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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

For the fiscal year ended December 31, 20192021

or

Commission file numberFile Number: 1-4119

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: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. YESYes ☒ NONo ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.  YESYes ☐ NONo ☒

Indicate by check mark whether the registrant:registrant (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.  YESYes ☒ NONo ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  YESYes ☒ NONo ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

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 has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C.7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  YESYes ☐ NONo ☒

The aggregate market value of the registrant’s common stock held by non-affiliates was approximately $16.58$28.21 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, June 29, 2019.July 3, 2021.

The number of shares of the registrant’s common stock outstanding as of February 21, 202018, 2022 was 301,000,375.269,124,863.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s definitive proxy statement to be filed with the Securities and Exchange Commission in connection with the registrant’s 20202022 Annual Meeting of Stockholders are incorporated by reference in Part III of this report to the extent described herein.

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Nucor Corporation

Annual Report on Form 10-K

For the Fiscal Year Ended December 31, 20192021

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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 2019,2021, we recycled approximately 17.820.4 million gross tons of scrap steel.

Segments, PrinciplePrincipal Products Produced, and Markets and Marketing

Nucor reports its results in three segments: steel mills, steel products and raw materials. The steel mills segment is Nucor’s largest segment, representing 62%66% of the Company’s sales to external customers in the year ended December 31, 2019.2021.

We 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)steel, steel electrical conduit pipe and insulated metal panels), we are the leading supplier.

Steel mills segment

In the steel mills segment, Nucor produces sheet steel (hot-rolled, cold-rolled and galvanized), 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 [“(“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”), NuMit LLC (“NuMit”) and Nucor-JFE Steel Mexico, S. de R.L. de C.V. (“Nucor-JFE”), as well as international trading and distribution companies that buy and sell steel manufactured by the Company and other steel producers.

The steel mills segment sells its products primarily to steel service centers, fabricators and manufacturers located throughout the United States, Canada and Mexico. The steel mills segment sold approximately 18,585,00020,296,000 tons to outside customers in 2019.2021.

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The following chart shows our outside steel shipments by end market:

In 2019, 80%2021, 79% of the shipments made by our steel mills segment were to external customers. The remaining 20%21% of the steel mills segment’s shipments went to our tubularsteel products piling distributor, joist, deck, rebar fabrication, fastener, metal buildings and cold finish operations.segment.

Steel produced by our bar mills has a wide usage serving end markets, including the agricultural, automotive, construction, energy, furniture, machinery, metal building, railroad, recreational equipment, shipbuilding, heavy truck and trailer market segments. Considering Nucor’s production capabilities and the mix of bar products generally produced and marketed, the capacity of the bar mills is currently estimated at approximately 8,830,0009,560,000 tons per year.

Reinforcing and merchant bar steel are sold in standard sizes and grades, which allows us to maintain inventory levels of these products to meet our customers’ expected orders. Our SBQ products are hot-rolled to exacting specifications primarily servicing the automotive, energy, agricultural, heavy equipment and transportation sectors.

In December 2021, Nucor announced that it expects to build a rebar micro mill at a to-be-determined location in the South Atlantic region.

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Nucor produces hot-rolled, cold-rolled and galvanized sheet steel to customers’ specifications while maintaining some inventories to fulfill anticipated orders.specifications. Contract sales within the steel mills segment are most notable in our sheet operations, as it is common for contract sales to account for the majority of sheet sales in a given year. We estimate that approximately 75%greater than 80% of our sheet steel sales in 20192021 were to contract customers. The balance of our sheet steel sales waswere made in the spot market at prevailing prices at the time of sale. The proportionamount of tons sold to contract customers at any given time depends on a variety of factors, including our consideration of current and future market conditions, our strategy to appropriately balance spot and contract tons in a manner to meet our customers’ requirements while considering the expected profitability, our desire to sustain a diversified customer base, and our end-use

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customers’ perceptions about future market conditions. These sheet sales contracts are generally noncancellable agreements that generally incorporate monthly or quarterly price adjustments reflecting changes in the current market-based indices and/or raw material cost, and typically have terms ranging from six to 12 months.

In January 2022, Nucor announced that it expects to build a new, state-of-the-art sheet mill in West Virginia. In February 2022, Nucor completed its acquisition of a majority ownership position in California Steel Industries, Inc. (“CSI”), a flat-rolled steel converter, based in Fontana, California, expanding the reach of Nucor’s sheet mill group to the west coast of the United States.

Nucor also owns a steel beam mill in Berkeley County, South Carolina. Considering Nucor’s production capabilities and the mix of structural products generally produced and marketed, the capacity of the two structural mills is estimated at approximately 3,250,000 tons per year. Both mills use a special continuous casting method that produces a beam blank closer in shape to that of the finished beam than traditional methods.

Structural 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 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 ability 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 is 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 meet 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 2630 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 for customers in a wide range of industries, including the automotive, agricultural and consumer goods markets.

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Nucor owns a 50% of the stock of Duferdofin Nucor, which operates a melt shopeconomic and bloom/billet castervoting interest 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 its 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 (“JFE”) of Japan that operates a galvanized sheet steel plant in central Mexico that willis expected to supply the country’s automotive market with an annual capacity of approximately 400,000 tons.

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Steel products segment

In the steel products segment, Nucor produces hollow structural section (“HSS”) steel tubing, electrical conduit, steel racking, steel joists and joist girders, steel deck, fabricated concrete reinforcing steel, cold finished steel, steel fasteners, metal building systems, insulated metal panels, 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.

In August 2021, Nucor acquired Hannibal Industries, Inc. (Hannibal), a leading national provider of steel racking solutions. Total annual NTP capacity is approximately 1,500,000 tons. In March 2021, Nucor announced that it expects to build a new tube mill on the site of its Kentucky sheet mill.

Reinforcing products are essential to concrete construction. They supply tensile strength, as well as additional compressive strength, and protect 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, with each facility serving a local market. Total annual rebar fabrication capacity is approximately 1,650,0001,686,000 tons.

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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 warehouses, data centers, 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 sell these finished steel 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 material costs.

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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 supply through all market conditions. These facilities 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 the appliance, automotive, construction equipment, electric motor, farm machinery and fluid power industries, as well as by service centers. NCF bars are used in 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 acquiredowns 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 and manufacturing facilities.

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Nucor produces mesh at Nucor Steel Connecticut, Inc. and Nucor Wire Products Utah. Nucor also produces mesh in Canada at the Harris operations of Laurel and Laurel-LEC.Steel. The combined annual production capacity of the steel mesh facilities is approximately 128,000 tons.

Our grating business which operates under the brand names Nucor Grating in the United States and Fisher & Ludlow in Canada, manufactures and fabricates steel and aluminum bar grating products at facilities located in North America. Nucor GratingAmerica and Fisher & Ludlow serveserves the new construction and maintenance-related markets. The annual production capacity for our grating business is approximately 120,00046,500 tons.

Nucor Fastener’s bolt-making facility in Indiana produces carbon and alloy steel hex head cap screws, hex bolts, structural bolts, nuts and washers, finished hex nuts and 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 annual production capacity of this facility is approximately 75,000 tons.

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Raw materials segment

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. Nucor’s raw materials investments are focused on creating an advantage for its steelmaking operations, through a global information network and a multi-pronged and flexible approach to metallics supply.

DJJ is the leading broker of ferrous scrap in North America and is a global trader of scrap metal, pig iron and other metallics. In addition to sourcing steel scrap for Nucor’s mills, DJJ is a global trader of ferro-alloys and nonferrous metals. DJJ’s logistics team owns and operates one of the largest independent fleets of railcars in the United States dedicated to the movement of scrap and steel and also offers railcar leasing and railcar fleet management services. These activities have strategic value to Nucor as the leading and most diversified North American steel producer.

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Our primary external customers for ferrous scrap are EAF 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 through in-house sales forces. In 2019,2021, approximately 10%9% of the ferrous and nonferrous metals and scrap substitute tons we brokered and processed were sold to external customers. We consumed the balance in our steel mills.

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

In 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.steel mills.

Nucor’s access to a long-term, low-cost supply of natural gas is an importanta 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 partially 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 and Markets

Customers

A significant portion of our steel millsWe have a diverse customer base and steel products segments’ sales are into the commercial, industrial and municipal construction markets.not dependent on any single customer. Our largest single customer in 20192021 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.

We believe that nonresidential construction is the largest end-use market that we serve. Products from our steel mills and steel products segment are used in a variety of nonresidential construction applications (e.g., commercial, industrial, infrastructure).

In recent years we have come to see our EAF-based steelmaking method, with its lower greenhouse gas (“GHG”) intensity when compared with blast furnace technology, as a competitive advantage for reasons beyond its flexible, highly variable cost base. Many of our customers are expressing greater concern for the GHG emissions in their supply chains and are prioritizing sourcing their steel requirements from EAF-based steelmakers for incorporation into their projects and products.  

We have developed branded product lines to leverage this, and other advantages conferred by our specialized capabilities.  

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We have also invested in people and processes to organize more of our commercial activities around large customers and end-use markets (e.g., automotive, construction, wind energy and solar energy). We have developed dedicated teams who are tasked with developing relationships and educating decision makers in these sectors. We believe this has resulted in earlier and more thoughtful consideration being given to steel-based solutions from Nucor, and a better appreciation for some our unique products and capabilities, such as AEOS^TM and ECONIQ^TM.

