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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
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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:
(Exact name of registrant as specified in its charter)
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(State or other jurisdiction of incorporation or organization) |
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(I.R.S. Employer Identification No.) |
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(Address of principal executive offices) |
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(Zip Code) |
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(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class |
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Trading Symbol(s) |
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Name of each exchange on which registered |
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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.
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).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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☒ |
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Accelerated filer |
☐ |
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Non-accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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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
Nucor Corporation
Quarterly Report on Form 10-Q
For the Three Months and Six Months Ended July 2, 2022
Table of Contents
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1 |
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2 |
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Condensed Consolidated Balance Sheets – July 2, 2022 and December 31, 2021 |
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5 |
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Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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30 |
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i
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Nucor Corporation Condensed Consolidated Statements of Earnings (Unaudited)
(In thousands, except per share amounts)
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Three Months (13 Weeks) Ended |
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Six Months (26 Weeks) Ended |
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July 2, 2022 |
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July 3, 2021 |
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July 2, 2022 |
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July 3, 2021 |
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Net sales |
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$ |
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$ |
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$ |
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$ |
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Costs, expenses and other: |
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Cost of products sold |
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Marketing, administrative and other expenses |
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Equity in earnings of unconsolidated affiliates |
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( |
) |
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( |
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( |
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( |
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Losses on assets |
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- |
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- |
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Interest expense, net |
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Earnings before income taxes and noncontrolling interests |
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Provision for income taxes |
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Net earnings |
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Earnings attributable to noncontrolling interests |
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Net earnings attributable to Nucor stockholders |
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$ |
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$ |
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$ |
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$ |
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Net earnings per share: |
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Basic |
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$ |
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$ |
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$ |
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$ |
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Diluted |
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$ |
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$ |
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$ |
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$ |
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Average shares outstanding: |
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Basic |
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Diluted |
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See notes to condensed consolidated financial statements.
1
Nucor Corporation Condensed Consolidated Statements of Comprehensive Income (Unaudited)
(In thousands)
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Three Months (13 Weeks) Ended |
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Six Months (26 Weeks) Ended |
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July 2, 2022 |
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July 3, 2021 |
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July 2, 2022 |
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July 3, 2021 |
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Net earnings |
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$ |
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$ |
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$ |
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$ |
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Other comprehensive income (loss): |
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Net unrealized income on hedging derivatives, net of income taxes of $ quarter of 2022 and 2021, respectively, and $ and $ 2021, respectively |
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Reclassification adjustment for settlement of hedging derivatives included in net earnings, net of income taxes of ($ 2022 and 2021, respectively, and ($ $ 2021, respectively |
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( |
) |
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( |
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Foreign currency translation (loss) gain, net of income taxes of $ months of 2022 and 2021 |
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( |
) |
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( |
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( |
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Comprehensive income |
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Comprehensive income attributable to noncontrolling interests |
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Comprehensive income attributable to Nucor stockholders |
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$ |
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$ |
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$ |
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$ |
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See notes to condensed consolidated financial statements.
2
Nucor Corporation Condensed Consolidated Balance Sheets (Unaudited)
(In thousands)
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July 2, 2022 |
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Dec 31, 2021 |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
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$ |
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$ |
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Short-term investments |
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Accounts receivable, net |
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Inventories, net |
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Other current assets |
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Total current assets |
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Property, plant and equipment, net |
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Restricted cash and cash equivalents |
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Goodwill |
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Other intangible assets, net |
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Other assets |
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Total assets |
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$ |
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$ |
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LIABILITIES |
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Current liabilities: |
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Short-term debt |
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$ |
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$ |
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Current portion of long-term debt and finance lease obligations |
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Accounts payable |
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Salaries, wages and related accruals |
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Accrued expenses and other current liabilities |
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Total current liabilities |
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Long-term debt and finance lease obligations due after one year |
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Deferred credits and other liabilities |
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Total liabilities |
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Commitments and contingencies |
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EQUITY |
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Nucor stockholders' equity: |
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Common stock |
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Additional paid-in capital |
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Retained earnings |
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Accumulated other comprehensive loss, net of income taxes |
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( |
) |
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( |
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Treasury stock |
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( |
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( |
) |
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Total Nucor stockholders' equity |
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Noncontrolling interests |
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Total equity |
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Total liabilities and equity |
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$ |
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$ |
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See notes to condensed consolidated financial statements.
3
Nucor Corporation Condensed Consolidated Statements of Cash Flows (Unaudited)
(In thousands)
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Six Months (26 Weeks) Ended |
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July 2, 2022 |
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July 3, 2021 |
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Operating activities: |
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Net earnings |
|
$ |
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$ |
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Adjustments: |
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Depreciation |
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Amortization |
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Stock-based compensation |
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Deferred income taxes |
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( |
) |
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Distributions from affiliates |
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Equity in earnings of unconsolidated affiliates |
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( |
) |
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( |
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Losses on assets |
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Changes in assets and liabilities (exclusive of acquisitions and dispositions): |
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Accounts receivable |
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( |
) |
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( |
) |
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Inventories |
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( |
) |
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( |
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Accounts payable |
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Federal income taxes |
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Salaries, wages and related accruals |
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( |
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Other operating activities |
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Cash provided by operating activities |
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Investing activities: |
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Capital expenditures |
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( |
) |
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( |
) |
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Investment in and advances to affiliates |
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( |
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( |
) |
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Disposition of plant and equipment |
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Acquisitions (net of cash acquired) |
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( |
) |
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Purchases of investments |
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( |
) |
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( |
) |
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Proceeds from the sale of investments |
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Other investing activities |
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( |
) |
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Cash used in investing activities |
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( |
) |
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( |
) |
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Financing activities: |
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Net change in short-term debt |
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( |
) |
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Proceeds from issuance of long-term debt, net of discount |
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Repayment of long-term debt |
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( |
) |
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Bond issuance costs |
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( |
) |
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Proceeds from exercise of stock options |
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Payment of tax withholdings on certain stock-based compensation |
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( |
) |
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( |
) |
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Distributions to noncontrolling interests |
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( |
) |
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( |
) |
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Cash dividends |
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( |
) |
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( |
) |
|
Acquisition of treasury stock |
|
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( |
) |
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( |
) |
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Proceeds from government incentives |
|
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Other financing activities |
|
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( |
) |
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|
( |
) |
|
Cash used in financing activities |
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( |
) |
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( |
) |
|
Effect of exchange rate changes on cash |
|
|
( |
) |
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(Decrease) increase in cash and cash equivalents and restricted cash and cash equivalents |
|
|
( |
) |
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Cash and cash equivalents and restricted cash and cash equivalents - beginning of year |
|
|
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Cash and cash equivalents and restricted cash and cash equivalents - end of six months |
|
$ |
|
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$ |
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|
Non-cash investing activity: |
|
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|
|
|
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Change in accrued plant and equipment purchases |
|
$ |
( |
) |
|
$ |
|
|
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, 2021 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, 2021.
