Steel Dynamics 10-Q 2024-09-30

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

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

ended September 30, 2024

OR

☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from _______ to _______

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)

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

Not Applicable

(Former name, former address and former fiscal year, if changed since last report.)

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

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Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock voting, $0.0025 par value	STLD	NASDAQ Global Select Market

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

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes ⌧ No ◻

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

​			Large accelerated filer ⌧		Accelerated filer ◻		Non-accelerated filer ◻
​	​		​	​	​	​	​
​	​		Smaller reporting company ☐	​	Emerging growth company ☐	​	​

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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ◻

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

As of November 6, 2024, Registrant had 152,244,995 outstanding shares of common stock.

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STEEL DYNAMICS, INC.

Table of Contents

PART I. Financial Information
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Item 1.	Financial Statements:	Page
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​	Consolidated Balance Sheets as of September 30, 2024 (unaudited) and December 31, 2023	1
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​	Consolidated Statements of Income for the three and nine-month periods ended September 30, 2024 and 2023 (unaudited)	2
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​	Consolidated Statements of Comprehensive Income for the three and nine-month periods ended September 30, 2024 and 2023 (unaudited)	3
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​	Consolidated Statements of Cash Flows for the three and nine-month periods ended September 30, 2024 and 2023 (unaudited)	4
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​	Notes to Consolidated Financial Statements (unaudited)	5
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Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
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Item 3.	Quantitative and Qualitative Disclosures about Market Risk	24
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Item 4.	Controls and Procedures	24
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​	PART II. Other Information	​
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Item 1.	Legal Proceedings	25
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Item 1A.	Risk Factors	25
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Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	25
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Item 3.	Defaults Upon Senior Securities	25
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Item 4.	Mine Safety Disclosures	25
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Item 5.	Other Information	25
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Item 6.	Exhibits	26
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Exhibit Index		27
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Signature		28

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STEEL DYNAMICS, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

​	​	​	​	​	​	​
​	September 30,		​	​	December 31,
​	2024		​	​	2023
Assets	(unaudited)		​	​	​	​
Current assets	​	​	​	​	​	​
Cash and equivalents	$	1,015,210	​	​	$	1,400,887
Short-term investments	​	645,343	​	​	​	721,210
Accounts receivable, net	​	1,500,685	​	​	​	1,535,062
Accounts receivable-related parties	​	64,272	​	​	​	73,245
Inventories	​	3,044,887	​	​	​	2,894,632
Other current assets	​	173,179	​	​	​	162,790
Total current assets	​	6,443,576	​	​	​	6,787,826
​	​	​	​	​	​	​
Property, plant and equipment, net	​	7,825,869	​	​	​	6,734,218
​	​	​	​	​	​	​
Intangible assets, net	​	234,806	​	​	​	257,759
Goodwill	​	477,471	​	​	​	477,471
Other assets	​	678,099	​	​	​	651,146
Total assets	$	15,659,821	​	​	$	14,908,420
Liabilities and Equity	​	​	​	​	​	​
Current liabilities	​	​	​	​	​	​
Accounts payable	$	1,074,501	​	​	$	1,078,645
Accounts payable-related parties	​	5,315	​	​	​	9,685
Income taxes payable	​	6,248	​	​	​	5,524
Accrued payroll and benefits	​	334,859	​	​	​	469,143
Accrued expenses	​	389,360	​	​	​	309,312
Current maturities of long-term debt	​	882,013	​	​	​	459,987
Total current liabilities	​	2,692,296	​	​	​	2,332,296
​	​	​	​	​	​	​
Long-term debt	​	2,801,871	​	​	​	2,611,069
Deferred income taxes	​	943,154	​	​	​	944,768
Other liabilities	​	143,200	​	​	​	180,760
Total liabilities	​	6,580,521	​	​	​	6,068,893
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Commitments and contingencies	​	​	​	​	​	​
​	​	​	​	​	​	​
Redeemable noncontrolling interests	​	171,212	​	​	​	171,2

