STLD 10-K & 10-Q changes, risk factors and insider trading

Our industry,industries, as well as the industries of many of our customers and suppliers upon whom we are dependent, isare affected by domestic and global economic factors including periods of slower than anticipated economic growth and the risk of a recession.

Our financial results are substantially dependent not only upon overall economic conditions in the United States and globally, including North America, Europe and in Asia, but also as they may affect one or more of the industries upon which we depend for the sale of our products. Global or domestic actions or conditions, including political actions, proposed or actual trade policies or restrictions, including tariffs or quotas, proposed or actual changes in tax laws, including the imposition of new tax laws or sunset of certain tax laws, 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,industries, or those of our customers or suppliers upon whom we are dependent. Additionally, periods of slower than anticipated economic growth could reduce customer confidence and adversely affect demand for our products and further adversely affect our business, results of operations, financial condition and cash flows. Metals industries have historically been vulnerable to significant declines in consumption and product pricing during periods of economic downturn or continued uncertainty.

Our business is also dependent upon certain industries, such as construction, automotive, manufacturing, transportation, heavy and agricultureagricultural equipment, energyenergy, food packaging, beverage can and pipe and tube (including OCTG) markets, and many of these industries are also cyclical in nature and may experience supply chain disruptions. Therefore, these industries may experience their own fluctuations in demand for our products based on such things as economic conditions, interest rates, supply chain disruptions, raw material and energy costs, consumer demand, the rate of inflation and infrastructure funding decisions by governments. Many of these factors are beyond our control. As a result of volatility in our industryindustries or in the industries we serve, we may have difficulty increasing or maintaining our level of sales or profitability. A downturn in our industryindustries or the industries we serve may adversely affect our business, results of operations, financial condition and cash flows.

A prospective decline in consumer and business confidence and spending, which is often coupled with reductions in the availability of credit or increased cost of credit and interest rates, as well as volatility in the capital and credit markets, may adversely affect the business and economic environment in which we operate and the profitability of our business. 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. 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. A disruption of the credit markets could also result in financial instability offor some of our customers and suppliers. The consequences of such adverse effects could include the interruption of production at the facilities of our customers, the reduction, delay or cancellation of customer orders, delays or interruptions of the supply of raw materials we purchase, and bankruptcy of customers, suppliers or other creditors. Any of these events may adversely affect our business, results of operations, financial condition 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, at prices that are lower than prevailing domestic prices, and sometimes at or below their cost of production. 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. 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. This, in turn, has led to and may further lead to increased domestic demand for ferrous scrap resulting in increased scrap prices. Our steel operations financial condition, results of operations, financial condition and cash flows are driven primarily from the metal spread achieved from the price we sell steel and steel products compared to the price of our metallic raw materials, including scrap. During prolonged periods of steel and steel products overcapacity, leading to lower selling prices, combined with high demand for scrap and raw materials, leading to higher buying prices, our metal spreads could be compressed, which may adversely affect our business, results of operations, financial condition and cash flows.

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. Some foreign steel producers are owned, controlled or subsidized by foreign governments. As a result, decisions by these producers with respect to their production, sales and pricing are sometimes influenced to a greater degree by political and economic policy considerations than by prevailing market conditions, realities of the marketplace or consideration of profit or loss. 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. A higher volume of steel imports into the United States tends to occur at depressed prices when foreign steelmaking countries experience periods of economic difficulty, decreased demand for steel products or excess capacity. The global steelmaking overcapacity is exacerbated by Chinese steel production capacity that far exceeds that country’s demand and has made China a major global exporter of steel, resulting in weakened global steel pricing than otherwise would be expected. 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. Should current or new tariffs, duties or quotas expire or be relaxed, repealed or circumvented by importers of steel and steel products, or should trade agreements be renegotiated, downward pressure may be exerted on United States steel and steel products prices, which may adversely affect our steel business, results of operations, financial condition and cash flows.

Our level of production and our sales and earnings are subject to significant fluctuations as a result of the cyclical nature of the steelmetals industryindustries and some of the other industries we serve.

The steel and aluminum manufacturing business is cyclical in nature, and the selling price of the steelproducts 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. The timing, magnitude and duration of these cycles and the resulting price fluctuations are difficult to predict. The sale of our manufactured steel and aluminum products is directly affected by demand for our products in other cyclical industries, such as construction, automotive, manufacturing, transportation, heavy and agricultureagricultural equipment, energyenergy, food packaging, beverage can and pipe and tube (including OCTG) markets. 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 or aluminum into the United States, which may decrease our sales, margins and profitability.

