Delaware | | | | Delaware | | 13-1860817 | (State or other jurisdiction of incorporation or organization) | | (I.R.S. Employer Identification No.) | | | | 1915 Rexford Road, Charlotte, North Carolina | | 28211 | (Address of principal executive offices) | | (Zip Code) |
(704)366-7000 (Registrant’s telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: Title of each class | | Trading Symbol(s) | | Name of each exchange on which registered | Common stock, par value $0.40 per share | | NUE | | New York Stock Exchange |
Indicate by check mark whether the 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 registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐ Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of RegulationS-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒No ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, anon-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule12b-2 of the Exchange Act. | | | | | | | Large accelerated filer | ☒ | ☒ | | Accelerated filer | | ☐ | | | | | Non-accelerated filer | ☐ | ☐ | | Smaller reporting company | | ☐ | | | | | | | | | Emerging growth company | | ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate by check mark whether the registrant is a shell company (as defined in Rule12b-2 of the Exchange Act). Yes ☐ No ☒ 316,343,488303,157,475 shares of the registrant’s common stock were outstanding at June 30, 2018.29, 2019.
Table of ContentsNucor Corporation Quarterly Report on Form10-Q For the Three Months and Six Months Ended June 30, 201829, 2019 Table of ContentsTABLE OF CONTENTS
| | | | | | | | | | | | | | | Page | | Part I | | Financial Information |
| | | | | | | | | | | Item 1 | |
| Financial Statements (Unaudited) | | | | | | | | | | | | | | | |
| | | Condensed Consolidated Statements of Earnings - Three Months (13 Weeks) and Six Months (26 Weeks) Ended June 29, 2019 and June 30, 2018 and July 1, 2017 | | | 3 | 1 | | | | | | | | | | | |
| | | Condensed Consolidated Statements of Comprehensive Income - Three Months (13 Weeks) and Six Months (26 Weeks) Ended June 29, 2019 and June 30, 2018 and July 1, 2017 | | | 4 | 2 | | | | | | | | | | | |
| | | Condensed Consolidated Balance Sheets - June 30, 201829, 2019 and December 31, 20172018 | | | 5 | 3 | | | | | | | | | | | |
| | | Condensed Consolidated Statements of Cash Flows - Six Months (26 Weeks) Ended June 29, 2019 and June 30, 2018 and July 1, 2017 | | | 6 | 4 | | | | | | | | | | | |
| | | Notes to Condensed Consolidated Financial Statements | | | 7 | 5 | | | | | | | | | | Item 2 | |
| Management’s Discussion and Analysis of Financial Condition and Results of Operations | | | 24 | 20 | | | | | | | | | | Item 3 | |
| Quantitative and Qualitative Disclosures About Market Risk | | | 32 | 27 | | | | | | | | | | Item 4 | |
| Controls and Procedures | | | 33 | | | 28 | Part II
| | Other Information |
| | | | | Part II | | Other Information | | | | | Item 1 | | Legal Proceedings
| | | 33 | | | | | Item 1 | | Legal Proceedings | | 29 | | | Item 1A | | Risk Factors
| | | 33 | | | | | Item 1A | | Risk Factors | | 29 | | | | | | | | | | Item 2 | |
| Unregistered Sales of Equity Securities and Use of Proceeds | | | 33 | | | | | | | | Item 6 | | Exhibits29
| | | 34 | | | | | Signatures
| | | | | 35 | | | | Item 6 | | Exhibits | | 30 | | | | | | | | Signatures | | 31 | | | | | | | |
2
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Table of Contents PART I. FINANCIAL INFORMATION Item 1. | Financial Statements
|
Item 1. Financial Statements Nucor Corporation Condensed Consolidated Statements of Earnings (Unaudited) (In thousands, except per share amounts) | | | Three Months (13 Weeks) Ended | | Six Months (26 Weeks) Ended | | | Three Months (13 Weeks) Ended | | | Six Months (26 Weeks) Ended | | | | June 30, 2018 | | July 1, 2017 | | June 30, 2018 | | July 1, 2017 | | | June 29, 2019 | | | June 30, 2018 | | | June 29, 2019 | | | June 30, 2018 | | Net sales | | $ | 6,460,774 | | | $ | 5,174,769 | | | $ | 12,029,193 | | | $ | 9,989,948 | | | $ | 5,895,986 | | | $ | 6,460,774 | | | $ | 11,992,610 | | | $ | 12,029,193 | | | | | | | | | | | | | | | | Costs, expenses and other: | | | | | | | | | | | | | | | | | | | | | | | | | Cost of products sold | | | 5,294,184 | | | | 4,465,144 | | | | 10,136,197 | | | | 8,520,073 | | | | 5,120,492 | | | | 5,294,184 | | | | 10,321,224 | | | | 10,136,197 | | Marketing, administrative and other expenses | | | 234,381 | | | | 170,211 | | | | 417,341 | | | | 346,637 | | | | 208,980 | | | | 234,381 | | | | 389,719 | | | | 417,341 | | Equity in earnings of unconsolidated affiliates | | | (10,943 | ) | | | (13,302 | ) | | | (20,523 | ) | | | (22,058 | ) | | | (1,138 | ) | | | (10,943 | ) | | | (4,044 | ) | | | (20,523 | ) | Interest expense, net | | | 29,451 | | | | 44,580 | | | | 66,565 | | | | 88,185 | | | | 33,030 | | | | 29,451 | | | | 61,473 | | | | 66,565 | | | | | | | | | | | | | | | | | 5,361,364 | | | | 5,547,073 | | | | 10,768,372 | | | | 10,599,580 | | | | | 5,547,073 | | | | 4,666,633 | | | | 10,599,580 | | | | 8,932,837 | | | | | | | | | | | | | | | | | Earnings before income taxes and noncontrolling interests | | | 913,701 | | | | 508,136 | | | | 1,429,613 | | | | 1,057,111 | | | | 534,622 | | | | 913,701 | | | | 1,224,238 | | | | 1,429,613 | | Provision for income taxes | | | 200,086 | | | | 166,412 | | | | 335,886 | | | | 337,739 | | | | 122,345 | | | | 200,086 | | | | 281,168 | | | | 335,886 | | | | | | | | | | | | | | | | Net earnings | | | 713,615 | | | | 341,724 | | | | 1,093,727 | | | | 719,372 | | | | 412,277 | | | | 713,615 | | | | 943,070 | | | | 1,093,727 | | Earnings attributable to noncontrolling interests | | | 30,462 | | | | 18,676 | | | | 56,395 | | | | 39,425 | | | | 25,794 | | | | 30,462 | | | | 54,781 | | | | 56,395 | | | | | | | | | | | | | | | | Net earnings attributable to Nucor stockholders | | $ | 683,153 | | | $ | 323,048 | | | $ | 1,037,332 | | | $ | 679,947 | | | $ | 386,483 | | | $ | 683,153 | | | $ | 888,289 | | | $ | 1,037,332 | | | | | | | | | | | | | | | | Net earnings per share: | | | | | | | | | | | | | | | | | | | | | | | | | Basic | | $ | 2.14 | | | $ | 1.00 | | | $ | 3.24 | | | $ | 2.12 | | | $ | 1.26 | | | $ | 2.14 | | | $ | 2.89 | | | $ | 3.24 | | Diluted | | $ | 2.13 | | | $ | 1.00 | | | $ | 3.23 | | | $ | 2.11 | | | $ | 1.26 | | | $ | 2.13 | | | $ | 2.88 | | | $ | 3.23 | | | Average shares outstanding: | | | | | | | | | | | | | | | | | | | | | | | | | Basic | | | 318,467 | | | | 320,439 | | | | 318,941 | | | | 320,332 | | | | 305,461 | | | | 318,467 | | | | 306,017 | | | | 318,941 | | Diluted | | | 319,391 | | | | 321,226 | | | | 319,930 | | | | 321,186 | | | | 305,952 | | | | 319,391 | | | | 306,559 | | | | 319,930 | | | Dividends declared per share | | $ | 0.3800 | | | $ | 0.3775 | | | $ | 0.7600 | | | $ | 0.7550 | | |
See notes to condensed consolidated financial statements. 1
Table of Contents 3
Nucor Corporation Condensed Consolidated Statements of Comprehensive Income (Unaudited) (In thousands) | | | Three Months (13 Weeks) Ended | | Six Months (26 Weeks) Ended | | | Three Months (13 Weeks) Ended | | | Six Months (26 Weeks) Ended | | | | June 30, 2018 | | July 1, 2017 | | June 30, 2018 | | July 1, 2017 | | | June 29, 2019 | | | June 30, 2018 | | | June 29, 2019 | | | June 30, 2018 | | Net earnings | | $ | 713,615 | | | $ | 341,724 | | | $ | 1,093,727 | | | $ | 719,372 | | | $ | 412,277 | | | $ | 713,615 | | | $ | 943,070 | | | $ | 1,093,727 | | | | | | | | | | | | | | | | Other comprehensive income: | | | | | | | | | | | | | | | | | | | | | | | | | Net unrealized loss on hedging derivatives, net of income taxes of ($1,100) and $0 for the second quarter of 2018 and 2017, respectively, and ($600) and ($1,000) for the first six months of 2018 and 2017, respectively | | | (3,647 | ) | | | (71 | ) | | | (4,399 | ) | | | (1,706 | ) | | Reclassification adjustment for loss on settlement of hedging derivatives included in net income, net of income taxes of $100 and $0 for the second quarter of 2018 and 2017, respectively, and $100 and $300 for the first six months of 2018 and 2017, respectively | | | 447 | | | | 171 | | | | 399 | | | | 656 | | | Foreign currency translation gain (loss), net of income taxes of $0 for the second quarter and first six months of 2018 and 2017 | | | (43,466 | ) | | | 23,957 | | | | (37,351 | ) | | | 25,958 | | | | | | | | | | | | | | | | | | | | (46,666 | ) | | | 24,057 | | | | (41,351 | ) | | | 24,908 | | | Net unrealized loss on hedging derivatives, net of income taxes of $(1,700) and $(1,100) for the second quarter of 2019 and 2018, respectively, and $(1,500) and $(600) for the first six months of 2019 and 2018, respectively | | | | (5,217 | ) | | | (3,647 | ) | | | (4,486 | ) | | | (4,399 | ) | Reclassification adjustment for settlement of hedging derivatives included in net income, net of income taxes of $200 and $100 for the second quarter of 2019 and 2018, respectively, and $0 and $100 for the first six months of 2019 and 2018, respectively | | | | 517 | | | | 447 | | | | (114 | ) | | | 399 | | Foreign currency translation gain (loss), net of income taxes of $0 for the second quarter and first six months of 2019 and 2018 | | | | 15,727 | | | | (43,466 | ) | | | 9,087 | | | | (37,351 | ) | | | | | | | | | | | | | | | | 11,027 | | | | (46,666 | ) | | | 4,487 | | | | (41,351 | ) | Comprehensive income | | | 666,949 | | | | 365,781 | | | | 1,052,376 | | | | 744,280 | | | | 423,304 | | | | 666,949 | | | | 947,557 | | | | 1,052,376 | | Comprehensive income attributable to noncontrolling interests | | | (30,462 | ) | | | (18,676 | ) | | | (56,395 | ) | | | (39,425 | ) | | | (25,794 | ) | | | (30,462 | ) | | | (54,781 | ) | | | (56,395 | ) | | | | | | | | | | | | | | | Comprehensive income attributable to Nucor stockholders | | $ | 636,487 | | | $ | 347,105 | | | $ | 995,981 | | | $ | 704,855 | | | $ | 397,510 | | | $ | 636,487 | | | $ | 892,776 | | | $ | 995,981 | | | | | | | | | | | | | | | |
See notes to condensed consolidated financial statements. 2
Table of Contents 4
Nucor Corporation Condensed Consolidated Balance Sheets (Unaudited) (In thousands) | | | June 30, 2018 | | December 31, 2017 | | | June 29, 2019 | | | December 31, 2018 | | ASSETS | | | | | | | | | | | | | | Current assets: | | | | | | | | | | | | | Cash and cash equivalents | | $ | 1,486,453 | | | $ | 949,104 | | | $ | 1,431,792 | | | $ | 1,398,886 | | Short-term investments | | | — | | | | 50,000 | | | | 50,000 | | | | - | | Accounts receivable, net | | | 2,637,744 | | | | 2,028,545 | | | | 2,399,239 | | | | 2,505,568 | | Inventories, net | | | 4,133,472 | | | | 3,461,686 | | | | 4,268,799 | | | | 4,553,500 | | Other current assets | | | 143,566 | | | | 335,085 | | | | 317,369 | | | | 178,311 | | | | | | | | | | Total current assets | | | 8,401,235 | | | | 6,824,420 | | | | 8,467,199 | | | | 8,636,265 | | | Property, plant and equipment, net | | | 5,122,381 | | | | 5,093,147 | | | | 5,797,513 | | | | 5,334,748 | | | Goodwill | | | 2,185,809 | | | | 2,196,058 | | | | 2,187,825 | | | | 2,184,336 | | | Other intangible assets, net | | | 867,905 | | | | 914,646 | | | | 786,406 | | | | 828,504 | | | Other assets | | | 874,362 | | | | 812,987 | | | | 887,537 | | | | 936,735 | | | | | | | | | | Total assets | | $ | 17,451,692 | | | $ | 15,841,258 | | | $ | 18,126,480 | | | $ | 17,920,588 | | | | | | | | | | LIABILITIES | | | | | | | | | | | | | | Current liabilities: | | | | | | | | | | | | | Short-term debt | | $ | 59,168 | | | $ | 52,833 | | | $ | 60,087 | | | $ | 57,870 | | Long-term debt due within one year | | | — | | | | 500,000 | | | Accounts payable | | | 1,558,020 | | | | 1,181,346 | | | | 1,219,792 | | | | 1,428,191 | | Salaries, wages and related accruals | | | 507,608 | | | | 516,660 | | | | 476,255 | | | | 709,397 | | Accrued expenses and other current liabilities | | | 625,533 | | | | 573,925 | | | | 624,280 | | | | 610,842 | | | | | | | | | | Total current liabilities | | | 2,750,329 | | | | 2,824,764 | | | | 2,380,414 | | | | 2,806,300 | | | Long-term debt due after one year | | | 4,232,244 | | | | 3,242,242 | | | | 4,234,308 | | | | 4,233,276 | | | Deferred credits and other liabilities | | | 733,695 | | | | 689,464 | | | | 813,750 | | | | 679,044 | | | | | | | | | | Total liabilities | | | 7,716,268 | | | | 6,756,470 | | | | 7,428,472 | | | | 7,718,620 | | | | | | | | | | EQUITY | | | | | | | | | | | | | | Nucor stockholders’ equity: | | | | | | Nucor stockholders' equity: | | | | | | | | | | Common stock | | | 152,061 | | | | 151,960 | | | | 152,061 | | | | 152,061 | | Additionalpaid-in capital | | | 2,051,382 | | | | 2,021,339 | | | | 2,098,809 | | | | 2,073,715 | | Retained earnings | | | 9,257,823 | | | | 8,463,709 | | | | 10,977,950 | | | | 10,337,445 | | Accumulated other comprehensive loss, net of income taxes | | | (296,032 | ) | | | (254,681 | ) | | Accumulated other comprehensive loss, | | | | | | | | | | net of income taxes | | | | (297,760 | ) | | | (304,133 | ) | Treasury stock | | | (1,791,827 | ) | | | (1,643,291 | ) | | | (2,630,343 | ) | | | (2,467,010 | ) | | | | | | | | | Total Nucor stockholders’ equity | | | 9,373,407 | | | | 8,739,036 | | | | Total Nucor stockholders' equity | | | | 10,300,717 | | | | 9,792,078 | | Noncontrolling interests | | | 362,017 | | | | 345,752 | | | | 397,291 | | | | 409,890 | | | | | | | | | | Total equity | | | 9,735,424 | | | | 9,084,788 | | | | 10,698,008 | | | | 10,201,968 | | | | | | | | | | Total liabilities and equity | | $ | 17,451,692 | | | $ | 15,841,258 | | | $ | 18,126,480 | | | $ | 17,920,588 | | | | | | | | | |
See notes to condensed consolidated financial statements. 3
Table of Contents 5
Nucor Corporation Condensed Consolidated Statements of Cash Flows (Unaudited) (In thousands) | | | Six Months (26 Weeks) Ended | | | Six Months (26 Weeks) Ended | | | | June 30, 2018 | | July 1, 2017 | | | June 29, 2019 | | | June 30, 2018 | | Operating activities: | | | | | | | | | | | | | Net earnings | | $ | 1,093,727 | | | $ | 719,372 | | | $ | 943,070 | | | $ | 1,093,727 | | Adjustments: | | | | | | | | | | | | | Depreciation | | | 316,402 | | | | 318,278 | | | | 321,979 | | | | 316,402 | | Amortization | | | 44,573 | | | | 45,443 | | | | 42,748 | | | | 44,573 | | Stock-based compensation | | | 51,905 | | | | 41,159 | | | | 61,260 | | | | 51,905 | | Deferred income taxes | | | 48,181 | | | | (4,173 | ) | | | 57,052 | | | | 48,181 | | Distributions from affiliates | | | 27,453 | | | | 46,877 | | | | 27,405 | | | | 27,453 | | Equity in earnings of unconsolidated affiliates | | | (20,523 | ) | | | (22,058 | ) | | | (4,044 | ) | | | (20,523 | ) | Changes in assets and liabilities (exclusive of acquisitions and dispositions): | | | | | | | | | | | | | Accounts receivable | | | (602,414 | ) | | | (396,452 | ) | | | 112,015 | | | | (602,414 | ) | Inventories | | | (676,266 | ) | | | (781,581 | ) | | | 281,119 | | | | (676,266 | ) | Accounts payable | | | 367,950 | | | | 371,158 | | | | (248,671 | ) | | | 367,950 | | Federal income taxes | | | 208,996 | | | | (14,114 | ) | | | (122,358 | ) | | | 208,996 | | Salaries, wages and related accruals | | | 1,631 | | | | (1,897 | ) | | | (220,946 | ) | | | 1,631 | | Other operating activities | | | 8,977 | | | | 28,849 | | | | (62,774 | ) | | | 8,977 | | | | | | | | | | Cash provided by operating activities | | | 870,592 | | | | 350,861 | | | | 1,187,855 | | | | 870,592 | | | | | | | | | | Investing activities: | | | | | | | | | | | | | Capital expenditures | | | (361,486 | ) | | | (189,235 | ) | | | (649,947 | ) | | | (361,486 | ) | Investment in and advances to affiliates | | | (73,427 | ) | | | (19,000 | ) | | | (11,170 | ) | | | (73,427 | ) | Divestiture of affiliates | | | | 67,591 | | | | - | | Disposition of plant and equipment | | | 17,297 | | | | 12,509 | | | | 18,396 | | | | 17,297 | | Acquisitions (net of cash acquired) | | | — | | | | (478,410 | ) | | | (9,495 | ) | | | - | | Purchases of investments | | | — | | | | (50,000 | ) | | Purchase of investments | | | | (50,000 | ) | | | - | | Proceeds from the sale of investments | | | 50,000 | | | | 150,000 | | | | - | | | | 50,000 | | Other investing activities | | | 1,378 | | | | (990 | ) | | | 2,176 | | | | 1,378 | | | | | | | | | | Cash used in investing activities | | | (366,238 | ) | | | (575,126 | ) | | | (632,449 | ) | | | (366,238 | ) | | | | | | | | | Financing activities: | | | | | | | | | | | | | Net change in short-term debt | | | 6,334 | | | | 21,235 | | | | 2,217 | | | | 6,334 | | Proceeds from long-term debt, net of discount | | | 995,710 | | | | — | | | | - | | | | 995,710 | | Repayment of long-term debt | | | (500,000 | ) | | | — | | | | - | | | | (500,000 | ) | Bond issuance related costs | | | (7,625 | ) | | | — | | | | - | | | | (7,625 | ) | Issuance of common stock | | | 12,280 | | | | 3,535 | | | | 5,892 | | | | 12,280 | | Payment of tax withholdings on certain stock-based compensation | | | (19,508 | ) | | | (13,185 | ) | | | (15,446 | ) | | | (19,508 | ) | Distributions to noncontrolling interests | | | (40,130 | ) | | | (79,420 | ) | | | (67,380 | ) | | | (40,130 | ) | Cash dividends | | | (243,649 | ) | | | (242,704 | ) | | | (246,474 | ) | | | (243,649 | ) | Acquisition of treasury stock | | | (170,315 | ) | | | — | | | | (197,511 | ) | | | (170,315 | ) | Other financing activities | | | (3,879 | ) | | | (1,101 | ) | | | (4,346 | ) | | | (3,879 | ) | | | | | | | | | Cash provided by (used in) financing activities | | | 29,218 | | | | (311,640 | ) | | | | | | | | | | Cash (used in) provided by financing activities | | | | (523,048 | ) | | | 29,218 | | Effect of exchange rate changes on cash | | | 3,777 | | | | 1,297 | | | | 548 | | | | 3,777 | | | | | | | | | | Increase (decrease) in cash and cash equivalents | | | 537,349 | | | | (534,608 | ) | | | Increase in cash and cash equivalents | | | | 32,906 | | | | 537,349 | | Cash and cash equivalents - beginning of year | | | 949,104 | | | | 2,045,961 | | | | 1,398,886 | | | | 949,104 | | | | | | | | | | Cash and cash equivalents - end of six months | | $ | 1,486,453 | | | $ | 1,511,353 | | | $ | 1,431,792 | | | $ | 1,486,453 | | | | | | | | | | Non-cash investing activity: | | | | | | | | | | | | | Change in accrued plant and equipment purchases recorded under capital lease arrangements | | $ | 1,776 | | | $ | (12,927 | ) | | | | | | | | | | Change in accrued plant and equipment purchases | | | $ | 39,862 | | | $ | 1,776 | |
See notes to condensed consolidated financial statements. 4
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Nucor Corporation – Notes to Condensed Consolidated Financial Statements (Unaudited) 1. | BASIS OF INTERIM PRESENTATION: The information furnished in this Item 1 reflects all adjustments which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented and are of a normal and recurring nature unless otherwise noted. The information furnished has not been audited; however, the December 31, 20172018 condensed consolidated balance sheet data was derived from audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America. The unaudited condensed consolidated financial statements included in this Item 1 should be read in conjunction with the audited consolidated financial statements and the notes thereto included in Nucor’s Annual Report on Form10-K for the year ended December 31, 2017.2018. |
ReclassificationsRecently Adopted Accounting Pronouncements– In the first quarter of 2018, the Company began reporting its tubular products and piling businesses as part of the steel products segment. These businesses were previously included in the steel mills segment and were reclassified to the steel products segment as part of a realignment of Nucor’s reportable segments to reflect the way in which they are now viewed by management and how segment performance assessments will be made by the chief operating decision maker beginning in such period. As a result, certain prior period amounts have been reclassified to conform to the current year presentation. These reclassifications did not have an impact on the condensed consolidated financial statements of the Company for the prior periods presented. See Note 15 for more information related to this segment realignment.