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Forward-Looking Statements

This report contains some predictive statements about future events, including statements related to conditions in domestic or global economies, conditions in steel, aluminum, and recycled metals market places, Steel Dynamics' revenues, costs of purchased materials, future profitability and earnings, and the operation of new, existing or planned facilities. These statements, which we generally precede or accompany by such typical conditional words as "anticipate", "intend", "believe", "estimate", "plan", "seek", "project", or "expect", or by the words "may", "will", or "should", are intended to be made as "forward-looking", subject to many risks and uncertainties, within the safe harbor protections of the Private Securities Litigation Reform Act of 1995. These statements speak only as of this date and are based upon information and assumptions, which we consider reasonable as of this date, concerning our businesses and the environments in which they operate. Such predictive statements are not guarantees of future performance, and we undertake no duty to update or revise any such statements. Some factors that could cause such forward-looking statements to turn out differently than anticipated include: (1) domestic and global economic factors; (2) global steelmaking overcapacity and imports of steel, together with increased scrap prices; (3) pandemics, epidemics, widespread illness or other health issues; (4) the cyclical nature of the steel industry and the industries we serve; (5) volatility and major fluctuations in prices and availability of scrap metal, scrap substitutes and supplies, and our potential inability to pass higher costs on to our customers; (6) cost and availability of electricity, natural gas, oil, and other energy resources are subject to volatile market conditions; (7) increased environmental, greenhouse gas emissions and sustainability considerations from our customers or related regulations; (8) compliance with and changes in environmental and remediation requirements; (9) significant price and other forms of competition from other steel and aluminum producers, scrap processors and alternative materials; (10) availability of an adequate source of supply of scrap for our metals recycling operations; (11) cybersecurity threats and risks to the security of our sensitive data and information technology; (12) the implementation of our growth strategy; (13) litigation and legal compliance; (14) unexpected equipment downtime or shutdowns; (15) governmental agencies may refuse to grant or renew some of our licenses and permits; (16) our senior unsecured credit facility contains, and any future financing agreements may contain, restrictive covenants that may limit our flexibility; and (17) the impacts of impairment charges.

More specifically, we refer you to our more detailed explanation of these and other factors and risks that may cause such predictive statements to turn out differently, as set forth in our most recent Annual Report on Form 10-K under the headings Special Note Regarding Forward-Looking Statements and Risk Factors for the year ended December 31, 2023, in our quarterly reports on Form 10-Q, or in other reports which we from time to time file with the Securities and Exchange Commission. These reports are available publicly on the Securities and Exchange Commission website, www.sec.gov, and on our website, www.steeldynamics.com under “Investors – SEC Filings.”

Description of the Business

We are one of the largest domestic steel producers and metal recyclers in the United States, based on estimated steelmaking and steel coating capacity of approximately 16 million tons and actual metals recycling volumes, with one of the most diversified product and end market portfolios in the domestic steel industry, combined with meaningful downstream steel fabrication operations. The company’s primary sources of revenue are currently from the manufacture and sale of steel products, the processing and sale of recycled ferrous and nonferrous metals, and the fabrication and sale of steel joists and deck products.

Operating Statement Classifications

Net Sales. Net sales from our operations are a factor of volumes shipped, product mix and related pricing. We charge premium prices for certain grades of steel, product dimensions, certain smaller volumes, and for value-added processing or coating of our steel products. Except for the steel fabrication operations, we recognize revenues from sales and the allowance for estimated returns and claims from these sales at the point in time control of the product transfers to the customer, upon shipment or delivery. Our steel fabrication operations recognize revenues over time based on completed fabricated tons to date as a percentage of total tons required for each contract.

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Costs of Goods Sold. Our costs of goods sold represent all direct and indirect costs associated with the manufacture of our products. The principal elements of these costs are scrap and scrap substitutes (which represent the most significant single component of our consolidated costs of goods sold), steel substrate, direct and indirect labor and related benefits, alloys, zinc, transportation and freight, repairs and maintenance, utilities such as electricity and natural gas, and depreciation.

Selling, General and Administrative Expenses. Selling, general and administrative expenses consist of all costs associated with our sales, finance and accounting, and administrative departments, including, among other items, labor and related benefits, and professional services.

Companywide profit sharing and amortization of intangible assets are each separately presented in the statement of income.

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

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

Results Overview

In the third quarter of 2024 we achieved quarterly steel shipments of 3.2 million tons, as steel demand was solid. Our metals recycling operations benefitted from consistent domestic steel industry demand during the third quarter of 2024 compared to the same period in 2023, while our steel fabrication segment achieved strong results on seasonally solid non-residential construction demand.

Consolidated operating income decreased $338.1 million, or 46%, to $395.4 million for the third quarter of 2024, compared to the third quarter of 2023 as metal spread contracted across all operating platforms. Third quarter 2024 net income attributable to Steel Dynamics, Inc. decreased $259.4 million, or 45%, to $317.8 million, compared to the third quarter of 2023, consistent with decreased operating income.

Consolidated operating income decreased $927.1 million, or 35%, to $1.7 billion for the first nine months of 2024, compared to the first nine months of 2023. First nine months 2024 net income attributable to Steel Dynamics, Inc. decreased $696.8 million, or 34%, to $1.3 billion, compared to the first nine months of 2023, consistent with decreased operating income.