Steel and aluminum producers require large amounts of raw materials, including ferrous and aluminum scrap metal and scrap substitute products such as pig iron and pelletized iron, and other supplies such as zinc, graphite electrodes and ferroalloys. The principal raw materialmaterials of our EAF steel operations isand aluminum operations are recycled ferrous scrap derived from, among other sources, “home scrap,” generated internally at steel and aluminum mills themselves; industrial scrap, generated as a by-product of manufacturing; obsolete scrap, recycled from end-of-life automobiles, appliancesappliances, machinery, food packaging and machineryused beverage cans; and demolition scrap, recycled from obsolete structures, containers and machines. The prices for scrap are subject to market forces largely beyond our control, including demand by United States and foreign steel and aluminum producers, freight costs and speculation. The scrap metal recycling industry has historically been, and is expected to remain, highly cyclical and the prices for scrap have varied significantly in the past, may vary significantly in the future and do not necessarily fluctuate in tandem with the price of steel.steel and aluminum. Moreover, some of our integrated steel producer competitors are not as dependent as we are on ferrous scrap as a part of their raw material melt mix, which, during periods of high scrap costs relative to the cost of blast furnace iron used by the integrated producers, give them a raw material cost advantage over EAF mills. 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 ferrous scrap prices. Additionally, the construction of any new aluminum flat rolled products mills may also lead to increased demand in aluminum scrap possibly resulting in higher aluminum scrap prices. While our vertical integration intowith theour metals recycling business and our liquid pig-iron operations are expected to enable us to continue being a cost-effective supplier to our own steelmaking and aluminum operations, for some of our metallics requirements, we still rely on other metallics and raw material suppliers, as well as upon general industry supply conditions for the balance of our needs.

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 heightedheightened during times of war or hostilities. 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.

We consume large amounts of energy to melt scrap, reheat semi-finished products for rolling into finished products and perform other steps necessary to our production process. We rely on third parties for the supply of energy resources we require in our production activities. The prices for and availability of electricity, natural gas, oil and other energy resources, including renewable or other clean energy sources, are subject to regulation and volatile market conditions, often affected by weather conditions as well as political, environmental and economic factors beyond our control. 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. Prolonged blackouts, curtailments or disruptions caused byby, among other things, 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.

Customers, investors and regulators have increased their focus on the environment, GHG emissions and sustainability. We are committed to the environment and sustainability. We are taking further action to reduce our environmental footprint through our 2025, 2030,2030 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. To achieve these goals, our operational costs may increaseincrease, and we have had and will continue to have additional capital expenditures, some of which we may not be able to pass along to our customers. 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.

●the use and treatment of groundwater and surface water;

●the remediation of equipment, product, soil andor groundwaterwater contamination;

●the remediation and reclamation of land used in or affected by our operations;

Compliance with environmental laws and regulations, which affect our EAF steelmaking, metals recycling, liquid pig-iron, aluminum, and copper and aluminum production operations, is a significant factor in our business. We are required to obtain and comply with environmental permits and licenses, and failure to obtain or renew or the violation of any permit or license may result in substantial fines and penalties, capital expenditures, operational changes, suspension of operations or the closure of a subject facility. Similarly, delays, increased costs or the imposition of onerous conditions to the securing or renewal of permits may adversely affect these operations.

Uncertainty regarding adequateappropriate pollution control levels, testing and sampling procedures, and new pollution control technology are factors that may increase our future compliance expenditures. We are unable to predict the ultimate cost of future compliance with environmental requirements or their effect on our operations. Although we strive to be in substantial compliance with all applicable laws and regulations, legal requirements frequently change and are subject to interpretation such that regulatory agencies may bring enforcement actions for alleged noncompliance. Private parties might also bring claims against us under citizen suit provisions and/or for property damage or personal injury allegedly resulting from our operations. New laws, regulations and changing interpretations by regulatory authorities, together with uncertainty regarding the application of existing requirements, are among the factors that may increase our future expenditures to comply with environmental requirements. The cost of complying with existing laws or regulations as currently interpreted or reinterpreted in the future, or with future laws or regulations, may adversely affect our results of operations and financial condition.

The global markets in which steel and aluminum companies and scrap processors conduct business are highly competitive and became even more so due to consolidations in the steel and scrapthese industries. Additionally, in many applications, steel competesand aluminum compete with other materials, such as aluminum,aluminum or steel, as the case may be, cement, composites, plastics, carbon fiber, glasstitanium, tin, glass, wood, and wood.paperboard. Increased use of alternative materials for any reason, including as a response to regulations or customer demands, could decrease demand for steel and aluminum or force other steel producers into new products or markets that compete more directly with us, and combined with increased competition could cause us to lose market share, increase expenditures or reduce pricing, any one of which may adversely affect our business, financial condition, results of operations and cash flows.

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. If a substantial number of scrap suppliers cease selling recyclable metal to us, we may be unable to recycle metal at desired levels which may adversely affect our results of operations and financial condition. In addition, a slowdown of industrial or other scrap sources, such as used beverage cans, 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 processprocess, andsell, sell.or consume for our steelmaking or aluminum operations. Further, additional EAF steel mill or aluminum production facility construction or blast furnace mills investing in EAF mills could increase the demand for ferrous and aluminum scrap, potentially resulting in higher scrap prices or periods of decreased scrap supply. Any inability to secure scrap for our EAFsteelmaking steeland millsaluminum operations could adversely affect our business, results of operations, financial condition and cash flows.

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. 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 steelsteel, aluminum or any of our other products for the duration of such interruption. Our customers and suppliers may also store certain of our sensitive information on their information technology systems, which if breached or attacked, could likewise expose our sensitive information. Similarly, information system vendors and software suppliers may experience a cybersecurity or information technology breach that exposes our systems or sensitive data. 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.

