2023 Annual Report
1
001
30 Years
of Strategic
Growth
Founded in 1993, Steel Dynamics began as a steel company.
Today, we are a leading lower-carbon emissions metals
solutions company, providing diversified high-quality products
and enhanced supply-chain solutions. We are one of the largest
and most diversified domestic steel producers, steel joist and
deck manufacturers, and metals recyclers in North America,
with best-in-class operating and financial metrics, including
an average three-year return on invested capital of 32%—the
highest among the S&P 500® Index materials companies.
Globally, we have the fifth largest market capitalization in the
steel industry.
Sustainability is a part of our long-term value creation, and we are
committed to our people, our communities, and our environment.
Our unique, entrepreneurial culture and dedicated team have
given rise to industry-first innovations, value-added products,
and supply-chain solutions. We are grateful to our team members
for their commitment to operating safely and creating long-term
value for all those involved with our company.
To our exceptional team, customers, vendors, shareholders,
and communities, thank you for joining us on this incredible
journey. We look forward to another 30 years of creating
possibilities together.
$18.8B
2023 Revenue
$2.5B
2023 Net Income
$3.5B
2023 Operating Cash Flow
Fortune 200 Company
S&P 500® Index Member
Investment Grade Ratings
ONE OF THE
WORLD’S MOST
ADMIRED
COMPANIES
FORTUNE
2023
ONE OF
AMERICA’S MOST
TRUSTED
COMPANIES
NEWSWEEK
2023
ONE OF
AMERICA’S BEST
EMPLOYERS
FOR VETERANS
ONE OF
AMERICA’S BEST
EMPLOYERS
FOR WOMEN
FORBES
2023
FORBES
2023
A Steel Company
Evolved into a
Leading Lower-Carbon
Emissions Metals
Solutions Company.
North America
2023
7
EAF Steel Mills
12.6K
Team Members
16M Tons
Steel Shipping Capacity
▶ Butler Flat Roll Division
Largest Metals Recycler
in North America
2
Indiana
1993
1
EAF Steel Mill
Under Construction
3
Team Members
4th
Largest Steel
Producer in
North America
9
Steel Processing
Operations
7
Steel Fabrication
Operations
15
Flat Roll Steel
Coating Lines
70+
Metals Recycling
Operations
1
Copper Rod and
Wire Operation
Continued Growth
Flat Roll Coating Lines
2023+
+4
+1
+2
+1
Recycled Aluminum Slab Centers
Biocarbon Production Facility
Aluminum Flat Rolled Products Mill
3
“Our People Drive
Our Success.”
Mark D. Millett
Co-Founder, Chairman, and CEO
002
4
A Letter from
Mark D. Millett
Co-Founder, Chairman, and CEO
$2.5B
2023 Net Income
billion. We maintained our positive dividend profile, increasing
the cash dividend 25% per share in the first quarter of 2023,
returning $1.7 billion to our shareholders in the form of both
cash dividends and share repurchases in 2023. We believe we
are uniquely positioned to execute meaningful strategic growth
initiatives, while also continuing to return meaningful capital to
shareholders and maintaining investment grade credit metrics.
On behalf of everyone at Steel Dynamics, I thank our loyal
customers, vendors, communities, and shareholders for their
continued support of our company. In particular, my heartfelt
thanks to our extraordinary team members for their passion,
innovation, and commitment to excellence. The entire Steel
Dynamics team delivered another exceptional performance during
2023. Our strategic growth and market positioning over the last
several years, combined with our superior operating culture, were
fundamental to our achieving numerous significant operational
and financial milestones. Most gratifying was completing our best
safety year, with the lowest recordable incident rate ever. I want
to applaud and congratulate all of our team members for the
monumental effort put forth to achieve this.
In 2023, we achieved revenues of $18.8 billion, representing
our second-best year, and operating income of $3.2 billion,
with adjusted EBITDA of $3.7 billion.
We generated cash flow from operations of $3.5 billion during
2023, ending the year with strong liquidity of $3.5 billion. We
made significant investments in our operations and our new
aluminum growth platform with capital expenditures of $1.7
Strong Operating Income
$5,092
$4,301
$3,151
$3,151
$987
$847
2019
2020
2021
2022
2023
Millions of Dollars
5
002
Our Resources
Our commitment to all aspects of sustainability is embedded in
our founding principles—valuing our people, our partners, our
communities, and our environment. These strategic principles
drive long-term value creation for all of us.
The health, safety, and welfare of our people is our number one
value and primary focus. Nothing surpasses the importance
of each individual team member. Safety is an integral part of
our culture, and we strive to collectively ensure every person
is personally engaged in sustaining a safe workplace for
themselves, their team members, and their families.
We are also committed to operating our business in an
environmentally responsible manner and have been since
our founding. Our steel mills produce steel exclusively utilizing
electric arc furnace (EAF) technology, which uses recycled
ferrous scrap as the primary raw material. This method of
steelmaking has a much lower environmental impact when
compared to traditional steelmaking technology. With our EAF
steelmaking, North American recycling business, and circular
manufacturing model, Steel Dynamics is already a leader in the
production of lower-carbon steel products within the global
industry. We continue to encourage the research and use of
new technologies and processes to further reduce our impact
on the environment, including a strategic focus on lowering
carbon emissions with a goal for our steel mills to be carbon
neutral by 2050.
Our sustainability and decarbonization strategy is an ongoing
journey, and we plan to use our entrepreneurial, innovative spirit
to continue to be a leader in the industry.
Our Operations
The team achieved a strong performance on a number of
key business measures, including operating margin, EBITDA
margin, and return on invested capital. Our entrepreneurial
culture is a core element of our success and is driven by our
extensive performance-based compensation philosophy
utilized throughout the company at all levels. Team members
are passionate about delivering quality products and excellent
service to our customers. Whether driving toward industry-
leading safety performance, implementing innovative
technologies, or ensuring we consistently exceed customer
expectations, our team members vigorously pursue excellence.
Steel
The domestic steel industry benefited from steady steel
consumption, low customer inventories, and strong pricing in
2023. Coupled with the execution of strategic growth initiatives
EBITDA Margin1
Outstanding Industry Performance
12%
12%
25%
25%
19%19%
2019
2020
2021
2022
2023
Steel Dynamics
Peer Group Average2
Peer Group Low2
1 EBITDA margin is calculated as EBITDA divided by sales. EBITDA is calculated as earnings before interest, taxes, depreciation, and amortization (excludes non-cash asset
impairments). See the reconciliation to GAAP net income for Steel Dynamics in the appendix to this presentation.
2 Peer group consists of Nucor, AK Steel: 2019, Cleveland Cliffs: 2021 to 2023, U.S. Steel, and Commercial Metals Company (CMC). Source: Respective SEC filings. CMC data
for annual periods ended November 30.
6
Steel Operations End Markets
Based on 2023 Steel Shipments
12.8M
Record Steel
Tons Shipped
in 2023
Construction-Related
Other Manufacturing
Automotive
Transportation & Rail
Energy
Ag. Equipment & Mining
Non-Energy Pipe & Tube
48%
18%
10%
8%
6%
5%
5%
▶ New Millennium steel joist installation at a jobsite
▶ Value-added flat rolled coil
in our steel operations, we achieved record shipments of 12.8
million tons and strong steel operating income of $1.9 billion,
representing our third-best year.
Our steel mills operated at 91% of their estimated annual
production capability (excluding our new Sinton, Texas Flat Roll
steel mill) compared to the domestic steel industry production
utilization rate of 76%. We consistently realize higher production
utilization than our peers, as a result of our diversified product
portfolio and end markets, emphasis on higher value-added
steel products, unique supply-chain offerings, consistent
customer focus, and vertically connected businesses. Our
internal processing and manufacturing operations consumed
1.8 million tons of internally sourced steel from our steel mills,
providing a powerful utilization lever.
Steel Fabrication
Our steel fabrication operations achieved their second-best
annual operating income of $1.6 billion in 2023, as non-
residential construction demand remained solid. The steel
fabrication platform excels as a result of the team’s superior
customer service, a national geographic service capability, and
a highly engineered complementary product mix. Additionally,
our vertical manufacturing model provides a natural hedge to
steel price volatility.
Metals Recycling
Our metals recycling platform performed well in a challenging
market environment, as ferrous scrap prices declined
throughout much of 2023, resulting in annual operating
income of $108 million. The metals recycling team works
synergistically with our steel mills to ensure the supply of low-
cost, high-quality raw materials, internally supplying almost
3.6 million tons of ferrous material in 2023. In anticipation of
supporting our aluminum growth, the team is growing our
aluminum scrap collection, despite already being the largest
collector in North America.
7
002
Current Key Strategic Growth Initiatives
We continue to position our company for the future through
optimization of existing operations and differentiated growth
investments. During 2023, we executed several key initiatives to
support our strategic growth and profitability strategies.
We increased production and improved financial results
at our 3.0-million-ton Sinton, Texas, EAF Flat Roll Steel Mill,
which includes a galvanizing line with Galvalume® coating
capability and a paint line. The state-of-the art facility is
designed to have product capabilities beyond that of any
existing domestic EAF flat roll steel producers, competing
even more effectively with the blast furnace steel model
and foreign competition, expanding our presence in the
southwest United States and Mexican steel markets, and
providing differentiated products and supply-chain solutions.
We are excited about the transformational growth and long-
term value creation that our Sinton Steel Mill represents.
We recently completed construction of four additional value-
added flat roll coating lines, comprised of two paint lines and
two galvanizing lines with Galvalume® coating capability.
Our unique value-added coated supply-chain strategy has
resulted in our existing lines consistently running at or near
full capacity. Our existing customers are anxiously awaiting
the volume from these new lines. A galvanizing line and
paint line are located onsite at our Sinton Steel Mill—while
the other two lines are located at our Heartland Flat Roll
Division located in Indiana. These lines will increase coating
capacity by 1.1 million tons to further support our flat roll steel
operations, providing them with more value-added product
diversification to serve our customer needs. We plan to
commission these lines in early 2024.
▶ Sinton steel mill team first coil from galvanizing line two
▶ Heartland Flat Roll Division
We continue to make great progress on the 650,000-metric-
ton recycled aluminum flat rolled products mill and two
supporting satellite recycled aluminum slab centers. We
have intentionally grown with our customers’ needs,
providing efficient, sustainable supply-chain solutions for
the highest quality products. Thus far, this has primarily
been achieved within the steel industry—however, a
significant number of our flat rolled steel customers are
also consumers and processors of aluminum flat rolled
products. We are pleased to further diversify our end
markets with plans to supply aluminum flat rolled products
with high recycled content to the countercyclical sustainable
beverage can industry, in addition to the automotive and
industrial sectors. We are progressing on our aluminum
flat rolled products mill in Columbus, Mississippi, and are
incredibly excited about this meaningful growth opportunity,
which is aligned with our existing business and operational
expertise. We plan to begin commissioning the aluminum flat
rolled products mill in mid-2025.
Igniting Our Future
We believe the market dynamics are in place to support
increased demand across our operating platforms in 2024.
Steel pricing has firmed, and customer order entry activity
continues to be solid across our steel operations, as demand
continues to be steady and customer inventories remain
at historically low levels. In addition, we believe demand for
lower-carbon emission, U.S. produced steel products will also
support future domestic steel pricing. The continued onshoring
of manufacturing businesses, combined with the expectation
of significant fixed asset investment to be derived from public
8
We believe the
market dynamics are
in place to support
increased demand
across our operating
platforms in 2024.
funding related to the U.S. Infrastructure, Inflation Reduction Act,
and Department of Energy programs, will competitively position
the domestic steel industry. We believe this will benefit all of our
operating platforms, especially our steel and steel fabrication
businesses. This demand environment, in combination with
our ongoing expansion initiatives, provides firm drivers for our
continued growth.
Our differentiated business model, performance-driven
culture, and the execution of our long-term strategy continue
to strengthen our financial position through consistent strong
cash flow generation through all market cycles and long-term
value creation—differentiating us from our competition and
demonstrating our sustainability. We are poised for growth.
The passion and strength of our team members compel us to a
standard of excellence—to perform at the highest level. I thank
▶ Heartland Flat Roll Division new paint line
each and every one of them for their hard work and dedication
and remind them safety is always our first priority. We continue
to focus on providing superior value to our team members,
customers, and shareholders, and look forward to creating new
opportunities for them in the years ahead.
Sincerely,
Mark D. Millett
Co-Founder, Chairman, and Chief Executive Officer
9
003
▶ Columbus Flat Roll Division | Photo: Mike Hainsey, Northstar Aerospace Solutions
Steel
Dynamics
Differentiated
Competitively advantaged differentiation in everything we do is core to our
long-term value creation strategy. We distinguish ourselves in every aspect
of our business through an overarching spirit of excellence.
Our Unique Entrepreneurial Culture
Our entrepreneurial culture is the foundation of our success
and is driven by our extensive, performance-based incentive
compensation philosophy—for those on the plant floor to
our senior leadership team. Over 60% of a production team
member’s total potential compensation is “at risk” to both
quality production and cost-effectiveness metrics. Over 85%
of our senior leadership team’s total potential compensation
is “at risk” to companywide financial performance metrics
that encourage long-term value creation, including return on
equity, growth, cash generation, and return on invested capital
measures. We believe diversity within our teams enhances
broad-based thinking, innovation, and value creation. Our
common goal of consistently achieving excellence in all we do
is reflected in the esprit de corps that permeates our team.
Our Diversified, Value-Added Product Offerings
and Supply-Chain Solutions
We have one of the most diversified, high-margin product
offerings within the domestic steel industry. We have a track
record of profitable growth, driving diversification in both end
markets and value-added product offerings to sustain higher
volume and profitability through varying market environments.
Over 70% of our steel and steel fabrication revenues are
considered value-added. Throughout our history and today,
we seek to provide unique supply-chain alternatives for our
customers to increase efficiency, reduce time and costs,
and promote decarbonization opportunities. Growing with
our customers in this manner has proven to be invaluable in
creating long-lasting relationships and product development.
10
Over 70% of our
steel and steel
fabrication revenues
are considered
value-added.
Our Vertically Connected Businesses and
Pull-Through Volume Advantage
Our vertically connected businesses contribute to our higher
through-cycle steel production and overall profitability. Our
internal manufacturing businesses are a significant competitive
advantage, supporting higher and more stable through-cycle
earnings and cash flow generation. Our steel fabrication
operations and downstream processing locations use a
significant amount of steel in their operations. During weaker
steel demand environments, we can source their steel needs
internally, and during strong steel demand environments, we
have the option to also purchase their steel needs externally.
Ultimately, we optimize our companywide profitability and
minimize earnings volatility. A strategic and synergistic
relationship also exists between our EAF steel mills and metals
recycling operations. Our metals recycling platform is the
largest supplier of recycled ferrous scrap to our steel operations
and is expected to be the largest supplier of recycled aluminum
scrap to our planned aluminum operations. This allows us to
reduce companywide working capital, as lower scrap volume
is required at our steel mills. We are also able to source higher-
quality scrap for our steel mills, increasing availability, optimizing
costs, and improving quality.
▶ Value-added welded rail
and performance-based incentive compensation programs
support our efficient, environmentally responsible, and
competitively advantaged footprint. Coupled with our low-cost,
highly variable operating cost structure and our continued
operating innovation and efficiency, we are one of the most
profitable and lowest-cost domestic producers.
Our Sustainable Through-Cycle Operating
and Financial Performance
Based on our low, highly variable cost structure, competitive
differentiation, adaptable value-added product mix, and
performance-based incentive compensation programs, we
are able to consistently outperform our industry peers in
varying market environments, while providing strong cash flow
generation for asset optimization, innovation, and future growth.
Our Technologically Advanced, Low-Cost,
Highly Efficient Operations
Our Strong Capital Foundation
We operate some of the most technologically advanced and
environmentally responsible steel mills in the world. Our steel
mills generate a fraction of the GHG emissions per ton of
steel produced as compared to traditional blast furnace steel
production and the average global steel industry. Our value-
added product diversification, circular manufacturing model,
All of these factors drive a preferred, adaptable financial
foundation to responsibly support both current operations
and continued meaningful strategic growth. We are committed
to responsible growth to optimize earnings and maintain
investment-grade ratings, while providing strong distributions
to shareholders.
11
004
A Letter from
Theresa E. Wagler
Executive Vice President and CFO
$3.7B
2023 Adjusted EBITDA
significant investments of $1.7 billion in our existing operations
and for our aluminum growth initiatives. For 2024, we plan to
invest approximately $2.0 billion in organic projects, including
most of the required capital for the aluminum flat rolled
investments and the biocarbon facility.
2023 was another strong year comprised of numerous
operational and financial achievements, culminating in our
third-best financial performance on many fronts. We continued
to execute our strategic initiatives, while also strengthening an
already outstanding capital foundation, and remain poised for
further growth.
Annual 2023 revenues were $18.8 billion with record annual
steel shipments and strong steel and steel fabrication selling
values. Together, we generated strong operating income of
$3.2 billion and net income of $2.5 billion.
Through both strong and weak market environments, our
unique operating culture, diverse and value-added product
portfolio, and low, highly variable cost structures allow us to
consistently achieve strong cash flow creation. We generated
our second-highest annual cash flow from operations of
$3.5 billion in 2023 and achieved a 3-year after-tax return on
invested capital (ROIC)¹ of 32%, a truly impressive performance.
Our capital allocation strategy remains focused on disciplined,
high-return growth through both organic investment and
transactional opportunities within our core competencies, while
also delivering strong shareholder returns. In 2023, we made
We achieved strong 3-year after-
tax ROIC1 of 32%, the highest of the
materials companies in the S&P
500® Index.
Based on our confidence in the strength of our cash generation
and earnings capability throughout market cycles, we intend
to maintain our positive cash dividend growth profile, while
executing a complementary share repurchase program. From
2018 through 2023, we increased our annual cash dividend
by 127% and repurchased $5.3 billion, or 34%, of our common
shares. Most recently, we increased our first quarter 2024
cash dividend by another 8%, and our board of directors
authorized an additional $1.5 billion share repurchase program
in November 2023. We returned value to shareholders through
purchasing 8% of our outstanding shares of common stock
for $1.5 billion during 2023, and we had $1.4 billion remaining
available under that program at the end of 2023. Our capital
allocation strategy prioritizes high-return growth, while
maintaining investment-grade metrics and providing significant
returns to shareholders.
¹ The company believes that after-tax return on invested capital
(after-tax ROIC) provides an indication of the effectiveness of the
company’s invested capital and is calculated as follows:
After tax ROIC =
Net Income Attributable to Steel Dynamics, Inc.
(Quarterly Average Current Maturities of Long-Term Debt + Long-Term Debt + Total Equity)
12
Strong Operating Cash Flow
Our low-cost, highly variable cost structure and
value-added product offerings establish a strong
basis for cash flow generation.
$4,460
$3,520
$3,520
$2,204
$1,396
$987
2019
2020
2021
2022
2023
▶ Butler Flat Roll Division digital print line
Millions of Dollars
Average Annual Free Cash Flow1
Following the Columbus Flat Roll Division transformation
and other value-added additions, our five-year average
annual free cash flow¹ more than tripled.
$2.2B
$540M
At December 31, 2023, we maintained strong liquidity of $3.5
billion. We achieved adjusted EBITDA of $3.7 billion in 2023, with
corresponding net leverage of well under 1.0 times—a profile
that supports our strategic growth plans, investment-grade
credit metrics, and continuing strong shareholder distributions.
Our current operations and growth strategy are aligned with a
focus toward sustainability of resources. Sustainability is a part
of our long-term value-creation strategy, and we are dedicated
to our people, our communities, and our environment. We are
committed to operating our business with the highest integrity.
We continue our focus to be the safest, most efficient producer
of high-quality, broadly diversified, value-added products,
creating the highest level of sustainable earnings for the long-
term benefit of all involved—our teams, families, communities,
vendors, customers, and shareholders.
As we look to 2024, we continue to see opportunity. With our
strong financial base, we are uniquely positioned to embrace
the momentum from our current operations, while successfully
executing our growth initiatives. Thank you for your trust.
2011–2015
2019–2023
Sincerely,
1 Free Cash Flow is defined as Adjusted EBITDA less capital investments. See the
appendix for the reconciliation. Excluding funding for our Sinton Steel Mill and
Aluminum Dynamics, our 2019-2023 average annual free cash flow would have been
$2.8 billion.
Theresa E. Wagler
Executive Vice President and Chief Financial Officer
13
005
▶ Aluminum Flat Rolled Products Mill | Photo: Mike Hainsey, Northstar Aerospace Solutions
Transformational
Growth
New Recycled Aluminum Flat Rolled Strategic Investments
Our planned lower-carbon-emitting, recycled aluminum
flat rolled products mill represents a new horizon for Steel
Dynamics, and there is a tremendous amount of excitement
surrounding this growth initiative, both internally, as well as
with our intended customer group. Our investment includes a
650,000-metric-ton recycled aluminum flat rolled products mill
and two supporting satellite recycled aluminum slab centers.
As with all of our growth initiatives, we seek to competitively
differentiate ourselves through service, product quality, and
supply-chain solutions. These investments capture each of
these elements.
This investment will broaden our ability to serve our existing
customers as well as new customers by adding high-quality,
lower-carbon flat rolled aluminum to our product portfolio.
The new aluminum flat rolled products mill is located and
engineered to provide an energy-efficient, lower-environmental-
impact product alternative compared to average aluminum
flat rolled production. It is a margin-enhancing opportunity
that further diversifies our end markets and product portfolio,
providing additional mitigation of market cycles.
We plan to bring the
Steel Dynamics
culture and related
operating efficiencies
to the flat rolled
aluminum industry.
The team is making great progress constructing these
facilities and building the business framework with raw
material suppliers and future aluminum customers. We plan
to begin commissioning the aluminum flat rolled products
mill in mid-2025, while the satellite recycled aluminum slab
centers will begin operating in advance of that timeline. Our
unique performance-based operating culture, coupled with
our considerable experience in successfully constructing and
operating cost-effective, highly profitable flat roll steel mills and
coating lines, positions us exceptionally well to execute this
significant strategic investment.
Customer Support
This investment allows us to grow with many of our existing
customers, in addition to new partners, by supporting their
sustainable metals needs. A significant number of our existing
carbon flat rolled steel customers also consume or process
aluminum flat rolled products for automotive, appliance,
construction, and other applications, and also seek our high-
quality, sustainable, customer-centric approach within the
aluminum flat rolled market.
A new aluminum flat rolled mill has not been constructed in
North America for over 40 years. The North American flat rolled
aluminum industry has a substantial and growing supply deficit,
based largely on increasing demand from the automotive and
sustainable beverage can industries.
We plan to bring the Steel Dynamics culture and related
operating efficiencies to the flat rolled aluminum industry. We
will offer a diversified product mix serving the sustainable
beverage packaging, automotive, and common alloy industrial
14
Planned Product Mix
45%
Can Sheet
35%
Automotive
20%
Common Alloy/Industrials
650K
Metric Tons Capacity
▶ View from within the pre-assembled hot mill stand
15
005
markets. The product offering will be supported by various
value-added finishing lines, including two CASH (continuous
annealing solutions heat treating) lines, a coating line, and
downstream processing and packaging lines.
Raw Material Supply
Our focus on decarbonization is also integral to our aluminum
growth strategy, including plans to use a significant amount of
recycled aluminum in our production process as our primary
raw material. Our metals recycling operations provide a key
competitive advantage in maximizing the amount of recycled
content in our aluminum flat rolled products, as they are already
the largest recycler of aluminum scrap in North America, and
growing. Our aluminum flat rolled products mill will be supported
by two satellite recycled aluminum slab centers located in
regions that are rich in Used Beverage Can (UBC) and industrial
aluminum scrap. One facility is planned to be located in the
Southwest U.S. and one in San Luis Potosí, Mexico.
We anticipate over 80% recycled content for our can sheet
product, with lower but meaningful recycled content for our
automotive and common alloy products. We have developed
new aluminum scrap segregation technologies within our metals
recycling operations to increase efficiencies and supply.
▶ UBC aluminum scrap
▶ Aluminum Flat Rolled Product Mill | Photo: Mike Hainsey, Northstar Aerospace Solutions
16
▶ Aluminum Dynamics groundbreaking
Location Benefits
Southwest U.S.
Columbus, MS
San Luis Potosí, MX
SDI Aluminum Flat Rolled Products Mill
SDI Recycled Aluminum Slab Centers
Sufficient acreage to allow customers to
locate onsite, providing logistic savings,
shorter lead times, meaningful customer
working capital savings, aluminum mill
volume base-loading opportunities, and
reducing emissions across the supply chain
Proximity to aluminum scrap generation via
the slab recycling centers, allowing us to
more cost-effectively and efficiently access
UBC and industrial aluminum scrap
Excellent logistics provided by accessible rail,
proximity to a major U.S. highway system,
and access to waterways, all supporting the
movement of raw materials and products
Existing, mature, and dependable lower-
carbon electrical power, natural gas, and
water sources
Proximity to our Columbus Flat Roll Steel
Division allows us to access culturally rich
talent and professional services
17
006
Intentionally
Sustainable
Our commitment to all aspects of sustainability is embedded in our founding
principles—valuing our people, our partners, our communities, and our
environment. These strategic principles drive long-term value creation for us all.
Valuing Our People
Our long-term success is driven by our culture, individual health
and safety, respect, inclusion and diversity of experiences and
backgrounds, and talent development opportunities. We value
the dedicated people whose passion, innovation, and spirit of
excellence have helped successfully grow our company and
serve our customers.
We intend for each individual to arrive at the workplace safely
and return home safely each day. This is achievable when we
all work together. It requires commitment from leadership
and team members at every level to take ownership and
responsibility for their safety and the safety of others. Under no
circumstance does anything—including the desire to maximize
production or earnings—override the value of individual safety.
Health and Safety
Valuing people includes providing a healthy and safe work
environment, and creating a culture of safety that extends
beyond the workplace, into our homes and communities.
Safety is, and always will be, our primary focus and core value.
Safety is our first core strategic pillar—it is the foundation of
our decision-making. We are committed to achieving world-
class safety performance throughout our operations. This
commitment is foundational and integral to our culture.
Platform Total Recordable Injury Rate1
Companywide Total Recordable Injury Rate1
During 2023, each of our platforms performed
meaningfully better than industry benchmarks.
4.3
2.2
2.2
1.4
2.9
1.1
2.3
1.9
1.9
Record Low
1.8
1.4
Steel
Steel
Fabrication
Metals
Recycling
Steel Dynamics
Industry2
2019
2020
2021
2022
2023
1 Total Recordable Injury Rate is defined as OSHA recordable incidents x 200,000/
hours worked.
2 Source: 2022 U.S. DOL Bureau of Labor Statistics released in 2023.
Performance-Based Incentive Compensation
18
A
B
C
D
A
B
C
D
Stock Awards
Aligns team members with shareholders in pursuit of
long-term value creation
Profit Sharing, 401(k) Match
Unites team members of the business segments in
promoting the success of the company as a whole
Production, ROA, Conversion Bonuses
Teamwork and performance bonuses focus on
productivity, cost control, and efficient use of assets
Base Pay
Rewards individual for superior performance,
responsibilities, and personal skill level
Performance-Based Incentives Drive Superior Results
We have a culture of trust, fostered through individual
empowerment and accountability, that drives decision-
making throughout our business. We empower our teams with
performance goals, align their interests with the company’s
long-term strategy, provide them with the right tools and
resources, and watch them succeed. Our performance-based
incentive compensation programs align with the interests of our
strategic long-term growth, our customers, communities, and
shareholders. We know our teams will do what is right and that
trust comes from effective communication and transparency.
$43M
Combined companywide
and SDI foundation
charitable donations over
the last 10 years
Valuing Relationships
Community Support
We are supported by numerous external constituents,
including our customers, suppliers, vendors, communities,
and shareholders. These relationships have contributed to our
sustainable growth and continued success.
Innovative Partnerships
We grow and innovate alongside our customers, providing
differentiated high-quality products and supply-chain
solutions to meet their current and future needs.
Supplier and Vendor Relationships
We have strong long-term relationships with our suppliers,
ensuring quality service, supplies, and other deliverables,
resulting in efficient and effective operations. We expect all
of our service providers to operate with the same high-
performance level of safety, service, and social practices as
we demand from ourselves.
We strongly believe in making a positive social impact
on our communities through supporting organizations
where our teams are involved and by empowering and
encouraging our teams to volunteer and take leadership
roles in these organizations. We collaborate with our
teams and communities to determine areas of need and to
identify those organizations that most effectively provide
current and long-term solutions to address those needs.
Among other areas, this has included financial support for
human services organizations, educational institutions, and
community programs. We are proud of, grateful for, and
humbled by the generosity of our teams.
Engagement
We value the support, interest, and insights of our
shareholders. We actively engage existing and potential
shareholders to build and sustain long-term relationships.
19
006
100%
of our steel mill production
utilizes EAF technology
82%
of the raw materials used
in our EAFs in 2023 were
recycled ferrous scrap and
internally produced iron
37M
tons of ferrous scrap
reintroduced into the
manufacturing life cycle
from 2021 through 2023
3.3B
pounds of nonferrous
scrap reintroduced into the
manufacturing life cycle
from 2021 through 2023
Valuing Our Environment
At Steel Dynamics, we take pride in our intentionally
sustainable approach. We are committed to operating our
business in an environmentally responsible manner and
have been since our founding. Our steel mills exclusively use
EAF technology with recycled ferrous scrap as the primary
raw material, producing lower-carbon emission quality steel
products for our customers and driving returns for our
shareholders. Additionally, our companywide performance-
based incentive programs encourage our teams to create
innovative solutions to increase efficiencies, reduce raw
material usage, reuse secondary materials, and promote
material conservation and recycling.
We intentionally developed a circular manufacturing model.
Our metals recycling platform collects and processes scrap,
which is then sold to end users for reuse, including our EAF
steel mills and, in the future, our aluminum operations. Our
steel is then sold to consumers that both further process and
manufacture end products. We sell a meaningful amount of
steel to our own manufacturing businesses that in turn sell
finished products to consumers. Scrap, from the industrial
manufacturing process and from when these products
ultimately reach the end of their lives, can be collected and
used again in our steelmaking operations, creating our circular
manufacturing model.
20
We Produce the Steel Required for a
Sustainable Future
The domestic steel industry is vital to a healthy manufacturing
base and sustainable infrastructure. Steel is essential to
connect our energy grid and utilities, and to build roads,
bridges, automobiles, hospitals, schools, and businesses.
With our EAF steelmaking, circular manufacturing model,
and innovative teams, Steel Dynamics is already a leader in
the production of lower-carbon steel products within the
global industry.
Our steel mills’ Scope 1 and 2
GHG emissions intensity is among
the lowest globally in the steel
industry and is well below the Paris
Climate Agreement aligned 1.5
degrees scenario.
Global Steel Industry Carbon Performance
3.0
2.5
2.0
1.5
1.0
0.5
0.0
2
&
1
e
p
o
c
S
l
e
e
t
S
t
/
e
2
O
C
t
0.39
2018
2019 2020 2021 2022 2023
2025
2030
2035
2040
2045
2050
Steel Dynamics Steel Mills
Steel Sector 1.5 Degrees Glidepath1
Steel Dynamics Steel Mills’ GHG Intensity Goals
Global Peers1
¹ Based on Transition Pathway Initiative (TPI) publicly available data for the steel sector (https://www.transitionpathwayinitiative.org/sectors/steel)
as of February 2024. TPI global peer data for 2022 and 2021 were the most recently available years and are reflected in the chart.
21
006
Environmental Performance and Goals
Emissions
Exclusively using EAF steelmaking technology, we generate
approximately 1/3 of the GHG emissions per metric ton
compared to those generated from global blast furnace
steelmaking technology,¹ which creates significant emissions
through the conversion of iron ore, coke, and coal into steel.
We have already made meaningful
progress toward our current
decarbonization goals. Since 2018
(our baseline year), we have reduced
our steel mills’ Scope 1 and 2 GHG
emissions intensity by 20%, already
achieving our 2025 Scope 1 and
Scope 2 emissions intensity goal.
Industry Scope 1, 2, & 3 GHG Emissions Intensity1
SDI Steel Mills’ Scope 1 & 2 GHG Emissions Intensity2
2.33
1.91
l
e
e
t
S
t
s
a
C
t
/
e
2
O
C
t
0.78
0.49
0.47
l
e
e
t
S
t
s
a
C
t
/
e
2
O
C
t
0.43
0.42
0.41
0.39
SDI
Steel Mills
Global
Avg.
BF-BOF
Global Avg.
2018
2019
2020
2021
2022
2023
1 Steel Dynamics steel mills’ data is for 2023. Steel Dynamics steel mills’ Scope 1, 2, and
3 emissions data were verified by a third party in accordance with ISO 14064-3: 2019.
Global average and BF-BOF global average data is for 2022 and is from World Steel
Association, Sustainability Indicators November 2023 report.
2 2023, 2022 and 2021 steel mills’ Scope 1 and Scope 2 emissions data were verified by a
third party in accordance with ISO 14064-3: 2019.
SDI Steel Mills’ Scope 1 & 2 GHG Emissions Intensity Goals
20%
Reduction
Achieved
Reduction50%
Carbon
Neutral
2025
2030
2050
22
Energy
By connecting the casting and rolling processes in our EAF flat
roll steel mills, we roll slabs into steel coils while the steel is still
hot, requiring less than a quarter of the energy compared to
global blast furnace steelmaking technology,¹ which typically
requires reheating cold slabs before rolling.
Industry Energy Intensity1
24.0
21.3
l
e
e
t
S
t
s
a
C
t
/
J
G
5.2
SDI
Steel Mills
Global
Avg.
BF-BOF
Global Avg.