General Development of Our Business in Recent Years

Nucor has invested significant capital in recent years to expand our product portfolio to include more value-added steel mill products and capabilities, improve our cost structure, enhance our operational flexibility and provide additional channelsincrease our exposure to market for our products.markets with attractive growth prospects; such as datacenters, warehouses and renewable energy. These investments totaled approximately $3.68$6.34 billion over the last three years, with approximately 80%75% going to capital expenditures and the remainingremainder going to acquisitions. We believe that our focus on lowering costs and diversifying our operationsthese investments will enablehelp us to execute on our strategy of deliveringdeliver 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 being negatively impacted by imports.

NewNucor has several new capital projects and an acquisition of majority ownership position a joint venture in the steel mills segment that align withsupport our expansion of value-added product offerings and cost-reduction strategies were completed in 2019. Atstrategies.

The new mill will be equipped to produce 84-inch sheet products, and among other features, will include a 76-inch tandem cold mill located in Ghent, Kentucky, Nucor’s approximately $200 million investment inand two galvanizing lines. Galvanizing capabilities will include an advanced high-end automotive line with full inspection capabilities as well as a new hot band galvanizingconstruction-grade line. In addition to its advanced capabilities and pickling line ramped up production in late 2019 and is shipping products to customers. We believestrategic location, the new galvanizing linegreenfield mill’s product mix is anticipated to have a significantly lower GHG intensity than competitors who have historically supplied the widest hot-rolled galvanizing line in North America with its 72-inch product, creating synergies with Nucor’s other sheetregion.

These mills are referred to as micro mills because they have a smaller operational footprint than our older rebar mills, as well as less productive capacity – typically about 400,000 tons per year.  This makes them suitable for smaller regional markets and allowingenables to 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 advanced, high-strength low-alloy steel and motor lamination steel products.

We have several growth initiatives underway in our 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 usserve these markets with a freightlogistics cost advantage relative to more distant suppliers,competitors operating from further away.  Micro mills also have a lower environmental footprint due to their smaller size and we will also benefit from the scrap supplyfact that their plant design does not typically include a natural gas fired reheat furnace that is common in many steel mills.

Our acquisition of CSI expands the immediate area provided by our existing DJJ operations. The newreach of Nucor’s sheet 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. Similargroup to the mill in Sedalia, Missouri, we believe this new micro mill will benefit fromwest coast of the scrap supply in the immediate area provided byUnited States and increases our existing DJJ operationsexposure to more value-added sheet steel.  CSI’s product capabilities include hot rolled, pickled & oiled, cold rolled and galvanized sheet steels, as well as strong regional demand for its products. This approximately $240 million investmentelectric resistance welded (ERW) pipe. Its annual capacity is expected to be operationalestimated at more than 2,000,000 tons. 

During 2021, Nucor made two strategic acquisitions 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 Nucor 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 capability 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.segment.

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 joint venture.

Capital Allocation Strategy

The significant developments in Nucor’s business in recent years have largely 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 share repurchases. Nucor has paid $1.46$1.47 billion in dividends to its stockholders during the past three years. That dividend payout represents 23%13% of cash flows from operations during that three-year period. The Company repurchased $298.5 million$3.28 billion of its common stock in 20192021 ($854.039.5 million in 20182020 and $90.3$298.5 million in 2017)2019).

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%58% of our net income in this manner. At December 31, 2021, the Company had approximately $3.85 billion available for share repurchases under the currently authorized share repurchase program.

We intend to execute on our capital allocation strategy while maintaining a strong balance sheet, with relatively low financial leverage, as measured in terms of net debt to total capital, as well as ample liquidity. At year-end 2021, our net debt to total capital was approximately 14% and we had cash and cash equivalents, short-term investments and restricted cash and cash equivalents on hand of $2.76 billion. At the end of 2021, Nucor had the strongest credit ratings in the North American steel sector (Baa1/A-) with stable outlooks at both Moody’s and Standard & Poor’s.

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.

In 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 domestic EAF steel mills, steel 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. EAF basedEAF-based steel 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. EAF-based steel producers also typically emit fewer GHGs per ton of steel produced than integrated steel producers.

Excess global steelmaking capacity, particularly in non-market economies,10

Global steel production overcapacity continues to be a significant challenge foran ongoing risk to Nucor and the entire U.S. steel industry. Steel production in China rose 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 Organisation for Economic Co-operationCooperation and Development (the “OECD”(“OECD”) estimates that excess global steel production overcapacity is currently approximately 500,000,000 tons, which is down slightly from previous years. However, additional capacity was approximately 485 million tons through the first half of 2019, up from 455 million tons at the end of 2018. Nearly a quarter of that excess capacity is located in China, wherecontinues to come online and China’s steel production, the largest steel producing country, is still near record levels. In 2021, China’s steel production was 1.13 billion tons compared to the record amount of 1.16 billion tons the previous year.

Circumvention of trade duties also continues to pose a risk. Besides producing record amounts of steel in its own country, China is investing heavily in steel production in neighboring countries which is one way it tries to avoid being subject to trade duties. State-owned Chinese steel companies are state-ownedinvolved in new steel capacity projects in Indonesia, the Philippines and receiveMalaysia. The South East Asia Iron and Steel Institute (SEAISI) has estimated that by 2026 there will be significant financial support fromproduction overcapacity in the Chinese government.region, noting it will take 20 years for demand to catch up with the projected capacity levels.

Strong trade enforcement has led to a structural change in the U.S. steel market. The Section 232 steel tariffs implemented by the current administrationand successful trade cases have been effective in 2018 are having their intended impact by preventing the dumpingkeeping unfairly traded imports out of steel products in the U.S. market. In addition, successful industry trade cases overNovember 2021, the past several years have hadU.S. government reached an impactagreement with Europe to end the Section 232 imports on import levels. Forsteel from the full year 2019, importsEuropean Union and replace them with a tariff rate quota. The U.S. government is also negotiating potential deals to end the tariffs with the United Kingdom and Japan. Imports of finished steel in 2021 were downup approximately 18%48% from the previous year2020 levels and accounted for approximately 19%22% of U.S. market share.

At the end of 2021, Congress passed a significant infrastructure spending bill. The last time steel import levels were this low wasbill will result in 2010. Approximately sixan estimated 4 million fewerto 6 million tons of imports enteredadditional steel demand per year, and contains strong Buy America requirements to ensure domestically produced steel is used to rebuild U.S. infrastructure.  Approximately 50% of Nucor products are shipped into the United Statesconstruction market, and Nucor’s lower carbon footprint is expected to provide an additional advantage as states and localities look to rebuild infrastructure 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, including requiring that higher levels of a vehicle’s content, including steel, be produced in North America for a vehicle to qualify for zero tariffs, and that 70% of the steel used in vehicles 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 includes enforceable commitments from China to refrain from currency devaluation for competitive purposes. Negotiations with China continue in order to address China’s use of subsidies and state-owned enterprises which contribute to its persistent steel production overcapacity.sustainable manner.

We also experience competition from other materials. Depending on our customers’ end use of our products, there are sometimesoften 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 $1.68$3.79 billion and $2.08$2.58 billion at December 31, 20192021 and 2018,2020, 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 $2.24$8.12 billion and $2.26$2.66 billion at December 31, 20192021 and 2018,2020, respectively. The increase in backlogs for the steel products segment is due to several businesses within the steel products segment having record backlog volume and pricing at December 31, 2021. The majority of these orders are expected to be filled within one year. Order backlog within our raw materials segment is not significantmeaningful because the vast majority of the raw materials that segment produces are used internally.

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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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transports steelmaking raw materials. Nucor’s raw materials investments are focused on creating an advantage for itsour steelmaking operations, through a global information network and a multi-pronged and flexible approach to metallics supply.

Scrap and scrap substitutes are the most significant element in the total cost of steel production. The average cost of scrap and scrap substitutes used in our steel mills segment decreased 13%increased 62% from $361$290 per gross ton used in 20182020 to $314$469 per gross ton used in 2019.2021. On average, it takes approximately 1.1 tons of scrap and scrap substitutes to produce one ton of steel. Depending on the market conditions at the time, a raw material surcharge or variable steel pricing mechanism may be implemented to assist Nucor in maintaining operating margins and in meeting our customer commitments during periods of rapidly changing scrap and scrap substitute costs.

For the past decade, Nucor has focused on securing access to low-cost raw material inputs as they are the Company’s largest expense. We believe 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 material 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. Continuedturmoil, such as Ukraine, Russia and Brazil. We believe the continued successful implementation of our raw material strategy, including key investments in DRI production, as well as in the scrap brokerage and processing services performed by our team at DJJ, gives us greater control over our metallic inputs and thus helps us mitigate the risk of significant fluctuations in the availability and costs of critical inputs.

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 primarily from a varietyoverseas sources including Russia, Ukraine and Brazil. We received over 2,800,000 gross tons of sources and operatepig iron in 2021. Our DRI plants in Trinidad and Louisiana withhave respective annual production capacities of approximately 2,000,000 and 2,500,000 metric tons. The primary raw material for our DRI facilities is pelletized iron ore, which we purchase from various international suppliers. Another major source of raw materials used in the production of steel is pig iron. We received over 2.5 million gross tons of pig iron in 2019. As with scrap and iron ore, we source pig iron from a large number of international suppliers.

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

Energy Consumption and Costs

Our steel mills are large consumersSteel manufacturing is considered an energy-intensive, trade exposed industry. As a result, we continuously strive to make our operations in all three of electricityour business segments more energy efficient. In addition, we proactively engage with suppliers, regulators and natural gas, which are significant costsother energy industry participants to Nucor. Access to long-term, low costensure the continued availability of reliable, low-cost sources of energy in various forms is critically important to our continued success. Because of the efficiency of Nucorforms.

