Table of Contents

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 28, 2019July 4, 2020

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                     to                     

Commission File Number: 1-4119

 

NUCOR CORPORATION

(Exact name of registrant as specified in its charter)

 

 

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,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 every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes       No   

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

 

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 Rule 12b-2 of the Exchange Act).    Yes      No  

303,215,267301,895,077 shares of the registrant’s common stock were outstanding at September 28, 2019.July 4, 2020.

 

 

 


Table of Contents

 

Nucor Corporation

Quarterly Report on Form 10-Q

For the Three Months and NineSix Months Ended September 28, 2019July 4, 2020

TABLE OF CONTENTS

 

 

 

 

 

 

 

Page

Part I

 

Financial Information

 

 

 

 

 

 

 

 

 

 

 

Item 1

 

Financial Statements (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

Condensed Consolidated Statements of Earnings - Three Months (13 Weeks) and NineSix Months (39(26 Weeks) Ended September 28,July 4, 2020 and June 29, 2019 and September 29, 2018

 

1

 

 

 

 

 

 

 

 

 

 

 

Condensed Consolidated Statements of Comprehensive Income - Three Months (13 Weeks) and NineSix Months (39(26 Weeks) Ended September 28,July 4, 2020 and June 29, 2019 and September 29, 2018

 

2

 

 

 

 

 

 

 

 

 

 

 

Condensed Consolidated Balance Sheets – September 28, 2019July 4, 2020 and December 31, 20182019

 

3

 

 

 

 

 

 

 

 

 

 

 

Condensed Consolidated Statements of Cash Flows - Nine– Six Months (39(26 Weeks) Ended September 28,July 4, 2020 and June 29, 2019 and September 29, 2018

 

4

 

 

 

 

 

 

 

 

 

 

 

Notes to Condensed Consolidated Financial Statements

 

5

 

 

 

 

 

 

 

 

 

Item 2

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

2019

 

 

 

 

 

 

 

 

 

Item 3

 

Quantitative and Qualitative Disclosures About Market Risk

 

27

 

 

 

 

 

 

 

 

 

Item 4

 

Controls and Procedures

 

28

 

 

 

 

 

 

 

Part II

 

Other Information

 

 

 

 

 

 

 

 

 

 

 

Item 1

 

Legal Proceedings

 

29

 

 

 

 

 

 

 

 

 

Item 1A

 

Risk Factors

 

29

 

 

 

 

 

 

 

 

 

Item 6

 

Exhibits

 

30

 

 

 

 

 

 

 

Signatures

 

31

 

 

 

 

 

 

 

 

 

i


Table of Contents

 

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Nucor Corporation Condensed Consolidated Statements of Earnings (Unaudited)

(In thousands, except per share amounts)

 

 

Three Months (13 Weeks) Ended

 

 

Nine Months (39 Weeks) Ended

 

 

Three Months (13 Weeks) Ended

 

 

Six Months (26 Weeks) Ended

 

 

Sept. 28, 2019

 

 

Sept. 29, 2018

 

 

Sept. 28, 2019

 

 

Sept. 29, 2018

 

 

July 4, 2020

 

 

June 29, 2019

 

 

July 4, 2020

 

 

June 29, 2019

 

Net sales

 

$

5,464,502

 

 

$

6,742,202

 

 

$

17,457,112

 

 

$

18,771,395

 

 

$

4,327,306

 

 

$

5,895,986

 

 

$

9,951,643

 

 

$

11,992,610

 

Costs, expenses and other:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of products sold

 

 

4,891,991

 

 

 

5,452,052

 

 

 

15,213,215

 

 

 

15,588,249

 

 

 

3,949,347

 

 

 

5,120,492

 

 

 

8,944,416

 

 

 

10,321,224

 

Marketing, administrative and other expenses

 

 

159,301

 

 

 

234,081

 

 

 

549,020

 

 

 

651,422

 

 

 

142,017

 

 

 

208,980

 

 

 

295,409

 

 

 

389,719

 

Equity in losses (earnings) of unconsolidated affiliates

 

 

1,585

 

 

 

(13,634

)

 

 

(2,459

)

 

 

(34,157

)

 

 

14,078

 

 

 

(1,138

)

 

 

14,901

 

 

 

(4,044

)

Impairment of assets

 

 

-

 

 

 

110,000

 

 

 

-

 

 

 

110,000

 

Losses on assets

 

 

5,000

 

 

 

-

 

 

 

292,846

 

 

 

-

 

Interest expense, net

 

 

31,286

 

 

 

37,201

 

 

 

92,759

 

 

 

103,766

 

 

 

35,807

 

 

 

33,030

 

 

 

76,717

 

 

 

61,473

 

 

 

5,084,163

 

 

 

5,819,700

 

 

 

15,852,535

 

 

 

16,419,280

 

 

 

4,146,249

 

 

 

5,361,364

 

 

 

9,624,289

 

 

 

10,768,372

 

Earnings before income taxes and noncontrolling interests

 

 

380,339

 

 

 

922,502

 

 

 

1,604,577

 

 

 

2,352,115

 

 

 

181,057

 

 

 

534,622

 

 

 

327,354

 

 

 

1,224,238

 

Provision for income taxes

 

 

86,752

 

 

 

216,215

 

 

 

367,920

 

 

 

552,101

 

 

 

47,904

 

 

 

122,345

 

 

 

139,822

 

 

 

281,168

 

Net earnings

 

 

293,587

 

 

 

706,287

 

 

 

1,236,657

 

 

 

1,800,014

 

 

 

133,153

 

 

 

412,277

 

 

 

187,532

 

 

 

943,070

 

Earnings attributable to noncontrolling interests

 

 

18,556

 

 

 

29,631

 

 

 

73,337

 

 

 

86,026

 

 

 

24,272

 

 

 

25,794

 

 

 

58,320

 

 

 

54,781

 

Net earnings attributable to Nucor stockholders

 

$

275,031

 

 

$

676,656

 

 

$

1,163,320

 

 

$

1,713,988

 

 

$

108,881

 

 

$

386,483

 

 

$

129,212

 

 

$

888,289

 

Net earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.90

 

 

$

2.13

 

 

$

3.79

 

 

$

5.37

 

 

$

0.36

 

 

$

1.26

 

 

$

0.42

 

 

$

2.89

 

Diluted

 

$

0.90

 

 

$

2.13

 

 

$

3.78

 

 

$

5.35

 

 

$

0.36

 

 

$

1.26

 

 

$

0.42

 

 

$

2.88

 

Average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

304,637

 

 

 

315,913

 

 

 

305,553

 

 

 

317,928

 

 

 

302,921

 

 

 

305,461

 

 

 

302,915

 

 

 

306,017

 

Diluted

 

 

304,980

 

 

 

316,798

 

 

 

306,029

 

 

 

318,882

 

 

 

302,933

 

 

 

305,952

 

 

 

302,932

 

 

 

306,559

 

 

See notes to condensed consolidated financial statements.

1


Table of Contents

 

 

Nucor Corporation Condensed Consolidated Statements of Comprehensive Income (Unaudited)

(In thousands)

 

 

Three Months (13 Weeks) Ended

 

 

Nine Months (39 Weeks) Ended

 

 

Three Months (13 Weeks) Ended

 

 

Six Months (26 Weeks) Ended

 

 

Sept. 28, 2019

 

 

Sept. 29, 2018

 

 

Sept. 28, 2019

 

 

Sept. 29, 2018

 

 

July 4, 2020

 

 

June 29, 2019

 

 

July 4, 2020

 

 

June 29, 2019

 

Net earnings

 

$

293,587

 

 

$

706,287

 

 

$

1,236,657

 

 

$

1,800,014

 

 

$

133,153

 

 

$

412,277

 

 

$

187,532

 

 

$

943,070

 

Other comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net unrealized loss on hedging derivatives, net of

income taxes of $(1,000) and $(400) for the third

quarter of 2019 and 2018, respectively, and $(2,500)

and $(1,000) for the first nine months of 2019 and 2018,

respectively

 

 

(3,315

)

 

 

(1,393

)

 

 

(7,801

)

 

 

(5,792

)

Reclassification adjustment for settlement of hedging

derivatives included in net income, net of income

taxes of $500 and $100 for the third quarter of 2019

and 2018, respectively, and $500 and $200 for the first

nine months of 2019 and 2018, respectively

 

 

1,615

 

 

 

193

 

 

 

1,501

 

 

 

592

 

Foreign currency translation (loss) gain, net of income

taxes of $0 for the third quarter and first nine months

of 2019 and 2018

 

 

(14,306

)

 

 

22,625

 

 

 

(5,219

)

 

 

(14,726

)

Net unrealized income (loss) on hedging derivatives, net

of income taxes of $200 and $(1,700) for the second

quarter of 2020 and 2019, respectively, and $(600)

and $(1,500) for the first six months of 2020 and

2019, respectively

 

 

757

 

 

 

(5,217

)

 

 

(1,499

)

 

 

(4,486

)

Reclassification adjustment for settlement of hedging

derivatives included in net income, net of income

taxes of $900 and $200 for the second quarter of 2020

and 2019, respectively, and $1,600 and $0 for the first

six months of 2020 and 2019, respectively

 

 

2,543

 

 

 

517

 

 

 

4,599

 

 

 

(114

)

Foreign currency translation gain (loss), net of income

taxes of $0 for the second quarter and first six months

of 2020 and 2019

 

 

23,491

 

 

 

15,727

 

 

 

(40,970

)

 

 

9,087

 

 

 

(16,006

)

 

 

21,425

 

 

 

(11,519

)

 

 

(19,926

)

 

 

26,791

 

 

 

11,027

 

 

 

(37,870

)

 

 

4,487

 

Comprehensive income

 

 

277,581

 

 

 

727,712

 

 

 

1,225,138

 

 

 

1,780,088

 

 

 

159,944

 

 

 

423,304

 

 

 

149,662

 

 

 

947,557

 

Comprehensive income attributable to noncontrolling

interests

 

 

(18,556

)

 

 

(29,631

)

 

 

(73,337

)

 

 

(86,026

)

 

 

(24,272

)

 

 

(25,794

)

 

 

(58,320

)

 

 

(54,781

)

Comprehensive income attributable to Nucor stockholders

 

$

259,025

 

 

$

698,081

 

 

$

1,151,801

 

 

$

1,694,062

 

 

$

135,672

 

 

$

397,510

 

 

$

91,342

 

 

$

892,776

 

 

See notes to condensed consolidated financial statements.

2


Table of Contents

 

 

Nucor Corporation Condensed Consolidated Balance Sheets (Unaudited)

(In thousands)

 

 

Sept. 28, 2019

 

 

Dec. 31, 2018

 

 

July 4, 2020

 

 

December 31, 2019

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

1,686,365

 

 

$

1,398,886

 

 

$

2,789,189

 

 

$

1,534,605

 

Short-term investments

 

 

249,616

 

 

 

-

 

 

 

247,473

 

 

 

300,040

 

Accounts receivable, net

 

 

2,312,366

 

 

 

2,505,568

 

 

 

1,888,929

 

 

 

2,160,102

 

Inventories, net

 

 

4,072,464

 

 

 

4,553,500

 

 

 

3,373,258

 

 

 

3,842,095

 

Other current assets

 

 

363,477

 

 

 

178,311

 

 

 

336,115

 

 

 

389,528

 

Total current assets

 

 

8,684,288

 

 

 

8,636,265

 

 

 

8,634,964

 

 

 

8,226,370

 

Property, plant and equipment, net

 

 

5,886,730

 

 

 

5,334,748

 

 

 

6,556,451

 

 

 

6,178,555

 

Goodwill

 

 

2,186,499

 

 

 

2,184,336

 

 

 

2,190,144

 

 

 

2,201,063

 

Other intangible assets, net

 

 

764,267

 

 

 

828,504

 

 

 

698,437

 

 

 

742,186

 

Other assets

 

 

984,481

 

 

 

936,735

 

 

 

685,969

 

 

 

996,492

 

Total assets

 

$

18,506,265

 

 

$

17,920,588

 

 

$

18,765,965

 

 

$

18,344,666

 

LIABILITIES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Short-term debt

 

$

47,725

 

 

$

57,870

 

 

$

64,652

 

 

$

62,444

 

Current portion of long-term debt and finance lease obligations

 

 

28,878

 

 

 

-

 

 

 

29,521

 

 

 

29,264

 

Accounts payable

 

 

1,310,670

 

 

 

1,428,191

 

 

 

902,071

 

 

 

1,201,698

 

Salaries, wages and related accruals

 

 

539,360

 

 

 

709,397

 

 

 

359,160

 

 

 

510,844

 

Accrued expenses and other current liabilities

 

 

659,360

 

 

 

610,842

 

 

 

609,634

 

 

 

659,524

 

Total current liabilities

 

 

2,585,993

 

 

 

2,806,300

 

 

 

1,965,038

 

 

 

2,463,774

 

Long-term debt and finance lease obligations due after one year

 

 

4,287,597

 

 

 

4,233,276

 

 

 

5,279,103

 

 

 

4,291,301

 

Deferred credits and other liabilities

 

 

771,642

 

 

 

679,044

 

 

 

898,339

 

 

 

798,415

 

Total liabilities

 

 

7,645,232

 

 

 

7,718,620

 

 

 

8,142,480

 

 

 

7,553,490

 

EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nucor stockholders' equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock

 

 

152,061

 

 

 

152,061

 

 

 

152,061

 

 

 

152,061

 

Additional paid-in capital

 

 

2,108,948

 

 

 

2,073,715

 

 

 

2,106,907

 

 

 

2,107,646

 

Retained earnings

 

 

11,130,172

 

 

 

10,337,445

 

 

 

10,998,533

 

 

 

11,115,056

 

Accumulated other comprehensive loss,

net of income taxes

 

 

(313,766

)

 

 

(304,133

)

 

 

(340,836

)

 

 

(302,966

)

Treasury stock

 

 

(2,628,368

)

 

 

(2,467,010

)

 

 

(2,721,845

)

 

 

(2,713,931

)

Total Nucor stockholders' equity

 

 

10,449,047

 

 

 

9,792,078

 

 

 

10,194,820

 

 

 

10,357,866

 

Noncontrolling interests

 

 

411,986

 

 

 

409,890

 

 

 

428,665

 

 

 

433,310

 

Total equity

 

 

10,861,033

 

 

 

10,201,968

 

 

 

10,623,485

 

 

 

10,791,176

 

Total liabilities and equity

 

$

18,506,265

 

 

$

17,920,588

 

 

$

18,765,965

 

 

$

18,344,666

 

 

See notes to condensed consolidated financial statements.

3


Table of Contents

 

 

Nucor Corporation Condensed Consolidated Statements of Cash Flows (Unaudited)

(In thousands)

 

 

Nine Months (39 Weeks) Ended

 

 

Six Months (26 Weeks) Ended

 

 

Sept. 28, 2019

 

 

Sept. 29, 2018

 

 

July 4, 2020

 

 

June 29, 2019

 

Operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings

 

$

1,236,657

 

 

$

1,800,014

 

 

$

187,532

 

 

$

943,070

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation

 

 

477,957

 

 

 

474,330

 

 

 

349,691

 

 

 

321,979

 

Amortization

 

 

64,655

 

 

 

66,684

 

 

 

42,165

 

 

 

42,748

 

Stock-based compensation

 

 

74,311

 

 

 

65,597

 

 

 

39,101

 

 

 

61,260

 

Deferred income taxes

 

 

76,737

 

 

 

54,162

 

 

 

90,515

 

 

 

57,052

 

Distributions from affiliates

 

 

27,405

 

 

 

29,325

 

 

 

2,000

 

 

 

27,405

 

Equity in earnings of unconsolidated affiliates

 

 

(2,459

)

 

 

(34,157

)

Impairment of assets

 

 

-

 

 

 

110,000

 

Equity in losses (earnings) of unconsolidated affiliates

 

 

14,901

 

 

 

(4,044

)

Losses on assets

 

 

292,846

 

 

 

-

 

Changes in assets and liabilities (exclusive of acquisitions and dispositions):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts receivable

 

 

197,783

 

 

 

(615,118

)

 

 

264,424

 

 

 

112,015

 

Inventories

 

 

476,761

 

 

 

(644,865

)

 

 

464,004

 

 

 

281,119

 

Accounts payable

 

 

(180,397

)

 

 

229,552

 

 

 

(272,910

)

 

 

(248,671

)

Federal income taxes

 

 

(177,405

)

 

 

168,639

 

 

 

26,145

 

 

 

(122,358

)

Salaries, wages and related accruals

 

 

(157,317

)

 

 

173,732

 

 

 

(142,388

)

 

 

(220,946

)

Other operating activities

 

 

5,526

 

 

 

23,564

 

 

 

(8,058

)

 

 

(62,774

)

Cash provided by operating activities

 

 

2,120,214

 

 

 

1,901,459

 

 

 

1,349,968

 

 

 

1,187,855

 

Investing activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures

 

 

(984,646

)

 

 

(624,739

)

 

 

(777,317

)

 

 

(649,947

)

Investment in and advances to affiliates

 

 

(27,613

)

 

 

(111,540

)

 

 

(9,756

)

 

 

(11,170

)

Divestiture of affiliates

 

 

67,591

 

 

 

-

 

 

 

-

 

 

 

67,591

 

Disposition of plant and equipment

 

 

32,922

 

 

 

27,964

 

 

 

17,652

 

 

 

18,396

 

Acquisitions (net of cash acquired)

 

 

(9,495

)

 

 

-

 

 

 

794

 

 

 

(9,495

)

Purchase of investments

 

 

(249,616

)

 

 

-

 

 

 

(222,500

)

 

 

(50,000

)

Proceeds from the sale of investments

 

 

-

 

 

 

50,000

 

 

 

275,067

 

 

 

-

 

Other investing activities

 

 

2,176

 

 

 

25,347

 

 

 

1,132

 

 

 

2,176

 

Cash used in investing activities

 

 

(1,168,681

)

 

 

(632,968

)

 

 

(714,928

)

 

 

(632,449

)

Financing activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net change in short-term debt

 

 

(10,145

)

 

 

(5

)

 

 

2,208

 

 

 

2,217

 

Proceeds from long-term debt, net of discount

 

 

-

 

 

 

995,710

 

 

 

1,074,995

 

 

 

-

 

Repayment of long-term debt

 

 

-

 

 

 

(500,000

)

 

 

(77,150

)

 

 

-

 

Bond issuance related costs

 

 

-

 

 

 

(7,625

)

 

 

(6,250

)

 

 

-

 

Issuance of common stock

 

 

5,892

 

 

 

24,102

 

 

 

-

 

 

 

5,892

 

Payment of tax withholdings on certain stock-based compensation

 

 

(15,723

)

 

 

(22,123

)

 

 

(17,263

)

 

 

(15,446

)

Distributions to noncontrolling interests

 

 

(71,241

)

 

 

(49,494

)

 

 

(62,965

)

 

 

(67,380

)

Cash dividends

 

 

(369,270

)

 

 

(364,982

)

 

 

(245,619

)

 

 

(246,474

)

Acquisition of treasury stock

 

 

(197,511

)

 

 

(351,392

)

 

 

(39,499

)

 

 

(197,511

)

Other financing activities

 

 

(6,538

)

 

 

(5,248

)

 

 

(4,645

)

 

 

(4,346

)

Cash used in financing activities

 

 

(664,536

)

 

 

(281,057

)

Cash provided by (used in) financing activities

 

 

623,812

 

 

 

(523,048

)

Effect of exchange rate changes on cash

 

 

482

 

 

 

(4,383

)

 

 

(4,268

)

 

 

548

 

Increase in cash and cash equivalents

 

 

287,479

 

 

 

983,051

 

 

 

1,254,584

 

 

 

32,906

 

Cash and cash equivalents - beginning of year

 

 

1,398,886

 

 

 

949,104

 

 

 

1,534,605

 

 

 

1,398,886

 

Cash and cash equivalents - end of nine months

 

$

1,686,365

 

 

$

1,932,155

 

Cash and cash equivalents - end of six months

 

$

2,789,189

 

 

$

1,431,792

 

Non-cash investing activity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Change in accrued plant and equipment purchases

 

$

62,700

 

 

$

40,996

 

 

$

(25,897

)

 

$

39,862

 

 

See notes to condensed consolidated financial statements.

