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Forward-Looking Statements

Forward-Looking Statements.

jeremy-castro
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Forward-Looking Statements

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  1. Forward-Looking Statements Certain statements made in this presentation are forward-looking statements that involve risks and uncertainties. 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 results and expectations discussed herein. 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) the sensitivity of the results of our operations to prevailing steel prices and the changes in the supply and cost of raw materials, including scrap steel; (2) availability and cost of electricity and natural gas; (3) market demand for steel products; (4) competitive pressure on sales and pricing, including pressure from imports and substitute materials; (5) uncertainties surrounding the global economy, including excess world capacity for steel production; (6) U.S. and foreign trade policy affecting steel imports or exports; (7) significant changes in government regulations affecting environmental compliance; (8) the cyclical nature of the domestic steel industry; (9) capital investments and their impact on our performance; (10) our safety performance; and (11) other factors described in the Company’s filings with the Securities and Exchange Commission. The following discussion should be read in conjunction with the audited consolidated financial statements and “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, 2003.

  2. Nucor’s Growth Strategy Nucor is in a position of strength to execute our cyclical growth strategy--- optimize existing operations, use greenfield growth to capitalize on new technologies, pursue strategic acquisitions, and grow globally thru joint ventures

  3. Nucor Overview • 45 Operating Facilities in 14 states • 9,900 employees generated $6.3 billion in 2003 sales and 17.7 million tons of 2003 steel shipments • Corporate Staff of about 50 Employees • Largest recycler in the United States

  4. Nucor Overview Key Facilities: Vulcraft (Joist/Deck - 7) Bar Mill Group (9) Sheet Mill Group (4) Structural Mills (2) Plate Mill (1) Cold Finish Group (3) Building Systems Group (3) Fastener Division (1) Nucon (2) • Nucor – North America’s largest steel producer in 2003.

  5. It Starts With Our Culture Commitment to Employees • Team work • Incentive-based pay for everyone • Non-union • Lean management • Decentralized structure fosters entrepreneurial spirit • Egalitarian benefits • No lay-off practice

  6. Position of Strength • Financial Strength • Market Leadership • Diversified Product Mix • Technological Innovation • Low-cost Position

  7. Nucor Overview • Profitable every year and every quarter since 1966 • Steel production has grown from 4.3 million tons in 1992 to 17.4 million tons in 2003 • Sales have grown from $1.6 billion in 1992 to $6.3 billion in 2003

  8. Steel Production 1992-2003(Millions of Tons)

  9. Net Sales 1992-2003 ($millions)

  10. Net Income 1992-2003 ($millions)

  11. Cash from Operations 1992-2003($millions)

  12. Financial Strength • Cash & ST Investments Of $398 Million At The Close Of Q1-2004 • Debt = 26% Of Total Capital At The Close Of Q1-2004 • Debt Rated “A+” By S&P – Highest North American Metals/Mining Debt Rating • Cash Provided By Operations Of Approximately $500 Million In Economically Depressed 2003 (Exceeded $800 Million In 2000) • Cash Dividends Increased Every Year Since Nucor Began Paying Dividends In 1973

  13. Conservative Financial Practices • Conservative Financial & Accounting Practices • Financial Reporting In Plain Language And Easy To Understand Format • Simple Capital Structure • No Off-Balance Sheet Financing Arrangements • No Pro Forma Earnings Reporting • Strong Balance Sheet • No Pension Liability • Superior Financial Flexibility

  14. Market Leadership Largest U.S. structural steel producer Largest U.S. steel bar producer Largest U.S. steel joist producer Largest U.S. steel deck producer

  15. Diversified Product Mix 2003 Sales Tons

  16. Diversified Product Mix End Use Markets

  17. Hot Rolled Sheet 8.7 million (Cold Rolled Sheet 3.0 million) (Galvanized 1.5 million) Bars 6.0 million Structural 3.2 million Plate 1.2 million Total Steel 19.1 million Diversified Product MixSteel Production Capacity (tons)Includes Decatur Sheet Mill & Birmingham Bar Mills

  18. Steel Joists 685,000 Steel Deck 430,000 Cold Finished Bars 350,000 Steel Buildings 145,000 Total Steel Products 1.6 million Diversified Product MixSteel Products Production Capacity (tons)

  19. Technological Innovation • First to commercialize thin-slab casting • Near net shape beam blank casting of wide-flange beams (structural steel) • Focus on new disruptive and leapfrog technologies • Castrip – strip casting • HIsmelt – converts iron ore to liquid metal or pig iron • Green Pig – environmentally sustainable blast furnace

  20. Low-Cost Structure • Variable cost emphasis – minimize fixed costs • Decentralized, flat management structure • Lean management – Nucor managers wear multiple hats • Strong balance sheet • “Can Do” attitude and energy level of Nucor people creates efficiencies

