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 April 3, 20212, 2022
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, 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”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 ☒
299,241,954266,061,964 shares of the registrant’s common stock were outstanding at April 3, 2021.2, 2022.
Nucor Corporation
Quarterly Report on Form 10-Q
For the Three Months Ended April 3, 20212, 2022
Table of Contents
i
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 |
|
| Three Months (13 Weeks) Ended |
| ||||||||||
|
| April 3, 2021 |
|
| April 4, 2020 |
|
| April 2, 2022 |
|
| April 3, 2021 |
| ||||
Net sales |
| $ | 7,017,140 |
|
| $ | 5,624,337 |
|
| $ | 10,493,282 |
|
| $ | 7,017,140 |
|
Costs, expenses and other: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of products sold |
|
| 5,394,703 |
|
|
| 4,995,069 |
|
|
| 7,035,143 |
|
|
| 5,394,703 |
|
Marketing, administrative and other expenses |
|
| 291,124 |
|
|
| 153,392 |
|
|
| 524,584 |
|
|
| 291,124 |
|
Equity in (earnings) losses of unconsolidated affiliates |
|
| (13,239 | ) |
|
| 823 |
| ||||||||
Equity in earnings of unconsolidated affiliates |
|
| (7,695 | ) |
|
| (13,239 | ) | ||||||||
Losses on assets |
|
| 6,662 |
|
|
| 287,846 |
|
|
| - |
|
|
| 6,662 |
|
Interest expense, net |
|
| 39,644 |
|
|
| 40,910 |
|
|
| 43,135 |
|
|
| 39,644 |
|
|
|
| 5,718,894 |
|
|
| 5,478,040 |
|
|
| 7,595,167 |
|
|
| 5,718,894 |
|
Earnings before income taxes and noncontrolling interests |
|
| 1,298,246 |
|
|
| 146,297 |
|
|
| 2,898,115 |
|
|
| 1,298,246 |
|
Provision for income taxes |
|
| 310,732 |
|
|
| 91,918 |
|
|
| 671,000 |
|
|
| 310,732 |
|
Net earnings |
|
| 987,514 |
|
|
| 54,379 |
|
|
| 2,227,115 |
|
|
| 987,514 |
|
Earnings attributable to noncontrolling interests |
|
| 45,082 |
|
|
| 34,048 |
|
|
| 131,492 |
|
|
| 45,082 |
|
Net earnings attributable to Nucor stockholders |
| $ | 942,432 |
|
| $ | 20,331 |
|
| $ | 2,095,623 |
|
| $ | 942,432 |
|
Net earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
| $ | 3.10 |
|
| $ | 0.07 |
|
| $ | 7.69 |
|
| $ | 3.10 |
|
Diluted |
| $ | 3.10 |
|
| $ | 0.07 |
|
| $ | 7.67 |
|
| $ | 3.10 |
|
Average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
| 301,846 |
|
|
| 302,909 |
|
|
| 271,564 |
|
|
| 301,846 |
|
Diluted |
|
| 302,518 |
|
|
| 302,932 |
|
|
| 272,094 |
|
|
| 302,518 |
|
See notes to condensed consolidated financial statements.
1
Nucor Corporation Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited)
(In thousands)
|
| Three Months (13 Weeks) Ended |
| |||||
|
| April 3, 2021 |
|
| April 4, 2020 |
| ||
Net earnings |
| $ | 987,514 |
|
| $ | 54,379 |
|
Other comprehensive income (loss): |
|
|
|
|
|
|
|
|
Net unrealized income (loss) on hedging derivatives, net of income taxes of $400 and $(800) for the first quarter of 2021 and 2020, respectively |
|
| 999 |
|
|
| (2,256 | ) |
Reclassification adjustment for settlement of hedging derivatives included in net income, net of income taxes of $100 and $700 for the first quarter of 2021 and 2020, respectively |
|
| 501 |
|
|
| 2,056 |
|
Foreign currency translation gain (loss), net of income taxes of $0 for the first quarter of 2021 and 2020 |
|
| 13,801 |
|
|
| (64,461 | ) |
|
|
| 15,301 |
|
|
| (64,661 | ) |
Comprehensive income (loss) |
|
| 1,002,815 |
|
|
| (10,282 | ) |
Comprehensive income attributable to noncontrolling interests |
|
| 45,082 |
|
|
| 34,048 |
|
Comprehensive income (loss) attributable to Nucor stockholders |
| $ | 957,733 |
|
| $ | (44,330 | ) |
|
| Three Months (13 Weeks) Ended |
| |||||
|
| April 2, 2022 |
|
| April 3, 2021 |
| ||
Net earnings |
| $ | 2,227,115 |
|
| $ | 987,514 |
|
Other comprehensive income: |
|
|
|
|
|
|
|
|
Net unrealized income on hedging derivatives, net of income taxes of $16,800 and $400 for the first quarter of 2022 and 2021, respectively |
|
| 53,476 |
|
|
| 999 |
|
Reclassification adjustment for settlement of hedging derivatives included in net earnings, net of income taxes of $(1,700) and $100 for the first quarter of 2022 and 2021, respectively |
|
| (5,390 | ) |
|
| 501 |
|
Foreign currency translation gain, net of income taxes of $0 for the first quarter of 2022 and 2021 |
|
| 22,692 |
|
|
| 13,801 |
|
|
|
| 70,778 |
|
|
| 15,301 |
|
Comprehensive income |
|
| 2,297,893 |
|
|
| 1,002,815 |
|
Comprehensive income attributable to noncontrolling interests |
|
| 131,492 |
|
|
| 45,082 |
|
Comprehensive income attributable to Nucor stockholders |
| $ | 2,166,401 |
|
| $ | 957,733 |
|
See notes to condensed consolidated financial statements.
2
Nucor Corporation Condensed Consolidated Balance Sheets (Unaudited)
(In thousands)
|
| April 3, 2021 |
|
| December 31, 2020 |
|
| April 2, 2022 |
|
| Dec 31, 2021 |
| ||||
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
| $ | 2,460,723 |
|
| $ | 2,639,671 |
|
| $ | 3,725,266 |
|
| $ | 2,364,858 |
|
Short-term investments |
|
| 402,595 |
|
|
| 408,004 |
|
|
| 446,868 |
|
|
| 253,005 |
|
Accounts receivable, net |
|
| 2,828,964 |
|
|
| 2,298,850 |
|
|
| 4,111,478 |
|
|
| 3,853,972 |
|
Inventories, net |
|
| 4,360,122 |
|
|
| 3,569,089 |
|
|
| 6,245,679 |
|
|
| 6,011,182 |
|
Other current assets |
|
| 356,727 |
|
|
| 573,048 |
|
|
| 252,060 |
|
|
| 316,540 |
|
Total current assets |
|
| 10,409,131 |
|
|
| 9,488,662 |
|
|
| 14,781,351 |
|
|
| 12,799,557 |
|
Property, plant and equipment, net |
|
| 7,031,688 |
|
|
| 6,899,110 |
|
|
| 8,921,263 |
|
|
| 8,114,818 |
|
Restricted cash and cash equivalents |
|
| 115,266 |
|
|
| 115,258 |
|
|
| 88,242 |
|
|
| 143,800 |
|
Goodwill |
|
| 2,235,183 |
|
|
| 2,229,672 |
|
|
| 2,904,134 |
|
|
| 2,827,344 |
|
Other intangible assets, net |
|
| 647,479 |
|
|
| 668,021 |
|
|
| 1,063,210 |
|
|
| 1,103,759 |
|
Other assets |
|
| 733,661 |
|
|
| 724,671 |
|
|
| 874,668 |
|
|
| 833,794 |
|
Total assets |
| $ | 21,172,408 |
|
| $ | 20,125,394 |
|
| $ | 28,632,868 |
|
| $ | 25,823,072 |
|
LIABILITIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term debt |
| $ | 56,299 |
|
| $ | 57,906 |
|
| $ | 86,521 |
|
| $ | 107,723 |
|
Current portion of long-term debt and finance lease obligations |
|
| 10,644 |
|
|
| 10,885 |
|
|
| 629,536 |
|
|
| 615,678 |
|
Accounts payable |
|
| 1,662,832 |
|
|
| 1,432,159 |
|
|
| 1,900,536 |
|
|
| 1,974,041 |
|
Salaries, wages and related accruals |
|
| 527,412 |
|
|
| 462,727 |
|
|
| 832,999 |
|
|
| 1,495,166 |
|
Accrued expenses and other current liabilities |
|
| 713,259 |
|
|
| 664,183 |
|
|
| 1,081,706 |
|
|
| 964,805 |
|
Federal income taxes payable |
|
| 602,537 |
|
|
| 0 |
| ||||||||
Total current liabilities |
|
| 2,970,446 |
|
|
| 2,627,860 |
|
|
| 5,133,835 |
|
|
| 5,157,413 |
|
Long-term debt and finance lease obligations due after one year |
|
| 5,273,036 |
|
|
| 5,271,789 |
|
|
| 6,112,331 |
|
|
| 4,961,410 |
|
Deferred credits and other liabilities |
|
| 1,067,203 |
|
|
| 993,884 |
|
|
| 1,243,582 |
|
|
| 1,100,455 |
|
Total liabilities |
|
| 9,310,685 |
|
|
| 8,893,533 |
|
|
| 12,489,748 |
|
|
| 11,219,278 |
|
Commitments and contingencies |
|
|
|
|
|
|
|
| ||||||||
EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nucor stockholders' equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock |
|
| 152,061 |
|
|
| 152,061 |
|
|
| 152,061 |
|
|
| 152,061 |
|
Additional paid-in capital |
|
| 2,160,909 |
|
|
| 2,121,288 |
|
|
| 2,163,129 |
|
|
| 2,140,608 |
|
Retained earnings |
|
| 12,163,626 |
|
|
| 11,343,852 |
|
|
| 19,635,277 |
|
|
| 17,674,100 |
|
Accumulated other comprehensive loss, net of income taxes |
|
| (103,560 | ) |
|
| (118,861 | ) |
|
| (44,504 | ) |
|
| (115,282 | ) |
Treasury stock |
|
| (2,925,796 | ) |
|
| (2,709,675 | ) |
|
| (6,701,401 | ) |
|
| (5,835,098 | ) |
Total Nucor stockholders' equity |
|
| 11,447,240 |
|
|
| 10,788,665 |
|
|
| 15,204,562 |
|
|
| 14,016,389 |
|
Noncontrolling interests |
|
| 414,483 |
|
|
| 443,196 |
|
|
| 938,558 |
|
|
| 587,405 |
|
Total equity |
|
| 11,861,723 |
|
|
| 11,231,861 |
|
|
| 16,143,120 |
|
|
| 14,603,794 |
|
Total liabilities and equity |
| $ | 21,172,408 |
|
| $ | 20,125,394 |
|
| $ | 28,632,868 |
|
| $ | 25,823,072 |
|
See notes to condensed consolidated financial statements.
