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 June 30, 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 July 31, 2013, Registrant had 220,795,089 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 June 30, 2013 (unaudited) and December 31, 2012

1

 

 

 

 

Consolidated Statements of Income for the three- and six-month periods ended June 30, 2013 and 2012 (unaudited)

2

 

 

 

 

Consolidated Statements of Cash Flows for the three- and six-month periods ended June 30, 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

17

 

 

 

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

25

 

 

 

Item 4.

Controls and Procedures

25

 

 

 

 

 

 

 

PART II.  Other Information

 

 

 

 

Item 1.

Legal Proceedings

26

 

 

 

Item 1A.

Risk Factors

26

 

 

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

26

 

 

 

Item 3.

Defaults Upon Senior Securities

26

 

 

 

Item 4.

Mine Safety Disclosures

26

 

 

 

Item 5.

Other Information

26

 

 

 

Item 6.

Exhibits

27

 

 

 

 

Signatures

28

 



Table of Contents

 

STEEL DYNAMICS, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

 

 

 

June 30,

 

December 31,

 

 

 

2013

 

2012

 

 

 

(unaudited)

 

 

 

Assets

 

 

 

 

 

Current assets

 

 

 

 

 

Cash and equivalents

 

$

243,753

 

$

375,917

 

Investments in short-term commercial paper

 

 

31,520

 

Accounts receivable, net

 

725,105

 

599,499

 

Accounts receivable-related parties

 

48,022

 

42,864

 

Inventories

 

1,168,499

 

1,202,507

 

Deferred income taxes

 

23,682

 

23,449

 

Other current assets

 

33,028

 

20,469

 

Total current assets

 

2,242,089

 

2,296,225

 

 

 

 

 

 

 

Property, plant and equipment, net

 

2,232,852

 

2,231,198

 

 

 

 

 

 

 

Restricted cash

 

23,231

 

27,749

 

Intangible assets, net

 

401,104

 

416,635

 

Goodwill

 

735,281

 

738,542

 

Other assets

 

101,353

 

105,067

 

Total assets

 

$

5,735,910

 

$

5,815,416

 

 

 

 

 

 

 

Liabilities and Equity

 

 

 

 

 

Current liabilities

 

 

 

 

 

Accounts payable

 

$

355,678

 

$

344,953

 

Accounts payable-related parties

 

8,652

 

15,144

 

Income taxes payable

 

2,862

 

16,941

 

Accrued payroll and benefits

 

65,698

 

85,802

 

Accrued interest

 

32,509

 

35,306

 

Accrued expenses

 

80,209

 

81,900

 

Current maturities of long-term debt

 

324,241

 

29,631

 

Total current liabilities

 

869,849

 

609,677

 

 

 

 

 

 

 

Long-term debt

 

 

 

 

 

Term note

 

233,750

 

247,500

 

Senior notes

 

1,500,000

 

1,600,000

 

Convertible senior notes

 

 

287,496

 

Other long-term debt

 

40,493

 

37,610

 

Total long-term debt

 

1,774,243

 

2,172,606

 

 

 

 

 

 

 

Deferred income taxes

 

556,023

 

537,304

 

Other liabilities

 

20,324

 

19,173

 

Commitments and contingencies

 

 

 

 

 

Redeemable noncontrolling interests

 

104,734

 

98,814

 

 

 

 

 

 

 

Equity

 

 

 

 

 

Common stock voting, $.0025 par value; 900,000,000 shares authorized; 256,630,645 and 255,592,901 shares issued; and 220,665,831 and 219,522,655 shares outstanding, as of June 30, 2013 and December 31, 2012, respectively

 

640

 

637

 

Treasury stock, at cost; 35,964,814 and 36,070,246 shares, as of June 30, 2013 and December 31, 2012, respectively

 

(718,373

)

(720,479

)

Additional paid-in capital

 

1,050,470

 

1,037,687

 

Retained earnings

 

2,116,262

 

2,087,620

 

Total Steel Dynamics, Inc. equity

 

2,448,999

 

2,405,465

 

Noncontrolling interests

 

(38,262

)

(27,623

)

Total equity

 

2,410,737

 

2,377,842

 

Total liabilities and equity

 

$

5,735,910

 

$

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

 

Six Months Ended

 

 

 

June 30,

 

June 30,

 

 

 

2013

 

2012

 

2013

 

