Quarterly Report for Quarter Ending April 4, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations

Certain statements made in this report, or in other public filings, press releases, or other written or oral communications made by Nucor Corporation, a Delaware corporation incorporated in 1958, and its affiliates (collectively, "Nucor," the "Company," "we," "us" or "our"), 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, 2025.

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, 2025.

Overview

Nucor and its affiliates manufacture steel and steel products. Nucor also produces direct reduced iron ("DRI") for use in its steel mills. Through The David J. Joseph Company and its affiliates ("DJJ"), the Company also processes ferrous and nonferrous metals and brokers ferrous and nonferrous metals, pig iron, hot briquetted iron and DRI. Most of Nucor's operating facilities and customers are located in North America. Nucor's operations include international trading and sales companies that buy and sell steel and steel products manufactured by the Company and others. Nucor is North America's largest recycler, using scrap steel as the primary raw material in producing steel and steel products.

Nucor reports its results in the following segments: steel mills, steel products and raw materials. The steel mills segment includes carbon and alloy steel in sheet, bars, structural and plate; steel trading businesses; rebar distribution businesses; and Nucor's equity method investment in NuMit LLC. 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, steel grating, tubular products businesses, steel racking, piling products business, wire and wire mesh, overhead doors, and utility towers and structures. The raw materials segment includes

DJJ, primarily a scrap broker and processor; Nu-Iron Unlimited and Nucor Steel Louisiana LLC ("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 86%, 60% and 76%, respectively, in the first quarter of 2026, compared to approximately 80%, 55% and 73%, respectively, in the first quarter of 2025.

Results of Operations

Nucor reported net earnings attributable to Nucor stockholders of $743 million, or $3.23 per diluted share, in the first quarter of 2026, which represented an increase compared to net earnings attributable to Nucor stockholders of $156 million, or $0.67 per diluted share, in the first quarter of 2025.

The primary driver of the increase in earnings in the first quarter of 2026 as compared to the first quarter of 2025 was the increased earnings of the steel mills segment. The increase in the steel mills segment earnings in the first quarter of 2026 was primarily due to record quarterly shipments and increased average selling prices and metal margins. Earnings increased for all product groups within the steel mills segment in the first quarter of 2026, with the largest increase at our sheet mills. Demand remains strong in our key end markets, and backlog levels in the steel mills segment increased at the end of the first quarter of 2026 compared to the end of 2025. Federal trade policies, including anti-dumping and countervailing duty laws in combination with Section 232 national security tariffs, are continuing to reduce the flood of unfairly traded imports into the United States. Imports' share of the U.S. finished steel market declined from over 22% in the first quarter of 2025 to approximately 15% in the first quarter of 2026.

Earnings in the steel products segment decreased slightly in the first quarter of 2026 compared to the first quarter of 2025 primarily due to margin compression caused by increased steel input costs. Demand remains strong in key end markets and volumes and average selling prices for the steel products segment increased in the first quarter of 2026 as compared to the first quarter of 2025. Backlogs for the steel products segment were increased at the end of the first quarter of 2026 as compared to the end of 2025.

Earnings in the raw materials segment increased in the first quarter of 2026 as compared to the first quarter of 2025, primarily due to the increased profitability of our scrap processing operations. Included in the raw materials segment's earnings in the first quarter of 2026 was $15 million of impairment charges related to certain assets within the segment.

The following discussion provides a greater quantitative and qualitative analysis of Nucor's performance in the first quarter of 2026 as compared to the first quarter of 2025.

Net Sales

Net sales to external customers by segment for the first quarter of 2026 and 2025 were as follows (in millions):

Net sales for the first quarter of 2026 increased 21% from the first quarter of 2025. Average sales price per ton increased 12% from $1,146 in the first quarter of 2025 to $1,279 in the first quarter of 2026. Total tons shipped to outside customers in the first quarter of 2026 were approximately 7,427,000 tons, a 9% increase from the first quarter of 2025.

In the steel mills segment, sales tons for the first quarter of 2026 and 2025 were as follows (in thousands):

Net sales for the steel mills segment increased 23% in the first quarter of 2026 compared to the first quarter of 2025, primarily due to a 14% increase in the average sales price per ton, from $938 to $1,074, and an 8% increase in tons sold to outside customers.

