Nucor Stock

Good morning, and welcome to Nucor's Second Quarter 2026 Earnings Call. [Operator Instructions] Today's call is being recorded. [Operator Instructions]

I would now like to introduce Chris Jacobi, Director of Investor Relations. You may begin your call.

Thank you, and good morning, everyone. Welcome to Nucor's Second Quarter Earnings Review and Business Update. Leading our call today is Leon Topalian, Chair and CEO, along with Steve Laxton, President and COO; and Jack Sullivan, CFO. Other members of Nucor's executive team are also here with us today and may participate during the Q&A portion of the call.

Yesterday, we posted our second quarter earnings release and investor presentation to Nucor's IR website. We encourage you to access these materials as we'll cover portions of them during the call. Today's discussion will include the use of non-GAAP financial measures and forward-looking information within the meaning of securities laws. Actual results may be different than forward-looking statements and involve risks outlined in our safe harbor statement and disclosed in Nucor's SEC filings. The appendix of today's presentation includes supplemental information disclosures along with the reconciliation of non-GAAP financial measures.

So with that, let's turn the call over to Leon.

Thanks, Chris. And before discussing the quarterly results, I want to begin with the most important measure of our performance and our greatest value safety. Earlier this year, we launched our safest summer ever initiative because we know that the summer months can present additional risks.

As we move into August, I'm pleased to say that we're on pace to not only make this the safest summer in Nucor's history, but also the safest year as well. While I'm proud of our progress, our job isn't finished. Let's remain focused and make sure every one of our teammates goes home safely at the end of every shift.

Turning to our financial results. Nucor delivered another strong quarter with improved earnings across all 3 operating segments. We generated approximately $2 billion of EBITDA and earned $5.04 per share, excluding a noncash benefit of $0.20 adjusted earnings were $4.84 per share. During the quarter, we returned $479 million to Nucor's shareholders through dividends and share buybacks, representing 41% of our net earnings. Capital expenditures totaled $571 million in the quarter, and we still expect to reinvest approximately $2.5 billion for the year, with about 60% of that allocated towards growth projects.

Moving to our operational performance. Demand for steel and steel products remain strong across most of our key end markets, and our teams continue to execute exceptionally well. In the steel mills, quarterly shipments reached an all-time high of 7.1 million tons. This is the second straight quarter we've set a new record. We're seeing strength across all of our product categories and are benefiting from the investments we've made to grow our core steelmaking capabilities over the past few years. In particular, I want to recognize our team at Brandenburg, which shipped more than 230,000 tons this quarter, leading to another quarterly shipment record in plate.

In Steel Products, shipments were up 11% versus Q1 with growth across all major products in the portfolio. This performance was led by our Tube group which posted a second consecutive quarterly shipment record and strong earnings. And even as our shipments grow, our backlogs continue to build, this reflects the business momentum we are seeing from our customers across a broad set of sectors in the economy.

Our team is executing at a very high level right now. Execution is critical, but so is having a level playing field. While we saw an increase from the first quarter, finished steel imports are down 25% year-over-year due to the strengthening of the 232 program, along with antidumping and countervailing duties on corrosion-resistant steel and other steel products. The impacts are real, and they are measurable. Vigorous enforcement of our trade laws is helping level the playing field for domestic producers by curtailing the flood of unfairly traded steel into the U.S. market.

Earlier this month, as expected, the Trump administration announced it has opted not to renew the USMCA trade agreement unless changes are made. This decision triggers an annual review process that provides a real opportunity to improve demand for the North American content while closing loop holes that operate to the detriment of the American industry. One important change we hope to see is a requirement that all steel used in any steel or steel intensive products must be melted and poured in North America to qualify as USMCA compliant. We also believe the North American steel purchasing requirement for automotive products should be increased with a melted and poured requirement effective immediately.

Finally, a renewed agreement should require Canada and Mexico to take additional steps to prevent excess capacity from non-USMCA economies, particularly China from entering North American supply chains and undermining our industries and workers. Beyond USMCA, the U.S. Trade Representative is currently conducting investigations under Section 301. We support the administration and use of tools like these to level the playing field for American manufacturers and achieve balanced trade.

We also commend the administration's decision to act consistently with Section 232 program and exempt vital steelmaking inputs and raw materials from the final action in the Brazil and forced labor 301 investigations. We urge the administration to do the same in all other 301 investigations. These are more than simply trade policy priorities, their investments in America's long-term industrial strength.

With our nation recently celebrating its 25th anniversary, it's worth remembering that America's success has been built not only on freedom, but also on the ingenuity, resilience and productive capacity of American manufacturing, a robust industrial base has always been essential to our economic prosperity and our national security.

For generations, steel has been the backbone of America's growth, security and prosperity and it will remain essential for generations to come. At Nucor, we are proud to help build the bridges, buildings energy infrastructure, manufacturing facilities and defense capabilities that keep our country strong.

With that, I'll turn it over to Steve for an update on our growth initiatives and market outlook. Steve?

Thank you, Leon, and thank you all for joining us this morning. Our team is continuing to make great progress at our new sheet mill project in West Virginia. We remain on time and on budget with continued excellent safety performance.

The team has achieved several important milestones over the past 2 months. In June, we ran our first coil through the pickle line. And earlier this month, we began commissioning of the melt shop in both the automotive and construction galv lines. Later this year, we will expand that to the cold mill and hot mill, keeping us on track to complete commissioning inspection and testing of equipment across the mill by the end of the year.

Our startup plan is unchanged. Following commissioning, our priority will be to operate safely and reliably as commercial shipments begin to ramp in early 2027, and capacity utilization and product offerings will be building steadily throughout 2027 and into 2028. In addition to West Virginia, we're making steady progress across our other major capital projects that are either under construction or ramping up. On the construction front, we expect to complete our Berkeley galv line, the full range of our Crawfordsville coating operation and Indiana Towers and structures facility later this year. We also expect our Utah Towers and structures facility to reach full production by mid-2027.

Turning to our recently completed growth projects. We continue to advance their strategic and commercial plans. Many of these projects, including our Lexington micromill and our Kingman melt shop reached EBITDA positive run rates during the first quarter, while others like our Alabama Towers and Structures facility are expected to reach EBITDA positive later this year. Across these projects, performance has improved steadily throughout the year, and we expect that trend to continue as they ramp to their full run rates.

Leon spoke earlier about the operational results in our steel mill and our steel products segment Building on that, I'd like to share how we're thinking about the current market environment and outlook for each of our businesses. Overall, the strength we see across the broad set of end markets is very encouraging. We now expect shipment growth to finish closer to the higher end of our previously suggested 5% to 10% range for 2026.

Beginning with flat products, we've seen double-digit shipment growth in both our sheet and plate groups in the first half of the year. Within sheet, underlying demand is strong, and we expect that to continue into 2027, led by energy, advanced manufacturing and data centers. In plate, although domestic consumption has moderated from the 2025 levels, demand remains healthy across many important end markets, while imports have fallen significantly. That backdrop, combined with our expanded plate capabilities, positions us well heading into the second half of the year.

Moving to Long Products, our Bar and Structural mills have also seen a meaningful step-up in shipments year-to-date. In our bar group, rising rebar demand reflects a sustained multiyear construction cycle with energy, infrastructure, advanced manufacturing and data centers more than offsetting softness in residential construction. In structural, domestic consumption has increased approximately 15% this year, fueled by data centers and other mega projects.

While higher imports have absorbed some of that incremental demand, our backlogs are up significantly compared to prior years. And we expect that strength to carry into next year. Nucor is unparalleled in its geographic reach, product diversity and size. These factors are allowing our team to optimize at scale to more effectively and more efficiently meet customer needs.

Finally, our steel products segment represents one of the broadest and most diverse portfolio of steel construction products in North America. Throughout these businesses, we're seeing many of the same demand drivers as in our steel mill segment with order visibility extending into 2027 for many products. Looking to the second half of the year, we expect continued momentum across our Steel Products group, along with further margin expansion over time as higher realized pricing more than offsets higher steel input cost.

With that, I'll turn it over to Jack for a closer look at our second quarter financial results and our outlook for the third quarter. Jack?

Thanks, Steve, and good morning, everyone. In the second quarter, Nucor generated net earnings of $1.2 billion or $5.04 per share exceeding the midpoint of our guidance range by $0.29. Excluding a noncash benefit of $0.20 related to an increase in the value of our Helion investment, adjusted earnings were $4.84 per share. The beat relative to our mid-quarter guidance was largely due to better-than-anticipated results in our steel mills segment. with many divisions outpacing their June forecast. Steel products and raw materials segments also came in ahead of forecast.

Let me now review our second quarter performance by segment. The steel mills segment generated $1.6 billion of pretax earnings, an increase of more than 35% from the prior quarter. Higher average selling prices, especially in our sheet and plate groups, were the largest drivers of the quarterly increase. And even with 3 few calendar days compared to the prior quarter, Q2 shipments for the steel mills segment grew slightly. The results also reflect $130 million of cash refunds associated with prior period raw material procurement costs primarily related to pig iron.

Turning to Steel Products. We generated pretax earnings of $353 million, up more than $75 million from the first quarter. Volumes increased 11% on stable pricing with the volume growth occurring across all of our major product lines. And in our raw materials segment, we generated pretax earnings of $146 million compared to $45 million in the prior quarter reflecting higher volumes and improved margins.

Our DRI operations benefited from a higher transfer price as we base internal DRI sales on pig iron pricing, which has risen over the past several months on strong demand in the U.S. We also saw improved performance in our scrap processing operations. Preoperating and start-up costs totaled $120 million for the quarter. We expect these costs to remain elevated through the rest of 2026 and throughout '27 as we complete construction and ramp up production at our greenfield sheet mill in West Virginia.

Turning to the balance sheet and capital allocation. Our strong investment-grade credit profile has long been central to Nucor's success, enabling us to consistently invest in growth while delivering meaningful returns to shareholders. We ended the quarter with approximately $2.7 billion in cash and liquidity of $3.4 billion. Total debt as a percentage of capital sits at 23%, and our credit ratings remain the strongest of any North American steel producer.

During the quarter, we generated $829 million in free cash flow, our strongest quarter since 2023 as higher earnings drove improved cash from operations and CapEx moderated to $571 million. We also returned $479 million to shareholders through dividends and share repurchases, an increase of more than $200 million from the first quarter and representing 41% of quarterly net earnings.

Consistent with our capital allocation framework, we remain committed to returning at least 40% of net earnings to shareholders on an annual basis. Year-to-date, we've returned over $730 million to shareholders and deployed approximately $1.2 billion in CapEx, with most of that going towards growth projects. Taken together, more than 75% of the capital we've allocated this year has gone directly to shareholder returns and growth investments. Looking forward, we expect free cash flow to continue to inflect higher as these growth projects come online and CapEx moderates.

Turning to our third quarter outlook. We expect higher consolidated earnings. For the steel mills segment, in contrast to the second quarter we do not expect any further cash refunds to materially benefit us in the third quarter or beyond. Even without that benefit, we expect higher third quarter segment earnings from expanding metal margins and stable volumes. The margin improvement reflects higher realized pricing across all product groups. In Steel Products, we expect increased earnings from higher volumes and higher average realized pricing. In raw materials, we expect lower earnings, primarily due to lower margins resulting from lower expected realized scrap pricing and elevated iron ore costs due to the idling of some pellet capacity in the Middle East.

As we look to the second half of 2026, we're encouraged by strong demand across key end markets, growing contributions from our recent investments and federal policies that support a healthy domestic steel sector with the broadest range of capabilities in the North American steel market, the Nucor team is well positioned to create value for our customers and shareholders.

And with that, we'd like to hear from you and answer any questions you may have. Operator, please open the line for questions.

[Operator Instructions] Your first question comes from the line of Lawson Winder of BofA Securities.

Very nice to hear from you all, and thank you for today's update. If I could, I'd like to start off with your view on flat rolled benchmark pricing and the CSP, it was up another $10 yesterday as per your report continuing to extend the gap versus import parity pricing, just given that the U.S. still is a net importer of steel, to what do you contribute to continued willingness of customers to buy domestic despite the import price advantage.