Our growth strategy subjects us to various risks. As part of our growth strategy, we may expand existing facilities, enter into new business lines, territories, products or process initiatives, acquire or build additional plants, acquire other businesses and assets, enter into joint ventures, or form strategic alliances that we believe will complement our existing business. These expansions and transactions, including our recycled aluminum flat rolled products mill with an anticipated annual production capacity of 650,000 metric tons of finished products located in Columbus, Mississippi,transactions may involve some or all of the following risks:

● the risk of a newly constructed facility being completed over budget or not on time, including due to equipment delays or labor shortages, or having delays or difficulties with its start-upstart-up, ramp-up or qualification of products;

● the risk of new product development,development and qualification, technology development or customer acquisition and penetration being more costlycostly, time-consuming or difficult than expected;

● the diversion of financial resources or management attention to new operationsoperations, acquisition targets or acquired businesses;

● the risk of becoming involved in labor, commercial, political, regulatory or regulatoryother disputes or litigation related to new operationsoperations, acquisition targets or acquired businesses;

● the risk of contractual or operational liability to other joint venture participants or to third parties as a result of our participation;

Delays in achieving full operational capacity at our Sintonnew Flat Roll Divisionfacilities has adversely affected and may continue to, and any delays in our recycled aluminum flat rolled products mill may,to adversely affect our prospects, business, financial condition, results of operations and cash flows.

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,condition, results of operations or liquidity. For additional information regarding legal proceedings please refer to Item 3. Legal Proceedings.

Interruptions in our production capabilities may adversely affect our production costs, products available for sale and earnings during the affected period. In addition to equipment failures, our facilities are subject to the risk of catastrophic loss due to unanticipated events such as fires, explosions or violent weather conditions. Our manufacturing processes are dependent upon critical pieces of steelmaking equipment, such as our EAFs, continuous casterscasters, aluminum melting, and rolling equipment, some of which are controlled by our information technology systems, as well as electrical equipment, such as transformers. 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 inefficiencies atduring ourthe Sintonstart-up Flatand Rollramp-up Division,of new facilities, including those related to major equipment failures. 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. Delayed delivery of our products to customers who require on-time delivery from us may cause customers to purchase alternative products, reschedule their own production, or incur other incremental costs. Customers may be able to pursue financial claims against us for their incremental costs, and we may incur costs to correct such problems in addition to any liability resulting from such claims. Interruptions may also harm our reputation among actual and potential customers, potentially resulting in a loss of business. These disruptions may adversely affect our business, financial condition, results of operations and cash flows.

Our seniorexisting unsecureddebt creditagreements facility contains,contain, and any future financing agreements may contain, restrictive covenants that may limit our flexibility.

Occasionally, assumptions that we have made regarding products or businesses we have acquired or sought to develop, about the sustainability of markets in which we sought to exploit,participate, or about industry conditions that underlie our decision making when we elected to capitalize a venture turn out differently than anticipated. In such instances, the fair value of such assets may fall below their carrying value recorded on our balance sheet.

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) pandemics, epidemics, widespread illness or other health issues; (4) the cyclical nature of the steelmetals industryindustries and the industries we serve; (54) 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; (65) cost and availability of electricity, natural gas, oil, and other energy resources are subject to volatile market conditions; (76) increased environmental, greenhouse gas emissions and sustainability considerations from our customers and investors or related regulations; (87) compliance with and changes in environmental and remediation requirements; (98) significant price and other forms of competition from other steel and aluminum producers, scrap processors and alternative materials; (109) availability of an adequate source of supply of scrap for our metals recycling operations; (1110) cybersecurity threats and risks to the security of our sensitive data and information technology; (1211) the implementation of our growth strategy; (1312) our ability to retain, develop and attract key personnel; (1413) litigation and legal compliance; (1514) 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; (1718) our seniorexisting unsecureddebt creditagreements facility contains,contain, and any future financing agreements may contain, restrictive covenants that may limit our flexibility; and (1819) the impacts of impairment charges.

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,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.

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 20242025 decreased $1.2$467.1 billion,million, or 38%,24%, to $1.9$1.5 billion, compared to $3.2$1.9 billion in 2023.2024. Net income attributable to Steel Dynamics, Inc. for 20242025 decreased $913.7$351.5 million, or 37%,23%, to $1.5$1.2 billion, compared to 2023.2024. Diluted earnings per share attributable to Steel Dynamics, Inc. was $9.84$7.99 for 2024,2025, compared to $14.64$9.84 for 2023.2024.

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, 2023,2024, for additional information regarding results of operations for the year ended December 31, 2023,2024, as compared to the year ended December 31, 2022,2023, and segment operating results for 20232024 as compared to 2022. Our 2024 change in reportable segments did not change the discussion previously provided. Refer to the Aluminum Operations segment discussion for additional information.2023.

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,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.,Inc.; warehouse operations in Mexico,Mexico; and a 75% controlling equity interest in SDI Biocarbon Solutions, LLC, a joint venture to construct and operate a biocarbon production facility.LLC. Steel operations accounted for 69%72% and 67%69% of our consolidated net sales during 20242025 and 2023,2024, respectively. See Item 1. Business for further information on Steel Operations segment operations.