3
Nucor Corporation Condensed Consolidated Statements of Cash Flows (Unaudited)
(In thousands)
|
| Three Months (13 Weeks) Ended |
|
| Three Months (13 Weeks) Ended |
| ||||||||||
|
| April 3, 2021 |
|
| April 4, 2020 |
|
| April 2, 2022 |
|
| April 3, 2021 |
| ||||
Operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings |
| $ | 987,514 |
|
| $ | 54,379 |
|
| $ | 2,227,115 |
|
| $ | 987,514 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation |
|
| 179,820 |
|
|
| 175,767 |
|
|
| 195,478 |
|
|
| 179,820 |
|
Amortization |
|
| 21,130 |
|
|
| 21,508 |
|
|
| 41,411 |
|
|
| 21,130 |
|
Stock-based compensation |
|
| 19,859 |
|
|
| 10,017 |
|
|
| 26,422 |
|
|
| 19,859 |
|
Deferred income taxes |
|
| 62,705 |
|
|
| 15,557 |
|
|
| (18,764 | ) |
|
| 62,705 |
|
Distributions from affiliates |
|
| 180 |
|
|
| 2,000 |
|
|
| 1,500 |
|
|
| 180 |
|
Equity in (earnings) losses of unconsolidated affiliates |
|
| (13,239 | ) |
|
| 823 |
| ||||||||
Equity in earnings of unconsolidated affiliates |
|
| (7,695 | ) |
|
| (13,239 | ) | ||||||||
Losses on assets |
|
| 6,662 |
|
|
| 287,846 |
|
|
| - |
|
|
| 6,662 |
|
Changes in assets and liabilities (exclusive of acquisitions and dispositions): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable |
|
| (524,570 | ) |
|
| (124,036 | ) |
|
| (92,394 | ) |
|
| (524,570 | ) |
Inventories |
|
| (795,940 | ) |
|
| (41,993 | ) |
|
| 124,201 |
|
|
| (795,940 | ) |
Accounts payable |
|
| 225,333 |
|
|
| (28,033 | ) |
|
| (165,476 | ) |
|
| 225,333 |
|
Federal income taxes |
|
| 200,888 |
|
|
| 55,987 |
|
|
| 672,142 |
|
|
| 200,888 |
|
Salaries, wages and related accruals |
|
| 69,780 |
|
|
| (216,736 | ) |
|
| (658,267 | ) |
|
| 69,780 |
|
Other operating activities |
|
| 90,289 |
|
|
| (11,880 | ) |
|
| 126,495 |
|
|
| 90,289 |
|
Cash provided by operating activities |
|
| 530,411 |
|
|
| 201,206 |
|
|
| 2,472,168 |
|
|
| 530,411 |
|
Investing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures |
|
| (313,510 | ) |
|
| (416,557 | ) |
|
| (447,682 | ) |
|
| (313,510 | ) |
Investment in and advances to affiliates |
|
| (118 | ) |
|
| (3,152 | ) |
|
| (63 | ) |
|
| (118 | ) |
Disposition of plant and equipment |
|
| 5,735 |
|
|
| 10,256 |
|
|
| 7,288 |
|
|
| 5,735 |
|
Acquisitions (net of cash acquired) |
|
| 300 |
|
|
| - |
|
|
| (347,177 | ) |
|
| 300 |
|
Purchase of investments |
|
| (214,427 | ) |
|
| (24,746 | ) | ||||||||
Purchases of investments |
|
| (274,197 | ) |
|
| (214,427 | ) | ||||||||
Proceeds from the sale of investments |
|
| 219,777 |
|
|
| 178,787 |
|
|
| 80,333 |
|
|
| 219,777 |
|
Other investing activities |
|
| 249 |
|
|
| 535 |
|
|
| (183 | ) |
|
| 249 |
|
Cash used in investing activities |
|
| (301,994 | ) |
|
| (254,877 | ) |
|
| (981,681 | ) |
|
| (301,994 | ) |
Financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net change in short-term debt |
|
| (1,607 | ) |
|
| (9,183 | ) |
|
| (21,202 | ) |
|
| (1,607 | ) |
Proceeds from long-term debt, net of discount |
|
| - |
|
|
| 32,000 |
| ||||||||
Proceeds from issuance of long-term debt, net of discount |
|
| 1,093,059 |
|
|
| - |
| ||||||||
Repayment of long-term debt |
|
| (2,500 | ) |
|
| - |
| ||||||||
Bond issuance costs |
|
| (8,388 | ) |
|
| - |
| ||||||||
Proceeds from exercise of stock options |
|
| 107,524 |
|
|
| - |
|
|
| 16,586 |
|
|
| 107,524 |
|
Repayment of long-term debt |
|
| - |
|
|
| (47,000 | ) | ||||||||
Payment of tax withholdings on certain stock-based compensation |
|
| (14,521 | ) |
|
| (209 | ) |
|
| (8,512 | ) |
|
| (14,521 | ) |
Distributions to noncontrolling interests |
|
| (73,795 | ) |
|
| (39,493 | ) |
|
| (211,558 | ) |
|
| (73,795 | ) |
Cash dividends |
|
| (123,901 | ) |
|
| (122,940 | ) |
|
| (137,587 | ) |
|
| (123,901 | ) |
Acquisition of treasury stock |
|
| (301,859 | ) |
|
| (39,499 | ) |
|
| (905,324 | ) |
|
| (301,859 | ) |
Other financing activities |
|
| (2,505 | ) |
|
| (2,290 | ) |
|
| (3,883 | ) |
|
| (2,505 | ) |
Cash used in financing activities |
|
| (410,664 | ) |
|
| (228,614 | ) |
|
| (189,309 | ) |
|
| (410,664 | ) |
Effect of exchange rate changes on cash |
|
| 3,307 |
|
|
| (7,163 | ) |
|
| 3,672 |
|
|
| 3,307 |
|
Decrease in cash and cash equivalents and restricted cash and cash equivalents |
|
| (178,940 | ) |
|
| (289,448 | ) | ||||||||
Increase (decrease) in cash and cash equivalents and restricted cash and cash equivalents |
|
| 1,304,850 |
|
|
| (178,940 | ) | ||||||||
Cash and cash equivalents and restricted cash and cash equivalents - beginning of year |
|
| 2,754,929 |
|
|
| 1,534,605 |
|
|
| 2,508,658 |
|
|
| 2,754,929 |
|
Cash and cash equivalents and restricted cash and cash equivalents - end of three months |
| $ | 2,575,989 |
|
| $ | 1,245,157 |
|
| $ | 3,813,508 |
|
| $ | 2,575,989 |
|
Non-cash investing activity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in accrued plant and equipment purchases |
| $ | 4,461 |
|
| $ | 17,756 |
|
| $ | (7,789 | ) |
| $ | 4,461 |
|
See notes to condensed consolidated financial statements.
4
Nucor Corporation – Notes to Condensed Consolidated Financial Statements (Unaudited)
1. Basis of Interim Presentation
The information furnished in this Item 1 reflects all adjustments which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented and are of a normal and recurring nature unless otherwise noted. The information furnished has not been audited; however, the December 31, 20202021 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, 2020.2021.
2. Inventories
Inventories consisted of approximately 43% raw materials and supplies and 57% finished and semi-finished products at both April 3, 2021 (42%2, 2022 and 58%, respectively, at December 31, 2020).2021. 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 $10.03$10.57 billion at April 3, 20212, 2022 ($9.8610.39 billion at December 31, 2020)2021).
Nucor reviews its natural gas well assets for impairment if and when circumstances indicate that a decline in value below their carrying amounts may have occurred. Nucor last assessed its proved producing natural gas well assets in the fourth quarter of 2020 due to the continued low-price natural gas pricing environment. After completing its assessment, Nucor determined that as of such time there were no impairments of any of its three groups of proved well assets. Changes in the natural gas industry or a prolonged low-price environment beyond what has already been assumed in the assessments could cause management to revise the natural gas and natural gas liquids price assumptions, the estimated reserves or the estimated lease operating costs. Therefore, it is reasonably possible that unfavorable revisions to these assumptions or estimates could result in further impairment of some or all of the groups of proved well assets. The combined carrying value of the three groups of wells was $69.9 million at April 3, 2021 ($71.7 million at December 31, 2020).
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 April 3, 2021 was $138.0 million. Nucor has full discretion on its participation in all future drilling capital investments related to the leasehold interest.
4. Goodwill and Other Intangible Assets
The change in the net carrying amount of goodwill for the three months ended April 3, 20212, 2022 by segment was as follows (in thousands):
|
| Steel Mills |
|
| Steel Products |
|
| Raw Materials |
|
| Total |
|
| Steel Mills |
|
| Steel Products |
|
| Raw Materials |
|
| Total |
| ||||||||
Balance at December 31, 2020 |
| $ | 612,470 |
|
| $ | 887,625 |
|
| $ | 729,577 |
|
| $ | 2,229,672 |
| ||||||||||||||||
Balance at December 31, 2021 |
| $ | 613,175 |
|
| $ | 1,439,874 |
|
| $ | 774,295 |
|
| $ | 2,827,344 |
| ||||||||||||||||
Acquisitions |
|
| 1,030 |
|
|
| - |
|
|
| - |
|
|
| 1,030 |
|
|
| 69,097 |
|
|
| (62 | ) |
|
| - |
|
|
| 69,035 |
|
Translation |
|
| - |
|
|
| 4,481 |
|
|
| - |
|
|
| 4,481 |
|
|
| - |
|
|
| 7,755 |
|
|
| - |
|
|
| 7,755 |
|
Balance at April 3, 2021 |
| $ | 613,500 |
|
| $ | 892,106 |
|
| $ | 729,577 |
|
| $ | 2,235,183 |
| ||||||||||||||||
Balance at April 2, 2022 |
| $ | 682,272 |
|
| $ | 1,447,567 |
|
| $ | 774,295 |
|
| $ | 2,904,134 |
|
Nucor completed its most recent annual goodwill impairment testing duringas of the first day of the fourth quarter of 20202021 and concluded that as of such timedate there was 0 impairment of goodwill for any of its reporting units.
5
The annual assessment performed in 20202021 for one of the Company’s reporting units, Rebar Fabrication, used forward-looking projections in future cash flows. The fair value of this reporting unit exceeded its carrying value by approximately 99%54% in the most recent assessment. The reporting unit was profitable in 2020 and we expect it to be profitable in 2021. If our assessment of the relevant facts and circumstances changes, orincluding if the actualexpected future performance of this reporting unit falls short of expected results,declines from the most recent assessment, non-cash impairment charges may be required. Total goodwill associated with the Rebar Fabrication reporting unit was $368.2$369.8 million as of April 3, 20212, 2022 ($364.3363.0 million as of December 31, 2020)2021). 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 $56.8$43.5 million as of April 3, 20212, 2022 ($58.845.0 million as of December 31, 2020)2021). 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 annual assessment performed in 2020 for one5
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 April 3, 20212, 2022 and December 31, 20202021 (in thousands):
|
| April 3, 2021 |
|
| December 31, 2020 |
|
| April 2, 2022 |
|
| December 31, 2021 |
| ||||||||||||||||||||
|
| Gross Amount |
|
| Accumulated Amortization |
|
| Gross Amount |
|
| Accumulated Amortization |
|
| Gross Amount |
|
| Accumulated Amortization |
|
| Gross Amount |
|
| Accumulated Amortization |
| ||||||||
Customer relationships |
| $ | 1,422,453 |
|
| $ | 856,406 |
|
| $ | 1,421,962 |
|
| $ | 838,443 |
|
| $ | 1,872,636 |
|
| $ | 952,967 |
|
| $ | 1,872,348 |
|
| $ | 924,506 |
|
Trademarks and trade names |
|
| 162,462 |
|
|
| 101,991 |
|
|
| 162,365 |
|
|
| 100,000 |
|
|
| 217,829 |
|
|
| 104,161 |
|
|
| 217,255 |
|
|
| 99,906 |
|
Other |
|
| 63,822 |
|
|
| 42,861 |
|
|
| 63,822 |
|
|
| 41,685 |
|
|
| 105,522 |
|
|
| 75,649 |
|
|
| 105,522 |
|
|
| 66,954 |
|
|
| $ | 1,648,737 |
|
| $ | 1,001,258 |
|
| $ | 1,648,149 |
|
| $ | 980,128 |
|
| $ | 2,195,987 |
|
| $ | 1,132,777 |
|
| $ | 2,195,125 |
|
| $ | 1,091,366 |
|
Intangible asset amortization expense in the first quarter of 2022 and 2021 and 2020 was $21.1$41.4 million and $21.5$21.1 million, respectively. Annual amortization expense is estimated to be $82.7 million in 2021; $81.1$154.6 million in 2022; $80.4$132.9 million in 2023; $79.6$132.1 million in 2024; and $78.6$131.2 million in 2025.
2025; and $128.2 million in 2026.
5. Current Liabilities
Book overdrafts, included in accounts payable in the condensed consolidated balance sheets, were $72.9$128.1 million at April 3, 20212, 2022 ($210.5143.8 million at December 31, 2020)2021). Dividends payable, included in accrued expenses and other current liabilities in the condensed consolidated balance sheets, were $122.7$134.5 million at April 3, 20212, 2022 ($123.9137.6 million at December 31, 2020)2021).