Lawson, it's Leon. I'll kick this off and then maybe ask Noah Hanners, who's over our sheet group to touch on it because I think there's a lot to unpack there in your question. Look, I also want to begin with thanking our team for the safest start to any summer in the history of Nucor. And so it's the men and women of this entire company that derive every result we're going to talk about today and how they execute and continue to execute it and becoming the world's safest steel company is our most important value.

With all that said, the demand drivers across the spectrum are incredible. And so as we look specifically to sheet and your question and the relative balance on imports. We saw a tick up Q-over-Q in imports in primarily in beans and some in sheet. But the reality is it's not a pricing delta that's driving that. It is a demand picture that we're seeing, the robust demand almost in every product group area that we have is either at or near record backlog, record order entry rates and is driving a again, healthy returns for our shareholders.

So again, this isn't where -- we saw in '21 or '22, where you had a really rapid spike of HRC and kind of knew it wasn't sustainable or for very long. It is a very different condition today. And again, I think part of that comes in what Noah and his team have done regarding CSP, but no, why don't you unpack that and then dive a little deeper to his question.

Yes, Lawson, to build on what Leon shared about demand and why we see it so strong now and continuing into first, let's back out and talk about just the broader demand picture for she. Imports, while a little elevated in Q2 remained very low. So if you back up to 2024, we saw sheet imports at 9 million tons. Today, we look forward, we see probably 4.5 million tons this year. So 4.5 million tons of additional addressable market for domestic suppliers. You add on to that what we believe is a couple of million tons of increase in ADC. So 6.5 million tons of addressable market for domestic suppliers strong market for us to participate in.

So talking about the significance of some of those demand drivers, Leon mentioned a few in the opening, but Board defense, energy, data centers. These things are all consuming millions of tons, and they are not projects that are one-off in 2026. We expect multiyear demand out of some of these drivers.

The other thing I'll share with you is we're starting to see some reshoring driving new demand for us. And the reshoring looks different than you may expect. It's things like auto and consumer durables that maybe consumption here in the U.S. isn't going up, but we've seen our customers restoring their production here to utilize existing capacity. So we're supplying more into auto, for example. Our auto shipments are up 6% Q2 over Q1.

The last thing I'd share on the demand side is we're seeing -- finally seeing service center demand during the quarter. Service center shipments were up 10% in June year-over-year, and we expect that trend to continue with really moderate to low inventories throughout the supply chain. So all that together, we think, looks like a very strong demand picture for us in '26 going into '27.

But I want to take a minute and talk to you about CSP for a second because that's the other thing that feels so unique about this market. It's not just demand but it's how pricing has moved over the last 6 months to a year. And we believe our discipline and our approach around CSP is markedly change in volatility in this market. So these extreme -- we've seen these extreme swings in sheet for decades and we're providing our customers with this transparent hot-rolled pricing every week. And what we're seeing out of them is we do not see the speculation we typically would have seen at this point in the cycle before. We're seeing buying that is reflective of supply in demand, not speculation.

So -- and we also think this has contributed another contributing factors to imports remaining low because customers are able to buy what they want when they need it. So we see a really strong demand picture. We are confident in our approach with CSP, and we have the best steelmaking team in the world hitting at a really high level right now. So we feel good about '26 going into 2027.

I really appreciate that detail, guys. That's really, really helpful. If I could, just a follow up. Thank you very much for providing the shipment tonnages for Brandenburg. It suggests the capacity utilization around 75% and I mean would you push back on us putting 75% capacity utilization in our models for that asset going forward.

Yes. Lawson, this is Brad. I'll tackle that one. As you mentioned, the team had an awesome quarter. Brandenburg producing record volumes and record earnings. I'd expect that number to continue to creep up, right? The investments we've made over the last 18 months in product development is really paying dividends. It's nearly 1/3 of the shipments out of Brandenburg in Q2 were grades and sizes that were previously unavailable from the new core plate group prior to Brandenburg.

Things like API line pipe, where we're fully qualified, we're producing net shipping now. We expect that to be as much as 25 million tons in 2027. Armor grades for our nation's military, we continue to qualify and expect to be a larger participant in the future. ABS grades for shipbuilding, wide and long place bridge applications and on down the list. In addition, it opens up doors for companion tons for our plate group. Obviously, that was reflected in our record shipments, backlog and market share in Q2. So I'd expect additional upside, not just out of Brandenburg, but out of the plate group into the future.

Your next question comes from the line of Timna Tanners of Wells Fargo.

I wanted to try to drill down a little bit more on some of the projects progress if we could. So definitely seems like collecting on like ramp-up of some of these projects that you've been talking about for a while. Can you help us put a finer point on the how to quantify the benefit of some of these towers and structures and galv lines ramping up? And the Q3 benefits, could that help Q4? And could Q4 with all this demand see an offset to typical seasonality?

Well, look, Tim, I'll kick it off and maybe let Jack or Steve jump in or any of the product group folks. But look, if we go back to Lexington, for example, the Lexington micromill, EBITDA positive already contributing. So again, they're launched in on their own and again, contributing cash to the operations. Our Kingman, Arizona facility is doing the same thing. Brandenburg, as you now heard Brad just mentioned, is also profitable. And so they're ramping up very, very quickly.

The towers and structures facilities, yes, you're going to see additions come in into the back half of the year positively to the balance sheet and our cash flow. And really, as we think about Berkley's galv line, which is going to come on later Q3, it's probably end of the year or early Q1 because, again, demand drivers are so strong there. that before we see that cash positive, but that's going to come very, very quickly. Again, it's a line that they know. It's their second galvanizing line, a product we know customer base, we know well. So this isn't going to be a slow ramp up. We should be able to ramp up that facility very quickly. Same in Crawfordsville.

The things that will carry into '27 before we see some likely positive contribution will be the third towers and structures, greenfield facility in Utah that will come on in Q1 of next year. But again, it will take a little bit of time to ramp up. And I would expect by the end of the year that is contributing very nicely. And if we think about the towers and structures group as a whole, as you know, it was an area we looked really hard in trying to do that in M&A. It didn't work out. So we built -- bought a small facility Summit facility in Pennsylvania and now we're building out 3, 2 are operational. The third, again, and we'll start up next year.

We've mentioned probably several calls ago that we were going to generate $150 million of EBITDA through that group. And so what I would tell you is the order book the backlog, the relationships with the utilities that is being built by that team and I hope that's a really low number. I think there's upside potential to that number. And obviously, we got to get there. But I would tell you that to -- our team is one of the most exciting high-growth megatrends that are going to continue for decades to come because all those utilities are specific engineering geographic and geological engineered. And again, we're ramping that up very, very quickly. You'll see in the coming weeks, some things that will come to fruition that we can be detailed in that backlog that's coming. But look, this team is firing on all cylinders. So again, this all culminates to with West Virginia facility that will start up later this year.

I would tell you '27 will be that ramp-up year. I'm not sure they're going to contribute in '27. But certainly, as we get they're going to find their footing and that will not only contribute then. But for the next 2, 3, 4 decades, continue to ramp up Nucor's overall earnings profile well beyond the $6.7 billion that we rolled out in 2022 from a through cycle standpoint. And finally, I would just tell you the drivers that I've seen as I celebrate my 30 years in Nucor I would tell you, create a profile on a demand picture unlike I've ever seen in my career.

Again, in almost every area across the spectrum, not only is the market demand drivers, but Nucor's capability set is the broadest and most diverse it's ever been. There are a bunch of things we don't talk about a lot on these calls, border walls, grating. UIG gases, Nucor fasteners, our tube group, tower structures insulated metal panels, Nucor data systems, they are all contributing at a really high level in executing it at a really high level. And so I couldn't be more optimistic in the back half of this year. But as we head into '27, I think '27 could be a very special year, not just for Nucor, but this industry.

Okay. If I could -- congrats on your 30 years as well. But if I could follow up on the 2027 outlook and you've been intimating the CapEx is rolling off, of course. And a lot of interest in kind of what Nucor's next plans are for cash use. So could you just give us any more color on how you're seeing the landscape with build versus buy in the downstream side and if that's still your focus for growth.

Yes, absolutely, Tim. So look, almost 7 years ago when I became CEO, our mission statement was really simple to grow the core, expand beyond and live our culture. Culture, obviously, is how we care for the 33,000 men and women of this incredible family of ours. The core is just that the steelmaking, the king and the galvanizing lines, the prepaint the Lexington micro mills, Brandenburg, West Virginia. But the expand beyond is the area where we purchased CHI overhead doors and now Ridetech and couldn't be more excited about what they're doing and the value proposition that they're going to bring not just to our shareholders, but to also provide our customers, again, with a very differentiated standpoint.

So it leads to your question, which is, okay, that tied up a lot of cash. Where is that cash going to go because we're going to continue to generate a lot of money. Well, it's going to go into the expand beyond bucket. And what I would tell you is you can think about a few things. One, it's going to come in and around the mega trend area. So as we think about towers and structures, as we think about the downstream areas that we can bring value in enclosures, energy, energy infrastructure. those types of areas are the things that I would tell you, our M&A and BD teams are looking really hard at identifying those companies that I obviously can't get into.

But again, I want to provide a little more color for you so that you can understand where that's going to go. The one caveat that I think is really -- well, maybe 2, that's really important to note, as Nucor's vision back then and now wasn't a pivot because our models broke. In fact, I would tell you, we're the safest, cleanest, most profitable steel company in the world. I would rival that us against anyone. So we don't have to pivot away from a broken model. It's, in fact, the best it's ever been. So we get to tweak that. We get to reinvest in our operating divisions to make them more efficient. We get to use AI and tools like that, and automation to create safer outcomes and higher return outcomes.

The other side is we're going to be incredibly disciplined with our capital because we don't have to pivot, there's no urgency in money burning a hole in our pocket. So you're going to see Nucor be incredibly -- continue to be incredibly disciplined about the M&A growth and how we approach that. If it's not accretive. If we can't find pathways to being the market leader and do it way better than our cost of capital, if not double our cost of capital. We're just not going to do it. So if we don't, then you're going to see a lot of money coming back in the form of dividends and share repurchases back to our shareholders.

And as we always have and as Jack spoke to earlier, we're going to commit to 40% of our net earnings. But I would tell you in the next several years, you can expect there's some incredible growth opportunities for Nucor that we're going to move into in the expand beyond bucket.

Your next question comes from the line of Bill Peterson of JPMorgan.

Thanks for all the color and nice job on the quarterly execution. Based on your comments on expectations to be at the higher end of the range, 5% to 10% for the mills, I guess taking into account backlog, presuming longer lead times, low inventory, the channel and so forth. How should we think about seasonality in the back half of the year including in the fourth quarter, which I believe you might have less shipping days, but can you help us understand just the profile in the back half, that would be helpful.

Bill, this is Steve. I'll take this one. Yes, we'll be closer to that high end of the previously guided range of 5% to 10%. And you know our business really well. There is seasonality. So you should expect a little bit of that in the fourth quarter. But as Leon, Brad, Noah have all already addressed, the demand drivers are extremely robust right now. They're very -- they're multiproduct. It's across all the spectrum that we have. So we're pretty bullish on the back half of the year. That doesn't mean there won't be seasonality, there always is, but it's a relative move down, I guess, I would say, because there's still so much strength in the marketplace.

And Bill, to your question about the fiscal days in the fourth quarter, we'll have 91 days in the third and 89 days in the fourth.

Okay. Great. That's helpful. And then maybe drilling down to the borderwall opportunity, can you give us a sense of the ship and opportunity into 2028 and any color you can provide on your share expectations?

Bill, this is John Hollatz. I appreciate you bringing up that border wall. That is a mega trend that I think needs to get a lot of attention. I appreciate Noah bringing it up earlier in his commentary. And I think you've got to keep in mind that Nucor is the only company with the raw materials, the sheet, the tube capacity and the logistics team to keep up with the demand for this border wall. We're shipping thousands of tons every week to multiple locations along the border and that is expected to continue well into 2028.