2012

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

 

 

 

 

 

 

 

 

Unrelated parties

 

$

1,735,420

 

$

1,830,117

 

$

3,463,821

 

$

3,735,192

 

Related parties

 

65,920

 

79,686

 

133,215

 

156,651

 

Total net sales

 

1,801,340

 

1,909,803

 

3,597,036

 

3,891,843

 

 

 

 

 

 

 

 

 

 

 

Costs of goods sold

 

1,653,648

 

1,727,667

 

3,273,080

 

3,508,443

 

Gross profit

 

147,692

 

182,136

 

323,956

 

383,400

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

65,356

 

61,235

 

130,618

 

125,619

 

Profit sharing

 

4,779

 

8,211

 

11,422

 

16,283

 

Amortization of intangible assets

 

8,051

 

8,991

 

16,178

 

17,983

 

Impairment charges

 

308

 

 

308

 

 

Total selling, general and administrative expenses

 

78,494

 

78,437

 

158,526

 

159,885

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

69,198

 

103,699

 

165,430

 

223,515

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net of capitalized interest

 

31,465

 

41,106

 

66,094

 

82,218

 

Other expense (income), net

 

(1,246

)

(1,892

)

(2,292

)

8,356

 

Income before income taxes

 

38,979

 

64,485

 

101,628

 

132,941

 

 

 

 

 

 

 

 

 

 

 

Income taxes

 

15,706

 

25,180

 

37,103

 

51,859

 

 

 

 

 

 

 

 

 

 

 

Net income

 

23,273

 

39,305

 

64,525

 

81,082

 

 

 

 

 

 

 

 

 

 

 

Net loss attributable to noncontrolling interests

 

5,685

 

5,167

 

12,648

 

9,065

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to Steel Dynamics, Inc.

 

$

28,958

 

$

44,472

 

$

77,173

 

$

90,147

 

 

 

 

 

 

 

 

 

 

 

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

 

$

0.13

 

$

0.20

 

$

0.35

 

$

0.41

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding

 

220,471

 

219,104

 

220,233

 

219,050

 

 

 

 

 

 

 

 

 

 

 

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

 

$

0.13

 

$

0.20

 

$

0.34

 

$

0.40

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares and share equivalents outstanding

 

221,736

 

236,208

 

238,246

 

236,367

 

 

 

 

 

 

 

 

 

 

 

Dividends declared per share

 

$

0.11

 

$

0.10

 

$

0.22

 

$

0.20

 

 

See notes to consolidated financial statements.

 

2



Table of Contents

 

STEEL DYNAMICS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(in thousands)

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

June 30,

 

June 30,

 

 

 

2013

 

2012

 

2013

 

2012

 

 

 

 

 

 

 

 

 

 

 

Operating activities:

 

 

 

 

 

 

 

 

 

Net income

 

$

23,273

 

$

39,305

 

$

64,525

 

$

81,082

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

56,826

 

55,502

 

113,887

 

111,074

 

Equity-based compensation

 

2,344

 

2,602

 

7,097

 

8,725

 

Impairment charges

 

308

 

 

308

 

 

Deferred income taxes

 

10,812

 

10,634

 

21,747

 

19,831

 

(Gain) loss on disposal of property, plant and equipment

 

588

 

326

 

(795

)

(413

)

Changes in certain assets and liabilities:

 

 

 

 

 

 

 

 

 

Accounts receivable

 

(19,826

)

73,734

 

(130,764

)

12,914

 

Inventories

 

1,660

 

18,787

 

34,008

 

(36,303

)

Other assets

 

6,783

 

(393

)

10,141

 

2,567

 

Accounts payable

 

(46,370

)

(60,837

)

(7,382

)

(25,935

)

Income taxes receivable/payable

 

(23,304

)

(26,468

)

(26,326

)

(9,076

)

Accrued expenses and liabilities

 

19,621

 

(12,590

)

(24,021

)

(42,446

)

Net cash provided by operating activities

 

32,715

 

100,602

 

62,425

 

122,020

 

 

 

 

 

 

 

 

 

 

 

Investing activities:

 

 

 

 

 

 

 

 

 

Purchases of property, plant and equipment

 

(49,236

)

(54,789

)

(94,582

)

(100,344

)

Proceeds from maturity of short-term commercial paper

 

 

54,984

 

31,520

 

74,832

 

