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What changed in Steel Dynamics's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Steel Dynamics's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+264 added−262 removedSource: 10-K (2024-02-29) vs 10-K (2023-02-28)

Top changes in Steel Dynamics's 2023 10-K

264 paragraphs added · 262 removed · 225 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

97 edited+15 added−9 removed83 unchanged
Biggest changeEAF steelmaking technology generates a mere fraction of the carbon emissions produced and energy intensity required by traditional blast furnace steelmaking technology. We believe EAF production is currently the steelmaking technology that provides the least environmental impact, is the most cost efficient, and provides the most flexibility, and as such, has been our method of growth.
Biggest changeWe 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.
Throughout our history and today, we seek to provide unique supply-chain alternatives for our customers to increase efficiency, to reduce time and costs, and to promote decarbonization opportunities.
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.
Millett has been the Board Chair since May 2021 and has been our President and Chief Executive Officer since January 2012. Prior to that, he 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 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.
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. Our senior leadership plays a key role in our development programs, linking our culture to critical, proven leadership concepts.
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.
We also utilize 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 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.
Our MBQ products are sold primarily to steel service centers, as well as reinforcing 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 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.
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 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.
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.
During 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. 6 Table of Contents Theresa E. Wagler has been our Executive Vice President, Chief Financial Officer and Corporate Secretary since May 2007. Ms.
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. 6 Table of Contents Theresa E. Wagler has been our Executive Vice President, Chief Financial Officer and Corporate Secretary since May 2007. Ms.
Finally, our operations could in certain situations be subject to toxic tort suits brought by citizens or other 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 .
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 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, such as our steel mills.
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.
The company’s primary sources of revenue are 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.
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.
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. ​ ​ 11 Table of Contents The following chart summarizes our steel operations primary products and the estimated percentage of tons sold by end market: ​ ​ 12 Table of Contents 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).
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. 12 Table of Contents The following chart summarizes our steel operations primary products and the estimated percentage of tons sold by end market: 13 Table of Contents 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).
The primary competitive influences on products we sell are price, quality and value-added services. ​ 15 Table of Contents ​ 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.
The primary competitive influences on products we sell are price, quality and value-added services. ​ 16 Table of Contents 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.
She is responsible for and oversees accounting and taxation, treasury, risk management, legal, information technology and cybersecurity, human resources, sustainability 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.
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.
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, 2022, with one of the most diversified product and end market portfolios in the domestic steel industry, combined with meaningful downstream steel fabrication operations.
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.
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 low-cost domestic steel producers.
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.
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. ​ 10 Table of Contents ​ 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 and processing lines.
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. ​ 11 Table of Contents 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 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. ​ 18 Table of Contents Other Information ​ Sources, Availability, and Cost of Steel and Other Operations’ Raw Materials Scrap Metals.
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. ​ 19 Table of Contents ​ ​ ​ Other Information ​ Sources, Availability, and Cost of Steel and Other Operations’ Raw Materials Scrap Metals.
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 currently serves as 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.
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.
Pushis was responsible for the successful design and construction of the 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 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.
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.
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.
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 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.
Working as one team, we will achieve it. ​ Our total recordable injury rate compared to industry benchmarks and lost time injury rates for 2022 are as follows: ​ ​ 8 Table of Contents 1 Total Recordable Injury Rate is defined as OSHA recordable incidents x 200,000 / hours worked.
Working as one team, we will achieve it. ​ ​ 8 Table of Contents Our total recordable injury rate compared to industry benchmarks and lost time injury rates for 2023 are as follows: ​ ​ 1 Total Recordable Injury Rate is defined as OSHA recordable incidents x 200,000 / hours worked.
No single scrap metals recycler has a significant market share in the domestic market. ​ 17 Table of Contents 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.
No single scrap metals recycler has a significant market share in the domestic market. ​ 18 Table of Contents 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 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 employee 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.
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.
Enforcement for alleged violations can be brought by the United States EPA, state agencies, and in certain instances private parties, and can result in penalties and injunctive relief. 20 Table of Contents 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.
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. 21 Table of Contents 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.
The Clean Water Act’s 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.
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.
Under no circumstance does the desire to maximize production or earnings override the priority of individual safety. ​ Safety is our first core strategic pillar — it is the foundation of our decision making.
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.
Lost Time Injury Rate is defined as OSHA days away from work cases x 200,000 / hours worked. 2 Source: 2021 U.S. DOL Bureau of Labor Statistics ​ Compensation Structure We believe in empowering our teams and rewarding them for their achievements through a four-tiered, performance-based compensation framework.
Lost Time Injury Rate is defined as OSHA days away from work cases x 200,000 / hours worked. 2 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.
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. 16 Table of Contents Products.
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.
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.
This is achieved through the following methods: ​ 9 Table of Contents ● 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.
The Steel Dynamics team consisted of approximately 12,060 full-time team members at December 31, 2022. ​ 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.
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.
Electricity is a significant input required in our EAF steel operations, representing approximately 4% of steel production costs of goods sold in 2022, 2021 and 2020.
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.
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.
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 4 Table of Contents use a significant amount of steel in their operations.
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.
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.
We have an additional 2.0 million tons of flat roll steel shipping 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 4.7 million tons and painting capability of 1.5 million tons.
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.
During weaker steel demand environments, we can source more of their steel needs internally, and during strong steel demand environments, we have optionality to also purchase their steel needs externally. Ultimately, we optimize our companywide profitability and minimize earnings volatility.
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.
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, and pipe and tube (including OCTG) markets. Our steel operations accounted for 65%, 72% and 74% of our consolidated net sales during 2022, 2021 and 2020, respectively.
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 sold 856,000, 789,000, and 666,000 tons of joist and deck products during 2022, 2021, and 2020, 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.
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 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, and breaking.
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 17 Table of Contents methods, including sorting, shredding, shearing, cutting, bailing, and breaking.
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 federal, state and local laws concerning the environment.
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.
Since the interpretation and enforcement of environmental laws and regulations that may be enacted from time to time are subject to changing social or political pressures, our environmental capital expenditures and costs for environmental compliance may increase in the future.
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.
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.
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.
Most of these research and development efforts have been conducted in-house by our employees. 19 Table of Contents Environmental Matters Our operations are subject to substantial and evolving local, state, and federal 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.
Most of these research and development efforts have been conducted in-house by our team members. 20 Table of Contents 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.
During 2022, 2021, and 2020 we consumed 12.0 million, 11.0 million, and 10.4 million tons, respectively, of metallic materials in our steelmaking furnaces, of which, iron units other than scrap, represented approximately 13% of the tons in 2022, 2021, and 2020. Energy Resources Electricity.
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.
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 the second half of 2023.
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.
Rinn (formerly the Executive Vice President, Metals Recycling) in 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.
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.
We have a national operating footprint that allows us to serve the entire domestic non-residential construction market, as well as national accounts, such as large retail chains and e-commerce distribution channels. Steel fabrication operations accounted for 19%, 10%, and 9% of our consolidated net sales during 2022, 2021 and 2020, respectively.
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.
The facility is expected to produce up to 228,000 metric tons per year, resulting in an estimated 35% reduction in our steel mills’ Scope 1 GHG emissions. Operations are planned to begin early 2024.
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.
USS adds a complementary distribution 13 Table of Contents 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 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.
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 and to collaborate with our customers to anticipate their future needs by further expanding our range of products and offerings.
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.
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.
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. 10 Table of Contents ​ 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.
We currently are predominantly a domestic steel company, with exported sales representing 5% of our steel segment net sales during 2022, and 4% during 2021 and 2020. Our steel operations consist primarily of steelmaking and numerous coating operations. In 2022, we had approximately 9.4 million tons of flat roll steel annual shipping capacity.
