# Nucor Corp: Form 10-Q for the period ended Mar 30, 2024

- Company: [Nucor Corp](/companies/nue.md) (CIK 73309)
- Form: 10-Q
- Filed: 2024-05-08
- Accepted by EDGAR: May 8, 2024, 09:35 ET
- Period: 2024-03-30
- Accession: 0000950170-24-055144
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/73309/000095017024055144/nue-20240330.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/73309/000095017024055144/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2024-03-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2024-01-01 to 2024-03-30 | $8.14bn | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Cost of revenue | 3 months, 2024-01-01 to 2024-03-30 | $6.61bn | us-gaap:CostOfGoodsAndServicesSold |
| Selling, general and administrative | 3 months, 2024-01-01 to 2024-03-30 | $345.4m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Interest expense | 3 months, 2024-01-01 to 2024-03-30 | $43.5m | us-gaap:InterestExpense |
| Income tax | 3 months, 2024-01-01 to 2024-03-30 | $266.4m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2024-01-01 to 2024-03-30 | $844.8m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2024-01-01 to 2024-03-30 | $3.46 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2024-01-01 to 2024-03-30 | $3.46 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2024-01-01 to 2024-03-30 | 243,497,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 3 months, 2024-01-01 to 2024-03-30 | $459.7m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 3 months, 2024-01-01 to 2024-03-30 | $670.3m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Dividends paid | 3 months, 2024-01-01 to 2024-03-30 | $133.6m | us-gaap:PaymentsOfDividendsCommonStock |
| Share repurchases | 3 months, 2024-01-01 to 2024-03-30 | $1.00bn | us-gaap:PaymentsForRepurchaseOfCommonStock |
| Cash and equivalents | at 2024-03-30 | $4.56bn | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2024-03-30 | $14.64bn | us-gaap:AssetsCurrent |
| Total assets | at 2024-03-30 | $33.93bn | us-gaap:Assets |
| Current liabilities | at 2024-03-30 | $3.65bn | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2024-03-30 | $12.21bn | us-gaap:Liabilities |
| Short-term borrowings | at 2024-03-30 | $130.0m | us-gaap:ShortTermBorrowings |
| Shareholders' equity | at 2024-03-30 | $20.69bn | us-gaap:StockholdersEquity |
| Shares outstanding | at 2024-03-30 | 239,761,770 shares | dei:EntityCommonStockSharesOutstanding |

## Management's discussion and analysis

As filed, 25,198 characters.

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 any 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, 2023 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, 2023.

### 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 investment in NuMit. 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.

The average utilization rates of all operating facilities in the steel mills, steel products and raw materials segments were approximately 82%, 59% and 77%, respectively, in the first quarter of 2024, compared with approximately 79%, 65% and 75%, respectively, in the first quarter of 2023.

### Results of Operations

Nucor reported net earnings attributable to Nucor Stockholders of $844.8 million, or $3.46 per diluted share, in the first quarter of 2024, which represented a decrease compared to net earnings attributable to Nucor stockholders of $1.14 billion, or $4.45 per diluted share, in the first quarter of 2023.

The primary driver for the decrease in earnings in the first quarter of 2024 as compared to the first quarter of 2023 was the decreased profitability of the steel products segment. The profitability of that segment has moderated from the historically high levels experienced over the last three years. The largest driver of the decrease was at our joist and deck businesses, but we believe selling prices will likely stabilize as we approach the second half of 2024. Though moderating, we expect the steel products segment to maintain profitability higher than pre-pandemic averages.

The profitability of the steel mills segment improved in the first quarter of 2024 as compared to the first quarter of 2023, driven by higher average selling prices and increased metal margins. The largest contributor to the increased profitability of the segment was our sheet mills, which experienced increases in selling prices and margins that offset decreases at our bar, plate and structural mills.

Earnings in the raw materials segment decreased in the first quarter of 2024 as compared to the first quarter of 2023, due to margin compression at our scrap processing operations and the decreased profitability of our DRI facilities.

The following discussion provides a greater quantitative and qualitative analysis of Nucor’s performance in the first quarter of 2024 as compared to the first quarter of 2023.

