Steel Dynamics, Inc.
ITEM 1. BUSINESS
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Steel Dynamics, Inc. is a leading industrial metals solutions company, with facilities located throughout the United States and Mexico. The company operates a circular manufacturing model, producing high-quality, lower-carbon-emission products with recycled scrap as the primary input. Steel Dynamics is one of the largest domestic steel producers and metals recyclers in North America based on estimated steelmaking and steel coating capacity of approximately 16 million tons and actual metals recycling volumes as of December 31, 2025, with one of the most diversified product and end market portfolios in the domestic steel industry, combined with a meaningful downstream steel fabrication platform. The company also has aluminum operations, further diversifying its product offerings to supply aluminum flat rolled products with higher recycled content to the countercyclical, sustainable beverage can industry, as well as the automotive and industrial sectors. The company’s primary sources of revenue are currently derived 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 joist and deck products.
We refer to our founding principles as our six core strategic pillars. These pillars unify our teams around a common focus and provide the foundation for how we operate and grow. Our unique entrepreneurial culture and business model create operational and financial advantages and support the responsible use of resources across diverse economic environments. Innovation in all forms is essential to our success, and our teams focus on working smarter within existing operations while pursuing opportunities for continued growth. This includes developing solutions for our teammates, customers, suppliers, and other stakeholders, as well as finding ways to operate with fewer resources and less environmental impact. The consistent execution of our six strategic pillars drives our long-term success and sustainability.
| ● | Health & Safety – Safety is our primary focus and core value. Nothing surpasses the importance of creating and maintaining a safe work environment. Our goal is zero injuries—no accidents. |
| ● | Entrepreneurial Culture – Fosters a team of energetic, positive, driven, innovative and diverse individuals by utilizing open communication and meaningful performance-based compensation aligned to our strategic focus. |
| ● | Customer Commitment – We focus on being a preferred partner of our customers by providing quality products and unique supply chain solutions to meet their current and future needs. |
| ● | Strategic Sustainable Growth – We focus on strategic growth with intentional margin expansion and consistency through-the-cycle. |
| ● | Innovation – Through individual creativity and ingenuity, our teams drive innovation to improve safety, quality, productivity, and resource sustainability. We strive to provide unique, superior products, customer supply chain solutions, and next-generation technologies and processes. |
| ● | Financial Strength – Through our adaptable value-added product diversification, vertically connected businesses model, highly variable operating cost structure and performance-based incentive compensation, along with our continued operating innovations and efficiency, we achieve higher utilization and lower costs, which provide strong cash flow generation through both strong and weak market cycles. |
Differentiated Model - Uniquely Steel Dynamics
Competitively advantaged differentiation is central to our long-term value creation strategy. We distinguish ourselves across all aspects of our business through an overarching culture of excellence that drives how we operate, innovate, and serve our customers.
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Unique Entrepreneurial Culture
Our entrepreneurial culture is the foundation of our success and is driven by our extensive, performance-based incentive compensation philosophy that spans from teammates on the plant floor to senior leadership. More than 60% of a production team member’s total potential compensation is “at risk” and tied to quality production and cost-effectiveness metrics. More than 85% of our senior leadership team’s total potential compensation is “at risk” and linked to companywide financial metrics that encourage long-term value creation, including return on equity, growth, cash generation, and return on invested capital. We believe diversity within our teams enhances broad-based thinking, innovation, and value creation. Our common goal of consistently achieving excellence in all we do is reflected in the esprit de corps that permeates our team.
Diversified, Value-Added Product Offerings and Supply-Chain Solutions
We have one of the most diversified, high-margin product portfolios in the domestic steel industry and a proven track record of profitable growth. We have driven diversification across both end markets and value-added product offerings to sustain higher volumes and profitability through varying market environments. Approximately 70% of our steel and steel fabrication sales are considered value-added.
Throughout our history and today, we have focused on providing differentiated supply-chain solutions that help our customers increase efficiency, reduce time and costs, and support decarbonization opportunities. Growing alongside our customers in this way has been instrumental in building long-lasting relationships and advancing product development.
The majority of our scrap consuming operations are located near sustainable sources of scrap metal and close to our customer base, creating freight savings on inbound scrap and outbound finished products. This proximity also allows us to provide consistent, on-time delivery with relatively short lead times, further strengthening our customer relationships.
This diversified product portfolio enables us to access a broad range of markets and serve a large customer base, while helping to mitigate exposure to any single product or end market and supporting higher through-cycle mill utilization. Our value-added product offerings also help balance our exposure to commodity grade products supplied by other manufacturers.
We will continue to seek additional opportunities, including our entry into the recycled aluminum flat rolled products market, and collaborating with our customers to anticipate their future needs by further expanding our range of products and offerings. As with all of our growth initiatives, we seek to competitively differentiate ourselves through service, product capability and quality, and integrated supply-chain solutions.
