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, 2020 condensed consolidated balance sheet data was derived from audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America. The unaudited condensed consolidated financial statements included in this Item 1 should be read in conjunction with the audited consolidated financial statements and the notes thereto included in Nucor’s Annual Report on Form 10-K for the year ended December 31, 2020.
2. Inventories
Inventories consisted of approximately 43% raw materials and supplies and 57% finished and semi-finished products at April 3, 2021 (42% and 58%, respectively, at December 31, 2020). Nucor’s manufacturing process consists of a continuous, vertically integrated process from which products are sold to customers at various stages throughout the process. Since most steel products can be classified as either finished or semi-finished products, these two categories of inventory are combined.
3. Property, Plant and Equipment
Property, plant and equipment is recorded net of accumulated depreciation of $10.03 billion at April 3, 2021 ($9.86 billion at December 31, 2020).
Nucor reviews its natural gas well assets for impairment if and when circumstances indicate that a decline in value below their carrying amounts may have occurred. Nucor last assessed its proved producing natural gas well assets in the fourth quarter of 2020 due to the continued low-price natural gas pricing environment. After completing its assessment, Nucor determined that as of such time there were no impairments of any of its three groups of proved well assets. Changes in the natural gas industry or a prolonged low-price environment beyond what has already been assumed in the assessments could cause management to revise the natural gas and natural gas liquids price assumptions, the estimated reserves or the estimated lease operating costs. Therefore, it is reasonably possible that unfavorable revisions to these assumptions or estimates could result in further impairment of some or all of the groups of proved well assets. The combined carrying value of the three groups of wells was $69.9 million at April 3, 2021 ($71.7 million at December 31, 2020).
Nucor owns a 49% leasehold interest in unproved oil and natural gas properties covering approximately 54,000 acres in the South Piceance Basin located in Colorado. Nucor is subject to forfeiture of a portion of its leasehold interest in these properties if we do not drill new wells within various contractually specified time periods. A decision to not develop a portion of these properties within the specified time periods would likely result in a partial asset impairment in the future. The carrying value of the entire leasehold interest at April 3, 2021 was $138.0 million. Nucor has full discretion on its participation in all future drilling capital investments related to the leasehold interest.
4. Goodwill and Other Intangible Assets
The change in the net carrying amount of goodwill for the three months ended April 3, 2021 by segment was as follows (in thousands):
|
|
Steel Mills
|
|
|
Steel Products
|
|
|
Raw Materials
|
|
|
Total
|
|
Balance at December 31, 2020
|
|
$
|
612,470
|
|
|
$
|
887,625
|
|
|
$
|
729,577
|
|
|
$
|
2,229,672
|
|
Acquisitions
|
|
|
1,030
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,030
|
|
Translation
|
|
|
-
|
|
|
|
4,481
|
|
|
|
-
|
|
|
|
4,481
|
|
Balance at April 3, 2021
|
|
$
|
613,500
|
|
|
$
|
892,106
|
|
|
$
|
729,577
|
|
|
$
|
2,235,183
|
|
Nucor completed its most recent annual goodwill impairment testing during the fourth quarter of 2020 and concluded that as of such time there was no impairment of goodwill for any of its reporting units.
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Table of Contents
The annual assessment performed in 2020 for one of the Company’s reporting units, Rebar Fabrication, used forward-looking projections in future cash flows. The fair value of this reporting unit exceeded its carrying value by approximately 99% in the most recent assessment. The reporting unit was profitable in 2020 and we expect it to be profitable in 2021. If our assessment of the relevant facts and circumstances changes, or the actual performance of this reporting unit falls short of expected results, non-cash impairment charges may be required. Total goodwill associated with the Rebar Fabrication reporting unit was $368.2 million as of April 3, 2021 ($364.3 million as of December 31, 2020). An impairment of goodwill may also lead us to record an impairment of other intangible assets. Total finite-lived intangible assets associated with the Rebar Fabrication reporting unit were $56.8 million as of April 3, 2021 ($58.8 million as of December 31, 2020). There have been no triggering events requiring an interim assessment for impairment of the Rebar Fabrication reporting unit since the most recent annual goodwill impairment testing date.
The annual assessment performed in 2020 for one of the Company’s reporting units, Grating, used forward-looking projections and included continued positive future cash flows. The fair value of this reporting unit exceeded its carrying value by approximately 88% in the most recent assessment. If our assessment of the relevant facts and circumstances changes, or the actual performance of this reporting unit falls short of expected results, non-cash impairment charges may be required. Total goodwill associated with the Grating reporting unit was $37.2 million as of April 3, 2021 ($37.0 million as of December 31, 2020).