If you look at the volumes that are going through our tube group, it will show you the increase that you've seen year-over-year, and that's on top of an already strong demand for our traditional HSS products and leading to a lot of the improved earnings that we expect in the second half of 2026.

Your next question is from the line of Tristan Gresser of BNP.

The first is on the raw materials division that had a very strong quarter, while I don't know, it looks like pretty -- should have been a relatively steady slightly up quarter. So I was wondering if you could provide some visibility on what drove the performance? And I mean, the strength of the past year has been pretty noticeable. So if you can if the margin trends we've seen for that division should carry forward? That would be my first question.

Yes. Thanks, Tristan. This is Al Behr. I'll take that one. I appreciate you asking the question because I'm really proud of our raw materials team and just how that whole team performed during the quarter, and I think the results speak for themselves. Our -- that segment includes a handful of businesses and -- but I'll share some thoughts on maybe a top of mind on a couple of the bigger pieces. One of them is our recycling yards and the other is our DRI operations.

For the recycling yards, it's a simple story of strong volumes with higher margins. So we see saw strong margins in the quarter, both on the shredded metals as well as on the recovered metals, the nonferrous metals that we sell as a byproduct coupled with just really consistent strong performance commercially and operationally within those businesses. On the DRI side, also a great quarter. We set a quarterly production record as rising pig iron allowed us to lean into DRI as an alternative supply for our mills and our DRI teams really rose to the occasion and super proud of what they did.

What I think is important about that, Tristan, is it's just another example of how our strategy of building flexibility into our raw material supply chain is a way to drive value for the organization. And so we believe there's always a winning play in the market, and we've got the depth and the breadth to be able to find those plays and run them. All right.

That's very clear. My second question is actually a quick one. Just if you could provide some update on the CapEx guidance and you had some big use of working capital in H1. How do you think the H2 should look like?

Yes. Thanks, Tristan, it's Jack. I'll take CapEx first. Earlier this year, we guided to $2.5 billion for 2026, materially down from the prior year. Halfway into the year, we're right at about 50% of that. And so we remain on target with that $2.5 billion estimate that we said earlier in the year.

With respect to working capital, yes, we did see a bit more of a build in Q2 primarily related just to with the higher backlog comes some higher inventory at higher valuations. And so both inventories and receivables did tick up some got to get a lot of credit though to the team in terms of how we're managing inventory, how we're managing cash conversion. So I think operationally, we're working through a really strong demand environment with shareholder interest in mind there with respect to cash flow.

Looking into the second half of the year, likely expect some moderation in working capital as we get into the sort of the fall months, but it could be some slight source of cash in the back half of the year.

Your next question comes from the line of Nick Cash of Goldman Sachs & Co.

I just have 1 follow-up here. I just wanted to drill in a little bit on the shipment mix you mentioned sheet is going to be -- or see continued strength through 2027 volumes were just a little bit softer in 2Q quarter-over-quarter. So I mean the first question was, was the softness due to, I guess, just some softness in the order book? Or was there an outage or are you starting to see any, I guess, import products coming back in on the flat side. And then on the contrary, your bar shipments have continued to accelerate despite long product imports ticking back up in 2Q. What would you attribute that market share capture to? And how should we think about that going forward?

And Nick, this is Noah. I'll start with sheet. You talked about Q2 versus Q1 shipments. We actually -- we broke up another production record in Q2. What you saw in the beat in Q1 from a shipment standpoint as we came into the quarter with some inventory we were able to ship, but we actually converted more efficiently in Q2, and we expect that level of production and shipment to continue.

Yes. Nick, this is Randy Spicer. Certainly, the team has performed tremendously in the second quarter, and we certainly saw that in our performance and driven by a lot of the very same things that have been talked about today. We continue to see growth in the infrastructure investment, the manufacturing reshoring. And then again, this continued growth in data center.

And then also just to echo what we've seen in both sheet and tube from John, we've also been a very active participant in border fence as well. So all of those factors, along with our newer assets that are coming online have truly allowed us to take advantage of this growth in the second quarter and instead of well, year as we move into the second half.

Our next question is from the line of Katja Jancic of BMO Capital Markets.

Maybe starting on the demand outlook more broadly. So you talked about a couple of tailwinds that could last for the next few years, what, in your view, would be a reasonable assumption for underlying demand growth over the next 2 to 3 years?

Katja, this is Steve. I'll go ahead and take this one. I think the backdrop for the demand picture is, again, it's broad enough and strong enough in enough channels, and it's driven by some fundamental reshoring, fundamental of the capital investment cycles that are probably multiyear in nature, things like Leon highlighted earlier with energy investment. That's not necessarily going to slow down over the next few years.

So this year, we would put an estimate somewhere around 2% up on demand overall. That's all products. Nucor's portfolio is positioned a little bit more strongly to some of the stronger areas of the market. So that's just a general comment about the market, not Nucor. And we see strength at least for the next couple of years in that same band or more.

So the parts of the market that are weak right now have to do with consumer-oriented activities, I think HVAC. Noah has commented about automotive, it's a fair one, automotive consumption is down, but the reshoring patterns might mean that steel consumption in automotive could be up for us. And so the parts that are weaker and could be more interest rate sensitive, for example, are already down. So if anything, you may skew some of that to potential upside if you saw uptick in consumer behavior. But the backdrop right now should continue for multiple years of demand with what we see.

Okay. And then maybe on the West Virginia mill, can you just remind us about how to think about the utilization rates over the next 2 years? And will the demand outlook change how the ramp-up progresses.

Katja, this is Noah. We've shared previously that we expect to be at about 50% utilization by the end of year 1. And really, our focus throughout -- from now through 2027 is just getting on being safe, getting reliable and getting consistent production on the mill. So I think you can draw a straight line from January to December and expect that we'll be at 50% by the end of that -- end of the year. And as we move forward into 2028, then we'll be focused on growing volume, but then moving into qualifications that get us into the higher quality items, the consumer durables, the auto that West Virginia is capable of.

So yes, absolutely. We're going to make sure that we are making good financial decisions with the tons we put in that mill. But one of the strengths we have is we bring up an asset like West Virginia is that we're able to shift tons around from our other mills to support that, those opportunities to run that mill, especially in 2027. And we're able to take our downstream pull through. We ship about 2 million to 2.5 million tons internally and we're able to place that most appropriately. And that's really supportive of a strong ramp for West Virginia.

The other comment, Katja, I would make is, look, we've done this for a long time. We know how to do this. We know the markets we've started mills up in great environments and we've started mills up in some very difficult markets. And so when you ask about the demand potentially changing and the ramp-up, look, most recently, and Brandenburg did not start up any wonderfully robust demand drivers like we're seeing today.

But look, Brad and the team and the play group balance that out very nicely, just like Noah described, right? We have multiple assets where we're able to utilize and balance some tons. However, West Virginia couldn't be starting up at a better time. So they've run their first coil through the pick a line last month as Noah indicated, and it's going to ramp up through the rest of this year.

So again, from a demand picture to have the pull-through that way, while you're starting up at mill is obviously ideal. But look, we we've balanced that. We've seen it on both sides of the equation, and we know our customers, we know how to balance this. And again, what I would expect as we go into '27, those demand drivers are going to still be very robust and just create a much better platform for this mill, it finds its way up to 50%, 60%, 70% utilization.

Your next question from the line of Carlos De Alba of Morgan Stanley.

I wonder if you could provide maybe a little bit more color on the raw material pricing. I think you mentioned, if I understood correctly, that you price your DRI based on pig iron, could you maybe elaborate on any lag on that reference pricing? And what that maybe specific iron price you're looking at, you see the imported pig iron pricing in the U.S. Is it the exported price from Brazil. Anything would help us given the material increase in profitability on that same.

Yes. Carlos, I'll take that one. This is Al Behr. We don't typically talk about the direct correlation between our transfer price and pig iron. But as you said, it is influenced by the price of pig iron. So think our prices go up, our DRI transfer price goes up, and that was a benefit to us in the quarter. In terms of the lag, I mean, certainly, there is a lag. It's a long sales cycle from when we buy iron ore pellets and we convert them to DRI and get them to our mills. I really don't want to quantify that for you because it varies a lot based on inventory positions all through that supply chain, but there is a lag.

Help me out too. I want to make sure I cover what you're asking. Was there any piece of that, that you would like more color on?

No. Maybe just when you price your DRI, you look at what specific index for pig iron? Is it the imported price in the U.S. or perhaps in the exported price from Brazil.

It's influenced by the price of big. I think I'd leave it at that, Carlos, the transfer price is influenced by the price of pig and it will flow correlated to the price of big I really don't want to elaborate more deeply on the mechanisms for it other than to share with you its influence. And as it goes up, you can assume that our transfer price will go up.

Fair enough. And another question I had is related to the import of beans and rebars. Recently, they are picking up. you flagged that in your presentation. I wonder if you can elaborate as to what you think may be behind this particularly being happy is quite significantly. And what actions could the company or the industry pursue in order to limit these businesses?

Yes, Carlos, I'll kick that off. And look, it's actually pretty positive story. While we don't want to see imports up and we saw a spike of about 50-plus percentage points and beams coming in Q-over-Q. It's a demand picture. And so again, when we think about our beam business at Nucor Yamato Steel and Berkeley beam they're sitting on backlogs today, unlike we've ever seen in the history of history of that facility. The demand drivers are so strong that it's creating a demand profile that volume is needed and it's coming in. And so that's -- that's why you're seeing the picture. It's not a lack of demand or you're seeing U.S. pricing versus rest of the world pricing reach some gap that the importers are willing to take that risk.

Look, again, I have the opportunity to spend 3 years at that facility and lead that team. When you start measuring backlogs, not in hundreds of thousands of tons but millions it changes the profile. And I would tell you that, that team is executing. The utilization rates are incredibly high. And again, every moment in the beam group and just about every other product group for us matters. So how our teams are executing today, yes, it's probably going to create some opportunity.

At the same time, if you asked me 5 years ago, would I take 16% overall imports into the U.S., all day long. All freaking day long, right? Because in the last 20 years, we've wrestled with 22%, 23%, 24% ,25%, 26%, 27% of the overall apparent domestic market being flooded by illegally dumped and subsidized imports. So again, even with those spikes, it is an incredibly robust demand picture and one we see continuing well into '27.

If I may squeeze one more very quickly. I think last quarter, you mentioned that you saw steel demand in the U.S. growing around 2% to 2.5% this year. Has that changed? And if so, what is the new number?

Yes, Carlos, we would just reaffirm that we're about 2% growth probably this year as an industry. So you're right on the numbers.

This concludes our Q&A portion. I will now turn the call back to Leon Topalian, Chair and CEO, for closing remarks.

Well, thank you for joining us today. And before I wrap up, I want to once again recognize our team for delivering an outstanding second quarter and for your commitment that you demonstrate every day as we work towards our goal of becoming the world's safest steel company, your dedication to serving our customers, operating safely and executing our strategy continues to set Nucor part.

I also want to thank our customers and our shareholders for the trust that you place in us we remain incredibly optimistic about the opportunities in the future ahead of Nucor and believe we are positioned to continue to have the best days that will be in front of us. Thank you all, and have a great day.

Thank you for attending. You may now disconnect.

Good morning, and welcome to Nucor's First Quarter 2026 Earnings Call. [Operator Instructions] Today's call is being recorded. [Operator Instructions] After I would now like to introduce Chris Jacobi, Director of Investor Relations. You may begin your call.

Thank you, and good morning, everyone. Welcome to Nucor's first quarter earnings review and business update. Leading our call today is Leon Topalian, Chair and CEO; along with Steve Laxton, President and COO; and Jack Sullivan, CFO. Other members of Nucor's executive team are also here with us today and may participate during the Q&A portion of the call.