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 shipped the following sheet steel products volumes at the following facilities (tons): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 ​ 2021 ​ 2020 ​ ​ ​ Butler, Columbus, and Sinton 6,771,141 ​ 5,868,734 ​ 5,889,735 ​ ​ ​ Flat Roll divisions ​ ​ ​ ​ ​ ​ ​ ​ Steel Processing divisions 1,673,967 ​ 1,653,433 ​ 1,699,428 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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: ​ ​ Customers.
We shipped the following sheet steel products volumes at the following facilities (tons): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 ​ 2022 ​ 2021 ​ ​ ​ Butler, Columbus, and Sinton 7,459,023 ​ 6,772,162 ​ 5,868,734 ​ ​ ​ Flat Roll divisions ​ ​ ​ ​ ​ ​ ​ ​ 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: ​ ​ Customers.
Our sheet steel operations represented 77%, 73% and 69% of steel operations net sales in 2022, 2021, and 2020, respectively. We produced 8.3 million tons of sheet steel at these facilities in 2022, including Sinton, and 7.6 million tons in 2021 and 2020.
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.
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.
Our steel fabrication operations also purchase angles from our Roanoke Bar Division. 15 Table of Contents 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.
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, governmental entities, and e-commerce data centers and warehouses.
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.
We shipped the following from our metals recycling operations: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 ​ 2021 ​ 2020 ​ ​ ​ Ferrous metal total (gross tons) 5,301,774 ​ 5,442,478 ​ 4,591,881 ​ ​ ​ Shipments to our steel mills 3,475,662 ​ 3,574,668 ​ 3,184,451 ​ ​ ​ Percent of total to our steel mills 66% ​ 66% ​ 69% ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nonferrous metals (thousands of pounds) 1,053,852 ​ 1,093,472 ​ 977,882 ​ ​ ​ We sell various grades of processed ferrous scrap primarily to steel mills and foundries.
We shipped the following from our metals recycling operations: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 ​ 2022 ​ 2021 ​ ​ ​ Ferrous metal total (gross tons) 5,779,114 ​ 5,301,774 ​ 5,442,478 ​ ​ ​ Shipments to our steel mills 3,579,958 ​ 3,475,662 ​ 3,574,668 ​ ​ ​ Percent of total to our steel mills 62% ​ 66% ​ 66% ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nonferrous metals (thousands of pounds) 1,108,211 ​ 1,053,852 ​ 1,093,472 ​ ​ ​ We sell various grades of processed ferrous scrap primarily to steel mills and foundries.
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 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.
This allows us to manage 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.
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.
We shipped the following long products volumes at each of these facilities (tons): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 ​ 2021 ​ 2020 ​ ​ ​ Structural and Rail Division 1,865,405 ​ 1,933,433 ​ 1,663,915 ​ ​ ​ Rail shipments (included above) 299,795 ​ 301,847 ​ 283,141 ​ ​ ​ Engineered Bar Products Division 894,374 ​ 809,808 ​ 630,870 ​ ​ ​ Roanoke Bar Division 589,449 ​ 595,879 ​ 505,387 ​ ​ ​ Steel of West Virginia 363,832 ​ 356,353 ​ 328,998 ​ ​ ​ Customers.
We shipped the following long products volumes at each of these facilities (tons): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 ​ 2022 ​ 2021 ​ ​ ​ Structural and Rail Division 1,851,349 ​ 1,865,405 ​ 1,933,433 ​ ​ ​ Rail shipments (included above) 319,241 ​ 299,795 ​ 301,847 ​ ​ ​ Engineered Bar Products Division 836,179 ​ 894,374 ​ 809,808 ​ ​ ​ Roanoke Bar Division 564,776 ​ 589,449 ​ 595,879 ​ ​ ​ Steel of West Virginia 378,515 ​ 363,832 ​ 356,353 ​ ​ ​ Customers.
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 continual improvement in minimizing carbon dioxide emissions, while maintaining compliance with emission limit regulations.
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.
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. A significant number of our steel customers are also consumers and processors of aluminum flat rolled products.
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.
In 2022, our own steel consuming businesses purchased 1.7 million tons of steel from our steel mills, representing 14% of our total 2022 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.
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.
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.
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 metals recycling operations accounted for 10%, 12% and 11% of our consolidated net sales during 2022, 2021 and 2020, respectively. Export sales represented 14%, 11% and 10% of metals recycling segment net sales during 2022, 2021 and 2020, respectively.
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.
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 a director for the Association of Iron & Steel Technology. James S.
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.
Transformational Growth / New Aluminum Flat Roll Mill In July 2022, we announced our new planned $2.5 billion project to construct and operate a 650,000 metric ton aluminum flat rolled products mill in Columbus, Mississippi, with two supporting satellite recycling aluminum slab centers.
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 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. ​ Segments We have three reporting segments: steel operations, metals recycling operations, and steel fabrication operations.
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.
We monitor our GHG emissions by regularly reviewing furnace performance and efficiency. We analyze the latest available technologies to also determine whether emissions can be minimized. In 2022, we announced a strategic joint venture, SDI Biocarbon Solutions, LLC.
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.
As we continue to grow, building talent 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.
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.
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 Roanoke Bar Division.
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.
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.
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.
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.
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.
This philosophy of fairness extends to work assignments, opportunities for advancement, compensation, training opportunities, and all other aspects of employment.
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.
Our current and planned operations in Mexico are similarly subject to federal, state and local environmental requirements applicable to those operations. In some instances, we may also be subject to other foreign governments’ regulations and international treaties and laws.
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 facilities for alleged environmental violations.
Our six strategic pillars and the team’s execution of them each day has driven our success and sustainability. ​ ● Health & Safety – Creating and maintaining a safe work environment is the foundation of our decision making. Health and safety are always at the forefront and are a constant topic of conversation across the company.
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.
In 2022, our overall employee retention was approximately 81%, with domestic and steel operations retention of 87% and 91%, respectively. ​ 9 Table of Contents Our compensation framework helps ensure that we remain strong with best-in-class performance and retain top talent even in economic downturns.
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.
Millett ​ 63 ​ Chairman, President and Chief Executive Officer Theresa E. Wagler ​ 52 ​ Executive Vice President, Chief Financial Officer, and Corporate Secretary Miguel Alvarez ​ 55 ​ Senior Vice President, Metals Recycling Chris A. Graham ​ 58 ​ Senior Vice President, Long Products Steel Group Glenn A.
Millett ​ 64 ​ Co-founder, Chairman, and Chief Executive Officer Theresa E. Wagler ​ 53 ​ Executive Vice President, Chief Financial Officer, and Corporate Secretary Barry T. Schneider ​ 55 ​ President and Chief Operating Officer Miguel Alvarez ​ 56 ​ Senior Vice President, Metals Recycling James S. Anderson ​ 63 ​ Senior Vice President, Steel Fabrication Chris A.
Pushis ​ 57 ​ Senior Vice President, Special Projects Barry T. Schneider ​ 54 ​ Senior Vice President, Flat Roll Steel Group James S. Anderson ​ 62 ​ Senior Vice President, Steel Fabrication ​ Mark D. Millett co-founded the company in 1993. Mr.
Graham ​ 59 ​ Senior Vice President, Flat Roll Steel Group Richard A. Poinsatte ​ 57 ​ Senior Vice President and Treasurer Glenn A. Pushis ​ 58 ​ Senior Vice President, Special Projects ​ Mark D. Millett co-founded the Company in 1993. Mr.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThe 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.
Biggest changeFurthermore, 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.
Steel producers require large amounts of raw materials, including ferrous scrap metal and scrap substitute products such as pig iron, pelletized iron and other supplies such as zinc, graphite electrodes and ferroalloys.
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.
Prolonged blackouts or 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.
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.
Additionally, such cybersecurity vulnerabilities or attacks could result in an interruption of the functionality of our 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.