Vertically Connected Businesses and Pull-Through Volume Advantage
Our vertically connected businesses support our higher through-cycle steel production and overall profitability. Our internal manufacturing operations provide a significant competitive advantage by contributing to more stable through-cycle earnings and cash flow generation. Our steel fabrication operations and downstream processing facilities consume significant volumes of steel. During weaker steel demand environments, we can source their steel needs internally, and during stronger steel demand environments, we may also purchase steel externally. Ultimately, we optimize our companywide profitability and minimize earnings volatility. In 2025, our own steel consuming businesses purchased 1.8 million tons of steel from our steel mills, representing 13% of our total 2025 steel shipments.
A strategic and synergistic relationship exists between our electric arc furnace (EAF) steel mills and our metals recycling operations, as well as between our aluminum operations and our metals recycling operations. Our metals recycling platform is the largest supplier of recycled ferrous scrap to our steel operations and the largest supplier of recycled aluminum scrap to our aluminum operations. This circular model allows us to reduce companywide working capital, as lower scrap inventory volume is required at our steel mills and aluminum operations. We are also able to source higher-quality scrap for our steel mills and aluminum operations, increasing availability, optimizing costs, and improving quality.
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Technologically Advanced, Low-Cost, Highly Efficient Operations
We have some of the most technologically advanced and environmentally responsible steel mills and aluminum operations in the world. Our steel mills generate a fraction of the greenhouse gas (GHG) emissions per ton of steel produced as compared to traditional blast furnace steel production and the average global steel industry. Our value-added product diversification, circular manufacturing model, and performance-based incentive compensation programs support our efficient, environmentally responsible, and competitively advantaged footprint. Coupled with our low, highly variable cost structure and our continued operating innovation and efficiency, we are one of the most profitable and lowest-cost domestic metals solutions companies.
Sustainability
Our commitment to all aspects of sustainability is embedded in our founding principles, which emphasizes valuing our people, our partners, our communities, and our environment. These strategic principles guide long-term value creation for all of us. We are committed to operating our business in an environmentally responsible manner and have been since our founding. Our steel mills exclusively use EAF steelmaking technology, which uses recycled ferrous scrap as the primary raw material. Our new recycled aluminum flat rolled products mill uses recycled aluminum scrap as its primary raw material and is engineered to provide an energy-efficient, lower-environmental-impact product alternative compared to average aluminum flat rolled production. These investments allow us to produce high-quality, lower-embodied-carbon steel and aluminum products for our customers and drive returns for our shareholders. Our sustainability and decarbonization strategy is an ongoing journey, and we plan to use our entrepreneurial, innovative spirit to continue to be a leader in the industry.
We have intentionally developed a circular manufacturing model. Our metals recycling platform collects and processes scrap, which is then sold to end users for reuse, including our EAF steel mills and our aluminum operations. Our steel and aluminum products are then sold to consumers that both further process and manufacture end products. We sell a meaningful amount of steel to our own manufacturing businesses that in turn sell finished products to consumers. Scrap, from the industrial manufacturing process, and from when these products ultimately reach the end of their lives, can be collected and used again in our steel and aluminum operations, creating our circular manufacturing model.
While we believe we operate some of the most efficient steel mills in the world, we recognize the need for continuous improvement. Our biocarbon production facility located in Columbus, Mississippi uses high-temperature pyrolysis to convert sustainably sourced biomass to high-purity biocarbon. We plan to use this biocarbon as a renewable replacement for anthracite in our steelmaking operations, which could result in as much as a 35% reduction in our steel mills’ Scope 1 GHG absolute emissions. The facility began operations in the second half of 2025. This investment represents a significant step toward the decarbonization of our steel mills.
Experienced Leadership Team / Fosters an Entrepreneurial Culture
Our senior leadership team is highly experienced and has a proven track record in the steel, metals recycling, and steel fabrication industries, as well as building and operating low-cost melting, casting and rolling facilities, such as our recycled aluminum flat rolled products mill. Our leadership objectives are closely aligned with our shareholder interests through meaningful stock ownership and performance-based incentive compensation programs that are tied to the company’s profitability and operational performance in relation to our steel manufacturing peers. We emphasize decentralized operational decision making and accountability, while maintaining appropriate corporate governance and risk oversight. We reward teamwork, innovation, and operating efficiency, and focus on maintaining the effectiveness of our performance-driven incentive bonus plans designed to maximize overall productivity and align the interests of our leadership and teams with our shareholders.
