2017Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM10-K

☒     ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THEFORM 10-K

SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 20172019

ORor

☐     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the transition period fromto

Commission file number1-4119

NUCOR CORPORATION

(Exact name of registrant as specified in its charter)

Registrant’s telephone number, including area code: (704)366-7000

Securities registered pursuant to Section 12(b) of the Act:

Securities registered pursuant to Section 12(g) of the Act:

None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes  YES ☒     No   NO ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.  Yes  YES ☐     No   NO ☒

Indicate by check mark whether the registrantregistrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrantRegistrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes  YES ☒     No   NO ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of RegulationS-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes  YES ☒     No   NO ☐

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of RegulationS-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form10-K or any amendment to this Form10-K.  ☒

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, anon-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company”company,” and “emerging growth company” in Rule12b-2 of the Exchange Act. (Check one):

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule12b-2 of the Exchange Act).  Yes  YES ☐     No   NO ☒

AggregateThe aggregate market value of the registrant’s common stock held bynon-affiliates was approximately $18.39$16.58 billion based upon the closing sales price of the registrant’s common stock on the last business day of the registrant’s most recently completed second fiscal quarter, July 1, 2017.June 29, 2019.

317,936,751The number of shares of the registrant’s common stock were outstanding atas of February 23, 2018.21, 2020 was 301,000,375.

DOCUMENTS INCORPORATED BY REFERENCE

Documents incorporated by reference include: Portions of the registrant’s 2017 Annual Reportdefinitive proxy statement to Stockholders (Parts I, IIbe filed with the Securities and IV), and portions ofExchange Commission in connection with the registrant’s definitive Proxy Statement for its 20182020 Annual Meeting of Stockholders (Part III)are incorporated by reference in Part III of this report to be filed within 120 days after the registrant’s fiscal year end.extent described herein.

Table of Contents

Nucor Corporation

Annual Report on Form10-K

For the Fiscal Year Ended December 31, 20172019

Table of Contents

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PART ITable of Contents

PART I

Overview

Nucor Corporation, a Delaware corporation incorporated in 1958, and its affiliates (“Nucor,” the “Company,” “we,” “us” or “our”) manufacture steel and steel products. The Company also produces direct reduced iron (“DRI”) for use in its steel mills. Through The David J. Joseph Company and its affiliates (“DJJ”), the Company also processes ferrous and nonferrous metals and brokers ferrous and nonferrous metals, pig iron, hot briquetted iron (“HBI”) and DRI. Most of the Company’s operating facilities and customers are located in North America. The Company’s operations include international trading and sales companies that buy and sell steel and steel products manufactured by the Company and others.

Nucor is North America’s largest recycler, using scrap steel as the primary raw material in producing steel and steel products. In 2017,2019, we recycled approximately 18.817.8 million gross tons of scrap steel.

General Development of our Business in Recent Years

The significant developments in Nucor’s business in recent years have aligned with our capital allocation strategy. Our highest capital allocation priority is to invest in our business for profitable long-term growth through our multi-pronged strategy of optimizing existing operations, acquisitionsSegments, Principle Products Produced, and greenfield expansions. Our second priority is to provide our stockholders with cash dividends that are consistent with our success in delivering long-term earnings growth. Our third priority is to opportunistically repurchase shares of our common stock when our cash position is strongMarkets and attractively priced growth opportunities are limited.

Nucor has invested significant capital in recent years to expand our product portfolio to include more value-added steel mill products, improve our cost structure, enhance our operational flexibility and provide additional channels to market for our products. These investments total $2.53 billion over the last three years, with approximatelytwo-thirds going to capital expenditures and approximatelyone-third going to acquisitions. We believe that our focus on lowering cost will enable us to execute on our strategy of delivering profitable long-term growth. Shifting our product mix to a greater portion of value-added products and increasingend-user market diversity will make us less susceptible to imports.

The following recently completed projects to optimize operations at existing facilities within our steel mills segment illustrate Nucor’s execution on the value-added product expansion and cost improvement aspects of our strategy. The final components of Nucor’s $290 million project at our South Carolina, Nebraska and Tennessee bar mills were completed in 2015 to expand our special bar quality (“SBQ”) and wire rod production capabilities by approximately 1,000,000 tons. These SBQ projects allow us to produce engineered bar for more demanding applications that are less exposed to imports while maintaining our position as alow-cost commodity bar producer by shifting production of rebar to our other bar mills. Additionally, our Nucor-Yamato Steel Company (“Nucor-Yamato”) joint venture recently completed two major capital projects to broaden its product offerings. Nucor-Yamato completed a $115 million project in late 2014 to add several additional sheet piling sections which are wider, lighter and stronger, covering more area at a lower installed cost. The joint venture also began shipping structural steel from its $75 million quench and self-tempering line in late 2016, which makes that mill the sole North American producer of certain high-strength,low-alloy structural sections.

Nucor also recently announced several new capital projects with 2019 targeted completion dates which align with our expansion of value-added product offerings and cost-reduction strategies. Our Nucor Steel Arkansas facility is building an additional cold mill at an estimated cost of $230 million. That cold mill facility will expand our ability to produce advanced, high-strengthlow-alloy and motor lamination steel products. At our sheet mill located in Ghent, Kentucky, which we acquired in 2014, Nucor recently announced plans to expand the 1,600,000tons-per-year mill by building a hot band galvanizing line for approximately $176 million. We believe

the new galvanizing line will be the widesthot-rolled galvanizing line in North America with its72-inch product, allowing us to enter new automotive market segments. Nucor has also recently announced several major investments within our bar mill group which will capitalize on our position as alow-cost producer of bar. Nucor will build a 350,000tons-per-year rebar micro mill near Kansas City in Sedalia, Missouri at an estimated cost of $250 million. We believe that positioning the micro mill near the Kansas City market will provide us with a freight cost advantage relative to more distant suppliers, and we will also benefit from the scrap supply in the immediate area provided by our existing DJJ operations. The second bar mill growth initiative is Nucor Steel Kankakee, Inc.’s plan to build a $180 million full range merchant bar mill with 500,000 tons of annual capacity at our existing mill in Bourbonnais, Illinois. Like the new micro mill, we believe that the Kankakee mill will also benefit from logistical advantages andlow-cost scrap supply. Finally, Nucor has begun construction on an $85 million modernization project at our Marion, Ohio bar mill which will allow us to reduce our operating costs.

Nucor’s steel mills segment has also grown significantly in recent years through the acquisitions of a plate mill in Longview, Texas (“Longview”), Independence Tube Corporation (“Independence Tube”), Southland Tube, Inc. (“Southland”) and Republic Conduit (“Republic”). Acquired during the third quarter of 2016 for approximately $29 million, Longview is able to produce approximately 125,000 tons annually of higher value-added carbon and alloy plate products that can range from 1 to 12 inches thick and up to 138 inches wide. We completed the acquisition of Independence Tube during the fourth quarter of 2016 for approximately $430 million, and we completed the acquisition of Southland in January 2017 for approximately $130 million. From their five facilities in Alabama and Illinois, Independence Tube and Southland are able to produce over 800,000 tons annually of hollow structural section (“HSS”) steel tubing used primarily in nonresidential construction markets. In January 2017, Nucor also completed the acquisition of Republic, a steel electrical conduit manufacturer with plants in Georgia and Kentucky, for approximately $332 million. These three pipe and tube businesses provide Nucor with a new line of value-added products to offer our customers, and they provide a value-added channel to market as the businesses are consumers of Nucor’shot-rolled sheet steel.

The steel products segment has experienced recent growth as well through the September 2017 acquisition of St. Louis Cold Drawn, Inc. (“St. Louis”) for approximately $60 million. With a manufacturing location in St. Louis, Missouri and another location in Monterrey, Mexico, St. Louis is able to manufacture approximately 200,000 tons annually of cold drawn rounds, hexagons, squares and special sections to serve the U.S. and Mexican automotive and industrial markets. The St. Louis acquisition also provides an additional channel to market for the SBQ products that we produce at some of our bar mills. Also within our steel products segment, we have recently acquired the assets of several businesses that will expand our bar grating presence in the United States and provide us with joist and deck production capabilities in Eastern and Western Canada to better serve our customers in Canadian markets.

In addition to growing through capital expansions at existing operations and acquisitions, Nucor also uses joint ventures as a platform for growth. In 2016, we announced the formation of a joint venture with JFE Steel Corporation of Japan in which Nucor will have 50% ownership in a plant that is being built in central Mexico to supply galvanized sheet steel to the growing Mexican automotive market. The plant, which is expected to be operational in the second half of 2019, will cost approximately $270 million and will have an annual capacity of approximately 400,000 tons. Nucor’s sheet mills are expected to provide approximately half of thehot-rolled steel substrate that will be consumed by the joint venture.

Nucor’s second capital allocation priority is to provide our stockholders with cash dividends that are consistent with our success in delivering long-term earnings growth. Nucor has paid $1.45 billion in dividends to its stockholders during the past three years. That dividend payout represents 29% of cash flows from operations during that three-year period.

Our third priority is to opportunistically repurchase shares of our common stock. In 2015, Nucor’s Board of Directors approved a share repurchase program under which the Company is authorized to repurchase up to $900.0 million of shares of its common stock. The Company repurchased $90.3 million shares of its common

stock in 2017, $5.2 million in 2016 and $66.5 million in 2015. As of December 31, 2017, approximately $738.0 million remained available for repurchase under the program.

SegmentsMarketing

Nucor reports its results in three segments: steel mills, steel products and raw materials. Net sales to external customers, intercompany sales, depreciation expense, amortization expense, earnings (loss) before income taxes and noncontrolling interests, assets and capital expenditures by segment for each of the three fiscal years in the three-year period ended December 31, 2017 are set forth in Note 22 of the Notes to Consolidated Financial Statements included in Nucor’s 2017 Annual Report to Stockholders, which is incorporated by reference. The steel mills segment is Nucor’s largest segment, representing approximately 72%62% of the Company’s sales to external customers in the year ended December 31, 2017.2019.

Principal Products ProducedWe market products from the steel mills and steel products segments mainly through in-house sales forces. We also utilize our internal distribution and trading companies to market our products abroad. The markets for these products are largely tied to capital and durable goods spending and are affected by changes in general economic conditions.

We are a leading domestic provider for most of the products we supply, and, in many cases (e.g., structural steel, merchant bar steel, steel joist and deck, pre-engineered metal buildings, steel piling and cold finish bar steel), we are the leading supplier.