Our steel mills we believe we are able to reduce ourutilize EAFs for 100% of their steel production, with approximately 50% of their total energy costs relative toconsumed as electricity. The total energy consumed by Nucor also includes natural gas, oxygen and carbon raw material inputs. For the scrap melting process, electricity is the primary energy source, with natural gas combustion serving as the fuel for reheat furnaces and other steel producers.

pre-heating operations. Our DRI facilities in Trinidad and Louisiana are also large consumers of natural gas. Consequently, we

The availability and prices of electricity and natural gas are influenced today by many factors, including changes in supply and demand, the regulatory environment and pipeline/transmission infrastructure.

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We use a variety of strategies to manage our exposure to price risk of natural gas, including cash flow hedges, as well as our owned 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 topartially 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. The availability and prices of electricity and natural gas are influenced today by many factors, including fuel switching (coal to natural gas by public utilities), changes in supply and demand, and pipeline and export infrastructure expansion. Because energy is such a significant cost for Nucor, we strive 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 workWe engage with policymakers to shape those developments in waysprovide technical information that wecan inform policy decisions and avoid unintended adverse consequences of legislative and regulatory actions. We believe will allow usthat a thoughtful approach to continue to be a competitive producer ofdomestic energy policy can help ensure that steel and steel products manufactured in anthe United States remain competitive in the increasingly competitive global marketplace.

Reducing Greenhouse Gas Emissions

GHG emissions by the energy sector have received an increasing amount of attention in recent years, as more people become concerned that these emissions are a significant contributor to climate change. This has led to increasing support for, and investment in, low or zero carbon energy generation technologies such as solar, wind and nuclear. As a result, the development of these technologies has accelerated, and in many cases, they are now more cost competitive with traditional, fossil fuel-based power generation. We believe that this ongoing diversification of power generation technologies is fundamentally positive, but without careful planning and investment there is some risk to the reliability of the domestic power grid as this transition continues. In particular, legacy fossil fuel-based assets will remain essential for some time to come and the U.S. transmission grid is broadly in need of substantial upgrades to take full advantage of these newer, more intermittent power sources. We are also optimistic about the related demand for our products as transmission grid upgrades are executed and newer power generation assets are developed using steel.

In July 2021, we announced a commitment to lower the GHG emissions intensity from our steel mill operations by 35% in 2030, measured against a 2015 baseline - the year the Paris Climate Agreement was adopted.  As a result, Nucor’s GHG intensity in 2030 is expected to be 77% less than today’s global average.  We expect to achieve these goals with a multi-pronged approach that includes utilization of renewable energy, carbon substitutes, more efficient operations and carbon sequestration.

  In 2020 and 2021, we entered into three Virtual Power Purchase Agreements (“VPPAs”). Under each VPPAs, we have agreed to purchase for a fixed price a portion of the output of both solar and wind renewable power projects being developed in the United States. The VPPAs will be settled financially on a monthly basis. We have undertaken these initiatives to support the ongoing transition of the U.S. power grid to a greater reliance on renewable power. As part of these arrangements, we will also receive Renewable Energy Credits (“RECs”) commensurate with the power we purchase. These RECs can be applied against a portion of our GHG emissions, enabling us to receive credit for reducing them. The pay fixed, received floating nature of this arrangement also offsets a portion of our exposure to higher prices for electricity over the life of the contract. We are evaluating and considering similar transactions. One VPPA started delivering RECs to us in June 2021 and the other two VPPAs may be delayed as a result of supply chain disruptions and permitting delays and interconnection delays.

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Government and Environmental LawsRegulations

Our business operations are subject to numerous federal, state and Regulationslocal laws and regulations, the most significant of which are intended to protect our teammates and the environment.  Due to the nature of the steel industry, we are subject to substantial regulations related to safety in the workplace.  In addition to the requirements of the state and local governments of the communities in which we operate, we must comply with federal health and safety regulations, the most significant of which are enforced by the Occupational Safety and Health Administration (“OSHA”). Because safety and safety compliance is one of our primary values, its effect on our capital expenditures, earnings and competitive position is not estimable.

Nucor operates an aggressivea robust and sustainable environmental program that incorporates the concept of each individual employee,teammate, as well as management, responsibilitybeing responsible for environmental performance. All of Nucor’s steelmaking operationssteel mills that have been in operation for over five years are ISO 14001 certified. Achieving ISO 14001 certification means that each ofrequires Nucor’s steel mills has putto implement 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.use.

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

As it relates to air emission rates, EAFs are the most efficient and cleanest steel making process commercially available today. In comparison to blast furnaces, emissions of sulfur oxides from EAFs are approximately 14% of the amount emitted from blast furnaces. EAFs emit less than 1% of the particulate emissions compared to blast furnace operations. Importantly, EAF emissions of GHGs per ton of steel average less than half of the rates typically generated by blast furnaces. Operating EAFs instead of blast furnaces is a proven air quality improvement strategy.  In addition, each of our steel mills operates air pollution control devices (baghouses) to collect and capture particulate emissions (“EAF dust”) from the steel making process.  We strive to maintain compliance with all applicable CAA requirements.

The primary raw material of Nucor’s steelmaking operations is scrap metal. The process of recycling scrap metal generates particulate matter emissions that are patterned on theseincludes contaminants such as paint, zinc, lead, chrome and other federal laws.

Asmetals. Initially, the leading recycler in North Americaparticulate matter captured and often onecollected is classified as a listed hazardous waste under the RCRA. Because these contaminants contain valuable metals, the EAF dust is recycled to recover these metals. Nucor sends all but a small fraction of the largest employersEAF dust it collects to recycling facilities that recover the zinc, lead, chrome and other valuable metals from this dust. By recycling this material, Nucor believes it is not only acting in a sustainable, responsible manner but it is also substantially limiting its potential for future liability under both the communities where we operate, weCERCLA and the RCRA.

In addition to recycling EAF dust, Nucor mills beneficially reuse steel slag in road materials as a granular base, embankments, engineered fill, highway shoulders, and hot mix asphalt pavement. The physical, chemical, mechanical and thermal properties of steel slag provide a vital resource for construction companies and activities. We take considerable interest and pride in our environmental track record. We believe that we are in substantial compliance withrecycling efforts.

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Not only does 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 establishesestablish standards for the management of solid and hazardous wastes. Thewastes, 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,Periodically, 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 thatWhen the U.S. Environmental Protection Agency (the “EPA”) has determineddetermines these off-site properties are contaminated, for which Nucor mayquickly evaluates such claims and, if Nucor is determined to be potentially responsible, at some level, are quickly evaluated and corrected. Whilewe do our part to remediate our share of such issues. Nucor has conducted and is in the final stages of completing some cleanupsbelieves all identified liabilities under the RCRA we believe these liabilitiesare either are identified already andcurrently being resolved or have been fully resolved.

Because Nucor long agohas historically 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, chromeTo protect water resources, the CWA regulates water withdrawals 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 wastedischarges. When applicable, Nucor maintains water withdrawal and discharge permits at its facilities under the RCRA. Because these contaminants contain valuable metals, this filtrant is recycled to recover those metals. Nucor sends all but a small fractionnational pollutant discharge elimination system program of the EAF dust it produces to recycling facilities that recoverCWA and conducts its operations in compliance with those permits. Nucor also maintains permits from local governments if 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.facility discharges into publicly owned treatment works.

Capital expenditures at our facilities that are associated with environmental regulation compliance for 20202021 and 20212022 are estimated to be less than $100 million per year.

EmployeesHuman Capital Resources

Culture, Organization and Compensation

We consider our teammates the most important part of Nucor and believe that our culture – and the encouragement that we provide to our teammates to “grow the core; expand beyond; and live our culture” – provides us with a competitive advantage. Our culture’s key principles are: Safety First, Trust, Open Communications, Teamwork, Community Stewardship and Results.  

Nucor has a simple, streamlined organizational structure to allowthat allows our employeesteammates to make quick decisions and to innovate. Our organization is also highly decentralized, with most day-to-day operating decisions made by our division general managers and their staff. We have slightly moreteams. With nearly 29,000 teammates, fewer than 100 employees200 work in our principal executive offices.offices in Charlotte, North Carolina. By empowering our teammates, our goal is to foster an entrepreneurial mindset, along with a strong sense of personal responsibility and a culture of accountability. This empowerment is reinforced by our compensation policies (see “Pay for Performance” discussion in Our Teammates, Compensation, Training & Development section below) to drive results and contribute to our success.

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Teammate input is essential for us to maintain our culture of empowering teammates to make operational decisions. Aside from our practice of everyday open communication, we periodically ask our teammates to formally provide feedback. Beginning in 1986, we have asked our teammates to complete a comprehensive survey in order to gather feedback on a range of topics, including matters relating to the effectiveness of our culture. We view the survey as an important tool we use to continually improve our company and ensure our teammates remain engaged and satisfied. This survey is conducted every three years, the last of which was conducted in 2019. In the most recent survey, 90% of the responses were favorable in the category of “Satisfaction & Commitment.” The vast majorityoverall percentage of Nucor’snegative responses in the most recent survey has dropped by 25 percentage points since the survey began in 1986. The next survey will be conducted in the summer of 2022. Teammates of certain previously acquired businesses – most notably Harris, which accounted for approximately 26,800 employees15% of our workforce as of December 31, 2019 are not represented by labor unions.2021 – complete a comparable survey that has also shown an improving trend over time.

Nucor places the highest value onSafety, Diversity, Equity & Inclusion

One of Nucor’s core values is our teammates’ well-being and safety.safety, and it is our goal to become the safest steel company in the world. 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 working to eliminate exposures that can lead to injury and encourage our teammates to share their ideas for safety improvement. Two key metrics Nucor uses to measure safety are: the Injury/Illness Rate and Days Away, Restricted and Transfer (“DART”) Case Rate.  

