Steel Dynamics Inc. (NASDAQ:STLD)

Land and improvements

The value of land and improvements showed a steady increase over the five-year period, rising from $314,854 thousand in 2017 to $350,898 thousand in 2021. This progression indicates a consistent but moderate investment or appreciation in land-related assets.

Buildings and improvements

Buildings and improvements also exhibited a gradual upward trend, growing from $723,504 thousand in 2017 to $873,131 thousand in 2021. The incremental increases suggest ongoing development or upgrades to building infrastructure on an annual basis.

Plant, machinery and equipment

This category experienced a notable growth, increasing from $4,035,717 thousand in 2017 to $5,193,405 thousand in 2021. The rise reflects significant capital expenditures or expansion in operational capacity, particularly evident in larger year-over-year increases between 2019 and 2021.

Construction in progress

Construction in progress demonstrated the most pronounced growth among all asset categories, escalating sharply from $91,433 thousand in 2017 to $1,839,110 thousand in 2021. There was a particularly large jump from 2019 onwards, which may indicate major ongoing projects or strategic investments transitioning into fixed assets.

Property, plant and equipment, gross

The gross value of property, plant, and equipment followed an increasing trend consistent with the individual components, climbing from $5,165,508 thousand in 2017 to $8,256,544 thousand in 2021. This overall increase highlights the continuous expansion of the company's asset base during the period.

Accumulated depreciation

Accumulated depreciation has increased in magnitude (more negative) each year, moving from -$2,489,604 thousand in 2017 to -$3,505,114 thousand in 2021. This trend reflects the amortization of assets over time, consistent with the growth in gross property, plant, and equipment values.

Property, plant and equipment, net

The net property, plant, and equipment, which accounts for accumulated depreciation, revealed a strong upward trend, growing from $2,675,904 thousand in 2017 to $4,751,430 thousand in 2021. Notably, the net value experienced significant increases after 2019, indicating substantial asset additions outpacing depreciation during the latter years.

Average Age Ratio

The average age ratio demonstrates a declining trend from 51.33% in 2017 to 44.34% in 2021. This reduction indicates a relative decrease in the age of the property, plant, and equipment compared to their estimated total useful life over the analyzed periods, suggesting newer assets or asset replacements are being incorporated more frequently.

Estimated Total Useful Life

There is a consistent increase in the estimated total useful life of assets from 18 years in 2017 to 25 years in 2021. This upward trend implies an extension in the expected operational lifespan of the equipment and facilities, which may result from improvements in maintenance, technological upgrades, or changes in asset valuation policies.

Estimated Age (Time Elapsed Since Purchase)

The estimated age of the assets shows a gradual increase from 9 years in 2017 to 11 years in 2021. Despite the increase in estimated total useful life, the assets have aged slightly, indicative of a stable asset base with limited rapid turnover.

Estimated Remaining Life

The estimated remaining life of the assets rises steadily from 9 years in 2017 to 14 years in 2021. This reflects the combined effect of increasing total useful life and relatively moderate aging, pointing to an improving outlook on the productivity and usability duration of the company's property, plant, and equipment.

Accumulated Depreciation

The accumulated depreciation shows a consistent upward trend over the five-year period, increasing from approximately US$2,489 million at the end of 2017 to about US$3,505 million by the end of 2021. This steady rise indicates ongoing wear and tear or usage of the assets, reflecting aging or extensive utilization of property, plant, and equipment.

Property, Plant and Equipment, Gross

The gross value of property, plant, and equipment demonstrates significant growth, rising from about US$5,166 million in 2017 to roughly US$8,256 million in 2021. The most notable increase occurs between 2019 and 2020, where the value jumps by approximately US$1,207 million, suggesting considerable capital investments or asset acquisitions during this period.

Land and Improvements

The value of land and improvements shows a modest but steady increase from around US$315 million in 2017 to nearly US$351 million in 2021. This gradual rise reflects ongoing investments or revaluations in land and associated improvements, albeit at a much slower pace compared to the overall property, plant, and equipment assets.

