Nucor 10-Q 2022-10-01

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended October 1, 2022

OR

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

For the transition period from to

Commission File Number: 1-4119

NUCOR CORPORATION

(Exact name of registrant as specified in its charter)

Delaware		13-1860817
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
1915 Rexford Road, Charlotte, North Carolina		28211
(Address of principal executive offices)		(Zip Code)

(704) 366-7000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, par value $0.40 per share		NUE		New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

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

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

Large accelerated filer	☒		Accelerated filer	☐
Non-accelerated filer	☐		Smaller reporting company	☐
			Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

256,543,710 shares of the registrant’s common stock were outstanding at October 1, 2022.

Nucor Corporation

Quarterly Report on Form 10-Q

For the Three Months and Nine Months Ended October 1, 2022

Table of Contents

						Page
Part I		Financial Information
		Item 1		Financial Statements (Unaudited)
				Condensed Consolidated Statements of Earnings – Three Months (13 Weeks) and Nine Months (39 Weeks) Ended October 1, 2022 and October 2, 2021		1
				Condensed Consolidated Statements of Comprehensive Income – Three Months (13 Weeks) and Nine Months (39 Weeks) Ended October 1, 2022 and October 2, 2021		2
				Condensed Consolidated Balance Sheets – October 1, 2022 and December 31, 2021		3
				Condensed Consolidated Statements of Cash Flows – Nine Months (39 Weeks) Ended October 1, 2022 and October 2, 2021		4
				Notes to Condensed Consolidated Financial Statements		5
		Item 2		Management’s Discussion and Analysis of Financial Condition and Results of Operations		19
		Item 3		Quantitative and Qualitative Disclosures About Market Risk		27
		Item 4		Controls and Procedures		28
Part II		Other Information
		Item 1		Legal Proceedings		29
		Item 1A		Risk Factors		29
		Item 2		Unregistered Sales of Equity Securities and Use of Proceeds		29
		Item 6		Exhibits		30
Signatures						31

i

PART I. FINANCIAL INFORMATION

Nucor Corporation Condensed Consolidated Statements of Earnings (Unaudited)

(In thousands, except per share amounts)

		Three Months (13 Weeks) Ended								Nine Months (39 Weeks) Ended
		Oct. 1, 2022				Oct. 2, 2021				Oct. 1, 2022				Oct. 2, 2021
Net sales		$	10,500,755			$	10,313,223			$	32,788,511			$	26,119,527
Costs, expenses and other:
Cost of products sold			7,657,364				6,906,950				22,382,718				18,617,314
Marketing, administrative and other expenses			486,560				526,345				1,574,355				1,204,539
Equity in earnings of unconsolidated affiliates			(8,438	)			(32,464	)			(23,246	)			(65,106	)
Losses on assets			-				-				-				50,970
Interest expense, net			42,347				43,285				143,245				118,709
			8,177,833				7,444,116				24,077,072				19,926,426
Earnings before income taxes and noncontrolling interests			2,322,922				2,869,107				8,711,439				6,193,101
Provision for income taxes			523,879				645,842				1,958,044				1,410,863
Net earnings			1,799,043				2,223,265				6,753,395				4,782,238
Earnings attributable to noncontrolling interests			104,295				95,522				401,791				205,195
Net earnings attributable to Nucor stockholders		$	1,694,748			$	2,127,743			$	6,351,604			$	4,577,043
Net earnings per share:
Basic		$	6.51			$	7.29			$	23.90			$	15.37
Diluted		$	6.50			$	7.28			$	23.85			$	15.34
Average shares outstanding:
Basic			259,102				290,510				264,655				296,431
Diluted			259,526				291,152				265,239				296,928

See notes to condensed consolidated financial statements.