Nucor calculates the annual Injury/Illness Rate by dividing the number of work-related injuries and illnesses by the total number of hours worked by all Nucor teammates in a given year, and then multiplying the resulting percentage by 200,000, the equivalent of 100 full-time employees working 40 hours per week, 50 weeks per year.  In 2021, we achieved an annual Injury/Illness Rate of 1.04, which marks the safest year in the Company’s history. This marks an improvement over our annual Injury/Illness Rate of 1.10 in 2020, which was the Company’s previous record.

Nucor uses the DART Case Rate to assess and manage the risk of serious injury in the workplace.  Nucor calculates the annual DART Case Rate by dividing the number of cases resulting in days away from work, restricted work activity and/or job transfers by the total number of hours worked by all Nucor teammates in a given year, and then multiplying the resulting percentage by 200,000, the equivalent of 100 full-time employees working 40 hours per week, 50 weeks per year.  In 2021, we achieved an annual DART Case Rate of 0.50 (0.59 in 2020).

Beginning in 1998, Nucor has used the President’s Safety Award to recognize divisions that achieve strong records of safety performance based on objective metrics. The operationsPresident’s Safety Award has the following three levels: Platinum, which is awarded to divisions with zero recordable illnesses or injuries; Gold, which is awarded to divisions that have an Illness/Injury Rate below 0.6 and a DART Case Rate below one-third of the national average for their NAICS code; and Silver, which is awarded to divisions that achieve one-third the national average on Illness/Injury Rate and DART Case Rate. In 2021, 16 divisions achieved the Platinum level award, 14 divisions achieved the Gold level award and 17 divisions achieved the Silver level award. Nucor also has 25 OSHA Voluntary Protection Program Sites, OSHA’s highest level of recognition.

In 2020, the Company introduced the Nucor President’s Safety Cup as a way to foster more safety benchmarking throughout the Company. The President’s Safety Cup is an additional annual award that is presented to the region that has the best safety record across all of Nucor. Not only does this reward a facility for exceeding their individual safety goals, but it encourages our teams to work with their regional teammates to share ideas and improve safety as a group. The President’s Safety Cup trophy travels among the mills and divisions that make up the winning region.

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We believe however, that Safety is about more than just avoiding injuries. At Nucor, safety means making sure our teammates feel safe, welcome and valued when they come to work each day. We are accelerating our diversity, equity and inclusion efforts with the objective of ensuring that each teammate feels a sense of belonging at Nucor. By creating an inclusive workplace, we believe we will attract top talent and achieve greater diversity in our millsworkforce and leadership, which will make Nucor a stronger company. Some of the initiatives focused on inclusion, equity and diversity we have launched include:

Our Teammates - Compensation, Training & Development

Nucor had approximately 28,800 teammates as of December 31, 2021.  The vast majority of our teammates are located in the United States, with only a small number of teammates located outside of North America. Our operations are highly automated, resulting inallowing us to take advantage of lower employment costs. Employee turnovercosts while still providing our teammates with compensation that we believe is highly competitive as compared to businesses in our industry. At Nucor, mills is extremely low.we believe in “Pay-for-Performance.”  Nucor employees haveteammates typically earn a significant part of their compensation based on their productivity. Production employeesteammates work under group incentives that provide increased earnings for increased production. This additional incentive compensation is paid weekly. Additionally, becauseweekly in most cases. Nucor has also historically contributed 10% of earnings before federal taxes to a profit sharing plan for the majority of teammates below the officer level. We believe such compensation practices incentivize our workforce and reinforce our culture. For 2021, this profit sharing contribution, was the largest in our history and amounted to approximately $861 million.

While Nucor seeks to hire qualified and talented individuals as teammates, we use EAFsalso believe in developing the skills of our workforce by providing educational and on-the-job training, in addition to producesafety training. Further, Nucor believes it is important for senior management to also be familiar with, and have had direct experience running, Nucor’s mills and other operational divisions. The vast majority of our steel,teammates are not represented by labor unions and we can easily varybelieve our production levelsteammate turnover is low.

At Nucor, we believe that a diversity of perspectives and background helps to match short-term changesfacilitate the “Nucor Way” as we work to “grow the core; expand beyond; and live our culture.” We also believe that recruiting and hiring the best talent available will continue to provide us with a more diverse and capable workforce.    

Policies

Nucor has a long history of conducting our businesses in demand, unlikea manner consistent with high standards of social responsibility.  We have adopted a comprehensive Human Rights Policy, which operates in conjunction with many other Nucor policies related to ethical conduct and human rights, including our integrated competitors. Taking advantageStandards of this highly variable, low-cost structure has enabled Nucor to better controlBusiness Conduct and Ethics, Code of Ethics for Senior Financial Professionals, Supplier Code of Conduct and Policy on Eliminating Forced Labor from our costs during weaker market conditions.Supply Chain.

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Available Information

Nucor’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-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 documents electronically with, or furnishes them to, the U.S. Securities and Exchange Commission (the “SEC”).

We use the investor relations portion of our website, www.nucor.com/investors, to distribute information, including as a means of disclosing material, non-public information and for complying with our disclosure obligations under Regulation FD. We routinely post and make accessible financial and other information regarding the Company on our website. Accordingly, investors should monitor the investor relations portion of our website, in addition to our press releases, SEC filings and other public communications.  Except as otherwise expressly stated in these documents, the information contained on our website or available by hyperlink from our website is not a part of this report and 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, results of operations and cash flows.

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Table of ContentsIndustry Specific Risk Factors

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.

Global steel production overcapacity continues to be an ongoing risk to Nucor and the entire steel industry. The current global steelmaking capacity significantly exceeds the current global consumption of steel. According to the OECD estimates that global steel production overcapacity wascurrently approximately 485 million500,000,000 tons, atwith additional capacity expected to come online over the halfway pointnext few years.  China continues to be a significant contributor to excess steelmaking capacity, producing more than 1 billion tons of 2019, with a quartersteel in each of that amount locatedthe past two years. China is also investing in China. Overcapacity is down from its peaknew steelmaking capacity in 2015 and 2016. Efforts by China to close inefficient steel production and improve air quality, steel mill closuresseveral countries in Europe and stronger global economic growth all contributed to reduce excess capacity.southeast Asia.

During periods of global economic weakness, this overcapacity is amplified because of weaker global demand.demand for steel and steel products. 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.

Section 232 steel tariffs are keeping dumped steel products out of the U.S. market. The U.S. government is also negotiating new or renegotiating existing trade agreements with many countries, including China, whichOur business requires substantial capital investment and maintenance expenditures, and our capital resources may not be adequate to provide another opportunity to address excess steelmaking capacity. Should these efforts fail to reduce excess capacity and the Section 232 tariffs be lifted, U.S. steelmakers would be at risk of having to compete again against steel products dumped in the U.S. 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 mostall of our products is cyclical in nature and sensitive to general economic conditions.cash requirements.

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Our operations are capital intensive. For the three-year period ended December 31, 2021, our total capital expenditures were approximately $4.74 billion. Our business supports cyclical industries such asrequires substantial expenditures for routine maintenance. We also recently announced substantial capital projects that we expect will increase production capacity, increase 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. General economic conditions in the United States and steel demand in this country are currently stronger than in many parts of the world, but challenges from global overcapacity in the steel industry and ongoing uncertainties, both in the United States and 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 current economic conditions. Future economic downturns or 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, energy, technology, labor and capital costs, 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. Certain automakers have begun to use greater amounts of aluminum and smaller proportions of steel in some models since 2015.

The resultsefficiency of our operations are sensitive to volatility in steel prices and enhance our product offerings. Although we expect requirements for our business needs, including the costfunding of raw materials, particularly scrap steel.

We rely to an extent on outside vendors to supply us with key consumables such as graphite electrodescapital expenditures, debt service for financings and raw materials, including both scrap and scrap substitutes that are critical to the manufactureany contingencies, will be financed by internally generated funds, short-term commercial paper issuance, offerings of our steel products. The raw material required to produce DRI is pelletized iron ore. Althoughdebt and equity securities or from borrowings under our $1.75 billion unsecured revolving credit facility, we have vertically integrated our business by constructing our DRI facilitiescannot guarantee that this will be the case. Additional acquisitions, increases in Trinidad and Louisiana and also acquiring DJJ in 2008, we still must purchase most of our primary raw material, steel scrap,interest rates or unforeseen events could require financing 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, 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.sources.

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, including 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 market fluctuations or 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.

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, energy, technology, labor, transportation and capital costs, currency exchange rates, government subsidies of foreign steel producers and other global political and economic factors, 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 or availability 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 mileage requirements for new cars and light trucks that they produce. 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, require different types or higher grades of steel products, or begin utilizing alternative materials in cars and light trucks to improve fuel economy, thereby reducing their demand for steel. Certain automakers have begun to use greater amounts of aluminum and smaller proportions of steel in some models since 2015. Additional shifts in demand for steel products by automobile producers could materially adversely affect our business, results of operations, financial condition and cash flows.

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.

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The U.S. economy has experienced a strong recovery from the conditions experienced at the onset of the COVID-19 pandemic, but new variants of COVID-19 and the continued abatement of the COVID-19 pandemic, labor shortages, supply chain disruptions, new or proposed legislation related to governmental spending, inflation and increases in interest rates have impacted, and will continue to impact, economic growth. Even with this economic recovery, challenges from global production overcapacity in the steel industry and ongoing uncertainties, both in the United States and in other regions of the world, remain.