6
6. Fair Value Measurements
The following table summarizes information regarding Nucor’s financial assets and financial liabilities that were measured at fair value as of April 3, 20212, 2022 and December 31, 20202021 (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 April 3, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||
As of April 2, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash equivalents |
| $ | 1,933,390 |
|
| $ | 1,933,390 |
|
| $ | - |
|
| $ | - |
|
| $ | 3,129,506 |
|
| $ | 3,129,506 |
|
| $ | - |
|
| $ | - |
|
Short-term investments |
|
| 402,595 |
|
|
| 402,595 |
|
|
| - |
|
|
| - |
|
|
| 446,868 |
|
|
| 446,868 |
|
|
| - |
|
|
| - |
|
Restricted cash and cash equivalents |
|
| 115,266 |
|
|
| 115,266 |
|
|
| - |
|
|
| - |
|
|
| 88,242 |
|
|
| 88,242 |
|
|
| - |
|
|
| - |
|
Derivative contracts |
|
| 69,020 |
|
| - |
|
|
| 69,020 |
|
|
| - |
| |||||||||||||||||
Total assets |
| $ | 2,451,251 |
|
| $ | 2,451,251 |
|
| $ | - |
|
| $ | - |
|
| $ | 3,733,636 |
|
| $ | 3,664,616 |
|
| $ | 69,020 |
|
| $ | - |
|
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative contracts |
| $ | (9,408 | ) |
| $ | - |
|
| $ | (9,408 | ) |
| $ | - |
|
| $ | (5,457 | ) |
| $ | - |
|
| $ | (5,457 | ) |
| $ | - |
|
As of December 31, 2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||
As of December 31, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash equivalents |
| $ | 2,186,820 |
|
| $ | 2,186,820 |
|
| $ | - |
|
| $ | - |
|
| $ | 1,776,477 |
|
| $ | 1,776,477 |
|
| $ | - |
|
| $ | - |
|
Short-term investments |
|
| 408,004 |
|
|
| 408,004 |
|
|
| - |
|
|
| - |
|
|
| 253,005 |
|
|
| 253,005 |
|
|
| - |
|
|
| - |
|
Restricted cash and cash equivalents |
|
| 115,258 |
|
|
| 115,258 |
|
|
| - |
|
|
| - |
|
|
| 143,800 |
|
|
| 143,800 |
|
|
| - |
|
|
| - |
|
Derivative contracts |
|
| 6,633 |
|
|
| - |
|
|
| 6,633 |
|
|
| - |
| ||||||||||||||||
Total assets |
| $ | 2,710,082 |
|
| $ | 2,710,082 |
|
| $ | - |
|
| $ | - |
|
| $ | 2,179,915 |
|
| $ | 2,173,282 |
|
| $ | 6,633 |
|
| $ | - |
|
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative contracts |
| $ | (14,361 | ) |
| $ | - |
|
| $ | (14,361 | ) |
| $ | - |
|
| $ | (2,666 | ) |
| $ | - |
|
| $ | (2,666 | ) |
| $ | - |
|
6
Fair value measurements for Nucor’s cash equivalents, short-term investments and restricted cash and cash equivalents 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 April 3, 20212, 2022 consisted of certificates of deposit, commercial paper and corporate notes. Fair value measurements for Nucor’s derivatives,which are typically commodity or foreign exchange contracts, are classified under Level 2 because such measurements are based on published market prices for similar assets or are estimated based on observable inputs such as interest rates, yield curves, credit risks, spot and future commodity prices, and spot and future exchange rates. There were no transfers between the levels in the fair value hierarchy for the periods presented.
The fair value of short-term and long-term debt, including current maturities, was approximately $5.76$6.77 billion at April 3, 2021 ($6.052, 2022 (approximately $6.06 billion at December 31, 2020)2021). The debt fair value estimates are classified under Level 2 because such estimates are based on readily available market prices of our debt at April 3, 20212, 2022 and December 31, 2020,2021, or similar debt with the same maturities, ratings and interest rates.
7. 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 $14.4 million of accrued environmental costs at April 3, 2021 ($16.0 million at December 31, 2020), $3.0 million was classified in accrued expenses and other current liabilities ($5.6 million at December 31, 2020) and $11.4 million was classified in deferred credits and other liabilities ($10.4 million at December 31, 2020). Inherent uncertainties exist in these estimates primarily due to unknown conditions, evolving remediation technology and changing governmental regulations, legal standards and enforcement priorities.
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 for certain risks with self-insurance limits for certain risks.
7
limits.
8. 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 an amendment and restatement of the 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 April 3, 2021, 7.6 million shares remained available for award under the Omnibus Plan.
The Company also maintains a number of inactive plans under which stock-based awards remain outstanding but no further awards may be made. As of April 3, 2021, 0.6 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 quarter of 20212022 is as follows (shares in thousands):
|
|
|
|
|
| Weighted- |
|
| Weighted- |
|
|
|
|
|
|
|
|
| Weighted- |
|
| Weighted- |
|
|
|
| ||
|
|
|
|
|
| Average |
|
| Average |
| Aggregate |
|
|
|
|
|
| Average |
|
| Average |
| Aggregate |
| ||||
|
|
|
|
|
| Exercise |
|
| Remaining |
| Intrinsic |
|
|
|
|
|
| Exercise |
|
| Remaining |
| Intrinsic |
| ||||
|
| Shares |
|
| Price |
|
| Contractual Life |
| Value |
|
| Shares |
|
| Price |
|
| Contractual Life |
| Value |
| ||||||
Number of shares under stock options: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding at beginning of year |
|
| 3,916 |
|
| $ | 50.03 |
|
|
|
|
|
|
|
|
| 1,186 |
|
| $ | 55.58 |
|
|
|
|
|
|
|
Granted |
|
| - |
|
| $ | - |
|
|
|
|
|
|
|
|
| - |
|
| $ | - |
|
|
|
|
|
|
|
Exercised |
|
| (2,135 | ) |
| $ | 50.37 |
|
|
|
| $ | 32,387 |
|
|
| (310 | ) |
| $ | 53.51 |
|
|
|
| $ | 20,040 |
|
Canceled |
|
| - |
|
| $ | - |
|
|
|
|
|
|
|
|
| - |
|
| $ | - |
|
|
|
|
|
|
|
Outstanding at April 3, 2021 |
|
| 1,781 |
|
| $ | 49.62 |
|
| 6.3 years |
| $ | 53,902 |
| ||||||||||||||
Stock options exercisable at April 3, 2021 |
|
| 1,034 |
|
| $ | 51.84 |
|
| 4.6 years |
| $ | 28,990 |
| ||||||||||||||
Outstanding at April 2, 2022 |
|
| 876 |
|
| $ | 56.31 |
|
| 7.5 years |
| $ | 81,417 |
| ||||||||||||||
Stock options exercisable at April 2, 2022 |
|
| 213 |
|
| $ | 56.46 |
|
| 5.7 years |
| $ | 19,761 |
|
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 $0.5 million and $0.3 million in the first quarter of both2022 and 2021, and 2020.respectively. As of April 3, 2021,2, 2022, unrecognized compensation expense related to stock options was $2.2$2.6 million, which is expected to be recognized over a weighted-average period of 2.01.8 years.
Restricted Stock Units
Nucor annually grantsA summary of Nucor’s restricted stock unitsunit (“RSUs”RSU”) 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 ofactivity for the first three anniversariesquarter of the grant date. Retirement, for purposes of vesting2022 is as follows (shares 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.thousands):
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.
|
| Shares |
|
| Grant Date Fair Value |
| ||
Restricted stock units: |
|
|
|
|
|
|
|
|
Unvested at beginning of year |
|
| 1,167 |
|
| $ | 60.45 |
|
Granted |
|
| - |
|
| $ | - |
|
Vested |
|
| (14 | ) |
| $ | 60.40 |
|
Canceled |
|
| (3 | ) |
| $ | 66.00 |
|
Unvested at April 2, 2022 |
|
| 1,150 |
|
| $ | 60.44 |
|
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.
87
The fair value of an RSU is determined based on the closing price of Nucor’s common stock on the date of the grant.
A summary of Nucor’s RSU activity for the first quarter of 2021 is as follows (shares in thousands):
|
| Shares |
|
| Grant Date Fair Value |
| ||
Restricted stock units: |
|
|
|
|
|
|
|
|
Unvested at beginning of year |
|
| 1,830 |
|
| $ | 47.33 |
|
Granted |
|
| - |
|
| $ | - |
|
Vested |
|
| (9 | ) |
| $ | 48.52 |
|
Canceled |
|
| (48 | ) |
| $ | 46.89 |
|
Unvested at April 3, 2021 |
|
| 1,773 |
|
| $ | 47.34 |
|
Compensation expense for RSUs was $9.0 million and $9.3 million in the first quarter of 2022 and 2021, ($10.0 million in the first quarter of 2020).respectively. As of April 3, 2021,2, 2022, unrecognized compensation expense related to unvested RSUs was $42.7$34.6 million, which is expected to be recognized over a weighted-average period of 1.00.9 years.
Restricted Stock Awards
Prior to their expiration effective December 31, 2017, the Nucor Corporation Senior Officers Long-Term Incentive Plan and the Nucor Corporation Senior Officers Annual Incentive Plan authorized the award of shares of common stock to officers subject to certain conditions and restrictions. Effective January 1, 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,” and the expired Senior Officers Annual Incentive Plan, together with the applicable supplement, is referred to below as the “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 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 AIPNucor Corporation Senior Officers Annual Incentive Plan (a supplement to the Nucor Corporation 2014 Omnibus Incentive Compensation Plan, the “AIP”) and the LTIPNucor Corporation Senior Officers Long-Term Incentive Plan (a supplement to the Nucor Corporation 2014 Omnibus Incentive Compensation Plan, the “LTIP”) for the first quarter of 20212022 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 |
|
| 127 |
|
| $ | 49.94 |
|
|
| 107 |
|
| $ | 57.17 |
|
Granted |
|
| 262 |
|
| $ | 65.61 |
|
|
| 465 |
|
| $ | 128.62 |
|
Vested |
|
| (235 | ) |
| $ | 63.28 |
|
|
| (341 | ) |
| $ | 119.52 |
|
Canceled |
|
| (9 | ) |
| $ | 48.75 |
|
|
| - |
|
| $ | - |
|
Unvested at April 3, 2021 |
|
| 145 |
|
| $ | 56.70 |
| ||||||||
Unvested at April 2, 2022 |
|
| 231 |
|
| $ | 109.02 |
|
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 $17.0 million and $10.2 million in the first quarter of 2022 and 2021, ($0.3 million of benefit in the first quarter of 2020).respectively. As of April 3, 2021,2, 2022, unrecognized compensation expense related to unvested restricted stock awards was $1.0$8.7 million, which is expected to be recognized over a weighted-average period of 1.92.4 years.
9
9. 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 $129.0$286.9 million and $11.6$129.0 million in the first quarter of 20212022 and 2020,2021, respectively. The related liability for these benefits is included in salaries, wages and related accruals in the condensed consolidated balance sheets.
10. Interest Expense (Income)
The components of net interest expense for the first quarter of 20212022 and 20202021 are as follows (in thousands):
|
| Three Months (13 Weeks) Ended |
|
| Three Months (13 Weeks) Ended |
| ||||||||||
|
| April 3, 2021 |
|
| April 4, 2020 |
|
| April 2, 2022 |
|
| April 3, 2021 |
| ||||
Interest expense |
| $ | 40,970 |
|
| $ | 47,596 |
|
| $ | 44,076 |
|
| $ | 40,970 |
|
Interest income |
|
| (1,326 | ) |
|
| (6,686 | ) |
|
| (941 | ) |
|
| (1,326 | ) |
Interest expense, net |
| $ | 39,644 |
|
| $ | 40,910 |
|
| $ | 43,135 |
|
| $ | 39,644 |
|
11. Income Taxes
The effective tax rate for the first quarter of 20212022 was 23.9% as23.2% compared to 62.8%23.9% for the first quarter of 2020. The effective tax rate for the first quarter of 2020 was elevated, relative to the first quarter of 2021, primarily due to a $250.0 million non-cash impairment charge to an equity method investment which had no corresponding impact to the provision for income taxes.2021.
Nucor has concluded U.S. federal income tax matters for tax years through 2014 and for tax year 2016. The tax years 2015 and 2017 through 20192020 remain open to examination by the Internal Revenue Service. The 2015 and 2018 Canadian income tax returns for Harris Steel Group Inc. and certain related affiliates are currently under examination by the Canada Revenue Agency. The tax years 20142015 through 20192020 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 liabilities included in deferred credits and other liabilities in the condensed consolidated balance sheets were $659.8$740.4 million at April 3, 20212, 2022 ($596.4610.3 million at December 31, 2020)2021).
