Nucor 10-Q 2023-07-01

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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 July 1, 2023

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 ☒

248,722,494 shares of the registrant’s common stock were outstanding at July 1, 2023.

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Nucor Corporation

Quarterly Report on Form 10-Q

For the Three Months and Six Months Ended July 1, 2023

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						Page
Part I		Financial Information
		Item 1		Financial Statements (Unaudited)
				Condensed Consolidated Statements of Earnings – Three Months (13 Weeks) and Six Months (26 Weeks) Ended July 1, 2023 and July 2, 2022		1
				Condensed Consolidated Statements of Comprehensive Income – Three Months (13 Weeks) and Six Months (26 Weeks) Ended July 1, 2023 and July 2, 2022		2
				Condensed Consolidated Balance Sheets – July 1, 2023 and December 31, 2022		3
				Condensed Consolidated Statements of Cash Flows – Six Months (26 Weeks) Ended July 1, 2023 and July 2, 2022		4
				Notes to Condensed Consolidated Financial Statements		5
		Item 2		Management’s Discussion and Analysis of Financial Condition and Results of Operations		16
		Item 3		Quantitative and Qualitative Disclosures About Market Risk		24
		Item 4		Controls and Procedures		25
		Item 5		Other Information		27
Part II		Other Information
		Item 1		Legal Proceedings		26
		Item 1A		Risk Factors		26
		Item 2		Unregistered Sales of Equity Securities and Use of Proceeds		27
		Item 6		Exhibits		28
Signatures						29

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PART I. FINANCI****AL INFORMATION

Nucor Corporation Condensed Consolidat****ed Statements of Earnings (Unaudited)

(In thousands, except per share amounts)

		Three Months (13 Weeks) Ended								Six Months (26 Weeks) Ended
		July 1, 2023				July 2, 2022				July 1, 2023				July 2, 2022
Net sales		$	9,523,256			$	11,794,474			$	18,233,236			$	22,287,756
Costs, expenses and other:
Cost of products sold			7,021,582				7,690,211				13,733,360				14,725,354
Marketing, administrative and other expenses			453,388				563,211				843,283				1,087,795
Equity in earnings of unconsolidated affiliates			(6,094	)			(7,113	)			(4,754	)			(14,808	)
Interest expense, net			4,598				57,763				14,781				100,898
			7,473,474				8,304,072				14,586,670				15,899,239
Earnings before income taxes and noncontrolling interests			2,049,782				3,490,402				3,646,566				6,388,517
Provision for income taxes			462,707				763,165				827,862				1,434,165
Net earnings before noncontrolling interests			1,587,075				2,727,237				2,818,704				4,954,352
Earnings attributable to noncontrolling interests			125,721				166,004				220,808				297,496
Net earnings attributable to Nucor stockholders		$	1,461,354			$	2,561,233			$	2,597,896			$	4,656,856
Net earnings per share:
Basic		$	5.82			$	9.69			$	10.28			$	17.34
Diluted		$	5.81			$	9.67			$	10.26			$	17.30
Average shares outstanding:
Basic			250,144				263,221				251,876				267,416
Diluted			250,524				263,719				252,334				268,066

See notes to condensed consolidated financial statements.

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Nucor Corporation Condensed Consolidated Sta****tements of Comprehensive Income (Unaudited)

(In thousands)

		Three Months (13 Weeks) Ended								Six Months (26 Weeks) Ended
		July 1, 2023				July 2, 2022				July 1, 2023				July 2, 2022
Net earnings before noncontrolling interests		$	1,587,075			$	2,727,237			$	2,818,704			$	4,954,352
Other comprehensive income (loss):
Net unrealized income (loss) on hedging derivatives, net of income taxes of $(1,400) and $5,100 for the second quarter of 2023 and 2022, respectively, and $(9,200) and $21,900 for the first six months of 2023 and 2022, respectively			(4,428	)			16,138				(29,003	)			69,614
Reclassification adjustment for settlement of hedging derivatives included in net earnings, net of income taxes of $1,900 and $(4,800) for the second quarter of 2023 and 2022, respectively, and $2,000 and $(6,500) for the first six months of 2023 and 2022, respectively			6,228				(15,136	)			6,403				(20,526	)
Foreign currency translation gain (loss), net of income taxes of $0 for the second quarter and first six months of 2023 and 2022			34,586				(27,308	)			31,145				(4,616	)
			36,386				(26,306	)			8,545				44,472
Comprehensive income			1,623,461				2,700,931				2,827,249				4,998,824
Comprehensive income attributable to noncontrolling interests			125,721				166,004				220,808				297,496
Comprehensive income attributable to Nucor stockholders		$	1,497,740			$	2,534,927			$	2,606,441			$	4,701,328