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Name | | Age | | Position |
Mark D. Millett | | 66 | | Co-founder, Chairman, and Chief Executive Officer |
Barry T. Schneider | | 57 |
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Financial statements
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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Forward-Looking Statements
This report contains some predictive statements about future events, including statements related to conditions in domestic or global economies, conditions in steel, aluminum, and recycled metals market places, Steel Dynamics' revenues, costs of purchased materials, future profitability and earnings, and the operation of new, existing or planned facilities. These statements, which we generally precede or accompany by such typical conditional words as "anticipate", "intend", "believe", "estimate", "plan", "seek", "project", or "expect", or by the words "may", "will", or "should", are intended to be made as "forward-looking", subject to many risks and uncertainties, within the safe harbor protections of the Private Securities Litigation Reform Act of 1995. These statements speak only as of this date and are based upon information and assumptions, which we consider reasonable as of this date, concerning our businesses and the environments in which they operate. Such predictive statements are not guarantees of future performance, and we undertake no duty to update or revise any such statements. Some factors that could cause such forward-looking statements to turn out differently than anticipated include: (1) domestic and global economic factors; (2) global steelmaking overcapacity and imports of steel, together with increased scrap prices; (3) the cyclical nature of the metals industries and the industries we serve; (4) 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; (5) cost and availability of electricity, natural gas, oil, and other energy resources are subject to volatile market conditions; (6) increased environmental, greenhouse gas emissions and sustainability considerations from our customers and investors or related regulations; (7) compliance with and changes in environmental and remediation requirements; (8) significant price and other forms of competition from other steel and aluminum producers, scrap processors and alternative materials; (9) availability of an adequate source of supply of scrap for our metals recycling operations; (10) cybersecurity threats and risks to the security of our sensitive data and information technology; (11) the implementation of our growth strategy; (12) our ability to retain, develop and attract key personnel; (13) litigation and legal compliance; (14) unexpected equipment downtime or shutdowns; (15) difficulties in the launch or production ramp-up of new products; (16) our aluminum operations depend on a core group of significant customers; (17) governmental agencies may refuse to grant or renew some of our licenses and permits; (18) our existing debt agreements contain, and any future financing agreements may contain, restrictive covenants that may limit our flexibility; and (19) the impacts of impairment charges.
More specifically, we refer you to our more detailed explanation of these and other factors and risks that may cause such predictive statements to turn out differently, as set forth in the sections titled Special Note Regarding Forward-Looking Statements at the beginning of Part I of this Report and Item 1A. Risk Factors, as well as in other subsequent reports we file with the Securities and Exchange Commission. These reports are available publicly on the Securities and Exchange Commission website, www.sec.gov, and on our website, www.steeldynamics.com under “Investors – SEC Filings.”
Operating Statement Classifications
Net Sales. Net sales from our operations are a factor of volumes shipped, product mix, and related pricing. We charge premium prices for certain grades of steel and aluminum, product dimensions, certain smaller volumes, and for value-added processing or coating of our steel products. Except for the steel fabrication operations, we recognize revenues from sales and the allowance for estimated returns and claims from these sales at the point in time control of the product transfers to the customer, upon shipment or delivery. Our steel fabrication operations recognize revenues over time based on completed fabricated tons to date as a percentage of total tons required for each contract.
Costs of Goods Sold. Our costs of goods sold represent all direct and indirect costs associated with the manufacture of our products. The principal elements of these costs are scrap and scrap substitutes (which represent the most significant single component of our consolidated costs of goods sold), steel substrate, direct and indirect labor and related benefits, alloys, zinc, transportation and freight, repairs and maintenance, utilities such as electricity and natural gas, and depreciation.
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Selling, General and Administrative Expenses. Selling, general and administrative expenses consist of all costs associated with our sales, finance and accounting, and administrative departments, including, among other items, labor and related benefits, and professional services.
Companywide profit sharing and amortization of intangible assets are each separately presented in the statements of income.
Interest Expense, net of Capitalized Interest. Interest expense consists of interest associated with our senior credit facilities and other debt, net of interest costs that are required to be capitalized during the construction period of certain capital investment projects.
Other (Income) Expense, net. Other income consists of interest income earned on our temporary cash deposits, short-term and other investments, and any other non-operating income activity, including income from investments in unconsolidated affiliates accounted for under the equity method. Other expense consists of any non-operating costs, such as certain acquisition and financing expenses.
2025 Overview
During 2025 we achieved record steel shipments of 13.7 million tons. Underlying domestic steel demand was stable during 2025, as imports declined from the elevated levels experienced during the first half of the year and as the Sinton Flat Roll Division’s year-over-year operating performance improved. Our metals recycling operations segment achieved notable improvement in operating income in 2025 compared to 2024 on higher ferrous metals volumes and higher ferrous and nonferrous pricing. Our steel fabrication operations experienced historically strong, yet moderating product pricing compared to 2024, with stabilization in selling values realized in the fourth quarter of 2025. Finally, our aluminum operations segment achieved successful production and qualifications of industrial, beverage can, and automotive quality flat rolled aluminum products, with shipments commencing in the late second half of 2025.
Consolidated net sales were $18.2 billion during 2025, with cash flow from operations of $1.4 billion. Metal spread compression in our steel and, particularly, steel fabrication segments resulted in lower operating income in 2025 compared to 2024. Consolidated operating income for 2025 decreased $467.1 million, or 24%, to $1.5 billion, compared to $1.9 billion in 2024. Net income attributable to Steel Dynamics, Inc. for 2025 decreased $351.5 million, or 23%, to $1.2 billion, compared to 2024. Diluted earnings per share attributable to Steel Dynamics, Inc. was $7.99 for 2025, compared to $9.84 for 2024.
Refer to Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations in Part II of our Annual Report on Form 10-K for the year ended December 31, 2024, for additional information regarding results of operations for the year ended December 31, 2024, as compared to the year ended December 31, 2023, and segment operating results for 2024 as compared to 2023.
