07 STLD 10 K Extracts (slides) PDF

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Financial Modelling lecture pack - from Wall Street Bet cost...

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TableofContents 

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Operatingdata: Netsales Grossprofit Operatingincome(loss) Assetimpairmentchargesreflectedinoperating income(loss) Netincome(loss) Netincome(loss)attributabletoSteel Dynamics,Inc. Basicearnings(loss)pershare Weightedaveragecommonsharesoutstanding

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Dilutedearnings(loss)pershare Weightedaveragecommonsharesandshare equivalentsoutstanding Dividendsdeclaredpershare Otherfinancialdata: Capitalexpenditures Ratioofearnings(losses)tofixedcharges Ratioofearnings,excludingassetimpairment charges,tofixedcharges Otherdata: Shipments:



YearsEndedDecember31, 2014 2013 2012     (dollarsandsharesinthousands,exceptpersharedata)

2015

 $  

 7,594,411 731,718 (72,784)

(428,500)  (145,170) 

   $  

(130,311)  (.54) $ 242,017 

 $

(0.54) $

 $  $

242,017 0.55  114,501 Note—prior   page

 

        $ 8,755,952 $ 7,372,924 $ 7,290,234 $ 7,997,500  966,211  719,144  719,898  931,518  320,320  386,525  391,165  584,820

   

   

 2011

 $  $ 

(260,000)  91,650 

(308)  163,516 

(8,250)  142,281 

— 265,692

157,024  0.68 $ 232,547 

189,314  0.86 $ 220,916 

163,551  0.75 $ 219,159 

278,120 1.27 218,471

0.67 $

0.83 $

0.73 $

1.22

236,624  0.40 $   223,525 $

235,992 0.40  167,007

2.31x 

3.40x

242,078 0.46  111,785

 $  $

238,996 0.44  186,843

 $  $

2.21x 

3.00x  3.01x 

 

2.20x 

4.07x 

     

     

     

            5,832,776  5,842,694

   

   

   

       5,647,058  5,879,729

 

 

 

  1,051,333  1,066,648

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 

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Steeloperationssegmentproduction(nettons)

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Sharesoutstanding(inthousands) Numberofemployees

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243,090  7,510 

Balancesheetdata: Cashandequivalents,andshort-termcommercial paper Operationalworkingcapital Netproperty,plantandequipment Totalassets Long-termdebt(includingcurrentmaturities) Equity

 

 

     

$     

2.36x 

295,161 

3.40x

217,838

8,528,885  7,376,657  6,266,507  5,884,775  5,931,833

727,032 $ 1,246,408  2,951,210  6,202,082  2,594,656  2,545,111  36

241,449  7,780    361,363 $ 1,723,208  3,123,906  7,233,159  2,981,849  2,795,527 

222,867  6,870    395,156 $ 1,405,736  2,226,134  5,888,534  2,081,110  2,495,855 

219,523  6,670    407,437 $ 1,281,765  2,231,198  5,763,561  2,173,832  2,377,842 

218,874 6,530  475,591 1,276,916 2,193,745 5,929,604 2,355,819 2,299,900

TableofContents SegmentOperatingResults(dollarsinthousands ) 

YearsEndedDecember31,





2015



Netsales

Total Consolidated Operatingincome(loss)

Total Consolidated

               

      $       $



% Change

     8,748,437

2014



  (7)%  (34)%  7%  (33)%      7,594,411 (13)%      (41)%  (1,823)%   123%  67%  (77,758)      (72,784) (123)% 



 % Change



2013





      24%     8%      44%      57%     10,461,097    8,698,447     $ 8,755,952 19%  $ 7,372,924        32%     (38)%      641%     (150)%    315,968    387,138      $ 320,320 (17)%  $ 386,525 

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 

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 

(1)

Metalsrecyclingoperationssegmentoperatinglossof$448.1millionin2015includes$428.5millionofpretaxnon-cashgoodwilland otherrelatedassetimpairmentcharges.