See notes to condensed consolidated financial statements.

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Nucor Corporation Condensed Consol****idated Balance Sheets (Unaudited)

(In thousands)

		July 1, 2023				Dec. 31, 2022
ASSETS
Current assets:
Cash and cash equivalents		$	4,510,563			$	4,280,852
Short-term investments			870,475				576,946
Accounts receivable, net			3,874,933				3,591,030
Inventories, net			5,632,324				5,453,531
Other current assets			402,213				789,325
Total current assets			15,290,508				14,691,684
Property, plant and equipment, net			10,093,399				9,616,920
Restricted cash and cash equivalents			12,665				80,368
Goodwill			3,926,197				3,920,060
Other intangible assets, net			3,205,881				3,322,265
Other assets			851,266				847,913
Total assets		$	33,379,916			$	32,479,210
LIABILITIES
Current liabilities:
Short-term debt		$	33,339			$	49,081
Current portion of long-term debt and finance lease obligations			25,087				28,582
Accounts payable			1,855,502				1,649,523
Salaries, wages and related accruals			1,043,967				1,654,210
Accrued expenses and other current liabilities			1,046,279				948,348
Total current liabilities			4,004,174				4,329,744
Long-term debt and finance lease obligations due after one year			6,620,686				6,613,687
Deferred credits and other liabilities			1,814,128				1,965,873
Total liabilities			12,438,988				12,909,304
Commitments and contingencies
EQUITY
Nucor stockholders' equity:
Common stock			152,061				152,061
Additional paid-in capital			2,149,693				2,143,520
Retained earnings			27,095,661				24,754,873
Accumulated other comprehensive loss, net of income taxes			(128,972	)			(137,517	)
Treasury stock			(9,314,764	)			(8,498,243	)
Total Nucor stockholders' equity			19,953,679				18,414,694
Noncontrolling interests			987,249				1,155,212
Total equity			20,940,928				19,569,906
Total liabilities and equity		$	33,379,916			$	32,479,210

See notes to condensed consolidated financial statements.

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Nucor Corporation Condensed Consolidate****d Statements of Cash Flows (Unaudited)

(In thousands)

		Six Months (26 Weeks) Ended
		July 1, 2023				July 2, 2022
Operating activities:
Net earnings before noncontrolling interests		$	2,818,704			$	4,954,352
Adjustments:
Depreciation			448,836				397,

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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, any variants of the virus and any other similar pandemic or public health situation; 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, 2022 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, 2022.

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 NJSM. 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

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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.

The average utilization rates of all operating facilities in the steel mills, steel products and raw materials segments were approximately 82%, 67% and 76%, respectively, in the first six months of 2023 compared with approximately 81%, 76% and 75%, respectively, in the first six months of 2022.

Results of Operations

Nucor reported net earnings attributable to Nucor stockholders of $1.46 billion, or $5.81 per diluted share, for the second quarter of 2023, as compared to net earnings attributable to Nucor stockholders of $1.14 billion, or $4.45 per diluted share, for the first quarter of 2023, and $2.56 billion, or $9.67 per diluted share, for the second quarter of 2022, which was the most profitable second quarter in Nucor's history.