Recently Adopted Accounting Pronouncements – In the first quarter of 2018, we2019, Nucor adopted new accounting guidance related to revenue recognition for all contractslease accounting using the modified retrospective method. The modified retrospective method requires that the cumulative effect of initially applying this new guidance be recorded as anapproach, which permits companies to recognize a cumulative-effect adjustment to the opening balance of retained earnings in the condensed consolidatedperiod of adoption without adjusting the comparative periods prior to adoption. The new lease guidance requires all lessees to recognize on the balance sheet. The adoption of this new accounting guidance did not have an impact on any prior period earnings attributable to Nucor stockholders,sheet right-of-use assets and no adjustment was recorded to the opening retained earnings balance as of January 1, 2018. Retrospective adjustment of comparative prior period information is not required when using the modified retrospective adoption method, and no comparative prior periods have been adjustedlease liabilities for the rights and obligations created by lease arrangements with terms greater than 12 months, including operating leases. Expenses are recognized in the statement of earnings in a manner similar to previous accounting guidance.
In addition, we elected the package of practical expedients permitted under the transition guidance within the new guidance. lease standard, which, among other things, allowed us to carry forward the historical lease classification. We also elected the practical expedient related to land easements, allowing us to carry forward our accounting treatment for land easements on existing agreements, and the short-term lease exemption policy such that the new lease guidance was applied to leases greater than one year in duration. The adoption of the new revenuelease standard did not have a material impact on our consolidated financial statements as it resulted in an increase of 0.5% and 1.2% to our total assets and total liabilities, respectively, on our consolidated balance sheet at January 1, 2019. The new lease standard did not materially impact our consolidated net earnings and had no impact on our cash flows. See Note 4 for further information. In the first quarter of 2019, we also adopted new accounting guidance did not significantly changerelated to tax effects of the way we recognize revenue. To illustrate this, if we had continued using the previous accounting guidance in effect beforeTax Cuts and Jobs Act of 2017. As a result of the adoption of the new revenue accounting guidance, our consolidated net sales for the second quarter and first six months of 2018 would have increased approximately $22.7 million, or 0.4%, and $32.9 million, or 0.3%, respectively, and cost of products sold would have increased by the same amounts. There would have been no impact on anywe elected to reclassify stranded tax effects from accumulated other financial statement line items in the condensed consolidated financial statements for the second quarter or first six months of 2018. See Note 16 for disclosures required by the new revenue accounting guidance. In the first quarter of 2018, we adopted new accounting guidance regarding the recognition and measurement of financial assets and financial liabilities. Changescomprehensive income to the current accounting guidance primarily affect the accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. In addition, the Financial Accounting Standards Board clarified guidance related to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses onavailable-for-sale debt securities. The accounting for other financial instruments, such as loans, investments in debt securities and financial liabilities, is largely unchanged.retained earnings, effective January 1, 2019. The adoption of this new guidance did not have a material impact on the Company’s consolidated financial statements.
In the first quarter of 2018, we adopted new accounting guidance regarding the presentation and classification of certain cash receipts and cash payments in the statement of cash flows. The new guidance addresses specific cash flow presentation issues in order to reduce diversity in existing practice. The adoption of this new guidance did not have a material impact on the Company’s consolidated financial statements.
In the first quarter of 2018, we adopted new accounting guidance regarding intra-entity transfers of assets other than inventory. The new guidance requires that an entity should recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. The adoption of this new guidance did not have a material impact on the Company’s consolidated financial statements.
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Recently Issued Accounting Pronouncements -In February 2016, new accounting guidance was issued regarding the accounting for leases. The new guidance requires all lessees to recognize on the balance sheet right to use assets and lease liabilities for the rights and obligations created by lease arrangements with terms greater than 12 months. The new guidance is effective for the Company for annual and interim reporting periods beginning after December 15, 2018. While the adoption of this new guidance is expected to increase assets and liabilities due to the recognition of lease rights and obligations on the balance sheet effective January 1, 2019, the Company does not expect the adoption of this new guidance to have a significant impact on its statement of earnings, statement of comprehensive income or statement of cash flows.
In February 2018, new accounting guidance was issued regarding the tax effects of the Tax Cuts and Jobs Act (the “Tax Reform Act”). The new guidance allows for a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Reform Act to improve the usefulness of information reported to financial statement users. The new guidance is effective for the Company for annual and interim reporting periods beginning after December 15, 2018. The Company does not expect the adoption of this new guidance to have a material impact on its consolidated financial statements.
2. | INVENTORIES: Inventories consisted of approximately 42%40% raw materials and supplies and 58%60% finished and semi-finished products at both June 30, 201829, 2019 (43% and 57%, respectively, at December 31, 2017.2018). Nucor’s manufacturing process consists of a continuous, vertically integrated process from which products are sold to customers at various stages throughout the process. Since most steel products can be classified as either finished or semi-finished products, these two categories of inventory are combined. |
3. | PROPERTY, PLANT AND EQUIPMENT: Property, plant and equipment is recorded net of accumulated depreciation of $8.89$9.46 billion at June 30, 201829, 2019 ($8.709.19 billion at December 31, 2017)2018). |
Given the natural gas pricing environment, Nucor performed an impairment assessment of its proved producing natural gas well assets in December 2017.September 2018. One of the main assumptions that most significantly affects the undiscounted cash flows determination is management’s estimate of future pricing of natural gas prices.and natural gas liquids. The pricing used in thisthe impairment assessment was developed by management based on projected natural gas market supply and demand dynamics.dynamics, in conjunction with a review of projections by market analysts. Management also makes key estimates on the expected reserve levels and on the expected drilling production costs. This analysisThe impairment assessment was performed on each of Nucor’s three groups (“fields”) of wells, with each groupfield defined by common geographic location. Each
As a result of Nucor’s three groupsthe impairment assessment, Nucor recorded an impairment charge of $110.0 million relating to two fields of wells passedin the impairment test.third quarter of 2018. The post-impairment combined carrying value of the three groups of wellsthese two fields was $241.0$68.6 million at June 30, 201829, 2019 ($252.071.0 million at December 31, 2017)2018). The third field was not impaired and had a carrying value of $49.5 million at June 29, 2019 ($51.8 million at December 31, 2018). Changes in the natural gas industry or a continuation of theprolonged low price environment beyond what had already been assumed in the analysisassessment could cause management to revise the natural gas and natural gas liquids price assumptions, the estimated reserves or the estimated drilling production costs. Unfavorable revisions to these assumptions or estimates could possibly result in an impairment of some or all of the groupsfields of proved well assets. 4. | LEASES: We lease certain equipment, office space and land. Leases with an initial term of 12 months or less are not recorded on the consolidated balance sheet. |
Most leases include one or more options to renew, with renewal terms that can extend the lease term from one to five years or more. The exercise of lease renewal options is at our sole discretion and we consider these options in determining the lease term used to establish our right-of-use assets and lease liabilities. Certain leases also include options to purchase the leased property. The depreciable life of assets and leasehold improvements is limited by the expected lease term, unless there is a transfer of title or a purchase option reasonably certain of exercise. 5
Table of Contents We determine that a contract contains a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. In evaluating whether we have the right to control the use of an identified asset, we assess whether or not we have the right to direct the use of the identified asset and to obtain substantially all of the economic benefit from the use of the identified asset. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. Certain of our lease agreements include payments that adjust periodically for consumption of goods provided by the right-of-use asset in excess of contractually determined minimum amounts and for inflation. These variable lease payments are not significant. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. Total lease costs included in the condensed consolidated statement of earnings for the second quarter of 2019 were $11.1 million. Finance lease costs were $5.2 million in the second quarter of 2019, with $2.4 million being included in cost of products sold related to amortization of leased assets and $2.8 million being included in interest expense, net related to interest on lease liabilities. Operating lease costs were $5.9 million in the second quarter of 2019, with $5.3 million being included in cost of products sold related to amortization of leased assets and $0.6 million being included in marketing, administrative and other expenses of leased assets. Total lease costs included in the condensed consolidated statement of earnings for the first six months of 2019 were $22.1 million. Finance lease costs were $10.4 million in the first six months of 2019, with $4.7 million being included in cost of products sold related to amortization of leased assets and $5.7 million being included in interest expense, net related to interest on lease liabilities. Operating lease costs were $11.7 million in the first six months of 2019, with $11.1 million being included in cost of products sold related to amortization of leased assets and $0.6 million being included in marketing, administrative and other expenses of leased assets. Supplemental cash flow information related to our leases are as follows (in thousands): | | Six Months | | | | (26 Weeks) Ended | | | | June 29, 2019 | | Cash paid for amounts included in measurement of lease liabilities: | | | | | Operating cash flows from operating leases | | $ | 11,687 | | Operating cash flows from finance leases | | $ | 5,663 | | Financing cash flows from finance leases | | $ | 4,346 | |
Supplemental balance sheet information related to our leases is as follows (in thousands): | | | | June 29, 2019 | | Assets: | | | | | | | Operating lease | | Property, plant and equipment, net | | $ | 91,084 | | Finance lease | | Property, plant and equipment, net | | | 65,445 | | Total leased | | | | $ | 156,529 | | Liabilities: | | | | | | | Current operating | | Accrued expenses and other current liabilities | | $ | 17,761 | | Current finance | | Accrued expenses and other current liabilities | | | 8,140 | | Non-current operating | | Deferred credits and other liabilities | | | 73,714 | | Non-current finance | | Deferred credits and other liabilities | | | 71,249 | | Total leased | | | | $ | 170,864 | |
Weighted-average remaining lease term and discount rate for our leases are as follows: | | June 29, 2019 | Weighted-average remaining lease term - operating leases | | 9.3 years | Weighted-average remaining lease term - finance leases | | 10.7 years | Weighted-average discount rate - operating leases | | 3.8% | Weighted-average discount rate - finance leases | | 31.6% |
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Table of Contents The reason for the substantial weighted-average discount rate – finance leases, of 31.6%, is due to Nucor’s past accounting for the respective finance leases following the former accounting guidance for capital leases. Pursuant to the former lease accounting guidance, the recognition of a capital lease asset and associated capital lease liability could not exceed the fair market value of the leased asset at the lease commencement. Accordingly, the incremental borrowing rate was adjusted upward so that the present value of the minimum lease payments would equal the fair value of the asset. Maturities of lease liabilities by fiscal year for our leases are as follows as of June 29, 2019 (in thousands): | | Operating Leases | | | Finance Leases | | Maturities of lease liabilities, year ending December 31, | | | | | | | | | 2019 | | $ | 11,337 | | | $ | 9,493 | | 2020 | | | 18,444 | | | | 18,333 | | 2021 | | | 15,836 | | | | 17,858 | | 2022 | | | 14,034 | | | | 17,064 | | 2023 | | | 11,020 | | | | 15,221 | | Thereafter | | | 40,924 | | | | 79,241 | | Total lease payments | | $ | 111,595 | | | $ | 157,210 | | Less imputed interest | | | (20,120 | ) | | | (77,821 | ) | Present value of lease liabilities | | $ | 91,475 | | | $ | 79,389 | |
Prior Period Disclosures - As a result of adopting the new lease accounting guidance on January 1, 2019 under the modified retrospective approach, the Company is required to present future minimum lease commitments for capital leases and operating leases having initial or noncancellable lease terms in excess of one year that were previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2018 and accounted for under previous lease guidance. Total future minimum lease payments related to capital leases at December 31, 2018 were $154.8 million, with the timing of those payments estimated at that date to be made as follows: $17.7 million in 2019; a total of $33.6 million to be paid between 2020 and 2021; a total of $30.0 million to be paid between 2022 and 2023; and $73.4 million to be paid thereafter. Total future minimum lease payments related to operating leases having initial or noncancellable lease terms in excess of one year at December 31, 2018 were $128.6 million, with the timing of those payments estimated at that date to be made as follows: $31.8 million in 2019; a total of $45.0 million to be paid between 2020 and 2021; a total of $28.4 million to be paid between 2022 and 2023; and $23.5 million to be paid thereafter. The gross amount of assets recorded under capital leases was $89.4 million as of December 31, 2018, which primarily consisted of buildings and improvements or machinery and equipment. 5. | GOODWILL AND OTHER INTANGIBLE ASSETS: The change in the net carrying amount of goodwill for the six months ended June 30, 2018,29, 2019 by segment was as follows (in thousands): |
| | | | | | | | | | Steel Mills | | | Steel Products | | | Raw Materials | | | Total | | | | Steel Mills | | | Steel Products | | | Raw Materials | | | Total | | | Balance at December 31, 2017 | | $ | 745,484 | | | $ | 720,997 | | | $ | 729,577 | | | $ | 2,196,058 | | | Balance at December 31, 2018 | | | $ | 591,986 | | | $ | 862,773 | | | $ | 729,577 | | | $ | 2,184,336 | | Translation | | | — | | | | (10,249 | ) | | | — | | | | (10,249 | ) | | | - | | | | 3,489 | | | | - | | | | 3,489 | | Reclassifications | | | (153,498 | ) | | | 153,498 | | | | — | | | | — | | | | - | | | | - | | | | - | | | | - | | | | | | | | | | | | | | | | Balance at June 30, 2018 | | $ | 591,986 | | | $ | 864,246 | | | $ | 729,577 | | | $ | 2,185,809 | | | | | | | | | | | | | | | | | Balance at June 29, 2019 | | | $ | 591,986 | | | $ | 866,262 | | | $ | 729,577 | | | $ | 2,187,825 | |
Previously, Nucor’s tubular products and piling businesses were reported in the steel mills segment. Beginning in the first quarter of 2018, these businesses were reclassified to the steel products segment to better reflect the way in which they are viewed by management.