Intangible assets with estimated useful lives of five to 22 years are amortized on a straight-line or accelerated basis and were comprised of the following as of April 3, 2021 and December 31, 2020 (in thousands):
|
|
April 3, 2021
|
|
|
December 31, 2020
|
|
|
|
Gross Amount
|
|
|
Accumulated
Amortization
|
|
|
Gross Amount
|
|
|
Accumulated
Amortization
|
|
Customer relationships
|
|
$
|
1,422,453
|
|
|
$
|
856,406
|
|
|
$
|
1,421,962
|
|
|
$
|
838,443
|
|
Trademarks and trade names
|
|
|
162,462
|
|
|
|
101,991
|
|
|
|
162,365
|
|
|
|
100,000
|
|
Other
|
|
|
63,822
|
|
|
|
42,861
|
|
|
|
63,822
|
|
|
|
41,685
|
|
|
|
$
|
1,648,737
|
|
|
$
|
1,001,258
|
|
|
$
|
1,648,149
|
|
|
$
|
980,128
|
|
Intangible asset amortization expense in the first quarter of 2021 and 2020 was $21.1 million and $21.5 million, respectively. Annual amortization expense is estimated to be $82.7 million in 2021; $81.1 million in 2022; $80.4 million in 2023; $79.6 million in 2024; and $78.6 million in 2025.
5. Current Liabilities
Book overdrafts, included in accounts payable in the condensed consolidated balance sheets, were $72.9 million at April 3, 2021 ($210.5 million at December 31, 2020). Dividends payable, included in accrued expenses and other current liabilities in the condensed consolidated balance sheets, were $122.7 million at April 3, 2021 ($123.9 million at December 31, 2020).
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Table of Contents
6. Fair Value Measurements
The following table summarizes information regarding Nucor’s financial assets and financial liabilities that were measured at fair value as of April 3, 2021 and December 31, 2020 (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 April 3, 2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash equivalents
|
|
$
|
1,933,390
|
|
|
$
|
1,933,390
|
|
|
$
|
-
|
|
|
$
|
-
|
|
Short-term investments
|
|
|
402,595
|
|
|
|
402,595
|
|
|
|
-
|
|
|
|
-
|
|
Restricted cash and cash equivalents
|
|
|
115,266
|
|
|
|
115,266
|
|
|
|
-
|
|
|
|
-
|
|
Total assets
|
|
$
|
2,451,251
|
|
|
$
|
2,451,251
|
|
|
$
|
-
|
|
|
$
|
-
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative contracts
|
|
$
|
(9,408
|
)
|
|
$
|
-
|
|
|
$
|
(9,408
|
)
|
|
$
|
-
|
|
As of December 31, 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash equivalents
|
|
$
|
2,186,820
|
|
|
$
|
2,186,820
|
|
|
$
|
-
|
|
|
$
|
-
|
|
Short-term investments
|
|
|
408,004
|
|
|
|
408,004
|
|
|
|
-
|
|
|
|
-
|
|
Restricted cash and cash equivalents
|
|
|
115,258
|
|
|
|
115,258
|
|
|
|
-
|
|
|
|
-
|
|
Total assets
|
|
$
|
2,710,082
|
|
|
$
|
2,710,082
|
|
|
$
|
-
|
|
|
$
|
-
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative contracts
|
|
$
|
(14,361
|
)
|
|
$
|
-
|
|
|
$
|
(14,361
|
)
|
|
$
|
-
|
|
Fair value measurements for Nucor’s cash equivalents, short-term investments and restricted cash and cash equivalents are classified under Level 1 because such measurements are based on quoted market prices in active markets for identical assets. Our short-term investments at April 3, 2021 consisted of certificates of deposit, commercial paper and corporate notes. Fair value measurements for Nucor’s derivatives are classified under Level 2 because such measurements are based on published market prices for similar assets or are estimated based on observable inputs such as interest rates, yield curves, credit risks, spot and future commodity prices, and spot and future exchange rates. There were no transfers between the levels in the fair value hierarchy for the periods presented.
The fair value of short-term and long-term debt, including current maturities, was approximately $5.76 billion at April 3, 2021 ($6.05 billion at December 31, 2020). The debt fair value estimates are classified under Level 2 because such estimates are based on readily available market prices of our debt at April 3, 2021 and December 31, 2020, or similar debt with the same maturities, ratings and interest rates.
7. Contingencies
Nucor is subject to environmental laws and regulations established by federal, state and local authorities and, accordingly, makes provisions for the estimated costs of compliance. Of the undiscounted total of $14.4 million of accrued environmental costs at April 3, 2021 ($16.0 million at December 31, 2020), $3.0 million was classified in accrued expenses and other current liabilities ($5.6 million at December 31, 2020) and $11.4 million was classified in deferred credits and other liabilities ($10.4 million at December 31, 2020). Inherent uncertainties exist in these estimates primarily due to unknown conditions, evolving remediation technology and changing governmental regulations, legal standards and enforcement priorities.