The primary driver for the decrease in earnings in the second quarter of 2023 compared to the second quarter of 2022 was the decreased earnings of the steel mills segment. The steel mills segment experienced lower shipping volumes in the second quarter of 2023 compared to the second quarter of 2022. Average selling prices in the steel mills segment decreased at our sheet, bar, plate and structural mills in the second quarter of 2023 as compared to the second quarter of 2022. The decreases in average selling prices outpaced the decrease in scrap and scrap substitute costs in the second quarter of 2023 as compared to the second quarter of 2022, resulting in significantly lower metal margins. We believe end-use market demand was healthy in the second quarter of 2023 and the contrast in earnings when compared with the second quarter of 2022 was due to the historically favorable market conditions that existed in the second quarter of 2022.

The earnings of the steel products segment moderated in the second quarter of 2023 as compared to the second quarter of 2022, but overall market conditions in nonresidential construction remained elevated. The steel products segment had decreased earnings in the second quarter of 2023 as compared to the second quarter of 2022, which was partially offset by the strong performance of our rebar fabrication operations and the earnings from our overhead doors business, that we acquired on June 24, 2022 and had minimal impact on the second quarter of 2022.

The earnings of the raw materials segment decreased in the second quarter and first six months of 2023 as compared to the second quarter and first six months of 2022 primarily due to margin compression at our scrap processing operations, our DRI facilities and our scrap brokerage operations.

Nucor reported net earnings attributable to Nucor stockholders of $2.60 billion, or $10.26 per diluted share, for the first six months of 2023, which is the second-most profitable first six months of a year in Nucor history. The only year that had a more profitable first six months of the year was 2022, in which Nucor reported net earnings attributable to Nucor stockholders of $4.66 billion, or $17.30 per diluted share.

The primary driver of the decrease in earnings in the first six months of 2023 as compared to the first six months of 2022 was due to the decreased performance of the steel mills segment, particularly at our sheet mills. Pricing for sheet mill products on average was significantly lower in the first six months of 2023 as compared to the first six months of 2022.

The earnings of the steel products segment increased in the first six months of 2023 as compared to the first six months of 2022, driven by the strong performance across several businesses including our joist, deck, tubular products, metal buildings and rebar fabrication operations, and the addition of our overhead doors business.

The following discussion provides a greater quantitative and qualitative analysis of Nucor’s performance in the second quarter and first six months of 2023 as compared to the second quarter and first six months of 2022.

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Net Sales

Net sales to external customers by segment for the second quarter and first six months of 2023 and 2022 were as follows (in thousands):

		Three Months (13 Weeks) Ended						Six Months (26 Weeks) Ended
		July 1, 2023		July 2, 2022		% Change		July 1, 2023		July 2, 2022		% Change
Steel mills		$5,565,772		$7,256,067		-23%		$10,545,029		$13,774,676		-23%
Steel products		3,442,862		3,842,948		-10%		6,718,859		7,166,036		-6%
Raw materials		514,622		695,459		-26%		969,348		1,347,044		-28%
Total net sales to external customers		$9,523,256		$11,794,474		-19%		$18,233,236		$22,287,756		-18%

Net sales for the second quarter of 2023 decreased 19% from the second quarter of 2022. Average sales price per ton decreased 14% from $1,690 in the second quarter of 2022 to $1,446 in the second quarter of 2023. Total tons shipped to outside customers in the second quarter of 2023 were approximately 6,588,000 tons, a 6% decrease from the second quarter of 2022.

Net sales for the first six months of 2023 decreased 18% from the first six months of 2022. Average sales price per ton decreased 16% from $1,667 in the first six months of 2022 to $1,399 in the first six months of 2023. Total tons shipped to outside customers in the first six months of 2023 were approximately 13,031,000 tons, a 3% decrease from the first six months of 2022.

In the steel mills segment, sales tons for the second quarter and first six months of 2023 and 2022 were as follows (in thousands):

		Three Months (13 Weeks) Ended						Six Months (26 Weeks) Ended
		July 1, 2023		July 2, 2022		% Change		July 1, 2023		July 2, 2022		% Change
Outside steel shipments		4,774		5,041		-5%		9,578		9,580		-
Inside steel shipments		1,205		1,407		-14%		2,436		2,682		-9%
Total steel shipments		5,979		6,448		-7%		12,014		12,262		-2%

Net sales for the steel mills segment decreased 23% in the second quarter of 2023 from the second quarter of 2022, due primarily to an 18% decrease in the average sales price per ton, from $1,429 to $1,168, and a 5% decrease in tons sold to outside customers.