Nucor completed its most recent annual goodwill impairment testing during the fourth quarter of 20172018 and concluded that as of such time there was no impairment of goodwill for any of its reporting units. 7
Table of Contents The assessment performed in 2018 used forward-looking projections and included significant expected improvements in the future cash flows of one of the Company’s reporting units, Rebar Fabrication. The fair value of this reporting unit exceeded its carrying value by approximately 8% in the most recent assessment. The operating results of this reporting unit declined significantly and remained depressed throughout 2018. Nucor expects the operating results of this reporting unit to improve when the price of steel in relation to the reporting unit’s backlog pricing stabilizes. If our assessment of the relevant facts and circumstances changes, or the actual performance of this reporting unit falls short of expected results, noncash impairment charges may be required. Total goodwill associated with the Rebar Fabrication reporting unit was $356.1 million as of June 29, 2019 ($353.0 million as of December 31, 2018). An impairment of goodwill may also lead us to record an impairment of other intangible assets. Total finite-lived intangible assets associated with the Rebar Fabrication reporting unit were $72.0 million as of June 29, 2019 ($76.7 million as of December 31, 2018). There have been no triggering events requiring an interim assessment for impairment since the most recent annual goodwill impairment testing date. During the first six months of 2019, the operating results and updated future projections of one of the Company’s reporting units, Grating, decreased from the assumptions used in our most recent impairment assessment. The fair value of this reporting unit exceeded its carrying value by approximately 19% in that assessment. The decline in operating results was determined not to be indicative of a long-term decline representing a triggering event given the amount the fair value of the reporting unit exceeded its carrying amount in the most recent assessment. As of June 29, 2019, total goodwill and finite-lived intangible assets associated with the Grating reporting unit were $36.7 million and $3.5 million, respectively. Management is currently assessing the Grating reporting unit’s business strategy and structure and will continue to monitor the reporting unit for potential triggering events that would require an interim assessment for impairment. 8
Intangible assets with estimated useful lives of five to 22 years are amortized on a straight-line or accelerated basis and were comprised of the following as of June 30, 201829, 2019 and December 31, 20172018 (in thousands): | | | June 30, 2018 | | | December 31, 2017 | | | June 29, 2019 | | | December 31, 2018 | | | | Gross Amount | | | Accumulated Amortization | | | Gross Amount | | | Accumulated Amortization | | | Gross Amount | | | Accumulated Amortization | | | Gross Amount | | | Accumulated Amortization | | Customer relationships | | $ | 1,418,437 | | �� | $ | 677,547 | | | $ | 1,420,224 | | | $ | 641,089 | | | $ | 1,421,296 | | | $ | 748,899 | | | $ | 1,418,250 | | | $ | 713,656 | | Trademarks and trade names | | | 176,089 | | | | 82,426 | | | | 176,471 | | | | 77,208 | | | | 177,663 | | | | 92,836 | | | | 176,046 | | | | 87,680 | | Other | | | 62,806 | | | | 29,454 | | | | 62,805 | | | | 26,557 | | | | 63,807 | | | | 34,625 | | | | 67,820 | | | | 32,276 | | | | | | | | | | | | | | | | $ | 1,662,766 | | | $ | 876,360 | | | $ | 1,662,116 | | | $ | 833,612 | | | | $ | 1,657,332 | | | $ | 789,427 | | | $ | 1,659,500 | | | $ | 744,854 | | | | | | | | | | | | | | | | |
Intangible asset amortization expense in the second quarter of 2019 and 2018 and 2017 was $22.1$21.2 million and $23.0$22.1 million, respectively, and was $44.6$42.7 million and $45.4$44.6 million in the first six months of 20182019 and 2017,2018, respectively. Annual amortization expense is estimated to be $88.6 million in 2018; $86.7$87.1 million in 2019; $84.4$84.7 million in 2020; $83.1$83.5 million in 2021; and $80.8$81.2 million in 2022.2022; and $80.0 million in 2023. 5.6. | EQUITY INVESTMENTS: The carrying value of our equity investments in domestic and foreign companies was $808.9$821.2 million at June 30, 201829, 2019 ($750.1869.9 million at December 31, 2017)2018) and is recorded in other assets in the condensed consolidated balance sheets. |
NUMIT Nucor owns a 50% economic and voting interest in NuMit LLC (“NuMit”). NuMit owns 100% of the equity interest in Steel Technologies LLC, an operator of 26 sheet processing facilities located throughout the United States, Canada and Mexico. Nucor accounts for the investment in NuMit (on aone-month lag basis) under the equity method, as control and risk of loss are shared equally between the members. Nucor’s investment in NuMit was $320.3 million at June 30, 2018 was $317.7 million29, 2019 ($321.4337.2 million at December 31, 2017)2018). Nucor received distributions of $27.5$27.4 million and $46.9$27.5 million from NuMit during the first six months of 2019 and 2018, and 2017, respectively. DUFERDOFIN NUCOR Nucor owns a 50% economic and voting interest in Duferdofin Nucor S.r.l. (“Duferdofin Nucor”), an Italian steel manufacturer, and accounts for the investment (on aone-month lag basis) under the equity method, as control and risk of loss are shared equally between the members. Nucor’s investment in Duferdofin Nucor was $262.0 million at June 30, 2018 was $275.2 million29, 2019 ($285.9269.1 million at December 31, 2017)2018). Nucor’s 50% share of the total net assets of Duferdofin Nucor was $114.5$111.9 million at June 30, 2018,29, 2019, resulting in a basis difference of $160.7$150.1 million due to thestep-up to fair value of certain assets and liabilities attributable to Duferdofin Nucor as well as the identification of goodwill ($89.887.6 million) and finite-lived intangible assets. This basis difference, excluding the portion attributable to goodwill, is being amortized based on the remaining estimated useful lives of the various underlying net assets, as appropriate. Amortization expense associated with the fair valuestep-up was $2.3 million and $2.2 million in 8
Table of Contents during the second quarterquarters of 2018both 2019 and 2017,2018, respectively, and was $4.8$4.5 million and $4.3$4.8 million in the first six months of 2019 and 2018, and 2017, respectively. As of June 30, 2018,29, 2019, Nucor had outstanding notes receivable of €35.0 million ($40.839.8 million) from Duferdofin Nucor (€35.0 million, or $41.9$40.2 million, as of December 31, 2017)2018). The notes receivable bear interest at 0.83%0.84% and reset annually on September 30 to the 12-month Euro Interbank Offered Rate plus 1% per year. The maturity date of the principal amounts was extended to January 31, 2022 during the first quarter of 2018. As of June 30, 201829, 2019 and December 31, 2017,2018, the notes receivable were classified in other assets in the condensed consolidated balance sheets. 9
Nucor has issued a guarantee for its ownership percentage (50%) of Duferdofin Nucor’s borrowings under Facility A of a Structured Trade Finance Facilities Agreement (“Facility A”). The fair value of the guarantee is immaterial. In April 2018, Duferdofin Nucor amended and extended Facility A to mature on April 16, 2021. The maximum amount Duferdofin Nucor could borrow under Facility A was €160.0 million ($186.4181.9 million) at June 30, 2018.29, 2019. As of June 30, 2018,29, 2019, there was €140.0€154.0 million ($163.1175.1 million) outstanding under that facility (€122.5155.0 million, or $146.7$178.0 million, as of December 31, 2017)2018). If Duferdofin Nucor fails to pay when due any amounts for which it is obligated under Facility A, Nucor could be required to pay 50% of such amounts pursuant to and in accordance with the terms of its guarantee. Any indebtedness of Duferdofin Nucor to Nucor is effectively subordinated to the indebtedness of Duferdofin Nucor under Facility A. Nucor has not recorded any liability associated with this guarantee. NUCOR-JFE Nucor owns a 50% economic and voting interest inNucor-JFE Steel Mexico, S. de R.L. de C.V.(“Nucor-JFE”), a50-50 joint venture with JFE Steel Corporation of Japan, to build and operate a galvanized sheet steel plant in central Mexico.Nucor-JFE plant construction has commenced and operations are expected to begin in the second half of 2019. Nucor accounts for the investment inNucor-JFE (on aone-month lag basis) under the equity method, as control and risk of loss are shared equally between the members. Nucor’s investment inNucor-JFE was $143.4 million at June 30, 2018 was $102.7 million29, 2019 ($71.1135.7 million at December 31, 2017)2018). On January 16, 2019, Nucor entered into an agreement to guarantee a percentage, equal to its ownership percentage (50%), of Nucor-JFE’s borrowings under the General Financing Agreement and Promissory Note (the “Facility”). The fair value of the guarantee is immaterial. Nucor’s guarantee expires on April 30, 2020. Under the Facility, the maximum amount Nucor-JFE could borrow was $65.0 million as of June 29, 2019. The Facility is uncommitted. As of June 29, 2019, there was $65.0 million outstanding under the Facility. If Nucor-JFE fails to pay when due any amounts for which it is obligated under the Facility, Nucor could be required to pay 50% of such amounts pursuant to and in accordance with the terms of its guarantee. Nucor has not recorded any liability associated with this guarantee. ALL EQUITY INVESTMENTS Nucor reviews its equity investments for impairment if and when circumstances indicate that a decline in fair value below their carrying amounts may have occurred. Nucor last assessed its equity investment in Duferdofin Nucor for impairment during the fourth quarter of 2017 due to the protracted challenging steel market conditions in Europe. After completing its assessment, the Company determined that the estimated fair value exceeded its carrying amount by a sufficient amount and that there was no need to record an impairment charge. The assumptions that most significantly affect the fair value determination include projected revenuescash flows and the discount rate. It is reasonably possible that material deviation of future performance from the estimates used in our most recent valuation could result in impairment of our investment in Duferdofin Nucor. We will continue to monitor for potential triggering events that could affect the carrying value of our investment in Duferdofin Nucor as a result of future market conditions and any changes in our business strategy. 6.7. | CURRENT LIABILITIES: Book overdrafts, included in accounts payable in the condensed consolidated balance sheets, were $163.2$181.0 million at June 30, 201829, 2019 ($139.289.8 million at December 31, 2017)2018). Dividends payable, included in accrued expenses and other current liabilities in the condensed consolidated balance sheets, were $121.3$122.8 million at June 30, 201829, 2019 ($121.8123.4 million at December 31, 2017)2018). |
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7.8. | FAIR VALUE MEASUREMENTS: The following table summarizes information regarding Nucor’s financial assets and financial liabilities that arewere measured at fair value as of June 30, 201829, 2019 and December 31, 20172018 (in thousands). Nucor does not have anynon-financial assets ornon-financial liabilities that are measured at fair value on a recurring basis. |
| | | | | | Fair Value Measurements at Reporting Date Using | | | | | | | Fair Value Measurements at Reporting Date Using | | Description | | Carrying Amount in Condensed Consolidated Balance Sheets | | | Quoted Prices in Active Markets for Identical Assets (Level 1) | | | Significant Other Observable Inputs (Level 2) | | | Significant Unobservable Inputs (Level 3) | | | Carrying Amount in Condensed Consolidated Balance Sheets | | | Quoted Prices in Active Markets for Identical Assets (Level 1) | | | Significant Other Observable Inputs (Level 2) | | | Significant Unobservable Inputs (Level 3) | | As of June 30, 2018 | | | | | | | | | | Assets: | | | | | | | | | | Cash equivalents | | $ | 1,178,986 | | | $ | 1,178,986 | | | $ | — | | | $ | — | | | Derivative contracts | | | 6,455 | | | | — | | | | 6,455 | | | | — | | | | | | | | | | | | | | | | | Total assets | | $ | 1,185,441 | | | $ | 1,178,986 | | | $ | 6,455 | | | $ | — | | | | | | | | | | | | | | | | | Liabilities: | | | | | | | | | | Derivative contracts | | $ | (9,000 | ) | | $ | — | | | $ | (9,000 | ) | | $ | — | | | | | | | | | | | | | | | | | As of December 31, 2017 | | | | | | | | | | As of June 29, 2019 | | | | | | | | | | | | | | | | | | Assets: | | | | | | | | | | | | | | | | | | | | | | | | | Cash equivalents | | $ | 594,946 | | | $ | 594,946 | | | $ | — | | | $ | — | | | $ | 1,152,174 | | | $ | 1,152,174 | | | $ | - | | | $ | - | | Short-term investments | | | 50,000 | | | | 50,000 | | | | — | | | | — | | | | 50,000 | | | | 50,000 | | | | - | | | | - | | Derivative contracts | | | 479 | | | | — | | | | 479 | | | | — | | | | 1,078 | | | | - | | | | 1,078 | | | | - | | | | | | | | | | | | | | | | Total assets | | $ | 645,425 | | | $ | 644,946 | | | $ | 479 | | | $ | — | | | $ | 1,203,252 | | | $ | 1,202,174 | | | $ | 1,078 | | | $ | - | | | | | | | | | | | | | | | | Liabilities: | | | | | | | | | | | | | | | | | | | | | | | | | Derivative contracts | | $ | (8,531 | ) | | $ | — | | | $ | (8,531 | ) | | $ | — | | | $ | (15,152 | ) | | $ | - | | | $ | (15,152 | ) | | $ | - | | | | | | | | | | | | | | | | As of December 31, 2018 | | | | | | | | | | | | | | | | | | Assets: | | | | | | | | | | | | | | | | | | Cash equivalents | | | $ | 1,084,319 | | | $ | 1,084,319 | | | $ | - | | | $ | - | | Derivative contracts | | | | 4,772 | | | | - | | | | 4,772 | | | | - | | Total assets | | | $ | 1,089,091 | | | $ | 1,084,319 | | | $ | 4,772 | | | $ | - | | Liabilities: | | | | | | | | | | | | | | | | | | Derivative contracts | | | $ | (8,600 | ) | | $ | - | | | $ | (8,600 | ) | | $ | - | |
Fair value measurements for Nucor’s cash equivalents and short-term investments are classified under Level 1 because such measurements are based on quoted market prices in active markets for identical assets. Our short-term investments are held in similar short-term investment instruments as described in Note 4 to the consolidated financial statements included in Nucor’s Annual Report on Form 10-K for the year ended December 31, 2018. Fair value measurements for Nucor’s derivatives which are typically commodity or foreign exchange contracts, are classified under Level 2 because such measurements are based on published market prices for similar assets or are estimated based on observable inputs such as interest rates, yield curves, credit risks, spot and future commodity prices, and spot and future exchange rates. The fair value of short-term and long-term debt, including current maturities, was approximately $4.53$4.74 billion at June 30, 201829, 2019 ($4.194.45 billion at December 31, 2017)2018). The debt fair value estimates are classified under Level 2 because such estimates are based on readily available market prices of our debt at June 30, 201829, 2019 and December 31, 2017,2018, or similar debt with the same maturities, ratings and interest rates. 11
8.9. | CONTINGENCIES: Nucor is subject to environmental laws and regulations established by federal, state and local authorities and, accordingly, makes provisions for the estimated costs of compliance. Of the undiscounted total of $16.7$17.0 million of accrued environmental costs at June 30, 201829, 2019 ($17.118.4 million at December 31, 2017)2018), $2.4$4.6 million was classified in accrued expenses and other current liabilities ($3.87.0 million at December 31, 2017)2018) and $14.3$12.4 million was classified in deferred credits and other liabilities ($13.311.4 million at December 31, 2017)2018). Inherent uncertainties exist in these estimates primarily due to unknown conditions, evolving remediation technology and changing governmental regulations and legal standards. |
We are 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. 10
Table of Contents 9.10. | STOCK-BASED COMPENSATION:Overview– The Company maintains the Nucor Corporation 2014 Omnibus Incentive Compensation Plan (the “Omnibus Plan”) under which the Company may award stock-based compensation to key employees, officers andnon-employee directors. The Company’s stockholders approved the Omnibus Plan on May 8, 2014. The Omnibus Plan permits the award of stock options, restricted stock units, restricted shares and other stock-based awards for up to 13.0 million shares of the Company’s common stock. As of June 30, 2018, 6.029, 2019, 3.6 million shares remained available for award under the Omnibus Plan. |
The Company also maintains a number of inactive plans under which stock-based awards remain outstanding but no further awards may be made. As of June 30, 2018, 2.029, 2019, 1.5 million shares were reserved for issuance upon the future settlement of outstanding awards under such inactive plans. Stock Options– Stock options may be granted to Nucor’s key employees, officers andnon-employee directors with exercise prices at 100% of the market value on the date of the grant. The stock options granted are generally exercisable at the end of three years and have a term of 10 years. New shares are issued upon exercise of stock options. A summary of activity under Nucor’s stock option plans for the first six months of 20182019 is as follows (in thousands, except years and per share amounts): | | | | | | | Weighted- | | | Weighted- | | | | | | | | | | | | Average | | | Average | | Aggregate | | | | | | | | | | | | | | | | Exercise | | | Remaining | | Intrinsic | | | | Shares | | | Weighted - Average Exercise Price | | | Weighted - Average Remaining Contractual Life | | | Aggregate Intrinsic Value | | | Shares | | | Price | | | Contractual Life | | Value | | Number of shares under stock options: | | | | | | | | | | | | | | | | | | | | | | | Outstanding at beginning of year | | | 4,106 | | | $ | 47.96 | | | | | | | | 3,828 | | | $ | 49.71 | | | | | | | | Granted | | | 265 | | | $ | 65.80 | | | | | | | | 489 | | | $ | 48.00 | | | | | | | | Exercised | | | (288 | ) | | $ | 42.64 | | | | | $ | 7,253 | | | | (153 | ) | | $ | 38.56 | | | | | $ | 3,058 | | Canceled | | | — | | | $ | — | | | | | | | | - | | | $ | - | | | | | | | | | | | | | | | | | | | Outstanding at June 30, 2018 | | | 4,083 | | | $ | 49.49 | | | | 6.8 years | | | $ | 53,997 | | | | | | | | | | | | | | Stock options exercisable at June 30, 2018 | | | 2,368 | | | $ | 45.50 | | | | 5.6 years | | | $ | 40,350 | | | | | | | | | | | | | | Outstanding at June 29, 2019 | | | | 4,164 | | | $ | 49.92 | | | 6.1 years | | $ | 27,194 | | Stock options exercisable at June 29, 2019 | | | | 2,914 | | | $ | 47.13 | | | 4.9 years | | $ | 24,130 | |
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For the 20182019 stock option grant, the grant date fair value of $15.07$8.69 per share was calculated using the Black-Scholes option-pricing model with the following assumptions: | Exercise price | | $ | 65.80 | | | $ | 48.00 | | Expected dividend yield | | | 2.31 | % | | | 3.33 | % | Expected stock price volatility | | | 25.28 | % | | | 25.57 | % | Risk-free interest rate | | | 2.85 | % | | | 2.03 | % | Expected life (years) | | | 6.5 | | | | 6.5 | |
Stock options granted to employees who are eligible for retirement on the date of the grant are expensed immediately since these awards vest upon retirement from the Company. Retirement, for purposes of vesting in these stock options, means termination of employment after satisfying age and years of service requirements. Similarly, stock options granted to employees who will become retirement-eligible prior to the end of the vesting term are expensed over the period through which the employee will become retirement-eligible. Compensation expense for stock options granted to employees who will not become retirement-eligible prior to the end of the vesting term is recognized on a straight-line basis over the vesting period. Compensation expense for stock options was $3.6$3.8 million and $7.2$3.6 million in the second quarter of 20182019 and 2017,2018, respectively, and $4.0$4.1 million and $7.5$4.0 million in the first six months of 20182019 and 2017,2018, respectively. As of June 30, 2018,29, 2019, unrecognized compensation expense related to stock options was $2.2$1.8 million, which is expected to be recognized over a weighted-average period of 2.12.0 years. Restricted Stock Units–Nucor annually grants restricted stock units (“RSUs”) to key employees, officers andnon-employee directors. The RSUs typicallygranted to key employees and officers vest and are converted to common stock in three equal installments on each of the first three anniversaries of the grant date. Adate, provided that a portion of the RSUs awarded to an officerofficers prior to 2018 vests only upon the officer’s retirement. Retirement, for purposes of vesting in these RSUs only, means termination of employment with approval of the Compensation and Executive Development Committee of the Board of Directors after satisfying age and years of service requirements. RSUs granted to anon-employee director are fully vested on the grant date and are payable to thenon-employee director in the form of common stock after the termination of the director’s service on the Board of Directors. 11
Table of Contents RSUs granted to employees who are eligible for retirement on the date of the grant are expensed immediately, and RSUs granted to employees who will become retirement-eligible prior to the end of the vesting term are expensed over the period through which the employee will become retirement-eligible since these awards vest upon retirement from the Company. Compensation expense for RSUs granted to employees who will not become retirement-eligible prior to the end of the vesting term is recognized on a straight-line basis over the vesting period. Cash dividend equivalents are paid to holders of RSUs each quarter. Dividend equivalents paid on RSUs expected to vest are recognized as a reduction in retained earnings. The fair value of an RSU is determined based on the closing price of Nucor’s common stock on the date of the grant. grant. A summary of Nucor’s RSU activity for the first six months of 20182019 is as follows (shares in thousands): | | | | | | Shares | | | Grant Date Fair Value | | | | Shares | | | Grant Date Fair Value | | | RSUs: | | | | | | Restricted stock units: | | | | | | | | | | Unvested at beginning of year | | | 1,071 | | | $ | 52.62 | | | | 1,246 | | | $ | 59.09 | | Granted | | | 1,013 | | | $ | 65.80 | | | | 1,770 | | | $ | 48.00 | | Vested | | | (762 | ) | | $ | 59.20 | | | | (1,131 | ) | | $ | 52.47 | | Canceled | | | (10 | ) | | $ | 53.50 | | | | (17 | ) | | $ | 60.62 | | | | | | | | | Unvested at June 30, 2018 | | | 1,312 | | | $ | 58.97 | | | | | | | | | | Unvested at June 29, 2019 | | | | 1,868 | | | $ | 52.58 | |
Compensation expense for RSUs was $32.6$41.3 million and $21.1$32.6 million in the second quarter of 20182019 and 2017,2018, respectively, and $38.3$48.1 million and $26.1$38.3 million in the first six months of 20182019 and 2017,2018, respectively. As of June 30, 2018,29, 2019, unrecognized compensation expense related to unvested RSUs was $62.1$81.4 million, which is expected to be recognized over a weighted-average period of 2.11.9 years. 13
Restricted Stock Awards–Prior to their expiration effective December 31, 2017, the NucorCorporation Senior Officers Long-Term Incentive Plan and the Nucor Corporation Senior Officers Annual Incentive Plan authorized the award of shares of common stock to officers subject to certain conditions and restrictions. Effective January1, 2018, the Company adopted supplements to the Omnibus Plan with terms that permit the award of shares of common stock to officers subject to the conditions and restrictions described below, which are substantially similar to those of the expired Senior Officers Long-Term Incentive Plan and Senior Officers Annual Incentive Plan. The expired Senior Officers Long-Term Incentive Plan, together with the applicable supplement, is referred to below as the “LTIP,“LTIP,”and the expired Senior Officers Annual Incentive Plan, together with the applicable supplement, is referred to below as the “AIP.“AIP.” The LTIP provides for the award of shares of restricted common stock at the end of each LTIP performance measurement period at no cost to officers if certain financial performance goals are met during the period.One-third of the LTIP restricted stock award vests upon each of the first three anniversaries of the award date or, if earlier, upon the officer’s attainment of age 55 while employed by Nucor. Although LTIP participants are entitled to cash dividends and may vote such awarded shares, the sale or transfer of such shares is limited during the restricted period. The AIP provides for the payment of annual cash incentive awards. An AIP participant may elect, however, to defer payment of up toone-half of an AIP award. In such event, the deferred AIP award is converted into common stock units and credited with a deferral incentive, in the form of additional common stock units, equal to 25% of the number of common stock units attributable to the deferred AIP award. Common stock units attributable to deferred AIP awards are fully vested. Common stock units credited as a deferral incentive vest upon the AIP participant’s attainment of age 55 while employed by Nucor. Vested common stock units are paid to AIP participants in the form of shares of common stock following their termination of employment with Nucor. A summary of Nucor’s restricted stock activity under the AIP and the LTIP for the first six months of 20182019 is as follows (shares in thousands): | | | | | | | | | | Grant Date | | | | Shares | | | Grant Date Fair Value | | | Shares | | | Fair Value | | RSUs and Restricted stock awards: | | | | | | Restricted stock units and restricted stock awards: | | | | | | | | | | Unvested at beginning of year | | | 91 | | | $ | 54.50 | | | | 130 | | | $ | 62.97 | | Granted | | | 256 | | | $ | 67.68 | | | | 316 | | | $ | 58.04 | | Vested | | | (212 | ) | | $ | 64.99 | | | | (287 | ) | | $ | 58.70 | | Canceled | | | — | | | | — | | | | - | | | $ | - | | | | | | | | | Unvested at June 30, 2018 | | | 135 | | | $ | 62.99 | | | | | | | | | | Unvested at June 29, 2019 | | | | 159 | | | $ | 60.87 | |
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Table of Contents Compensation expense for common stock and common stock units awarded under the AIP and the LTIP is recorded over the performance measurement and vesting periods based on the anticipated number and market value of shares of common stock and common stock units to be awarded. Compensation expense for anticipated awards based upon Nucor’s financial performance, exclusive of amounts payable in cash, was $5.3$3.7 million and $3.2$5.3 million in the second quarter of 20182019 and 2017,2018, respectively, and $9.7$9.1 million and $7.5$9.7 million in the first six months of 20182019 and 2017,2018, respectively. As of June 30, 2018,29, 2019, unrecognized compensation expense related to unvested restricted stock awards was $2.4$2.6 million, which is expected to be recognized over a weighted-average period of 2.01.9 years. 10.11. | EMPLOYEE BENEFIT PLAN: Nucor makes contributions to a Profit Sharing and Retirement Savings Plan for qualified employees based on the profitability of the Company. Nucor’s expense for these benefits totaled $88.4$52.5 million and $48.5$88.4 million in the second quarter of 20182019 and 2017,2018, respectively, and $140.1$123.7 million and $102.5$140.1 million in the first six months of 20182019 and 2017,2018, respectively. The related liability for these benefits is included in salaries, wages and related accruals in the condensed consolidated balance sheets. |
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11.12. | INTEREST EXPENSE (INCOME): The components of net interest expense for the second quarter and first six months of 20182019 and 20172018 are as follows (in thousands): |
| | | Three Months (13 Weeks) Ended | | | Six Months (26 Weeks) Ended | | | Three Months (13 Weeks) Ended | | | Six Months (26 Weeks) Ended | | | | June 30, 2018 | | | July 1, 2017 | | | June 30, 2018 | | | July 1, 2017 | | | June 29, 2019 | | | June 30, 2018 | | | June 29, 2019 | | | June 30, 2018 | | Interest expense | | $ | 35,341 | | | $ | 47,565 | | | $ | 75,519 | | | $ | 93,865 | | | $ | 41,953 | | | $ | 35,341 | | | $ | 79,015 | | | $ | 75,519 | | Interest income | | | (5,890 | ) | | | (2,985 | ) | | | (8,954 | ) | | | (5,680 | ) | | | (8,923 | ) | | | (5,890 | ) | | | (17,542 | ) | | | (8,954 | ) | | | | | | | | | | | | | | | Interest expense, net | | $ | 29,451 | | | $ | 44,580 | | | $ | 66,565 | | | $ | 88,185 | | | $ | 33,030 | | | $ | 29,451 | | | $ | 61,473 | | | $ | 66,565 | | | | | | | | | | | | | | | |
Interest
Included in interest expense forin the second quarter and first six months of 2018 decreased compared towas the second quarter of 2017 due to a benefit received from entering into and settlingthe 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 expense for the first half of 2018 decreased compared to the first half of 2017 due to a decrease in average debt outstanding associated with the repayment of $600.0 million of 5.750% notes due 2017 in the fourth quarter of 2017 and the treasury lock instrument noted above. Interest income for the second quarter and first half of 2018 increased compared to the respective prior year periods due to higher average interest rates on investments. 12.13. | INCOME TAXES: The staffeffective tax rate for the second quarter of 2019 was 22.9% as compared to 21.9% for the Securitiessecond quarter of 2018. Included in the second quarter of 2018 were benefits totaling $10.6 million related to state tax credits and Exchange Commission issued Staff Accounting Bulletin No. 118 (“SAB 118”) to address situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Tax Reform Act. Reflected in our 2017 financial results in accordance with SAB 118 were certain provisional income tax effects of the Tax Reform Act. The Company continues to analyze and assess the impact of the Tax Reform Act.return true-ups. |
The effective tax rate for the second quarter of 2018 was 21.9% compared to 32.7% for the second quarter of 2017. The decrease in the effective tax rate for the second quarter of 2018 as compared to the second quarter of 2017 was primarily due to the permanent lowering of the U.S. corporate federal income tax rate from 35% to 21% effective for the years beginning after December 31, 2017 under the Tax Reform Act. This decrease was somewhat offset by increases in the effective tax rate due to the elimination of the domestic manufacturing deduction under the Tax Reform Act.