Yesterday, we posted our first quarter earnings release and investor presentation to Nucor's IR website. We encourage you to access these materials as we will cover portions of them during the call. Today's discussion will include the use of non-GAAP financial measures and forward-looking information within the meaning of securities laws. Actual results may be different than forward-looking statements and involve risks outlined in our safe harbor statement and disclosed in Nucor's SEC filings. The appendix of today's presentation includes supplemental information and disclosures, along with a reconciliation of non-GAAP financial measures. So with that, let's turn the call over to Leon.

Thanks, Chris. And as always, I want to begin by recognizing our 33,000 teammates across the company for their continued commitment to working safely. Safety is and will always remain our most important value. And at Nucor, that means more than the physical safety of our team. It encompasses the mental health of all of our teammates as well. With May being mental health awareness month, it's a great time to reinforce that commitment. And as we move through 2026, we are firmly focused on making this the safest year in Nucor's history.

Before turning to our financial performance, I'd like to briefly highlight a few leadership updates. Effective March 1, Jack Sullivan was promoted to Chief Financial Officer, Treasurer and Executive Vice President. Since joining Nucor in 2022, Jack has demonstrated strong leadership, deep financial acumen and a clear understanding of Nucor's culture and how to create long-term value for our shareholders. Congratulations, Jack. We also announced that Dan Needham, our Executive Vice President of Commercial, will retire in June after 26 years with Nucor. I want to thank Dan for all his sacrifice and leadership during this time and wish he and his family the very best in retirement.

Turning to Nucor's first quarter financial results. We generated EBITDA of approximately $1.5 billion and earned $3.23 per share. This is an excellent start to the year and a significant increase compared to the fourth quarter, driven by strong performance across all 3 of our operating segments. Consistent with our capital allocation framework, we returned $254 million to Nucor shareholders through dividends and share buybacks during the quarter while also reinvesting $661 million into the business. Roughly 40% of CapEx in the quarter went towards our new sheet mill in West Virginia.

Operationally, our team has performed incredibly well during the quarter. One of the clearest indications is the record shipments our steel mills achieved for the quarter. At 7 million tons, this was the highest quarterly shipment volume in Nucor's history, reflecting strong execution across our 26 steel mills and growing contributions from recently completed projects. Equally encouraging is the momentum evident in our backlogs. At the end of the first quarter, our steel mills backlog was up to 4.7 million tons, a 20% increase from year-end and the highest level we've seen since the second quarter of 2021.

In Steel Products, our backlog grew 9% from year-end with increases across all major product groups. I want to thank our operating and commercial teams for a strong start to 2026 and for putting Nucor in a position to deliver even better second quarter results for our customers and our shareholders. Turning to trade policy. The combination of Section 232 steel tariffs and trade remedy orders have been effective at reducing imports with that trend accelerating in the second half of '25 and continuing in the first quarter of 2026.

Import share of the U.S. finished steel market declined from over 22% in the first quarter of 2025 to approximately 15% this quarter. More recently, we were pleased to see the administration reaffirm the 50% 232 tariff on steel and implement important changes to how derivative steel products are treated, specifically applying tariffs to the full value of those products. This action simplifies administration and enforcement while closing a key loophole that had allowed for undervaluation and circumvention.

Taken together with existing trade remedies, these measures are working to ensure a more level playing field for domestic producers. We appreciate the administration's recognition of the importance of a healthy and competitive American steel industry. That said, we remain vigilant and there is still work to be done. As USMCA discussions continue, there is an opportunity to address ongoing challenges, including steel subsidies provided by the Canadian government and the use of North American channels as backdoors to our domestic markets, putting U.S. manufacturers at a competitive disadvantage.

We also continue to advocate for policies that prioritize the use of American-made steel in critical sectors such as energy, infrastructure, defense and shipbuilding. With that, I'll turn it over to Steve for an update on the growth initiatives and market outlook. Steve?

Thank you, Leon, and thank you all for joining us this morning. Our team continues to make great progress on our new sheet mill project in West Virginia, and we'll see key milestones achieved in 2026. We're entering the final phases of construction and we'll be sequencing commissioning of operations throughout the year, beginning with the pickle line in the second quarter. By the end of the year, we expect commissioning, inspecting and testing of all equipment across the mill to be complete.

Following commissioning, our priority will be to operate safely and reliably as commercial shipments begin ramping up in early 2027. We will be increasing production and advancing product development throughout 2027 and '28 with capacity utilization and product offerings building steadily over time. Once fully ramped, Nucor West Virginia will supply some of the cleanest and most advanced sheet steel in North America with expanded capabilities to better service automotive and consumer durable markets. This positions Nucor to grow market share in the Midwest and Northeast, 2 large sheet consuming regions where Nucor is relatively underweighted today.

In addition to West Virginia, we have several major capital projects under construction or ramping up, and we're making meaningful progress across all of them. Starting with projects under construction. In our towers and structures business, we're building 2 new utility towers facilities, one in Indiana and one in Utah. In Indiana, we expect to be fully operational in the third quarter of this year. And in Utah, we expect to reach full production by mid-2027. We are also advancing the construction of a second galvanizing line at our Berkeley County sheet steel mill in South Carolina.

Once complete, this line will expand our ability to service automotive customers in the Southeast. Equipment commissioning is planned for the middle of the year, and we expect production to begin in the fall. In addition to projects under construction and commissioning, we have recently completed several growth projects that are advancing their strategic and commercial plans as expected. In the bar group, our new micro mill in Lexington, North Carolina and our new melt shop in Kingman, Arizona were both EBITDA positive in March.

In the sheet group, our new galvanizing line at Crawfordsville, Indiana was also EBITDA positive in March, and we expect to commission the paint line later this year. Finally, our Alabama towers and structures facility is expanding its customer base, improving production and on track to reach EBITDA positive run rates by the end of the summer. Before I turn the call over to Jack, let me share how we're thinking about the current market environment and Nucor's place in these markets.

Already the established industry leader, producing roughly 1 out of every 4 tons of steel in the United States and having unparalleled range of product offerings in our downstream businesses, Nucor continues to find ways to grow. After achieving approximately 6% growth of shipments in 2025, we expect shipments to grow by more than 5% in 2026. A confluence of factors are enabling this. First, consistent with our comments on Nucor's fourth quarter earnings call in January, overall demand remains relatively stable. There are pockets of strength such as data centers, energy, border fence and infrastructure. And there are some markets that have remained softer for now, including consumer cyclicals, traditional office, heavy equipment and agriculture.

Taken as a whole, we expect domestic steel consumption to be stable with overall demand remaining flat to up 2% for 2026. Second, as Leon highlighted, enforcement of trade laws is stabilizing what might have happened in the past where patterns of flooding dumped imports shocked the supply picture. And third, execution by our team with the investments we've made. Nucor is well positioned with the portfolio we've developed to service market segments exhibiting particular strength right now. A few examples include we can supply 95% of the steel needed to build a data center. We're the leading manufacturer of HSS structural tubing that are the primary building materials for large sections of the border fence.

Our industry-leading pre-engineered metal buildings and insulated metal panels offering helped to accelerate our customers' speed to market, which is increasingly valued in today's landscape. And as the leading domestic producer of beams, plate and bar, we are an essential material supplier and enabler for the construction of pipelines, LNG terminals, bridges, manufacturing facilities and power generation and transmission infrastructure.

Nucor's national reach, coupled with our strength in raw materials, steelmaking and downstream products provides supply chain integration, improved reliability and operating efficiencies that no other North American producer can match. We have the right capabilities and team for this moment, and we're always looking ahead to assure Nucor remains well positioned as markets evolve. With that, I'll turn it over to Jack for a closer look at our first quarter financial results and our outlook for the second quarter. Jack?

Thanks, Steve, and good morning, everyone. In the first quarter, Nucor generated net earnings of $743 million or $3.23 per share, exceeding the midpoint of our guidance range by nearly $0.50. The beat was largely due to higher volumes and higher margin product mix. After some weather-related shipping delays early in the quarter, the team delivered a very strong March with our sheet, plate and rebar groups all setting quarterly shipment records, while structural steel shipments reached levels not seen since 2021.

Turning to the segment level results for the first quarter. The steel mills segment generated $1.1 billion of pretax net earnings, more than double the prior quarter. Volumes and average selling prices increased across all 4 product groups with sheet and structural being the largest drivers. Metal spreads also expanded across all formats. In Steel Products, we generated pretax earnings of $285 million, up 24% from the fourth quarter. Volumes increased 13% on stable pricing with our Tubular group setting a new quarterly shipment record. Strong demand related to the border fence was a significant contributor, and we expect that to continue for the next several years.

We did see some margin compression due to higher steel input costs flowing through, but we expect this to ease as the year progresses and realized pricing catches up. And in our Raw Materials segment, we generated pretax earnings of approximately $45 million compared to $24 million in the prior quarter, reflecting higher DRI production following 2 planned outages in the fall. Pre-operating and start-up costs totaled $108 million for the quarter. As a reminder, we expect these costs to trend higher as we work our way further into 2026 and toward the completion of our West Virginia sheet mill.

Moving to the balance sheet. Our strong investment-grade credit profile is the foundation of our capital allocation framework. It allows us to execute our strategy of disciplined investment to grow our business while still providing meaningful cash returns to shareholders. We ended the quarter with approximately $2.5 billion in cash and liquidity of $3.2 billion. Total debt as a percentage of capital sits at 24%, and our credit ratings remain the strongest of any U.S.-based steel producer.

Capital expenditures totaled $661 million for the quarter, and we remain on track with our $2.5 billion CapEx estimate for the full year. While this level of investment remains elevated as we finish several remaining growth projects, it is moderating compared to recent years. And as our CapEx is trending down, our cash from operations is moving up. That combination produced a meaningful increase in free cash flow for the quarter, and we expect this trend to continue.

We also returned over $250 million to shareholders in the form of dividends and share repurchases or roughly 34% of quarterly net earnings. Consistent with our long-term track record, we remain committed to returning at least 40% of net earnings to shareholders on an annual basis. Looking ahead, Nucor's financial strength, highly variable cost structure and business diversification position the company to invest in growth, reward our shareholders and navigate through economic cycles.

Turning to our second quarter outlook. We expect higher consolidated earnings with improvement across all 3 operating segments. In steel mills, we expect stable volumes and increasing metal margins. The margin improvement reflects higher realized pricing, partially offset by rising raw material costs. Within the segment, we expect our sheet and plate businesses to be the largest contributors in the sequential increase. In Steel Products, we expect higher volumes and stable pricing. In some of our longer lead time products like fabricated rebar and joist and deck, margins have been impacted by rising substrate costs but are poised to improve as we work through backlogs and start to realize higher average selling prices.

In raw materials, we expect higher earnings driven primarily by improved realized pricing for DRI. Taken as a whole, the earnings uplift across all of our operating segments will be partially offset by higher corporate and intercompany profit eliminations upon consolidation. As we look further into 2026, we continue to expect that Nucor's earnings and cash flow will trend significantly higher than 2025 as we benefit from strong nonresidential construction and infrastructure demand and begin to see returns from the investments we've been making these past few years.

With the hard work and dedication of the Nucor team, we are confident in our ability to create value for our customers and shareholder. And with that, we'd like to hear from you and answer any questions you may have. Operator, please open the line for questions.

[Operator Instructions] Our first question comes from Bill Peterson from JPMorgan.

Congratulations on a strong quarter. Congrats to the new management appointees, and thanks for the details thus far. On the West Virginia sheet mill, which you provided some granularity, I was hoping to get a bit more color on the phasing of commissioning, the strategy through year-end and maybe what to expect for the next few years. And I guess, specifically, how long do you expect the commission phases to be complete? When do you expect the construction of the galv line to be complete? And I guess, how should we think about when you're going to start production as well as the customer qualifications? And then any sort of thoughts on utilization in the next few years as well? I appreciate that.

All right, Bill, thank you for the question. I'm going to kick it off and maybe just stay at a high level and then ask Steve Laxton or Noah to jump in with some more of the details around the commissioning of that mill. But look, I want to begin with the backdrop of our most important value, which is the safety, health and well-being of the entire Nucor 33,000 team member family. Today, we sit at 65 of our divisions are recordable free at this point. It is an amazing accomplishment, and I want to thank each and every one of our teams who are delivering exceptional results, and you will see and continue to see those amazing results continue as we push into the quarter.