We are unable to predict with certainty the duration of current economic conditions or the magnitude and timing of changes in economic activity. Future economic downturns, prolonged slow growth or stagnation in the economy, a sector-specific slowdown in one of our key end-use markets, such as nonresidential construction, or changes in inflation could materially adversely affect our business, results of operations, financial condition and cash flows, especially in light of the capital-intensive nature of our business.

The results of our operations are sensitive to volatility in steel prices and the cost and availability 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 by 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 and internationally. 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, as well as volatility in currency rates and political conditions.  For example, we source a substantial amount of our scrap and scrap substitutes from countries in Europe such as Russia and Ukraine.  If political conditions in those countries or their relations with the United States or each other further deteriorate, or such countries were to become subject to sanctions or other restrictions or interruptions in trade with the United States, it may materially affect the price and availability of scrap and scrap substitutes.

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, war and other forms of armed conflict or political instability, changes in exchange rates, worldwide price fluctuations, including due to global political and economic factors, changes in governmental, business and consumer spending, inflation, increases in interest rates, labor shortages, and the availability and cost of transportation, including as a result of the COVID-19 pandemic. 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 or pass along increased transportation costs. Also, if we are unable to obtain adequate, cost-effective 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, experience margin compressions or suffer harm to our reputation and customer relationships.

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 greenhouse gases (“GHGs”).GHGs. The regulation of these GHGs throughcould have a material adverse impact on our results of operations, financial condition and cash flows.

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Our operations are subject to numerous federal, state and local laws and regulations relating to the protection of the environment, and, accordingly, we make provision in our financial statements for the estimated costs of compliance. There are inherent uncertainties in these estimates.  Most notably, the uncertainty of policies, enforcement priorities, legislation and regulations related to climate change mitigation strategies pose the greatest risk.

As a carbon steel producer, Nucor could be increasingly affected both directly and indirectly if carbon policy decisions and mandates are not properly implemented. Carbon is an essential raw material in Nucor’s steel production processes. Furthermore, Nucor steel mills utilize EAFs for 100% of their steel melting operations and the costs associated with the decarbonization of electricity generation is a significant concern.  Significant new rulemaking or legislation could have a material adverse impact on our results of operations, financial condition and cash flows.

Carbon is an essential raw materialEnvironmental regulation compliance and remediation could result in Nucor’s production processes. As a carbon steel producer, Nucor could be increasingly affected both directlysubstantially increased costs and indirectly if more stringent domestic GHGmaterially adversely impact our competitive position.

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TableWe incur significant costs in meeting our environmental regulation compliance and remediation obligations. The principal federal environmental laws include the CAA, which regulates air emissions; the CWA which regulates water withdrawals and discharges; the RCRA, which addresses solid and hazardous waste treatment, storage and disposal; and the CERCLA, which governs releases of Contents

regulations are further implemented. Because ourhazardous substances, and remediation of contaminated sites. Our operations are also subject to most of these new GHG regulations, westate and local environmental laws and regulations. Capital expenditures at our facilities that are already impacted inassociated with environmental regulation compliance for 2022 and 2023 are estimated to be less than $100 million per year.

In addition to the permit modification and reporting processes. Both GHG regulations andabove mentioned statutes, certain revisions to National Air Ambient Quality Standards which are more restrictive than previous standards, cancould make it significantly more difficult for us to obtain newconstruction permits and permits to modifyexpand existing permits.

These same regulations have indirectly increased theoperations.  Resulting cancellations, delays or unanticipated costs to manufacturethese projects could negatively impact our products as they have increased and continueability to generate expected returns on our investments. These regulations can also increase theour 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 mitigating 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 lead to increased electrical energy prices.

In 2019, the EPA issued its Affordable Clean Energy (ACE) rule to replace the promulgated Clean Power Plan that was driving many utilities to shutter coal fired power plants. While this is expected to result in lower electric power costsWe may in the United States, another change in regulatory approach due to political or other considerations could cause, either directly or indirectly an increase in the cost of energy, adversely impacting Nucor’s competitive position.

While the federal government has moved in recent years to relax some regulations that can impact domestic energyfuture incur substantially increased costs some states are moving to enact their own regulations to curtail carbon and other GHG emissions. Ifcomplying with such regulations, are enacted in states in which Nucor does business, it could increaseparticularly if federal regulatory agencies were to change their enforcement posture with respect to such regulations.

Emerging customer preferences for greater product transparency and less GHG intensive materials may put us at a competitive disadvantage or reduce demand for our costs there. products.

Numerous states, including California, Washington, Oregon and New York, are considering or have passed laws usingestablishing requirements for Environmental Product Declarations (“EPDs”) to evaluate environmental impacts of products. California has implementedenacted the “Buy Clean California Act” and California is currently requestinghas established Global Warming Potential (GWP) benchmarks through EPDs from manufacturers to be used in State of California funded projects. EPDs are now required for certain materials, including somecertain steel products.  Global Warming Potentials (“GWP”) will be established by January 1, 2021Currently, the federal government is considering similar legislation. To provide for applicablegreater product categoriestransparency, Nucor contracted an independent, third-party to evaluate and publish EPDs will befor many of its products.  Nucor’s EPDs extend beyond what is required under the “Buy Clean California Act”, which requires EPDs for four steel products.  The following Nucor products have been evaluated and issued a corresponding EPD: fabricated hot-rolled structural steel sections; fabricated steel concrete reinforcing bar and merchant bar products; steel reinforcing bar and merchant bar products; fabricated steel hollow structural sections; fabricated structural plate; fabricated open web steel joist and joist girders; and fabricated steel roof and floor deck.

EPD legislation has the potential to put domestic steel manufacturers at a disadvantage to foreign competitors unless standardized mechanisms are used to determine product compliancefully evaluate products produced by foreign steel producers.

General Risk Factors

The COVID-19 pandemic, as well as similar epidemics and other public health emergencies in the future, could have a material adverse effect on our business, results of operations, financial condition and cash flows.

Our operations expose us to risks associated with pandemics, epidemics and other public health emergencies, such as the ongoing COVID-19 pandemic which spread from China to many other countries including the United States. The COVID-19 pandemic has had and may have further negative impacts on our operations, supply chain, transportation networks and customers, which may compress our margins or impact demand for our steel products, including as a result of preventative and precautionary measures that we, other businesses and governments have taken or may take in the future. The COVID-19 pandemic and governmental actions in response have adversely affected the economies of many countries and caused periodic disruption to and increased volatility in financial markets. The progression of the COVID-19 pandemic, including due to new variants of COVID-19, could also negatively impact our business or results of operations through the temporary closure of our operating facilities or those of our customers or suppliers.

In addition, the ability of our teammates and our suppliers’ and customers’ teammates to work may be significantly impacted by individuals contracting or being exposed to COVID-19. Our customers may be directly impacted by business interruptions or weak market conditions and may not be willing or able to fulfill their contractual obligations. Furthermore, the progression of and global response to the GWP limits.COVID-19 pandemic has caused and increased the risk of further delays in construction activities and equipment deliveries related to our capital projects, including potential delays in obtaining permits from government agencies, as well as changes in the prices and availability of labor and equipment for capital projects. The impacts identified by EPDsextent of such delays and other effects of COVID-19 on our capital projects, certain of which are outside of our control, is unknown, but they could impact or delay the timing of anticipated benefits on capital projects.

The extent to which COVID-19 may adversely impact our business depends on future state/consumer purchasing decisions. In addition to increased costsdevelopments, which are highly uncertain and unpredictable, including new variants of production, we could also incur costs to defend and resolve legal claims and other litigation related to these regulationsthe virus,information concerning the severity of the pandemic, the adoption rate of vaccines, and the allegedeffectiveness of actions globally to contain or mitigate the effects of the pandemic. The current level of uncertainty over the economic and operational impacts of COVID-19 means the related financial impact of our operations on the environment.cannot be reasonably estimated at this time.

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. We also utilize third-party service providers for certain information technology services that are important to our operations. We continuously evaluate our cyber security systems and practices, assess potential threats, and improve our information technology networks, policies and procedures to address potential vulnerabilities. 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 of our systems or those of our third-party service providers. These risks could result in disclosure or destruction of key proprietary information or personal data or reputational damage, theft of assets or trade secrets, or could adversely affect our ability to physically produce or transport 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 cyber security breach, including to repair or replace networks and information technology systems. We may also contend with potential liability for stolen information, increased cybersecuritycyber security protection costs, litigation expense and increased insurance premiums.

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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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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 accordingly, we make provision in our financial statements for the estimated costs of compliance. There are inherent uncertainties in these estimates.

Nucor has implemented revised EPA 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. We have incurred increased administrative and operational costs 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 and enter into joint ventures 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 effectively identify and tomanage risks, and 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 business requires substantial capital investment and maintenance expenditures, and our capital resources may not be adequatebusinesses or otherwise fail to provide for allrealize the anticipated benefits of our cash requirements.

Our operations are capital intensive. For the five-year period ended December 31, 2019, our total capital expenditures, excluding acquisitions, were approximately $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 guarantee that this will be the case. Additional acquisitions or unforeseen events could require financing from additional sources.other transactions.

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,Canada, Mexico and in emerging markets. There are a number of risks inherent in doing business in or sourcing raw materials from 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;rates, interest rates and inflation; and complex foreign laws, treaties including tax laws, and the United States Foreign Corrupt Practices Act of 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 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 a non-cash impairment loss that would negatively impact our results of operations.

Tax increases and changes in tax laws and regulations or exposure to additional tax liabilities could adversely affect our financial results.