Nucor Corporation Condensed Consolidated Statements of Comprehensive Income (Unaudited)

(In thousands)

		Three Months (13 Weeks) Ended								Nine Months (39 Weeks) Ended
		October 1, 2022				October 2, 2021				October 1, 2022				October 2, 2021
Net earnings		$	1,799,043			$	2,223,265			$	6,753,395			$	4,782,238
Other comprehensive income (loss):
Net unrealized income on hedging derivatives, net of income taxes of $8,800 and $6,100 for the third quarter of 2022 and 2021, respectively, and $30,700 and $9,100 for the first nine months of 2022 and 2021, respectively			27,411				19,057				97,025				28,260
Reclassification adjustment for settlement of hedging derivatives included in net earnings, net of income taxes of $(5,200) and $(800) for the third quarter of 2022 and 2021, respectively, and $(11,700) and $(700) for the first nine months of 2022 and 2021, respectively			(16,311	)			(2,457	)			(36,837	)			(1,760	)
Foreign currency translation (loss) gain, net of income taxes of $0 for the third quarter and first nine months of 2022 and 2021			(43,843	)			(28,772	)			(48,459	)			6,460
			(32,743	)			(12,172	)			11,729				32,960
Comprehensive income			1,766,300				2,211,093				6,765,124				4,815,198
Comprehensive income attributable to noncontrolling interests			104,295				95,522				401,791				205,195
Comprehensive income attributable to Nucor stockholders		$	1,662,005			$	2,115,571			$	6,363,333			$	4,610,003

See notes to condensed consolidated financial statements.

Nucor Corporation Condensed Consolidated Balance Sheets (Unaudited)

(In thousands)

		Oct. 1, 2022				Dec. 31, 2021
ASSETS
Current assets:
Cash and cash equivalents		$	3,049,864			$	2,364,858
Short-term investments			377,426				253,005
Accounts receivable, net			4,200,643				3,853,972
Inventories, net			6,046,235				6,011,182
Other current assets			682,289				316,540
Total current assets			14,356,457				12,799,557
Property, plant and equipment, net			9,440,074				8,114,818
Restricted cash and cash equivalents			79,880				143,800
Goodwill			3,917,452				2,827,344
Other intangible assets, net			3,392,941				1,103,759
Other assets			885,900				833,794
Total assets		$	32,072,704			$	25,823,072
LIABILITIES
Current liabilities:
Short-term debt		$	64,649			$	107,723
Current portion of long-term debt and finance lease obligations			28,994				615,678
Accounts payable			1,810,388				1,974,041
Salaries, wages and related accruals			1,613,387				1,495,166
Accrued expenses and other current liabilities			1,114,671				964,805
Total current liabilities			4,632,089				5,157,413
Long-term debt and finance lease obligations due after one year			6,617,030				4,961,410
Deferred credits and other liabilities			1,998,906				1,100,455
Total liabilities			13,248,025				11,219,278
Commitments and contingencies
EQUITY
Nucor stockholders' equity:
Common stock			152,061				152,061
Additional paid-in capital			2,128,521				2,140,608
Retained earnings			23,629,649				17,674,100
Accumulated other comprehensive loss, net of income taxes			(103,553	)			(115,282	)
Treasury stock			(8,098,221	)			(5,835,098	)
Total Nucor stockholders' equity			17,708,457				14,016,389
Noncontrolling interests			1,116,222				587,405
Total equity			18,824,679				14,603,794
Total liabilities and equity		$	32,072,704			$	25,823,072

See notes to condensed consolidated financial statements.

Nucor Corporation Condensed Consolidated Statements of Cash Flows (Unaudited)

(In thousands)

		Nine Months (39 Weeks) Ended
		Oct. 1, 2022				Oct. 2, 2021
Operating activities:
Net earnings		$	6,753,395			$	4,782,238
Adjustments:
Depreciation			609,933				546,619
Amortization			164,480				76,656
Stock-based compensation			99,838				97,652
Deferred income taxes			(33,116	)			166,748
Distributions from affiliates			25,571				200
Equity in earnings of unconsolidated affili

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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 general market conditions, and in particular, 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 and volatility 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 and 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, wire and wire mesh, and utility towers and structures. 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.