More specifically, Bill, and as we think about West Virginia, and we touched on it in the opening remarks, I and our team could not be more excited about the capability set that, that mill will bring for Nucor for our customers, our shareholders, the value that's going to be generated and created in the largest sheet consuming region in the United States. Johnny Jacobs, who is our Vice President, GM and his team have done an incredible job.

And as you know, the work that's just behind the scenes during construction and start-up is tireless, it's thankless and it is just a really, really challenging environment. And those individuals have done an amazing job. So thank you to our entire West Virginia team. And again, I'll let Steve and Noah maybe update some more on the details.

Yes, happy to do that. Thanks for the question, Bill. And I'll just echo what Leon said about the team in West Virginia. They've had a remarkable safety record. I'll lead off with that. They've only had one reportable in all the years of that project. So outstanding safety culture and leadership in that team. And in terms of the specifics of your question, right now, Bill, we're about 85% of the way through construction. So we still have work to do on the construction side.

Having said that, we're starting right now with some of the commissioning, and we'll be sequencing that throughout the year. And so we'll start with the pickle line and then we'll bring up the cold mill and proceed through one of the galv lines, the automotive quality galv line will be the next thing we start up after that, but in commissioning. Ultimately, we'll get to commissioning the melt shop and hot mill later in the year. By the end of this year, we'll be done with all the commissioning. We're on track to hit that milestone. And then we'll start moving up through production and ramp up in '27. Bill, what you'll see there is a very intentional and deliberate plan from that team and our entire sheet group.

Noah and our team in the sheet group have really designed an excellent plan to bring that mill up in a very constructive and coordinated and intentional way. And so by the time we get to the end of 2027, you asked about utilization rates and markets are going to dictate some of that. So I might hedge here just a little bit. It will depend on market conditions somewhat, but we'll be operating somewhere near that 50% of capacity by the end of next year. And so that team is poised. We're going to make great progress over the next 1.5 years and into 2028, even with product development and continued penetration of the markets. Anything you want to add?

No. I think you were all over it.

Great. And Steve, obviously, we've been working with you as a CFO, and now we have Jack, so congrats on -- for both of you. Maybe the next question is for Jack as your new role in CFO, how should investors think about any potential shifts in strategy relative to recent years? Or anything you would continue, anything you would change or just any sort of insights on how you're considering your new role?

Yes. Thanks, Bill. I appreciate that. I step into this role with a lot of humility and gratitude to serve this great company and the 33,000 teammates who make it such a special place. Preceding me in the role are 4 highly accomplished Nucor CFOs. And really, my goal is just to carry on their long-standing tradition of doing 3 things really well: maintaining a healthy balance sheet, investing for the future and generating attractive returns for our shareholders.

And Steve Laxton, who's sitting right here to my right, did a terrific job during his 4-year tenure, funding $15 billion in growth investments, returning $9 billion to our shareholders and improving our credit profile along the way. So that's a pretty impressive trifecta right there. And as the old saying goes, if it ain't broke, don't fix it. So Bill, no major shifts from that winning strategy. But what I would say is I think I bring a fresh set of eyes, a strong understanding of this business and how we make money and just a lot of excitement to accelerate what is already one of the most compelling stories in American manufacturing.

Our next question is from Alex Hacking from Citi.

A couple of questions. I'll ask them together, if that's okay. Firstly, on the sheet side, the new slow and steady approach to price hikes in this cycle that we're seeing right now, could you maybe discuss the rationale a little bit there and how the customer feedback has been? I mean I hear only good things from customers, but I'm curious. And then secondly, on structurals, demand there very, very strong. Imports are down, but don't seem to be down that much. Is there any particular subsegments that's driving structurals to be so good?

Yes, I'll kick it off, Alex, and thanks for the question. And again, keep it a little broader base. But the question you asked around sheet is an important one, and there's some very deliberate strategies there that I'll ask Noah to kind of walk us through because, again, I think it's an important context as you overlay the backdrop of the current sheet market and demand today versus '21 and '22. And again, Noah can touch on that. You mentioned the structural side.

And again, having spent 3 years at Nucor-Yamato, our Nucor-Yamato team and our Berkeley beam mill continue to deliver excellent performance, both from a safety standpoint as well as from just net earnings. They are absolutely on fire. Their backlogs are at historic levels. Their customers' customers are busier than anything that I've seen in, again, my 30-year career. So where is that going? I mean, it's obviously the nonres data centers, energy structural side and infrastructure around energy, CHIPS, CHIP plants and facilities, warehousing in an area that we're going to continue to see expanded into the military complex in the years to come for Nucor.

So I would tell you, it's hitting on all cylinders. And while data centers are white hot, everyone is looking to participate, if you pulled out all of the data center backlog from Nucor, I mean it only takes that down about 10%. So the historic backlogs we're seeing are really, really spread out incredibly well across the enterprise that give me great confidence that not only as we indicated, Q2 will be better, but I think 2026 is going to be a very strong year from Nucor or for Nucor. So with that, Noah, why don't you walk through a little bit of the sheet strategy and where we sit today?

Yes. Thanks for the question, Alex. We like slow and steady and our customers are liking slow and steady, and let's take a little time to unpack that. The fundamentals supporting pricing right now are really strong. And I would say the rally we're in is probably the strongest kind of fundamentals we've seen for some time. Maybe to give you some context for how we see the rest of '26, let's step back to the last inflection point in the market, which was Q4 of last year, the low side of pricing in Q4 of last year. And to think about how our strategies work differently this year.

You recall that historically, what would have happened in that low point, that trough in the market is we would have had opportunistic speculative buyers overloading their order books to try to time the market. And the result, if you think about traditional behavior in Q4 would have been that we would have overbooked on the mill side, lead times would have jumped significantly, prices would have jumped significantly, and we would have really overshot basic market fundamentals. So then due to the spreads and the lead times, we then inevitably create the surge of imports that arrive a few months later, similar to what we saw in the back half of '24. That's what usually happens.

We've seen this time and time again in the sheet world. But this time, our trajectory and our behavior has been markedly importantly different in this cycle. We didn't chase the market down in Q4. We managed our order book to match what we saw as true underlying demand, and you saw this reflected in our steady, I would call it, modest consistent approach with pricing in CSP, consistent modest increases that were supported by underlying demand. And then this is one factor that we believe has helped to keep imports low.

If you think back to '24 and you saw imports that were 9 million-ish tons. This year, we're tracking 4 million or under. So there's a 5 million ton window of serviceable market for domestic suppliers. That's a huge impact to the positivity with which we see the market today. And then as importantly, the supply chain is really healthy right now. Inventory levels are modest, which just tells you we haven't seen the speculation that traditionally drives the volatility we would see in this market.

A couple of other notes just on the strength of the current market, while we have a pretty positive outlook. We have some key markets that are starting to show signs of positive outlook. Service center shipments are starting to move up. They're trending up. We've heard from HVAC customers recently that are really in the nonresidential construction space, about a really strong second half there. So there's some tailwinds there in non-res construction that yield some strength as well. And then you already heard mention of the border fence, which is 1 million, 1.5 million tons over this year and next. So all that together, we believe, supports a strong operating environment through '26 and then into potentially next year.

Our next question comes from Timna Tanners from Wells Fargo.

I wanted to follow up, if I could, on the guidance comments. So the 5% year-over-year volume increase would seem to imply that this level that we saw in the first quarter year-over-year is not sustainable. So I'm just curious about what's driving that expectation? And I conclude just looking at the values that perhaps the bigger driver into Q2 could be price catching up with the market rather than volumes. Is that a fair conclusion? And if you could comment a little bit more about the moving parts, that would be great.

Yes, Tim. Look, I think both are true. I think you're going to see volumes. And again, Nucor's operating rate is about 87% right now, utilization across the board, some groups being a little higher, some a little lower. So we have room. And again, from a contract standpoint, you think about sheet market and the things Noah just walked through, we remain and have tons available in a very strong market. So we've maintained some discipline in not booking all of those tons through contracts. So we have spot tons to offer.

But again, we have -- we still have availability. And again, I think you're going to see that continue to move up. The demand drivers, again, I'm not going to underplay this. I've been in this business a long time. I've been in our longs product businesses or sheet group. And from a longs perspective, our customers that I'm talking to today are busier than anything they've ever seen in their history. So when I tell you the demand drivers today are hot. It's like '21, '22 or even beyond in some cases, depending on the product group. So it is an incredible market.

So I do think you're going to see some improvements in volume. To your point on the 5%, yes, I think you're right. I think it's much more likely that it pushes closer to double digits. Again, not ready to say it's going to be at or above 10%, but we -- I think it will strongly be above that 5% mark. So you're going to see that move up as well. So I think that answered the 2 questions you were pulling on. Did I miss anything there, Timna?

I think that's fair. I think I just -- it would be always helpful to get a little bit more color on how to think about some of the lags in pricing. If you want, that would be great. And then I guess the second question I was going to ask has to do with costs. And obviously, we all track scrap really closely, and that's a key one. But I just wondered if you could elaborate on some of the cost pressures that you alluded to earlier in the script, that would be great.

Yes. Steve, I actually want to take both. I mean the cost as well as the lag effect on -- which, again, I think is playing through, but will play through very positively as we head into Q2.

Yes. Yes. Sure, Tim. The lag effect, just to elaborate on that just a little bit on the prior question. You know this, but for the other listeners on the call, 20% of our volume goes to our downstream business, and that gets in our financial results backed out through intercompany elims. So you see that impacting financial results for us, but also with over 70%, 80% of our business in sheet being contract and some other businesses that have a lag effect to the pricing. As pricing trends move up, it does -- there is this catch-up effect that takes time.

And so to the heart of the question you were asking just a minute ago about Q2, you'll see some volume pickup. We had weather effect, particularly some of the downstream products. You'll probably see a little bit more volume pickup relative to pricing in our products group. But on the sheet side -- or excuse me, steel side, you're going to see it the other way around, where the pricing is catching up with the trends that you're seeing today in the marketplace.

So that's sort of putting a little bit finer point on your comment about the lag effect. And with regards to cost, Nucor's costs have been down year-over-year and quarter-over-quarter. I think that's important to note. And a lot of that has to do with utilization. Our utilization is up and -- but also supplies and services are down on a few other little details. The one area that is up that might be on investors' mind is energy.

But I think it's important to note that energy is around 10% of the cost in steelmaking, and it probably has a far less pronounced impact than some investors might be thinking because of what some of our integrated competition has in terms of their costs. So our profile is simply different there. We hedge -- we typically forward buy anywhere between 40% to 50% of a year's worth of natural gas heading into it. And most of our cost -- 80% of our energy cost is related to power anyway. So we don't have quite the same degree of exposure to near-term moves in costs on that front.

Our next question comes from Lawson Winder from BofA Securities.

Could I ask about the capital return? So in recent years, Nucor has exceeded the 40% net income return. I mean, last year, it was like just under 70%. Is there room to push that higher in 2026? And how are you thinking about that? And then the corollary to that would be looking at the investment opportunity set, are you seeing any new opportunities in which to invest in the business that could compete for that free cash flow versus capital return?

Yes. Lawson, it's Jack. Thanks for the question. In terms of share -- returns to shareholders, I think over the past 5 years, we've trended close to 60% of net earnings over that time. Starting out the first quarter a touch under that 40% target, and that was really the result of our earnings beat. So as we work our way further into the year, you should expect us to continue to close that gap and potentially exceed it.

But when it comes to actual returns to shareholders, it's sort of that balancing act between staying true to our long-standing targets of roughly 40%, recently higher, but also being opportunistic about other areas to create value for shareholders. And a lot of that is through reinvestment. So we'll continue to do just that, balance reinvestment opportunities as they come along, maintain a healthy balance sheet along the way and make good on our commitment to shareholders.

Okay. That's quite clear. And Jack, congratulations on the promotion. If I could ask a follow-up question just related to joist and deck. You noted that pricing is expected to recover to help offset some of the higher substrate costs going forward in 2026. Can you just speak to some of the strength and weakness that you're seeing in the underlying market for that business?