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Segment Operating Results 2024 vs. 2023 (dollars in thousands)

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	Three Months Ended September 30,							​	Nine Months Ended September 30,
​	2024		​	% Change	​	​	2023	​	2024		​	% Change	​	2023
Net sales:	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Steel Operations Segment	$	3,024,008	​	(8)%	​	$	3,293,356	​	$	9,786,498	​	(3)%	​	$	10,060,497
Metals Recycling Operations Segment	​	1,092,562	​	4%	​	​	1,052,305	​	​	3,358,809	​	(1)%	​	​	3,382,357
Steel Fabrication Operations Segment	​	449,803	​	(29)%	​	​	633,207	​	​	1,375,302	​	(40)%	​	​	2,281,609
Aluminum Operations Segment	​	4,169	​	-	​	​	-	​	​	6,034	​	-	​	​	-
Other	​	411,733	​	65%	​	​	249,118	​	​	1,163,985	​	35%	​	​	862,160
​	​	4,982,275	​	​	​	​	5,227,986	​	​	15,690,628	​	​	​	​	16,586,623
Intra-company	​	(640,660)	​	​	​	​	(640,929)	​	​	(2,022,376)	​	​	​	​	(2,024,730)
​	$	4,341,615	​	(5)%	​	$	4,587,057	​	$	13,668,252	​	(6)%	​	$	14,561,893
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Operating income (loss):	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Steel Operations Segment	$	301,254	​	(37)%	​	$	478,740	​	$	1,410,805	​	(7)%	​	$	1,520,367
Metals Recycling Operations Segment	​	7,709	​	(45)%	​	​	13,981	​	​	54,662	​	(37)%	​	​	86,674
Steel Fabrication Operations Segment	​	165,592	​	(50)%	​	​	330,020	​	​	524,672	​	(61)%	​	​	1,343,372
Aluminum Operations Segment	​	(23,593)	​	(229)%	​	​	(7,172)	​	​	(56,372)	​	(333)%	​	​	(13,004)
Other	​	(60,154)	​	33%	​	​	(90,441)	​	​	(231,961)	​	25%	​	​	(308,077)
​	​	390,808	​	​	​	​	725,128	​	​	1,701,806	​	​	​	​	2,629,332
Intra-company	​	4,629	​	​	​	​	8,422	​	​	3,729	​	​	​	​	3,313
​	$	395,437	​	(46)%	​	$	733,550	​	$	1,705,535	​	(35)%	​	$	2,632,645

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Steel Operations Segment

Steel operations include our electric arc furnace (EAF) steel mills, including Butler Flat Roll Division, Columbus Flat Roll Division, Southwest-Sinton Flat Roll Division, Structural and Rail Division, Engineered Bar Products Division, Roanoke Bar Division, Steel of West Virginia, steel coating and processing operations at The Techs, Heartland Flat Roll Division, United Steel Supply (USS), Vulcan Threaded Products, Inc., warehouse operations in Mexico, and SDI Biocarbon Solutions, LLC, a joint venture to construct and operate a biocarbon production facility. Steel operations accounted for 67% and 70% of our consolidated net sales during the three-month periods ended September 30, 2024 and 2023, respectively, and 69% and 67% during the nine-month periods ended September 30, 2024 and 2023, respectively.

Steel Operations Segment Shipments (tons):

​	​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​	​
​	Three Months Ended September 30,					​	Nine Months Ended September 30,
​	2024	​	% Change	​	2023	​	2024	​	% Change	​	2023
​	​	​	​	​	​	​	​	​	​	​	​
Total shipments	3,181,377	​	1%	​	3,147,702	​	9,640,171	​	(1)%	​	9,758,016
Intra-segment shipments	(320,674)	​	​	​	(372,377)	​	(1,001,795)	​	​	​	(1,150,423)
Steel Operations Segment shipments	2,860,703	​	3%	​	2,775,325	​	8,638,376	​	0%	​	8,607,593
​	​	​	​	​	​	​	​	​	​	​	​
External shipments	2,754,853	​	3%	​	2,676,068	​	8,311,539	​	0%	​	8,302,311

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Steel Operations Segment Results 2024 vs. 2023

During the third quarter of 2024, our steel operations achieved shipments of 3.2 million tons (2.9 million excluding intra-segment). Despite stable steel demand during the quarter, we experienced lower realized average selling prices, primarily for flat rolled products as generally 80 percent of this business is contractually based and tied to lagging pricing indices. Third quarter 2024 total steel segment average selling prices decreased 11%, or $130 per ton, compared to the third quarter of 2023. Steel operations segment shipments increased 3% in the third quarter 2024, as compared to the third quarter of 2023. Net sales for the steel operations in the third quarter 2024 decreased 8% compared to the same period in 2023, due to the decrease in average steel selling prices. Net sales for the steel operations decreased 3% in the first nine months of 2024 when compared to the same period in 2023.