4


Table of Contents

 

Nucor Corporation – Notes to Condensed Consolidated Financial Statements (Unaudited)

1. Basis of Interim Presentation

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, 2018 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 Form 10-K for the year ended December 31, 2018.

Recently Adopted Accounting Pronouncements– In the first quarter of 2019, Nucor adopted new guidance related to lease accounting using the modified retrospective approach, which permits companies to recognize a cumulative-effect adjustment to the opening balance of retained earnings in the periodopinion of adoption without adjustingmanagement, necessary to a fair statement of the comparative periods prior to adoption. The new lease guidance requires all lessees to recognize on the balance sheet right-of-use assets and lease liabilitiesresults for the rightsinterim periods presented and obligations created by lease arrangements with terms greater than 12 months, including operating leases. Expenses are recognized inof a normal and recurring nature unless otherwise noted. The information furnished has not been audited; however, the statement of earnings in a manner similar to previous accounting guidance.

We elected the package of practical expedients permitted under the transition guidance within the new 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 lease 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. Finance lease right-of-use assets and liabilities are presented separately from operating lease right-of-use assets and liabilities in theDecember 31, 2019 condensed consolidated balance sheet data was derived from audited financial statements but does not include all disclosures required by accounting principles generally accepted in accordancethe United States of America. The unaudited condensed consolidated financial statements included in this Item 1 should be read in conjunction with the new lease standard. See Note 4 for further information.

In the first quarter of 2019, we also adopted new accounting guidance related to tax effects of the Tax Cuts and Jobs Act of 2017. As a result of the adoption of the new guidance, we elected to reclassify stranded tax effects from accumulated other comprehensive income to retained earnings, effective January 1, 2019. The adoption of this new guidance did not have a material impact on the Company’saudited consolidated financial statements.statements and the notes thereto included in Nucor’s Annual Report on Form 10-K for the year ended December 31, 2019.

2.

INVENTORIES: Inventories consisted of approximately 43% raw materials and supplies and 57% finished and semi-finished products at September 28, 2019 and December 31, 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 $9.54 billion at September 28, 2019 ($9.19 billion at December 31, 2018)

2. Inventories

Inventories consisted of approximately 39% raw materials and supplies and 61% finished and semi-finished products at July 4, 2020 (42% and 58%, respectively, at December 31, 2019). 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 $9.71 billion at July 4, 2020 ($9.42 billion at December 31, 2019).

Nucor performed an impairment assessment of its proved producing natural gas well assets in September 2018.the fourth quarter of 2019. One of the main assumptions that most significantly affects the undiscounted cash flows determination is management’s estimate of future pricing of natural gas and natural gas liquids. The pricing used in the impairment assessment was developed by management based on projected natural gas market supply and demand 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 productionlease operating costs. The impairment assessment was performed on each of Nucor’s three groups (“fields”) of wells, with each field defined by common geographic location.

As a result of the impairment assessment, Nucor recorded ana non-cash impairment charge of $110.0$35.0 million relating to two fieldsone field of wells in the thirdfourth quarter of 2018.2019. The post-impairment carrying value of this field was $11.8 million at July 4, 2020 ($12.3 million at December 31, 2019). The remaining two fields were not impaired as a result of the assessment and had a combined carrying value of these two fields was $68.0$63.9 million at September 28, 2019July 4, 2020 ($71.066.6 million at December 31, 2018)2019). The third field was not impaired and had a carrying value of $48.3 million at September 28, 2019 ($51.8 million at December 31, 2018). Changes in the natural gas industry or a prolonged low pricelow-price environment beyond what had already been assumed in the assessmentassessments could cause management to revise the natural gas and natural gas liquids price assumptions, the estimated reserves or the estimated drilling productionlease operating costs. Unfavorable revisions to these assumptions or estimates could possibly result in anfurther impairment of some or all of the fields of proved well assets.

Nucor owns a 49% leasehold interest in unproved oil and natural gas properties covering approximately 54,000 acres in the South Piceance Basin located in Colorado. Nucor is subject to forfeiture of a portion of its leasehold interest in these properties if we do not drill new wells within various contractually specified time periods. A decision to not develop a portion of these properties within the specified time periods would likely result in a partial asset impairment in the future. The carrying value of the entire leasehold interest at July 4, 2020 was $165.0 million. Nucor has full discretion on its participation in all future drilling capital investments related to the leasehold interest.

 

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.

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Table of Contents

 

4. We determine that a contract contains a lease ifGoodwill and Other Intangible Assets

The change in the contract conveysnet carrying amount of goodwill for 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 providedsix months ended July 4, 2020 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.

Supplemental statement of earnings information related to our leases issegment was as follows (in thousands):

 

 

 

 

 

Three Months

 

 

Nine Months

 

 

 

 

 

(13 Weeks) Ended

 

 

(39 Weeks) Ended

 

 

 

Statement of Earnings Classification

 

Sept. 28, 2019

 

 

Sept. 28, 2019

 

Operating lease cost

 

Cost of products sold

 

$

4,932

 

 

$

16,075

 

Operating lease cost

 

Marketing, administrative and other expenses

 

 

990

 

 

 

1,572

 

Total operating lease cost

 

 

 

$

5,922

 

 

$

17,647

 

Finance lease cost:

 

 

 

 

 

 

 

 

 

 

Amortization of leased assets

 

Cost of products sold

 

$

2,377

 

 

$

7,054

 

Interest on lease liabilities

 

Interest expense, net

 

 

2,788

 

 

 

8,451

 

Total finance lease cost

 

 

 

$

5,165

 

 

$

15,505

 

Total lease cost

 

 

 

$

11,087

 

 

$

33,152

 

Supplemental cash flow information related to our leases is as follows (in thousands):

 

 

Nine Months

 

 

 

(39 Weeks) Ended

 

 

 

Sept. 28, 2019

 

Cash paid for amounts included in measurement of lease liabilities:

 

 

 

 

Operating cash flows from operating leases

 

$

16,766

 

Operating cash flows from finance leases

 

$

8,451

 

Financing cash flows from finance leases

 

$

6,538

 

Supplemental balance sheet information related to our leases is as follows (in thousands):

 

 

Balance Sheet Classification

 

Sept. 28, 2019

 

Assets:

 

 

 

 

 

 

Operating lease

 

Other assets

 

$

92,022

 

Finance lease

 

Property, plant and equipment, net

 

 

67,554

 

Total leased

 

 

 

$

159,576

 

Liabilities:

 

 

 

 

 

 

Current operating

 

Accrued expenses and other current liabilities

 

$

17,362

 

Current finance

 

Current portion of long-term debt and finance lease obligations

 

 

8,878

 

Non-current operating

 

Deferred credits and other liabilities

 

 

75,854

 

Non-current finance

 

Long-term debt and finance lease obligations due after one year

 

 

72,773

 

Total leased

 

 

 

$

174,867

 

Weighted-average remaining lease term and discount rate for our leases are as follows:

Sept. 28, 2019

Weighted-average remaining lease term - operating leases

9.3 years

Weighted-average remaining lease term - finance leases

10.3 years

Weighted-average discount rate - operating leases

3.8%

Weighted-average discount rate - finance leases

30.8%

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Table of Contents

The reason for the substantial weighted-average discount rate – finance leases, of 30.8%, 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 were as follows as of September 28, 2019 (in thousands):

 

 

Operating Leases

 

 

Finance Leases

 

Maturities of lease liabilities, year ending December 31,

 

 

 

 

 

 

 

 

2019

 

$

5,957

 

 

$

4,904

 

2020

 

 

19,223

 

 

 

19,307

 

2021

 

 

16,853

 

 

 

18,833

 

2022

 

 

15,248

 

 

 

18,038

 

2023

 

 

12,161

 

 

 

16,194

 

Thereafter

 

 

44,265

 

 

 

79,529

 

Total lease payments

 

$

113,707

 

 

$

156,805

 

Less imputed interest

 

 

(20,491

)

 

 

(75,154

)

Present value of lease liabilities

 

$

93,216

 

 

$

81,651

 

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 nine months ended September 28, 2019 by segment was as follows (in thousands):

 

 

Steel Mills

 

 

Steel Products

 

 

Raw Materials

 

 

Total

 

Balance at December 31, 2018

 

$

591,986

 

 

$

862,773

 

 

$

729,577

 

 

$

2,184,336

 

Translation

 

 

-

 

 

 

2,163

 

 

 

-

 

 

 

2,163

 

Balance at September 28, 2019

 

$

591,986

 

 

$

864,936

 

 

$

729,577

 

 

$

2,186,499

 

 

 

Steel Mills

 

 

Steel Products

 

 

Raw Materials

 

 

Total

 

Balance at December 31, 2019

 

$

591,986

 

 

$

879,500

 

 

$

729,577

 

 

$

2,201,063

 

Other

 

 

-

 

 

 

(821

)

 

 

-

 

 

 

(821

)

Translation

 

 

-

 

 

 

(10,098

)

 

 

-

 

 

 

(10,098

)

Balance at July 4, 2020

 

$

591,986

 

 

$

868,581

 

 

$

729,577

 

 

$

2,190,144

 

 

Nucor completed its most recent annual goodwill impairment testing during the fourth quarter of 20182019 and concluded that as of such time there was no0 impairment of goodwill for any of its reporting units.

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Table of Contents

The assessment performed in 20182019 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%56% in the most recent assessment. The reporting unit’s profitability in the first half of 2020 significantly increased from the first half of 2019. We expect the 20192020 operating results of thisthe Rebar Fabrication reporting unit will continue to improve as compared to 2018.2019. If our assessment of the relevant facts and circumstances changes, or the actual performance of this reporting unit falls short of expected results, noncashnon-cash impairment charges may be required. Total goodwill associated with the Rebar Fabrication reporting unit was $354.9$347.8 million as of September 28, 2019July 4, 2020 ($353.0356.6 million as of December 31, 2018)2019). 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 $69.4$61.3 million as of September 28, 2019July 4, 2020 ($76.767.2 million as of December 31, 2018)2019). There have been no triggering events requiring an interim assessment for impairment of the Rebar Fabrication reporting unit since the most recent annual goodwill impairment testing date.

The Company has monitored one of its reporting units, Grating, for potential triggering events since the impairment assessment performed in the fourth quarter of 2018. Due to lower than expected operating performanceresults and anticipated changes to the Grating reporting unit’s business strategy and structure, the Company determined a triggering event occurred in the third quarter of 2019 and performed an impairment assessment. The fair value of the Grating reporting unit exceeded its carrying value by approximately 17% in the most recentthat assessment. If our assessment of the relevant facts and circumstances changes, or the actual performance of this reporting unit falls short of expected results, noncashnon-cash impairment charges may be required. An impairment ofTotal goodwill may also lead us to record an impairment of other intangible assets. As of September 28, 2019, total goodwill and finite-lived intangible assets associated with the Grating reporting unit were $36.7was $36.5 million and $3.3as of July 4, 2020 ($36.8 million respectively.as of December 31, 2019).

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 September 28, 2019July 4, 2020 and December 31, 20182019 (in thousands):

 

 

September 28, 2019

 

 

December 31, 2018

 

 

July 4, 2020

 

 

December 31, 2019

 

 

Gross Amount

 

 

Accumulated

Amortization

 

 

Gross Amount

 

 

Accumulated

Amortization

 

 

Gross Amount

 

 

Accumulated

Amortization

 

 

Gross Amount

 

 

Accumulated

Amortization

 

Customer relationships

 

$

1,421,107

 

 

$

767,027

 

 

$

1,418,250

 

 

$

713,656

 

 

$

1,411,626

 

 

$

803,415

 

 

$

1,412,954

 

 

$

767,532

 

Trademarks and trade names

 

 

177,620

 

 

 

95,450

 

 

 

176,046

 

 

 

87,680

 

 

 

161,926

 

 

 

96,187

 

 

 

162,183

 

 

 

92,258

 

Other

 

 

63,807

 

 

 

35,790

 

 

 

67,820

 

 

 

32,276

 

 

 

63,822

 

 

 

39,335

 

 

 

63,807

 

 

 

36,968

 

 

$

1,662,534

 

 

$

898,267

 

 

$

1,662,116

 

 

$

833,612

 

 

$

1,637,374

 

 

$

938,937

 

 

$

1,638,944

 

 

$

896,758

 

 

Intangible asset amortization expense in the thirdsecond quarter of 2020 and 2019 and 2018 was $22.0$20.7 million and $22.1$21.2 million, respectively, and was $64.7$42.2 million and $66.7$42.7 million in the first ninesix months of 20192020 and 2018,2019, respectively. Annual amortization expense is estimated to be $87.1 million in 2019; $84.7$83.5 million in 2020; $83.5$82.3 million in 2021; $81.2$80.7 million in 2022; and $80.0 million in 2023.2023; and $79.2 million in 2024.

5. Equity Investments

6.

EQUITY INVESTMENTS: The carrying value of our equity investments in domestic and foreign companies was $826.1 million at September 28, 2019 ($869.9 million at December 31, 2018) and is recorded in other assets in the condensed consolidated balance sheets.

NUMITThe carrying value of our equity investments in domestic and foreign companies was $521.5 million at July 4, 2020 ($793.2 million at December 31, 2019) 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 a one-month lag basis) under the equity method, as control and risk

6


Table of Contents

of loss are shared equally between the members. Nucor’s investment in NuMit was $323.9$316.7 million at September 28, 2019July 4, 2020 ($337.2319.8 million at December 31, 2018)2019). Nucor received distributions of $27.4$2.0 million and $28.3$27.4 million from NuMit during the first ninesix months of 2020 and 2019, and 2018, respectively.

DUFERDOFIN NUCORDuferdofin 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 a one-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 $256.0$2.5 million at September 28, 2019July 4, 2020 ($269.1263.0 million at December 31, 2018)2019). Nucor’s 50% share of the total net assets of Duferdofin Nucor was $107.0$115.9 million at September 28, 2019,July 4, 2020, resulting in a negative basis difference of $149.0$113.4 million. This is due to the $255.0 million due toimpairment charge taken against the Company’s investment in Duferdofin Nucor in the first half of 2020 as discussed below, offset by the step-up to fair value of certain assets and liabilities attributable to Duferdofin Nucor, as well as the identification of goodwill ($84.3 million)86.5 million at December 31, 2019) and finite-lived intangible assets. This basis difference prior to the impairment charge, excluding the portion attributable to goodwill, iswas being amortized based on the remaining estimated useful lives of the various underlying net assets, as appropriate, through the first quarter of 2020. Beginning with the second quarter of 2020, the negative basis difference of $113.4 million began amortizing based on the remaining useful lives of the various underlying net assets, as appropriate. Amortization expense associated with the fair value step-upnegative basis in the second quarter of 2020 was $2.2

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Tableincome of Contents

$1.8 million, andcompared to an expense of $2.3 million in the thirdsecond quarter of 2019, and 2018, respectively, andassociated with the fair value step-up. Net amortization expense was $6.7$0.3 million and $7.1$4.5 million in the first ninesix months of 2020 and 2019, and 2018, respectively.

As of September 28, 2019,July 4, 2020, Nucor had outstanding notes receivable of €35.0 million ($38.339.4 million) from Duferdofin Nucor (€35.0 million, or $40.2$39.3 million, as of December 31, 2018)2019). The notes receivable bear interest at a rate that resets annually on September 30 to the 12-month Euro Interbank Offered Rate plus 0.75% per year. The maturity date of the principal amounts was extended tois January 31, 2022 during the first quarter of 2018.2022. As of September 28, 2019July 4, 2020 and December 31, 2018,2019, the notes receivable were classified in other assets in the condensed consolidated balance sheets. These notes were fully reserved in connection with the $255.0 million impairment charge taken against the Company’s investment in Duferdofin Nucor in the first half of 2020 as discussed below.

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 ($175.1180.0 million) at September 28, 2019.July 4, 2020. As of September 28, 2019,July 4, 2020, there was €154.0€147.0 million ($168.5165.4 million) outstanding under that facility (€155.0147.0 million, or $178.0$164.9 million, as of December 31, 2018)2019). 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-JFENucor-JFE

Nucor owns a 50% economic and voting interest in Nucor-JFE Steel Mexico, S. de R.L. de C.V. (“Nucor-JFE”), a 50-50 joint venture with JFE Steel Corporation of Japan, to build and operate a galvanized sheet steel plant in central Mexico. Nucor-JFE plant construction is substantially complete and operations are expected to begin by the end of 2019. Nucor accounts for the investment in Nucor-JFE (on a one-month lag basis) under the equity method, as control and risk of loss are shared equally between the members. Nucor’s investment in Nucor-JFE was $150.1$153.6 million at September 28, 2019July 4, 2020 ($135.7163.2 million at December 31, 2018)2019).

