NUCOR CORP 10-K Summary: Fiscal Year Ended December 31, 2002
Business Context and Reporting Period
This Form 10-K covers the fiscal year ended December 31, 2002, for Nucor Corporation, a Delaware-incorporated manufacturer of steel and steel products. The company operates through two primary segments: steel mills and steel products. Nucor reported 9,800 employees as of the reporting date. The filing incorporates by reference the 2002 Annual Report for detailed financial statements and management discussion.
Key Financial Metrics
The filing text incorporates detailed financial statements by reference and does not provide specific consolidated revenue, net income, cash flow, or margin figures in the narrative sections. However, the following specific financial data points are disclosed:
- Unusual Items: 2002 earnings include a pre-tax gain of $29,900,000 from a graphite electrodes anti-trust settlement. 2001 earnings included a $20,200,000 pre-tax gain from the sale of Nucor Iron Carbide, Inc.
- Backlog: Order backlog at December 31, 2002, was approximately $816,000,000 ($628,000,000 for steel mills; $188,000,000 for steel products).
- Debt Issuance: On October 3, 2002, the company issued $350,000,000 of 4.875% Notes due 2012.
- Market Value: Aggregate market value of common stock held by non-affiliates was $5,054,773,192 as of June 28, 2002.
- Shares Outstanding: 78,182,838 shares as of February 28, 2003.
Material Changes and Acquisitions
Nucor executed significant strategic acquisitions and operational expansions during 2002:
- Trico Steel Acquisition: Purchased assets of Trico Steel Company, LLC for $117,700,000, assuming $86,000,000 in debt. The facility in Decatur, Alabama, has an annual capacity of approximately 1,900,000 tons.
- Birmingham Steel Acquisition: Purchased assets of Birmingham Steel Corporation for approximately $615,000,000 (cash, excluding transaction costs). This included four operating mills with a combined annual capacity of approximately 2,000,000 tons.
- Castrip Facility: Began operations at the Castrip facility in Crawfordsville, Indiana, in May 2002, utilizing strip casting technology.
- HIsmelt Joint Venture: Entered a joint venture in April 2002 to construct a commercial HIsmelt plant in Western Australia, holding a 25% interest.
- Utilization Rates: Average facility utilization was 91% for steel mills and 68% for steel products in 2002.
Outlook, Risks, and Management Commentary
Trade Environment: Nucor notes that tariffs imposed in March 2002 (ranging from 8% to 30%) helped reduce illegal steel imports. The company is monitoring the International Trade Commission's mid-term review of these tariffs, which could impact future competitive conditions.
Legal Proceedings: Nucor resolved environmental violations via a Consent Decree, paying a $9,000,000 penalty in July 2001 and agreeing to spend $4,000,000 on Supplemental Environmental Projects. Management does not believe current legal proceedings will have a material adverse effect.
Market Risk: The company manages interest rate risk through fixed-rate debt and an interest rate swap agreement converting a $175,000,000 note to a variable rate. Management does not expect interest rate changes to significantly impact earnings.
Investor Verification Checklist
- Verify the impact of the $615,000,000 Birmingham Steel acquisition on future debt service and integration costs.
- Review the 2002 Annual Report (incorporated by reference) for specific revenue, net income, and cash flow figures not detailed in this summary.
- Monitor the status of the Section 204 mid-term review of steel tariffs and potential changes to import duties.
- Assess the operational performance and cost savings of the new Castrip facility in Crawfordsville.
- Confirm the timeline for the completion of the HIsmelt commercial plant in Australia.