Metallic raw materials used in our electric arc furnaces represent our single most significant steel manufacturing cost, generally comprising approximately 55% to 65% of our steel mill operations’ manufacturing costs. Our metallic raw material cost per net ton consumed in our steel operations decreased $38 per ton, or 9%, in the third quarter of 2024, compared to the same period in 2023, consistent with overall decreased domestic ferrous scrap pricing noted below in the Metals Recycling Operations segment discussion. In the first nine months of 2024, our metallic raw material cost per ton decreased $30, or 7%, compared to the same period in 2023.

In the third quarter of 2024, as a result of average selling prices decreasing more than scrap costs, metal spread (which we define as the difference between average steel mill selling prices and the cost of ferrous scrap consumed in our steel mills) decreased 12% compared to the third quarter of 2023. As a result of this metal spread compression, operating income for the steel operations decreased 37%, to $301.3 million, in the third quarter of 2024, compared to the same period in 2023. First nine months 2024 operating income decreased 7%, to $1.4 billion, compared to the first nine months of 2023 due primarily to a 1% decrease in metal spread, as scrap costs decreased more than selling prices.

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Metals Recycling Operations Segment

Metals recycling operations include our OmniSource ferrous and nonferrous processing, transportation, marketing, brokerage, and scrap management services primarily throughout the United States and in Central and Northern Mexico. Our steel mills utilize a large portion of the ferrous scrap sold by our metals recycling operations as raw material in our steelmaking operations, and the remainder is sold to other consumers, such as other steel manufacturers and foundries. In the third quarters of 2024 and 2023, 61% and 62%, respectively, of metals recycling operations ferrous scrap was sold to our own steel mills, while our steel mill utilization was 80% in the third quarters of 2024 and 2023. Metals recycling operations accounted for 13% and 11% of our consolidated net sales during the three-month periods ended September 30, 2024 and 2023, respectively, and 13% and 12% during the nine-month periods ended September 30, 2024 and 2023.

Metals Recycling Operations Segment Shipments:

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​	​	​	​	​	​	​	​	​	​	​	​
​	Three Months Ended September 30,					​	Nine Months Ended September 30,
​	2024	​	% Change	​	2023	​	2024	​	% Change	​	2023
Ferrous metal (gross tons)	​	​	​	​	​	​	​	​	​	​	​
Total	1,459,206	​	1%	​	1,442,964	​	4,420,054	​	0%	​	4,415,949
Inter-company	(922,124)	​	​	​	(895,318)	​	(2,754,879)	​	​	​	(2,722,921)
External shipments	537,082	​	(2)%	​	547,646	​	1,665,175	​	(2)%	​	1,693,028
​	​	​	​	​	​	​	​	​	​	​	​
Nonferrous metals (thousands of pounds)	​	​	​	​	​	​	​	​	​	​	​
Total	293,470	​	5%	​	279,877	​	886,923	​	5%	​	845,477
Inter-company	(42,432)	​	​	​	(43,043)	​	(121,576)	​	​	​	(123,552)
External shipments	251,038	​	6%	​	236,834	​	765,347	​	6%	​	721,925

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Metals Recycling Operations Segment Results 2024 vs. 2023

During the third quarter of 2024, our metals recycling operations were negatively impacted by declining nonferrous metal spreads (primarily copper), with ferrous scrap shipments that remained flat compared to the same period in 2023 and nonferrous shipments increased 5%. Ferrous scrap average selling prices decreased 5% during the third quarter of 2024 compared to the same period in 2023, while nonferrous scrap prices increased 10%, resulting in a 4% increase in segment net sales. Ferrous metal spreads (which we define as the difference between average selling prices and the cost of purchased scrap) increased 8% during the third quarter of 2024 compared to the same period in 2023, and nonferrous metal spreads decreased 22%. As a result of the decreased nonferrous metals spreads, metals recycling operations operating income decreased 45% to $7.7 million in the third quarter of 2024 compared to the third quarter of 2023.

Net sales for our metals recycling operations in the first nine months of 2024 decreased 1% compared to the same period in 2023. Ferrous scrap average selling prices declined 6% during the first nine months of 2024 compared to the same period in 2023, while nonferrous average selling prices increased 3%. Ferrous shipments were flat and nonferrous shipments increased 5% in the first nine months of 2024 compared to the first nine months of 2023. Ferrous metal spreads were flat, while nonferrous metal spreads decreased 16% in the first nine months of 2024 compared to the first nine months of 2023. Metals recycling operations operating income in the first nine months of 2024 of $54.7 million decreased 37% from the first nine months of 2023 due to the decreased nonferrous metal spreads.