Net sales for the steel mills segment decreased 23% in the first six months of 2023 from the first six months of 2022, due to a 23% decrease in the average sales price per ton, from $1,432 to $1,101.

Outside sales tonnage for the steel products segment for the second quarter and first six months of 2023 and 2022 was as follows (in thousands):

		Three Months (13 Weeks) Ended						Six Months (26 Weeks) Ended
		July 1, 2023		July 2, 2022		% Change		July 1, 2023		July 2, 2022		% Change
Joist sales		142		158		-10%		277		337		-18%
Deck sales		107		123		-13%		206		259		-20%
Cold finished sales		112		123		-9%		229		256		-11%
Rebar fabrication sales		332		339		-2%		611		630		-3%
Piling products sales		113		119		-5%		214		230		-7%
Tubular products sales		239		274		-13%		514		504		2%
Other steel products sales		148		175		-15%		283		330		-14%
Total steel products sales		1,193		1,311		-9%		2,334		2,546		-8%

Net sales for the steel products segment decreased 10% in the second quarter of 2023 compared to the second quarter of 2022, due to a 2% decrease in the average sales price per ton, from $2,931 to $2,884, and a 9% decrease in shipping volumes. Average selling prices decreased across most businesses within the steel products segment in the second quarter of 2023 as compared to the second quarter of 2022, most notably at our buildings and tubular businesses.

Net sales for the steel products segment decreased 6% in the first six months of 2023 compared to the first six months of 2022, due to an 8% decrease in shipping volumes, partially offset by 2% increase in the average sales price

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per ton, from $2,814 to $2,878. The most notable increases in average selling prices in the first six months of 2023 as compared to the first six months of 2022 were at our insulated metal panels and joist businesses.

Net sales for the raw materials segment decreased 26% in the second quarter of 2023 compared to the second quarter of 2022, due to decreases for both DJJ brokerage and scrap processing operations in average sales price per ton and decreased volumes at our scrap processing operations. In the second quarter of 2023, approximately 94% of outside sales for the raw materials segment were from the brokerage operations of DJJ, and approximately 3% of outside sales were from the scrap processing operations of DJJ (91% and 7%, respectively, in the second quarter of 2022).

Net sales for the raw materials segment decreased 28% in the first six months of 2023 compared to the first six months of 2022, 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 first six months of 2023, approximately 93% of outside sales for the raw materials segment were from the brokerage operations of DJJ, and approximately 3% of outside sales were from the scrap processing operations of DJJ (91% and 7%, respectively, in the first six months of 2022).

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Gross Margins

Nucor recorded gross margins of $2.50 billion (26%) in the second quarter of 2023, which was a decrease compared to $4.10 billion (35%) in the second quarter of 2022.

The decrease in gross margin in the second quarter of 2023 as compared to the second quarter of 2022 was due primarily to lower metal margins across 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 second quarter of 2023 was $455, a 15% decrease compared to $534 in the second quarter of 2022. The decrease in scrap and scrap substitute costs 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. As we enter the third quarter of 2023, we expect scrap prices to decrease compared to the second quarter of 2023.

Gross margins in the steel products segment decreased in the second quarter of 2023 compared to the second quarter of 2022, primarily due to decreases at our joist, deck, tubular, and metal buildings businesses. This decrease was partially offset by the strong performance of our rebar fabrication business and the addition of our overhead doors business. Demand in nonresidential construction markets continues to be strong. As we enter the third quarter of 2023, backlogs for the steel products segment are consistent with historical averages.

