the exercise of stock options, including related tax effect

 

2

 

7,612

 

 

 

 

7,614

 

 

Dividends declared

 

 

 

(24,238

)

 

 

(24,238

)

 

Equity-based compensation and issuance of restricted stock

 

 

2,906

 

 

1,403

 

 

4,309

 

 

Acquisition of noncontrolling interest

 

 

(2,232

)

 

 

2,232

 

 

 

Contributions from noncontrolling investors

 

 

 

 

 

112

 

112

 

600

 

Distributions to noncontrolling investors

 

 

 

 

 

(301

)

(301

)

 

Net income (loss)

 

 

 

48,215

 

 

(6,963

)

41,252

 

 

Balances at March 31, 2013

 

$

639

 

$

1,045,973

 

$

2,111,597

 

$

(719,076

)

$

(32,543

)

$

2,406,590

 

$

99,414

 

 

Note 6.  Derivative Financial Instruments

 

The company is exposed to certain risks relating to its ongoing business operations. The company utilizes derivative instruments to mitigate interest rate risk, foreign currency exchange rate risk, and commodity margin risk. Interest rate swaps may be entered into to manage interest rate risk associated with the company’s fixed and floating-rate borrowings. Forward exchange contracts on various foreign currencies may be entered into to manage foreign currency exchange rate risk as necessary. No interest rate swaps or significant forward exchange contracts on foreign currency existed for the periods presented. The company routinely enters into forward exchange traded futures and option contracts to manage the price risk associated with nonferrous metals inventory as well as purchases and sales of nonferrous metals (specifically aluminum, copper, nickel and silver).  The company offsets fair value amounts recognized for derivative instruments executed with the same counterparty under master netting agreements.  The company began to designate certain of its nonferrous metals, forward exchange futures contracts as fair value hedges of inventory and firm sales commitments in January 2013.

 

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 futures contracts, 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 March 31, 2013 (MT represents metric tons and Lbs represents pounds):

 

Commodity Futures

 

Long/Short

 

Total

 

 

 

Aluminum

 

Long

 

2,950

 

MT

 

Aluminum

 

Short

 

3,050

 

MT

 

Copper

 

Long

 

2,813

 

MT

 

Copper

 

Short

 

11,884

 

MT

 

Nickel

 

Short

 

78

 

MT

 

Silver

 

Short

 

686

 

Lbs

 

 

6



Table of Contents

 

STEEL DYNAMICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

 

Note 6.  Derivative Financial Instruments (Continued)

 

The following summarizes the location and amounts of the fair values and gains or losses related to derivatives included in the company’s financial statements as of March 31, 2013, and December 31, 2012, and for the three-month periods ended March 31, 2013 and 2012 (in thousands):

 

 

 

Asset Derivatives

 

Liability Derivatives

 

 

 

 

 

Fair Value

 

Fair Value

 

 

 

Balance sheet location

 

March 31,
2013

 

December 31,
2012

 

March 31,
2013

 

December 31,
2012

 

Derivative instruments designated as fair value hedges -

 

 

 

 

 

 

 

 

 

 

 

Commodity futures

 

Other current assets

 

$

3,417

 

 

 

$

(521

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivative instruments not designated as hedges -

 

 

 

 

 

 

 

 

 

 

 

Commodity futures

 

Other current assets

 

$

2,296

 

$

4,024

 

$

(327

)

$

(1,854

)

 

 

 

 

 

 

 

 

 

 

 

 

Total derivative instruments

 

 

 

$

5,713

 

$

4,024

 

$

(848

)

$

(1,854

)

 

 

 

Location of gain

 

Amount of gain (loss)
recognized in income on
derivatives for the three
 months ended

 

Hedged items

 

Location of gain (loss)

 

Amount of gain (loss)
recognized in income on
related hedged items for the
three months ended

 

 

 

(loss) recognized in
income on derivatives

 

March 31,
2013

 

March 31,
 2012

 

in fair value hedge
 relationships

 

recognized in income on
related hedged item

 