2. Inventories
Inventories consisted of approximately
3. Property, Plant and Equipment
Property, plant and equipment is recorded net of accumulated depreciation of $
4. Goodwill and Other Intangible Assets
The change in the net carrying amount of goodwill for the six months ended July 2, 2022 by segment was as follows (in thousands):
|
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Steel Mills |
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Steel Products |
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Raw Materials |
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Total |
|
||||
|
Balance at December 31, 2021 |
|
$ |
|
|
|
$ |
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|
|
$ |
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|
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$ |
|
|
|
Acquisitions |
|
|
|
|
|
|
|
|
|
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- |
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Other |
|
|
- |
|
|
|
- |
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|
|
( |
) |
|
|
( |
) |
|
Translation |
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
|
( |
) |
|
Balance at July 2, 2022 |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Nucor completed its most recent annual goodwill impairment testing as of the first day of the fourth quarter of 2021 and concluded that as of such date there was
The annual assessment performed in 2021 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
5
Intangible assets with estimated useful lives of
|
|
|
July 2, 2022 |
|
|
December 31, 2021 |
|
||||||||||
|
|
|
Gross Amount |
|
|
Accumulated Amortization |
|
|
Gross Amount |
|
|
Accumulated Amortization |
|
||||
|
Customer relationships |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
Trademarks and trade names |
|
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Other |
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|
|
|
|
|
|
|
|
|
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Intangible asset amortization expense in the second quarter of 2022 and 2021 was $
5. Current Liabilities
Book overdrafts, included in accounts payable in the condensed consolidated balance sheets, were $
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 July 2, 2022 and December 31, 2021 (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 |
|
|||||||||
|
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) |
|
||||
|
As of July 2, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash equivalents |
|
$ |
|
|
|
$ |
|
|
|
$ |
- |
|
|
$ |
- |
|
|
Short-term investments |
|
|
|
|
|
|
|
|
|
|
- |
|
|
|
- |
|
|
Restricted cash and cash equivalents |
|
|
|
|
|
|
|
|
|
|
- |
|
|
|
- |
|
|
Derivative contracts |
|
|
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
Total assets |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
- |
|
|
As of December 31, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash equivalents |
|
$ |
|
|
|
$ |
|
|
|
$ |
- |
|
|
$ |
- |
|
|
Short-term investments |
|
|
|
|
|
|
|
|
|
|
- |
|
|
|
- |
|
|
Restricted cash and cash equivalents |
|
|
|
|
|
|
|
|
|
|
- |
|
|
|
- |
|
|
Derivative contracts |
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
Total assets |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
- |
|
|
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative contracts |
|
$ |
( |
) |
|
$ |
- |
|
|
$ |
( |
) |
|
$ |
- |
|
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 July 2, 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 $
7. Contingencies
We are from time to time a party to various lawsuits, claims and other legal proceedings that arise in the ordinary course of business. With respect to all such lawsuits, claims and proceedings, we record reserves when it is probable a liability has been incurred and the amount of loss can be reasonably estimated. We do not believe that any of these proceedings, individually or in the aggregate, would be expected to have a material adverse effect on our results of operations, financial position or cash flows. Nucor maintains liability insurance with self-insurance limits for certain risks.
8. Stock-Based Compensation
Stock Options
A summary of activity under Nucor’s stock option plans for the first six months of 2022 is as follows (shares and aggregate intrinsic value in thousands):
|
|
|
|
|
|
|
Weighted- |
|
|
Weighted- |
|
|
|
|
|
|
|
|
|
|
|
|
Average |
|
|
Average |
|
Aggregate |
|
||
|
|
|
|
|
|
|
Exercise |
|
|
Remaining |
|
Intrinsic |
|
||
|
|
|
Shares |
|
|
Price |
|
|
Contractual Life |
|
Value |
|
|||
|
Number of shares under stock options: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding at beginning of year |
|
|
|
|
|
$ |
|
|
|
|
|
|
|
|
|
Granted |
|
|
|
|
|
$ |
|
|
|
|
|
|
|
|
|
Exercised |
|
|
( |
) |
|
$ |
|
|
|
|
|
$ |
|
|
|
Canceled |
|
|
- |
|
|
$ |
- |
|
|
|
|
|
|
|
|
Outstanding at July 2, 2022 |
|
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
|
Stock options exercisable at July 2, 2022 |
|
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
For the 2022 stock option grant, the grant date fair value of $
|
Exercise price |
|
$ |
|
|
|
Expected dividend yield |
|
|
|
% |
|
Expected stock price volatility |
|
|
|
% |
|
Risk-free interest rate |
|
|
|
% |
|
Expected life (in years) |
|
|
|
|
Compensation expense for stock options was $
7
Restricted Stock Units
A summary of Nucor’s restricted stock unit (“RSU”) activity for the first six months of 2022 is as follows (shares in thousands):
|
|
|
Shares |
|
|
Grant Date Fair Value |
|
||
|
Restricted stock units: |
|
|
|
|
|
|
|
|
|
Unvested at beginning of year |
|
|
|
|
|
$ |
|
|
|
Granted |
|
|
|
|
|
$ |
|
|
|
Vested |
|
|
( |
) |
|
$ |
|
|
|
Canceled |
|
|
( |
) |
|
$ |
|
|
|
Unvested at July 2, 2022 |
|
|
|
|
|
$ |
|
|
Compensation expense for RSUs was $
Restricted Stock Awards
A summary of Nucor’s restricted stock activity under the Nucor Corporation Senior Officers Annual Incentive Plan (a supplement to the Nucor Corporation 2014 Omnibus Incentive Compensation Plan, the “AIP”) and the Nucor Corporation Senior Officers Long-Term Incentive Plan (a supplement to the Nucor Corporation 2014 Omnibus Incentive Compensation Plan, the “LTIP”) for the first six months of 2022 is as follows (shares in thousands):
|
|
|
|
|
|
|
Grant Date |
|
|
|
|
|
Shares |
|
|
Fair Value |
|
||
|
Restricted stock units and restricted stock awards: |
|
|
|
|
|
|
|
|
|
Unvested at beginning of year |
|
|
|
|
|
$ |
|
|
|
Granted |
|
|
|
|
|
$ |
|
|
|
Vested |
|
|
( |
) |
|
$ |
|
|
|
Canceled |
|
|
- |
|
|
$ |
- |
|
|
Unvested at July 2, 2022 |
|
|
|
|
|
$ |
|
|
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 $
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 $
8
10. Interest Expense (Income)
The components of net interest expense for the second quarter and first six months of 2022 and 2021 are as follows (in thousands):
|
|
|
Three Months (13 Weeks) Ended |
|
|
Six Months (26 Weeks) Ended |
|
||||||||||
|
|
|
July 2, 2022 |
|
|
July 3, 2021 |
|
|
July 2, 2022 |
|
|
July 3, 2021 |
|
||||
|
Interest expense |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
Interest income |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
Interest expense, net |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
11. Income Taxes
The effective tax rate for the second quarter of 2022 was
The Internal Revenue Service (the “IRS”) is currently examining Nucor’s 2015, 2019 and 2020 federal income tax returns. Nucor has concluded U.S. federal income tax matters for tax years through 2014 and for tax year 2016. The tax years 2017 and 2018 remain open to examination by the IRS. 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 2015 through 2020 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 $
9
12. Stockholders’ Equity
The following tables reflect the changes in stockholders’ equity attributable to Nucor and the noncontrolling interests of Nucor’s joint ventures, Nucor-Yamato Steel Company (Limited Partnership) (“NYS”) and California Steel Industries, Inc. (“CSI”), in both of which Nucor owns
|
|
|
|
|
|
|
Three Months (13 Weeks) Ended July 2, 2022 |
|
|
|
|
|
|||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated |
|
|
|
|
|
|
|
|
|
|
Total |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional |
|
|
|
|
|
|
Other |
|
|
Treasury Stock |
|
|
Nucor |
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
Common Stock |
|
|
Paid-in |
|
|
Retained |