We are from time to time a party to various lawsuits, claims and other legal proceedings that arise in the ordinary course of business. With respect to all such lawsuits, claims and proceedings, we record reserves when it is probable a liability has been incurred and the amount of loss can be reasonably estimated. We do not believe that any of these proceedings, individually or in the aggregate, would be expected to have a material adverse effect on our results of operations, financial position or cash flows. Nucor maintains liability insurance with self-insurance limits for certain risks.
7
Table of Contents
8. Stock-Based Compensation
Overview
The Company maintains the Nucor Corporation 2014 Omnibus Incentive Compensation Plan (the “Omnibus Plan”) under which the Company may award stock-based compensation to key employees, officers and non-employee directors. The Company’s stockholders approved an amendment and restatement of the Omnibus Plan on May 14, 2020. The Omnibus Plan, as amended and restated, permits the award of stock options, restricted stock units, restricted shares and other stock-based awards for up to 19.0 million shares of the Company’s common stock. As of April 3, 2021, 7.6 million shares remained available for award under the Omnibus Plan.
The Company also maintains a number of inactive plans under which stock-based awards remain outstanding but no further awards may be made. As of April 3, 2021, 0.6 million shares were reserved for issuance upon the future settlement of outstanding awards under such inactive plans.
Stock Options
Stock options may be granted to Nucor’s key employees, officers and non-employee directors with exercise prices at 100% of the market value on the date of the grant. The stock options granted are generally exercisable at the end of three years and have a term of 10 years.
A summary of activity under Nucor’s stock option plans for the first quarter of 2021 is as follows (shares in thousands):
|
|
|
|
|
|
Weighted-
|
|
|
Weighted-
|
|
|
|
|
|
|
|
|
|
|
Average
|
|
|
Average
|
|
Aggregate
|
|
|
|
|
|
|
|
Exercise
|
|
|
Remaining
|
|
Intrinsic
|
|
|
|
Shares
|
|
|
Price
|
|
|
Contractual Life
|
|
Value
|
|
Number of shares under stock options:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding at beginning of year
|
|
|
3,916
|
|
|
$
|
50.03
|
|
|
|
|
|
|
|
Granted
|
|
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
Exercised
|
|
|
(2,135
|
)
|
|
$
|
50.37
|
|
|
|
|
$
|
32,387
|
|
Canceled
|
|
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
Outstanding at April 3, 2021
|
|
|
1,781
|
|
|
$
|
49.62
|
|
|
6.3 years
|
|
$
|
53,902
|
|
Stock options exercisable at April 3, 2021
|
|
|
1,034
|
|
|
$
|
51.84
|
|
|
4.6 years
|
|
$
|
28,990
|
|
Stock options granted to employees who are eligible for retirement on the date of the grant are expensed immediately since these awards vest upon retirement from the Company. Retirement, for purposes of vesting in these stock options, means termination of employment after satisfying age and years of service requirements. Similarly, stock options granted to employees who will become retirement-eligible prior to the end of the vesting term are expensed over the period through which the employee will become retirement-eligible. Compensation expense for stock options granted to employees who will not become retirement-eligible prior to the end of the vesting term is recognized on a straight-line basis over the vesting period. Compensation expense for stock options was $0.3 million in the first quarter of both 2021 and 2020. As of April 3, 2021, unrecognized compensation expense related to stock options was $2.2 million, which is expected to be recognized over a weighted-average period of 2.0 years.
Restricted Stock Units
Nucor annually grants restricted stock units (“RSUs”) to key employees, officers and non-employee directors. The RSUs granted to key employees and officers vest and are converted to common stock in three equal installments on each of the first three anniversaries of the grant date. Retirement, for purposes of vesting in these RSUs only, means termination of employment with approval of the Compensation and Executive Development Committee of the Board of Directors after satisfying age and years of service requirements. RSUs granted to a non-employee director are fully vested on the grant date and are payable to the non-employee director in the form of common stock after the termination of the director’s service on the Board of Directors.
RSUs granted to employees who are eligible for retirement on the date of the grant are expensed immediately, and RSUs granted to employees who will become retirement-eligible prior to the end of the vesting term are expensed over the period through which the employee will become retirement-eligible since these awards vest upon retirement from the Company. Compensation expense for RSUs granted to employees who will not become retirement-eligible prior to the end of the vesting term is recognized on a straight-line basis over the vesting period.
Cash dividend equivalents are paid to holders of RSUs each quarter. Dividend equivalents paid on RSUs expected to vest are recognized as a reduction in retained earnings.