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, 2020.2021. Under the Facility, the maximum amount Nucor-JFE could borrow was $65.0 million as of September 28, 2019.July 4, 2020. The Facility is uncommitted. As of September 28, 2019,July 4, 2020, there was $30.0$35.0 million outstanding under the Facility.Facility (0ne as of December 31, 2019). 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.

On July 26, 2019,Nucor-JFE has other credit facilities that Nucor entered into another agreementhas agreed to guarantee. The principal amount subject to guarantee $17.5by Nucor for these other credit facilities was $25.0 million as of debt, plus interest and fees, totaling up to $20.0July 4, 2020 ($25.0 million under the $35.0 million Uncommitted Loan Facility Agreement and Promissory Note (the “Loan Agreement”)as of December 31, 2019). The fair value of the guaranteeguarantees is immaterial. Nucor’s guarantee expires on July 31, 2024. If Nucor-JFE fails to pay when due any amounts for which it is obligated, under the Loan Agreement, Nucor could be required to pay such amounts pursuant to and in accordance with the terms of its guarantee. Nucor has not recorded any liability associated with this guarantee.these guarantees.

ALL EQUITY INVESTMENTS7


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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 assesseddetermined that a triggering event occurred in the first quarter of 2020 with respect to its equity method investment in Duferdofin Nucor for impairment during the fourth quarter of 2017 due to adverse developments in the protracted challenging steel market conditions in Europe.joint venture’s commercial outlook, which have been exacerbated by the COVID-19 pandemic, all of which have negatively impacted the joint venture’s strategic direction. After completing its impairment assessment, the CompanyNucor determined that the carrying amount exceeded its estimated fair value exceededand the impairment condition was considered to be other than temporary. Therefore, Nucor recorded a $250.0 million impairment charge in the first quarter of 2020 and a $5.0 million impairment charge in the second quarter of 2020 against its carrying amount by a sufficient amountinvestment in Duferdofin Nucor. Any additional capital contributions, if necessary, that Nucor makes to Duferdofin Nucor will be subject to impairment. Additionally, the Company fully reserved its €35.0 million ($39.4 million) outstanding note receivable from Duferdofin Nucor due to an assessment of the likelihood of collection in light of these adverse developments and that there was no needits effective subordination to record an impairment charge.Facility A. These charges are included in losses on assets in the condensed consolidated statements of earnings. The assumptions that most significantly affect the fair value determination include projected cash flows and the discount rate. The Company-specific inputs for measuring fair value are considered “Level 3” or unobservable inputs that are not corroborated by market data under applicable fair value authoritative guidance, as quoted market prices are not available.

It is reasonably possible that material deviation of future performance from the estimates used in our most recent valuation could result in further impairment of our investment in Duferdofin Nucor. The outlook forNucor and affect any potential liability associated with the European economy has weakened in 2019. We will continue to monitor for potential triggering events that could affectCompany’s guarantee of the carrying valueindebtedness of our investment in Duferdofin Nucor as discussed above.

6. Current Liabilities

Book overdrafts, included in accounts payable in the condensed consolidated balance sheets, were $65.7 million at July 4, 2020 ($116.4 million at December 31, 2019). Dividends payable, included in accrued expenses and other current liabilities in the condensed consolidated balance sheets, were $123.0 million at July 4, 2020 ($122.9 million at December 31, 2019).Accrued vacation and holiday pay, included in salaries, wages and related accruals in the condensed consolidated balance sheets, were $119.0 million at July 4, 2020 ($106.2 million at December 31, 2019).

7. Fair Value Measurements

The following table summarizes information regarding Nucor’s financial assets and financial liabilities that were measured at fair value as of July 4, 2020 and December 31, 2019 (in thousands). Nucor does not have any non-financial assets or non-financial liabilities that are measured at fair value on a result of future market conditions and any changes in our business strategy.

7.

CURRENT LIABILITIES: Book overdrafts, included in accounts payable in the condensed consolidated balance sheets, were $161.5 million at September 28, 2019 ($89.8 million at December 31, 2018). Dividends payable, included in accrued expenses and other current liabilities in the condensed consolidated balance sheets, were $122.8 million at September 28, 2019 ($123.4 million at December 31, 2018).

9


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8.

FAIR VALUE MEASUREMENTS: The following table summarizes information regarding Nucor’s financial assets and financial liabilities that were measured at fair value as of September 28, 2019 and December 31, 2018 (in thousands). Nucor does not have any non-financial assets or non-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 September 28, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of July 4, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents

 

$

1,445,116

 

 

$

1,445,116

 

 

$

-

 

 

$

-

 

 

$

2,409,727

 

 

$

2,409,727

 

 

$

-

 

 

$

-

 

Short-term investments

 

 

249,616

 

 

 

249,616

 

 

 

-

 

 

 

-

 

 

 

247,473

 

 

 

247,473

 

 

 

-

 

 

 

-

 

Derivative contracts

 

 

2,228

 

 

 

-

 

 

 

2,228

 

 

 

-

 

Total assets

 

$

1,696,960

 

 

$

1,694,732

 

 

$

2,228

 

 

$

-

 

 

$

2,657,200

 

 

$

2,657,200

 

 

$

-

 

 

$

-

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivative contracts

 

$

(16,800

)

 

$

-

 

 

$

(16,800

)

 

$

-

 

 

$

(14,344

)

 

$

-

 

 

$

(14,344

)

 

$

-

 

As of December 31, 2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of December 31, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents

 

$

1,084,319

 

 

$

1,084,319

 

 

$

-

 

 

$

-

 

 

$

1,229,000

 

 

$

1,229,000

 

 

$

-

 

 

$

-

 

Derivative contracts

 

 

4,772

 

 

 

-

 

 

 

4,772

 

 

 

-

 

Short-term investments

 

 

300,040

 

 

 

300,040

 

 

 

-

 

 

 

-

 

Total assets

 

$

1,089,091

 

 

$

1,084,319

 

 

$

4,772

 

 

$

-

 

 

$

1,529,040

 

 

$

1,529,040

 

 

$

-

 

 

$

-

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivative contracts

 

$

(8,600

)

 

$

-

 

 

$

(8,600

)

 

$

-

 

 

$

(19,599

)

 

$

-

 

 

$

(19,599

)

 

$

-

 

 

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 at September 28, 2019July 4, 2020 consisted of certificates of deposit, commercial paper and corporate notes. Fair value

8


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measurements for Nucor’sNucor���s derivatives 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 $4.83$6.00 billion at September 28, 2019July 4, 2020 ($4.454.81 billion at December 31, 2018)2019). The debt fair value estimates are classified under Level 2 because such estimates are based on readily available market prices of our debt at September 28, 2019July 4, 2020 and December 31, 2018,2019, or similar debt with the same maturities, ratings and interest rates.

9.

Disclosures are required for certain assets and liabilities that are measured at fair value, but are recognized and disclosed on a nonrecurring basis in periods subsequent to initial recognition. For Nucor, our equity investment in Duferdofin Nucor was measured at fair value as a result of the impairment charges recorded in the first six months of 2020 (see Note 5).

8. 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 $16.3 million of accrued environmental costs at July 4, 2020 ($16.4 million at December 31, 2019), $5.9 million was classified in accrued expenses and other current liabilities ($4.1 million at December 31, 2019) and $10.4 million was classified in deferred credits and other liabilities ($12.3 million at December 31, 2019). Inherent uncertainties exist in these estimates primarily due to unknown conditions, evolving remediation technology and changing governmental regulations, legal standards and enforcement priorities.

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 $17.1 million of accrued environmental costs at September 28, 2019 ($18.4 million at December 31, 2018), $4.7 million was classified in accrued expenses and other current liabilities ($7.0 million at December 31, 2018) and $12.4 million was classified in deferred credits and other liabilities ($11.4 million at December 31, 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.

109. Stock-Based Compensation


TableOverview

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 and non-employee directors. The Company’s stockholders approved the Omnibus Plan on May 8, 2014 and an amendment and restatement of Contents

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 and non-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 September 28, 2019, 3.6the Omnibus Plan on May 14, 2020. The Omnibus Plan, as amended and restated, permits the award of stock options, restricted stock units, restricted shares and other stock-based awards for up to 19.0 million shares of the Company’s common stock. As of July 4, 2020, 7.8 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 September 28, 2019, 1.5July 4, 2020, 1.0 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 and non-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.

A summary of activity under Nucor’s stock option plans for the first ninesix months of 20192020 is as follows (in thousands, except years and(shares in thousands):

 

 

 

 

 

 

Weighted-

 

 

Weighted-

 

 

 

 

 

 

 

 

 

 

Average

 

 

Average

 

Aggregate

 

 

 

 

 

 

 

Exercise

 

 

Remaining

 

Intrinsic

 

 

 

Shares

 

 

Price

 

 

Contractual Life

 

Value

 

Number of shares under stock options:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Outstanding at beginning of year

 

 

3,892

 

 

$

50.78

 

 

 

 

 

 

 

Granted

 

 

529

 

 

$

42.46

 

 

 

 

 

 

 

Exercised

 

 

-

 

 

$

-

 

 

 

 

$

-

 

Canceled

 

 

(239

)

 

$

51.58

 

 

 

 

 

 

 

Outstanding at July 4, 2020

 

 

4,182

 

 

$

49.68

 

 

6.2 years

 

$

564

 

Stock options exercisable at July 4, 2020

 

 

3,435

 

 

$

50.36

 

 

5.5 years

 

$

564

 

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Table of Contents

For the 2020 stock option grant, the grant date fair value of $7.56 per share amounts):was calculated using the Black-Scholes options pricing model with the following assumptions:

 

 

 

 

 

 

 

Weighted-

 

 

Weighted-

 

 

 

 

 

 

 

 

 

 

Average

 

 

Average

 

Aggregate

 

 

 

 

 

 

 

Exercise

 

 

Remaining

 

Intrinsic

 

 

 

Shares

 

 

Price

 

 

Contractual Life

 

Value

 

Number of shares under stock options:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Outstanding at beginning of year

 

 

3,828

 

 

$

49.71

 

 

 

 

 

 

 

Granted

 

 

489

 

 

$

48.00

 

 

 

 

 

 

 

Exercised

 

 

(153

)

 

$

38.56

 

 

 

 

$

3,058

 

Canceled

 

 

-

 

 

$

-

 

 

 

 

 

 

 

Outstanding at September 28, 2019

 

 

4,164

 

 

$

49.92

 

 

5.9 years

 

$

11,151

 

Stock options exercisable at September 28, 2019

 

 

2,914

 

 

$

47.13

 

 

4.7 years

 

$

10,283

 

Exercise price

 

$

42.46

 

Expected dividend yield

 

 

3.79

%

Expected stock price volatility

 

 

30.12

%

Risk-free interest rate

 

 

0.50

%

Expected life (years)

 

 

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 $0.3$1.8 million and $3.8 million in the thirdsecond quarter of both2020 and 2019, respectively, and 2018 and $4.4$2.1 million and $4.3$4.1 million in the first ninesix months of 20192020 and 2018,2019, respectively. As of September 28, 2019,July 4, 2020, unrecognized compensation expense related to stock options was $1.5$3.1 million, which is expected to be recognized over a weighted-average period of 1.82.6 years.

Restricted Stock Units

Nucor annually grants restricted stock units (“RSUs”) to key employees, officers and non-employee directors. The RSUs granted 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 provided that a portion of the RSUs awarded to officersan officer prior to 2018 vestsvest 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 a non-employee director are fully vested on the grant date and are payable to the non-employee director in the form of common stock after the termination of the director’s service on the Board of Directors.

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.

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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 ninesix months of 20192020 is as follows (shares in thousands):

 

 

Shares

 

 

Grant Date

Fair Value

 

 

Shares

 

 

Grant Date

Fair Value

 

Restricted stock units:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unvested at beginning of year

 

 

1,246

 

 

$

59.09

 

 

 

1,776

 

 

$

52.60

 

Granted

 

 

1,770

 

 

$

48.00

 

 

 

1,246

 

 

$

42.46

 

Vested

 

 

(1,177

)

 

$

52.39

 

 

 

(1,089

)

 

$

50.13

 

Canceled

 

 

(29

)

 

$

57.53

 

 

 

(17

)

 

$

51.33

 

Unvested at September 28, 2019

 

 

1,810

 

 

$

52.62

 

Unvested at July 4, 2020

 

 

1,916

 

 

$

47.42

 

 

Compensation expense for RSUs was $11.0$26.8 million and $8.5$41.3 million in the thirdsecond quarter of 20192020 and 2018,2019, respectively, and $59.1$36.8 million and $46.8$48.1 million in the first ninesix months of 20192020 and 2018,2019, respectively. As of September 28, 2019,July 4, 2020, unrecognized compensation expense related to unvested RSUs was $70.2$75.1 million, which is expected to be recognized over a weighted-average period of 1.7 years.

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

10


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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 to one-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 ninesix months of 20192020 is as follows (shares in thousands):

 

 

 

 

 

Grant Date

 

 

 

 

 

 

Grant Date

 

 

Shares

 

 

Fair Value

 

 

Shares

 

 

Fair Value

 

Restricted stock units and restricted stock awards:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unvested at beginning of year

 

 

130

 

 

$

62.97

 

 

 

147

 

 

$

60.81

 

Granted

 

 

316

 

 

$

58.04

 

 

 

348

 

 

$

36.15

 

Vested

 

 

(296

)

 

$

58.78

 

 

 

(352

)

 

$

40.77

 

Canceled

 

 

-

 

 

$

-

 

 

 

-

 

 

$

-

 

Unvested at September 28, 2019

 

 

150

 

 

$

60.84

 

Unvested at July 4, 2020

 

 

143

 

 

$

50.04

 

12


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 $1.8$2.8 million and $4.9$3.7 million in the thirdsecond quarter of 20192020 and 2018,2019, respectively, and $10.9$2.5 million and $14.6$9.1 million in the first ninesix months of 20192020 and 2018,2019, respectively. As of September 28, 2019,July 4, 2020, unrecognized compensation expense related to unvested restricted stock awards was $2.1$2.0 million, which is expected to be recognized over a weighted-average period of 1.71.8 years.

10. Employee Benefit Plan

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 $40.0 million and $86.4 million in the third quarter of 2019 and 2018, respectively, and $163.7 million and $226.5 million in the first nine months of 2019 and 2018, respectively. The related liability for these benefits is included in salaries, wages and related accruals in the condensed consolidated balance sheets.

12.

INTEREST EXPENSE (INCOME): The components of net interest expense for the third quarter and first nine months of 2019 and 2018 are as follows (in thousands):

 

 

Three Months (13 Weeks) Ended

 

 

Nine Months (39 Weeks) Ended

 

 

 

Sept. 28, 2019

 

 

Sept. 29, 2018

 

 

Sept. 28, 2019

 

 

Sept. 29, 2018

 

Interest expense

 

$

40,721

 

 

$

44,789

 

 

$

119,736

 

 

$

120,308

 

Interest income

 

 

(9,435

)

 

 

(7,588

)

 

 

(26,977

)

 

 

(16,542

)

Interest expense, net

 

$

31,286

 

 

$

37,201

 

 

$

92,759

 

 

$

103,766

 

Interest expense decreased in the third quarter and first nine months of 2019 as compared to the third quarter and first nine months of 2018 due to an increase in capitalized interest related to capital projects being constructed in the first nine months of 2019. Included in interest expense in the first nine months of 2018 was the benefit received from the settlement of a treasury lock instrument that was entered into in anticipation of the Company’s debt issuance that occurredCompany. Nucor’s expense for these benefits totaled $20.4 million and $52.5 million in the second quarter of 2018.2020 and 2019, respectively, and $32.0 million and $123.7 million in the first six months of 2020 and 2019, respectively. The Company did not elect hedge accountingrelated liability for this instrument.these benefits is included in salaries, wages and related accruals in the condensed consolidated balance sheets.

11. Interest Expense (Income):

The components of net interest expense for the second quarter and first six months of 2020 and 2019 are as follows (in thousands):

 

13.

 

 

Three Months (13 Weeks) Ended

 

 

Six Months (26 Weeks) Ended

 

 

 

July 4, 2020

 

 

June 29, 2019

 

 

July 4, 2020

 

 

June 29, 2019

 

Interest expense

 

$

38,849

 

 

$

41,953

 

 

$

86,445

 

 

$

79,015

 

Interest income

 

 

(3,042

)

 

 

(8,923

)

 

 

(9,728

)

 

 

(17,542

)

Interest expense, net

 

$

35,807

 

 

$

33,030

 

 

$

76,717

 

 

$

61,473

 

11


Table of Contents

12. Income Taxes

The effective tax rate for the second quarter of 2020 was 26.5% as compared to 22.9% for the second quarter of 2019. The increase in the effective tax rate between 2019 and 2020 was primarily due to a $5.3 million unfavorable non-cash, out-of-period adjustment to deferred tax balances during the second quarter of 2020.

INCOME TAXES: The effective tax rate for the third quarter of 2019 was 22.8% as compared to 23.4% for the third quarter of 2018.

Nucor has concluded U.S. federal income tax matters for years through 2014. The tax years 2015 through 2018 remain open to examination by the Internal Revenue Service. The Canada Revenue Agency has concluded its examination of the 2012 and 20132015 Canadian income tax returns for Harris Steel Group Inc. and certain related affiliates. The 2015 tax year isaffiliates are currently under examination by the Canada Revenue Agency. The Trinidad and Tobago Inland Revenue Division has concluded its examination of the Nu-Iron Unlimited 2013 corporate income tax return. The tax years 20122013 through 2018 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 $0.9 million at September 28, 2019 ($0.7 million at December 31, 2018). Non-current deferred tax liabilities included in deferred credits and other liabilities in the condensed consolidated balance sheets were $407.0$522.5 million at September 28, 2019July 4, 2020 ($332.0431.0 million at December 31, 2018)2019).