Steel mills segment

In the steel mills segment, Nucor produces sheet steel(hot-rolled, (hot-rolled, cold-rolled and galvanized), HSS steel tubing, electrical conduit, plate steel, structural steel (wide-flange beams, beam blanks,H-piling and sheet piling) and bar steel (blooms, billets, concrete reinforcing bar, merchant bar and engineered special bar quality)quality [“SBQ”]). Nucor manufactures steel principally from scrap steel and scrap steel substitutes using electric arc furnaces (“EAFs”), continuous casting and automated rolling mills. The steel mills segment also includes Nucor’s equity method investments in Duferdofin Nucor S.r.l. (“Duferdofin Nucor”) and, NuMit LLC (“NuMit”) and Nucor-JFE Steel Mexico, S. de R.L. de C.V. (“Nucor-JFE”), as well as Nucor’sinternational trading and distribution companies that buy and sell steel trading businessesmanufactured by the Company and rebar distribution businesses. In theother steel products segment, Nucor produces steel joists and joist girders, steel deck, fabricated concrete reinforcing steel, cold finished steel, steel fasteners, metal building systems, steel grating and expanded metal, and wire and wire mesh. In the raw materials segment, Nucor produces DRI; brokers ferrous and nonferrous metals, pig iron, HBI and DRI; supplies ferro-alloys; and processes ferrous and nonferrous scrap metal. The raw materials segment also includes our natural gas drilling operations.producers.

Markets and Marketing

The steel mills segment sells its products primarily to steel service centers, fabricators and manufacturers located throughout the United States, Canada Mexico and elsewhereMexico. The steel mills segment sold approximately 18,585,000 tons to outside customers in 2019.

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customers’ perceptions about future market conditions. These sheet sales contracts permitare generally noncancellable agreements that incorporate monthly or quarterly price adjustments to reflectreflecting changes in the current market-based indices and/or raw material costs near the time of shipment. These sheet sales contractscost, and typically have terms ranging from six to 12 months. Steel contract sales outside of our sheet operations are not significant.

Our tubular, plate, structural, reinforcing and merchant barStructural steel products come in standard sizes and grades, which allows us to maintain inventory levels of these products to meet our customers’ expected orders.

In addition,January 2019, Nucor announced that it will build a state-of-the-art plate mill, to be located in Brandenburg, Kentucky. Nucor Steel Brandenburg will be located on the Ohio River and well placed to serve the U.S. midwest, which is the largest plate-consuming area in the United States. The new plate mill will enhance our barability to serve our customers and will produce cut-to-length, coiled, heat-treated and discrete plate in widths and thicknesses that are not currently offered by Nucor. With an expected investment of $1.70 billion, the mill group manufactureshot-rolled SBQis expected to have an annual capacity of approximately 1,200,000 tons and is expected to be completed in 2022.

Plate steel products come in standard sizes and grades, which allows us to maintain inventory levels of these products to exactingmeet our customers’ expected orders.

Nucor owns a 50% economic and voting interest in NuMit, a company that owns 100% of the equity interest in Steel Technologies LLC (“Steel Technologies”), an operator of 26 strategically located sheet processing facilities in the United States, Canada and Mexico. Steel Technologies transforms flat-rolled steel into products that meet the exact specifications primarily servicingfor customers in a wide range of industries, including the automotive, energy, agricultural heavy equipment and transportation sectors. Almost all of our tubular, plate, structural, rebar, merchant bar and SBQ steel sales occur in the spot market at prevailing market prices.consumer goods markets.

In 2017, approximately 83%Nucor owns 50% of the shipments madestock of Duferdofin Nucor, which operates a melt shop and bloom/billet caster in Brescia, Italy, with an annual capacity of approximately 1,000,000 metric tons, including the capability to produce high-quality, value-added, semi-finished SBQ products. Duferdofin Nucor announced plans to construct a new rolling mill in Brescia, Italy, which will be supplied by ourits existing nearby EAF. The new mill will be designed to produce beams and other rolled products. The plant will consume energy from renewable sources through a long-term Power Purchase Agreement. With the new plant, the entire Duferdofin Nucor production system will produce over 1,000,000 tons of rolled products.

Nucor owns 50% of Nucor-JFE, a joint venture with JFE Steel Corporation of Japan that operates a galvanized sheet steel millsplant in central Mexico that will supply the country’s automotive market with an annual capacity of approximately 400,000 tons.

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Steel products segment were to external customers. The remaining 17% of the steel mills segment’s shipments went to our tubular products mills, our piling distributor and our downstream joist, deck, rebar fabrication, fastener, metal buildings and cold finish operations.

One of Nucor’s strategies for growth is expanding the channels by which our steel mills’ products can reachend-user customers. The percentage of shipments consumed internally has increased from 14% in 2016 due to some of the recent investments in our business, such as the tubular products plants and St. Louis that consume steel produced by our steel mills.

In the steel products segment, we sellNucor produces hollow structural section (“HSS”) steel tubing, electrical conduit, steel joists and joist girders, and steel deck, fabricated concrete reinforcing steel, cold finished steel, steel fasteners, metal building systems, steel grating and expanded metal, and wire and wire mesh. The steel products segment also includes our piling distributor. These products are sold primarily for use in nonresidential construction applications.

Reinforcing products are essential to general contractorsconcrete construction. They supply tensile strength, as well as additional compressive strength, and fabricators located throughoutprotect the concrete from cracking. In many markets, Harris sells reinforcing products on an installed basis (i.e., Harris fabricates the reinforcing products for a specific application and performs the installation). Harris operates nearly 70 fabrication facilities across the United States and Canada.Canada, with each facility serving a local market. Total annual rebar fabrication capacity is approximately 1,650,000 tons.

Sales of steel joists, joist girders and steel decking are dependent on the nonresidential building construction market. The majority of steel joists, joist girders and steel decking are used extensively as part of the roof and floor structural support systems in manufacturing buildings, retail stores, shopping centers, warehouses, schools, hospitals and, to a lesser extent, in multi-story buildings and apartments. We make these products to the customers’ specifications and do not maintain inventories ofsell these finished steel products.products out of inventory. The majority of these contracts are firm, fixed-price contracts that are, in most cases, competitively bid against other suppliers. Longer-term supply contracts may or may not permit us to adjust our prices to reflect changes in prevailing raw materialsmaterial costs. We sell

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Nucor’s cold finished facilities are among the most modern in the world, producing cold finished bars for the most demanding applications. NCF obtains most of its steel from the Nucor bar mills, ensuring consistent quality and install fabricated reinforcing products primarily on a construction contract bid basis.supply through all market conditions. These productsfacilities produce cold-drawn, turned, ground and polished steel bars that are used extensively for shafting and other precision machined applications. NCF produces rounds, hexagons, flats and squares in carbon, alloy and leaded steels. These bars are purchased by contractorsthe appliance, automotive, construction equipment, electric motor, farm machinery and fluid power industries, as well as by service centers. NCF bars are used in constructing highways, bridges, reservoirs, utilities, hospitals,tens of thousands of products. A few examples include anchor bolts, hydraulic cylinders and shafting for air conditioner compressors, ceiling fan motors, garage door openers, electric motors and lawn mowers.

In late 2018, Nucor acquired a fully integrated precision castings company, Corporacion POK, S.A. de C.V. (“POK”), with a facility in Guadalajara, Mexico. POK produces complex castings and precision machined products used by the oil and gas, mining and sugar processing industries. POK produces a wide array of precision castings using steel, bronze, iron and specialty exotic alloys. POK complements NCF’s businesses and Nucor’s cold finish facility in Monterrey.

The sizes of the buildings that can be produced range from less than 1,000 square feet to more than 1,000,000 square feet. Complete metal building packages can be customized and combined with other materials such as glass, wood and masonry to produce cost-effective, energy efficient, aesthetically pleasing buildings designed to the customers’ special requirements. The buildings are sold primarily through independent builder distribution networks in order to provide fast-track, customized solutions for building owners. The primary markets served are commercial, industrial and institutional buildings, including distribution centers, data centers, automobile dealerships, retail centers, schools airports, stadiums and high-rise buildings. We manufacture cold finished steel, steel fasteners, steelmanufacturing facilities.

Nucor produces mesh at Nucor Steel Connecticut, Inc. and wireNucor Wire Products Utah. Nucor also produces mesh in standard sizesCanada at the Harris operations of Laurel and maintain inventoriesLaurel-LEC. The combined annual production capacity of these products to fulfill anticipated orders. We sell cold finishedthe steel and steel fasteners primarily to distributors and manufacturers located throughoutmesh facilities is approximately 128,000 tons.

Our grating business, which operates under the brand names Nucor Grating in the United States and Canada.Fisher & Ludlow in Canada, manufactures and fabricates steel and aluminum bar grating products at facilities located in North America. Nucor Grating and Fisher & Ludlow serve the new construction and maintenance-related markets. The annual production capacity for our grating business is approximately 120,000 tons.

We market products from theNucor Fastener’s bolt-making facility in Indiana produces carbon and alloy steel millshex head cap screws, hex bolts, structural bolts, nuts and steel products segments mainly throughin-house sales forces. We also utilize our internal distributionwashers, finished hex nuts and trading companies to market our products abroad.custom-engineered fasteners. Nucor fasteners are used in a broad range of markets, including demanding automotive, machine tool, farm implement, construction and military applications. The markets for these products are largely tied to capital and durable goods spending and are affected by changes in general economic conditions.annual production capacity of this facility is approximately 75,000 tons.

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Our primary external customers for ferrous scrap are electric arc furnaceEAF steel mills and foundries that use ferrous scrap as a raw material in their manufacturing process. External customers purchasing nonferrous scrap metal include aluminum can producers, secondary aluminum smelters, steel mills, and other processors and consumers of various nonferrous metals. We market scrap metal products and related services to our external customers throughin-house sales forces. In 2017,2019, approximately 10% of the ferrous and nonferrous metals and scrap substitutessubstitute tons we processed were sold to external customers. We consumed the balance in our steel mills.

Nucor’s DRI production capabilities provide our steel mills flexibility to quickly adjust the metallic mix to changing market conditions and to maintain competitiveness in the sometimes-volatile scrap market. With the potential for high-quality scrap becoming scarcer, coupled with the risk of third-party supplier disruptions, Nucor’s DRI facilities provide a greater degree of certainty over its metallics supply.