8
Table of Contents
The fair value of an RSU is determined based on the closing price of Nucor’s common stock on the date of the grant.
A summary of Nucor’s RSU activity for the first quarter of 2021 is as follows (shares in thousands):
|
|
Shares
|
|
|
Grant Date
Fair Value
|
|
Restricted stock units:
|
|
|
|
|
|
|
|
|
Unvested at beginning of year
|
|
|
1,830
|
|
|
$
|
47.33
|
|
Granted
|
|
|
-
|
|
|
$
|
-
|
|
Vested
|
|
|
(9
|
)
|
|
$
|
48.52
|
|
Canceled
|
|
|
(48
|
)
|
|
$
|
46.89
|
|
Unvested at April 3, 2021
|
|
|
1,773
|
|
|
$
|
47.34
|
|
Compensation expense for RSUs was $9.3 million in the first quarter of 2021 ($10.0 million in the first quarter of 2020). As of April 3, 2021, unrecognized compensation expense related to unvested RSUs was $42.7 million, which is expected to be recognized over a weighted-average period of 1.0 years.
Restricted Stock Awards
Prior to their expiration effective December 31, 2017, the Nucor Corporation Senior Officers Long-Term Incentive Plan and the Nucor Corporation Senior Officers Annual Incentive Plan authorized the award of shares of common stock to officers subject to certain conditions and restrictions. Effective January 1, 2018, the Company adopted supplements to the Omnibus Plan with terms that permit the award of shares of common stock to officers subject to the conditions and restrictions described below, which are substantially similar to those of the expired Senior Officers Long-Term Incentive Plan and Senior Officers Annual Incentive Plan. The expired Senior Officers Long-Term Incentive Plan, together with the applicable supplement, is referred to below as the “LTIP,” and the expired Senior Officers Annual Incentive Plan, together with the applicable supplement, is referred to below as the “AIP.”
The LTIP provides for the award of shares of restricted common stock at the end of each LTIP performance measurement period at no cost to officers if certain financial performance goals are met during the period. One-third of the LTIP restricted stock award vests upon each of the first three anniversaries of the award date or, if earlier, upon the officer’s attainment of age 55 while employed by Nucor. Although participants are entitled to cash dividends and may vote such awarded shares, the sale or transfer of such shares is limited during the restricted period.
The AIP provides for the payment of annual cash incentive awards. An AIP participant may elect, however, to defer payment of up to one-half of an AIP award. In such event, the deferred AIP award is converted into common stock units and credited with a deferral incentive, in the form of additional common stock units, equal to 25% of the number of common stock units attributable to the deferred AIP award. Common stock units attributable to deferred AIP awards are fully vested. Common stock units credited as a deferral incentive vest upon the AIP participant’s attainment of age 55 while employed by Nucor. Vested common stock units are paid to AIP participants in the form of shares of common stock following their termination of employment with Nucor.
A summary of Nucor’s restricted stock activity under the AIP and the LTIP for the first quarter of 2021 is as follows (shares in thousands):
|
|
|
|
|
|
Grant Date
|
|
|
|
Shares
|
|
|
Fair Value
|
|
Restricted stock units and restricted stock awards:
|
|
|
|
|
|
|
|
|
Unvested at beginning of year
|
|
|
127
|
|
|
$
|
49.94
|
|
Granted
|
|
|
262
|
|
|
$
|
65.61
|
|
Vested
|
|
|
(235
|
)
|
|
$
|
63.28
|
|
Canceled
|
|
|
(9
|
)
|
|
$
|
48.75
|
|
Unvested at April 3, 2021
|
|
|
145
|
|
|
$
|
56.70
|
|
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 $10.2 million in the first quarter of 2021 ($0.3 million of benefit in the first quarter of 2020). As of April 3, 2021, unrecognized compensation expense related to unvested restricted stock awards was $1.0 million, which is expected to be recognized over a weighted-average period of 1.9 years.
9
Table of Contents
9. Employee Benefit Plan
Nucor makes contributions to a Profit Sharing and Retirement Savings Plan for qualified employees based on the profitability of the Company. Nucor’s expense for these benefits totaled $129.0 million and $11.6 million in the first quarter of 2021 and 2020, respectively. The related liability for these benefits is included in salaries, wages and related accruals in the condensed consolidated balance sheets.