13

13. 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) of which Nucor owns 51%, for the three months and six months ended July 4, 2020 and June 29, 2019 (in thousands):

 

 

 

 

 

 

Three Months (13 Weeks) Ended July 4, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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, April 4, 2020

 

$

10,596,069

 

 

 

380,154

 

 

$

152,061

 

 

$

2,119,370

 

 

$

11,012,690

 

 

$

(367,627

)

 

 

79,019

 

 

$

(2,748,290

)

 

$

10,168,204

 

 

$

427,865

 

Net earnings

 

 

133,153

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

108,881

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

108,881

 

 

 

24,272

 

Other comprehensive income (loss)

 

 

26,791

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

26,791

 

 

 

-

 

 

 

-

 

 

 

26,791

 

 

 

-

 

Stock option expense

 

 

1,864

 

 

 

-

 

 

 

-

 

 

 

1,864

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

1,864

 

 

 

-

 

Issuance of stock under award

   plans, net of forfeitures

 

 

11,618

 

 

 

-

 

 

 

-

 

 

 

(14,827

)

 

 

-

 

 

 

-

 

 

 

(760

)

 

 

26,445

 

 

 

11,618

 

 

 

-

 

Amortization of unearned

   compensation

 

 

500

 

 

 

-

 

 

 

-

 

 

 

500

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

500

 

 

 

-

 

Cash dividends declared

 

 

(123,038

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(123,038

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(123,038

)

 

 

-

 

Distributions to noncontrolling

   interests

 

 

(23,472

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(23,472

)

BALANCES, July 4, 2020

 

$

10,623,485

 

 

 

380,154

 

 

$

152,061

 

 

$

2,106,907

 

 

$

10,998,533

 

 

$

(340,836

)

 

 

78,259

 

 

$

(2,721,845

)

 

$

10,194,820

 

 

$

428,665

 

 

 

 

 

 

 

Six Months (26 Weeks) Ended July 4, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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, 2019

 

$

10,791,176

 

 

 

380,154

 

 

$

152,061

 

 

$

2,107,646

 

 

$

11,115,056

 

 

$

(302,966

)

 

 

78,342

 

 

$

(2,713,931

)

 

$

10,357,866

 

 

$

433,310

 

Net earnings

 

 

187,532

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

129,212

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

129,212

 

 

 

58,320

 

Other comprehensive income (loss)

 

 

(37,870

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(37,870

)

 

 

-

 

 

 

-

 

 

 

(37,870

)

 

 

-

 

Stock option expense

 

 

2,139

 

 

 

-

 

 

 

-

 

 

 

2,139

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

2,139

 

 

 

-

 

Issuance of stock under award

   plans, net of forfeitures

 

 

27,807

 

 

 

-

 

 

 

-

 

 

 

(3,778

)

 

 

-

 

 

 

-

 

 

 

(908

)

 

 

31,585

 

 

 

27,807

 

 

 

-

 

Amortization of unearned

   compensation

 

 

900

 

 

 

-

 

 

 

-

 

 

 

900

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

900

 

 

 

-

 

Treasury stock acquired

 

 

(39,499

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

825

 

 

 

(39,499

)

 

 

(39,499

)

 

 

-

 

Cash dividends declared

 

 

(245,735

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(245,735

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(245,735

)

 

 

-

 

Distributions to noncontrolling

   interests

 

 

(62,965

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(62,965

)

BALANCES, July 4, 2020

 

$

10,623,485

 

 

 

380,154

 

 

$

152,061

 

 

$

2,106,907

 

 

$

10,998,533

 

 

$

(340,836

)

 

 

78,259

 

 

$

(2,721,845

)

 

$

10,194,820

 

 

$

428,665

 

12


Table of Contents

 

 

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) of which Nucor owns 51%, for the three months andnine months ended September 28, 2019 and September 29, 2018 (in thousands):

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

Three Months (13 Weeks) Ended September 28, 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, 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

 

Net earnings

 

 

293,587

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

275,031

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

275,031

 

 

 

18,556

 

Other comprehensive income (loss)

 

 

(16,006

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(16,006

)

 

 

-

 

 

 

-

 

 

 

(16,006

)

 

 

-

 

Stock options exercised

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Stock option expense

 

 

275

 

 

 

-

 

 

 

-

 

 

 

275

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

275

 

 

 

-

 

Issuance of stock under award plans,

   net of forfeitures

 

 

11,339

 

 

 

-

 

 

 

-

 

 

 

9,365

 

 

 

-

 

 

 

-

 

 

 

(58

)

 

 

1,974

 

 

 

11,339

 

 

 

-

 

Amortization of unearned

   compensation

 

 

500

 

 

 

-

 

 

 

-

 

 

 

500

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

500

 

 

 

-

 

Treasury stock acquired

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Cash dividends declared

 

 

(122,809

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(122,809

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(122,809

)

 

 

-

 

Distributions to noncontrolling

   interests

 

 

(3,861

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(3,861

)

Other

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(1

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

1

 

 

 

-

 

 

 

-

 

BALANCES, September 28, 2019

 

$

10,861,033

 

 

 

380,154

 

 

$

152,061

 

 

$

2,108,948

 

 

$

11,130,172

 

 

$

(313,766

)

 

 

76,939

 

 

$

(2,628,368

)

 

$

10,449,047

 

 

$

411,986

 

 

 

 

 

 

 

Nine Months (39 Weeks) Ended September 28, 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

 

 

1,236,657

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

1,163,320

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

1,163,320

 

 

 

73,337

 

Other comprehensive income (loss)

 

 

(11,519

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(11,519

)

 

 

-

 

 

 

-

 

 

 

(11,519

)

 

 

-

 

Stock options exercised

 

 

5,892

 

 

 

-

 

 

 

-

 

 

 

808

 

 

 

-

 

 

 

-

 

 

 

(153

)

 

 

5,084

 

 

 

5,892

 

 

 

-

 

Stock option expense

 

 

4,387

 

 

 

-

 

 

 

-

 

 

 

4,387

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

4,387

 

 

 

-

 

Issuance of stock under award plans,

   net of forfeitures

 

 

59,608

 

 

 

-

 

 

 

-

 

 

 

28,540

 

 

 

-

 

 

 

-

 

 

 

(920

)

 

 

31,068

 

 

 

59,608

 

 

 

-

 

Amortization of unearned

   compensation

 

 

1,500

 

 

 

-

 

 

 

-

 

 

 

1,500

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

1,500

 

 

 

-

 

Treasury stock acquired

 

 

(197,511

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

3,450

 

 

 

(197,511

)

 

 

(197,511

)

 

 

-

 

Cash dividends declared

 

 

(368,707

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(368,707

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(368,707

)

 

 

-

 

Distributions to noncontrolling

   interests

 

 

(71,241

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(71,241

)

Other

 

 

(1

)

 

 

-

 

 

 

-

 

 

 

(2

)

 

 

(1,886

)

 

 

1,886

 

 

 

-

 

 

 

1

 

 

 

(1

)

 

 

-

 

BALANCES, September 28, 2019

 

$

10,861,033

 

 

 

380,154

 

 

$

152,061

 

 

$

2,108,948

 

 

$

11,130,172

 

 

$

(313,766

)

 

 

76,939

 

 

$

(2,628,368

)

 

$

10,449,047

 

 

$

411,986

 

 

 

 

 

 

 

Three Months (13 Weeks) Ended September 29, 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, 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

 

Net earnings

 

 

706,287

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

676,656

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

676,656

 

 

 

29,631

 

Other comprehensive income (loss)

 

 

21,425

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

21,425

 

 

 

-

 

 

 

-

 

 

 

21,425

 

 

 

-

 

Stock options exercised

 

 

11,822

 

 

 

-

 

 

 

-

 

 

 

4,572

 

 

 

-

 

 

 

-

 

 

 

(256

)

 

 

7,250

 

 

 

11,822

 

 

 

-

 

Stock option expense

 

 

312

 

 

 

-

 

 

 

-

 

 

 

312

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

312

 

 

 

-

 

Issuance of stock under award plans,

   net of forfeitures

 

 

9,598

 

 

 

-

 

 

 

-

 

 

 

8,633

 

 

 

-

 

 

 

-

 

 

 

(34

)

 

 

965

 

 

 

9,598

 

 

 

-

 

Amortization of unearned

   compensation

 

 

400

 

 

 

-

 

 

 

-

 

 

 

400

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

400

 

 

 

-

 

Treasury stock acquired

 

 

(181,077

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

2,701

 

 

 

(181,077

)

 

 

(181,077

)

 

 

-

 

Cash dividends declared

 

 

(120,406

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(120,406

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(120,406

)

 

 

-

 

Distributions to noncontrolling

   interests

 

 

(9,364

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(9,364

)

Other

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(1

)

 

 

1

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

BALANCES, September 29, 2018

 

$

10,174,421

 

 

 

380,154

 

 

$

152,061

 

 

$

2,065,299

 

 

$

9,814,073

 

 

$

(274,607

)

 

 

66,221

 

 

$

(1,964,689

)

 

$

9,792,137

 

 

$

382,284

 

14


Table of Contents

 

 

 

 

 

Nine Months (39 Weeks) Ended September 29, 2018

 

 

 

 

 

 

 

 

 

 

Six Months (26 Weeks) Ended June 29, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

 

Other

 

 

Treasury Stock

 

 

Nucor

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

 

Other

 

 

Treasury Stock

 

 

Nucor

 

 

 

 

 

 

 

 

 

 

Common Stock

 

 

Paid-in

 

 

Retained

 

 

Comprehensive

 

 

(at cost)

 

 

Stockholders'

 

 

Noncontrolling

 

 

 

 

 

 

Common Stock

 

 

Paid-in

 

 

Retained

 

 

Comprehensive

 

 

(at cost)

 

 

Stockholders'

 

 

Noncontrolling

 

 

Total

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Earnings

 

 

Income (Loss)

 

 

Shares

 

 

Amount

 

 

Equity

 

 

Interests

 

 

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

 

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

 

 

1,800,014

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

1,713,988

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

1,713,988

 

 

 

86,026

 

 

 

943,070

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

888,289

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

888,289

 

 

 

54,781

 

Other comprehensive income (loss)

 

 

(19,926

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(19,926

)

 

 

-

 

 

 

-

 

 

 

(19,926

)

 

 

-

 

 

 

4,487

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

4,487

 

 

 

-

 

 

 

-

 

 

 

4,487

 

 

 

-

 

Stock options exercised

 

 

24,102

 

 

 

210

 

 

 

84

 

 

 

14,675

 

 

 

-

 

 

 

-

 

 

 

(334

)

 

 

9,343

 

 

 

24,102

 

 

 

-

 

 

 

5,892

 

 

 

-

 

 

 

-

 

 

 

808

 

 

 

-

 

 

 

-

 

 

 

(153

)

 

 

5,084

 

 

 

5,892

 

 

 

-

 

Stock option expense

 

 

4,249

 

 

 

-

 

 

 

-

 

 

 

4,249

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

4,249

 

 

 

-

 

 

 

4,112

 

 

 

-

 

 

 

-

 

 

 

4,112

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

4,112

 

 

 

-

 

Issuance of stock under award plans,

net of forfeitures

 

 

44,304

 

 

 

44

 

 

 

17

 

 

 

23,636

 

 

 

-

 

 

 

-

 

 

 

(754

)

 

 

20,651

 

 

 

44,304

 

 

 

-

 

 

 

48,269

 

 

 

-

 

 

 

-

 

 

 

19,175

 

 

 

-

 

 

 

-

 

 

 

(862

)

 

 

29,094

 

 

 

48,269

 

 

 

-

 

Amortization of unearned

compensation

 

 

1,400

 

 

 

-

 

 

 

-

 

 

 

1,400

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

1,400

 

 

 

-

 

 

 

1,000

 

 

 

-

 

 

 

-

 

 

 

1,000

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

1,000

 

 

 

-

 

Treasury stock acquired

 

 

(351,392

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

5,378

 

 

 

(351,392

)

 

 

(351,392

)

 

 

-

 

 

 

(197,511

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

3,450

 

 

 

(197,511

)

 

 

(197,511

)

 

 

-

 

Cash dividends declared

 

 

(363,624

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(363,624

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(363,624

)

 

 

-

 

 

 

(245,898

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(245,898

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(245,898

)

 

 

-

 

Distributions to noncontrolling

interests

 

 

(49,494

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(49,494

)

 

 

(67,380

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(67,380

)

BALANCES, September 29, 2018

 

$

10,174,421

 

 

 

380,154

 

 

$

152,061

 

 

$

2,065,299

 

 

$

9,814,073

 

 

$

(274,607

)

 

 

66,221

 

 

$

(1,964,689

)

 

$

9,792,137

 

 

$

382,284

 

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

 

 

Dividends declared per share were $0.40$0.4025 per share in the thirdsecond quarter of 20192020 ($0.380.40 per share in the thirdsecond quarter of 2018)2019) and $1.20$0.805 per share in the first ninesix months of 20192020 ($1.140.80 per share in the first ninesix months of 2018)2019).

InOn September 6, 2018, the Company announced that the Board of Directors had approved a new share repurchase program under which the Company is authorized to repurchase up to $2.0$2.00 billion of the Company’s common stock.stock and terminated any previously authorized share repurchase programs. Share repurchases will be made from time to time in the open market at prevailing market prices or through private transactions or block trades. The timing and amount of 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 September 28, 2019,July 4, 2020, the Company had approximately $1.3$1.16 billion remaining available for share repurchases under the program.

15.

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS): The following tables reflect the changes in accumulated other comprehensive income (loss) by component for the three- and nine-month periods ended September 28, 2019 and September 29, 2018 (in thousands):

 

 

Three-Month (13-Week) Period Ended

 

 

 

September 28, 2019

 

 

 

Gains and Losses on

 

 

Foreign Currency

 

 

Adjustment to Early

 

 

 

 

 

 

 

Hedging Derivatives

 

 

Gain (Loss)

 

 

Retiree Medical Plan

 

 

Total

 

Accumulated other comprehensive income

   (loss) at June 29, 2019

 

$

(11,100

)

 

$

(295,559

)

 

$

8,899

 

 

$

(297,760

)

Other comprehensive income (loss) before

   reclassifications

 

 

(3,315

)

 

 

(14,306

)

 

 

-

 

 

 

(17,621

)

Amounts reclassified from accumulated other

   comprehensive income (loss) into earnings (1)

 

 

1,615

 

 

 

-

 

 

 

-

 

 

 

1,615

 

Net current-period other comprehensive income

   (loss)

 

 

(1,700

)

 

 

(14,306

)

 

 

-

 

 

 

(16,006

)

Accumulated other comprehensive income (loss) at

   September 28, 2019

 

$

(12,800

)

 

$

(309,865

)

 

$

8,899

 

 

$

(313,766

)

 

 

 

15


Table of Contents

 

 

 

Nine-Month (39-Week) Period Ended

 

 

 

September 28, 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

 

 

(7,801

)

 

 

(5,219

)

 

 

-

 

 

 

(13,020

)

Amounts reclassified from accumulated other

   comprehensive income (loss) into earnings (1)

 

 

1,501

 

 

 

-

 

 

 

-

 

 

 

1,501

 

Net current-period other comprehensive income

   (loss)

 

 

(6,300

)

 

 

(5,219

)

 

 

-

 

 

 

(11,519

)

Other

 

 

-

 

 

 

-

 

 

 

1,886

 

 

 

1,886

 

Accumulated other comprehensive income (loss) at

   September 28, 2019

 

$

(12,800

)

 

$

(309,865

)

 

$

8,899

 

 

$

(313,766

)

 

(1)

Includes $1,615 and $1,501 of accumulated other comprehensive income (loss) reclassifications into cost of products sold for net losses on commodity contracts in the third quarter and first nine months of 2019, respectively. The tax impact of those reclassifications was $500 in both the third quarter and first nine months of 2019.

 

 

 

Three-Month (13-Week) Period Ended

 

 

 

September 29, 2018

 

 

 

Gains and Losses on

 

 

Foreign Currency

 

 

Adjustment to Early

 

 

 

 

 

 

 

Hedging Derivatives

 

 

Gain (Loss)

 

 

Retiree Medical Plan

 

 

Total

 

Accumulated other comprehensive income

   (loss) at June 30, 2018

 

$

(6,800

)

 

$

(294,864

)

 

$

5,632

 

 

$

(296,032

)

Other comprehensive income (loss) before

   reclassifications

 

 

(1,393

)

 

 

22,625

 

 

 

-

 

 

 

21,232

 

Amounts reclassified from accumulated other

   comprehensive income (loss) into earnings (2)

 

 

193

 

 

 

-

 

 

 

-

 

 

 

193

 

Net current-period other comprehensive income

   (loss)

 

 

(1,200

)

 

 

22,625

 

 

 

-

 

 

 

21,425

 

Accumulated other comprehensive income (loss) at

   September 29, 2018

 

$

(8,000

)

 

$

(272,239

)

 

$

5,632

 

 

$

(274,607

)

 

 

 

Nine-Month (39-Week) Period Ended

 

 

 

September 29, 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

 

 

(5,792

)

 

 

(14,726

)

 

 

-

 

 

 

(20,518

)

Amounts reclassified from accumulated other

   comprehensive income (loss) into earnings (2)

 

 

592

 

 

 

-

 

 

 

-

 

 

 

592

 

Net current-period other comprehensive income

   (loss)

 

 

(5,200

)

 

 

(14,726

)

 

 

-

 

 

 

(19,926

)

Accumulated other comprehensive income (loss) at

   September 29, 2018

 

$

(8,000

)

 

$

(272,239

)

 

$

5,632

 

 

$

(274,607

)

16

13


Table of Contents

 

14. (2)Accumulated Other Comprehensive Income (Loss)

The following tables reflect the changes in accumulated other comprehensive income (loss) by component for the three months and six months ended July 4, 2020 and June 29, 2019 (in thousands):

 

 

Three-Month (13-Week) Period Ended

 

 

 

July 4, 2020

 

 

 

Gains and Losses on

 

 

Foreign Currency

 

 

Adjustment to Early

 

 

 

 

 

 

 

Hedging Derivatives

 

 

Gain (Loss)

 

 

Retiree Medical Plan

 

 

Total

 

Accumulated other comprehensive

   income (loss) at April 4, 2020

 

$

(14,200

)

 

$

(361,234

)

 

$

7,807

 

 

$

(367,627

)

Other comprehensive income (loss)

   before reclassifications

 

 

757

 

 

 

23,491

 

 

 

-

 

 

 

24,248

 

Amounts reclassified from accumulated

   other comprehensive income (loss)

   into earnings (1)

 

 

2,543

 

 

 

-

 

 

 

-

 

 

 

2,543

 

Net current-period other comprehensive

   income (loss)

 

 

3,300

 

 

 

23,491

 

 

 

-

 

 

 

26,791

 

Accumulated other comprehensive

   income (loss) at July 4, 2020

 

$

(10,900

)

 

$

(337,743

)

 

$

7,807

 

 

$

(340,836

)

 

 

Six-Month (26-Week) Period Ended

 

 

 

July 4, 2020

 

 

 

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, 2019

 

$

(14,000

)

 

$

(296,773

)

 

$

7,807

 

 

$

(302,966

)

Other comprehensive income (loss) before

   reclassifications

 

 

(1,499

)

 

 

(40,970

)

 

 

-

 

 

 

(42,469

)

Amounts reclassified from accumulated

   other comprehensive income (loss)

   into earnings (1)

 

 

4,599

 

 

 

-

 

 

 

-

 

 

 

4,599

 

Net current-period other comprehensive income

   (loss)

 

 

3,100

 

 

 

(40,970

)

 

 

-

 

 

 

(37,870

)

Accumulated other comprehensive

   income (loss) at July 4, 2020

 

$

(10,900

)

 

$

(337,743

)

 

$

7,807

 

 

$

(340,836

)

(1)   Includes $193$2,543 and $592$4,599 of accumulated other comprehensive income (loss) reclassifications into cost of products sold for net losses on commodity contracts in the thirdsecond quarter and first ninesix months of 2018,2020, respectively. The tax impactimpacts of those reclassifications was $100were $900 and $200$1,600 in the thirdsecond quarter and first ninesix months of 2020, respectively.