1 Steel Dynamics steel mills’ data is for 2023. Global average and BF-BOF data is for 2022
and is from World Steel Association, Sustainability Indicators November 2023 report.
SDI Steel Mills’ Renewable Electrical Energy Goals
10%
Energy Goal
Achieved
Energy Goal30%
2025
2030
▶ Value-added flat rolled coil
Since 2018 (our baseline year), we
have increased our use of renewable
electrical energy to 10% within
our steel mill operations, already
achieving our 2025 renewable
electrical energy goal.
23
006
Our Path Forward
We have an actionable path forward to carbon neutrality at our
steel mills, and we continue to make progress toward our GHG
emissions reduction and renewable electrical energy goals.
Our entrepreneurial, innovative, performance-based culture
supports our decarbonization efforts through the continuation
of EAF steelmaking technology development, the continuation
of new technologies in our metals recycling operations, the
identification of lower-carbon raw material alternatives, and
increased operating efficiency initiatives.
While we operate some of the most efficient steel operations in
the world, we recognize the need for continuous improvement.
In 2023, we began construction of a biocarbon production
facility located in Columbus, Mississippi. The facility will use
high-temperature pyrolysis to convert sustainably sourced
biomass to high-purity biocarbon. We will use this biocarbon as
a lower carbon replacement for anthracite in our steelmaking
operations, which could result in as much as a 35% reduction
in our steel mills’ Scope 1 GHG absolute emissions. The facility
is projected to begin operations before the end of 2024.
This investment represents a significant step toward the
decarbonization of our steel mills.
Additionally in 2023, we signed the largest renewable product
purchase agreement for the steel industry in North America,
equivalent to approximately 15% of our steel mills’ electricity
usage in 2023. This wind energy center came online in the first
quarter of 2024, and represents the single most significant
step in increasing our exposure to renewable electrical energy,
▶ Biocarbon Production Facility | Photo: Mike Hainsey, Northstar
Aerospace Solutions
These biocarbon and wind energy
initiatives will help us achieve our
stated Scope 1 and Scope 2 emissions
reduction goals.
surpassing our 2025 goal and propelling us much of the way
to our 2030 goal of 30%. This investment is also expected to
meaningfully contribute to our long-term reduction of Scope
2 GHG emissions intensity and represents a meaningful step
forward on our path to carbon neutrality.
To Achieve Carbon Neutrality at Our Steel Mills, We Plan to Continue Working to:
Identify and implement
GHG emission reduction
projects
Improve energy
management to reduce
GHG emissions and enhance
operational efficiency
Increase the use of
renewable energy,
including partnering with
utilities
Research, develop, and
implement innovative
technologies
24
“As a leader in decarbonization of
steelmaking today, we are
committed to achieving even more.”
Mark D. Millett
Co-Founder, Chairman, and CEO
Moving the Industry Forward
We are a founding member of the Global Steel Climate Council
(GSCC), an international coalition of steel producers and other
stakeholders spearheading the steel industry’s efforts toward
reducing carbon emissions. The GSCC is a nonprofit association
organized to advance climate strategy through its Steel Climate
Standard and advocating for carbon emissions reductions by
members of the steel industry. In 2023, the GSCC published the
Steel Climate Standard to provide a technology-agnostic global
standard to measure and report steel product GHG emissions
and provide a science-based, target-setting framework to
enable the industry to reduce carbon emissions.
The Steel Climate Standard is comprised of two main
components: (1) product certification criteria that allows
customers to know if the steel they are buying is on the
glidepath to achieve the goals of the Paris Climate Agreement;
and (2) a science-based, target-setting framework based on a
1.5°C scenario glidepath for net zero GHG emissions by 2050.
The Steel Climate Standard will measure all key GHG emissions
from Scope 1, Scope 2, and Scope 3 categories.
We are excited to have led in the development and launch
of this important standard for the industry, and for the
investment and innovation that will surely follow. We intend to
issue GSCC science-based targets for our steel mills’ Scope
1, 2, and 3 GHG emissions in 2024. We plan to continue to
address decarbonization issues and to play a leadership role in
developing innovative ways to reduce our carbon impact.
▶ Canyon Wind Energy Center | Photo: NextEra Energy Resources
25
Selected Financial Data
(Millions of dollars, except share amounts)
Net Sales
Operating Income
Net Income Attributable to SDI
Net Income per Diluted Share
Cash Flow from Operations
Capital Investments
Net Debt (long-term debt including current portion
less cash and short-term investments)
Shares Outstanding (thousands)
Dividends Declared per Share
Adjusted EBITDA and Free Cash
Flow Reconciliation
(Millions of dollars)
2019
2020
2021
2022
2023
10,465 $
9,601 $
18,409 $
22,261 $
18,795
987 $
847 $
4,301 $
5,092 $
3,151
671 $
551 $
3,214 $
3,863 $
2,451
3.04 $
2.59 $
15.56 $
20.92 $
14.64
1,396 $
987 $
2,204 $
4,460 $
3,520
452 $
1,198 $
1,006 $
909 $
1,658
1,091 $
1,790 $
1,912 $
857 $
990
214,503
210,914
194,998
172,936
160,018
0.96 $
1.00 $
1.04 $
1.36 $
1.70
$
$
$
$
$
$
$
$
2011
2012
2013
2014
2015
2019
2020
2021
2022
2023
Net Income (Loss)
$ 266 $ 142 $ 164 $
92 $ (145)
$ 678 $ 571 $ 3,247 $ 3,879 $ 2,467
Income Taxes (Benefit)
158
62
99
73
(97)
197
135
962
1,142
752
Net Interest Expense (Income)
172
154
123
135
153
99
85
56
62
(35)
Depreciation
177
180
192
229
263
286
291
312
350
397
Amortization
40
36
32
28
25
30
29
29
28
34
EBITDA
$ 813 $ 574 $ 610 $ 557 $ 199
$ 1,290 $ 1,111 $ 4,606 $ 5,461 $ 3,615
Unrealized (Gains)/Losses
Equity-Based Compensation
Asset Impairment Charges
Refinancing Charges
(4)
17
-
-
(3)
12
8
3
5
16
-
2
(5)
23
3
29
213
429
-
3
3
43
-
3
2
49
17
8
(2)
80
-
-
1
(12)
69
60
-
-
-
-
Adjusted EBITDA
$ 826 $ 594 $ 633 $ 788 $ 663
$ 1,339 $ 1,187 $ 4,684 $ 5,531 $ 3,663
Less Capital Investments
167
224
187
112
115
452
1,198
1,006
909
1,658
Free Cash Flow
$ 659 $ 370 $ 446 $ 676 $ 548
$ 887 $
(11) $ 3,678 $ 4,622 $ 2,005
Note Regarding Non-GAAP Financial Measures
The company reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). Management believes that the
non-GAAP financial measures EBITDA, Adjusted EBITDA, EBITDA Margin and Free Cash Flow provide additional meaningful information regarding
the company’s performance and financial strength. Non-GAAP financial measures should be viewed in addition to and not as an alternative for the
company’s reported results prepared in accordance with GAAP. In addition, not all companies use identical calculations for EBITDA, Adjusted EBITDA,
EBITDA Margin and Free Cash Flow; therefore, EBITDA, Adjusted EBITDA, EBITDA Margin and Free Cash Flow included in this report may not be
comparable to similarly titled measures of other companies.
Broadridge Financial Solutions, Inc. • Tel: (631) 254-7494
@edipvwctxa217/PRODUCTION_Jobs/CLS_Funds/GRP_Steel_Dynamics/JOB_ny20020056x1_print/DIV_100-regcov
Operator: kaplowitzk
Date: March 21, 2024 Time: 19:32:58
Page 1 of 1 Session: 36
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2023
□ 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
(State or other jurisdiction of incorporation or organization)
35-1929476
(IRS Employer Identification No.)
7575 West Jefferson Blvd, Fort Wayne, IN
(Address of principal executive offices)
46804
(Zip Code)
Registrant’s telephone number, including area code: (260) 969-3500
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Common Stock voting, $0.0025 par value
Trading Symbol
STLD
Name of each exchange on which registered
NASDAQ Global Select Market
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No □
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes □ No ☒
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 □
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 has filed a report on and attestation to its management’s assessment of the effectiveness of
its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public
accounting firm that prepared or issued its audit report. ☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
included in the filing reflect the correction of an error to previously issued financial statements. □
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based
compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). □
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes □ No ☒
The aggregate market value of the voting stock held by non-affiliates of the registrant computed by reference to the price at which the
common equity was last sold as of June 30, 2023, was approximately $12.1 billion. Registrant has no non-voting shares. For purposes of
this calculation, shares of common stock held by directors, officers and 5% stockholders known to the registrant have been deemed to be
owned by affiliates, but this should not be construed as an admission that any such person possesses the power, direct or indirect, to
direct or cause the direction of the management or policies of the registrant or that such person is controlled by or under common control
with the registrant.
As of February 26, 2024, Registrant had outstanding 158,154,594 shares of common stock.
Portions of registrant’s definitive proxy statement for the 2024 Annual Meeting of Stockholders are incorporated by reference into
Part III, Items 10 through 14, of this report.
DOCUMENTS INCORPORATED BY REFERENCE
Broadridge Financial Solutions, Inc. • Tel: (631) 254-7494
@edipvwctxa217/PRODUCTION_Jobs/CLS_Funds/GRP_Steel_Dynamics/JOB_ny20020056x1_print/DIV_101-toc
Operator: kaplowitzk
Date: March 21, 2024 Time: 19:32:58
Page 1 of 1 Session: 34
STEEL DYNAMICS, INC.
Table of Contents
Part I
Item 1. Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 1A. Risk Factors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 1B. Unresolved Staff Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 1C. Cybersecurity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 2.
Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 3. Legal Proceedings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 4. Mine Safety Disclosures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Part II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 6.
[Reserved] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of
Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 7A. Quantitative and Qualitative Disclosures About Market Risk . . . . . . . . . . . . . . . . . . . .
Item 8. Consolidated Financial Statements and Supplementary Data . . . . . . . . . . . . . . . . . . . .
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 9A. Controls and Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 9B. Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections . . . . . . . . . . . . . . .
Part III
Item 10. Directors, Executive Officers, and Corporate Governance . . . . . . . . . . . . . . . . . . . . . .
Item 11. Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 13. Certain Relationships and Related Transactions, and Director Independence. . . . . . . . . .
Item 14. Principal Accountant Fees and Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Part IV
Item 15. Exhibits and Financial Statement Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 16. Form 10-K Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exhibit Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Signatures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Page
3
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30
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34
34
35
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38
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50
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Broadridge Financial Solutions, Inc. • Tel: (631) 254-7494
@edipvwctxa217/PRODUCTION_Jobs/CLS_Funds/GRP_Steel_Dynamics/JOB_ny20020056x1_print/DIV_102-part1
Operator: kaplowitzk
Date: March 21, 2024 Time: 19:32:59
Page 1 of 34 Session: 56
PART I
1
Special Note Regarding Forward-Looking Statements
Throughout this report, or in other reports or registration statements filed from time to time with the
Securities and Exchange Commission under the Securities Exchange Act of 1934, or under the Securities Act
of 1933, as well as in documents we incorporate by reference herein or here-from, or in press releases or oral
statements made by our officers or Regulation FD authorized representatives, we may make statements that
express our opinions, expectations, or projections regarding future events or future results, in contrast with
statements that reflect present or historical facts. These predictive 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 operate as
‘‘forward-looking statements’’ of the kind permitted by the Private Securities Litigation Reform Act of 1995,
incorporated in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of
1934. Such forward-looking statements involve both known and unknown risks, uncertainties and other factors
that may cause our actual results, performance or achievements to be materially different from any future
results, performance or achievements expressed or implied by such forward-looking statements. That
legislation protects such predictive and cautionary statements by creating a ‘‘safe harbor’’ from liability in the
event that a particular prediction does not turn out as anticipated.
While we always intend to express our best judgment when we make statements about what we believe
will occur in the future, and although we base these statements on assumptions that we believe to be
reasonable when made, these forward-looking statements are not a guarantee of performance, and you should
not place undue reliance on such statements. Forward-looking statements are subject to many uncertainties and
other variable circumstances, many of which are outside of our control, that could cause our actual results and
experience to differ materially from those we thought would occur.
The following listing represents some, but not necessarily all, of the factors that may cause actual results
to differ from those we may have anticipated or predicted:
Global and National Risks
•
•
•
domestic and global economic factors including periods of slower than anticipated economic growth
and the risk of a recession;
global steelmaking overcapacity and imports of steel into the United States, together with increased
scrap prices;
pandemics, epidemics, widespread illness or other health issues;
Industry Risks
•
•
•
•
•
the cyclical nature of the steel industry and some of the industries we serve;
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;
cost and availability of electricity, natural gas, oil and other energy resources are subject to volatile
market conditions;
increased environmental, greenhouse gas emissions and sustainability considerations from our
customers or related regulations;
compliance with and changes in environmental and remediation requirements;
Operational and Commercial Risks
•
•
significant price and other forms of competition from other steel and aluminum producers, scrap
processors and alternative materials;
availability of an adequate source of supply of scrap for our metals recycling operations;
2023 Annual Report
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•
•
•
•
•
•
•
cybersecurity threats and risks to the security of our sensitive data and information technology;
the implementation of our growth strategy;
litigation and legal compliance;
unexpected equipment downtime or shutdowns;
governmental agencies may refuse to grant or renew some of our licenses and permits required to
operate our businesses;
our senior unsecured credit facility contains, and any future financing agreements may contain,
restrictive covenants that may limit our flexibility; and
the impact of impairment charges.
We also refer you to and urge you to carefully read the section entitled Risk Factors at Item 1A of this
report to better understand some of the principal risks and uncertainties inherent in our businesses or in
owning our securities, as well as the section entitled Management Discussion and Analysis of Financial
Condition and Results of Operations at Item 7. You should also review the notes to consolidated financial
statements under headings in Note 1. Use of Estimates and in Note 9. Commitments and Contingencies.
Any forward-looking statements which we make in this report, or in any of the documents that are
incorporated by reference herein or here-from, speak only as of the date of such statement, and we undertake
no ongoing obligation to update such statements. Comparisons of results between current and any prior
periods are not intended to express any future trends or indications of future performance, unless expressed as
such, and should only be viewed as historical data.
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3
ITEM 1. BUSINESS
Steel Dynamics, Inc. is 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 as of December 31, 2023, 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.
We refer to our founding principles as our six core strategic pillars. They bring us together with a
common focus, and they provide the foundation upon which we operate and grow. Our unique entrepreneurial
culture and business model benefit us operationally, financially, and through the responsible use of our
resources in diverse economic environments. Innovation in all forms is essential to our success, and our teams
focus on how to do things ‘‘smarter’’ within our current operations, as well as how we continue to grow.
This means creating solutions for our teammates, customers, suppliers, and other stakeholders. It also includes
finding ways to ‘‘do business’’ with fewer resources and less environmental impact. Our six strategic pillars
and the team’s execution of them each day has driven our success and sustainability.
• Health & Safety – Safety is our primary focus and core value. Nothing surpasses the importance of
creating and maintaining a safe work environment. Our goal is zero injuries—no accidents.
•
•
•
•
•
Entrepreneurial Culture – Fosters a team of energetic, positive, driven, innovative and diverse
individuals by utilizing open communication and meaningful performance-based compensation
aligned to our strategic focus.
Customer Commitment – We focus on being a preferred partner of our customers by providing
quality products and unique supply chain solutions to meet their current and future needs.
Strategic Sustainable Growth – We focus on strategic growth with intentional margin expansion
and consistency through-the-cycle.
Innovation – Through individual creativity and ingenuity, our teams drive innovation to improve
safety, quality, productivity, and resource sustainability. We strive to provide unique, superior
products, customer supply chain solutions, and next-generation technologies and processes.
Financial Strength – Through our adaptable value-added product diversification, vertically
connected businesses model, coupled with our highly variable operating cost structure and
performance-based incentive compensation, along with our continued operating innovations and
efficiency, we achieve higher utilization and lower costs, which provide strong cash flow generation
through both strong and weak market cycles.
Differentiated Model - Uniquely Steel Dynamics
Competitively advantaged differentiation is core to our long-term value creation strategy. We set
ourselves apart in every aspect of our business with a spirit of excellence.
Unique Entrepreneurial Culture
Our entrepreneurial culture is at the core of our success and is driven by our extensive
performance-based incentive compensation philosophy from those on the plant floor to our senior leadership.
Over 60% of a production team member’s total potential compensation is ‘‘at risk’’ to both quality production
and cost-effectiveness metrics. Over 85% of our senior leadership team’s total potential compensation is ‘‘at
risk’’ to companywide financial performance metrics that encourage long-term value creation, including return
on equity, growth, cash generation, and return on invested capital measures. We believe diversity within our
teams enhances broad-based thinking, innovation, and value creation. Our common goal of consistently
achieving excellence in all we do is reflected in the esprit de corps that permeates our team.
Diversified, Value-Added Product Offerings and Supply-Chain Solutions
We have one of the most diversified, high-margin product offerings within the domestic steel industry.
We have a track record of profitable growth, driving diversification in both end markets and value-added
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Page 4 of 34 Session: 56
4
product offerings to sustain higher volume and profitability through varying market environments. Over
70% of our steel and steel fabrication sales are considered value-added. Throughout our history and today, we
seek to provide unique supply-chain alternatives for our customers to increase efficiency, reduce time and
costs, and promote decarbonization opportunities. Growing with our customers in this way has proven to be
invaluable in creating long-lasting relationships and product development.
The majority of our steelmaking operations are in locations near sustainable sources of scrap metals and
near our customer base, allowing us to realize freight savings for inbound scrap as well as for outbound steel
products destined for our customers. This also allows us to provide consistent on-time delivery to our
customer base with relatively short lead times, further solidifying our customer relationships.
This diversified portfolio of products enables us to access a broad range of markets, serve a large
customer base, and helps mitigate our market exposure to any one product or sector, resulting in increased
through-cycle steel mill utilization. In addition, our value-added steel product offerings help to balance our
exposure to commodity grade products supplied by other steel manufacturers. We will continue to seek
additional opportunities, such as entering into the recycled aluminum flat rolled products market, and to
collaborate with our customers to anticipate their future needs by further expanding our range of products and
offerings.
Our Southwest-Sinton Flat Roll Division (Sinton) is a prime example of our internal growth and
differentiated business model. This electric arc furnace (EAF) flat roll steel mill has approximately 3.0 million
tons of annual steel production capacity, currently including two value-added coating lines comprised of a
galvanizing line with annual coating capacity of 550,000 tons with galvalume capability, and a paint line with
annual coating capacity of 250,000 tons. We are also currently building four additional value-added flat roll
steel coating lines comprised of an additional paint line and galvanizing line located onsite at Sinton and a
paint line and galvanizing line at our Heartland Flat Roll Division. These new coating lines are expected to
begin operating in early 2024.
As with all our growth initiatives, we seek to competitively differentiate ourselves through service,
product capability and quality, and supply-chain solutions. Sinton is a ‘‘next-generation’’ EAF flat roll steel
mill, which has the capability to provide higher-strength, tougher grades of flat roll steel for the energy and
automotive markets. These ultra-high-strength steel products are not currently readily available from other
domestic steel producers. Sinton is adhering to the same sustainability model as our other steelmaking
facilities, utilizing state-of-the-art environmental controls and processes to produce high quality sustainable
steel. Sinton was fully commissioned during the first half of 2022, and operations have continued to ramp up
as the team navigated unexpected challenges related to equipment during 2023.
Vertically Connected Businesses and Pull-Through Volume Advantage
Our vertically connected businesses contribute to our higher through-cycle steel production and overall
profitability. Our internal manufacturing businesses are a significant competitive advantage supporting higher
and more stable through-cycle earnings and cash flow generation. Our steel fabrication operations and
downstream processing locations use a significant amount of steel in their operations. During weaker steel
demand environments, we can source more of their steel needs internally, and during strong steel demand
environments, we have the option to also purchase their steel needs externally. Ultimately, we optimize our
companywide profitability and minimize earnings volatility. In 2023, our own steel consuming businesses
purchased 1.8 million tons of steel from our steel mills, representing 14% of our total 2023 steel shipments.
A strategic and synergistic relationship also exists between our steel mills and metals recycling
operations. Our metals recycling platform is the largest supplier of recycled ferrous scrap to our steel
operations and is expected to be the largest supplier of recycled nonferrous scrap to our aluminum operations.
This allows us to reduce companywide working capital, as lower scrap volume is required at our steel mills.
We are also able to source higher-quality scrap for our steel mills, optimizing cost and quality.
Technically Advanced, Low-Cost, Highly-Efficient Operations
We operate some of the most technically advanced and environmentally responsible steel mills in the
world. Our steel mills generate a fraction of the greenhouse gas emissions (GHG) per ton of steel produced as
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Page 5 of 34 Session: 56
5
compared to traditional blast furnace steel production and the average global steel industry. Our value-added
product diversification, vertically connected businesses, and performance-based incentive compensation
programs support our efficient, environmentally responsible, and competitively advantaged footprint. Coupled
with our low-cost, highly variable operating cost structure and our continued operating innovation and
efficiency, we are one of the most profitable and lowest-cost domestic steel producers.
Transformational Growth / New Recycled Aluminum Flat Rolled Products Mill
In 2022, we announced our $2.7 billion project to construct and operate a 650,000 metric ton recycled
aluminum flat rolled products mill in Columbus, Mississippi, with two supporting satellite recycled aluminum
slab centers. A significant number of our steel customers are also consumers and processors of aluminum flat
rolled products. We have had customers indicate that they would like to co-locate on the rolling mill site in
Columbus, enhancing cost efficiencies and reducing emissions across the supply chain. This investment will
allow us to broaden our ability to serve both our existing and new customers by adding high-quality,
low-carbon flat rolled aluminum to our product portfolio. The product mix from the flat rolled products mill is
expected to be approximately 45% can stock, 35% automotive, and 20% common alloy and industrial use.
The product offering will be supported by various value-added finishing lines, including CASH (continuous
annealing solutions heat treating) lines, continuous coating, and various slitting and packaging operations.
The state-of-the-art recycled aluminum flat rolled products mill will utilize a significant amount of aluminum
scrap, and as such is also a complementary extension of the company’s metals recycling platform. The
two satellite recycling aluminum slab centers are expected to begin operations in late 2024 and mid-2025, and
the recycled aluminum flat rolled products mill is expected to begin commissioning in mid-2025. Our unique
performance-based operating culture, coupled with our experience in successfully constructing and operating
cost-effective, highly profitable carbon flat roll steel mills, positions us exceptionally well to execute strategic
opportunities and to deliver strong long-term value creation.
Sustainability
Sustainability is a part of our long-term value creation strategy. We are dedicated to our people, our
communities and our environment. We are committed to operating our business with the highest integrity and
have been since our founding. We only produce steel using EAF technology with recycled ferrous scrap as the
primary raw material. This method of steelmaking emits approximately one-third of the Scope 1, 2 and 3
GHG emissions and uses less than one-quarter of the energy of the global blast furnace steelmaking averages
on a per metric ton basis. We believe EAF production is the best commercially available steelmaking, is the
most cost efficient, and provides the most flexibility, and as such, has been our method of growth for our steel
operations. We encourage the use of new technologies and processes to reduce our impact on the environment,
including a strategic focus on lowering carbon emissions. We are taking further action to reduce our
environmental footprint through our 2025, 2030, and 2050 goals for GHG emissions reduction and increased
renewable energy usage.
We intentionally developed a vertically connected operating model, further strengthening our company.
Our metals recycling platform collects and processes scrap from manufacturing and end-of-life items, such as
automobiles, appliances, and machinery. This processed scrap is then sold to end-users for reuse, including our
EAF steel mills, which produce new steel from the scrapped material. Our steel is then sold to consumers that
both further process and manufacture end products. We sell a meaningful amount of steel to our own
manufacturing businesses that in turn sell finished products to consumers. Ultimately, when these products
reach the end of their useful lives, they can be collected as scrap and used again in our steelmaking
operations, creating our circular manufacturing model.
Our growth strategy focuses on increasing through-cycle cash generation and providing growth
opportunities for our people, partners, communities, and shareholders, all while keeping the sustainability of
resources and carbon impact in focus.
We endeavor for continuous improvement in decarbonization, while maintaining compliance with
regulated emission limits. We evaluate our GHG emissions by regularly reviewing furnace performance and
efficiency. We analyze the latest available technologies to also determine whether emissions can be further
lowered. In 2022, we announced a strategic joint venture, SDI Biocarbon Solutions, LLC. The joint venture,
2023 Annual Report
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which is in the process of construction, will operate a biocarbon production facility in Columbus, Mississippi
and is planned to supply our EAF steel mills with a renewable product alternative to anthracite used in our
steelmaking operations. The facility is expected to produce up to 228,000 metric tons per year, which could
result in as much as an estimated 35% reduction in our steel mills’ Scope 1 GHG emissions. Operations are
planned to begin in late 2024.
Experienced Leadership Team / Fosters an Entrepreneurial Culture
Our senior leadership team is highly experienced and has a proven track record in the steel, metals
recycling, and steel fabrication industries, as well as in the construction and start-up of new operations. Our
leadership objectives are closely aligned with our stakeholders through meaningful stock ownership positions
and performance-based incentive compensation programs that are correlated to the company’s profitability and
operational performance in relationship to our steel manufacturing peers. We emphasize decentralized
operational decision making and responsibility, while continuing to maintain appropriate corporate governance
and risk oversight. We reward teamwork, innovation, and operating efficiency, and focus on maintaining the
effectiveness of our performance-driven incentive bonus plans that are designed to maximize overall
productivity and align the interests of our leadership and teams with our stakeholders.
Name
Mark D. Millett
Theresa E. Wagler
Barry T. Schneider
Miguel Alvarez
James S. Anderson
Chris A. Graham
Richard A. Poinsatte
Glenn A. Pushis
Age
64
53
55
56
63
59
57
58
Position
Co-founder, Chairman, and Chief Executive Officer
Executive Vice President, Chief Financial Officer, and Corporate Secretary
President and Chief Operating Officer
Senior Vice President, Metals Recycling
Senior Vice President, Steel Fabrication
Senior Vice President, Flat Roll Steel Group
Senior Vice President and Treasurer
Senior Vice President, Special Projects
Mark D. Millett co-founded the Company in 1993. Mr. Millett has been our Board Chair since
May 2021 and has been our Chief Executive Officer since January 2012. Prior to that, he has held various
positions within the Company, including President and Chief Operating Officer, Executive Vice President of
Metals Recycling and Ferrous Resources, and Executive Vice President of Flat Roll Operations. Mr. Millett
was responsible for the design, construction, and start-up operation of all of our steel mills, including our
Butler, Indiana flat roll, melting, and casting operations. Mr. Millett serves as Past Chairman of the Steel
Manufacturers Association (SMA). During 2019, Mr. Millett was named the recipient of the James F. Collins
Achievement in Advocacy Award by the SMA. In 2014 and 2022, Mr. Millet was named Steelmaker of the
Year by the Association of Iron and Steel Technology. Mr. Millett earned his bachelor’s degree in metallurgy
from the University of Surrey, England.
Theresa E. Wagler has been our Executive Vice President, Chief Financial Officer and Corporate
Secretary since May 2007. Ms. Wagler joined the Steel Dynamics corporate finance team in 1998, and has
held various finance and accounting positions, including Chief Accounting Officer and Vice President and
Corporate Controller. She is responsible for and oversees accounting and taxation, treasury, risk management,
legal, information technology and cybersecurity, human resources, decarbonization strategy, and strategic
business development functions, as well as, financial planning and analysis, investor relations, and corporate
communications. Ms. Wagler also has various operational responsibilities directly overseeing two operating
joint ventures. Prior to joining Steel Dynamics, Ms. Wagler was a certified public accountant with Ernst &
Young LLP. She graduated cum laude from Taylor University with a bachelor’s degree in accounting and
systems analysis. In addition, Ms. Wagler serves as a director, chair of the audit committee, and a member of
the environmental sustainability and community committee of CF Industries Holdings, Inc., a public company,
and also serves as a trustee for Trine University and director for the Metals Service Center Institute.
Barry T. Schneider was appointed our President and Chief Operating Officer in March 2023.
Mr. Schneider is responsible for the company’s steel platform, steel fabrication platform, and metals recycling
platform. Before that, Mr. Schneider served as our Senior Vice President, Flat Roll Steel Group, between
March 2016 and February 2023, responsible for the company’s entire flat roll steel operations, including the
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company’s three flat roll steel mills and numerous flat roll processing, coating, and distribution operations.
Before that, Mr. Schneider served in various operational and leadership roles within the company’s steel
operations, including our Engineered Bar Products Division and Butler Flat Roll Division. He was also part of
the team that constructed the company’s first steel mill in Butler, Indiana, in 1994. Mr. Schneider earned a
bachelor’s degree in mechanical engineering and a master of science in engineering management from
Rose-Hulman Institute of Technology. He also received an Executive Certificate in Technology, Operations,
and Value Chain Management from the MIT Sloan School of Management. In addition, Mr. Schneider serves
as president for the Association of Iron & Steel Technology.
Miguel Alvarez has been our Senior Vice President, Metals Recycling since March 2022. In this role,
Mr. Alvarez is responsible for OmniSource’s ferrous and nonferrous metals recycling operations including
marketing, trading and logistics activities. Prior to this role, Mr. Alvarez served as Senior Vice President,
Southwest United States and Mexico, since February 2019. Prior to joining Steel Dynamics, Mr. Alvarez
served in leadership positions at BlueScope; this included leading BlueScope’s North American metal
buildings business with manufacturing facilities in the United States and Mexico, and being responsible for
BlueScope’s only North American electric arc furnace flat roll steel mill as President of North Star BlueScope
Steel. Mr. Alvarez earned a bachelor’s degree in industrial engineering and an MBA from Tecnológico de
Monterrey, México.
James S. Anderson has been our Senior Vice President, Steel Fabrication since March 2022. Previously,
Mr. Anderson served as Vice President, Steel Fabrication and President of New Millennium Building Systems.
In this role, Mr. Anderson is responsible for the company’s steel fabrication operations. Prior to that,
Mr. Anderson served as the Chief Operating Officer of New Millennium Building Systems, and was the
general manager of The Techs three flat roll galvanizing lines. Mr. Anderson earned a bachelor’s degree in
metallurgical engineering from Grove City College and an MBA from the University of Pittsburgh.
Christopher A. Graham was appointed our Senior Vice President, Flat Roll Steel Group in
October 2023. Mr. Graham is responsible for the company’s entire flat rolled steel operations, including the
company’s three flat roll steel mills and numerous flat roll processing, coating, and distribution operations.
Before that, Mr. Graham served as our Senior Vice President, Long Products Steel Group. In this role,
Mr. Graham was responsible for the company’s four long product steel mills, along with a downstream
finishing operation and the company’s copper rod manufacturing facility. Prior to that, Mr. Graham served as
Senior Vice President, Downstream Manufacturing and President of New Millennium Building Systems,
responsible for the company’s steel fabrication and downstream manufacturing operations, and other
operational and leadership roles. Mr. Graham was also a part of the team that constructed the company’s
first steel mill in Butler, Indiana, in 1994. Mr. Graham earned a bachelor’s degree in business management
from Western Governors University and an MBA from the University of Saint Francis. In addition,
Mr. Graham completed the Harvard Advanced Management Program in 2017.
Richard A. Poinsatte was appointed to Senior Vice President in October 2023 and as Treasurer is
responsible for the areas of treasury, legal, business development, and risk. Mr. Poinsatte joined Steel
Dynamics in 2000, as the Chief Financial Officer of one of the company’s joint venture businesses, which is
now part of the steel fabrication platform. During his time with Steel Dynamics, he has held positions of
increasing responsibility, including the operating position of General Manager of the company’s Florida steel
fabrication plant. Since 2008, he has been responsible for the company’s treasury, risk, and legal applications.
Mr. Poinsatte earned a bachelor’s degree in accounting from the University of Notre Dame, and he is a
certified public accountant.
Glenn A. Pushis has been our Senior Vice President, Special Projects, since February 2019. Mr. Pushis is
responsible for the successful design and construction of the company’s new 650,000 metric ton
state-of-the-art lower-carbon, recycled aluminum flat rolled products mill in Columbus, Mississippi with
two satellite recycled aluminum slab centers in the Southwestern United States and Northcentral Mexico.
From 2019 until 2022, Mr. Pushis was responsible for the successful design and construction of the
Company’s new Southwest-Sinton Flat Roll Division developed to serve the Southwestern United States and
Mexico. He has extensive experience in this capacity and has been instrumental in numerous construction
projects for Steel Dynamics since its founding. Prior to that, Mr. Pushis served as Senior Vice President,
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Long Products Steel Group, responsible for the company’s four long product steel mills. Mr. Pushis has been
with Steel Dynamics since 1994, holding various operational and leadership roles, including roles within the
Engineered Bar Products Division and the Butler Flat Roll Division. He was also part of the team that
constructed the company’s first steel mill in Butler, Indiana, in 1994. Mr. Pushis earned a bachelor’s degree in
mechanical engineering from Purdue University and his MBA from Indiana University.
Human Capital / Valuing People
We value the dedicated people whose passion, innovation, and spirit of excellence have helped
successfully grow our company and serve our customers. We have a culture of transparency and trust, fostered
through individual empowerment and accountability that drives decision making throughout our business. Our
performance-based incentive compensation programs align our people with the interests of our strategic
long-term growth and our customers, communities, and shareholders. We know our teams will do what is right
and that trust comes from effective communication and transparency. The Steel Dynamics team consisted of
approximately 12,600 full-time team members at December 31, 2023.
Health and Safety
Valuing people includes providing a healthy and safe work environment, and creating a culture of safety
that extends beyond the workplace, into our homes and communities. Safety is, and always will be, our
primary focus and core value. We intend for each individual to arrive at the workplace safely and return home
safely each day. This is achievable when we all work together. It requires commitment from leadership and
team members at every level to take ownership and responsibility for their safety and the safety of others.