Yes. This is John. I'll take that question, Lawson. So really, the biggest market for the joist and deck business is the warehouse market. That's really in a steady state. It's certainly not what it was in '21 or '22, but leveled off to a good position. The data center market continues to be really strong for us. That's where we're seeing a lot of our price increasing and our backlog pricing has benefited from that and will continue to over the course of the year. So we feel good about where we are in that part of the business.

The next question comes from Katja Jancic from BMO.

Earlier, you mentioned the recent change to Section 232 tariffs impacting derivative products. Have you since then seen an increase in inquiries from manufacturers that could potentially try to reduce the impact? Or do you expect that to happen?

Got you. I want to make sure I understand the question. With the 232, are we seeing our customers look to basically shore up their supply chains domestically? Is that?

Right or even the nearshoring because there's an ability for them to reduce the tariff from 25% to 10% if they use 100% U.S. steel. So I'm just wondering if you're seeing any inquiries...

Yes, we absolutely are. And again, I think what you've seen with Trump 2.0 and the trade things that he's implemented both from an EO and 232 is to create a long-term level fair playing field. And so again, we're seeing import levels trend down to 15%, which is certainly the lowest I've seen in my entire career at Nucor. So it's at a healthy and what I believe is a very sustainable level for the U.S. industry.

But yes, to answer your question, and it's something that we will certainly support in the melted and made in America provisions of any trade policy that gets enacted. And so yes, our customers are certainly aware of that and looking to see how they can control their cost and output. And so yes, the domestic industry is healthy. It's strong. And again, Nucor's best days are still in front of us.

And maybe going back to the energy side. I understand that it's only 10%, but maybe looking more longer term, given that there is this expectation data centers are going to consume more energy and power costs are going to be moving higher. How are you thinking about your power costs longer term? Or are you thinking in any way to potentially look at longer-term contracts? Or how should we think about it?

Yes, Katja, look, this is something we've talked about for a long, long time. In fact, very early days from when I became CEO in 2020, we've taken small positions, but financial positions in things like NuScale Power, which is the small module reactor technology because we need all the power that we can get, not just in solar and wind, which are good. We're suppliers to both of those industries, but it's simply not enough.

We've got to embrace -- or we believe -- Nucor believes we've got to reembrace nuclear power in this country. It is the cleanest, most sustainable, always-on demand-driven power that we can bring to the grid. So you saw us invest in NuScale. You saw us invest in Helion that we're incredibly excited about. But those investments also tied to being able to build those facilities, whether it's nuclear or vision and/or fusion behind the meter so that we could generate our own supply, any excess then would go to the grid.

So to your point, the demand profile and what the U.S. economy is not doing to keep up with supply has been an issue and something we've thought about for a very long period of time at Nucor. So we've made those positions. But Steve mentioned it earlier as well, part of the reason why we hedge our natural gas buys. It's part of the reason we got into drilling wells on our own to begin with. It's the reason why we have a great relationship in every state that we're in that we have a steel mill in with the utilities so that we maintain long-term uninterruptible power contracts that are very, very efficient and cost effective.

So do I expect in the years to come that will get a lot of pressure? -- absolutely, 100%. As you know, the data centers aren't pushing 200, 300, 400 megawatts. Now they're pushing gigawatts. These facilities are massive, and they are massive power consumers. And so we've been thoughtful about it. We continue to be thoughtful about it, and we will continue to invest in the things not because we want to make electrons, but we recognize that this nation has to reembrace nuclear. Today, China is building 46 new nuclear facilities. The U.S. is building 0. We've got to change that. And again, I think it's one of the clearest ways that we remain a superpower in cloud computing, AI and the things that are going to transform and revolutionize the U.S. economy.

Our next question comes from Carlos De Alba from Morgan Stanley.

So a couple of questions that are basically follow-ups from prior inquiries. One is on returning money to shareholders. As your CapEx starts to peak and you get the benefit of the new projects, would you have any preference between incremental buybacks or special dividends? Or are you agnostic to those 2 choices?

Yes. I think -- thanks for the question, Carlos. With respect to the best way to return cash to shareholders, traditionally, our preference has been through buybacks. There have been very few instances over decades in which we've contemplated a special dividend. Not taking that entirely off the table. It's just our traditional practice has been through buybacks and sort of dollar cost averaging our way through the year.

And then the other question is related to imports. The administration recently put out procedures for submissions by steel or aluminum producers that would be committed to new capacity in the U.S. This is related to the Proclamation 10984 on imports of medium and heavy-duty vehicles and vehicle parts. How do you think this could impact potentially the announcement of new capacity in the U.S., steel capacity in the U.S. So I think [indiscernible] the imports from 50% -- sorry, not imports, but the tariff from 50% to 25%.

Look, Carlos, I think it's a fair question. And look, we've seen it. We've seen the interest from overseas. We've seen Nippon Steel come in and buy the U.S. steel assets, and that company no longer exists, right? It's now owned and operated by a Japanese company. You're seeing similar results in Louisiana with Hyundai building their sheet mill there. And when -- I think there are drivers to that, not just trade policy, but when you're the strongest economic situation in the world, people want to come here and build things. Certainly, there are some incentives for them to do that. But Ben, maybe just touch on some more specifics to Carlos' question.

Yes, Carlos, I appreciate the question. We're obviously aware of that to EO. We've studied as well. I would not add much more actually than Leon did, right? We continue to study that. I think that a lot of people are always going to tend to move towards the U.S. market as strong as it is. However, we're still a wait-and-see approach on that EO, along with many other things that are coming out right now.

Our next question is from Nick Cash from Goldman Sachs.

I just want to double-click on Tim's question in response from earlier. So, the guide from 4Q was about 5% volume growth, and now it sounds like Nucor is expecting more than 5% volume growth for the year. You sound pretty positive and constructive on that in the environment. So I'm just trying to -- any more color on what specifically has changed over the past, I guess, 2 to 3 months? Are you more positive on the end markets? And does that give you conviction in heading into the back half of the year? Or are certain end markets seeing a stronger-than-anticipated rate of change over the past 2 months, imports weaker than thought or what you're seeing potentially even across the backlog? Any additional color would be helpful.

Yes, Nick, look, I appreciate the question. And I think you're seeing a trifecta come to fruition. So I think it's all the above. So I'll unpack it in 3 categories. One, I think in our core businesses, we're seeing incredible demand, incredible growth. Our longs products groups are from rebar, MBQ, our structural backlogs are beyond numbers that we've ever seen. Our customers' customers in the nonres, the structural fabricators are incredibly busy. There is a demand picture today that is incredibly robust that I think is a part of that driver.

The second piece of that is our expand beyond businesses that are continuing to ramp up. When we talk about insulated metal panels, our doors and door technologies, the towers and structures, greenfield plants, that we're building that, again, we are incredibly excited about what they're bringing to the table. And then the enclosures and data center spaces all are going to be contributing to a much healthier bottom line for Nucor and our shareholders, not just this quarter, not just in the coming quarters, but year-over-year, you're going to see it.

And then the third and last and probably most important point, Nick, we spent nearly $20 billion since I took over the company as CEO. And our teams have done an incredible job of a, implementing that cash and projects safely. They've worked tirelessly to bring those projects through construction, commissioning, start-up, you're beginning now to see some of those in that planting and that toiling and just nurturing come to harvest.

So for, again, years of working towards and building out, you're now beginning to see the harvest starting to hit the balance sheet, and that's only going to continue. The pent-up tsunami of earnings power that Nucor has invested is still yet to hit the balance sheet. It is why I am so incredibly optimistic and looking at where our share price closed last night, the opening this morning, I mean we're just getting warmed up.

And so Nucor's best days, weeks, months and years are still in front of it, and I couldn't be more optimistic. So those 3 factors combined bring to me what's going to generate the healthiest returns Nucor shareholders have ever experienced and ever seen and higher lows than Nucor has ever experienced by balancing out the M&A portfolio with countercyclical companies and product ranges that are in different end markets that, again, just stabilize the earnings portfolio through the balance sheet. So again, I couldn't be more optimistic. And that -- those 3 pieces really are why we feel very confident about 2026 and beyond.

We currently have no further questions. So I'd like to hand back to Leon Topalian, Chair and CEO, for any closing remarks.

Well, thank you all for joining us on today's call. And before I conclude, I want to once again thank our team for delivering a strong start to our year and also for your unwavering commitment to becoming the world's safest steel company. I'd also like to thank our customers for the trust that you place in us each and every day. And finally, to our investors for your continued confidence in our long-term strategy. Thank you, and have a great day.

Thank you. This now concludes today's call. Thank you all for joining. You may now disconnect your lines.

Good morning, and welcome to Nucor's Fourth Quarter 2025 Earnings Call. [Operator Instructions] Today's call is being recorded. [Operator Instructions]

I would now like to introduce Chris Jacobi, Director of Investor Relations. You may begin your call.

Thank you, and good morning, everyone. Welcome to Nucor's Fourth Quarter Earnings Review and Business Update. Leading our call today is Leon Topalian, Chair and CEO; along with Steve Laxton, President, COO and CFO. Other members of Nucor's executive team are also here with us today and may participate during the Q&A portion of the call. Yesterday, we posted our fourth quarter earnings release and investor presentation to Nucor's IR website. We encourage you to access these materials as we will cover portions of them during the call.

Today's discussion will include the use of non-GAAP financial measures and forward-looking information within the meaning of securities laws. Actual results may be different than forward-looking statements and involve risks outlined in our safe harbor statement and disclosed in Nucor's SEC filings.

The appendix of today's presentation includes supplemental information and disclosures, along with a reconciliation of non-GAAP financial measures. So with that, let's turn the call over to Leon.

Thanks, Chris, and welcome, everyone. For as long as I've been Nucor's CEO, we have opened our earnings calls by recognizing our safety performance, and I am pleased to continue that tradition again. In 2025, our team achieved the lowest injury and illness rate in our history, marking the eighth consecutive year of improvement, and we finished the year with incredible momentum as the final two months of the year were the safest two months we have ever recorded. These milestones have occurred during a period of significant growth and transformation for Nucor, and I am extremely proud of how our team continues to prioritize safety in everything we do. However, as we pursue our goal of becoming the world's safest steel company, our safety journey will not be complete until we operate injury-free every day.

Before I comment on our results, I would like to briefly address the management changes we announced at the end of last year. Effective January 1, Steve Laxton, was promoted to President and Chief Operating Officer. Throughout his 23 years at Nucor, Steve has demonstrated strong leadership and has played an important role in shaping our growth strategy. In this expanded role, he will have an even greater impact on the company's future. Steve will also continue to serve as CFO until a successor is named. Congratulations, Steve.

I would also like to acknowledge the many contributions of Dave Sumoski. Dave has served as our Chief Operating Officer since 2021 and will retire in June after more than 30 years at Nucor. Over that time, Dave has been a trusted leader and his deep operational expertise and strong commitment to advancing our safety culture have made a lasting impact on the company. He will be missed by all of us when he begins a well-deserved retirement in June. On behalf of our teammates across Nucor, we wish Dave and his family all the best.

Turning to our financial performance. We delivered adjusted earnings of $1.73 per share in the fourth quarter and $7.71 per share for the full year. EBITDA totaled $918 million for the quarter and approximately $4.2 billion for the year.

We remain committed to balancing long-term growth with meaningful shareholder returns while maintaining the strongest credit profile in our industry. For 2025, we reinvested $3.4 billion into the company with the majority of that capital going to projects that were completed in 2025 or will be completed later this year, returned $1.2 billion to shareholders through dividends and share buybacks, representing approximately 70% of net earnings and finished the year with $2.7 billion in cash, providing ample liquidity to support the business and finance our growth objectives.

We began 2026 with real momentum built on years of hard work disciplined investment and a relentless commitment to grow the core, expand beyond and live our culture. Since 2019, we have strengthened our steel mills segment through 15 major projects across our sheet, bar and plate groups. These investments have enhanced our capabilities while shifting our product mix toward higher-margin products that address growing customer needs in key markets. We have also expanded our steel products portfolio by delivering more comprehensive customer solutions and adding steel adjacent businesses supported by strong secular demand trends.