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Steel Fabrication Operations Segment

Steel fabrication operations include the company’s New Millennium Building Systems’ joist and deck plants located throughout the United States, and in Northern Mexico. Revenues from these plants are generated from the fabrication of trusses, girders, steel joists and steel deck used within the non-residential construction industry. Steel fabrication operations accounted for 10% and 14% of our consolidated net sales during the three-month periods ended September 30, 2024 and 2023, respectively, and 10% and 15% during the nine-month periods ended September 30, 2024 and 2023, respectively.

Steel Fabrication Operations Segment Results 2024 vs. 2023

Net sales for the steel fabrication operations decreased 29% during the third quarter of 2024 compared to the same period in 2023, as average selling prices decreased $1,080 per ton, or 28%, and volume decreased 2% from the third quarter of 2023. While demand remained at historically strong levels, third quarter 2024 was impacted by lower shipments and continued falling selling prices, as we continue to move back to pre-pandemic pricing levels. Our steel fabrication operations continue to benefit from the solid non-residential construction market, as evidenced by an historically solid order backlog that extends through the first quarter 2025. The continued onshoring of manufacturing, coupled with interest rate declines and the U.S. infrastructure program, supports consistent strong demand.

The purchase of various steel products is the largest single cost of production for our steel fabrication operations, historically representing approximately two-thirds of the total cost of manufacturing. The average cost per ton of steel consumed decreased 9% in the third quarter of 2024 compared to the same period in 2023. As a result of decreased selling prices per ton, metal spread (which we define as the difference between average selling prices and the cost of purchased steel) contracted 36% in the third quarter of 2024 compared to the same period in 2023. This metal spread compression coupled with decreased volume resulted in operating income decreasing 50% to $165.6 million in the third quarter 2024, compared to $330.0 million in the same period in 2023. For the first nine months of 2024, operating income decreased 61% to $524.7 million compared to the first nine months of 2023, due to a 44% decrease in metal spread.

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Aluminum Operations Segment

Aluminum operations include the recycled aluminum flat rolled products mill being constructed in Columbus, Mississippi, and two satellite recycled aluminum slab centers in the southwest United States (US) and central Mexico. The flat rolled products mill is a joint venture concurrently formed with Unity Aluminum, Inc. of which SDI has a 94.4% equity interest. Construction is progressing on the flat rolled products mill and the recycled aluminum slab centers with the flat rolled mill operations expected to begin mid-2025 and operations at the Mexico and US recycled slab centers in 2025. The results of this segment currently consist of construction and start-up costs recorded in selling, general and administrative expenses, included within the discussion of consolidated results within the Other Consolidated Results section below. During the first nine months of 2024, there were no additional results of operations, such as those related to shipments or production, to be discussed.

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Other Consolidated Results

Third Quarter Consolidated Results 2024 vs. 2023

Selling, General and Administrative Expenses. Selling, general and administrative expenses of $167.7 million during the third quarter of 2024 increased 15% from $145.9 million during the third quarter of 2023 primarily due to an increase in payroll and benefits expense related to the growth of the aluminum operations segment during 2024. Selling, general and administrative expenses represented 3.9% and 3.2% of net sales during third quarter 2024 and 2023, respectively.

Profit sharing expense during the third quarter of 2024 of $34.4 million decreased 47% from the $64.4 million during the same period in 2023, consistent with decreased pretax earnings. This decrease in profit sharing expense was the primary driver of decreased operating loss for other operations of 33% in the third quarter of 2024 compared to the same period in 2023. Profit sharing expense for eligible employees is 8% of consolidated pretax income excluding noncontrolling interests and other items.

Interest Expense, net of Capitalized Interest. During the third quarter of 2024, interest expense of $17.1 million, was comparable to the $18.4 million during the third quarter of 2023.

Other (Income) Expense, net. Net other income was $29.7 million in the third quarter of 2024, compared to $39.5 million in the third quarter of 2023, due primarily to the impact of decreased interest income and increased foreign currency exchange rate losses in the third quarter 2024 compared to the same period in 2023.

Income Tax Expense. Third quarter 2024 income tax expense of $87.1 million, at an effective income tax rate of 21.4%, decreased 50% compared to the $174.8 million, at an effective income tax rate of 23.2%, during the third quarter of 2023, consistent with decreased pretax earnings. Our effective tax rate decrease was due primarily to certain discrete tax adjustments during the third quarter of 2024.

First Nine Months Consolidated Results 2024 vs. 2023

Selling, General and Administrative Expenses. Selling, general and administrative expenses of $487.2 million during the first nine months of 2024 increased 13% from $431.4 million during the first nine months of 2023 primarily due to an increase in payroll and benefits expense related to the growth of the aluminum operations segment during 2024. Selling, general and administrative expenses represented 3.6% and 3.0% of net sales during the first nine months of 2024 and 2023, respectively.