Pre-operating and start-up costs of new facilities were approximately $90 million in the second quarter of 2023 and approximately $60 million in the second quarter of 2022. Pre-operating and start-up costs in the second quarter of 2023 primarily included costs related to the plate mill in Kentucky, the sheet mill in West Virginia, and the sheet mill expansion in Indiana. Pre-operating and start-up costs in the second quarter of 2022 primarily included costs related to the plate mill in Kentucky, the sheet mill expansion in Kentucky and the construction of a galvanizing line at our sheet mill expansion in Arkansas. Nucor defines pre-operating and start-up costs, all of which are expensed, as the losses attributable to facilities or major projects that are either under construction or in the early stages of operation. Once these facilities or projects have attained a utilization rate that is consistent with our similar operating facilities, Nucor no longer considers them to be in start-up.

Gross margins in the raw materials segment decreased in the second quarter of 2023 as compared to the second quarter of 2022, due to decreased gross margins across all businesses in the raw materials segment.

Nucor recorded gross margins of $4.50 billion (25%) in the first six months of 2023, which was a decrease compared to $7.56 billion (34%) in the first six months of 2022.

In the steel mills segment, the average scrap and scrap substitute cost per gross ton used in the first six months of 2023 was $435, a 16% decrease compared to $516 in the first six months of 2022. However, the decrease in scrap and substitute costs was more than offset by the decreases in average selling prices and volumes shipped, resulting in lower metal margins.

The steel products segment had increased gross margins in the first six months of 2023 compared to the first six months of 2022, primarily due to the strong performance of our rebar fabrication business and the addition of our overhead doors business.

Pre-operating and start-up costs of new facilities increased to approximately $172 million in the first six months of 2023 from approximately $122 million in the first six months of 2022. Pre-operating and start-up costs in the first six months of 2023 primarily included costs related to the plate mill in Kentucky, the sheet mill in West Virginia, and the sheet mill expansion in Indiana. Pre-operating and start-up costs in the first six months of 2022 primarily included costs related to the plate mill in Kentucky, the sheet mill expansion in Kentucky and the construction of a galvanizing line at our sheet mill expansion in Arkansas.

Gross margins in the raw materials segment decreased in the first six months of 2023 as compared to the first six months of 2022, due to decreased gross margins across all businesses in the raw materials segment.

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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 $121.5 million in the second quarter of 2023 as compared to the second quarter of 2022, and decreased by $246.6 million in the first six months of 2023 as compared to the first six months of 2022. These decreases were due to Nucor's decreased profitability in the second quarter and first six months of 2023 as compared to the respective prior year periods, which resulted in decreased accruals related to profit sharing.

Equity in Earnings of Unconsolidated Affiliates

Equity in earnings of unconsolidated affiliates was $6.1 million and $7.1 million in the second quarter of 2023 and 2022, respectively, and $4.8 million and $14.8 million in the first six months of 2023 and 2022, respectively. The decreases in equity method investment earnings were primarily due to the decreased results of NuMit.

Interest Expense (Income)

Net interest expense for the second quarter and first six months of 2023 and 2022 was as follows (in thousands):

		Three Months (13 Weeks) Ended								Six Months (26 Weeks) Ended
		July 1, 2023				July 2, 2022				July 1, 2023				July 2, 2022
Interest expense		$	60,806			$	63,514			$	123,488			$	107,590
Interest income			(56,208	)			(5,751	)			(108,707	)			(6,692	)
Interest expense, net		$	4,598			$	57,763			$	14,781			$	100,898

Interest expense decreased in the second quarter of 2023 compared to the second quarter of 2022 due to an increase in capitalized interest. Interest expense increased in the first six months of 2023 compared to the first six months of 2022 primarily due to higher average interest rates on debt and an increase in average debt outstanding.

Interest income increased in the second quarter and first six months of 2023 compared to the second quarter and first six months of 2022 primarily due to an increase in average interest rates on investments and higher average investments.

Earnings Before Income Taxes and Noncontrolling Interests

The table below presents earnings before income taxes and noncontrolling interests by segment for the second quarter and first six months of 2023 and 2022 (in thousands). The changes between periods were driven by the quantitative and qualitative factors previously discussed.

