01—Abstract
Summary
Summary of the 10-K filed February 28, 2014. Cited figures are marked; the original filing is the authoritative source.
Nucor Corporation (NYSE: NUE) reported 2013 net sales of $19.05 billiona, down 2% from $19.43 billion in 2012, and net earnings attributable to Nucor stockholders of $488.0 million, or $1.52 per diluted share, compared with $504.6 million, or $1.58 per share, in 2012.
Earnings before income taxes and noncontrolling interests were $791.1 millionb versus $852.9 million. The decline reflected a 5% decrease in the average sales price per ton to $803, partly offset by a 3% increase in tons shipped to outside customers. Gross margin was $1.41 billion (7%) versus $1.51 billion (8%).
The steel mills segment, about 70% of external sales, saw earnings before taxes of $1.16 billionc, roughly flat, while the steel products segment swung to a profit of $82.1 million from a $17.1 million loss. Raw materials earnings fell to $13.7 million. The company cited weak nonresidential construction, imports equal to about 30% of the U.S. steel market, and Chinese overcapacity as pressures on pricing and volumes.
Management stated it expects net sales and financial results to be stronger in 2014 than in 2013, while noting continued adverse effects from general economic factors. Steel mills backlog rose to $1.77 billiond from $1.46 billion, and steel products backlog rose to $1.27 billion from $1.17 billion. Cash and short-term investments totaled $1.51 billion, and long-term debt was $4.38 billion following a $1.0 billion bond issuance.
Capital expenditures were $1.23 billion in 2013 and are projected at approximately $600 million in 2014, reflecting the suspension of new natural gas well drilling with Encana. The base quarterly dividend was increased to $0.37 per share, and the company's 2013 total dividend was $1.47 per share.
02—Key points
Key Highlights
- 2013 net sales of $19.05 billion, down 2% from $19.43 billion in 2012; average sales price per ton fell 5% to $803 while outside tons shipped rose 3%.
- Net earnings attributable to Nucor stockholders of $488.0 million ($1.52 per diluted share) versus $504.6 million ($1.58) in 2012.
- Steel mills segment (about 70% of external sales) earnings before taxes of $1.16 billion, roughly flat; steel products segment turned profitable at $82.1 million versus a $17.1 million loss.
- Gross margin of $1.41 billion (7%) compared with $1.51 billion (8%) in 2012, with a LIFO charge of $17.4 million in 2013 versus a $155.9 million LIFO credit in 2012.
- Steel mills and steel products backlogs rose to $1.77 billion and $1.27 billion, up from $1.46 billion and $1.17 billion at year-end 2012.
- Cash and short-term investments of $1.51 billion; long-term debt of $4.38 billion after issuing $1.0 billion of notes in 2013; $1.5 billion revolving credit facility undrawn.
- Capital expenditures of $1.23 billion in 2013, projected at about $600 million in 2014; base quarterly dividend increased to $0.37 per share.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2013filed February 28, 2014Financial Statements
FY2013 against FY2012
| Line item | FY2013FY2012 | Change |
|---|---|---|
| Revenue | $19.05B$19.43B | −1.9% |
| Cost of Revenue | $17.64B$17.92B | −1.5% |
| Gross Profit | $1.41B$1.51B | −6.8% |
| SG&A Expenses | $467.90M$454.90M | +2.9% |
| Interest Expense | $151.99M$173.50M | −12.4% |
| Net Income | $488.02M$504.62M | −3.3% |
| EPS (Basic) | $1.52$1.58 | −3.8% |
| EPS (Diluted) | $1.52$1.58 | −3.8% |
| Shares Outstanding (Basic) | 319.08M318.17M | +0.3% |
| Shares Outstanding (Diluted) | 319.27M318.24M | +0.3% |
05—Questions
Frequently Asked Questions
How did Nucor's profitability change in 2013?
Net earnings attributable to Nucor stockholders fell 3% to $488.0 million, or $1.52 per diluted share, from $504.6 million, or $1.58 per share, in 2012. The decline was driven mainly by a 5% drop in average sales price per ton, partly offset by higher shipment volumes.
What are the main pressures on Nucor's business according to the filing?
The filing cites weak nonresidential construction demand, excess domestic and global steel capacity, imports at about 30% of the U.S. steel market, and artificially low-priced Chinese steel. It also notes volatility in scrap prices and energy costs, and regulatory uncertainty around greenhouse gas rules.
What is management's outlook for 2014?
Management said it believes net sales and financial results will be stronger in 2014 than in 2013, while noting continued adverse effects from economic conditions and industry factors. It said significant earnings and sales growth will remain limited until nonresidential construction shows sustained improvement.
How is Nucor managing its natural gas exposure?
Nucor has natural gas working interest drilling programs with Encana Oil & Gas (USA) Inc. Because of weak natural gas prices, Nucor and Encana jointly decided in the fourth quarter of 2013 to temporarily suspend drilling new wells. The filing says in-process wells will be completed by mid-2014, and 2014 capital expenditures are expected to be lower as a result.
How strong is Nucor's balance sheet and dividend position?
The company had $1.51 billion in cash and short-term investments and $4.38 billion of long-term debt at year-end 2013, with a current ratio of 3.3. Its $1.5 billion revolving credit facility was undrawn. Dividends declared were $1.4725 per share in 2013, and the board raised the base quarterly dividend to $0.37 per share.
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