Included in the $337.7 million foreign currency losses at July 4, 2020 are $191.5 million of losses related to our equity method investment in Duferdofin Nucor and $146.2 million of losses related primarily to our Canadian operations.

14


Table of Contents

 

 

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

)

 

 

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)   Includes $517 and $(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 2019, respectively. The tax impacts of those reclassifications were $200 and $0 in the second quarter and first six months of 2019, respectively.

15. 2018, respectively.Segments

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 and 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 The David J. Joseph Company and its affiliates (“DJJ”), primarily a scrap broker and processor; Nu-Iron Unlimited and Nucor Steel Louisiana LLC (“NSLA”), two facilities that produce direct reduced iron (“DRI”) used by the steel mills; and our natural gas production operations.

Net interest expense 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 investmentsinvestment in and advances to affiliates.

15


Table of Contents

Nucor’s results by segment for the thirdsecond quarter and first ninesix months of 20192020 and 20182019 were as follows (in thousands):

 

 

Three Months (13 Weeks) Ended

 

 

Nine Months (39 Weeks) Ended

 

 

Three Months (13 Weeks) Ended

 

 

Six Months (26 Weeks) Ended

 

 

Sept. 28, 2019

 

 

Sept. 29, 2018

 

 

Sept. 28, 2019

 

 

Sept. 29, 2018

 

 

July 4, 2020

 

 

June 29, 2019

 

 

July 4, 2020

 

 

June 29, 2019

 

Net sales to external customers:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Steel mills

 

$

3,244,473

 

 

$

4,401,610

 

 

$

10,897,322

 

 

$

12,151,843

 

 

$

2,513,961

 

 

$

3,703,447

 

 

$

6,033,231

 

 

$

7,652,849

 

Steel products

 

 

1,820,359

 

 

 

1,849,218

 

 

 

5,225,064

 

 

 

5,056,299

 

 

 

1,523,168

 

 

 

1,750,183

 

 

 

3,250,022

 

 

 

3,404,705

 

Raw materials

 

 

399,670

 

 

 

491,374

 

 

 

1,334,726

 

 

 

1,563,253

 

 

 

290,177

 

 

 

442,356

 

 

 

668,390

 

 

 

935,056

 

 

$

5,464,502

 

 

$

6,742,202

 

 

$

17,457,112

 

 

$

18,771,395

 

 

$

4,327,306

 

 

$

5,895,986

 

 

$

9,951,643

 

 

$

11,992,610

 

Intercompany sales:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Steel mills

 

$

825,237

 

 

$

1,055,093

 

 

$

2,542,008

 

 

$

3,019,199

 

 

$

663,244

 

 

$

814,548

 

 

$

1,532,336

 

 

$

1,716,771

 

Steel products

 

 

57,517

 

 

 

56,185

 

 

 

174,718

 

 

 

142,862

 

 

 

63,205

 

 

 

54,396

 

 

 

146,574

 

 

 

117,201

 

Raw materials

 

 

2,063,167

 

 

 

2,923,196

 

 

 

6,917,523

 

 

 

8,687,408

 

 

 

1,484,982

 

 

 

2,430,487

 

 

 

3,908,787

 

 

 

4,854,356

 

Corporate/eliminations

 

 

(2,945,921

)

 

 

(4,034,474

)

 

 

(9,634,249

)

 

 

(11,849,469

)

 

 

(2,211,431

)

 

 

(3,299,431

)

 

 

(5,587,697

)

 

 

(6,688,328

)

 

$

-

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

-

 

Earnings (loss) before income taxes and noncontrolling

interests:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Steel mills

 

$

309,939

 

 

$

1,095,360

 

 

$

1,578,257

 

 

$

2,617,647

 

 

$

150,424

 

 

$

578,920

 

 

$

306,930

 

 

$

1,268,318

 

Steel products

 

 

170,214

 

 

 

138,688

 

 

 

363,731

 

 

 

380,268

 

 

 

152,874

 

 

 

116,084

 

 

 

315,433

 

 

 

193,517

 

Raw materials

 

 

(10,599

)

 

 

(29,074

)

 

 

64,333

 

 

 

180,468

 

 

 

(1,389

)

 

 

21,709

 

 

 

(9,300

)

 

 

74,932

 

Corporate/eliminations

 

 

(89,215

)

 

 

(282,472

)

 

 

(401,744

)

 

 

(826,268

)

 

 

(120,852

)

 

 

(182,091

)

 

 

(285,709

)

 

 

(312,529

)

 

$

380,339

 

 

$

922,502

 

 

$

1,604,577

 

 

$

2,352,115

 

 

$

181,057

 

 

$

534,622

 

 

$

327,354

 

 

$

1,224,238

 

 

 

Sept. 28, 2019

 

 

Dec. 31, 2018

 

 

July 4, 2020

 

 

Dec. 31, 2019

 

Segment assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Steel mills

 

$

9,117,610

 

 

$

9,244,086

 

 

$

9,011,588

 

 

$

9,283,216

 

Steel products

 

 

4,730,410

 

 

 

4,734,636

 

 

 

4,414,063

 

 

 

4,610,628

 

Raw materials

 

 

3,225,367

 

 

 

3,492,126

 

 

 

3,125,590

 

 

 

3,316,479

 

Corporate/eliminations

 

 

1,432,878

 

 

 

449,740

 

 

 

2,214,724

 

 

 

1,134,343

 

 

$

18,506,265

 

 

$

17,920,588

 

 

$

18,765,965

 

 

$

18,344,666

 

 

17Amounts related to each segment’s earnings (loss) before income taxes and noncontrolling interests for the second quarter and first six months of 2020 that were previously disclosed in our news release attached as Exhibit 99.1 to our Current Report on Form 8-K furnished with the Securities and Exchange Commission on July 23, 2020 have been revised in this Note by immaterial amounts due to a reallocation of Corporate adjustments.

16. Revenue

The following tables disaggregate our revenue by major source for the second quarter and first six months of 2020 and 2019 (in thousands):

 

 

Three Months (13 Weeks) Ended July 4, 2020

 

 

Six Months (26 Weeks) Ended July 4, 2020

 

 

 

Steel

Mills

 

 

Steel

Products

 

 

Raw

Materials

 

 

Total

 

 

Steel

Mills

 

 

Steel

Products

 

 

Raw

Materials

 

 

Total

 

Sheet

 

$

1,065,004

 

 

$

-

 

 

$

-

 

 

$

1,065,004

 

 

$

2,643,433

 

 

$

-

 

 

$

-

 

 

$

2,643,433

 

Bar

 

 

811,054

 

 

 

-

 

 

 

-

 

 

 

811,054

 

 

 

1,873,720

 

 

 

-

 

 

 

-

 

 

 

1,873,720

 

Structural

 

 

347,258

 

 

 

-

 

 

 

-

 

 

 

347,258

 

 

 

797,757

 

 

 

-

 

 

 

-

 

 

 

797,757

 

Plate

 

 

290,645

 

 

 

-

 

 

 

-

 

 

 

290,645

 

 

 

718,321

 

 

 

-

 

 

 

-

 

 

 

718,321

 

Tubular Products

 

 

-

 

 

 

250,311

 

 

 

-

 

 

 

250,311

 

 

 

-

 

 

 

555,368

 

 

 

-

 

 

 

555,368

 

Rebar Fabrication

 

 

-

 

 

 

413,916

 

 

 

-

 

 

 

413,916

 

 

 

-

 

 

 

837,232

 

 

 

-

 

 

 

837,232

 

Other Steel Products

 

 

-

 

 

 

858,941

 

 

 

-

 

 

 

858,941

 

 

 

-

 

 

 

1,857,422

 

 

 

-

 

 

 

1,857,422

 

Raw Materials

 

 

-

 

 

 

-

 

 

 

290,177

 

 

 

290,177

 

 

 

-

 

 

 

-

 

 

 

668,390

 

 

 

668,390

 

 

 

$

2,513,961

 

 

$

1,523,168

 

 

$

290,177

 

 

$

4,327,306

 

 

$

6,033,231

 

 

$

3,250,022

 

 

$

668,390

 

 

$

9,951,643

 

16


Table of Contents

 

17.

REVENUE: The following tables disaggregate our revenue by major source for the third quarter and first nine months of 2019 and 2018 (in thousands):

 

 

 

Three Months (13 Weeks) Ended September 28, 2019

 

 

Nine Months (39 Weeks) Ended September 28, 2019

 

 

 

Steel

Mills

 

 

Steel

Products

 

 

Raw

Materials

 

 

Total

 

 

Steel

Mills

 

 

Steel

Products

 

 

Raw

Materials

 

 

Total

 

Sheet

 

$

1,513,884

 

 

$

-

 

 

$

-

 

 

$

1,513,884

 

 

$

5,071,027

 

 

$

-

 

 

$

-

 

 

$

5,071,027

 

Bar

 

 

979,082

 

 

 

-

 

 

 

-

 

 

 

979,082

 

 

 

3,173,289

 

 

 

-

 

 

 

-

 

 

 

3,173,289

 

Structural

 

 

378,670

 

 

 

-

 

 

 

-

 

 

 

378,670

 

 

 

1,214,355

 

 

 

-

 

 

 

-

 

 

 

1,214,355

 

Plate

 

 

372,837

 

 

 

-

 

 

 

-

 

 

 

372,837

 

 

 

1,438,651

 

 

 

-

 

 

 

-

 

 

 

1,438,651

 

Tubular Products

 

 

-

 

 

 

296,519

 

 

 

-

 

 

 

296,519

 

 

 

-

 

 

 

919,711

 

 

 

-

 

 

 

919,711

 

Rebar Fabrication

 

 

-

 

 

 

469,180

 

 

 

-

 

 

 

469,180

 

 

 

-

 

 

 

1,249,912

 

 

 

-

 

 

 

1,249,912

 

Other Steel Products

 

 

-

 

 

 

1,054,660

 

 

 

-

 

 

 

1,054,660

 

 

 

-

 

 

 

3,055,441

 

 

 

-

 

 

 

3,055,441

 

Raw Materials

 

 

-

 

 

 

-

 

 

 

399,670

 

 

 

399,670

 

 

 

-

 

 

 

-

 

 

 

1,334,726

 

 

 

1,334,726

 

 

 

$

3,244,473

 

 

$

1,820,359

 

 

$

399,670

 

 

$

5,464,502

 

 

$

10,897,322

 

 

$

5,225,064

 

 

$

1,334,726

 

 

$

17,457,112

 

 

 

Three Months (13 Weeks) Ended September 29, 2018

 

 

Nine Months (39 Weeks) Ended September 29, 2018

 

 

 

Steel

Mills

 

 

Steel

Products

 

 

Raw

Materials

 

 

Total

 

 

Steel

Mills

 

 

Steel

Products

 

 

Raw

Materials

 

 

Total

 

Sheet

 

$

2,051,634

 

 

$

-

 

 

$

-

 

 

$

2,051,634

 

 

$

5,692,281

 

 

$

-

 

 

$

-

 

 

$

5,692,281

 

Bar

 

 

1,243,890

 

 

 

-

 

 

 

-

 

 

 

1,243,890

 

 

 

3,592,475

 

 

 

-

 

 

 

-

 

 

 

3,592,475

 

Structural

 

 

503,733

 

 

 

-

 

 

 

-

 

 

 

503,733

 

 

 

1,348,987

 

 

 

-

 

 

 

-

 

 

 

1,348,987

 

Plate

 

 

602,353

 

 

 

-

 

 

 

-

 

 

 

602,353

 

 

 

1,518,100

 

 

 

-

 

 

 

-

 

 

 

1,518,100

 

Tubular Products

 

 

-

 

 

 

357,815

 

 

 

-

 

 

 

357,815

 

 

 

-

 

 

 

1,040,611

 

 

 

-

 

 

 

1,040,611

 

Rebar Fabrication

 

 

-

 

 

 

412,977

 

 

 

-

 

 

 

412,977

 

 

 

-

 

 

 

1,133,117

 

 

 

-

 

 

 

1,133,117

 

Other Steel Products

 

 

-

 

 

 

1,078,426

 

 

 

-

 

 

 

1,078,426

 

 

 

-

 

 

 

2,882,571

 

 

 

-

 

 

 

2,882,571

 

Raw Materials

 

 

-

 

 

 

-

 

 

 

491,374

 

 

 

491,374

 

 

 

-

 

 

 

-

 

 

 

1,563,253

 

 

 

1,563,253

 

 

 

$

4,401,610

 

 

$

1,849,218

 

 

$

491,374

 

 

$

6,742,202

 

 

$

12,151,843

 

 

$

5,056,299

 

 

$

1,563,253

 

 

$

18,771,395

 

18.

EARNINGS PER SHARE: The computations of basic and diluted net earnings per share for the third quarter and first nine months of 2019 and 2018 are as follows (in thousands, except per share amounts):

 

 

Three Months (13 Weeks) Ended

 

 

Nine Months (39 Weeks) Ended

 

 

 

Sept. 28, 2019

 

 

Sept. 29, 2018

 

 

Sept. 28, 2019

 

 

Sept. 29, 2018

 

Basic net earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic net earnings

 

$

275,031

 

 

$

676,656

 

 

$

1,163,320

 

 

$

1,713,988

 

Earnings allocated to participating securities

 

 

(1,655

)

 

 

(2,807

)

 

 

(6,295

)

 

 

(6,707

)

Net earnings available to common stockholders

 

$

273,376

 

 

$

673,849

 

 

$

1,157,025

 

 

$

1,707,281

 

Average shares outstanding

 

 

304,637

 

 

 

315,913

 

 

 

305,553

 

 

 

317,928

 

Basic net earnings per share

 

$

0.90

 

 

$

2.13

 

 

$

3.79

 

 

$

5.37

 

Diluted net earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted net earnings

 

$

275,031

 

 

$

676,656

 

 

$

1,163,320

 

 

$

1,713,988

 

Earnings allocated to participating securities

 

 

(1,656

)

 

 

(2,796

)

 

 

(6,295

)

 

 

(6,684

)

Net earnings available to common stockholders

 

$

273,375

 

 

$

673,860

 

 

$

1,157,025

 

 

$

1,707,304

 

Diluted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic shares outstanding

 

 

304,637

 

 

 

315,913

 

 

 

305,553

 

 

 

317,928

 

Dilutive effect of stock options and other

 

 

343

 

 

 

885

 

 

 

476

 

 

 

954

 

 

 

 

304,980

 

 

 

316,798

 

 

 

306,029

 

 

 

318,882

 

Diluted net earnings per share

 

$

0.90

 

 

$

2.13

 

 

$

3.78

 

 

$

5.35

 

 

 

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

 

 

18


TableContract liabilities are primarily related to deferred revenue resulting from cash payments received in advance from customers to protect against credit risk. Contract liabilities totaled $122.2 million as of ContentsJuly 4, 2020 ($108.6 million as of December 31, 2019), and are included in accrued expenses and other current liabilities in the condensed consolidated balance sheets.

17. Earnings Per Share

The computations of basic and diluted net earnings per share for the second quarter and first six months of 2020 and 2019 are as follows (in thousands, except per share amounts):

 

 

Three Months (13 Weeks) Ended

 

 

Six Months (26 Weeks) Ended

 

 

 

July 4, 2020

 

 

June 29, 2019

 

 

July 4, 2020

 

 

June 29, 2019

 

Basic net earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic net earnings

 

$

108,881

 

 

$

386,483

 

 

$

129,212

 

 

$

888,289

 

Earnings allocated to participating securities

 

 

(792

)

 

 

(2,431

)

 

 

(1,423

)

 

 

(4,536

)

Net earnings available to common stockholders

 

$

108,089

 

 

$

384,052

 

 

$

127,789

 

 

$

883,753

 

Basic average shares outstanding

 

 

302,921

 

 

 

305,461

 

 

 

302,915

 

 

 

306,017

 

Basic net earnings per share

 

$

0.36

 

 

$

1.26

 

 

$

0.42

 

 

$

2.89

 

Diluted net earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted net earnings

 

$

108,881

 

 

$

386,483

 

 

$

129,212

 

 

$

888,289

 

Earnings allocated to participating securities

 

 

(792

)

 

 

(2,430

)

 

 

(1,423

)

 

 

(4,532

)

Net earnings available to common stockholders

 

$

108,089

 

 

$

384,053

 

 

$

127,789

 

 

$

883,757

 

Diluted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic average shares outstanding

 

 

302,921

 

 

 

305,461

 

 

 

302,915

 

 

 

306,017

 

Dilutive effect of stock options and other

 

 

12

 

 

 

491

 

 

 

17

 

 

 

542

 

 

 

 

302,933

 

 

 

305,952

 

 

 

302,932

 

 

 

306,559

 

Diluted net earnings per share

 

$

0.36

 

 

$

1.26

 

 

$

0.42

 

 

$

2.88

 

 

The following stock options were excluded from the computation of diluted net earnings per share for the thirdsecond quarter and first ninesix months of 20192020 and 20182019 because their effect would have been anti-dilutive (shares in thousands):

 

 

Three Months (13 Weeks) Ended

 

 

Nine Months (39 Weeks) Ended

 

 

Three Months (13 Weeks) Ended

 

 

Six Months (26 Weeks) Ended

 

 

Sept. 28, 2019

 

 

Sept. 29, 2018

 

 

Sept. 28, 2019

 

 

Sept. 29, 2018

 

 

July 4, 2020

 

 

June 29, 2019

 

 

July 4, 2020

 

 

June 29, 2019

 

Anti-dilutive stock options:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average shares

 

 

963

 

 

 

265

 

 

 

963

 

 

 

89

 

 

 

3,749

 

 

 

963

 

 

 

3,724

 

 

 

963

 

Weighted-average exercise price

 

$

60.92

 

 

$

65.80

 

 

$

60.92

 

 

$

65.80

 

 

$

50.69

 

 

$

60.92

 

 

$

51.04

 

 

$

60.92

 


18. Debt

19In May 2020, Nucor issued $500.0 million of 2.000% Notes due 2025 and $500.0 million of 2.700% Notes due 2030. Net proceeds of the issuances were $989.4 million. Costs of $8.4 million associated with the issuances have been capitalized and will be amortized over the life of the notes.