AlsoIn early 2018, teammates at our Nucor Steel Louisiana facility began implementation of a three-pronged strategy to increase the plant's reliability and uptime called Project 8000. The plan focuses on achieving improvements in people, process and equipment. The Louisiana DRI facility established new annual records for plant uptime, production and shipments in 2018 as improvements related to people and processes were implemented. In 2019, the critical work of replacing the convection section of our process gas heater as well as relining the reactor refractory was completed during a planned 70-day outage that began in early-September and ended in mid-November. Despite this outage, 2019 was the second-best year for uptime and output at Nucor Steel Louisiana, since its startup in 2013. We expect these projects will further improve the plant’s reliability.

Nucor’s access to a long-term, low-cost supply of natural gas is an important component in the execution of Nucor’s raw material strategy. Natural gas produced by Nucor’s drilling operations

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is being sold to third parties to offset our exposure to changes in the price of natural gas consumed by our DRI plant in Louisiana and our steel mills in the United States.

Customers

A significant portion of our steel mills and steel products segments’ sales are into the commercial, industrial and municipal construction markets. Our largest single customer in 2019 represented approximately 5% of sales and consistently pays within terms. Our steel mills use a significant portion of the products of the raw materials segment aresegment.

General Development of Our Business in Recent Years

Nucor has invested significant capital in recent years to expand our DRI plantsproduct portfolio to include more value-added steel mill products, improve our cost structure, enhance our operational flexibility and provide additional channels to market for our products. These investments totaled approximately $3.68 billion over the last three years, with approximately 80% going to capital expenditures and the remaining going to acquisitions. We believe that our focus on lowering costs and diversifying our operations will enable us to execute on our strategy of delivering profitable long-term growth. Further, we believe shifting our product mix to a greater proportion of value-added products and increasing end-use market diversity will make us less susceptible to imports.

New capital projects that align with our expansion of value-added product offerings and cost-reduction strategies were completed in Trinidad2019. At our sheet mill located in Ghent, Kentucky, Nucor’s approximately $200 million investment in a new hot band galvanizing and Louisianapickling line ramped up production in late 2019 and is shipping products to customers. We believe the new galvanizing line is the widest hot-rolled galvanizing line in North America with its 72-inch product, creating synergies with Nucor’s other sheet mills and allowing us to enter new automotive market segments. Our Nucor Steel Arkansas facility built an additional specialty cold mill for approximately $245 million that began start up in 2019. That cold mill facility expands our ability to produce high quality iron inputs able to be usedadvanced, high-strength low-alloy steel and motor lamination steel products.

We have several growth initiatives underway in our steel mills’ melting process,bar mill group that will enhance our position as a low-cost producer of bar. Nucor’s rebar micro mill near Kansas City in Sedalia, Missouri is capable of producing approximately 380,000 tons annually and was completed at a cost of approximately $245 million. We believe that positioning the micro mill near the Kansas City market will provide us with a freight cost advantage relative to more distant suppliers, and we will also benefit from the scrap supply in the immediate area provided by our existing DJJ operations. The new mill went into startup in early 2020. Nucor Steel Kankakee, Inc. is building a full-range merchant bar quality mill with approximately 500,000 tons of annual capacity at our existing mill in Bourbonnais, Illinois at an estimated cost of $185 million. Like the new micro mill, we believe that the Kankakee mill will also benefit from logistical advantages and low-cost scrap supply. We expect this project to begin startup in the second quarter of 2020. In March 2018, Nucor announced that it would build a second rebar micro mill capable of producing approximately 380,000 tons annually in Frostproof, Florida. Similar to the mill in Sedalia, Missouri, we believe this new micro mill will benefit from the scrap supply in the immediate area provided by our existing DJJ operations as well as strong regional demand for its products. This approximately $240 million investment is expected to be operational in the second half of 2020.

In May 2018, Nucor announced an approximately $275 million investment to construct a new 3^rd generation flexible galvanizing line with an annual capacity of approximately 500,000 tons at our natural gasNucor Steel Arkansas facility. This project complements the previously mentioned specialty cold mill recently started up at the facility and we believe it will accelerate our goal of increasing our automotive market share. The new galvanizing line is expected to be operational in mid-2021. In September 2018, Nucor announced an approximately $650 million investment to modernize and expand the production operations. All natural gas producedcapability at its Gallatin flat-rolled sheet mill located in Ghent, Kentucky. This investment will increase the production capability from approximately 1,600,000 tons to approximately 3,000,000 tons annually and will increase the maximum coil width to approximately 73 inches. This expansion is expected to be completed in mid-2021 and complements the previously mentioned hot band galvanizing and pickling line that recently

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started up at Gallatin. In January 2019, Nucor announced plans to build a state-of-the-art plate mill, which will be based in Brandenburg, Kentucky on the Ohio river. With an expected investment of $1.70 billion, we expect the mill to be completed in late 2022 and to be capable of producing approximately 1,200,000 tons per year of steel plate products.

Nucor’s steel products segment has also grown significantly in recent years through the acquisitions of the companies that make up our NTP group. NTP consists of the former Independence Tube Corporation (acquired in October 2016), Southland Tube, Inc. (acquired in January 2017), Republic Conduit (acquired in January 2017), and the assets of Century Tube, LLC (acquired in December 2018). The combined purchase price of these acquisitions was approximately $898 million. NTP is optimizing the teams and assets of the eight strategically located facilities to create leadership positions in the following markets: HSS steel tubing, piling, sprinkler pipe, steel electrical conduit, and mechanical tube for the automotive market. The NTP group provides Nucor with a line of value-added products to offer our customers and a significant channel to market as the businesses are consumers of Nucor’s hot-rolled and cold-rolled sheet steel.

In addition to growing through capital expansions at our existing operations and acquisitions, Nucor also uses joint ventures as a platform for growth. Nucor-JFE, our joint venture with JFE Steel Corporation of Japan, in which Nucor has 50% ownership, is expected to start up in the first quarter of 2020. Located in central Mexico, Nucor-JFE will supply galvanized sheet steel to the growing Mexican automotive market. The facility's construction has faced some unanticipated challenges, including: more difficult soil conditions requiring incremental piling and insufficient electrical system infrastructure. These events increased the total capital budget from our initial estimate of $270 million to approximately $360 million, with Nucor's share of these amounts being 50%. Nucor’s sheet mills are expected to provide approximately half of the hot-rolled steel substrate that will be consumed by the drillingjoint venture.

Capital Allocation Strategy

The significant developments in Nucor’s business in recent years have been driven by our capital allocation strategy. Our highest capital allocation priority is to invest in our business for profitable long-term growth through our multi-pronged strategy of optimizing existing operations, greenfield expansions and acquisitions.

Our second priority is to return capital to our stockholders through cash dividends and will be soldshare repurchases. Nucor has paid $1.46 billion in dividends to outside parties.its stockholders during the past three years. That dividend payout represents 23% of cash flows from operations during that three-year period. The Company repurchased $298.5 million of its common stock in 2019 ($854.0 million in 2018 and $90.3 million in 2017).

We intend to return at least 40% of our net income to stockholders over time via a combination of both cash dividends and share repurchases. Over the past three years we have returned approximately 55% of our net income in this manner.

Competition

We compete in a variety of steel and metal markets, including markets for finished steel products, unfinished steel products and raw materials. These markets are highly competitive with many domestic and foreign firms participating, and, as a result of this highly competitive environment, we find that we primarily compete on price and service.

Our electric arc furnaceIn our steel mills segment, our EAF steel mills face many different forms of competition, including domestic integrated steel producers (who use iron ore converted into liquid form in a blast furnace as their basic raw material instead of scrap steel), other electric arc furnacedomestic EAF steel mills, foreignsteel imports and alternative materials. Large domestic integrated steel producers have the ability to manufacture a variety of products but face significantly higher energy costs and are often burdened with higher capital and fixed operating

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costs. Electric arc furnaceEAF based steel mill producers, such as Nucor, are sensitive to increases in scrap prices but tend to have lower capital and fixed operating costs compared with large integrated steel producers.

Excess global steelmaking capacity, particularly innon-market economies, continues to be a significant challenge for Nucor and the entire U.S. steel industry. With the U.S. economy performing better than most other

economies around the world and a strong U.S. dollar, the U.S. steel market is the destinationSteel production in China rose from approximately 1.02 billion tons in 2018 to approximately 1.10 billion tons in 2019 – an increase of choice for global steel producers. In 2017, total steel imports increased by more than 15% compared to 2016. Finished imports last year captured an estimated 27% market share.8%. As a result, China’s share of global crude steel production rose from 51.3% in 2018 to 53.3% in 2019. The Organisation for Economic Co-operation and Development (the “OECD”) estimates that excess global steel production capacity was approximately 485 million tons through the domesticfirst half of 2019, up from 455 million tons at the end of 2018. Nearly a quarter of that excess capacity is located in China, where the largest steel companies are state-owned and receive significant financial support from the Chinese government.

The Section 232 steel tariffs implemented by the current administration in 2018 are having their intended impact by preventing the dumping of steel products in the U.S. market. In addition, successful industry trade cases over the past several years have had an impact on import levels. For the full year 2019, imports of finished steel were down approximately 18% from the previous year and accounted for approximately 19% of U.S. market share. The last time steel import levels were this low was in 2010. Approximately six million fewer tons of imports entered the United States in 2019 than in 2018. The comprehensive nature of the Section 232 tariffs is also preventing the transshipment of artificially low-priced steel through third party countries.

The new United States-Mexico-Canada trade agreement was passed by the U.S. House and Senate and signed by President Trump in January 2020. The agreement has several provisions that will benefit the steel industry, has continuedincluding requiring that higher levels of a vehicle’s content, including steel, be produced in North America for a vehicle to aggressively pursue trade cases to curb unfairly traded imports.

Competition from foreign steelqualify for zero tariffs, and steel product producers presents unique challenges for us. Imported steel and steel products often benefit from government subsidies, either directly or indirectly through government-owned enterprises or government-owned or controlled financial institutions. China, which accounts for almost halfthat 70% of the steel produced annuallyused in the world, is the prime example of how some foreign governments impact the global steel market. Nucor believes that Chinese producers, many ofvehicles be melted and poured in North America. There are also provisions addressing currency manipulation and state-owned enterprises.

The United States also reached a phase-one trade agreement with China in January 2020, which are government-owned in whole or in part, benefitincludes enforceable commitments from their government’s manipulation of foreign currency exchange rates and from the receipt of government subsidies, which allow them to sell their products below cost. Other foreign governments utilize similar tactics to artificially lower their steel production costs. These distorting trade practices are widely recognized as being unfair and have been challenged successfully as violating world trade rules. In 2017, the U.S. Department of Commerce made favorable rulings in trade cases involving steel plate, rebar and wire rod.