		Three Months (13 Weeks) Ended								Six Months (26 Weeks) Ended
		July 1, 2023				July 2, 2022				July 1, 2023				July 2, 2022
Steel mills		$	1,403,547			$	2,815,723			$	2,241,935			$	5,394,577
Steel products			1,010,789				1,129,932				1,981,591				1,814,799
Raw materials			138,411				263,598				196,551				359,451
Corporate/eliminations			(502,965	)			(718,851	)			(773,511	)			(1,180,310	)
		$	2,049,782			$	3,490,402			$	3,646,566			$	6,388,517

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 decrease in earnings attributable to noncontrolling interests in the second quarter and first six months of 2023 as compared to the second quarter and first six months of 2022 was primarily due to the decreased earnings of CSI as well as the earnings of NYS.

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Provision for Income Taxes

The effective tax rate for the second quarter of 2023 was 22.6% compared to 21.9% for the second quarter of 2022. The expected effective tax rate for the full year of 2023 is approximately 22.9%.

We estimate that in the next 12 months our gross unrecognized tax benefits, which totaled $161.5 million at July 1, 2023, exclusive of interest, could decrease by as much as $5.8 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 through 2021 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 2022 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 net earnings attributable to Nucor stockholders of $1.46 billion, or $5.81 per diluted share, in the second quarter of 2023 as compared to net earnings attributable to Nucor stockholders of $2.56 billion, or $9.67 per diluted share, in the second quarter of 2022. Net earnings attributable to Nucor stockholders as a percentage of net sales were 15.3% and 21.7% in the second quarter of 2023 and 2022, respectively.

Nucor reported net earnings attributable to Nucor stockholders of $2.60 billion, or $10.26 per diluted share, in the first six months of 2023 as compared to net earnings attributable to Nucor stockholders of $4.66 billion, or $17.30 per diluted share, in the first six months of 2022. Net earnings attributable to Nucor stockholders as a percentage of net sales were 14.2% and 20.9% in the first six months of 2023 and 2022, respectively. Annualized return on average stockholders’ equity was 27.1% and 60.4% in the first six months of 2023 and 2022, respectively.

Outlook

We expect earnings in the third quarter of 2023 to decrease compared to the second quarter of 2023. We expect earnings for the steel mills segment to decline in the third quarter of 2023 as compared to the second quarter of 2023 due to decreased profitability, with the largest impact at our sheet mills. The earnings of the steel products segment are expected to moderate in the third quarter of 2023 as compared to the second quarter of 2023. Earnings for the raw materials segment are expected to decrease in the third quarter of 2023 as compared to the second quarter of 2023 due to margin compression at our DRI facilities and scrap processing operations.

Nucor’s largest exposure to market risk is in our steel mills and steel products segments. Our largest single customer in the second quarter of 2023 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, particularly during recessionary business cycles. We currently have the highest credit ratings of any steel producer headquartered in North America, with an A- long-term rating from Standard & Poor’s, an A- rating from Fitch Ratings and a Baa1 long-term rating from Moody’s. Our credit ratings are dependent, however, upon a number of factors, both qualitative and quantitative, and are subject to change at any time. The disclosure of our credit ratings is made in order to enhance investors’ understanding of our sources of liquidity and the impact of our credit ratings on our cost of funds.

Our liquidity position as of July 1, 2023 remained strong, consisting of total cash and cash equivalents, short-term investments and restricted cash and cash equivalents of $5.39 billion as of such date compared to $4.94 billion as of December 31, 2022. Of these totals, the amount of restricted cash and cash equivalents was $12.7 million at July 1, 2023 and $80.4 million at December 31, 2022. Approximately $583.3 million of the cash and cash equivalents position at July, 1, 2023, was held by our majority-owned and controlled subsidiaries as compared to $1.04 billion at December 31, 2022.

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Cash provided by operating activities was $3.13 billion in the first six months of 2023 as compared to $4.73 billion in the first six months of 2022. The $1.60 billion decrease was primarily driven by net earnings before noncontrolling interests of $2.82 billion for the first six months of 2023, a decrease of $2.14 billion from net earnings before noncontrolling interests for the prior year period of $4.95 billion. Partially offsetting the decline in net earnings before noncontrolling interests were the changes in operating assets and operating liabilities (exclusive of acquisitions) which used cash of $310.0 million in the first six months of 2023 as compared to using cash of $730.6 million in the first six months of 2022.