Under no circumstance does the desire to maximize production or earnings override the value of individual
safety.
Safety is our first core strategic pillar — it is the foundation of our decision making. Safety is always at
the forefront and is discussed regularly across the company, whether led by a team member from the plant
floor, a supervisor, or a manager. Leadership is engaged and continuously evaluates where we can improve.
We believe having every individual engaged in safety will lead to zero injuries. We are committed to
achieving world-class safety performance throughout our operations. This commitment is foundational and
integral to our culture. Working as one team, we will achieve it.
Our total recordable injury rate compared to industry benchmarks and lost time injury rates for 2023 are
as follows:
Total 2023 Recordable Injury Rate1
4.3
2.9
Steel Dynamics
Industry²
2.2
2.2
1.4
1.1
Steel
Steel Fabrication
Metals Recycling
5.0
4.0
3.0
2.0
1.0
0.0
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Lost Time Injury Rate1
0.61
0.39
0.33
0.30
0.30
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0.0
2019
2020
2021
2022
2023
1
2
Total Recordable Injury Rate is defined as OSHA recordable incidents x 200,000 / hours worked. Lost
Time Injury Rate is defined as OSHA days away from work cases x 200,000 / hours worked.
Source: 2022 U.S. DOL Bureau of Labor Statistics released in 2023
Compensation Structure
We believe in empowering our teams and rewarding them for their achievements through a four-tiered,
performance-based compensation framework. The various components of our compensation programs promote
a balance of high-return growth, effective capital investment, low-cost operations, and risk mitigation. By
rewarding our teams based on their performance as an individual, as a team, as a company, and based on
shareholder interests, we believe we have the ultimate alignment with our external constituents. This is
achieved through the following methods:
•
•
•
•
Individual performance awards consist of an individual’s base compensation, which is determined by
their individual performance, responsibilities, and skills.
Team performance awards are based on departmental results, rewarding cost effectiveness and
quality production. Our performance-based incentive programs reward team members for reducing
waste and increasing efficiency, while also producing quality products for our customers. These
awards can be well over 100% of base wages, based on strong performance and on the teams doing
things that are within their control.
Companywide performance awards unite everyone through our profit-sharing program, which is
based on consolidated pretax profitability, and our 401(k) match, which is based on consolidated
return on assets.
Alignment with our shareholders and the pursuit of long-term value creation is fostered through the
issuance of restricted stock units. Each full-time, non-union, United States-based team member
receives annual equity awards. These awards generally have a two-year vesting period, supporting
retention and companywide strategy alignment.
Our team-based culture and competitive pay structure supported continued high retention. In 2023, our
overall team retention was approximately 80%, with U.S.-based teams retention of 89%.
Our compensation framework helps ensure that we remain strong with best-in-class performance and
retain top talent even in economic downturns. We all share in the company’s successes, as well as the
challenges.
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Talent Development and Educational Opportunities
Our people represent the foundation of our six strategic pillars. Their continued education and talent
development are paramount to our success. Our educational assistance and development programs encourage
personal growth so individuals can remain current in their areas of responsibility, as well as develop new
skills for advancement. Senior leadership plays a key role in our development programs, linking our culture to
critical, proven leadership concepts. As we continue to grow, building talent, retaining team members with
relevant industry and technical experience, and creating opportunities within our teams is one of our most
important tasks and is critical to our long-term success.
Workplace Philosophy
Our people are the foundation of our success and are our most important resource. Our culture safeguards
all people and requires each person to be treated fairly and with dignity. We have equal employment
opportunity, no tolerance for harassment of any kind, respect for human rights, inclusion, and diversity – all of
which focus on our expectations of treating every person with the utmost respect. Our leadership receives
recurring training on these critical topics.
We provide equal employment opportunities to all individuals and applicants. This philosophy of fairness
extends to work assignments, opportunities for advancement, compensation, training opportunities, and all
other aspects of employment. All job-related considerations are based on merit and ability, without regard to
race, color, religion, creed, sex, sexual orientation, gender identity or expression, national origin, genetics, age,
marital or veteran status, pregnancy, the presence of handicaps or disabilities, or any other basis protected by
law. We provide accommodations as required by applicable laws, including for disabilities and religious
beliefs.
We respect human rights, which includes providing safe work environments for our people, providing fair
compensation based on job responsibilities and performance, and ensuring all team members meet minimum
age requirements and eligible working status to qualify for employment.
We do not tolerate harassment or disrespect of an individual or group for any reason. Harassment of a
team member is prohibited, both in the workplace and off the premises. We forbid harassment by any
personnel of a customer, vendor, or any other person. Likewise, we prohibit harassment of our teams in any
way related to their interactions with customers, vendors, or any other person related to their work
responsibilities.
We recognize the value of having a business that reflects diversity of backgrounds and experiences.
We work together as a unified team and respect each other as individuals. Our team-based compensation
structure reinforces this philosophy. We strive to create a welcoming, open, and inclusive environment,
ensuring the best ideas are heard and valued regardless of the position or the individual. We believe these
ideals will continue to drive our success. Our teams and colleagues represent the diversity of the communities
where we live and work and our team member population is representative of our industry and communities.
Broadridge Financial Solutions, Inc. • Tel: (631) 254-7494
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11
Segments
In the fourth quarter 2023, we changed our reportable segments, consistent with how we currently
manage the business, which include steel operations (including warehousing operations previously included in
‘‘Other’’), metals recycling operations, steel fabrication operations, and our new aluminum operations.
Segment information provided within this Form 10-K has been recast for all prior periods presented,
consistent with the current reportable segment presentation. Refer to Notes 1 and 13 in the notes to
consolidated financial statements in Part II, Item 8 of this Form 10-K for additional segment information.
Steel Operations Segment
Steel operations consist of our EAF steel mills, producing steel from ferrous scrap and scrap substitutes,
utilizing continuous casting, automated rolling mills and numerous steel coating, processing lines and
warehouse operations. Our steel operations sell directly to end-users, steel fabricators, and service centers.
These products are used in numerous industry sectors, including the construction, automotive, manufacturing,
transportation, heavy and agriculture equipment, energy, and pipe and tube (including OCTG) markets. Our
steel operations accounted for 67%, 65% and 72% of our consolidated net sales during 2023, 2022 and 2021,
respectively. We are predominantly a domestic steel company with growing sales in Mexico. Exported sales
represented 8%, 5%, and 4% of our steel segment net sales during 2023, 2022 and 2021, respectively.
Our steel operations consist primarily of steelmaking and numerous coating operations. In 2023, we had
approximately 9.4 million tons of flat roll steel annual production capacity. We have an additional 2.0 million
tons of flat roll steel processing capacity through The Techs and our Heartland Flat Roll Division, as well as
distribution of metallic coated and pre-painted products through United Steel Supply (USS). We have annual
flat roll galvanizing capability of 4.8 million tons and painting capability of 1.5 million tons. We also have
approximately 4.6 million tons of long product steel capacity at our long products divisions.
Capacities represent manufacturing capabilities based on steel mill configuration and related team
member support. These capacities do not represent expected volumes in a given year. In addition, estimates of
steel mill capacity are highly dependent on the specific product mix manufactured. Each of our steel mills can
and do roll many different types and sizes of products; therefore, our capacity estimates assume a typical
product mix.
2023 Annual Report
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Page 12 of 34 Session: 56
12
The following chart summarizes our steel operations primary products and the estimated percentage of
tons sold by end market:
Steel Operations Products and Tons Sold by End Market
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S teel Operations Tons S old by End Market (based on 2023 tons shipped)
10% 17% 16% 5% 10% 2% 8% 2% 6% 5% 19%
S heet S teel Products:
Butler, Columbus, and S outhwest-S inton Flat Roll Divisions
Divisions and Products
48%
•
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Hot Roll (HR)
Cold Roll (CR)
M etallic Coated
detniaP
The Techs - Processing
M etallic Coated
HR, and pickled and oiled HR sheet steel
CR sheet steel
HR and CR galvanized, HR galvannealed,
CR galvannealed, and Galvalume® sheet steel
leetsteehsdetniap-erP
HR and CR galvanized and Galfan®
sheet steel
Heartland Flat Roll Division - Processing
Hot Roll and Cold Roll
M etallic Coated
HR pickled and oiled, and CR sheet steel
CR galvanized sheet steel
United S teel S upply - Distribution
M etallic Coated
detniaP
Long Products:
S tructural and Rail Division
Structural Steel Beams
liaR
Structural Shapes
HR and CR galvanized, and Galvalume® sheet
steel
leetsteehsdetniap-erP
Wide flange, American Standard Beams,
H Piling, and manufactured housing beams
yollaetaidemretni,nobrachtgnertsdradnatS
hardness, and premium grade
Channels, angles and flat bars
Reinforcing bar and smooth rounds: cut-to-length
and coiled
Engineered Bar Products Division
Special-Bar-Quality
M erchant-Bar-Quality
Round-cornered squares
Round bars
Bar finishing
Vulcan Threaded Products
Threaded rod
gnissecorP
gnihsinifraB
Cold drawn and heat treated bar
Roanoke Bar Division
M erchant Steel
Light Structural Shapes
S teel of West Virginia
Wide Flange Beams
Standard Beams
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Specialty Steel Sections
Flats
Channels, angles, and flat bars
Rounds
Reinforcing Bar
Fabrication and finishing
Cut-to-length
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Broadridge Financial Solutions, Inc. • Tel: (631) 254-7494
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Date: March 21, 2024 Time: 19:33:0
Page 13 of 34 Session: 56
13
SHEET STEEL PRODUCTS
Our sheet steel products, consisting of hot rolled, cold rolled and coated steel products are currently
produced by our Butler, Columbus, and Sinton Flat Roll Divisions, and our numerous downstream coating
lines, including The Techs, Heartland Flat Roll Division, and USS (Steel Processing divisions). Our sheet steel
operations represented 68%, 77% and 73% of steel operations net sales in 2023, 2022, and 2021, respectively.
We produced 9.2 million tons of sheet steel at these facilities in 2023, 8.3 million tons in 2022, and
7.6 million tons in 2021.
We shipped the following sheet steel products volumes at the following facilities (tons):
Butler, Columbus, and Sinton . . . . . . . . . . . . . . . . . . .
Flat Roll divisions
2023
7,459,023
2022
6,772,162
2021
5,868,734
Steel Processing divisions . . . . . . . . . . . . . . . . . . . . . .
1,731,911
1,673,967
1,653,433
The following chart summarizes the types of sheet steel products sold by sales dollars, during the
respective years, with cold rolled and coated products representing value-added products:
70%
60%
50%
40%
30%
20%
10%
0%
Sheet Steel Product Mix
62%
64%
62%
32%
31%
33%
2021
2022
2023
6%
5%
5%
Hot Roll and Pickled and
Oiled
Cold Roll
Coated
Customers. Steel processors and service centers typically act as intermediaries between primary sheet
steel producers and the many end-user manufacturers that require further processing of hot roll coils.
The additional processing performed by the intermediate steel processors and service centers include pickling,
galvanizing, cutting to length, slitting to size, leveling, blanking, shape correcting, edge rolling, shearing and
stamping. We believe that our intermediate steel processor and service center customers will remain an
integral part of our customer base. The Columbus and Sinton Flat Roll Divisions allow us to capitalize on the
industrial markets in the Southern United States and Mexico, as well as further expand our customer base in
painted, line pipe and other pipe products. Galvanized flat rolled products produced by our Butler, Columbus,
and Sinton Flat Roll Divisions are similar and are sold to a similar customer base. The Techs and Heartland
Flat Roll Division specialize in the galvanizing of specific types of flat roll steels in primarily non-automotive
applications, servicing a variety of customers in the heating, ventilation and air conditioning (HVAC),
construction, agriculture and consumer goods markets. USS adds a complementary distribution channel for
metallic coated and pre-painted flat roll steel coils to the roll-former market, serving the roofing and siding
industry. This connects us to a rapidly growing industry sector with customers that do not historically
purchase steel directly from a steel producer. USS provides continued growth to one of our highest-margin
flat roll steel products. Our sheet steel operations also provide a substantial portion (56% in 2023) of the sheet
steel utilized in our steel fabrication operations.
2023 Annual Report
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Page 14 of 34 Session: 56
14
The following chart summarizes the types of end customers who purchased our sheet steel products, by
sales dollars, during the respective years:
Sheet Steel Customers
60%
50%
40%
30%
20%
10%
0%
37%
35%
33%
31%
32% 31%
2021
2022
2023
20%
14%
9%
9%
10%
9%
9%
6%
6%
3%
3%
3%
LONG PRODUCTS
Our long steel products consist of a wide array of differentiating products produced by our four mills and
Vulcan Threaded Products, Inc. (Vulcan), a downstream finishing operation.
Structural and Rail Division produces a variety of parallel flange beams and channel sections, as well
as flat bars and large unequal leg angles, and reinforcing steel bar including custom cut-to-length, smooth bar,
and coiled. We also produce standard strength carbon, intermediate alloy hardness, and premium grade rails in
40 to 320 feet length for the railroad industry. Our state-of-the art heat treating system allows us to produce
high quality premium rail, which has been certified by all Class I railroads. In addition, our rail-welding
facility has the ability to weld (Continuous Welded Rail) in lengths up to 1,600 feet, which offers substantial
savings to the railroads both in terms of initial capital cost and through reduced maintenance. We also utilize
our Structural and Rail Division’s excess capacity to supply our Engineered Bar Products Division with
pull-through volume of billets to utilize its excess rolling capacity.
Engineered Bar Products Division produces a broad range of engineered special-bar-quality (SBQ),
merchant-bar-quality (MBQ) and other engineered round steel bars. We also have a bar finishing facility,
which provides various downstream finishing operations for SBQ steel bars, including turning, polishing,
straightening, chamfering, precision saw-cutting, and heat-treating capabilities. Vulcan produces threaded rod
products, and cold drawn and heat-treated bar, creating strategic pull-through demand of our Engineered Bar
Products Division’s special-bar-quality products.
Roanoke Bar Division produces merchant products, including channels, angles, flats, merchant rounds,
and reinforcing steel bars. Excess steel billet production is sold to mills without sufficient melting capacities,
including our Steel of West Virginia facility. Our steel fabrication operations also purchase angles from our
Roanoke Bar Division.
Steel of West Virginia produces a wide array of specialty shapes and light structural steel and frequently
performs fabrication and finishing operations on those products, such as cutting to length, additional
straightening, hole punching, shot blasting, welding, galvanizing, and coating. Through this array of products
and additional finishing, we create custom finished products that are generally placed directly into our
customers’ assembly operations.
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We shipped the following long products volumes at each of these facilities (tons):
Structural and Rail Division . . . . . . . . . . . . . . . . . . . . .
Rail shipments (included above) . . . . . . . . . . . . . . . .
Engineered Bar Products Division . . . . . . . . . . . . . . . . .
Roanoke Bar Division . . . . . . . . . . . . . . . . . . . . . . . . .
Steel of West Virginia . . . . . . . . . . . . . . . . . . . . . . . . .
2023
1,851,349
319,241
836,179
564,776
378,515
2022
1,865,405
299,795
894,374
589,449
363,832
2021
1,933,433
301,847
809,808
595,879
356,353
Customers. The principal customers for our structural steel products are steel service centers, steel
fabricators and various manufacturers. Service centers provide key distribution channels for the mills and
value-add services to the end-user. A growing number of fabricators and end-users request to source some of
their steel products directly from the mill. The steel rail marketplace in the United States, Canada and Mexico
is specialized and defined, with eight Class I railroads and a large distribution network.
SBQ products are principally consumed by cold finishers, forgers, intermediate processors, OEM
manufacturers, steel service centers, and distributors, as well as pull-through volume to Vulcan. Our MBQ
products are sold primarily to steel service centers, as well as reinforcing steel bar distributors, joist producers
(such as our New Millennium Building Systems), and OEMs. Some of the excess steel billet production at the
Roanoke Bar Division is sold to mills without sufficient melting capacities, including our Steel of West
Virginia facility. Our steel fabrication operations also purchase angles from Roanoke Bar Division. Steel of
West Virginia’s customers are primarily OEMs producing solar panel structures, truck trailers, industrial lift
trucks, merchant products, guardrail posts, manufactured housing, mining, and off-highway construction
equipment. Steel of West Virginia’s flexible manufacturing capabilities enable us to meet demand for a variety
of custom-ordered and designed products. Many of these products are produced in small quantities for
low volume end-uses resulting in a wide variety of customers, the largest of which are in the truck trailer and
industrial lift truck industries.
Steel Operations Segment Competition
The markets in which we conduct business are highly competitive with an abundance of competition in
the carbon steel industry from North American and foreign integrated and mini-mill steelmaking and
processing operations. We compete in numerous industry sections, most significantly tied to the construction,
automotive, and other manufacturing sectors. In many applications within these industry sections, steel
competes with other materials, such as aluminum, cement, composites, plastics, carbon fiber, glass and wood.
Some of our products are commodities, subject to their own cyclical fluctuations in supply and demand.
However, we are focused on providing a broad range of diversified value-added products that de-emphasize
commodity steel. The primary competitive influences on products we sell are price, quality and value-added
services.
2023 Annual Report
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Page 16 of 34 Session: 56
16
Metals Recycling Operations Segment
Metals Recycling operations include both ferrous and nonferrous scrap metal processing, transportation,
marketing, brokerage and scrap management services, strategically located primarily in close proximity to our
steel mills and other end-user scrap consumers, throughout the United States, and Central and
Northern Mexico. Our metals recycling operations accounted for 12%, 10% and 12% of our consolidated net
sales during 2023, 2022 and 2021, respectively. Through acquisitions in 2020 and 2022, we have increased
shipments into Mexico, and export sales represented 18%, 14% and 11% of metals recycling segment net
sales during 2023, 2022 and 2021, respectively.
We shipped the following from our metals recycling operations:
Ferrous metal total (gross tons) . . . . . . . . . . . . . . . . . . .
Shipments to our steel mills . . . . . . . . . . . . . . . . . . .
Percent of total to our steel mills . . . . . . . . . . . . . . . .
Nonferrous metals (thousands of pounds) . . . . . . . . . . . .
2023
5,779,114
3,579,958
2022
5,301,774
3,475,662
2021
5,442,478
3,574,668
62%
66%
66%
1,108,211
1,053,852
1,093,472
We sell various grades of processed ferrous scrap primarily to steel mills and foundries. Ferrous scrap
metal is the primary raw material for EAFs, including our steel mills. In addition, we sell various grades of
nonferrous metals including copper, brass, aluminum, and stainless steel, to smelters, refineries, alloy
manufacturers, specialty mills and other consumers.
We purchase processed and unprocessed ferrous and nonferrous scrap metals, in a variety of forms for
our metals recycling facilities.
Ferrous scrap comes from two primary sources:
• Manufacturing industrial facilities, metal fabrication plants, and machine shops, which generate
ferrous scrap referred to as prompt or industrial scrap, and
•
Scrap dealers, retail individuals, auto wreckers, demolition firms and others who provide steel and
iron scrap, referred to as obsolete scrap. Obsolete scrap includes scrap recycled from end-of-life
items, such as automobiles, appliances, and machinery.
Nonferrous scrap comes from three primary sources:
• Manufacturers and other nonferrous scrap sources, which generate or sell scrap aluminum, copper,
stainless steel, and other nonferrous metals,
•
•
Producers of items such as electric wire, telecommunication service providers, aerospace, defense
and recycling companies that generate nonferrous scrap consisting primarily of copper wire,
aluminum beverage cans, and various other metals and alloys, and
Retail transactions conducted with the general public who sell material directly to our facilities,
collected from a variety of sources.
We do not purchase a significant amount of scrap metal from a single source or from a limited number
of major sources. Market demand and the composition, quality, size, weight, and location of the materials are
the primary factors that determine prices.
Products. Our metals recycling operations primarily involve the purchase, processing, and resale of
ferrous and nonferrous scrap metals into reusable forms and grades. We process an array of ferrous products
through a variety of methods, including sorting, shredding, shearing, cutting, bailing, and breaking. Our major
ferrous products include heavy melting steel, busheling, bundled scrap, shredded scrap and other scrap metal
products, such as steel turnings and cast iron. These products vary in properties or attributes related to
cleanness, size of individual pieces, and residual alloys. The necessary characteristics of the ferrous products
are determined by the specific needs and requirements of the consumer and affect the individual product’s
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17
relative value. We process numerous grades of nonferrous products, including aluminum, brass, copper,
stainless steel, and other nonferrous metals. Additionally, we provide transportation logistics (truck, rail, and
river barge), marketing, brokerage, and scrap management services, providing competitive price and cost
advantages to our suppliers and customers. We design, install, and manage customized scrap management
programs for industrial manufacturing companies.
Customers. We sell various grades of processed ferrous scrap to end-users, such as EAF steel mills,
integrated steelmakers, foundries, secondary smelters, and metal brokers, who aggregate materials for other
large users. Ferrous scrap metal is the primary raw material for EAFs, including our steel mills. Most of our
ferrous scrap customers purchase processed scrap through negotiated spot sales contracts which establish a
quantity purchase for the month. The price we charge for ferrous scrap depends upon market demand,
composition, quality, size, weight, and transportation costs, as well as the quality and grade of the scrap. We
sell various grades of processed nonferrous scrap to end-users such as aluminum sheet and ingot
manufacturers, brass and bronze ingot makers, copper refineries, mills, smelters, specialty steelmakers, alloy
manufacturers, wire and cable producers, utilities, and telephone networks. The price we charge for nonferrous
scrap also depends upon market demand and pricing, transportation costs, as well as the quality and grade of
the scrap.
Competition. Scrap is a global commodity influenced by conditions in a number of industrialized and
emerging markets throughout Asia, Europe and North America. The markets for scrap metals are highly
competitive, both in the purchase of raw or unprocessed scrap, and the sale of processed scrap. With regard to
the purchase of unprocessed scrap, we compete with numerous independent recyclers, as well as smaller scrap
companies engaged only in collecting obsolete scrap. In many cases, we also purchase unprocessed scrap
metal from smaller scrap dealers and other processors. Successful procurement of materials is determined
primarily by the price offered by the purchaser for the raw scrap and the proximity of our processing facility
to the source of the raw scrap. Both ferrous and nonferrous scrap sell as a commodity in both domestic and
international markets, which are affected, sometimes significantly, by relative economic conditions, currency
fluctuations, and the availability and cost of transportation. Competition for sales of processed scrap is based
primarily on the price, quality, and location of the scrap metals, as well as the level of service provided in
terms of reliability and timing of delivery.
We also face potential competition for sales of processed scrap from other producers of steel products,
such as EAFs and integrated steel mills, some of which, like us, are also vertically connected in the scrap
metals recycling business. In addition, other steel mills may compete with us in attempting to secure scrap
supply through direct purchasing from our scrap suppliers. Scrap metal processors also face competition from
substitutes for prepared ferrous scrap, such as pig iron, pelletized iron, hot briquetted iron (HBI), direct
reduced iron (DRI), and other forms of processed iron.
The industry is highly fragmented with many smaller, regional, national and global companies, which
have multiple locations in areas in which our metals recycling operations also operate. No single scrap metals
recycler has a significant market share in the domestic market.
2023 Annual Report
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Page 18 of 34 Session: 56
18
Steel Fabrication Operations Segment
Our steel fabrication operations include seven New Millennium Building Systems plants that primarily
serve the non-residential construction industry throughout the United States. We have a national operating
footprint that allows us to serve the entire domestic non-residential construction market including large retail
chains and e-commerce distribution channels.
Steel fabrication operations accounted for 15%, 19%, and 10% of our consolidated net sales during 2023,
2022 and 2021, respectively. We sold 663,000, 856,000, and 789,000 tons of joist and deck products during
2023, 2022, and 2021, respectively.
Products. Our steel fabrication operations produce steel non-residential building components, including
steel joists, trusses, girders, and steel deck. Our joist products include bowstring, arched, scissor,
double-pitched and single-pitched joists. Our deck products include a full range of steel decking: roof, form,
cellular, composite floor, specialty architectural, floor systems, and bridge deck.
Customers and Markets. Our primary steel fabrication operations customers are non-residential steel
fabricators, metal building companies, general construction contractors, developers, owners, brokers, and
governmental entities. Our customers are located throughout the United States, including national accounts.
Our non-residential construction market consists primarily of e-commerce warehouses, data centers, metal
buildings, education, and commercial building projects. Our steel fabrication operations maintain
approximately one-third of the total domestic steel joist and deck market for bookings, of approximately
1.8 million tons, 2.1 million tons. and 3.6 million tons during 2023, 2022 and 2021, respectively.
Competition. We compete with other North American joist and steel deck producers primarily on the
basis of price, quality, customer service, and proximity to the customer. Our national footprint allows us to
service the entire domestic non-residential construction market, as well as national accounts such as large
retail chains, including their distribution warehouse facilities, and certain specialty deck customers.
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Page 19 of 34 Session: 56
19
Other Information
Sources, Availability, and Cost of Steel and Other Operations’ Raw Materials
Scrap Metals. The principal raw material of our EAF steel operations is recycled ferrous scrap derived
from, among other sources, ‘‘home scrap,’’ generated internally at our steel mills themselves; industrial scrap,
generated as a by-product of manufacturing; obsolete scrap, recycled from end-of-life automobiles, appliances,
and machinery, and demolition scrap, recycled from obsolete structures, containers and machines.
Recycled ferrous scrap typically comprises more than 80% of the metallic melt mix in EAF steelmaking,
in contrast to integrated mill steelmaking, where the proportion of scrap has traditionally been approximately
25% to 35%. Depending upon the scrap substitute material that may be available from time to time, and the
relative cost of such material, the percentage of scrap used in our steelmaking operations could be increased
or reduced in our metallic melt mix.
Many variables can impact ferrous scrap prices, all of which reflect the pushes and pulls of the supply
demand equation. These factors include the level of domestic steel production (high quality low-residual scrap
is a by-product of manufacturing activity), the level of exports of scrap from the United States, and the
amount of obsolete scrap recycled. In addition, historical domestic ferrous scrap prices typically have a strong
correlation and spread to global pig iron pricing. Generally, as domestic steel demand increases, so does scrap
demand and resulting scrap prices. The reverse is also normally, but not always, true with scrap prices
following steel prices downward when supply exceeds demand. When scrap prices greatly accelerate, this can
challenge one of the principal elements of an EAF based steel mill’s traditional lower cost structure—the cost
of its metallic raw material.
Iron Units. In addition to scrap, pig iron, DRI, HBI, and internally sourced liquid pig iron are used in
our EAF steel mill production. During 2023, 2022, and 2021 we consumed 13.0 million, 12.0 million, and
11.0 million tons, respectively, of metallic materials in our steelmaking furnaces, of which, iron units other
than scrap, represented approximately 15% of the tons in 2023, and 13% of the tons in 2022 and 2021.
Energy Resources
Electricity. Electricity is a significant input required in our EAF steel operations, representing
approximately 4% of steel production costs of goods sold in 2023, 2022 and 2021. We have entered into fixed
price electricity contracts for the Butler Flat Roll Division, Columbus Flat Roll Division, Roanoke Bar
Division and Steel of West Virginia, while our Engineered Bar Products Division has a combination of fixed
pricing and market pricing for the various components of the electrical services (demand charge, energy
charge, riders, etc.). Our Sinton Flat Roll Division purchases electricity at current market prices. Our
Structural and Rail Division purchases electricity at current market prices and through fixed price forward
contracts.
Research and Development
Our research and development activities have consisted of efforts to expand, develop and improve our
steel products and operating processes, such as our Sinton Flat Roll Division, and our efforts to develop and
improve alternative ironmaking technologies. Most of these research and development efforts have been
conducted in-house by our team members.
Environmental Matters
Our operations are subject to substantial and evolving environmental, health and safety laws and
regulations concerning, among other things, emissions to the air, discharges to surface and ground water and
to sewer systems, and the generation, handling, storage, transportation, treatment and disposal of solid and
hazardous wastes and secondary materials. Our operations are dependent upon permits regulating discharges
into the environment or the use and handling of by-products in order to operate our facilities. We dedicate
considerable resources aimed at achieving compliance with applicable laws concerning the environment.
While we do not currently believe that our future compliance efforts with such provisions will have a material
adverse effect on our results of operations, cash flows or financial condition, this is subject to change in the
ever-evolving regulatory environment in which we operate.
2023 Annual Report
Broadridge Financial Solutions, Inc. • Tel: (631) 254-7494
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Operator: kaplowitzk
Date: March 21, 2024 Time: 19:33:0
Page 20 of 34 Session: 56
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Since the interpretation and enforcement of environmental laws and regulations that may be enacted from
time to time can be subject to changing social or political norms, our environmental capital expenditures and
costs for environmental compliance may increase in the future. In addition, due to the possibility of
unanticipated regulatory or other developments, the amount and timing of future environmental expenditures
may vary substantially from those currently anticipated. The cost of current and future environmental
compliance may also place our operations at a competitive disadvantage with respect to foreign producers,
which may not be required to undertake equivalent costs in their operations.
Pursuant to the Resource Conservation and Recovery Act (RCRA), which governs the treatment, handling
and disposal of solid and hazardous wastes, the United States Environmental Protection Agency (United States
EPA) and authorized state or local environmental agencies may conduct inspections to identify alleged
violations or areas where there may have been releases of solid or hazardous constituents into the environment
and require the facilities to pay penalties and/or take corrective action to address any such releases. RCRA
also allows citizens in certain situations to bring suits against regulated facilities for potential damages and
cleanup. Many states have statutes and regulatory authorities similar to RCRA that can also apply. Many of
our facilities generate wastes subject to these requirements. Our operations produce various by-products, some
of which, for example EAF dust, may be categorized as hazardous waste, requiring special handling for
disposal or for the recovery of metallics. We collect by-products in pollution control equipment such as
baghouses, and then recycle or appropriately dispose of the by-products. While we cannot predict the future
actions of the regulators or other interested parties, the potential exists for required corrective action, the costs
of which could be substantial.
Under the Comprehensive Environmental Response Compensation and Liability Act, known as CERCLA
or Superfund, the United States EPA, state agencies and, in some instances, private parties have the authority
to impose joint and several liability for the remediation of contaminated properties upon generators of
hazardous substances, current and former site owners and operators, transporters and other potentially
responsible parties, regardless of fault or the legality of the original disposal activity. Many states have
statutes and regulatory authorities similar to CERCLA that can also apply. We have a number of material
handling agreements with various contractors to properly dispose of or recycle our EAF dust and certain other
by-products of our operations. However, we cannot assure that, even if there has been no fault by us, we may
not still be cited as a hazardous substances generator by reason of an environmental cleanup at one of our
facilities or a site to which our by-products were transported.
The Clean Water Act and similar state and local laws apply to aspects of our operations and impose
regulatory restrictions related to the discharge of wastewater, storm water and dredged or fill material. The
United States EPA, state agencies and, in certain instances, private parties have the ability to bring suit
alleging violations and seeking penalties and injunctive relief. These legal provisions can also require new or
expanded water treatment investments to be made and can limit or even prohibit certain current or planned
activities at our operations.
The Clean Air Act and analogous state and local laws require many of our facilities to obtain and
maintain air permits in order to operate. Air permits can impose new or expanded obligations to limit or
prevent current or future emissions and to add costly pollution control equipment. Enforcement for alleged
violations can be brought by the United States EPA, state and local agencies, and in certain instances private
parties, and can result in penalties and injunctive relief.
In addition, there are a number of other environmental, health and safety laws and regulations that apply
to our facilities and may affect our operations. By way of example and not of limitation, certain portions of
the federal Toxic Substances Control Act, Oil Pollution Act, Safe Drinking Water Act and Emergency
Planning and Community Right-to-Know Act, as well as state and local laws and regulations implemented by
the regulatory agencies, apply to aspects of our facilities’ operations. Our current and planned operations in
Mexico are similarly subject to environmental requirements applicable to those operations. In some instances,
we may also be subject to other foreign governments’ regulations and international treaties and laws. Many of
these laws allow both the governments and citizens in certain situations to bring suits against regulated
Broadridge Financial Solutions, Inc. • Tel: (631) 254-7494
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Operator: kaplowitzk
Date: March 21, 2024 Time: 19:33:0
Page 21 of 34 Session: 56
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facilities for alleged environmental violations. Finally, our operations could in certain situations be subject to
toxic tort suits brought by third parties alleging causes of action such as nuisance, negligence, trespass,
infliction of emotional distress, or other claims alleging personal injury, property damage, or other harms.
Available Information
Our internet website address is www.steeldynamics.com. We make available on our internet website, under
‘‘Investors,’’ free of charge, as soon as reasonably practicable after such materials are electronically filed with, or
furnished to, the Securities and Exchange Commission, our Annual Report on Form 10-K, Quarterly Reports on
Form 10-Q, Current Reports on Form 8-K and amendments to those reports, as well as press releases, ownership
reports pursuant to Section 16(a) of the Securities Act of 1933, our Code of Ethics for Principal Executive Officers
and Senior Financial Officers, our Code of Business Conduct and Ethics, and any amendments thereto or waivers
thereof, as well as our Audit, Compensation, and Corporate Governance and Nominating Committee Charters. The
contents of our or any other website are not incorporated into this report. These reports are also available publicly
on the Securities and Exchange Commission website, www.sec.gov.
2023 Annual Report
Broadridge Financial Solutions, Inc. • Tel: (631) 254-7494
@edipvwctxa217/PRODUCTION_Jobs/CLS_Funds/GRP_Steel_Dynamics/JOB_ny20020056x1_print/DIV_102-part1
Operator: kaplowitzk
Date: March 21, 2024 Time: 19:33:0
Page 22 of 34 Session: 56
22
ITEM 1A. RISK FACTORS
Many factors may have an effect on our business, results of operations, financial condition and cash
flows. We are subject to various risks resulting from changing economic, environmental, regulatory, political,
industry, business and financial conditions. The factors described below are some of the risks that could
materially negatively impact us.