The progress we made in 2025 marked a meaningful inflection point as the number of projects transitioned from the construction phase to the ramp-up phase. Major projects completed include our new rebar micro mill in Lexington, North Carolina, a new melt shop at our bar mill in Kingman, Arizona, a new Nucor Towers and Structures facility in Alabama and new galvanizing and pre-paint lines at our Crawfordsville sheet mill in Indiana. All of these projects are on track to be fully ramped up and operating at positive EBITDA run rates within the year.

Our growth strategy has never been about simply getting bigger, it's about generating more value for our customers, shareholders and teammates. Even as we've executed on these growth projects, we've also taken deliberate steps to realign our asset base and improve our cost structure by restructuring operations and repurposing facilities to better serve fast-growing end markets. For example, we converted two existing steel products facilities to support our Nucor Data Systems business as it supplies the rapidly expanding data center market. This demonstrates a core strength of Nucor. With the broadest range of capabilities in the North American steel industry, we are uniquely positioned to capitalize on new opportunities wherever they emerge.

Turning to 2026. Several remaining projects will reach completion this year, and our teams are focused on bringing them online safely, on time and on budget. Within the sheet group, we are on schedule to complete construction of our new mill in West Virginia by year-end. Once online, this mill will begin supplying some of the cleanest and most advanced sheet steel in North America, serving automotive, construction and industrial customers. We will also start up the new galvanizing line at our Berkeley County mill with commissioning planned for mid-2026. Within Towers and Structures, construction continues on our greenfield utility [ pulp ] production facility in Indiana which is expected to begin full operations in the second quarter. Our third greenfield project in Utah remains on track for completion in 2027 when these facilities are fully online, we will operate four highly automated state-of-the-art production sites with national coverage in the high-growth utility transmission tower market.

Since 2020, we have invested approximately through CapEx and acquisitions to grow our core steelmaking capabilities and expand into downstream businesses while returning nearly $14 billion of capital to shareholders and improving our credit profile. With the majority of our recent investments largely complete, I'm confident it sets up Nucor to enter its next phase of growth from a position of strength, focused on disciplined capital allocation while driving long-term value for our shareholders.

Moving to trade policy, vigorous enforcement of our trade remedy laws and the full reinstatement of the Section 232 steel tariffs without exemptions last year have helped drive down steel imports. Foreign import share of the U.S. finished steel market has dropped from approximately 25% at this time last year to 16% in October and an estimated 14% in November. We expect imports will continue to trend at or below those levels in 2026 as the market absorbs the full impact of the Section 232 tariffs and recent trade case determinations.

During 2025, the Department of Commerce and the International Trade Commission made important rulings regarding unfairly traded imports of corrosion-resistant steel and rebar. Together, the Section 232 tariffs and product-specific trade cases provide vital defenses against countries that seek to dump their steel into the U.S. market. We appreciate the efforts the federal government took in 2025 and to level the playing field for the American steel industry. Looking ahead, the trade policy will remain a priority for our industry.

The formal USMCA review beginning in July, offers the opportunity to drive additional steel demand in North America, crack down on efforts to transship steel through Mexico and Canada and address steel subsidies provided by the Canadian government. We must also continue to implement common sense policies like By America that incentivize the use of American-made steel for infrastructure, shipbuilding and defense.

Turning to our expectations for 2026. We continue to see strength in many of our primary end markets, including infrastructure, data centers and in energy infrastructure. We are also seeing healthy demand related to advanced manufacturing in the border fence. While those markets remain strong, we have yet to see much improvement from interest rate sensitive markets like automotive and residential construction. In total, we expect domestic steel demand to be slightly up relative to 2025. And as I mentioned earlier, we expect the full impact of the Section 232 tariffs and recent trade determinations with lower levels of imported steel in 2026. Against this supply and demand backdrop, we entered the year with historically strong backlogs, up nearly 40% year-over-year in the steel mill segment and 15% in steel products. Within that, our structural group really stands out. The team set a record in the first quarter of 2025 and the structural backlog we are carrying into this year is more than 15% above that, reflecting sustained demand across key nonresidential and infrastructure markets. For the full year, we currently expect Nucor steel mill shipments to increase approximately 5% compared to 2025.

With that, I will turn the call over to Steve to provide additional details on our fourth quarter and full year performance as well as our outlook for the first quarter. Steve?

Thank you, Leon, and thank you all for joining us on the call this morning. During the fourth quarter, Nucor generated adjusted net earnings of $400 million or $1.73 and per share. For the full year, adjusted net earnings were approximately $1.8 billion or $7.71 per share. As noted in our earnings news release, adjusted fourth quarter earnings exclude $27 million or $0.09 per share of charges related to onetime noncash asset impairments, primarily related to discontinued operations that were recognized during the period. Full year results also exclude approximately $23 million or $0.10 per share of after-tax charges incurred in the first quarter, primarily related to closing or repurposing facilities in the Steel Products segment and ceasing production of wire rod at our Connecticut bar mills.

Turning to the segment level results. For the fourth quarter, the steel mill segment generated $516 million of pretax earnings, down roughly 35% from the prior quarter. Shipment volumes declined 8%, reflecting seasonal effects, fewer shipping days in Nucor's fiscal fourth quarter and the impact of both planned and unplanned outages. While average realized pricing improved in our bar and structural groups, those gains were more than offset by lower pricing in our sheet and plate groups. This decline was expected as lagging sheet prices from the fall flowed through in the quarter. Sheet prices began to rise in November and December, with most of that benefit expected to be realized in the first quarter.

Turning to Steel Products. We generated pretax earnings of $230 million down from $319 million in the third quarter. Consistent with our steel mills segment, volumes declined sequentially across the steel products portfolio. Our rebar fabrication business accounted for roughly half of the quarter-over-quarter volume decline, in line with its typical seasonal volume trend.

Turning to our raw materials segment. We generated pretax earnings of approximately $24 million compared to $43 million for the prior quarter, primarily reflecting the impact of two scheduled outages at our DRI facilities.

As we continue to advance our long-term multiyear growth strategy, 2025 CapEx totaled approximately $3.4 billion with several major projects reaching completion this past year. We will see a meaningful step down in capital spending for 2026. Our current estimate for 2026 CapEx is approximately $2.5 billion. Growth-oriented investments will represent roughly 2/3 of our planned spending with our West Virginia sheet mill remaining the largest single use of capital. Our growth efforts are also having a pronounced near-term impact on profitability.

For 2025, preoperating and start-up costs totaled $496 million. Looking ahead, we expect these costs to remain elevated in 2026 as several projects moved beyond the startup phase, offset by higher expenses associated with others, particularly bringing West Virginia online.

Nucor remains committed to a balanced capital allocation framework anchored by three principles: maintaining a strong balance sheet, investing for value-creating growth and making meaningful direct returns to shareholders. In the past three years alone, Nucor has invested over $9.5 billion through capital spending and acquisitions. During that same period, Nucor returned over $6 billion to shareholders in dividends and share repurchases, an amount equal to roughly 73% of Nucor's net earnings during that time frame. Even with these historically sizable investments and returns, we have preserved low leverage and substantial liquidity supporting our industry-leading A- and A3 credit ratings from all three major rating agencies. It is worth noting that in December, our Board approved an increase in the quarterly dividend to $0.56 per share extending our record of paying and increasing our regular quarterly dividend for 53 consecutive years.

Turning to our first quarter outlook. We expect higher consolidated earnings with improved results across all three operating segments. Shipment volumes should increase in each segment, supported by a healthy demand environment, typical positive seasonal trends and fewer outages relative to the fourth quarter. The steel mills segment is expected to drive the largest portion of the sequential earnings growth due to higher volumes and higher realized pricing. All product groups within this segment should see improved results with our sheet business contributing the most to the overall increase. In the Steel Products segment, we expect higher volumes and stable pricing. And in our raw materials segment, earnings are expected to improve modestly following the successful completion of planned DRI outages in the prior quarter. These gains will be partially offset by higher profit eliminations upon consolidation.

Before we take questions, I'd like to spend a minute on what has long been both a source and evidence of Nucor's resilient and sustainable business model: our ability to generate free cash flow across a wide range of market conditions. Last year, Nucor had negative free cash flow, something that is very rare in our company's history, but this event was not a surprise, it was a measured and intentional result that was the product of advancing our aggressive growth initiatives and strategy. We prudently positioned the company with ample liquidity ahead of these expected results to afford the ability to maintain our growth and return commitments. With lower capital spending, incremental EBITDA from recently completed capital projects and improved market conditions as a backdrop, we expect Nucor to generate meaningfully higher free cash flow in the year ahead. We entered 2026 with healthy, favorably priced backlogs, supporting both higher shipments and better margins across most of our product lines, and we remain confident that with the broadest range of capabilities and solutions in the North American market, our driven and dedicated team is exceptionally well positioned to create value for our customers and shareholders.

And with that, we'd like to hear from you and answer any questions you may have. Operator, please open the line for questions.

[Operator Instructions] Our first question comes from Lawson Winder from Bank of America.

Dave, I would say congratulations on your new adventures going forward. If I could ask about CapEx and look out to 2027, and by the way, thank you for the detailed guidance on 2026 CapEx. As we think of how falling CapEx might help support Nucor's unfolding free cash flow inflection. Could you just speak to your current view on CapEx for 2027 and in particular, maybe address -- one would be the $950 million for West Virginia in 2026 and how that might be expected to follow on in 2027 with some additional CapEx. And then the breakdown in 2026 CapEx suggests non-expansionary and non-improvement CapEx of about $950 million. And I think we've talked about $600 million in the past? Like what is the latest thinking of sort of ongoing non-expansionary CapEx to just kind of keep the business running?

Lawson, I'll kick this off and then ask Steve to provide a little bit of color as we think about CapEx flowing into 2027, but I do want to begin where you started in thanking Dave and Steve both for their commitment, Dave's 30 years with our company. And again, he and I started our careers together building Nucor Berkeley in the mid-90s, and we appreciate everything you've done and on behalf of our 33,000 team members, Dave. Thank you.

And look, Lawson, the other thing I'll also just mention briefly is 8 straight years of safety performance that our team continues to just exemplify the value of safety and what it means to accept the challenge of becoming the world's safest steel company. It is something that gives me tremendous pride in all of us in Charlotte as they execute each and every day across all of our product groups to these startups, the enhancements, the build outs, the new lines and greenfield operations. It's an incredibly exciting time for Nucor that positions us well for the long term. And as again, we move to the future, we do see a day in time where Nucor will go an entire year without a single injury to any of our team members. So we're going to continue to focus on that as our primary value as we drive all of our business results and again, thanking our team for that.

Finally, the last comment I'll make specific to the CapEx. Look, when we began this journey in 2020, it was to make sure Nucor remained a growth company. We've invested heavily. We've taken meaningful steps. But against that backdrop, Lawson, one of the wonderful things then and now is we didn't have to pivot. We didn't have to change tact of where the company was headed or the direction. In fact, we were coming off some of the best years we've ever achieved as a company when we added the expand beyond portion of our growth strategy, and it remains the same today that we can be incredibly prudent and disciplined with how we think about spending our valuable shareholder capital to grow this company meaningful. Again, the culmination of West Virginia that will start up later this year, will really absorb the majority of that CapEx as we move into 2027.

But Steve, maybe provide some additional details?

Yes, sure. Lawson, just to kind of follow up on what Leon said there. West Virginia will be done at the end of this year, and that team is doing a fantastic job moving that project forward. Busy, as you could imagine, it's a big project. And in the past, we have guided figures of what we would call maintenance capital but included in maintenance capital, I would call, safety, environmental compliance and a certain amount of efficiency projects that are smaller in nature that don't necessarily add new capabilities to us. I would guide you to a figure closer to $800 million a year now for that just because of the inflation that we've seen in the last several years post-COVID and just the size of our company, we're larger now. So as you think about modeling out things beyond '27 and beyond, I'd guide it more towards an $800 million figure plus whatever projects are going on.