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. We believe this acquisition helps give Nucor a strong presence in the Western region of the United States and grows our ability to produce a wide 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, net of cash acquired, of approximately $3.00 billion. 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 on recently through other value-added products such as insulated metal panels (CENTRIA, Metl-Span and TrueCore brands) and steel racking solutions (Nucor Warehouse Systems). 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 80%, 76% and 73%, respectively, in the first nine months of 2022 compared with approximately 96%, 77% and 75%, respectively, in the first nine months of 2021.

Results of Operations

Nucor reported consolidated net earnings of $1.69 billion, or $6.50 per diluted share, for the third quarter of 2022, as compared to consolidated net earnings of $2.56 billion, or $9.67 per diluted share, for the second quarter of 2022, and $2.13 billion, or $7.28 per diluted share, for the third quarter of 2021. The second quarter of 2022 was the most profitable quarter in Nucor’s history, and the third quarter of 2021 was the most profitable quarter in Nucor’s history at that time.

The decline in third quarter of 2022 earnings as compared to the second quarter of 2022 was due primarily to the decreased earnings of the steel mills segment. The steel mills segment experienced lower shipping volumes in the third quarter of 2022 compared to the second quarter of 2022. Average selling prices in the steel mills segment decreased more rapidly than raw materials costs in the third quarter of 2022, resulting in contracted metal margins when compared to the second quarter of 2022. The decreased shipping volumes and metal margin contractions were most pronounced at our sheet and plate mills. The steel products segment reported another strong quarter of profitability in the third quarter of 2022 due to continued robust demand in nonresidential construction markets. The raw materials segment’s earnings increased in the third quarter of 2022 compared to the second quarter of 2022 due to the increased profitability of our DRI facilities which more than offset declines at our scrap brokerage and processing businesses.

The decline in earnings in the third quarter of 2022 as compared to the third quarter of 2021 also was due primarily to the decreased earnings of the steel mills segment, which had decreased shipping volumes and average selling prices in the third quarter of 2022. The steel products segment earnings increased significantly in the third quarter of 2022 as compared to the third quarter of 2021 due to increased average selling prices and margin expansion. The earnings of the raw materials segment in the third quarter of 2022 as compared to the third quarter of 2021 increased due to the increased profitability of our DRI facilities.

Nucor reported consolidated net earnings of $6.35 billion, or $23.85 per diluted share, for the first nine months of 2022, which established a new record for earnings in the first nine months of a year. By comparison, Nucor reported consolidated net earnings of $4.58 billion, or $15.34 per diluted share, for the first nine months of 2021, which was the previous Company record for earnings in the first nine months of a year. Nucor had Company record-setting quarterly profitability in the first quarter of 2021, which increased significantly in the second half of 2021 due to strong demand in most of the end markets we serve and increased average selling prices. The trend of strong profitability continued into 2022, and began to decline in the third quarter of 2022, a trend that we expect to continue into the fourth quarter of the year. The primary driver for the increase in earnings in the first nine months of 2022 was the increased profitability of the steel products segment. After a strong year of profitability in 2021 fueled by robust demand in nonresidential construction markets, the steel products segment experienced increases in margin expansion due to higher average selling prices, particularly at our joist and deck businesses, in the first nine months of 2022. The profitability of the steel mills segment in the first nine months of 2022 increased from the first nine months of 2021, due to the much stronger start to 2022 as compared to the first nine months of 2021. The primary driver for the increase in the raw materials segment earnings in the first nine months of 2022 as compared to the first nine months of 2021 was the increased profitability of our DRI facilities.

The ongoing conflict in Ukraine, other geopolitical tensions and rapid U.S. and international monetary policy actions attempting to lower inflation likely mean tempered near-term demand and a stronger U.S. dollar, both of which are challenging elements for Nucor's customer base. Service centers in particular are cautious at this time, negatively impacting pricing and volumes for the steel mills segment. Even with this uncertainty, we believe that the medium- and long-term outlook for our business is positive. We continue to see good demand in our steel products segment largely due to nonresidential construction markets.

The following discussion provides a greater quantitative and qualitative analysis of Nucor’s performance in the third quarter and first nine months of 2022 as compared to the third quarter and first nine months of 2021.