March 31,
2013

 

March 31,
2012

 

Derivatives in fair value hedging relationships -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commodity futures

 

Cost of goods sold

 

$

5,684

 

 

 

Firm commitments

 

Cost of goods sold

 

$

1,316

 

 

 

 

 

 

 

 

 

 

 

Inventory

 

Cost of goods sold

 

(6,779

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

(5,463

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivatives not designated as hedging instruments -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commodity futures

 

Cost of goods sold

 

$

2,401

 

$

(3,618

)

 

 

 

 

 

 

 

 

 

Derivatives accounted for as fair value hedges had ineffectiveness resulting in a gain of $221,000, and a gain excluded from hedge effectiveness testing of $2.3 million, that reduced cost of goods sold during the three month period ended March 31, 2013.

 

Note 7.  Fair Value Measurements

 

FASB accounting standards provide a comprehensive framework for measuring fair value and set forth a definition of fair value and establish 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.

 

7



Table of Contents

 

STEEL DYNAMICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

 

Note 7.  Fair Value Measurements (Continued)

 

The following table sets forth financial assets and liabilities measured at fair value in the consolidated balance sheets and the respective levels to which the fair value measurements are classified within the fair value hierarchy as of  March 31, 2013, and December 31, 2012 (in thousands):

 

 

 

Total

 

Quoted Prices in
Active Markets
for Identical
Assets 
(Level 1)

 

Significant
Other
Observable
Inputs
(Level 2)

 

Significant
Unobservable 
Inputs 
(Level 3)

 

March 31, 2013

 

 

 

 

 

 

 

 

 

Commodity futures — financial assets

 

$

5,713

 

 

$

5,713

 

$

 

Commodity futures — financial liabilities

 

848

 

 

848

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2012

 

 

 

 

 

 

 

 

 

Investments in short-term commercial paper

 

$

31,520

 

$

 

$

31,520

 

$

 

Commodity futures — financial assets

 

4,024

 

 

4,024

 

 

Commodity futures — financial liabilities

 

1,854

 

 

1,854

 

 

 

The carrying amounts of financial instruments including cash and equivalents approximate fair value. The fair values of short-term commercial paper and commodity futures and options contracts are estimated by the use of quoted market prices, estimates obtained from brokers, and other appropriate valuation techniques based on references available. The fair value of long-term debt, including current maturities, as determined by quoted market prices (Level 2), was approximately $2.4 billion and $2.3 billion (with a corresponding carrying amount in the consolidated balance sheets of $2.3 billion and $2.2 billion) at March 31, 2013 and December 31, 2012, respectively.

 

Note 8.  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.

 

The company is involved, along with eight other steel manufacturing companies, in a class action antitrust complaint filed in federal court in Chicago, Illinois in September 2008, which alleges a conspiracy to fix, raise, maintain and stabilize the price at which steel products were sold in the United States starting in 2005, by artificially restricting the supply of such steel products. All but one of the Complaints were brought on behalf of a purported class consisting of all direct purchasers of steel products between January 1, 2005, and the present.  The other Complaint was brought on behalf of a purported class consisting of all indirect purchasers of steel products within the same time period.  In addition, in December 2010, we and the other co-defendants were served with a substantially similar complaint in the Circuit Court of Cocke County, Tennessee, purporting to be on behalf of indirect purchasers of steel products in Tennessee. That case has been removed to the federal court in Chicago that is hearing the main complaint. All Complaints seek treble damages and costs, including reasonable attorney fees, pre- and post-judgment interest and injunctive relief.  In January 2009, Steel Dynamics and the other defendants filed a Joint Motion to Dismiss all of the direct purchaser lawsuits, but this motion was denied in June 2009.  Following a period of preliminary discovery relating to class certification matters, Plaintiffs filed their Motion for Class Certification in May 2012, and on February 28, 2013, Defendants filed their Joint Memorandum in Opposition to Plaintiffs’ Motion for Class Certification, together with joint motions to exclude the expert opinions of both of Plaintiffs’ two retained experts. Additional briefing is anticipated on all issues related to the pending motions.  Due to the uncertain nature of litigation, we cannot presently determine the ultimate outcome of this litigation. However, we have determined, based on the information available at this time, that there is not presently a “reasonable possibility” (as that term is defined in ASC 450-20-20), that the outcome of these legal proceedings would have a material impact on our financial condition, results of operations, or liquidity.