108
12. 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) (“NYS”) and California Steel Industries, Inc. (“CSI”), both of which Nucor owns 51%, for the three months ended April 3, 20212, 2022 and April 4, 20203, 2021 (in thousands):
|
|
|
|
|
| Three Months (13 Weeks) Ended April 3, 2021 |
|
|
|
|
|
|
|
|
|
| Three Months (13 Weeks) Ended April 2, 2022 |
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 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, 2020 |
| $ | 11,231,861 |
|
|
| 380,154 |
|
| $ | 152,061 |
|
| $ | 2,121,288 |
|
| $ | 11,343,852 |
|
| $ | (118,861 | ) |
|
| 77,909 |
|
| $ | (2,709,675 | ) |
| $ | 10,788,665 |
|
| $ | 443,196 |
| ||||||||||||||||||||||||||||||||||||||||
BALANCES, December 31, 2021 |
| $ | 14,603,794 |
|
|
| 380,154 |
|
| $ | 152,061 |
|
| $ | 2,140,608 |
|
| $ | 17,674,100 |
|
| $ | (115,282 | ) |
|
| 107,742 |
|
| $ | (5,835,098 | ) |
| $ | 14,016,389 |
|
| $ | 587,405 |
| ||||||||||||||||||||||||||||||||||||||||
Net earnings |
|
| 987,514 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 942,432 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 942,432 |
|
|
| 45,082 |
|
|
| 2,227,115 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 2,095,623 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 2,095,623 |
|
|
| 131,492 |
|
Other comprehensive income (loss) |
|
| 15,301 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 15,301 |
|
|
| - |
|
|
| - |
|
|
| 15,301 |
|
|
| - |
|
|
| 70,778 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 70,778 |
|
|
| - |
|
|
| - |
|
|
| 70,778 |
|
|
| - |
|
Stock options exercised |
|
| 107,524 |
|
|
| - |
|
|
| - |
|
|
| 30,488 |
|
|
| - |
|
|
| - |
|
|
| (2,135 | ) |
|
| 77,036 |
|
|
| 107,524 |
|
|
| - |
|
|
| 16,586 |
|
|
| - |
|
|
| - |
|
|
| (507 | ) |
|
| - |
|
|
| - |
|
|
| (310 | ) |
|
| 17,093 |
|
|
| 16,586 |
|
|
| - |
|
Stock option expense |
|
| 333 |
|
|
| - |
|
|
| - |
|
|
| 333 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 333 |
|
|
| - |
|
|
| 458 |
|
|
| - |
|
|
| - |
|
|
| 458 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 458 |
|
|
| - |
|
Issuance of stock under award plans, net of forfeitures |
|
| 15,602 |
|
|
| - |
|
|
| - |
|
|
| 6,900 |
|
|
| - |
|
|
| - |
|
|
| (242 | ) |
|
| 8,702 |
|
|
| 15,602 |
|
|
| - |
|
|
| 43,098 |
|
|
| - |
|
|
| - |
|
|
| 21,170 |
|
|
| - |
|
|
| - |
|
|
| (388 | ) |
|
| 21,928 |
|
|
| 43,098 |
|
|
| - |
|
Amortization of unearned compensation |
|
| 1,900 |
|
|
| - |
|
|
| - |
|
|
| 1,900 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 1,900 |
|
|
| - |
|
|
| 1,400 |
|
|
| - |
|
|
| - |
|
|
| 1,400 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 1,400 |
|
|
| - |
|
Treasury stock acquired |
|
| (301,859 | ) |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 5,380 |
|
|
| (301,859 | ) |
|
| (301,859 | ) |
|
| - |
|
|
| (905,324 | ) |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 7,048 |
|
|
| (905,324 | ) |
|
| (905,324 | ) |
|
| - |
|
Cash dividends declared |
|
| (122,658 | ) |
|
| - |
|
|
| - |
|
|
| - |
|
|
| (122,658 | ) |
|
| - |
|
|
| - |
|
|
| - |
|
|
| (122,658 | ) |
|
| - |
|
|
| (134,446 | ) |
|
| - |
|
|
| - |
|
|
| - |
|
|
| (134,446 | ) |
|
| - |
|
|
| - |
|
|
| - |
|
|
| (134,446 | ) |
|
| - |
|
Distributions to noncontrolling interests |
|
| (73,795 | ) |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| (73,795 | ) |
|
| (211,558 | ) |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| (211,558 | ) |
BALANCES, April 3, 2021 |
| $ | 11,861,723 |
|
|
| 380,154 |
|
| $ | 152,061 |
|
| $ | 2,160,909 |
|
| $ | 12,163,626 |
|
| $ | (103,560 | ) |
|
| 80,912 |
|
| $ | (2,925,796 | ) |
| $ | 11,447,240 |
|
| $ | 414,483 |
| ||||||||||||||||||||||||||||||||||||||||
Acquisition of noncontrolling interest in CSI |
|
| 431,219 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 431,219 |
| ||||||||||||||||||||||||||||||||||||||||
BALANCES, April 2, 2022 |
| $ | 16,143,120 |
|
|
| 380,154 |
|
| $ | 152,061 |
|
| $ | 2,163,129 |
|
| $ | 19,635,277 |
|
| $ | (44,504 | ) |
|
| 114,092 |
|
| $ | (6,701,401 | ) |
| $ | 15,204,562 |
|
| $ | 938,558 |
|
|
|
|
|
|
| Three Months (13 Weeks) Ended April 4, 2020 |
|
|
|
|
|
|
|
|
|
| Three Months (13 Weeks) Ended April 3, 2021 |
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 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, 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 |
| ||||||||||||||||||||||||||||||||||||||||
BALANCES, December 31, 2020 |
| $ | 11,231,861 |
|
|
| 380,154 |
|
| $ | 152,061 |
|
| $ | 2,121,288 |
|
| $ | 11,343,852 |
|
| $ | (118,861 | ) |
|
| 77,909 |
|
| $ | (2,709,675 | ) |
| $ | 10,788,665 |
|
| $ | 443,196 |
| ||||||||||||||||||||||||||||||||||||||||
Net earnings |
|
| 54,379 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 20,331 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 20,331 |
|
|
| 34,048 |
|
|
| 987,514 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 942,432 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 942,432 |
|
|
| 45,082 |
|
Other comprehensive income (loss) |
|
| (64,661 | ) |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| (64,661 | ) |
|
| - |
|
|
| - |
|
|
| (64,661 | ) |
|
| - |
|
|
| 15,301 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 15,301 |
|
|
| - |
|
|
| - |
|
|
| 15,301 |
|
|
| - |
|
Stock options exercised |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 107,524 |
|
|
| - |
|
|
| - |
|
|
| 30,488 |
|
|
| - |
|
|
| - |
|
|
| (2,135 | ) |
|
| 77,036 |
|
|
| 107,524 |
|
|
| - |
|
Stock option expense |
|
| 275 |
|
|
| - |
|
|
| - |
|
|
| 275 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 275 |
|
|
| - |
|
|
| 333 |
|
|
| - |
|
|
| - |
|
|
| 333 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 333 |
|
|
| - |
|
Issuance of stock under award plans, net of forfeitures |
|
| 16,189 |
|
|
| - |
|
|
| - |
|
|
| 11,049 |
|
|
| - |
|
|
| - |
|
|
| (148 | ) |
|
| 5,140 |
|
|
| 16,189 |
|
|
| - |
|
|
| 15,602 |
|
|
| - |
|
|
| - |
|
|
| 6,900 |
|
|
| - |
|
|
| - |
|
|
| (242 | ) |
|
| 8,702 |
|
|
| 15,602 |
|
|
| - |
|
Amortization of unearned compensation |
|
| 400 |
|
|
| - |
|
|
| - |
|
|
| 400 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 400 |
|
|
| - |
|
|
| 1,900 |
|
|
| - |
|
|
| - |
|
|
| 1,900 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 1,900 |
|
|
| - |
|
Treasury stock acquired |
|
| (39,499 | ) |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 825 |
|
|
| (39,499 | ) |
|
| (39,499 | ) |
|
| - |
|
|
| (301,859 | ) |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 5,380 |
|
|
| (301,859 | ) |
|
| (301,859 | ) |
|
| - |
|
Cash dividends declared |
|
| (122,697 | ) |
|
| - |
|
|
| - |
|
|
| - |
|
|
| (122,697 | ) |
|
| - |
|
|
| - |
|
|
| - |
|
|
| (122,697 | ) |
|
| - |
|
|
| (122,658 | ) |
|
| - |
|
|
| - |
|
|
| - |
|
|
| (122,658 | ) |
|
| - |
|
|
| - |
|
|
| - |
|
|
| (122,658 | ) |
|
| - |
|
Distributions to noncontrolling interests |
|
| (39,493 | ) |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| (39,493 | ) |
|
| (73,795 | ) |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| (73,795 | ) |
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 |
| ||||||||||||||||||||||||||||||||||||||||
BALANCES, April 3, 2021 |
| $ | 11,861,723 |
|
|
| 380,154 |
|
| $ | 152,061 |
|
| $ | 2,160,909 |
|
| $ | 12,163,626 |
|
| $ | (103,560 | ) |
|
| 80,912 |
|
| $ | (2,925,796 | ) |
| $ | 11,447,240 |
|
| $ | 414,483 |
|
11Dividends declared per share were $0.50 per share in the first quarter of 2022 ($0.405 per share in the first quarter of 2021).
9
Dividends declared per share were $0.405 per share in the first quarter ofOn December 2, 2021, ($0.4025 per share in the first quarter of 2020).
On 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 $2.00$4.00 billion of the Company’s common stock and terminated anyall 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. As of April 3, 2021,2, 2022, the Company had approximately $857.5 million remaining$2.94 billion available for share repurchases under the program.program authorized by the Company’s Board of Directors.
10
13. Accumulated Other Comprehensive Income (Loss)
The following tables reflect the changes in accumulated other comprehensive income (loss) by component for the three months ended April 3, 20212, 2022 and April 4, 20203, 2021 (in thousands):
|
| Three-Month (13-Week) Period Ended |
|
| Three-Month (13-Week) Period Ended |
| ||||||||||||||||||||||||||
|
| April 3, 2021 |
|
| April 2, 2022 |
| ||||||||||||||||||||||||||
|
| Gains and Losses on |
|
| Foreign Currency |
|
| Adjustment to Early |
|
|
|
|
|
| Gains and (Losses) on |
|
| Foreign Currency |
|
| Adjustment to Early |
|
|
|
|
| ||||||
|
| Hedging Derivatives |
|
| Gain (Loss) |
|
| Retiree Medical Plan |
|
| Total |
|
| Hedging Derivatives |
|
| Gains (Losses) |
|
| Retiree Medical Plan |
|
| Total |
| ||||||||
Accumulated other comprehensive income (loss) at December 31, 2020 |
| $ | (4,700 | ) |
| $ | (120,827 | ) |
| $ | 6,666 |
|
| $ | (118,861 | ) | ||||||||||||||||
Accumulated other comprehensive income (loss) at December 31, 2021 |
| $ | 1,112 |
|
| $ | (124,868 | ) |
| $ | 8,474 |
|
| $ | (115,282 | ) | ||||||||||||||||
Other comprehensive income (loss) before reclassifications |
|
| 999 |
|
|
| 13,801 |
|
|
| - |
|
|
| 14,800 |
|
|
| 53,476 |
|
|
| 22,692 |
|
|
| - |
|
|
| 76,168 |
|
Amounts reclassified from accumulated other comprehensive income (loss) into earnings (1) |
|
| 501 |
|
|
| - |
|
|
| - |
|
|
| 501 |
|
|
| (5,390 | ) |
|
| - |
|
|
| - |
|
|
| (5,390 | ) |
Net current-period other comprehensive income (loss) |
|
| 1,500 |
|
|
| 13,801 |
|
|
| - |
|
|
| 15,301 |
|
|
| 48,086 |
|
|
| 22,692 |
|
|
| - |
|
|
| 70,778 |
|
Accumulated other comprehensive income (loss) at April 3, 2021 |
| $ | (3,200 | ) |
| $ | (107,026 | ) |
| $ | 6,666 |
|
| $ | (103,560 | ) | ||||||||||||||||
Accumulated other comprehensive income (loss) at April 2, 2022 |
| $ | 49,198 |
|
| $ | (102,176 | ) |
| $ | 8,474 |
|
| $ | (44,504 | ) |
|
| Three-Month (13-Week) Period Ended |
| |||||||||||||
|
| April 3, 2021 |
| |||||||||||||
|
| Gains and (Losses) on |
|
| Foreign Currency |
|
| Adjustment to Early |
|
|
|
|
| |||
|
| Hedging Derivatives |
|
| Gains (Losses) |
|
| Retiree Medical Plan |
|
| Total |
| ||||
Accumulated other comprehensive income (loss) at December 31, 2020 |
| $ | (4,700 | ) |
| $ | (120,827 | ) |
| $ | 6,666 |
|
| $ | (118,861 | ) |
Other comprehensive income (loss) before reclassifications |
|
| 999 |
|
|
| 13,801 |
|
|
| - |
|
|
| 14,800 |
|
Amounts reclassified from accumulated other comprehensive income (loss) into earnings (1) |
|
| 501 |
|
|
| - |
|
|
| - |
|
|
| 501 |
|
Net current-period other comprehensive income (loss) |
|
| 1,500 |
|
|
| 13,801 |
|
|
| - |
|
|
| 15,301 |
|
Accumulated other comprehensive income (loss) at April 3, 2021 |
| $ | (3,200 | ) |
| $ | (107,026 | ) |
| $ | 6,666 |
|
| $ | (103,560 | ) |
|
| Three-Month (13-Week) Period Ended |
| |||||||||||||
|
| April 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 |
|
| (2,256 | ) |
|
| (64,461 | ) |
|
| - |
|
|
| (66,717 | ) |
Amounts reclassified from accumulated other comprehensive income (loss) into earnings (1) |
|
| 2,056 |
|
|
| - |
|
|
| - |
|
|
| 2,056 |
|
Net current-period other comprehensive income (loss) |
|
| (200 | ) |
|
| (64,461 | ) |
|
| - |
|
|
| (64,661 | ) |
Accumulated other comprehensive income (loss) at April 4, 2020 |
| $ | (14,200 | ) |
| $ | (361,234 | ) |
| $ | 7,807 |
|
| $ | (367,627 | ) |
(1) Includes $(5,390) and $501 and $2,056net-of-tax impact of accumulated other comprehensive income (loss) reclassifications into cost of products sold for net (gains) losses on commodity contracts in the first quarter of 20212022 and 2020,2021, respectively. The tax impact of those reclassifications was $100$(1,700) and $700$100 in the first quarter of 2022 and 2021, and 2020, respectively.