Net Sales

Net sales to external customers by segment for the third quarter and first nine months of 2022 and 2021 were as follows (in thousands):

		Three Months (13 Weeks) Ended						Nine Months (39 Weeks) Ended
		October 1, 2022		October 2, 2021		% Change		October 1, 2022		October 2, 2021		% Change
Steel mills		$5,908,153		$6,862,133		-14%		$19,682,829		$17,380,819		13%
Steel products		4,087,107		2,744,279		49%		11,253,143		6,795,441		66%
Raw materials		505,495		706,811		-28%		1,852,539		1,943,267		-5%
Total net sales to external customers		$10,500,755		$10,313,223		2%		$32,788,511		$26,119,527		26%

Net sales for the third quarter of 2022 increased 2% from the third quarter of 2021. Average sales price per ton increased 14% from $1,438 in the third quarter of 2021 to $1,637 in the third quarter of 2022. Total tons shipped to outside customers in the third quarter of 2022 were 6,415,000 tons, an 11% decrease from the third quarter of 2021.

Net sales for the first nine months of 2022 increased 26% from the first nine months of 2021. Average sales price per ton increased 39% from $1,196 in the first nine months of 2021 to $1,657 in the first nine months of 2022. Total tons shipped to outside customers in the first nine months of 2022 were 19,786,000 tons, a 9% decrease from the first nine months of 2021.

In the steel mills segment, sales tons for the third quarter and first nine months of 2022 and 2021 were as follows (in thousands):

		Three Months (13 Weeks) Ended						Nine Months (39 Weeks) Ended
		October 1, 2022		October 2, 2021		% Change		October 1, 2022		October 2, 2021		% Change
Outside steel shipments		4,553		5,144		-11%		14,133		15,690		-10%
Inside steel shipments		1,316		1,399		-6%		3,998		4,131		-3%
Total steel shipments		5,869		6,543		-10%		18,131		19,821		-9%

Net sales for the steel mills segment decreased 14% in the third quarter of 2022 from the third quarter of 2021, due primarily to a 3% decrease in the average sales price per ton, from $1,339 to $1,296, and an 11% decrease in tons sold to outside customers.

Net sales for the steel mills segment increased 13% in the first nine months of 2022 from the first nine months of 2021, due to a 25% increase in the average sales price per ton from $1,112 to $1,388, partially offset by a 10% decrease in tons sold to outside customers.

Outside sales tonnage for the steel products segment for the third quarter and first nine months of 2022 and 2021 was as follows (in thousands):

		Three Months (13 Weeks) Ended						Nine Months (39 Weeks) Ended
		October 1, 2022		October 2, 2021		% Change		October 1, 2022		October 2, 2021		% Change
Joist sales		160		190		-16%		497		529		-6%
Deck sales		129		139		-7%		388		404		-4%
Cold finished sales		112		123		-9%		368		383		-4%
Rebar fabrication sales		350		323		8%		980		943		4%
Piling products sales		119		144		-17%		349		451		-23%
Tubular products sales		231		260		-11%		735		779		-6%
Other steel products sales		190		128		48%		520		337		54%
Total steel products sales		1,291		1,307		-1%		3,837		3,826		-

Net sales for the steel products segment increased 49% in the third quarter of 2022 compared to the third quarter of 2021, due to a 51% increase in the average sales price per ton, from $2,101 to $3,167, which was partially offset by a 1% decrease in shipping volumes. Average selling prices increased across most businesses within the steel products segment in the third quarter of 2022 as compared to the third quarter of 2021, most notably at our joist and deck businesses.

Net sales for the steel products segment increased 66% in the first nine months of 2022 compared to the first nine months of 2021, due to a 65% increase in the average sales price per ton, from $1,776 to $2,933. Average selling prices increased across all businesses within the steel products segment in the first nine months of 2022 as compared to the first nine months of 2021, most notably at our joist and deck businesses.