 

Although not presently necessary or appropriate to make a dollar estimate of exposure to loss, if any, in connection with the above matter, we may in the future determine that a loss accrual is necessary. Although we may make loss accruals, if and as warranted, any amounts that we may accrue from time to time could vary significantly from the amounts we actually pay, due to inherent uncertainties and the inherent shortcomings of the estimation process, the uncertainties involved in litigation and other factors. Additionally, an adverse result could have a material effect on our financial condition, results of operations and liquidity.

 

8



Table of Contents

 

STEEL DYNAMICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

 

Note 9.  Segment Information

 

The company has three reportable segments: steel operations, metals recycling and ferrous resources operations, and steel fabrication operations.  These operations are described in Note 1 to the financial statements.  Revenues included in the category “Other” are from subsidiary operations that are below the quantitative thresholds required for reportable segments and primarily consist of further processing, slitting, and sale of certain steel products and the resale of certain secondary and excess steel products.  In addition, “Other” also includes certain unallocated corporate accounts, such as the company’s senior secured credit facilities, senior notes and convertible senior notes, certain other investments, and certain profit sharing expenses.

 

The company’s operations are primarily organized and managed by operating segment.  Operating segment performance and resource allocations are primarily based on operating results before income taxes.  The accounting policies of the reportable segments are consistent with those described in Note 1 to the financial statements. Intra-segment and intra-company sales and any related profits are eliminated in consolidation. Refer to the company’s Annual Report on Form 10-K for the year ended December 31, 2012, for more information related to the company’s segment reporting. The company’s segment results for the three-month periods ended March 31, 2013 and 2012 are as follows (in thousands):

 

For the three months ended

 

 

 

Metals Recycling /

 

Steel Fabrication

 

 

 

 

 

 

 

March 31, 2013

 

Steel Operations

 

Ferrous Resources

 

Operations

 

Other

 

Eliminations

 

Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Sales

 

 

 

 

 

 

 

 

 

 

 

 

 

External

 

$

1,011,195

 

$

557,611

 

$

93,797

 

$

19,371

 

 

 

$

1,681,974

 

External Non-U.S.

 

50,117

 

63,517

 

 

88

 

 

 

113,722

 

Other segments

 

61,048

 

276,364

 

578

 

5,395

 

(343,385

)

 

 

 

1,122,360

 

897,492

 

94,375

 

24,854

 

(343,385

)

1,795,696

 

Operating income (loss)

 

119,301

 

(9,824

)

1,530

 

(16,439

)(1)

1,664

(2)

96,232

 

Income (loss) before income taxes

 

105,007

 

(17,854

)

(76

)

(26,092

)

1,664

 

62,649

 

Depreciation and amortization

 

26,387

 

27,136

 

2,057

 

1,532

 

(51

)

57,061

 

Capital expenditures

 

24,726

 

19,069

 

881

 

670

 

 

45,346

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of March 31, 2013

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets

 

2,566,642

 

2,529,951

 

254,176

 

822,064

(3)

(216,259

)(4)

5,956,574

 

Liabilities

 

557,404

 

526,457

 

15,646

 

2,556,590

(5)

(205,527

)(6)

3,450,570

 

 


Footnotes related to the three months ended March 31, 2013 segment results (in millions):

 

(1) Corporate SG&A

 

$

(8.0

)

(2) Gross profit increase from intra-company sales

 

$

1.7

 

Company-wide equity-based compensation

 

(3.2

)

 

 

 

 

Profit sharing

 