Other investing activities

 

863

 

678

 

3,277

 

(21,034

)

Net cash provided by (used in) investing activities

 

(48,373

)

873

 

(59,785

)

(46,546

)

 

 

 

 

 

 

 

 

 

 

Financing activities:

 

 

 

 

 

 

 

 

 

Issuance of current and long-term debt

 

32

 

 

409,293

 

289,969

 

Repayment of current and long-term debt

 

(202,312

)

(21,896

)

(508,003

)

(305,344

)

Debt issuance costs

 

(195

)

 

(6,192

)

(2,188

)

Proceeds from exercise of stock options, including related tax effect

 

2,977

 

341

 

10,591

 

1,438

 

Contributions from noncontrolling investors, net

 

5,286

 

5,117

 

5,697

 

14,623

 

Dividends paid

 

(24,238

)

(21,908

)

(46,190

)

(43,795

)

Net cash used in financing activities

 

(218,450

)

(38,346

)

(134,804

)

(45,297

)

 

 

 

 

 

 

 

 

 

 

Increase (decrease) in cash and equivalents

 

(234,108

)

63,129

 

(132,164

)

30,177

 

Cash and equivalents at beginning of period

 

477,861

 

357,809

 

375,917

 

390,761

 

 

 

 

 

 

 

 

 

 

 

Cash and equivalents at end of period

 

$

243,753

 

$

420,938

 

$

243,753

 

$

420,938

 

 

 

 

 

 

 

 

 

 

 

Supplemental disclosure information:

 

 

 

 

 

 

 

 

 

Cash paid for interest

 

$

17,583

 

$

62,807

 

$

67,315

 

$

81,560

 

Cash paid for federal and state income taxes, net

 

$

27,360

 

$

41,302

 

$

38,525

 

$

40,347

 

 

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 61% and 63% of the company’s external net sales during the three-month periods ended June 30, 2013 and 2012, respectively, and 60% and 62% of the company’s external net sales during the six-month periods ended June 30, 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 33% and 31% of the company’s external net sales during the three-month periods ended June 30, 2013 and 2012, respectively, and 34% and 33% of the company’s external net sales during the six-month periods ended June 30, 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 6% and 5% of the company’s external net sales during the three-month periods ended June 30, 2013 and 2012, respectively, and 6% and 4% of the company’s external net sales during the six-month periods ended June 30, 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 June 30, 2013, and December 31, 2012, (in thousands):

 

 

 

June 30,

 

December 31,

 

 

 

2013

 

2012

 

OmniSource — Metals Recycling/Ferrous Resources Segment

 

$

561,532

 

$

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

 

 

 

$

735,281

 

$

738,542

 

 

OmniSource goodwill decreased $3.3 million from December 31, 2012 to June 30, 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 2.5 million and 6.6 million shares were anti-dilutive at June 30, 2013 and 2012, respectively. The computation of diluted earnings per share for the three month period ended June 30, 2013 did not include the after-tax equivalent of interest of $2.4 million for the company’s 5.125% senior convertible notes, due 2014 and the related weighted average equivalent of 16.7 million shares, as the result would have been anti-dilutive.

 

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 June 30,

 

 

 

2013

 

2012

 

 

 

Net Income
(Numerator)

 

Shares
(Denominator)

 

Per Share
Amount

 

Net Income
(Numerator)

 

Shares
(Denominator)

 

Per Share
Amount

 

Basic earnings per share

 

$

28,958

 

220,471

 

$

0.13

 

$

44,472

 

219,104

 

$

0.20

 

Dilutive common share equivalents

 

 

1,265

 

 

 

 

722

 

 

 

5.125% convertible senior notes, net of tax

 

 

 

 

 

2,358

 

16,382

 

 

 

Diluted earnings per share

 

$

28,958

 

221,736

 

$

0.13

 

$

46,830

 

236,208

 

$

0.20

 

 

 

 

Six Months Ended June 30,

 

 

 

2013

 

2012

 

 

 

Net Income
(Numerator)

 

Shares
(Denominator)

 

Per Share
Amount

 

Net Income
(Numerator)

 

Shares
(Denominator)

 

Per Share
Amount

 

Basic earnings per share

 

$

77,173

 

220,233

 

$

0.35

 

$

90,147

 

219,050

 

$

0.41

 

Dilutive common share equivalents

 

 

1,363

 