Net sales for the raw materials segment decreased 28% in the third quarter of 2022 compared to the third quarter of 2021, due to decreases for both DJJ brokerage and scrap processing operations in average sales price per ton and tons shipped to outside customers. In the third quarter of 2022, approximately 90% of outside sales for the raw materials segment were from the brokerage operations of DJJ, and approximately 6% of outside sales were from the scrap processing operations of DJJ (91% and 7%, respectively, in the third quarter of 2021).

Net sales for the raw materials segment decreased 5% in the first nine months of 2022 compared to the first nine months of 2021, due to decreased average sales price per ton in the scrap processing operations and decreased tons shipped to outside customers in both the DJJ brokerage and scrap processing operations. In the first nine months 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 8%, respectively, in the first nine months of 2021).

Gross Margins

Nucor recorded gross margins of $2.84 billion (27%) in the third quarter of 2022, which was a decrease compared with $3.41 billion (33%) in the third quarter of 2021.

	•	The primary driver of the decrease in gross margin in the third quarter of 2022 as compared to the third quarter of 2021 was lower metal margins in the steel mills segment. 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 third quarter of 2022 was $502, a 2% decrease compared to $511 in the third quarter of 2021. The decrease in scrap and scrap substitute cost was more than offset by decreased average selling prices and lower shipments to external customers, resulting in lower total metal margins.

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 nine months of 2022 as the conflict in Ukraine and other factors disrupted global supply chains. As we enter the fourth quarter of 2022, scrap prices continue to decrease.

	•	The decrease in total gross margin was partially offset by increases in 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 fourth quarter of 2022, backlogs for the steel products segment are strong.

	•	Pre-operating and start-up costs of new facilities were approximately $52 million in the third quarter of 2022 and approximately $36 million in the third quarter of 2021. Pre-operating and start-up costs in the third quarter of 2022 and 2021 primarily included costs related to the plate mill being built in Kentucky, the galvanizing line at our sheet mill expansion in Arkansas, and the construction of the sheet mill in West Virginia. 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, Nucor no longer considers them to be in start-up.

	•	Gross margins in the raw materials segment increased in the third quarter of 2022 as compared to the third quarter of 2021, primarily due to increased gross margins at our DRI facilities, which had strong profitability in the third quarter of 2022.

Nucor recorded gross margins of $10.41 billion (32%) in the first nine months of 2022, which was an increase compared with $7.50 billion (29%) in the first nine months of 2021.

	•	The primary driver of the increase in gross margin in the first nine months of 2022 as compared to the first nine months of 2021 was gross margins in the steel products segment, which benefitted from higher average selling prices and continued robust demand in nonresidential construction markets.

	•	The steel mills segment had increased gross margins in the first nine months of 2022 compared to the first nine months of 2021. The average scrap and scrap substitute cost per gross ton used in the first nine months of 2022 was $511, a 12% increase compared to $457 in the first nine months of 2021. The increase in scrap and scrap substitute cost was more than offset by increased average selling prices.

	•	Pre-operating and start-up costs of new facilities increased to approximately $174 million in the first nine months of 2022 from approximately $76 million in the first nine months of 2021. Pre-operating and start-up costs in the first nine months of 2022 and 2021 primarily included costs related to the plate mill being built in Kentucky, the sheet mill expansion in Kentucky, and the galvanizing line at our sheet mill expansion in Arkansas.

	•	Gross margins in the raw materials segment increased in the first nine months of 2022 as compared to the first nine months of 2021, primarily due to increased gross margins at our DRI facilities and increased average selling prices for DJJ brokerage operations.

Marketing, Administrative and Other Expenses

A major component of marketing, administrative and other expenses is profit sharing and other incentive compensation costs. These costs, which are based upon and fluctuate with Nucor’s financial performance, decreased by $87.1 million in the third quarter of 2022 as compared to the third quarter of 2021, and increased by $179.7 million in the first nine months of 2022 as compared to the first nine months of 2021. The decrease in the third quarter of 2022 was due to the Company’s decreased earnings in the third quarter of 2022 as compared to the third quarter of 2021. The increase in the first nine months of 2022 was due to Nucor’s increased profitability in the first nine months of 2022 as compared to the first nine months of 2021, which resulted in significantly increased accruals related to profit sharing.