Nucor has concluded U.S. federal income tax matters for years through 2013.2014. The tax years 20142015 through 20162017 remain open to examination by the Internal Revenue Service. The Canada Revenue Agency has substantially concluded its examination of the 2012 and 2013 Canadian returns for Harris Steel Group Inc. and certain related affiliates. The 2015 tax year is currently under examination by the Canada Revenue Agency. The Trinidad and Tobago Inland Revenue Division is examining the Nu-Iron Unlimited 2013 corporate income tax return. The tax years 20102012 through 20172018 remain open to examination by other major taxing jurisdictions to which Nucor is subject (primarily Canada and other state and local jurisdictions). Non-current deferred tax assets included in other assets in the condensed consolidated balance sheets were $0.7$0.9 million at June 30, 201829, 2019 ($0.60.7 million at December 31, 2017)2018).Non-current deferred tax liabilities included in deferred credits and other liabilities in the condensed consolidated balance sheets were $376.6$387.9 million at June 30, 201829, 2019 ($329.3332.0 million at December 31, 2017)2018). 13
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13.14. | STOCKHOLDERS’ EQUITY: The following tables reflect the changes in stockholders’ equity attributable to both Nucor and the noncontrolling interests of Nucor’s joint ventures, primarily Nucor-Yamato Steel Company Limited Partnership,(Limited Partnership), of which Nucor owns 51%, for the three months and six months ended June 29, 2019 and June 30, 2018 and July 1, 2017 (in thousands): |
| | | | | | | | | | | | | | | Attributable to Nucor Corporation | | | Attributable to Noncontrolling Interests | | | Total | | Stockholders’ equity at December 31, 2017 | | $ | 8,739,036 | | | $ | 345,752 | | | $ | 9,084,788 | | Total comprehensive income | | | 995,981 | | | | 56,395 | | | | 1,052,376 | | Stock options | | | 16,218 | | | | — | | | | 16,218 | | Issuance of stock under award plans, net of forfeitures | | | 34,706 | | | | — | | | | 34,706 | | Amortization of unearned compensation | | | 1,000 | | | | — | | | | 1,000 | | Treasury stock acquired | | | (170,315 | ) | | | — | | | | (170,315 | ) | Dividends declared | | | (243,219 | ) | | | — | | | | (243,219 | ) | Distributions to noncontrolling interests | | | — | | | | (40,130 | ) | | | (40,130 | ) | | | | | | | | | | | | | | Stockholders’ equity at June 30, 2018 | | $ | 9,373,407 | | | $ | 362,017 | | | $ | 9,735,424 | | | | | | | | | | | | | | | | | | | | | Attributable to Nucor Corporation | | | Attributable to Noncontrolling Interests | | | Total | | Stockholders’ equity at December 31, 2016 | | $ | 7,879,865 | | | $ | 374,843 | | | $ | 8,254,708 | | Total comprehensive income | | | 704,855 | | | | 39,425 | | | | 744,280 | | Stock options | | | 11,068 | | | | — | | | | 11,068 | | Issuance of stock under award plans, net of forfeitures | | | 23,593 | | | | — | | | | 23,593 | | Amortization of unearned compensation | | | 700 | | | | — | | | | 700 | | Dividends declared | | | (243,016 | ) | | | — | | | | (243,016 | ) | Distributions to noncontrolling interests | | | — | | | | (79,420 | ) | | | (79,420 | ) | | | | | | | | | | | | | | Stockholders’ equity at July 1, 2017 | | $ | 8,377,065 | | | $ | 334,848 | | | $ | 8,711,913 | | | | | | | | | | | | | | |
| | | | | | Three Months (13 Weeks) Ended June 29, 2019 | | | | | | | | | | | | | | | | | | | | | | | | | | | | Accumulated | | | | | | | | | | | Total | | | | | | | | | | | | | | | | | | | | Additional | | | | | | | Other | | | Treasury Stock | | | Nucor | | | | | | | | | | | | Common Stock | | | Paid-in | | | Retained | | | Comprehensive | | | (at cost) | | | Stockholders' | | | Noncontrolling | | | | Total | | | Shares | | | Amount | | | Capital | | | Earnings | | | Income (Loss) | | | Shares | | | Amount | | | Equity | | | Interests | | BALANCES, March 30, 2019 | | $ | 10,502,666 | | | | 380,154 | | | $ | 152,061 | | | $ | 2,083,339 | | | $ | 10,714,279 | | | $ | (308,787 | ) | | | 75,368 | | | $ | (2,526,701 | ) | | $ | 10,114,191 | | | $ | 388,475 | | Net earnings | | | 412,277 | | | | - | | | | - | | | | - | | | | 386,483 | | | | - | | | | - | | | | - | | | | 386,483 | | | | 25,794 | | Other comprehensive income (loss) | | | 11,027 | | | | - | | | | - | | | | - | | | | - | | | | 11,027 | | | | - | | | | - | | | | 11,027 | | | | - | | Stock options exercised | | | 2,756 | | | | - | | | | - | | | | 575 | | | | - | | | | - | | | | (65 | ) | | | 2,181 | | | | 2,756 | | | | - | | Stock option expense | | | 3,800 | | | | - | | | | - | | | | 3,800 | | | | - | | | | - | | | | - | | | | - | | | | 3,800 | | | | - | | Issuance of stock under award plans, net of forfeitures | | | 29,554 | | | | - | | | | - | | | | 10,696 | | | | - | | | | - | | | | (556 | ) | | | 18,858 | | | | 29,554 | | | | - | | Amortization of unearned compensation | | | 400 | | | | - | | | | - | | | | 400 | | | | - | | | | - | | | | - | | | | - | | | | 400 | | | | - | | Treasury stock acquired | | | (124,681 | ) | | | - | | | | - | | | | - | | | | - | | | | - | | | | 2,250 | | | | (124,681 | ) | | | (124,681 | ) | | | - | | Cash dividends declared | | | (122,812 | ) | | | - | | | | - | | | | - | | | | (122,812 | ) | | | - | | | | - | | | | - | | | | (122,812 | ) | | | - | | Distributions to noncontrolling interests | | | (16,978 | ) | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | (16,978 | ) | Other | | | (1 | ) | | | - | | | | - | | | | (1 | ) | | | - | | | | - | | | | - | | | | - | | | | (1 | ) | | | - | | BALANCES, June 29, 2019 | | $ | 10,698,008 | | | | 380,154 | | | $ | 152,061 | | | $ | 2,098,809 | | | $ | 10,977,950 | | | $ | (297,760 | ) | | | 76,997 | | | $ | (2,630,343 | ) | | $ | 10,300,717 | | | $ | 397,291 | |
| | | | | | Six Months (26 Weeks) Ended June 29, 2019 | | | | | | | | | | | | | | | | | | | | | | | | | | | | Accumulated | | | | | | | | | | | Total | | | | | | | | | | | | | | | | | | | | Additional | | | | | | | Other | | | Treasury Stock | | | Nucor | | | | | | | | | | | | Common Stock | | | Paid-in | | | Retained | | | Comprehensive | | | (at cost) | | | Stockholders' | | | Noncontrolling | | | | Total | | | Shares | | | Amount | | | Capital | | | Earnings | | | Income (Loss) | | | Shares | | | Amount | | | Equity | | | Interests | | BALANCES, December 31, 2018 | | $ | 10,201,968 | | | | 380,154 | | | $ | 152,061 | | | $ | 2,073,715 | | | $ | 10,337,445 | | | $ | (304,133 | ) | | | 74,562 | | | $ | (2,467,010 | ) | | $ | 9,792,078 | | | $ | 409,890 | | Net earnings | | | 943,070 | | | | - | | | | - | | | | - | | | | 888,289 | | | | - | | | | - | | | | - | | | | 888,289 | | | | 54,781 | | Other comprehensive income (loss) | | | 4,487 | | | | - | | | | - | | | | - | | | | - | | | | 4,487 | | | | - | | | | - | | | | 4,487 | | | | - | | Stock options exercised | | | 5,892 | | | | - | | | | - | | | | 808 | | | | - | | | | - | | | | (153 | ) | | | 5,084 | | | | 5,892 | | | | - | | Stock option expense | | | 4,112 | | | | - | | | | - | | | | 4,112 | | | | - | | | | - | | | | - | | | | - | | | | 4,112 | | | | - | | Issuance of stock under award plans, net of forfeitures | | | 48,269 | | | | - | | | | - | | | | 19,175 | | | | - | | | | - | | | | (862 | ) | | | 29,094 | | | | 48,269 | | | | - | | Amortization of unearned compensation | | | 1,000 | | | | - | | | | - | | | | 1,000 | | | | - | | | | - | | | | - | | | | - | | | | 1,000 | | | | - | | Treasury stock acquired | | | (197,511 | ) | | | - | | | | - | | | | - | | | | - | | | | - | | | | 3,450 | | | | (197,511 | ) | | | (197,511 | ) | | | - | | Cash dividends declared | | | (245,898 | ) | | | - | | | | - | | | | - | | | | (245,898 | ) | | | - | | | | - | | | | - | | | | (245,898 | ) | | | - | | Distributions to noncontrolling interests | | | (67,380 | ) | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | (67,380 | ) | Other | | | (1 | ) | | | - | | | | - | | | | (1 | ) | | | (1,886 | ) | | | 1,886 | | | | - | | | | - | | | | (1 | ) | | | - | | BALANCES, June 29, 2019 | | $ | 10,698,008 | | | | 380,154 | | | $ | 152,061 | | | $ | 2,098,809 | | | $ | 10,977,950 | | | $ | (297,760 | ) | | | 76,997 | | | $ | (2,630,343 | ) | | $ | 10,300,717 | | | $ | 397,291 | |
| | | | | | Three Months (13 Weeks) Ended June 30, 2018 | | | | | | | | | | | | | | | | | | | | | | | | | | | | Accumulated | | | | | | | | | | | Total | | | | | | | | | | | | | | | | | | | | Additional | | | | | | | Other | | | Treasury Stock | | | Nucor | | | | | | | | | | | | Common Stock | | | Paid-in | | | Retained | | | Comprehensive | | | (at cost) | | | Stockholders' | | | Noncontrolling | | | | Total | | | Shares | | | Amount | | | Capital | | | Earnings | | | Income (Loss) | | | Shares | | | Amount | | | Equity | | | Interests | | BALANCES, March 31, 2018 | | $ | 9,322,919 | | | | 380,154 | | | $ | 152,061 | | | $ | 2,041,297 | | | $ | 8,696,007 | | | $ | (249,366 | ) | | | 62,056 | | | $ | (1,663,972 | ) | | $ | 8,976,027 | | | $ | 346,892 | | Net earnings | | | 713,615 | | | | - | | | | - | | | | - | | | | 683,153 | | | | - | | | | - | | | | - | | | | 683,153 | | | | 30,462 | | Other comprehensive income (loss) | | | (46,666 | ) | | | - | | | | - | | | | - | | | | - | | | | (46,666 | ) | | | - | | | | - | | | | (46,666 | ) | | | - | | Stock option expense | | | 3,587 | | | | - | | | | - | | | | 3,587 | | | | - | | | | - | | | | - | | | | - | | | | 3,587 | | | | - | | Issuance of stock under award plans, net of forfeitures | | | 19,465 | | | | - | | | | - | | | | 6,198 | | | | - | | | | - | | | | (479 | ) | | | 13,267 | | | | 19,465 | | | | - | | Amortization of unearned compensation | | | 300 | | | | - | | | | - | | | | 300 | | | | - | | | | - | | | | - | | | | - | | | | 300 | | | | - | | Treasury stock acquired | | | (141,122 | ) | | | - | | | | - | | | | - | | | | - | | | | - | | | | 2,233 | | | | (141,122 | ) | | | (141,122 | ) | | | - | | Cash dividends declared | | | (121,337 | ) | | | - | | | | - | | | | - | | | | (121,337 | ) | | | - | | | | - | | | | - | | | | (121,337 | ) | | | - | | Distributions to noncontrolling interests | | | (15,337 | ) | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | (15,337 | ) | Other | | | - | | | | - | | | | - | | | | 1 | | | | (1 | ) | | | - | | | | - | | | | - | | | | - | | | | - | | BALANCES, June 30, 2018 | | $ | 9,735,424 | | | | 380,154 | | | $ | 152,061 | | | $ | 2,051,383 | | | $ | 9,257,822 | | | $ | (296,032 | ) | | | 63,810 | | | $ | (1,791,827 | ) | | $ | 9,373,407 | | | $ | 362,017 | |
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Table of Contents | | | | | | Six Months (26 Weeks) Ended June 30, 2018 | | | | | | | | | | | | | | | | | | | | | | | | | | | | Accumulated | | | | | | | | | | | Total | | | | | | | | | | | | | | | | | | | | Additional | | | | | | | Other | | | Treasury Stock | | | Nucor | | | | | | | | | | | | Common Stock | | | Paid-in | | | Retained | | | Comprehensive | | | (at cost) | | | Stockholders' | | | Noncontrolling | | | | Total | | | Shares | | | Amount | | | Capital | | | Earnings | | | Income (Loss) | | | Shares | | | Amount | | | Equity | | | Interests | | BALANCES, December 31, 2017 | | $ | 9,084,788 | | | | 379,900 | | | $ | 151,960 | | | $ | 2,021,339 | | | $ | 8,463,709 | | | $ | (254,681 | ) | | | 61,931 | | | $ | (1,643,291 | ) | | $ | 8,739,036 | | | $ | 345,752 | | Net earnings | | | 1,093,727 | | | | - | | | | - | | | | - | | | | 1,037,332 | | | | - | | | | - | | | | - | | | | 1,037,332 | | | | 56,395 | | Other comprehensive income (loss) | | | (41,351 | ) | | | - | | | | - | | | | - | | | | - | | | | (41,351 | ) | | | - | | | | - | | | | (41,351 | ) | | | - | | Stock options exercised | | | 12,280 | | | | 210 | | | | 84 | | | | 10,103 | | | | - | | | | - | | | | (78 | ) | | | 2,093 | | | | 12,280 | | | | - | | Stock option expense | | | 3,937 | | | | - | | | | - | | | | 3,937 | | | | - | | | | - | | | | - | | | | - | | | | 3,937 | | | | - | | Issuance of stock under award plans, net of forfeitures | | | 34,706 | | | | 44 | | | | 17 | | | | 15,003 | | | | - | | | | - | | | | (720 | ) | | | 19,686 | | | | 34,706 | | | | - | | Amortization of unearned compensation | | | 1,000 | | | | - | | | | - | | | | 1,000 | | | | - | | | | - | | | | - | | | | - | | | | 1,000 | | | | - | | Treasury stock acquired | | | (170,315 | ) | | | - | | | | - | | | | - | | | | - | | | | - | | | | 2,677 | | | | (170,315 | ) | | | (170,315 | ) | | | - | | Cash dividends declared | | | (243,218 | ) | | | - | | | | - | | | | - | | | | (243,218 | ) | | | - | | | | - | | | | - | | | | (243,218 | ) | | | - | | Distributions to noncontrolling interests | | | (40,130 | ) | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | (40,130 | ) | Other | | | - | | | | - | | | | - | | | | 1 | | | | (1 | ) | | | - | | | | - | | | | - | | | | - | | | | - | | BALANCES, June 30, 2018 | | $ | 9,735,424 | | | | 380,154 | | | $ | 152,061 | | | $ | 2,051,383 | | | $ | 9,257,822 | | | $ | (296,032 | ) | | | 63,810 | | | $ | (1,791,827 | ) | | $ | 9,373,407 | | | $ | 362,017 | |
Dividends declared per share were $0.40 per share in the second quarter of 2019 ($0.38 per share in the second quarter of 2018) and $0.80 per share in the first six months of 2019 ($0.76 per share in the first six months of 2018). In September 2015,2018, the Company announced that the Board of Directors had approved a share repurchase program under which the Company is authorized to repurchase up to $900.0 million$2.0 billion of the Company’s common stock. This $900.0 million share repurchase program has no stated expiration and replaced any previously authorized repurchase programs. As of June 30, 2018, the Company had approximately $567.7 million remaining available for shareShare repurchases under the program. The Company expects any share repurchases towill be made through purchases from time to time in the open market at prevailing market prices, through private transactions or block trades. The timing and amount of any repurchases will depend on market conditions, share price, applicable legal requirements and other factors. The share repurchase authorization is discretionary and has no expiration date. The Board of Directors also terminated any previously authorized share repurchase programs. As of June 29, 2019, the Company had approximately $1.3 billion remaining available for share repurchases under the program. 16
14.15. | ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS): The following tables reflect the changes in accumulated other comprehensive income (loss) by component for the three- andsix-month periods ended June 29, 2019 and June 30, 2018 and July 1, 2017 (in thousands): |
| | | | | | | | | | | | | | | | | | | Three-Month(13-Week) Period Ended June 30, 2018 | | | | Gains and Losses on Hedging Derivatives | | | Foreign Currency Gain (Loss) | | | Adjustment to Early Retiree Medical Plan | | | Total | | Accumulated other comprehensive income (loss) at March 31, 2018 | | $ | (3,600 | ) | | $ | (251,398 | ) | | $ | 5,632 | | | $ | (249,366 | ) | | | | | | Other comprehensive income (loss) before reclassifications | | | (3,647 | ) | | | (43,466 | ) | | | — | | | | (47,113 | ) | | | | | | Amounts reclassified from accumulated other comprehensive income (loss) into earnings(1) | | | 447 | | | | — | | | | — | | | | 447 | | | | | | | | | | | | | | | | | | | Net current-period other comprehensive income (loss) | | | (3,200 | ) | | | (43,466 | ) | | | — | | | | (46,666 | ) | | | | | | | | | | | | | | | | | | Accumulated other comprehensive income (loss) at June 30, 2018 | | $ | (6,800 | ) | | $ | (294,864 | ) | | $ | 5,632 | | | $ | (296,032 | ) | | | | | | | | | | | | | | | | | | | | | | Six-Month(26-Week) Period Ended June 30, 2018 | | | | Gains and Losses on Hedging Derivatives | | | Foreign Currency Gain (Loss) | | | Adjustment to Early Retiree Medical Plan | | | Total | | Accumulated other comprehensive income (loss) at December 31, 2017 | | $ | (2,800 | ) | | $ | (257,513 | ) | | $ | 5,632 | | | $ | (254,681 | ) | | | | | | Other comprehensive income (loss) before reclassifications | | | (4,399 | ) | | | (37,351 | ) | | | — | | | | (41,750 | ) | | | | | | Amounts reclassified from accumulated other comprehensive income (loss) into earnings(1) | | | 399 | | | | — | | | | — | | | | 399 | | | | | | | | | | | | | | | | | | | Net current-period other comprehensive income (loss) | | | (4,000 | ) | | | (37,351 | ) | | | — | | | | (41,351 | ) | | | | | | | | | | | | | | | | | | Accumulated other comprehensive income (loss) at June 30, 2018 | | $ | (6,800 | ) | | $ | (294,864 | ) | | $ | 5,632 | | | $ | (296,032 | ) | | | | | | | | | | | | | | | | | |
| | Three-Month (13-Week) Period Ended | | | | June 29, 2019 | | | | Gains and Losses on | | | Foreign Currency | | | Adjustment to Early | | | | | | | | Hedging Derivatives | | | Gain (Loss) | | | Retiree Medical Plan | | | Total | | Accumulated other comprehensive income (loss) at March 30, 2019 | | $ | (6,400 | ) | | $ | (311,286 | ) | | $ | 8,899 | | | $ | (308,787 | ) | Other comprehensive income (loss) before reclassifications | | | (5,217 | ) | | | 15,727 | | | | - | | | | 10,510 | | Amounts reclassified from accumulated other comprehensive income (loss) into earnings (1) | | | 517 | | | | - | | | | - | | | | 517 | | Net current-period other comprehensive income (loss) | | | (4,700 | ) | | | 15,727 | | | | - | | | | 11,027 | | Accumulated other comprehensive income (loss) at June 29, 2019 | | $ | (11,100 | ) | | $ | (295,559 | ) | | $ | 8,899 | | | $ | (297,760 | ) |
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Table of Contents | | Six-Month (26-Week) Period Ended | | | | June 29, 2019 | | | | Gains and Losses on | | | Foreign Currency | | | Adjustment to Early | | | | | | | | Hedging Derivatives | | | Gain (Loss) | | | Retiree Medical Plan | | | Total | | Accumulated other comprehensive income (loss) at December 31, 2018 | | $ | (6,500 | ) | | $ | (304,646 | ) | | $ | 7,013 | | | $ | (304,133 | ) | Other comprehensive income (loss) before reclassifications | | | (4,486 | ) | | | 9,087 | | | | - | | | | 4,601 | | Amounts reclassified from accumulated other comprehensive income (loss) into earnings (1) | | | (114 | ) | | | - | | | | - | | | | (114 | ) | Net current-period other comprehensive income (loss) | | | (4,600 | ) | | | 9,087 | | | | - | | | | 4,487 | | Other | | | - | | | | - | | | | 1,886 | | | | 1,886 | | Accumulated other comprehensive income (loss) at June 29, 2019 | | $ | (11,100 | ) | | $ | (295,559 | ) | | $ | 8,899 | | | $ | (297,760 | ) |
(1)(1) | Includes $447$517 and $399$(114) of accumulated other comprehensive income (loss) reclassifications into cost of products sold for net losses on commodity contracts in the second quarter and first six months of 2018,2019, respectively. The tax impacts of those reclassifications were $100 in both the second quarter$200 and first six months of 2018. |
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| | | | | | | | | | | | | | | | | | | Three-Month(13-Week) Period Ended July 1, 2017 | | | | Gains and Losses on Hedging Derivatives | | | Foreign Currency Gain (Loss) | | | Adjustment to Early Retiree Medical Plan | | | Total | | Accumulated other comprehensive income (loss) at April 1, 2017 | | $ | (400 | ) | | $ | (324,169 | ) | | $ | 7,577 | | | $ | (316,992 | ) | | | | | | Other comprehensive income (loss) before reclassifications | | | (71 | ) | | | 23,957 | | | | — | | | | 23,886 | | | | | | | Amounts reclassified from accumulated other comprehensive income (loss) into earnings(2) | | | 171 | | | | — | | | | — | | | | 171 | | | | | | | | | | | | | | | | | | | Net current-period other comprehensive income (loss) | | | 100 | | | | 23,957 | | | | — | | | | 24,057 | | | | | | | | | | | | | | | | | | | Accumulated other comprehensive income (loss) at July 1, 2017 | | $ | (300 | ) | | $ | (300,212 | ) | | $ | 7,577 | | | $ | (292,935 | ) | | | | | | | | | | | | | | | | | | | | | | Six-Month(26-Week) Period Ended July 1, 2017 | | | | Gains and Losses on Hedging Derivatives | | | Foreign Currency Gain (Loss) | | | Adjustment to Early Retiree Medical Plan | | | Total | | Accumulated other comprehensive income (loss) at December 31, 2016 | | $ | 750 | | | $ | (326,170 | ) | | $ | 7,577 | | | $ | (317,843 | ) | | | | | | Other comprehensive income (loss) before reclassifications | | | (1,706 | ) | | | 25,958 | | | | — | | | | 24,252 | | | | | | | Amounts reclassified from accumulated other comprehensive income (loss) into earnings(2) | | | 656 | | | | — | | | | — | | | | 656 | | | | | | | | | | | | | | | | | | | Net current-period other comprehensive income (loss) | | | (1,050 | ) | | | 25,958 | | | | — | | | | 24,908 | | | | | | | | | | | | | | | | | | | Accumulated other comprehensive income (loss) at July 1, 2017 | | $ | (300 | ) | | $ | (300,212 | ) | | $ | 7,577 | | | $ | (292,935 | ) | | | | | | | | | | | | | | | | | |
(2) | Includes $171 and $656 of accumulated other comprehensive income reclassifications into cost of products sold for net losses on commodity contracts$0 in the second quarter and first six months of 2017, respectively. The tax impacts of those reclassifications were $0 and $300 in the second quarter and first six months of 2017,2019, respectively.