#### Net Sales

Net sales to external customers by segment for the first quarter of 2024 and 2023 were as follows (in thousands):

|  | Three Months (13 Weeks) Ended March 30, 2024 | April 1, 2023 | % Change |
| --- | ---: | ---: | ---: |
| Steel mills | $5,168,778 | $4,979,257 | 4% |
| Steel products | 2,516,868 | 3,275,997 | -23% |
| Raw materials | 451,437 | 454,726 | -1% |
| Total net sales to external customers | $8,137,083 | $8,709,980 | -7% |

Net sales for the first quarter of 2024 decreased 7% from the first quarter of 2023. Average sales price per ton decreased 3% from $1,352 in the first quarter of 2023 to $1,307 in the first quarter of 2024. Total tons shipped to outside customers in the first quarter of 2024 were approximately 6,224,000 tons, a 3% decrease from the first quarter of 2023.

In the steel mills segment, sales tons for the first quarter of 2024 and 2023 were as follows (in thousands):

|  | Three Months (13 Weeks) Ended March 30, 2024 | April 1, 2023 | % Change |
| --- | ---: | ---: | ---: |
| Outside steel shipments | 4,676 | 4,804 | -3% |
| Inside steel shipments | 1,214 | 1,231 | -1% |
| Total steel shipments | 5,890 | 6,035 | -2% |

Net sales for the steel mills segment increased 4% in the first quarter of 2024 from the first quarter of 2023, due primarily to a 7% increase in the average sales price per ton, from $1,035 to $1,108, partially offset by a 3% decrease in tons sold to outside customers.

Outside sales tonnage for the steel products segment for the first quarter of 2024 and 2023 was as follows (in thousands):

|  | Three Months (13 Weeks) Ended March 30, 2024 | April 1, 2023 | % Change |
| --- | ---: | ---: | ---: |
| Joist sales | 99 | 135 | -27% |
| Deck sales | 81 | 99 | -18% |
| Cold finished sales | 99 | 117 | -15% |
| Rebar fabrication sales | 238 | 279 | -15% |
| Piling products sales | 98 | 101 | -3% |
| Tubular products sales | 208 | 275 | -24% |
| Other steel products sales | 142 | 135 | 5% |
| Total steel products sales | 965 | 1,141 | -15% |

Net sales for the steel products segment decreased 23% in the first quarter of 2024 compared to the first quarter of 2023, due to a 15% decrease in shipping volumes and a 9% decrease in the average sales price per ton, from $2,872 to $2,608. Average selling prices decreased across most businesses within the steel products segment in the first quarter of 2024 as compared to the first quarter of 2023.

Net sales for the raw materials segment decreased 1% in the first quarter of 2024 compared to the first quarter of 2023, due to decreases in average sales price per ton at our scrap brokerage operations and decreased volumes at our scrap processing operations. In the first quarter of 2024, approximately 93% of outside sales for the raw materials segment were from the scrap brokerage operations of DJJ, and approximately 4% of outside sales were from the scrap processing operations of DJJ (approximately 93% and 4%, respectively, in the first quarter of 2023).

#### Gross Margins

Nucor recorded gross margins of $1.52 billion (19%) in the first quarter of 2024, which was a decrease compared with $2.00 billion (23%) in the first quarter of 2023.

- The primary driver of the decrease in gross margin in the first quarter of 2024 as compared to the first quarter of 2023 was decreased margins in the steel products segment. The decrease in gross margins for the steel products segment was due to decreased selling prices and volumes shipped to outside customers, with the largest decreases at our joist and deck businesses.
- The decrease in total gross margin in the first quarter of 2024 as compared to the first quarter of 2023 was partially offset by higher 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 first quarter of 2024 was $421, a 2% increase compared to $414 in the first quarter of 2023. The increase in scrap and scrap substitute cost was offset by increased average selling prices, resulting in higher 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 are subject to change based on market fluctuations.

- Pre-operating and start-up costs of new facilities were approximately $125 million in the first quarter of 2024 and approximately $82 million in the first quarter of 2023. Pre-operating and start-up costs in the first quarter of 2024 and 2023 primarily included costs related to the plate mill in Kentucky and the sheet mill under construction 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 decreased in the first quarter of 2024 as compared to the first quarter of 2023, primarily due to decreased profitability in our scrap processing and DRI 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 $46.9 million in the first quarter of 2024 as compared to the first quarter of 2023. The decrease was due to the Company’s decreased earnings in the first quarter of 2024 as compared to the first quarter of 2023.