(5.9

)

 

 

 

 

Other, net

 

0.7

 

 

 

 

 

Total

 

$

(16.4

)

 

 

 

 

 

 

 

 

 

 

 

 

(3) Cash and equivalents

 

$

445.8

 

(4) Elimination of intra-company receivables

 

$

(49.4

)

Deferred income taxes

 

23.5

 

Elimination of intra-company debt

 

(156.0

)

Property, plant and equipment, net

 

74.8

 

Other

 

(10.9

)

Debt issuance costs, net

 

31.3

 

Total

 

$

(216.3

)

Intra-company debt

 

156.0

 

 

 

 

 

Other

 

90.7

 

 

 

 

 

Total

 

$

822.1

 

 

 

 

 

 

 

 

 

 

 

 

 

(5) Accounts payable

 

$

38.8

 

(6) Elimination of intra-company payables

 

$

(49.7

)

Income taxes payable

 

13.4

 

Elimination of intra-company debt

 

(156.0

)

Accrued interest

 

19.1

 

Other

 

0.2

 

Debt

 

2,247.1

 

Total

 

$

(205.5

)

Deferred income taxes

 

213.8

 

 

 

 

 

Other

 

24.4

 

 

 

 

 

Total

 

$

2,556.6

 

 

 

 

 

 

9



Table of Contents

 

STEEL DYNAMICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

 

Note 9.  Segment Information (Continued)

 

 

For the three months ended
March 31, 2012

 

Steel Operations

 

Metals Recycling /
Ferrous Resources

 

Steel Fabrication
Operations

 

Other 

 

Eliminations

 

Consolidated

 

Net Sales

 

 

 

 

 

 

 

 

 

 

 

 

 

External

 

$

1,135,912

 

$

 634,134

 

$

74,892

 

$

 20,732

 

$

 

$

1,865,670

 

External Non-U.S.

 

50,808

 

65,466

 

 

96

 

 

116,370

 

Other segments

 

47,759

 

411,520

 

4

 

3,262

 

(462,545

)

 

 

 

1,234,479

 

1,111,120

 

74,896

 

24,090

 

(462,545

)

1,982,040

 

Operating income (loss)

 

137,308

 

4,163

 

(2,668

)

(16,862

)(1)

(2,125

)(2)

119,816

 

Income (loss) before income taxes

 

119,078

 

(4,273

)

(4,184

)

(40,040

)

(2,125

)

68,456

 

Depreciation and amortization

 

26,084

 

26,074

 

1,848

 

1,617

 

(51

)

55,572

 

Capital expenditures

 

5,948

 

37,906

 

1,168

 

533

 

 

45,555

 

As of March 31, 2012

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets

 

2,677,623

 

2,610,476

 

231,284

 

712,673

(3)

(188,429

)(4)

6,043,627

 

Liabilities

 

494,177

 

574,598

 

14,542

 

2,732,432

(5)

(178,607

)(6)

3,637,142

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


Footnotes related to the three months ended March 31, 2012 segment results (in millions):

 

(1) Corporate SG&A

 

$

(7.6

)

(2) Gross profit reduction from intra-company sales

 

$

 (2.1

)

Company-wide equity-based compensation\

 

(3.7

)

 

 

 

 

Profit sharing

 

(6.5

)

 

 

 

 

Other, net

 

0.9

 

 

 

 

 

 

 

$

(16.9

)

 

 

 

 

(3) Cash and equivalents

 

$

278.2

 

(4) Elimination of intra-company receivables

 

$

(27.9

)

Investments in short-term commercial paper

 

65.0

 

Elimination of intra-company debt

 

(149.6

)

Deferred income taxes

 

26.1

 

Other

 

(10.9

)

Property, plant and equipment, net

 

84.6

 

 

 

$

(188.4

)

Debt issuance costs, net

 

24.0

 

 

 

 

 

Intra-company debt

 

149.6

 

 

 

 

 

Other

 

85.2

 

 

 

 

 

 

 