12
14. 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 NuMit LLC (“NuMit”) and Nucor-JFE.Nucor-JFE Steel Mexico, S. de R.L. de C.V. (“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, insulated metal panels, steel grating, tubular products, businesses,steel racking, 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 (“Nucor Steel Louisiana”), two facilities that produce direct reduced iron (“DRI”) used by the steel mills; and our natural gas production operations.
NetCorporate/eliminations include items such as 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.compensation. Corporate assets primarily include cash and cash equivalents, short-term investments, restricted cash and
11
cash equivalents, allowances to eliminate intercompany profit in inventory, deferred income tax assets, federal and state income taxes receivable and investments in and advances to affiliates.
Nucor’s results by segment for the first quarter of 20212022 and 20202021 were as follows (in thousands):
|
| Three Months (13 Weeks) Ended |
|
| Three Months (13 Weeks) Ended |
| ||||||||||
|
| April 3, 2021 |
|
| April 4, 2020 |
|
| April 2, 2022 |
|
| April 3, 2021 |
| ||||
Net sales to external customers: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Steel mills |
| $ | 4,608,777 |
|
| $ | 3,519,270 |
|
| $ | 6,518,609 |
|
| $ | 4,608,777 |
|
Steel products |
|
| 1,810,055 |
|
|
| 1,726,854 |
|
|
| 3,323,088 |
|
|
| 1,810,055 |
|
Raw materials |
|
| 598,308 |
|
|
| 378,213 |
|
|
| 651,585 |
|
|
| 598,308 |
|
|
| $ | 7,017,140 |
|
| $ | 5,624,337 |
|
| $ | 10,493,282 |
|
| $ | 7,017,140 |
|
Intercompany sales: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Steel mills |
| $ | 1,225,113 |
|
| $ | 869,092 |
|
| $ | 1,593,258 |
|
| $ | 1,225,113 |
|
Steel products |
|
| 71,219 |
|
|
| 83,369 |
|
|
| 134,706 |
|
|
| 71,219 |
|
Raw materials |
|
| 3,646,195 |
|
|
| 2,423,805 |
|
|
| 3,546,519 |
|
|
| 3,646,195 |
|
Corporate/eliminations |
|
| (4,942,527 | ) |
|
| (3,376,266 | ) |
|
| (5,274,483 | ) |
|
| (4,942,527 | ) |
|
| $ | - |
|
| $ | - |
|
| $ | - |
|
| $ | - |
|
Earnings (loss) before income taxes and noncontrolling interests: |
|
|
|
|
|
|
|
| ||||||||
Earnings before income taxes and noncontrolling interests: |
|
|
|
|
|
|
|
| ||||||||
Steel mills |
| $ | 1,314,974 |
|
| $ | 156,506 |
|
| $ | 2,578,854 |
|
| $ | 1,314,974 |
|
Steel products |
|
| 211,812 |
|
|
| 162,559 |
|
|
| 684,867 |
|
|
| 211,812 |
|
Raw materials |
|
| 223,235 |
|
|
| (7,911 | ) |
|
| 95,853 |
|
|
| 223,235 |
|
Corporate/eliminations |
|
| (451,775 | ) |
|
| (164,857 | ) |
|
| (461,459 | ) |
|
| (451,775 | ) |
|
| $ | 1,298,246 |
|
| $ | 146,297 |
|
| $ | 2,898,115 |
|
| $ | 1,298,246 |
|
|
| April 3, 2021 |
|
| Dec. 31, 2020 |
|
| April 2, 2022 |
|
| Dec. 31, 2021 |
| ||||
Segment assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Steel mills |
| $ | 10,785,872 |
|
| $ | 9,708,260 |
|
| $ | 14,458,171 |
|
| $ | 13,235,463 |
|
Steel products |
|
| 4,838,456 |
|
|
| 4,461,042 |
|
|
| 8,014,507 |
|
|
| 7,845,010 |
|
Raw materials |
|
| 3,605,884 |
|
|
| 3,324,489 |
|
|
| 3,709,087 |
|
|
| 3,870,806 |
|
Corporate/eliminations |
|
| 1,942,196 |
|
|
| 2,631,603 |
|
|
| 2,451,103 |
|
|
| 871,793 |
|
|
| $ | 21,172,408 |
|
| $ | 20,125,394 |
|
| $ | 28,632,868 |
|
| $ | 25,823,072 |
|
13
15. Revenue
The following tables disaggregate our revenue by major source for the first quarter of 20212022 and 20202021 (in thousands):
|
| Three Months (13 Weeks) Ended April 3, 2021 |
|
| Three Months (13 Weeks) Ended April 2, 2022 |
| ||||||||||||||||||||||||||
|
| Steel Mills |
|
| Steel Products |
|
| Raw Materials |
|
| Total |
|
| Steel Mills |
|
| Steel Products |
|
| Raw Materials |
|
| Total |
| ||||||||
Sheet |
| $ | 2,351,455 |
|
| $ | - |
|
| $ | - |
|
| $ | 2,351,455 |
|
| $ | 3,183,063 |
|
| $ | - |
|
| $ | - |
|
| $ | 3,183,063 |
|
Bar |
|
| 1,261,042 |
|
|
| - |
|
|
| - |
|
|
| 1,261,042 |
|
|
| 1,827,731 |
|
|
| - |
|
|
| - |
|
|
| 1,827,731 |
|
Structural |
|
| 477,195 |
|
|
| - |
|
|
| - |
|
|
| 477,195 |
|
|
| 783,271 |
|
|
| - |
|
|
| - |
|
|
| 783,271 |
|
Plate |
|
| 519,085 |
|
|
| - |
|
|
| - |
|
|
| 519,085 |
|
|
| 724,544 |
|
|
| - |
|
|
| - |
|
|
| 724,544 |
|
Tubular Products |
|
| - |
|
|
| 374,653 |
|
|
| - |
|
|
| 374,653 |
|
|
| - |
|
|
| 610,300 |
|
|
| - |
|
|
| 610,300 |
|
Rebar Fabrication |
|
| - |
|
|
| 386,557 |
|
|
| - |
|
|
| 386,557 |
|
|
| - |
|
|
| 445,232 |
|
|
| - |
|
|
| 445,232 |
|
Joist |
|
| - |
|
|
| 612,235 |
|
|
| - |
|
|
| 612,235 |
| ||||||||||||||||
Deck |
|
| - |
|
|
| 550,909 |
|
|
| - |
|
|
| 550,909 |
| ||||||||||||||||
Other Steel Products |
|
| - |
|
|
| 1,048,845 |
|
|
| - |
|
|
| 1,048,845 |
|
|
| - |
|
|
| 1,104,412 |
|
|
| - |
|
|
| 1,104,412 |
|
Raw Materials |
|
| - |
|
|
| - |
|
|
| 598,308 |
|
|
| 598,308 |
|
|
| - |
|
|
| - |
|
|
| 651,585 |
|
|
| 651,585 |
|
|
| $ | 4,608,777 |
|
| $ | 1,810,055 |
|
| $ | 598,308 |
|
| $ | 7,017,140 |
|
| $ | 6,518,609 |
|
| $ | 3,323,088 |
|
| $ | 651,585 |
|
| $ | 10,493,282 |
|
12
|
| Three Months (13 Weeks) Ended April 4, 2020 |
|
| Three Months (13 Weeks) Ended April 3, 2021 |
| ||||||||||||||||||||||||||
|
| Steel Mills |
|
| Steel Products |
|
| Raw Materials |
|
| Total |
|
| Steel Mills |
|
| Steel Products |
|
| Raw Materials |
|
| Total |
| ||||||||
Sheet |
| $ | 1,578,429 |
|
| $ | - |
|
| $ | - |
|
| $ | 1,578,429 |
|
| $ | 2,351,455 |
|
| $ | - |
|
| $ | - |
|
| $ | 2,351,455 |
|
Bar |
|
| 1,062,666 |
|
|
| - |
|
|
| - |
|
|
| 1,062,666 |
|
|
| 1,261,042 |
|
|
| - |
|
|
| - |
|
|
| 1,261,042 |
|
Structural |
|
| 450,499 |
|
|
| - |
|
|
| - |
|
|
| 450,499 |
|
|
| 477,195 |
|
|
| - |
|
|
| - |
|
|
| 477,195 |
|
Plate |
|
| 427,676 |
|
|
| - |
|
|
| - |
|
|
| 427,676 |
|
|
| 519,085 |
|
|
| - |
|
|
| - |
|
|
| 519,085 |
|
Tubular Products |
|
| - |
|
|
| 305,057 |
|
|
| - |
|
|
| 305,057 |
|
|
| - |
|
|
| 374,653 |
|
|
| - |
|
|
| 374,653 |
|
Rebar Fabrication |
|
| - |
|
|
| 423,316 |
|
|
| - |
|
|
| 423,316 |
|
|
| - |
|
|
| 386,557 |
|
|
| - |
|
|
| 386,557 |
|
Joist |
|
| - |
|
|
| 229,129 |
|
|
| - |
|
|
| 229,129 |
| ||||||||||||||||
Deck |
|
| - |
|
|
| 193,413 |
|
|
| - |
|
|
| 193,413 |
| ||||||||||||||||
Other Steel Products |
|
| - |
|
|
| 998,481 |
|
|
| - |
|
|
| 998,481 |
|
|
| - |
|
|
| 626,303 |
|
|
| - |
|
|
| 626,303 |
|
Raw Materials |
|
| - |
|
|
| - |
|
|
| 378,213 |
|
|
| 378,213 |
|
|
| - |
|
|
| - |
|
|
| 598,308 |
|
|
| 598,308 |
|
|
| $ | 3,519,270 |
|
| $ | 1,726,854 |
|
| $ | 378,213 |
|
| $ | 5,624,337 |
|
| $ | 4,608,777 |
|
| $ | 1,810,055 |
|
| $ | 598,308 |
|
| $ | 7,017,140 |
|
Contract liabilities are primarily related to deferred revenue resulting from cash payments received in advance from customers to protect against credit risk. Contract liabilities totaled $173.1$345.7 million as of April 3, 20212, 2022 ($120.2251.9 million as of December 31, 2020),2021) and are included in accrued expenses and other current liabilities in the condensed consolidated balance sheets.
14
16. Earnings Per Share
The computations of basic and diluted net earnings per share for the first quarter of 20212022 and 20202021 are as follows (in thousands, except per share amounts):
|
| Three Months (13 Weeks) Ended |
|
| Three Months (13 Weeks) Ended |
| ||||||||||
|
| April 3, 2021 |
|
| April 4, 2020 |
|
| April 2, 2022 |
|
| April 3, 2021 |
| ||||
Basic net earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net earnings |
| $ | 942,432 |
|
| $ | 20,331 |
|
| $ | 2,095,623 |
|
| $ | 942,432 |
|
Earnings allocated to participating securities |
|
| (5,376 | ) |
|
| (630 | ) |
|
| (8,420 | ) |
|
| (5,376 | ) |
Net earnings available to common stockholders |
| $ | 937,056 |
|
| $ | 19,701 |
|
| $ | 2,087,203 |
|
| $ | 937,056 |
|
Basic average shares outstanding |
|
| 301,846 |
|
|
| 302,909 |
|
|
| 271,564 |
|
|
| 301,846 |
|
Basic net earnings per share |
| $ | 3.10 |
|
| $ | 0.07 |
|
| $ | 7.69 |
|
| $ | 3.10 |
|
Diluted net earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net earnings |
| $ | 942,432 |
|
| $ | 20,331 |
|
| $ | 2,095,623 |
|
| $ | 942,432 |
|
Earnings allocated to participating securities |
|
| (5,363 | ) |
|
| (630 | ) |
|
| (8,385 | ) |
|
| (5,363 | ) |
Net earnings available to common stockholders |
| $ | 937,069 |
|
| $ | 19,701 |
|
| $ | 2,087,238 |
|
| $ | 937,069 |
|
Diluted average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic average shares outstanding |
|
| 301,846 |
|
|
| 302,909 |
|
|
| 271,564 |
|
|
| 301,846 |
|
Dilutive effect of stock options and other |
|
| 672 |
|
|
| 23 |
|
|
| 530 |
|
|
| 672 |
|
|
|
| 302,518 |
|
|
| 302,932 |
|
|
| 272,094 |
|
|
| 302,518 |
|
Diluted net earnings per share |
| $ | 3.10 |
|
| $ | 0.07 |
|
| $ | 7.67 |
|
| $ | 3.10 |
|
The following stock options were excluded from the computation of diluted net earnings per share for the first quarter of 20212022 and 20202021 because their effect would have been anti-dilutive (shares in thousands):
|
| Three Months (13 Weeks) Ended |
|
| Three Months (13 Weeks) Ended |
| ||||||||||
|
| April 3, 2021 |
|
| April 4, 2020 |
|
| April 2, 2022 |
|
| April 3, 2021 |
| ||||
Anti-dilutive stock options: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shares |
|
| 249 |
|
|
| 3,701 |
|
|
| - |
|
|
| 249 |
|
Weighted-average exercise price |
| $ | 65.80 |
|
| $ | 51.38 |
|
| $ | - |
|
| $ | 65.80 |
|
13
17. Debt and Other Financing Arrangements
On March 11, 2022, Nucor completed the issuance and sale of $550.0 million aggregate principal amount of its 3.125% Notes due 2032 (the “2032 Notes”) and $550.0 million aggregate principal amount of its 3.850% Notes due 2052 (the “2052 Notes” and, together with the 2032 Notes, the “Notes”). We plan to use the net proceeds from the issuance and sale of the Notes to redeem, along with cash on hand if necessary, all of the outstanding $600.0 million aggregate principal amount of our 4.125% Notes due 2022 (the “2022 Notes”) and $500.0 million aggregate principal amount of our 4.000% Notes due 2023 (the “2023 Notes”) pursuant to the terms of the indenture governing the 2022 Notes and the 2023 Notes, with remaining proceeds, if any, to be used for general corporate purposes.Net proceeds from the issuance and sale of the Notes were $1.09 billion. Costs of $15.3 million associated with the issuance and sale of the Notes have been capitalized and will be amortized over the life of the Notes.