Equity in Earnings of Unconsolidated Affiliates

Equity in earnings of unconsolidated affiliates was $8.4 million and $32.5 million in the third quarter of 2022 and 2021, respectively, and $23.2 million and $65.1 million in the first nine months of 2022 and 2021, respectively. The decreases in equity method investment earnings were primarily due to increased losses at Nucor-JFE, which is still in the start-up phase of its operations.

Losses on Assets

Included in the first nine 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 nine 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 third quarter and first nine months of 2022 and 2021 was as follows (in thousands):

		Three Months (13 Weeks) Ended								Nine Months (39 Weeks) Ended
		October 1, 2022				October 2, 2021				October 1, 2022				October 2, 2021
Interest expense		$	54,569			$	43,908			$	162,159			$	122,539
Interest income			(12,222	)			(623	)			(18,914	)			(3,830	)
Interest expense, net		$	42,347			$	43,285			$	143,245			$	118,709

Interest expense increased in the third quarter and first nine months of 2022 compared to the third quarter and first nine months of 2021, primarily due to the following: an increase in average debt outstanding; higher average interest rates on debt; and approximately $9.3 million related to the early redemption of the 2023 Notes. Interest income increased in the third quarter and first nine months of 2022 compared to the third quarter and first nine 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 third quarter and first nine 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								Nine Months (39 Weeks) Ended
		Oct. 1, 2022				Oct. 2, 2021				Oct. 1, 2022				Oct. 2, 2021
Steel mills		$	1,287,855			$	3,116,539			$	6,682,432			$	6,606,320
Steel products			1,196,845				368,595				3,011,644				839,737
Raw materials			279,189				161,870				638,640				505,248
Corporate/eliminations			(440,967	)			(777,897	)			(1,621,277	)			(1,758,204	)
		$	2,322,922			$	2,869,107			$	8,711,439			$	6,193,101

Noncontrolling Interests

Noncontrolling interests represent the income attributable to the holders of noncontrolling interests in Nucor’s joint ventures, NYS and CSI. Nucor owns a 51% controlling interest in each of NYS and CSI. The increase in earnings attributable to noncontrolling interests in the third quarter and first nine months of 2022 as compared to the third quarter and first nine months of 2021 was due to the increased earnings of NYS, which was a result of the increased metal margins, as well as 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 third quarter of 2022 was 22.6% compared to 22.5% for the third quarter of 2021. The expected effective tax rate for the full year of 2022 is approximately 22.6%.

We estimate that in the next 12 months our gross unrecognized tax benefits, which totaled $136.9 million at October 1, 2022, exclusive of interest, could decrease by as much as $8.5 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 years 2016 and 2018. The tax years 2017 and 2021 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 2016 through 2021 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 $1.69 billion, or $6.50 per diluted share, in the third quarter of 2022 as compared to consolidated net earnings of $2.13 billion, or $7.28 per diluted share, in the third quarter of 2021. Net earnings attributable to Nucor stockholders as a percentage of net sales were 16.1% and 20.6% in the third quarter of 2022 and 2021, respectively.

Nucor reported consolidated net earnings of $6.35 billion, or $23.85 per diluted share, in the first nine months of 2022 as compared to consolidated net earnings of $4.58 billion, or $15.34 per diluted share, in the first nine months of 2021. Net earnings attributable to Nucor stockholders as a percentage of net sales were 19.4% and 17.5% in the first nine months of 2022 and 2021, respectively. Annualized return on average stockholders’ equity was 53.4% and 50.4% in the first nine months of 2022 and 2021, respectively.

Outlook

We continue to believe that 2022 will be the most profitable year for earnings in Nucor’s history. As we approach the end of the year, we are seeing increasingly challenging market conditions amid economic uncertainty.

We expect fourth quarter of 2022 earnings to be decreased from the third quarter of 2022. In the steel mills segment, we expect considerably lower earnings in the fourth quarter of 2022 as compared to the third quarter of 2022 due to lower average selling prices and lower volumes, with the largest decrease in profitability expected at our sheet mills. The steel products segment is expected to have another strong quarter in the fourth quarter of 2022, but the segment’s profitability is anticipated to decrease from the third quarter of 2022 primarily due to typical seasonality experienced in the fourth quarter. The raw materials segment is expected to have significantly decreased earnings in the fourth quarter of 2022 as compared to the third quarter of 2022 due to decreased selling prices for raw materials.