Global and National Risks Related to our Business
Our industry, as well as the industries of many of our customers and suppliers upon whom we are
dependent, is affected by domestic and global economic factors including periods of slower than anticipated
economic growth and the risk of a recession.
Our financial results are substantially dependent not only upon overall economic conditions in the United
States and globally, including North America, Europe and in Asia, but also as they may affect one or more of
the industries upon which we depend for the sale of our products. Global or domestic actions or conditions,
including political actions, trade policies or restrictions, proposed or actual changes in tax laws, such as those
introduced, proposed or actual regulation, including those related to the environment, interest rates, terrorism,
acts of war or hostility, natural disasters, or pandemics, epidemics, widespread illness or other health issues,
could result in changing economic conditions in the United States and globally, disruptions to or slowdowns
in our business, our supply chain, or our global or domestic industry, or those of our customers or suppliers
upon whom we are dependent. Additionally, periods of slower than anticipated economic growth could reduce
customer confidence and adversely affect demand for our products and further adversely affect our business,
results of operations, financial condition and cash flows. Metals industries have historically been vulnerable to
significant declines in consumption and product pricing during periods of economic downturn or continued
uncertainty, including the pace of domestic non-residential construction activity.
Our business is also dependent upon certain industries, such as construction, automotive, manufacturing,
transportation, heavy and agriculture equipment, energy and pipe and tube (including OCTG) markets, and
these industries are also cyclical in nature and may experience supply chain disruptions. Therefore, these
industries may experience their own fluctuations in demand for our products based on such things as
economic conditions, interest rates, supply chain disruptions, raw material and energy costs, consumer
demand, the rate of inflation and infrastructure funding decisions by governments. Many of these factors are
beyond our control. As a result of volatility in our industry or in the industries we serve, we may have
difficulty increasing or maintaining our level of sales or profitability. A downturn in our industry or the
industries we serve may adversely affect our business, results of operations, financial condition and cash
flows.
A prospective decline in consumer and business confidence and spending, which is often coupled with
reductions in the availability of credit or increased cost of credit and interest rates, as well as volatility in the
capital and credit markets, may adversely affect the business and economic environment in which we operate
and the profitability of our business. We are also exposed to risks associated with the creditworthiness of our
customers and suppliers, which during times of high interest rates can be intensified. If the availability of
credit to fund or support the continuation and expansion of our customers’ business operations is curtailed or
if the cost of that credit is high, the resulting inability of our customers or of their customers to either access
credit or absorb the cost of that credit may adversely affect our business by reducing our sales or by
increasing our exposure to losses from uncollectible customer accounts. A disruption of the credit markets
could also result in financial instability of some of our customers and suppliers. The consequences of such
adverse effects could include the interruption of production at the facilities of our customers, the reduction,
delay or cancellation of customer orders, delays or interruptions of the supply of raw materials we purchase,
and bankruptcy of customers, suppliers or other creditors. Any of these events may adversely affect our
business, results of operations, financial condition and cash flows.
Broadridge Financial Solutions, Inc. • Tel: (631) 254-7494
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Date: March 21, 2024 Time: 19:33:0
Page 23 of 34 Session: 56
23
Global steelmaking overcapacity and imports of steel into the United States may adversely affect United
States steel prices, which, together with increased scrap prices, may adversely affect our business, results of
operations, financial condition and cash flows.
Global steelmaking capacity currently exceeds global consumption of steel products, which adversely
affects United States and global steel prices. Such excess capacity sometimes results in steel manufacturers in
certain countries exporting steel and steel products, at prices that are lower than prevailing domestic prices,
and sometimes at or below their cost of production. Excessive imports of steel and steel products, into the
United States, may exert downward pressure on United States steel and steel products prices, which adversely
affects our business, results of operations, financial condition and cash flows. Fluctuations in the value of the
dollar can also affect imports, as a strong United States dollar makes imported products less expensive,
potentially resulting in more imports of steel and steel products into the United States by our foreign
competitors. Furthermore, the introduction of additional domestic steel capacity could increase this global
overcapacity. This, in turn, has led to and may further lead to increased domestic demand for ferrous scrap
resulting in increased scrap prices. Our results of operations, financial condition and cash flows are driven
primarily from the metal spread achieved from the price we sell steel and steel products compared to the price
of our metallic raw materials, including scrap. During prolonged periods of steel and steel products
overcapacity, leading to lower selling prices, combined with high demand for scrap and raw materials, leading
to higher buying prices, our metal spreads could be compressed, which may adversely affect our business,
results of operations, financial condition and cash flows.
United States steel producers compete with many foreign producers, including those in China, Vietnam
and other Asian and European countries. Competition from foreign producers is typically strong and is
periodically exacerbated by weakening of the economies of certain foreign steelmaking countries, at times
leading to imports of steel involving dumping and subsidy abuses by foreign steel producers. Some foreign
steel producers are owned, controlled or subsidized by foreign governments. As a result, decisions by these
producers with respect to their production, sales and pricing are sometimes influenced to a greater degree by
political and economic policy considerations than by prevailing market conditions, realities of the marketplace
or consideration of profit or loss. Additionally, at times when iron ore prices are low, disruption of the scrap
price correlation to iron ore may occur, which may lead to reduced global costs to produce steel, further
depressing steel import prices. A higher volume of steel imports into the United States tends to occur at
depressed prices when foreign steelmaking countries experience periods of economic difficulty, decreased
demand for steel products or excess capacity. The global steelmaking overcapacity is exacerbated by Chinese
steel production capacity that far exceeds that country’s demand and has made China a major global exporter
of steel, resulting in weakened global steel pricing than otherwise would be expected. While measures to curb
unfair trade such as tariffs, duties or quotas, along with trade agreements with other countries, have decreased
the volume of steel and steel products imports, domestic steel and steel products prices can be negatively
impacted by excessive imports of steel and steel products. Should current tariffs, duties or quotas expire or be
relaxed, repealed or circumvented by importers of steel and steel products, or should trade agreements be
renegotiated, downward pressure may be exerted on United States steel and steel products prices, which may
adversely affect our business, results of operations, financial condition and cash flows.
Pandemics, epidemics, widespread illness or other health issues may adversely affect our business, results
of operations, financial condition, cash flows, liquidity, and stock price.
Pandemics, epidemics, widespread illness or other health issues may adversely affect our business, results
of operations, financial condition, cash flows, liquidity and stock price. Government actions globally,
including United States federal and state governmental actions, related to pandemics, epidemics, widespread
illness or other health issues have historically impacted demand for our products, our supply chain, our
employees, the economy generally, inflation and high interest rates, and any similar future actions may result
in similar or additional impacts.
2023 Annual Report
Broadridge Financial Solutions, Inc. • Tel: (631) 254-7494
@edipvwctxa217/PRODUCTION_Jobs/CLS_Funds/GRP_Steel_Dynamics/JOB_ny20020056x1_print/DIV_102-part1
Operator: kaplowitzk
Date: March 21, 2024 Time: 19:33:0
Page 24 of 34 Session: 56
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Industry Risks Related to our Business
Our level of production and our sales and earnings are subject to significant fluctuations as a result of the
cyclical nature of the steel industry and some of the industries we serve.
The steel manufacturing business is cyclical in nature, and the selling price of the steel we make may
fluctuate significantly due to many factors beyond our control. Furthermore, a number of our products are
commodities, subject to their own cyclical fluctuations in supply and demand in both metal consuming and
metal generating industries, including the construction and manufacturing industries. The timing, magnitude
and duration of these cycles and the resulting price fluctuations are difficult to predict. The sale of our
manufactured steel products is directly affected by demand for our products in other cyclical industries, such
as construction, automotive, manufacturing, transportation, heavy and agriculture equipment, energy and pipe
and tube (including OCTG) markets. Economic difficulties, stagnant or slow global economies, supply and
demand imbalances, supply chain disruptions, periods of heightened inflation or high interest rates, and
currency fluctuations in the United States or globally may decrease the demand for our products or increase
the amount of imports of steel into the United States, which may decrease our sales, margins and profitability.
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, may constrain operating levels and
reduce profit margins.
Steel producers require large amounts of raw materials, including ferrous scrap metal and scrap substitute
products such as pig iron and pelletized iron, and other supplies such as zinc, graphite electrodes and
ferroalloys. The principal raw material of our EAF steel operations is recycled ferrous scrap derived from,
among other sources, ‘‘home scrap,’’ generated internally at steel mills themselves, industrial scrap, generated
as a by-product of manufacturing, obsolete scrap, recycled from end-of-life automobiles, appliances and
machinery, and demolition scrap, recycled from obsolete structures, containers and machines. The prices for
scrap are subject to market forces largely beyond our control, including demand by United States and foreign
steel producers, freight costs and speculation. The scrap metal recycling industry has historically been, and is
expected to remain, highly cyclical and the prices for scrap have varied significantly in the past, may vary
significantly in the future and do not necessarily fluctuate in tandem with the price of steel. Moreover, some
of our integrated steel producer competitors are not as dependent as we are on ferrous scrap as a part of their
raw material melt mix, which, during periods of high scrap costs relative to the cost of blast furnace iron used
by the integrated producers, give them a raw material cost advantage over EAF mills. However, given
environmental considerations of investors, customers and regulators, additional EAF mills may be constructed,
or companies currently operating blast furnace mills may invest in EAF mills, leading to increased demand in
ferrous scrap possibly resulting in higher scrap prices. While our vertical integration into the metals recycling
business and our liquid pig-iron operations are expected to enable us to continue being a cost-effective
supplier to our own steelmaking operations, for some of our metallics requirements, we still rely on other
metallics and raw material suppliers, as well as upon general industry supply conditions for the balance of our
needs.
The availability and prices of raw materials and supplies, particularly those with positive environmental
attributes, may also be negatively affected by new, existing or changing laws, regulations, sanctions or
embargoes, including those that may impose output limitations or higher costs associated with climate change
or GHG allocation by suppliers, interruptions in production, accidents or natural disasters, changes in
exchange rates, global price fluctuations, the availability and cost of transportation, and competing uses, all of
which may be heighted during times of war or hostilities. As a major producer of galvanized steel products,
we purchase and consume a large amount of zinc, which if purchased at high prices, may adversely affect our
profit margins. Any inability to secure a consistent, cost-effective and timely supply of our raw materials and
supplies may adversely affect our business, financial condition, results of operations and cash flows.
Additionally, our inability to pass on all or a substantial part of any cost increases, whether due to
positive environmental attributes, inflation, supply and demand imbalances, or otherwise, or to provide for our
customers’ needs because of the potential unavailability of raw materials, supplies or required environmental
attributes, may result in production slowdowns or curtailments or may otherwise adversely affect our business,
financial condition, results of operations and cash flows.
Broadridge Financial Solutions, Inc. • Tel: (631) 254-7494
@edipvwctxa217/PRODUCTION_Jobs/CLS_Funds/GRP_Steel_Dynamics/JOB_ny20020056x1_print/DIV_102-part1
Operator: kaplowitzk
Date: March 21, 2024 Time: 19:33:0
Page 25 of 34 Session: 56
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The cost and availability of electricity, natural gas, oil and other energy resources are subject to volatile
market conditions.
We consume large amounts of energy to melt scrap, reheat semi-finished products for rolling into
finished products and perform other steps necessary to our production process. We rely on third parties for the
supply of energy resources we require in our production activities. The prices for and availability of
electricity, natural gas, oil and other energy resources, including renewable or other clean energy sources, are
subject to regulation and volatile market conditions, often affected by weather conditions as well as political,
environmental and economic factors beyond our control. As large consumers of electricity and natural gas, we
must have dependable delivery in order to operate. Accordingly, we are at risk in the event of an energy
disruption, including power outages, power unavailability or inability to obtain power at a reasonable price or
with sufficient desired environmental attributes. Prolonged blackouts, curtailments or disruptions caused by
natural disasters or by political or environmental considerations would substantially disrupt our production.
Since a significant portion of our finished products are delivered by truck, unforeseen fluctuations in the price
of fuel would also adversely affect our costs or the costs of many of our customers.
Increased environmental, GHG emissions and sustainability considerations from our customers or related
regulations could affect demand for our products and add significant costs.
Customers, investors and regulators have increased their focus on the environment, GHG emissions and
sustainability. We are committed to the environment and sustainability. We are taking further action to reduce
our environmental footprint through our 2025, 2030, and 2050 goals for GHG emission reduction and
increased renewable energy usage. We believe that achievement of these goals will comport with expectations
of our customers and investors, but certain customers and investors may have differing requirements. To
achieve these goals, our operational costs may increase and we have had and will continue to have additional
capital expenditures, some of which we may not be able to pass along to our customers. Any failure to timely
meet these goals, or other requirements of customers or investors, may have an adverse effect on our business,
results of operations and stock price.
Additionally, governmental agencies, regulators, investors or other groups have introduced, and may
request or require, environmental monitoring, disclosures or regulations in response to the potential impacts of
climate change. International treaties or agreements may also result in increasing regulation of GHG
emissions, including the introduction of carbon emissions limitations or trading mechanisms. Any such
regulation or disclosure requirement could impose significant costs on our operations and on the operations of
our customers and suppliers, including increased energy, capital equipment, emissions controls, environmental
monitoring and reporting and other costs in order to comply with current or future laws, regulations or
demands concerning the environment, climate change, GHG emissions and sustainability. Any adopted
regulations could negatively impact our ability, and that of our customers and suppliers, to compete with
companies situated in areas not subject to or not complying with such regulations, or could affect our
environmental disclosures for any allowances, offsets or credits. We may see an increase in costs relating to
our assets that emit GHGs as a result of these initiatives, which may impact our operations directly or through
our customers and suppliers.
Compliance with and changes in environmental and remediation requirements may result in substantially
increased capital requirements and operating costs.
Existing laws or regulations, as currently interpreted or as may be interpreted in the future, as well as
future laws or regulations, may adversely affect our results of operations and financial condition.
We are subject to numerous local, state, federal and international statutory and regulatory environmental
requirements relating to, among other things:
•
•
•
the generation, storage, treatment, handling and disposal of solid and hazardous waste and secondary
materials;
the discharge of materials into the air, including periodic changes to the National Ambient Air
Quality Standards and to emission standards;
the management, treatment and discharge of wastewater and storm water;
2023 Annual Report
Broadridge Financial Solutions, Inc. • Tel: (631) 254-7494
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Date: March 21, 2024 Time: 19:33:1
Page 26 of 34 Session: 56
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•
•
•
•
•
•
•
•
the use and treatment of groundwater;
the remediation of soil and groundwater contamination;
climate change legislation or regulation;
the need for and the ability to timely obtain air, water or other environmental permits;
the timely reporting of certain chemical usage, content, storage and releases;
the remediation and reclamation of land used in our operations;
natural resource protections; and
the protection of our employees’ health and safety.
Compliance with environmental laws and regulations, which affect our EAF steelmaking, metals
recycling, liquid pig-iron, and copper and aluminum production operations, is a significant factor in our
business. We are required to obtain and comply with environmental permits and licenses, and failure to obtain
or renew or the violation of any permit or license may result in substantial fines and penalties, capital
expenditures, operational changes, suspension of operations and/or the closure of a subject facility. Similarly,
delays, increased costs and/or the imposition of onerous conditions to the securing or renewal of permits may
adversely affect these operations.
Uncertainty regarding adequate pollution control levels, testing and sampling procedures, and new
pollution control technology are factors that may increase our future compliance expenditures. We are unable
to predict the ultimate cost of future compliance with environmental requirements or their effect on our
operations. Although we strive to be in substantial compliance with all applicable laws and regulations, legal
requirements frequently change and are subject to interpretation such that regulatory agencies may bring
enforcement actions for alleged noncompliance. Private parties might also bring claims against us under
citizen suit provisions and/or for property damage or personal injury allegedly resulting from our operations.
New laws, regulations and changing interpretations by regulatory authorities, together with uncertainty
regarding the application of existing requirements, are among the factors that may increase our future
expenditures to comply with environmental requirements. The cost of complying with existing laws or
regulations as currently interpreted or reinterpreted in the future, or with future laws or regulations, may
adversely affect our results of operations and financial condition.
Our operations produce significant amounts of by-products, some of which are handled as solid or
hazardous waste or as hazardous secondary materials. For example, our steel mills generate EAF dust, which
the United States Environmental Protection Agency (United States EPA) and other regulatory authorities
classify as hazardous waste and regulate accordingly unless recycled in an exempt manner.
In addition, the feed materials for the shredders operated by our metals recycling operations include
automobile bodies. A portion of the feed materials consist of currently unrecyclable material known as
shredder residue. If laws or regulations or the interpretation of the laws or regulations change with regard to
EAF dust or shredder residue or other by-products created by our operations, we may incur significant
additional expenditures.
Federal and state environmental laws enable federal and state agencies and certain private parties to
recover from owners, operators, generators and transporters the cost of investigation and cleanup of sites at
which wastes or hazardous substances were disposed and/or migrated. In connection with these laws, we may
be required to clean up contamination discovered at our sites including contamination that may have been
caused by former owners or operators of the sites, to conduct additional cleanup at sites that have already had
some cleanup performed, to address emerging and newly-regulated contaminants such as per- and
polyfluoroalkyl substances (PFAS) and 1,4-dioxane, and/or to perform cleanup with regard to sites formerly
used in connection with our operations.
In addition, we may be required to pay for, or to pay a portion of, the costs of cleanup at sites to which
we sent materials for disposal or recycling, notwithstanding that the original disposal or recycling activity may
have complied with all regulatory requirements then in effect. Under certain laws, a party can be held jointly
Broadridge Financial Solutions, Inc. • Tel: (631) 254-7494
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Page 27 of 34 Session: 56
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and severally liable for all of the cleanup costs associated with a disposal site. In practice, a liable party often
splits the costs of cleanup with other potentially responsible parties. We have received notices from the United
States EPA, state agencies and third parties that we have been identified as potentially responsible for the
costs of investigating and cleaning up a number of disposal sites. In most cases, many other parties are also
named as potentially responsible parties and also contribute to payment of those costs.
Because cleanup liability can in some cases be imposed retroactively on activities that occurred many
years ago, and because federal and state agencies are still discovering sites that pose a threat to public health
or the environment, we can provide no assurance that we will not become liable for significant costs
associated with investigation and remediation of cleanup sites.
Operational and Commercial Risks Related to our Business
We may face significant price and other forms of competition from other steel and aluminum producers,
scrap processors and alternative materials, which may adversely affect our business, financial condition,
results of operations and cash flows.
The global markets in which steel companies and scrap processors conduct business are highly
competitive and became even more so due to consolidations in the steel and scrap industries. Additionally, in
many applications, steel competes with other materials, such as aluminum, cement, composites, plastics,
carbon fiber, glass and wood. Increased use of alternative materials for any reason, including as a response to
regulations or customer demands, could decrease demand for steel or force other steel producers into new
products or markets that compete more directly with us, and combined with increased competition could cause
us to lose market share, increase expenditures or reduce pricing, any one of which may adversely affect our
business, financial condition, results of operations and cash flows.
Additionally, during 2022 we announced our planned project to construct and operate a recycled
aluminum flat rolled products mill with an anticipated annual production capacity of 650,000 tonnes of
finished products to be located in Columbus, Mississippi, with two supporting satellite recycling aluminum
slab centers. Although we anticipate being able to effectively compete in the aluminum industry, along with
the other risks described herein, we may face unexpected and enhanced competition, which may adversely
affect the expected contributions of our aluminum operations and our resulting business, financial condition,
results of operations and cash flows.
Availability of an adequate source of supply of scrap is required for our metals recycling operations.
We procure our scrap inventory from numerous sources. These suppliers generally are not bound by
long-term contracts and generally have no obligation to sell recyclable metal to us. In periods of low industry
scrap prices, scrap suppliers may elect to hold recyclable metal to wait for higher prices or intentionally slow
their metal collection activities. If a substantial number of scrap suppliers cease selling recyclable metal to us,
we may be unable to recycle metal at desired levels which may adversely affect our results of operations and
financial condition. In addition, a slowdown of industrial production in the United States reduces the supply of
industrial grades of metal to the metals recycling industry, resulting in our having less recyclable metal
available to process and sell. Further, additional EAF steel mill construction or blast furnace mills investing in
EAF mills could increase the demand for scrap, potentially resulting in higher scrap prices or periods of
decreased scrap supply. Any inability to secure scrap for our EAF steel mills could adversely affect our
business, results of operations, financial condition and cash flows.
We are subject to cybersecurity threats and may face risks to the security of our sensitive data and
information technology which may adversely affect our business, results of operations, financial condition
and cash flows.
Increased cybersecurity and information technology security requirements, vulnerabilities and threats and
a rise in sophisticated and targeted cybercrime, all of which may be heightened during times of war or
hostilities, pose a risk to the security and functionality of our systems and information networks, and to the
confidentiality, availability and integrity of sensitive data, including intellectual property, proprietary
information, financial information, customer and supplier information, and personally identifiable information.
Additionally, cybersecurity vulnerabilities or attacks could result in an interruption of the functionality of our
2023 Annual Report
Broadridge Financial Solutions, Inc. • Tel: (631) 254-7494
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Page 28 of 34 Session: 56
28
automated and electronically controlled manufacturing operating systems, which, if compromised, could cease,
threaten, delay or slow down our ability to melt, roll or otherwise process steel or any of our other products
for the duration of such interruption. Our customers and suppliers may also store certain of our sensitive
information on their information technology systems, which if breached or attacked, could likewise expose our
sensitive information. Similarly, information system vendors and software suppliers may experience a
cybersecurity or information technology breach that exposes our systems or sensitive data. Any of these
cybersecurity and information technology breaches or disruptions may result in reputational harm and may
adversely affect our business, results of operations, financial condition and cash flows.
Although we believe we have adopted procedures, training programs, and controls to adequately protect
our sensitive data, networks and information and operating technology and systems, there can be no assurance
that a system or network failure, or cybersecurity breach or attack, will be prevented, whether due to attacks
by cyber criminals or due to employee, contractor or other error or malfeasance. This could lead to system
interruption, production delays or downtimes and operational disruptions, and the disclosure, modification or
destruction of sensitive data, which may adversely affect our reputation, customer and supplier relationships,
financial results and results of operations, and could result in litigation or regulatory investigations, actions,
fines or penalties, as well as increased cybersecurity monitoring and protection costs, including the cost or
availability of insurance. Additionally, as cybersecurity threats continue to evolve and become more
sophisticated, we may need to invest additional time, resources and finances to protect the security of our
sensitive data, systems and information networks. We maintain an information security risk insurance policy to
mitigate the impact of cybersecurity threats.
We may face risks associated with the implementation of our growth strategy.
Our growth strategy subjects us to various risks. As part of our growth strategy, we may expand existing
facilities, enter into new business lines, products or process initiatives, acquire or build additional plants,
acquire other businesses and assets, enter into joint ventures, or form strategic alliances that we believe will
complement our existing business. These expansions and transactions, including our planned recycled
aluminum flat rolled products mill with an anticipated annual production capacity of 650,000 tonnes of
finished products to be located in Columbus, Mississippi, may involve some or all of the following risks:
•
•
•
•
•
•
•
•
•
•
•
the risk of entering business lines or product, domestic, or foreign markets, in which we have little
experience, including the aluminum industry;
the risk of a newly constructed facility being completed over budget or not on time, including due to
equipment delays or labor shortages;
the risk of not being able to adequately obtain sufficient labor to efficiently build or staff a new
facility, while maintaining our culture;
the risk of expected markets, products, customers and demand for products produced by a new
facility being lower than expected;
the risk of new product development, technology development or customer acquisition and
penetration being more costly or difficult than expected;
the difficulty of competing for acquisitions and other growth opportunities with companies having
materially greater financial resources than us;
the inability to realize anticipated synergies or other expected benefits;
the difficulty of integrating new or acquired operations and personnel into our existing operations,
while maintaining our culture;
the potential disruption of ongoing operations;
the diversion of financial resources or management attention to new operations or acquired
businesses;
the loss of key employees, customers or suppliers of acquired businesses;
Broadridge Financial Solutions, Inc. • Tel: (631) 254-7494
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Date: March 21, 2024 Time: 19:33:1
Page 29 of 34 Session: 56
29
•
•
•
•
•
•
•
•
the potential exposure to unknown liabilities;
the inability of management to maintain uniform standards, controls, procedures and policies;
the difficulty of managing the growth of a larger company;
the risk of becoming involved in labor, commercial, or regulatory disputes or litigation related to
new operations or acquired businesses;
the risk of becoming more highly leveraged;
the risk of contractual or operational liability to other venture participants or to third parties as a
result of our participation;
the inability to work efficiently with joint venture or strategic alliance partners; and
the difficulties of terminating joint ventures or strategic alliances.
Delays in achieving full operational capacity at our Sinton Flat Roll Division has and may continue to,
and any delays in our announced planned recycled aluminum flat rolled products mill may, adversely affect
our prospects, business, financial condition, results of operations and cash flows.
These expansions or transactions might be required for us to remain competitive, but we may not be able
to complete any such expansions or transactions on favorable terms or obtain financing, if necessary. Future
expansions and transactions may not improve our competitive position and business prospects as anticipated,
and if they do not, our business, financial condition, results of operations and cash flows may be adversely
affected.
We are subject to litigation and legal compliance risks which may adversely affect our financial condition,
results of operations and liquidity.
We are involved from time to time 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 conditions,
results of operations or liquidity. For additional information regarding legal proceedings please refer to
Item 3. Legal Proceedings.
In addition to risks associated with our environmental and other regulatory compliance, our international
operations are subject to complex foreign and United States laws and regulations, including the Foreign
Corrupt Practices Act and other anti-bribery laws, regulations related to import-export controls, the Office of
Foreign Assets Control, and other laws and regulations, each of which may increase our cost of doing
business and expose us to increased risk.
Unexpected equipment downtime or shutdowns may adversely affect our business, financial condition,
results of operations and cash flows.
Interruptions in our production capabilities may adversely affect our production costs, products available
for sale and earnings during the affected period. In addition to equipment failures, our facilities are subject to
the risk of catastrophic loss due to unanticipated events such as fires, explosions or violent weather conditions.
Our manufacturing processes are dependent upon critical pieces of steelmaking equipment, such as our EAFs,
continuous casters and rolling equipment, some of which are controlled by our information technology
systems, as well as electrical equipment, such as transformers. This equipment may, on occasion, be out of
service as a result of unanticipated failures or other events, including equipment failure, power surges,
cybersecurity breaches or attacks or system failures. Further, we have experienced and may continue to
experience ramp-up inefficiencies at our Sinton Flat Roll Division, including those related to major equipment
failures. We have experienced and in the future may experience plant shutdowns or periods of reduced
production as a result of equipment failures or other events. Supply chain disruptions and labor shortages have
and may continue to exacerbate the effects of equipment failures. These disruptions may adversely affect our
business, financial condition, results of operations and cash flows.
2023 Annual Report
Broadridge Financial Solutions, Inc. • Tel: (631) 254-7494
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Page 30 of 34 Session: 56
30
Governmental agencies may refuse to grant or renew some of our licenses and permits required to operate
our businesses.
Some of our operations must receive licenses and air, water and other permits and approvals from
federal, state and local governments to conduct certain of our operations or to build, expand or acquire
new facilities. Governmental agencies, non-governmental organizations, and members of the public sometimes
resist the establishment of certain types of facilities in their communities. There can be no assurance that
future approvals, licenses and permits will be granted or that we will be able to maintain and renew the
approvals, licenses and permits we currently hold. Failure to do so may adversely affect our business,
financial condition, results of operations and cash flows.
Our senior unsecured credit facility contains, and any future financing agreements may contain, restrictive
covenants that may limit our flexibility.
Restrictions and covenants in our existing debt agreements, including our senior unsecured credit facility,
and any future financing agreements, may impair our ability to finance future operations or capital needs or to
engage in other business activities. A breach of any of the restrictions or covenants could cause a default
under our senior unsecured credit facility, our senior notes, or our other debt. A significant portion of our
indebtedness may then become immediately due and payable.
Under our senior unsecured credit facility, we are required to maintain certain financial covenants. Our
ability to meet such covenants or other restrictions can be affected by events beyond our control. If a default
were to occur, the lenders could elect to declare all amounts then outstanding to be immediately due and
payable and terminate all commitments to extend further credit.
Impairment charges may adversely affect our results of operations.
Occasionally, assumptions that we have made regarding products or businesses we have acquired or
sought to develop, about the sustainability of markets we sought to exploit, or about industry conditions that
underlie our decision making when we elected to capitalize a venture turn out differently than anticipated. In
such instances, the fair value of such assets may fall below their carrying value recorded on our balance sheet.
Accordingly, we periodically test goodwill, and other assets such as long-lived tangible and intangible
assets, right of use assets and equity method investments when indicators of impairment are present, to
determine whether their estimated fair value is in fact less than their value recorded on our balance sheet. If
we determine that the fair value of any of these assets, from whatever cause, is less than the value recorded
on our balance sheet, we are required to incur non-cash asset impairment charges that adversely affect our
results of operations. There can be no assurances that market dynamics or other factors may not result in
future impairment charges.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 1C. CYBERSECURITY
We manage risks from cybersecurity threats through our overall companywide risk management process,
which is overseen by our Board of Directors and specific Board Committees. Management has created a
global information security program, which encompasses a dedicated global information security team and
policies, procedures, and processes for assessing, identifying, and managing risks from cybersecurity threats.
Our policies, procedures, and processes follow recognized frameworks established by the National Institute of
Standards and Technology (‘‘NIST’’), as well as other relevant standards. Our program is designed to maintain
the confidentiality, integrity, security, and availability of the data that is created, collected, stored, and used to
operate our business.
Risk Management and Strategy
We recognize the importance of assessing, identifying, and managing material risks associated with
cybersecurity threats, utilizing from time to time, tabletop exercises, business unit assessments, threat
modeling, impact analyses, internal audits, external audits, third party vulnerability scans, third party
Broadridge Financial Solutions, Inc. • Tel: (631) 254-7494
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penetration tests, and engagement of third parties to conduct analysis of our information security programs,
including an overall assessment utilizing the NIST standards. These risks include, among other things:
operational risks, intellectual property theft, fraud, extortion, harm to team members or customers and
violations of data privacy or security laws.
Our Director of Information Security has twenty years of cybersecurity experience, has completed a
Masters in Homeland Security, with an emphasis on cybersecurity, and holds several cybersecurity
certifications. Our Director of Information Security is responsible for leading the Information Security Team
which has established a cybersecurity risk management program of policies and processes for assessing,
identifying, and managing risk from cybersecurity threats. We have integrated these processes into our overall
risk management systems and processes, and routinely assess risks from cybersecurity threats, including any
potential unauthorized access to or activity conducted through our information systems that may result in
material adverse effects on the confidentiality, integrity, or availability of our information systems or any
information residing therein. This program includes established reasonable safeguards to minimize the
identified risks; processes to reasonably address any identified gaps in existing safeguards; updates to existing
safeguards as necessary; and monitoring the effectiveness of those safeguards.
Our safeguards include continuous network monitoring, complex passwords, team member training that
reinforces our policies, standards and practices, incident response capability reviews and exercises, and
cybersecurity insurance and disaster recovery plans for the protection of our assets. The information security
training and awareness program engages personnel through training modules on how to identify potential
cybersecurity risks and protect the Company’s resources and information. This training is mandatory for all
team members monthly, and is supplemented by companywide testing initiatives, including periodic phishing
tests.
Our cybersecurity risk management program also assesses third party providers, such as vendors,
suppliers, and other business partners. Cybersecurity risks are evaluated when determining the selection and
oversight of applicable third party providers and potential risks when handling and/or processing our
employee, business or customer data.
Further, we have designated a member of our senior leadership team, our Chief Financial Officer, to
oversee the management of the safeguards, cybersecurity risk assessment and mitigation process. From time to
time, the Company’s program is reviewed and validated by internal and external experts.
In general, our incident response process follows the NIST framework and focuses on four phases:
(i) preparation; (ii) detection and analysis; (iii) containment, eradication, and recovery; and (iv) post-incident
remediation. As cybersecurity incidents occur, including at third party providers, the Director of Information
Security leads the Information Security Team through a standardized incident response process that focuses on
responding to and containing the threat, minimizing any business impact, and evaluating its severity level. The
severity level assessment determines how widespread the incident is and to what degree it could impact our
overall business and manufacturing environment. In the event an incident is determined by the Information
Security Team to be a high severity level, our cross functional team, with expertise in various disciplines, will
assess the incident to determine if it has had a material affect or is reasonably likely of having a material
effect on the Company’s business strategy, results of operations or financial condition.
We do not believe that risks from cybersecurity threats, including as a result of any previous
cybersecurity incidents, have materially affected or are reasonably likely to materially affect our overall
business strategy, results of operations, or financial condition over the long term. In the last three years, the
Company has not experienced any material cybersecurity incidents and we have not incurred material
expenses from cybersecurity incidents (including penalties and settlements, of which there were none). For
additional discussion of whether and how risks from cybersecurity threats could materially affect or are
reasonably likely to materially affect the Company, see Item 1A. Risk Factors – ‘‘We are subject to
cybersecurity threats and may face risks to the security of our sensitive data and information technology
which may adversely affect our business, results of operations, financial condition and cash flows.’’