(2)

Otheroperationsconsistsofsubsidiaryoperationsthatarebelowthequantitativethresholdsrequiredforreportablesegmentsandprimari consistofourMinnesotaironmakingoperationsthatwereindefinitelyidledinMay2015,andseveralsmallerjointventures.Alsoinclude in"Other"arecertainunallocatedcorporateaccounts,suchasthecompany'sseniorsecuredcreditfacility,seniornotes,certainother investmentsandcertainprofitsharingexpenses.Operatinglossof$445.5millionin2014includes$260.0millionofpretaxnon-cashasse impairmentchargesrelatedtoourMinnesotaironmakingoperations. SteelOperationsSegment

SteelOperationsSegment.Steeloperationsconsistofoursixelectricarcfurnacesteelmills,producingsteelfromferrousscrapandscrapsubstitutes, utilizingcontinuouscasting,automatedrollingmills,andtendownstreamcoatinglines,andIDI,ourliquidpigproductionfacilitythatsuppliessolelyourButler FlatRollDivisionmill.Oursteeloperationsselldirectlytoendusersandservicecenters(seeItem1tothisForm10-K).Theseproductsareusedinnumerous industrysectors,includingtheautomotive,construction,manufacturing,transportation,heavyandagricultureequipment,andpipeandtube(includingOCTG) markets.During2015,2014,and2013,oursteeloperationsaccountedfor69%,63%,and61%respectively,ofourconsolidatednetsales. SheetProducts.OursheetproductsoperationsconsistofButlerandColumbus(acquiredSeptember16,2014)FlatRollDivisions,andourdownstream coatinglines,includingTheTechs.Theseoperationssellabroadrangeofsheetsteelproducts,suchashotroll,coldrollandcoatedsteelproducts, includingawidevarietyofspecialtyproducts,suchaslightgaugehotrolland 41

TableofContents ITEM7A.QUANTITATIVEANDQUALITATIVEDISCLOSURESABOUTMARKETRISK MarketRisk Inthenormalcourseofbusiness,weareexposedtointerestratechanges.Ourobjectivesinmanagingexposuretointerestratechangesaretolimittheimpa oftheseratechangesonearningsandcashflowsandtoloweroverallborrowingcosts.Toachievetheseobjectives,weprimarilyuseinterestrateswapstomanag netexposuretointerestratechangesrelatedtoourportfolioofborrowings. Thefollowingtablerepresentstheprincipalcashrepaymentsandrelatedweighted-averageinterestratesbymaturitydateforourlong-termdebtasof December31,2015(inthousands): 

 

 



Expectedmaturitydate: 2016 2017 2018 2019 2020 Thereafter

InterestRateRisk  FixedRate VariableRate   Average Average Rate Rate Principal   Principal  

     $ 3,593    3,296    3,102    403,291    3,491    1,973,274       

  4.9%$ 6.1  5.9  6.1  6.0  5.5  5.6%$  $

 13,087 12,500 12,500 200,000 — — 238,087 238,087

        

 2.0% 1.9 1.9 1.9   1.9% 

CommodityRisk Inthenormalcourseofbusinessweareexposedtothemarketriskandpricefluctuationsrelatedtothesaleofourproductsandtothepurchaseofraw materialsusedinouroperations,suchasmetallicrawmaterials,electricity,naturalgasanditstransportationservices,fuel,airproducts,andzinc.Ourriskstrate 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,naturalgasanditstransportationservices,fuel,airproducts,andzinc.Certain thesecommitmentscontainprovisionswhichrequireusto"takeorpay"forspecifiedquantitieswithoutregardtoactualusageforperiodsofupto24monthsfor physicalcommodityrequirements,forupto4yearsforcommoditytransportationrequirements,andforupto13yearsforairproducts.Ourcommitmentsforthe arrangementswith"takeorpay"orothersimilarcommitmentprovisionsfortheyearsendingDecember31areasfollows(inthousands): 2016 2017 2018 2019 2020 Thereafter

       57

$ 224,850  32,120  18,636  20,059  17,099  66,600 $ 379,364

TableofContents

STEELDYNAMICS,INC. CONSOLIDATEDBALANCESHEETS (inthousands,exceptsharedata)  

 

Assets Currentassets Cashandequivalents Accountsreceivable,netofrelatedallowancesof$9,765and$12,646asofDecember31,2015,and2014,respectively Accountsreceivable-relatedparties Inventories Othercurrentassets Totalcurrentassets Property,plantandequipment,net Restrictedcash Intangibleassets,netofaccumulatedamortizationof$265,940and$241,731asofDecember31,2015,and2014,respectively Goodwill Otherassets Totalassets LiabilitiesandEquity Currentliabilities Accountspayable Accountspayable-relatedparties Incometaxespayable Accruedpayrollandbenefits Accruedinterest Accruedexpenses Currentmaturitiesoflong-termdebt Totalcurrentliabilities Long-termdebt Deferredincometaxes Otherliabilities Commitmentsandcontingencies Redeemablenoncontrollinginterests Equity Commonstockvoting,$.0025parvalue;900,000,000sharesauthorized;262,937,139and261,420,126sharesissued;and 243,089,514and241,449,423sharesoutstanding,asofDecember31,2015,and2014,respectively Treasurystock,atcost;19,847,625and19,970,703shares,asofDecember31,2015,and2014,respectively Additionalpaid-incapital Retainedearnings TotalSteelDynamics,Inc.equity Noncontrollinginterests Totalequity Totalliabilitiesandequity

