SECOND
QUARTER
2001
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For quarter ended March 31,June 30, 2001 Commission file number 1-4119
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NUCOR CORPORATION
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(Exact name as specified in charter)
Delaware 13-1860817
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(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
2100 Rexford Road, Charlotte, North Carolina 28211
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(Address of principal executive offices) (Zip code)
Telephone number, including area code: (704) 366-7000
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Indication by check mark whether Nucor Corporation (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 twelve months, and (2) has been subject to such filing
requirements for the past 90 days: Yes X No
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77,594,520----
77,763,516 shares of common stock were outstanding at March 31,June 30, 2001.
- 1 -
PART I - FINANCIAL INFORMATION
Nucor Corporation - Condensed Consolidated Condensed Statements of Earnings
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Six Months (26 Weeks) Ended Three Months (13 Weeks) Ended
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March 31,June 30, 2001 AprilJuly 1, 2000 -------------- --------------June 30, 2001 July 1, 2000
(Unaudited) (Unaudited) -------------- --------------(Unaudited) (Unaudited)
--------------- --------------- --------------- ---------------
Net sales........................................ $1,028,017,720 $1,199,634,778
-------------- --------------sales ................... $ 2,106,592,592 $ 2,413,580,080 $ 1,078,574,872 $ 1,213,945,302
--------------- --------------- --------------- ---------------
Costs and expenses:
Cost of products sold.......................... 943,772,386 1,031,750,001sold ..... 1,922,335,525 2,068,820,925 978,563,139 1,037,070,924
Marketing, administrative
and other expenses... 34,679,902 44,315,406expenses ...... 80,220,154 93,507,925 45,540,252 49,192,519
Interest expense (income)...................... (773,544) (2,720,474)
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977,678,744 1,073,344,933
------------- -------------- 2,405,074 (1,842,308) 3,178,618 878,166
--------------- --------------- --------------- ---------------
2,004,960,753 2,160,486,542 1,027,282,009 1,087,141,609
--------------- --------------- --------------- ---------------
Earnings before
federal income taxes............. 50,338,976 126,289,845taxes ...... 101,631,839 253,093,538 51,292,863 126,803,693
Federal income taxes........................... 17,600,000 44,800,000
------------- --------------taxes ...... 35,600,000 89,800,000 18,000,000 45,000,000
--------------- --------------- --------------- ---------------
Net earnings.................................earnings ............ $ 32,738,97666,031,839 $ 81,489,845
============= ==============163,293,538 $ 33,292,863 $ 81,803,693
=============== =============== =============== ===============
Net earnings per share........................... $.42 $.94share ...... $0.85 $1.92 $.43 $.98
===== ===== ==== ====
Dividends declared
per share...................share ............... $.34 $.30 $.17 $.15
==== ==== ==== ====
Average number of
shares outstanding......... 77,586,843 86,571,585outstanding 77,631,068 84,871,429 77,674,806 83,152,589
See notes to condensed consolidated financial statements.
- 2 -
Nucor Corporation - Condensed Consolidated Condensed Balance Sheets
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March 31,June 30, December 31,
2001 2000
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Assets (Unaudited) (Audited)(Unaudited)
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Current assets:
Cash and short-term investments................. $ 331,993,069385,170,638 $ 490,576,279
Accounts receivable............................. 391,409,944408,713,476 350,184,329
Inventories..................................... 492,338,985502,472,269 461,151,913
Other current assets............................ 81,360,92680,620,105 79,534,386
-------------- --------------
Total current assets.......................... 1,297,102,9241,376,976,488 1,381,446,907
Property, plant and equipment..................... 2,397,205,642 2,340,340,8122,375,681,515 2,329,420,798
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Total assets.................................. $3,694,308,566 $3,721,787,719$3,752,658,003 $3,710,867,705
============== ==============
Liabilities and stockholders' equity
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Current liabilities:
Accounts payable................................ $ 231,728,991242,945,499 $ 203,334,079
Federal income taxes............................ 7,174,944 -15,185,513 --
Salaries, wages and related accruals............ 83,111,21797,417,220 134,953,274
Accrued expenses and other current liabilities.. 223,134,007234,351,067 219,781,099
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Total current liabilities..................... 545,149,159589,899,299 558,068,452
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Long-term debt due after one year................. 460,450,000 460,450,000
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Deferred credits and other liabilities............ 268,751,254275,724,754 260,054,154
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Minority interests................................ 269,015,075 312,263,473248,539,858 301,343,459
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Stockholders' equity:
Common stock.................................... 36,047,90836,113,176 36,044,855
Additional paid-in capital...................... 71,791,92978,556,931 71,494,670
Retained earnings............................... 2,498,333,6172,518,392,622 2,478,785,710
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2,606,173,4542,633,062,729 2,586,325,235
Treasury stock.................................. (455,230,376)(455,018,637) (455,373,595)
-------------- --------------
2,150,943,0782,178,044,092 2,130,951,640
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Total liabilities and stockholders' equity.... $3,694,308,566 $3,721,787,719$3,752,658,003 $3,710,867,705
============== ==============
See notes to condensed consolidated financial statements.