10. Interest Expense (Income)
The components of net interest expense for the first quarter of 2021 and 2020 are as follows (in thousands):
|
|
Three Months (13 Weeks) Ended
|
|
|
|
April 3, 2021
|
|
|
April 4, 2020
|
|
Interest expense
|
|
$
|
40,970
|
|
|
$
|
47,596
|
|
Interest income
|
|
|
(1,326
|
)
|
|
|
(6,686
|
)
|
Interest expense, net
|
|
$
|
39,644
|
|
|
$
|
40,910
|
|
11. Income Taxes
The effective tax rate for the first quarter of 2021 was 23.9% as compared to 62.8% for the first quarter of 2020. The effective tax rate for the first quarter of 2020 was elevated, relative to the first quarter of 2021, primarily due to a $250.0 million non-cash impairment charge to an equity method investment which had no corresponding impact to the provision for income taxes.
Nucor has concluded U.S. federal income tax matters for tax years through 2014 and for tax year 2016. The tax years 2015 and 2017 through 2019 remain open to examination by the Internal Revenue Service. The 2015 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 2014 through 2019 remain open to examination by other major taxing jurisdictions to which Nucor is subject (primarily Canada and other state and local jurisdictions).
Non-current deferred tax liabilities included in deferred credits and other liabilities in the condensed consolidated balance sheets were $659.8 million at April 3, 2021 ($596.4 million at December 31, 2020).
10
Table of Contents
12. Stockholders’ Equity
The following tables reflect the changes in stockholders’ equity attributable to both Nucor and the noncontrolling interests of Nucor’s joint ventures, primarily Nucor-Yamato Steel Company (Limited Partnership) of which Nucor owns 51%, for the three months ended April 3, 2021 and April 4, 2020 (in thousands):
|
|
|
|
|
|
Three Months (13 Weeks) Ended April 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
|
|
$
|
11,231,861
|
|
|
|
380,154
|
|
|
$
|
152,061
|
|
|
$
|
2,121,288
|
|
|
$
|
11,343,852
|
|
|
$
|
(118,861
|
)
|
|
|
77,909
|
|
|
$
|
(2,709,675
|
)
|
|
$
|
10,788,665
|
|
|
$
|
443,196
|
|
Net earnings
|
|
|
987,514
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
942,432
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
942,432
|
|
|
|
45,082
|
|
Other comprehensive income (loss)
|
|
|
15,301
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
15,301
|
|
|
|
-
|
|
|
|
-
|
|
|
|
15,301
|
|
|
|
-
|
|
Stock options exercised
|
|
|
107,524
|
|
|
|
-
|
|
|
|
-
|
|
|
|
30,488
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(2,135
|
)
|
|
|
77,036
|
|
|
|
107,524
|
|
|
|
-
|
|
Stock option expense
|
|
|
333
|
|
|
|
-
|
|
|
|
-
|
|
|
|
333
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
333
|
|
|
|
-
|
|
Issuance of stock under award plans,
net of forfeitures
|
|
|
15,602
|
|
|
|
-
|
|
|
|
-
|
|
|
|
6,900
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(242
|
)
|
|
|
8,702
|
|
|
|
15,602
|
|
|
|
-
|
|
Amortization of unearned
compensation
|
|
|
1,900
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,900
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,900
|
|
|
|
-
|
|
Treasury stock acquired
|
|
|
(301,859
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
5,380
|
|
|
|
(301,859
|
)
|
|
|
(301,859
|
)
|
|
|
-
|
|
Cash dividends declared
|
|
|
(122,658
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(122,658
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(122,658
|
)
|
|
|
-
|
|
Distributions to noncontrolling
interests
|
|
|
(73,795
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(73,795
|
)
|
BALANCES, April 3, 2021
|
|
$
|
11,861,723
|
|
|
|
380,154
|
|
|
$
|
152,061
|
|
|
$
|
2,160,909
|
|
|
$
|
12,163,626
|
|
|
$
|
(103,560
|
)
|
|
|
80,912
|
|
|
$
|
(2,925,796
|
)
|
|
$
|
11,447,240
|
|
|
$
|
414,483
|
|
|
|
|
|
|
|
Three Months (13 Weeks) Ended April 4, 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional
|
|
|
|
|
|
|
Other
|
|
|
Treasury Stock
|
|
|
Nucor
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock
|
|
|
Paid-in
|
|
|
Retained
|
|
|
Comprehensive
|
|
|
(at cost)
|
|
|
Stockholders'
|
|
|
Noncontrolling
|
|
|
|
Total
|
|
|
Shares
|
|
|
Amount
|
|
|
Capital
|
|
|
Earnings
|
|
|
Income (Loss)
|
|
|
Shares
|
|
|
Amount
|
|
|
Equity
|
|
|
Interests
|
|
BALANCES, December 31, 2019
|
|
$
|
10,791,176
|
|
|
|
380,154
|
|
|
$
|
152,061
|
|
|
$
|
2,107,646
|
|
|
$
|
11,115,056
|
|
|
$
|
(302,966
|
)
|
|
|
78,342
|
|
|
$
|
(2,713,931
|
)
|
|
$
|
10,357,866
|
|
|
$
|
433,310
|
|
Net earnings
|
|
|
54,379
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
20,331
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
20,331
|
|
|
|
34,048
|
|
Other comprehensive income (loss)