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Segment Operating Results (dollars in thousands)
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| | Years Ended December 31, | | ||||||
| | 2025 | | % Change | | 2024 | | ||
| | | | | | | | | |
| Net sales | | | | | | | | |
| Steel Operations | $ | 13,412,773 | | 7% | | $ | 12,527,066 | |
| Metals Recycling Operations | | 4,346,074 | | 5% | | | 4,136,913 | |
| Steel Fabrication Operations | | 1,418,665 | | (20)% | | | 1,771,795 | |
| Aluminum Operations | | 473,881 | | 49% | | | 318,689 | |
| Other | | 1,335,454 | | (8)% | | | 1,451,723 | |
| | | 20,986,847 | | | | | 20,206,186 | |
| Inter-segment | | (2,810,266) | | | | | (2,665,796) | |
| | $ | 18,176,581 | | 4% | | $ | 17,540,390 | |
| | | | | | | | | |
| Operating income (loss) | | | | | | | | |
| Steel Operations | $ | 1,427,544 | | (10)% | | $ | 1,582,374 | |
| Metals Recycling Operations | | 97,176 | | 27% | | | 76,807 | |
| Steel Fabrication Operations | | 407,425 | | (39)% | | | 666,984 | |
| Aluminum Operations | | (172,970) | | (139)% | | | (72,331) | |
| Other | | (281,851) | | 11% | | | (317,408) | |
| | | 1,477,324 | | | | | 1,936,426 | |
| Inter-segment | | (1,338) | | | | | 6,611 | |
| | $ | 1,475,986 | | (24)% | | $ | 1,943,037 | |
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Steel operations include our electric arc furnace (EAF) steel mills, including Butler Flat Roll Division, Columbus Flat Roll Division, Southwest-Sinton Flat Roll Division, Structural and Rail Division, Engineered Bar Products Division, Roanoke Bar Division, and Steel of West Virginia; steel coating and processing operations at The Techs, Heartland Flat Roll Division, United Steel Supply, New Process Steel, L.P. (acquired December 1, 2025), and Vulcan Threaded Products, Inc.; warehouse operations in Mexico; and a 75% controlling equity interest in SDI Biocarbon Solutions, LLC. Steel operations accounted for 72% and 69% of our consolidated net sales during 2025 and 2024, respectively. See Item 1. Business for further information on Steel Operations segment operations.
Steel Operations Segment Shipments (tons):
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| | Years Ended December 31, | | ||||
| | 2025 | | % Change | | 2024 | |
| Total shipments | 13,748,801 | | 9% | | 12,660,487 | |
| Intra-segment shipments | (1,429,299) | | | | (1,306,364) | |
| Steel Operations Segment shipments | 12,319,502 | | 9% | | 11,354,123 | |
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| External shipments | 11,960,582 | | 9% | | 10,929,453 | |
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Steel Operations Segment Results 2025 vs. 2024
During 2025, our steel operations achieved record annual shipments of 13.7 million tons (12.3 million excluding intra-segment), 9% higher than 2024 shipments, primarily due to significant sales volume increases at our Sinton and Heartland facilities as the four new value-added lines operated for a full year in 2025. Customer order activity and steel demand were strong during 2025, particularly as imports declined in the latter half of the year. Demand was supported by manufacturing onshoring, infrastructure program funding, lower interest rates, and the increasing regionalization of supply chains in the US. Despite these favorable market demand conditions, in the face of trade policy uncertainty, average selling prices were modestly lower during 2025 compared to 2024. Steel segment average selling prices decreased 1%, or $14 per ton, compared to 2024. Net sales for the steel operations segment were 7% higher in 2025 when compared to 2024, due to a 9% increase in segment shipments.
Metallic raw materials used in our electric arc furnaces represent our single most significant steel manufacturing cost, generally comprising approximately 55% to 65% of our steel mill operations’ manufacturing costs. Our metallic raw material cost consumed in our steel mills was unchanged on a per net ton basis in 2025 compared to 2024, consistent with overall steady domestic scrap pricing noted below in the metals recycling operations segment discussion.
As a result of average selling prices decreasing more than scrap costs, metal spread (which we define as the difference between average steel mill selling prices and the cost of ferrous scrap consumed in our steel mills) decreased 2% in 2025 compared to 2024. Due to metal spread compression, operating income for the steel operations decreased 10% to $1.4 billion in 2025 compared to 2024.
Metals recycling operations include our Omni ferrous and nonferrous processing, transportation, marketing, brokerage, and scrap management services located throughout the United States and in Central and Northern Mexico. Our steel mills utilize a large portion of the ferrous scrap sold by our metals recycling operations as raw material in our steelmaking operations, and the remainder is sold to other consumers, such as other steel manufacturers and foundries. In 2025 and 2024, 65% and 62%, respectively, of metals recycling operations ferrous scrap was sold to our own steel mills, as our steel mill utilization increased to 86% in 2025 compared to 81% 2024, with production levels at our Sinton facility increasing during 2025. Metals recycling operations accounted for 11% of our consolidated net sales during 2025 and 2024.
