6. NUCOR: THE โDEFENSIVEโ
AND HIGH RETURN STEEL INVESTMENT
4.3%
173.9%
463.9%
0%
100%
200%
300%
400%
500%
S&P 500 S&P Steel Group Index Nucor
Total Return 9/2000 to 12/2011
6
7. CASH DIVIDENDS PAID
2000โ2011 Base & Supplemental Dividends (millions of dollars)
$0
$100
$200
$300
$400
$500
$600
$700
$800
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Base Supplemental
7
Approx. $5 / share in total
supplemental dividends
from 2005 to 2008
13. MARKET LEADERSHIP
IN NORTH AMERICA
Structural Steel
Bar Steel
Rebar Steel
Cold Finished Bar Steel
Steel Joist
Steel Deck
Rebar Fabrication, Distribution, & Placement
Steel Piling Distribution
Sheet Steel
Plate Steel
Metal Buildings
#1North American
Market Leader
#2North American
Market Leader
#3North American
Market Leader
13
16. 16
NUCORโS FOCUS: PROFITABLE GROWTH!!!
NUCORโS 5 PRONGED
GROWTH STRATEGY
Nucorโs
Position
of
STRENGTH
1. OPTIMIZE EXISTING
OPERATIONS
2. RAW MATERIALS STRATEGY
3. GREENFIELD GROWTH
(technology & market niches)
4. INTERNATIONAL GROWTH
via joint ventures
5. STRATEGIC ACQUISITIONS
17. GROWING NUCORโS EARNINGS POWER
$2.9 Billion
$6.8 Billion
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
Depreciation& Amortization Capital Invested
Capital Invested Versus Depreciation & Amort.
2008-2012
17
18. Capital Spending of $3.2 billion &
Acquisitions of $3.6 billion
Steel Mills - 45%
Raw Materials - 45%
Steel Products - 10%
2008-2012 Capital Invested By
Product Segment
18
19. BUILDING EARNINGS POWER โ
STEELMAKING
SBQ
โข Capacity growth at TN, NE, and SC mills (2014)
BAR
โข AZ wire rod mill (2010)
BEAM
โข AR sheet piling expansion โ wider & stronger
sections (2014)
19
20. BUILDING EARNINGS POWER โ
STEELMAKING
SHEET
โข AL galvanizing line (2009)
โข AR vacuum degasser (2012)
โข SC โwide โ lightโ sheet steel (2013)
PLATE
โข AL temper line (2008)
โข NC heat treat facility (2011)
โข NC vacuum degasser (2012)
โข NC normalizing line (2013)
20
21. BUILDING EARNINGS POWER โ STEELMAKING
SKYLINE STEEL ACQUISITION
๏ฃ Steel piling distributor: NAFTA MARKET LEADER
๏ฃ 20+ yr strategic growth partnership with Nucor-
Yamato, MARKET LEADER in steel piling production
๏ฃ Enhanced and accelerated growth opportunities in
both distribution & steelmaking
H-Pile Sheet Pile Pipe Pile
21
22. BUILDING EARNINGS POWER โ
DOWNSTREAM
๏ฃ NuMit / Steel Tech JV sheet steel
processing
๏ฃ Harris rebar fabrication acquisitions
๏ฃ Joist, deck, and metal buildings
market leadership positions
expanding
๏ฃ BIM 3-D modeling technology
22
23. BUILDING EARNINGS POWER โ
RAW MATERIALS STRATEGY
๏ฃ Gain control of 6 to 7 million tons annual supply of
high quality scrap substitutes
๏ฃ Nucorโs world-class Trinidad direct reduced iron
(DRI) facility = 2 million tons annual capacity
๏ฃ Louisiana DRI first module start-up
in mid-2013 = 2.5 million tons
annual capacity
๏ฃ Permitted for 2nd DRI module in LA
(would increase total DRI annual
capacity to 7 million tons)
23
24. BUILDING EARNINGS POWER โ
RAW MATERIALS STRATEGY
๏ฃ Two long-term agreements (2010 & 2012) with
Encana for natural gas drilling programs
๏ฃ Industry leader Encana will be operator
๏ฃ On-shore drilling in continental United States โ
areas with proved reserves
๏ฃ Production of wells drilled under 2010
agreement exceeding projections by
more than 60%
๏ฃ Nucor has right to suspend drilling if
natural gas prices drop below
predetermined threshold
24
25. BUILDING EARNINGS POWER โ
RAW MATERIALS STRATEGY
๏ฃ Expected to provide more than 20 years natural gas
supply equal to usage at Nucor steel
steel mills plus 2 DRI plants
๏ฃ COST-BASED & PAY-AS-YOU-GO supply of natural
gas
๏ฃ Natural gas = reductant cost advantage
vs. coking coal used by blast furnaces
๏ฃ Significant environmental advantages
DRIโs CO2 emissions 67% less
than blast furnaceโs output
25
26. BUILDING EARNINGS POWER โ
RAW MATERIALS STRATEGY
DRI production capability
+ Long-term/low-cost natural gas supply
= GAME-CHANGER for cost structure
of Nucorโs steelmaking operations
26
27. DRI VERSUS PIG IRON
COST COMPARISON
27
$/ton Blast Furnace DRI
Iron Ore (62% FE, FOB Brazil)
Pellet Premium
Iron Premium (BF = 65% Fe & DRI = 68% Fe)
Freight
Iron Ore Consumption (BF = 1.6 ton & DRI = 1.5 ton)
$100
$30
$9
$25
$262
$100
$30
$18
$15
$245
Cash Conversion Costs
BF Reductant (100% coke)
DRI Reductant (11 mmbtus @ $4)
$70
$144
$35
$44
Iron Unit Cost
BF with sinter plant cost savings
BF Cost Savings By Substituting 40% of coke
usage with PCI & natural gas
BF Higher โValue-In-Useโ Benefit
โAdjustedโ BF Iron Unit Cost
$476
$30
$26
$15
$406
$324
Coke cost assumes 0.5 ton of coke using 1.5 tons of metallurgical
coal costing $175/ton