Nucor’s largest exposure to market risk is in our steel mills and steel products segments. Our largest single customer in the third 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. Businesses within the steel mills segment account for the majority of the raw materials segment’s sales.

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 October 1, 2022 remained strong, consisting of total cash and cash equivalents, short-term investments and restricted cash and cash equivalents of $3.51 billion as of such date compared to $2.76 billion as of December 31, 2021. Of these totals, the amount of restricted cash and cash equivalents was $79.9 million at October 1, 2022 and $143.8 million at December 31, 2021. Approximately $896.3 million of the cash and cash equivalents position at October 1, 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 $7.54 billion in the first nine months of 2022 as compared to $3.62 billion in the first nine months of 2021. The $3.92 billion increase was primarily driven by net earnings of $6.75 billion for the first nine months of 2022, an increase of $1.97 billion over net earnings in the prior year period of $4.78 billion. In addition, changes in operating assets and operating liabilities (exclusive of acquisitions) only used cash of $58.3 million in the first nine months of 2022 as compared to $2.04 billion in the first nine months of 2021.

The funding of our working capital in the first nine months of 2022 decreased by $1.98 billion over the first nine months of 2021 mainly due to the change in accounts receivable using $1.52 billion less cash and the change in inventories using $2.35 billion less cash as compared to the same period in 2021**.** The change in accounts receivable used cash of $104.8 million in the first nine months of 2022 as compared to $1.62 billion in the first nine months of 2021. The change in inventories provided cash of $371.1 million in the first nine months of 2022 as compared to using cash of $1.98 billion in the same period of 2021. These changes were offset by the changes in accounts payable, federal income taxes and salaries, wages and related accruals in the first nine months of 2022 as compared to the first nine months of 2021. The change in accounts payable used cash of $299.8 million in the first nine months of 2022 as compared to providing cash of $343.0 million in the first nine months of 2021, a decrease of $642.8 million. The change in federal income taxes used cash of $302.3 million in the first nine months of 2022 as compared to providing cash of $262.2 million in the first nine months of 2021, a decrease of $564.5 million. The change in salaries, wages and related accruals provided cash of $121.2 million in the first nine months of 2022 as compared to $835.4 million in the first nine months of 2021, a decrease of $714.1 million, due primarily to the payout in the first nine 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 nine months of 2021 due to higher earnings in 2021.

The current ratio was 3.1 at the end of the third quarter of 2022 and 2.5 at year-end 2021. The increase in the current ratio at the end of the third quarter of 2022 compared to year-end 2021 was due to the increase in cash and cash equivalents and short-term investments and the decrease in the current portion of long-term debt due to the payment of the $600.0 million aggregate principal amount outstanding of the 2022 Notes in the third quarter of 2022.

Cash used in investing activities during the first nine months of 2022 was $4.99 billion as compared to $2.38 billion in the prior year period, an increase of $2.61 billion. The primary reason for the change was an increase in cash used for acquisitions (net of cash acquired) of $2.20 billion for the acquisitions of CSI on February 1, 2022 and C.H.I. on June 24, 2022. Cash used for capital expenditures of $1.43 billion in the first nine months of 2022 increased by $223.0 million over the same period of 2021 primarily due to the plate mill under construction in Kentucky, the sheet mill expansion in Indiana and the sheet mill under construction in West Virginia. Capital expenditures for 2022 are estimated to be approximately $2.0 billion as compared to $1.70 billion in 2021. The projects that we anticipate will have the largest capital expenditures in 2022 are the plate mill under construction in Kentucky, the sheet mill expansions in Kentucky and Indiana and the sheet mill under construction in West Virginia.