Additionally, cybersecurity vulnerabilities or attacks could result in an interruption of the functionality of our 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.
Increased global 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.
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.
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 may introduce, request or require environmental monitoring, disclosures or regulations in response to the potential impacts of climate change.
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.
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 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.
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 increased, the resulting inability of our customers or of their customers to either access credit or absorb the increased cost of that credit may adversely affect our business by reducing our sales or by increasing our exposure to losses from uncollectible customer accounts.
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.
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 due to imports of steel involving dumping and subsidy abuses by foreign steel producers.
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.
Economic difficulties, stagnant or slow global economies, supply/demand imbalances, supply chain disruptions, periods of heightened inflation or increased 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.
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.
Additionally, during 2022 we announced our planned project to construct and operate a recycled aluminum flat roll 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.
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.
Any of these events may adversely affect our business, results of operations, financial condition and cash flows. 22 Table of Contents 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.
Any of these events may adversely affect our business, results of operations, financial condition and cash flows. 23 Table of Contents 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.
Any adopted future 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 limitations, or could affect our environmental disclosures for any allowances, offsets or credits.
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.
In 2021, we announced that 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.
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.
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 with sufficient desired environmental attributes.
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.
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 at the present time are 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.
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 .
We are also exposed to risks associated with the creditworthiness of our customers and suppliers, which during times of increased interest rates can be intensified.
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.
These expansions and transactions, including our announced planned recycled aluminum flat roll 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; ● 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; ● 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; ● 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 the 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. 29 Table of Contents As our Sinton Flat Roll Division ramps up, we have faced and could continue to face start-up inefficiencies.
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; ● the potential exposure to unknown liabilities; 29 Table of Contents ● 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.
Excessive imports of steel and steel products, including pre-fabricated steel, 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.
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.
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.
Any of these cybersecurity 28 Table of Contents 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.
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 start-up inefficiencies at our Sinton Flat Roll Division.
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.
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. 24 Table of Contents Additionally, our inability to pass on all or any 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.
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.
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, including pre-fabricated long product steel, at prices that are lower than prevailing domestic prices, and sometimes at or below their cost of production.
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.
Global or domestic actions or conditions, including political actions, trade policies or restrictions, such as the United States-Mexico-Canada Agreement (USMCA), proposed or actual changes in tax laws, such as those introduced, proposed or actual regulation, such as those related to the environment, increasing interest rates, terrorism, acts of war or hostility, natural disasters, or pandemics, epidemics, widespread illness or other health issues, such as COVID-19 or its variants, 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.
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.
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, including those occurring in Eastern Europe as it relates to global pig iron supply.
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.
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 products into the United States by our foreign competitors. Furthermore, recent additions of domestic steel capacity as well as anticipated additional domestic steel capacity could increase this global overcapacity.
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.
We rely on third parties for the supply of energy resources we require in our production activities.
We rely on third parties for the supply of energy resources 25 Table of Contents we require in our production activities.
Our business is also dependent upon certain industries, such as construction, automotive, manufacturing, transportation, heavy and agriculture equipment, and pipe and tube (including OCTG) markets, and these industries are also cyclical in nature and have recently experienced supply chain disruptions.
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.
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.
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.
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.
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.
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. 25 Table of Contents 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; ● 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.
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; ● the use and treatment of groundwater; ● the remediation of soil and groundwater contamination; ● climate change legislation or regulation; 26 Table of Contents ● 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.
While measures to curb unfair trade such as tariffs, duties or quotas, and the renegotiation of trade agreements with other countries, including the USMCA, have decreased the volume of steel and steel products imports, domestic steel and steel products prices remain negatively impacted by excessive imports of steel and steel products.
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.
Pandemics, epidemics, widespread illness or other health issues, such as COVID-19 or its variants, 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. Pandemics, epidemics, widespread illness or other health issues may adversely affect our business, results of operations, financial condition, cash flows, liquidity and stock price.
However, given environmental considerations of investors, customers and regulators, additional EAF mills may be constructed, leading to increased demand in ferrous scrap possibly resulting in higher scrap prices.
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.
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.
In most cases, many other parties are also named as potentially responsible parties and also contribute to payment of those costs. 27 Table of Contents 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.
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.
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.
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.
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.
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. 27 Table of Contents Availability of an adequate source of supply of scrap is required for our metals recycling operations.
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.
The prices for scrap are subject to market forces largely beyond our control, including demand by United States and foreign steel producers of which there has been recent capacity additions and expected further additions, freight costs and speculation.
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.
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.
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.
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, and pipe and tube (including OCTG) markets.
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.
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, long-lived tangible and intangible assets and right of use assets to determine whether their estimated fair value is in fact less than their 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.
Additionally, low iron ore prices, resulting in disruption of the scrap price correlation to iron ore, leads to reduced global costs to produce steel, further depressing steel import prices.
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.
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.
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. 24 Table of Contents 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.
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 could increase the demand for scrap, potentially resulting in higher scrap prices or periods of decreased scrap supply.
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.
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.
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.
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.
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.
Delays in achieving full operational capacity 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.
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.
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. 26 Table of Contents 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.
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.
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.
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.
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. Until the timing, scope and extent of any future regulation becomes known, we cannot predict the effect on our financial condition, operating performance and ability to compete.
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.
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.
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.
Government actions globally, including United States federal and state governmental actions, related to COVID-19 and its variants have impacted and may further impact demand for our products, our supply chain, and our employees.
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.
A portion of the feed materials consist of currently unrecyclable material known as shredder residue.
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.
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Pandemics, epidemics, widespread illness or other health issues, such as a resurgence of COVID-19 or its variants, may adversely affect our business, results of operations, financial condition, cash flows, liquidity and stock price.
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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.
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The response to COVID-19 has adversely affected and may continue to adversely affect us and the economy generally, as a result of, among other things, labor shortages, supply chain disruptions, inflation and rising interest rates. 23 Table of Contents Additionally, while our operations have not been curtailed, virus variants that are more contagious or more severe could reduce demand for our products and thus, reduce the productivity of our operations and adversely affect our business, results of operations, financial condition and cash flows.
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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.
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We or certain of our customers and suppliers have and may continue to experience supply chain disruptions, which may adversely affect our operations. Reduced demand for our products or raw material supply availability due to shutdowns or slowdowns in businesses may further adversely affect our volumes and margins, results of operations, financial condition and cash flows.
Added
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.
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Compliance with and changes in environmental and remediation requirements may result in substantially increased capital requirements and operating costs.
Added
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.
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We did not experience any material information security breaches or third-party information security breaches during 2022, 2021, or 2020 and we did not incur any net expenses from information security breach penalties and settlements during 2022, 2021, or 2020. 28 Table of Contents We may face risks associated with the implementation of our growth strategy.
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These disruptions may adversely affect our business, financial condition, results of operations and cash flows. 30 Table of Contents Governmental agencies may refuse to grant or renew some of our licenses and permits required to operate our businesses.
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Failure to do so may adversely affect our business, financial condition, results of operations and cash flows. 30 Table of Contents Our senior unsecured credit facility contains, and any future financing agreements may contain, restrictive covenants that may limit our flexibility.
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In such instances, the fair value of such assets may fall below their carrying value recorded on our balance sheet.