#### Equity in (Earnings) Losses of Unconsolidated Affiliates

Equity in earnings of unconsolidated affiliates was $9.8 million in the first quarter of 2024, and equity in losses of unconsolidated affiliates was $1.3 million in the first quarter of 2023. The increase in equity method investment earnings in the first quarter of 2024 as compared to the first quarter of 2023 was primarily due to the increased results of NuMit.

NJSM was included as an unconsolidated affiliate in the first quarter of 2023. During the fourth quarter of 2023, Nucor obtained control of and began accounting for NJSM on a consolidated basis.

#### Interest (Income) Expense

Net interest (income) expense for the first quarter of 2024 and 2023 was as follows (in thousands):

|  | Three Months (13 Weeks) Ended March 30, 2024 | April 1, 2023 |
| --- | ---: | ---: |
| Interest expense | $43,487 | $62,682 |
| Interest income | (81,274) | (52,499) |
| Interest (income) expense, net | $(37,787) | $10,183 |

Interest expense decreased in the first quarter of 2024 compared to the first quarter of 2023, primarily due to an increase in capitalized interest. Interest income increased in the first quarter of 2024 compared to the first quarter of 2023, due to higher average interest rates on investments and an increase in average invested balances.

#### Earnings Before Income Taxes and Noncontrolling Interests

The table below presents earnings before income taxes and noncontrolling interests by segment for the first quarter of 2024 and 2023 (in thousands). The changes between periods were driven by the quantitative and qualitative factors previously discussed.

|  | Three Months (13 Weeks) Ended March 30, 2024 | April 1, 2023 |
| --- | ---: | ---: |
| Steel mills | $1,102,251 | $838,388 |
| Steel products | 511,559 | 970,802 |
| Raw materials | 9,581 | 58,140 |
| Corporate/eliminations | (398,050) | (270,546) |
|  | $1,225,341 | $1,596,784 |

#### Noncontrolling Interests

Noncontrolling interests represent the income attributable to the holders of noncontrolling interests in Nucor’s joint ventures, NYS, CSI and NJSM. Nucor owns a 51% controlling interest in each of NYS, CSI and NJSM. The increase in earnings attributable to noncontrolling interests in the first quarter of 2024 as compared to the first quarter of 2023 was primarily due to the increased earnings of CSI.

#### Provision for Income Taxes

The effective tax rate for the first quarter of 2024 was 21.7% compared to 22.9% for the first quarter of 2023. The decrease in the effective tax rate for the first quarter of 2024 as compared to the first quarter of 2023 was primarily due to increased federal tax credits and the change in relative proportions of net earnings attributable to noncontrolling interests to total pre-tax earnings between the periods. The expected effective tax rate for the full year of 2024 is approximately 22.1%.

We estimate that in the next 12 months our gross unrecognized tax benefits, which totaled $194.5 million at March 30, 2024, exclusive of interest, could decrease by as much as $8.4 million as a result of the expiration of the statute of limitations and the closures of examinations, substantially all of which would impact the effective tax rate.

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 the tax years through 2014, and for the tax years 2016 and 2018. The tax years 2017, 2021, and 2022 remain open to examination by the IRS. The 2015 through 2021 Canadian income tax returns for Nucor Rebar Fabrication Group Inc. (formally known as 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, Trinidad & Tobago, 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 $844.8 million, or $3.46 per diluted share, in the first quarter of 2024, as compared to net earnings attributable to Nucor stockholders of $1.14 billion, or $4.45 per diluted share, in the first quarter of 2023. Net earnings attributable to Nucor stockholders as a percentage of net sales were 10.4% and 13.0% in the first quarter of 2024 and 2023, respectively. Annualized return on average stockholders’ equity was 16.2% and 24.3% in the first quarter of 2024 and 2023, respectively.

#### Outlook

We expect earnings in the second quarter of 2024 to decrease compared to the first quarter of 2024. The largest driver for the expected decrease in earnings in the second quarter of 2024 is the expected decrease in earnings of the steel mills segment, primarily due to lower average selling prices, partially offset by modestly increased volumes. The steel products segment is expected to have moderately decreased earnings in the second quarter of 2024 as compared to the first quarter of 2024 due to lower average selling prices, partially offset by increased volumes. Earnings in the raw materials segment are expected to be higher in the second quarter of 2024 as compared to the first quarter of 2024 due to the expected increased profitability of 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 first quarter of 2024 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 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- long-term 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.