The steel industry and our business are sensitive to changes in taxes. As a company based in the United States, Nucor is more exposed to the effects of changes in U.S. tax laws than some of our major competitors. Our provision for income taxes and cash tax liability in the future could be adversely affected by changes in U.S. tax laws.

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Nucor recognizes the effect of income tax positions only if those positions are believed to be more likely than not of being sustained. We cannot predict whether taxing authorities will conduct an audit challenging any of our tax positions and there can be no assurance as to the outcome of any challenges. If we are unsuccessful in any of these matters, we may be required to pay taxes for prior periods, interest, fines or penalties.

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 3. Legal 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 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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We own allmost of our principal operating facilities. These facilities, by segment, are as follows:

In the steel products segment, we have 8189 operating facilities, excluding the locations listed above, in 38 states with 3129 operating facilities in Canada and two in Mexico. Our affiliate,subsidiary, Harris Steel Inc., also operates multiple sales offices in Canada and certain other foreign locations. The steel products segment also includes Skyline Steel, LLC, our steel foundation distributor. Hannibal Industries, Inc., which

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Tablewe acquired during 2021, has leased square footage of Contentsapproximately 630,000 square feet in Los Angeles, California, and has leased square footage of approximately 420,000 square feet in Houston, Texas.

In the raw materials segment, we have 8594 operating facilities in 2022 states with one operating facility in Point Lisas, Trinidad. For our DRI facilities in Trinidad and Louisiana, a significant portion of the production process occurs outdoors. The Trinidad site, including leased land, is approximately 1.9 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 8088 operating facilities in 1821 states along with multiple brokerage offices in the United States and certain other foreign locationslocations.

The average utilization rates of all operating facilities in the steel mills, steel products and raw materials segments in 20192021 were approximately 84%94%, 70%76% and 67%75% 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.

There were no proceedings that were pending or contemplated under federal, state or local environmental laws that the Company reasonably believes may result in monetary sanctions of at least $1.0 million (the threshold chosen by Nucor as permitted by Item 103 of Regulation S-K promulgated under the Securities Exchange Act of 1934, as amended, and which Nucor believes is reasonably designed to result in disclosure of any such proceeding that is material to its business or financial condition).

Not applicable.

Information About Our Executive Officers

The following is a description of the names 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.

Craig A. FeldmanAllen C. Behr (55)(48), Executive Vice President of Raw Materials,Plate and Structural Products, was named EVP in April 2018. He continues to serve as President of The David J. Joseph Company (“DJJ”), a role he has held since 2013.May 2020. Mr. FeldmanBehr began his career with Nucor in 1996 as a Brokerage Representative for DJJDesign Engineer at Nucor Building Systems-Indiana and joined the start-up team at Nucor Building Systems-Texas in 1986, subsequently serving as District1999. In 2001, he became the Engineering Manager at Nucor Building Systems-South Carolina and was promoted to General Manager in 2008. Mr. Behr became the General Manager of DJJ’s Salt Lake City brokerage office, CommercialVulcraft-South Carolina in 2011 and was promoted to Vice President at DJJ’s subsidiary, Western Metals Recycling (“WMR”), andin 2012. He was promoted to President of WMR. Mr. Feldmanthe Vulcraft/Verco group in 2014 and he served on the operational staff of DJJ’s then-owner in the Netherlands from 2005 until his 2007 appointment as DJJ’s Executive Vice President, Recycling Operations. Mr. Feldman became a Vice President and General Manager of Nucor when DJJ was acquired by Nucor in 2008.Steel-Texas from 2017 to 2019.

James D. Frias (63),(65) has beenserved as Chief Financial Officer, Treasurer and Executive Vice President since 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 2015. Mr. Frias has announced that he will retire effective June 11, 2022. 

Ladd R. HallDouglas J. Jellison (63), Executive Vice President of Flat-RolledRaw Materials, was named EVP in January 2021. Mr. Jellison began his Nucor career in 1990 as Materials Manager at Nucor Bearing Products and has worked in various positions and businesses in his more than 30 years with Nucor, including several controller and business development roles. Mr. Jellison was promoted to Vice President in 2004 and served as General Manager of Nucor Bearing Products, Nucor Steel Seattle, Inc. and Nucor-Yamato. He then served as President of Nucor Tubular Products and most recently as President of Nucor’s steel piling subsidiary, Skyline Steel LLC.

Gregory J. Murphy (58), Executive Vice President of Business Services and General Counsel, was named EVP in January 2021. Mr. Murphy began his Nucor career in 2015 as Vice President and General Counsel.  In 2020, he assumed additional responsibilities and was named General Counsel and Vice President of Legal, Environmental and Public Affairs. Prior to joining Nucor, Mr. Murphy was a Partner with the law firm of Moore & Van Allen PLLC, where he was the team leader of the Litigation Practice Group and served for a decade on the firm’s Executive Committee.

Daniel R. Needham (56), Executive Vice President of Bar, Engineered Bar and Rebar Fabrication Products was named EVP in 2007, having previouslyFebruary 2021. Mr. Needham began his career with Nucor in 2000 as Controller at Nucor Steel Hertford County. He subsequently served as Vice PresidentController of Nucor since 1994. He began hisSteel Decatur, LLC and Nucor career in Inside Sales atSteel Utah. In 2011, Mr. Needham became General Manager of Nucor Steel-Utah in 1981.Steel Connecticut, Inc. He later served as SalesGeneral Manager of Vulcraft-Utah,Nucor Steel Utah and was elected Vice President in 2016. In 2019, Mr. Needham was promoted to Vice President and General Manager of Vulcraft-Texas, Vulcraft-Utah, Nucor Steel-South Carolina and Nucor Steel-Berkeley County.Steel Indiana.

Raymond S. Napolitan, Jr.K. Rex Query (62)(56), Executive Vice President of Engineered BarSheet and Tubular Products, and Digital, was named EVP in 2013, having previouslyJanuary 2021. Mr. Query joined Nucor in 1990 as a financial analyst in the Corporate Office and subsequently served as Controller at Vulcraft South Carolina, Nucor Steel Berkeley and Nucor Steel Hertford. After serving as General Manager and Corporate Controller, Mr. Query was elected to Vice President in 2002 and served as General Manager at Nucor Steel Auburn, Inc., Nucor Steel Decatur, LLC, Nucor Steel South Carolina and NCF as well as President of Nucor Europe. Most recently, Mr. Query served as President of Nucor’s Vulcraft/Verco group from 2010group. Mr. Query is married to 2013 and Presidentthe sister 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.Topalian’s wife.

MaryEmily Slate (55) (57), Executive Vice President of Plate, Structural and Tubular Products,Commercial, was named EVP in May 2019.2019, 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 then 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 Steel Arkansas from 2015 to 2019.

David A. Sumoski (53)(55), was named Chief Operating Officer, in January 2021. He previously served as Executive Vice President from 2014 to 2020, most recently as EVP of Merchant and Rebar Products, was named EVP in 2014.Products. He previouslyalso 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. 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.

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Leon J. Topalian (51)(53), was namedhas served as President and Chief Executive Officer effectivesince January 2020. He previously served as President and Chief Operating Officer beginning infrom September 2019 to December 2019, as Executive Vice President of Beam and Plate Products from 2017 to 2019 and as Vice President of Nucor since 2013.from 2013 to 2017. 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 from 2014 to 2017. Mr. Topalian is married to the sister of Mr. Query’s wife.

D. Chad Utermark (51)(53), Executive Vice President of Fabricated Construction Products, was named EVP in 2014. He previously served as General Manager of Nucor-Yamato from 2011 to 2014 and as General Manager of Nucor Steel-Texas from 2008 to 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.

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PART II

Our common stock is listed and traded on the New York Stock Exchange under the symbol “NUE.” As of January 31, 2020,2022, there were approximately 14,00013,000 stockholders of record of our common stock.

Our share repurchase program activity for each of the three months and the quarter ended December 31, 20192021 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 $1.60$1.62 per share in 20192021 compared with $1.52$1.61 per share in 2018.2020. In December 2019,2021, the Board of Directors increased the base quarterly cash dividend on Nucor’s common stock to $0.4025$0.50 per share from $0.40$0.405 per share. In February 2020,2022, the Board of Directors also declared Nucor’s 188th196^th consecutive quarterly cash dividend of $0.4025$0.50 per share payable on May 11, 20202022 to stockholders of record on March 31, 2020.2022.

See Note 1716 to the Company’s consolidated financial statements for a discussion regarding securities authorized for issuance under the Company’s stock-based compensation 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 2014.2016. The resulting cumulative total return assumes that cash dividends were reinvested. Nucor common stock comprised 35%39% of the S&P 1500 Steel Group Index at year-end 2019 and2021 (36% at year-end 2014.2016).

The table below sets forth certain selected financial data concerning the Company for the five fiscal years ended December 31, 2019. The data is derived 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 the consolidated financial statements for additional information.

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The following 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 report discusses our financial condition and results of operations as of and for the years ended December 31, 20192021 and 2018.2020. Information concerning the year ended December 31, 20172020 and a comparison of the years 2018ended December 31, 2020 and 20172019 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, 2018,2020, filed with the SEC on February 28, 2019.26, 2021.