|
|
Comprehensive |
|
|
(at cost) |
|
|
Stockholders' |
|
|
Noncontrolling |
|
|||||||||||||||
|
|
|
Total |
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Earnings |
|
|
Income (Loss) |
|
|
Shares |
|
|
Amount |
|
|
Equity |
|
|
Interests |
|
||||||||||
|
BALANCES, April 2, 2022 |
|
$ |
|
|
|
|
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
( |
) |
|
|
|
|
|
$ |
( |
) |
|
$ |
|
|
|
$ |
|
|
|
Net earnings |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
Other comprehensive income (loss) |
|
|
( |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
Stock options exercised |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
- |
|
|
Stock option expense |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
Issuance of stock under award plans, net of forfeitures |
|
|
( |
) |
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
|
|
|
|
( |
) |
|
|
- |
|
|
Amortization of unearned compensation |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
Treasury stock acquired |
|
|
( |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
- |
|
|
Cash dividends declared |
|
|
( |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
Distributions to noncontrolling interests |
|
|
( |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
Acquisition of noncontrolling interest in CSI |
|
|
( |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
BALANCES, July 2, 2022 |
|
$ |
|
|
|
|
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
( |
) |
|
|
|
|
|
$ |
( |
) |
|
$ |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
Six Months (26 Weeks) Ended July 2, 2022 |
|
|
|
|
|
|||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated |
|
|
|
|
|
|
|
|
|
|
Total |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional |
|
|
|
|
|
|
Other |
|
|
Treasury Stock |
|
|
Nucor |
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
Common Stock |
|
|
Paid-in |
|
|
Retained |
|
|
Comprehensive |
|
|
(at cost) |
|
|
Stockholders' |
|
|
Noncontrolling |
|
|||||||||||||||
|
|
|
Total |
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Earnings |
|
|
Income (Loss) |
|
|
Shares |
|
|
Amount |
|
|
Equity |
|
|
Interests |
|
||||||||||
|
BALANCES, December 31, 2021 |
|
$ |
|
|
|
|
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
( |
) |
|
|
|
|
|
$ |
( |
) |
|
$ |
|
|
|
$ |
|
|
|
Net earnings |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
Other comprehensive income (loss) |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
Stock options exercised |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
- |
|
|
Stock option expense |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
Issuance of stock under award plans, net of forfeitures |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
- |
|
|
Amortization of unearned compensation |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
Treasury stock acquired |
|
|
( |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
- |
|
|
Cash dividends declared |
|
|
( |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
Distributions to noncontrolling interests |
|
|
( |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
Acquisition of noncontrolling interest in CSI |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
BALANCES, July 2, 2022 |
|
$ |
|
|
|
|
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
( |
) |
|
|
|
|
|
$ |
( |
) |
|
$ |
|
|
|
$ |
|
|
10
|
|
|
|
|
|
|
Three Months (13 Weeks) Ended July 3, 2021 |
|
|
|
|
|
|||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated |
|
|
|
|
|
|
|
|
|
|
Total |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional |
|
|
|
|
|
|
Other |
|
|
Treasury Stock |
|
|
Nucor |
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
Common Stock |
|
|
Paid-in |
|
|
Retained |
|
|
Comprehensive |
|
|
(at cost) |
|
|
Stockholders' |
|
|
Noncontrolling |
|
|||||||||||||||
|
|
|
Total |
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Earnings |
|
|
Income (Loss) |
|
|
Shares |
|
|
Amount |
|
|
Equity |
|
|
Interests |
|
||||||||||
|
BALANCES, April 3, 2021 |
|
$ |
|
|
|
|
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
( |
) |
|
|
|
|
|
$ |
( |
) |
|
$ |
|
|
|
$ |
|
|
|
Net earnings |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
Other comprehensive income (loss) |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
Stock options exercised |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
- |
|
|
Stock option expense |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
Issuance of stock under award plans, net of forfeitures |
|
|
( |
) |
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
|
|
|
|
( |
) |
|
|
- |
|
|
Amortization of unearned compensation |
|
|
( |
) |
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
Treasury stock acquired |
|
|
( |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
- |
|
|
Cash dividends declared |
|
|
( |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
Distributions to noncontrolling interests |
|
|
( |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
BALANCES, July 3, 2021 |
|
$ |
|
|
|
|
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
( |
) |
|
|
|
|
|
$ |
( |
) |
|
$ |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
Six Months (26 Weeks) Ended July 3, 2021 |
|
|
|
|
|
|||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated |
|
|
|
|
|
|
|
|
|
|
Total |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional |
|
|
|
|
|
|
Other |
|
|
Treasury Stock |
|
|
Nucor |
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
Common Stock |
|
|
Paid-in |
|
|
Retained |
|
|
Comprehensive |
|
|
(at cost) |
|
|
Stockholders' |
|
|
Noncontrolling |
|
|||||||||||||||
|
|
|
Total |
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Earnings |
|
|
Income (Loss) |
|
|
Shares |
|
|
Amount |
|
|
Equity |
|
|
Interests |
|
||||||||||
|
BALANCES, December 31, 2020 |
|
$ |
|
|
|
|
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
( |
) |
|
|
|
|
|
$ |
( |
) |
|
$ |
|
|
|
$ |
|
|
|
Net earnings |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
Other comprehensive income (loss) |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
Stock options exercised |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
- |
|
|
Stock option expense |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
Issuance of stock under award plans, net of forfeitures |
|
|
( |
) |
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
|
|
|
|
( |
) |
|
|
- |
|
|
Amortization of unearned compensation |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
Treasury stock acquired |
|
|
( |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
- |
|
|
Cash dividends declared |
|
|
( |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
Distributions to noncontrolling interests |
|
|
( |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
BALANCES, July 3, 2021 |
|
$ |
|
|
|
|
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
( |
) |
|
|
|
|
|
$ |
( |
) |
|
$ |
|
|
|
$ |
|
|
Dividends declared per share were $
On December 2, 2021, 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 $
11
13. Accumulated Other Comprehensive Income (Loss)
The following tables reflect the changes in accumulated other comprehensive income (loss) by component for the three months and six months ended July 2, 2022 and July 3, 2021 (in thousands):
|
|
|
Three-Month (13-Week) Period Ended |
|
|||||||||||||
|
|
|
July 2, 2022 |
|
|||||||||||||
|
|
|
Gains and (Losses) on |
|
|
Foreign Currency |
|
|
Adjustment to Early |
|
|
|
|
|
|||
|
|
|
Hedging Derivatives |
|
|
Gains (Losses) |
|
|
Retiree Medical Plan |
|
|
Total |
|
||||
|
Accumulated other comprehensive income (loss) at April 2, 2022 |
|
$ |
|
|
|
$ |
( |
) |
|
$ |
|
|
|
$ |
( |
) |
|
Other comprehensive income (loss) before reclassifications |
|
|
|
|
|
|
( |
) |
|
|
- |
|
|
|
( |
) |
|
Amounts reclassified from accumulated other comprehensive income (loss) into earnings (1) |
|
|
( |
) |
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
Net current-period other comprehensive income (loss) |
|
|
|
|
|
|
( |
) |
|
|
- |
|
|
|
( |
) |
|
Accumulated other comprehensive income (loss) at July 2, 2022 |
|
$ |
|
|
|
$ |
( |
) |
|
$ |
|
|
|
$ |
( |
) |
|
|
|
Six-Month (26-Week) Period Ended |
|
|||||||||||||
|
|
|
July 2, 2022 |
|
|||||||||||||
|
|
|
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, 2021 |
|
$ |
|
|
|
$ |
( |
) |
|
$ |
|
|
|
$ |
( |
) |
|
Other comprehensive income (loss) before reclassifications |