 

 

 

935

 

 

 

5.125% convertible senior notes, net of tax

 

4,716

 

16,650

 

 

 

4,716

 

16,382

 

 

 

Diluted earnings per share

 

$

81,889

 

238,246

 

$

0.34

 

$

94,863

 

236,367

 

$

0.40

 

 

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 inventories.  Inventories consisted of the following (in thousands):

 

 

 

June 30,

 

December 31,

 

 

 

2013

 

2012

 

Raw materials

 

$

558,355

 

$

594,388

 

Supplies

 

279,147

 

278,494

 

Work-in-progress

 

89,156

 

82,934

 

Finished goods

 

241,841

 

246,691

 

Total inventories

 

$

1,168,499

 

$

1,202,507

 

 

Note 4.  Debt

 

On March 26, 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.

 

5



Table of Contents

 

STEEL DYNAMICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

 

Note 4.  Debt (Continued)

 

A portion of the proceeds from the issuance of the 2023 Notes was used to fund the March 26, 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. 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). As a result of the tender offer to purchase the 2015 Notes in March and the early payoff of the remaining balance of the 2015 Notes in April, the company recorded expenses related to tender premiums, unamortized debt issuance costs write-off, and tender expenses of $600,000 and $2.6 million, which is reflected in other expenses in the consolidated statement of income for the three and six-month periods ended June 30, 2013.

 

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

 

3

 

10,588

 

 

 

 

10,591

 

 

Dividends declared

 

 

 

(48,511

)

 

 

(48,511

)

 

Equity-based compensation and issuance of restricted stock

 

 

4,427

 

(20

)

2,106

 

 

6,513

 

 

Acquisition of noncontrolling interest

 

 

(2,232

)

 

 

2,232

 

 

 

Contributions from noncontrolling investors

 

 

 

 

 

126

 

126

 

5,920

 

Distributions to noncontrolling investors

 

 

 

 

 

(349

)

(349

)

 

Net income (loss)

 

 

 

77,173

 

 

(12,648

)

64,525

 

 

Balances at June 30, 2013

 

$

640

 

$

1,050,470

 

$

2,116,262

 

$

(718,373

)

$

(38,262

)

$

2,410,737

 

$

104,734

 

 

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 June 30, 2013 (MT represents metric tons and Lbs represents pounds):

 

Commodity Futures

 

Long/Short

 

Total

 

 

 

Aluminum

 

Long

 

1,925

 

MT

 

Aluminum

 

Short

 

1,750

 

MT

 

Copper

 

Long

 

5,232

 

MT

 

Copper

 

Short

 

5,699

 

MT

 

Silver

 

Long

 

343

 

Lbs

 

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 June 30, 2013, and December 31, 2012, and for the three and six-month periods ended June 30, 2013 and 2012 (in thousands):

 

 

 

Asset Derivatives

 

Liability Derivatives

 

 

 

 

 

Fair Value

 

Fair Value

 

 

 

Balance sheet location

 

June 30,
2013

 

December 31,
2012

 

June 30,
2013

 

December 31,
2012

 

Derivative instruments designated as fair value hedges -

 

 

 

 

 

 

 

 

 

 

 

Commodity futures

 

Other current assets

 

$

1,747

 

 

 

$

1,577

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivative instruments not designated as hedges -

 

 

 

 

 

 

 

 

 

 

 

Commodity futures

 

Other current assets

 

$

1,714

 

$

4,024

 

$

595

 

$

1,854

 

 

 

 

 

 

 

 

 

 

 

 

 

Total derivative instruments

 

 

 

$

3,461

 

$

4,024

 

$

2,172

 

$

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

 

June 30,
2013

 

June 30,
2012

 

in fair value hedge
relationships

 

recognized in income on
related hedged item

 

June 30,
2013

 

June 30,
2012

 

Derivatives in fair value hedging relationships -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commodity futures

 

Costs of goods sold

 

$

(654

)

 

 

Firm commitments

 

Costs of goods sold

 

$

1,297

 

 

 

 

 

 

 

 

 

 

 

Inventory

 

Costs of goods sold

 

(2,014

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

(717

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivatives not designated as hedging instruments -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commodity futures

 

Costs of goods sold

 

$

6,621

 

$

5,893

 

 

 

 

 

 

 

 

 

 

 

 

Location of gain

 

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

 