Efforts by foreign companies to evade duties by routing products through third-party countries is also a challenge. Artificially-priced imports and duty evasion schemes make it very difficult for Nucor to maintain sales prices and profit levels. As a result, Nucor joined three other steelmakers in filing a petition alleging China is circumventing coated steel sheet duties by shipping product through Vietnam. At the end of the year, U.S. steel producers also received a favorable ruling in this case when the U.S. Department of Commerce made a preliminary determination that corrosion-resistant and cold-rolled steel from Vietnam that originated in China evaded U.S. anti-dumping and anti-subsidy orders. A final determination is expected to be announced in the first quarter of 2018.

The U.S. government continues to treat China as anon-market economy, despite China’s insistence that it should be recognized as a market economy under its Protocol of Accession to the World Trade Organization (the “Protocol”). China was agovernment-run,non-market economy in 2001 when it entered the Protocol, and China remains agovernment-run,non-market economy today. The main objective of the Protocol was to encourage, and in some cases to require, China to make market-based economic reforms. However, over the past 16 years,refrain from currency devaluation for competitive purposes. Negotiations with China has failed to take the required steps to establish that it is a market economy under U.S. law. Therefore, the United States had no reason to change its treatment of China as anon-market economy when one of the relevant provisions of the Protocol expired in December 2016. By treating China as anon-market economy in antidumping cases, the U.S. Department of Commerce can assume that Chinese prices and costs are distorted, and may use other methodologies to calculate antidumping duties. This often results in appropriately higher duties against Chinese productscontinue in order to offsetaddress China’s use of subsidies and state-owned enterprises which contribute to its unfair trade practices. China has filed a challenge to the U.S. decision with the World Trade Organization.

Aggressive trade practices, left unchallenged, seriously undermine the ability of Nucor and other domestic producers to compete on price. Competition from countries with subsidizedpersistent steel production costs has significantly contributed to the exodus of manufacturing jobs from the United States. When such an exodus occurs, the U.S. economy is weakened and Nucor’s customer base is diminished. Rigorous trade law enforcement is critical to our ability to maintain our competitive position against foreign producers that engage in unlawful trade practices. Nucor has been active in calling on policymakers to enforce global trade agreements.overcapacity.

We also experience competition from other materials. Depending on our customers’ end use of our products, there are sometimes other materials, such as concrete, aluminum, plastics, composites and wood that compete with our steel products. When the price of steel relative to other raw materials rises, these alternatives can become more attractive to our customers.

Competition in our scrap and raw materials business is also vigorous. The scrap metals market consists of many firms and is highly fragmented. Firms typically compete on price and geographic proximity to the sources of scrap metal.

Backlog

In the steel mills segment, Nucor’s backlog of orders was approximately $1.87$1.68 billion and $1.52$2.08 billion at December 31, 20172019 and 2016,2018, respectively. Order backlog for the steel mills segment includes only orders from external customers and excludes orders from other Nucor businesses. Nucor’s backlog of orders in the steel products segment was approximately $1.58$2.24 billion and $1.40$2.26 billion at December 31, 20172019 and 2016,2018, respectively. The majority of these orders willare expected to be filled within one year. Order backlog within our raw materials segment is not significant because the majority of the raw materials that segment produces are used internally.

Sources and Availability of Raw Materials

An ample supply of high-quality scrap and scrap substitutes is critical to support Nucor’s ability to produce high-quality steel. Nucor’s raw materials segment safely produces, sources, trades and

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For the past decade, Nucor has focused on securing access tolow-cost raw material inputs as they are the Company’s largest expense. Nucor’s broad, balanced supply chain is an important strength which allows us to reduce the cost of our steelmaking operations, create a shorter supply chain and have greater optionality over our metallic inputs. Our investment in DRI production facilities and scrap yards, as well as our access to international raw materials markets, provides Nucor with significant flexibility in optimizing our raw materialsmaterial costs. Additionally, having a significant portion of our raw materials supply under our control minimizes risk associated with the global sourcing of raw materials, particularly since a good deal of scrap substitutes comes from regions of the world that have historically experienced greater political turmoil. Continued successful implementation of our raw material strategy, including key investments in DRI production, coupled withas well as in the scrap brokerage and processing services performed by our team at DJJ, givegives us greater control over our metallic inputs and thus helphelps us mitigate the risk of significant price fluctuations in input costs.the availability and costs of critical inputs.

The primary raw materials for our steel mills segment are ferrous scrap and scrap substitutes such as pig iron, DRI and HBI. On average, it takes approximately 1.1 tons of scrap and scrap substitutes to produce a ton of steel. DJJ operates six regional scrap companies within the United States that have a combined annual scrap processing capability of approximately 5,000,000 tons. DJJ acquires ferrous scrap from numerous sources, including manufacturers of products made from steel, industrial plants, scrap dealers, peddlers, auto wreckers and demolition firms. We purchase pig iron as needed from a variety of sources and operate DRI plants in Trinidad and Louisiana with respective annual production capacities of approximately 2,000,000 and 2,500,000 metric tons annually.tons. The primary raw material for our DRI facilities is iron ore, which we purchase from various international suppliers.

In October 2016, Nucor concluded several transactions to improve its access to a long-term supply Another major source of natural gas. Nucor purchased 49% of Encana Oil & Gas (USA) Inc.’s (“Encana”) leasehold interest covering approximately 54,000 acresraw materials used in the South Piceance Basin. Further, Nucorproduction of steel is pig iron. We received over 2.5 million gross tons of pig iron in 2019. As with scrap and Encana also terminated the two Carry and Earning (“C&E”) drilling agreements entered into in 2010 and 2012, and Nucor sold its 50% equity interest in Hunter Ridge Energy Services LLC (“Hunter Ridge”) to Encana. Hunter Ridge isiron ore, we source pig iron from a gas gathering and water service provider formed by Nucor and Encana in 2012 to support the joint well development in the North Piceance Basin.In the new arrangement, the determinationlarge number of whether or not to participate and invest in all future drilling capital investment by one working interest owner is independent of the other working interest owners. As such, Nucor has full discretion on its participation in all future drilling capital investments. By canceling the C&E drilling agreements, Nucor has eliminated all future carry capital and all contingent liabilities associated with those contracts, which should result in lower unit cost for any future drilling. Nucor retains all existing producing wells it currently owns. To support Nucor’s operating wells and potential future well developments on the approximately 54,000 acres, Nucor has entered into long-term agreements directly with existing third-party gathering and processing service providers.international suppliers.

The primary raw material for our steel products segment is steel produced by Nucor’s steel mills.

DJJ generally purchases ferrous and nonferrous scrap for sale to external customers from the same variety of sources it purchases ferrous scrap for use as a raw material in Nucor’s steel mills. DJJ does not purchase a significant amount of scrap metal from a single source or from a limited number of major sources. The availability and price of ferrous scrap and other metallic inputs such as iron ore are affected by changes in the global supply and demand for steel and steel products.

Energy Consumption and Costs

Our steel mills are large consumers of electricity and natural gas. gas, which are significant costs to Nucor. Access to long-term, low cost sources of energy in various forms is critically important to our continued success. Because of the efficiency of Nucor steel mills, we believe we are able to reduce our energy costs relative to other steel producers.

Our DRI facilities in Trinidad and Louisiana are also large consumers of natural gas. Consequently, we use a variety of strategies to manage our exposure to price risk of natural gas, including cash flow hedges, andas well as our natural gas drilling operations. In addition to the currently producing wells in the Piceance Basin, Nucor owns leasehold interests in natural gas properties totaling approximately 54,000 acres in the South Piceance Basin, in the Western Slope of Colorado. To support Nucor’s operating wells and potential future well developments on these properties, Nucor has entered into long-term agreements directly with existing third-party gathering and processing service providers. Natural gas produced by Nucor’s drilling operations is being sold to third parties to offset our exposure to changes in the price of natural gas consumed by our DRI plant in Louisiana, and by our steel mills in the United States. The determination of whether or not to participate in all future drilling capital investments by one working interest owner is independent of the other working interest owner. As such, Nucor has full discretion on its participation in all future drilling capital investments.

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Historically, manufacturers in the United States have benefited from relatively stable and competitive energy costs that have allowed them to compete on an equal footing in the increasingly global marketplace.costs. The availability and prices of electricity and natural gas are influenced today however, by many factors, including fuel switching (coal to natural gas by public utilities), changes in supply and demand, advances in drilling technology and increasingly, changes in public policy relating to energy productionpipeline and use.export infrastructure expansion. Because energy is such a significant cost for Nucor, we strive continually to make our operations in all three of our business segments more energy efficient. We also closely monitor developments in public policy relating to energy production and consumption. When appropriate, we work to shape those developments in ways that we believe will allow us to continue to be a competitive producer of steel and steel products in an increasingly competitive global marketplace.

Environmental Laws and Regulations

Our business operations are subject to numerous federal, state and local laws and regulations intended to protect the environment. The principal federal environmental laws include the Clean Air Act that regulates air emissions; the Clean Water Act (the “CWA”) that regulates water discharges and withdrawals; the Resource Conservation and Recovery Act (the “RCRA”) that addresses solid and hazardous waste treatment, storage and disposal; and the Comprehensive Environmental Response, Compensation and Liability Act (the “CERCLA”) that governs releases of, and remediation of, sites contaminated by hazardous substances. Our operations are also subject to state laws and regulations that are patterned on these and other federal laws.

We believe that we are in substantial compliance with the provisions of all federal and state environmental laws and regulations applicable to our business operations.

Nucor uses electric arc furnaces (“EAFs”) to recycle scrap metal and scrap substitutes into new steel products. These EAFs use electricity as their primary source of energy. As the Trump administration revisits any number of recently implemented environmental regulations, such as greenhouse gas (“GHG”) regulations, air toxics rules and emissions standards imposed on coal-fired electric utilities, it is reasonable to assume that any cost implications would be delayed until those reviews are complete.

The CWA regulates water discharges and withdrawals. Nucor maintains discharge and withdrawal permits as appropriate at its facilities under the national pollutant discharge elimination system program of the CWA and conducts its operations in compliance with those permits. Nucor also maintains permits from local governments for the discharge of water into publicly owned treatment works where available.