|
|
|
|
|
|
( |
) |
|
|
- |
|
|
|
|
|
|
Amounts reclassified from accumulated other comprehensive income (loss) into earnings (1) |
|
|
( |
) |
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
Net current-period other comprehensive income (loss) |
|
|
|
|
|
|
( |
) |
|
|
- |
|
|
|
|
|
|
Accumulated other comprehensive income (loss) at July 2, 2022 |
|
$ |
|
|
|
$ |
( |
) |
|
$ |
|
|
|
$ |
( |
) |
|
(1) |
|
|
|
|
Three-Month (13-Week) Period Ended |
|
|||||||||||||
|
|
|
July 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 April 3, 2021 |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
|
$ |
( |
) |
|
Other comprehensive income (loss) before reclassifications |
|
|
|
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
Amounts reclassified from accumulated other comprehensive income (loss) into earnings (2) |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
Net current-period other comprehensive income (loss) |
|
|
|
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
Accumulated other comprehensive income (loss) at July 3, 2021 |
|
$ |
|
|
|
$ |
( |
) |
|
$ |
|
|
|
$ |
( |
) |
12
|
|
|
Six-Month (26-Week) Period Ended |
|
|||||||||||||
|
|
|
July 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 |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
|
$ |
( |
) |
|
Other comprehensive income (loss) before reclassifications |
|
|
|
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
Amounts reclassified from accumulated other comprehensive income (loss) into earnings (2) |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
Net current-period other comprehensive income (loss) |
|
|
|
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
Accumulated other comprehensive income (loss) at July 3, 2021 |
|
$ |
|
|
|
$ |
( |
) |
|
$ |
|
|
|
$ |
( |
) |
13
(2)
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 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, overhead doors, steel grating, tubular products, steel racking, piling products, 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.
Corporate/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. Corporate assets primarily include cash and cash equivalents, short-term investments, restricted cash and 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 second quarter and first six months of 2022 and 2021 were as follows (in thousands):
|
|
|
Three Months (13 Weeks) Ended |
|
|
Six Months (26 Weeks) Ended |
|
||||||||||
|
|
|
July 2, 2022 |
|
|
July 3, 2021 |
|
|
July 2, 2022 |
|
|
July 3, 2021 |
|
||||
|
Net sales to external customers: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Steel mills |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
Steel products |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Raw materials |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
Intercompany sales: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Steel mills |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
Steel products |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Raw materials |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate/eliminations |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
Earnings before income taxes and noncontrolling interests: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Steel mills |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
Steel products |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Raw materials |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate/eliminations |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
|
|
July 2, 2022 |
|
|
Dec. 31, 2021 |
|
||
|
Segment assets: |
|
|
|
|
|
|
|
|
|
Steel mills |
|
$ |
|
|
|
$ |
|
|
|
Steel products |
|
|
|
|
|
|
|
|
|
Raw materials |
|
|
|
|
|
|
|
|
|
Corporate/eliminations |
|
|
|
|
|
|
|
|
|
|
|
$ |
|
|
|
$ |
|
|
14
15. Revenue
The following tables disaggregate our revenue by major source for the second quarter and first six months of 2022 and 2021 (in thousands):
|
|
|
Three Months (13 Weeks) Ended July 2, 2022 |
|
|
Six Months (26 Weeks) Ended July 2, 2022 |
|
||||||||||||||||||||||||||
|
|
|
Steel Mills |
|
|
Steel Products |
|
|
Raw Materials |
|
|
Total |
|
|
Steel Mills |
|
|
Steel Products |
|
|
Raw Materials |
|
|
Total |
|
||||||||
|
Sheet |
|
$ |
|
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
|
|
|
$ |
|
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
|
|
|
Bar |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
Structural |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
Plate |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
Tubular Products |
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
Rebar Fabrication |
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
Joist |
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
Deck |
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
Other Steel Products |
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
Raw Materials |
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
|
|
Three Months (13 Weeks) Ended July 3, 2021 |
|
|
Six Months (26 Weeks) Ended July 3, 2021 |
|
||||||||||||||||||||||||||
|
|
|
Steel Mills |
|
|
Steel Products |
|
|
Raw Materials |
|
|
Total |
|
|
Steel Mills |
|
|
Steel Products |
|
|
Raw Materials |
|
|
Total |
|
||||||||
|
Sheet |
|
$ |
|
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
|
|
|
$ |
|
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
|
|
|
Bar |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
Structural |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
Plate |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
Tubular Products |
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
Rebar Fabrication |
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
Joist |
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
Deck |
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
Other Steel Products |
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
Raw Materials |
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
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 $
15
16. Earnings Per Share
The computations of basic and diluted net earnings per share for the second quarter and first six months of 2022 and 2021 are as follows (in thousands, except per share amounts):
|
|
|
Three Months (13 Weeks) Ended |
|
|
Six Months (26 Weeks) Ended |
|
||||||||||
|
|
|
July 2, 2022 |
|
|
July 3, 2021 |
|
|
July 2, 2022 |
|
|
July 3, 2021 |
|
||||
|
Basic net earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net earnings |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
Earnings allocated to participating securities |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
Net earnings available to common stockholders |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
Basic average shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net earnings per share |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
Diluted net earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net earnings |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
Earnings allocated to participating securities |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
Net earnings available to common stockholders |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
Diluted average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic average shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dilutive effect of stock options and other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net earnings per share |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
The following stock options were excluded from the computation of diluted net earnings per share for the second quarter and first six months of 2022 and 2021 because their effect would have been anti-dilutive (shares in thousands):
|
|
|
Three Months (13 Weeks) Ended |
|
|
Six Months (26 Weeks) Ended |
|
||||||||||
|
|
|
July 2, 2022 |
|
|
July 3, 2021 |
|
|
July 2, 2022 |
|
|
July 3, 2021 |
|
||||
|
Anti-dilutive stock options: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shares |
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
Weighted-average exercise price |
|
$ |
- |
|
|
$ |
|
|
|
$ |
- |
|
|
$ |
|
|
17. Debt and Other Financing Arrangements
On March 11, 2022, Nucor completed the issuance and sale of $
On April 25, 2022, Nucor redeemed all $
On May 23, 2022, Nucor completed the issuance and sale of $
16
18. Acquisitions
Acquisition of C.H.I.