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| | Three-Month (13-Week) Period Ended | | | | June 30, 2018 | | | | Gains and Losses on | | | Foreign Currency | | | Adjustment to Early | | | | | | | | Hedging Derivatives | | | Gain (Loss) | | | Retiree Medical Plan | | | Total | | Accumulated other comprehensive income (loss) at March 31, 2018 | | $ | (3,600 | ) | | $ | (251,398 | ) | | $ | 5,632 | | | $ | (249,366 | ) | Other comprehensive income (loss) before reclassifications | | | (3,647 | ) | | | (43,466 | ) | | | - | | | | (47,113 | ) | Amounts reclassified from accumulated other comprehensive income (loss) into earnings (2) | | | 447 | | | | - | | | | - | | | | 447 | | Net current-period other comprehensive income (loss) | | | (3,200 | ) | | | (43,466 | ) | | | - | | | | (46,666 | ) | Accumulated other comprehensive income (loss) at June 30, 2018 | | $ | (6,800 | ) | | $ | (294,864 | ) | | $ | 5,632 | | | $ | (296,032 | ) |
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Table of Contents | | Six-Month (26-Week) Period Ended | | | | June 30, 2018 | | | | Gains and Losses on | | | Foreign Currency | | | Adjustment to Early | | | | | | | | Hedging Derivatives | | | Gain (Loss) | | | Retiree Medical Plan | | | Total | | Accumulated other comprehensive income (loss) at December 31, 2017 | | $ | (2,800 | ) | | $ | (257,513 | ) | | $ | 5,632 | | | $ | (254,681 | ) | Other comprehensive income (loss) before reclassifications | | | (4,399 | ) | | | (37,351 | ) | | | - | | | | (41,750 | ) | Amounts reclassified from accumulated other comprehensive income (loss) into earnings (2) | | | 399 | | | | - | | | | - | | | | 399 | | Net current-period other comprehensive income (loss) | | | (4,000 | ) | | | (37,351 | ) | | | - | | | | (41,351 | ) | Accumulated other comprehensive income (loss) at June 30, 2018 | | $ | (6,800 | ) | | $ | (294,864 | ) | | $ | 5,632 | | | $ | (296,032 | ) |
(2) Includes $447 and $399 of accumulated other comprehensive income (loss) reclassifications into cost of products sold for net losses on commodity contracts in the second quarter and first six months of 2018, respectively. The tax impacts of those reclassifications were $100 in both the second quarter and first six months of 2018. 15.16. | SEGMENTS: Nucor reports its results in the following segments: steel mills, steel products and raw materials. The steel mills segment includes carbon and alloy steel in sheet, bars, structural and plate; steel trading businesses; rebar distribution businesses; and Nucor’s equity method investments in Duferdofin Nucor, NuMit andNucor-JFE. The steel products segment includes steel joists and joist girders, steel deck, fabricated concrete reinforcing steel, cold finished steel, precision castings, steel fasteners, metal building systems, steel grating, tubular products businesses, piling products business, and wire and wire mesh. The raw materials segment includes The David J. Joseph Company and its affiliates, primarily a scrap broker and processor;Nu-Iron Unlimited and Nucor Steel Louisiana, two facilities that produce direct reduced iron used by the steel mills; and our natural gas production operations. |
Previously, Nucor’s tubular products and piling products businesses were reported in the steel mills segment. Beginning in the first quarter of 2018, these businesses were reclassified to the steel products segment as part of a realignment of Nucor’s reportable segments to reflect the way in which they are now viewed by management and how segment performance assessments will be made by the chief operating decision maker beginning in such period. The segment data for the comparable periods has also been reclassified into the steel products segment in order to conform to the current year presentation. The steel mills, steel products and raw materials segments are consistent with the way Nucor manages its business, which is primarily based upon the similarity of the types of products produced and sold by each segment. Additionally, the composition of assets by segment at December 31, 2017 was reclassified to conform to the current year presentation. This reclassification between segments did not have any impact on the consolidated asset balances.
Net interest expense other income,on long-term debt, charges and credits associated with changes in allowances to eliminate intercompany profit in inventory, profit sharing expense and stock-based compensation are shown under Corporate/eliminations. Corporate assets primarily include cash and cash equivalents, short-term investments, allowances to eliminate intercompany profit in inventory, deferred income tax assets, federal and state income taxes receivable and investments in and advances to affiliates. 19
Nucor’s results by segment for the second quarter and first six months of 20182019 and 20172018 were as follows (in thousands): | | | Three Months (13 Weeks) Ended | | | Six Months (26 Weeks) Ended | | | Three Months (13 Weeks) Ended | | | Six Months (26 Weeks) Ended | | | | June 30, 2018 | | | July 1, 2017 | | | June 30, 2018 | | | July 1, 2017 | | | June 29, 2019 | | | June 30, 2018 | | | June 29, 2019 | | | June 30, 2018 | | Net sales to external customers: | | | | | | | | | | | | | | | | | | | | | | | | | Steel mills | | $ | 4,169,539 | | | $ | 3,404,064 | | | $ | 7,750,233 | | | $ | 6,594,571 | | | $ | 3,703,447 | | | $ | 4,169,539 | | | $ | 7,652,849 | | | $ | 7,750,233 | | Steel products | | | 1,738,370 | | | | 1,366,693 | | | | 3,207,081 | | | | 2,579,050 | | | | 1,750,183 | | | | 1,738,370 | | | | 3,404,705 | | | | 3,207,081 | | Raw materials | | | 552,865 | | | | 404,012 | | | | 1,071,879 | | | | 816,327 | | | | 442,356 | | | | 552,865 | | | | 935,056 | | | | 1,071,879 | | | | | | | | | | | | | | | | $ | 5,895,986 | | | $ | 6,460,774 | | | $ | 11,992,610 | | | $ | 12,029,193 | | | | $ | 6,460,774 | | | $ | 5,174,769 | | | $ | 12,029,193 | | | $ | 9,989,948 | | | | | | | | | | | | | | | | | Intercompany sales: | | | | | | | | | | | | | | | | | | | | | | | | | Steel mills | | $ | 1,065,780 | | | $ | 759,245 | | | $ | 1,964,106 | | | $ | 1,417,605 | | | $ | 814,548 | | | $ | 1,065,780 | | | $ | 1,716,771 | | | $ | 1,964,106 | | Steel products | | | 50,907 | | | | 26,664 | | | | 86,677 | | | | 56,365 | | | | 54,396 | | | | 50,907 | | | | 117,201 | | | | 86,677 | | Raw materials | | | 3,155,268 | | | | 2,459,352 | | | | 5,764,212 | | | | 4,637,991 | | | | 2,430,487 | | | | 3,155,268 | | | | 4,854,356 | | | | 5,764,212 | | Corporate/eliminations | | | (4,271,955 | ) | | | (3,245,261 | ) | | | (7,814,995 | ) | | | (6,111,961 | ) | | | (3,299,431 | ) | | | (4,271,955 | ) | | | (6,688,328 | ) | | | (7,814,995 | ) | | | | | | | | | | | | | | | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | | | | | | | | | | | | | | | $ | - | | | $ | - | | | $ | - | | | $ | - | | Earnings (loss) before income taxes and noncontrolling interests: | | | | | | | | | | | | | | | | | | | | | | | | | Steel mills | | $ | 961,784 | | | $ | 579,520 | | | $ | 1,522,287 | | | $ | 1,223,703 | | | $ | 578,920 | | | $ | 961,784 | | | $ | 1,268,318 | | | $ | 1,522,287 | | Steel products | | | 155,766 | | | | 83,636 | | | | 241,580 | | | | 150,555 | | | | 116,084 | | | | 155,766 | | | | 193,517 | | | | 241,580 | | Raw materials | | | 134,995 | | | | 66,227 | | | | 209,542 | | | | 92,618 | | | | 21,709 | | | | 134,995 | | | | 74,932 | | | | 209,542 | | Corporate/eliminations | | | (338,844 | ) | | | (221,247 | ) | | | (543,796 | ) | | | (409,765 | ) | | | (182,091 | ) | | | (338,844 | ) | | | (312,529 | ) | | | (543,796 | ) | | | | | | | | | | | | | | | $ | 534,622 | | | $ | 913,701 | | | $ | 1,224,238 | | | $ | 1,429,613 | | | | $ | 913,701 | | | $ | 508,136 | | | $ | 1,429,613 | | | $ | 1,057,111 | | | | | | | | | | | | | | | | | | | | June 30, 2018 | | | Dec. 31, 2017 | | | | | | | | | Segment assets: | | | | | | | | | | Steel mills | | $ | 8,590,433 | | | $ | 7,671,217 | | | | | | | Steel products | | | 4,672,730 | | | | 4,323,907 | | | | | | | Raw materials | | | 3,573,219 | | | | 3,396,110 | | | | | | | Corporate/eliminations | | | 615,310 | | | | 450,024 | | | | | | | | | | | | | | | | | | | | | $ | 17,451,692 | | | $ | 15,841,258 | | | | | | | | | | | | | | | | | | |
17 16. | REVENUE: Revenue is recognized when obligations under the terms of a contract with our customers are satisfied; generally, this occurs upon shipment or when control is transferred. Revenue is measured as the amount of consideration expected to be received in exchange for transferring the goods. In addition, revenue is deferred when cash payments are received or due in advance of performance.
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The durationsTable of Nucor’s contracts with customers are generally one year or less. Customer payment terms are generally 30 days.
Contract liabilities are primarily related to deferred revenue resulting from cash payments received in advance from customers to protect against credit risk. Contract liabilities totaled $94.3 million as of June 30, 2018 ($72.3 million as of December 31, 2017), and are included in accrued expenses and other current liabilities in the condensed consolidated balance sheets. The amount of revenue reclassified from the December 31, 2017 contract liabilities balance during the first six months of 2018 was approximately $57.9 million.Contents
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| | June 29, 2019 | | | December 31, 2018 | | Segment assets: | | | | | | | | | Steel mills | | $ | 9,204,020 | | | $ | 9,244,086 | | Steel products | | | 4,770,901 | | | | 4,734,636 | | Raw materials | | | 3,259,940 | | | | 3,492,126 | | Corporate/eliminations | | | 891,619 | | | | 449,740 | | | | $ | 18,126,480 | | | $ | 17,920,588 | |
The following table disaggregates our net sales
17. | REVENUE: The following tables disaggregate our revenue by major source for the second quarter and first six months of 2019 and 2018 (in thousands): |
| | Three Months (13 Weeks) Ended June 29, 2019 | | | Six Months (26 Weeks) Ended June 29, 2019 | | | | Steel Mills | | | Steel Products | | | Raw Materials | | | Total | | | Steel Mills | | | Steel Products | | | Raw Materials | | | Total | | Sheet | | $ | 1,749,840 | | | $ | - | | | $ | - | | | $ | 1,749,840 | | | $ | 3,557,143 | | | $ | - | | | $ | - | | | $ | 3,557,143 | | Bar | | | 1,079,077 | | | | - | | | | - | | | | 1,079,077 | | | | 2,194,207 | | | | - | | | | - | | | | 2,194,207 | | Structural | | | 401,756 | | | | - | | | | - | | | | 401,756 | | | | 835,685 | | | | - | | | | - | | | | 835,685 | | Plate | | | 472,774 | | | | - | | | | - | | | | 472,774 | | | | 1,065,814 | | | | - | | | | - | | | | 1,065,814 | | Tubular Products | | | - | | | | 293,321 | | | | - | | | | 293,321 | | | | - | | | | 623,192 | | | | - | | | | 623,192 | | Rebar Fabrication | | | - | | | | 438,677 | | | | - | | | | 438,677 | | | | - | | | | 780,732 | | | | - | | | | 780,732 | | Other Steel Products | | | - | | | | 1,018,185 | | | | - | | | | 1,018,185 | | | | - | | | | 2,000,781 | | | | - | | | | 2,000,781 | | Raw Materials | | | - | | | | - | | | | 442,356 | | | | 442,356 | | | | - | | | | - | | | | 935,056 | | | | 935,056 | | | | $ | 3,703,447 | | | $ | 1,750,183 | | | $ | 442,356 | | | $ | 5,895,986 | | | $ | 7,652,849 | | | $ | 3,404,705 | | | $ | 935,056 | | | $ | 11,992,610 | |
| | Three Months (13 Weeks) Ended June 30, 2018 | | | Six Months (26 Weeks) Ended June 30, 2018 | | | | Steel Mills | | | Steel Products | | | Raw Materials | | | Total | | | Steel Mills | | | Steel Products | | | Raw Materials | | | Total | | Sheet | | $ | 1,974,427 | | | $ | - | | | $ | - | | | $ | 1,974,427 | | | $ | 3,640,647 | | | $ | - | | | $ | - | | | $ | 3,640,647 | | Bar | | | 1,258,438 | | | | - | | | | - | | | | 1,258,438 | | | | 2,348,585 | | | | - | | | | - | | | | 2,348,585 | | Structural | | | 448,557 | | | | - | | | | - | | | | 448,557 | | | | 845,254 | | | | - | | | | - | | | | 845,254 | | Plate | | | 488,117 | | | | - | | | | - | | | | 488,117 | | | | 915,747 | | | | - | | | | - | | | | 915,747 | | Tubular Products | | | - | | | | 371,568 | | | | - | | | | 371,568 | | | | - | | | | 682,796 | | | | - | | | | 682,796 | | Rebar Fabrication | | | - | | | | 390,921 | | | | - | | | | 390,921 | | | | - | | | | 720,140 | | | | - | | | | 720,140 | | Other Steel Products | | | - | | | | 975,881 | | | | - | | | | 975,881 | | | | - | | | | 1,804,145 | | | | - | | | | 1,804,145 | | Raw Materials | | | - | | | | - | | | | 552,865 | | | | 552,865 | | | | - | | | | - | | | | 1,071,879 | | | | 1,071,879 | | | | $ | 4,169,539 | | | $ | 1,738,370 | | | $ | 552,865 | | | $ | 6,460,774 | | | $ | 7,750,233 | | | $ | 3,207,081 | | | $ | 1,071,879 | | | $ | 12,029,193 | |
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Table of Contents | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Three Months (13 Weeks) Ended June 30, 2018 | | | Six Months (26 Weeks) Ended June 30, 2018 | | | | Steel Mills | | | Steel Products | | | Raw Materials | | | Total | | | Steel Mills | | | Steel Products | | | Raw Materials | | | Total | | Sheet | | $ | 1,974,427 | | | | | | | | | | | $ | 1,974,427 | | | $ | 3,640,647 | | | | | | | | | | | $ | 3,640,647 | | Bar | | | 1,258,438 | | | | | | | | | | | | 1,258,438 | | | | 2,348,585 | | | | | | | | | | | | 2,348,585 | | Structural | | | 448,557 | | | | | | | | | | | | 448,557 | | | | 845,254 | | | | | | | | | | | | 845,254 | | Plate | | | 488,117 | | | | | | | | | | | | 488,117 | | | | 915,747 | | | | | | | | | | | | 915,747 | | Tubular Products | | | | | | $ | 371,568 | | | | | | | | 371,568 | | | | | | | $ | 682,796 | | | | | | | | 682,796 | | Rebar Fabrication | | | | | | | 390,921 | | | | | | | | 390,921 | | | | | | | | 720,140 | | | | | | | | 720,140 | | Other Steel Products | | | | | | | 975,881 | | | | | | | | 975,881 | | | | | | | | 1,804,145 | | | | | | | | 1,804,145 | | Raw Materials | | | | | | | | | | $ | 552,865 | | | | 552,865 | | | | | | | | | | | $ | 1,071,879 | | | | 1,071,879 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | $ | 4,169,539 | | | $ | 1,738,370 | | | $ | 552,865 | | | $ | 6,460,774 | | | $ | 7,750,233 | | | $ | 3,207,081 | | | $ | 1,071,879 | | | $ | 12,029,193 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
STEEL MILLS SEGMENT
Sheet – For the majority of sheet products, we transfer control and recognize a sale when we ship the product from the sheet mill to our customer. The amount of consideration we receive and revenue we recognize for spot market sales are based upon prevailing prices at the time of sale. The amount of consideration we receive and revenue we recognize for contract customers are based primarily on pricing formulae that permit price adjustments to reflect changes in the current market-based indices and/or raw material costs near the time of shipment.
The amount 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 andour end-use customers’ perceptions about future market conditions. These contracts are typically one year or less. Steel mills segment contract sales outside of our sheet operations are not significant.
Bar, Structural and Plate – For the majority of bar, structural and plate products, we transfer control and recognize a sale when we ship the product from the mill to our customer. The significant majority of bar, structural and plate product sales are spot market sales, and the amount of consideration we receive and revenue we recognize for those sales are based upon prevailing prices at the time of sale.
STEEL PRODUCTS SEGMENT
Tubular Products– The tubular products businesses transfer control and recognize a sale when the product is shipped from our operating locations to our customers. The significant majority of tubular product sales are spot market sales, and the amount of consideration we receive and revenue we recognize for those sales are based upon prevailing prices at the time of sale.
Rebar Fabrication – The majority of revenue for our rebar fabrication businesses relates to revenue from contracts with customers for the supply of fabricated rebar. For the majority of these transactions, we transfer control and recognize a sale when the products are shipped from our operating locations and collection is reasonably assured. Provisions for losses on incomplete contracts are made in the period in which such losses are determined.