The RCRA establishes standards for the management of solid and hazardous wastes. The RCRA also addresses the environmental impact of contamination from waste disposal activities and from recycling and storage of most wastes. While Nucor believes it is in substantial compliance with these regulations, past waste disposal activities that were legal when conducted but now may pose a contamination threat are periodically discovered. These activities andoff-site properties that the U.S. Environmental Protection Agency (the “EPA”) has determined are contaminated, for which Nucor may be potentially responsible at some level, are quickly evaluated and corrected. While Nucor has conducted and is in the final stages of completing some cleanups under the RCRA, these liabilities either are identified already and being resolved or have been fully resolved.

Because Nucor long ago implemented environmental practices that have resulted in the responsible disposal of waste materials, Nucor is also not presently considered a major contributor to any major cleanups under the CERCLA for which Nucor has been named a potentially responsible party. Nucor continually evaluates these

types of potential liabilities and, if appropriate, maintains reserves sufficient to remediate the identified liabilities. Under the RCRA, private citizens may also bring an action against the operator of a regulated facility for potential damages and payment of cleanup costs. Nucor is confident that its system of internal evaluation and due diligence has sufficiently identified these types of potential liabilities so that compliance with these regulations will not have a material adverse effect on our results of operations, cash flows or financial condition beyond that already reflected in the reserves established for them.

The primary raw material of Nucor’s steelmaking operations is scrap metal. The process of recycling scrap metal brings with it many contaminants such as paint, zinc, chrome and other metals that produce air emissions which are captured in specialized emission control equipment. This filtrant (EAF dust) is classified as a listed hazardous waste under the RCRA. Because these contaminants contain valuable metals, this filtrant is recycled to recover those metals. Nucor sends all but a small fraction of the EAF dust it produces to recycling facilities that recover the zinc, lead, chrome and other valuable metals from this dust. By recycling this material, Nucor is not only acting in a sustainable, responsible manner but is also substantially limiting its potential for future liability under both the CERCLA and the RCRA.

Nucor operates an aggressive and sustainable environmental program that incorporates the concept of individual employee, as well as management, responsibility for environmental performance. All of Nucor’s steelmaking operations are ISO 14001 certified. Achieving ISO 14001 certification means that each of Nucor’s steel mills has put an environmental management system in place with measurable targets and objectives, such as reducing the use of oil and grease and minimizing electricity use and has implemented site-wide recycling programs. Many of our facilities have incorporated energy efficiency targets to reduce both cost and environmental impacts into their environmental management systems. These environmental management systems help facilitate compliance with our environmental commitment, which is every Nucor teammate’s responsibility. Nucor’s environmental program maintains a high level of ongoing training, commitment, outreach and visibility.

Our business operations are subject to numerous federal, state and local laws and regulations intended to protect the environment. The principal federal environmental laws include the Clean Air Act that regulates air emissions; the Clean Water Act (the “CWA”) that regulates water discharges and withdrawals; the Resource Conservation and Recovery Act (the “RCRA”) that addresses solid and hazardous waste treatment, storage and disposal; and the Comprehensive Environmental Response, Compensation and Liability Act (the “CERCLA”) that governs releases of hazardous substances, and remediation of sites contaminated thereby. Our operations are also subject to state laws and regulations that are patterned on these and other federal laws.

As the leading recycler in North America and often one of the largest employers in the communities where we operate, we take considerable interest and pride in our environmental track record. We believe that we are in substantial compliance with the provisions of all federal and state environmental laws and regulations applicable to our business operations.

The CWA regulates water discharges and withdrawals. Nucor maintains discharge and withdrawal permits as appropriate at its facilities under the national pollutant discharge elimination system program of the CWA and conducts its operations in compliance with those permits. Nucor also maintains permits from local governments for the discharge of water into publicly owned treatment works where available.

The RCRA establishes standards for the management of solid and hazardous wastes. The RCRA also addresses the environmental impact of contamination from waste disposal activities and from recycling and storage of most wastes. While Nucor believes it is in substantial compliance with these regulations, past waste disposal activities that were legal when conducted but now may pose a contamination threat are periodically discovered. These activities and off-site properties that the U.S. Environmental Protection Agency (the “EPA”) has determined are contaminated, for which Nucor may be potentially responsible at some level, are quickly evaluated and corrected. While Nucor has conducted and is in the final stages of completing some cleanups under the RCRA, we believe these liabilities either are identified already and being resolved or have been fully resolved.

Because Nucor long ago implemented environmental practices that have resulted in the responsible disposal of waste materials, Nucor is also not presently considered a major contributor to any major cleanups under the CERCLA for which Nucor has been named a potentially responsible party. Nucor regularly evaluates these types of potential liabilities and, if appropriate, maintains reserves sufficient to remediate the identified liabilities. Under the RCRA, private citizens may also bring an action against the

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operator of a regulated facility for potential damages and payment of cleanup costs. Nucor believes that its system of internal evaluation and due diligence has sufficiently identified these types of potential liabilities so that compliance with these regulations will not have a material adverse effect on our results of operations, cash flows or financial condition beyond that already reflected in the reserves established for them.

The primary raw material of Nucor’s steelmaking operations is scrap metal. The process of recycling scrap metal brings with it many contaminants such as paint, zinc, chrome and other metals that produce air emissions which are captured in specialized emission control equipment. This filtrant (“EAF dust”) is classified as a listed hazardous waste under the RCRA. Because these contaminants contain valuable metals, this filtrant is recycled to recover those metals. Nucor sends all but a small fraction of the EAF dust it produces to recycling facilities that recover the zinc, lead, chrome and other valuable metals from this dust. By recycling this material, Nucor is not only acting in a sustainable, responsible manner but is also substantially limiting its potential for future liability under both the CERCLA and the RCRA.

Capital expenditures at our facilities that are associated with environmental regulation compliance for 20182020 and 20192021 are estimated to be less than $100 million per year.

Employees

Nucor has a simple, streamlined organizational structure to allow our employees to make quick decisions and to innovate. Our organization is highly decentralized, with mostday-to-day operating decisions made by our division general managers and their staff. We have slightly more than 100 employees in our principal executive offices. The vast majority of Nucor’s approximately 25,10026,800 employees as of December 31, 20172019 are not represented by labor unions.

Nucor places the highest value on our teammates’ well-being and safety. Our foremost responsibility is to work safely, which requires our teammates to identify unsafe conditions and activities and mitigate these hazards. In 2019, we achieved our best safety performance in the key metrics we measure, including Injury/Illness Rate and Days Away, Restricted and Transfer (DART) Case Rate. We will continue to eliminate exposures that can lead to injury and encourage our teammates to share their ideas for safety improvement.

The operations in our mills are highly automated, resulting in lower employment costs. Employee turnover in Nucor mills is extremely low. Nucor employees have a significant part of their compensation based on their productivity. Production employees work under group incentives that provide increased earnings for increased production. This additional incentive compensation is paid weekly. Additionally, because we use EAFs to produce our steel, we can easily vary our production levels to match short-term changes in demand, unlike our integrated competitors. Taking advantage of this highly variable, low-cost structure has enabled Nucor to better control our costs during weaker market conditions.

Available Information

Nucor’s annual reportAnnual Report on Form10-K, quarterly reports Quarterly Reports on Form10-Q, current reports Current Reports on Form8-K, and any amendments to these reports, as well as proxy statements and other information, are available on our website at www.nucor.com, as soon as reasonably practicable after Nucor files these reportsdocuments electronically with, or furnishes them to, the U.S. Securities and Exchange Commission (the “SEC”). Except as otherwise expressly stated in these reports,documents, the information contained on our website or available by hyperlink from our website is not incorporated into this report or any other documents we file with, or furnish to, the SEC.

Many of the factors that affect our business and operations involve risk and uncertainty. The factors described below are some of the risks that could materially negatively affect our business, financial condition, and results of operations.

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Overcapacity in the global steel industry could increase the level of steel imports, which may negatively affect our business, results of operations, financial condition and cash flows.

The current global steelmaking capacity significantly exceeds the current global consumption of steel. According to the OECD, global steel production overcapacity was approximately 485 million tons at the halfway point of 2019, with a quarter of that amount located in China. Overcapacity is down from its peak in 2015 and 2016. Efforts by China to close inefficient steel production and improve air quality, steel mill closures in Europe and stronger global economic growth all contributed to reduce excess capacity.

During periods of global economic weakness, this overcapacity is amplified because of weaker global demand. This excess capacity often results in manufacturers in certain countries exporting significant amounts of steel and steel products at prices that are at or below their costs of production. In some countries the steel industry is subsidized or owned in whole or in part by the government, giving imported steel from those countries certain cost advantages. These imports, which are also affected by demand in the domestic market, international currency conversion rates, and domestic and international government actions, can result in downward pressure on steel prices, which could materially adversely affect our business, results of operations, financial condition and cash flows. Overcapacity has

Section 232 steel tariffs are keeping dumped steel products out of the U.S. market. The U.S. government is also lednegotiating new or renegotiating existing trade agreements with many countries, including China, which provide another opportunity to greater protectionism as is evident in raw material and finished product border tariffs put in place by China, Brazil and other countries.

TheG-20 Global Forum on Steel Excess Capacity, citing data from the Organisation for EconomicCo-operation & Developmentaddress excess steelmaking capacity. Should these efforts fail to reduce excess capacity and the World Steel Association, reports that in 2016 global steel production overcapacity was estimatedSection 232 tariffs be lifted, U.S. steelmakers would be at approximately 812,000,000 tons per year, with China being the largest contributorrisk of having to overcapacity. Total steel imports into the United States increased more than 15% in 2017 compared to the prior year. Excess capacity results in steel andcompete again against steel products which would otherwise have been consumed by the local steel customers, being displaced into global markets and thereby putting our steel and steel products at a competitive disadvantage.

The domestic steel market could experience a contractiondumped in exports at the same time as imports grow due to weakening conditions in Europe and policies of foreign governments that result in overvaluing the U.S. dollar against other foreign currencies. Furthermore, the addition of new capacity in the United States could exacerbate the issue of overcapacity domestically as well as globally.market.

Our industry is cyclical and both recessions and prolonged periods of slow economic growth could have an adverse effect on our business.