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Nucor Corporation - Condensed Consolidated Condensed Statements of Cash Flows
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ThreeSix Months (13(26 Weeks) Ended
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March 31,Ended_
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June 30, 2001 AprilJuly 1, 2000
------------2000_
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(Unaudited) (Unaudited)
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Operating activities:
Net earnings............................................earnings........................................... $ 32,738,976 $ 81,489,84566,031,839 $163,293,538
Adjustments:
Depreciation of plant and equipment................... 69,087,812 68,552,403equipment.................. 143,799,820 134,883,717
Minority interests.................................... 31,143,402 38,041,327interests................................... 47,582,899 74,827,395
Changes in (exclusive of acquisition):
Current assets...................................... (30,985,420) (47,459,865)assets..................................... (57,681,415) (60,709,070)
Current liabilities................................. (20,504,244) 48,952,858
Other............................................... 8,344,269 5,398,143liabilities................................ 24,245,896 50,100,032
Other.............................................. 15,317,769 (7,741,472)
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Cash provided by operating activities................. 89,824,795 194,974,711activities................ 239,296,808 354,654,140
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Investing activities:
Capital expenditures (net).............................. (62,013,064) (118,461,013)............................. (126,120,959) (239,307,070)
Proceeds from sale of facility..........................facility......................... 15,724,799 ---
Acquisition (net of cash acquired)........................................... (114,980,402) -
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Cash used in investing activities..................... (161,268,667) (118,461,013)activities.................... (225,376,562) (239,307,070)
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Financing activities:
Increase in long-term debt.............................. - -
Distributions to minority interests..................... (74,391,800) (54,007,800)interests.................... (100,386,500) (87,563,000)
Issuance of common stock................................ 443,531 306,697stock............................... 7,485,540 689,573
Acquisition of treasury stock........................... - (102,757,502)stock.......................... -- (263,934,815)
Cash dividends.......................................... (13,191,069) (12,793,006)dividends......................................... (26,424,927) (24,989,751)
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Cash used in financing activities..................... (87,139,338) (169,251,611)activities.................... (119,325,887) (375,797,993)
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Decrease in cash and short-term investments............... $(158,583,210) $(92,737,913)investments.............. $(105,405,641) $(260,450,923)
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See notes to condensed consolidated financial statements.
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Nucor Corporation - Notes to Condensed Consolidated Financial Statements
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- Unaudited
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1. BASIS OF INTERIM PRESENTATION: The information furnished in Part I reflects
all adjustments which are, in the opinion of management, necessary to a
fair statement of the results for the interim periods. The information
furnished has not been audited and is subject to year-end adjustments.
These condensed consolidated financial statements should be read in
conjunction with the consolidated financial statements and the notes
thereto included in Nucor's annual report for the fiscal year ended
December 31, 2000. The 2000 balance sheet has been reclassified to conform
with the 2001 presentation.
2. INVENTORIES: Inventories consisted of approximately 40%45% raw materials and
supplies, and 60%55% finished and semi-finished products, at March 31,June 30, 2001 (45% and 55% at
December 31, 2000).2000. Inventories valued on the last-in, first-out (LIFO)
method of accounting represent approximately 80%85% of total inventories as of
March 31,June 30, 2001 (85% as ofand December 31, 2000).2000. If the first-in, first-out method
(FIFO) of accounting had been used, inventories would have been $26,558,398$24,508,398
higher at March 31,June 30, 2001 ($19,358,398 higher at December 31, 2000).
3. CONTINGENCIES: Nucor is subject to environmental laws and regulations
established by federal, state and local authorities; and makes provision
for the estimated costs related to compliance. In December 2000, Nucor
entered into a consent decree with the United States Environmental
Protection Agency and certain states in order to resolve alleged
environmental violations. Under terms of this decree, Nucor will conduct
testing at some of its facilities, perform corrective action where
necessary, and pilot certain pollution control technologies.