Overview

The U.S. economy experienced strong growth ratein 2021, growing by 5.7%, the largest annual increase since 1984. This performance was a significant improvement over 2020 when the economy shrank by 3.4% in response to the onset of the U.S. economy slowed a bitCOVID-19 pandemic. The COVID-19 pandemic continued to have an impact on our business and operations, but the impact was significantly lessened than that experienced in 2019, growing at 2.3% on an annualized basis compared to 2.9% the previous year. Demand2020. Market demand in 2019 remained healthy in many2021 was very strong across most of the end markets Nucor monitors, with the strongest being nonresidential construction.we serve and selling prices for steel and steel products were at historically high levels. Operating rates at our steel mills for the full year 2019 decreased2021 increased to 84%94% as compared to 91%82% 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 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, globalGlobal 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 2018an ongoing risk to approximately 1.10 billion tons in 2019 – an increase of 8%. As a result, China’s share ofNucor and the entire steel industry, with the OECD estimating that global crude steel production rose from 51.3% in 2018 to 53.3% in 2019. The OECD estimates that global excess steel production capacity wasovercapacity is currently approximately 485500 million tons, at the halfway point of 2019, upwhich is down slightly from 455 million tons at the end of 2018. Nearly a quarter of that excessprevious years. However, additional capacity is located in China, wherecontinues to come online and China’s steel production, the largest steel companies are state-owned and receive significant financial support fromproducing country, is still near record levels. In 2021, China’s steel production was 1.13 billion tons compared to the Chinese government.  record amount of 1.16 billion tons the previous year. Circumvention of trade duties also continues to pose a risk, as countries route products through third-party countries to evade duties. Increasingly, China is seeking to evade trade duties by building new steelmaking capacity in other countries with a focus on neighboring countries in southeast Asia.

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 strongstronger 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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levels at the steel mills to match the anticipated demand over the next several weeks. Certain scrap substitutes, including pig iron, have longer lead times for delivery than scrap, which can make this inventory management strategy difficult to achieve. Continued successful implementation of our raw material strategy, including key investments in DRI production, coupled with the scrap brokerage and processing services performed by our team at DJJ, give us greater control over our metallic inputs and thus also helps us to mitigate this risk.

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During periods of stronger or rapidly improving steel market conditions, we are more likely to be able to pass through to our customers, relatively quickly, the increased costs of ferrous scrap and scrap substitutes, protecting our gross margins from significant erosion. During periods of weaker or rapidly deteriorating steel market conditions, weak steel demand, low industry utilization rates and the impact of imports create an even more intensified competitive environment and increased pricing pressure. All of those factors, to some degree, impact pricing, which increases the likelihood that Nucor will experience lower gross margins.

Although the majority of our steel sales are to spot market customers in North America who place their orders each month based on their business needs and our pricing competitiveness compared to both domestic and global producers and trading companies, we also sell contract tons, most notably in our sheet operations. Approximately 75%80% of our sheet sales were to contract customers in 2019 and 2018,2021 (70% in 2020), with the balance being sold in the spot market at the prevailing prices at the time of sale. Steel contract sales outside of our sheet operations are not significant. The amount of tons sold to contract customers at any given time depends on the overall market conditions at the time, how the end-use customers see the market moving forward and the strategy that Nucor management believes is appropriate to the upcoming period.

Nucor management considerations include maintaining an appropriate balance of spot and contract tons based on market projections and appropriately supporting our diversified customer base. The percentage of tons that is placed under contract also depends on the overall market dynamics and customer negotiations. In years of strengthening demand, we typically see an increase in the percentage of sheet sales sold under contract as our customers have an expectation that transaction prices will rapidly rise, and available capacity will quickly be sold out. To mitigate this risk, customers prefer to enter into contracts in order to obtain committed volumes of supply from the mills. OurThe vast majority of our contracts include a method of adjusting prices on a periodic basis to reflect changes in the market pricing for steel and/or scrap. Market indices for steel generally trend with scrap pricing changes, but, during periods of steel market weakness, the more intensified competitive steel market environment can cause the sales price indices to decrease resulting in reduced gross margins and profitability. Furthermore, since the selling price adjustments are not immediate, there will always be a timing difference between changes in the prices we pay for raw materials and the adjustments we make to our contract selling prices. Generally, in periods of increasing scrap prices, we typically experience a short-term margin contraction on contract tons. Conversely, in periods of decreasing scrap prices, we typically experience a short-term margin expansion.expansion on contract tons. Contract sales typically have terms ranging from six to 12 months.

Our Strengths and Opportunities

We are North America’s most diversified steel producer. As a result, our short-term performance is not tied to any one market. We have numerous, large, strategic capital projects at various stages of progress that we believe will help us further diversify our product offerings and expand the markets that we serve. We expect these investments to grow our long-term earnings power by increasing our channels to market, expanding our product portfolio into higher value-added offerings that are less vulnerable to imports, improving our cost structure and further building upon our market leadership positions.

We believe that Nucor’s raw material supply chain is another important strength. Our investment in DRI production facilities and scrap brokerage and processing businesses provides Nucor with significant flexibility in optimizing our raw materials costs. Additionally, having a significant portion of our raw materials supply under our control reduces risk associated with the global sourcing of raw materials, particularly since a considerable portion of scrap substitutes comes from regions of the world that historically have experienced greater political turmoil.

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Our highly variable, low-cost structure, combined with our financial strength and liquidity, hashave allowed us to successfully navigate cyclical, severely depressed steel industry market conditions in the past. In such times, our incentive-based pay system reduces our payroll costs, both hourly and salary, which helps to offset lower selling prices. Our pay-for-performance system that is closely tied to our levels of production also allows us to keep our highly experienced workforce intact and to continue operating our facilities when some of our competitors with greater fixed costs are forced to shut down some of their facilities. Because we use EAFs to produce our steel, we can easily vary our production levels to match short-term changes in demand, unlike our blast furnace-based integrated competitors. We believe these strengths also provide us further opportunities to gain market share during such times.

Evaluating Our Operating Performance

We report our results of operations in three segments: steel mills, steel products and raw materials. Most of the steel we produce in our mills is sold to outside customers (80%(79% in both 20192021 and 2018)80% in 2020), but a significant percentage is used internally by many of the facilities in our steel products segment (20%(21% in both 20192021 and 2018)20% in 2020).

We begin measuring our performance by comparing our net sales, both in total and by individual segment, during a reporting period with our net sales in the corresponding period in the prior year. In doing so, we focus on changes in and the reasons for such changes in the two key variables that have the greatest influence on our net sales: average sales price per ton during the period and total tons shipped to outside customers.

We also focus on both dollar and percentage changes in gross margins, which are key drivers of our profitability, and the reasons for such changes. There are many factors from period to period that can affect our gross margins. One consistent area of focus for us is changes in “metal margins,” which is the difference between the selling price of steel and the cost of scrap and scrap substitutes. Increases or decreases in the cost of scrap and scrap substitutes that are not offset by changes in the selling price of steel can quickly compress or expand our margins and reduce or increase our profitability.

Changes in marketing, administrative and other expenses, particularly profit sharing and other variable incentive-based payment costs, can have a material effect on our results of operations for a reporting period as well. These costs vary significantly from period to period as they are based upon changes in our pre-tax earnings and other profitability metrics that are a reflection of our pay-for-performance system that is closely tied to our levels of production.

Evaluating Our Financial Condition

We evaluate our financial condition each reporting period by focusing primarily on the amounts of and reasons for changes in cash provided by operating activities, our current ratio, the turnover rate of our accounts receivable and inventories, the amounts of and reasons for changes in cash used in or provided by investing activities (including projected capital expenditures) and financing activities and our cash and cash equivalents and short-term investments position at period end. OurWe believe that our conservative financial practices have served us well in the past and are serving us well today. As a result, our financial position remains strong.

Comparison of 20192021 to 20182020

Results of Operations

Nucor reported consolidated net earnings of $4.14$6.83 billion, or $23.16 per diluted share, in 2019. Though this year’s results decreased from record consolidated net earnings of $7.42 per diluted share reported in 2018, we view this as solid performance given the more challenging environment when compared to the prior year.

Nucor’s record-setting profitability in 2018 was fueled2021, making it by a strong domestic economy driving domestic steel demand, the adoption of tax reform and the ongoing efforts to reform federal regulations. Also benefitting 2018 were reductions in unfairly traded imports entering our country as a result of years of successful trade cases and broad-based tariffs imposed under Section 232, which were announced in

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March 2018. These conditions and our execution of strong operating performance continued for the remainder of 2018, making itfar the most profitable year in Nucor’sthe Company’s history. We believe that as a result of those strong steel industry conditions, customers purchased in excess of normal demand levelsThis record year more than doubled the previous record for consolidated net earnings, which was $2.36 billion set in 2018, resultingand more than tripled the previous record for diluted earnings per share, which was $7.42 per diluted share that was also set in excess inventory throughout the supply chain by the end2018. By comparison, Nucor reported consolidated net earnings of 2018. Inventory destocking was the primary driver for the decreased 2019 performance$721.5 million, or $2.36 per diluted share, in 2020.

All three of Nucor’s operating segments reported very strong profitable in 2021. The steel mills segment operated at a 94% average utilization rate in 2021, as average steel selling prices fell throughout most of 2019, despite lower imports and relatively stable underlying demand. We believe that inventory destocking concluded in the fourth quarter of 2019 when customers resumed more normal buying patterns. Additionally, we announced price increases for our sheet, bar, plate and structural products in the fourth quarter of 2019 that we expect to realize the benefit of in the first quarter of 2020. Though down from 2018, we believeend-use market demand remained healthyvery strong throughout the year. Higher volumes, combined with increases in 2019 as we saw stable or improving market conditionsaverage selling prices that outpaced increases in 16the average cost of scrap and scrap substitutes, resulted in robust metal margins and record profits for the 24 end-use markets we monitor.steel mills segment in 2021.