Demand for most of our products is cyclical in nature and sensitive to general economic conditions. Our business supports cyclical industries such as the commercial construction, energy, metals service centers, appliance and automotive industries. As a result, downturns in the U.S. economy or any of these industries could materially adversely affect our results of operations, financial condition and cash flows. WhileGeneral economic conditions in the United States has recently experienced modest growth in the general economy and steel demand in this country isare currently stronger than in many parts of the world, the global and domestic steel industries continue to face significant challenges. Thesebut challenges are caused byfrom global overcapacity in the steel industry and ongoing uncertainties, in other regions of the world. These situations can contribute to weakerend-markets and depressed demand for domestically produced steel and steel products, potentially resulting in extraordinary volatility in our financial results.

The economic outlook for our industry remains uncertain both in the United States and globally. in other regions of the world, remain.

While we believe that the long-term prospects for the steel industry remain bright, we are unable to predict the duration of the current economic conditions that are contributing to reduced demand for domestically produced steel and steel products below the 2007pre-recession levels.conditions. Future economic downturns or a prolonged slow-growth or a stagnant economy could materially adversely affect our business, results of operations, financial condition and cash flows.

Competition from other steel producers, imports or alternative materials may adversely affect our business.

We face strong competition from other steel producers and imports that compete with our products on price, quality and service. The steel markets are highly competitive and a number of firms, domestic and foreign, participate in the steel, steel products and raw materials markets. Depending on a variety of factors, including the cost and availability of raw materials, cost and

availability, energy, technology, labor and capital costs, government control of currency exchange rates and government subsidies of foreign steel producers, our business may be materially adversely affected by competitive forces.

In many applications, steel competes with other materials, such as concrete, aluminum, plastics, composites and wood. Increased use of these materials in substitution for steel products could have a material adverse effect on prices and demand for our steel products.

Since 2011, automobile producers have begun taking steps towards complying with new Corporate Average Fuel Economy (“CAFE”) mileage requirements for new cars and light trucks that they produce.

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As automobile producers work to produce vehicles in compliance with these new standards, they may seek to reduce the amount of steel they incorporate in their vehicles or begin utilizing alternative materials in cars and light trucks to improve fuel economy, thereby reducing their demand for steel and resulting in further over-supply of steel in North America.steel. Certain automakers have begun to use greater amounts of aluminum and smaller proportions of steel in some models since 2015.

The results of our operations are sensitive to volatility in steel prices and the cost of raw materials, particularly scrap steel.

We rely to an extent on outside vendors to supply us with key consumables such as graphite electrodes and raw materials, including both scrap and scrap substitutes that are critical to the manufacture of our steel products. The raw material required to produce DRI is pelletized iron ore. Although we have vertically integrated our business by constructing our DRI facilities in Trinidad and Louisiana and also acquiring DJJ in 2008, we still must purchase most of our primary raw material, steel scrap, from numerous other sources located throughout the United States. Although we believe that the supply of scrap and scrap substitutes is adequate to operate our facilities, prices of these critical raw materials are volatile and are influenced by changes in scrap exports in response to changes in the scrap, scrap substitutes and iron ore demands of our global competitors.competitors, as well as currency fluctuations. At any given time, we may be unable to obtain an adequate supply of these critical raw materials with price and other terms acceptable to us. The availability and prices of raw materials may also be negatively affected by new laws and regulations, allocation by suppliers, interruptions in production, accidents or natural disasters, changes in exchange rates, worldwide price fluctuations, and the availability and cost of transportation. Many countries that export steel into our markets restrict the export of scrap, protecting the supply chain of some foreign competitors. This trade practice creates an artificial competitive advantage for foreign producers that could limit our ability to compete in the U.S. market.

If our suppliers increase the prices of our critical raw materials, we may not have alternative sources of supply. In addition, to the extent that we have quoted prices to our customers and accepted customer orders for our products prior to purchasing necessary raw materials, we may be unable to raise the price of our products to cover all or part of the increased cost of the raw materials. Also, if we are unable to obtain adequate and timely deliveries of our required raw materials, we may be unable to timely manufacture sufficient quantities of our products. This could cause us to lose sales, incur additional costs and suffer harm to our reputation.

Changes in the availability and cost of electricity and natural gas are subject to volatile market conditions that could adversely affect our business.

Our steel mills are large consumers of electricity and natural gas. In addition, our DRI facilities are also large consumers of natural gas. We rely upon third parties for our supply of energy resources consumed in the manufacture of our products. The prices for and availability of electricity and natural gas are subject to volatile market conditions. These market conditions often are affected by weather, political, regulatory and economic factors beyond our control, and we may be unable to raise the price of our products to cover increased energy costs. Disruptions, inincluding physical or information systems related issues that impact the supply of our energy resources could temporarily impair our ability to manufacture our products for our customers. Increases in our energy costs resulting from regulations that are not equally applicable across the entire global steel market could materially adversely affect our business, results of operations, financial condition and cash flows.

Our steelmaking processes, our DRI processes, and the manufacturing processes of many of our suppliers, customers and competitors are energy intensive and generate carbon dioxide and other GHGs.greenhouse gases (“GHGs”). The regulation of these GHGs through significant new rulemaking or legislation in an onerous form could have a material adverse impact on our results of operations, financial condition and cash flows.

Carbon is an essential raw material in Nucor’s production processes. As a carbon steel producer, Nucor could be increasingly affected both directly and indirectly if more stringent domestic GHG

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regulations are further implemented. Because our operations are subject to most of these new GHG regulations, we are already impacted in the permit modification and reporting processes. Both GHG regulations and recently promulgated National Air Ambient Quality Standards, which are more restrictive than previous standards, can make it significantly more difficult to obtain new permits and to modify existing permits.

These same regulations have indirectly increased the costs to manufacture our products as they have increased and continue to increase the cost of energy, primarily electricity, which we use extensively in the steelmaking process. The discovery of new natural gas reserves utilizing the practice of horizontal drilling and hydraulic fracturing is dampeningmitigating some of this indirect impact, as some utilities switch fuels to natural gas from coal thereby reducing their emissions significantly. However, because some generating facilities when faced with new regulations are idling facilities instead of converting to natural gas, the resulting reduction in capacity can and will create further pressure onlead to increased electrical energy prices. The

In 2019, the EPA has recently announced that it will be replacingissued its Affordable Clean Energy (ACE) rule to replace the previously promulgated Clean Power Plan that was driving many utilities to shutter coal fired power plants. AtWhile this time there is a significant degree of uncertainty with respectexpected to result in lower electric power costs in the results of thisUnited States, another change in regulatory direction. To the extent that these regulationsapproach due to political or other considerations could cause, either directly or indirectly an increase in the cost of energy, they could have an impact onadversely impacting Nucor’s competitive position.

While the federal government appears to be movinghas moved in recent years to relax burdensomesome regulations that can impact domestic energy costs, some states are moving to enact their own regulations ofto curtail carbon and other GHG emissions. If such regulations are enacted in states in which Nucor does business, it could negatively affect those operations. Becauseincrease our costs there. Numerous states, including California, Washington, Oregon and New York, are considering or have passed laws using Environmental Product Declarations (“EPDs”) to evaluate environmental impacts of products. California has implemented the “Buy Clean California Act” and California is currently requesting EPDs from manufacturers to be used in State of California funded projects. EPDs are now required for certain materials including some foreign steel producers are not subjectproducts. Global Warming Potentials (“GWP”) will be established by January 1, 2021 for applicable product categories and EPDs will be used to these same indirect and direct regulatory burdens and their associated cost increases, our productsdetermine product compliance to the GWP limits. The impacts identified by EPDs could be at a further competitive disadvantage.impact future state/consumer purchasing decisions. In addition to increased costs of production, we could also incur costs to defend and resolve legal claims and other litigation related to new air and water qualitythese regulations and the alleged impact of our operations on the environment.

Environmental compliance and remediation could result in substantially increased costs and materially adversely impact our competitive position.

Our operations are subject to numerous federal, state and local laws and regulations relating to protection of the environment, and we accordingly, make provision in our financial statements for the estimated costs of compliance. These laws and regulations are becoming increasingly stringent, resulting in inherent uncertainties in these estimates. The EPA has recently revised the rules and definitions around recycling and solid wastes. The new rules require states to create new programs and certification processes for the companies that wish to continue recycling materials. Increased administrative and operational costs are likely in the United States to handle steel mill recycled materials such as slag, mill scale, iron dusts, lime and air filtration control dusts. To the extent that competitors, particularly foreign steel producers and manufacturers of competitive products, are not subject to similar regulation and required to incur equivalent costs, our competitive position could be materially adversely impacted. If one of our permits is revoked or if we were to experience significant delays in obtaining a permit modification or a new permit, this could result in operational delays at one or more of our facilities, causing a negative impact on our results of operations and cash flows.

We acquire businesses from time to time and we may encounter difficulties in integrating businesses we acquire.

We plan to continue to seek attractive opportunities to acquire businesses, enter into joint ventures and make other investments that strengthen Nucor. Realizing the anticipated benefits of acquisitions or other transactions

will depend on our ability to operate these businesses and integrate them with our operations and to cooperate with our strategic partners. Our business, results of operations, financial condition and cash flows could be materially adversely affected if we are unable to successfully integrate these businesses.

Our operations are subject to business interruptions and casualty losses.

The steelmaking business is subject to numerous inherent risks, particularly unplanned events such as explosions, fires, other accidents, natural disasters such as floods or earthquakes, unplanned critical equipment failures, acts of terrorism, inclement weather and transportation interruptions. While our insurance coverage could offset losses relating to some of those types of events, our results of operations and cash flows could be adversely impacted to the extent any such losses are not covered by our insurance.

We are subject to information technology and cyber security threats which could have an adverse effect on our business and results of operations.

We utilize various information technology systems to efficiently address business functions ranging from the operation of our production equipment to administrative computation to the storage of data such as intellectual property and proprietary business information. Despite efforts to assure secure and uninterrupted operations, threats from increasingly sophisticated cyber-attacks or system failures could result in materially adverse operational disruptions or security breaches.breaches of our systems or those of our third-party service providers. These risks could result in disclosure or destruction of key proprietary information, andpersonal data, reputational damage thator could adversely affect our ability to physically produce steel, resulting in lost revenues, as well as delays in reporting our financial results. We also could be required to spend significant financial and other resources to remedy the damage caused by a security breach, including to repair or replace networks and information technology systems,systems. We may also contend with potential liability for stolen information, increased cybersecurity protection costs, litigation expense and increased insurance premiums.

Our operations are subject to business interruptions and casualty losses.