On June 24, 2022, Nucor used cash on hand to acquire the assets of C.H.I. for a purchase price, net of cash acquired, of approximately $
We allocated the purchase price for C.H.I. 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 the assets acquired and liabilities assumed of C.H.I. as of June 24, 2022, the date of acquisition (in thousands):
|
Cash |
|
$ |
|
|
|
Accounts receivable |
|
|
|
|
|
Inventory |
|
|
|
|
|
Other current assets |
|
|
|
|
|
Property, plant and equipment |
|
|
|
|
|
Goodwill |
|
|
|
|
|
Other intangible assets |
|
|
|
|
|
Other assets |
|
|
|
|
|
Total assets acquired |
|
|
|
|
|
Current liabilities |
|
|
|
|
|
Deferred income taxes |
|
|
|
|
|
Other liabilities |
|
|
|
|
|
Total liabilities assumed |
|
|
|
|
|
Net assets acquired |
|
$ |
|
|
The following table summarizes the purchase price allocation to the identifiable intangible assets of C.H.I. as of June 24, 2022, the date of acquisition (in thousands, except years):
|
|
|
|
|
|
|
Weighted- |
|
|
|
|
|
|
|
Average Life |
|
Customer relationships |
|
$ |
|
|
|
|
|
Trade name |
|
|
|
|
|
|
|
|
|
$ |
|
|
|
|
The goodwill of $
17
Acquisition of CSI
On February 1, 2022, Nucor used cash on hand to acquire a
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.
The following table summarizes the fair values of
|
Cash |
|
$ |
|
|
|
Accounts receivable |
|
|
|
|
|
Inventory |
|
|
|
|
|
Other current assets |
|
|
|
|
|
Property, plant and equipment |
|
|
|
|
|
Goodwill |
|
|
|
|
|
Other intangible assets |
|
— |
|
|
|
Other assets |
|
|
|
|
|
Total assets acquired |
|
|
|
|
|
Current portion of long-term debt |
|
|
|
|
|
Other current liabilities |
|
|
|
|
|
Long-term debt due after one year |
|
|
|
|
|
Other liabilities |
|
|
|
|
|
Total liabilities assumed |
|
|
|
|
|
Net assets acquired at 100% |
|
|
|
|
|
Less: Fair value of noncontrolling interest |
|
|
|
|
|
Net assets acquired at 51% |
|
$ |
|
|
The determination of the fair value of the noncontrolling interest was calculated using the implied value of
The goodwill of $
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.
Other Acquisitions
Other smaller acquisitions in the first six months of 2022, exclusive of purchase price adjustments made and net of cash acquired, totaled approximately $
18
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Certain statements made in this 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, 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) our ability to integrate businesses we acquire; (15) the impact of the COVID-19 pandemic and any variants of the virus; and (16) the risks discussed in “Item 1A. Risk Factors” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 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, 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, overhead doors, steel grating, tubular products, steel racking, piling products, 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 production operations.
19
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. The CSI business 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.
On June 24, 2022, Nucor used cash on hand to acquire the assets of C.H.I. for a purchase price of approximately $3.00 billion, net of cash acquired. C.H.I. is a leading manufacturer of overhead doors for residential and commercial markets in the United States and Canada. Commercial overhead doors are used in warehousing and retail, areas that Nucor has focused its attention recently through other value-added products such as insulated metal panels (CENTRIA, Metl-Span and TrueCore brands) and steel racking solutions (Hannibal Industries and Elite Storage Solutions). It is expected that the C.H.I. acquisition will also benefit from Nucor’s recent paint line investments at its Hickman, Arkansas and Crawfordsville, Indiana sheet mills. The C.H.I. business financial results are included as part of the steel products segment.
The average utilization rates of all operating facilities in the steel mills, steel products and raw materials segments were approximately 81%, 76% and 75%, respectively, in the first six months of 2022 compared with approximately 96%, 76% and 77%, respectively, in the first six months of 2021.
Results of Operations
Nucor reported record consolidated net earnings of $2.56 billion, or $9.67 per diluted share, for the second quarter of 2022, surpassing the previous record set in the fourth quarter of 2021 of $2.25 billion, or $7.97 per diluted share. By comparison, Nucor reported consolidated net earnings of $2.10 billion, or $7.67 per diluted share, in the first quarter of 2022 and consolidated net earnings of $1.51 billion, or $5.04 per diluted share, in the second quarter of 2021.
Nucor’s consolidated net earnings for the first six months of 2022 were $4.66 billion, or $17.30 per diluted share, making it the most profitable first six months in the Company’s history. By comparison, Nucor reported consolidated net earnings of $2.45 billion, or $8.13 per diluted share, in the first six months of 2021.
The significant increase in earnings in the second quarter and first six months of 2022 as compared to the respective periods in 2021 was primarily due to significant increases in average selling prices that more than exceeded the impact of decreased shipping volumes during the same periods. Average selling prices increased rapidly in the first six months of 2021 and continued to increase over the remainder of 2021 as demand was robust across most of the end markets we serve. In the steel mills segment, prices softened in the first six months of 2022 from the fourth quarter of 2021, due primarily to decreased average sheet pricing. However, average selling prices in the steel products segment continued to increase in the first six months of 2022.
Comparing the second quarter of 2022 to the first quarter of 2022, all three operating segments generated higher earnings with the largest increase in our steel products segment. Overall, demand from nonresidential construction markets remains strong and demand in our other key end-use markets appears stable and resilient in light of economic uncertainty.
The following discussion provides a greater quantitative and qualitative analysis of Nucor’s performance in the second quarter and first six months of 2022 as compared to the second quarter and first six months of 2021.
Net Sales
Net sales to external customers by segment for the second quarter and first six months of 2022 and 2021 were as follows (in thousands):
|
|
|
Three Months (13 Weeks) Ended |
|
Six Months (26 Weeks) Ended |
||||||||
|
|
|
July 2, 2022 |
|
July 3, 2021 |
|
% Change |
|
July 2, 2022 |
|
July 3, 2021 |
|
% Change |
|
Steel mills |
|
$ 7,256,067 |
|
$ 5,909,909 |
|
23% |
|
$ 13,774,676 |
|
$ 10,518,686 |
|
31% |
|
Steel products |
|
3,842,948 |
|
2,241,107 |
|
71% |
|
7,166,036 |
|
4,051,162 |
|
77% |
|
Raw materials |
|
695,459 |
|
638,148 |
|
9% |
|
1,347,044 |
|
1,236,456 |
|
9% |
|
Total net sales to external customers |
|
$ 11,794,474 |
|
$ 8,789,164 |
|
34% |
|
$ 22,287,756 |
|
$ 15,806,304 |
|
41% |
20
Net sales for the second quarter of 2022 increased 34% from the second quarter of 2021. Average sales price per ton increased 44% from $1,175 in the second quarter of 2021 to $1,690 in the second quarter of 2022. Total tons shipped to outside customers in the second quarter of 2022 were 6,977,000 tons, a 7% decrease from the second quarter of 2021.