On April 25, 2022, Nucor redeemed all $500.0 million aggregate principal amount outstanding of the2023 Notes.The 2023 Notes were redeemed using a portion of the net proceeds from the issuance and sale of the Notes. In September 2022, $600.0 million aggregate principal amount of the 2022 Notes will mature, which we expect to redeem in-full prior to that time using a portion of the net proceeds from the issuance and sale of the Notes, along with cash on hand, if necessary.
14
18. Acquisitions
On February 1, 2022, Nucor used cash on hand to acquire a 51% controlling ownership position in CSI by purchasing a 50% equity interest from a subsidiary of Vale S.A. (Vale) for a cash purchase price of approximately $400.0 million, adjusted for net debt and working capital at closing, as well as a 1% equity interest from JFE Steel Corporation (JFE). CSI is a flat-rolled steel converter with the capability to produce more than two million tons of finished steel and steel products annually. The company has five product lines, including hot rolled, pickled and oiled, cold rolled, galvanized and electric resistance welded (“ERW”) pipe. Key end-use markets served by CSI include customers in the construction, service center and energy industries. This acquisition gives Nucor a strong presence in the Western region of the United States and grows our ability to produce an even wider range of value-added sheet products. CSI financial results were included as part of the steel mills segment (see Note 14) beginning on February 1, 2022, the date of the acquisition of Nucor’s 51% controlling ownership position.
We allocated the purchase price for CSI to its individual assets acquired and liabilities assumed. While the purchase price allocation is substantially complete, it is still preliminary and subject to change, including for the final working capital settlement.
The following table summarizes the fair values of 100% of the assets and liabilities of CSI, as well as the fair value of the 49% noncontrolling interest not acquired by Nucor, as of February 1, 2022, the date of the acquisition of Nucor’s 51% controlling ownership position (in thousands):
Cash |
| $ | 98,537 |
|
Accounts receivable |
|
| 159,257 |
|
Inventory |
|
| 354,614 |
|
Other current assets |
|
| 5,298 |
|
Property, plant and equipment |
|
| 561,812 |
|
Goodwill |
|
| 69,097 |
|
Other intangible assets |
| — |
| |
Other assets |
|
| 11,973 |
|
Total assets acquired |
|
| 1,260,588 |
|
Current portion of long-term debt |
|
| 9,826 |
|
Other current liabilities |
|
| 162,808 |
|
Long-term debt due after one year |
|
| 67,866 |
|
Other liabilities |
|
| 140,050 |
|
Total liabilities assumed |
|
| 380,550 |
|
Net assets acquired at 100% |
|
| 880,038 |
|
Less: Fair value of noncontrolling interest |
|
| 431,219 |
|
Net assets acquired at 51% |
| $ | 448,819 |
|
The determination of the fair value of the noncontrolling interest was calculated using the implied value of 100% of the enterprise value of the business using the purchase price as the purchase price did not include a control premium on a per-share basis and the noncontrolling interest shareholder will participate equally in the economic benefits of CSI after the acquisition.
The goodwill of $69.1 million is calculated as the excess of the purchase price over the fair values of the assets acquired and liabilities assumed and has been allocated to the steel mills segment (see Note 4). The goodwill is attributable to the assembled workforce acquired, expanding our Western United States presence and CSI’s value-added product capabilities. None of the goodwill is deductible for tax purposes.
The results of operations for CSI upon the effective date of the acquisition have been included in the accompanying financial statements. Pro-forma results of operations for the Company would not be materially different as a result of the acquisition of CSI and, therefore, this information is not presented.
15
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,report, 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 subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve risks and 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,” “intend,” “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; (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;production, inflation and interest rate changes; (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, 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; (13) our safety performance; (14) the impact of the COVID-19 pandemic;pandemic and any variants of the virus; 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, 20202021 and elsewhere in this report.
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 United States 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 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, 2020.2021.
Overview
Nucor and its affiliates manufacture steel and steel products. Nucor also produces DRI for use in its steel mills. Through 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 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, insulated metal panels, steel grating, tubular products, businesses,steel racking, 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, two facilities that produce DRI used by the steel mills; and our natural gas related assets.production operations.
16
On February 1, 2022, Nucor used cash on hand to acquire a 51% controlling ownership position in CSI for a cash purchase price of approximately $400.0 million, adjusted for net debt and working capital at closing. CSI is a flat-rolled steel converter with the capability to produce more than two million tons of finished steel and steel products annually. The company has five product lines, including hot rolled, pickled and oiled, cold rolled, galvanized and ERW pipe. Key end-use markets served by CSI include customers in the construction, service center and energy industries. This acquisition gives Nucor a strong presence in the Western region of the United States and grows our ability to produce an even wider range of value-added sheet products. CSI financial results were included as part of the steel mills segment beginning on February 1, 2022, the date of the acquisition of Nucor’s 51% controlling ownership position.
The average utilization rates of all operating facilities in the steel mills, steel products and raw materials segments were approximately 77%, 73% and 72%, respectively, in the first quarter of 2022 compared with approximately 95%, 74% and 79%, respectively, in the first quarter of 2021 compared with approximately 89%, 73% and 73%, respectively, in the first quarter of 2020.
16
2021.
Results of Operations
TheNucor reported consolidated net earnings of $2.10 billion, or $7.67 per diluted share, in the first quarter of 2021 was2022, making it the most profitable first quarter in Nucor’sthe Company’s history. The CompanyBy comparison, Nucor reported record consolidated net earnings of $942.4 million, or $3.10 per diluted share in the first quarter of 2021. By comparison,2021, which was the CompanyCompany’s previous record for first quarter earnings. Nucor reported consolidated net earnings of $20.3 million,$2.25 billion, or $0.07$7.97 per diluted share, in the firstfourth quarter of 2020.
In addition to being the most profitable quarter for Nucor as a whole, the first quarter of 2021, which was the most profitable quarter for each segment. The steel mills segment benefited from strong demand and increased average selling prices. Our sheet, bar, plate and structural mills had increased profitabilityin the Company’s history.
Demand remained robust in the first quarter of 2022 across the key end-use markets we serve, a continuation of the trend that we saw throughout 2021. Average selling prices for our steel mills and steel products segments increased rapidly during 2021, and the Company’s profitability increased during the first quarter of 2022 as compared to the first quarter of 2020, with the largest increase by our sheet mills. The steel products segment continued its strong performance due to the continued strength in nonresidential construction markets. The raw materials segment’s record-setting quarterly profitability was driven by the strong performance of our scrap brokerage and processing operations and our DRI facilities. 2021.
The impact of the COVID-19 pandemic on our business and results of operations continued to subsideEarnings in the first quarter of 2021. Most2022 decreased from the fourth quarter of 2021 primarily due to the decreased earnings of the end use markets we serve remain strongsteel mills segment, which was impacted by some demand softening at our sheet mills. This softening demand, combined with increased imports and inventories remain lean across supply chains. Nonresidential construction markets were resilient during the depths of the economic turmoil in 2020 caused by the COVID-19 pandemic and have remained strong in 2021. The automotive market is continuing its recovery from pandemic-induced lows and the industry has been challenged thus far in 2021 duehigher customer inventory levels, led to a shortage of semiconductors and severe weather. However, light vehicle demand is very strong and inventories are low. We continue to see strong demand in the renewable energy market, and agricultural and heavy equipment are also showing strength.
Market conditionsdecreased average selling prices for sheet products in the first quarter of 2020 were building off pricing momentum that began2022. However, overall selling prices in late 2019. However, the onset ofsteel mills segment increased later in the COVID-19 pandemic latefirst quarter due in part to the supply chain disruptions caused by the conflict in Ukraine. The steel products segment had a record quarter for profitability in the first quarter of 2020 had a negative impact on the2022 as demand in nonresidential construction markets we serve and the global economy at large. In addition, Nucor recorded $287.8 million of losses on assets relatedcontinued to our equity method investmentbe strong. Earnings in the Duferdofin Nucor S.r.l (“Duferdofin Nucor”) joint ventureraw materials segment increased in the first quarter of 2020, which we would ultimately exit in2022 as compared to the fourth quarter of 2020.2021 due to volatility and market conditions.
The following discussion will provideprovides a greater quantitative and qualitative analysis of Nucor’s performance in the first quarter of 20212022 as compared to the first quarter of 2020.2021.
Net Sales
Net sales to external customers by segment for the first quarter of 20212022 and 20202021 were as follows (in thousands):
|
| Three Months (13 Weeks) Ended |
| Three Months (13 Weeks) Ended | ||||||||
|
| April 3, 2021 |
| April 4, 2020 |
| % Change |
| April 2, 2022 |
| April 3, 2021 |
| % Change |
Steel mills |
| $4,608,777 |
| $3,519,270 |
| 31% |
| $6,518,609 |
| $4,608,777 |
| 41% |
Steel products |
| 1,810,055 |
| 1,726,854 |
| 5% |
| 3,323,088 |
| 1,810,055 |
| 84% |
Raw materials |
| 598,308 |
| 378,213 |
| 58% |
| 651,585 |
| 598,308 |
| 9% |
Total net sales |
| $7,017,140 |
| $5,624,337 |
| 25% | ||||||
Total net sales to external customers |
| $10,493,282 |
| $7,017,140 |
| 50% |
Net sales for the first quarter of 20212022 increased 25%50% from the first quarter of 2020.2021. Average sales price per ton increased 25%68% from $783 in the first quarter of 2020 to $978 in the first quarter of 2021.2021 to $1,641 in the first quarter of 2022. Total tons shipped to outside customers in the first quarter of 20212022 were 7,176,0006,394,000 tons, a slightan 11% decrease from the first quarter of 2020.2021.
17
In the steel mills segment, sales tons for the first quarter of 20212022 and 20202021 were as follows (in thousands):
|
| Three Months (13 Weeks) Ended |
| Three Months (13 Weeks) Ended | ||||||||
|
| April 3, 2021 |
| April 4, 2020 |
| % Change |
| April 2, 2022 |
| April 3, 2021 |
| % Change |
Outside steel shipments |
| 5,190 |
| 5,182 |
| - |
| 4,539 |
| 5,190 |
| -13% |
Inside steel shipments |
| 1,354 |
| 1,316 |
| 3% |
| 1,275 |
| 1,354 |
| -6% |
Total steel shipments |
| 6,544 |
| 6,498 |
| 1% |
| 5,814 |
| 6,544 |
| -11% |
Net sales for the steel mills segment increased 31%41% in the first quarter of 20212022 from the first quarter of 2020,2021, due primarily to a 31%61% increase in the average sales price per ton, from $680$891 to $891 as well as$1,436, partially offset by a slight increase13% decrease in tons sold to outside customers. Average selling prices increased across all product groups within the steel mills segment in the first quarter of 20212022 as compared to the first quarter of 2020.2021.