The steelmaking business is subject to numerous inherent risks, particularly unplanned events such as explosions, fires, other accidents, natural disasters such as floods or earthquakes, critical equipment failures, acts of terrorism, inclement weather and transportation interruptions. While our insurance coverage could offset a portion of the losses relating to some of those types of events, our results of operations and cash flows could be adversely impacted to the extent that any such losses are not covered by our insurance, or that there are significant delays in resolving our claims with our insurance providers.

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Our business requires substantial capital investment and maintenance expenditures, and our capital resources may not be adequate to provide for all of our cash requirements.

Our operations are capital intensive. For thefive-year period ended December 31, 2017,2019, our total capital expenditures, excluding acquisitions, were approximately $3.3$4.0 billion. Our business also requires substantial expenditures for routine maintenance. Although we expect requirements for our business needs, including the funding of capital expenditures, debt service for financings and any contingencies, will be financed by internally generated funds, short-term commercial paper issuance or from borrowings under our $1.5 billion unsecured revolving credit facility, we cannot assure youguarantee that this will be the case. Additional acquisitions or unforeseen events could require financing from additional sources.

Risks associated with operating in international markets could adversely affect our business, financial position and results of operations.

Certain of our businesses and investments are located outside of the United States, in Europe, Mexico and in emerging markets. There are a number of risks inherent in doing business in such markets. These risks include but are not limited to: unfavorable political or economic factors; local labor and social issues; changes in regulatory requirements; fluctuations in foreign currency exchange rates; and complex foreign laws, treaties including tax laws, and the United States Foreign Corrupt Practices Act of 1977.1977 (FCPA). These risks could restrict our ability to operate our international businesses profitably and therefore have a negative impact on our financial position and results of operations. In addition, our reported results of operations and financial position could also be negatively affected by exchange rates when the activities and balances of our foreign operations are translated into U.S. dollars for financial reporting purposes.

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The accounting treatment of equity method investments, goodwill and other long-lived assets could result in future asset impairments, which would reduce our earnings.

We periodically test our equity method investments, goodwill and other long-lived assets to determine whether their estimated fair value is less than their value recorded on our balance sheet. The results of this testing

for potential impairment may be adversely affected by the continuing uncertain market conditions for the global steel industry, as well as changes in interest rates, commodity prices and general economic conditions. If we determine that the fair value of any of these assets is less than the value recorded on our balance sheet, and, in the case of equity method investments the decline is other than temporary, we would likely incur anon-cash impairment loss that would negatively impact our results of operations.

Tax increases and changes in tax laws and regulations could adversely affect our financial results.

The Tax Cutssteel industry and Jobs Actour business are sensitive to changes in taxes. As a company based in the United States, Nucor is more exposed to the effects of 2017 significantly affected the way U.S.-based multinational companies are taxed. Nucor expects to benefit from the Act’s domestic corporatechanges in U.S. tax law changes which will decrease the Company’s effective tax ratelaws than some of our major competitors. Our provision for income taxes and cash tax liabilities. The international portions ofliability in the Act, which transition thefuture could be adversely affected by changes in U.S. tax regime from a worldwide system to a modified territorial system and provide for U.S. tax on certain types of foreign income, may cause tax increases on the Company’s foreign operations. It is unclear the extent to which U.S. states will change their rates and tax base in response to the Tax Cuts and Jobs Act, but changes could adversely affect our financial results.laws.

We are subject to legal proceedings and legal compliance risks.

We spend substantial resources ensuring that we comply with domestic and foreign regulations, contractual obligations and other legal standards. Notwithstanding this, we are subject to a variety of legal proceedings and legal compliance risks in respect of various issues, including regulatory, safety, environmental, employment, transportation, intellectual property, contractual, import/export, international trade and governmental matters that arise in the course of our business and in our industry. For information regarding our current significant legal proceedings, see Item“Item 3. “LegalLegal Proceedings.” A negative outcome in an unusual or significant legal proceeding or compliance investigation could adversely affect our financial condition and results of operations. While we believe that we have adopted appropriate risk management and compliance programs, the nature of our operations means that legal and compliance risks will continue to exist and additional legal proceedings and other contingencies, the outcome of which cannot be predicted with certainty, will arise from time to time.

None.

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In the raw materials segment, DJJ has 68we have 85 operating facilities in 1620 states along with multiple brokerage officesone operating facility in the United States and certain other foreign locations. Nucor’s raw materials segment also includesPoint Lisas, Trinidad. For our DRI facilities in Point Lisas, Trinidad and St. James Parish, Louisiana. ALouisiana, a significant portion of the DRI production process occurs outdoors. The Trinidad site, including leased land, is approximately 1.911.9 million square feet. The Louisiana site has approximately 174.2 million square feet of owned land with buildings that total approximately 72,500 square feet. DJJ has 80 operating facilities in 18 states along with multiple brokerage offices in the United States and certain other foreign locations

The average utilization rates of all operating facilities in the steel mills, steel products and raw materials segments in 20172019 were approximately 85%84%, 64%70% and 65%67% of production capacity, respectively.

We also own our principal executive offices in Charlotte, North Carolina.

Nucor is from time to time a party to various lawsuits, claims and other legal proceedings that arise in the ordinary course of business. With respect to all such lawsuits, claims and proceedings, we record reserves when it is probable a liability has been incurred and the amount of loss can be reasonably estimated. We do not believe that any of these proceedings, individually or in the aggregate, would be expected to have a material adverse effect on our results of operations, financial position or cash flows. Nucor maintains liability insurance with self-insurance limits for certain risks.

Not applicable.

Information About Our Executive Officers

The following is a description of the Registrantnames and ages of the executive officers of the Company, indicating all positions and offices with the Company held by each such person and each person’s principal occupation or employment during the past five years. Each executive officer of Nucor is elected by the Board of Directors and holds office from the date of election until thereafter removed by the Board.

James R. Darsey (62)Craig A. Feldman(55), Executive Vice President of Raw Materials, was named EVP in September 2010. PriorApril 2018. He continues to that, he servedserve as President of the Vulcraft/Verco Group from 2007 and was electedThe David J. Joseph Company (“DJJ”), a role he has held since 2013. Mr. Feldman began his career as a Brokerage Representative for DJJ in 1986, subsequently serving as District Manager of DJJ’s Salt Lake City brokerage office, Commercial Vice President at DJJ’s subsidiary, Western Metals Recycling (“WMR”), and President of NucorWMR. Mr. Feldman served on the operational staff of DJJ’s then-owner in 1996.the Netherlands from 2005 until his 2007 appointment as DJJ’s Executive Vice President, Recycling Operations. Mr. Darsey began his Nucor career in 1979 as Design Engineer at Vulcraft-Texas, later serving as Engineering Manager at Vulcraft-Utah and Vulcraft-Texas. He then served as General Manager of Vulcraft-TexasFeldman became a Vice President and General Manager of Nucor Steel-Texas.

John J. Ferriola(65), has served as Chairman of the Board of Directors of Nucor since January 2014, as Chief Executive Officer since January 2013 and as President since January 2011. Previously, Mr. Ferriola served as President and Chief Operating Officer from January 2011 to December 2012 and, prior to that, as Chief Operating Officer of Steelmaking Operations from 2007 to 2010, Executive Vice President from 2002 to 2007 and Vice President from 1996 to 2001. He has also been a director of Nucor since January 2011. Mr. Ferriola joinedwhen DJJ was acquired by Nucor in 1991 as the Manager of Maintenance and Engineering at Nucor Steel-Texas. He later served as General Manager of Vulcraft-Texas, Nucor Steel-Nebraska and Nucor Steel-Indiana.2008.

James D. Frias (61) (63), has been Chief Financial Officer, Treasurer and Executive Vice President since January 2010. Prior to that, Mr. Frias was Vice President of Finance from 2006 to 2009. Mr. Frias joined Nucor in 1991 as Controller of Nucor Building Systems-Indiana. He also served as Controller of Nucor Steel-Indiana and as Corporate Controller. Mr. Frias joined the board of directors of Carlisle Companies Incorporated in February 2015.

Ladd R. Hall (61) (63), Executive Vice President of Flat-Rolled Products, was named EVP in September 2007, having previously served as Vice President of Nucor since 1994. He began his Nucor career in Inside Sales at Nucor Steel-Utah in 1981. He later served as Sales Manager of Vulcraft-Utah, and General Manager of Vulcraft-Texas, Vulcraft-Utah, Nucor Steel-South Carolina and Nucor Steel-Berkeley County.

Raymond S. Napolitan, Jr. (60) (62), Executive Vice President of Engineered Bar Products and Digital, was named EVP in June 2013, having previously served as President of Nucor’s Vulcraft/Verco group from 2010 to 2013 and President of American Buildings Company from 2007 to 2010. He was elected Vice

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President of Nucor in 2007. Mr. Napolitan began his Nucor career in 1996 as Engineering Manager of Nucor Building Systems-Indiana, and later served as General Manager of Nucor Building Systems-Texas.

R. Joseph Stratman (61)MaryEmily Slate (55), Chief Digital Officer and Executive Vice President of Plate, Structural and Tubular Products, was named EVP in September 2007May 2019. Ms. Slate began her career with Nucor in 2000 as a District Sales Manager at Nucor Steel Arkansas. She later served as Sales Manager at Nucor Steel Decatur, LLC and CDO in August 2016. Hethen as Cold Mill Manager. In 2010, Ms. Slate was promoted to General Manager of Nucor Steel Auburn, Inc. and was elected Vice President in 2012. She most recently served as Vice President of Nucor in 1999. Mr. Stratman joined Nucor in 1989 as Controller of Nucor Building Systems-Indiana. He then served as Controller of Nucor-Yamato, General Manager of Nucor Steel-Nebraska and General Manager of Nucor-Yamato.Steel Arkansas from 2015 to 2019.

David A. Sumoski (51) (53), Executive Vice President of Merchant and Rebar Products, was named EVP in September 2014. He had previously served as General Manager of Nucor Steel Memphis, Inc. from 2012 to 2014 and as General Manager of Nucor Steel Marion, Inc. from 2008 to 2012 and as General Manager of Nucor Steel Memphis, Inc. from 2012 to September 2014.2012. Mr. Sumoski was named Vice President of Nucor in 2010. He began his career with Nucor as an electrical supervisor at Nucor Steel-Berkeley in 1995, later serving as Maintenance Manager.