 Seenotestoconsolidatedfinancialstatements. 63

     $                    $      $                          

     

December31,  2015 2014         727,032 $ 361,363  579,333  859,835 34,272  42,990 1,149,390  1,618,419 47,914  55,655 2,537,941  2,938,262 2,951,210  3,123,906 19,565  19,312  278,960  370,669 397,470  745,158 16,936  35,852 6,202,082 $ 7,233,159       276,725 $ 489,791 6,630  21,265 2,023  6,086 94,906  128,968 38,502  50,405 99,824  107,607 16,680  46,460 535,290  850,582 2,577,976  2,935,389 400,770  506,482 16,595  18,839    126,340  126,340   

  638  635   (396,455)  (398,898)  1,110,253  1,083,435  1,965,291  2,227,843  2,679,727  2,913,015  (134,616)  (117,488)  2,545,111  2,795,527 $ 6,202,082 $ 7,233,159

TableofContents

STEELDYNAMICS,INC. CONSOLIDATEDSTATEMENTSOFOPERATIONS (inthousands,exceptpersharedata) 

 



2015

YearsEndedDecember31, 2014  

Netsales Unrelatedparties Relatedparties Totalnetsales

   

Costsofgoodssold Grossprofit

  6,862,693  7,789,741    731,718  966,211 

Selling,generalandadministrativeexpenses Profitsharing Amortizationofintangibleassets Assetimpairmentcharges Operatingincome(loss)

    

Interestexpense,netofcapitalizedinterest Other(income)expense,net Income(loss)beforeincometaxes

     

Incometaxexpense(benefit) Netincome(loss) Netlossattributabletononcontrollinginterests Netincome(loss)attributabletoSteelDynamics,Inc. Basicearnings(loss)pershareattributabletoSteelDynamics,Inc. stockholders Weightedaveragecommonsharesoutstanding Dilutedearnings(loss)pershareattributabletoSteelDynamics,Inc. stockholders,includingtheeffectofassumedconversionswhendilutive Weightedaveragecommonsharesandshareequivalentsoutstanding Dividendsdeclaredpershare

 

      $ 7,407,233 $ 8,481,567 $ 7,087,101  187,178  274,385  285,823  7,594,411  8,755,952  7,372,924

    

327,626 23,064 25,312 428,500 (72,784)

272,777 27,764 31,770 308 386,525

153,950  15,383  (242,117) 

137,263  18,254  164,803 

127,728 (4,033) 262,830

   

(96,947)  (145,170) 

73,153  91,650 

99,314 163,516

   $

14,859  (130,311) $

65,374  157,024 $

25,798 189,314

 $  

(0.54) $ 242,017 

0.68 $ 232,547 

0.86 220,916

 $    $

(0.54) $   0.55 $

0.67 $ 242,078  0.46 $

0.83 238,996 0.44

Seenotestoconsolidatedfinancialstatements.

    

316,214 42,126 27,551 260,000 320,320

6,653,780 719,144

    



64

2013

TableofContents

STEELDYNAMICS,INC. CONSOLIDATEDSTATEMENTSOFCASHFLOWS (inthousands) 

 



2015

   $

Operatingactivities: Netincome(loss)

Adjustmentstoreconcilenetincome(loss)tonetcashprovidedbyoperating activities:   Impairmentcharges  Equity-basedcompensation   Lossondisposalofassets  Changesincertainassetsandliabilities:        Netcashprovidedbyoperatingactivities  Investingactivities: Proceedsfrommaturitiesofshort-termcommercialpaper,net Acquisitionofbusiness,netofcashacquired Otherinvestingactivities Netcashusedininvestingactivities Financingactivities: Issuanceofcurrentandlong-termdebt Repaymentsofcurrentandlong-termdebt Proceedsfromexerciseofstockoptions,includingrelatedtaxeffect Contributionsfromnoncontrollinginvestors Distributionstononcontrollinginvestors Dividendspaid Debtissuancecosts Netcashprovidedby(usedin)financingactivities Increase(decrease)incashandequivalents Cashandequivalentsatbeginningofyear Cashandequivalentsatendofyear