Removed
ITEM 1B. UNRESOLVED STAFF COMMENTS None. ​ 31 Table of Contents

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeBusiness. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Site ​ Site ​ ​ ​ ​ ​ ​ Acreage ​ Acreage Operations ​ Location ​ Description ​ Owned ​ Leased Steel Operations Segment * ​ ​ ​ ​ ​ ​ ​ ​ Butler Flat Roll Division: ​ ​ ​ ​ ​ ​ ​ ​ Butler Operations ​ Butler, IN ​ Flat Roll Steel Mill and Coating Facility ​ 993 ​ — Jeffersonville Operations ​ Jeffersonville, IN ​ Flat Roll Steel Coating Facility ​ 27 ​ 10 Iron Dynamics ​ Butler, IN ​ Liquid Ironmaking Facility ​ 25 ​ — Columbus Flat Roll Division ​ Columbus, MS ​ Flat Roll Steel Mill and Coating Facility ​ 1,387 ​ — Sinton Flat Roll Division ​ Sinton, TX ​ Flat Roll Steel Mill and Coating Facility ​ 2,487 ​ — The Techs ​ Pittsburgh, PA ​ Flat Roll Steel Coating Facilities ​ 16 ​ 2 Heartland Flat Roll Division ​ Terre Haute, IN ​ Flat Roll Steel Cold-Rolling and Coating Facility ​ 246 ​ — United Steel Supply ​ IN, MS, OR, and TX ​ Distributor of Painted Galvalume® Flat Roll Steel ​ 40 ​ 3 Structural and Rail Division ​ Columbia City, IN ​ Structural and Rail Steel Mill ​ 814 ​ — Engineered Bar Products Division ​ Pittsboro, IN ​ Engineered Bar Steel Mill and Finishing Facility ​ 312 ​ — Vulcan Threaded Products ​ Pelham, AL ​ Bar Steel Processing Facility ​ 31 ​ — Roanoke Bar Division ​ Roanoke, VA ​ Merchant Bar Steel Mill ​ 302 ​ — Steel of West Virginia ​ WV, KY, and TN ​ Specialty Shapes Steel Mill and Finishing ​ 139 ​ 6 ​ ​ ​ ​ and Coating Facilities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Metals Recycling Operations Segment ​ ​ ​ ​ ​ ​ ​ ​ OmniSource: ​ ​ ​ ​ ​ ​ ​ ​ Alabama ​ Birmingham, AL ​ Ferrous Scrap Processing ​ 59 ​ — Indiana ​ Multiple Cities ​ Ferrous and Nonferrous Scrap Processing ​ 456 ​ 26 Michigan ​ Multiple Cities ​ Ferrous and Nonferrous Scrap Processing ​ 186 ​ — Mississippi ​ Multiple Cities ​ Ferrous and Nonferrous Scrap Processing ​ 54 ​ 13 North Carolina ​ Multiple Cities ​ Ferrous and Nonferrous Scrap Processing ​ 346 ​ — Ohio ​ Multiple Cities ​ Ferrous and Nonferrous Scrap Processing ​ 212 ​ 21 Oklahoma ​ Sand Springs, OK ​ Ferrous Scrap Processing ​ — ​ 10 Tennessee ​ Multiple Cities ​ Ferrous and Nonferrous Scrap Processing ​ 65 ​ — Texas ​ Multiple Cities ​ Ferrous and Nonferrous Scrap Processing ​ 75 ​ — Virginia ​ Multiple Cities ​ Ferrous and Nonferrous Scrap Processing ​ 121 ​ — Mexico ​ Multiple Cities ​ Ferrous and Nonferrous Scrap Processing ​ — ​ 70 ​ ​ ​ ​ ​ ​ ​ ​ ​ Steel Fabrication Operations Segment ​ ​ ​ ​ ​ ​ ​ ​ New Millennium Building Systems: ​ ​ ​ ​ ​ ​ ​ ​ Joist and Deck Operations ​ Butler, IN ​ Steel Joist and Deck Fabrication Facility ​ 156 ​ — Joist Operations ​ Fallon, NV ​ Steel Joist Fabrication Facility ​ 53 ​ — Joist and Deck Operations ​ Hope, AR ​ Steel Joist and Deck Fabrication Facility ​ 245 ​ 7 Joist Operations ​ Juarez, MX ​ Steel Joist Fabrication Facility ​ 17 ​ — Joist and Deck Operations ​ Lake City, FL ​ Steel Joist and Deck Fabrication Facility ​ 75 ​ — Deck Operations ​ Memphis, TN ​ Deck Fabrication Facility ​ 19 ​ — Joist and Deck Operations ​ Salem, VA ​ Steel Joist and Deck Fabrication Facility ​ 113 ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The company’s corporate headquarters is in Fort Wayne, Indiana on 20 owned acres.
Biggest changeBusiness. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Site ​ Site ​ ​ ​ ​ ​ ​ Acreage ​ Acreage Operations ​ Location ​ Description ​ Owned ​ Leased Steel Operations Segment * ​ ​ ​ ​ ​ ​ ​ ​ Butler Flat Roll Division: ​ ​ ​ ​ ​ ​ ​ ​ Butler Operations ​ Butler, IN ​ Flat Roll Steel Mill and Coating Facility ​ 993 ​ — Jeffersonville Operations ​ Jeffersonville, IN ​ Flat Roll Steel Coating Facility ​ 27 ​ 10 Iron Dynamics ​ Butler, IN ​ Liquid Ironmaking Facility ​ 25 ​ — Columbus Flat Roll Division ​ Columbus, MS ​ Flat Roll Steel Mill and Coating Facility ​ 1,387 ​ — Sinton Flat Roll Division ​ Sinton, TX ​ Flat Roll Steel Mill and Coating Facility ​ 2,487 ​ — The Techs ​ Pittsburgh, PA ​ Flat Roll Steel Coating Facilities ​ 16 ​ 2 Heartland Flat Roll Division ​ Terre Haute, IN ​ Flat Roll Steel Cold-Rolling and Coating Facility ​ 246 ​ — United Steel Supply ​ IN, ID, MS, OR, and TX ​ Distributor of Painted Galvalume® Flat Roll Steel ​ 53 ​ 1 Structural and Rail Division ​ Columbia City, IN ​ Structural and Rail Steel Mill ​ 962 ​ — Engineered Bar Products Division ​ Pittsboro, IN ​ Engineered Bar Steel Mill and Finishing Facility ​ 312 ​ — Vulcan Threaded Products ​ Pelham, AL ​ Bar Steel Processing Facility ​ 31 ​ — Roanoke Bar Division ​ Roanoke, VA ​ Merchant Bar Steel Mill ​ 310 ​ — Steel of West Virginia ​ WV, KY, and TN ​ Specialty Shapes Steel Mill and Finishing ​ 139 ​ 6 ​ ​ ​ ​ and Coating Facilities ​ ​ ​ ​ SDI Biocarbon Solutions ​ Columbus, MS ​ Biocarbon Production Facility ​ 133 ​ — SDI Mexico ​ Monterrey, Mexico ​ Flat Roll Steel Distribution Warehouse ​ — ​ 5 ​ ​ ​ ​ ​ ​ ​ ​ ​ Metals Recycling Operations Segment ​ ​ ​ ​ ​ ​ ​ ​ OmniSource: ​ ​ ​ ​ ​ ​ ​ ​ Alabama ​ Birmingham, AL ​ Ferrous Scrap Processing ​ 59 ​ — Indiana ​ Multiple Cities ​ Ferrous and Nonferrous Scrap Processing ​ 456 ​ 26 Michigan ​ Multiple Cities ​ Ferrous and Nonferrous Scrap Processing ​ 186 ​ — Mississippi ​ Multiple Cities ​ Ferrous and Nonferrous Scrap Processing ​ 43 ​ 13 North Carolina ​ Multiple Cities ​ Ferrous and Nonferrous Scrap Processing ​ 302 ​ — Ohio ​ Multiple Cities ​ Ferrous and Nonferrous Scrap Processing ​ 212 ​ 21 Oklahoma ​ Sand Springs, OK ​ Ferrous Scrap Processing ​ — ​ 10 Tennessee ​ Multiple Cities ​ Ferrous and Nonferrous Scrap Processing ​ 65 ​ — Texas ​ Multiple Cities ​ Ferrous and Nonferrous Scrap Processing ​ 75 ​ — Virginia ​ Multiple Cities ​ Ferrous and Nonferrous Scrap Processing ​ 121 ​ — Mexico ​ Multiple Cities ​ Ferrous and Nonferrous Scrap Processing ​ 17 ​ 61 ​ ​ ​ ​ ​ ​ ​ ​ ​ Steel Fabrication Operations Segment ​ ​ ​ ​ ​ ​ ​ ​ New Millennium Building Systems: ​ ​ ​ ​ ​ ​ ​ ​ Joist and Deck Operations ​ Butler, IN ​ Steel Joist and Deck Fabrication Facility ​ 156 ​ — Joist Operations ​ Fallon, NV ​ Steel Joist Fabrication Facility ​ 68 ​ — Joist and Deck Operations ​ Hope, AR ​ Steel Joist and Deck Fabrication Facility ​ 245 ​ 7 Joist Operations ​ Juarez, MX ​ Steel Joist Fabrication Facility ​ 17 ​ — Joist and Deck Operations ​ Lake City, FL ​ Steel Joist and Deck Fabrication Facility ​ 81 ​ — Deck Operations ​ Memphis, TN ​ Deck Fabrication Facility ​ 19 ​ — Joist and Deck Operations ​ Salem, VA ​ Steel Joist and Deck Fabrication Facility ​ 113 ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ Aluminum Operations Segment Aluminum Dynamics, LLC ​ Columbus, MS ​ Recycled Aluminum Flat Rolled Products Mill ​ 2,098 ​ — Aluminum Dynamics, Inc. ​ Phoenix, AZ ​ Recycled Aluminum Slab Facility ​ 256 ​ — Aluminum Dynamics of Mexico ​ San Luis Potosi, Mexico ​ Recycled Aluminum Slab Facility ​ 692 ​ — ​ The company’s corporate headquarters is in Fort Wayne, Indiana on 20 owned acres.