Average Age Ratio

The average age ratio, representing the proportion of accumulated depreciation relative to gross property, plant, and equipment, declines from approximately 51.33% in 2017 to 44.34% in 2021. This decreasing trend suggests that the asset base is becoming relatively younger, likely due to new acquisitions outpacing depreciation or significant replacements of older assets.

The analysis of property, plant, and equipment (PPE) data over the five-year period reveals several notable trends. The gross value of PPE has shown consistent growth year over year, increasing from approximately $5.17 billion at the end of 2017 to about $8.26 billion by the end of 2021. This steady upward trend indicates ongoing investments in the expansion or enhancement of physical assets.

Within the PPE category, land and improvements have also experienced gradual increases, though at a much slower pace compared to the overall PPE gross value. The value increased from roughly $315 million in 2017 to approximately $351 million in 2021, suggesting relatively modest acquisitions or improvements in land-related assets.

The depreciation expense has risen steadily throughout the period, moving from $263.7 million in 2017 to $311.4 million in 2021. This increase is proportionate to the growth in gross PPE, signaling that depreciation is keeping pace with asset additions. The progression in depreciation expense reflects an expanding asset base and consistent amortization policies.

The estimated total useful life of the assets has lengthened over the years, increasing from 18 years in 2017 to 25 years by 2021. This could indicate a reassessment of asset longevity, potentially due to improved maintenance, changes in asset composition, or shifts in company accounting policies. A longer useful life generally decreases annual depreciation charges per unit cost but also reflects confidence in the durability of assets.

Accumulated Depreciation

The accumulated depreciation displays a consistent upward trend from 2017 to 2021, increasing each year from approximately 2.49 billion USD to 3.51 billion USD. This steady growth indicates ongoing depreciation of the company's assets over the analyzed period, reflecting the wear and use of property, plant, and equipment.

Depreciation Expense

Depreciation expense also rises progressively year-over-year, starting at around 263.7 million USD in 2017 and reaching about 311.4 million USD by 2021. The incremental increase suggests that either the company's capital asset base is growing, resulting in higher depreciation charges, or changes in asset utilization and depreciation methods are leading to higher expense recognition.

Time Elapsed Since Purchase

The time elapsed since purchase remains relatively stable, shifting slightly from 9 years in 2017 to 11 years by 2021. This modest increase implies an aging asset base, which is consistent with the increasing accumulated depreciation observed during the period.

Overall Analysis

The data reveals a pattern of gradual asset aging alongside increasing depreciation charges. The cumulative effect is a steadily rising accumulated depreciation balance, reflecting both the passage of time and continued asset consumption. The increase in depreciation expense may also hint at asset additions or changes in depreciation assumptions, warranting further investigation into asset acquisitions or disposals during these years.

Property, Plant, and Equipment, Net

The net value of property, plant, and equipment exhibited a consistent upward trend from 2017 through 2021. There was an increase from approximately 2.68 billion US dollars in 2017 to around 4.75 billion US dollars by the end of 2021. Notably, the largest year-over-year growth occurred between 2019 and 2020, with an increase exceeding 900 million US dollars, followed by a continued significant increase from 2020 to 2021.

Land and Improvements

The value of land and improvements also demonstrated steady growth over the period, rising from roughly 315 million US dollars in 2017 to about 351 million US dollars at the end of 2021. The increments were relatively modest and consistent year-over-year, indicating stable investment or appreciation in land-related assets without sharp fluctuations.

Depreciation Expense

Depreciation expense showed a gradual increase each year, rising from 263.7 million US dollars in 2017 to 311.4 million US dollars in 2021. The increments were moderate but consistent, suggesting ongoing asset usage and aging contributing to higher annual depreciation charges.

Estimated Remaining Life of Assets

The estimated remaining life of the assets extended over the five-year period, increasing from 9 years at the end of 2017 and 2018 to 14 years by the end of 2021. This trend indicates either the acquisition of newer assets with longer useful lives or reassessment and extension of the useful lives of existing assets, which could affect depreciation profiles moving forward.