Nucor’sThe steel products segment experienced record profitability in 2019, surpassing the previous record set in 2018. In particular, our Vulcraft/Verco group (combined joist and deck operations) and metal building businessesalso had theits most profitable year in their history2021, surpassing its previous record that was set in 2019. The improved segment2020. This record performance in 2019 was due to the continued strong performance of manydemand in nonresidential construction markets. Most of the businesses that make up thiswithin the steel products segment which benefitedhad increased profitability in 2021 compared to 2020, with the biggest increases coming from strong nonresidential construction market conditionsour joist, deck and lower steel input costs. Additionally, changes in business strategy and efficiency initiatives significantly improved the performance of our rebar fabrication operations and metal buildings business.tubular products businesses.

The raw materials segment faced a challengingalso had its most profitable year in 2019 primarily due to decreased pricing for raw materials when compared to 2018. We saw significant declines in the profitability of our DRI businesses due to margin compression caused by decreased2021 and was significantly increased from 2020. DJJ’s scrap brokerage and processing operations benefited from higher average selling prices and increasedvolumes. Our DRI facilities had a strong year of profitability in 2021, particularly in the first half of the year due to rising raw material prices. As the year progressed, the DRI facilities’ profitability waned as the cost of consumed iron ore costs. Our DRI facility in Louisiana also experienced a planned 70-day outage in 2019 thatincreased and selling prices for scrap substitutes began in early September and was completed in mid-November. The profitability of DJJ’s brokerage and scrap processing operations also decreased in 2019 as compared to 2018.decrease.

The following discussion will provide greater quantitative and qualitative analysis of Nucor’s performance in 20192021 as compared to 2018.

2020.

Net Sales–

Net sales to external customers by segment for 2019the years ended December 31, 2021 and 20182020 were as follows (in thousands):

Net sales for 2019 decreased 10%2021 increased 81% from the prior year. Average sales price per ton decreased 5%increased 64% from $899$789 in 20182020 to $851$1,292 in 2019.2021. Total tons shipped to outside customers decreased 5%increased 11% from 27,899,00025,519,000 tons in 20182020 to 26,532,00028,247,000 tons in 2019.2021.

In the steel mills segment, sales tons for the years ended December 31, 2021 and 2020 were as follows (in thousands):

Net sales for the steel mills segment decreased 14%increased 99% in 20192021 from the prior year due to an 8% decreasea 78% increase in the average sales price per ton, from $817$671 in 20182020 to $748$1,195 in 2019,2021, as well as a 7% decrease12% increase in total tons shippedsold to outside customers. In 2019, averageAverage selling prices for our sheet, bar, structural and volumes decreased across all product groups within the steelplate mills segment.increased substantially in 2021 as compared to 2020.

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Outside sales tonnage for the steel products segment for the years ended December 31, 2021 and 2020 was as follows (in thousands):

Net sales for the steel products segment increased 3%47% in 20192021 from the prior year due to a 4%41% increase in the average sales price per ton, from $1,402$1,382 in 20182020 to $1,452$1,954 in 2019, which was partially offset by2021, as well as a 1% decrease4% increase in volume. In 2019, average selling prices increased across all businesses within the steel products segment, except for our tubular products businesses. The largest decrease in volume for 2019 as compared to 2018 was in our cold finished products business.volumes.

Net sales for the raw materials segment decreased 18%increased 86% in 20192021 from the prior year primarily due to decreased average selling prices at DJJ’s brokerage operations and, to a lesser extent, decreasedincreased average selling prices and volumes at DJJ’s brokerage and scrap processing operations. ApproximatelyIn 2021, approximately 90% of outside sales infor the raw materials segment in both 2019 and 2018 were from DJJ’sthe brokerage operations of DJJ, and approximately 9%8% of outside sales were from DJJ’sthe scrap processing operations.operations of DJJ (88% and 9%, respectively, in 2020).

Gross Margins –

In 2019,2021, Nucor recorded gross margins of $2.68$11.03 billion (12%(30%), which was a decreasesubstantial increase from $4.30$2.23 billion (17%(11%) in 2018:2020:

Scrap prices are driven by the global supply and demand for scrap and other iron-based raw materials used to make steel. Scrap prices decreasedincreased during most of 2019. As we enter 2020, we see a more stable price environment as2021, but began to decline late in the year. We are seeing the trend of lower scrap prices have increased, a trend that began in late 2019.

Pre-operating and start-up costs of new facilities increased to approximately $103 million in 2019 as compared to $36 million in 2018. The increase in pre-operating and start-up costs was due to increased costs at the bar mills being built in Missouri and Florida, increased costs for the cold mill expansion at our sheet mill in Arkansas and increased costs related to the expansion at our sheet mill in Kentucky. Nucor defines pre-operating and start-up costs, all of which are expensed, as the losses attributable to facilities or major projects that are either under construction or in the early stages of operation. Once these facilities or projects have attained a utilization rate that is consistent with our similar operating facilities, they are no longer considered by Nucor to be in start-up.we begin 2022.

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In 2019, our Louisiana DRI facility experienced a planned 70-day outage that began in early September and was completed in mid-November that replaced the convection section of the facility’s process gas heater and relined the reactor’s refractory.

Gross margins related to DJJ’s scrap processing operations decreased significantly in 2019 as compared to 2018 due to margin compression and decreased volumes. Gross margins for DJJ’s brokerage operations also decreased in 2019.

Included in 2018 gross margins of the raw materials segment was a $27.6 million benefit related to insurance recoveries.

Marketing, Administrative and Other Expenses –

A major component of marketing, administrative and other expenses is profit sharing and other incentive compensation costs. These costs, which are based upon and fluctuate with Nucor’s financial performance, decreasedincreased from 20182020 to 20192021 due to our decreasedthe increased profitability in 2019.of the Company. In 2019,2021, profit sharing costs consisted of $181.4$869.9 million of contributions, including the Company’s matching contribution, made to the Company’s Profit Sharing and Retirement Savings Plan for qualified employees ($307.986.6 million in 2018)2020). Other employee bonus costs also fluctuate based on Nucor’s achievement of certain financial performance goals, including achieving record earnings, and comparisons of Nucor’s financial performance to peers in the steel industry and other companies. Stock-based compensation included in marketing, administrative and other expenses increased by 21%111% to $36.9$61.7 million in 20192021 compared with $30.6$29.2 million in 20182020 and includes costs associated with the vesting of stock awards granted in prior years. Also included in marketing, administrative and other expenses in 2018 is approximately $50 million in bonus costs related to the Company achieving record earnings that was distributed evenly among employees (none in 2019).

Included in marketing, administrative and other expenses in 20192020 was a benefit$18.2 million of $33.7 millionrestructuring charges related to the gain on the salerealignment of an equity method investmentNucor’s metal buildings business in the raw materialssteel products segment. Included in marketing, administrative and other expenses in 2018 was a $20.5 million benefit related to insurance recoveries.

Equity in Earnings(Earnings) Losses of Unconsolidated Affiliates –

Equity method investment earnings were $3.3in (earnings) losses of unconsolidated affiliates was ($103.1) million in 20192021 and $40.2$10.5 million in 2018.2020. The decreaseimprovement in equity method investment earnings from 20182020 to 20192021 was primarily due to margin compressionthe increased results of NuMit and decreased volumes at NuMit.Nucor-JFE.

Losses and Impairments of Assets

ImpairmentIn 2020, Nucor recorded losses on assets of Assets – During$483.5 million related to our equity method investment in Duferdofin Nucor S.r.l. (“Duferdofin Nucor”). Nucor also recorded impairment charges in 2020 of $103.2 million related to certain inventory and long-lived assets in the third quartersteel mills segment, and $27.0 million related to the write-down of 2018, Nucor performed an impairment analysis of its three fields of proved producingour unproved natural gas well assets and determined that the carrying amount exceeded the fair value and was other than temporary for two of these fields of wells. As a result, Nucor recorded a $110.0 million non-cash impairment charge against these assets, driven primarily by management’s estimate of future pricing of natural gas and natural gas liquids.

During the fourth quarter of 2019, Nucor performed another impairment analysis of its three fields of proved producing natural gas well assets and determined that the carrying amount of one of the fields of wells exceeded its fair value and was other than temporary. This field of wells was not impaired as a result of the 2018 analysis. Nucor recorded a $35.0 million non-cash impairment charge against this field of wells, driven primarily by estimated lease operating costs that were higher than the estimates used in the 2018 analysis. These charges were included in the raw materials segment. See Note 8 to the Company’s consolidated financial statements for additional information.

During 2021, Nucor recorded additional impairment charges in 2019a non-cash loss on assets of $20.0$42.0 million related to certain property, plantour leasehold interest in unproved oil and equipmentnatural gas properties in the steel mills segment, and $11.9raw materials segment. Also included in the 2021 results were losses on assets of $20.2 million related to the write-down of certain intangible assets in the steel products segment.

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Interest Expense (Income) –

Net interest expense is detailed belowfor the years ended December 31, 2021 and 2020 was as follows (in thousands):

Interest expense decreased in 20192021 compared to 20182020 due to lower average interest rates on debt and an increase in capitalized interest related to an increase in spending associated with capital projects in 2019. Included in interest expense in 2018 was the benefit received from the settlement of a treasury lock instrument that was entered into in anticipation of the Company’s debt issuance that occurred in the second quarter of 2018. The Company did not elect hedge accounting for this instrument.interest. Interest income increaseddecreased in 20192021 compared to 20182020 due to an increasea decrease in average interest rates on investments.

Earnings Before Income Taxes and Noncontrolling Interests – Earnings

The following table presents earnings before income taxes and noncontrolling interests by segment for 2019the years ended December 31, 2021 and 20182020 (in thousands). The changes between periods were as follows (in thousands):driven by the quantitative and qualitative factors previously discussed.