Net sales for the first six months of 2022 increased 41% from the first six months of 2021. Average sales price per ton increased 55% from $1,078 in the first six months of 2021 to $1,667 in the first six months of 2022. Total tons shipped to outside customers in the first six months of 2022 were 13,371,000 tons, a 9% decrease from the first six months of 2021.
In the steel mills segment, sales tons for the second quarter and first six months of 2022 and 2021 were as follows (in thousands):
|
|
|
Three Months (13 Weeks) Ended |
|
Six Months (26 Weeks) Ended |
||||||||
|
|
|
July 2, 2022 |
|
July 3, 2021 |
|
% Change |
|
July 2, 2022 |
|
July 3, 2021 |
|
% Change |
|
Outside steel shipments |
|
5,041 |
|
5,356 |
|
-6% |
|
9,580 |
|
10,546 |
|
-9% |
|
Inside steel shipments |
|
1,407 |
|
1,378 |
|
2% |
|
2,682 |
|
2,732 |
|
-2% |
|
Total steel shipments |
|
6,448 |
|
6,734 |
|
-4% |
|
12,262 |
|
13,278 |
|
-8% |
Net sales for the steel mills segment increased 23% in the second quarter of 2022 from the second quarter of 2021, due primarily to a 29% increase in the average sales price per ton, from $1,107 to $1,429, partially offset by a 6% decrease in tons sold to outside customers. Average selling prices increased across all product groups within the steel mills segment in the second quarter of 2022 as compared to the second quarter of 2021.
Net sales for the steel mills segment increased 31% in the first six months of 2022 from the first six months of 2021, due to a 43% increase in the average sales price per ton from $1,001 to $1,432, partially offset by a 9% decrease in tons sold to outside customers.
Outside sales tonnage for the steel products segment for the second quarter and first six months of 2022 and 2021 was as follows (in thousands):
|
|
|
Three Months (13 Weeks) Ended |
|
Six Months (26 Weeks) Ended |
||||||||
|
|
|
July 2, 2022 |
|
July 3, 2021 |
|
% Change |
|
July 2, 2022 |
|
July 3, 2021 |
|
% Change |
|
Joist sales |
|
158 |
|
167 |
|
-5% |
|
337 |
|
339 |
|
-1% |
|
Deck sales |
|
123 |
|
130 |
|
-5% |
|
259 |
|
265 |
|
-2% |
|
Cold finished sales |
|
123 |
|
128 |
|
-4% |
|
256 |
|
260 |
|
-2% |
|
Rebar fabrication sales |
|
339 |
|
338 |
|
- |
|
630 |
|
620 |
|
2% |
|
Piling products sales |
|
119 |
|
171 |
|
-30% |
|
230 |
|
307 |
|
-25% |
|
Tubular products sales |
|
274 |
|
269 |
|
2% |
|
504 |
|
519 |
|
-3% |
|
Other steel products sales |
|
175 |
|
109 |
|
61% |
|
330 |
|
209 |
|
58% |
|
Total steel products sales |
|
1,311 |
|
1,312 |
|
- |
|
2,546 |
|
2,519 |
|
1% |
Net sales for the steel products segment increased 71% in the second quarter of 2022 compared to the second quarter of 2021, due to a 72% increase in the average sales price per ton from $1,708 to $2,931. Average selling prices increased across all businesses within the steel products segment in the second quarter of 2022 as compared to the second quarter of 2021, most notably at our joist, deck and building systems businesses.
Net sales for the steel products segment increased 77% in the first six months of 2022 compared to the first six months of 2021, due to a 75% increase in the average sales price per ton from $1,608 to $2,814 and a 1% increase in tons sold to outside customers. Average selling prices increased across all businesses within the steel products segment in the first six months of 2022 as compared to the first six months of 2021, most notably at our joist, deck and building systems businesses.
Net sales for the raw materials segment increased 9% in both the second quarter and first six months of 2022 compared to the same prior year periods. The increases in net sales were due primarily to increased average selling prices at DJJ’s brokerage operations, which were partially offset by a decrease in volumes. In the second quarter of 2022, approximately 91% of outside sales for the raw materials segment were from the brokerage operations of DJJ, and approximately 7% of outside sales were from the scrap processing operations of DJJ (90% and 9%, respectively, in the second quarter of 2021). In the first six months of 2022, approximately 91% of outside sales for the raw materials segment
21
were from the brokerage operations of DJJ, and approximately 7% of outside sales were from the scrap processing operations of DJJ (89% and 9%, respectively, in the first six months of 2021).
Gross Margins
Nucor recorded gross margins of $4.10 billion (35%) in the second quarter of 2022, which was a significant increase compared with $2.47 billion (28%) in the second quarter of 2021.
|
|
• |
The primary driver for the increase in gross margins in the second quarter of 2022 as compared to the second quarter of 2021 was the increased gross margins in the steel products segment. The largest increases in gross margins in the steel products segment were at our joist, deck and building systems businesses. Demand in nonresidential construction markets continues to be strong. As we enter the third quarter of 2022, backlogs for the steel products segment are strong. |
|
|
• |
Gross margins in the steel mills segment increased in the second quarter of 2022 as compared to the second quarter of 2021 due to increased metal margins. Metal margin is the difference between the selling price of steel and the cost of scrap and scrap substitutes. |
Scrap and scrap substitutes are the most significant element in the total cost of steel production. The average scrap and scrap substitute cost per gross ton used in the second quarter of 2022 was $534, a 17% increase compared to $457 in the second quarter of 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 were volatile during the first six months of 2022 as the conflict in Ukraine and other factors disrupted global supply chains. As we enter the third quarter of 2022, scrap pricing has decreased.
|
|
• |
Pre-operating and start-up costs of new facilities were approximately $60 million in the second quarter of 2022 and approximately $22 million in the second quarter of 2021. Pre-operating and start-up costs in the second quarter of 2022 and 2021 primarily included costs related to the sheet mill expansion in Kentucky, the plate mill being built in Kentucky 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 raw materials segment increased in the second quarter of 2022 as compared to the second quarter of 2021, primarily due to increased margins at our DRI facilities and DJJ’s scrap processing operations, which had strong profitability in the second quarter of 2022. |
Nucor recorded gross margins of $7.56 billion (34%) in the first six months of 2022, which was a significant increase compared with $4.10 billion (26%) in the first six months of 2021.
|
|
• |
The primary driver for the increase in gross margins in the first six months of 2022 as compared to the first six months of 2021 was the increased metal margins in the steel mills segment. The average scrap and scrap substitute cost per gross ton used in the first six months of 2022 was $516, a 20% increase compared to $431 in the first six months of 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. |
|
|
• |
Pre-operating and start-up costs of new facilities increased to approximately $122 million in the first six months of 2022 from approximately $41 million in the first six months of 2021. Pre-operating and start-up costs in the first six months of 2022 and 2021 primarily included costs related to the sheet mill expansion in Kentucky, the plate mill being built in Kentucky and the galvanizing line at our sheet mill expansion in Arkansas. |
|
|
• |
Gross margins in the steel products segment increased in the first six months of 2022 as compared to the first six months of 2021. The primary driver was the increased gross margins at our joist, deck and building systems businesses. |
|
|
• |
Gross margins in the raw materials segment decreased in the first six months of 2022 as compared to the first six months of 2021, primarily due to decreased gross margins at our DRI facilities in the first quarter of 2022, which improved in the second quarter of 2022. |
22
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 $109.7 million in the second quarter of 2022 as compared to the second quarter of 2021, and increased by $266.8 million in the first six months of 2022 as compared to the first six months of 2021. These increases were due to Nucor’s increased profitability in the second quarter and first six months of 2022 as compared to the respective prior year periods, which resulted in significantly increased accruals related to profit sharing.