ITEM 2. PROPERTIES The following table describes our significant properties as of December 31, 2022. 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.
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.
Our copper rod and wire facility, a controlled subsidiary, is in New Haven, Indiana on 35 owned acres. *Our 2022 steel mill production utilization was 92% of our estimated annual steelmaking capability, exclusive of Sinton which started up steel operations in 2022.
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. 34 Table of Contents

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeLEGAL 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. 32 Table of Contents 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.
Biggest changeITEM 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.
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, 2022. ITEM 4.
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. ​ 35 Table of Contents PART II
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MINE SAFETY DISCLOSURES Information required to be furnished pursuant to Item 4 concerning mine safety disclosure matters by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K (17 CFR 229.104), is included in Exhibit 95 to this annual report. ​ 33 Table of Contents PART II
Added
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.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThis program was exhausted in November 2022. In November 2022, our board of directors authorized an additional share repurchase program of up to $1.5 billion of our common stock. ​ 34 Table of Contents Total Return Graph On December 22, 2022, Steel Dynamics, Inc. was added to the S&P 500.
Biggest changeIn November 2023, our board of directors authorized an additional share repurchase program of up to $1.5 billion of our common stock. ​ 36 Table of Contents 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.
As of February 21, 2023, we had 171,577,705 shares of common stock outstanding and held beneficially by approximately 23,700 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 1,320) is not representative of the number of beneficial holders.
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, 2022. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Period ​ 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) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Quarter ended December 31, 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ October 1-31 ​ 1,493,698 ​ $ 83.68 ​ ​ 1,493,698 ​ $ 120,501 November 1-30 ​ 1,419,306 ​ ​ 99.35 ​ ​ 1,419,306 ​ ​ 1,479,496 December 1 - 31 ​ 1,402,142 ​ ​ 104.85 ​ ​ 1,402,142 ​ ​ 1,332,506 ​ ​ 4,315,146 ​ ​ ​ ​ ​ 4,315,146 ​ ​ ​ ​ (1) In February 2022, our board of directors authorized a share repurchase program of up to $1.25 billion of our common stock.
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 ​ 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) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Quarter ended December 31, 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ October 1-31 ​ 1,373,216 ​ $ 104.91 ​ ​ 1,373,216 ​ $ 135,125 November 1-30 ​ 1,471,893 ​ ​ 112.49 ​ ​ 1,471,893 ​ ​ 1,471,217 December 1-31 ​ 667,785 ​ ​ 115.38 ​ ​ 667,785 ​ ​ 1,394,232 ​ ​ 3,512,894 ​ ​ ​ ​ ​ 3,512,894 ​ ​ ​ ​ (1) In November 2022, our board of directors authorized a share repurchase program of up to $1.5 billion of our common stock.
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As such, we have added the S&P 500 index to the comparison of 5 year cumulative total returns in the graph below. ​ ​ ​ ​ 35 Table of Contents ITEM 6. [RESERVED] 36 Table of Contents
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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. ​ ​ ​ ​ ​ ​ 37 Table of Contents ITEM 6. [RESERVED] 38 Table of Contents

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeManagement’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, 2021, for additional information regarding results of operations for the year ended December 31, 2021, as compared to the year ended December 31, 2020, and segment operating results for 2021 as compared to 2020. ​ 38 Table of Contents Segment Operating Results ( dollars in thousands ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ ​ ​ 2022 ​ % Change ​ 2021 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net sales ​ ​ ​ ​ ​ ​ ​ ​ ​ Steel Operations $ 15,100,917 ​ 8% ​ $ 14,023,133 ​ ​ Metals Recycling Operations ​ 4,395,636 ​ (4)% ​ ​ 4,590,121 ​ ​ Steel Fabrication Operations ​ 4,257,207 ​ 141% ​ ​ 1,764,710 ​ ​ Other ​ 1,288,984 ​ 2% ​ ​ 1,266,971 ​ ​ ​ ​ 25,042,744 ​ ​ ​ ​ 21,644,935 ​ ​ Intra-company ​ (2,781,970) ​ ​ ​ ​ (3,236,085) ​ ​ ​ $ 22,260,774 ​ 21% ​ $ 18,408,850 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating income (loss) ​ ​ ​ ​ ​ ​ ​ ​ ​ Steel Operations $ 3,095,348 ​ (29)% ​ $ 4,360,488 ​ ​ Metals Recycling Operations ​ 117,266 ​ (36)% ​ ​ 181,986 ​ ​ Steel Fabrication Operations ​ 2,424,655 ​ 564% ​ ​ 365,250 ​ ​ Other ​ (599,828) ​ (9)% ​ ​ (551,725) ​ ​ ​ ​ 5,037,441 ​ ​ ​ ​ 4,355,999 ​ ​ Intra-company ​ 54,381 ​ ​ ​ ​ (54,894) ​ ​ ​ $ 5,091,822 ​ 18% ​ $ 4,301,105 ​ ​ ​ 39 Table of Contents ​ Steel Operations Segment ​ Steel operations consist of our electric arc furnace steel mills, producing steel from ferrous scrap and scrap substitutes, utilizing continuous casting, automated rolling mills, numerous value-added downstream steel coating and processing operations, and distribution operations.