  21. Growth Opportunities Position of strength allows us to take advantage of marketplace opportunities and continue Nucor’s successful tradition as a cyclical growth company. Nucor’s 4 Pronged Growth Strategy • Optimize existing operations • Continue greenfield growth – opportunities to capitalize on technology • Pursue strategic acquisitions • Grow globally through joint ventures

  22. Optimize Existing Operations • Continued Quality Improvements & Cost Reductions – Our Focus Every Day • Nucor “BESTmarking” • Improve Sheet Steel Mill Volume and Profitability (continue moving up the value chain) • Bar Mill Group Capital Projects Program • Building Systems and Load Bearing Light Gauge Steel Framing Opportunities

  23. Optimize Existing Operations • Nucor announced Bar Mill Group Capital Projects in early 2002 • More than $200 million on capital projects - program to be completed in 2004 • Projects include: Rolling Mill Modernization at Nebraska, New Melt Shop & Reheat Furnace at Texas, and New Finishing End at South Carolina • Program reflects Nucor’s commitment to maintain our position as a world class competitor in steel markets ---Focus On Continual Improvement

  24. Continue Greenfield Growth • Hertford County, North Carolina steel plate mill – strong market presence established • Chemung, NY Vulcraft plant continues production growth in a new geographic market • New facility using Castrip technology in Crawfordsville, Indiana began commercial production in Q2-2002

  25. Strip-casting Produces ultra-thin gauge hot rolled steel with superior properties (cold rolled replacement at hot band cost) Minimizes environmentaland economic impact (See www.castrip.com) . . . . . . . . . . . . . . . . . . . . . . . . Technological Innovation Ladle Tundish Pinch rolls Transition piece Casting rolls Shear Hot rolling stand 2nd hot rolling stand (optional) Controlled atmosphere Down Coilers

  26. 2.00 0.25 1.7 .22 1.80 0.20 1.60 1.40 0.15 1.20 1.0 .12 GGE (t CO2 equiv/t) 1.00 EnergyConsumed(GJ/t) 0.10 0.80 0.60 0.05 0.40 .2 .02 0.20 0.00 0.00 Energy & Emissions(ladle through hot band)

  27. Technology For The 21st Century - HIsmelt • Direct smelting process being developed by Rio Tinto, Nucor, Mitsubishi and Shougang. • Blast furnace replacement technology and hot metal source for electric arc furnaces. • Production at Kwinana, Australia plant scheduled to start in late 2004. • Future royalty stream for partners. • Raw material source for Nucor

  28. Quick OverviewWhat is Green Pig? • Pig Iron made with no land fixed carbon units • Pig Iron made in an Environmentally Friendly manner • No forest exploitation • Process absorbs more CO than it produces

  29. Pursue Acquisitions • Former Auburn Steel – an excellent beginning. • Acquired in late March 2001 • 450,000 tons-per-year merchant bar, rebar and SBQ steel mill in New York • Nucor Steel – Auburn gave us a merchant bar presence in the Northeast • With adoption of Nucor incentive pay system, 26-year production records set in 2001. Growth continued in 2002 & 2003 – and with solid earnings contributions. • Excellent strategic fit with Vulcraft joist and deck plant 80 miles away in Chemung, New York

  30. Pursue Acquisitions • Former Trico Steel Mill acquisition completed on 7/22/02 for purchase price of $116.7 million • Annual capacity of 1.9 million tons---increased our sheet capacity by roughly 30%. Plant located in Decatur, Alabama • Supports our flat-rolled strategy by building market share and broadening our product portfolio to include higher grades • 2003 production of 1.2 million tons and 2004 production expected to exceed 1.7 million tons

  31. Pursue Acquisitions • Birmingham Steel – in December 2002 acquired substantially all the assets for $615 million in cash (included roughly $117 million of working capital) • The four operating bar mills have combined annual capacity of more than 2 million tons – increased Nucor’s annual bar steel annual shipment capacity by more than 50% to 6.0 million • Delivered significant 2003 EBIT contribution • Acquisition broadens base of customers and markets served

  32. Performance Expectations • 10% or better annual compound earnings growth (through the economic cycle) • Minimum average return on equity of 14% • Return on invested capital exceeding our cost of capital • Market leadership in every product group and business in which we compete • Continue Nucor tradition of emerging from economic down-cycles stronger than before entering them

  33. 15 Year History: Scrap & Pre-Tax Profit / Ton

  34. First Quarter 2004 Results • RECORD quarterly EPS of $1.43 in Q1-2004 – up from $0.23 in year-ago quarter • Q1-2004 steel shipments of over 5.1 million tons – up 18.4% year/year • Two newest steel mills – North Carolina plate mill and Alabama sheet mill – breakthrough to profitability • Q2-2004 EPS guidance of $2.00 to $2.20

  35. Nucor’s Success • Nucor’s facilities • Nucor’s capabilities • Nucor’s financial strength • Nucor’s strategies • And, the single most important asset behind Nucor’s success – Nucor’s EMPLOYEES – THE RIGHT PEOPLE • NUCOR’S BEST YEARS ARE STILL AHEAD OF US

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