Metals Recycling Operations Segment Shipments:
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| | | | | | | | |
| | | Years Ended December 31, | | ||||
| | | 2025 | | % Change | | 2024 | |
| Ferrous metal (gross tons) | | | | | | | |
| Total | | 6,160,797 | | 5% | | 5,850,544 | |
| Inter-segment | | (4,013,035) | | | | (3,656,034) | |
| External shipments | | 2,147,762 | | (2)% | | 2,194,510 | |
| | | | | | | | |
| Nonferrous metal (thousands of pounds) | | | | | | | |
| Total | | 916,502 | | (5)% | | 965,491 | |
| Inter-segment | | (178,716) | | | | (171,915) | |
| External shipments | | 737,786 | | (7)% | | 793,576 | |
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Metals Recycling Operations Segment Results 2025 vs. 2024
During 2025, our metals recycling operations continued to benefit from solid domestic steel industry demand, resulting in increased ferrous scrap shipments compared to 2024. Net sales for our metals recycling operations in 2025 increased 5% compared to 2024, driven by increased ferrous volumes and increased selling prices for both ferrous and nonferrous metals. Ferrous and nonferrous scrap average selling prices increased 2% and 7%, respectively, during 2025 compared to 2024. Ferrous shipments increased 5% and nonferrous shipments decreased 5% in 2025 compared to 2024.
Ferrous metal spreads (which we define as the difference between average selling prices and the cost of purchased scrap) were flat, while nonferrous metal spreads, primarily aluminum, increased 24% in 2025 compared to 2024, with aluminum prices rising in the fourth quarter of 2025. As a result of these volume and metal spread changes, metals recycling operations operating income in 2025 of $97.2 million increased 27% from 2024.
Steel fabrication operations include our New Millennium Building Systems’ joist and deck plants located throughout the United States, and in Northern Mexico. Revenues from these plants are generated from the fabrication of steel joists, joist girders, and steel deck systems used within the non-residential construction industry. Steel fabrication operations accounted for 8% and 10% of our consolidated net sales during 2025 and 2024, respectively.
Steel Fabrication Operations Segment Results 2025 vs. 2024
Net sales for the steel fabrication operations decreased 20% during 2025 compared to 2024, as average selling prices decreased 13% and volumes decreased 8% compared to 2024. Order activity remained strong during 2025, with our order backlog maintaining solid levels and extending through the first half of 2026, supported by stable and historically strong pricing. Demand was largely driven by the commercial, data center, manufacturing, warehouse, and healthcare sectors.
The purchase of various steel products is the largest single cost of production for our steel fabrication operations, historically representing approximately two-thirds of the total cost of manufacturing. The average cost of steel consumed decreased 7% in 2025, as compared to 2024. Lower selling prices per ton offset decreased steel input costs per ton,
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resulting in contraction of metal spread (which we define as the difference between average selling prices and the cost of purchased steel) by 17% in 2025 compared to 2024. Metal spread compression coupled with decreased volume resulted in operating income decreasing 39% to $407.4 million in 2025, compared to $667.0 million in 2024.
Our aluminum operations consist of a 650,000-metric-ton recycled aluminum flat rolled products mill in Columbus, Mississippi; two 150,000-metric-ton satellite recycled aluminum slab centers, one in Central Mexico and one under construction in the Southwest U.S.; and an ancillary recycled aluminum deox-rod facility. The recycled aluminum flat roll products mill produces flat rolled aluminum products from aluminum scrap and is a complementary extension of the company’s metals recycling platform. Our product offerings will be supported by various value-added finishing lines that are still under construction, including two CASH (Continuous Annealing Solutions Heat Treating) lines, a can end and tab coating line, and downstream processing and packaging lines. Aluminum operations accounted for 2% and 1% of our consolidated net sales during 2025 and 2024, respectively.
Aluminum Operations Segment Results 2025 vs. 2024
During 2025, the results of this segment largely consisted of sales from the ancillary recycled aluminum deox-rod facility, as well as construction, start-up, and commissioning costs associated with the recycled aluminum flat roll products mill and satellite recycled aluminum slab centers. The flat rolled products mill shipped 15,000 metric tons of finished product during the second half of 2025. In 2025, aluminum operations sales, including those of our ancillary recycled aluminum deox-rod facility, totaled $473.9 million, an increase of 49%, compared to $318.7 million in 2024 primarily due to the volumes from the aluminum flat rolled products mill beginning in the second half of 2025.
Consolidated Results 2025 vs. 2024
Selling, General and Administrative Expenses. Selling, general and administrative expenses of $765.3 million during 2025 increased 15% from $664.1 million during 2024 primarily due to an increase in payroll and benefits expense primarily related to construction, start-up, and commissioning costs associated with the recycled aluminum flat rolled products mill and satellite recycled aluminum slab centers during 2025. Selling, general and administrative expenses represented 4.2% and 3.8% of net sales during 2025 and 2024, respectively.