Nucor's cash and cash equivalents, short-term investments and restricted cash and cash equivalents position remained strong at $5.54 billion as of March 30, 2024, compared with $7.13 billion as of December 31, 2023. Approximately $619.1 million of the cash and cash equivalents position at March 30, 2024, was held by our majority-owned joint ventures as compared to $1.05 billion at December 31, 2023.

Cash provided by operating activities during the first quarter of 2024 was $459.7 million as compared to $1.21 billion during the first quarter of 2023. The $747.5 million decrease was driven by net earnings before noncontrolling interests of $959.0 million for the first quarter of 2024, a decrease of $272.7 million from net earnings before noncontrolling interests for the prior year period of $1.23 billion. In addition, changes in operating assets and operating liabilities (exclusive of acquisitions) used cash of $794.1 million in the first quarter of 2024 as compared to $315.3 million in the first quarter of 2023. The change in accounts payable used cash of $392.4 million in the first quarter of 2024 as compared to providing cash of $394.6 million in the first quarter of 2023, a change of $787.0 million. This change was partially offset by the change in salaries, wages, and related accruals, which used cash of $595.9 million in the first quarter of 2024 as compared to $858.9 million in the first quarter of 2023, a change of $263.1 million.

The current ratio was 4.0 at the end of the first quarter of 2024 and 3.6 at year-end 2023. The increase in the current ratio at the end of the first quarter of 2024 compared to year-end 2023 was primarily due to the $948.5 million, or 20.6%, decrease in current liabilities. The decrease in current liabilities was primarily due to the $640.2 million decrease in salaries, wages and related accruals at the end of the first quarter of 2024 as compared to year-end 2023, which was largely due to the profit sharing payment being made in the first quarter of 2024 (based on the Company's earnings for the full year 2023).

Cash used in investing activities during the first quarter of 2024 was $889.7 million as compared to $769.8 million during the first quarter of 2023, an increase of $119.9 million. The primary reason for the increase in cash used in investing activities was cash used for capital expenditures, which was $670.3 million in the first quarter of 2024, an increase of $138.6 million from the prior year period. Capital expenditures in the first quarter of 2024 primarily related to the plate mill in Kentucky, the sheet mill expansion in Indiana and the sheet mill under construction in West Virginia. Capital expenditures for 2024 are estimated to be approximately $3.5 billion as compared to $2.2 billion in 2023. The projects that we anticipate will have the largest capital expenditures in 2024 are the sheet mill expansion in Indiana, the sheet mill under construction in West Virginia, the rebar micro mill under construction in North Carolina and the construction of two manufacturing locations to expand Nucor Towers & Structures.

Cash used in financing activities during the first quarter of 2024 was $1.40 billion as compared to $920.7 million during the first quarter of 2023. The primary uses of cash were stock repurchases of $1.00 billion in the first quarter of 2024 as compared to $425.8 million in the first quarter of 2023, an increase of $575.5 million, and distributions to noncontrolling interests of $265.4 million in the first quarter of 2024 as compared to $337.8 million in the first quarter of 2023, a decrease of 72.4 million.

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 March 30, 2024, the funded debt to total capital ratio was 24.0% 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 March 30, 2024.

In February 2024, Nucor’s Board of Directors declared a quarterly cash dividend on Nucor’s common stock of $0.54 per share payable on May 10, 2024 to stockholders of record on March 28, 2024. This dividend is Nucor’s 204th consecutive quarterly cash dividend.

Funds provided by 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 expenditures 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.

## Market risk

As filed, 3,671 characters.

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, 2023. There were no interest rate swaps outstanding at March 30, 2024.

#### 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 material 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 March 30, 2024, accumulated other comprehensive loss, net of income taxes included $13.8 million in unrealized net-of-tax losses 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 March 30, 2024, 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 | $11,769 | $29,423 |
| Other commodities | $15,507 | $38,800 |

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 March 30, 2024 were insignificant.

## Controls and procedures

As filed, 888 characters.

#### 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 March 30, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

## Risk factors

As filed, 182 characters.

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, 2023.

Filed May 8, 2024.
Source: SEC EDGAR, the filing index for accession 0000950170-24-055144. Last ingested by Listed: Nov 4, 2026, 15:06 ET. No prices; not investment advice.