Nucor 2013 Annual Report Download - page 37

36
DIVIDENDS
Nucor has increased its base cash dividend every year since it began paying dividends in 1973. Nucor paid dividends of $1.47 per
share in 2013 compared with $1.46 per share in 2012. In December 2013, the board of directors increased the base quarterly
dividend to $0.37 per share. The base quarterly dividend has more than tripled since the end of 2007. In February 2014, the board
of directors declared Nucor’s 164th consecutive quarterly cash dividend of $0.37 per share payable on May 12, 2014 to stockholders
of record on March 31, 2014.
OUTLOOK
In 2014, we will continue to take advantage of our position of strength to grow Nucor’s long-term earnings power and shareholder
value despite a U.S. economy burdened by a challenging regulatory and overall business environment. We have invested significant
capital into our business since the last cyclical peak in 2008. We have done so over a broad range of strategic investments that will
further enhance our key competitive strengths: low-cost production, diversified product mix and market leadership positions. With
many of these capital projects completed and ready to yield results, we will focus on execution in order to generate strong returns on
these investments.
Although macro-level uncertainties in world markets will almost certainly affect both global and domestic growth, we anticipate
that our sales and profitability will strengthen somewhat in 2014. Utilization rates, which were flat when compared to 2012, have
continued at a similar pace in early 2014 and we expect this trend to continue as we progress through the first quarter. We are
encouraged by improvements in backlogs at our steel mills and steel products segments of approximately 21% and 9%, respectively,
over year end 2012, and we believe several end-use markets such as automotive, energy and general manufacturing will experience
some real demand improvement in 2014. However, the effect this improvement in demand will have on our operating rates will be
challenged by excess global steel capacity and the threat of continued increases in imported steel. Nucor is most closely tied to the
nonresidential construction sector, which is showing signs of improvement but still lacks sustained momentum. Our ability to achieve
significant earnings and sales growth will be diminished until there is sustained improvement in nonresidential construction. Although
we expect that we will continue to experience fluctuations in raw material costs in 2014, we have made great strides to manage our
raw material costs more effectively with the completion and startup of our second DRI facility located in Louisiana.
We are committed to executing on the opportunities we see ahead to reward Nucor stockholders with very attractive long-term returns
on their valuable capital invested in our company. Nucor is the only steel producer in North America with the extremely important
competitive advantage of an investment grade credit rating. Our industry-leading financial strength allows us to support investments
in our facilities that will prepare us for increased profitability as we enter into more favorable market conditions. In 2014, as we have
in our past, we will allocate capital to investments that build our long-term earnings power. Capital expenditures are currently
projected to be approximately $600 million in 2014, which is significantly lower than in 2013 mainly due to the joint agreement with
Encana to temporarily suspend drilling new natural gas wells given current gas price expectations for 2014. Included in this $600
million total are residual expenditures for our Louisiana DRI facility and our natural gas related investments, capacity expansions in
SBQ steel and in sheet piling production as well as other investments in our core operations to expand our product offerings and
keep our facilities state-of-the-art and globally competitive.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements,
which have been prepared in accordance with accounting principles generally accepted in the United States of America. The
preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets
and liabilities, the disclosure of contingent assets and liabilities at year end and the reported amount of revenues and expenses
during the year. On an ongoing basis, we evaluate our estimates, including those related to the valuation allowances for receivables,
the carrying value of non-current assets, reserves for environmental obligations and income taxes. Our estimates are based on
historical experience and various other assumptions that we believe to be reasonable under the circumstances, the results of which
form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other
sources. Accordingly, actual costs could differ materially from these estimates under different assumptions or conditions. We believe
the following critical accounting policies affect our significant judgments and estimates used in the preparation of our consolidated
financial statements.