Steel Operations Segment Shipments (tons):

Steel Operations Segment Results 20242025 vs. 20232024

During 2024,2025, our steel operations achieved record annual shipments of 12.713.7 million tons (11.412.3 million excluding intra-segment), slightly9% lesshigher than 20232024 totalshipments, recordprimarily shipments.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 stablestrong during 2024,2025, withparticularly as imports declined in the construction,latter automotive,half industrial,of the year. Demand was supported by manufacturing onshoring, infrastructure program funding, lower interest rates, and energythe sectorsincreasing leading demand. In spiteregionalization of strongsupply chains in the US. Despite these favorable market demand,demand conditions, in the face of trade policy uncertainty, average selling prices were modestly lower during 20242025 compared to 2023,2024. as total steelSteel segment average selling prices decreased 4%,1%, or $46$14 per ton, compared to 2023.2024. Net sales for the steel operations segment were 4%7% lowerhigher in 20242025 when compared to 2023,2024, due to lowera average9% steelincrease sellingin pricessegment on consistent volumes.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 decreasedwas $28unchanged on a per net ton,ton or 7%,basis in 20242025 compared to 2023,2024, consistent with overall decreasedsteady 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 long 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 3%2% in 20242025 compared to 2023.2024. Due to metal spread compression, operating income for the steel operations decreased 16%10% to $1.6$1.4 billion in 20242025 compared to 2023.2024.

Metals recycling operations include our OmniSourceOmni ferrous and nonferrous processing, transportation, marketing, brokerage, and scrap management services primarilylocated 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 20242025 and 2023,2024, 62%65% and 62%, respectively, of metals recycling operations ferrous scrap was sold to our own steel mills, whileas our steel mill utilization remainedincreased consistentto 86% in 2025 compared to 81% 2024, with production levels at 81%our andSinton 82%facility inincreasing 2024during and 2023, respectively.2025. Metals recycling operations accounted for 11% of our consolidated net sales during 20242025 and 2023.2024.

Metals Recycling Operations Segment Shipments:

Metals Recycling Operations Segment Results 20242025 vs. 20232024

During 2024,2025, our metals recycling operations continued to benefit from solid domestic steel industry demand, resulting in consistentincreased ferrous and nonferrous scrap shipments compared to 2023.2024. Net sales for our metals recycling operations in 20242025 wereincreased comparable5% compared to 20232024, baseddriven onby consistent shipments. Due to a challenging pricing environment throughout much of 2024,increased ferrous averagevolumes and increased selling prices decreasedfor 7%both whileferrous and nonferrous metals. Ferrous and nonferrous scrap average selling prices increased 10%2% and 7%, respectively, during 20242025 compared to 2023.2024. Ferrous shipments increased 5% and nonferrous shipments decreased 5% in 2025 compared to 2024.

Ferrous metal spreadspreads (which we define as the difference between average selling prices and the cost of purchased scrap) waswere flatflat, andwhile nonferrous metal spreadspreads, primarily aluminum, increased 13%24% duringin 20242025 compared to 2023.2024, with aluminum prices rising in the fourth quarter of 2025. As a result of thethese overallvolume increasedand metalsmetal spreads,spread changes, metals recycling operations operating income increasedin 61%2025 toof $76.8$97.2 million inincreased 202427% comparedfrom to 2023.2024.

Steel fabrication operations include the company’sour 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 girders, steel joistsjoists, joist girders, and steel deck systems used within the non-residential construction industry. Steel fabrication operations accounted for 10%8% and 15%10% of our consolidated net sales during 20242025 and 2023,2024, respectively.

Steel Fabrication Operations Segment Results 20242025 vs. 20232024

Net sales for the steel fabrication operations decreased 37%20% during 20242025 compared to 2023,2024, as average selling prices decreased 31%13% and volumes decreased 8% compared to 2023.2024. OurOrder steelactivity fabricationremained operationsstrong benefitedduring from2025, awith solid non-residential construction market, as evidenced by historically solidour order backlog thatmaintaining extendssolid deeplevels intoand extending through the first half of 20252026, atsupported attractiveby pricingstable levels.and Thehistorically continuedstrong onshoringpricing. ofDemand was largely driven by the commercial, data center, manufacturing, coupled with the robust U.S. infrastructurewarehouse, and Inflationhealthcare Reduction Act programs, supports consistent strong demand for steel joist and deck products.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 5%7% in 2024,2025, as compared to 2023.2024. Due to decreasedLower selling prices per ton more than offsettingoffset decreased steel input costs per ton, resulting in contraction of metal spread (which we define as the difference between average selling prices and the cost of purchased steel) contractedby 41%17% in 20242025 compared to 2023.2024. Metal spread compression coupled with decreased volume resulted in operating income decreasing 58%39% to $407.4 million in 2025, compared to $667.0 million in 2024, compared to $1.6 billion in 2023.2024.

ConsolidatedAluminum Operations Segment Results 20242025 vs. 20232024

Selling, General and Administrative Expenses. Selling, general and administrative expenses of $765.3 million during 2025 increased 15% from $664.1 million during 2024 increased 13% from $588.6 million during 2023 primarily due to an increase in payroll and benefits expense primarily related to theconstruction, growthstart-up, ofand commissioning costs associated with the recycled aluminum operationsflat segmentrolled products mill and satellite recycled aluminum slab centers during 2024.2025. Selling, general and administrative expenses represented 3.8%4.2% and 3.1%3.8% of net sales during 20242025 and 2023,2024, respectively.