Our rebar fabrication businesses also generate a significant amount of revenue from contracts with customers in which they supply fabricated rebar and install it at the customer’s job site. There are two performance obligations for these types of contracts: the supply of the fabricated rebar and the installation of the supplied rebar at the customer’s job site. For the supply of fabricated rebar performance obligation, we transfer control and recognize a sale when the product is delivered to our customer’s job site. The transaction price allocated to this performance obligation is determined at the start of the contract, based on the then current market price for supplied fabricated rebar. For the installation performance obligation, we transfer control and recognize a sale when the delivered material is installed. The transaction price allocated to this performance obligation is determined at the start of the contract, based on the then current market price for the installation of fabricated rebar.
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Variable consideration occurring from change orders and price escalations caused by changes in underlying material costs for previously satisfied performance obligations are recognized cumulatively in the period in which management believes that the amount of consideration is changed and collection is reasonably assured. Management reviews these situations on acase-by-case basis, and considers a variety of factors, including relevant experience with similar types of performance obligations, our experience with the customer and collectability considerations.
Other Steel Products – Other steel products include our joist, deck, cold finish, metal building systems, piling and the other remaining businesses that comprise the steel products segment. Generally for these businesses, we transfer control and recognize a sale when we ship the product from our operating locations to our customers. The amount of consideration we receive and revenue we recognize for those sales are agreed upon with the customers before the product is shipped.
RAW MATERIALS SEGMENT
The majority of the raw materials segment revenue from outside customers is generated by The David J. Joseph Company and its affiliates. We transfer control and recognize a sale based on the terms of the agreement with the customer, which is generally when the product has met the delivery requirements. The amount of consideration we receive and revenue we recognize for those sales is based on the contract with the customer, which generally reflects current market prices at the time the contract is entered into.
17.18. | EARNINGS PER SHARE: The computations of basic and diluted net earnings per share for the second quarter and first six months of 20182019 and 20172018 are as follows (in thousands, except per share amounts): |
| | | Three Months (13 Weeks) Ended | | | Six Months (26 Weeks) Ended | | | Three Months (13 Weeks) Ended | | | Six Months (26 Weeks) Ended | | | | June 30, 2018 | | | July 1, 2017 | | | June 30, 2018 | | | July 1, 2017 | | | June 29, 2019 | | | June 30, 2018 | | | June 29, 2019 | | | June 30, 2018 | | Basic net earnings per share: | | | | | | | | | | | | | | | | | | | | | | | | | Basic net earnings | | $ | 683,153 | | | $ | 323,048 | | | $ | 1,037,332 | | | $ | 679,947 | | | $ | 386,483 | | | $ | 683,153 | | | $ | 888,289 | | | $ | 1,037,332 | | Earnings allocated to participating securities | | | (2,919 | ) | | | (1,138 | ) | | | (3,940 | ) | | | (2,333 | ) | | | (2,431 | ) | | | (2,919 | ) | | | (4,536 | ) | | | (3,940 | ) | | | | | | | | | | | | | | | Net earnings available to common stockholders | | $ | 680,234 | | | $ | 321,910 | | | $ | 1,033,392 | | | $ | 677,614 | | | $ | 384,052 | | | $ | 680,234 | | | $ | 883,753 | | | $ | 1,033,392 | | | | | | | | | | | | | | | | Average shares outstanding | | | 318,467 | | | | 320,439 | | | | 318,941 | | | | 320,332 | | | | 305,461 | | | | 318,467 | | | | 306,017 | | | | 318,941 | | | | | | | | | | | | | | | | Basic net earnings per share | | $ | 2.14 | | | $ | 1.00 | | | $ | 3.24 | | | $ | 2.12 | | | $ | 1.26 | | | $ | 2.14 | | | $ | 2.89 | | | $ | 3.24 | | | | | | | | | | | | | | | | Diluted net earnings per share: | | | | | | | | | | | | | | | | | | | | | | | | | Diluted net earnings | | $ | 683,153 | | | $ | 323,048 | | | $ | 1,037,332 | | | $ | 679,947 | | | $ | 386,483 | | | $ | 683,153 | | | $ | 888,289 | | | $ | 1,037,332 | | Earnings allocated to participating securities | | | (2,909 | ) | | | (1,136 | ) | | | (3,926 | ) | | | (2,328 | ) | | | (2,430 | ) | | | (2,909 | ) | | | (4,532 | ) | | | (3,926 | ) | | | | | | | | | | | | | | | Net earnings available to common stockholders | | $ | 680,244 | | | $ | 321,912 | | | $ | 1,033,406 | | | $ | 677,619 | | | $ | 384,053 | | | $ | 680,244 | | | $ | 883,757 | | | $ | 1,033,406 | | | | | | | | | | | | | | | | Diluted average shares outstanding: | | | | | | | | | | | | | | | | | | | | | | | | | Basic shares outstanding | | | 318,467 | | | | 320,439 | | | | 318,941 | | | | 320,332 | | | | 305,461 | | | | 318,467 | | | | 306,017 | | | | 318,941 | | Dilutive effect of stock options and other | | | 924 | | | | 787 | | | | 989 | | | | 854 | | | | 491 | | | | 924 | | | | 542 | | | | 989 | | | | | | | | | | | | | | | | | 305,952 | | | | 319,391 | | | | 306,559 | | | | 319,930 | | | | | 319,391 | | | | 321,226 | | | | 319,930 | | | | 321,186 | | | | | | | | | | | | | | | | | Diluted net earnings per share | | $ | 2.13 | | | $ | 1.00 | | | $ | 3.23 | | | $ | 2.11 | | | $ | 1.26 | | | $ | 2.13 | | | $ | 2.88 | | | $ | 3.23 | | | | | | | | | | | | | | | |
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The following stock options were excluded from the computation of diluted net earnings per share for the second quarter and first six months of 20182019 and 20172018 because their effect would have been anti-dilutive (in thousands, except per share amounts)(shares in thousands): | | | Three Months (13 Weeks) Ended | | | Six Months (26 Weeks) Ended | | | Three Months (13 Weeks) Ended | | | Six Months (26 Weeks) Ended | | | | June 30, 2018 | | | July 1, 2017 | | | June 30, 2018 | | | July 1, 2017 | | | June 29, 2019 | | | June 30, 2018 | | | June 29, 2019 | | | June 30, 2018 | | Anti-dilutive stock options: | | | | | | | | | | | | | | | | | | | | | | | | | Weighted-average shares | | | 265 | | | | 698 | | | | 133 | | | | 349 | | | | 963 | | | | 265 | | | | 963 | | | | 133 | | | | | | | | | | | | | | | | Weighted-average exercise price | | $ | 65.80 | | | $ | 59.07 | | | $ | 65.80 | | | $ | 59.07 | | | $ | 60.92 | | | $ | 65.80 | | | $ | 60.92 | | | $ | 65.80 | | | | | | | | | | | | | | | |
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Table of Contents
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations |
Certain statements made in this quarterly reportQuarterly Report on Form 10-Q are forward-looking statements that involve risks and uncertainties. The words “believe,” “expect,” “project,” “will,” “should,” “could” and similar expressions are intended to identify those forward-looking statements. These forward-looking statements reflect the Company’s best judgment based on current information, and although we base these statements on circumstances that we believe to be reasonable when made, there can be no assurance that future events will not affect the accuracy of such forward-looking information. As such, the forward-looking statements are not guarantees of future performance, and actual results may vary materially from the projected results and expectations discussed in this report. Factors that might cause the Company’s actual results to differ materially from those anticipated in forward-looking statements include, but are not limited to: (1) competitive pressure on sales and pricing, including pressure from imports and substitute materials; (2) U.S. and foreign trade policies affecting steel imports or exports; (3) the sensitivity of the results of our operations to prevailing steel prices and changes in the supply and cost of raw materials, including pig iron, iron ore and scrap steel; (4) the availability and cost of electricity and natural gas which could negatively affect our cost of steel production or could result in a delay or cancelationcancellation of existing or future drilling within our natural gas drilling programs; (5) critical equipment failures and business interruptions; (6) market demand for steel products, which, in the case of many of our products, is driven by the level of nonresidential construction activity in the United States; (7) impairment in the recorded value of inventory, equity investments, fixed assets, goodwill or other long-lived assets; (8) uncertainties surrounding the global economy, including excess world capacity for steel production; (9) fluctuations in currency conversion rates; (10) significant changes in laws or government regulations affecting environmental compliance, including legislation and regulations that result in greater regulation of greenhouse gas emissions that could increase our energy costs and our capital expenditures and operating costs or cause one or more of our permits to be revoked or make it more difficult to obtain permit modifications; (11) the cyclical nature of the steel industry; (12) capital investments and their impact on our performance; and (13) our safety performance. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the unaudited condensed consolidated financial statements and the notes thereto included elsewhere in this report, as well as the audited consolidated financial statements and the notes thereto, “Item 1A. Risk Factors” and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in Nucor’s Annual Report onForm 10-K for the year ended December 31, 2017.2018. Overview Nucor and its affiliates manufacture steel and steel products. Nucor 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 and DRI. Most of Nucor’s operating facilities and customers are located in North America. Nucor’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. Nucor reports its results in the following segments: steel mills, steel products and raw materials. The steel mills segment includes carbon and alloy steel in sheet, bars, structural and plate; steel trading businesses; rebar distribution businesses; and Nucor’s equity method investments in Duferdofin Nucor, S.r.l., NuMit LLC andNucor-JFE Steel Mexico, S. de R.L. de C.V.(“Nucor-JFE”). Nucor-JFE. The steel products segment includes steel joists and joist girders, steel deck, fabricated concrete reinforcing steel, cold finished steel, precision castings, steel fasteners, metal building systems, steel grating, tubular products businesses, piling products business, and wire and wire mesh. The raw materials segment includes DJJ, primarily a scrap broker andprocessor; Nu-Iron Unlimited and Nucor Steel Louisiana, two facilities that produce DRI used by the steel mills; and our natural gas production operations. Previously, Nucor’s tubular products and piling products businesses were reported in the steel mills segment. Beginning in the first quarter of 2018, these businesses were reclassified to the steel products segment as part of a realignment of Nucor’s reportable segments to reflect the way in which they are now viewed by management and how segment performance assessments will be made by the chief operating decision maker beginning in such period. The segment data for the comparable periods in the following discussion and analysis has also been reclassified into the steel products segment to reflect this change.
The average utilization rates of all operating facilities in the steel mills, steel products and raw materials segments were approximately 85%, 68% and 72%, respectively, in the first six months of 2019 compared with approximately 93%, 73% and 76%, respectively, in the first six months of 2018, compared to 89%, 64% and 67%, respectively, in the first six months of 2017.2018. 24
In March 2018,2019, Nucor announced its plans to build a rebar micronew state of the art steel plate mill in Frostproof, Florida, which is located in Polk County.Brandenburg, Kentucky. The micronew plate mill is a $240 million investment that will have an estimated annual capacity of 350,0001.2 million tons and employ approximately 250400 people. We anticipate the project will take approximately two years to complete. We believe this location will provide a logistical advantage to Nucor and will allow us to capitalize on a currently abundant supply of scrap, a good portion of which is handled by our scrap business, DJJ. This is the second rebar micro mill Nucor is constructing. In May 2018, Nucor announced plans to build a galvanizing line at the Company’s sheet mill in Arkansas to support Nucor’s growth into a wider and more diverse set of strategicend-market applications. The new galvanizing line is a $240 million investment with an annual capacityplate mill will significantly strengthen Nucor’s plate product portfolio, giving the Company the ability to produce approximately 97% of approximately 500,000 tons. Itthe products demanded in the current domestic plate market, including the specialty higher-margin products. The new plate mill will complement Nucor’s existing plate mills in North Carolina, Alabama and Texas and is expected to be fully operational in 2022.
Results of Operations Nucor reported consolidated net earnings of $1.26 per diluted share in the second quarter of 2019. Though this quarter’s results decreased from consolidated net earnings of $2.13 per diluted share reported in the second quarter of 2018, we view this 20
Table of Contents as solid quarterly performance given the more challenging environment when compared to the prior year period. Nucor’s profitability in the second quarter of 2018 was a significant increase from the first quarter of 2018, which was fueled by a strong domestic economy driving domestic steel demand, the adoption of tax reform and the ongoing efforts to reform federal regulations. Also benefitting the second quarter and first half of 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 March 2018. These conditions and our execution of strong operating performance continued for the remainder of 2018, making it the most profitable year in Nucor’s history. We still see demand in the end-use markets that we serve as strong and unfairly traded imports into our country have declined from the comparable periods in 2018. However, aggressive supply chain destocking and unusually wet weather impacted order rates at our steel mills in the first half of 2021.2019. Lower sales volume during the first half of the year has resulted in a more challenging price environment. Despite these challenges, Nucor’s consolidated net earnings of $2.88 per diluted share in the first six months of 2019 represents one of the most profitable first six months in the Company’s history. Results
The following discussion will provide greater quantitative and qualitative analysis of OperationsNucor’s performance in the second quarter and first six months of 2019 as compared to the respective prior year periods. Net Sales–Net sales to external customers by segment for the second quarter and first six months of 20182019 and 20172018 were as follows (in thousands): | | | Three Months (13 Weeks) Ended | | Six Months (26 Weeks) Ended | | | Three Months (13 Weeks) Ended | | Six Months (26 Weeks) Ended | | | June 30, 2018 | | | July 1, 2017 | | | % Change | | June 30, 2018 | | | July 1, 2017 | | | % Change | | | June 29, 2019 | | June 30, 2018 | | % Change | | June 29, 2019 | | June 30, 2018 | | % Change | Steel mills | | $ | 4,169,539 | | | $ | 3,404,064 | | | | 22 | % | | $ | 7,750,233 | | | $ | 6,594,571 | | | | 18 | % | | $3,703,447 | | $4,169,539 | | -11% | | $7,652,849 | | $7,750,233 | | -1% | Steel products | | | 1,738,370 | | | | 1,366,693 | | | | 27 | % | | | 3,207,081 | | | | 2,579,050 | | | | 24 | % | | 1,750,183 | | 1,738,370 | | 1% | | 3,404,705 | | 3,207,081 | | 6% | Raw materials | | | 552,865 | | | | 404,012 | | | | 37 | % | | | 1,071,879 | | | | 816,327 | | | | 31 | % | | 442,356 | | 552,865 | | -20% | | 935,056 | | 1,071,879 | | -13% | | | | | | | | | | | | | | | | | | | Total net sales | | $ | 6,460,774 | | | $ | 5,174,769 | | | | 25 | % | | $ | 12,029,193 | | | $ | 9,989,948 | | | | 20 | % | | $5,895,986 | | $6,460,774 | | -9% | | $11,992,610 | | $12,029,193 | | - | | | | | | | | | | | | | | | | | | |
Net sales for the second quarter of 2018 increased 25%2019 decreased 9% from the second quarter of 2017.2018. Average sales price per ton increased 17%decreased 2% from $767 in the second quarter of 2017 to $898 in the second quarter of 2018.2018 to $877 in the second quarter of 2019. Total tons shipped to outside customers in the second quarter of 20182019 were 7,197,000,6,724,000 tons, a 7% increasedecrease from the second quarter of 2017.2018. Net sales for the second quarter of 2018 increased 16% from the first quarter of 2018 due to a 12% increase in average sales price per ton and a 3% increase in total tons shipped to outside customers.
Net sales for the first six months of 2018 increased 20% from2019 were similar to the first six months of 2017.2018. Average sales price per ton increased 13%5% from $749 in the first half of 2017 to $849 in the first halfsix months of 2018.2018 to $889 in the first six months of 2019. Total tons shipped to outside customers in the first halfsix months of 20182019 were 14,164,000,13,491,000 tons, a 6% increase5% decrease from the first halfsix months of 2017.2018. In the steel mills segment, sales tons for the second quarter and first six months of 20182019 and 20172018 were as follows (in thousands): | | | Three Months (13 Weeks) Ended | | Six Months (26 Weeks) Ended | | | Three Months (13 Weeks) Ended | | Six Months (26 Weeks) Ended | | | June 30, 2018 | | | July 1, 2017 | | | % Change | | June 30, 2018 | | | July 1, 2017 | | | % Change | | | June 29, 2019 | | June 30, 2018 | | % Change | | June 29, 2019 | | June 30, 2018 | | % Change | Outside steel shipments | | | 5,078 | | | | 4,950 | | | | 3 | % | | | 10,094 | | | | 9,810 | | | | 3 | % | | 4,682 | | 5,078 | | -8% | | 9,454 | | 10,094 | | -6% | Inside steel shipments | | | 1,362 | | | | 1,129 | | | | 21 | % | | | 2,614 | | | | 2,154 | | | | 21 | % | | 1,118 | | 1,362 | | -18% | | 2,335 | | 2,614 | | -11% | | | | | | | | | | | | | | | | | | | Total steel shipments | | | 6,440 | | | | 6,079 | | | | 6 | % | | | 12,708 | | | | 11,964 | | | | 6 | % | | 5,800 | | 6,440 | | -10% | | 11,789 | | 12,708 | | -7% | | | | | | | | | | | | | | | | | | |
Net sales for the steel mills segment increased 22%decreased 11% in the second quarter of 20182019 from the second quarter of 20172018, due primarily due to an 8% decrease in tons sold to outside customers and a 19% increase4% decrease in the average sales price per ton from $688$819 to $819 as well as a 3% increase in tons sold to outside customers. All of our steel mill products$788. Our structural and plate mills experienced higher average selling prices in the second quarter and first half of 20182019 as compared to the respective prior year periods.second quarter of 2018, while our sheet mills experienced lower average selling prices and our bar mills were flat as compared to the second quarter of 2018. Total shipments decreased across the steel mills segment in the second quarter of 2019 as compared to the second quarter of 2018, with the largest decrease by our bar mills. Net sales for the steel mills segment increased 16%decreased 1% in the second quarterfirst six months of 20182019 from the first quartersix months of 2018, primarily due to a 14%6% decrease in tons sold to outside customers that was partially offset by a 5% increase in average sales price per ton and a 1% increase in tons sold to outside customers.ton. Net sales for the steel mills segment increased 18% in the first half21
Table of 2018 from the first half of 2017 primarily due to a 14% increase in average sales price per ton and a 3% increase in tons sold to outside customers.Contents 25
The performance of the steel mills segment is expected to remain strong in the third quarter of 2018, with margin expansion expected primarily at our sheet and plate mills. Based on the current steel market fundamentals and communications with our customers, we believe there is sustainable strength in steelend-use markets.
Selected outsideOutside sales tonnage for the steel products segment for the second quarter and first six months of 20182019 and 20172018 was as follows (in thousands):
| | | Three Months (13 Weeks) Ended | | Six Months (26 Weeks) Ended | | | Three Months (13 Weeks) Ended | | Six Months (26 Weeks) Ended | | | June 30, 2018 | | | July 1, 2017 | | | % Change | | June 30, 2018 | | | July 1, 2017 | | | % Change | | | June 29, 2019 | | June 30, 2018 | | % Change | | June 29, 2019 | | June 30, 2018 | | % Change | Joist sales | | | 114 | | | | 104 | | | | 10 | % | | | 219 | | | | 205 | | | | 7 | % | | 116 | | 114 | | 2% | | 226 | | 219 | | 3% | Deck sales | | | 116 | | | | 104 | | | | 12 | % | | | 222 | | | | 210 | | | | 6 | % | | 116 | | 116 | | - | | 222 | | 222 | | - | Cold finish sales | | | 149 | | | | 120 | | | | 24 | % | | | 296 | | | | 242 | | | | 22 | % | | 131 | | 149 | | -12% | | 274 | | 296 | | -7% | Fabricated concrete reinforcing steel sales | | | 337 | | | | 291 | | | | 16 | % | | | 627 | | | | 538 | | | | 17 | % | | 328 | | 337 | | -3% | | 587 | | 627 | | -6% | Piling products sales | | | 160 | | | | 145 | | | | 10 | % | | | 286 | | | | 264 | | | | 8 | % | | 164 | | 160 | | 3% | | 302 | | 286 | | 6% | Tubular products sales | | | 286 | | | | 227 | | | | 26 | % | | | 570 | | | | 450 | | | | 27 | % | | 245 | | 286 | | -14% | | 508 | | 570 | | -11% |
Net sales for the steel products segment increased 27% in the second quarter of 2018 from the second quarter of 2017 due to a 17% increase in volume and a 9% increase in average sales price per ton from $1,245 to $1,357. We expect the performance of the steel products segment in the third quarter of 2018 to be similar to the second quarter of 2018.