Hedged items

 

Location of gain (loss)

 

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

 

 

 

(loss) recognized in
income on derivatives

 

June 30,
2013

 

June 30,
2012

 

in fair value hedge
relationships

 

recognized in income on
related hedged item

 

June 30,
2013

 

June 30,
2012

 

Derivatives in fair value hedging relationships -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commodity futures

 

Costs of goods sold

 

$

7,392

 

 

 

Firm commitments

 

Costs of goods sold

 

$

2,613

 

 

 

 

 

 

 

 

 

 

 

Inventory

 

Costs of goods sold

 

(8,822

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

(6,209

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivatives not designated as hedging instruments -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commodity futures

 

Costs of goods sold

 

$

6,629

 

$

2,275

 

 

 

 

 

 

 

 

 

 

Derivatives accounted for as fair value hedges had ineffectiveness resulting in a loss of $108,000 during the three-month period ended June 30, 2013, and a gain of $113,000 during the six-month period ended June 30, 2013; and a loss excluded from hedge effectiveness testing of $1.2 million that increased costs of goods sold during the three-month period ended June 30, 2013, and a gain of $1.1 million that reduced costs of goods sold during the six-month period ended June 30, 2013.

 

7



Table of Contents

 

STEEL DYNAMICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

 

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.

 

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  June 30, 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)

 

June 30, 2013

 

 

 

 

 

 

 

 

 

Commodity futures — financial assets

 

$

3,461

 

$

 

$

3,461

 

$

 

Commodity futures — financial liabilities

 

2,172

 

 

2,172

 

 

 

 

 

 

 

 

 

 

 

 

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 $2.2 billion and $2.3 billion (with a corresponding carrying amount in the consolidated balance sheets of $2.1 billion and $2.2 billion) at June 30, 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 and six-month periods ended June 30, 2013 and 2012 are as follows (in thousands):

 

For the three months ended

 

 

 

Metals Recycling /

 

Steel Fabrication

 

 

 

 

 

 

 

June 30, 2013

 

Steel Operations

 

Ferrous Resources

 

Operations

 

Other

 

Eliminations

 

Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Sales

 

 

 

 

 

 

 

 

 

 

 

 

 

External

 

$

1,038,868

 

$

538,599

 

$

103,595

 

$

20,828

 

$

 

$

1,701,890

 

External Non-U.S.

 

52,148

 

46,893

 

 

409

 

 

99,450

 

Other segments

 

52,897

 

275,666

 

564

 

6,885

 

(336,012

)

 

 

 

1,143,913

 

861,158

 

104,159

 

28,122

 

(336,012

)

1,801,340

 

Operating income (loss)

 

85,545

 

(7,251

)

2,330

 

(14,434

)(1)

3,008

(2)

69,198

 

Income (loss) before income taxes

 

71,732

 

(14,439

)

800

 

(22,122

)

3,008

 

38,979

 

Depreciation and amortization

 

26,496

 

26,704

 

2,179

 

1,498

 

(51

)

56,826

 

Capital expenditures

 

34,533

 

13,545

 

822

 

336

 

 

49,236

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of June 30, 2013

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets

 

2,582,168

 

2,490,215

 

261,556

 

604,195

(3)

(202,224

)(4)

5,735,910

 

Liabilities

 

512,634

 

522,306

 

16,136

 

2,362,721

(5)

(193,358

)(6)

3,220,439

 

 


Footnotes related to the three months ended June 30, 2013 segment results (in millions):

 

(1) Corporate SG&A

 

$

(9.1

)

(2) Gross profit increase from intra-company sales

 

$

3.0

 

Company-wide equity-based compensation

 

(2.0

)

 

 

 

 

Profit sharing

 

(3.2

)

 

 

 

 

Other, net

 

(0.1

)

 

 

 

 

Total

 

$

(14.4

)

 

 

 

 

 

 

 

 

 

 

 

 

(3) Cash and equivalents

 

$

218.2

 

(4) Elimination of intra-company receivables

 

$

(40.2

)

Deferred income taxes

 

23.6

 

Elimination of intra-company debt

 

(154.2

)

Property, plant and equipment, net

 

73.7

 

Other

 

(7.8

)

Debt issuance costs, net

 

29.3

 

Total

 

$

(202.2

)

Intra-company debt

 

154.2

 

 

 

 

 

Other

 

105.2

 