$

712.7

 

 

 

 

 

(5) Accounts payable

 

$

29.2

 

(6) Elimination of intra-company payables

 

$

(27.9

)

Income taxes payable

 

14.6

 

Elimination of intra-company debt

 

(149.6

)

Accrued interest

 

54.5

 

Other

 

(1.1

)

Debt

 

2,333.6

 

 

 

$

(178.6

)

Deferred income taxes

 

213.1

 

 

 

 

 

Other

 

87.4

 

 

 

 

 

 

 

$

2,732.4

 

 

 

 

 

 

10



Table of Contents

 

STEEL DYNAMICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

 

Note 10.  Condensed Consolidating Information

 

Certain 100%-owned subsidiaries of SDI have fully and unconditionally guaranteed all of the indebtedness relating to the issuance of the company’s senior notes due 2014, 2015, 2019, 2020, 2022 and 2023. 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, 2012.

 

Condensed Consolidating Balance Sheets (in thousands)

 

 

 

 

 

 

 

Combined

 

Consolidating

 

Total

 

As of March 31, 2013

 

Parent

 

Guarantors

 

Non-Guarantors

 

Adjustments

 

Consolidated

 

Cash and equivalents

 

$

441,989

 

$

22,546

 

$

13,326

 

$

 

$

477,861

 

Investments in short-term commercial paper

 

 

 

 

 

 

Accounts receivable, net

 

290,332

 

874,233

 

25,813

 

(437,077

)

753,301

 

Inventories

 

604,370

 

482,512

 

88,668

 

(5,391

)

1,170,159

 

Other current assets

 

51,597

 

8,443

 

6,298

 

(18,718

)

47,620

 

Total current assets

 

1,388,288

 

1,387,734

 

134,105

 

(461,186

)

2,448,941

 

Property, plant and equiment, net

 

1,018,938

 

657,918

 

558,130

 

(2,573

)

2,232,413

 

Intangible assets, net

 

 

408,832

 

 

 

408,832

 

Goodwill

 

 

736,912

 

 

 

736,912

 

Other assets, including investments in subs

 

2,745,488

 

25,784

 

8,724

 

(2,650,520

)

129,476

 

Total assets

 

$

5,152,714

 

$

3,217,180

 

$

700,959

 

$

(3,114,279

)

$

5,956,574

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts payable

 

$

186,419

 

$

232,442

 

$

63,767

 

$

(71,996

)

$

410,632

 

Accrued expenses

 

104,882

 

91,586

 

10,179

 

(34,174

)

172,473

 

Current maturities of long-term debt

 

215,991

 

300

 

41,517

 

(26,226

)

231,582

 

Total current liabilities

 

507,292

 

324,328

 

115,463

 

(132,396

)

814,687

 

Long-term debt

 

2,033,955

 

 

198,695

 

(163,436

)

2,069,214

 

Other liabilities

 

172,334

 

2,067,830

 

49,376

 

(1,722,871

)

566,669

 

 

 

 

 

 

 

 

 

 

 

 

 

Redeemable noncontrolling interest

 

 

 

99,414

 

 

99,414

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock

 

639

 

33,896

 

18,121

 

(52,017

)

639

 

Treasury stock

 

(719,076

)

 

 

 

(719,076

)

Additional paid-in-capital

 

1,045,973

 

117,737

 

479,648

 

(597,385

)

1,045,973

 

Retained earnings (deficit)

 

2,111,597

 

673,389

 

(227,215

)

(446,174

)

2,111,597

 

Total Steel Dynamics, Inc. equity

 

2,439,133

 

825,022

 

270,554

 

(1,095,576

)

2,439,133

 

Noncontrolling interests

 

 

 

(32,543

)

 

(32,543

)

Total equity

 

2,439,133

 

825,022

 

238,011

 

(1,095,576

)

2,406,590

 

Total liabilities and equity

 

$

5,152,714

 

$

3,217,180

 

$

700,959

 

$

(3,114,279

)