Leon J. Topalian (49) (51), was named President and Chief Executive Officer effective January 2020. He previously served as President and Chief Operating Officer beginning in September 2019, Executive Vice President of Beam and Plate Products in Mayfrom 2017 having previously servedto 2019 and as Vice President of Nucor since 2013. He began his Nucor career at Nucor Steel-Berkeley in 1996, serving as a project engineer and then as cold mill production supervisor. Mr. Topalian was promoted to Operations Manager for Nucor’s former joint venture in Australia and later served as Melting and Casting Manager at Nucor Steel-South Carolina. He then served as General Manager of Nucor Steel Kankakee, Inc. from 2011 to 2014 and as General Manager of Nucor-Yamato Steel Company from 2014 to May 2017.

D. Chad Utermark (49) (51), Executive Vice President of Fabricated Construction Products, was named EVP in May 2014. He had previously served as General Manager of Nucor-Yamato from 2011 to 2014 and as General Manager of Nucor Steel-Texas from 2008 to 2011 and as General Manager of Nucor-Yamato Steel Company from 2011 to May 2014.2011. He was named Vice President of Nucor in 2009. Mr. Utermark began his Nucor career as a utility operator at Nucor Steel-Arkansas in 1992, subsequently serving as shift supervisor and Hot Mill Manager at that division as well as Roll Mill Manager at Nucor Steel-Texas.

PART IITable of Contents

PART II

Our common stock is listed and traded on the New York Stock Exchange under the symbol “NUE.” As of January 31, 2020, there were approximately 14,000 stockholders of record of our common stock.

Our share repurchase program activity for each of the three months and the quarter ended December 31, 2019 was as follows (in thousands, except per share amounts):

Nucor has increased its base cash dividend every year since the Company began paying dividends in 1973. Nucor paid a total dividend of $1.51$1.60 per share in 20172019 compared with $1.50$1.52 per share in 2016.2018. In December 2017,2019, the Board of Directors increased the base quarterly cash dividend on Nucor’s common stock to $0.38$0.4025 per share from $0.3775$0.40 per share. In February 2018,2020, the Board of Directors also declared Nucor’s 180^th188th consecutive quarterly cash dividend of $0.38$0.4025 per share payable on May 11, 20182020 to stockholders of record on March 29, 2018.31, 2020.

Additional information regardingSee Note 17 to the marketCompany’s consolidated financial statements for Nucor’s common stock, quarterly market price ranges, the number of stockholders and dividend payments is incorporated by reference to Nucor’s 2017 Annual Report to Stockholders, page 84. Additional informationa discussion regarding securities authorized for issuance under stock-based compensation plans is incorporated by reference to Nucor’s 2017 Annual Report to Stockholders, pages 68 through 71.plans.

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Stock Performance

This graphic comparison assumes the investment of $100 in each of Nucor common stock, the S&P 500 Index and the S&P 1500 Steel Group Index, all at year-end 2014. The resulting cumulative total return assumes that cash dividends were reinvested. Nucor common stock comprised 35% of the S&P 1500 Steel Group Index at year-end 2019 and year-end 2014.

HistoricalThe table below sets forth certain selected financial informationdata concerning the Company for the five fiscal years ended December 31, 2019. The data is incorporated by referencederived from the consolidated financial statements of the Company. See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the accompanying notes to Nucor’s 2017 Annual Report to Stockholders, page 46.the consolidated financial statements for additional information.

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The information required byfollowing Management’s Discussion and Analysis of Financial Condition and Results of Operations of Nucor Corporation should be read in conjunction with the consolidated financial statements of the Company and the accompanying notes to the consolidated financial statements.

Management’s Discussion and Analysis of Financial Condition and Results of Operations included in this item is incorporated by reference to Nucor’s 2017 Annual Report to Stockholders, page 3 (Forward-Looking Statements)report discusses our financial condition and pages 24 through 42.

Inresults of operations as of and for the ordinary course of business, Nucor is exposed to a variety of market risks. We continually monitor these risksyears ended December 31, 2019 and develop strategies to manage them.

Interest Rate Risk – Nucor manages interest rate risk by using a combination of variable-rate and fixed-rate debt. At2018. Information concerning the year ended December 31, 2017 and a comparison of years 2018 and 2017 may be found under “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, filed with the SEC on February 28, 2019.

Overview

The growth rate of the U.S. economy slowed a bit in 2019, growing at 2.3% on an annualized basis compared to 2.9% the previous year. Demand in 2019 remained healthy in many of the markets Nucor monitors, with the strongest being nonresidential construction. Operating rates at our steel mills for the full year 2019 decreased to 84% as compared to 91% for the full year 2018. Industry-wide, the U.S. capacity utilization rate was 80% for 2019, its highest annual rate since 2008.  

The Section 232 steel tariffs continued to be effective in keeping unfairly traded imports out of the U.S. market. For the full year 2019, finished steel imports were down approximately 27%18% from the previous year and accounted for approximately 19% of U.S. market share. This was the lowest level of steel imports since 2010. Approximately six million fewer tons of imports entered the United States in 2019.

We are optimistic about market conditions heading into 2020. There have been a number of recent positive developments at the end of 2019 and the beginning of 2020, including the United States-Mexico-Canada trade agreement becoming law and reduced trade tensions with China. We expect stable or growing end-use markets in the markets that account for approximately 70% of our shipments. We expect the nonresidential construction market to remain strong.

Our Challenges and Risks

Sales of many of our products are largely dependent upon capital spending in the nonresidential construction markets in the United States, including in the industrial and commercial sectors, as well as capital spending on infrastructure that is publicly funded, such as bridges, schools, prisons and hospitals. While there has been no federal infrastructure bill, many states have passed bills funding infrastructure improvements.

While the Section 232 tariffs are having their intended impact by keeping unfairly traded imports out of the U.S. market, global steel production overcapacity continues to be a long-term challenge. Steel production in China rose in 2019, going from approximately 1.02 billion tons in 2018 to approximately 1.10 billion tons in 2019 – an increase of 8%. As a result, China’s share of global crude steel production rose from 51.3% in 2018 to 53.3% in 2019. The OECD estimates that global excess steel production capacity was approximately 485 million tons at the halfway point of 2019, up from 455 million tons at the end of 2018. Nearly a quarter of that excess capacity is located in China, where the largest steel companies are state-owned and receive significant financial support from the Chinese government.  

A major uncertainty we continue to face in our business is the price of our principal raw material, ferrous scrap, which is volatile and often increases or decreases rapidly in response to changes in domestic demand, unanticipated events that affect the flow of scrap into scrap yards, the availability of scrap substitutes, currency fluctuations and changes in foreign demand for scrap. In periods of rapidly increasing raw material prices in the industry, which are often also associated with periods of strong or rapidly improving steel market conditions, being able to increase our prices for the products we sell quickly enough to offset increases in the prices we pay for ferrous scrap is challenging but critical to maintaining our profitability. We attempt to mitigate the scrap price risk by managing scrap inventory

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Nucor’s tax-exempt industrial development revenue bonds that(“IDRBs”) have variable interest rates that are adjusted weekly. The remaining 73%These IDRBs represented 24% of Nucor’s long-term debt wasoutstanding at December 31, 2019. The remaining 76% of Nucor’s long-term debt is at fixed rates. Future changes in interest rates are not expected to significantly impact earnings. From time to time, Nucor also occasionally makes use of interest rate swaps to manage net exposure to interest rate changes.risk. As of December 31, 2017,2019, there were no such contracts outstanding. Nucor’s investment practice is to invest in securities that are highly liquid with short maturities. As a result, we do not expect changes in interest rates to have a significant impact on the value of our investment securities recorded as short-term investments.

Nucor also uses derivative financial instruments from time to time to partially manage its exposure to price risk related to purchases of natural gas used in the production process, as well as scrap, copper and aluminum purchased for resale to its customers. In addition, Nucor uses forward foreign exchange contracts from time to time to hedge cash flows associated with certain assets and liabilities, firm commitments and anticipated transactions. Nucor generally does not enter into derivative instruments for any purpose other than hedging the cash flows associated with specific volumes of commodities that will be purchased and processed or sold in future periods and hedging the exposures related to changes in the fair value of outstanding fixed-rate debt instruments and foreign currency transactions. Nucor recognizes all derivative instruments in the consolidated balance sheets at fair value.

The Company is exposed to foreign currency risk primarily through its operations in Canada, Europe and Mexico. We periodically use derivative contracts to mitigate the risk of currency fluctuations.

Dividends

Nucor has increased its base cash dividend every year since it began paying dividends in 1973. Nucor paid dividends of $1.60 per share in 2019, compared with $1.52 per share in 2018. In December 2019, the Board of Directors increased the regular quarterly cash dividend on Nucor’s common stock to

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Commodity Price Risk – In the ordinary course of business, Nucor is exposed to market risk for price fluctuations of raw materials and energy, principally scrap steel, other ferrous and nonferrous metals, alloys and natural gas. We attempt to negotiate the best prices for our raw materials and energy requirements and to obtain prices for our steel products that match market price movements in response to supply and demand. In periods of strong or stable demand for our products, we are more likely to be able to effectively reduce the normal time lag in passing through higher raw material costs so that we can maintain our gross margins. When demand for our products is weaker, this becomes more challenging. Our DRI facilities in Trinidad and Louisiana provide us with flexibility in managing our input costs. DRI is particularly important for operational flexibility when demand for prime scrap increases due to increased domestic steel production.

Natural gas produced by Nucor’s drilling operations is being sold to third parties to offset our exposure to changes in the price of natural gas consumed by our Louisiana DRI facility and our steel mills in the United States. For the year ended December 31, 2017, the volume of natural gas sold from our drilling operations was approximately 21% of the volume of natural gas purchased for consumption in our domestic steelmaking and DRI facilities.

Nucor also periodically uses derivative financial instruments to hedge a portion of our exposure to price risk related to natural gas purchases used in the production process and to hedge a portion of our scrap, aluminum and copper purchases and sales. Gains and losses from derivatives designated as hedges are deferred in accumulated other comprehensive loss, net of income taxes on the consolidated balance sheets and recognized intoin net earnings in the same period as the underlying physical transaction. At December 31, 2017,2019, accumulated other comprehensive loss, net of income taxes included $2.8$14.0 million in unrealizednet-of-tax losses for the fair value of these derivative instruments. Changes in the fair values of derivatives not designated as hedges are recognized in earnings each period. The following table presents the negative effect onpre-tax earnings of a hypothetical change in the fair value of the derivative instruments outstanding at December 31, 2017,2019, due to an assumed 10% and 25% change in the market price of each of the indicated commodities (in thousands):