 

 

 

 

Total

 

$

604.2

 

 

 

 

 

 

 

 

 

 

 

 

 

(5) Accounts payable

 

$

43.5

 

(6) Elimination of intra-company payables

 

$

(40.5

)

Income taxes payable

 

2.9

 

Elimination of intra-company debt

 

(154.2

)

Accrued interest

 

32.3

 

Other

 

1.3

 

Debt

 

2,045.3

 

Total

 

$

(193.4

)

Deferred income taxes

 

205.1

 

 

 

 

 

Other

 

33.6

 

 

 

 

 

Total

 

$

2,362.7

 

 

 

 

 

 

9



Table of Contents

 

STEEL DYNAMICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

 

Note 9.  Segment Information (Continued)

 

For the three months ended

 

 

 

Metals Recycling /

 

Steel Fabrication

 

 

 

 

 

 

 

June 30, 2012

 

Steel Operations

 

Ferrous Resources

 

Operations

 

Other

 

Eliminations

 

Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Sales

 

 

 

 

 

 

 

 

 

 

 

 

 

External

 

$

1,157,908

 

$

533,841

 

$

95,767

 

$

16,183

 

$

 

$

1,803,699

 

External Non-U.S.

 

49,392

 

56,668

 

 

44

 

 

106,104

 

Other segments

 

52,923

 

329,947

 

 

4,164

 

(387,034

)

 

 

 

1,260,223

 

920,456

 

95,767

 

20,391

 

(387,034

)

1,909,803

 

Operating income (loss)

 

136,597

 

(19,371

)

193

 

(14,673

)(1)

953

(2)

103,699

 

Income (loss) before income taxes

 

118,049

 

(28,830

)

(1,449

)

(24,238

)

953

 

64,485

 

Depreciation and amortization

 

26,384

 

25,591

 

2,059

 

1,519

 

(51

)

55,502

 

Capital expenditures

 

6,275

 

46,857

 

1,329

 

328

 

 

54,789

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of June 30, 2012

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets

 

2,604,810

 

2,607,834

 

255,967

 

725,717

(3)

(222,948

)(4)

5,971,380

 

Liabilities

 

464,861

 

574,204

 

14,807

 

2,699,661

(5)

(213,713

)(6)

3,539,820

 

 


Footnotes related to the three months ended June 30, 2012 segment results (in millions):

 

(1)

 

Corporate SG&A

 

$

(7.2

)

(2)

 

Gross profit increase from intra-company sales

 

$

1.0

 

 

 

Company-wide equity-based compensation

 

(2.0

)

 

 

 

 

 

 

 

 

Profit sharing

 

(5.9

)

 

 

 

 

 

 

 

 

Other, net

 

0.4

 

 

 

 

 

 

 

 

 

Total

 

$

(14.7

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3)

 

Cash and equivalents

 

$

309.2

 

(4)

 

Elimination of intra-company receivables

 

$

(38.8

)

 

 

Investments in short-term commercial paper

 

10.0

 

 

 

Elimination of intra-company debt

 

(170.6

)

 

 

Income taxes receivable

 

17.1

 

 

 

Other

 

(13.5

)

 

 

Deferred income taxes

 

26.9

 

 

 

Total

 

$

(222.9

)

 

 

Property, plant and equipment, net

 

83.9

 

 

 

 

 

 

 

 

 

Debt issuance costs, net

 

22.3

 

 

 

 

 

 

 

 

 

Intra-company debt

 

170.6

 

 

 

 

 

 

 

 

 

Other

 

85.7

 

 

 

 

 

 

 

 

 

Total

 

$

725.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(5)

 

Accounts payable

 

$

28.7

 

(6)

 

Elimination of intra-company payables

 

$

(41.2

)

 

 

Income taxes payable

 

2.9

 

 

 

Elimination of intra-company debt

 

(170.6

)

 

 

Accrued interest

 

31.0

 

 

 

Other

 

(1.9

)

 

 

Accrued profit sharing

 

12.6

 

 

 

Total

 

$

(213.7

)

 

 

Debt

 

2,330.0

 

 

 

 

 

 

 

 

 

Deferred income taxes

 

213.0

 

 

 

 

 

 

 

 

 

Other

 

81.5

 

 

 

 

 

 

 

 

 

Total

 

$

2,699.7

 

 

 

 

 

 

 

 

10



Table of Contents

 

STEEL DYNAMICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

 

Note 9.  Segment Information (Continued)

 

For the six months ended

 

 

 

Metals Recycling /

 

Steel Fabrication

 

 

 

 

 

 

 

June 30, 2013

 

Steel Operations

 

Ferrous Resources

 

Operations

 

Other

 

Eliminations

 

Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Sales

 

 

 

 

 

 

 

 

 

 

 

 

 

External

 

$

2,050,063

 

$

1,096,210

 

$

197,392

 

$

40,199

 

$

 

$

3,383,864

 

External Non-U.S.