Profit sharing expense during the first nine months of 2024 of $145.1 million decreased 35% from the $225.0 million during the same period in 2023, consistent with decreased pretax earnings. This decrease in profit sharing expense was the primary driver of decreased operating loss for other operations of 25% in the first nine months of 2024 compared to the same period in 2023.

Interest Expense, net of Capitalized Interest. During the first nine months of 2024, interest expense of $41.8 million decreased 32% from $61.7 million during the first nine months of 2023. The lower interest expense in the first nine months of 2024 compared to the same period in 2023 is due to higher capitalized interest in 2024 related to construction at our Sinton and Heartland divisions, and within the aluminum operations segment.

Other (Income) Expense, net. Net other income was $75.2 million in the first nine months of 2024, compared to $105.7 million in the first nine months of 2023, due primarily to the impact of foreign currency exchange rate losses of $14.5 million in 2024 compared to gains of $7.5 million in 2023.

Income Tax Expense. First nine months 2024 income tax expense of $398.8 million, at an effective income tax rate of 22.9%, decreased 37% compared to the $636.4 million, at an effective income tax rate of 23.8%, during the first nine months of 2023, consistent with decreased pretax earnings. Our effective tax rate decrease was due primarily to certain discrete tax adjustments during the third quarter of 2024.

Liquidity and Capital Resources

Capital Resources and Long-term Debt. Our business is capital intensive and requires substantial expenditures for, among other things, the purchase and maintenance of equipment used in our operations, and to remain in compliance with environmental laws. Our short-term and long-term liquidity needs arise primarily from working capital requirements, capital expenditures, including expansion projects, principal and interest payments related to our outstanding indebtedness, dividends to our shareholders, and potential stock repurchases and acquisitions or investments. We have met and intend to continue to meet these liquidity requirements primarily with available cash and cash provided by operations, long-term borrowings, and we also have availability under our unsecured Revolver. Our liquidity at September 30, 2024, is as follows (in thousands):

​

​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​
​	​	​	Cash and equivalents	​	$	1,015,210	​	​	​
​	​	​	Short-term and other investments	​	​	883,546	​	​	​
​	​	​	Revolver availability	​	​	1,190,709	​	​	​
​	​	​	Total liquidity	​	$	3,089,465	​	​	​

​

Our total outstanding debt of $3.7 billion increased $612.8 million compared to December 31, 2023, due to our issuance of senior unsecured notes in July 2024 as described in Note 3, the proceeds of which may be used for the repayment at or prior to maturity of our 2.800% senior notes due December 2024, working capital, capital expenditures, advances for or investments in the company’s subsidiaries, acquisitions, redemption and repayment of other outstanding indebtedness, and purchases of the company’s common stock. Our total long-term debt to capitalization ratio (representing our long-term debt, including current maturities, divided by the sum of our long-term debt, redeemable noncontrolling interests, and our total stockholders’ equity) was 28.9% and 25.8% at September 30, 2024 and December 31, 2023, respectively.

Our unsecured credit agreement has a senior unsecured revolving credit facility (Facility), which provides a $1.2 billion Revolver and matures in July 2028. Subject to certain conditions, we have the ability to increase the Facility size by $500.0 million. The unsecured Revolver is available to fund working capital, capital expenditures, and other general corporate purposes. The Facility contains financial covenants and other covenants pertaining to our ability to incur indebtedness and permit liens on certain assets. Our ability to borrow funds within the terms of the unsecured Revolver is dependent upon our continued compliance with the financial and other covenants. At September 30, 2024, we had $1.2 billion of availability on the Revolver, $9.3 million of outstanding letters of credit and other obligations which reduce availability, and there were no borrowings outstanding.

The financial covenants under our Facility state that we must maintain an interest coverage ratio of not less than 2.50:1.00. Our interest coverage ratio is calculated by dividing our last-twelve-months (LTM) consolidated Adjusted EBITDA as defined in the Facility (earnings before interest, taxes, depreciation, amortization, and certain other non-cash transactions as defined in the Facility) by our LTM gross interest expense, less amortization of financing fees. In addition, a debt to capitalization ratio of not more than 0.60:1.00 must be maintained. At September 30, 2024, our

interest coverage ratio and debt to capitalization ratio were 25.88:1.00 and 0.29:1.00, respectively. We were, therefore, in compliance with these covenants at September 30, 2024, and we anticipate we will continue to be in compliance during the next twelve months.

Working Capital (representing excess of current assets over current liabilities). We generated cash flow from operations of $1.5 billion in the first nine months of 2024 compared to $2.7 billion in the same 2023 period. Working capital decreased $704.2 million, or 16%, during the first nine months of 2024 to $3.8 billion at September 30, 2024, due to a $385.7 million decrease in cash and equivalents, and a $422.0 million increase in current maturities of long-term debt, as our $400 million 2.400% senior notes due 2025 were recorded as current in June 2024.