17
Outside sales tonnage for the steel products segment for the first quarter of 20212022 and 20202021 was as follows (in thousands):
|
| Three Months (13 Weeks) Ended |
| Three Months (13 Weeks) Ended | ||||||||
|
| April 3, 2021 |
| April 4, 2020 |
| % Change |
| April 2, 2022 |
| April 3, 2021 |
| % Change |
Joist sales |
| 172 |
| 131 |
| 31% |
| 179 |
| 172 |
| 4% |
Deck sales |
| 135 |
| 125 |
| 8% |
| 136 |
| 135 |
| 1% |
Cold finished sales |
| 132 |
| 126 |
| 5% |
| 133 |
| 132 |
| 1% |
Rebar fabrication sales |
| 282 |
| 311 |
| -9% |
| 291 |
| 282 |
| 3% |
Piling products sales |
| 136 |
| 180 |
| -24% |
| 111 |
| 136 |
| -18% |
Tubular products sales |
| 250 |
| 287 |
| -13% |
| 255 |
| 250 |
| 2% |
Other steel products sales |
| 100 |
| 99 |
| 1% |
| 130 |
| 100 |
| 30% |
Total steel products sales |
| 1,207 |
| 1,259 |
| -4% |
| 1,235 |
| 1,207 |
| 2% |
Net sales for the steel products segment increased 5%84% in the first quarter of 20212022 compared to the first quarter of 2020,2021, due primarily to a 9%79% increase in the average sales price per ton from $1,372$1,499 to $1,499 which was partially offset by$2,689 and a 4% decrease2% increase in tons sold to outside customers. Average selling price per tonprices increased across mostall businesses within the steel products segment in the first quarter of 20212022 as compared to the first quarter of 2020, most notably at our tubular products businesses.2021.
Net sales for the raw materials segment increased 58%9% in the first quarter of 20212022 compared to the first quarter of 2020,2021. The increase in net sales was due primarily to increased average selling prices, andwhich were partially offset by a decrease in volumes at DJJ’s brokerage and scrap processing operations. In the first quarter of both 2021 and 2020,2022, approximately 88%91% of outside sales for the raw materials segment were from the brokerage operations of DJJ, and approximately 9%7% of outside sales were from the scrap processing operations of DJJ.DJJ (88% and 9%, respectively, in the first quarter of 2021).
Gross Margins
Nucor recorded gross margins of $3.46 billion (33%) in the first quarter of 2022, which was a significant increase compared with $1.62 billion (23%) in the first quarter of 2021, which was a significant increase compared with $629.3 million (11%) in the first quarter of 2020.2021.
| • | The primary driver for the increase in gross margins in the first quarter of |
Partially offsettingScrap and scrap substitutes are the previously mentioned increasemost significant element in the average selling pricetotal cost of steel in the first quarter of 2021 as compared to the first quarter of 2020 was increased scrap and scrap substitute costs.production. The average scrap and scrap substitute cost per gross ton used in the first quarter of 20212022 was $405,$495, a 38%22% increase compared to $293$405 in the first quarter of 2020.2021. The increase in the average scrap and scrap substitute cost per gross ton used was more than offset by the previously mentioned increases in average selling 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 have increased dramatically sincebeen volatile as the beginning of 2021 and we expect continued volatilityconflict in Ukraine has disrupted global supply chains. We believe that scrap prices as we beginmarkets will continue to be volatile in the second quarter.quarter of 2022.
| • | Pre-operating and start-up costs of new facilities |
18
merchant bar quality mill expansion at our bar mill in Illinois and the galvanizing line at our sheet mill expansion in Arkansas. Nucor defines pre-operating and start-up costs, all of which are expensed, as the losses attributable to facilities or major projects that are either under construction or in the early stages of operation. Once these facilities or projects have attained a utilization rate that is consistent with our similar operating facilities, they are no longer considered by Nucor to be in start-up. |
| • | Gross margins in the steel products segment increased in the first quarter of |
| • | Gross margins in the raw materials segment |
18
|
Marketing, Administrative and Other Expenses
A major component of marketing, administrative and other expenses is profit sharing and other incentive compensation costs. These costs, which are based upon and fluctuate with Nucor’s financial performance, increased by $136.1$157.1 million in the first quarter of 20212022 as compared to thefirst quarter of 2020.2021. This increase was due to Nucor’s increased profitability in the first quarter of 20212022 as compared to the prior year period, which resulted in significantly increased accruals related to profit sharing.
Equity in (Earnings) LossesEarnings of Unconsolidated Affiliates
Equity in earnings of unconsolidated affiliates was $7.7 million and $13.2 million in the first quarter of 2022 and 2021, which compared to equity in losses of unconsolidated affiliates of $0.8 million in the first quarter of 2020.respectively. The increasedecrease in equity method investment earnings from the first quarter of 2020 to the first quarter of 2021 was primarily due to increaseddecreased earnings at NuMit.
Losses on Assets
Included in the first quarter of 2021 earnings were losses on assets of $6.7 million in the steel products segment.
Included in the first quarter of 2020 earnings were losses on assets of $287.8 million related to our equity method investment in Duferdofin Nucor that we have since exited. Nucor determined that a triggering event occurred in the first quarter of 2020 due to adverse developments in the joint venture’s commercial outlook, which were exacerbated by the COVID‐19 pandemic, all of which negatively impacted the joint venture’s strategic direction.Nucor-JFE.
Interest Expense (Income)
Net interest expense for the first quarter of 20212022 and 20202021 was as follows (in thousands):
|
| Three Months (13 Weeks) Ended |
|
| Three Months (13 Weeks) Ended |
| ||||||||||
|
| April 3, 2021 |
|
| April 4, 2020 |
|
| April 2, 2022 |
|
| April 3, 2021 |
| ||||
Interest expense |
| $ | 40,970 |
|
| $ | 47,596 |
|
| $ | 44,076 |
|
| $ | 40,970 |
|
Interest income |
|
| (1,326 | ) |
|
| (6,686 | ) |
|
| (941 | ) |
|
| (1,326 | ) |
Interest expense, net |
| $ | 39,644 |
|
| $ | 40,910 |
|
| $ | 43,135 |
|
| $ | 39,644 |
|
Interest expense decreasedincreased in the first quarter of 20212022 compared to the first quarter of 20202021 due primarily to an increase in capitalized interest.average debt outstanding. Interest income decreased in the first quarter of 20212022 compared to the first quarter of 20202021 due to a decrease in average interest rates on investments.
Earnings (Loss) Before Income Taxes and Noncontrolling Interests
Earnings (loss)The table below presents earnings before income taxes and noncontrolling interests by segment for the first quarter of 20212022 and 2020 were as follows2021 (in thousands). The changes between periods were driven by the quantitative and qualitative factors previously discussed.
|
| Three Months |
|
|
|
| ||||||||||
|
| (13 Weeks) Ended |
|
| Three Months (13 Weeks) Ended |
| ||||||||||
|
| April 3, 2021 |
|
| April 4, 2020 |
|
| April 2, 2022 |
|
| April 3, 2021 |
| ||||
Steel mills |
| $ | 1,314,974 |
|
| $ | 156,506 |
|
| $ | 2,578,854 |
|
| $ | 1,314,974 |
|
Steel products |
|
| 211,812 |
|
|
| 162,559 |
|
|
| 684,867 |
|
|
| 211,812 |
|
Raw materials |
|
| 223,235 |
|
|
| (7,911 | ) |
|
| 95,853 |
|
|
| 223,235 |
|
Corporate/eliminations |
|
| (451,775 | ) |
|
| (164,857 | ) |
|
| (461,459 | ) |
|
| (451,775 | ) |
|
| $ | 1,298,246 |
|
| $ | 146,297 |
|
| $ | 2,898,115 |
|
| $ | 1,298,246 |
|
19
Noncontrolling Interests
Noncontrolling interests represent the income attributable to the holders of noncontrolling partners ofinterests in Nucor’s joint ventures, primarily Nucor-Yamato Steel Company (Limited Partnership) (“NYS”)NYS and CSI, in both of which Nucor owns 51%. controlling interests. The increase in earnings attributable to noncontrolling interests in the first quarter of 20212022 as compared to the first quarter of 20202021 was primarily due to the increased earnings of NYS, which was a result of the increased metal margin per ton inmargins, as well as the first quarterearnings of 2021 as compared toCSI, for which results were consolidated beginning on February 1, 2022, the first quarterdate of 2020. the acquisition of Nucor’s 51% controlling ownership position.
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 quarter of both2022 and 2021, and 2020, the amount of cash distributed to noncontrolling interest holders exceeded the earnings attributable to noncontrolling interests based on mutual agreement of the general partners.
Provision for Income Taxes
Theeffective tax rate for the first quarter of 20212022 was 23.9% as23.2% compared to 62.8%23.9% for the first quarter of 2020. The effective tax rate for the first quarter of 2020 was elevated, relative to the first quarter of 2021, primarily due to a $250.0 million non-cash impairment charge to an equity method investment which had no corresponding impact to the provision for income taxes.2021. The expected effective tax rate for the full year of 20212022 is approximately 23.6%23.5%.
We estimate that in the next 12 months our gross unrecognized tax benefits, which totaled $53.0$118.0 million at April 3, 2021,2, 2022, exclusive of interest, could decrease by as much as $5.0$10.4 million as a result of the expiration of the statute of limitations and the closures of examinations, substantially all of which would impact the effective tax rate.
Nucor has concluded U.S. federal income tax matters for tax years through 2014 and for tax year 2016. The tax years 2015 and 2017 through 20192020 remain open to examination by the Internal Revenue Service. The 2015 and 2018 Canadian income tax returns for Harris Steel Group Inc. and certain related affiliates are currently under examination by the Canada Revenue Agency. The tax years 20142015 through 20192020 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 $2.10 billion, or $7.67 per diluted share, in the first quarter of 2022 as compared to consolidated net earnings of $942.4 million, or $3.10 per diluted share, in the first quarter of 2021 as compared to consolidated net earnings of $20.3 million, or $0.07 per diluted share, in the first quarter of 2020.2021. Net earnings attributable to Nucor stockholders as a percentage of net sales were 13.4%20.0% and 0.4%13.4% in the first quarter of 2022 and 2021, and 2020, respectively. Annualized return on average stockholders’ equity was 33.9%57.4% and 0.8%33.9% in the first quarter of 2022 and 2021, respectively.
Outlook
End-use market demand remains strong for steel and 2020, respectively.
Outlooksteel products, and we remain confident that 2022 will be another year of strong earnings and cash flow for Nucor.
We expect earnings inthat the second quarter of 2021 to2022 will be the highest quarterly earningsmost profitable quarter in NucorNucor's history, surpassing the previous record set in the firstfourth quarter of 2021. The primary drivers for the expected increase in earnings in the
We expect that second quarter of 2021 as compared to the first quarter of 2021 are improved pricing and marginsearnings will be driven by increased profitability in the steel products segment, which continues to benefit from robust demand in nonresidential construction markets. In addition, the steel mills segment. The segment’s largest increases in performancesegment earnings are expected to strengthen due primarily to increased profitability at our sheet and plate mills. The steel products segment is expected to have another strong quarter in the second quarter of 2021 that will be comparable to the first quarter of 2021. The profitability of theSimilarly, Nucor's raw materials segment is expected to decreasegenerate increased profits in the second quarter of 2021 as compared to the first quarter of 2021 due to risingrelatively higher selling prices for raw materials input costs.materials.
Nucor’s largest exposure to market risk is viain our steel mills and steel products segments. Our largest single customer in the first quarter of 20212022 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 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
Nucor operates a capital-intensive business in highly cyclical markets. We therefore utilize conservative financial practices that maximize our financial strength during economic downturns like the one we experienced as a result of the COVID-19 pandemic. Our liquidity position, consisting of cash and cash equivalents, short-term investments and restricted cash and cash equivalents, remained strong at $2.98 billion as of April 3, 2021. Additionally, Nucor has no significant debt maturities until September 2022.
We believe that our conservative financial practices have served us well in the past and are serving us well today. Nucor’s financial strength allows for a consistent, balanced approach to capital allocation throughout the business cycle.
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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 expansionsLiquidity and make acquisitions. Our second priority is to return capital to our stockholders through cash dividends and share repurchases. We intend to return a minimum of 40% of our net earnings to our stockholders, while maintaining a debt-to-capital ratio that supports a strong investment grade credit rating. In September 2018, Nucor’s Board of Directors approved a share repurchase program under which the Company is authorized to repurchase up to $2.00 billion of its common stock. As of April 3, 2021, the Company had approximately $857.5 million remaining for share repurchases under the program.Capital Resources
Cash provided by operating activities was $530.4 million in the first quarter of 2021 as compared to $201.2 million in the first quarter of 2020. Net earnings improved by $933.1 million over the prior year period. Included in the first quarter of 2020 was a non-cash loss on assets of $287.8 million related to our previously held equity method investment in Duferdofin Nucor. In addition, changes in operating assets and operating liabilities (exclusive of acquisitions) used cash of $734.2 million in the first quarter of 2021 compared with $366.7 million in the first quarter of 2020. The funding of our working capital in the first quarter of 2021 increased over the first quarter of 2020 mainly due to larger increases in inventories and accounts receivable from year-end 2020 than the increase from year-end 2019 to the end of the first quarter of 2020. Inventories increased due to a 27% increase in the cost of scrap and scrap substitutes in inventory on hand from year-end 2020 to the end of the first quarter of 2021, as compared to a 4% increase in the cost of scrap and scrap substitutes during the same prior year period. Accounts receivable increased in the first quarter of 2021 from the fourth quarter of 2020 due to a 21% increase in composite sales price for the quarter and an 11% increase in tons shipped to outside customers, whereas the first quarter of 2020 saw a similar increase in tons shipped to outside customers from year-end 2019, but composite sales price was flat quarter-over-quarter.