Profit sharing expense during 2025 of $123.0 million decreased 25% from $164.9 million during 2024, consistent with decreased pretax earnings. This decrease in profit sharing expense was the primary driver of decreased operating loss for our other operations of 11% in 2025 compared to 2024. Profit sharing expense for eligible employees is 8% of consolidated pretax income excluding noncontrolling interests and other items. Refer to Note 10. Retirement Plans to the consolidated financial statements elsewhere in this report for further information.
Interest Expense, net of Capitalized Interest. During 2025, interest expense of $70.0 million increased 24% from $56.3 million during 2024. This increase is primarily a result of higher outstanding long-term debt balances during 2025 compared to 2024 due to our issuance of senior unsecured notes in March and November 2025.
Other (Income) Expense, net. Net other income was $87.0 million in 2025, compared to $96.2 million in 2024, a decrease of $9.2 million due primarily to the impact of decreased interest income due to declining rates of return and lower invested cash balances in 2025 compared to 2024.
Income Tax Expense. Income tax expense of $305.7 million, at an effective income tax rate of 20.5%, during 2025 decreased 29% compared to $432.9 million, at an effective income tax rate of 21.8%, during 2024, consistent with decreased pretax earnings. In July 2025, U.S. Congress enacted the One Big Beautiful Bill Act (“OBBBA”), which included significant provisions modifying the U.S. tax framework. These legislative changes did not and are not expected to have a material impact on 2025 and future effective tax rates, tax liabilities, and cash taxes. Refer to Note 4. Income Taxes to the consolidated financial statements elsewhere in this report for additional information.
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Included in the balance of unrecognized tax benefits at December 31, 2025, are potential benefits of $27.2 million that, if recognized, would affect the effective tax rate. We recognize interest and penalties related to our tax contingencies on a net-of-tax basis in income tax expense. During the year ended December 31, 2025, we recognized income from the decrease of interest expense and penalties of $340,000, net of tax. In addition to the unrecognized tax benefits noted above, we had $3.7 million accrued for the payment of interest and penalties at December 31, 2025.
We file income tax returns in the U.S. federal jurisdiction as well as income tax returns in various state jurisdictions. The tax years 2022 through 2025 remain open to examination by the Internal Revenue Service and various state and local jurisdictions. At this time, we do not believe there will be any significant examination adjustments that would result in a material change to our financial position, results of operations or cash flows.
Liquidity and Capital Resources
Capital Resources and Long-term Debt. Our business is capital intensive and requires substantial expenditures for, among other things, the purchase and maintenance of equipment used in our operations. 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, potential stock repurchases and acquisitions or investments. We have met and intend to continue to meet these liquidity requirements primarily with available cash and cash provided by operations, long-term borrowings, and we also have availability under our unsecured Revolver. Our liquidity at December 31, 2025, is as follows (in thousands):
| | | | | | | | | |
| | | | | | | | | |
| | | Cash and equivalents | | $ | 769,878 | | | |
| | | Short-term and other investments | | | 255,731 | | | |
| | | Unsecured revolver availability | | | 1,190,820 | | | |
| | | Total liquidity | | $ | 2,216,429 | | | |
Our total outstanding debt of $4.2 billion increased $980.2 million compared to December 31, 2024, due to our issuance of $600.0 million of 5.250% notes due 2035 and $400.0 million of 5.750% notes due 2055 in March 2025 and $650.0 million of 4.000% notes due 2028 and an additional $150.0 million of 5.250% notes due 2035 in November 2025 as described in Note 3, the proceeds of which were used to redeem our $400.0 million of 2.400% notes due June 2025 and our $400.0 million of 5.000% notes due December 2026, and other general corporate purposes. 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 32.1% and 26.5% at December 31, 2025, and December 31, 2024, respectively.
Our unsecured credit agreement has a senior unsecured revolving credit facility (Facility), which provides a $1.2 billion Revolver and matures in July 2028. Subject to certain conditions, we have the ability to increase the Facility size by $500.0 million. The unsecured Revolver is available to fund working capital, capital expenditures, and other general corporate purposes. The Facility contains financial covenants and other covenants pertaining to our ability to incur indebtedness and permit liens on certain assets. Our ability to borrow funds within the terms of the unsecured Revolver is dependent upon our continued compliance with the financial and other covenants. At December 31, 2025, we had $1.2 billion of availability on the Revolver, $9.2 million of outstanding letters of credit and other obligations which reduce availability, and there were no borrowings outstanding.
The financial covenants under our Facility state that we must maintain an interest coverage ratio of not less than 2.50:1.00. Our interest coverage ratio is calculated by dividing our last-twelve-months (LTM) consolidated EBITDA as defined in the Facility (earnings before interest, taxes, depreciation, amortization, and certain other non-cash transactions as defined in the Facility) by our LTM gross interest expense, less amortization of financing fees. In addition, a debt to capitalization ratio of not more than 0.60:1.00 must be maintained. At December 31, 2025, our interest coverage ratio and debt to capitalization ratio were 13.33:1.00 and 0.32:1.00, respectively. We were in compliance with these covenants at December 31, 2025, and we anticipate we will continue to be in compliance during the next twelve months.