Outside sales tonnage for the steel products segment for the first quarter of 2026 and 2025 was as follows (in thousands):

Net sales for the steel products segment increased 16% in the first quarter of 2026 compared to the first quarter of 2025, primarily due to a 5% increase in the average sales price per ton, from $2,294 to $2,405, and an 11% increase in tons sold to outside customers.

Net sales to external customers for the raw materials segment increased 30% in the first quarter of 2026 compared to the first quarter of 2025, primarily due to increased volumes and average selling prices at DJJ's scrap brokerage operations. In the first quarter of 2026, approximately 96% of outside sales for the raw materials segment were from DJJ's scrap brokerage operations, and approximately 3% of outside sales for the raw materials segment were from DJJ's scrap processing operations (approximately 94% and 4%, respectively, in the first quarter of 2025).

The majority of the raw materials segment's total sales are to internal customers in the steel mills segment. Net sales to outside customers represented approximately 18% of the raw materials segment's total sales in the first quarter of 2026 (approximately 16% in the first quarter of 2025).

Gross Margins

Nucor recorded gross margins of $1.50 billion (16%) in the first quarter of 2026, which was an increase compared to $605 million (8%) in the first quarter of 2025.

The average scrap and scrap substitute cost per gross ton used in the first quarter of 2026 was $403, a 2% increase compared to $394 in the first quarter of 2025. The increase in scrap and scrap substitute costs was more than offset by increased average selling prices, resulting in higher metal margins.

Marketing, Administrative and Other Expenses

A major component of marketing, administrative and other expenses is profit sharing and other incentive compensation costs. These costs, which are based upon and fluctuate with Nucor's financial performance, increased by $88 million in the first quarter of 2026 as compared to the first quarter of 2025. The increase was primarily due to the Company's increased earnings in the first quarter of 2026 as compared to the first quarter of 2025.

Losses and Impairments of Assets

Included in the first quarter of 2026 net earnings was $15 million of impairment charges related to certain assets in the raw materials segment.

Included in the first quarter of 2025 net earnings was $29 million of losses and impairments of assets. Of this amount, $19 million was related to the closure or repurposing of certain facilities in the steel products segment. The remaining $10 million was related to the repurposing of a facility in the steel mills segment.

Interest Expense (Income)

Net interest expense for the first quarter of 2026 and 2025 was as follows (in millions):

Interest expense decreased in the first quarter of 2026 compared to the first quarter of 2025, primarily due to an increase in capitalized interest. Interest income decreased in the first quarter of 2026 compared to the first quarter of 2025, primarily due to lower average investments and a decrease in average interest rates on investments.

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 2026 and 2025 (in millions). The changes between periods were driven by the quantitative and qualitative factors previously discussed.

Noncontrolling Interests

Noncontrolling interests represent the income attributable to the noncontrolling partners of Nucor's joint ventures, Nucor-Yamato Steel Company (Limited Partnership) ("NYS"), California Steel Industries, Inc. ("CSI") and Nucor-JFE Steel Mexico, S. de R.L. de C.V. ("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 2026 as compared to the first quarter of 2025 was primarily due to the increased earnings of NYS and CSI.

Provision for Income Taxes

The effective tax rate for the first quarter of 2026 was 20.6% compared to 20.7% for the first quarter of 2025. The expected effective tax rate for the full year 2026 is between 20.0% and 22.0%.

Nucor is subject to taxation in the United States, as well as various state and foreign jurisdictions. Nucor has concluded U.S. federal income tax matters for the tax years through 2021. The tax years 2022 through 2024 remain open to examination by the IRS. The 2015 through 2021 Canadian income tax returns for Nucor Rebar Fabrication Group Inc. (formerly known as Harris Steel Group Inc.) and certain related affiliates are currently under examination by the Canada Revenue Agency. Additional state and foreign taxing authorities are examining open years. The resolution of these audits is not expected to have a material impact on our consolidated financial statements. The tax years 2017 through 2024 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 $743 million, or $3.23 per diluted share, in the first quarter of 2026, as compared to net earnings attributable to Nucor stockholders of $156 million, or $0.67 per diluted share, in the first quarter of 2025. Net earnings attributable to Nucor stockholders as a percentage of net sales were 7.8% and 2.0% in the first quarter of 2026 and 2025, respectively. Annualized return on average stockholders' equity was 14.0% and 3.1% in the first quarter of 2026 and 2025, respectively.