The funding of our working capital in the first six months of 2023 decreased by $420.6 million compared to the first six months of 2022 mainly due to the change in accounts receivable using $378.3 million less cash and the change in federal income taxes providing $362.9 million more cash as compared to the same period in 2022. These changes were offset by the $321.2 million decrease in the change in salaries, wages and related accruals in the first six months of 2023 as compared to the first six months of 2022. The change in salaries, wages, and related accruals used cash of $574.0 million in the first six months of 2023 as compared to $252.8 million in the first six months of 2022, due primarily to the payout in the first six months of 2023 of incentive compensation for 2022, which was higher than the incentive compensation for 2021 that was paid out in the first six months of 2022 due to higher Company earnings in 2022.

The current ratio was 3.8 at the end of the second quarter of 2023 and 3.4 at year-end 2022. The increase in the current ratio at the end of the second quarter of 2023 compared to year-end 2022 was due to the $325.6 million, or 8%, decrease in current liabilities. The decrease in current liabilities was primarily due to the $610.2 million decrease in salaries, wages and related accruals in the first six months of 2023 as compared to the first six months of 2022 due to the aforementioned incentive compensation accrued on December 31, 2022 and paid out during the first six months of 2023.

Cash used in investing activities during the first six months of 2023 was $1.38 billion as compared to $4.54 billion in the prior year period, a decrease of $3.16 billion. The primary reason for the decrease in cash used in investing activities was the decrease in cash used for acquisitions of $3.47 billion. Acquisitions were significantly higher in the first six months of 2022 due to the acquisition of CSI on February 1, 2022 and C.H.I. Overhead Doors, LLC on June 24, 2022. Cash used for capital expenditures of $1.06 billion in the first six months of 2023 increased by $88.3 million over the same period of 2022 primarily due to the plate mill and tubular product facility being built in Kentucky, the sheet mill in West Virginia and the micro mill being built in North Carolina. Capital expenditures for 2023 are estimated to be approximately $3.0 billion as compared to $1.95 billion in 2022. The projects that we anticipate will have the largest capital expenditures in 2023 are the sheet mill under construction in West Virginia, the micro mill being built in North Carolina, the sheet mill expansion in Indiana and the plate mill in Kentucky.

Cash used in financing activities during the first six months of 2023 was $1.59 billion as compared to $614.3 million in the first six months of 2022. The primary uses of cash were stock repurchases of $876.7 million in the first six months of 2023 as compared to $1.71 billion in the first six months of 2022, a decrease of $831.2 million and distributions to noncontrolling interests of $388.8 million in the first six months of 2023 as compared to $268.5 million in the first six months of 2022, an increase of $120.2 million. The primary change in the source of cash offsetting these uses of cash was proceeds from long-term debt, net of discount to the public, of $2.09 billion in the first six months of 2022 as compared to none in the first six months of 2023. In the first six months of 2022, Nucor issued $500.0 million aggregate principal amount of its 3.950% Notes due in 2025, $500.0 million aggregate principal amount of its 4.300% Notes due in 2027, $550.0 million aggregate principal amount of the 3.125% Notes due in 2032 and $550.0 million aggregate principal amount of the 3.850% Notes due in 2052. On April 25, 2022, we redeemed all $500.0 million aggregate principal amount outstanding of our 4.000% Notes due 2023.

Nucor’s $1.75 billion revolving credit facility matures on November 5, 2026. The revolving credit facility includes only one financial covenant, which is a limit of 60% on the ratio of funded debt to total capital. In addition, the revolving credit facility contains customary non-financial covenants, including a limit on Nucor’s ability to pledge the Company’s assets and a limit on consolidations, mergers and sales of assets. As of July 1, 2023, the funded debt to total capital ratio was 24.2% and we were in compliance with all non-financial covenants under the revolving credit facility. No borrowings were outstanding under the revolving credit facility as of July 1, 2023.