|
|
|
(64,661
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(64,661
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(64,661
|
)
|
|
|
-
|
|
Stock options exercised
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Stock option expense
|
|
|
275
|
|
|
|
-
|
|
|
|
-
|
|
|
|
275
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
275
|
|
|
|
-
|
|
Issuance of stock under award plans,
net of forfeitures
|
|
|
16,189
|
|
|
|
-
|
|
|
|
-
|
|
|
|
11,049
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(148
|
)
|
|
|
5,140
|
|
|
|
16,189
|
|
|
|
-
|
|
Amortization of unearned
compensation
|
|
|
400
|
|
|
|
-
|
|
|
|
-
|
|
|
|
400
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
400
|
|
|
|
-
|
|
Treasury stock acquired
|
|
|
(39,499
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
825
|
|
|
|
(39,499
|
)
|
|
|
(39,499
|
)
|
|
|
-
|
|
Cash dividends declared
|
|
|
(122,697
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(122,697
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(122,697
|
)
|
|
|
-
|
|
Distributions to noncontrolling
interests
|
|
|
(39,493
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(39,493
|
)
|
BALANCES, April 4, 2020
|
|
$
|
10,596,069
|
|
|
|
380,154
|
|
|
$
|
152,061
|
|
|
$
|
2,119,370
|
|
|
$
|
11,012,690
|
|
|
$
|
(367,627
|
)
|
|
|
79,019
|
|
|
$
|
(2,748,290
|
)
|
|
$
|
10,168,204
|
|
|
$
|
427,865
|
|
11
Table of Contents
Dividends declared per share were $0.405 per share in the first quarter of 2021 ($0.4025 per share in the first quarter of 2020).
On September 6, 2018, the Company announced that the Board of Directors had approved a new share repurchase program under which the Company is authorized to repurchase up to $2.00 billion of the Company’s common stock and terminated any previously authorized share repurchase programs. Share repurchases will be made from time to time in the open market at prevailing market prices or through private transactions or block trades. The timing and amount of repurchases will depend on market conditions, share price, applicable legal requirements and other factors. The share repurchase authorization is discretionary and has no expiration date. As of April 3, 2021, the Company had approximately $857.5 million remaining available for share repurchases under the program.
13. Accumulated Other Comprehensive Income (Loss)
The following tables reflect the changes in accumulated other comprehensive income (loss) by component for the three months ended April 3, 2021 and April 4, 2020 (in thousands):
|
|
Three-Month (13-Week) Period Ended
|
|
|
|
April 3, 2021
|
|
|
|
Gains and Losses on
|
|
|
Foreign Currency
|
|
|
Adjustment to Early
|
|
|
|
|
|
|
|
Hedging Derivatives
|
|
|
Gain (Loss)
|
|
|
Retiree Medical Plan
|
|
|
Total
|
|
Accumulated other comprehensive
income (loss) at December 31, 2020
|
|
$
|
(4,700
|
)
|
|
$
|
(120,827
|
)
|
|
$
|
6,666
|
|
|
$
|
(118,861
|
)
|
Other comprehensive income (loss)
before reclassifications
|
|
|
999
|
|
|
|
13,801
|
|
|
|
-
|
|
|
|
14,800
|
|
Amounts reclassified from accumulated
other comprehensive income (loss)
into earnings (1)
|
|
|
501
|
|
|
|
-
|
|
|
|
-
|
|
|
|
501
|
|
Net current-period other comprehensive
income (loss)
|
|
|
1,500
|
|
|
|
13,801
|
|
|
|
-
|
|
|
|
15,301
|
|
Accumulated other comprehensive
income (loss) at April 3, 2021
|
|
$
|
(3,200
|
)
|
|
$
|
(107,026
|
)
|
|
$
|
6,666
|
|
|
$
|
(103,560
|
)
|
|
|
Three-Month (13-Week) Period Ended
|
|
|
|
April 4, 2020
|
|
|
|
Gains and Losses on
|
|
|
Foreign Currency
|
|
|
Adjustment to Early
|
|
|
|
|
|
|
|
Hedging Derivatives
|
|
|
Gain (Loss)
|
|
|
Retiree Medical Plan
|
|
|
Total
|
|
Accumulated other comprehensive
income (loss) at December 31, 2019
|
|
$
|
(14,000
|
)
|
|
$
|
(296,773
|
)
|
|
$
|
7,807
|
|
|
$
|
(302,966
|
)
|
Other comprehensive income (loss)
before reclassifications
|
|
|
(2,256
|
)
|
|
|
(64,461
|
)
|
|
|
-
|
|
|
|
(66,717
|
)
|
Amounts reclassified from accumulated
other comprehensive income (loss)
into earnings (1)
|
|
|
2,056
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2,056
|
|
Net current-period other comprehensive
income (loss)
|
|
|
(200
|
)
|
|
|
(64,461
|
)
|
|
|
-
|
|
|
|
(64,661
|
)
|
Accumulated other comprehensive
income (loss) at April 4, 2020
|
|
$
|
(14,200
|
)
|
|
$
|
(361,234
|
)
|
|
$
|
7,807
|
|
|
$
|
(367,627
|
)
|
(1) Includes $501 and $2,056 of accumulated other comprehensive income (loss) reclassifications into cost of products sold for net losses on commodity contracts in the first quarter of 2021 and 2020, respectively. The tax impact of those reclassifications was $100 and $700 in the first quarter of 2021 and 2020, respectively.