Working Capital (representing excess of current assets over current liabilities). We generated cash flow from operations of $1.4 billion in 2025 compared to $1.8 billion in 2024. Working capital increased $1.1 billion, or 33%,
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during 2025 to $4.4 billion at December 31, 2025, due to a $265.5 million increase in accounts receivable, as well as a $624.8 million dollar increase in inventories, primarily within our aluminum operations segment as our recycled aluminum flat rolled products mill began commissioning and operations in the second half of 2025.
Capital Investments. During 2025, we invested $948.0 million in property, plant and equipment, primarily within our aluminum operations and steel operations segments, compared with $1.9 billion invested during 2024. Our liquidity of $2.2 billion and anticipated future operating cash flow generation is sufficient to provide for our planned 2026 capital requirements.
Cash Dividends. As a reflection of continued confidence in our current and future cash flow generation capability and financial position, we increased our quarterly cash dividend by 9% to $0.50 per share in the first quarter of 2025 (from $0.46 per share for each quarter in 2024), resulting in declared cash dividends of $294.1 million during 2025, compared to $284.1 million during 2024. We paid cash dividends of $291.2 million and $282.6 million during 2025 and 2024, respectively. Our board of directors approves the payment of dividends on a quarterly basis. The determination to pay cash dividends in the future is at the discretion of our board of directors, after taking into account various factors provided by executive management, including our financial condition, results of operations, outstanding indebtedness, current and anticipated cash needs and growth plans.
Other. Our board of directors has authorized share repurchase programs during prior years and the current year, the most recent of which occurred in February 2025 for a program of up to $1.5 billion of the company’s common stock. Under the share repurchase programs, purchases take place as and when we determine in open market or private transactions made based upon the market price of our common stock, the nature of other investment opportunities or growth projects, our cash flows from operations, and general economic conditions. The share repurchase programs do not require us to acquire any specific number of shares, and may be modified, suspended, extended, or terminated by us at any time. The share repurchase programs do not have an expiration date. There were $900.9 million and $1.2 billion of share repurchases during 2025 and 2024, respectively. As of December 31, 2025, we had $801.0 million remaining available to purchase under the February 2025 share repurchase program. See Part II, Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities for additional information.
Our ability to meet our debt service obligations and reduce our total debt will depend upon our future performance which, in turn, will depend upon general economic, financial, and business conditions, along with competition, legislation and regulatory factors that are largely beyond our control. In addition, we cannot assure that our operating results, cash flows, access to credit markets and capital resources will be sufficient for repayment of our indebtedness in the future. We believe that based upon current levels of operations and anticipated growth, cash flows from operations, together with other available sources of funds, including borrowings under our Facility, if necessary, will be adequate for the next twelve months for making required payments of principal and interest on our indebtedness, funding working capital requirements, and funding anticipated capital expenditures.
Contractual Obligations and Other Long-Term Liabilities
We have the following minimum commitments under contractual obligations, including purchase obligations, as defined by the Securities and Exchange Commission. A “purchase obligation” is defined as an agreement to purchase goods or services that is enforceable and legally binding and that specifies all significant terms, including fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction.
Long-term debt and estimated interest. Refer to Note 3. Long-Term Debt to the consolidated financial statements elsewhere in this report for our long-term debt maturities. Estimated interest payments on our senior unsecured notes were determined based on their outstanding balances through maturity at their contractual interest rates, as detailed in Note 3. Estimated interest payments also include a 0.175% commitment fee on our available Revolver, and an average interest rate of 5.44% on our other debt of $36.6 million. Our estimated interest payments are $180.5 million, $177.4 million, $168.5 million, $144.6 million, and $129.9 million, for the years 2026 through 2030, respectively, and $1.1 billion thereafter.
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Purchase obligations. We have commitments for the purchase of commodities such as electricity, water, natural gas and its transportation services, fuel, air products, zinc, and electrodes. Refer to Note 8. Commitments and Contingencies to the consolidated financial statements elsewhere in this report for this information.
Construction commitments. We have firm contracts with various vendors for the completion of certain construction projects at our various divisions at December 31, 2025. Refer to Note 8. Commitments and Contingencies to the consolidated financial statements elsewhere in this report for this information.
Lease commitments. We have entered into operating leases relating principally to transportation and other equipment, and some real estate. Refer to Note 11. Leases to the consolidated financial statements elsewhere in this report for this information.
Unrecognized tax benefits. We expect to make cash outlays in the future related to our unrecognized tax benefits; however, due to the uncertainty of the timing, we are unable to make reasonably reliable estimates regarding the period of cash settlement with the respective taxing authorities. Refer to Note 4. Income Taxes to the consolidated financial statements elsewhere in this report for this information.