In June 2023, Nucor’s Board of Directors declared a quarterly cash dividend on Nucor’s common stock of $0.51 per share payable on August 11, 2023 to stockholders of record on June 30, 2023. This dividend is Nucor’s 201st 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

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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, 2022. There were no interest rate swaps outstanding at July 1, 2023.

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 production 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 July 1, 2023, accumulated other comprehensive loss, net of income taxes included $3.5 million in unrealized net-of-tax gains for the fair value of these derivative instruments. Changes in the fair values of derivatives not designated as hedges are recognized in net earnings each period.

The following table presents the negative effect on pre-tax earnings of a hypothetical change in the fair value of the derivative instruments outstanding at July 1, 2023, 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		$	13,960			$	34,910
Aluminum		$	4,421			$	12,672
Copper		$	1,004			$	2,504

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 July 1, 2023 were insignificant.

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Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this report, the Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures. Based upon that evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of the evaluation date.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting during the quarter ended July 1, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

Nucor is from time to time a party to various lawsuits, claims and other legal proceedings that arise in the ordinary course of business. With respect to all such lawsuits, claims and proceedings, we record reserves when it is probable a liability has been incurred and the amount of loss can be reasonably estimated. We do not believe that any of these proceedings, individually or in the aggregate, would be expected to have a material adverse effect on our results of operations, financial position or cash flows. Nucor maintains liability insurance with self-insurance limits for certain risks.

There were no proceedings that were pending or contemplated under federal, state or local environmental laws that the Company reasonably believes may result in monetary sanctions of at least $1.0 million (the threshold chosen by Nucor as permitted by Item 103 of Regulation S-K promulgated under the Securities Exchange Act of 1934, as amended, (the "Exchange Act"), 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, 2022.

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Item 2. Unregistered Sales of Eq****uity Securities and Use of Proceeds

Our share repurchase program activity for each of the three months and the quarter ended July 1, 2023 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)
April 2, 2023 - April 29, 2023			2,323			$	147.99				2,323			$	317,952
April 30, 2023 - May 27, 2023			744			$	144.01				744			$	4,000,000
May 28, 2023 - July 1, 2023			-			$	-				-			$	4,000,000
For the Quarter Ended July 1, 2023			3,067								3,067

(1)

Includes commissions of $0.29 per share.

(2)

On May 11, 2023, 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. Share repurchases made prior to May 11, 2023 were made under the Company's prior share repurchase program. The prior share repurchase program was announced on December 2, 2021 and authorized the Company to repurchase up to $4.00 billion of the Company's common stock. The prior share repurchase program was terminated in connection with the approval of the new share repurchase program announced on May 11, 2023.

Insider Trading Arrangements

During the quarter ended July 1, 2023, none of our directors or officers (as defined in rule 16a-1 (f) under the Exchange Act) adopted, modified or terminated a "Rule 10b5-1 trading arrangement" or a "non-Rule 10b5-1 trading arrangement" (as such terms are defined in Item 408 of Regulation S-K).

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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))
10*		Executive Employment Agreement of Brad Ford (#)
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 July 1, 2023, filed August 9, 2023, formatted in Inline XBRL: (i) the Condensed Consolidated Statements of Earnings, (ii) the Condensed Consolidated Statements of Comprehensive Income, (iii) the Condensed Consolidated Balance Sheets, (iv) the Condensed Consolidated Statements of Cash Flows and (v) the Notes to Condensed Consolidated Financial Statements.
104*		Cover Page from the Quarterly Report on Form 10-Q of Nucor Corporation for the quarter ended July 1, 2023, filed August 9, 2023, formatted in Inline XBRL (included in Exhibit 101 above).

• Filed herewith.

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

(#) Indicates a management contract or compensatory plan or arrangement

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SIGNA****TURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	NUCOR CORPORATION
	By:		/s/ Stephen D. Laxton
			Stephen D. Laxton
			Chief Financial Officer, Treasurer and
			Executive Vice President

Dated: August 9, 2023