Name: Steel Dynamics Inc. (NASDAQ:STLD) | Cash Flow Statement
Creator: Stock Analysis on Net

Cash Flow Statement

The cash flow statement provides information about a company cash receipts and cash payments during an accounting period, showing how these cash flows link the ending cash balance to the beginning balance shown on the company balance sheet.

The cash flow statement consists of three parts: cash flows provided by (used in) operating activities, cash flows provided by (used in) investing activities, and cash flows provided by (used in) financing activities.

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Steel Dynamics Inc., consolidated cash flow statement

US$ in thousands

12 months ended:	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Net income	3,246,814)	570,828)	677,900)	1,255,805)	805,796)
Depreciation and amortization	347,653)	325,789)	321,082)	317,198)	298,999)
Asset impairment charges	—)	19,409)	—)	—)	—)
Equity-based compensation	57,715)	55,598)	47,631)	43,317)	36,197)
Deferred income taxes	322,007)	47,808)	51,721)	61,827)	(135,899)
Other adjustments	(3,240)	30,974)	1,413)	(1,245)	14,068)
Accounts receivable	(944,516)	(111,920)	237,805)	(145,873)	(139,054)
Inventories	(1,685,834)	(150,596)	217,866)	(246,213)	(242,883)
Other assets	(2,491)	(1,547)	13,735)	(3,475)	4,188)
Accounts payable	557,735)	182,509)	(86,445)	37,904)	96,062)
Income taxes receivable/payable	(105,921)	32,551)	(12,095)	26,471)	(33,889)
Accrued expenses	414,214)	(14,371)	(74,323)	69,753)	36,021)
Changes in certain assets and liabilities	(1,766,813)	(63,374)	296,543)	(261,433)	(279,555)
Adjustments to reconcile net income to net cash provided by operating activities	(1,042,678)	416,204)	718,390)	159,664)	(66,190)
Net cash provided by operating activities	2,204,136)	987,032)	1,396,290)	1,415,469)	739,606)
Purchases of property, plant and equipment	(1,006,239)	(1,198,055)	(451,945)	(239,390)	(164,935)
Purchases of short-term investments	—)	(149,359)	(396,159)	(268,783)	—)
Proceeds from maturities of short-term investments	—)	411,533)	362,768)	40,000)	—)
Acquisition of business, net of cash acquired	—)	(60,012)	(97,106)	(433,998)	(6,192)
Other investing activities	6,819)	2,634)	5,756)	6,907)	32,022)
Net cash used in investing activities	(999,420)	(993,259)	(576,686)	(895,264)	(139,105)
Issuance of current and long-term debt	1,516,556)	2,523,356)	1,573,962)	445,607)	620,041)
Repayment of current and long-term debt	(1,522,002)	(2,177,527)	(1,264,152)	(455,491)	(609,914)
Dividends paid	(212,968)	(209,248)	(200,271)	(168,913)	(145,565)
Purchases of treasury stock	(1,060,632)	(106,529)	(348,608)	(523,569)	(252,242)
Other financing activities	(50,423)	(37,100)	(27,561)	(18,501)	(25,655)
Net cash used in financing activities	(1,329,469)	(7,048)	(266,630)	(720,867)	(413,335)
Increase (decrease) in cash and equivalents, and restricted cash	(124,753)	(13,275)	552,974)	(200,662)	187,166)
Cash and equivalents, and restricted cash at beginning of period	1,374,122)	1,387,397)	834,423)	1,035,085)	841,483)
Cash and equivalents, and restricted cash at end of period	1,249,369)	1,374,122)	1,387,397)	834,423)	1,028,649)

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).

Operating cash flow demonstrates an overall upward trajectory from 2017 to 2021, characterized by a significant surge in the final year. While net income reached a peak of 3.24 billion USD in 2021, net cash provided by operating activities was lower at 2.20 billion USD. This discrepancy is primarily attributed to a substantial increase in working capital requirements, specifically a sharp rise in inventories and accounts receivable during the 2021 fiscal year, which acted as a significant drag on cash conversion.

Operating Performance and Working Capital: Net income exhibited volatility between 2017 and 2020 before expanding rapidly in 2021. The reconciliation of net income to operating cash flow reveals that in 2021, the company experienced a negative adjustment of 1.76 billion USD in assets and liabilities. This indicates that a substantial portion of the period's profitability was absorbed by operational growth and inventory accumulation rather than being converted into liquid cash.
Capital Investment Trends: A strategic shift toward aggressive capital expansion is observable beginning in 2020. Purchases of property, plant, and equipment increased from a historical average of approximately 278 million USD between 2017 and 2019 to over 1 billion USD annually in both 2020 and 2021. Net cash used in investing activities remained consistently negative, reflecting a sustained commitment to infrastructure and capacity expansion.
Financing and Shareholder Returns: Financing activities are characterized by high debt turnover and increasing shareholder distributions. Dividends paid grew steadily from 145.5 million USD in 2017 to 212.9 million USD in 2021. A notable shift occurred in 2021, where treasury stock purchases escalated to 1.06 billion USD, marking a significant increase in capital return via share buybacks compared to the 106.5 million USD spent in 2020.
Liquidity and Cash Position: Despite the combination of heavy capital expenditures and aggressive share repurchases, the company maintained a stable liquidity profile. The cash and equivalents balance at the end of the period remained relatively consistent across the five-year span, ending 2021 at 1.24 billion USD. This stability suggests that the increased investment and financing outflows were well-funded by the surge in operating cash flows.

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