The current ratio was 3.5 at the end of the first quarter of 2021 and 3.6 at year-end 2020. The current ratio decreased slightly due to the following: a 38% decrease in other current assets, most notably the federal income tax receivable; a 16% increase in accounts payable driven by the previously discussed increased inventory costs; and a 14% increase in salaries, wages and related accruals due to increased profit sharing accruals resulting from the increased earnings of the Company. Partially offsetting these items were a 23% and 22% increase in accounts receivable and inventories, respectively, due to the previously discussed increases in inventory costs and selling prices. In the first three months of both 2021 and 2020, accounts receivable turned approximately every five weeks and inventories turned approximately every 10 weeks.
Cash used in investing activities during the first three months of 2021 was $302.0 million as compared to $254.9 million in the prior year period. Nucor purchased $214.4 million of investments in the first three months of 2021, as opposed to $24.7 million in the first three months of 2020. Offsetting the increase in cash used for purchasing investments was a 25%, or $103.0 million, decrease in capital expenditures during the first quarter of 2021 as compared to the first quarter of 2020. The decrease in capital expenditures was primarily related to completion of three significant strategic growth projects in 2020: the micro mill in Sedalia, Missouri; the rolling mill upgrade in Kankakee, Illinois; and the micro mill in Frostproof, Florida. The first quarter of 2021 also benefitted from an additional $41.0 million of cash provided by the sale of investments when compared to the prior year period.
Cash used in financing activities during the first three months of 2021 was $410.7 million as compared to $228.6 million in the prior year period. Stock repurchases were $301.9 million in the first three months of 2021 as compared to $39.5 million in the first three months of 2020. Offsetting the increase in cash used for acquisition of stock was $107.5 million of proceeds from the exercise of stock options.
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 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.
Our liquidity position as of April 2, 2022 remained strong, consisting of total cash and cash equivalents, short-term investments and restricted cash and cash equivalents of $4.26 billion as of such date compared to $2.76 billion as of December 31, 2021. Of these totals, the amount of restricted cash and cash equivalents was $88.2 million at April 2, 2022and $143.8 million at December 31, 2021. Approximately $504.6 million of the cash and cash equivalents position at April 2, 2022, was held by our majority-owned and controlled subsidiaries, including CSI which was acquired on February 1, 2022, as compared to $540.3 million at December 31, 2021.
Cash provided by operating activities was $2.47 billion in the first quarter of 2022 as compared to $530.4 million in the first quarter of 2021. The $1.94 billion increase was primarily driven by net earnings of $2.23 billion for the first quarter of 2022, an increase of $1.24 billion over net earnings in the prior year period of $987.5 million. In addition, changes in operating assets and operating liabilities (exclusive of acquisitions) provided cash of $6.7 million in the first quarter of 2022 as compared to using cash of $734.2 million in the first quarter of 2021.
The funding of our working capital in the first quarter of 2022 decreased over the first quarter of 2021 mainly due to accounts receivable and inventories only increasing by 7% and 4%, respectively, as compared to 23% and 22%, respectively, in the first quarter of 2021. As a result, the change in accounts receivable only used cash of $92.4 million in the first quarter of 2022 as compared to $524.6 million in the first quarter of 2021. The change in inventories provided cash of $124.2 million in the first quarter of 2022 as compared to using cash of $795.9 million in the same period of 2021. The increase in accrued federal income taxes provided cash of $672.1 million compared to the change in federal income taxes providing cash of $200.9 million in the first quarter of 2021. These changes were offset primarily by the following: (i) the change in salaries, wages and related accruals using cash of $658.3 million in the first quarter of 2022 as 2021 incentive compensation was paid versus providing cash of $69.8 million in the first quarter of 2021; and (ii) the change in accounts payable using cash of $165.5 million in the first quarter of 2022as compared to providing cash of $225.3 million in the same period of 2021.
The current ratio was 2.9 at the end of the first quarter of 2022 and 2.5 at year-end 2021. The current ratio increased primarily due to the following increases in current assets: a 58%, or $1.36 billion, increase in cash and cash equivalents, a 77%, or $193.9 million, increase in short-term investments, a 7%, or $257.5 million, increase in accounts receivable, and a 4%, or $234.5 million, increase in inventories. Additionally, salaries, wages and related accruals decreased by 44%, or $662.2 million, as 2021 incentive compensation accrued as of year-end 2021 was paid in the first quarter of 2022.
Cash used in investing activities during the first quarter of 2022 was $981.7 million as compared to $302.0 million in the prior year period. Cash used for acquisitions (net of cash acquired) increased by $347.5 milliondue to the acquisition of CSI on February 1, 2022. Additionally, cash used to purchase investments increased by $59.8 million and cash proceeds from the sale of investments decreased by $139.4 million over the same period of 2021. Finally, cash used for capital expenditures of $447.7 million in the first quarter of 2022 increased by $134.2 million over the same period of 2021 primarily due to the plate mill under construction in Kentucky, the sheet mill expansion in Kentucky and the sheet mill in West Virginia. Capital expenditures for 2022 are estimated to be around $2.35 billion as compared to $1.62 billion in 2021. The projects that we anticipate will have the largest capital expenditures in 2022 are the plate mill under construction in Brandenburg, Kentucky and the sheet mill in West Virginia.
Cash used in financing activities during the first quarter of 2022 was $189.3 millionas compared to $410.7 million in the prior year period. Stock repurchases were $905.3 million in the first quarter of 2022 as compared to $301.9 million in the first quarter of 2021 and distributions to noncontrolling interests were $211.6 million in the first quarter of 2022 as compared to $73.8 million in the first quarter of 2021. Offsetting these uses of cash was cash provided from the issuance and sale of the Notes, net of the discount, of $1.09 billion in the first quarter of 2022 (none in the same period of 2021). In the first quarter of 2022, Nucor issued $550.0 million of the 2032 Notes and $550.0 million of the 2052 Notes. In April 2022, we redeemed all $500.0 million aggregate principal of the 2023 Notes.
Nucor’s $1.75 billion revolving credit facility matures on November 5, 2026. The revolving credit facility includes only one financial covenant, which is a limit of 60% on the ratio of funded debt to total capitalization.capital. In addition, the revolving credit
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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 April 3, 2021, our2, 2022, the funded debt to total capital ratio was 31%29.7% and we were in compliance with all non-financial covenants under ourthe revolving credit facility. No borrowings were outstanding under the revolving credit facility as of April 3, 2021.
Our financial strength allows a number of capital preservation options. Nucor’s robust capital investment and maintenance practices give us the flexibility to reduce spending by prioritizing our capital projects, potentially rescheduling
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certain projects and selectively allocating capital to investments with the greatest impact on our long-term earnings power. Capital expenditures for 2021 are estimated to be around $2.00 billion as compared to $1.53 billion in 2020. The projects that we anticipate will have the largest capital expenditures in 2021 are the hot band galvanizing line at Nucor Steel Arkansas, the sheet mill expansion at Nucor Steel Gallatin, and the plate mill under construction in Brandenburg, Kentucky.2, 2022.
In February 2021,2022, Nucor’s Board of Directors declared a quarterly cash dividend on Nucor’s common stock of $0.405$0.50 per share payable on May 11, 20212022 to stockholders of record on March 31, 2021.2022. This dividend is Nucor’s 192196ndth consecutive quarterly cash dividend.
Funds provided from operations, cash and cash equivalents, short-term investments, restricted cash and cash equivalents 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. We also believe we have adequate access to capital markets for liquidity purposes. In September 2022, $600.0 million aggregate principal amount of the 2022 Notes will mature, which we expect to redeem in-full prior to that time using a portion of the net proceeds from the sale of the Notes, along with cash on hand, if necessary.
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, 2020.2021. There were no interest rate swaps outstanding at April 3, 2021.2, 2022.
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 raw materials requirements and 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 partially 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 in net earnings in the same period as the underlying physical transaction. At April 3, 2021,2, 2022, accumulated other comprehensive loss, net of income taxes included $3.2$49.2 million in unrealized net-of-tax lossesgains for the fair value of these derivative instruments. Changes in the fair values of derivatives not designated as hedges are recognized in net earnings each period.
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The following table presents the negative effect on pre-tax earnings of a hypothetical change in the fair value of the derivative instruments outstanding at April 3, 2021,2, 2022, 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 |
| $ | 5,228 |
|
| $ | 13,069 |
|
| $ | 23,216 |
|
| $ | 58,041 |
|
Aluminum |
| $ | 5,772 |
|
| $ | 14,431 |
|
| $ | 7,430 |
|
| $ | 18,574 |
|
Copper |
| $ | 4,390 |
|
| $ | 10,995 |
|
| $ | 4,257 |
|
| $ | 10,668 |
|
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.
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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 April 3, 20212, 2022 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 April 3, 20212, 2022 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
Item 1. Legal Proceedings
Nucor is from time to time a party to various lawsuits, claims and other legal proceedings that arise in the ordinary course of business. With respect to all such lawsuits, claims and proceedings, we record reserves when it is probable a liability has been incurred and the amount of loss can be reasonably estimated. We do not believe that any of these proceedings, individually or in the aggregate, would be expected to have a material adverse effect on our results of operations, financial position or cash flows. Nucor maintains liability insurance with self-insurance limits for certain risks.
There were no proceedings that were pending or contemplated under federal, state or local environmental laws that the Company reasonably believes may result in monetary sanctions of at least $1.0 million (the threshold chosen by Nucor as permitted by Item 103 of Regulation S-K promulgated under the Securities Exchange Act of 1934, as amended, and which Nucor believes is reasonably designed to result in disclosure of any such proceeding that is material to its business or financial condition).
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, 2020.2021.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Our share repurchase program activity for each of the three months and the quarter ended April 3, 20212, 2022 was as follows (in thousands, except per share amounts):
|
| Total Number of Shares Purchased |
|
| Average Price Paid per Share (1) |
|
| Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2) |
|
| Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (2) |
| ||||
January 1, 2021 - January 30, 2021 |
|
| - |
|
|
| - |
|
|
| - |
|
| $ | 1,159,357 |
|
January 31, 2021 - February 27, 2021 |
|
| 5,380 |
|
| $ | 56.11 |
|
|
| 5,380 |
|
|
| 857,485 |
|
February 28, 2021 - April 3, 2021 |
|
| - |
|
|
| - |
|
|
| - |
|
|
| 857,485 |
|
For the Quarter Ended April 3, 2021 |
|
| 5,380 |
|
|
|
|
|
|
| 5,380 |
|
|
|
|
|
|
| Total Number of Shares Purchased |
|
| Average Price Paid per Share (1) |
|
| Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2) |
|
| Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (2) |
| ||||
January 1, 2022 - January 29, 2022 |
|
| - |
|
| $ | - |
|
|
| - |
|
| $ | 3,849,489 |
|
January 30, 2022 - February 26, 2022 |
|
| 4,298 |
|
| $ | 115.62 |
|
|
| 4,298 |
|
| $ | 3,352,566 |
|
February 27, 2022 - April 2, 2022 |
|
| 2,750 |
|
| $ | 148.51 |
|
|
| 2,750 |
|
| $ | 2,944,165 |
|
For the Quarter Ended April 2, 2022 |
|
| 7,048 |
|
|
|
|
|
|
| 7,048 |
|
|
|
|
|
(1) | Includes commissions of |
(2) | On |
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Item 6. Exhibits
Exhibit No. |
| Description of Exhibit |
|
| |
3 |
| |
|
| |
3.1 |
| |
4 | ||
4.1 | ||
4.2 | ||
4.3 | ||
10* | 2014 Omnibus Incentive Compensation Plan, as amended and restated effective February 21, 2022 (#) | |
10.1* | ||
10.2* | ||
|
|
|
| ||
10.4* | ||
10.5 |
| |
| ||
| ||
| ||
| ||
|
|
|
31* |
| |
|
| |
31.1* |
| |
|
| |
32** |
| |
|
| |
32.1** |
| |
|
| |
101* |
| Financial Statements (Unaudited) from the Quarterly Report on Form 10-Q of Nucor Corporation for the quarter ended April |
|
|
|
104* |
| Cover Page from the Quarterly Report on Form 10-Q of Nucor Corporation for the quarter ended April |
* | 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/ |
|
|
|
|
|
|
| Chief Financial Officer, Treasurer and Executive |
|
|
| Vice President |
Dated: May 12, 202111, 2022
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