4. SHAREHOLDER RIGHTS PLAN: On March 8, 2001, the Board of Directors adopted a
Shareholder Rights Plan ("Plan") in which one right ("Right") was declared
as a dividend for each Nucor common share outstanding. Each Right entitles
Nucor common shareholders to purchase, under certain conditions, one
five-thousandth of a share of newly authorized Series A Junior
Participating Preferred Stock ("Preferred Stock"), with one five-thousandth
of a share of Preferred Stock intended to be the economic equivalent of one
share of Nucor common stock. Until the occurrence of certain events, the
Rights are represented by and traded in tandem with Nucor common stock.
Rights will be exercisable only if a person or group acquires beneficial
ownership of 15 percent (15%) or more of the Nucor common shares or
commences a tender or exchange offer, upon the consummation of which such
person or group would beneficially own 15 percent (15%) or more of the
common shares. Upon such an event, the Rights enable dilution of the
acquiring person's or group's interest by providing that other holders of
Nucor common stock may purchase, at an exercise price of $150.00, Nucor
common stock, or in the discretion of the Board of Directors, Preferred
Stock, having double the value of such exercise price. Nucor will be
entitled to redeem the Rights at $.001 per Right under certain
circumstances set forth in the Plan. The Rights themselves have no voting
power and will expire on March 8, 2011, unless earlier exercised, redeemed
or exchanged. Each one five-thousandth of a share of Preferred Stock has
the same voting rights as one share of Nucor common stock, and each share
of Preferred Stock has 5,000 times the voting power of one share of Nucor
common stock.
- 5 -
Nucor Corporation - Analysis of Operations and Finances
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Operations
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NetAlthough the second quarter of 2001 established new tonnage records for
steel shipments to outside customers, net sales dollars decreased by 14%11% from
the firstsecond quarter of 2000 to the firstsecond quarter of 2001, due primarily to a 20% decrease
in averagecomposite sales prices.price per ton. New tonnage records for steel shipments were
also established in the first half of 2001; however, net sales dollars decreased
by 13% from the first half of 2000 to the first half of 2001, due to a 19%
decrease in composite sales price per ton.
The major component of cost of products sold is raw material costs. The
average price of raw materials decreased approximately 16% in the second quarter
of 2001 compared with the second quarter of 2000, and decreased about 15% from16% in the
first quarterhalf of 2001 compared with the first half of 2000.
Pre-operating and start-up costs of new facilities increased to $20,000,000$40,000,000
in the first quarterhalf of 2001, compared with $6,600,000$16,600,000 in the first half of 2000.
For the second quarter of 2001, pre-operating and start-up costs were
$20,000,000, compared with $10,000,000 in the prior year.second quarter of 2000.
Major components of marketing, administrative and other expenses are freight
and profit sharing costs. Unit freight costs increased 11%about 1% from the firstsecond
quarter of 2000 to the firstsecond quarter of 2001, and profitincreased about 6% from the
first half of 2000 to the first half of 2001. Profit sharing costs decreased
about 65% from the second quarter of 2000 to the second quarter of 2001, and
decreased by 66% compared withfrom the first half of 2000 to the first quarter.half of 2001. Profit
sharing costs are based upon and generally fluctuate with pre-tax earnings. The
decrease in profit sharing costs was partially offset by additional costs for
employment agreements entered into in the second quarter of 2001.
Interest income,expense, net of interest expense, decreased forincome, increased from the firstsecond quarter
of 2000 to the second quarter of 2001 and increased from the first quarterhalf of 2000
to the first half of 2001, due primarily due to increased debt, decreased short-term
investments and decreased average interest rates on short-term investments.
Federal income taxes were at a rate of 35% for the second quarter and first
quarterhalf of 2001, and approximately 35.5% for the second quarter and first quarterhalf of
2000.
Net earnings decreased approximately 60% fromduring the second quarter and first half of 2001,
compared with the second quarter and first half of 2000, to
the first quarter of 2001, due to decreased
margins and increased pre-operating and start-up costs.costs of new facilities,
partially offset by decreased profit sharing costs and decreased federal income
taxes.
Margins were approximately 8%9% for both the second quarter and for the first
quarterhalf of 2001, compared with approximately 15% for the second quarter and
approximately 14% for
the first quarterhalf of 2000.
On March 31, 2001, Nucor purchased substantially all of the assets of
Auburn Steel Company, Inc.'s steel bar facility in Auburn, New York for
approximately $115,000,000. This facility has the capacity to produce up to
430,000 tons of merchant bar quality steel shapes, SBQ and rebar.