Cash used in financing activities during the first nine months of 2022 was $1.93 billion as compared to $1.95 billion in the first nine months of 2021. The primary uses of cash were: (i) stock repurchases of $2.36 billion in the first nine months of 2022 as compared to $1.77 billion in the first nine months of 2021, an increase of $586.1 million; (ii) repayments of long-term debt of $1.11 billion in the first nine months of 2022 (none in the same period of 2021); and (iii) distributions to noncontrolling interests of $300.8 million in the first nine months of 2022 as compared to $120.6 million in the first nine months of 2021, an increase of $180.2 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 nine months of 2022 as compared to $197.0 million in the first nine months of 2021, an increase of $1.89 billion. In the first nine months of 2022, Nucor issued $500.0 million aggregate principal amount of the 2025 Notes, $500.0 million aggregate principal amount of the 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, Nucor redeemed all $500.0 million aggregate principal amount outstanding of the 2023 Notes. On August 15, 2022, Nucor redeemed all $600.0 million aggregate principal amount outstanding of the 2022 Notes.

Nucor’s $1.75 billion revolving credit facility matures on November 5, 2026. The revolving credit facility includes only one financial covenant, which is a limit of 60% on the ratio of funded debt to total 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 October 1, 2022, the funded debt to total capital ratio was 26.3% 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 October 1, 2022.

In September 2022, Nucor’s Board of Directors declared a quarterly cash dividend on Nucor’s common stock of $0.50 per share payable on November 10, 2022 to stockholders of record on September 30, 2022. This dividend is Nucor’s 198th consecutive quarterly cash dividend.

Funds provided from operations, cash and cash equivalents, short-term investments, restricted cash and cash equivalents and new borrowings under our existing credit facilities are expected to be adequate to meet future capital expenditure and working capital requirements for existing operations for at least the next 24 months. We also believe we have adequate access to capital markets for liquidity purposes.

In 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 October 1, 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 in the condensed consolidated balance sheets and recognized in net earnings in the same period as the underlying physical transaction. At October 1, 2022, accumulated other comprehensive loss, net of income taxes included $61.3 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 October 1, 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		$	20,325			$	50,813
Aluminum		$	5,573			$	16,194
Copper		$	995			$	2,485

Any resulting changes in fair value would be recorded as adjustments to accumulated other comprehensive loss, net of income taxes or recognized in net earnings, as appropriate. These hypothetical losses would be partially offset by the benefit of lower prices paid or higher prices received for the physical commodities.

Foreign Currency Risk

Nucor is exposed to foreign currency risk primarily through its operations in Canada, Europe and Mexico. We periodically use derivative contracts to mitigate the risk of currency fluctuations. Open foreign currency derivative contracts at October 1, 2022 were insignificant.

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 October 1, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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).

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 October 1, 2022 was as follows (in thousands, except per share amounts):

		Total Number of Shares Purchased				Average Price Paid per Share (1)				Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2)				Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (2)
July 3, 2022 - July 30, 2022			3,159			$	112.29				3,159			$	1,786,862
July 31, 2022 - August 27, 2022			1,415			$	138.40				1,415			$	1,590,971
August 28, 2022 - October 1, 2022			760			$	133.52				760			$	1,489,517
For the Quarter Ended October 1, 2022			5,334								5,334

(1)	Includes commissions of $0.39 per share.

(2)	On December 2, 2021, the Company announced that its 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.

Exhibit No.		Description of Exhibit
3		Restated Certificate of Incorporation of Nucor Corporation (incorporated by reference to Exhibit 3.3 to the Current Report on Form 8-K filed September 14, 2010 (File No. 001-04119))
3.1		Bylaws of Nucor Corporation, as amended and restated February 22, 2021 (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed February 24, 2021 (File No. 001-04119))
31*		Certification of Principal Executive Officer Pursuant to Rule 13a-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.1*		Certification of Principal Financial Officer Pursuant to Rule 13a-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32**		Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.1**		Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101*		Financial Statements (Unaudited) from the Quarterly Report on Form 10-Q of Nucor Corporation for the quarter ended October 1, 2022, filed November 9, 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 October 1, 2022, filed November 9, 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.

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: November 9, 2022