$

5,956,574

 

 

11



Table of Contents

 

STEEL DYNAMICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

 

Note 10.  Condensed Consolidating Information (Continued)

 

 

 

 

 

 

 

Combined

 

Consolidating

 

Total

 

As of December 31, 2012

 

Parent

 

Guarantors

 

Non-Guarantors

 

Adjustments

 

Consolidated

 

Cash and equivalents

 

$

322,707

 

$

41,675

 

$

11,535

 

$

 

$

375,917

 

Investments in short-term commercial paper

 

31,520

 

 

 

 

31,520

 

Accounts receivable, net

 

277,428

 

772,868

 

11,293

 

(419,226

)

642,363

 

Inventories

 

564,882

 

536,331

 

107,422

 

(6,128

)

1,202,507

 

Other current assets

 

51,268

 

7,253

 

4,006

 

(18,609

)

43,918

 

Total current assets

 

1,247,805

 

1,358,127

 

134,256

 

(443,963

)

2,296,225

 

Property, plant and equiment, net

 

1,017,587

 

664,332

 

551,903

 

(2,624

)

2,231,198

 

Intangible assets, net

 

 

416,635

 

 

 

416,635

 

Goodwill

 

 

738,542

 

 

 

738,542

 

Other assets, including investments in subs

 

2,768,360

 

30,862

 

9,189

 

(2,675,595

)

132,816

 

Total assets

 

$

5,033,752

 

$

3,208,498

 

$

695,348

 

$

(3,122,182

)

$

5,815,416

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts payable

 

$

150,191

 

$

219,415

 

$

56,472

 

$

(65,981

)

$

360,097

 

Accrued expenses

 

144,719

 

98,484

 

9,877

 

(33,131

)

219,949

 

Current maturities of long-term debt

 

14,237

 

300

 

52,595

 

(37,501

)

29,631

 

Total current liabilities

 

309,147

 

318,199

 

118,944

 

(136,613

)

609,677

 

Long-term debt

 

2,140,958

 

 

169,223

 

(137,575

)

2,172,606

 

Other liabilities

 

178,182

 

2,087,957

 

41,581

 

(1,751,243

)

556,477

 

 

 

 

 

 

 

 

 

 

 

 

 

Redeemable noncontrolling interest

 

 

 

98,814

 

 

98,814

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock

 

637

 

33,896

 

18,121

 

(52,017

)

637

 

Treasury stock

 

(720,479

)

 

 

 

(720,479

)

Additional paid-in-capital

 

1,037,687

 

117,737

 

476,677

 

(594,414

)

1,037,687

 

Retained earnings (deficit)

 

2,087,620

 

650,709

 

(200,389

)

(450,320

)

2,087,620

 

Total Steel Dynamics, Inc. equity

 

2,405,465

 

802,342

 

294,409

 

(1,096,751

)

2,405,465

 

Noncontrolling interests

 

 

 

(27,623

)

 

(27,623

)

Total equity

 

2,405,465

 

802,342

 

266,786

 

(1,096,751

)

2,377,842

 

Total liabilities and equity

 

$

5,033,752

 

$

3,208,498

 

$

695,348

 

$

(3,122,182

)

$

5,815,416

 

 

12



Table of Contents

 

STEEL DYNAMICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

 

Note 10.  Condensed Consolidating Information (Continued)

 

Condensed Consolidating Statements of Operations (in thousands)

 

For the Three Months Ended,

 

 

 

 

 

Combined

 

Consolidating

 

Total

 

March 31, 2013

 

Parent

 

Guarantors

 

Non-Guarantors

 

Adjustments

 

Consolidated

 

Net sales

 

$

827,201

 

$

2,015,487

 

$

66,370

 

$

(1,113,362

)

$

1,795,696

 

Costs of goods sold

 

706,387

 

1,914,058

 

95,941

 

(1,096,954

)

1,619,432

 

Gross profit (loss)

 

120,814

 

101,429

 

(29,571

)