Biggest changeOur 2023 change in reportable segments did not change the discussion previously provided. ​ 40 Table of Contents Segment Operating Results ( dollars in thousands ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ ​ ​ 2023 ​ % Change ​ 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net sales ​ ​ ​ ​ ​ ​ ​ ​ ​ Steel Operations $ 13,067,622 ​ (13)% ​ $ 15,100,996 ​ ​ Metals Recycling Operations ​ 4,360,127 ​ (1)% ​ ​ 4,395,668 ​ ​ Steel Fabrication Operations ​ 2,806,777 ​ (34)% ​ ​ 4,257,207 ​ ​ Aluminum Operations ​ - ​ - ​ ​ - ​ ​ Other ​ 1,171,901 ​ (9)% ​ ​ 1,287,980 ​ ​ ​ ​ 21,406,427 ​ ​ ​ ​ 25,041,851 ​ ​ Intra-company ​ (2,611,111) ​ ​ ​ ​ (2,781,077) ​ ​ ​ $ 18,795,316 ​ (16)% ​ $ 22,260,774 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating income (loss) ​ ​ ​ ​ ​ ​ ​ ​ ​ Steel Operations $ 1,881,600 ​ (39)% ​ $ 3,092,689 ​ ​ Metals Recycling Operations ​ 88,654 ​ (24)% ​ ​ 116,497 ​ ​ Steel Fabrication Operations ​ 1,593,261 ​ (34)% ​ ​ 2,424,655 ​ ​ Aluminum Operations ​ (23,773) ​ (909)% ​ ​ (2,355) ​ ​ Other ​ (394,577) ​ 34% ​ ​ (594,045) ​ ​ ​ ​ 3,145,165 ​ ​ ​ ​ 5,037,441 ​ ​ Intra-company ​ 6,016 ​ ​ ​ ​ 54,381 ​ ​ ​ $ 3,151,181 ​ (38)% ​ $ 5,091,822 ​ ​ ​ 41 Table of Contents ​ 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.
Other income consists of interest income earned on our temporary cash deposits and short-term investments; any other non-operating income activity, including income from investments in unconsolidated affiliates accounted for under the equity method.
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.
Revenues from these plants are generated from the fabrication of steel joists, girders, trusses, and steel deck used within the non-residential construction industry.
Revenues from these plants are generated from the fabrication of trusses, girders, steel joists, and steel deck used within the non-residential construction industry.
We have met and intend to continue to meet these liquidity requirements primarily with available cash and cash provided by operations, and long-term borrowings, and we also have availability under our unsecured Revolver.
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.
We have an accrual of $6.2 million recorded for environmental remediation related to our metals recycling operations, and $2.6 million related to our idled Minnesota ironmaking operations.
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.
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, such as COVID-19 or its variants; (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, or other energy resources are subject to volatile market conditions; (7) increased environmental, greenhouse gas emissions and sustainability considerations or 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.
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.
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 Revolver, 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.
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.
We have firm contracts with various vendors for the completion of certain construction projects at our various divisions at December 31, 2022. 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.
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.
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. 37 Table of Contents Selling, General and Administrative Expenses .
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. 39 Table of Contents Selling, General and Administrative Expenses .
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. 47 Table of Contents Impairments of Long-Lived Tangible and Definite-Lived Intangible Assets.
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. 49 Table of Contents Impairments of Long-Lived Tangible and Definite-Lived Intangible Assets.
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. ​ ​ 49 Table of Contents
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. ​ 51 Table of Contents
Accordingly, discount rate scenario analysis is performed to evaluate the impact on estimated reporting unit fair values. Our fourth quarter 2022, 2021, and 2020 annual goodwill impairment analyses did not result in any impairment charges.
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.
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.
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.
Our board of directors has authorized share repurchase programs during prior years, the most recent of which occurred in November 2022 for a program of up to $1.5 billion of the company’s common stock.
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.
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 $1.8 billion and $1.1 billion of share repurchases during 2022 and 2021, respectively.
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, 2022, we had $1.3 billion remaining available to purchase under the November 2022 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.
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 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, and pipe and tube (including OCTG) markets. Steel operations accounted for 65% and 72% of our consolidated net sales during 2022 and 2021, respectively. See Item 1.
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.
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 $3.3 million, as a result of the expiration of the statute of limitations and other federal and state income tax audits. 44 Table of Contents Liquidity and Capital Resources Capital Resources and Long-term Debt.
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. 46 Table of Contents Liquidity and Capital Resources Capital Resources and Long-term Debt.
Metals recycling operations accounted for 10% and 12% of our consolidated net sales during 2022 and 2021, respectively.
Metals recycling operations accounted for 12% and 10% of our consolidated net sales during 2023 and 2022, respectively.
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 (no significant principal payments until 2024), dividends to our shareholders, and potential stock repurchases and acquisitions or investments.
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.
Our steel mills utilize a large portion (approximately 66% in 2022 and 2021) 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.
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.
We file income tax returns in the United States federal jurisdiction as well as income tax returns in various state jurisdictions. The tax years 2019 through 2021 remain open to examination by the Internal Revenue Service and various state and local jurisdictions.
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.
Included in the balance of unrecognized tax benefits at December 31, 2022, are potential benefits of $25.1 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.
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.
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 United States government or various governmental agencies introducing regulatory changes in response to the potential of climate change.
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.
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.
Additionally, we are required 50 Table of Contents to ensure that assumptions used to determine fair value in our analyses are consistent with the assumptions a hypothetical marketplace participant would use.
During the year ended December 31, 2022, we recognized expense from the increase of interest expense and penalties of $480,000, net of tax. In addition to the unrecognized tax benefits noted above, we had $1.2 million accrued for the payment of interest and penalties at December 31, 2022.
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.
Our goodwill, relating to various business combinations, consisted of the following at December 31 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 ​ 2021 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Steel Operations Segment ​ $ 272,133 ​ $ 272,133 ​ ​ Metals Recycling Operations Segment ​ ​ 228,009 ​ ​ 179,777 ​ ​ Steel Fabrication Operations Segment ​ ​ 1,925 ​ ​ 1,925 ​ ​ ​ ​ $ 502,067 ​ $ 453,835 ​ ​ At least once annually (as of October 1), or when indicators of impairment exist, the company performs an impairment test for goodwill.
Our goodwill, relating to various business combinations, consisted of the following at December 31 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 ​ 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Steel Operations Segment ​ $ 272,133 ​ $ 272,133 ​ ​ Metals Recycling Operations Segment ​ ​ 203,413 ​ ​ 228,009 ​ ​ Steel Fabrication Operations Segment ​ ​ 1,925 ​ ​ 1,925 ​ ​ ​ ​ $ 477,471 ​ $ 502,067 ​ ​ At least once annually (as of October 1), or when indicators of impairment exist, the company performs an impairment test for goodwill.
We paid cash dividends of $237.2 million and $213.0 million during 2022 and 2021, respectively. Our board of directors, along with executive management, approves the payment of dividends on a quarterly basis.
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.
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.
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.
We announced in July our plans to invest $2.5 billion in a new state-of-the-art low-carbon aluminum flat roll mill with two supporting satellite recycled aluminum slab centers, which is planned to be funded by available cash and cash flow from operations. Expenditures began in the third quarter of 2022 and are expected to continue through 2025. Cash Dividends.
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.
Net sales for the steel operations segment were 8% higher in 2022 when compared to 2021, due to stable average steel selling prices and record volumes. ​ 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.
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. ​ 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.
Of the costs incurred during 2022 for monitoring and compliance, approximately 70% were related to the normal transportation of certain types of waste produced in our steelmaking processes and other facilities, in accordance with legal requirements. We incurred combined environmental remediation costs of approximately $398,000 at all of our facilities during 2022.
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.
During 2022, income tax expense of $1.1 billion, at an effective income tax rate of 22.7%, increased 19% from the $962.3 million of income tax expense, at an effective income tax rate of 22.9%, during 2021, consistent with increased pretax earnings. Refer to Note 4. Income Taxes to the consolidated financial statements elsewhere in this report for additional information.
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.
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 31% to $0.34 per share in the first quarter of 2022 (from $0.26 per share in 2021), resulting in declared cash dividends of $245.3 million during 2022, compared to $210.9 million during 2021.
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.
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 27.7% and 32.9% at December 31, 2022, and 2021, respectively, decreasing due to the growth in stockholders’ equity from undistributed 2022 earnings.
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.