2023 Annual Report
Broadridge Financial Solutions, Inc. • Tel: (631) 254-7494
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Governance
One of the key functions of our Board of Directors is informed oversight of our risk management
process, including risks from cybersecurity threats. Our Board of Directors is responsible for monitoring and
assessing strategic risk exposure, and our Leadership Team is responsible for the day-to-day management of
the material risks we face. Our Board of Directors administers its cybersecurity risk oversight function directly
as a whole, as well as directly through the Audit Committee. Management and members of the Information
Security Group (‘‘ISG’’) regularly present to the Board of Directors regarding information security and an
in-depth review of our processes for assessing, identifying, and managing material risks from cybersecurity
threats. On a quarterly basis, the Audit Committee is informed by management concerning the status of
existing and new cybersecurity risks, status of how management is addressing and/or mitigating those risks,
cybersecurity and data privacy incidents (if any), and status of key information security initiatives.
Additionally, on a biennial basis, we engage third parties to assess our information security program, using the
NIST framework, as well as penetration testing.
We have allocated substantial cross functional internal resources with expertise in information security,
information technology, operations, risk management, human resources, finance, and legal to form a
governance counsel known as the ISG. The ISG is an internal working group that collaborates with the
Director of Information Security to ensure our cybersecurity program is adequately responsive to the evolving
threat landscape. Our Director of Information Security has twenty years of cybersecurity experience, has
completed a Masters in Homeland Security, with an emphasis on cybersecurity, and holds several
cybersecurity certifications.
Broadridge Financial Solutions, Inc. • Tel: (631) 254-7494
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Page 33 of 34 Session: 56
33
ITEM 2.
PROPERTIES
The following table describes our significant properties as of December 31, 2023. These properties are
owned by us, and not subject to any significant encumbrances, or are leased by us. We believe these
properties are suitable and adequate for our current operations and are appropriately utilized. For additional
information regarding our significant facilities please refer to Item 1. Business.
Operations
Steel Operations Segment *
Butler Flat Roll Division:
Location
Description
Site
Acreage
Owned
Site
Acreage
Leased
Flat Roll Steel Mill and Coating Facility
Butler Operations. . . . . . . Butler, IN
Flat Roll Steel Coating Facility
Jeffersonville Operations . . Jeffersonville, IN
Liquid Ironmaking Facility
Iron Dynamics . . . . . . . . Butler, IN
Flat Roll Steel Mill and Coating Facility
Columbus Flat Roll Division . . Columbus, MS
Flat Roll Steel Mill and Coating Facility
Sinton Flat Roll Division . . . . Sinton, TX
Flat Roll Steel Coating Facilities
The Techs. . . . . . . . . . . . . Pittsburgh, PA
Flat Roll Steel Cold-Rolling and Coating Facility
Heartland Flat Roll Division . . Terre Haute, IN
United Steel Supply . . . . . . . IN, ID, MS, OR, and TX Distributor of Painted Galvalume® Flat Roll Steel
Structural and Rail Division . . Columbia City, IN
Engineered Bar Products
Structural and Rail Steel Mill
993
27
25
1,387
2,487
16
246
53
962
Division . . . . . . . . . . . . Pittsboro, IN
Vulcan Threaded Products . . . Pelham, AL
Roanoke Bar Division. . . . . . Roanoke, VA
Steel of West Virginia . . . . . . WV, KY, and TN
SDI Biocarbon Solutions . . . . Columbus, MS
SDI Mexico . . . . . . . . . . . Monterrey, Mexico
Engineered Bar Steel Mill and Finishing Facility
Bar Steel Processing Facility
Merchant Bar Steel Mill
Specialty Shapes Steel Mill and Finishing and
Coating Facilities
Biocarbon Production Facility
Flat Roll Steel Distribution Warehouse
Metals Recycling Operations Segment
OmniSource:
Alabama . . . . . . . . . . . . Birmingham, AL
Indiana. . . . . . . . . . . . . Multiple Cities
Michigan . . . . . . . . . . . Multiple Cities
Mississippi
. . . . . . . . . . Multiple Cities
North Carolina . . . . . . . . Multiple Cities
Ohio . . . . . . . . . . . . . . Multiple Cities
Oklahoma . . . . . . . . . . . Sand Springs, OK
Tennessee . . . . . . . . . . . Multiple Cities
Texas. . . . . . . . . . . . . . Multiple Cities
Virginia . . . . . . . . . . . . Multiple Cities
Mexico . . . . . . . . . . . . Multiple Cities
Ferrous Scrap Processing
Ferrous and Nonferrous Scrap Processing
Ferrous and Nonferrous Scrap Processing
Ferrous and Nonferrous Scrap Processing
Ferrous and Nonferrous Scrap Processing
Ferrous and Nonferrous Scrap Processing
Ferrous Scrap Processing
Ferrous and Nonferrous Scrap Processing
Ferrous and Nonferrous Scrap Processing
Ferrous and Nonferrous Scrap Processing
Ferrous and Nonferrous Scrap Processing
Steel Fabrication Operations Segment
New Millennium Building Systems:
Joist and Deck Operations. . Butler, IN
Joist Operations. . . . . . . . Fallon, NV
Joist and Deck Operations. . Hope, AR
Joist Operations. . . . . . . . Juarez, MX
Joist and Deck Operations. . Lake City, FL
Deck Operations . . . . . . . Memphis, TN
Joist and Deck Operations. . Salem, VA
Aluminum Operations Segment
Aluminum Dynamics, LLC. . . Columbus, MS
Aluminum Dynamics, Inc. . . . Phoenix, AZ
Aluminum Dynamics of
Steel Joist and Deck Fabrication Facility
Steel Joist Fabrication Facility
Steel Joist and Deck Fabrication Facility
Steel Joist Fabrication Facility
Steel Joist and Deck Fabrication Facility
Deck Fabrication Facility
Steel Joist and Deck Fabrication Facility
Recycled Aluminum Flat Rolled Products Mill
Recycled Aluminum Slab Facility
Mexico . . . . . . . . . . . . San Luis Potosi, Mexico Recycled Aluminum Slab Facility
312
31
310
139
133
—
59
456
186
43
302
212
—
65
75
121
17
156
68
245
17
81
19
113
2,098
256
692
—
10
—
—
—
2
—
1
—
—
—
—
6
—
5
—
26
—
13
—
21
10
—
—
—
61
—
—
7
—
—
—
—
—
—
—
The company’s corporate headquarters is in Fort Wayne, Indiana on 20 owned acres. Our copper rod and wire
facility, a controlled subsidiary, is in New Haven, Indiana on 35 owned and 4 leased acres.
*
Our 2023 steel mill production utilization was 91% exclusive of Sinton (82% including Sinton) of our
estimated annual steelmaking capability.
2023 Annual Report
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34
ITEM 3. LEGAL PROCEEDINGS
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 December 31, 2023.
ITEM 4. MINE SAFETY DISCLOSURES
None.
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Page 1 of 15 Session: 54
PART II
35
ITEM 5.
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER
MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
The information required by Item 5 with respect to securities authorized for issuance under equity
compensation plans is set forth in Part III, Item 12 of this Form 10-K. Our common stock trades on The
NASDAQ Global Select Stock Market under the symbol STLD.
As of February 26, 2024, we had 158,154,594 shares of common stock outstanding and held beneficially
by approximately 29,000 stockholders based on our security position listing. Because many of the shares were
held by depositories, brokers and other nominees, the number of registered holders (approximately 1,270) is
not representative of the number of beneficial holders.
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 months ended December 31, 2023.
Period
Quarter ended December 31, 2023
Total Number
of Shares
Purchased
Average Price
Paid per Share
Total Number of Shares
Purchased as Part of
Publicly Announced
Program(1)
Maximum Dollar Value of
Shares That May Yet be
Purchased Under the
Program (in thousands)(1)
October 1-31 . . . . . . . . . . . . . . . .
November 1-30 . . . . . . . . . . . . . . .
December 1-31 . . . . . . . . . . . . . . .
1,373,216
1,471,893
667,785
3,512,894
$104.91
112.49
115.38
1,373,216
1,471,893
667,785
3,512,894
$ 135,125
1,471,217
1,394,232
(1)
In November 2022, our board of directors authorized a share repurchase program of up to $1.5 billion of
our common stock. This program was exhausted in November 2023. In November 2023, our board of
directors authorized an additional share repurchase program of up to $1.5 billion of our common stock.
2023 Annual Report
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36
Total Return Graph
The graph below compares Steel Dynamics, Inc.’s cumulative 5-year total shareholder return on common
stock with the cumulative total returns of the NASDAQ Composite index, the S&P 500 index, and the S&P
500 Steel index. The graph tracks the performance of a $100 investment in our common stock and in each
index (with the reinvestment of all dividends) from December 31, 2018 to December 31, 2023.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
Among Steel Dynamics, Inc., the NASDAQ Composite Index,
the S&P 500 Index and the S&P 500 Steel Index
$500
$450
$400
$350
$300
$250
$200
$150
$100
$50
$0
12/18
12/19
12/20
12/21
12/22
12/23
Steel Dynamics, Inc.
NASDAQ Composite
S&P 500
S&P 500 Steel
*$100 invested on 12/31/18 in stock or index, including reinvestment of dividends.
Fiscal year ending December 31.
Copyright© 2024 Standard & Poor's, a division of S&P Global. All rights reserved.
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37
ITEM 6.
[RESERVED]
2023 Annual Report
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Page 4 of 15 Session: 54
38
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
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 the sections titled Special
Note Regarding Forward-Looking Statements at the beginning of Part I of this Report and Item 1A. Risk
Factors, as well as in other subsequent reports we 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.’’
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.
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.
Broadridge Financial Solutions, Inc. • Tel: (631) 254-7494
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39
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.
2023 Overview
During 2023, underlying domestic steel demand was firm, supported by the construction, automotive, and
energy sectors. Customer steel inventories also remained below historical averages, in combination resulting in
generally steady order patterns. This solid market environment, coupled with the continued ramp-up of Sinton,
drove record annual shipments of 12.8 million tons for our steel operations. Despite a challenging pricing
environment throughout much of the year, our metals recycling teams meaningfully increased volume during
2023 compared to 2022. Our steel fabrication business achieved its second highest annual earnings during
2023, on continued solid non-residential construction demand. Our consolidated net sales of $18.8 billion and
cash flow from operations of $3.5 billion were our second-best and our consolidated operating income of
$3.2 billion was our third-best performance in company history. Metal spread compression among each of our
operating segments resulted in significantly lower operating income in 2023 compared to our record
2022 earnings despite continued strong market demand and volumes.
Consolidated operating income for 2023 decreased $1.9 billion, or 38%, to $3.2 billion, compared to a
record $5.1 billion in 2022. Net income attributable to Steel Dynamics, Inc. for 2023 decreased $1.4 billion,
or 37%, to $2.5 billion, compared to a record in 2022. Diluted earnings per share attributable to Steel
Dynamics, Inc. was $14.64 for 2023, compared to $20.92 for 2022.
Effective the fourth quarter 2023, the company changed its reportable segments, consistent with how it
currently manages the business, representing four reporting segments: steel operations (now including
warehouse operations previously included in Other), metals recycling operations, steel fabrication operations,
and a new reportable segment, aluminum operations. Segment information provided within this Form 10-K
has been recast for all prior periods consistent with the current reportable segment presentation. Aluminum
Operations includes the results of the recycled aluminum flat rolled products mill in Columbus, Mississippi,
and two satellite recycled aluminum slab centers located in Arizona and Mexico, all of which are currently
being constructed. 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 Operations section below. During 2023, there were no additional results of operations, such as those
related to shipments or production, to be discussed. Operations are expected to begin in 2025.
Refer to Item 7. Management’s Discussion and Analysis of Financial Condition and Results of
Operations in Part II of our Annual Report on Form 10-K for the year ended December 31, 2022, for
additional information regarding results of operations for the year ended December 31, 2022, as compared to
the year ended December 31, 2021, and segment operating results for 2022 as compared to 2021. Our
2023 change in reportable segments did not change the discussion previously provided.
2023 Annual Report
Broadridge Financial Solutions, Inc. • Tel: (631) 254-7494
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Page 6 of 15 Session: 54
40
Segment Operating Results (dollars in thousands)
Net sales
Steel Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Metals Recycling Operations . . . . . . . . . . . . . . . . . . . . . . .
Steel Fabrication Operations . . . . . . . . . . . . . . . . . . . . . . .
Aluminum Operations . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intra-company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating income (loss)
Steel Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Metals Recycling Operations . . . . . . . . . . . . . . . . . . . . . . .
Steel Fabrication Operations . . . . . . . . . . . . . . . . . . . . . . .
Aluminum Operations . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intra-company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Years Ended December 31,
% Change
2022
2023
$13,067,622
4,360,127
2,806,777
—
1,171,901
21,406,427
(2,611,111)
$18,795,316
$ 1,881,600
88,654
1,593,261
(23,773)
(394,577)
3,145,165
6,016
$ 3,151,181
(13)% $15,100,996
4,395,668
(1)%
4,257,207
(34)%
—
—
1,287,980
(9)%
25,041,851
(2,781,077)
(16)% $22,260,774
(39)% $ 3,092,689
(24)%
116,497
2,424,655
(34)%
(2,355)
(909)%
(594,045)
34%
5,037,441
54,381
(38)% $ 5,091,822
Broadridge Financial Solutions, Inc. • Tel: (631) 254-7494
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Page 7 of 15 Session: 54
41
Steel Operations Segment
Steel operations consist of our electric arc furnace (EAF) steel mills, producing steel from ferrous scrap
and scrap substitutes, utilizing continuous casting, automated rolling mills and numerous steel coating,
processing lines and warehouse operations. Our steel operations sell directly to end-users, steel fabricators,
and service centers. These products are used in numerous industry sectors, including the construction,
automotive, manufacturing, transportation, heavy and agriculture equipment, energy and pipe and tube
(including OCTG) markets. Steel operations accounted for 67% and 65% of our consolidated net sales during
2023 and 2022, respectively. See Item 1. Business for further information on Steel Operations segment
operations.
Steel Operations Shipments (tons):
Total shipments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intra-segment shipments . . . . . . . . . . . . . . . . . . . . . . . . . .
Steel Operations Segment shipments . . . . . . . . . . . . . . . . . . .
External shipments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10,976,707
Years Ended December 31,
% Change
5%
2023
12,821,753
(1,449,832)
11,371,921
5%
5%
3,500
3,000
2,500
2,000
1,500
1,000
)
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0
0
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Steel Operations Segment
Shipments and Average Selling Price
2,759
2,815
2,721
2,954
2,879
2,775
2,764
2,510
$1,567
$1,539
$1,376
$1,120
$1,074
$1,249
$1,187
$1,088
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
2022 Shipments: 10,804
2023 Shipments: 11,372
2022 Average Selling Price: $1,398
2023 Average Selling Price: $1,149
Steel Operations Segment Shipments
Steel Operations Segment Average Selling Prices
2022
12,159,189
(1,354,940)
10,804,249
10,411,490
$2,500
$2,000
$1,500
$1,000
$500
$0
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Segment Results 2023 vs. 2022
During 2023, our steel operations achieved record annual shipments of 12.8 million tons (11.4 million
excluding intra-segment) a 5% increase over 2022 shipments, including 1.4 million tons from Sinton during
2023, an increase of 67% over 2022. Customer order activity and steel demand were strong during 2023, with
the construction, automotive, industrial, and energy sectors continuing to lead demand. In spite of strong
market demand, average selling prices were lower during 2023 compared to 2022, as total steel segment
average selling prices decreased 18%, or $249 per ton, compared to 2022. Sheet steel pricing was 22% lower,
while long products pricing decreased 6%. Net sales for the steel operations segment were 13% lower in
2023 when compared to historically high prices in 2022, due to lower average steel selling prices more than
offsetting record volumes.
2023 Annual Report
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Page 8 of 15 Session: 54
42
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 consumed in our steel mills decreased $61 per net ton, or
13%, in 2023 compared to 2022, consistent with overall decreased domestic scrap pricing noted below in the
metals recycling operations segment discussion.
As a result of average selling prices decreasing more than scrap costs, specifically for sheet steel
products, 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 20% in 2023 compared to 2022. Due to this
metal spread compression, operating income for the steel operations decreased 39%, to $1.9 billion, in
2023 compared to 2022.
Metals Recycling Operations Segment
Metals recycling operations includes both ferrous and nonferrous scrap metal processing, transportation,
marketing, brokerage, and scrap management services. 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 2023 and 2022,
62% and 66%, respectively, of metals recycling operations ferrous scrap was sold to our own steel mills,
while our steel mill utilization was 82% and 77% including Sinton (91% and 92% exclusive of Sinton) in
2023 and 2022, respectively. Metals recycling operations accounted for 12% and 10% of our consolidated net
sales during 2023 and 2022, respectively.
Metals Recycling Operations Shipments:
Years Ended December 31,
% Change
2022
2023
Ferrous metal (gross tons)
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inter-company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
External shipments . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5,779,114
(3,579,958)
2,199,156
Nonferrous metal (thousands of pounds)
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inter-company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
External shipments . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,108,211
(157,892)
950,319
9%
20%
5%
4%
5,301,774
(3,475,662)
1,826,112
1,053,852
(138,407)
915,445
Segment Results 2023 vs. 2022
During 2023, our metals recycling operations continued to benefit from solid domestic steel industry
demand, resulting in higher ferrous and nonferrous scrap shipments compared to 2022. We were able to
increase shipments even as domestic steel mill utilization rates declined slightly to approximately 75% in
2023, as compared to approximately 78% in 2022. Ferrous and nonferrous shipments increased 9% and 5%,
respectively, in 2023 compared to 2022. Net sales for our metals recycling operations in 2023 were
comparable to 2022, as increased shipments were offset by ferrous and nonferrous average selling prices that
decreased 7% and 8%, respectively, during 2023 compared to 2022.
Ferrous metal spread (which we define as the difference between average selling prices and the cost of
purchased scrap) decreased 7% and nonferrous metal spread increased 9% during 2023 compared to 2022. As
a result of the overall decreased metals spreads, metals recycling operations operating income decreased 24%
to $88.7 million in 2023 compared to 2022.
Broadridge Financial Solutions, Inc. • Tel: (631) 254-7494
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Page 9 of 15 Session: 54
43
Steel Fabrication Operations Segment
Steel fabrication operations include seven 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 15% and 19% of our consolidated net sales during 2023
and 2022, respectively.
Steel Fabrication Operations Segment
Volumes and Average Selling Price
210
218
218
209
$5,001
$5,245
$5,222
$4,424
173
$5,021
178
$4,384
162
$3,916
250
200
150
100
50
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$7,000
$6,000
$5,000
$4,000
150
$3,501
$3,000
$2,000
$1,000
$0
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
2022 Shipments: 856
2023 Shipments: 663
2022 Average Selling Price: $4,976
2023 Average Selling Price: $4,236
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Steel Fabrication Segment Volumes
Steel Fabrication Segment Average Selling Prices
Segment Results 2023 vs. 2022
Our steel fabrication operations continue to benefit from the solid non-residential construction market, as
evidenced by our historically strong order backlog that extends through the first half of 2024. The continued
onshoring of manufacturing, coupled with the robust U.S. infrastructure and Inflation Reduction Act programs
and industrial construction, supports consistent strong demand. Net sales for the steel fabrication operations
decreased 34% during 2023 compared to the record levels during 2022, as average selling prices decreased
$740 per ton, or 15%, and volumes decreased 23% from the record volume during 2022.
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 of steel consumed decreased 26% in 2023, as compared to 2022. Due to decreased selling prices per ton
more than offsetting decreased steel input costs per ton, metal spread (which we define as the difference
between average selling prices and the cost of purchased steel) contracted 10% in 2023 compared to 2022.
Metal spread compression coupled with decreased volume resulted in operating income decreasing 34% to
$1.6 billion in 2023, compared to $2.4 billion in 2022.
Consolidated Results 2023 vs. 2022
Other Operations
Selling, General and Administrative Expenses. Selling, general and administrative expenses of
$588.6 million during 2023 increased 8% from $545.6 million during 2022 primarily due to a 10% increase in
payroll and benefits expense related to the execution of our growth strategy during 2023, including
construction and start-up costs of our Aluminum Operations. Selling, general and administrative expenses
represented 3.1% and 2.5% of net sales during 2023 and 2022, respectively.
2023 Annual Report
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Page 10 of 15 Session: 54
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Companywide profit sharing expense during 2023 of $272.0 million decreased 40% from $452.6 million
during 2022, consistent with decreased pretax earnings. Refer to Note 11. Retirement Plans to the consolidated
financial statements elsewhere in this report for further information.
Interest Expense, net of Capitalized Interest. During 2023, interest expense of $76.5 million decreased
16% from $91.5 million during 2022, due to higher capitalized interest in 2023 ($33.0 million, compared to
$15.8 million in 2022) related to our ongoing expansion projects, most notably within Aluminum Operations.
Other (Income) Expense, net. Net other income was $144.2 million in 2023, compared to $20.8 million
in 2022, due primarily to an increase in interest income of $88.2 million associated with an increase in
invested balances and an increase in yield earned on our invested cash and short-term investments in 2023.
Income Tax Expense. During 2023, income tax expense of $751.6 million, at an effective income tax
rate of 23.3%, decreased 34% compared to the $1.1 billion, at an effective income tax rate of 22.7%, during
2022, consistent with decreased pretax earnings. Refer to Note 4. Income Taxes to the consolidated financial
statements elsewhere in this report for additional information.
Included in the balance of unrecognized tax benefits at December 31, 2023, are potential benefits of
$27.8 million that, if recognized, would affect the effective tax rate. We recognize interest and penalties
related to our tax contingencies on a net-of-tax basis in income tax expense. During the year ended
December 31, 2023, we recognized expense from the increase of interest expense and penalties of
$1.6 million, net of tax. In addition to the unrecognized tax benefits noted above, we had $3.2 million accrued
for the payment of interest and penalties at December 31, 2023.
We file income tax returns in the United States federal jurisdiction as well as income tax returns in
various state jurisdictions. The tax years 2020 through 2022 remain open to examination by the Internal
Revenue Service and various state and local jurisdictions. At this time, we do not believe there will be any
significant examination adjustments that would result in a material change to our financial position, results of
operations or cash flows. It is reasonably possible that the amount of unrecognized tax benefits could change
in the next twelve months in an amount ranging from zero to $10.0 million, as a result of the expiration of the
statute of limitations and other federal and state income tax audits.
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 December 31, 2023, is as follows
(in thousands):
Cash and equivalents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Short-term and other investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unsecured revolver availability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total liquidity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$1,400,887
951,873
1,190,873
$3,543,633
Our total outstanding debt of $3.1 billion is consistent with our total outstanding debt at December 31,
2022. 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 25.8% and 27.7% at December 31, 2023 and December 31, 2022, respectively.
In the third quarter of 2023, we entered into a new unsecured credit agreement, replacing the previous
one, which 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
Broadridge Financial Solutions, Inc. • Tel: (631) 254-7494
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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 December 31, 2023, we had $1.2 billion of availability on the Revolver, $9.1 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 December 31, 2023, our interest coverage ratio and debt to capitalization
ratio were 36.13:1.00 and 0.26:1.00, respectively. We were, therefore, in compliance with these covenants at
December 31, 2023, 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 $3.5 billion in 2023 compared to $4.5 billion in 2022. Working capital decreased
$1.2 billion, or 21%, during 2023 to $4.5 billion at December 31, 2023, due primarily to our accounts
receivable and inventories decreasing $683.1 million, or 13%, compared to December 31, 2022, due to lower
sales and inventory values in 2023. In addition, our $400 million 2.800% senior notes were recorded as
current at December 31, 2023.
Capital Investments. During 2023, we invested $1.7 billion in property, plant and equipment, primarily
within our aluminum operations and steel operations segments, compared with $908.9 million invested during
2022. 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 is
planned to be 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 $3.5 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 25% to $0.425 per share in the
first quarter of 2023, and continued at that level through the remainder of 2023 (from $0.34 per share in
2022), resulting in declared cash dividends of $280.5 million during 2023, compared to $245.3 million during
2022. We paid cash dividends of $271.3 million and $237.2 million during 2023 and 2022, 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 $1.5 billion and $1.8 billion of share repurchases during 2023 and 2022,
respectively. As of December 31, 2023, we had $1.4 billion remaining available to purchase under the
November 2023 share repurchase program. See Part II, Item 5. Market for Registrant’s Common Equity,
Related Stockholder Matters and Issuer Purchases of Equity Securities for additional information.
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
2023 Annual Report
Broadridge Financial Solutions, Inc. • Tel: (631) 254-7494
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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.
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.
Long-term debt and estimated interest. Refer to Note 3. Long-Term Debt to the consolidated financial
statements elsewhere in this report for our long-term debt maturities. Estimated interest payments on our
senior unsecured notes were determined based on their outstanding balances through maturity at their
contractual interest rates, as detailed in Note 3. Estimated interest payments also include a 0.15% commitment
fee on our available Revolver, and an average interest rate of 7.0% on our other debt of $61.8 million. Our
estimated interest payments are $102.2 million, $80.1 million, $74.9 million, $54.5 million, $50.0 million, for
the years 2024 through 2028, respectively, and $343.2 million thereafter.
Purchase obligations. We have commitments for the purchase of commodities such as electricity, water,
natural gas and its transportation services, fuel, air products, zinc, and electrodes. Refer to Note 9.
Commitments and Contingencies to the consolidated financial statements elsewhere in this report for this
information.
Construction commitments. We have firm contracts with various vendors for the completion of certain
construction projects at our various divisions at December 31, 2023. Refer to Note 9. Commitments and
Contingencies to the consolidated financial statements elsewhere in this report for this information.
Lease commitments. We have entered into operating leases relating principally to transportation and other
equipment, and some real estate. Refer to Note 12. Leases to the consolidated financial statements elsewhere
in this report for this information.
Unrecognized tax benefits. We expect to make cash outlays in the future related to our unrecognized tax
benefits; however, due to the uncertainty of the timing, we are unable to make reasonably reliable estimates
regarding the period of cash settlement with the respective taxing authorities. Refer to Note 4. Income Taxes
to the consolidated financial statements elsewhere in this report for this information.
Other Matters
Environmental and Other Contingencies
We have incurred, and in the future will continue to incur, capital expenditures and operating expenses
for matters relating to environmental control, remediation, monitoring and compliance. During 2023, we
incurred costs related to the monitoring and compliance of environmental matters in the amount of
approximately $54.6 million and capital expenditures related to environmental compliance of approximately
$5.4 million. Of the costs incurred during 2023 for monitoring and compliance, approximately 71% were
related to the normal transportation of certain types of by-products produced in our steelmaking processes and
other facilities, in accordance with legal requirements. We incurred combined environmental remediation costs
of approximately $3.1 million at all of our facilities during 2023. We have an accrual of $6.6 million recorded
for environmental remediation related to our metals recycling operations, and $2.6 million related to our idled
Minnesota ironmaking operations. We believe, apart from our dependence on environmental construction and
operating permits for our existing and any future manufacturing facilities, that compliance with current
environmental laws and regulations is not likely to have a materially adverse effect on our financial condition,
Broadridge Financial Solutions, Inc. • Tel: (631) 254-7494
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results of operations or liquidity. However, environmental laws and regulations evolve and change, and we
may become subject to more stringent environmental laws and regulations in the future, such as the impact of
various governmental legislatures and agencies introducing regulatory changes in response to the potential of
climate change.
Critical Accounting Estimates
Management’s Discussion and Analysis of Our Financial Condition and Results of Operations is based
upon our consolidated financial statements, which have been prepared in accordance with accounting
principles generally accepted in the United States. We review the accounting estimates we use in reporting our
financial results on a regular basis. The preparation of these financial statements requires us to make estimates
and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related
disclosure of contingent liabilities. We evaluate the appropriateness of these estimations and judgments on an
ongoing basis. We base our estimates on historical experience and on various other assumptions that are
believed to be reasonable under the circumstances, the results of which form the basis for making judgments
about the carrying value of assets and liabilities that are not readily apparent from other sources. Results may
differ from these estimates due to actual outcomes being different from those on which we based our
assumptions. We believe the following critical accounting estimates affect our more significant judgments and
estimates used in the preparation of our consolidated financial statements.
Impairments of Long-Lived Tangible and Definite-Lived Intangible Assets. We review long-lived assets for
impairment whenever events or changes in circumstances indicate the carrying amount of such assets may not be
fully recoverable. Impairment losses are recorded on long-lived assets used in operations when indicators of
impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the
assets’ carrying amounts. The impairment loss is measured by comparing the fair value of the asset to its carrying
amount. We consider various factors and determine whether an impairment test is necessary, including by way of
examples, a significant and prolonged deterioration in operating results and/or projected cash flows, significant
changes in the extent or manner in which an asset is used, technological advances with respect to assets which
would potentially render them obsolete, our strategy and capital planning, and the economic environment in
markets to be served. When determining future cash flows and if necessary, fair value, we must make judgments as
to the expected utilization of assets and estimated future cash flows related to those assets. We consider historical
and anticipated future results, general economic and market conditions, the impact of planned business and
operational strategies and all other available information at the time the estimates are made. Those estimates and
judgments may or may not ultimately prove accurate. There were no indicators of impairment or impairment
charges recorded during 2023, 2022, of 2021.
Goodwill.
Our goodwill, relating to various business combinations, consisted of the following at December 31
(in thousands):
Steel Operations Segment
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Metals Recycling Operations Segment . . . . . . . . . . . . . . . . . . . . . . . . . .
Steel Fabrication Operations Segment . . . . . . . . . . . . . . . . . . . . . . . . . .
2023
$272,133
203,413
1,925
$477,471
2022
$272,133
228,009
1,925
$502,067
At least once annually (as of October 1), or when indicators of impairment exist, the company performs an
impairment test for goodwill. Goodwill is allocated to various reporting units, which are generally one level below
the company’s operating segments. The fair value of the reporting unit is determined using a complex valuation
model including an estimate of future cash flows utilizing a risk-adjusted discount rate to calculate the net present
value of future cash flows (income approach), and for some years by using a market approach based upon an
analysis of valuation metrics of comparable peer companies, using Level 3 fair value inputs as provided for under
ASC 820. If the fair value exceeds the carrying value of the reporting unit, there is no impairment. If the carrying
2023 Annual Report
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amount exceeds the fair value, we recognize an impairment loss in the amount by which the carrying value of the
net assets assigned to the reporting unit exceeds the fair value of the reporting unit, with the impairment loss not to
exceed the amount of goodwill allocated to the reporting unit.
Key assumptions used to determine the estimated fair value of each reporting unit under the discounted
cash flows method (income approach) include: (a) expected cash flows for the five-year period following the
testing date (including market share, sales volumes and prices, costs to produce and estimated capital needs);
(b) an estimated terminal value using a terminal year growth rate determined based on the growth prospects of
the reporting unit; and (c) a risk-adjusted discount rate based on management’s best estimate of market
participants’ after-tax weighted average cost of capital and market risk premiums. Key assumptions used to
determine the estimated fair value of each reporting unit under the market approach include the expected
revenues and cash flows in the next year. We consider historical and anticipated future results, general
economic and market conditions, the impact of planned business and operational strategies and all available
information at the time the fair values of its reporting units are estimated. Those estimates and judgments may
or may not ultimately prove accurate.
Goodwill acquired in past transactions is naturally more susceptible to impairment, primarily due to the
fact that they are recorded at fair value based on operating plans and economic conditions at the time of
acquisition. Consequently, if operating results and/or economic conditions deteriorate after an acquisition, it
could result in the impairment of the acquired asset. A deterioration of economic conditions may not only
negatively impact the estimated operating cash flows used in our cash flow models but may also negatively
impact other assumptions used in our analyses, including, but not limited to, the estimated cost of capital
and/or discount rates. Additionally, we are required to ensure that assumptions used to determine fair value in
our analyses are consistent with the assumptions a hypothetical marketplace participant would use. As a result,
the cost of capital and/or discount rates used in our analyses may increase or decrease based on market
conditions and trends, regardless of whether our actual cost of capital has changed. Therefore, we may
recognize an impairment in spite of realizing actual cash flows that are approximately equal to or greater than
our previously forecasted amounts. Accordingly, discount rate scenario analysis is performed to evaluate the
impact on estimated reporting unit fair values.
Our fourth quarter 2023, 2022, and 2021 annual goodwill impairment analyses did not result in any
impairment charges. Management does not believe that it is reasonably likely that our reporting units will fail
the goodwill impairment test in the near term, as the determined fair value of the reporting units with
goodwill exceeded their carrying value by more than an insignificant amount. Changes in judgments and
estimates underlying our analysis of goodwill for possible impairment, including expected future operating
cash flows and discount rate, could decrease the estimated fair value of our reporting units in the future and
could result in an impairment of goodwill.
Income Taxes. We are required to estimate our income taxes as a part of the process of preparing our
consolidated financial statements. This requires us to estimate our actual current tax exposure together with
assessing temporary differences resulting from differing treatments of items for tax and accounting purposes. These
differences result in deferred tax assets and liabilities, which are included within our consolidated balance sheet. We
must then assess the likelihood that our deferred tax assets will be recovered from future taxable income and, to the
extent we believe that recovery is not likely, we must establish a valuation allowance. We also establish reserves to
reduce some or all of the tax benefit of any of our tax positions at the time we determine that the positions become
uncertain. We adjust these reserves, including any impact on the related interest and penalties, in light of changing
facts and circumstances, such as the progress of a tax audit. A number of years may elapse before a particular
matter for which we have established a reserve is audited by a taxing authority and finally resolved. The number of
years with open tax audits varies depending on the tax jurisdiction. A tax benefit that has been previously reserved
because of a failure to meet the ‘‘more likely than not’’ recognition threshold would be recognized in our income
tax expense in the first interim period when the uncertainty disappears. Settlement of any particular issue would
usually require the use of cash.
Broadridge Financial Solutions, Inc. • Tel: (631) 254-7494
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Date: March 21, 2024 Time: 19:33:3
Page 15 of 15 Session: 54
49
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
fluctuations in interest rates are to limit the impact of these rate changes on earnings and cash flows and to
lower overall borrowing costs. To achieve these objectives, we may use interest rate swaps to manage net
exposure to interest rate changes related to our portfolio of borrowings; however, we have not done so during
2023, 2022, or 2021.