Net sales for the steel products segment increased 18%1% in the second quarter of 20182019 from the firstsecond quarter of 2018, due primarily to an 11%8% increase in volume and a 7% increase inthe average sales price per ton.ton from $1,357 to $1,462, which was partially offset by a 7% decrease in tons shipped to outside customers. While average selling prices increased for most businesses within the steel products segment in the second quarter of 2019 as compared to the second quarter of 2018, our tubular products businesses experienced lower average selling prices and lower volumes. Net sales for the steel products segment increased 24%6% in the first halfsix months of 20182019 from the first halfsix months of 20172018, due primarily to a 16%12% increase in volume and an 8% increase inthe average sales price per ton from $1,224$1,316 to $1,316. The largest increase$1,471, which was partially offset by a 5% decrease in volumesvolume. Average selling prices increased across all businesses within the steel products segment in the first halfsix months of 20182019 as compared to the first halfsix months of 2017 was at2018. The largest decreases in volume in the first six months of 2019 as compared to the first six months of 2018 were in our tubular products and rebar fabrication and cold finish operations.businesses. Net sales for the raw materials segment increased 37%decreased 20% and 31%13% in the second quarter and first halfsix months of 2018,2019, respectively, from the same prior year periods. The increasesdecreases were primarily due to significantly higherdecreased average selling prices and volumes inat DJJ’s brokerage and scrap processingoperations, which were partially offset by increased volumes at DJJ’s brokerage operations. In the second quarter of 2018,2019, approximately 90%92% of outside sales for the raw materials segment were from the brokerage operations of DJJ, and approximately 9%7% of outside sales were from the scrap processing operations of DJJ (88%(90% and 10%9%, respectively, in the second quarter of 2017)2018). In the first halfsix months of 2018,2019, approximately 90%91% of outside sales for the raw materials segment were from the brokerage operations of DJJ, and approximately 9%8% of outside sales were from the scrap processing operations of DJJ (87%(90% and 10%9%, respectively, in the first halfsix months of 2017)2018). GrossGross Margins –Nucor recorded gross margins of $775.5 million (13%) in the second quarter of 2019, which was a decrease compared with $1.17 billion (18%) in the second quarter of 2018, which was an increase from $709.6 million (14%) in the second quarter of 2017:
2018. The primary driver for the increase in gross margins in the second quarter of 2018 as compared to the second quarter of 2017 was increased metal margins across all of our steel mills segment products, with sheet steel having the most significant impact. Metal margin is the difference between the selling price of steel and the cost of scrap and scrap substitutes. In the steel mills segment, the previously mentioned 19% increase in average sales price per ton and 3% increase in tons sold to outside customers in the second quarter of 2018 compared to the second quarter of 2017 more than offset an increase of 19% in the average scrap and scrap substitute cost per ton used from $313 in the second quarter of 2017 to $373 in the second quarter of 2018.
| • | In the steel mills segment, the average scrap and scrap substitutes cost per gross ton used in the second quarter of 2019 was $330, a 12% decrease from $373 in the second quarter of 2018. Metal margin is the difference between the selling price of steel and the cost of scrap and scrap substitutes. Metal margins per ton for the steel mills segment increased as the decrease in average scrap and scrap substitutes cost per ton outpaced the previously mentioned decrease in average selling price per ton. However, overall metal margins for the steel mills segment decreased in the second quarter of 2019 as compared to the second quarter of 2018 due to the previously mentioned lower volumes. |
Scrap prices are driven by the global supply and demand for scrap and other iron-based raw materials used to make steel. Scrap prices continued to risedecreased during the first half of 2018 with2019. We expect that there will be some increase in scrap prices beginning to level out at the end of the second quarter. As we beginin the third quarter we do not see much volatility in scrap prices from their second quarter of 2018 levels.2019. | • | Pre-operating and start-up costs of new facilities increased to $20.5 million in the second quarter of 2019 from $5.8 million in the second quarter of 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, and increased costs related to the galvanizing line and mill 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. |
| • | Gross margins in the steel products segment decreased in the second quarter of 2019 as compared to the second quarter of 2018. The primary driver for this decrease was lower margins at our tubular products businesses, which were partially offset by the increased profitability of our deck businesses. |
| • | Gross margins in the raw materials segment decreased in the second quarter of 2019 as compared to the second quarter of 2018, due primarily to the decreased profitability of our DRI facilities, which experienced lower average |
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| | selling prices and increased iron ore costs in the second quarter of 2019. Our DRI facility in Trinidad began a planned maintenance outage in mid-June of 2019 that was successfully completed in mid-July of 2019. |
Steel mill energy costs decreased approximately $1 per ton in the second quarter of 2018 from the second quarter of 2017 primarily due to lower natural gas unit costs and higher efficiency resulting from increased steel production.
Gross margins in the steel products segment in the second quarter of 2018 increased significantly compared to the second quarter of 2017 primarily driven by the improvement in our tubular products businesses. Additionally, all of our steel products businesses experienced improved profitability in the second quarter of 2018 compared to the second quarter of 2017, with the exception of our rebar fabrication operations.
Gross margins related to DJJ’s scrap processing operations in the second quarter of 2018 increased2019 decreased significantly compared to the second quarter of 20172018 due to increased volumesmargin compression and margin expansion caused by improveddecreased volumes. The flow of scrap selling prices. Grossinto DJJ’s scrap yards declined in the second quarter of 2019 as compared to the second quarter of 2018. Additionally, gross margins for DJJ’s brokerage operations also increaseddecreased in the second quarter of 20182019 as compared to the second quarter of 2017.2018. Gross margins in the raw materials segment in the second quarter of 2018 were positively impacted by the improved performance of our DRI facilities compared to the second quarter of 2017. Included in the second quarter of 2018 gross margins of the raw materials segment was a $9.6 million benefit related to insurance recoveries.
Gross margins in the second quarter of 2018 improved significantly from the first quarter of 2018. The increase was primarily driven by expanded margins for all of our steel mills segment products, while our steel products and raw materials segments also experienced improved performance. The previously mentioned 14% increase in the steel mills segment’s average sales price per ton in the second quarter of 2018 compared to the first quarter of 2018 more than offset an increase of 11% in the average scrap and scrap substitute cost per ton used from $337 in the first quarter of 2018 to $373 in the second quarter of 2018.
In the first halfsix months of 2018,2019, Nucor recorded gross margins of $1.89$1.67 billion (16%(14%), which was an increasea decrease from $1.47$1.89 billion (15%(16%) in the first half of 2017: The primary driver for the increase in gross margins in the first half of 2018 as compared to the first half of 2017 was increased metal margins in the steel mills segment. As previously discussed, in the steel mills segment, higher average selling prices and increased volumes drove improved margins despite a 19% increase in the average scrap and scrap substitute cost per ton used from $298 in the first half of 2017 to $355 in the first half of 2018.
Steel mill energy costs for the first half of 2018 were consistent with the first half of 2017.
Gross margins in the steel products segment increased in the first half of 2018 over the first half of 2017 due to the increased profitability of most of the businesses in the segment, with the largest increase in our tubular products businesses.
Improved gross margins in the raw materials segment in the first half of 2018 compared to the first half of 2017 were primarily due to the improved profitability of our DRI operations. DJJ’s brokerage and scrap operations also improved as a result of improved pricing and volumes in the first half of 2018 compared to the first half of 2017. Included in the first six months of 20182018.
| • | In the steel mills segment, the average scrap and scrap substitutes cost per gross ton used in the first six months of 2019 was $341, a 4% decrease from $355 in the first six months of 2018. |
| • | Negatively impacting the gross margins in the steel mills segment for the first six months of 2019 was increased per unit conversion costs resulting from lower utilization rates and higher costs for consumables used in the production process, such as electrodes, compared to the prior year period. |
| • | Pre-operating and start-up costs of new facilities increased to $40.1 million in the first six months of 2019 from $8.1 million in the first six months of 2018. The increase in pre-operating and start-up costs was due to the previously mentioned projects. |
| • | Gross margins in the steel products segment decreased in the first six months of 2019 as compared to the first six months of 2018, primarily due to lower margins at our tubular products businesses which experienced margin compression per unit along with the previously mentioned lower volumes. |
| • | Gross margins in the raw materials segment decreased in the first six months of 2019 as compared to the first six months of 2018, due primarily to the decreased profitability of our DRI facilities, which experienced lower average selling prices and increased iron ore costs in the first six months of 2019. |
Gross margins of the raw materials segment was a $9.6 million benefit related to insurance recoveries.DJJ’s scrap processing operations in the first six months of 2019 decreased significantly compared to the first six months of 2018 due to margin compression and decreased volumes. The flow of scrap into DJJ’s scrap yards declined in the first six months of 2019 as compared to the first six months of 2018. Gross margins for DJJ’s brokerage operations also decreased in the first six months of 2019 as compared to the first six months of 2018. 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, increased $55.9decreased $51.1 million in the second quarter of 20182019 as compared to the second quarter of 2017,2018, and increased $55.5decreased $35.1 million in the first halfsix months of 20182019 as compared to the first halfsix months of 2017, due to the increased profitability of the Company. Profit sharing and other incentive compensation costs increased $62.7 million in the second quarter of 2018 compared to the first quarter of 2018 due to the increased profitability of the Company and the annual RSU and stock option grants that occurred in the second quarter of 2018. 27
Included in marketing, administrative and other expenses in the second quarterfirst half of 2019 was a benefit of $33.7 million related to the gain on the sale of an equity method investment in the raw materials segment. Included in marketing, administrative and other expenses in the first half of 2018 iswas a $13.7 million benefit related to insurance recoveries. Equity in Earnings of Unconsolidated Affiliates –Equity in earnings of unconsolidated affiliates was $10.9$1.1 million and $13.3$10.9 million in the second quarter of 20182019 and 2017,2018, respectively, and $20.5$4.0 million and $22.1$20.5 million in the first halfsix months of 20182019 and 2017,2018, respectively. The decreases in equity method investment earnings were primarily due to costs associated with the plant construction forNucor-JFE.decreased earnings at NuMit. Interest Expense (Income) -–Net interest expense for the second quarter and first halfsix months of 20182019 and 20172018 was as follows (in thousands): | | | Three Months (13 Weeks) Ended | | | Six Months (26 Weeks) Ended | | | Three Months (13 Weeks) Ended | | | Six Months (26 Weeks) Ended | | | | June 30, 2018 | | | July 1, 2017 | | | June 30, 2018 | | | July 1, 2017 | | | June 29, 2019 | | | June 30, 2018 | | | June 29, 2019 | | | June 30, 2018 | | Interest expense | | $ | 35,341 | | | $ | 47,565 | | | $ | 75,519 | | | $ | 93,865 | | | $ | 41,953 | | | $ | 35,341 | | | $ | 79,015 | | | $ | 75,519 | | Interest income | | | (5,890 | ) | | | (2,985 | ) | | | (8,954 | ) | | | (5,680 | ) | | | (8,923 | ) | | | (5,890 | ) | | | (17,542 | ) | | | (8,954 | ) | | | | | | | | | | | | | | | Interest expense, net | | $ | 29,451 | | | $ | 44,580 | | | $ | 66,565 | | | $ | 88,185 | | | $ | 33,030 | | | $ | 29,451 | | | $ | 61,473 | | | $ | 66,565 | | | | | | | | | | | | | | | |
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Table of Contents Interest expense forincreased in the second quarter and first six months of 2019 as compared to the second quarter and first six months of 2018. Though capitalized interest related to significant capital projects reduced interest expense in the second quarter and first six months of 2019 as compared to the respective prior year periods, it was more than offset by the benefit received in the second quarter of 2018 decreased compared tofrom the second quartersettlement of 2017 due to a benefit received from entering in to and settling a treasury lock instrument that was entered into in anticipation of the Company’s debt issuance that occurred in the second quarter of 2018. Interest expense for the first half of 2018 decreased compared to the first half of 2017 due to a decreaseincome increased in average debt outstanding associated with the repayment of $600.0 million of 5.750% notes due 2017 in the fourth quarter of 2017 and the treasury lock instrument noted above. Interest income for the second quarter and first halfsix months of 2018 increased2019 as compared to the respective prior year periodssecond quarter and first six months of 2018 due to higheran increase in average interest rates on investments. Earnings (Loss) Before Income Taxes and Noncontrolling Interests –Earnings (loss) before income taxes and noncontrolling interests by segment for the second quarter and first halfsix months of 20182019 and 20172018 were as follows (in thousands): | | | Three Months | | | Six Months | | | | | | | | | | | | (13 Weeks) Ended | | | (26 Weeks) Ended | | | | Three Months (13 Weeks) Ended | | | Six Months (26 Weeks) Ended | | | | | | | | | | | | | | | | | | | | June 30, 2018 | | | July 1, 2017 | | | June 30, 2018 | | | July 1, 2017 | | | June 29, 2019 | | | June 30, 2018 | | | June 29, 2019 | | | June 30, 2018 | | Steel mills | | $ | 961,784 | | | $ | 579,520 | | | $ | 1,522,287 | | | $ | 1,223,703 | | | $ | 578,920 | | | $ | 961,784 | | | $ | 1,268,318 | | | $ | 1,522,287 | | Steel products | | | 155,766 | | | | 83,636 | | | | 241,580 | | | | 150,555 | | | | 116,084 | | | | 155,766 | | | | 193,517 | | | | 241,580 | | Raw materials | | | 134,995 | | | | 66,227 | | | | 209,542 | | | | 92,618 | | | | 21,709 | | | | 134,995 | | | | 74,932 | | | | 209,542 | | Corporate/eliminations | | | (338,844 | ) | | | (221,247 | ) | | | (543,796 | ) | | | (409,765 | ) | | | (182,091 | ) | | | (338,844 | ) | | | (312,529 | ) | | | (543,796 | ) | | | | | | | | | | | | | | | $ | 534,622 | | | $ | 913,701 | | | $ | 1,224,238 | | | $ | 1,429,613 | | | | $ | 913,701 | | | $ | 508,136 | | | $ | 1,429,613 | | | $ | 1,057,111 | | | | | | | | | | | | | | | | |
Earnings before income taxes and noncontrolling interests for the steel mills segment forin the second quarter and first halfsix months of 2018 increased2019 decreased compared to the respective prior year periods, primarily due to significantly improved metal margins. Higher scrapthe previously mentioned lower volumes and scrap substitutes costs were more than offset by higher average selling prices and some increases in volumedecreased utilization rates. Shipments to service center customers decreased in the first halfsix months of 20182019 compared to the prior year period, reflecting their caution with respect to inventory levels and order rates in an environment of weakening scrap and steel prices. Additionally, unusually wet weather conditions in the first halfsix months of 2017. Additionally, overall2019 negatively impacted markets and projects located in areas affected by these weather conditions. Overall operating rates at our steel mills increased todecreased from 95% and 93% for the second quarter and first halfsix months of 2018, respectively, from 89%to 84% and 85% for both the second quarter and first halfsix months of 2017. The strength of the U.S. economy was a major driver2019, respectively. We believe end-use demand is strong, and we see healthy conditions in end-use markets that typically account for more than two-thirds of our continued financial and operational success. Economic fundamentals began improving in the middle of 2017, and that trend has continued into this year. We believe the economy is being energized by tax and regulatory reform, and by strength in the global energy markets where the United States has become a major producer and exporter. We believe the combination of a competitive U.S. corporate tax rate, a favorable regulatory environment and strong U.S. energy production are the keys to the current strong business environment for Nucor. With U.S. economic strength driving domestic steel demand, 22 of the 24 markets we serve are seeing increased or stable demand. The U.S. steel market is also benefiting from a reduction in unfairly traded imports entering our country as a result of years of successful trade cases, and the broad-based tariffs imposed under Section 232. Imports are down more than 7% through the first half of 2018.shipments.
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In the steel products segment, earnings before income taxes and noncontrolling interests fordecreased in the second quarter and first halfsix months of 2018 increased significantly2019 as compared to the respective prior year periods. The increaseprimary driver for these decreases was the decreased performance in profitability was due to increased volumes and margin expansion, primarily driven by higher average selling prices. The largest increase in profitability in the second quarter and first half of 2018 as compared to the respective prior year periods was at our tubular products businesses.operations that were partially offset by increased performance in our joist and deck operations. Our tubular products operations are suffering from aggressive destocking by service center customers, resulting in lower order rates, which in return is driving down prices and margins. Nonresidential construction activity remains strong, and we believe some incremental demand has likely shifted to later in the year due to difficult weather conditions during the first six months of 2019. The profitability of our raw materials segment in the second quarter and first halfsix months of 2018 improved significantly2019 decreased compared to the respective prior year periods, primarily due to the improved, profitabledecreased performance offrom our DRI facilities. Also benefitingfacilities and DJJ’s scrap processing operations.Partially offsetting the decrease in profitability was a benefit of $33.7 million related to the gain on the sale of an equity method investment in the raw materials segment’s improved profitabilitysegment that occurred in the second quarter and first halfsix months of 2018 was the improved performance of DJJ’s scrap processing and brokerage operations, both of which experienced increased average selling prices and volumes.2019. The raw materials segment also benefited from $23.3 million of insurance recoveries in the second quarter and first six months of 2018. Greater lossesThe decrease in the loss of the corporate/eliminations line in the second quarter and first halfsix months of 20182019 as compared to the respective prior year periods was driven by increased incentive compensation costs, primarily due to decreased intercompany eliminations of profit in inventory as well as lower profit sharing caused by the increased profitabilitycosts.