12
Table of Contents
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 and Nucor-JFE. The steel products segment includes steel joists and joist girders, steel deck, fabricated concrete reinforcing steel, cold finished steel, precision castings, steel fasteners, metal building systems, steel grating, tubular products businesses, piling products business, and wire and wire mesh. The raw materials segment includes The David J. Joseph Company and its affiliates (“DJJ”), primarily a scrap broker and processor; Nu-Iron Unlimited and Nucor Steel Louisiana LLC, two facilities that produce direct reduced iron (“DRI”) used by the steel mills; and our natural gas production operations.
Net interest expense on long-term debt, charges and credits associated with changes in allowances to eliminate intercompany profit in inventory, profit sharing expense and stock-based compensation are shown under Corporate/eliminations. Corporate assets primarily include cash and cash equivalents, short-term investments, 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 first quarter of 2021 and 2020 were as follows (in thousands):
|
|
Three Months (13 Weeks) Ended
|
|
|
|
April 3, 2021
|
|
|
April 4, 2020
|
|
Net sales to external customers:
|
|
|
|
|
|
|
|
|
Steel mills
|
|
$
|
4,608,777
|
|
|
$
|
3,519,270
|
|
Steel products
|
|
|
1,810,055
|
|
|
|
1,726,854
|
|
Raw materials
|
|
|
598,308
|
|
|
|
378,213
|
|
|
|
$
|
7,017,140
|
|
|
$
|
5,624,337
|
|
Intercompany sales:
|
|
|
|
|
|
|
|
|
Steel mills
|
|
$
|
1,225,113
|
|
|
$
|
869,092
|
|
Steel products
|
|
|
71,219
|
|
|
|
83,369
|
|
Raw materials
|
|
|
3,646,195
|
|
|
|
2,423,805
|
|
Corporate/eliminations
|
|
|
(4,942,527
|
)
|
|
|
(3,376,266
|
)
|
|
|
$
|
-
|
|
|
$
|
-
|
|
Earnings (loss) before income taxes and noncontrolling
interests:
|
|
|
|
|
|
|
|
|
Steel mills
|
|
$
|
1,314,974
|
|
|
$
|
156,506
|
|
Steel products
|
|
|
211,812
|
|
|
|
162,559
|
|
Raw materials
|
|
|
223,235
|
|
|
|
(7,911
|
)
|
Corporate/eliminations
|
|
|
(451,775
|
)
|
|
|
(164,857
|
)
|
|
|
$
|
1,298,246
|
|
|
$
|
146,297
|
|
|
|
April 3, 2021
|
|
|
Dec. 31, 2020
|
|
Segment assets:
|
|
|
|
|
|
|
|
|
Steel mills
|
|
$
|
10,785,872
|
|
|
$
|
9,708,260
|
|
Steel products
|
|
|
4,838,456
|
|
|
|
4,461,042
|
|
Raw materials
|
|
|
3,605,884
|
|
|
|
3,324,489
|
|
Corporate/eliminations
|
|
|
1,942,196
|
|
|
|
2,631,603
|
|
|
|
$
|
21,172,408
|
|
|
$
|
20,125,394
|
|
13
Table of Contents
15. Revenue
The following tables disaggregate our revenue by major source for the first quarter of 2021 and 2020 (in thousands):
|
|
Three Months (13 Weeks) Ended April 3, 2021
|
|
|
|
Steel
Mills
|
|
|
Steel
Products
|
|
|
Raw
Materials
|
|
|
Total
|
|
Sheet
|
|
$
|
2,351,455
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
2,351,455
|
|
Bar
|
|
|
1,261,042
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,261,042
|
|
Structural
|
|
|
477,195
|
|
|
|
-
|
|
|
|
-
|
|
|
|
477,195
|
|
Plate
|
|
|
519,085
|
|
|
|
-
|
|
|
|
-
|
|
|
|
519,085
|
|
Tubular Products
|
|
|
-
|
|
|
|
374,653
|
|
|
|
-
|
|
|
|
374,653
|
|
Rebar Fabrication
|
|
|
-
|
|
|
|
386,557
|
|
|
|
-
|
|
|
