Analysis of Debt
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- Common-Size Income Statement
- Common-Size Balance Sheet: Assets
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Solvency Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Common Stock Valuation Ratios
- Enterprise Value to FCFF (EV/FCFF)
- Capital Asset Pricing Model (CAPM)
- Operating Profit Margin since 2005
- Current Ratio since 2005
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Total Debt (Carrying Amount)
Steel Dynamics Inc., balance sheet: debt
US$ in thousands
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
- Current Maturities of Long-Term Debt
- The current maturities of long-term debt exhibited fluctuations over the five-year period. Starting at 28,795 thousand USD in 2017, the amount decreased to 24,234 thousand USD in 2018. However, a notable increase occurred in 2019, with the figure rising sharply to 89,356 thousand USD. This higher level was maintained in 2020 with a slight reduction to 86,894 thousand USD, followed by an increase again to 97,174 thousand USD in 2021. The overall trend indicates a significant upward movement and increasing short-term debt obligations in the later years.
- Long-Term Debt, Excluding Current Maturities
- The long-term debt excluding current maturities showed a steady upward trend from 2017 through 2020. Beginning at 2,353,145 thousand USD in 2017, the amount remained virtually unchanged in 2018 at 2,352,489 thousand USD. From 2018 onward, the debt increased consistently: 2,644,988 thousand USD in 2019, 3,015,782 thousand USD in 2020. However, in 2021, the figure slightly decreased to 3,008,702 thousand USD. This suggests an overall expansion of long-term debt commitments with some stabilization in the most recent period.
- Total Long-Term Debt, Including Current Maturities (Carrying Amount)
- Total long-term debt, inclusive of current maturities, mirrored the upward trajectory seen in the individual components. The carrying amount stood at 2,381,940 thousand USD in 2017 and slightly declined to 2,376,723 thousand USD in 2018. Thereafter, a marked increase occurred: 2,734,344 thousand USD in 2019, 3,102,676 thousand USD in 2020, and a marginal rise to 3,105,876 thousand USD in 2021. This trend reflects the cumulative effect of increasing long-term debt and elevated current maturities.
- Summary of Debt Trends
- The data reflects a significant growth in total long-term debt over the five-year span, primarily driven by increases in both current maturities and the long-term portion excluding current maturities. The substantial rise in current maturities from 2018 onwards signals a growing amount of debt due in the short term, which may impact liquidity and refinancing requirements. Meanwhile, the consistent growth in non-current long-term debt up to 2020 shows an expansion in financing through long-term obligations, with a slight reduction in 2021 potentially indicating early repayments or refinancing strategies. Overall, the company's debt profile has become larger and more concentrated towards higher short-term repayment obligations by the end of the period.
Total Debt (Fair Value)
| Dec 31, 2021 | |
|---|---|
| Selected Financial Data (US$ in thousands) | |
| Total long-term debt, including current maturities (fair value) | |
| Financial Ratio | |
| Debt, fair value to carrying amount ratio | |
Based on: 10-K (reporting date: 2021-12-31).
Weighted-average Interest Rate on Debt
Weighted-average interest rate on long-term debt:
| Interest rate | Debt amount1 | Interest rate × Debt amount | Weighted-average interest rate2 |
|---|---|---|---|
| Total | |||
Based on: 10-K (reporting date: 2021-12-31).
1 US$ in thousands
2 Weighted-average interest rate = 100 × ÷ =
Interest Costs Incurred
Steel Dynamics Inc., interest costs incurred
US$ in thousands
| 12 months ended: | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest expense | |||||||||||
| Capitalized interest on construction in progress assets | |||||||||||
| Interest costs incurred |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
The analysis of the annual interest costs incurred reveals distinct trends over the five-year period from 2017 to 2021.
- Interest Expense
- The interest expense shows a gradual decrease over the years. Starting at approximately 134.4 million USD in 2017, it declines to 126.6 million USD in 2018, then stabilizes around 127.1 million USD in 2019. A more pronounced reduction occurs in 2020, dropping to about 94.9 million USD, followed by a further decline to 57.2 million USD in 2021. This steady downward trend suggests effective cost control or favorable refinancing conditions leading to lower interest charges.
- Capitalized Interest on Construction in Progress Assets
- This component exhibits a strong upward trajectory. From a modest 1.7 million USD in 2017, capitalized interest increases to 2.9 million USD in 2018 and further rises to 5.5 million USD in 2019. The growth accelerates markedly in 2020 reaching 23.9 million USD, and peaks at 50.5 million USD in 2021. This substantial increase indicates a significant rise in ongoing construction projects or capital investments during this period, leading to more interest being allocated to asset capitalization rather than expensed immediately.
- Interest Costs Incurred
- The total interest costs incurred, which is the summation of interest expense and capitalized interest, reveals a declining trend albeit less steep than the interest expense alone. Beginning at approximately 136.1 million USD in 2017, the figure decreases slightly to 129.5 million USD in 2018 and marginally rises to 132.6 million USD in 2019. Subsequently, it decreases to 118.8 million USD in 2020 and further to 107.7 million USD by 2021. This pattern suggests that while overall interest costs are reducing, a growing share is being capitalized, shifting some interest costs from the income statement to the balance sheet.
Adjusted Interest Coverage Ratio
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
2021 Calculations
1 Interest coverage ratio (without capitalized interest) = EBIT ÷ Interest expense, net of capitalized interest
= ÷ =
2 Adjusted interest coverage ratio (with capitalized interest) = EBIT ÷ Interest costs incurred
= ÷ =
- Interest Coverage Ratio (without capitalized interest)
- The interest coverage ratio exhibited significant variability over the analyzed period. Starting at 7.96 in 2017, it increased substantially to 13.79 in 2018, indicating an improved ability to cover interest expenses with earnings. However, this ratio declined to 7.89 in 2019 and showed a modest increase to 8.44 in 2020. Notably, there was a dramatic surge to 74.57 in 2021, suggesting a markedly enhanced capacity to meet interest obligations during that year.
- Adjusted Interest Coverage Ratio (with capitalized interest)
- Similar to the unadjusted ratio, the adjusted interest coverage ratio rose from 7.86 in 2017 to 13.48 in 2018, indicating improved financial coverage of interest expenses. It then decreased to 7.56 in 2019 and further declined to 6.74 in 2020, reflecting a weakening trend over these two years. In 2021, the ratio increased substantially to 39.61, although this peak is less pronounced compared to the unadjusted measure. This suggests that capitalized interest impacts the overall coverage capacity, particularly in 2021.