(16,408

)

176,264

 

Selling, general and administrative

 

28,686

 

53,992

 

2,138

 

(4,784

)

80,032

 

Operating income (loss)

 

92,128

 

47,437

 

(31,709

)

(11,624

)

96,232

 

Interest expense, net of capitalized interest

 

22,046

 

12,039

 

1,701

 

(1,157

)

34,629

 

Other (income) expense, net

 

(820

)

(200

)

(1,183

)

1,157

 

(1,046

)

Income (loss) before income taxes and equity in net income of subsidiaries

 

70,902

 

35,598

 

(32,227

)

(11,624

)

62,649

 

Income taxes

 

11,394

 

12,919

 

699

 

(3,615

)

21,397

 

 

 

59,508

 

22,679

 

(32,926

)

(8,009

)

41,252

 

Equity in net loss of subsidiaries

 

(11,293

)

 

 

11,293

 

 

Net loss attributable to noncontrolling interests

 

 

 

6,963

 

 

6,963

 

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

 

$

48,215

 

$

22,679

 

$

(25,963

)

$

3,284

 

$

48,215

 

 

For the Three Months Ended,
March 31, 2012

 

Parent

 

Guarantors

 

Combined
Non-Guarantors

 

Consolidating
Adjustments

 

Total
Consolidated

 

Net sales

 

$

913,193

 

$

2,308,156

 

$

46,835

 

$

(1,286,144

)

$

1,982,040

 

Costs of goods sold

 

785,567

 

2,198,898

 

63,894

 

(1,267,583

)

1,780,776

 

Gross profit (loss)

 

127,626

 

109,258

 

(17,059

)

(18,561

)

201,264

 

Selling, general and administrative

 

27,566

 

54,555

 

2,459

 

(3,132

)

81,448

 

Operating income (loss)

 

100,060

 

54,703

 

(19,518

)

(15,429

)

119,816

 

Interest expense, net of capitalized interest

 

27,217

 

13,606

 

1,710

 

(1,421

)

41,112

 

Other (income) expense, net

 

10,769

 

(1,064

)

(877

)

1,420

 

10,248

 

Income (loss) before income taxes and equity in net income of subsidiaries

 

62,074

 

42,161

 

(20,351

)

(15,428

)

68,456

 

Income taxes (benefit)

 

15,870

 

16,134

 

353

 

(5,678

)

26,679

 

 

 

46,204

 

26,027

 

(20,704

)

(9,750

)

41,777

 

Equity in net loss of subsidiaries

 

(4,427

)

 

 

4,427

 

 

Net loss attributable to noncontrolling interests

 

 

 

3,898

 

 

3,898

 

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

 

$

41,777

 

$

26,027

 

$

(16,806

)

$

(5,323

)

$

45,675

 

 

13



Table of Contents

 

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 Three Months Ended,

 

 

 

 

 

Combined

 

Consolidating

 

Total

 

March 31, 2013

 

Parent

 

Guarantors

 

Non-Guarantors

 

Adjustments

 

Consolidated

 

Net cash provided by (used in) operating activities

 

$

29,373

 

$

14,903

 

$

(17,530

)

$

2,964

 

$

29,710

 

Net cash used in investing activities

 

(8,837

)

(11,985

)

(6,805

)

16,215

 

(11,412

)

Financing activities

 

 

 

 

 

 

 

 

 

 

 

Issuance of long term debt

 

400,425

 

 

23,980

 

(15,144

)

409,261

 

Repayments of long term debt

 

(304,471

)

(1,203

)

(9,836

)

9,819

 

(305,691

)

Other

 

2,792

 

(20,844

)

11,982

 

(13,854

)

(19,924

)

Net cash provided by (used in) financing activities

 

98,746

 

(22,047

)

26,126

 

(19,179

)

83,646

 

Increase (decrease) in cash and equivalents

 

119,282

 

(19,129

)

1,791

 

 

101,944

 

Cash and equivalents at beginning of period

 

322