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, 2023 (in thousands):
Interest Rate Risk
Fixed Rate
Variable Rate
Principal
Average
Rate
Principal
Average
Rate
Expected maturity date:
2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2026 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2027 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2028 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total debt outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 400,901
400,653
400,453
350,035
—
1,500,000
$ 3,052,042
2.8% $ 59,794
—
2.4
—
5.0
—
1.7
—
—
3.3
—
3.2% $ 59,794
7.2%
7.2%
Fair value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 2,776,826
$ 59,794
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. Refer to Note 9. Commitments and Contingencies to the consolidated financial statements
elsewhere in this report for additional information.
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. At December 31, 2023, we
had a cumulative unrealized loss associated with these financial contracts of $6.8 million, substantially all of
which have settlement dates in 2024. We believe the customer contracts associated with the financial contracts
will be fully consummated. Refer to Note 7. Derivative Financial Instruments to the consolidated financial
statements elsewhere in this report for additional information.
2023 Annual Report
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ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Management’s Report on Internal Control Over Financial Reporting . . . . . . . . . . . . . . . . . . . . . . . . . .
Reports of Independent Registered Public Accounting Firm (PCAOB ID 42) . . . . . . . . . . . . . . . . . . . .
Consolidated Balance Sheets as of December 31, 2023 and 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Income for each of the three years in the period ended December 31, 2023. .
Consolidated Statements of Comprehensive Income for each of the three years in the period ended
December 31, 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Equity for each of the three years in the period ended December 31, 2023 . .
Consolidated Statements of Cash Flows for each of the three years in the period ended December 31,
2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Page
51
52
55
56
57
58
59
60
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MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
The management of Steel Dynamics, Inc. is responsible for the preparation and integrity of the
company’s consolidated financial statements and for establishing and maintaining adequate internal control
over financial reporting, as such term is defined in Rule 13a – 15(f) of the Exchange Act, for the company
(including its consolidated subsidiaries). We maintain accounting and internal control systems which are
intended to provide reasonable assurance that assets are safeguarded against loss from unauthorized use or
disposition, transactions are executed in accordance with management’s authorization, and accounting records
are reliable for preparing financial statements in accordance with accounting principles generally accepted in
the United States. We are dedicated to ensuring that we maintain the high standards of financial accounting
and reporting that we have established. Our culture demands integrity and an unyielding commitment to
strong internal control practices and policies.
Internal control over financial reporting includes those policies and procedures that (1) pertain to the
maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions
of our assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit
preparation of the financial statements in accordance with generally accepted accounting principles; and
provide reasonable assurance that our receipts and expenditures are being made only in accordance with
authorizations of our management and directors; and (3) provide reasonable assurance regarding prevention or
timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect
on our financial statements.
Because of its inherent limitations, internal control over financial reporting may not always prevent or
detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the
risk that controls may become inadequate because of changes in conditions, or that the degree of compliance
with policies and procedures may deteriorate.
Under the supervision and with the participation of our management, including our principal executive
officer and our principal financial officer, we conducted an evaluation of the effectiveness of our internal
control over financial reporting. The framework on which such evaluation was based upon is contained in the
report entitled ‘‘Internal Control—Integrated Framework’’ issued by the Committee of Sponsoring
Organizations of the Treadway Commission (2013 Framework) (the ‘‘COSO criteria’’). Based on that
evaluation, management concluded that our internal control over financial reporting was effective as of
December 31, 2023, the end of the period covered by this report.
/s/ Mark D. Millett
Chief Executive Officer
(Principal Executive Officer)
/s/ Theresa E. Wagler
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
2023 Annual Report
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Stockholders and the Board of Directors of Steel Dynamics, Inc.
Opinion on Internal Control Over Financial Reporting
We have audited Steel Dynamics, Inc.’s internal control over financial reporting as of December 31, 2023,
based on criteria established in Internal Control—Integrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our
opinion, Steel Dynamics, Inc. (the Company) maintained, in all material respects, effective internal control
over financial reporting as of December 31, 2023, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board
(United States) (PCAOB), the consolidated balance sheets of Steel Dynamics, Inc. as of December 31, 2023
and 2022, the related consolidated statements of income, comprehensive income, equity, and cash flows for
each of the three years in the period ended December 31, 2023, and the related notes and our report dated
February 29, 2024 expressed an unqualified opinion thereon.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting
and for its assessment of the effectiveness of internal control over financial reporting included in the
accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to
express an opinion on the Company’s internal control over financial reporting based on our audit. We are a
public accounting firm registered with the PCAOB and are required to be independent with respect to the
Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the
Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether effective internal control over financial
reporting was maintained in all material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk
that a material weakness exists, testing and evaluating the design and operating effectiveness of internal
control based on the assessed risk, and performing such other procedures as we considered necessary in the
circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. A company’s internal control over financial reporting
includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance
with generally accepted accounting principles, and that receipts and expenditures of the company are being made
only in accordance with authorizations of management and directors of the company; and (3) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s
assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.
/s/ Ernst & Young LLP
Indianapolis, Indiana
February 29, 2024
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Stockholders and the Board of Directors of Steel Dynamics, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Steel Dynamics, Inc. (the Company) as of
December 31, 2023 and 2022, the related consolidated statements of income, comprehensive income, equity
and cash flows for each of the three years in the period ended December 31, 2023, and the related notes
(collectively referred to as the ‘‘consolidated financial statements’’). In our opinion, the consolidated financial
statements present fairly, in all material respects, the financial position of the Company at December 31, 2023
and 2022, and the results of its operations and its cash flows for each of the three years in the period ended
December 31, 2023, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board
(United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2023,
based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (2013 framework), and our report dated February 29, 2024
expressed an unqualified opinion thereon.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to
express an opinion on the Company’s financial statements based on our audits. We are a public accounting
firm registered with the PCAOB and are required to be independent with respect to the Company in
accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and
Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of
material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the
risks of material misstatement of the financial statements, whether due to error or fraud, and performing
procedures that respond to those risks. Such procedures included examining, on a test basis, evidence
regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the
accounting principles used and significant estimates made by management, as well as evaluating the overall
presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial
statements that was communicated or required to be communicated to the audit committee and that: (1) relates
to accounts or disclosures that are material to the financial statements and (2) involved our especially
challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in
any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by
communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on
the account or disclosure to which it relates.
Valuation of Goodwill
Description
of the
Matter
At December 31, 2023, the Company’s goodwill was approximately $477 million. As discussed
in Note 1 of the consolidated financial statements, the Company performs an impairment test
for goodwill at least annually or when indicators of impairment exist.
Auditing management’s goodwill impairment test was complex and judgmental due to the
significant estimation required to determine the fair value of the reporting units. In particular, the fair
value estimate was sensitive to significant assumptions, specifically changes in the risk-adjusted
discount rate and a complex valuation model.
2023 Annual Report
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How We
Addressed
the Matter
in Our
Audit
We obtained an understanding, evaluated the design and tested the operating effectiveness of
controls over the Company’s goodwill impairment review process, including controls over
management’s review of the assumptions and methodologies used in the calculation of the fair value
of the reporting units, as well as the Company’s review of the completeness and accuracy of the
data used in the Company’s analysis.
To test the estimated fair value of each of the Company’s reporting units, we performed audit
procedures that included, among others, testing the underlying assumptions used in the Company’s
analysis, testing the completeness and accuracy of the underlying estimates of future cash flows
used by management and testing the calculation of the fair value of the reporting units. We
compared the assumptions used by management to historical results and performed sensitivity
analyses over certain assumptions used by management to evaluate the changes in the fair value of
each of the reporting units that would result from changes in those assumptions. In addition, we
involved our specialist to assist with our evaluation of the methodologies applied and assumptions
used by management.
/s/ Ernst & Young LLP
We have served as the Company’s auditor since 1999.
Indianapolis, Indiana
February 29, 2024
Broadridge Financial Solutions, Inc. • Tel: (631) 254-7494
@edipvwctxa217/PRODUCTION_Jobs/CLS_Funds/GRP_Steel_Dynamics/JOB_ny20020056x1_print/DIV_105-fintab01
Operator: kaplowitzk
Date: March 21, 2024 Time: 19:33:4
Page 4 of 8 Session: 37
55
STEEL DYNAMICS, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
December 31,
2023
2022
Current assets
Assets
Cash and equivalents
Short-term investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts receivable, net of allowances for credit losses of $8,480 and $5,678
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,400,887
721,210
$ 1,628,417
628,215
as of December 31, 2023, and December 31, 2022, respectively . . . . . . . . .
Accounts receivable-related parties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventories
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other current assets
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,535,062
73,245
2,894,632
162,790
6,787,826
1,976,282
79,769
3,129,964
195,371
7,638,018
Property, plant and equipment, net. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intangible assets, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Goodwill. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6,734,218
257,759
477,471
651,146
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $14,908,420
5,373,665
267,507
502,067
378,727
$14,159,984
Current liabilities
Liabilities and Equity
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,078,645
9,685
Accounts payable-related parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5,524
469,143
Accrued payroll and benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
309,312
Accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
459,987
Current maturities of long-term debt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,332,296
Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 1,007,304
9,934
6,520
610,558
340,646
57,334
2,032,296
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,611,069
944,768
180,760
6,068,893
3,013,241
889,103
129,539
6,064,179
Commitments and contingencies
Redeemable noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
171,212
181,503
Equity
Common stock voting, $.0025 par value; 900,000,000 shares authorized;
268,112,991 and 267,762,488 shares issued; and 160,018,100 and
172,936,163 shares outstanding, as of December 31, 2023, and
December 31, 2022, respectively . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Treasury stock, at cost; 108,094,891 and 94,826,325 shares, as of
651
650
(5,897,606)
December 31, 2023, and December 31, 2022, respectively . . . . . . . . . . . . .
1,217,610
Additional paid-in capital
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
13,545,590
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
421
Accumulated other comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . .
8,866,666
Total Steel Dynamics, Inc. equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(198,351)
Noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8,668,315
Total liabilities and equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $14,908,420
(4,459,513)
1,212,566
11,375,765
889
8,130,357
(216,055)
7,914,302
$14,159,984
See notes to consolidated financial statements.
2023 Annual Report
Broadridge Financial Solutions, Inc. • Tel: (631) 254-7494
@edipvwctxa217/PRODUCTION_Jobs/CLS_Funds/GRP_Steel_Dynamics/JOB_ny20020056x1_print/DIV_105-fintab01
Operator: kaplowitzk
Date: March 21, 2024 Time: 19:33:4
Page 5 of 8 Session: 37
56
STEEL DYNAMICS, INC.
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
Years Ended December 31,
2022
2021
2023
Net sales
Unrelated parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Related parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$18,115,312
680,004
18,795,316
$21,469,251
791,523
22,260,774
$18,376,743
32,107
18,408,850
Costs of goods sold. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
14,749,433
4,045,883
16,142,943
6,117,831
13,046,426
5,362,424
Selling, general and administrative expenses . . . . . . . . . . . . .
Profit sharing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of intangible assets. . . . . . . . . . . . . . . . . . . . .
Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . .
588,621
272,033
34,048
3,151,181
545,621
452,551
27,837
5,091,822
Interest expense, net of capitalized interest . . . . . . . . . . . . . .
Other (income) expense, net . . . . . . . . . . . . . . . . . . . . . . . .
Income before income taxes. . . . . . . . . . . . . . . . . . . .
76,484
(144,246)
3,218,943
91,538
(20,785)
5,021,069
643,976
388,111
29,232
4,301,105
57,209
34,826
4,209,070
Income tax expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
751,611
2,467,332
1,141,577
3,879,492
962,256
3,246,814
Net income attributable to noncontrolling interests . . . . . . . . .
Net income attributable to Steel Dynamics, Inc. . . . . .
(16,450)
$ 2,450,882
(16,818)
$ 3,862,674
(32,748)
$ 3,214,066
Basic earnings per share attributable to Steel Dynamics,
Inc. stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
14.72
$
21.06
$
15.67
Weighted average common shares outstanding. . . . . . . . . . . .
166,552
183,393
205,115
Diluted earnings per share attributable to Steel Dynamics,
Inc. stockholders, including the effect of assumed
conversions when dilutive . . . . . . . . . . . . . . . . . . . . . . .
$
14.64
$
20.92
$
15.56
Weighted average common shares and share equivalents
outstanding. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
167,431
184,622
206,615
Dividends declared per share . . . . . . . . . . . . . . . . . . . . . .
$
1.70
$
1.36
$
1.04
See notes to consolidated financial statements.
Broadridge Financial Solutions, Inc. • Tel: (631) 254-7494
@edipvwctxa217/PRODUCTION_Jobs/CLS_Funds/GRP_Steel_Dynamics/JOB_ny20020056x1_print/DIV_105-fintab01
Operator: kaplowitzk
Date: March 21, 2024 Time: 19:33:4
Page 6 of 8 Session: 37
57
STEEL DYNAMICS, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands)
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other comprehensive income (loss) - net unrealized gain (loss) on
cash flow hedging derivatives, net of income tax benefit of $149,
income tax expense of $937, and income tax benefit of $1,247 for
2023, 2022 and 2021, respectively . . . . . . . . . . . . . . . . . . . . . .
Comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Years Ended December 31,
2022
2021
2023
$2,467,332
$3,879,492
$3,246,814
(468)
2,466,864
2,980
3,882,472
(3,993)
3,242,821
Comprehensive income attributable to noncontrolling interests . . . . .
Comprehensive income attributable to Steel Dynamics, Inc. . . .
(16,450)
$2,450,414
(16,818)
$3,865,654
(32,748)
$3,210,073
See notes to consolidated financial statements.
2023 Annual Report
Broadridge Financial Solutions, Inc. • Tel: (631) 254-7494
@edipvwctxa217/PRODUCTION_Jobs/CLS_Funds/GRP_Steel_Dynamics/JOB_ny20020056x1_print/DIV_105-fintab01
Operator: kaplowitzk
Date: March 21, 2024 Time: 19:33:4
Page 7 of 8 Session: 37
58
STEEL DYNAMICS, INC.
CONSOLIDATED STATEMENTS OF EQUITY
(in thousands)
.
.
.
Balances at January 1, 2021 .
.
Dividends declared .
.
.
Noncontrolling investors, net
.
Share repurchases .
.
.
Equity-based compensation .
Net income.
.
.
.
.
Other comprehensive loss, net
.
.
.
.
.
.
.
.
.
.
Shares
Common Treasury
55,704
—
—
16,867
(344)
—
. 210,914
—
.
—
.
(16,867)
.
951
.
—
.
Treasury
Common
Stock
Stock
(1,623,747)
648
—
—
—
—
— (1,060,632)
10,112
—
1
—
Additional
Paid-In
Capital
1,207,392
Retained
Earnings
4,758,969
— (210,939)
(150)
—
—
—
(529)
11,541
— 3,214,066
Accumulated
Other
Comprehensive
Income (Loss)
1,902
—
—
—
—
—
Noncontrolling
Interests
(155,552)
—
(73,080)
Total
Equity
4,189,612
(210,939)
(73,230)
— (1,060,632)
21,125
—
3,246,814
32,748
Redeemable
Noncontrolling
Interests
158,614
—
52,800
—
—
—
of tax .
.
.
Balances at December 31,
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
2021 .
.
.
.
Dividends declared .
.
Noncontrolling investors, net
Share repurchases .
.
Equity-based compensation .
Net income.
.
.
.
Other comprehensive income,
.
.
.
.
.
.
.
.
.
.
net of tax .
.
Balances at December 31,
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
2022 .
.
.
.
Dividends declared .
.
Noncontrolling investors, net
Share repurchases .
.
Equity-based compensation .
Net income.
.
.
.
Other comprehensive loss, net
.
.
.
.
.
.
.
.
.
.
of tax .
.
.
Balances at December 31,
.
.
.
.
.
.
.
2023 .
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
—
—
—
—
—
—
(3,993)
—
(3,993)
—
. 194,998
—
.
—
.
(22,996)
.
934
.
—
.
72,227
—
—
22,996
(397)
—
(2,674,267)
649
—
—
—
—
— (1,800,905)
15,659
—
1
—
1,218,933
7,761,417
— (245,287)
(2,495)
630
—
—
(544)
(6,997)
— 3,862,674
(2,091)
—
—
—
—
—
(195,884)
—
(36,989)
6,108,757
(245,287)
(38,854)
— (1,800,905)
8,119
—
3,879,492
16,818
211,414
—
(29,911)
—
—
—
.
—
—
—
—
—
—
2,980
—
2,980
—
. 172,936
—
.
—
.
(13,394)
.
476
.
—
.
94,826
—
—
13,394
(125)
—
$650
—
—
—
—
— (1,452,203)
14,110
—
$(4,459,513) $1,212,566 $11,375,765
— (280,501)
—
—
—
—
(556)
5,044
— 2,450,882
1
—
$
889
—
—
—
—
—
$(216,055)
—
1,254
$ 7,914,302
(280,501)
1,254
— (1,452,203)
18,599
—
2,467,332
16,450
$181,503
—
(10,291)
—
—
—
.
—
—
—
—
—
—
(468)
—
(468)
—
. 160,018 108,095
$651
$(5,897,606) $1,217,610 $13,545,590
$
421
$(198,351)
$ 8,668,315
$171,212
See notes to consolidated financial statements.
Broadridge Financial Solutions, Inc. • Tel: (631) 254-7494
@edipvwctxa217/PRODUCTION_Jobs/CLS_Funds/GRP_Steel_Dynamics/JOB_ny20020056x1_print/DIV_105-fintab01
Operator: kaplowitzk
Date: March 21, 2024 Time: 19:33:4
Page 8 of 8 Session: 37
59
STEEL DYNAMICS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Years Ended December 31,
2022
2021
2023
Operating activities:
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 2,467,332
$ 3,879,492
$ 3,246,814
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . .
Equity-based compensation . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Changes in certain assets and liabilities:
Accounts receivable
. . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes receivable/payable . . . . . . . . . . . . . . . . . . . . .
Accrued expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash provided by operating activities . . . . . . . . . . . . . . . .
437,804
61,744
55,665
(19,716)
446,765
232,282
(23,777)
(30,148)
56,756
(164,779)
3,519,928
384,202
59,240
37,186
(1,795)
(110,560)
413,262
(6,884)
(289,042)
31,623
63,679
4,460,403
347,653
57,715
322,007
(3,240)
(944,516)
(1,685,834)
(2,491)
557,735
(105,921)
414,214
2,204,136
Investing activities:
Purchases of property, plant and equipment
. . . . . . . . . . . . . .
Purchases of short-term investments . . . . . . . . . . . . . . . . . . . .
Proceeds from maturities of short-term investments . . . . . . . . .
Business combinations, net of cash acquired . . . . . . . . . . . . . .
Investments in unconsolidated affiliates. . . . . . . . . . . . . . . . . .
Other investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash used in investing activities . . . . . . . . . . . . . . . . . .
(1,657,905)
(1,145,493)
1,054,742
—
—
(221,593)
(1,970,249)
(908,902)
(927,584)
297,950
(134,090)
(222,480)
15,837
(1,879,269)
(1,006,239)
—
—
—
—
6,819
(999,420)
Financing activities:
. . . . . . . . . . . . . . . . .
Issuance of current and long-term debt
Repayment of current and long-term debt . . . . . . . . . . . . . . . .
Dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchases of treasury stock . . . . . . . . . . . . . . . . . . . . . . . . . .
Other financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . .
Net cash used in financing activities
1,365,664
(1,367,553)
(271,317)
(1,452,203)
(51,725)
(1,777,134)
1,465,257
(1,507,475)
(237,163)
(1,800,905)
(116,298)
(2,196,584)
1,516,556
(1,522,002)
(212,968)
(1,060,632)
(50,423)
(1,329,469)
Increase (decrease) in cash and equivalents, and restricted cash . . .
Cash and equivalents, and restricted cash at beginning of period . .
(227,455)
1,633,919
384,550
1,249,369
(124,753)
1,374,122
Cash and equivalents, and restricted cash at end of period . . . .
$ 1,406,464
$ 1,633,919
$ 1,249,369
Supplemental disclosure information:
Cash paid for interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash paid for income taxes, net . . . . . . . . . . . . . . . . . . . . . . .
$
$
103,165
642,667
$
100,994
$ 1,063,844
$
$
103,374
737,157
See notes to consolidated financial statements.
2023 Annual Report
Broadridge Financial Solutions, Inc. • Tel: (631) 254-7494
@edipvwctxa217/PRODUCTION_Jobs/CLS_Funds/GRP_Steel_Dynamics/JOB_ny20020056x1_print/DIV_106-finnote01
Operator: kaplowitzk
Date: March 21, 2024 Time: 19:33:5
Page 1 of 23 Session: 58
60
Note 1. Description of the Business and Summary of Significant Accounting Policies
Description of the Business
Steel Dynamics, Inc. (SDI), together with its subsidiaries (the company), is one of the largest and most
diversified domestic steel producers and metals recycler, combined with a meaningful steel fabrication
manufacturing platform. Effective the fourth quarter 2023, the company changed its reportable segments, consistent
with how it currently manages the business, representing four reporting segments: steel operations, metals recycling
operations, steel fabrication operations, and aluminum operations. Segment information provided within this
Form 10-K, including that within Note 13. Segment Information, has been recast for all prior periods consistent
with the current reportable segment presentation. Approximately 6% of the company’s workforce in five locations is
represented by collective bargaining agreements, none of which are expiring in 2023.
Steel Operations Segment
Steel operations include the company’s electric arc furnace (EAF) steel mills, including Butler Flat Roll
Division, Columbus Flat Roll Division, Southwest-Sinton Flat Roll Division, Structural and Rail Division,
Engineered Bar Products Division, Roanoke Bar Division, and Steel of West Virginia, steel coating and
processing operations at The Techs, Heartland Flat Roll Division, United Steel Supply (USS) – 90% equity
interest as of April 1, 2023, Vulcan Threaded Products, Inc., and warehouse operations in Mexico. Steel
operations accounted for 67%, 65%, and 72% of the company’s consolidated net sales during 2023, 2022, and
2021, respectively.
Metals Recycling Operations Segment
Metals recycling operations include the company’s OmniSource ferrous and nonferrous processing,
transportation, marketing, brokerage, and scrap management services primarily throughout the United States
and in Central and Northern Mexico. Metals recycling operations accounted for 12%, 10%, and 12% of the
company’s consolidated net sales during 2023, 2022, and 2021, respectively.
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 15%, 19%, and 10% of the company’s
consolidated net sales during 2023, 2022, and 2021, respectively.
Aluminum Operations Segment
Aluminum operations includes the recycled aluminum flat rolled products mill being constructed in
Columbus, Mississippi, and two satellite recycled aluminum slab centers in Arizona and 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 has begun 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
Arizona recycled slab centers in late 2024 and mid-2025, respectively.
Other
Other operations consist of subsidiary operations that are below the quantitative thresholds required for
reportable segments and primarily consist of joint ventures and the company’s idled Minnesota ironmaking
operations. Redeemable noncontrolling interests related to Mesabi Nugget (owned 86% by SDI) are
$111.2 million at December 31, 2023 and 2022. Also included in ‘‘Other’’ are certain unallocated corporate
accounts, such as the company’s senior unsecured credit facility, senior notes, certain other investments and
certain profit sharing expenses.
Summary of 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 intercompany accounts and transactions.
Broadridge Financial Solutions, Inc. • Tel: (631) 254-7494
@edipvwctxa217/PRODUCTION_Jobs/CLS_Funds/GRP_Steel_Dynamics/JOB_ny20020056x1_print/DIV_106-finnote01
Operator: kaplowitzk
Date: March 21, 2024 Time: 19:33:5
Page 2 of 23 Session: 58
61
Note 1. Description of the Business and Summary of Significant Accounting Policies (continued)
Noncontrolling and redeemable noncontrolling interests represent the noncontrolling owners’ proportionate
share in the equity, income, or losses of the company’s majority-owned or controlled consolidated subsidiaries.
Use of Estimates
These consolidated financial statements are prepared in conformity with accounting principles generally
accepted in the United States, and accordingly, include amounts that require management to make estimates
and assumptions that affect the amounts reported in the consolidated financial statements and in the notes
thereto. Significant items subject to such estimates and assumptions include the carrying value of property,
plant and equipment, intangible assets, and goodwill; allowances for credit losses for trade receivables,
inventories and deferred income tax assets; unrecognized tax benefits; potential environmental liabilities; and
litigation claims and settlements. Actual results may differ from these estimates and assumptions.
Revenue from Contracts with Customers
In the steel and metals recycling operations segments, revenue is recognized at the point in time the
performance obligation is satisfied, and control of the product is transferred to the customer upon shipment or
delivery, at the amount of consideration the company expects to receive, including any variable consideration.
The variable consideration included in the company’s steel operations segment contracts, which is not
constrained, include estimated product returns and customer claims based on historical experience, and may
include volume rebates which are recorded on an expected value basis. Revenue recognized is limited to the
amount the company expects to receive. The company does not exercise significant judgments in determining
the timing of satisfaction of performance obligations or the transaction price. Shipment of products to
customers is considered a fulfillment activity with amounts billed to customers included in sales and costs
associated with such activities included in cost of goods sold.
The company’s steel fabrication operations segment recognizes revenue over time at the amount of
consideration the company expects to receive. Revenue is measured on an output method representing
completed fabricated tons to date as a percentage of total tons required for each contract. Revenue from
fabrication of tons remaining on partially fabricated customer contracts as of a reporting date, and future
revenue from yet to be fabricated customer contracts, has not been disclosed under the practical expedient in
Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers (ASC 606),
paragraph ASC 606-10-50-14 related to customer contracts with expected duration of one year or less.
The company does not exercise significant judgments in determining the timing of satisfaction of performance
obligations or the transaction price. Shipment of products to customers, which occurs after control over the
product has transferred to the customer and revenue is recognized, is considered a fulfillment activity with
amounts billed to customers included in sales and costs associated with such activities included in cost of
goods sold.
Payments from customers are generally due within 30 days of invoicing, which generally occurs upon
shipment of the products. Shipment for the steel fabrication operations segment generally occurs within
30 days of satisfaction of the performance obligation and revenue recognition. The company does not have
financing components. Payments from customers have historically been within these terms, however, payments
for non-U.S. sales may extend longer.
Refer to Note 13. Segment Information for disaggregated revenue by segment to external, external
non-United States, and other segment customers.
Credit Losses
The company is exposed to credit risk in the event of nonpayment of accounts receivable by customers.
The company mitigates its exposure to credit risk, which it generally extends on an unsecured basis, by
performing ongoing credit evaluations and taking further action if necessary, such as requiring letters of credit
or other security interests to support the customer receivable. The allowance for credit losses for accounts
receivable is based on the company’s reasonable estimate of known credit risks and historical experience,
adjusted for current and anticipated economic and other pertinent factors affecting the company’s customers,
2023 Annual Report
Broadridge Financial Solutions, Inc. • Tel: (631) 254-7494
@edipvwctxa217/PRODUCTION_Jobs/CLS_Funds/GRP_Steel_Dynamics/JOB_ny20020056x1_print/DIV_106-finnote01
Operator: kaplowitzk
Date: March 21, 2024 Time: 19:33:5
Page 3 of 23 Session: 58
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Note 1. Description of the Business and Summary of Significant Accounting Policies (continued)
that may differ from historical experience. Customer accounts receivable are written off when all collection
efforts have been exhausted and the amounts are deemed uncollectible.
At December 31, 2023 and 2022, the company reported $1,608.3 million and $2,056.1 million, respectively, of
accounts receivable, net of allowances for credit losses of $8.5 million and $5.7 million respectively. Changes in the
allowance were not material for the years ended December 31, 2023, 2022, or 2021.
Cash and Equivalents, and Restricted Cash
Cash and equivalents include all highly liquid investments with a maturity of three months or less at the
date of acquisition. Restricted cash is primarily funds held in escrow as required by various insurance and
government organizations. The balance of cash, cash equivalents and restricted cash in the consolidated
statements of cash flows includes restricted cash of $5.6 million at December 31, 2023 and $5.5 million at
December 31, 2022, 2021, and 2020, which are recorded in Other Assets (noncurrent) in the company’s
consolidated balance sheets.
Short-Term Investments
Short-term investments include investments with maturity dates of longer than three months but less than
one year when purchased. The company’s short-term investments are classified as trading securities. Interest
income from invested cash and short-term investments was $111.9 million and $29.3 million as of
December 31, 2023 and 2022, respectively, and is recorded in other (income) expense, net as earned. The
company’s short-term investments were $721.2 million and $628.2 million as of December 31, 2023 and
2022, respectively. The short-term investments held as of December 31, 2023 consisted of commercial paper
($146.2 million), US Treasuries ($564.9 million), and certificates on deposit ($10.1 million). Short-term
investments held as of December 31, 2022, consisted of commercial paper ($145.7 million) and US Treasuries
($482.5 million).
Inventories
Inventories are stated at lower of cost or net realizable value. Cost is determined using a weighted
average cost method for raw materials (including scrap and purchased steel substrate) and supplies, and on a
first-in, first-out basis for other inventory. Inventory consisted of the following at December 31 (in thousands):
Raw materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Supplies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Work in progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Finished goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2023
$1,226,272
711,653
296,932
659,775
$2,894,632
2022
$1,608,344
629,074
256,071
636,475
$3,129,964
Property, Plant and Equipment
Property, plant and equipment are stated at cost, except for assets acquired in acquisitions which are
valued at fair value, which includes capitalized interest on construction in progress amounts, and is reduced by
proceeds received from certain state and local government grants and other capital cost reimbursements. The
company assigns each fixed asset a useful life ranging from 3 to 15 years for plant, machinery and equipment,
and 10 to 40 years for buildings and improvements. Repairs and maintenance are expensed as incurred.
Depreciation is provided utilizing the straight-line depreciation methodology, or the units-of-production
depreciation methodology for certain production-related steel operations segment assets, based on units
produced, subject to minimum and maximum levels. Depreciation expense was $397.0 million, $349.4 million,
and $311.4 million for the years ended December 31, 2023, 2022, and 2021, respectively.
Broadridge Financial Solutions, Inc. • Tel: (631) 254-7494
@edipvwctxa217/PRODUCTION_Jobs/CLS_Funds/GRP_Steel_Dynamics/JOB_ny20020056x1_print/DIV_106-finnote01
Operator: kaplowitzk
Date: March 21, 2024 Time: 19:33:5
Page 4 of 23 Session: 58
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Note 1. Description of the Business and Summary of Significant Accounting Policies (continued)
The company’s property, plant and equipment consisted of the following at December 31 (in thousands):
Land and improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Buildings and improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Plant, machinery and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Construction in progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . .
Property, plant and equipment, net
$
2023
693,166
1,255,274
6,887,985
2,096,489
10,932,914
4,198,696
$ 6,734,218
2022
$ 521,881
1,238,824
6,683,237
780,741
9,224,683
3,851,018
$5,373,665
Intangible Assets
The company’s intangible assets consisted of the following at December 31 (in thousands):
Customer, vendor and scrap generator relationships . . . . . $444,812 $420,512
Trade names . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less accumulated amortization . . . . . . . . . . . . . . . . . . .
2022
Useful
Life
8 to 25 years
147,950 15 to 25 years
5 years
2023
147,950
600
593,362
335,603
600
569,062
301,555
$257,759 $267,507
Weighted
Average
Amortization
Period
22 years
19 years
5 years
22 years
The company utilizes an accelerated amortization methodology for customer, vendor and scrap generator
relationships in order to follow the pattern in which the economic benefits of the amounts are anticipated to
be consumed. Trade names are amortized using a straight-line methodology. Amortization of intangible assets
was $34.0 million, $27.8 million, and $29.2 million for the years ended December 31, 2023, 2022, and 2021,
respectively.
Estimated amortization expense related to amortizable intangibles for the years ending December 31 is as
follows (in thousands):
2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2026 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2027 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2028 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total
$ 30,526
27,464
25,562
23,163
21,953
129,091
$257,759
Impairment of Long-Lived Tangible and Definite-Lived Intangible Assets
The company reviews long-lived assets for impairment whenever events or changes in circumstances
indicate the carrying amount of such assets may not be fully recoverable. Impairment losses are recorded on
long-lived assets used in operations when indicators of impairment are present and the undiscounted cash
flows estimated to be generated by those assets are less than the assets’ carrying amounts. The impairment
loss is measured by comparing the fair value of the assets to its carrying amount. The company considers
various factors and determines whether an impairment test is necessary, including by way of examples, a
2023 Annual Report
Broadridge Financial Solutions, Inc. • Tel: (631) 254-7494
@edipvwctxa217/PRODUCTION_Jobs/CLS_Funds/GRP_Steel_Dynamics/JOB_ny20020056x1_print/DIV_106-finnote01
Operator: kaplowitzk
Date: March 21, 2024 Time: 19:33:5
Page 5 of 23 Session: 58
64
Note 1. Description of the Business and Summary of Significant Accounting Policies (continued)
significant and prolonged deterioration in operating results and/or projected cash flows, significant changes in
the extent or manner in which an asset is used, technological advances with respect to assets which would
potentially render them obsolete, the company’s strategy and capital planning, and the economic environment
in markets to be served.
Goodwill
The company’s goodwill consisted of the following at December 31 (in thousands):
Steel Operations Segment
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Metals Recycling Operations Segment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Steel Fabrication Operations Segment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2023
$272,133
203,413
1,925
$477,471
2022
$272,133
228,009
1,925
$502,067
Cumulative OmniSource goodwill impairment charges were $346.8 million at December 31, 2023 and 2022.