17


Table of Contents

19. Subsequent Event

On July 27, 2020, Nucor became an obligor with respect to $162.6 million in 40-year variable-rate Green Bonds to partially fund the capital costs, in particular the expenditures associated with pollution prevention and control including waste recycling, associated with the construction of Nucor’s plate mill located in Brandenburg, Kentucky. The net proceeds from the debt issuance are being held in a trust account pending disbursement for the construction of the facility.

18


Table of Contents

 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Certain statements made in this Quarterly Report on Form 10-Q, or in other public filings, press releases, or other written or oral communications made by Nucor, which are not historical facts are forward-looking statements thatsubject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve risks and uncertainties.uncertainties which we expect will or may occur in the future and may impact our business, financial condition and results of operations. The words “anticipate,” “believe,” “expect,” “project,” “may,” “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 market 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 result in a delay or cancellation 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;States, as well as prevailing domestic prices for oil and gas; (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.performance; (14) the impact of the COVID-19 pandemic; and (15) the risks discussed in “Item 1A. Risk Factors” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 and in “Item 1A. Risk Factors” of this report and elsewhere herein.

Caution should be taken not to place undue reliance on the forward-looking statements included in this report. We assume no obligation to update any forward-looking statements except as may be required by law. In evaluating forward-looking statements, these risks and uncertainties should be considered, together with the other risks described from time to time in our reports and other filings with the Securities and Exchange Commission.

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 and “Item 1A. Risk Factors” 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 on Form 10-K for the year ended December 31, 2018.2019.

Overview

Nucor and its affiliates manufacture steel and steel products. Nucor also produces direct reduced iron (“DRI”)DRI for use in its steel mills. Through The David J. Joseph Company and its affiliates (“DJJ”),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, NuMit and 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 and processor; Nu-Iron Unlimited and Nucor Steel Louisiana,NSLA, two facilities that produce DRI used by the steel mills; and our natural gas production operations.

The average utilization rates of all operating facilities in the steel mills, steel products and raw materials segments were approximately 85%79%, 71%69% and 70%62%, respectively, in the first ninesix months of 20192020 compared with approximately 93%85%, 74%68% and 73%72%, respectively, in the first ninesix months of 2018.2019.

In March 2019,19


Table of Contents

COVID-19 Update

The COVID-19 pandemic continues to impact Nucor’s operations and we believe it is currently the most significant ongoing event impacting almost all aspects of our business. Our most important value is the health and safety of our teammates, their families and the communities where we operate. We have formed several internal task forces to closely monitor developments related to the pandemic and provide guidance to Nucor announced its plansfacilities. Our facilities around the country are each taking steps to build a newrespond to COVID-19 based on the nature of their operations and the actions being taken by their state ofand local governments. We have restricted travel, upgraded the art steel plate mill in Brandenburg, Kentucky. The new plate mill will have an estimated annual capacity of 1.2 million tonscleaning practices at our facilities and employ approximately 400 people. The new plate mill will significantly strengthen Nucor’s plate product portfolio, givingoffices, implemented remote work arrangements for teammates wherever possible, and instituted social distancing measures throughout the Company the abilityCompany. Across Nucor, we remain committed to produce approximately 97% of the products demanded in the current domestic plate market, including specialty higher-margin products. The new plate mill will complement Nucor’s existing plate mills in North Carolina, Alabamaprotecting our teammates while minimizing disruptions to our customers and Texas and is expected to be fully operational in 2022.supply chain.

Results of Operations

 

Nucor reported consolidated net earnings of $0.90$108.9 million, or $0.36 per diluted share, for the second quarter of 2020 and $129.2 million, or $0.42 per diluted share, for the first six months of 2020. These are significant decreases when compared to the respective prior year periods in which we reported net earnings of $386.5 million, or $1.26 per diluted share, for the thirdsecond quarter of 2019 and $3.78$888.3 million, or $2.88 per diluted share, infor the first ninesix months of 2019. The thirdmajor factor driving the decreased 2020 performance has been the ongoing COVID-19 pandemic that began to impact the domestic economy and our business late in the first quarter performance reflectsof 2020. Reduced production schedules by our customers and weak demand in energy have driven steel prices and volumes down since the continuing downward trendpandemic began, disrupting the positive momentum we felt as we began the year. A bright spot has been the resiliency of nonresidential construction. Though many state and local governments have eased shelter-in-place or stay-at-home orders to varying degrees, recent increases in earnings that

20


TableCOVID-19 cases continue to cause uncertainty in overall market conditions and these market conditions could adversely impact our business in the second half of Contents2020.

 

we have experiencedThough second quarter of 2020 net earnings of $108.9 million, or $0.36 per diluted share, is an increase compared to first quarter of 2020 net earnings of $20.3 million, or $0.07 per diluted share, the drivers of those results are very different. The most significant factor affecting the change in 2019. We believe that inventory levels were overstocked by both service center and end-use customers at the end of a very strong 2018, and as a result the excess inventory throughout the supply chain has resulted in destocking by many of our customers throughnet earnings from the first nine monthsquarter to the second quarter was non-cash losses on assets of 2019. This customer destocking, combined$287.8 million in the first quarter of 2020 related to our equity method investment in the Duferdofin Nucor joint venture located in Italy. The first quarter of 2020 started off with difficult weather conditions earlier in 2019 and falling average selling prices, have made steel market conditions much more challenging in 2019 than what we experienced instrong performance from our record-setting 2018. Our steel products segment had a strong thirdand an 89% utilization rate for our steel mills segment, showing an upward trajectory from the fourth quarter of 2019, and benefited from lower steel prices and excellent commercial execution as nonresidential construction conditions remained positive. Our raw materials segment operating results have been negatively impacted by margin compressionbut that momentum was disrupted late in the first quarter of 2020 due to decreased pricing for raw materials.the impacts of COVID-19.

 

The following discussion will provide greater quantitative and qualitative analysis of Nucor’s performance in the thirdsecond quarter and first ninesix months of 20192020 as compared to the respective prior year periods.

Net Sales

Net sales to external customers by segment for the thirdsecond quarter and first ninesix months of 20192020 and 20182019 were as follows (in thousands):

 

 

Three Months (13 Weeks) Ended

 

Nine Months (39 Weeks) Ended

 

Three Months (13 Weeks) Ended

 

Six Months (26 Weeks) Ended

 

Sept. 28, 2019

 

Sept. 29, 2018

 

% Change

 

Sept. 28, 2019

 

Sept. 29, 2018

 

% Change

 

July 4, 2020

 

June 29, 2019

 

% Change

 

July 4, 2020

 

June 29, 2019

 

% Change

Steel mills

 

$3,244,473

 

$4,401,610

 

-26%

 

$10,897,322

 

$12,151,843

 

-10%

 

$2,513,961

 

$3,703,447

 

-32%

 

$6,033,231

 

$7,652,849

 

-21%

Steel products

 

1,820,359

 

1,849,218

 

-2%

 

5,225,064

 

5,056,299

 

3%

 

1,523,168

 

1,750,183

 

-13%

 

3,250,022

 

3,404,705

 

-5%

Raw materials

 

399,670

 

491,374

 

-19%

 

1,334,726

 

1,563,253

 

-15%

 

290,177

 

442,356

 

-34%

 

668,390

 

935,056

 

-29%

Total net sales

 

$5,464,502

 

$6,742,202

 

-19%

 

$17,457,112

 

$18,771,395

 

-7%

 

$4,327,306

 

$5,895,986

 

-27%

 

$9,951,643

 

$11,992,610

 

-17%

 

Net sales for the thirdsecond quarter of 20192020 decreased 19%27% from the third quarter of 2018. Average sales price per ton decreased 13% from $957 in the third quarter of 2018 to $834 in the thirdsecond quarter of 2019. Total tons shipped to outside customers in the thirdsecond quarter of 2020 were 5,479,000 tons, a 19% decrease from the second quarter of 2019. Average sales price per ton decreased 10% from $877 in the second quarter of 2019 were 6,555,000 tons, a 7% decrease fromto $790 in the thirdsecond quarter of 2018.2020.

 

Net sales for the first ninesix months of 2020 decreased 17% from the first six months of 2019. Average sales price per ton decreased 12% from $889 in the first six months of 2019 decreased 7% fromto $786 in the first ninesix months of 2018.2020. Total tons shipped to outside customers in the first ninesix months of 20192020 were 20,046,00012,666,000 tons, a 5%6% decrease from the first nine months of 2018. Average sales price per ton decreased 2% from $885 in the first nine months of 2018 to $871 in the first ninesix months of 2019.

20


Table of Contents

In the steel mills segment, sales tons for the thirdsecond quarter and first ninesix months of 20192020 and 20182019 were as follows (in thousands):

 

 

Three Months (13 Weeks) Ended

 

Nine Months (39 Weeks) Ended

 

Three Months (13 Weeks) Ended

 

Six Months (26 Weeks) Ended

 

Sept. 28, 2019

 

Sept. 29, 2018

 

% Change

 

Sept. 28, 2019

 

Sept. 29, 2018

 

% Change

 

July 4, 2020

 

June 29, 2019

 

% Change

 

July 4, 2020

 

June 29, 2019

 

% Change

Outside steel shipments

 

4,559

 

5,031

 

-9%

 

14,013

 

15,125

 

-7%

 

3,758

 

4,682

 

-20%

 

8,940

 

9,454

 

-5%

Inside steel shipments

 

1,229

 

1,262

 

-3%

 

3,564

 

3,876

 

-8%

 

1,011

 

1,118

 

-10%

 

2,327

 

2,335

 

-

Total steel shipments

 

5,788

 

6,293

 

-8%

 

17,577

 

19,001

 

-7%

 

4,769

 

5,800

 

-18%

 

11,267

 

11,789

 

-4%

 

Net sales for the steel mills segment decreased 26%32% in the thirdsecond quarter of 20192020 from the thirdsecond quarter of 2018,2019, due primarily to a 19%20% decrease in tons sold to outside customers and a 15% decrease in the average sales price per ton from $876$788 to $711 and a 9% decrease in$672. Total tons sold to outside customers. Averagecustomers and average selling prices and volumes decreased across all product groups within the steel mills segment in the thirdsecond quarter of 20192020 as compared to the thirdsecond quarter of 2018.2019.

 

Net sales for the steel mills segment decreased 10%21% in the first ninesix months of 2020 from the first six months of 2019, fromdue to a 16% decrease in the average sales price per ton and a 5% decrease in tons sold to outside customers.

Outside sales tonnage for the steel products segment for the second quarter and first ninesix months of 2018,2020 and 2019 was as follows (in thousands):

 

 

Three Months (13 Weeks) Ended

 

Six Months (26 Weeks) Ended

 

 

July 4, 2020

 

June 29, 2019

 

% Change

 

July 4, 2020

 

June 29, 2019

 

% Change

Joist

 

122

 

116

 

5%

 

253

 

226

 

12%

Deck

 

111

 

116

 

-4%

 

236

 

222

 

6%

Cold finish

 

75

 

131

 

-43%

 

201

 

274

 

-27%

Rebar fabrication

 

309

 

328

 

-6%

 

620

 

587

 

6%

Piling products

 

156

 

164

 

-5%

 

336

 

302

 

11%

Tubular products

 

249

 

245

 

2%

 

536

 

508

 

6%

Other steel products

 

87

 

97

 

-10%

 

186

 

196

 

-5%

Total steel products

 

1,109

 

1,197

 

-7%

 

2,368

 

2,315

 

2%

Net sales for the steel products segment decreased 13% in the second quarter of 2020 compared to the second quarter of 2019, due primarily due to a 7% decrease in tons sold to outside customers and a 3%6% decrease in the average sales price per ton from $804$1,462 to $776.

21


Table of Contents

Outside sales tonnage for$1,372. Average selling prices decreased across most businesses within the steel products segment forin the thirdsecond quarter and first nine monthsof 2020 as compared to the second quarter of 2019, and 2018 was as follows (in thousands):with the most notable exception being our rebar fabrication business.

 

 

Three Months (13 Weeks) Ended

 

Nine Months (39 Weeks) Ended

 

 

Sept. 28, 2019

 

Sept. 29, 2018

 

% Change

 

Sept. 28, 2019

 

Sept. 29, 2018

 

% Change

Joist sales

 

133

 

136

 

-2%

 

359

 

355

 

1%

Deck sales

 

132

 

130

 

2%

 

354

 

352

 

1%

Cold finish sales

 

116

 

141

 

-18%

 

390

 

437

 

-11%

Fabricated concrete reinforcing steel

   sales

 

342

 

324

 

6%

 

929

 

951

 

-2%

Piling products sales

 

160

 

152

 

5%

 

462

 

438

 

5%

Tubular products sales

 

272

 

259

 

5%

 

780

 

829

 

-6%

Other steel products

 

107

 

126

 

-15%

 

303

 

343

 

-12%

Total steel products

 

1,262

 

1,268

 

-

 

3,577

 

3,705

 

-3%

 

Net sales for the steel products segment decreased 2%5% in the third quarterfirst six months of 20192020 compared to the third quarterfirst six months of 2018,2019, due primarily to a 1%7% decrease in the average sales price per ton from $1,459$1,471 to $1,442 and$1,372 which was partially offset by a slight decrease2% increase in tons shippedsold to outside customers. While averageAverage selling prices increased fordecreased across most businesses within the steel products segment in the third quarter of 2019 as compared to the third quarter of 2018, our tubular products businesses experienced lower average selling prices.

Net sales for the steel products segment increased 3% in the first ninesix months of 2019 from the first nine months of 2018, due primarily to a 7% increase in the average sales price per ton from $1,365 to $1,461, which was partially offset by a 3% decrease in volume. Average selling prices increased across all businesses within the steel products segment, except for our tubular products businesses, in the first nine months of 20192020 as compared to the first nine months of 2018. The largest decreases in volume in the first ninesix months of 2019, as compared towith the first nine months of 2018 were inmost notable exception being our tubular products and cold finished products businesses.rebar fabrication business.

Net sales for the raw materials segment decreased 19%34% and 29% in the thirdsecond quarter and first six months of 2019 compared to2020, respectively, from the third quarter of 2018,same prior year periods. The decreases were primarily due primarily to decreased average selling prices at DJJ’s brokerage operations and decreased volumes at both DJJ’s scrap processing and brokerage operations. In the thirdsecond quarter of 2019,2020, approximately 89% of outside sales for the raw materials segment were from the brokerage operations of DJJ, and approximately 10%8% of outside sales were from the scrap processing operations of DJJ (89%(92% and 9%7%, respectively, in the thirdsecond quarter of 2018)2019).

Net sales for the raw materials segment decreased 15% in the first nine months of 2019 from the first nine months of 2018, due primarily to decreased average selling prices at DJJ’s brokerage operations and, to a lesser extent, decreased average selling prices and volumes at DJJ’s scrap processing operations. In the first ninesix months of 2019,2020, approximately 90%88% 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 (90%(91% and 9%8%, respectively, in the first ninesix months of 2018)2019).

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Gross Margins

Nucor recorded gross margins of $572.5$378.0 million (10%(9%) in the thirdsecond quarter of 2019,2020, which was a decrease compared with $1.29 billion (19%$775.5 million (13%) in the thirdsecond quarter of 2018.2019.

 

The primary driver for the decrease in gross margins in the thirdsecond quarter of 20192020 as compared to the thirdsecond quarter of 20182019 was decreased metal margin in the steel mills segment. Metal margin is the difference between the selling price of steel and the cost of scrap and scrap substitutes. The average scrap and scrap substitute cost per gross ton used in the thirdsecond quarter of 20192020 was $299,$284, a 20%14% decrease compared to $374$330 in the thirdsecond quarter of 2018.2019. Despite the decrease in average scrap and scrap substitute cost per gross ton used, metal margin in the steel mills segment decreased due to lower volumes and average selling prices and volumes.prices.

Scrap prices are driven by the global supply and demand for scrap and other iron-based raw materials used to make steel. Scrap prices decreased during the first nine months of 2019. As we begin the fourththird quarter of 2019,2020, we believeexpect a stable outlook for scrap prices have bottomed.prices.

 

Pre-operating and start-up costs of new facilities increased to approximately $28$22 million in the thirdsecond quarter of 20192020 from approximately $11$21 million in the thirdsecond quarter of 2018. The increase2019. Pre-operating and start-up costs in the second quarter of 2020 primarily related to the plate mill being built in Kentucky, the bar mill being built in Florida and the merchant bar quality mill expansion at our bar mill in Illinois. In the second quarter of 2019, pre-operating and start-up costs was duerelated primarily to increased costs at the bar millsmill in Missouri, the sheet mill expansion in Kentucky, the upgrades at our Louisiana DRI facility and the bar mill being built in Missouri and Florida, increased costs for the cold mill expansion at our sheet mill in Arkansas and increased costs related to the expansion at our sheet mill in Kentucky.Florida. 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.