Capital Investments. During the first nine months of 2024, we invested $1.4 billion in property, plant and equipment, primarily within our aluminum operations segment and steel operations segment, compared with $1.1 billion invested during the same period in 2023. We are currently executing our plan to invest $2.7 billion in a new state-of-the-art low-carbon recycled aluminum flat rolled products mill with two supporting satellite recycled aluminum slab centers, which are being funded by available cash and cash flow from operations. Related expenditures began in the third quarter of 2022 and are expected to continue through early 2025. Our liquidity of $3.1 billion and anticipated future operating cash flow generation is sufficient to provide for our planned 2024 capital requirements.

Cash Dividends. As a reflection of continued confidence in our current and future cash flow generation capability and financial position, we increased our quarterly cash dividend by 8% to $0.46 per share in the first quarter of 2024 (from $0.425 per share for each quarter in 2023), resulting in declared cash dividends of $214.6 million during the first nine months of 2024, compared to $212.5 million during the same period in 2023. We paid cash dividends of $212.2 million and $201.8 million during the first nine months of 2024 and 2023, respectively. Our board of directors, along with executive management, approves the payment of dividends on a quarterly basis. The determination to pay cash dividends in the future is at the discretion of our board of directors, after taking into account various factors, including our financial condition, results of operations, outstanding indebtedness, current and anticipated cash needs and growth plans.

Other. Our board of directors has authorized share repurchase programs during prior years, the most recent of which occurred in November 2023 for a program of up to $1.5 billion of the company’s common stock. Under the share repurchase programs, purchases take place as and when we determine in open market or private transactions made based upon the market price of our common stock, the nature of other investment opportunities or growth projects, our cash flows from operations, and general economic conditions. The share repurchase programs do not require us to acquire any specific number of shares, and may be modified, suspended, extended, or terminated by us at any time. The share repurchase programs do not have an expiration date. There were $917.0 million and $1.1 billion of share repurchases during the first nine months of 2024 and 2023, respectively. As of September 30, 2024, we had $486.4 million remaining available to purchase under the November 2023 share repurchase program.

Our ability to meet our debt service obligations and reduce our total debt will depend upon our future performance which, in turn, will depend upon general economic, financial, and business conditions, along with competition, legislation and regulatory factors that are largely beyond our control. In addition, we cannot assure that our operating results, cash flows, access to credit markets and capital resources will be sufficient for repayment of our indebtedness in the future. We believe that based upon current levels of operations and anticipated growth, cash flows from operations, together with other available sources of funds, including borrowings under our Facility, if necessary, will be adequate for the next twelve months for making required payments of principal and interest on our indebtedness, funding working capital requirements, and funding anticipated capital expenditures.

Commodity Risk

In the normal course of business, we are exposed to the market risk and price fluctuations related to the sale of our products and to the purchase of raw materials used in our operations, such as metallic raw materials, electricity, water, natural gas and its transportation services, fuel, air products, zinc, and electrodes. Our risk strategy associated with product sales has generally been to obtain competitive prices for our products and to allow operating results to reflect market price movements dictated by supply and demand.

Our risk strategy associated with the purchase of raw materials utilized within our operations has generally been to make some commitments with suppliers relating to future expected requirements for some commodities such as electricity, water, natural gas and its transportation services, fuel, air products, zinc, and electrodes. Certain of these commitments contain provisions which require us to “take or pay” for specified quantities without regard to actual usage for periods of generally up to 5 years for physical commodity requirements and commodity transportation requirements, with some extending beyond, and for up to 16 years for air products and 28 years for water products. We utilized such “take or pay” requirements during the past three years under these contracts. We believe that production requirements will be such that consumption of the products or services purchased under these commitments will occur in the normal production process.

In our metals recycling and steel operations, we have certain fixed price contracts with various customers and suppliers for future delivery of nonferrous and ferrous metals. Our risk strategy has been to enter into base metal financial contracts with the goal to protect the profit margin, within certain parameters, that was contemplated when we entered into the transaction with the customer or vendor. As of September 30, 2024, substantially all of these financial contracts have a settlement date within the next twelve months. We believe the customer contracts associated with the financial contracts will be fully consummated.