Equity in Earnings of Unconsolidated Affiliates
Equity in earnings of unconsolidated affiliates was $7.1 million and $19.4 million in the second quarter of 2022 and 2021, respectively, and $14.8 million and $32.6 million in the first six months of 2022 and 2021, respectively. The decreases in equity method investment earnings were primarily due to increased losses at Nucor-JFE.
Losses on Assets
Included in the first six months of 2021 earnings was a non-cash loss on assets of $42.0 million related to our leasehold interest in unproved oil and natural gas properties in the raw materials segment. Also included in the first six months of 2021 earnings were losses on assets of $9.0 million in the steel products segment.
Interest Expense (Income)
Net interest expense for the second quarter and first six months of 2022 and 2021 was as follows (in thousands):
|
|
|
Three Months (13 Weeks) Ended |
|
|
Six Months (26 Weeks) Ended |
|
||||||||||
|
|
|
July 2, 2022 |
|
|
July 3, 2021 |
|
|
July 2, 2022 |
|
|
July 3, 2021 |
|
||||
|
Interest expense |
|
$ |
63,514 |
|
|
$ |
37,661 |
|
|
$ |
107,590 |
|
|
$ |
78,631 |
|
|
Interest income |
|
|
(5,751 |
) |
|
|
(1,881 |
) |
|
|
(6,692 |
) |
|
|
(3,207 |
) |
|
Interest expense, net |
|
$ |
57,763 |
|
|
$ |
35,780 |
|
|
$ |
100,898 |
|
|
$ |
75,424 |
|
Interest expense increased in the second quarter and first six months of 2022 compared to the second quarter and first six months of 2021, primarily due to the following: an increase in average debt outstanding; higher average interest rates on debt; a decrease in capitalized interest; and approximately $9.3 million related to the early redemption of the 2023 Notes. Interest income increased in the second quarter and first six months of 2022 compared to the second quarter and first six months of 2021 due to higher average interest rates on investments and an increase in average investment levels.
Earnings Before Income Taxes and Noncontrolling Interests
The table below presents earnings before income taxes and noncontrolling interests by segment for the second quarter and first six months of 2022 and 2021 (in thousands). The changes between periods were driven by the quantitative and qualitative factors previously discussed.
|
|
|
|
|
|
|
|
||||||||||
|
|
|
Three Months (13 Weeks) Ended |
|
|
Six Months (26 Weeks) Ended |
|
||||||||||
|
|
|
July 2, 2022 |
|
|
July 3, 2021 |
|
|
July 2, 2022 |
|
|
July 3, 2021 |
|
||||
|
Steel mills |
|
$ |
2,815,723 |
|
|
$ |
2,174,807 |
|
|
$ |
5,394,577 |
|
|
$ |
3,489,781 |
|
|
Steel products |
|
|
1,129,932 |
|
|
|
259,330 |
|
|
|
1,814,799 |
|
|
|
471,142 |
|
|
Raw materials |
|
|
263,598 |
|
|
|
120,143 |
|
|
|
359,451 |
|
|
|
343,378 |
|
|
Corporate/eliminations |
|
|
(718,851 |
) |
|
|
(528,532 |
) |
|
|
(1,180,310 |
) |
|
|
(980,307 |
) |
|
|
|
$ |
3,490,402 |
|
|
$ |
2,025,748 |
|
|
$ |
6,388,517 |
|
|
$ |
3,323,994 |
|
Noncontrolling Interests
Noncontrolling interests represent the income attributable to the holders of noncontrolling interests in Nucor’s joint ventures, NYS and CSI, both of which Nucor owns a 51% controlling interest. The increase in earnings attributable to noncontrolling interests in the second quarter and first six months of 2022 as compared to the second quarter and first six months of 2021 was due to the increased earnings of NYS, which was a result of the increased metal margins, as well as
23
the earnings of CSI, for which results were consolidated beginning on February 1, 2022, the date Nucor acquired its 51% controlling ownership position.
Provision for Income Taxes
The effective tax rate for the second quarter of 2022 was 21.9% compared to 22.4% for the second quarter of 2021. The expected effective tax rate for the full year of 2022 is approximately 22.8%.
We estimate that in the next 12 months our gross unrecognized tax benefits, which totaled $124.0 million at July 2, 2022, exclusive of interest, could decrease by as much as $10.5 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.
The IRS is currently examining Nucor’s 2015, 2019 and 2020 federal income tax returns. Nucor has concluded U.S. federal income tax matters for tax years through 2014 and for tax year 2016. The tax years 2017 and 2018 remain open to examination by the IRS. 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 2015 through 2020 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 $2.56 billion, or $9.67 per diluted share, in the second quarter of 2022 as compared to consolidated net earnings of $1.51 billion, or $5.04 per diluted share, in the second quarter of 2021. Net earnings attributable to Nucor stockholders as a percentage of net sales were 21.7% and 17.1% in the second quarter of 2022 and 2021, respectively.
Nucor reported consolidated net earnings of $4.66 billion, or $17.30 per diluted share, in the first six months of 2022 as compared to consolidated net earnings of $2.45 billion, or $8.13 per diluted share, in the first six months of 2021. Net earnings attributable to Nucor stockholders as a percentage of net sales were 20.9% and 15.5% in the first six months of 2022 and 2021, respectively. Annualized return on average stockholders’ equity was 60.4% and 42.5% in the first six months of 2022 and 2021, respectively.
Outlook
As we enter the third quarter, demand remains stable and resilient across the major end-use markets we serve, and customer inventory levels appear right-sized relative to economic conditions. Though we expect a decrease from the record-setting second quarter, we anticipate another strong quarter of profitability in the third quarter of 2022. We believe that 2022 will be the most profitable year in Nucor’s history.
We expect the steel mills segment earnings to be sequentially lower in the third quarter of 2022, due to lower expected shipment volumes and average selling prices, particularly at our sheet and plate mills. The steel products segment is expected to have another very strong quarter in the third quarter of 2022, with earnings roughly in-line with the second quarter of 2022. Raw materials segment earnings are expected to improve in the third quarter of 2022 due to higher realized pricing at our DRI facilities.
Nucor’s largest exposure to market risk is in our steel mills and steel products segments. Our largest single customer in the second quarter of 2022 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
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 July 2, 2022 remained strong, consisting of total cash and cash equivalents, short-term investments and restricted cash and cash equivalents of $2.45 billion as of such date compared to $2.76 billion as of
24
December 31, 2021. Of these totals, the amount of restricted cash and cash equivalents was $88.3 million at July 2, 2022 and $143.8 million at December 31, 2021. Approximately $664.6 million of the cash and cash equivalents position at July 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 $4.73 billion in the first six months of 2022 as compared to $1.88 billion in the first six months of 2021. The $2.85 billion increase was primarily driven by net earnings of $4.95 billion for the first six months of 2022, an increase of $2.40 billion over net earnings in the prior year period of $2.56 billion. In addition, changes in operating assets and operating liabilities (exclusive of acquisitions) only used cash of $730.6 million in the first six months of 2022 as compared to $1.27 billion in the first six months of 2021.