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Gross margins in the steel products segment increased in the thirdsecond quarter of 20192020 as compared to the thirdsecond quarter of 2018.2019. The primary driver for this increase was the increased profitability oflarge increase in margins from our joist, deck, rebar fabrication and building systemtubular products businesses which wasas demand in nonresidential construction markets remains resilient. These large increases were partially offset by the decreased profitability ofmargins at our tubular products businesses.cold finish business.

 

Gross margins in the raw materials segment decreased in the thirdsecond quarter of 20192020 as compared to the thirdsecond quarter of 2018,2019, primarily due primarily to decreased margins at DJJ’s brokerage and scrap processing operations, as well as margin contraction at our DRI facilities.

Nucor’s DRI facilities had outages in
the decreased profitabilitysecond quarter of 2020. Our Louisiana DRI facility halted production for approximately three weeks in April out of concern for the health and safety of our DRI facilities, which experienced lower average selling pricesteammates in an area of the country that, at the time, was experiencing a particularly aggressive outbreak of COVID-19 cases and increased iron ore costs in the third quarter of 2019.response to market conditions. Our DRI facility in Louisiana began a planned maintenance outageTrinidad stopped production in early September of 2019 that is expectedlate March to last until mid-November of 2019.comply with the country’s stay-at-home orders related to the COVID-19 pandemic. The Trinidad DRI facility resumed production in May.

Gross margins related to DJJ’s scrap processing operations in the third quarter of 2019 decreased significantly compared to the third quarter of 2018 due to margin compression and decreased volumes. The flow of scrap into DJJ’s scrap yards declined in the third quarter of 2019 as compared to the third quarter of 2018.

Included in the third quarter of 2018 gross margins of the raw materials segment was an $18.0 million benefit related to insurance recoveries.

In the first nine months of 2019, Nucor recorded gross margins of $2.24$1.01 billion (13%(10%), in the first six months of 2020, which was a decrease from $3.18compared with $1.67 billion (17%(14%) in the first ninesix months of 2018.2019.

 

The primary driver for the decrease in gross margins in the first ninesix months of 20192020 as compared to the first ninesix months of 20182019 was decreased metal margin in the steel mills segment. The average scrap and scrap substitute cost per gross ton used in the first ninesix months of 20192020 was $328,$289, a 9%15% decrease compared to $361$341 in the first ninesix months of 2018.2019. Despite the decrease in average scrap and scrap substitute cost per gross ton used, metal margin in the steel mills segment decreased due to lower average selling prices and volumes.

 

Pre-operating and start-up costs of new facilities increased to approximately $68$51 million in the first ninesix months of 20192020 from approximately $19$40 million in the first ninesix months of 2018. The increase in pre-operating and start-up costs was due to the previously mentioned projects.2019.

 

Gross margins in the steel products segment decreasedincreased in the first ninesix months of 20192020 as compared to the first ninesix months of 2018,2019, primarily due to the decreased profitabilityincreased margins across most of our steel product businesses, most notably at our tubular products and rebar fabrication businesses, which waswere partially offset by higherdecreased margins at our joist, deck and building system businesses.cold finish business.

 

Gross margins in the raw materials segment significantly decreased in the first ninesix months of 20192020 as compared to the first ninesix months of 2018,2019, primarily due primarily to the decreased profitability ofmargins at DJJ’s brokerage and scrap processing operations, as well as margin contraction at our DRI facilities, which experienced lower average selling prices and increased iron ore costs in the first nine months of 2019.facilities.

Gross margins related to DJJ’s scrap processing operations in the first nine months of 2019 decreased significantly compared to the first nine months of 2018 due to margin compression and decreased volumes. The flow of scrap into DJJ’s scrap yards declined in the first nine months of 2019 as compared to the first nine months of 2018. Gross margins for DJJ’s brokerage operations also decreased in the first nine months of 2019 as compared to the first nine months of 2018.

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

Marketing, Administrative and Other Expenses

A major component of marketing, administrative and other expenses is profit sharing and other incentive compensation costs. These costs, which are based upon and fluctuate with Nucor’s financial performance, decreased $81.3by $44.0 million in the thirdsecond quarter of 20192020 as compared to the thirdsecond quarter of 2018,2019, and decreased $116.4by $111.3 million in the first ninesix months of 20192020 as compared to the first ninesix months of 2018.2019. These decreases were due to Nucor’s decreased

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profitability in the second quarter and first six months of 2020 as compared to the respective prior year periods, which resulted in significantly decreased accruals related to profit sharing.

Included in marketing, administrative and other expenses in the first ninesix months 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 third quarter and first nine months of 2018 were a $6.8 million benefit and a $20.5 million benefit, respectively, related to insurance recoveries.

Equity in Losses (Earnings) of Unconsolidated Affiliates

Equity in losses (earnings) of unconsolidated affiliates was $1.6$14.1 million and $(1.1) million in the thirdsecond quarter of 2020 and 2019, which compared to equity in earnings ofunconsolidated affiliates of $13.6 million in the third quarter of 2018. Equity in earnings of unconsolidated affiliates was $2.5respectively, and $14.9 million and $34.2$(4.0) million in the first ninesix months of 20192020 and 2018,2019, respectively. The decreases in equity method investment earnings were primarily due to margin compressiondecreased results of NuMit and decreased volumesincreased losses at NuMit.Nucor-JFE.

 

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Table of ContentsLosses on Assets

 

Impairment of Assets – There were no impairment chargesIncluded in the thirdfirst six months of 2020 earnings were losses on assets of $292.8 million related to our equity method investment in Duferdofin Nucor. Nucor determined that a triggering event occurred in the first quarter and first nine months of 2019. In2020 due to adverse developments in the third quarter and first nine monthsjoint venture’s commercial outlook, which have been exacerbated by the COVID19 pandemic, all of 2018,which have negatively impacted the joint venture’s strategic direction.

As a part of the losses on assets, Nucor recorded a $110.0 millionnoncash impairment charge related toof $255.0 million on its proved producing natural gas well assetsequity method investment in Duferdofin Nucor that is included in the raw materialssteel mills segment (see Note 3earnings. Additionally, the Company recorded a $37.8 million charge to fully reserve its outstanding note receivable from Duferdofin Nucor. This impact is recorded in the condensed consolidated financial statements).Corporate/eliminations line.

Interest Expense (Income)

Net interest expense for the thirdsecond quarter and first ninesix months of 20192020 and 20182019 was as follows (in thousands):

 

 

Three Months (13 Weeks) Ended

 

 

Nine Months (39 Weeks) Ended

 

 

Three Months (13 Weeks) Ended

 

 

Six Months (26 Weeks) Ended

 

 

Sept. 28, 2019

 

 

Sept. 29, 2018

 

 

Sept. 28, 2019

 

 

Sept. 29, 2018

 

 

July 4, 2020

 

 

June 29, 2019

 

 

July 4, 2020

 

 

June 29, 2019

 

Interest expense

 

$

40,721

 

 

$

44,789

 

 

$

119,736

 

 

$

120,308

 

 

$

38,849

 

 

$

41,953

 

 

$

86,445

 

 

$

79,015

 

Interest income

 

 

(9,435

)

 

 

(7,588

)

 

 

(26,977

)

 

 

(16,542

)

 

 

(3,042

)

 

 

(8,923

)

 

 

(9,728

)

 

 

(17,542

)

Interest expense, net

 

$

31,286

 

 

$

37,201

 

 

$

92,759

 

 

$

103,766

 

 

$

35,807

 

 

$

33,030

 

 

$

76,717

 

 

$

61,473

 

 

Interest expense decreased in the thirdsecond quarter and first nine months of 20192020 as compared to the thirdsecond quarter andof 2019 due to increased capitalized interest; however, capitalized interest for the first ninesix months of 2018 due2020 decreased compared to an increase in capitalized interest related to capital projects being constructed in the first ninesix months of 2019. Included in interest expense in the first nine months of 2018 was the benefit received from the settlement of a treasury lock instrument that was entered into in anticipation of the Company’s debt issuance that occurred

Interest income decreased in the second quarter of 2018. The Company did not elect hedge accounting for this instrument.

Interest income increased in the third quarter and first ninesix months of 20192020 as compared to the thirdsecond quarter and first ninesix months of 20182019 due to an increasea decrease in average interest rates on investments.

Earnings (Loss) Before Income Taxes and Noncontrolling InterestsEarnings

The following table presents earnings (loss) before income taxes and noncontrolling interests by segment for the thirdsecond quarter and first ninesix months of 20192020 and 2018 were as follows2019 (in thousands):. The changes between periods were driven by the quantitative and qualitative factors previously discussed.

 

 

Three Months

 

 

Nine Months

 

 

(13 Weeks) Ended

 

 

(39 Weeks) Ended

 

 

Three Months

 

 

Six Months

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(13 Weeks) Ended

 

 

(26 Weeks) Ended

 

 

Sept. 28, 2019

 

 

Sept. 29, 2018

 

 

Sept. 28, 2019

 

 

Sept. 29, 2018

 

 

July 4, 2020

 

 

June 29, 2019

 

 

July 4, 2020

 

 

June 29, 2019

 

Steel mills

 

$

309,939

 

 

$

1,095,360

 

 

$

1,578,257

 

 

$

2,617,647

 

 

$

150,424

 

 

$

578,920

 

 

$

306,930

 

 

$

1,268,318

 

Steel products

 

 

170,214

 

 

 

138,688

 

 

 

363,731

 

 

 

380,268

 

 

 

152,874

 

 

 

116,084

 

 

 

315,433

 

 

 

193,517

 

Raw materials

 

 

(10,599

)

 

 

(29,074

)

 

 

64,333

 

 

 

180,468

 

 

 

(1,389

)

 

 

21,709

 

 

 

(9,300

)

 

 

74,932

 

Corporate/eliminations

 

 

(89,215

)

 

 

(282,472

)

 

 

(401,744

)

 

 

(826,268

)

 

 

(120,852

)

 

 

(182,091

)

 

 

(285,709

)

 

 

(312,529

)

 

$

380,339

 

 

$

922,502

 

 

$

1,604,577

 

 

$

2,352,115

 

 

$

181,057

 

 

$

534,622

 

 

$

327,354

 

 

$

1,224,238

 

 

Earnings before income taxes and noncontrolling interests for the steel mills segment in the third quarter and first nine months of 2019 decreased compared to the respective prior year periods, primarily due to the previously mentioned lower average selling prices, volumes and metal margin. Excess inventory throughout the supply chain resulted in continued destocking by many of our customers through the first nine months of 2019. Additionally, unusually wet weather conditions earlier in 2019 negatively impacted markets and projects located in areas affected by these weather conditions. Overall operating rates decreased from 92% and 93% for the third quarter and first nine months of 2018, respectively, to 83% and 85% for the third quarter and first nine months of 2019, respectively.

In the steel products segment, earnings before income taxes and noncontrolling interests increased in the third quarter of 2019 as compared to the third quarter of 2018, primarily due to the increased performance at our joist, deck, rebar fabrication and building systems businesses, which have implemented efficiency initiatives and made adjustments to their business models. This increase was partially offset by the continued trend of decreased earnings at our tubular products operations, which drove the decrease in earnings of the steel products segment in the first nine months of 2019 as compared to the first nine months of 2018. Our tubular products are suffering from aggressive destocking by service center customers, resulting in lower order rates, which is driving down prices and margins.

The performance of our raw materials segment increased in the third quarter of 2019 as compared to the third quarter of 2018, primarily due to the absence of the $110.0 million impairment charge related to our proved producing natural gas well assets that was recorded in the third quarter of 2018. This improved performance was partially offset by the decreased performance from our DRI facilities and DJJ’s scrap processing operations in the third quarter of 2019 and the $24.8 million benefit related to insurance recoveries that was recorded in the third quarter of 2018.

The profitability of our raw materials segment decreased in the first nine months of 2019 as compared to the first nine months of 2018, primarily due to the decreased performance from our DRI facilities and DJJ’s scrap processing operations.Partially offsetting the decrease in profitability in the first nine months of 2019 was a benefit of $33.7 million related to the gain

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on the sale of an equity method investment in the raw materials segment. Included in the first nine months of 2018 was the $110.0 million impairment charge related to our proved producing natural gas well assets, which was partially offset by the benefit of $48.1 million related to insurance recoveries.

The decrease in the loss of the corporate/eliminations line in the third quarter and first nine months of 2019 as compared to the respective prior year periods was primarily due to decreased intercompany eliminations of profit in inventory as well as lower profit sharing costs.

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 decrease in earnings attributable to noncontrolling interests in the thirdsecond quarter and first nine months of 20192020 as compared to the thirdsecond quarter and first nine months of 20182019 was primarily due to lower metal margins and decreased sales volume in the decreasedsecond quarter of 2020 as compared to the second quarter of 2019. The increase in earnings attributable to noncontrolling interests in the first six months of 2020 as compared to the first six months of 2019 was mainly the result of the higher earnings of NYS, which was a result of decreaseddue to increased sales volume in the first ninesix months of 20192020 as compared to the first ninesix months of 2018.2019. 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 six months of both 2020 and 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 The effective tax rate for the thirdsecond quarter of 20192020 was 22.8%26.5% as compared to 23.4%22.9% for the thirdsecond quarter of 2018.2019. The increase in the effective tax rate between 2019 and 2020 was primarily due to a $5.3 million unfavorable non-cash, out-of-period adjustment to deferred tax balances during the second quarter of 2020. The expected effective tax rate for the full year of 20192020 is approximately 23.0%32.3% as compared to 23.2%23.1% for the full year of 2018.2019. The increase in the expected rate for the full year of 2020 as compared to the rate for the full year of 2019 is primarily due to the $255.0 million financial statement impairment of our equity method investment in Duferdofin Nucor in the first six months of 2020. The impairment has no corresponding impact to the provision for income taxes.

We estimate that in the next 12 months our gross unrecognized tax benefits, which totaled $54.7$52.4 million at September 28, 2019,July 4, 2020, exclusive of interest, could decrease by as much as $8.1$7.1 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 2014. The tax years 2015 through 2018 remain open to examination by the Internal Revenue Service. The Canada Revenue Agency has concluded its examination of the 2012 and 20132015 Canadian income tax returns for Harris Steel Group Inc. and certain related affiliates. The 2015 tax year isaffiliates are currently under examination by the Canada Revenue Agency. The Trinidad and Tobago Inland Revenue Division has concluded its examination of the Nu-Iron Unlimited 2013 corporate income tax return. The tax years 20122013 through 2018 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 $275.0$108.9 million, or $0.90$0.36 per diluted share, in the thirdsecond quarter of 20192020 as compared to consolidated net earnings of $676.7$386.5 million, or $2.13$1.26 per diluted share, in the thirdsecond quarter of 2018.2019. Net earnings attributable to Nucor stockholders as a percentage of net sales were 5%2.5% and 10%6.6% in the thirdsecond quarter of 2020 and 2019, and 2018, respectively.

Nucor reported consolidated net earnings of $1.16 billion,$129.2 million, or $3.78$0.42 per diluted share, in the first ninesix months of 20192020 as compared to consolidated net earnings of $1.71 billion,$888.3 million, or $5.35$2.88 per diluted share, in the first ninesix months of 2018.2019. Net earnings attributable to Nucor stockholders as a percentage of net sales were 7%1.3% and 9%7.4% in the first ninesix months of 20192020 and 2018,2019, respectively. Annualized return on average stockholders’ equity was 15%2.5% and 25%17.7% in the first ninesix months of 20192020 and 2018,2019, respectively.


OutlookNucor’s earnings

The ongoing COVID-19 pandemic continues to cause uncertainty in the fourth quarter of 2019 are expected to decreaseoverall market conditions as compared towe enter the third quarter of 2019. We expect2020. At this point, we believe earnings in the third quarter of 2020 will be similar to the second quarter of 2020. We expect another strong quarter for our downstream products segment due to the continued resiliency of nonresidential construction markets. The steel mills segment to further decreasesegment's performance in the fourth quarter of 2019 from the third quarter as lower steelof 2020 is expected to be similar to the second quarter of 2020. Nonresidential construction market conditions continue to benefit our bar and structural mills, but market conditions for our sheet and plate mills remain challenged and average selling prices at the endremain depressed. The performance of our raw materials segment in the third quarter which we believe have bottomed, impact our fourth quarter results. The profitability of the steel products segment in the fourth quarter of 20192020 is expected to decrease slightly from the third quarter of 2019 due to normal year-end seasonality. The performance of the raw materials segment is expected to decline in the fourth quarter of 2019 compared to the thirdsecond quarter of 20192020 due to the impact of our Louisiana DRI plant’s planned outage continuing until mid-November – as well as expected further margin pressure throughout ourdepressed pricing for raw materials businesses.materials.

Nucor’s largest exposure to market risk is via our steel mills and steel products segments. Our largest single customer in the first nine monthssecond quarter of 20192020 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, pig iron and

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iron ore. Our exposure to market risk is mitigated by the fact that our steel mills use a significant portion of the products of the raw materials segment.

Liquidity and Capital Resources

Cash provided by operating activities was $2.12 billionAs a result of the COVID-19 pandemic and the significant uncertainty it will continue to have on Nucor and our stakeholders, we have instituted enterprise-wide efforts to enhance our liquidity and support our teammates, which include, among other things:

Capital Expenditures – We began the year with a capital expenditures budget of $2.00 billion. We reviewed our capital expenditures budget and decided to freeze spending on certain capital projects currently in process and delay capital projects that have not begun. As a result, our 2020 capital expenditures estimate is approximately $1.70 billion.

Working Capital – Our net working capital position has contracted to provide a source of incremental liquidity as business activity has slowed. In addition, we are maintaining reduced raw material inventory levels in line with our anticipated near-term production requirements, a change we believe is sustainable and intend to continue to maintain after the pandemic.

Pay & Benefits – We expect a significant decrease in compensation expense in 2020 as almost all of our remuneration plans are heavily weighted toward incentive compensation which rewards productivity and profitability. We have implemented a temporary compensation floor for production and non-production hourly teammates and have committed to offering their normal benefits during the crisis. Nucor’s executive compensation program intentionally sets base salaries below the market median for similar size industrial and materials companies. With much lower profitability expected in 2020, we anticipate our executive leadership will incur a significant reduction in earned incentive compensation on an absolute dollar and percentage basis compared to compensation attributable to 2019 performance.