Due to metal spread compression and additional costs during start-up at Sinton, operating income for the steel operations decreased 29%, to $3.1 billion, in 2022 compared to 2021. ​ ​ 41 Table of Contents Metals Recycling Operations Segment ​ Metals recycling operations includes both ferrous and nonferrous scrap metal processing, transportation, marketing, brokerage, and scrap management services.
Due to this metal spread compression, operating income for the steel operations decreased 39%, to $1.9 billion, in 2023 compared to 2022. 43 Table of Contents Metals Recycling Operations Segment ​ Metals recycling operations includes both ferrous and nonferrous scrap metal processing, transportation, marketing, brokerage, and scrap management services.
The average cost of steel consumed increased 24% in 2022, as compared to 2021. Selling prices per ton increased more than steel input costs per ton, resulting in metal spread (which we define as the difference between average selling prices and the cost of purchased steel) increasing 258% in 2022 compared to 2021.
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.
Our interest coverage ratio is calculated by dividing our last-twelve-months (LTM) consolidated Adjusted EBITDA (earnings before interest, taxes, depreciation, amortization, and certain other non-cash transactions as allowed 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.
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.
Our liquidity at December 31, 2022, is as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash and equivalents ​ $ 1,628,417 ​ ​ ​ ​ ​ ​ Short-term investments ​ ​ 628,215 ​ ​ ​ ​ ​ ​ Unsecured revolver availability ​ ​ 1,190,899 ​ ​ ​ ​ ​ ​ Total liquidity ​ $ 3,447,531 ​ ​ ​ ​ Our total outstanding debt of $3.1 billion at December 31, 2022 is consistent with December 31, 2021.
Our liquidity at December 31, 2023, is as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash and equivalents ​ $ 1,400,887 ​ ​ ​ ​ ​ ​ Short-term and other investments ​ ​ 951,873 ​ ​ ​ ​ ​ ​ Unsecured revolver availability ​ ​ 1,190,873 ​ ​ ​ ​ ​ ​ Total liquidity ​ $ 3,543,633 ​ ​ ​ ​ Our total outstanding debt of $3.1 billion is consistent with our total outstanding debt at December 31, 2022.
During 2022, we incurred costs related to the monitoring and compliance of environmental matters in the amount of approximately $47.7 million and capital expenditures related to environmental compliance of approximately $9.8 million.
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.
Our metallic raw material cost consumed in our steel mills increased $28 per net ton, or 6%, in 2022 compared to 2021. ​ As a result of scrap costs increasing more than average selling prices, 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 slightly in 2022 compared to 2021.
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.
Estimated interest payments also include a 0.175% commitment fee on our available Revolver, and an average interest rate of 5.5% on our other debt of $63.7 million. Our estimated interest payments are $102.2 million, $98.3 million, $80.3 million, $75.0 million, $54.6 million, for the years 2023 through 2027, respectively, and $393.2 million thereafter. 46 Table of Contents Purchase obligations.
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. 48 Table of Contents Purchase obligations.
Other expense consists of any non-operating costs, such as certain acquisition and financing expenses. 2022 Overview During 2022, domestic steel demand continued to be strong throughout the year, supported most significantly by the construction, automotive, industrial, and energy sectors. Customer steel inventories remained below historical averages for most of the year, allowing for steady order patterns.
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.
At December 31, 2022, our interest coverage ratio and debt to capitalization ratio were 54.42:1.00 and 0.27:1.00, respectively. We were, therefore, in compliance with these covenants at December 31, 2022, and we anticipate we will continue to be in compliance during the next twelve months. Working Capital.
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.
This expanded metal spread, coupled with record shipments, resulted in record operating income of $2.4 billion in 2022 compared to $365.3 million in 2021. ​ 43 Table of Contents Other Operations ​ Consolidated Results 2022 vs. 2021 Selling, General and Administrative Expenses.
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. ​ 45 Table of Contents Other Operations ​ Consolidated Results 2023 vs. 2022 Selling, General and Administrative Expenses.
Those estimates and judgments may or may not ultimately prove accurate. 48 Table of Contents Goodwill acquired in past transactions are 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.
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.
Record net sales for the segment of $4.3 billion increased 141% during 2022, compared to 2021, as shipments increased 8%, and average selling prices increased 123%, or $2,740 per ton. ​ 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, increasing to approximately three-fourths during 2022 and 2021 consistent with the historically higher steel costs.
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.
Metals recycling operations operating income in 2022 of $117.3 million decreased $64.7 million, or 36%, from the record in 2021, due to decreased ferrous and nonferrous shipments and metal spread. ​ 42 Table of Contents 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.
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. ​ 44 Table of Contents 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.
The net other income in 2022 compared to net other expense in 2021 was due primarily to an increase in interest income of $28.0 million associated with our increased invested cash and short-term investment balances, as well as an increase in net earnings from equity investments of $18.6 million. Income Tax Expense.
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.
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.
The unsecured Revolver is available to fund working capital, capital expenditures, and other general corporate purposes. The Facility contains financial covenants and other covenants pertaining to our ability to incur indebtedness and permit liens on certain assets.
We generated cash flow from operations of $4.5 billion in 2022 compared to $2.2 billion in 2021.
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.
Our unsecured credit agreement has a senior unsecured revolving credit facility (Facility), which provides a $1.2 billion unsecured Revolver, and matures in December 2024. Subject to certain conditions, we have the opportunity to increase the Facility size by $500.0 million. The unsecured Revolver is available to fund working capital, capital expenditures, and other general corporate purposes.
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.
Ferrous metal spread (which we define as the difference between average selling prices and the cost of purchased scrap) decreased 2%, while nonferrous metal spread also decreased 2% in 2022 compared to 2021.
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.
At December 31, 2022, 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 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.
Metals Recycling Operations Shipments: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ ​ ​ ​ 2022 ​ % Change ​ 2021 ​ ​ Ferrous metal (gross tons) ​ ​ ​ ​ ​ ​ ​ ​ Total ​ 5,301,774 ​ (3)% ​ 5,442,478 ​ ​ Inter-company ​ (3,475,662) ​ 3% ​ (3,574,668) ​ ​ External shipments ​ 1,826,112 ​ (2)% ​ 1,867,810 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nonferrous metal (thousands of pounds) ​ ​ ​ ​ ​ ​ ​ ​ Total ​ 1,053,852 ​ (4)% ​ 1,093,472 ​ ​ Inter-company ​ (138,407) ​ (2)% ​ (135,914) ​ ​ External shipments ​ 915,445 ​ (4)% ​ 957,558 ​ ​ Segment Results 2022 vs. 2021 Our metals recycling operations faced a challenging price environment during 2022.
Metals Recycling Operations Shipments: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ ​ ​ ​ 2023 ​ % Change ​ 2022 ​ ​ Ferrous metal (gross tons) ​ ​ ​ ​ ​ ​ ​ ​ Total ​ 5,779,114 ​ 9% ​ 5,301,774 ​ ​ Inter-company ​ (3,579,958) ​ ​ ​ (3,475,662) ​ ​ External shipments ​ 2,199,156 ​ 20% ​ 1,826,112 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nonferrous metal (thousands of pounds) ​ ​ ​ ​ ​ ​ ​ ​ Total ​ 1,108,211 ​ 5% ​ 1,053,852 ​ ​ Inter-company ​ (157,892) ​ ​ ​ (138,407) ​ ​ External shipments ​ 950,319 ​ 4% ​ 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 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.
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.
Steel fabrication operations accounted for 19% and 10% of our consolidated net sales during 2022 and 2021, respectively. ​ ​ Segment Results 2022 vs. 2021 Our steel fabrication operations benefited in 2022 from a steady non-residential construction market, as order activity remained strong throughout the year, resulting in record shipments and significantly higher selling prices.
Steel fabrication operations accounted for 15% and 19% of our consolidated net sales during 2023 and 2022, respectively. ​ ​ 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.
