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Nucor Reports 4th Quarter Results

Jan. 30, 2004 — Nucor Corp. reported fourth quarter income of $20,600,000 on net sales of $1,661,100,000, and full year net income of $62,800,000 on consolidated net sales of $6,265,800,000.

Fourth Quarter Results—Earnings, $20,600,000 ($.26 per share), compare with $16,000,000 ($.20 per share) in the third quarter of 2003 and represent a 52% decrease compared with $42,900,000 ($.55 per share) in the fourth quarter of 2002. Net earnings for the fourth quarter of 2003 were negatively impacted by higher scrap and energy costs as well as by continued severely depressed levels of activity in the nonresidential construction and capital goods markets.

Consolidated net sales represent a 4% increase over this year's third quarter net sales, and a 28% increase compared with $1,294,600,000 in last year's fourth quarter. Average sales price per ton increased 2% from the fourth quarter of 2002 and increased 5% from the third quarter of 2003. Total tons shipped to outside customers increased 26% from the fourth quarter of 2002 and decreased 2% from the third quarter of 2003.

Full Year Results— Consolidated net earnings decreased 61% to $62,800,000 ($.80 per share), compared with $162,100,000 ($2.07 per share) in 2002.

Consolidated net sales increased 30% to $6,265,800,000, compared with $4,801,800,000 in 2002. Average sales price per ton increased less than 1% while total tons shipped to outside customers increased 30%. The increase in total tons shipped was primarily due to the acquisitions of the assets of Trico Steel Co., LLC in July 2002 and the assets of Birmingham Steel Corp. in December 2002. Excluding the increases resulting from these acquisitions, total tons shipped to outside customers increased 6% from 2002 to 2003 and increased 5% from the fourth quarter of 2002 to the fourth quarter of 2003.

Special Charges and Gains—Nucor incurred a charge to value inventories using the last-in, first-out (LIFO) method of accounting of $115,000,000 in 2003 (including a LIFO charge of $17,600,000 for Nucor-Yamato Steel Co., of which Nucor owns 51%), compared with a charge of $34,300,000 in 2002 (including a LIFO charge of $50,000 for Nucor-Yamato Steel Co.). In the fourth quarter of 2003, the LIFO charge was $75,500,000 (including a LIFO charge of $8,900,000 for Nucor-Yamato Steel Co.), which was significantly higher than forecast, compared with $15,600,000 in the fourth quarter of 2002 (including a LIFO credit of $1,400,000 for Nucor-Yamato Steel Co.). Total energy costs increased approximately $4 per ton from 2002 to 2003 and increased $3 per ton from the fourth quarter of 2002 to the fourth quarter of 2003.

In the fourth quarter of 2003, consolidated net earnings included other income of $4,400,000 related to a gain on sale of equipment. Also during 2003 and 2002, Nucor received graphite electrodes anti-trust settlements of $7,100,000 and $29,900,000, respectively. No graphite electrodes anti-trust settlements were received in the fourth quarter of 2003 or 2002. In both 2003 and 2002, Nucor revised estimates for environmental reserves as additional information was obtained, reducing environmental reserves by $8,300,000 and $22,900,000, respectively. During the fourth quarter of 2003, Nucor reduced environmental reserves by $200,000, compared with an increase of $1,400,000 in the fourth quarter of 2002.

Tonnage Records—Nucor established annual tonnage records for steel production, total steel shipments and steel shipments to outside customers in 2003.

Start-Ups—Pre-operating and start-up costs of new facilities increased to $117,500,000 in 2003, compared with $84,400,000 in 2002.

For the fourth quarter of 2003, pre-operating and start-up costs decreased to $26,000,000, compared with $31,200,000 in the fourth quarter of 2002. In 2003, these costs primarily related to the start-up of the sheet mill in Decatur, Ala., and the Castrip^(R) facility at the Crawfordsville, Ind., sheet mill. In 2002, these costs primarily related to the start-up of the Castrip facility, the Chemung, N.Y., Vulcraft facility, and Nucor Steel Decatur, LLC. The operating performance of Nucor Steel Decatur continues to improve. The impact of Nucor Steel Decatur on start-up costs will continue to decrease in the first quarter of 2004.

Nucor recently announced the purchase of a one-half interest in Harris Steel, Inc. from Harris Steel Group, Inc. for a cash purchase price of approximately $21,000,000. In addition, Harris Steel Group may receive up to an additional $6,000,000 upon the achievement of certain operating results of the venture over the next five years. Closing of the transaction is expected to occur within the next 30 days.

Outlook—Nucor expects the first quarter of 2004 to be impacted by high scrap costs but anticipates that higher average selling prices will provide increased margins. Nucor expects to earn between $.40 and $.60 per share in the first quarter of 2004, compared to $.23 per share in the first quarter of 2003. If economic conditions continue to recover, the company expects profitability to improve as 2004 progresses.

Nucor is one of the largest steel producers in the United States and is the nation's largest recycler. Nucor and affiliates manufacture steel products, with operating facilities in fourteen states. Products include carbon and alloy steel bars, beams, sheet and plate; steel joists and joist girders; steel deck; cold finished steel; steel fasteners; metal building systems; and light gauge steel framing.

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