To further enhance our liquidity, Nucor took advantage of attractive market conditions during the second quarter of 2020 to issue low coupon debt in the first nine monthsform of 2019 as compared to $1.90 billion in the first nine months of 2018. The primary reason for the increase in cash provided by operating activities was the $829.4 million reduction of cash used in operating assets and operating liabilities. Changes in operating assets and operating liabilities

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(exclusive of acquisitions and dispositions) provided cash of $165.0 million in the first nine months of 2019 as compared to using $664.5long-term notes. In May, Nucor issued $500.0 million of cash in the first nine months2.000% Notes due 2025 and $500.0 million of 2018. The funding of our working capital in the first nine months of 2019 decreased compared to the first nine months of 2018 mainly2.700% Notes due to decreases in inventory and accounts receivable, partially offset by an increase in other current assets and decreases in accounts payable and salaries, wages and related accruals. Accounts receivable decreased in the first nine months of 2019 from year-end 2018 due to an 11% decrease in composite sales price per ton. From year-end 20182030. Additionally, subsequent to the end of the thirdsecond quarter of 2019, inventories and accounts payable decreased due2020, Nucor became an obligor with respect to an 18% decline in average scrap and scrap substitutes cost per ton in inventory and an 8% decline in total inventory tons on hand. The increase in other current assets, specifically federal income tax receivable, is mainly a function of the timing of federal tax payments. The increase in cash used to fund salaries, wages and related accruals was primarily attributable to the increased payout of accrued profit sharing and other incentive compensation costs in the first nine months of 2019 as compared to payouts in the first nine months of 2018. The 2019 payments were based on Nucor’s financial performance in 2018, which was a record earnings year.

The current ratio was 3.4 at the end of the third quarter of 2019 and 3.1 at year-end 2018. The current ratio was positively impacted by the 104% increase in other current assets, the 38% increase in cash and cash equivalents and short-term investments, the 24% decrease in salaries, wages and related accruals and the 8% decrease in accounts payable from year-end 2018 due to the reasons cited above. In the first nine months of 2019, accounts receivable turned approximately every five weeks and inventories turned approximately every 11 weeks, compared to approximately every five weeks and nine weeks, respectively, in the first nine months of 2018.

Cash used in investing activities during the first nine months of 2019 was $1.17 billion as compared to $633.0$162.6 million in 40-year variable-rate Green Bonds to partially fund the prior year period. The primary driver forcapital costs associated with the increaseconstruction of our plate mill located in cash used in investing activities was that cash used for capital expenditures increased by 58%, from $624.7 million in the first nine months of 2018 to $984.6 million in the first nine months of 2019. The higher levels of capital expenditures in the first three quarters of 2019 over the same period in 2018 were primarily related to the new hot band galvanizing line and sheet mill expansion at Nucor Steel Gallatin and the new micro mill greenfield expansion in Sedalia, Missouri. Also impacting cash used in investing activities was the purchase of $249.6 million in investments. Cash provided by the divestitureBrandenburg, Kentucky. Our credit ratings of an affiliate of $67.6 million related to the sale of an equity method investmentA- long-term rating from Standard & Poor’s and an $83.9 million reductiona Baa1 long-term rating from Moody’s were unchanged by these debt issuances.

Nucor operates a capital-intensive business in investments in and advances to affiliates over the first nine months of 2019 partially offset the capital expenditures and investment purchases. The greater investments in affiliates in the first nine months of 2018 as compared to the first nine months of 2019 related to an additional $61.0 million of investments in Nucor-JFE, as well as investments in other minor equity method investments.

Cash used in financing activities during the first nine months of 2019 was $664.5 million as compared to $281.1 million in the prior year period. In 2018, cash from financing activities benefited from the issuance of $500.0 million of 10-year 3.950% notes and $500.0 million of 30-year 4.400% notes, partially offset by the repayment of $500.0 million of 5.850% notes. Treasury stock repurchases were $197.5 million in the first nine months of 2019 as compared to $351.4 million in the first nine months of 2018.

Nucor’shighly cyclical markets. We therefore utilize conservative financial practices have served us well inthat maximize our financial strength during economic downturns like the past and continue to serve us well today.one we are currently experiencing that was caused by the COVID-19 pandemic. Our cash and cash equivalents and short-term investments position remained strong at $1.94$3.04 billion as of July 4, 2020. Additionally, Nucor has no significant debt maturities until September 28, 2019. 2022.

Nucor’s solidstrong cash and cash equivalents and short-term investments position provides many opportunitiesmaximizes our flexibility for prudent deployment of our capital. We have three approachespriorities to allocating our capital. Nucor’s highest capital allocation priority is to reinvest in our business to ensure our continued profitable growth over the long term. We have historically done this by investing to optimize our existing operations, initiate greenfield expansions and 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 supplement our base dividend with additional returns of capital to our stockholders when both our earnings and financial condition are strong. We still currently 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 40% return level when our base dividend is not sufficient to meet this goal. The primary factor we will use to decide between share repurchases and supplemental dividends will be our assessment of the intrinsic value of a Nucor share. In September 2018, Nucor’s Board of Directors approved a share repurchase program under which authorized the Company is authorized to repurchase up to $2.00 billion of its common stock. As of September 28, 2019,July 4, 2020, the Company had approximately $1.30$1.16 billion remaining for share repurchases under the program.

Cash provided by operating activities was $1.35 billion in the first six months of 2020 as compared to $1.19 billion in the first six months of 2019. Net earnings declined by $755.5 million over the prior year period, which included a $292.8 million non-cash loss on assets related to our equity method investment in Duferdofin Nucor. The decrease in net earnings in the first six months of 2020 as compared to the first six months of 2019 was offset by a $592.8 million reduction of cash used in operating assets and operating liabilities in the first half of 2019 as compared to the first half of 2020. Changes in operating assets and liabilities (exclusive of acquisitions) provided cash of $331.2 million in the first half of 2020 as compared to using $261.6 million of cash in the prior year period. The funding of our working capital in the first half of 2020 decreased as compared to the first half of 2019 mainly due to decreases in inventory, accounts receivable, and other current assets, specifically federal income tax receivable. Inventory reduction, especially with scrap, was a focus during the second

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quarter of 2020. As a result, inventories decreased by over one million tons, or 15%, in the second quarter of 2020 from the fourth quarter of 2019. Accounts receivable also decreased in the second quarter of 2020 from the fourth quarter of 2019 due to a 16% decrease in tons shipped to outside customers. The decrease in federal income tax receivable was mainly a function of the timing of federal tax payments.

The current ratio was 4.4 at the end of the second quarter of 2020 and 3.3 at year-end 2019. The current ratio was positively impacted by the 82% increase in cash and cash equivalents, the 30% decrease in salaries, wages and related accruals, and the 25% decrease in accounts payable. The increase in cash was a result of the debt issuance and robust cash provided by operations during the second quarter of 2020. The decrease in salaries, wages and related accruals was due to the timing of incentive compensation payments and lower current year profit sharing accruals due to the decreased profitability of the Company. Finally, the decrease in accounts payable was driven by the decreased inventory levels mentioned previously. Accounts receivable turned approximately every five weeks and inventories turned approximately every 11 weeks in the first six months of 2020 and 2019.

Cash used in investing activities during the first six months of 2020 was $714.9 million as compared to $632.4 million in the prior year period. Cash used for capital expenditures in the first half of 2020 increased by 20%, or $127.4 million, from the same period in 2019. The higher levels of capital expenditures were primarily related to the new micro mill greenfield expansion in Frostproof, Florida, the flex galvanizing line at Nucor Steel Arkansas, and the sheet mill expansion at Nucor Steel Gallatin. Also impacting cash used in investing activities in the first six months of 2020 was the purchase of $222.5 million of investments, as opposed to $50.0 million in the prior year period, offset by proceeds from the sale of investments of $275.1 million.Additionally, the first six months of 2019 benefitted from cash provided by the divestiture of an affiliate of $67.6 million related to the sale of an equity method investment.

Cash provided by financing activities during the first half of 2020 was $623.8 million as compared to cash used in financing activities of $523.0 million in the prior year period. The majority of this change related to the issuance of $500.0 million of 2.000% Notes due 2025 and $500.0 million of 2.700% Notes due 2030. In addition, there were approximately $39.5 million of treasury stock repurchases in the first six months of 2020 (none in the second quarter of 2020) as compared to $197.5 million in the first six months of 2019. In the first quarter of 2020, one of the remarketing agents for Nucor’s industrial development revenue bonds (“IDRBs”) put a portion of two bonds to us, resulting in repayment of $32.0 million in long-term debt. We subsequently remarketed the bonds and received $32.0 million in proceeds. Nucor’s IDRBs are variable-rate, tax-exempt bonds which have interest rates that reset on a weekly basis through an ongoing remarketing process. We expect our bonds to be successfully placed with investors at the market driven rates in the future. However, there have been times in severe economic downturns, as was the case during the first quarter of 2020 as a result of the economic impacts of COVID-19, that a remarketing agent is unable to remarket Nucor’s bonds successfully and is unwilling to temporarily hold the bonds. In that situation, which has been rare in our experience, it is possible that the bonds could be put back to us in the future. In this instance during the first quarter of 2020, the IDRBs were remarketed successfully in a short period of time. However, in the event of a prolonged failed remarketing, we have, among other options, availability under our $1.50 billion revolver credit facility to repurchase the IDRBs until they are remarketed successfully. In general, Nucor has the ability and intent to refinance the IDRB debt on a long-term basis, therefore we classify the IDRBs as a long-term liability. The remaining $45.0 million of debt that was repaid during the first half of 2020 was related to a different tranche of Nucor’s IDRBs that was repurchased as part of our investment strategy.

Nucor’s $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 believe this was demonstrated with the second quarter of 2020 issuance of $500.0 million of 2.000% Notes due 2025 and $500.0 million of 2.700% Notes due 2030, the coupon rates of which were the lowest in Nucor’s history for fixed-rate debt of those durations. We currently carry the highest credit ratings of any steel producer headquartered in North America, with an A- long-term rating from Standard & 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.

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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 customary non-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 September 28, 2019,July 4, 2020, our funded debt to total capital ratio was 29%,34% and we were in compliance with all non-financial covenants under our credit facility. No borrowings were outstanding under the credit facility as of September 28, 2019.July 4, 2020.

Our financial strength allowsAlthough our business is capital intensive, we maintain 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

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long-term earnings power. CapitalWe have taken advantage of this flexibility in the current environment. Nucor originally estimated its 2020 capital expenditures for 2019 are expected to be approximately$2.00 billion, adjusted it to less than $1.50 billion as compared to $997.3 million in 2018. The increase in projected 2019at the end of the first quarter, and now estimates 2020 capital expenditures is primarily due to be $1.70 billion. As previously mentioned, Nucor has reviewed its capital spending budget and has decided to freeze spending on certain capital projects in 2020 in order to enhance our liquidity during the fact that several majorCOVID-19 pandemic. We have made the decision to reaccelerate our investment in the Brandenburg, Kentucky plate mill and the expansion and modernization of our Gallatin, Kentucky sheet mill. We are taking this step after a thorough review of these projects have begun and are underwaytheir compelling projected economic returns as well as our strong cash flow performance in 2019. Thethe first half of 2020. We expect these projects, that we anticipateas well as the flex galvanizing line at Nucor Steel Arkansas and the micro mill greenfield expansion in Frostproof, Florida, will have the largest capital expenditures in 2019 are the hot band galvanizing line at Nucor Steel Arkansas, the 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, the merchant bar rolling facility at Nucor Steel Kankakee and the upgrades at Nucor Steel Louisiana to improve the reliability and efficiency of the facility.2020.

In September 2019,June 2020, Nucor’s Board of Directors declared a quarterly cash dividend on Nucor’s common stock of $0.40$0.4025 per share payable on November 8, 2019,August 11, 2020 to stockholders of record on September 27, 2019.June 30, 2020. This dividend is Nucor’s 186189th 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

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 risk has significantly changed since December 31, 2018.2019. There were no interest rate swaps outstanding at September 28, 2019.July 4, 2020.

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.

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 September 28, 2019,July 4, 2020, accumulated other comprehensive loss, net of income taxes included $12.8$10.9 million in unrealized net-of-tax losses for the fair value of these derivative instruments. Changes in the fair value of derivatives not designated as hedges are recognized in net earnings each period. The following table presents the negative effect on pre-tax earnings of a hypothetical change in the fair value of derivative instruments outstanding at September 28, 2019,July 4, 2020, 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

 

$

9,050

 

 

$

22,630

 

 

$

7,039

 

 

$

17,600

 

Aluminum

 

$

3,624

 

 

$

8,959

 

 

$

4,411

 

 

$

11,103

 

Copper

 

$

1,071

 

 

$

2,630

 

 

$

1,800

 

 

$

4,462

 

 

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Any resulting changes in fair value would be recorded as adjustments to accumulated other comprehensive 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 September 28, 2019July 4, 2020 were insignificant.

Item 4. Controls and Procedures

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 September 28, 2019July 4, 2020 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

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.

Nucor Steel Louisiana LLC, our DRI facility located in St. James Parish, Louisiana, has received a Consolidated Compliance Order and Notice of Potential Penalty from the Office of Environmental Enforcement of the Louisiana Department of Environmental Quality (“LDEQ”) related to emissions issues that the facility voluntarily reported to LDEQ. Nucor Steel Louisiana LLC and LDEQ are in discussions regarding a Consolidated Settlement Agreement with LDEQ, but no penalty has been finalized. We believe the aggregate civil penalty for these compliance issues will not be material to Nucor but will likely exceed $100,000.

Item 1A. Risk Factors

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 Form 10-K for the year ended December 31, 2018.2019, except as follows:

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

Our operations expose us to risks associated with pandemics, epidemics and other public health emergencies, such as the recent COVID-19 pandemic which has spread from China to the rest of the world. In March 2020, the World Health Organization characterized the outbreak of COVID-19 as a pandemic, and the President of the United States declared the COVID-19 pandemic a national emergency.

We are a company operating in a critical infrastructure industry, as defined by the U.S. Department of Homeland Security. Shelterinplace or stayathome orders have been implemented in the jurisdictions in the United States where we operate production facilities. In all of these jurisdictions, Nucor has been deemed an essential or lifesustaining operation and, accordingly, we are maintaining operations sufficient to meet our customers’ ongoing needs. In spite of our continued operations, the COVID-19 pandemic has had, and we expect will continue to have, further negative impacts on our operations, supply chain, transportation networks and customers, which may compress our margins, including as a result of preventative and precautionary measures that we, other businesses and governments are taking. The COVID-19 pandemic is a widespread public health crisis that is adversely affecting financial markets and the economies of many countries, including that of the United States. The resulting economic downturn could adversely affect demand for our products and contribute to volatile supply and demand conditions affecting prices and volumes in the markets for our products and raw materials. The progression of the COVID-19 pandemic could also negatively impact our business or results of operations through the temporary closure of our operating facilities or those of our customers or suppliers.

In addition, the ability of our teammates and our suppliers’ and customers’ teammates to work may be significantly impacted by individuals contracting or being exposed to COVID-19 or, as a result of governmental control measures, which may significantly impact our production throughout the supply chain and constrict sales channels. Our customers may be directly impacted by business interruptions or weak market conditions and may not be willing or able to fulfill their contractual obligations. Furthermore, the progression of and global response to the COVID-19 pandemic has begun to cause, and increases the risk of, further delays in construction activities and equipment deliveries related to our capital projects, including potential delays in obtaining permits from government agencies. The extent of such delays and other effects of COVID-19 on our capital projects, certain of which are outside of our control, is unknown, but they could impact or delay the timing of anticipated benefits on capital projects.

The extent to which COVID-19 may adversely impact our business depends on future developments, which are highly uncertain and unpredictable, including new information concerning the severity of the pandemic and the effectiveness of actions globally to contain or mitigate its effects. While we expect the COVID-19 pandemic to negatively impact our results of operations, cash flows and financial position, the current level of uncertainty over the economic and operational impacts of COVID-19 means the related financial impact cannot be reasonably estimated at this time.

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Item 6. Exhibits

 

Exhibit No.

 

Description of Exhibit

 

 

3

  

Restated Certificate of Incorporation of Nucor Corporation (incorporated by reference to Exhibit 3.3 to the Current Report on Form 8-K filed September 14, 2010 (File No. 001-04119))

 

 

3.1

  

Bylaws of Nucor Corporation, as amended and restated September 15, 2016 (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed September 20, 2016 (File No. 001-04119))

4

Second Supplemental Indenture, dated as of May 22, 2020, between Nucor Corporation and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed May 22, 2020 (File No. 001-04119))

4.1

Form of 2.000% Notes due 2025 (included in Exhibit 4) (incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K filed May 22, 2020 (File No. 001-04119))

4.2

Form of 2.700% Notes due 2030 (included in Exhibit 4) (incorporated by reference to Exhibit 4.3 to the Current Report on Form 8-K filed May 22, 2020 (File No. 001-04119))

10

2014 Omnibus Incentive Compensation Plan, as amended and restated effective February 17, 2020 (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed May 18, 2020 (File No. 001-04119)) (#)

10.1*

Executive Employment Agreement of Allen C. Behr (#)

10.2

Retirement, Separation, Waiver and Release Agreement, dated as of June 17, 2020, by and between Nucor Corporation and Ladd R. Hall (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K/A filed June 17, 2020 (File No. 001-04119)) (#)

 

 

 

31*

  

Certification of Principal Executive Officer Pursuant to Rule 13a-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 Rule 13a-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 Form 10-Q of Nucor Corporation for the quarter ended September 28, 2019,July 4, 2020, filed on November 6, 2019,August 12, 2020, formatted in Inline XBRL: (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 September 28, 2019,July 4, 2020, filed on November 6, 2019,August 12, 2020, formatted in Inline XBRL (included in Exhibit 101).

 

*

Filed herewith.

**

Furnished (and not filed) herewith pursuant to Item 601(b)(32)(ii) of Regulation S-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

 

 

 

 

 

By:

 

/s/ James D. Frias

 

 

 

James D. Frias

 

 

 

Chief Financial Officer, Treasurer and Executive

 

 

 

Vice President

 

Dated: November 6, 2019August 12, 2020

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