Profit sharing expense during 20242025 of $123.0 million decreased 25% from $164.9 million decreased 39% from $272.0 million during 2023,2024, consistent with decreased pretax earnings. This decrease in profit sharing expense was the primary driver of decreased operating loss for our other operations of 20%11% in 20242025 compared to 2023.2024. 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 2024,2025, interest expense of $56.3$70.0 million decreasedincreased 26%24% from $76.5$56.3 million during 2023.2024. TheThis lowerincrease interestis expenseprimarily ina 2024result of higher outstanding long-term debt balances during 2025 compared to 2023 is2024 due to higherour capitalizedissuance interestof senior unsecured notes in 2024March ($66.8and million,November compared to $33.0 million in 2023) related to our ongoing expansion projects, most notably within Aluminum Operations.2025.

Other (Income) Expense, net. Net other income was $87.0 million in 2025, compared to $96.2 million in 2024, compareda todecrease $144.2of $9.2 million in 2023, due primarily to the impact of foreigndecreased currencyinterest exchangeincome ratedue lossesto declining rates of $18.7return millionand lower invested cash balances in 20242025 compared to gains of $10.5 million in 2023, as well as a $21.8 million reduction in interest income on investments in 2024 compared to 2023 due to a decrease in the balance of invested cash during 2024.

Income Tax Expense. During 2024, incomeIncome 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%, decreased 42% compared to the $751.6 million, at an effective income tax rate of 23.3%, during 2023,2024, consistent with decreased pretax earnings. OurIn 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 rate decrease was due primarily to certain discreterates, tax adjustments during the third quarterliabilities, and fourthcash quarters of 2024.taxes. Refer to Note 4. Income Taxes to the consolidated financial statements elsewhere in this report for additional information.

Included in the balance of unrecognized tax benefits at December 31, 2024,2025, are potential benefits of $26.4$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, 2024,2025, we recognized expenseincome from the increasedecrease of interest expense and penalties of $710,000,$340,000, net of tax. In addition to the unrecognized tax benefits noted above, we had $4.2$3.7 million accrued for the payment of interest and penalties at December 31, 2024.2025.

We file income tax returns in the United StatesU.S. federal jurisdiction as well as income tax returns in various state jurisdictions. The tax years 20212022 through 20232025 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. 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 $12.0 million, as a result of the expiration of the statute of limitations and other federal and state income tax audits.

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, and to remain in compliance with environmental laws.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, 2024,2025, is as follows (in thousands):

Our total outstanding debt of $3.2$4.2 billion increased $160.0$980.2 million compared to December 31, 2023,2024, due to our issuance of $600.0 million of senior unsecured5.250% notes due 2035 and $400.0 million of 5.750% notes due 2055 in JulyMarch 20242025 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 forto generalredeem corporateour purposes,$400.0 including the repaymentmillion of 2.400% notes due June 2025 and our 2.800%$400.0 seniormillion of 5.000% notes due December 2024, working capital, capital expenditures, advances for or investments in subsidiaries, acquisitions, redemption2026, and repayment of other outstandinggeneral indebtedness,corporate and purchases of the company’s common stock.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 26.5%32.1% and 25.8%26.5% at December 31, 20242025, and 2023,December 31, 2024, respectively.

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 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. In addition, a debt to capitalization ratio of not more than 0.60:1.00 must be maintained. At December 31, 2024,2025, our interest coverage ratio and debt to capitalization ratio were 21.6813.33:1.00 and 0.270.32:1.00, respectively. We were, therefore,were in compliance with these covenants at December 31, 2024,2025, 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 compared to $3.5 billion in 2023.2024. Working capital decreasedincreased $1.2$1.1 billion, or 26%,33%, during 20242025 to $3.3$4.4 billion at December 31, 2024,2025, due primarily to a $1.4$265.5 billionmillion decreaseincrease in cashaccounts andreceivable, equivalentsas andwell short-termas investmentsa $624.8 million dollar increase in supportinventories, of our capital investmentsprimarily within our aluminum operations segment as our recycled aluminum flat rolled products mill began commissioning and steeloperations operations.in the second half of 2025.

Capital Investments. During 2024,2025, we invested $1.9$948.0 billionmillion in property, plant and equipment, primarily within our aluminum operations and steel operations segments, compared with $1.7$1.9 billion invested during 2023. We are currently executing our plan to invest $2.7 billion in a new state-of-the-art lower-carbon recycled aluminum flat rolled products mill with two new supporting satellite recycled aluminum slab centers, which are being funded by available cash and cash flow from operations. Related expenditures began in the third quarter of 2022 and are expected to continue through 2025.2024. Our liquidity of $2.2 billion and anticipated future operating cash flow generation is sufficient to provide for our planned 20252026 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 8%9% to $0.46$0.50 per share in the first quarter of 20242025 (from $0.425$0.46 per share for each quarter in 20232024), resulting in declared cash dividends of $294.1 million during 2025, compared to $284.1 million during 2024, compared to $280.5 million in 2023.2024. We paid cash dividends of $282.6$291.2 million and $271.3$282.6 million during 20242025 and 2023,2024, respectively. Our board of directors, along with executive management,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,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,years and the current year, the most recent of which occurred in NovemberFebruary 20232025 for a program of up to $1.5 billion of the company’s common stock. In February 2025, our board of directors authorized an additional share repurchase program of up to $1.5 billion of our 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 $1.2$900.9 billionmillion and $1.5$1.2 billion of share repurchases during 20242025 and 2023,2024, respectively. As of December 31, 2024,2025, we had $193.5$801.0 million remaining available to purchase under the NovemberFebruary 20232025 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.