 

102,265

 

110,410

 

 

497

 

 

213,172

 

Other segments

 

113,945

 

552,030

 

1,142

 

12,280

 

(679,397

)

 

 

 

2,266,273

 

1,758,650

 

198,534

 

52,976

 

(679,397

)

3,597,036

 

Operating income (loss)

 

204,846

 

(17,075

)

3,860

 

(30,873

)(1)

4,672

(2)

165,430

 

Income (loss) before income taxes

 

176,739

 

(32,293

)

724

 

(48,214

)

4,672

 

101,628

 

Depreciation and amortization

 

52,883

 

53,840

 

4,236

 

3,030

 

(102

)

113,887

 

Capital expenditures

 

59,259

 

32,614

 

1,703

 

1,006

 

 

94,582

 

 


Footnotes related to the six months ended June 30, 2013 segment results (in millions):

 

(1)

 

Corporate SG&A

 

$

(17.1

)

(2)

 

Gross profit increase from intra-company sales

 

$

4.7

 

 

 

Company-wide equity-based compensation

 

(5.2

)

 

 

 

 

 

 

 

 

Profit sharing

 

(9.1

)

 

 

 

 

 

 

 

 

Other, net

 

0.5

 

 

 

 

 

 

 

 

 

Total

 

$

(30.9

)

 

 

 

 

 

 

 

For the six months ended

 

 

 

Metals Recycling /

 

Steel Fabrication

 

 

 

 

 

 

 

June 30, 2012

 

Steel Operations

 

Ferrous Resources

 

Operations

 

Other

 

Eliminations

 

Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Sales

 

 

 

 

 

 

 

 

 

 

 

 

 

External

 

$

2,293,820

 

$

1,167,975

 

$

170,659

 

$

36,915

 

$

 

$

3,669,369

 

External Non-U.S.

 

100,200

 

122,134

 

 

140

 

 

222,474

 

Other segments

 

100,682

 

741,467

 

4

 

7,426

 

(849,579

)

 

 

 

2,494,702

 

2,031,576

 

170,663

 

44,481

 

(849,579

)

3,891,843

 

Operating income (loss)

 

273,905

 

(15,208

)

(2,475

)

(31,535

)(1)

(1,172

)(2)

223,515

 

Income (loss) before income taxes

 

237,127

 

(33,103

)

(5,633

)

(64,278

)

(1,172

)

132,941

 

Depreciation and amortization

 

52,468

 

51,665

 

3,907

 

3,136

 

(102

)

111,074

 

Capital expenditures

 

12,223

 

84,763

 

2,497

 

861

 

 

100,344

 

 


Footnotes related to the six months ended June 30, 2012 segment results (in millions):

 

(1)

 

Corporate SG&A

 

$

(14.8

)

(2)

 

Gross profit reduction from intra-company sales

 

$

(1.2

)

 

 

Company-wide equity-based compensation

 

(5.7

)

 

 

 

 

 

 

 

 

Profit sharing

 

(12.4

)

 

 

 

 

 

 

 

 

Other, net

 

1.4

 

 

 

 

 

 

 

 

 

Total

 

$

(31.5

)

 

 

 

 

 

 

 

11



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, 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 June 30, 2013

 

Parent

 

Guarantors

 

Non-Guarantors

 

Adjustments

 

Consolidated

 

Cash and equivalents

 

$

213,717

 

$

14,726

 

$

15,310

 

$

 

$

243,753

 

Investments in short-term commercial paper

 

 

 

 

 

 

Accounts receivable, net

 

328,445

 

847,046

 

43,406

 

(445,770

)

773,127

 

Inventories

 

610,160

 

470,759

 

90,197

 

(2,617

)

1,168,499

 

Other current assets

 

63,513

 

6,012

 

5,860