Liquidity and capital resources
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The current ratio was 2.42.3 at the end of the 2001 first quarter,half of 2001, and 2.5 at
year-end 2000. The percentage of long-term debt to total capital was about 16% at the
end of the first quarterhalf of 2001 and at year-end 2000.
Capital expenditures decreased approximately 48% during47% from the first quarterhalf of 2001 compared with2000 to the first
quarterhalf of 2000.2001. However, this decrease was partially offset by the purchase of
substantially all of the assets of Auburn Steel Company, Inc.'s steel bar
facility for approximately $115,000,000. Capital expenditures are projected to
be moreless than $275$300 million for all of 2001. Funds provided from operations,
existing credit facilities, and new borrowings are expected to be more than
adequate to meet future capital expenditure and working capital requirements.
6
Nucor's directors have approved the purchase of up to 15,000,000 shares of
Nucor common stock. There were no repurchases during the second quarter and
first quarterhalf of 2001. Since the inception of the stock repurchase program in 1998,
a total of approximately 10,800,000 shares have been repurchased at a total cost
of about $445,000,000.
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PART II - OTHER INFORMATION
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Item 1 - Legal Proceedings
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In December 2000, the United States Environmental Protection Agency and
the Department of Justice announced an agreement with Nucor and certain states
that resolved alleged environmental violations. Under the terms of the agreement
or Consent Decree, Nucor will pilot new air pollution control technology and
will evaluate and improve, as appropriate, its water pollution control systems.
Nucor will also evaluate and remediate any contamination that may be present on
its sites. In July 2001, Nucor has also agreed to paypaid a $9,000,000 penalty withand has agreed to spend
another $4,000,000 in Supplemental Environmental Projects under this Consent
Decree. As part of the Consent Decree, Nucor will implementis implementing an Environmental
Management System throughout its operations. The agreement is comprehensive and
involves eight Nucor Steel Mills and six Vulcraft Facilities throughout the
nation. Nucor is involved in various other judicial and administrative
proceedings as both plaintiff and defendant, arising in the ordinary course of
business. Nucor does not believe that any such proceedings (including matters
relating to contracts, torts, taxes, warranties and insurance) will have a
material adverse effect on its business, operating results, financial condition
or cash flows.
Item 4 - Submission of Matters to a Vote of Security Holders
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At the annual meeting of stockholders held on May 9, 2001, two directors
were elected for terms of three years expiring in 2004; 53,085,444 shares were
voted for Daniel R. DiMicco (13,290,449 abstained) and 58,134,289 shares were
voted for James D. Hlavacek (8,241,604 abstained).
Item 6 - Exhibits and Reports on Form 8-K
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a. List of Exhibits:
3 - By-Laws as amended January 23, 2001
4 - Rights--------------------------
Exhibit No. Description of Exhibit
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10.1 Employment Agreement dated as of March 8, 2001, between Nucor
Corporation and American Stock Transfer & Trust Co. (incorporated by
reference to Exhibit 4 to Nucor's Form 8-K filed March 9, 2001)Daniel R. DiMicco
10.2 Employment Agreement of Terry S. Lisenby
10.3 Employment Agreement of Hamilton Lott, Jr.
10.4 Employment Agreement of D. Michael Parrish
10.5 Employment Agreement of Joseph A. Rutkowski
11 - Computation of net earnings per share
b. Reports on Form 8-K:
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On March 9,April 5, 2001, Nucor filed a current report on Form 8-K under Item 5
concerning the adoptionpurchase of a Shareholder Rights Plan in
which rights were distributed as a dividend at the rate of one Right
for each share of common stock par value, $.40 per share,substantially all of the assets of Auburn Steel
Company, held by shareholders of record as of the close of businessInc.'s steel bar facility for approximately $115,000,000. The
transaction closed on March 12,31, 2001.
7
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
Nucor Corporation has duly caused this report to be signed on its behalf by the
undersigned, who is (1) a duly authorized officer, and (2) the principal
accounting officer.
NUCOR CORPORATION
By: --------------------------------------/s/ Terry S. Lisenby
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Terry S. Lisenby
Chief Financial Officer, Treasurer
Dated: May 8, 2001 and Executive Vice President
Dated: August 10, 2001
8
NUCOR CORPORATION
List of Exhibits to Form 10-Q - 7 -June 30, 2001
Exhibit No. Description of Exhibit
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10.1 Employment Agreement of Daniel R. DiMicco
10.2 Employment Agreement of Terry S. Lisenby
10.3 Employment Agreement of Hamilton Lott, Jr.
10.4 Employment Agreement of D. Michael Parrish
10.5 Employment Agreement of Joseph A. Rutkowski
11 Computation of net earnings per share