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 6.23%5.44% on our other debt of $28.8$36.6 million. Our estimated interest payments are $116.4$180.5 million, $109.4$177.4 million, $89.0$168.5 million, $83.4$144.6 million, and $82.2$129.9 million, for the years 20252026 through 2029,2030, respectively, and $442.4$1.1 millionbillion thereafter.

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 2024,2025, we incurred costs related to the monitoring and compliance of environmental matters in the amount of approximately $60.2$60.4 million and capital expenditures related to environmental compliance of approximately $4.3$10.0 million. Of the costs incurred during 20242025 for monitoring and compliance, approximately 74%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 $4.9$9.3 million at all of our facilities during 2024.2025. We have an accrual of $3.8$4.4 million recorded for environmental remediation related to our metals recycling operations, $2.6 million related to our idled Minnesota ironmaking operations, and $712,000$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.

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, 2023, or 2022.2023.

Our fourth quarter 2025, 2024, 2023, and 20222023 annual goodwill impairment analyses did not result in any impairment charges. During 2025 and 2024, we performed a qualitative assessment and performed a quantitative teststest in 2023 and 2022.2023. Management does not believe that it is reasonably likely that our reporting units will fail the goodwill impairment test in the near term, given the results of our most recent qualitative assessment and the determined fair value of the reporting units with goodwill from our most recent quantitative test exceeded their carrying value by more than an insignificant amount. Changes in judgments and estimates underlying our analysis of goodwill for possible impairment, including expected future operating cash flows and discount rate, could decrease the estimated fair value of our reporting units in the future and could result in an impairment of goodwill.

We are a leading industrial metals solutions company, with facilities located throughout the United States and Mexico. We operate a circular manufacturing model, producing high-quality, lower-carbon-emission products with recycled scrap as the primary input. Our 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 have also recently added aluminum operations, further diversifying our product offerings to supply aluminum flat rolled products with higher recycled content to the countercyclical sustainable beverage can industry, in addition to the automotive and industrial sectors. Our 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.

In the firstsecond quarter of 2026, we achieved record quarterly total steel shipments of 3.63.7 million tons. Underlying domestic steel demand strengthened during the quarter, as customer orders rebounded and backlogs increased, also benefitting our metals recycling operations segment, which achieved notable improvement in operating income in the firstsecond quarter of 2026 compared to the firstsecond quarter of 2025. Our steel fabrication operations also experienced increased customer orders and backlogs, with sales volumes increasing in the firstsecond quarter of 2026 compared to the firstsecond quarter of 2025. Finally, our aluminum operations segment continuedcontinues to achievemake successfulstrong productionprogress on the commissioning and qualificationsstartup of our aluminum flat-rolled sheet products mill, already providing high-quality products for the industrial, beverage can and automotive quality flat rolled aluminum products.markets.

Consolidated operating income increased $262.9$317.6 million, or 96%,83%, to $538.0$700.5 million for the firstsecond quarter of 2026, compared to the firstsecond quarter of 20252025, as steel and metals recycling operations metal spreads expanded. FirstSecond quarter 2026 net income attributable to Steel Dynamics, Inc. increased $186.3$235.4 million, or 86%,79%, to $403.4$534.1 million, compared to the firstsecond quarter of 2025, consistent with increased operating income.

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, and Roanoke Bar Division; steel coating and processing operations at Steel of West Virginia, The Techs, Heartland Flat Roll Division, United Steel Supply, New Process Steel, L.P. (“NPS”),L.P., and Vulcan Threaded Products, Inc.; warehouse operations in Mexico; and a 75% controlling equity interest in SDI Biocarbon Solutions, LLC.LLC (100% owned as of June 19, 2026). Steel operations accounted for 68%66% and 70%72% of our consolidated net sales during the three-month periods ending MarchJune 31,30, 2026,2026 and 2025, respectively, and 67% and 71% during the six-month periods ended June 30, 2026 and 2025, respectively.

During the firstsecond quarter of 2026, our steel operations achieved record quarterly total shipments of 3.63.7 million tons (3.13.2 million excluding intra-segment). UnderlyingSteel steelfundamentals demandcontinued strengthenedto strengthen during the firstsecond quarterquarter, ofas 2026,pricing resultingimproved, indemand increasedremained shipments compared to the first quarter of 2025solid, and particularlycustomer theinventory sequentiallevels fourthdeclined, quarterremaining oflower 2025.than historical norms. Steel prices continued to improve,backlogs and lead times have also extended. Additionally, flat-rolled steel spreads expanded in the quarter. We arecontinue seeingto see an improved steel market environment, supported by domestic trade actions, manufacturing onshoring, andreshoring, infrastructure program funding.funding, Longand productthe increasing regionalization of supply chains within the United States. Long-product steel demand remains very strong, especially for structural steel and railroad rail. FirstSecond quarter 2026 total steel segment average selling prices increased 19%,14%, or $193$162 per ton, compared to the firstsecond quarter of 2025, while segment shipments decreasedincreased 3% as we have continued to maximize our circular manufacturing model by increasing intra-company shipments.7%. Net sales for the steel operations in the firstsecond quarter of 2026 increased 16%22% compared to the same period in 2025, due to the increased average selling prices.prices and volumes. Net sales for the steel operations increased 19% in the first half of 2026 when compared to the same period in 2025.

