Nucor 2011 Annual Report Download - page 4

33
TO OUR STOCKHOLDERS
Fellow Stockholders:
I want to thank everyone on our teams at Nucor and our Harris Steel and David J.
Joseph (DJJ) operations for their excellent work in an economic environment that
remained extremely challenging in 2011. Together, we have continued to deliver on our
goal of Taking Care of Our Customers, which include our fellow teammates, the people
who buy and use our products, and you, our stockholders, who trust us to make the
most valuable use of your capital. We have done this by working and succeeding at being
the Safest, Highest Quality, Lowest Cost, Most Productive and Most Profitable steel and
steel products company.
The hard work of the Nucor team — along with our strong financial position and our
business model with its flexibility, diversification and sustainability — drove us to
improved results in 2011.
Financial Highlights
Earnings increased more than fivefold in 2011 to $778.2 million, or $2.45 per diluted share, compared with $134.1 million, or $0.42 per
diluted share, in 2010. Earnings remain significantly lower than they were during the five-year cyclical peak that ended in 2008.
Consolidated net sales increased 26% to $20.02 billion, compared with $15.84 billion in 2010. Average sales price per ton increased 21%,
while total tons shipped to outside customers increased 5%. The average scrap and scrap substitute cost per ton used increased 25%
to $439 from $351. Overall operating rates at our steel mills increased to 74% from 70%, which is still well under the pre-recession 91%
utilization rate for the first nine months of 2008.
In 2012, we expect to see continued growth in sales and earnings for Nucor, albeit in a slow-growth U.S. economy with a challenging
regulatory and business environment. Uncertainties in Europe’s financial sector, and its potential to impact the banks in other regions of the
world like the USA, will continue to weigh on global and domestic growth.
In December 2011, the board of directors authorized an increase to the regular quarterly cash dividend on our common stock to $0.365
per share from $0.3625 per share, continuing our record of increasing the base cash dividend every year since 1973, when Nucor began
paying cash dividends. Through the end of 2011,
Nucor has made 154 consecutive quarterly cash
dividend payments.
Growing Stronger in Tough Times
The nation’s economy continued to stumble in
2011, making this one of the longest and deepest
slumps in several generations. At year end, the U-6 unemployment rate, which includes people who have given up looking for
work or are underemployed, stood at 15.2%. That’s down from its peak in late 2010 but roughly double the rate in 2007. Adding
college graduates in low skill positions that do not utilize their education, the unemployment rate is likely closer to 18%.
The U.S. monthly trade deficit widened to over $50 billion over the summer, its highest level in more than 2.5 years, though it narrowed
somewhat later in the year. GDP growth was an anemic rate of under 2%. Nonresidential construction spending remained at 2010’s
depressed levels.
Daniel R. DiMicco
Chairman and
Chief Executive Officer
IN 2012, WE EXPECT TO SEE CONTINUED GROWTH IN SALES AND
EARNINGS FOR NUCOR, ALBEIT IN A SLOW-GROWTH U.S. ECONOMY WITH A
CHALLENGING REGULATORY AND BUSINESS ENVIRONMENT.
EARNINGS INCREASED MORE THAN FIVEFOLD IN 2011 TO $778.2 MILLION,
OR $2.45 PER DILUTED SHARE, COMPARED WITH $134.1 MILLION, OR $0.42
PER DILUTED SHARE, IN 2010.