Net income attributable to Steel Dynamics, Inc. for 2022 increased $648.6 million, or 20%, to $3.9 billion, compared to 2021. Diluted earnings per share attributable to Steel Dynamics, Inc. was $20.92 for 2022, compared to $15.56 for 2021. Refer to Item 7.
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.
We enter 2023 with ample liquidity of $3.4 billion and anticipated operating cash flow generation to provide for our planned 2023 capital requirements, including the four new flat roll coating lines at Sinton and Heartland.
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.
During 2022, we invested $908.9 million in property, plant and equipment, primarily within our steel operations segment, compared with $1.0 billion invested during 2021. Spending at Sinton decreased in 2022 versus 2021 as we completed the construction phase in early 2022.
In addition, our $400 million 2.800% senior notes were recorded as current at December 31, 2023. 47 Table of Contents 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.
The higher interest expense in 2022 compared to 2021 was due to higher capitalized interest in 2021 ($50.5 million, compared to $15.8 million in 2022) related to the construction of Sinton. Other (Income) Expense, net. Net other income was $20.8 million in 2022, compared to net other expense of $34.8 million in 2021.
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.
Retirement Plans to the consolidated financial statements elsewhere in this report for further information. Interest Expense, net of Capitalized Interest. During 2022, interest expense of $91.5 million increased 60% from $57.2 million during 2021.
Selling, general and administrative expenses represented 3.1% and 2.5% of net sales during 2023 and 2022, respectively. 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.
Removed
This strong market environment allowed annual average steel selling prices to remain at historically high levels, with steady steel operations segment metal spreads compared to 2021, partially offset by additional costs of $439 million during start-up at Sinton. Our metals recycling operations experienced a challenging pricing environment in 2022, with ferrous scrap prices generally falling throughout the year.
Added
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.
Removed
Metal spread compression, coupled with lower volumes, resulted in significantly lower operating income. Our steel fabrication operations segment achieved significantly higher record operating income and record shipments during 2022, on continued strong non-residential construction demand, record average selling prices and stable average steel product pricing.
Added
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.
Removed
The symbiotic relationship among our three operating segments resulted in record companywide financial and operational performance during 2022.
Added
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.
Removed
We achieved record 2022 operational and financial results. ​ ● Record net sales of $22.3 billion ● Record operating income of $5.1 billion and net income of $3.9 billion ● Record cash flow from operations of $4.5 billion ● Record steel and steel fabrication shipments of 12.2 million and 856,000 tons, respectively ● Record steel fabrication operating income of $2.4 billion ● Share repurchases of $1.8 billion of our common stock, representing 12% of our outstanding shares ​ Consolidated operating income for 2022 increased $790.7 million, or 18%, to $5.1 billion, compared to $4.3 billion in 2021.
Added
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.
Removed
Steel Operations Shipments (tons): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ ​ ​ 2022 ​ % Change ​ 2021 ​ ​ Total shipments 12,158,168 ​ 8% ​ 11,217,640 ​ ​ Intra-segment shipments (1,353,824) ​ ​ ​ (1,106,525) ​ ​ Steel Operations Segment shipments 10,804,344 ​ 7% ​ 10,111,115 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ External shipments 10,410,469 ​ 9% ​ 9,559,617 ​ ​ ​ 40 Table of Contents Segment Results 2022 vs. 2021 During 2022, domestic steel demand remained strong from the construction, automotive, industrial, and energy sectors, resulting in record shipments of 10.8 million tons in 2022, including 828,000 tons from Sinton.
Added
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.
Removed
Average product pricing for our steel operations, though higher year over year compared to 2021, experienced steady declines throughout 2022 for sheet steel products, which had risen to record levels at the end of 2021. Conversely, long products realized higher selling prices through the majority of 2022.
Added
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.
Removed
Steel operations segment shipments increased 7% in 2022 compared to 2021, as Sinton started up production throughout the year, with average selling prices remaining steady.
Added
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.
Removed
In October 2022, we completed our acquisition of ROCA ACERO, S.A. de C.V. (ROCA), whose post-acquisition operations are included in 2022 results.
Added
Steel Operations Shipments (tons): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ ​ ​ 2023 ​ % Change ​ 2022 ​ ​ Total shipments 12,821,753 ​ 5% ​ 12,159,189 ​ ​ Intra-segment shipments (1,449,832) ​ ​ ​ (1,354,940) ​ ​ Steel Operations Segment shipments 11,371,921 ​ 5% ​ 10,804,249 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ External shipments 10,976,707 ​ 5% ​ 10,411,490 ​ ​ ​ 42 Table of Contents 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.
Removed
Domestic steel mill utilization rates decreased to approximately 78% in 2022 from 81% in the prior year, impacting demand for ferrous scrap. Net sales for our metals recycling operations decreased 4% in 2022 as compared to 2021, driven by lower shipments and average selling values.
Added
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.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThe 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, 2022 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest Rate Risk ​ ​ ​ ​ Fixed Rate ​ Variable Rate ​ ​ ​ ​ ​ ​ Average ​ ​ ​ Average ​ ​ ​ ​ Principal ​ Rate ​ Principal ​ Rate ​ ​ Expected maturity date: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 ​ $ 2,254 ​ ​ 4.1% ​ $ 55,080 ​ ​ 5.6% ​ ​ 2024 ​ ​ 401,800 ​ ​ 2.8 ​ ​ - ​ ​ ​ ​ ​ 2025 ​ ​ 401,608 ​ ​ 2.4 ​ ​ - ​ ​ ​ ​ ​ 2026 ​ ​ 401,481 ​ ​ 5.0 ​ ​ - ​ ​ ​ ​ ​ 2027 ​ ​ 351,142 ​ ​ 1.7 ​ ​ - ​ ​ ​ ​ ​ Thereafter ​ ​ 1,500,361 ​ ​ 3.3 ​ ​ - ​ ​ ​ ​ ​ Total debt outstanding ​ $ 3,058,646 ​ ​ 3.2% ​ $ 55,080 ​ ​ 5.6% ​ ​ Fair value ​ $ 2,677,777 ​ ​ ​ ​ $ 55,080 ​ ​ ​ ​ ​ 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.
Biggest changeThe 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 ​ ​ ​ ​ ​ ​ Average ​ ​ ​ Average ​ ​ ​ ​ Principal ​ Rate ​ Principal ​ Rate ​ ​ Expected maturity date: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 ​ $ 400,901 ​ ​ 2.8% ​ $ 59,794 ​ ​ 7.2% ​ ​ 2025 ​ ​ 400,653 ​ ​ 2.4 ​ ​ - ​ ​ ​ ​ ​ 2026 ​ ​ 400,453 ​ ​ 5.0 ​ ​ - ​ ​ ​ ​ ​ 2027 ​ ​ 350,035 ​ ​ 1.7 ​ ​ - ​ ​ ​ ​ ​ 2028 ​ ​ - ​ ​ - ​ ​ - ​ ​ ​ ​ ​ Thereafter ​ ​ 1,500,000 ​ ​ 3.3 ​ ​ - ​ ​ ​ ​ ​ Total debt outstanding ​ $ 3,052,042 ​ ​ 3.2% ​ $ 59,794 ​ ​ 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.
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 2022, 2021, or 2020.
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.
Derivative Financial Instruments to the consolidated financial statements elsewhere in this report for additional information . ​ ​ 50 Table of Contents
Derivative Financial Instruments to the consolidated financial statements elsewhere in this report for additional information . ​ ​ 52 Table of Contents
At December 31, 2022, we had a cumulative unrealized loss associated with these financial contracts of $3.1 million, substantially all of which have settlement dates in 2023. We believe the customer contracts associated with the financial contracts will be fully consummated. Refer to Note 7.
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.

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