	(a)	Evaluation of Disclosure Controls and Procedures

As required, we carried out an evaluation, under the supervision and with the participation of our principal executive officer and principal financial officer, of the effectiveness of our disclosure controls and procedures, as defined in rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act). Based on this evaluation, our principal executive officer and principal financial officer concluded that, as of September 30, 2024, the end of the period covered by this quarterly report, our disclosure controls and procedures were designed to provide and were effective to provide reasonable assurance that the information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the applicable rules and forms, and that it is accumulated and communicated to our management, including our principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

	(b)	Changes in Internal Controls Over Financial Reporting

No changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the fiscal quarter ended September 30, 2024, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

​

PART II OTHER INFORMATION

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

We may also be involved from time to time in various governmental investigations, regulatory proceedings or judicial actions seeking penalties, injunctive relief, and/or remediation under federal, state and local environmental laws and regulations. The United States EPA has conducted such investigations and proceedings involving us, in some instances along with state environmental regulators, under various environmental laws, including RCRA, CERCLA, the Clean Water Act and the Clean Air Act. Some of these matters have resulted in fines or penalties, exclusive of interest and costs, which did not exceed $1 million in aggregate, as of September 30, 2024.

No material changes have occurred to the indicated risk factors as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023.

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

(c) Issuer Purchases of Equity Securities

​

We purchased the following equity securities registered by us pursuant to Section 12 of the Exchange Act during the three-month period ended September 30, 2024.

​	​	​	​	​	​	​	​	​	​	​	​	​	​
Period	​	Total Number of Shares Purchased	​	Average Price Paid per Share			​	Total Number of Shares Purchased as Part of Publicly Announced Programs (1)		​	Maximum Dollar Value of Shares That May Yet be Purchased Under the Programs**(in thousands)** (1)
Quarter ended September 30, 2024			​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​
July 1 - 31	​	964,893	​	​	$	129.59	​	​	964,893	​	​	$	669,430
August 1 - 31	​	1,256,867	​	​	​	120.56	​	​	1,256,867	​	​	​	519,431
September 1 - 30	​	297,003	​	​	​	112.24	​	​	297,003	​	​	​	486,432
​	​	2,518,763	​	​	​	​	​	​	2,518,763	​	​	​	​

(1)	In November 2023, our board of directors authorized a share repurchase program of up to $1.5 billion of the company’s common stock.

​

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

None.

During the three-month period ended September 30, 2024, none of the Company’s directors or executive officers adopted, modified or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement” as such terms are defined under Item 408 of Regulation S-K.

​

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

​

EXHIBIT INDEX

​	​
Articles of Incorporation
​	​
3.1	Amended and Restated Articles of Incorporation of Steel Dynamics, Inc., reflecting all amendments thereto through May 11, 2023, incorporated herein by reference from Exhibit 3.1 to our Form 10-Q filed August 8, 2023.
​	​
3.2	Amended and Restated Bylaws of Steel Dynamics, Inc., reflecting all amendments thereto through January 31, 2024, incorporated herein by reference from Exhibit 3.2 to our Form 10-K filed February 29, 2024.
​
​
Instruments Defining the Rights of Security Holders, Including Indentures
​	​
4.42	First Supplemental Indenture, relating to our issuance of $600 million 5.375% Notes due 2034, dated as of July 3, 2024, between Steel Dynamics, Inc. and U.S. Bank Trust Company, National Association, as Trustee, incorporated herein by reference from Exhibit 4.2 to our Form 8-K filed July 5, 2024.
​	​
4.43	Form of 5.375% Notes due 2034 (included in Exhibit 4.42), incorporated herein by reference from Exhibit 4.3 to our Form 8-K filed July 5, 2024.
​ Executive Officer Certifications
​
31.1*	Certification of Chief Executive Officer required by Item 307 of Regulation S-K as promulgated by the Securities and Exchange Commission and pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
​	​
31.2*	Certification of Chief Financial Officer required by Item 307 of Regulation S-K as promulgated by the Securities and Exchange Commission and pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
​	​
32.1*	Certification of Chief Executive Officer Pursuant to 18 U.S.C Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
​	​
32.2*	Certification of Chief Financial Officer Pursuant to 18 U.S.C Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
​
XBRL Documents
​	​
101.INS*	XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
​	​
101.SCH*	Inline XBRL Taxonomy Extension Schema Document
​	​
101.CAL*	Inline XBRL Taxonomy Extension Calculation Document
​	​
101.DEF*	Inline XBRL Taxonomy Definition Document
​	​
101.LAB*	Inline XBRL Taxonomy Extension Label Document
​	​
101.PRE*	Inline XBRL Taxonomy Presentation Document
​	​
104*	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

​

	*	Filed concurrently herewith

SIGNATURE

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

November 8, 2024	​	​
​		​
​	​	STEEL DYNAMICS, INC.
​	​	​
​	By:	/s/ Theresa E. Wagler
​	​	Theresa E. Wagler
​	​	Executive Vice President and Chief Financial Officer
​	​	(Principal Financial Officer and Principal Accounting Officer)

​

​

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