|
386,557
|
|
Other Steel Products
|
|
|
-
|
|
|
|
1,048,845
|
|
|
|
-
|
|
|
|
1,048,845
|
|
Raw Materials
|
|
|
-
|
|
|
|
-
|
|
|
|
598,308
|
|
|
|
598,308
|
|
|
|
$
|
4,608,777
|
|
|
$
|
1,810,055
|
|
|
$
|
598,308
|
|
|
$
|
7,017,140
|
|
|
|
Three Months (13 Weeks) Ended April 4, 2020
|
|
|
|
Steel
Mills
|
|
|
Steel
Products
|
|
|
Raw
Materials
|
|
|
Total
|
|
Sheet
|
|
$
|
1,578,429
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
1,578,429
|
|
Bar
|
|
|
1,062,666
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,062,666
|
|
Structural
|
|
|
450,499
|
|
|
|
-
|
|
|
|
-
|
|
|
|
450,499
|
|
Plate
|
|
|
427,676
|
|
|
|
-
|
|
|
|
-
|
|
|
|
427,676
|
|
Tubular Products
|
|
|
-
|
|
|
|
305,057
|
|
|
|
-
|
|
|
|
305,057
|
|
Rebar Fabrication
|
|
|
-
|
|
|
|
423,316
|
|
|
|
-
|
|
|
|
423,316
|
|
Other Steel Products
|
|
|
-
|
|
|
|
998,481
|
|
|
|
-
|
|
|
|
998,481
|
|
Raw Materials
|
|
|
-
|
|
|
|
-
|
|
|
|
378,213
|
|
|
|
378,213
|
|
|
|
$
|
3,519,270
|
|
|
$
|
1,726,854
|
|
|
$
|
378,213
|
|
|
$
|
5,624,337
|
|
Contract liabilities are primarily related to deferred revenue resulting from cash payments received in advance from customers to protect against credit risk. Contract liabilities totaled $173.1 million as of April 3, 2021 ($120.2 million as of December 31, 2020), and are included in accrued expenses and other current liabilities in the condensed consolidated balance sheets.
14
Table of Contents
16. Earnings Per Share
The computations of basic and diluted net earnings per share for the first quarter of 2021 and 2020 are as follows (in thousands, except per share amounts):
|
|
Three Months (13 Weeks) Ended
|
|
|
|
April 3, 2021
|
|
|
April 4, 2020
|
|
Basic net earnings per share:
|
|
|
|
|
|
|
|
|
Basic net earnings
|
|
$
|
942,432
|
|
|
$
|
20,331
|
|
Earnings allocated to participating securities
|
|
|
(5,376
|
)
|
|
|
(630
|
)
|
Net earnings available to common stockholders
|
|
$
|
937,056
|
|
|
$
|
19,701
|
|
Basic average shares outstanding
|
|
|
301,846
|
|
|
|
302,909
|
|
Basic net earnings per share
|
|
$
|
3.10
|
|
|
$
|
0.07
|
|
Diluted net earnings per share:
|
|
|
|
|
|
|
|
|
Diluted net earnings
|
|
$
|
942,432
|
|
|
$
|
20,331
|
|
Earnings allocated to participating securities
|
|
|
(5,363
|
)
|
|
|
(630
|
)
|
Net earnings available to common stockholders
|
|
$
|
937,069
|
|
|
$
|
19,701
|
|
Diluted average shares outstanding:
|
|
|
|
|
|
|
|
|
Basic average shares outstanding
|
|
|
301,846
|
|
|
|
302,909
|
|
Dilutive effect of stock options and other
|
|
|
672
|
|
|
|
23
|
|
|
|
|
302,518
|
|
|
|
302,932
|
|
Diluted net earnings per share
|
|
$
|
3.10
|
|
|
$
|
0.07
|
|
The following stock options were excluded from the computation of diluted net earnings per share for the first quarter of 2021 and 2020 because their effect would have been anti-dilutive (shares in thousands):
|
|
Three Months (13 Weeks) Ended
|
|
|
|
April 3, 2021
|
|
|
April 4, 2020
|
|
Anti-dilutive stock options:
|
|
|
|
|
|
|
|
|
Weighted-average shares
|
|
|
249
|
|
|
|
3,701
|
|
Weighted-average exercise price
|
|
$
|
65.80
|
|
|
$
|
51.38
|
|
15
Table of Contents