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 per net ton consumed in our steel mills increased $10$5 per ton, or 3%,1%, in the firstsecond quarter of 2026, compared to the same period in 2025, consistent with overall increased domestic ferrous scrap pricing noted below in the Metals Recycling Operations segment discussion. In the first half of 2026, our metallic raw material cost per ton increased $7 per ton, or 2%, compared to the same period in 2025.

In the firstsecond quarter of 2026, as a result of average selling prices rising 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) increased 30%22% compared to the firstsecond quarter of 2025. As a result of this metal spread expansion, operating income for the steel operations increased 143%,89%, to $555.5$719.8 million, in the firstsecond quarter of 2026, compared to the same period in 2025. First half 2026 operating income increased 109%, to $1.3 billion, compared to the first half of 2025 due primarily to a 26% increase in metal spread, as average selling prices increased more than scrap costs.

Metals recycling operations include our Omni ferrous and nonferrous processing, transportation, marketing, brokerage, and scrap management services primarily 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 the firstsecond quarters of 2026 and 2025, 62%65% and 66%, respectively, of metals recycling operations ferrous scrap was sold to our own steel mills, while our steel mill utilization was 89%90% and 85% in the firstsecond quarters of 2026 and 2025.2025, respectively. Metals recycling operations accounted for 11% and 12% of our consolidated net sales during the three-monththree and six-month periods ending MarchJune 31,30, 2026,2026 and 2025,12% respectively.during the three and six-month periods ending June 30, 2025.

During the firstsecond quarter of 2026, metals recycling operations net sales increased $52.9$102.9 million, or 5%,9%, compared to the firstsecond quarter of 2025, as selling prices improved for both ferrous and nonferrous scrap. Scrap flows improved in the second quarter of 2026 as domestic steel mills increased utilization. Ferrous scrap shipments increased 1%5% compared to the same period in 2025 while nonferrous shipments decreased 15%.14%. Ferrous scrap average selling prices increased 5%8% during the firstsecond quarter of 2026 compared to the same period in 2025, while nonferrous scrap prices increased 20%.19%. Ferrous metal spreads (which we define as the difference between average selling prices and the cost of purchased scrap) increased 12%20% during the firstsecond quarter of 2026 compared to the same period in 2025, and nonferrous metal spreads increased 81%,52%, particularly due to increased copper prices. As a result of the increased metals spreads, particularly within nonferrous, metals recycling operations operating income increased 85%125% to $47.5$47.8 million in the firstsecond quarter of 2026 compared to the firstsecond quarter of 2025.

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 7%6% and 8%7% of our consolidated net sales during the three-month periods ending MarchJune 31,30, 2026, and 2025, and 7% and 8% during the six-month periods ending June 30, 2026, and 2025, respectively.

Net sales for theour steel fabrication operations increased 1%16% during the firstsecond quarter of 2026 compared to the same period in 2025, as volumes increased 19%, while average selling prices decreased $121$75 per ton, or 5%, and volume increased 5%3%, from the firstsecond quarter of 2025. Customer order activity has significantlycontinued increasedto strengthen since the end of 2025, with the customer order backlog overnow 38nearly 45 percent higher than a year ago and extending throughinto the thirdfirst quarter 2026.2027. ImprovedDemand demandimproved wasacross supportedseveral largelykey byend themarkets, commercial,including commercial construction, data center,centers, manufacturing, warehouse,warehousing, and healthcare sectors. Further, the accelerated announcements related to meaningful domestic investments in manufacturing and increased onshoring, coupled with the U.S. infrastructure program, are expected to positively impact demand for not only steel joist and deck products, but also for flat rolled and long product steel.healthcare.

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 per ton of steel consumed increased 10%8% in the firstsecond quarter of 2026 compared to the same period in 2025. Metal spread (which we define as the difference between average selling prices and the cost of purchased steel) contracted 14%11% in the firstsecond quarter of 2026 compared to the same period in 2025.2025 due to rising steel input costs. Metal spread compression resulted in operating income decreasing 23%9% to $89.5$84.6 million in the firstsecond quarter 2026, compared to $116.7$93.1 million in the same period in 2025. For the first half of 2026, operating income decreased 17% to $174.1 million compared to the first half of 2025, as a result of a 13% decrease in metal spread, primarily attributable to rising steel input costs.

Aluminum operations include a 650,000-metric-ton recycled aluminum flat rolled products mill located in Columbus, Mississippi; two 150,000-metric-ton satellite recycled aluminum slab centers, one in Central Mexico and one underplanned for construction in theColumbus, Southwest USMississippi; and an ancillary recycled aluminum deox-rod facility. The recycled aluminum flat rolled 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 are supported by various value-added finishing lines that are in production or currently being commissioned, 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 4%8% and 2%1% of our consolidated net sales during the three-month periods ending MarchJune 31,30, 2026,2026 and 2025, respectively, and 6% and 1% during the six-month periods ended June 30, 2026 and 2025, respectively.