The funding of our working capital in the first six months of 2022 decreased by $537.1 million over the first six months of 2021 mainly due to the change in accounts receivable using $444.5 million less cash and the change in inventories using $1.52 billion less cash as compared to the same period in 2021. The change in accounts receivable used cash of $648.6 million in the first six months of 2022 as compared to $1.09 billion in the first six months of 2021. The change in inventories used cash of $158.0 million in the first six months of 2022 as compared to $1.67 billion in the same period of 2021. These were offset by the change in accounts payable, federal income taxes and salaries, wages and related accruals in the first six months of 2022 as compared to the first six months of 2021. The change in accounts payable only provided cash of $198.1 million in the first six months of 2022 as compared to providing cash of $726.6 million in the first six months of 2021, a decrease of $528.6 million. The change in federal income taxes provided cash of $33.4 million in the first six months of 2022 as compared to providing cash of $290.3 million in the first six months of 2021, a decrease of $256.8 million. The change in salaries, wages and related accruals used cash of $252.8 million in the first six months of 2022 as compared to providing cash of $385.3 million in the first six months of 2021, a decrease of $638.0 million, due primarily to the payout in the first six months of 2022 of the incentive compensation for 2021, which was higher than the incentive compensation for 2020 that was paid out in the first six months of 2021 due to higher earnings in 2021.
The current ratio was 2.6 at the end of the second quarter of 2022, which was in-line with the current ratio of 2.5 at year-end 2021.
Cash used in investing activities during the first six months of 2022 was $4.54 billion as compared to $681.4 million in the prior year period, an increase of $3.85 billion. The primary reason for the change was an increase in cash used for acquisitions (net of cash acquired) of $3.47 billion due to the acquisitions of CSI on February 1, 2022 and C.H.I. on June 24, 2022. Cash used for capital expenditures of $968.8 million in the first six months of 2022 increased by $266.4 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 six months of 2022 was $614.3 million as compared to $1.16 billion in the first six months of 2021. The primary uses of cash were: (i) stock repurchases of $1.71 billion in the first six months of 2022 as compared to $916.1 million in the first six months of 2021, an increase of $791.7 million; (ii) repayments of long-term debt of $506.0 million in the first six months of 2022 (none in the same period of 2021); and (iii) distributions to noncontrolling interests of $268.5 million in the first six months of 2022 as compared to $97.2 million in the first six months of 2021, an increase of $171.3 million. The primary source of cash offsetting these uses of cash was proceeds from long-term debt, net of discount to the public, of $2.09 billion in the first six months of 2022 (none in the same period of 2021). In the first six months of 2022, Nucor issued $500.0 million aggregate principal amount of its 2025 Notes, $500.0 million aggregate principal amount of its 2027 Notes, $550.0 million aggregate principal amount of the 2032 Notes and $550.0 million aggregate principal amount of the 2052 Notes. On April 25, 2022, we redeemed all $500.0 million aggregate principal amount outstanding of the 2023 Notes. On July 15, 2022, we provided the required 30-day notice of redemption to holders of the 2022 Notes that we intend to redeem the 2022 Notes in-full on August 15, 2022.
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 capital. In addition, the revolving credit facility contains customary non-financial covenants, including a limit on Nucor’s ability to pledge the Company’s assets and a limit on consolidations, mergers and sales of assets. As of July 2, 2022, the funded debt to total capital ratio was 29.2% and we were in compliance with all non-financial covenants under the revolving credit facility. No borrowings were outstanding under the revolving credit facility as of July 2, 2022.
In June 2022, Nucor’s Board of Directors declared a quarterly cash dividend on Nucor’s common stock of $0.50 per share payable on August 11, 2022 to stockholders of record on June 30, 2022. This dividend is Nucor’s 197th consecutive quarterly cash dividend.
25
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 March 2022 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, 2021. There were no interest rate swaps outstanding at July 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 July 2, 2022, accumulated other comprehensive loss, net of income taxes included $50.2 million in unrealized net-of-tax gains 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.
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 July 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 |
|
||
|
Natural gas |
|
$ |
21,150 |
|
|
$ |
52,870 |
|
|
Aluminum |
|
$ |
1,489 |
|
|
$ |
10,984 |
|
|
Copper |
|
$ |
923 |
|
|
$ |
2,293 |
|
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.
26
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 July 2, 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 July 2, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
27
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, 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 July 2, 2022 was as follows (in thousands, except share and per share amounts):
|
|
|
Total Number of Shares Purchased |
|
|
Average Price Paid per Share (1) |
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2) |
|
|
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (2) |
|
||||
|
April 3, 2022 - April 30, 2022 |
|
|
5,100 |
|
|
$ |
157.37 |
|
|
|
5,100 |
|
|
$ |
2,141,596 |
|
|
May 1, 2022 - May 28, 2022 |
|
|
- |
|
|
$ |
- |
|
|
|
- |
|
|
$ |
2,141,596 |
|
|
May 29, 2022 - July 2, 2022 |
|
|
- |
|
|
$ |
- |
|
|
|
- |
|
|
$ |
2,141,596 |
|
|
For the Quarter Ended July 2, 2022 |
|
|
5,100 |
|
|
|
|
|
|
|
5,100 |
|
|
|
|
|
|
(1) |
Includes commissions of $0.50 per share. |
|
(2) |
On December 2, 2021, 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 $4.00 billion of the Company’s common stock and terminated all previously authorized share repurchase programs. The share repurchase authorization is discretionary and has no expiration date. |
28
Item 6. Exhibits
|
Exhibit No. |
|
Description of Exhibit |
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|
|
|
|
2 |
|
|
|
3 |
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|
|
|
|
|
|
3.1 |
|
|
|
4 |
|
|
|
4.1 |
|
|
|
4.2 |
|
|
|
10* |
|
Executive Employment Agreement of John Hollatz (#)
|
|
10.1 |
|
|
|
10.2* |
|
|
|
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 July 2, 2022, filed August 10, 2022, formatted in Inline XBRL: (i) the Condensed Consolidated Statements of Earnings, (ii) the Condensed Consolidated Statements of Comprehensive Income, (iii) the Condensed Consolidated Balance Sheets, (iv) the Condensed Consolidated Statements of Cash Flows and (v) the Notes to Condensed Consolidated Financial Statements. |
|
|
|
|
|
104* |
|
Cover Page from the Quarterly Report on Form 10-Q of Nucor Corporation for the quarter ended July 2, 2022, filed August 10, 2022, formatted in Inline XBRL (included in Exhibit 101 above). |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* |
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. |
29
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/ Stephen D. Laxton |
|
|
|
|
Stephen D. Laxton |
|
|
|
|
Chief Financial Officer, Treasurer and |
|
|
|
|
Executive Vice President |
Dated: August 10, 2022
30