Impairment of Goodwill
At least once annually (as of October 1), or when indicators of impairment exist, the company performs
an impairment test for goodwill. Goodwill is allocated to various reporting units, which are generally one
level below the company’s operating segments. The fair value of the reporting unit is determined by using an
estimate of future cash flows utilizing a risk-adjusted discount rate to calculate the net present value of future
cash flows (income approach), and for some years by using a market approach based upon an analysis of
valuation metrics of comparable peer companies, using Level 3 fair value inputs as provided for under
ASC 820, Fair Value Measurement. If the fair value exceeds the carrying value of the reporting unit, there is
no impairment. If the carrying amount exceeds the fair value, the company recognizes an impairment loss in
the amount by which the carrying value of the net assets assigned to the reporting unit exceeds the fair value
of the reporting unit, with the impairment loss not to exceed the amount of goodwill allocated to the reporting
unit. No impairment was identified during the company’s 2023, 2022 or 2021 annual goodwill impairment
analysis.
Equity-Based Compensation
The company has several stock-based employee compensation plans which are more fully described in
Note 6. Equity-Based Incentive Plans. Compensation expense for restricted stock units, deferred stock units,
restricted stock, stock appreciation awards, and performance awards is recorded over the vesting periods using
the fair value as determined by the closing fair market value of the company’s common stock on the grant
date, and with respect to performance awards, an estimate of probability of award achievement during the
performance period. The company recognizes forfeitures as they occur. Compensation expense for these
stock-based employee compensation plans was $60.1 million, $69.2 million, and $80.2 million for the years
ended December 31, 2023, 2022, and 2021, respectively.
Income Taxes
The company accounts for income taxes and the related accounts under the liability method. Deferred tax
liabilities and assets are determined based on the difference between the financial statement and tax bases of
assets and liabilities using enacted rates expected to be in effect during the year in which the basis differences
reverse.
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
Broadridge Financial Solutions, Inc. • Tel: (631) 254-7494
@edipvwctxa217/PRODUCTION_Jobs/CLS_Funds/GRP_Steel_Dynamics/JOB_ny20020056x1_print/DIV_106-finnote01
Operator: kaplowitzk
Date: March 21, 2024 Time: 19:33:5
Page 6 of 23 Session: 58
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Note 1. Description of the Business and Summary of Significant Accounting Policies (continued)
equivalents represent potentially dilutive restricted stock units, deferred stock units, restricted stock, and
performance awards, and are excluded from the computation in periods in which they have an anti-dilutive
effect. There were no anti-dilutive common stock equivalents as of and for the years ended December 31,
2023, 2022, and 2021.
The following table presents a reconciliation of the numerators and the denominators of the company’s
basic and diluted earnings per share computations for the years ended December 31 (in thousands, except per
share data):
Net Income
(Numerator)
Basic earnings per share . . . . . . . . . $2,450,882
Dilutive common share
2023
Shares
(Denominator)
166,552
Per Share
Amount
$14.72
Net Income
(Numerator)
$3,862,674
2022
Shares
(Denominator)
183,393
Per Share
Amount
$21.06
equivalents . . . . . . . . . . . . . . .
—
Diluted earnings per share . . . . . . . . $2,450,882
879
167,431
—
$3,862,674
1,229
184,622
$14.64
$20.92
Net Income
(Numerator)
Basic earnings per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $3,214,066
—
Diluted earnings per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $3,214,066
Dilutive common share equivalents . . . . . . . . . . . . . . . . . . . . . . . .
2021
Shares
(Denominator)
205,115
1,500
206,615
Per Share
Amount
$15.67
$15.56
Concentration of Credit Risk
Financial instruments that potentially subject the company to significant concentrations of credit risk
principally consist of temporary cash investments and accounts receivable. When advantageous, the company
places its temporary cash with high credit quality financial institutions and companies and limits the amount
of credit exposure from any one entity. The company is exposed to credit risk in the event of nonpayment by
customers. The company mitigates its exposure to credit risk, which it generally extends initially on an
unsecured basis, by performing ongoing credit evaluations and taking further action if necessary, such as
requiring letters of credit or other security interests to support the customer receivable.
Derivative Financial Instruments
The company recognizes all derivatives as either assets or liabilities in the consolidated balance sheets
and measures those instruments at fair value. Derivatives that are not designated as hedges must be adjusted
to fair value through earnings. Changes in the fair value of derivatives that are designated as hedges,
depending on the nature of the hedge, are recognized as either an offset against the change in fair value of the
hedged balance sheet item in the case of fair value hedges or as other comprehensive income in the case of
cash flow hedges, until the hedged item is recognized in earnings. The ineffective portion of a derivative’s
change in fair value is immediately recognized in earnings for fair value hedges. The company offsets fair
value amounts recognized for derivative instruments executed with the same counterparty under master netting
agreements.
In the normal course of business, the company has derivative financial instruments in the form of
forward contracts in various metallic commodities, may have involvement with derivative financial
instruments related to managing fluctuations in foreign exchange rates, and in the past has had derivative
financial instruments related to managing fluctuations in interest rates. At the time of acquiring these financial
instruments, the company designates and assigns these instruments as hedges of specific assets, liabilities or
anticipated transactions. When hedged assets or liabilities are sold or extinguished, or the anticipated
transaction being hedged is no longer expected to occur, the company recognizes the gain or loss on the
designated hedged financial instrument in earnings.
2023 Annual Report
Broadridge Financial Solutions, Inc. • Tel: (631) 254-7494
@edipvwctxa217/PRODUCTION_Jobs/CLS_Funds/GRP_Steel_Dynamics/JOB_ny20020056x1_print/DIV_106-finnote01
Operator: kaplowitzk
Date: March 21, 2024 Time: 19:33:5
Page 7 of 23 Session: 58
66
Note 1. Description of the Business and Summary of Significant Accounting Policies (continued)
The company routinely enters into forward exchange traded futures to manage price risk associated with
nonferrous metal inventory, as well as purchases and sales of nonferrous (primarily aluminum and copper) and
ferrous metals, to reduce exposure to commodity related price fluctuations. The company does not enter into
these derivative financial instruments for speculative purposes.
Recently Issued Accounting Pronouncements
In November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards
Update (ASU) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures,
which is intended to improve reportable segment disclosure requirements, primarily through enhanced
disclosures about significant segment expenses. The guidance is effective for fiscal years beginning after
December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early
adoption is permitted. The guidance is to be applied retrospectively to all prior periods presented in the
financial statements. Upon transition, the segment expense categories and amounts disclosed in the prior
periods should be based on the significant segment expense categories identified and disclosed in the period of
adoption. The company is currently evaluating the potential impact of adopting this new guidance on the
consolidated financial statements and related disclosures.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income
Tax Disclosures, which modifies the rules on income tax disclosures to require entities to disclose specific
categories in the rate reconciliation, the income or loss from continuing operations before income tax expense
or benefit (separated between domestic and foreign) and income tax expense or benefit from continuing
operations (separated by federal, state and foreign). ASU 2023-09 also requires entities to disclose their
income tax payments to international, federal, state and local jurisdictions, among other changes. The guidance
is effective for annual periods beginning after December 15, 2024. Early adoption is permitted for annual
financial statements that have not yet been issued or made available for issuance. ASU 2023-09 is to be
applied on a prospective basis, but retrospective application is permitted. The company is currently evaluating
the potential impact of adopting this new guidance on the consolidated financial statements and related
disclosures.
Note 2. Business Combinations and Investments in Unconsolidated Affiliates
Business Combinations
ROCA
The company acquired 100% of ROCA ACERO, S.A. de C.V. (ROCA) on October 1, 2022. The
acquisition of ROCA is part of the company’s North American raw material procurement strategy. ROCA is
headquartered in Monterrey, Mexico, and operates ferrous and nonferrous scrap facilities strategically
positioned near high-volume industrial scrap sources located throughout Central and Northern Mexico. The
transaction was funded with available cash. Post-acquisition operating results are reflected in the company’s
financial statements in the metals recycling operations segment.
Aluminum Dynamics
The company attained a 94.4% equity interest in a joint venture concurrently formed with Unity
Aluminum, Inc. on July 29, 2022, for the construction and operation of a new state-of-the-art low-carbon
recycled aluminum flat rolled products mill. The transaction was funded with available cash. Operating results
from and after July 29, 2022, are reflected in the company’s consolidated financial statements in the aluminum
operations segment. Prior periods, when amounts were recorded in Other, have been recast to reflect this new
segment.
United Steel Supply
The company purchased a 75% equity interest in United Steel Supply, LLC (USS) on March 1, 2019. On
April 1, 2022, the company purchased an additional 12.5% equity interest in USS. On April 1, 2023, a
noncontrolling member of USS exercised its option to require SDI to purchase its 2.5% equity interest,
Broadridge Financial Solutions, Inc. • Tel: (631) 254-7494
@edipvwctxa217/PRODUCTION_Jobs/CLS_Funds/GRP_Steel_Dynamics/JOB_ny20020056x1_print/DIV_106-finnote01
Operator: kaplowitzk
Date: March 21, 2024 Time: 19:33:5
Page 8 of 23 Session: 58
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Note 2. Business Combinations and Investments in Unconsolidated Affiliates (continued)
increasing SDI’s ownership to 90%. The remaining noncontrolling members’ option to require SDI to purchase
the remaining 10% equity interest of USS has been extended to on or after February 28, 2025. The
USS noncontrolling interest is therefore reflected in redeemable noncontrolling interest in the consolidated
balance sheets.
Investments in Unconsolidated Affiliates
The company purchased a 45% minority equity interest in New Process Steel, L.P. (NPS) on January 31,
2022. NPS is a metals solutions and distribution supply-chain management company headquartered in
Houston, Texas, with a focus toward growing its value-added manufacturing applications. On February 28,
2022, the company also purchased a minority equity interest in Aymium, a producer of renewable biocarbon
products. As the company does not have power to control these entities, the company accounts for these
investments using the equity method of accounting, which are recorded in Other Assets (noncurrent) in the
company’s consolidated balance sheets with related activity recorded in Other (Income) Expense, net. Profits
or losses from transactions with NPS are eliminated until realized by the majority equity interest owner.
Note 3. Long-Term Debt
The company’s borrowings consisted of the following at December 31 (in thousands):
2.800% senior notes due 2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.400% senior notes due 2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.000% senior notes due 2026 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.650% senior notes due 2027 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.450% senior notes due 2030 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.250% senior notes due 2031 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.250% senior notes due 2050 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total debt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less debt issuance costs and original issue discounts . . . . . . . . . . . . . . . . .
Total amounts outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less current maturities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2023
$ 400,000
400,000
400,000
350,000
600,000
500,000
400,000
61,836
3,111,836
40,780
3,071,056
459,987
$2,611,069
2022
$ 400,000
400,000
400,000
350,000
600,000
500,000
400,000
63,726
3,113,726
43,151
3,070,575
57,334
$3,013,241
Senior Credit Facility due 2028
On July 19, 2023, the company entered into a new unsecured credit agreement comprised of a senior
unsecured credit facility (Facility), which provides a $1.2 billion unsecured Revolver, maturing July 2028. The
new Credit Agreement replaced the December 3, 2019 Credit Agreement. Subject to certain conditions, the
company has the opportunity to increase the Facility size by $500.0 million. The unsecured Facility is
available to fund working capital, capital expenditures, and other general corporate purposes. The Facility
contains financial covenants and other covenants pertaining to the company’s ability to incur indebtedness and
permit liens on certain assets. The company’s ability to borrow funds within the terms of the unsecured
Facility is dependent upon its continued compliance with financial and other covenants. At December 31,
2023, the company had $1.2 billion of availability on the Facility, $9.1 million of outstanding letters of credit
and other obligations which reduce availability, and there were no borrowings outstanding.
The Facility pricing grid is adjusted quarterly and is based on either the company’s leverage of net debt
(as defined in the Facility) to last-twelve-months (LTM) consolidated Adjusted EBITDA as defined in the
Facility (earnings before interest, taxes, depreciation, amortization, and certain other non-cash items as
allowed in the Facility), or the company’s credit ratings. The minimum pricing is adjusted Secured Overnight
2023 Annual Report
Broadridge Financial Solutions, Inc. • Tel: (631) 254-7494
@edipvwctxa217/PRODUCTION_Jobs/CLS_Funds/GRP_Steel_Dynamics/JOB_ny20020056x1_print/DIV_106-finnote01
Operator: kaplowitzk
Date: March 21, 2024 Time: 19:33:5
Page 9 of 23 Session: 58
68
Note 3. Long-Term Debt
(continued)
Financing Rate (SOFR) plus 1.000% and the maximum pricing is adjusted SOFR plus 1.75%. In addition, the
company is subject to an unused commitment fee of between 0.11% and 0.275% (based on either the leverage
of net debt to LTM consolidated adjusted EBITDA, or the company’s credit ratings) which is applied to the
unused portion of the Facility.
The financial covenants under the Facility state that the company must maintain an interest coverage ratio
of not less than 2.50:1.00. The company’s interest coverage ratio is calculated by dividing its LTM
consolidated Adjusted EBITDA by its 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 December 31, 2023,
the company’s interest coverage ratio and debt to capitalization ratio were 36.13:1.00 and 0.26:1.00,
respectively. The company was, therefore, in compliance with these covenants at December 31, 2023, and
anticipates remaining in compliance during the next twelve months.
Senior Unsecured Notes
The company has seven different tranches of senior unsecured notes (Notes) outstanding. These Notes are in
equal right of payment with all existing and future senior unsecured indebtedness and are senior in right of payment
to all subordinated indebtedness. These Notes contain provisions that allow the company to redeem the Notes on or
after the dates and at redemption prices (expressed as a percentage of principal amount) listed below.
The company’s $400.0 million of 2.800% senior notes due 2024 mature on December 15, 2024, with
interest payable semi-annually. Early redemption is permitted any time prior to November 15, 2024, at the
greater of par or a make-whole price of the remaining payments to be made discounted at the applicable
U.S. Treasury rate plus 0.20%; and as of November 15, 2024, at 100.000%.
The company’s $400.0 million of 2.400% senior notes due 2025 mature on June 15, 2025, with interest
payable semi-annually. Early redemption is permitted any time prior to May 15, 2025, at the greater of par or
a make-whole price of the remaining payments to be made discounted at the applicable U.S. Treasury rate
plus 0.35%; and as of May 15, 2025, at 100.000%.
The company’s $400.0 million of 5.000% senior notes due 2026 mature on December 15, 2026, with
interest payable semi-annually. Early redemption is permitted as of December 15, 2023, at 100.833%, and as
of December 15, 2024, at 100.000%.
The company’s $350.0 million of 1.650% senior notes due 2027 mature on October 15, 2027, with
interest payable semi-annually. Early redemption is permitted any time prior to August 15, 2027, at the greater
of par or a make-whole price of the remaining payments to be made discounted at the applicable
U.S. Treasury rate plus 0.20%; and as of August 15, 2027, at 100.000%.
The company’s $600.0 million of 3.450% senior notes due 2030 mature on April 15, 2030, with interest
payable semi-annually. Early redemption is permitted any time prior to January 15, 2030, at the greater of par
or a make-whole price of the remaining payments to be made discounted at the applicable U.S. Treasury rate
plus 0.25%; and as of January 15, 2030, at 100.000%.
The company’s $500.0 million of 3.250% senior notes due 2031 mature on January 15, 2031, with
interest payable semi-annually. Early redemption is permitted any time prior to October 15, 2030, at the
greater of par or a make-whole price of the remaining payments to be made discounted at the applicable
U.S. Treasury rate plus 0.40%; and as of October 15, 2030, at 100.000%.
The company’s $400.0 million of 3.250% senior notes due 2050 mature on October 15, 2050, with
interest payable semi-annually. Early redemption is permitted any time prior to April 15, 2050, at the greater
of par or a make-whole price of the remaining payments to be made discounted at the applicable
U.S. Treasury rate plus 0.30%; and as of April 15, 2050, at 100.000%.
Other Obligations
Secured Loans. One of the company’s controlled subsidiaries has entered into a financing agreement for
certain equipment which bears interest at a rate of 2.8%, with monthly principal and interest payments
Broadridge Financial Solutions, Inc. • Tel: (631) 254-7494
@edipvwctxa217/PRODUCTION_Jobs/CLS_Funds/GRP_Steel_Dynamics/JOB_ny20020056x1_print/DIV_106-finnote01
Operator: kaplowitzk
Date: March 21, 2024 Time: 19:33:5
Page 10 of 23 Session: 58
69
Note 3. Long-Term Debt
(continued)
required through 2027. The outstanding principal balance of these agreements was $2.0 million and
$8.6 million at December 31, 2023, and 2022, respectively.
One of the company’s controlled subsidiaries amended its secured credit agreement, extending the
maturity to June 2028, and provides a revolving variable rate credit facility of up to $125.0 million, subject to
a borrowing base determined from eligible accounts receivable and inventory. Interest, which was 7.2% at
December 31, 2023, is payable monthly. Amounts due under the credit facility were $59.8 million and
$55.1 million at December 31, 2023, and 2022, respectively.
Another of the company’s controlled subsidiaries amended its secured credit agreement, extending the
maturity to March 2026, and provides a revolving variable rate credit facility of up to $30.0 million, subject
to a borrowing base determined from eligible accounts receivable and inventory. Interest, which was 6.7% at
December 31, 2023, is payable monthly. There were no amounts due under the credit facility at December 31,
2023 or 2022.
Outstanding Debt Maturities
Maturities of outstanding debt as of December 31, 2023, are as follows (in thousands):
2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2026 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2027 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2028 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 460,694
400,653
400,453
350,036
—
1,500,000
$3,111,836
The company capitalizes interest on all qualifying construction in progress assets. For the years ended
December 31, 2023, 2022, and 2021, total interest costs incurred were $109.5 million, $107.4 million, and
$107.7 million, respectively, of which $33.0 million, $15.8 million, and $50.5 million, respectively, were
capitalized.
Note 4.
Income Taxes
Components of earnings before income taxes and noncontrolling interests for the years ended
December 31 are as follows (in thousands):
2023
2022
2021
United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $3,198,048 $4,996,762 $4,179,064
30,006
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . $3,218,943 $5,021,069 $4,209,070
24,307
20,895
2023 Annual Report
Broadridge Financial Solutions, Inc. • Tel: (631) 254-7494
@edipvwctxa217/PRODUCTION_Jobs/CLS_Funds/GRP_Steel_Dynamics/JOB_ny20020056x1_print/DIV_106-finnote01
Operator: kaplowitzk
Date: March 21, 2024 Time: 19:33:5
Page 11 of 23 Session: 58
70
Note 4.
Income Taxes (continued)
The company files a consolidated federal income tax return. The provision for income tax expense for
the years ended December 31 is as follows (in thousands):
Current income tax expense
Federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred income tax expense
Federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total deferred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . .
2023
2022
2021
$600,499
91,965
3,482
695,946
38,172
15,355
2,138
55,665
$751,611
$ 946,016
152,758
8,605
1,107,379
$517,272
116,448
9,919
643,639
22,168
13,333
(1,303)
34,198
$1,141,577
304,235
16,226
(1,844)
318,617
$962,256
A reconciliation of the statutory rates to the actual effective tax rates for the years ended December 31
are as follows:
Statutory federal tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
State income taxes, net of federal benefit . . . . . . . . . . . . . . . . . . . . . . . . . .
Federal research & development credits . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other permanent differences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effective tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2021
2023
2022
21.0% 21.0% 21.0%
2.6
2.6
(0.6)
(0.2)
(0.1)
(0.3)
23.3% 22.7% 22.9%
2.5
(0.7)
0.1
Significant components of the company’s deferred tax assets and liabilities at December 31 are as follows
(in thousands):
Deferred tax assets
Accrued expenses and allowances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventories
Net operating loss carryforwards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortizable assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other
Less: valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total net deferred tax assets
Deferred tax liabilities
2023
2022
41,894 $ 34,052
8,028
10,685
16,412
7,663
—
5,798
8,091
9,149
66,583
75,189
(805)
(816)
65,778
74,373
Property, plant and equipment
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortizable assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other
Total deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(951,404)
(1,304)
(2,173)
(954,881)
Net deferred tax liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (944,768) $(889,103)
(1,013,045)
—
(6,096)
(1,019,141)
Certain wholly-owned and controlled subsidiaries of the company file separate federal and state income
tax returns. One of the controlled subsidiaries generated federal net operating loss carryforwards in the
Broadridge Financial Solutions, Inc. • Tel: (631) 254-7494
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Operator: kaplowitzk
Date: March 21, 2024 Time: 19:33:5
Page 12 of 23 Session: 58
71
Note 4.
Income Taxes (continued)
years 2018 and prior, which total $11.5 million at December 31, 2023, and which expire in the years
2037 through 2039, along with state net operating loss carryforwards which expire in the years 2034 through
2039. Annually, the company evaluates the realizability of the net deferred tax assets for this controlled
subsidiary. In completing this evaluation, the company considers all available positive and negative evidence
in order to determine whether, based on the weight of the evidence, a valuation allowance for its deferred tax
assets was necessary. Such evidence includes current operating results, historical results, future reversals of
existing taxable temporary differences and expectations for future taxable income (exclusive of the reversal of
temporary differences and carryforwards), as well as the implementation of feasible and prudent tax planning
strategies. Based on the positive evidence, the company concluded that it was more likely than not that the net
deferred tax assets would be realized and a valuation allowance was not necessary. The company continues to
maintain a valuation allowance of $816,000 and $805,000 as of December 31, 2023, and 2022, respectively,
with respect to certain state tax credits of the controlled subsidiary.
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows
(in thousands):
Balance at January 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increases related to current year tax positions . . . . . . . . . . . . . . . . . . . . .
Increases related to prior year tax positions
. . . . . . . . . . . . . . . . . . . . . .
Decreases related to prior year tax positions . . . . . . . . . . . . . . . . . . . . . .
Balance at December 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2023
$28,646
1,500
1,798
(686)
$31,258
2022
$20,466
9,600
364
(1,784)
$28,646
2021
$12,830
8,250
2,095
(2,709)
$20,466
Included in the balance of unrecognized tax benefits at December 31, 2023 and 2022, are potential
benefits of $27.8 million and $25.1 million, respectively, that, if recognized, would affect the effective tax
rate. The company recognizes interest and penalties related to its tax contingencies on a net-of-tax basis in
income tax expense. During the years ended December 31, 2023 and 2022, the company recognized expense
from the increase of interest expense and penalties of $1,560,000 and $480,000, respectively, net of tax and
during the year ended December 31, 2021, the company recognized a benefit from the decrease of interest
expense and penalties of $205,000, net of tax. In addition to the unrecognized tax benefits in the table above,
the company had $3.2 million and $1.2 million accrued for the payment of interest and penalties at
December 31, 2023 and 2022, respectively.
It is reasonably possible that the amount of unrecognized tax benefits could change in the next twelve
months in an amount ranging from zero to $10.0 million, as a result of the expiration of the statute of
limitations and other federal and state income tax audits. The company files income tax returns in the U.S.
federal jurisdiction as well as income tax returns in various state jurisdictions. The tax years 2020 through
2022 remain open to examination by the Internal Revenue Service and various state and local jurisdictions.
Note 5. Shareholders’ Equity
Cash Dividends
The company declared cash dividends of $280.5 million, or $1.70 per common share, during 2023;
$245.3 million, or $1.36 per common share, during 2022; and $210.9 million, or $1.04 per common share,
during 2021. The company paid cash dividends of $271.3 million, $237.2 million, and $213.0 million during
2023, 2022, and 2021, respectively.
Treasury Stock
In February 2020, the board of directors authorized a share repurchase program of up to $500.0 million
of the company’s common stock. This program was exhausted in July 2021. In July 2021, the board of
directors authorized an additional share repurchase program of up to $1.0 billion of the company’s common
stock. This program was exhausted in April 2022. In February 2022, the board of directors authorized an
additional share repurchase program of up to $1.25 billion of the company’s common stock. This program was
2023 Annual Report
Broadridge Financial Solutions, Inc. • Tel: (631) 254-7494
@edipvwctxa217/PRODUCTION_Jobs/CLS_Funds/GRP_Steel_Dynamics/JOB_ny20020056x1_print/DIV_106-finnote01
Operator: kaplowitzk
Date: March 21, 2024 Time: 19:33:5
Page 13 of 23 Session: 58
72
Note 5. Shareholders’ Equity (continued)
exhausted in November 2022. In November 2022, the board of directors authorized an additional share
repurchase program of up to $1.5 billion of the company’s common stock. This program was exhausted in
November 2023. In November 2023, the board of directors authorized an additional share repurchase program
of up to $1.5 billion of the company’s common stock. Under the above share repurchase programs, and
similar prior programs, purchases take place as and when the company determines in open market or private
transactions made based upon the market price of the company’s common stock, the nature of other
investment opportunities or growth projects, the company’s cash flows from operations, and general economic
conditions. The share repurchase programs do not require the company to acquire any specific number of
shares, and may be modified, suspended, extended or terminated by the company at any time. The share
repurchase programs do not have an expiration date. The company repurchased 13.4 million shares for
$1.5 billion during 2023, 23.0 million shares for $1.8 billion during 2022, and 16.9 million shares for
$1.1 billion during 2021 under the share repurchase programs. At December 31, 2023, the company had
remaining authorization to repurchase $1.4 billion of additional shares under the November 2023 share
repurchase program.
Note 6. Equity-Based Incentive Plans
2023 Equity Incentive Plan
In May 2023, the company’s shareholders approved the 2023 Equity Incentive Plan (2023 Plan), which
supersedes the prior Amended and Restated 2015 Equity Incentive Plan. The 2023 Plan is designed to attract,
motivate and retain qualified persons that are able to make important contributions to the company’s success.
To accomplish these objectives, the 2023 Plan provides for awards of equity-based incentives through granting
of restricted stock units (RSUs), deferred stock units (DSUs), restricted stock awards (of which none have
been granted), stock options (of which none have been granted), unrestricted stock awards (of which none
have been granted), stock appreciation rights (SARs), and performance awards, such as long-term incentive
compensation program (LTIP). Under the 2023 Plan, 9.0 million shares of common stock were reserved for
grant through December 31, 2033. The 2023 Plan uses a fungible share concept under which any awards that
are not a full-value award, such as stock options and stock-settled SARs, will be counted against the share
reserve as one share for each share of common stock, and awards that are full-value awards, such as RSUs,
DSUs, restricted and unrestricted stock awards, and performance awards, will be counted against the share
reserve as 2.09 shares for each share of common stock. The SARs the company has granted to date can only
be settled in cash, and thus, do not count against the share reserve. At December 31, 2023, there were
7.5 million shares still available for issuance.
Substantially all of the company’s full-time, non-union, U.S. team members receive RSUs, which are
granted annually in November at no cost to employees and vest 100% over the shorter of two years from
grant date or upon the recipient reaching retirement eligible age (59½ years). During 2023, 2022, and 2021,
certain senior leadership of the company received RSUs in February which vest over a period of 2 to 4 years.
The stock is issued to employees upon vesting. The company satisfies RSUs with newly issued shares, and
satisfies restricted and unrestricted stock awards, DSUs, and performance awards with treasury shares. In
addition to the RSUs and LTIP awards granted during the three-year period ended December 31, 2023,
presented below, the company awarded 18,000, 20,000 and 25,000 DSUs in 2023, 2022 and 2021,
respectively; and 171,200 SARs in 2021. No SARs awards were granted in 2023 and 2022. The 77,000
SARs awards outstanding at December 31, 2023, for which no shares of common stock can be issued because
the awards must be cash-settled upon exercise, have a weighted-average exercise price of $38.74.
Broadridge Financial Solutions, Inc. • Tel: (631) 254-7494
@edipvwctxa217/PRODUCTION_Jobs/CLS_Funds/GRP_Steel_Dynamics/JOB_ny20020056x1_print/DIV_106-finnote01
Operator: kaplowitzk
Date: March 21, 2024 Time: 19:33:5
Page 14 of 23 Session: 58
Note 6. Equity-Based Incentive Plans (continued)
Restricted Stock Units
A summary of the company’s RSU activity and outstanding RSUs as of December 31, 2023, are
presented below (dollars in thousands except grant date fair value):
73
Number
of RSUs
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Vested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Outstanding RSUs as of January 1, 2021 . . . . . . . . . . . . 1,698,579
627,973
(895,706)
(82,588)
As of December 31, 2021 . . . . . . . . . . . . . . . . . . . . . . 1,348,258
481,926
(786,622)
(70,011)
973,551
433,810
(517,041)
(40,829)
849,491
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Vested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
As of December 31, 2022 . . . . . . . . . . . . . . . . . . . . . .
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Vested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
As of December 31, 2023 (nonvested) . . . . . . . . . . . . . .
Weighted
Average Grant
Date Fair Value
$ 31.44
59.38
32.30
32.47
$ 43.82
98.29
37.38
46.82
$ 71.80
108.95
64.03
78.70
$ 99.13
Aggregate
Intrinsic
Value
$ 62,627
Unrecognized
Compensation
$35,821
$ 83,686
$39,657
$ 94,765
$44,394
$101,480
$43,073
The weighted average remaining life before vesting of the outstanding RSUs as of December 31, 2023, is
1.6 years. The fair value of RSUs vesting during 2023, 2022, and 2021 was $58.3 million, $79.1 million, and
$56.5 million, respectively, and was net-share settled such that the company withheld shares with value
equivalent to the employees’ minimum statutory obligation for the applicable income and other employment
taxes and remitted the cash to the appropriate taxing authorities. The total shares withheld in 2023, 2022, and
2021 were approximately 342,000, 249,000, and 290,000 shares, respectively, and were based on the value of
the RSUs on their vesting dates as determined by the company’s closing stock price.
Long-Term Incentive Compensation Program (LTIP)
The company maintains an LTIP performance-based program directed toward key senior leadership of the
company, as determined at the discretion of the Compensation Committee of the Board of Directors. Awards
are in shares of the company’s common stock using the stock price on the first day of the performance period
to convert each key senior executive’s predetermined multiple of annual base salary. The performance period
is generally three years; however, transition awards can be issued with a shorter performance period.
Performance is measured in terms of equal portions of four growth and profitability measures, as compared to
the same measures, similarly treated, of a pre-established group of steel sector competitors. Awards earned can
range from zero to 100% of the shares awarded, and award shares vest immediately once earned on the basis
of performance.
2023 Annual Report
Broadridge Financial Solutions, Inc. • Tel: (631) 254-7494
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Date: March 21, 2024 Time: 19:33:5
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74
Note 6. Equity-Based Incentive Plans (continued)
The Compensation Committee granted the following three-year performance period awards and transition
awards, which have been earned and have or will be issued as follows:
Maximum
Shares That
Could Be Issued
Award
Earned
Award Issued/Issuable
2020 LTIP Award:
Three-year performance period award . . . . . . . . . . . . .
Two-year performance period transition award . . . . . . .
405,922
9,764
356,845
8,300
356,845 March 2023
8,300 March 2022
2021 LTIP Award:
Three-year performance period award . . . . . . . . . . . . .
360,189
324,173
324,173 March 2024
2022 LTIP Award:
Three-year performance period award . . . . . . . . . . . . .
249,759
2023 LTIP Award:
Three-year performance period award . . . . . . . . . . . . .
Two-year performance period transition award . . . . . . .
One-year performance period transition award . . . . . . .
193,946
5,517
3,678
*
*
*
*
*
*
2,759
2,759 March 2024
*
Not yet earned as performance period not complete.
2018 Executive Incentive Compensation Plan (2018 Executive Plan)
The 2018 Executive Plan provides for eligibility of certain senior leadership of the company to receive
cash and stock bonuses based on predetermined formulas. The company’s shareholders approved the 2018
Executive Plan in May 2018 and 2.0 million shares of company stock were reserved for grant through
February 28, 2028. At times a portion of the bonus may be distributed in shares of the company’s stock, of
which one-third of the shares vest immediately and the remaining shares vest in equal annual installments
over an additional two-year service-based vesting period requirement. At December 31, 2023, 2022, and 2021,
1.3 million, 1.4 million, and 1.4 million shares, respectively, under the 2018 Executive Plan remained
available for grant. Pursuant to the 2018 Executive Plan, 29,000, 26,000, and 157,000 shares were awarded
with a market value of $3.5 million, $3.2 million, and $8.7 million for the 2023, 2022, and 2021 award years,
respectively.
Broadridge Financial Solutions, Inc. • Tel: (631) 254-7494
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Date: March 21, 2024 Time: 19:33:5
Page 16 of 23 Session: 58
75
Note 7. Derivative Financial Instruments
The company is exposed to certain risks relating to its ongoing business operations. The company utilizes
derivative instruments to mitigate commodity price risk, occasionally to mitigate foreign currency exchange
rate risk, and has in the past to mitigate interest rate fluctuation risk. The company routinely enters into
forward exchange traded futures to manage the price risk associated with nonferrous metals inventory, as well
as purchases and sales of nonferrous (primarily aluminum and copper) and ferrous metals. The company
offsets fair value amounts recognized for derivative instruments executed with the same counterparty under
master netting agreements.
If the company is ‘‘long’’ on commodity 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 a
futures contract, 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
December 31, 2023:
Commodity Futures
Aluminum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Aluminum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Copper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Copper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long/Short Metric Tons
Long
Short
Long
Short
3,550
8,800
12,837
33,589
The following summarizes the location and amounts of the fair values reported on the company’s
consolidated balance sheets and gains or losses related to derivatives included in the company’s consolidated
statements of income as of and for the years ended December 31 (in thousands):
Asset Derivatives
Fair Value
Liability Derivatives
Fair Value
Balance sheet location
December 31,
2023
December 31,
2022
December 31,
2023
December 31,
2022
Derivative instruments designated
as hedges
Commodity futures . . . . . . . . . Other current assets
Derivative instruments not
designated as hedges
Commodity futures . . . . . . . . . Other current assets
Total derivative instruments . .