Outlook

We expect higher consolidated earnings in the second quarter of 2026, with improved earnings across all three operating segments. In the steel mills segment, the expected increase is due to higher realized selling prices with stable volumes. In the steel products segment, we expect improved earnings due to higher volumes on stable pricing. The raw materials segment is expected to have increased earnings due to higher realized pricing.

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 2026 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 an A3 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 April 4, 2026 remained strong, consisting of total cash and cash equivalents and short-term investments of $2.48 billion ($2.70 billion as of December 31, 2025). Approximately $730 million of the cash and cash equivalents position at April 4, 2026 was held by our majority-owned joint ventures as compared to approximately $931 million at December 31, 2025.

Cash provided by operating activities during the first quarter of 2026 was $886 million as compared to $364 million during the first quarter of 2025. The $522 million increase was driven by net earnings before noncontrolling interests of $870 million for the first quarter of 2026, an increase of $644 million from net earnings before noncontrolling interests for the prior year period of $226 million. Partially offsetting this increase were changes in operating assets and operating liabilities (exclusive of acquisitions), which used cash in the amount of $378 million in the first quarter of 2026 as compared to $239 million in the first quarter of 2025. The increase in the amount of cash used related to changes in operating assets and operating liabilities was primarily attributable to the change in accounts receivable using cash of $463 million and $291 million during the first quarter of 2026 and 2025, respectively, an increase of $172 million from the prior year period.

The current ratio was 2.9 at the end of the first quarter of 2026 and at year-end 2025.

Cash used in investing activities during the first quarter of 2026 was $446 million as compared to $1.18 billion during the first quarter of 2025. The $734 million decrease was primarily driven by a decrease in funds used to purchase short-term investments of $311 million and an increase in proceeds from the sale of short-term investments of $199 million. Cash used for capital expenditures was $661 million in the first quarter of 2026 as compared to $859 million in the prior year period. Capital expenditures in the first quarter of 2026 primarily related to the sheet mill under construction in West Virginia and the construction of two manufacturing locations to expand Nucor Towers & Structures ("NTS"). Capital expenditures for 2026 are estimated to be approximately $2.50 billion as compared to $3.42 billion in 2025. The projects that we anticipate will have the largest capital expenditures in 2026 are the sheet mill under construction in West Virginia, the construction of two manufacturing locations to expand NTS, and the galvanizing line at our sheet mill in South Carolina.

Cash used in financing activities during the first quarter of 2026 was $472 million as compared to cash provided by financing activities of $414 million during the first quarter of 2025. The primary source of cash in the first quarter of 2025 was proceeds from the issuance and sale of long-term debt, net of discount to the public, of $997 million. In the first quarter of 2025, Nucor issued and sold $500 million aggregate principal amount of its 4.650% Notes due 2030 and $500 million aggregate principal amount of its 5.100% Notes due 2035. Net proceeds from the issuance and sale of these Notes were used during the second quarter of 2025 to redeem all of the outstanding $500 million aggregate principal amount of our 2.000% Notes due 2025 and $500 million aggregate principal amount of our 3.950% Notes due 2025 (collectively, the "2025 Notes") pursuant to the terms of the indenture governing the 2025 Notes. The Company also repurchased $125 million of its common stock in the first quarter of 2026 as compared to $300 million in the first quarter of 2025.

On March 11, 2025, Nucor amended and restated its revolving credit facility to increase the borrowing capacity from $1.75 billion to $2.25 billion and to extend its maturity date to March 11, 2030. 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 April 4, 2026, 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 April 4, 2026.

On February 20, 2026, Nucor's Board of Directors declared a cash dividend of $0.56 per share. This cash dividend is payable on May 11, 2026 to stockholders of record as of March 31, 2026 and is Nucor's 212th consecutive quarterly cash dividend.

Funds provided from operations, cash and cash equivalents, short-term investments 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.