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Table of the Company and higher intercompany eliminations. Intercompany eliminations increased due to increased intercompany sales activity and increased intercompany margins at our steel mills and DRI facilities.Contents
Noncontrolling Interests –Noncontrolling interests represent the income attributable to the noncontrolling partners of Nucor’s joint ventures, primarily Nucor-Yamato Steel Company (Limited Partnership) (“NYS”), of which Nucor owns 51%. The increasedecrease in earnings attributable to noncontrolling interests in the second quarter and first halfsix months of 20182019 as compared to the second quarter and first halfsix months of 20172018 was primarily due to the increaseddecreased earnings of NYS. NYS, had higher metal margins and volumeswhich was a result of decreased sales volume in the second quarter and first halfsix months of 20182019 as compared to the second quarter and first halfsix months of 2017.2018. Under the NYS limited partnership agreement, the minimum amount of cash to be distributed each year to the partners is the amount needed by each partner to pay applicable U.S. federal and state income taxes. In the first halfsix months of 2017,2019, the amount of cash distributed to noncontrolling interest holders exceeded the earnings attributable to noncontrolling interests based on mutual agreement of the general partners; however, the cumulative amount of cash distributed to partners was less than the cumulative net earnings of the partnership. Provision for Income Taxes –The effective tax rate for the second quarter of 20182019 was 21.9%22.9% as compared to 32.7%21.9% for the second quarter of 2017.2018. The decrease in the effective tax rate for the second quarter of 2018 as compared to the second quarter of 2017 was primarily due to the permanent lowering of the U.S. corporate federal income tax rate from 35% to 21% effective for the years beginning after December 31, 2017 under the Tax Cuts and Jobs Act (the “Tax Reform Act”). This decrease was somewhat offset by increases in the effective tax rate due to the elimination of the domestic manufacturing deduction under the Tax Reform Act. We expect that theexpected effective tax rate for the full year of 2018 will be2019 is approximately 23.4%23.0% as compared to 21.1%23.2% for the full year of 2017. The full year2018. Included in the second quarter of 2017 included a provisional net tax benefit of $175.22018 were benefits totaling $10.6 million mainly driven by the revaluation of Nucor’s U.S. deferred tax liabilities and assets related to the Tax Reform Act.state tax credits and tax return true-ups. We estimate that in the next 12 months our gross unrecognized tax benefits, which totaled $48.9$51.9 million at June 30, 201829, 2019, exclusive of interest, could decrease by as much as $8.4$6.1 million as a result of the expiration of the statute of limitations and closures of examinations, substantially all of which would impact the effective tax rate. Nucor has concluded U.S. federal income tax matters for years through 2013.2014. The tax years 20142015 through 20162017 remain open to examination by the Internal Revenue Service. The Canada Revenue Agency has substantially concluded its examination of the 2012 and 2013 Canadian returns for Harris Steel Group Inc. and certain related affiliates. The 2015 tax year is currently under examination by the Canada Revenue Agency. The Trinidad and Tobago Inland Revenue Division is examining the Nu-Iron Unlimited 2013 corporate income tax return. The tax years 20102012 through 20172018 remain open to examination by other major taxing jurisdictions to which Nucor is subject (primarily Canada and other state and local jurisdictions). Net Earnings Attributable to Nucor Stockholders and Return on Equity –Nucor reported consolidated net earnings of $386.5 million, or $1.26 per diluted share, in the second quarter of 2019 as compared to consolidated net earnings of $683.2 million, or $2.13 per diluted share, in the second quarter of 2018, compared to consolidated net earnings of $323.0 million, or $1.00 per diluted share, in the second quarter of 2017.2018. Net earnings attributable to Nucor stockholders as a percentage of net sales were 11%7% and 6%11% in the second quarter of 2019 and 2018, and 2017, respectively. 29
Nucor reported consolidated net earnings of $888.3 million, or $2.88 per diluted share, in the first six months of 2019 as compared to consolidated net earnings of $1.04 billion, or $3.23 per diluted share, in the first halfsix months of 2018 compared to consolidated net earnings of $679.9 million, or $2.11 per diluted share, in the first half of 2017.2018. Net earnings attributable to Nucor stockholders as a percentage of net sales were 9%7% and 7%9% in the first halfsix months of 20182019 and 2017,2018, respectively. Annualized return on average stockholders’ equity was 23%18% and 17%23% in the first halfsix months of 20182019 and 2017,2018, respectively. Outlook –Earnings in the third quarter of 2018 are expected to further improve compared to the second quarter of 2018. The performance of the steel mills segment is expected to remain strong in the third quarter of 2018 as compared to the second quarter of 2018, with margin expansion expected primarily at our sheet and plate mills. Based on the current steel market fundamentals and communications with our customers, we believe there is sustainable strength in steelend-use markets. We expect third quarter of 2018 performance of our steel products segment to be similar to the second quarter of 2018. The performance of our raw materials segment is expected to decrease in the third quarter of 20182019 as compared to the second quarter of 20182019 due to further margin compression.compression in the Company’s DRI businesses. The profitability of Nucor’s steel products segment is expected to continue to improve during the third quarter of 2019 as compared to the second quarter of 2019. Nonresidential construction market conditions remain strong. In addition, recently implemented efficiency initiatives in our rebar fabrication and metal buildings businesses are enhancing performance from those businesses. We expect the performance of the steel mills segment in the third quarter of 2019 to be lower than this year’s second quarter, due primarily to lower prices for flat rolled and plate steel. Prices for several key product lines have only recently reversed the downward trajectory that prevailed during the first half of the year due to weather conditions and service center destocking. We expect service center customers will resume more normal market demand-driven buying patterns during the third quarter of 2019. Nucor’s largest exposure to market risk is via our steel mills and steel products segments. Our largest single customer in the first half of 20182019 represented approximately 5% of sales and has consistently paid within terms. In the raw materials segment, we are exposed to price fluctuations related to the purchase of scrap and scrap substitutes and iron ore. Our exposure to market risk is mitigated by the fact that our steel mills use a significant portion of the products of thisthe raw materials segment. Liquidity and capital resourcesCapital Resources Cash provided by operating activities was $1.19 billion in the first six months of 2019 as compared to $870.6 million in the first halfsix months of 2018 compared to $350.9 million in the first half of 2017.2018. The primary reason for the increase in cash provided by operating activities is due to a 52% increase in net earnings overwas the first half$429.5 million reduction of 2017. In addition, changescash used in operating assets and operating liabilities. Changes in operating assets and operating liabilities (exclusive 25
Table of Contents (exclusive of acquisitions) used cash of $691.1$261.6 million in the first halfsix months of 20182019 as compared to $794.0$691.1 million of cash used in the first halfsix months of 2017.2018. The funding of our working capital in the first half of 20182019 decreased from the prior year period due to the rapid increase in scrap prices and inventory volumes from theyear-end of 2016 through the first half of 2017. Scrap prices and inventory tons on hand increased more moderately betweenyear-end 2017 and the first half of 2018. More specifically, there was a 19% increase in the cost of scrap and scrap substitutes in inventory and a 12% increase in inventory tons on hand fromyear-end 2017 throughover the first half of 2018 as comparedmainly due to decreases in accounts receivable and inventory, partially offset by increases in other current assets and decreases in accounts payable and salaries, wages and related accruals. Accounts receivable decreased in the first half of 2019 from year-end 2018 due to a 28% increase7% decrease in composite sales price per ton. From year-end 2018 to the costend of the second quarter of 2019, inventories and accounts payable decreased due to a 14% decline in average scrap and scrap substitutes cost per ton in inventory and a 16% increase7% decline in total inventory tons on hand fromyear-end 2016 through the first half of 2017. Another leading cause of thehand. The increase in cash provided by operating activities was the decrease inother assets, specifically federal income tax receivable, which is mainly a function of Nucor’s increased profitability, the permanent lowering of the U.S. corporate federal income tax rate from 35% to 21% effective for the years beginning after December 31, 2017 under the Tax Reform Act, and the timing of the receipt of federal tax refunds. These decreasespayments. The increase in cash used to fund working capital were partially offset by increases in cash usedsalaries, wages and related accruals was primarily attributable to fund accounts receivable. Accounts receivablethe increased due to a 6% increase in tons shipped to outside customerspayout of accrued profit sharing and other incentive compensation costs in the first halfsix months of 2018 from the first half of 2017 and a 13% increase in average sales price per ton2019 as compared to payouts in the first halfsix months of 2018. The first six months of 2019 payment was based on Nucor’s financial performance in 2018, over the same prior year period.which was a record earnings year. The current ratio was 3.13.6 at the end of the second quarter of 20182019 and 2.43.1 atyear-end 2017. 2018. The main driver of the increase in the current ratio was positively impacted by the 23%78% increase in other current assets, at June 30,the 15% decrease in accounts payable, and the 33% decrease in salaries, wages and related accruals from year-end 2018 as compared to December 31, 2017. Accounts receivable increased 30% and inventories increased 19%, both due to the reasons cited above. Also contributing to the increase in current assets at June 30, 2018 compared to December 31, 2017 was the $537.3 million increase in cash and cash equivalents. The second quarter of 2018 issuance of $500.0 million of 3.950% notes due 2028 and $500.0 million of 4.400% notes due 2048 increased cash by $1.0 billion. Of that amount, $500.0 million was used to repay the $500.0 million of 5.850% notes that matured June 1, 2018. The repayment of debt that occurred in the second quarter of 2018 was the primary driver of the 3% decrease in current liabilities at June 30, 2018 as compared to December 31, 2017. The amount that was repaid in the second quarter of 2018 was included in long-term debt due within one year at December 31, 2017. Partially offsetting the decrease in long-term debt due within one year was the 32% increase in accounts payable at June 30, 2018 as compared to December 31, 2017. Accounts payable primarily increased due to the 19% increase in the cost of scrap and scrap substitutes in inventory. In the first half of 2018,2019, accounts receivable turned approximately every five weeks and inventories turned approximately every 1011 weeks. These ratios compare with accounts receivable turnover of approximately every five weeks and inventory turnover of approximately every nine10 weeks in the first half of 2017.2018. 30
Cash used in investing activities during the first half of 20182019 was $366.2$632.4 million as compared to $575.1$366.2 million in the prior year period. Nucor used $478.4 million of cash for acquisitions in the first half of 2017 mainlyThe primary driver for the purchases of Republic Conduit and Southland Tube, Inc. during that period, while Nucor had no acquisitions in the first half of 2018. The decreaseincrease in cash used in investing activities was that cash used for capital expenditures increased from $361.5 million in the first half of 2018 was offset by a $100.0to $649.9 million decrease in proceeds from the sale of investments, a $172.3 million increase in cash used for capital expenditures, and a $54.4 million increase in investments in affiliates over the first half of 2017.2019. The higher levels of capital expenditures in the first half of 20182019 over the first half of 20172018 were primarily related to the new coldhot band galvanizing line and the sheet mill complexexpansion at Nucor Steel ArkansasGallatin and the new galvanizing line at Nucor Steel Gallatin. The increasedmicro mill greenfield expansion in Sedalia, Missouri. Cash provided by the divestiture of an affiliate of $67.6 million in the first half of 2019, related to the sale of an equity method investment, was partially offset by the $50.0 million purchase of investments in the same period. Cash used in investments and advances to affiliates of $73.4 million in the first half of 2018 overwas partially offset by cash provided from the first halfsale of 2017 related to an additional $35.0investment of $50.0 million of investments inNucor-JFE as well as investments in other minor equity method investments.the same period. Cash provided byused in financing activities during the first half of 20182019 was $29.2$523.0 million as compared to cash usedprovided of $311.6$29.2 million in the prior year period. The majority of this change related toIn 2018, cash from financing activities benefited from the issuance of the $500.0 million of 10-year 3.950% notes due 2028 and the $500.0 million of 30-year 4.400% notes, due 2048,partially offset by the repayment of the $500.0 million of 5.850% notes due 2018 and approximately $170.3 million ofnotes. In addition, treasury stock repurchases (these amounts were $0$197.5 million in the prior year period). During 2017, we retired $600.0first half of 2019 as compared to $170.3 million in the first half of long-term debt,2018, and there was an increase in additiondistributions to noncontrolling interests of $27.3 million from the first half of 2018 to the previously mentioned second quarterfirst half of 2018 retirement of $500.0 million of long-term debt. Both of these debt tranches were at weighted average interest rates that were higher than the weighted average interest rates on the $1.0 billion of notes issued in April 2018. We used a portion of the net proceeds from the sale of the $1.0 billion of notes to repay the $500.0 million of long-term debt mentioned above and plan to use the remaining proceeds for other general corporate purposes.2019. Nucor’s conservative financial practices have served us well in the past and are servingcontinue to serve us well today. Our cash and cash equivalents and short-term investments position remained strong at $1.5$1.48 billion as of June 30, 2018.29, 2019. Nucor’s solid cash and cash equivalents and short-term investments position provides many opportunities for prudent deployment of our capital. We have three approaches to allocating our capital. Nucor’s highest capital allocation priority is to invest forreinvest in our business to ensure our continued profitable long-term growth throughover the long term. We have historically done this by investing to optimize our multi-pronged strategy of optimizing existing operations, acquisitionsinitiate greenfield expansions and greenfield expansions.make acquisitions. Our second priority is to provide our stockholders with cash dividends that are consistent with our success in delivering long-term earnings growth. Our third priority is to opportunistically repurchasesupplement our base dividend with additional returns of capital to our stockholders when both our earnings and financial condition are strong. We intend to return a minimum of 40% of our net earnings to our stockholders while maintaining a debt-to-capital ratio that supports a strong investment grade credit rating. We will use stock repurchases or supplemental dividends to reach this level when our cash positionbase dividend is strongnot sufficient to meet this goal. The primary factor we will use to decide between share repurchases and attractively priced growth opportunities are limited.supplemental dividends will be our assessment of the intrinsic value of a Nucor share. If we believe Nucor shares to be trading at a discount to their intrinsic value, we will likely employ repurchases to return capital to our stockholders. In September 2015,2018, Nucor’s Board of Directors approved a share repurchase program under which the Company is authorized to repurchase up to $900.0 million$2.00 billion of its common stock. As of June 30, 2018,29, 2019, the Company had approximately $567.7 million$1.30 billion remaining for share repurchases under the program. Nucor’s $1.5$1.50 billion revolving credit facility is undrawn and was amended and restated in April 2018 to extend the maturity date to April 2023. We believe our financial strength is a key strategic advantage among domestic steel producers, particularly during recessionary business cycles. We carry the highest credit ratings of any steel producer headquartered in North America, with anA- long-term rating from Standard and& Poor’s and a Baa1 long-term rating from Moody’s. Our credit ratings are dependent, however, upon a number of factors, both qualitative and quantitative, and are subject to change at any time. The disclosure of our credit ratings is made in order to enhance investors’ understanding of our sources of liquidity and the impact of our credit ratings on our cost of funds. Based upon the preceding factors, and based on the fact that we were able to raise $1.0 billion 26
Table of capital at attractive interest rates in April 2018, we expect to continue to have adequate access to the capital markets at a reasonable cost of funds for liquidity purposes when needed.Contents
Our credit facility includes only one financial covenant, which is a limit of 60% on the ratio of funded debt to total capitalization. In addition, the credit facility contains customarynon-financial covenants, including a limit on Nucor’s ability to pledge the Company’s assets and a limit on consolidations, mergers and sales of assets. As of June 30, 2018,29, 2019, our funded debt to total capital ratio was 30%29%, and we were in compliance with allnon-financial covenants under our credit facility. No borrowings were outstanding under the credit facility as of June 30, 2018.29, 2019. Our financial strength allows a number of capital preservation options. Nucor’s robust capital investment and maintenance practices give us the flexibility to reduce spending by prioritizing our capital projects, potentially rescheduling certain projects and selectively allocating capital to investments with the greatest impact on our long-term earnings power. Capital expenditures for 20182019 are expected to be approximately $1.0$1.8 billion as compared to $507.1$997.3 million in 2017.2018. The increase in projected 20182019 capital expenditures is primarily due to the fact that several major expansion projects arewill be underway in 2018.2019. The projects that we anticipate will have the largest capital expenditures in 20182019 are the $230.0 million cold mill complex additionhot band galvanizing line at Nucor Steel Arkansas, the $176.0 million hot band galvanizing line and the sheet mill expansion at Nucor Steel Gallatin, the two micro mill greenfield expansions in Sedalia, Missouri and Frostproof, Florida, with a combined estimated cost of $490.0 million, and the $180.0 million merchant bar rolling facility at Nucor Steel Kankakee.Kankakee and the steel plate mill in Brandenburg, Kentucky. In addition to these expansion projects, we also have a project underway at Nucor Steel Louisiana to improve the reliability and efficiency of the facility. 31
In June 2018,2019, Nucor’s Board of Directors declared a quarterly cash dividend on Nucor’s common stock of $0.38$0.40 per share payable on August 10, 20189, 2019, to stockholders of record on June 29, 2018.28, 2019. This dividend is Nucor’s 181185stth consecutive quarterly cash dividend. Funds provided from operations, cash and cash equivalents, short-term investments and new borrowings under our existing credit facilities are expected to be adequate to meet future capital expenditure and working capital requirements for existing operations for at least the next 24 months. Item 3. | Quantitative and Qualitative Disclosures About Market Risk
Item 3. Quantitative and Qualitative Disclosures About Market Risk |
In the ordinary course of business, Nucor is exposed to a variety of market risks. We continually monitor these risks and develop strategies to manage them. Interest Rate Risk– Nucor manages interest rate risk by using a combination of variable-rate and fixed-rate debt. Nucor also occasionally makes use of interest rate swaps to manage net exposure to interest rate changes. Management does not believe that Nucor’s exposure to interest rate market risk has significantly changed since December 31, 2017.2018. There were no interest rate swaps outstanding at June 30, 2018.29, 2019. Commodity Price Risk– In the ordinary course of business, Nucor is exposed to market risk for price fluctuations of raw materials and energy, principally scrap steel, other ferrous and nonferrous metals, alloys and natural gas. We attempt to negotiate the best prices for our raw material and energy requirements and to obtain prices for our steel products that match market price movements in response to supply and demand. In periods of strong or stable demand for our products, we are more likely to be able to effectively reduce the normal time lag in passing through higher raw material costs so that we can maintain our gross margins. When demand for our products is weaker, this becomes more challenging. Our DRI facilities in Trinidad and Louisiana provide us with flexibility in managing our input costs. DRI is particularly important for operational flexibility when demand for prime scrap increases due to increased domestic steel production. Natural gas produced by Nucor’s drilling operations is being sold to third parties to offset our exposure to changes in the price of natural gas consumed by our Louisiana DRI facility and our steel mills in the United States. For the six months ended June 30, 2018, the volume of natural gas sold from our drilling operations was approximately 15% of the volume of natural gas purchased for consumption in our domestic steelmaking and DRI facilities. Nucor also periodically uses derivative financial instruments to hedge a portion of our exposure to price risk related to natural gas purchases used in the production process and to hedge a portion of our scrap, aluminum and copper purchases and sales. Gains and losses from derivatives designated as hedges are deferred in accumulated other comprehensive loss, net of income taxes on the condensed consolidated balance sheets and recognized into earnings in the same period as the underlying physical transaction. At June 30, 2018,29, 2019, accumulated other comprehensive loss, net of income taxes included $6.8$11.1 million in unrealizednet-of-tax losses for the fair value of these derivative instruments. Changes in the fair valuesvalue of derivatives not designated as hedges are recognized in net earnings each period. The following table presents the negative effect onpre-tax earnings of a hypothetical change in the fair value of derivative instruments outstanding at June 30, 2018,29, 2019, due to an assumed 10% and 25% change in the market price of each of the indicated commodities (in thousands): | Commodity Derivative | | 10% Change | | | 25% Change | | | 10% Change | | | 25% Change | | Natural gas | | $ | 13,305 | | | $ | 33,260 | | | $ | 10,009 | | | $ | 25,020 | | Aluminum | | | 3,833 | | | | 9,572 | | | $ | 4,366 | | | $ | 11,371 | | Copper | | | 2,904 | | | | 7,101 | | | $ | 1,796 | | | $ | 4,397 | |
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Table of Contents Any resulting changes in fair value would be recorded as adjustments to accumulated other comprehensive income (loss),loss, net of income taxes or recognized in net earnings, as appropriate. These hypothetical losses would be partially offset by the benefit of lower prices paid or higher prices received for the physical commodities. Foreign Currency Risk -– Nucor is exposed to foreign currency risk primarily through its operations in Canada, Europe and Mexico. We periodically use derivative contracts to mitigate the risk of currency fluctuations. Open foreign currency derivative contracts at June 30, 201829, 2019 were insignificant. 32
Item 4. | Item 4. Controls and Procedures Controls and Procedures
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Evaluation of Disclosure Controls and Procedures– As of the end of the period covered by this report, the Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures. Based upon that evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of the evaluation date. Changes in Internal Control Over Financial Reporting– There were no changes in our internal control over financial reporting during the quarter ended June 30, 201829, 2019 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. 28
Table of Contents PART II. OTHER INFORMATION Item 1. | Legal Proceedings
Item 1. Legal Proceedings |
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. Item 1A. | Item 1A. Risk Factors Risk Factors
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There have been no material changes in Nucor’s risk factors from those included in “Item 1A. Risk Factors” in Nucor’s Annual Report on Form10-K for the year ended December 31, 2017.2018. Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds |
Our share repurchase program activity for each of the three months and the quarter ended June 30, 201829, 2019 was as follows (in thousands, except per share amounts): | | | | | | | | | | | | | | | | | | | Total Number of Shares Purchased | | | Average Price Paid per Share (1) | | | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2) | | | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs ( 2) | | April 1, 2018 - April 28, 2018 | | | — | | | $ | — | | | | — | | | $ | 708,853 | | April 29, 2018 - May 26, 2018 | | | 1,483 | | | | 62.17 | | | | 1,483 | | | | 616,655 | | May 27, 2018 - June 30, 2018 | | | 750 | | | | 65.24 | | | | 750 | | | | 567,725 | | | | | | | | | | | | | | | | | | | For the Quarter Ended June 30, 2018 | | | 2,233 | | | $ | 63.20 | | | | 2,233 | | | $ | 567,725 | | | | | | | | | | | | | | | | | | |
| | Total Number of Shares Purchased | | | Average Price Paid per Share (1) | | | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2) | | | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (2) | | March 31, 2019 - April 27, 2019 | | | - | | | $ | - | | | | - | | | $ | 1,424,567 | | April 28, 2019 - May 25, 2019 | | | 1,150 | | | | 56.67 | | | | 1,150 | | | | 1,359,396 | | May 26, 2019 - June 29, 2019 | | | 1,100 | | | | 54.10 | | | | 1,100 | | | | 1,299,886 | | For the Quarter Ended June 29, 2019 | | | 2,250 | | | $ | 55.41 | | | | 2,250 | | | $ | 1,299,886 | |
(1) | Includes commissions of $0.02 per share. |
(2) | On September 2, 2015,6, 2018, the Company announced that the Board of Directors had approved a share repurchase program under which the Company is authorized to repurchase up to $900.0 million$2.0 billion of the Company’s common stock. This $900.0 million share repurchase programauthorization is discretionary and has no stated expiration and replaceddate. The Board of Directors also terminated any previously authorized share repurchase programs. |
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Item 6. | Exhibits
Item 6. Exhibits |
| | | Exhibit No. | | Description of Exhibit | | | 43 | | First Supplemental Indenture, dated asRestated Certificate of April 26, 2018, between Nucor Corporation and U.S. Bank National Association, as trusteeIncorporation (incorporated by reference to Exhibit 4.13.3 to the Current Report on Form8-K filed April 26, 2018September 14, 2010 (FileNo. 001-04119))
| | | 4.13.1 | | Form of 3.950% Notes due 2028 (included in Exhibit 4 above)Bylaws as amended and restated September 15, 2016 (incorporated by reference to Exhibit 4.23.1 to the Current Report on Form8-K filed April 26, 2018September 20, 2016 (FileNo. 001-04119))
| | | | 4.210* | | FormEmployment Agreement of 4.400% Notes due 2048 (included in Exhibit 4 above) (incorporated by reference to Exhibit 4.3 to the Current Report on Form8-K filed April 26, 2018 (FileNo. 001-04119))MaryEmily Slate (#)
| | | | 10*10.1 | | Retirement, Separation, Waiver and Release Agreement of James R. DarseyJoseph Stratman (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed June 5, 2019 (File No. 001-04119)) (#) | | | 10.1*31* | | Employment Agreement of Craig Feldman (#)
| | | 12* | | Computation of Ratio of Earnings to Fixed Charges | | | 31* | | Certification of Principal Executive Officer Pursuant to Rule13a-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | | | 31.1* | | Certification of Principal Financial Officer Pursuant to Rule13a-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | | | 32** | | Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | | | 32.1** | | Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | | | 101* | | Financial Statements (Unaudited) from the Quarterly Report on Form10-Q of Nucor Corporation for the quarter ended June 30, 201829, 2019, filed on August 8, 2018,7, 2019, formatted in XBRL:iXBRL (Inline eXtensible Business Reporting Language): (i) the Condensed Consolidated Statements of Earnings, (ii) the Condensed Consolidated Statements of Comprehensive Income, (iii) the Condensed Consolidated Balance Sheets, (iv) the Condensed Consolidated Statements of Cash Flows and (v) the Notes to Condensed Consolidated Financial Statements. | | | | 104* | | Cover Page from the Quarterly Report on Form 10-Q of Nucor Corporation for the quarter ended June 29, 2019, filed on August 7, 2019, formatted in iXBRL (Inline eXtensible Business Reporting Language) (included in Exhibit 101). |
** | Furnished (and not filed) herewith pursuant to Item 601(b)(32)(ii) of RegulationS-K. |
(#)# | Indicates a management contract or compensatory plan or arrangement. |
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SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. | | NUCOR CORPORATION | NUCOR CORPORATION | | | | | | By: | | /s/ James D. Frias | | | | James D. Frias | | | | Chief Financial Officer, Treasurer and Executive | | | | Vice President |
Dated: August 8, 20187, 2019 31 35
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