Other Matters
Environmental and Other Contingencies
We have incurred, and in the future will continue to incur, capital expenditures and operating expenses for matters relating to environmental control, remediation, monitoring, and compliance. During 2025, we incurred costs related to the monitoring and compliance of environmental matters in the amount of approximately $60.4 million and capital expenditures related to environmental compliance of approximately $10.0 million. Of the costs incurred during 2025 for monitoring and compliance, approximately 72% were related to the normal transportation and disposal 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 $9.3 million at all of our facilities during 2025. We have an accrual of $4.4 million recorded for environmental remediation related to our metals recycling operations, $2.6 million related to our idled Minnesota ironmaking operations, and $566,000 related to our steel operations. We believe, apart from our dependence on environmental construction and operating permits for our existing and any future manufacturing facilities, that compliance with current environmental laws and regulations is not likely to have a materially adverse effect on our financial condition, results of operations, or liquidity. However, environmental laws and regulations evolve and change, and we may become subject to more stringent environmental laws and regulations in the future, such as the impact of various governmental legislatures and agencies introducing regulatory changes in response to the potential of climate change.
Critical Accounting Estimates
Management’s Discussion and Analysis of Our Financial Condition and Results of Operations is based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. We review the accounting estimates we use in reporting our financial results on a regular basis. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent liabilities. We evaluate the appropriateness of these estimations and judgments on an ongoing basis. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Results may differ from these estimates due to actual outcomes being different from those on which we based our assumptions. We believe the following critical accounting estimates affect our more significant judgments and estimates used in the preparation of our consolidated financial statements.
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Impairments of Long-Lived Tangible and Definite-Lived Intangible Assets. We review long-lived assets for impairment whenever events or changes in circumstances indicate the carrying amount of such assets may not be fully recoverable. Impairment losses are recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amounts. The impairment loss is measured by comparing the fair value of the asset to its carrying amount. We consider various factors and determine whether an impairment test is necessary, including by way of examples, a significant and prolonged deterioration in operating results and/or projected cash flows, significant changes in the extent or manner in which an asset is used, technological advances with respect to assets which would potentially render them obsolete, our strategy and capital planning, and the economic environment in markets to be served. When determining future cash flows, and, if necessary, fair value, we must make judgments as to the expected utilization of assets and estimated future cash flows related to those assets. We consider historical and anticipated future results, general economic and market conditions, the impact of planned business and operational strategies, and all other available information at the time the estimates are made. Those estimates and judgments may or may not ultimately prove accurate. There were no material indicators of impairment or impairment charges recorded during 2025, 2024, or 2023.
Goodwill.
Our goodwill, relating to various business combinations, consisted of the following at December 31, 2025 and 2024 (in thousands):
| | | | | | |
| | | | | | |
| Steel Operations Segment | | $ | 272,133 | | |
| Aluminum Operations Segment | | | 14,000 | | |
| Metals Recycling Operations Segment | | | 189,413 | | |
| Steel Fabrication Operations Segment | | | 1,925 | | |
| | | $ | 477,471 | | |
Recent insider activity
| Date | Insider | Role | Action | Shares | Price | Value |
|---|---|---|---|---|---|---|
| 2026-06-05 | Anderson James Stanley | Senior Vice President | Sell | -10,000 ×4 | $268.70 | -$2,687,030 |
| 2026-05-13 | Graham Christopher A | Senior Vice President | Sell | -9,000 ×3 | $236.81 | -$2,131,290 |
| 2026-05-12 | Poinsatte Richard A | Senior Vice President | Sell | -2,300 | $234.11 | -$538,453 |
| 2026-04-23 | Cornew Kenneth W. | Director | Sell | -5,000 ×2 | $224.87 | -$1,124,358 |
| 2026-04-23 | Alvarez Miguel | Senior Vice President | Sell | -4,825 ×3 | $225.58 | -$1,088,428 |
Source: SEC Form 4 filings.
Next expected filings
- ~2026-08-13 10-Q expected by 2026-08-14 (in 59 days)
- ~2026-10-26 10-Q expected by 2026-10-27 (in 133 days)
- ~2027-02-27 10-K expected by 2027-03-01 (in 257 days)
- ~2027-04-29 10-Q expected by 2027-04-30 (in 318 days)
Predicted from historical filing cadence; not an SEC commitment.
Recent SEC filings
- 2026-05-08 8-K Shareholder Vote Results; Other Events; Financial Statements and Exhibits
- 2026-04-27 10-Q Quarterly Report
- 2026-04-21 8-K Earnings Release; Financial Statements and Exhibits
- 2026-03-27 8-K Officer/Director Change; Regulation FD Disclosure; Financial Statements and Exhibits
- 2026-02-27 10-K Annual Report
- 2026-02-23 8-K Other Events; Financial Statements and Exhibits
- 2026-01-27 8-K Earnings Release; Financial Statements and Exhibits
- 2025-12-23 8-K Material Agreement Entered
- 2025-12-02 8-K Other Events; Financial Statements and Exhibits
- 2025-11-21 8-K Material Agreement Entered; Material Financial Obligation; Other Events; Financial Statements and Exhibits
- 2025-11-12 8-K Other Events; Financial Statements and Exhibits
- 2025-11-10 8-K Other Events; Financial Statements and Exhibits
- 2025-10-24 10-Q Quarterly Report
- 2025-10-21 8-K Earnings Release; Financial Statements and Exhibits
- 2025-09-30 8-K/A Officer/Director Change