$1,065
$2,169
$1,097
$2,119
1,418
$2,483
2,102
$4,271
8,208
$9,305
5,269
$7,388
2023 Annual Report
Broadridge Financial Solutions, Inc. • Tel: (631) 254-7494
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Date: March 21, 2024 Time: 19:33:5
Page 17 of 23 Session: 58
76
Note 7. Derivative Financial Instruments (continued)
The fair value of the above derivative instruments along with required margin deposit amounts with the
same counterparty under master netting agreements totaled $24.0 million and $23.5 million at December 31,
2023, and 2022, respectively, and are reflected in other current assets in the consolidated balance sheets.
Location of gain
(loss) recognized
in income on
derivatives
Amount of
gain (loss)
recognized in
income on
derivatives
Hedged items in
fair value hedge
relationships
Location of gain
(loss) recognized
in income on
related hedged items
Amount of gain
(loss) recognized in
income on related
hedged items
For the Year Ended
December 31, 2023
Derivatives in fair value
hedging relationships
Commodity futures . . . . . . . Costs of goods sold
$
536
Firm commitments Costs of goods sold
Inventory
Costs of goods sold
Derivatives not designated as
hedging instruments
Commodity futures . . . . . . . Costs of goods sold
$ 4,734
For the Year Ended
December 31, 2022
Derivatives in fair value
hedging relationships
Commodity futures . . . . . . . Costs of goods sold
$ 2,284
Firm commitments Costs of goods sold
Inventory
Costs of goods sold
Derivatives not designated
as hedging instruments
Commodity futures . . . . . . . Costs of goods sold
$ 24,748
For the Year Ended
December 31, 2021
Derivatives in fair value
hedging relationships
Commodity futures . . . . . . . Costs of goods sold
$ (1,369)
Firm commitments Costs of goods sold
Inventory
Costs of goods sold
Derivatives not designated
as hedging instruments
Commodity futures . . . . . . . Costs of goods sold
$(33,517)
$
$
853
(217)
636
$(2,290)
(708)
$(2,998)
$ 3,354
1,054
$ 4,408
Derivatives accounted for as fair value hedges had ineffectiveness resulting in gains of $440,000,
$72,000, and losses of $101,000 for the years ended December 31, 2023, 2022, and 2021, respectively. Gains
excluded from hedge effectiveness testing of $732,000 decreased cost of goods sold, losses excluded from
hedge effectiveness testing of $786,000 increased cost of goods sold, and gains excluded from hedge
effectiveness testing of $3.1 million decreased cost of goods sold for the years ended December 31, 2023,
2022, and 2021, respectively.
Derivatives accounted for as cash flow hedges resulted in net gains of $2.3 million, $15.0 million and
$40.9 million recognized in other comprehensive income for the years ended December 31, 2023, 2022, and
Broadridge Financial Solutions, Inc. • Tel: (631) 254-7494
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Note 7. Derivative Financial Instruments (continued)
2021, respectively. Net gains of $2.9 million, net losses of $11.1 million, and net gains of $46.1 million were
reclassified from accumulated other comprehensive income to income for the years ended December 31, 2023,
2022, and 2021, respectively. At December 31, 2023, the company expects to reclassify all $556,000 of net
gains on derivative instruments from accumulated other comprehensive income to income during the next 12
months due to the settlement of futures contracts. The maximum term over which the company is hedging its
exposure to the variability of future cash flows for forecasted transactions is less than 12 months.
Note 8. Fair Value Measurements
Accounting standards provide a comprehensive framework for measuring fair value, sets forth a
definition of fair value and establishes 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 on a recurring basis in
the consolidated balance sheet and the respective levels to which the fair value measurements are classified
within the fair value hierarchy as of December 31 (in thousands):
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Total
December 31, 2023
Short-term investments . . . . . . . . . . . . . . . . . . . . . . . $721,210
2,483
Commodity futures – financial assets . . . . . . . . . . . . .
9,305
Commodity futures – financial liabilities . . . . . . . . . . .
December 31, 2022
Short-term investments . . . . . . . . . . . . . . . . . . . . . . . $628,215
4,271
Commodity futures – financial assets . . . . . . . . . . . . .
7,388
Commodity futures – financial liabilities . . . . . . . . . . .
$—
—
—
$—
—
—
$721,210
2,483
9,305
$628,215
4,271
7,388
$—
—
—
$—
—
—
The carrying amounts of financial instruments including cash and equivalents, and restricted cash
approximate fair value (Level 1). The fair values of short-term investments commodity futures contracts are
estimated by the use of quoted market prices, estimates obtained from brokers, and other appropriate valuation
techniques based on references available (Level 2). The fair value of long-term debt, including current
maturities, as determined by quoted market prices (Level 2), was approximately $2.8 billion and $2.7 billion
at December 31, 2023 and 2022 (with a corresponding carrying amount in the consolidated balance sheet of
$3.1 billion at December 31, 2023 and 2022).
Note 9. Commitments and Contingencies
The company has entered into certain commitments with suppliers which are of a customary nature.
Commitments have been entered into relating to future expected requirements for commodities such as
electricity, water, natural gas and its transportation services, fuel, air products, zinc, and electrodes. Certain
commitments contain provisions which require that the company ‘‘take or pay’’ for specified quantities at
fixed prices without regard to actual usage for periods of generally up to 5 years for physical commodity
2023 Annual Report
Broadridge Financial Solutions, Inc. • Tel: (631) 254-7494
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Date: March 21, 2024 Time: 19:33:6
Page 19 of 23 Session: 58
78
Note 9. Commitments and Contingencies (continued)
requirements and commodity transportation requirements, with some extending beyond, and for up to 16 years
for air products and 28 years for water products. The company utilized such ‘‘take or pay’’ requirements
during the past three years under these contracts. The company believes that production requirements will be
such that consumption of the products or services purchased under these commitments will occur in the
normal production process.
The company’s commitments for these agreements with ‘‘take or pay’’ or other similar commitment
provisions for the years ending December 31 are as follows (in thousands):
2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2026 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2027 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2028 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$290,054
60,120
25,387
24,735
23,131
163,998
$587,425
At December 31, 2023, the company has outstanding commitments of $1.1 billion related to ongoing
construction of property, plant, and equipment, most significantly the recycled aluminum flat rolled products
mill and recycled aluminum slab facilities, as well as other steel operations expansion projects in 2024.
The company’s commitments for operating leases are discussed in Note 12. Leases.
The company is involved in various 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 the company’s financial condition, results
of operations, or liquidity.
Note 10. Transactions with Affiliated Companies
The company purchases and sells recycled and scrap metal, steel, and purchases transportation services
with other smaller affiliated companies, including equity method investments. These transactions for the years
ended December 31, are as follows (in thousands):
Sales. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2023
$680,004
73,245
167,798
9,685
2022
$791,523
79,769
127,860
9,934
2021
$ 32,107
5,049
163,453
13,722
Note 11. Retirement Plans
The company sponsors several 401(k) retirement savings and profit sharing plans (Plans) for eligible
employees, which are considered ‘‘qualified plans’’ for federal income tax purposes. The company’s total expense
for the Plans was $312.4 million, $466.9 million, and $382.8 million for the years ended December 31, 2023, 2022,
and 2021, respectively. Profit sharing expense for eligible employees is 8% of consolidated pretax income
excluding noncontrolling interests and other items. The resulting profit sharing expense under the Plan was $264.6
million, $421.6 million, and $359.8 million for the years ended December 31, 2023, 2022, and 2021, respectively;
of which up to $211.6 million, $337.2 million, and $287.8 million, respectively, was directed by the company’s
board of directors to be contributed to the Plans (subject to total Plan contribution limitations), with the remaining
amounts each year paid directly in cash to the Plans’ participants.
Note 12. Leases
The company has operating leases relating principally to transportation and other equipment, and some
real estate. The company determines if an arrangement contains a lease at inception, which generally occurs
when the arrangement identifies a specific asset that the company has the right to direct the use of and obtain
substantially all of the economic benefit from use of the identified asset. Certain of the lease agreements
Broadridge Financial Solutions, Inc. • Tel: (631) 254-7494
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79
Note 12. Leases (continued)
contain rent escalation clauses (including fixed and index-based escalations), and options to extend or
terminate the lease. For purposes of calculating operating lease obligations, the company’s lease terms include
options to extend the lease when it is reasonably certain that the company will exercise such option. The
company uses its incremental borrowing rate at lease commencement to determine the present value of lease
payments. The incremental borrowing rate is the rate of interest the company could borrow on a collateralized
basis over a similar term with similar payments. Operating lease expense is recognized on a straight-line basis
over the lease term.
Operating lease right-of-use assets and lease obligations included in the consolidated balance sheets at
December 31, are as follows (in thousands):
Right-of-use assets under operating leases:
Other assets - noncurrent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$127,499
$110,638
2023
2022
Lease obligations under operating leases:
Accrued liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other liabilities - noncurrent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 21,003
107,147
$128,150
$ 18,850
91,793
$110,643
The weighted average remaining lease term for our operating leases is nine and ten years, and the
weighted-average discount rate is 4.31% and 3.86% as of December 31, 2023 and 2022, respectively. Future
operating lease liabilities as of December 31, 2023, for the next five years and thereafter are as follows
(in thousands):
2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2026 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2027 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2028 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total undiscounted cash flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less imputed interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Lease obligations under operating leases. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 25,609
21,599
17,129
15,055
12,416
62,302
154,110
(25,960)
$128,150
Operating lease expense included in the consolidated statements of income was $27.9 million, $23.7
million, and $22.5 million for the years ended December 31, 2023, 2022, and 2021, respectively. Cash paid
related to operating lease obligations was $22.8 million, $20.1 million, and $19.0 million for the years ended
December 31, 2023, 2022, and 2021, respectively. Variable lease costs were not material for the years ended
December 31, 2023, 2022, and 2021. Short-term lease expense included in the consolidated statements of
income was $40.4 million, $35.8 million, and $28.0 million for the years ended December 31, 2023, 2022,
and 2021, respectively. Right-of-use assets obtained in exchange for new operating lease liabilities for the
years ended December 31, 2023, 2022, and 2021 was $38.8 million, $30.9 million with addition of $16.8
million related to ROCA, and $28.6 million, respectively.
Note 13. Segment Information
The company’s operations are primarily organized and managed by reportable operating segments. In the
fourth quarter 2023, the company changed its reportable segments, consistent with how it currently manages
the business, which include steel operations (including warehousing operations previously included in
‘‘Other’’), metals recycling operations, steel fabrication operations, and a newly created aluminum operations.
Segment information provided within this Form 10-K has been recast for all prior periods presented consistent
with the current reportable segment presentation. The segment operations are more fully described in Note 1.
2023 Annual Report
Broadridge Financial Solutions, Inc. • Tel: (631) 254-7494
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Note 13. Segment Information (continued)
Description of the Business and Summary of Significant Accounting Policies to the consolidated financial
statements. 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 consolidated financial statements. Intra-segment sales and any related profits are eliminated in
consolidation. Amounts included in the category ‘‘Other’’ are from subsidiary operations that are below the
quantitative thresholds required for reportable segments and primarily consist of joint ventures and the idled
Minnesota ironmaking operations. Also included in ‘‘Other’’ are certain unallocated corporate accounts, such
as the company’s senior unsecured credit facility, senior notes, certain other investments and certain profit
sharing expenses.
The company’s segment results, with prior periods recast consistent with our current reportable segments
presentation, including disaggregated revenue by segment to external, external non-United States, and other
segment customers, are as follows (in thousands):
For the year ended
December 31, 2023
Net sales - disaggregated revenue
.
.
.
.
External .
.
External Non-United States.
.
.
Other segments .
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
Operating income (loss) .
Income (loss) before income taxes .
.
Depreciation and amortization .
.
.
Capital expenditures .
.
.
.
.
.
.
.
.
.
.
Steel
Operations
Metals
Recycling
Operations
Steel
Fabrication
Operations
Aluminum
Operations
Other
Eliminations Consolidated
. $11,603,139
1,037,412
.
427,071
.
13,067,622
1,881,600
1,888,611
331,225
453,955
$1,401,341
783,316
2,175,470
4,360,127
88,654
105,797
70,705
190,864
$2,798,262
672
7,843
2,806,777
1,593,261
1,593,275
9,787
22,044
$
— $ 1,164,942
6,232
—
—
727
1,171,901
—
(394,577)(1)
(23,773)
(349,626)
(23,600)
26,072
15
28,264
962,778
$
— $16,967,684
1,827,632
—
(2,611,111)
—
18,795,316
(2,611,111)
3,151,181
6,016
4,486(2)
3,218,943
—
437,804
1,657,905
—
As of December 31, 2023
.
.
.
Assets .
.
.
.
.
.
.
.
.
.
.
.
.
. $ 8,650,450
$1,458,500
$ 790,399
$1,320,224
$3,248,822(3)
$ (559,975)(4) $14,908,420
Footnotes related to the year ended December 31, 2023, segment results (in millions):
(1)
Corporate SG&A
$ (91.0)
(2)
Gross profit increase from intra-company sales
$
4.5
Companywide equity-based compensation
Profit sharing
Other, net
(3)
Cash and equivalents
Short-term and other investments
Accounts receivable
Inventories
Property, plant and equipment, net
Intra-company debt
Investments in unconsolidated affiliates
Other
(58.3)
(264.6)
19.3
$ (394.6)
$1,199.7
951.9
50.1
81.2
128.9
476.9
234.8
125.3
$3,248.8
(4)
Elimination of intra-company receivables
Elimination of intra-company debt
Elimination of intra-company profit in inventory
$ (68.0)
(476.9)
(15.1)
$(560.0)
Broadridge Financial Solutions, Inc. • Tel: (631) 254-7494
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Page 22 of 23 Session: 58
Note 13. Segment Information (continued)
81
For the year ended
December 31, 2022
Net sales - disaggregated revenue
External .
.
.
.
External Non-United States .
.
Other segments .
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
Operating income (loss) .
.
Income (loss) before income taxes .
.
Depreciation and amortization.
.
.
Capital expenditures .
.
.
.
.
.
.
.
.
.
.
Steel
Operations
Metals
Recycling
Operations
Steel
Fabrication
Operations
Aluminum
Operations
Other
Eliminations Consolidated
. $13,783,666 $1,545,379
619,361
.
2,230,928
.
4,395,668
116,497
117,034
53,934
68,690
779,683
537,647
15,100,996
3,092,689
3,057,446
295,468
613,678
.
.
.
.
$
$4,245,803
183
11,221
4,257,207
2,424,655
2,417,752
9,727
17,519
— $ 1,276,923
9,776
—
—
1,281
1,287,980
—
(594,045)(1)
(2,355)
(621,813)
(2,341)
25,029
44
23,933
185,082
$
— $20,851,771
1,409,003
—
(2,781,077)
—
22,260,774
(2,781,077)
5,091,822
54,381
52,991(2)
5,021,069
384,202
—
908,902
—
As of December 31, 2022
.
.
Assets.
. .
.
.
.
.
.
.
.
.
.
.
.
.
. $ 8,616,142 $1,320,871
$1,349,138
$186,254
$2,813,020(3) $ (125,441)(4) $14,159,984
Footnotes related to the year ended December 31, 2022, segment results (in millions):
(1)
Corporate SG&A
$ (77.8)
(2)
Gross profit increase from intra-company sales
$ 53.0
Companywide equity-based compensation
Profit sharing
Other, net
(3)
Cash and equivalents
Short-term investments
Accounts receivable
Inventories
Property, plant and equipment, net
Intra-company debt
Investments in unconsolidated affiliates
Other
(67.3)
(444.4)
(4.5)
$ (594.0)
$1,457.7
628.2
33.3
90.3
189.9
47.9
226.6
139.1
$2,813.0
(4)
Elimination of intra-company receivables
Elimination of intra-company debt
Elimination of intra-company profit in inventory
$ (58.0)
(47.9)
(19.5)
$(125.4)
For the year ended
December 31, 2021
Net sales - disaggregated revenue
External .
.
.
.
External Non-United States .
.
Other segments .
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
Operating income (loss) .
.
Income (loss) before income taxes .
.
Depreciation and amortization.
.
.
Capital expenditures .
.
.
.
.
.
.
.
.
.
.
Steel
Operations
Metals
Recycling
Operations
Steel
Fabrication
Operations
Aluminum
Operations
Other
Eliminations Consolidated
. $12,618,917
580,225
.
823,991
.
14,023,133
4,358,300
4,327,032
263,125
940,838
.
.
.
.
$1,658,843
524,629
2,406,649
4,590,121
181,986
181,579
55,620
46,360
$1,761,078
569
3,063
1,764,710
365,250
362,473
9,961
12,939
$—
—
—
—
—
—
—
—
1,252,095
12,494
2,382
1,266,971
(549,537)(1)
(605,753)
18,947
6,102
$
— $17,290,933
1,117,917
—
(3,236,085)
—
18,408,850
(3,236,085)
4,301,105
(54,894)
(56,261)(2)
4,209,070
347,653
—
1,006,239
—
Footnotes related to the year ended December 31, 2021, segment results (in millions):
(1)
Corporate SG&A
$ (78.0)
(2)
Gross profit decrease from intra-company sales
$(56.3)
Companywide equity-based compensation
Profit sharing
Other, net
(78.8)
(379.3)
(13.4)
$(549.5)
2023 Annual Report
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82
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
(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 December 31, 2023, the end of the period covered by this annual 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 officer, as appropriate to allow timely decisions regarding required
disclosure.
Management’s report on our internal control over financial reporting (as defined in Rules 13a-15(f) and
15d-15(f) under the Exchange Act) and the independent registered public accounting firm’s related audit report
are included in Item 8. Consolidated Financial Statements and Supplementary Data of this Form 10-K and are
incorporated herein by reference.
(b) Changes in Internal Control 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 December 31, 2023, that has materially
affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Our Management’s Report on Internal Control Over Financial Reporting, as of December 31, 2023, can
be found on page 51 of this Form 10-K, and the related Report of Independent Registered Public Accounting
Firm, Ernst & Young LLP, can be found on page 52 of this Form 10-K, each of which is incorporated by
reference into this Item 9A.
ITEM 9B. OTHER INFORMATION
During the three-month period ended December 31, 2023, 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.
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT
INSPECTIONS
Not applicable.
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PART III
83
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERANCE
The information required to be furnished pursuant to Item 10 with respect to directors, executive officers,
code of ethics, and audit committee and audit committee financial experts is incorporated herein by reference
from the section entitled ‘‘Governance of the Company’’ and ‘‘Proposal No. 1 – Election of Directors’’ in our
Proxy Statement for the 2024 Annual Meeting of Stockholders, which we will file with the Securities and
Exchange Commission no later than 120 days after the end of our fiscal year.
ITEM 11. EXECUTIVE COMPENSATION
The information required to be furnished pursuant to Item 11 with respect to executive compensation is
incorporated herein by reference from the section entitled ‘‘Executive Compensation and Related Information’’
in our Proxy Statement for the 2024 Annual Meeting of Stockholders, which we will file with the Securities
and Exchange Commission no later than 120 days after the end of our fiscal year.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
AND RELATED STOCKHOLDER MATTERS
The information relating to security ownership of certain beneficial owners and management required by
Item 12 is incorporated herein by reference from the section entitled ‘‘Security Ownership of Directors and
Executive Officers’’ and ‘‘Security Ownership of Certain Beneficial Owners’’ in our Proxy Statement for the
2024 Annual Meeting of Stockholders, which we will file with the Securities and Exchange Commission no
later than 120 days after the end of our fiscal year. The Equity Compensation Plan Information required by
Item 12 is set forth in the table below.
Equity Compensation Plan Information
Our stockholders approved the Steel Dynamics, Inc. 2014 Employee Stock Purchase Plan at our annual
meeting of stockholders held May 15, 2014 (2014 Plan). Our stockholders approved the Steel Dynamics, Inc.
2018 Executive Incentive Compensation Plan at our annual meeting of stockholders held May 17, 2018
(2018 Plan). Our stockholders approved the Steel Dynamics, Inc. 2023 Equity Incentive Plan at our annual
meeting of stockholders held May 11, 2023 (2023 Plan). The following table summarizes information about
our equity compensation plans at December 31, 2023, all of which have been approved by stockholders. We
do not have any equity compensation plans that have not been approved by stockholders.
Plan Category
Equity compensation plans approved by
security holders:
2014 Plan(1) . . . . . . . . . . . . . . . . . . . .
2018 Plan. . . . . . . . . . . . . . . . . . . . . .
2023 Plan(2) . . . . . . . . . . . . . . . . . . . .
Equity compensation plans not approved by
security holders . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . .
(a)
Number of securities
to be issued upon
exercise of
outstanding options,
warrants and rights
(b)
Weighted-average
exercise price of
outstanding options,
warrants and rights(1)
(c)
Number of securities
remaining available for
future issuance under
equity compensation plans
(excluding securities
reflected in column (a))
—
95,487
1,438,945
N/A
1,534,432
—
—
—
N/A
—
—
1,334,300
7,493,534
N/A
8,827,834
(1) Shares are purchased on the open market and no shares are reserved.
(2)
Includes 849,491 RSUs, 262,522 DSUs, and 326,932 LTIP awards issuable upon expiration of the vesting
or deferral periods, which have no exercise price.
2023 Annual Report
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84
ITEM 13.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
The information required to be furnished pursuant to Item 13 with respect to certain relationships and
related transactions is incorporated herein by reference from the sections entitled ‘‘Governance of the
Company – Statement of Policy for the Review, Approval or Ratification of Transactions with Related
Persons,’’ and ‘‘Governance of the Company – Director Independence’’ in our Proxy Statement for the
2024 Annual Meeting of Stockholders, which we will file with the Securities and Exchange Commission no
later than 120 days after the end of our fiscal year; and from Note 10. Transactions with Affiliated Companies
to our consolidated financial statements as of December 31, 2023 and 2022, and each of the three years in the
periods ended December 31, 2023, 2022, and 2021, included in Item 8. Consolidated Financial Statements
and Supplementary Data of this Form 10-K Annual Report for the fiscal year ended December 31, 2023.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The information required to be furnished pursuant to Item 14 with respect to principal accountant fees
and services is incorporated herein by reference from the sections entitled ‘‘Proposal No. 2 – Ratification of
the Appointment of Independent Registered Public Accounting Firm as Auditors – Audit and Non-Audit Fees’’
and ‘‘Proposal No. 2 – Ratification of the Appointment of Independent Registered Public Accounting Firm as
Auditors – Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of
Independent Registered Public Accounting Firm’’ in our Proxy Statement for the 2024 Annual Meeting of
Stockholders, which we will file with the Securities and Exchange Commission no later than 120 days after
the end of our fiscal year.
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85
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) The following documents are filed as a part of this report:
PART IV
1.
2.
Financial Statements: See the Audited Consolidated Financial Statements of Steel Dynamics, Inc.
included as part of Item 8. Consolidated Financial Statements and Supplementary Data and
described in the Index on page 50 of this Report.
Financial Statement Schedules: All schedules for which provision is made in the applicable
regulations of the Securities and Exchange Commission are not required under the related
instructions or are inapplicable and therefore have been omitted.
(b) Exhibits:
Reference is made to the Exhibit Index preceding the signature pages hereto, which Exhibit Index is
hereby incorporated into this item.
ITEM 16. FORM 10-K SUMMARY
None.
Articles of Incorporation
EXHIBIT INDEX
3.1
3.2*
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.
Amended and Restated Bylaws of Steel Dynamics, Inc., reflecting all amendments thereto
through January 31, 2024.
Instruments Defining the Rights of Security Holders, Including Indentures
4.1
4.27a
4.27b
4.31
4.32
4.33
Description of Common Stock, incorporated herein by reference from Exhibit 4.1 to our
Form 10-K filed February 27, 2020.
Indenture dated December 6, 2016, relating to our issuance of $400 million 5.000% Senior
Notes due 2026, among Steel Dynamics, Inc., as Issuer, the Initial Subsidiary Guarantors named
therein, and Wells Fargo Bank, National Association, as Trustee, incorporated herein by
reference from Exhibit 4.27 to our Form 8-K filed December 8, 2016.
Form of 5.000% Senior Notes due 2026 (included in Exhibit 4.27a), incorporated herein by
reference from Exhibit 4.27 to our Form 8-K filed December 8, 2016.
Indenture dated December 4, 2019, among Steel Dynamics, Inc., as Issuer, and Wells Fargo
Bank, National Association, as Trustee, incorporated herein by reference from Exhibit 4.1 to our
Registration Statement on Form S-3 (Registration No. 333-235343) filed December 4, 2019.
First Supplemental Indenture dated December 11, 2019, relating to our issuance of $400 million
2.800% Notes due 2024, and $600 million 3.450% Notes due 2030 among Steel Dynamics,
Inc., as Issuer, and Wells Fargo Bank, National Association, as Trustee, incorporated herein by
reference from Exhibit 4.2 to our Form 8-K filed December 11, 2019.
Form of 2.800% Notes due 2024 (included in Exhibit 4.32), incorporated herein by reference
from Exhibit 4.3 to our Form 8-K filed December 11, 2019.
2023 Annual Report
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86
4.34
4.35
4.36
4.37
4.38
4.39
4.40
4.41
Form of 3.450% Notes due 2030 (included in Exhibit 4.32), incorporated herein by reference
from Exhibit 4.4 to our Form 8-K filed December 11, 2019.
Second Supplemental Indenture, dated as of June 5, 2020, relating to our issuance of
$400 million 2.400% Notes due 2025 and $500 million 3.250% Notes due 2031, between
Steel Dynamics, Inc. and Wells Fargo Bank, National Association, as Trustee, incorporated
herein by reference from Exhibit 4.2 to our Form 8-K filed June 5, 2020.
Form of 2.400% Notes due 2025 (included in Exhibit 4.35), incorporated herein by reference
from Exhibit 4.3 to our Form 8-K filed June 5, 2020.
Form of 3.250% Notes due 2031 (included in Exhibit 4.35), incorporated herein by reference
from Exhibit 4.4 to our Form 8-K filed June 5, 2020.
Third Supplemental Indenture, dated as of October 9, 2020, relating to our issuance of
$350 million 1.650% Notes due 2027 and $400 million 3.250% Notes due 2050, between
Steel Dynamics, Inc. and Wells Fargo Bank, National Association, as Trustee, incorporated
herein by reference from Exhibit 4.2 to our Form 8-K filed October 9, 2020.
Form of 1.650% Notes due 2027 (included in Exhibit 4.38), incorporated herein by reference
from Exhibit 4.3 to our Form 8-K filed October 9, 2020.
Form of 3.250% Notes due 2050 (included in Exhibit 4.38), incorporated herein by reference
from Exhibit 4.4 to our Form 8-K filed October 9, 2020.
Indenture, dated as of December 7, 2022, between Steel Dynamics, Inc., as Issuer, and
U.S. Bank Trust Company, National Association, as Trustee, incorporated herein by reference
from Exhibit 4.1 to our Registration Statement on Form S-3 (Registration No. 333-268703)
filed December 7, 2022.
Material Contracts
10.20†
10.55†
10.61†
10.62
10.63†
Steel Dynamics, Inc., Change in Control Benefit Plan, incorporated herein by reference from
our Exhibit 10.20 to our 8-K filed December 4, 2012.
Steel Dynamics, Inc. 2014 Employee Stock Purchase Plan, incorporated herein by reference
from our May 15, 2014, Notice of Annual Meeting and Stockholders filed March 27, 2014.
2018 Executive Incentive Compensation Plan, approved by stockholders on May 17, 2018,
incorporated herein by reference from our May 17, 2018, Notice of Annual Meeting of
Stockholders filed March 28, 2018.
Credit Agreement dated as of July 19, 2023, among Steel Dynamics, Inc. and the agents and
lenders named therein, incorporated herein by reference from Exhibit 10.62 to our Form 8-K
filed July 21, 2023.
Steel Dynamics, Inc. 2023 Equity Incentive Plan, as approved by stockholders on May 11,
2023, incorporated herein by reference from our Notice of 2023 Annual Meeting & Proxy
Statement filed March 30, 2023.
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87
Other
21.1*
List of our Subsidiaries.
23.1*
Consent of Ernst & Young LLP.
24.1
Powers of attorney (see signature pages on pages 88 and 89 of this Report).
97.1*
Policy on Recoupment of Executive Officer Incentive-Based Compensation In the Event of
Restatements
Executive Officer Certifications
31.1*
31.2*
32.1*
32.2*
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.
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.
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.
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 Linkbase Document
101.DEF* Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB* Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE* Inline XBRL Taxonomy Presentation Linkbase Document
104*
Cover page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
*
†
Filed concurrently herewith
Indicates a management contract or compensatory plan or arrangement.
2023 Annual Report
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88
Pursuant to the requirements of Section 13 or 15(d) of Securities Exchange Act of 1934, Steel Dynamics,
Inc. has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
SIGNATURES
February 29, 2024
STEEL DYNAMICS, INC.
By:
/s/ MARK D. MILLETT
Mark D. Millett
Chief Executive Officer
(Principal Executive Officer)
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Mark D. Millett and Theresa E.
Wagler, either of whom may act without the joinder of the other, as his or her true and lawful attorneys-in-fact
and agents with full power of substitution and resubstitution, for him or her, and in his or her name, place and
stead, in any and all capacities to sign any and all amendments, and supplements to this 2023 Annual Report
on Form 10-K, filed pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, and
to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities
and Exchange Commission, granting unto said attorneys-in-fact and agents full power and authority to do and
performs each and every act and thing requisite and necessary to be done, as full to all intents and purposes
as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or their substitute or substitutes may lawfully do or cause to be done by virtue thereof. Pursuant to
the requirements of the Securities Exchange Act of 1934, this 2023 Annual Report on Form 10-K has
been signed below by the following persons on behalf of Steel Dynamics, Inc. and in the capacities and
on the dates indicated.
Signatures
Title
Date
/s/ MARK D. MILLETT
Mark D. Millett
Chairman and Chief Executive Officer
(Principal Executive Officer)
February 29, 2024
/s/ THERESA E. WAGLER
Theresa E. Wagler
Executive Vice President and Chief Financial Officer
(Principal Financial Officer and
Principal Accounting Officer)
February 29, 2024
/s/ SHEREE L. BARGABOS
Sheree L. Bargabos
/s/ KENNETH W. CORNEW
Kenneth W. Cornew
/s/ TRACI M. DOLAN
Traci M. Dolan
/s/ JENNIFER L HAMANN
Jennifer L. Hamann
/s/ JAMES C. MARCUCCILLI
James C. Marcuccilli
Director
Director
Director
Director
Director
February 29, 2024
February 29, 2024
February 29, 2024
February 29, 2024
February 29, 2024
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Signatures
/s/ BRADLEY S. SEAMAN
Bradley S. Seaman
/s/ GABRIEL L. SHAHEEN
Gabriel L. Shaheen
/s/ LUIS M. SIERRA
Luis M. Sierra
/s/ STEVEN A. SONNENBERG
Steven A. Sonnenberg
/s/ RICHARD P. TEETS, JR.
Richard P. Teets, Jr.
Title
Director
Director
Director
Director
Director
89
Date
February 29, 2024
February 29, 2024
February 29, 2024
February 29, 2024
February 29, 2024
2023 Annual Report
Investor
Information
The company’s stock trades on the NASDAQ
Global Select Market under the symbol STLD
ANNUAL MEETING
May 9, 2024 | 9:00 a.m. EDT
Fort Wayne Country Club
5221 Covington Road
Fort Wayne, IN 46804
Investor Information
Stockholder Records
Headquarters
Investor Relations
(260) 969-3500
investor@steeldynamics.com
Computershare Investor Services
150 Royall St., Suite 101
Canton, MA 02021
(877) 282-1168
web.queries@computershare.com
computershare.com/investor
7575 West Jefferson Blvd.
Fort Wayne, IN 46804
(260) 969-3500
steeldynamics.com
2023 Board of Directors
Employee Director
Non-Employee Directors
Mark D. Millett
Co-Founder, Chairman, and
Chief Executive Officer
Sheree L. Bargabos
Retired
Former President of Roofing
& Asphalt Division
Owens Corning
Kenneth W. Cornew
Retired
Former Senior Executive
Vice President and Chief
Commercial Officer, Exelon
Corporation, and President
and CEO, Exelon Generation
Traci M. Dolan
Retired
Former Chief Administrative
Officer, ExactTarget, Inc.
Gabriel L. Shaheen
President, CEO, and Principal
GLS Capital Ventures, LLC and
Founding Partner, Insurex, LLC
Jennifer L. Hamann
Executive Vice President and
Chief Financial Officer
Union Pacific Corporation
James C. Marcuccilli
Chairman and CEO
STAR Financial Bank
Bradley S. Seaman
Managing Partner
Parallel49 Equity
Luis M. Sierra
Former President and CEO
NOVA Chemicals Corporation
Steven A. Sonnenberg
Retired
Former Chair of Automation
Solutions, Emerson Electric Co.
Richard P. Teets, Jr.
Co-Founder
Retired
Executive Officers
Mark D. Millett
Co-Founder, Chairman,
and Chief Executive Officer
Miguel Alvarez
Senior Vice President,
Metals Recycling
Richard A. Poinsatte
Senior Vice President
and Treasurer
Barry T. Schneider
President and Chief
Operating Officer
James S. Anderson
Senior Vice President,
Steel Fabrication
Glenn A. Pushis
Senior Vice President,
Special Projects
Theresa E. Wagler
Executive Vice President, Chief Financial
Officer, and Corporate Secretary
Christopher A. Graham
Senior Vice President,
Flat Roll Steel Group
Health
and Safety
Entrepreneurial
Culture
Customer
Commitment
Strategic
Sustainable
Growth
Innovation
Financial
Strength