During the firstsecond quarter of 2026, the results of aluminum operations consisted of the continued construction, commissioning, and startup of our recycled aluminum flat rolled products mill, associated satellite recycled aluminum slab centers, and our ancillary recycled aluminum deox-rod facility. The flat rolled products mill shipped 22,50053,000 metric tons of finished product during the firstsecond quarter of 2026, an increase of 54%135% from the sequential fourthfirst quarter of 2025.2026. We expect both shipments and earnings to increase in the second quarterhalf of 2026. Net sales for the aluminum operations increased 141%455% during the firstsecond quarter of 2026 compared to the same period in 2025 prior to the startup of our aluminum flat rolled mill, while operating income was negatively impacted by normala startupnon-cash issuesimpairment atcharge ourof $16 million in the second quarter of 2026, recorded in selling, general, and administrative expenses, related to the relocation of the planned second satellite aluminum flatrecycled rolledslab mill, necessitating a temporary pause in operations which have since been resolved.center.

FirstSecond Quarter Consolidated Results 2026 vs. 2025

Selling, General and Administrative Expenses. Selling, general and administrative expenses of $175.2$193.5 million during the firstsecond quarter of 2026 decreased 4%2% from $181.8$198.0 million during the firstsecond quarter of 2025 primarily due to certain payroll and benefits expense reported within this category during construction and startup of the aluminum flat rolled products mill during the first quarter of 2025 now being reported in cost of goods sold in the first quarter of 2026, consistent with the commencement of production.2025. Selling, general and administrative expenses represented 3.4% and 4.2%4.3% of net sales during the firstsecond quarters of 2026 and 2025, respectively.

Profit sharing expense during the firstsecond quarter of 2026 of $42.2$57.3 million increased 86%87% from $22.7$30.7 million during the same period in 2025, consistent with increased pretax earnings. This increase in profit sharing expense was the primary driver of the increased operating loss for our other operations of 24%49% in the firstsecond quarter of 2026 compared to the same period in 2025. Profit sharing expense for eligible employees is 8% of consolidated pretax income excluding noncontrolling interests and other items.

Interest Expense, net of Capitalized Interest. During the firstsecond quarter of 2026, net interest expense of $33.2$39.1 million increased 174%125% from $12.1$17.4 million during the firstsecond quarter of 2025. This increase is primarily a result of higheran outstanding$18.8 long-termmillion, debtor balances68%, decrease in capitalized interest during the firstsecond quarter of 2026 compared to the firstsecond quarter of 2025 dueas to our issuanceconstruction of seniorthe unsecuredaluminum notesflat rolled products mill was substantially completed in Marchthe andsecond Novemberhalf of 2025.

Income Tax Expense. FirstSecond quarter 2026 income tax expense of $113.1$152.7 million, at an effective income tax rate of 22.0%,22.3%, increased 80%76% compared to $63.0$86.7 million, at an effective income tax rate of 22.4%,22.3%, during the firstsecond quarter of 2025, consistent with increased pretax earnings.

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 MarchJune 31,30, 2026, is as follows (in thousands):

Our total outstanding debt of $4.2 billion was unchanged from December 31, 2025. 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 31.5%31% and 32.1%32% at MarchJune 31,30, 2026, and December 31, 2025, 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 MarchJune 31,30, 2026, we had $1.2 billion of availability on the Revolver, $9.4$14.4 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 MarchJune 31,30, 2026, our interest coverage ratio and debt to capitalization ratio were 13.7215.63:1.00 and 0.320.31:1.00, respectively. We were in compliance with these covenants at MarchJune 31,30, 2026, 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 $148.3$576.3 million in the first quarterhalf of 2026 compared to $152.6$454.2 million in the same 2025 period. Working capital increased $262.5$631.8 million, or 6%,14%, during the first quarterhalf of 2026 to $4.6$5.0 billion at MarchJune 31,30, 2026. The increase in working capital included a $373.8$760.3 million increase in accounts receivable consistent with increased sales prices and volumes, a $169.6$217.1 million increase in inventories consistent with the startup of our recycled aluminum flat rolled products mill, and a $163.0 million decrease in accrued expenses primarily related to the $120.1 million payment of our annual companywide profit sharing funding, partially offset by a $148.1$252.2 million increase in accounts payable consistent with increased scrap prices for our metals recycling operations and increased scrap volumes on hand within our aluminum operations.

Capital Investments. During the first quarterhalf of 2026, we invested $138.0$261.8 million in property, plant and equipment, primarily within our aluminum operations and steel operations segments, compared with $305.5$593.8 million invested during the same period in 2025. We are nearing completion of commissioning and startup of our recycled aluminum flat rolled products mill and one of the two supporting satellite recycled aluminum slab centers, which are being funded by available cash and cash flow from operations. Our liquidity of $2.0 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 6% to $0.53 per share in the first quarter of 2026 (from $0.50 per share for each quarter in 2025), resulting in declared cash dividends of $76.6$152.7 million during the first quarterhalf of 2026, compared to $74.7$148.6 million during the same period in 2025. We paid cash dividends of $72.5$149.0 million and $69.5$144.2 million during the first quartershalf of 2026 and 2025, 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, 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 $115.1$315.4 million and $250.1$450.2 million of share repurchases during the first quartershalf of 2026 and 2025, respectively. As of MarchJune 31,30, 2026, we had $687.0$488.7 million remaining available to purchase under the February 2025 share repurchase program.