     

 

2013

  (145,170) $

  91,650 $

 163,516

       428,500   22,604     9,763                      1,038,483 

    260,000  14,016   5,561             617,572 



     

 308 15,504  1,082 

   312,175

  — (45,000) 9,874 (149,627)

      —  31,520  (1,669,449)  —  33,967  2,478  (1,747,267)  (152,845)

         207,930  1,822,096  423,965   (612,534)  (635,578)  (517,978)   10,781  32,307  37,508   —  5,418  17,860   (1,187)  (743)  (439)   (127,569)  (105,379)  (94,812)   (608)  (22,219)  (6,195)   (523,187)  1,095,902  (140,091)   365,669  (33,793)  19,239   361,363  395,156  375,917  $ 727,032 $ 361,363 $ 395,156

 Seenotestoconsolidatedfinancialstatements. 66

YearsEndedDecember31, 2014  

TableofContents ContractualObligationsandOtherLong-TermLiabilities Wehavethefollowingminimumcommitmentsundercontractualobligations,includingpurchaseobligations,asdefinedbytheSecuritiesandExchange Commission.A"purchaseobligation"isdefinedasanagreementtopurchasegoodsorservicesthatisenforceableandlegallybindingandthatspecifiesall significantterms,includingfixedorminimumquantitiestobepurchased;fixed,minimumorvariablepriceprovisions;andtheapproximatetimingofthe transaction.Otherlong-termliabilitiesaredefinedaslong-termliabilitiesthatarereflectedonourbalancesheetundergenerallyacceptedaccountingprinciples. Basedonthisdefinition,thefollowingtableincludesonlythosecontractswhichincludefixedorminimumobligations.Itdoesnotincludenormalpurchases,wh aremadeintheordinarycourseofbusiness.Thefollowingtableprovidesaggregatedinformationaboutoutstandingcontractualobligationsandotherlong-term liabilitiesasofDecember31,2015(inthousands): 

 



Long-termdebt(1) Estimatedinterestpaymentsondebt(2) Purchaseobligations(3) Constructioncommitments(4) Leasecommitments Othercommitments(5) Total(6) (1)

      

Total



2016

PaymentsDueByPeriod  2017&2018  2019&2020

$ 2,628,134 $ 16,680 $  878,816  140,902   379,364  224,850   69,638  69,638   49,660  14,699   3,134  575  $ 4,008,746 $ 467,344 $

31,397 281,147 50,756 — 17,043 750 381,093

$      $

 

2021&After



606,782 $ 1,973,275 237,984  218,783 37,158  66,600 —  — 11,232  6,686 600  1,209 893,756 $ 2,266,553

Thelong-termdebtpaymentinformationpresentedaboveassumesthatourtermloanandseniornotesremainoutstandinguntilmaturity. RefertoNote3totheconsolidatedfinancialstatementselsewhereinthisreportforadditionalinformationregardingthesetransactions,a ourlong-termdebt.

(2)

 (3)

Purchaseobligationsincludecommitmentswehaveforthepurchaseofelectricity,naturalgasanditstransportation,fuel,airproducts,an zinc.Thesearrangementshave"takeorpay"orothersimilarcommitmentprovisions.Wehaveutilizedsuch"takeorpay"requirements duringthepastthreeyearsunderthesecontracts,exceptforcertainairproductsatourMinnesotaironmakingoperationswhichwereidled inMay2015.

(4)

Constructioncommitmentsrelatetofirmcontractswehavewithvariousvendorsforthecompletionofcertainconstructionprojectsatou variousdivisionsatDecember31,2015.

(5)

Othercommitmentsprincipallyrelatetocertainpensionanddeferredcompensationplanobligations.

(6)

Weexpecttomakecashoutlaysinthefuturerelatedtoourunrecognizedtaxbenefits;however,duetotheuncertaintyofthetiming,wea unabletomakereasonablyreliableestimatesregardingtheperiodofcashsettlementwiththerespectivetaxingauthorities.Accordingly, unrecognizedtaxbenefitsandrelatedinterestandpenaltiesof$21.2millionasofDecember31,2015,havebeenexcludedfromthe contrac...