Fantastic. And I guess just a follow-up would be on those potential expansionary projects. It feels like you're quite satisfied with the long product business at this point with the step back from a potential Pacific Northwest expansion. Are there areas of the business that you might be able to highlight today as places where you actually might consider some expansionary capital beyond '26?

Yes. Look Lawson, I think without getting very specific and completely not answering your question, I would just guide you to the things that you've seen and how we've looked for growth. And it's coming through the megatrends in our economy, things like data centers, energy, energy infrastructure. Obviously, the ability for us to pivot very quickly and handle the increase in the border wall has been a nice boom for our businesses across Nucor. And finally, the Towers and Structure segments of our growth that we are tremendously excited about, every one of those continues to provide a platform for additional growth. For example, in data centers today, Nucor supplies about 95% of the overall steel demand required for the entirety of a data center. And so again, we look for, okay, what's the next step? How can we continue to maximize our capability set and continue to enhance the growth profile for our shareholders? So we're looking for things that aren't high CapEx. We're looking for businesses that might be countercyclical to the steel industry and trends that we've, I think, been a partner for 6 decades.

And then lastly, I think on the core side, it's how do we continue to invest for the long term that moves us up the value chain and higher value products. And again, you're seeing that in our galvanizing lines in Crawfordsville and Nucor Berkeley, the two galvanizing lines at West Virginia's building. So again, we're thinking about how do we continue to grow and enhance our differentiated position that we have to supply our customers with products that they're going to need today and down the road.

Our next question will be from Timna Tanners from Wells Fargo.

I wanted to take a step back and recall your November 2022 Investor Day, where you talked about through the cycle EBITDA at $6.7 billion. And if you could just refresh us on where we stand relative to that number, what it might take to get there considering the projects that you have? I know those were -- that number was assuming they were complete. But should we assume that, that could be the run rate in 2027 as you finalize some of these projects? Or any updated thoughts there, please?

Yes. A couple of thoughts. First, thank you for referencing that. For me, it was my first Investor Day as CEO. And again, Steve and his new role is Chief Operating Officer as well as CFO, at least for a short time until we announce his successor. Look, we're thinking hard about when the next Investor Day is, Timna, and again, to provide an update against that backdrop. But look, it's something we spend a lot of time thinking through the investments we're making at that time. So look, to answer your question broadly, yes, I think you're thinking about it the right way as we culminate the West Virginia start-up and then bring that to its full ramp capabilities.

At the same time, I would tell you, look, I'm an optimist and I believe in the long-term growth strategy Nucor's had, but I also think we've reached the time in our economy where we've seen import levels, for example, I've never seen in my 30 years at Nucor. So we're poised today to capitalize on those trends as well as the opportunities. And again, I know your background and obviously, how well you understand sheet. The material decrease in the import levels on sheet alone are 4 million tons of consumption that the domestic supply chain gets to now contribute. It is a meaningful number. And so again, I don't know what the next administration brings. But certainly, as we look to '26 in the short-term horizon, may we see import levels staying or maybe even slightly coming down some more.

So Steve, anything you'd add on the Investor Day or the EBITDA that we projected at that point?

No, not really. I think what I would be a little bit clear on, I think I heard you ask about is that good guidance for '27. And I want to hesitate to say that its guidance for '27. The Investor Day materials, which you're familiar with, that others on the call may not be was a mid-cycle guidance around -- after all projects at that time were completed, including West Virginia and the others. And just -- so I'd back off of that being a specific guide toward '27, all the points we made are solid and can be baked into your thinking around '27 but with respect to the ramp-up of West Virginia, that's a big complex mill. It's not going to be at its run rate of EBITDA in '27 among other projects, for example.

Okay. Appreciate that color. Along the lines of what Leon was talking about with the loss of imports, it does make sense that the domestic mills can take share. Can you just give us some thoughts on the spare capacity across your operations and what you might be able to do incrementally to take share from imports?

Yes. Look, again, I think overall, we're in a great position. We're roughly about 85% utilization across our sheet mills, that gives us opportunity to contribute into the spot market and as well as think about the long term. So again, with an import level, overall ADC about 15%. It creates some unique opportunities that we have the room. We have the capability set in our mills. And again, really creates a wonderful time for a ramp-up of a new facility in West Virginia. And so we see more opportunities there as well. I think the Northeast and Midwest corridors provide some unique geographic opportunities for Nucor. And again, I think from a cost position, that mill is going to provide a significant value for our shareholders.

Our next question comes from Bill Peterson from JPMorgan.

Again, congrats to Steve and Dave here. I wanted to follow up on the last question. You discussed shipments or year-over-year shipments are projected to increase by 5%, implying a higher share of U.S. market demand. I think you talked that there's some uplift, you can see, in utilization message sheet. But I guess, should demand support is there upside to that 5% expectation? And what would drive that? Would that be more in your view, sheet played or I guess bar considering that you have Lexington and [ Kidman ] coming online?

Well, yes, Bill, look, do I think it's sustainable? 100%. If you look at our backlogs, again, they're up 40% year-over-year in the steel group, 15% or 16% in our products group. In many of our product groups today, they are record-setting backlogs. I think maybe the -- our earnings call in Q3 and 4, I actually shared some volumes in our structural backlogs. And again, in my opening comments, they are record backlogs and they're historic backlog for what we've seen and it's a market and end-use customer in our [ nonres ] and industrial sectors that we know incredibly well. So when I'm talking to our customers and our customers' customers, the demand picture is robust and it's very optimistic for 2026. We believe that the 5% is not only an achievable number, but the demand profile is going to create some uplift for virtually every product group.

Finally, I'd tell you that as you look at the commodity across the board, we've -- the supply and demand environment, it's not tariffs or a single thing that's driving pricing, but the pricing that Nucor's realized that were announced in Q4 hits almost every product group. Sheet, plate, bar being in many of the product group segments themselves that are all seeing that stick. So look, I think we're entering what should be a better year in 2026. We're very optimistic. And again, we -- the timing of our start-ups in several of the expand businesses and core are coming at a perfect time in a demand environment that's peaking in energy, infrastructure, non-res, border fence, energy infrastructure, towers and structures, and I think positions Nucor incredibly well.

And I wanted to follow up on your comments around trade policy would be your expectations that the tariffs are going to continue without exemptions. So is that kind of a statement on 2026? I guess, are you expecting that to be durable beyond? I'm also trying to get a sense for the risk of lower tariff rates and/or quotas. Maybe these are on the table for the upcoming USMCA negotiations. And maybe what is Nucor lobbying for or positioning for. I guess bottom line is, are you supportive of lower rates for Mexico and Canada? If they have equally high steel tariffs to other regions basically in order to mitigate transshipments. Any sort of specifics on your expectations around trade policy would be helpful.

Yes, Bill, I'll [indiscernible]. Look, let me begin with the end in mind. What Nucor is most in favor of is banning a legally dumped subsidized imported steel to come in and ravage the shores of the U.S. economy period, full stop. How we do that, how that's affected, obviously, it matters greatly. And if you had asked me and you did a year ago, hey, did I think our trade agreement with USMCA as we reinstituted or Trump reinstituted the 232 tariffs would be resolved very quickly, I would have told you, absolutely, I believe that would have been resolved very quickly. But here we are a year later, still not done. And then again, July, the renegotiations come up. But the reality is, I can't tell you, does that end up with a trilateral, lateral agreement, a bilateral agreement. And again, the one-offs on what this current administration is going to do.

What I can tell you is what we've seen out of commerce and USTR is a very supportive trade environment that's Pro America and Pro U.S. manufacturing. So what would we like to see ultimately? Manage strengths in the rules of origin, continued enforcement of the policies that are already on the books, the enforcement of that. And that's why we've been such staunch supporters of the level -- the Playing Field Act 2.0 and still think that needs to pass.

But look, I think as we look to the second half of President Trump administration, you will see a continuation of those Pro America first trade policies and remedies.

Our next question comes from Phil Gibbs from KeyBanc.

On West Virginia specifically, can you just update all of us on some of the new products and market capabilities that, that mill may give you relative to the current fleet of assets that you have right now on the sheet side, just to kind of go back over the investment case and why you're making the move here and -- yes, that's effectively the question, just kind of want a refresher in terms of what it brings you because I know it's a different mill relative to what you currently have.

Yes. Look, Phil, I appreciate the question. I'll kick it off and then ask Noah Hanners to actually give you the specifics of that capability because it's going to be very unique for Nucor. But if we step back to the macro question you asked about why, look, it's the right opportunity. If you look at Nucor's market share in the largest sheet consumer region in the U.S. it's about 15% or 16%. So we have a huge opportunity to grow in that space against what we believe is some competitors that we have ample opportunity to continue to provide a better differentiated value proposition in that market. So the geography of West Virginia, coupled with the state in the Mason County, West Virginia, the people of that state fuels what we believe is going to be an unprecedented growth for us and a capability set unlike anything Nucor has brought to bear in the market. So we couldn't be more excited about the geographic, the technical and again, the people side of the state of West Virginia, they've been an amazing group to work with. We couldn't be prouder of the team we've hired, the work that's being done there.

But Noah, why don't you touch on some of the capability sets of the mill?

Yes. Maybe just to add a little bit more detail to Leon's excitement there, one, we feel great about the strategy to get into higher value-added products. And specifically at West Virginia, that's about 1/3 of that production going into the automotive market. And some of those grades, the quality of the production there will be into exposed automotive an area where EAF production really hasn't played broadly before the U.S. And we're really excited about the capability to get there mostly because of the demand we hear from customers. We've recently got qualified on exposed automotive through another route to our mills and that will really open the door for us to expand our business into the highest quality ongoing production.

The other point I'd highlight is into consumer durables. We haven't had great market share there with the specialty items like appliances. And Leon hit the regionality of this, but we see some pretty substantial growth in demand through some reshoring projects that are being built in that region. So probably those are the two areas that I'd highlight for you, 1 million tons of galvanizing is going to play really well with that. We're going to have the capabilities to match what is a really robust growth in demand for us.

Do you have any carryover CapEx from these major projects like West Virginia into 2027? Steve, I know you talked about $800 million maintenance plus whatever growth you have, and you always have some sort of growth element. But anything left on West Virginia or these other major projects in '27?

Yes, there'll be a small amount, Phil. That's very normal for us to have some carryover between calendar years. So we'll update you more on the outlook in '27 as we get toward the end of '26. I'd love it if the team beats every time and we don't do that, but that's been the historic pattern you're on.

And then if I could sneak one more in just on kind of just a modeling question, high-level question, just because I don't have it in my model. Do you guys have an idea what mill utilizations were for Nucor in general in 2025?

Yes, we do. As I think about our major product groups, somewhere in that 82, 84 range is about the right utilization Phil.

Our next question comes from Katja Jancic from BMO Capital Markets.

I think earlier you talked about beyond the current project pipeline, you would be looking at growth opportunities that would be less capital intensive. In the future, could you talk -- or could you provide a little more color on what the, let's say, annual growth CapEx could potentially be in a more normalized environment without these major projects?

Well, Katja, yes, I appreciate the question, and I'll probably have you back into the numbers because we're not going to exactly tell you the exact amount of dollars. What I would tell you is this, we are committed to a long-term investment-grade credit rating, we're committed to returning at least 40% of our net earnings back to our shareholders in dividends and share repurchases. And quite frankly, beyond that, I want to use the rest, 60% for growth period, full stop. So I want us to be using the money that Nucor is generating to continue to fuel our growth for the next 10, 12, 15, 20 years and beyond. And so that's how you can be thinking about it. We -- again, we provided some details in the 2022 Investor Day that we had. And so again, if you think about through-cycle EBITDA of $7 billion, okay, everything that didn't go back to our shareholders is then going to be used for growth. So again, our M&A teams are working hard and we're really looking really hard this year at -- okay, how do we invest that? How do we continue to grow Nucor in meaningful ways. And I think you're going to see a shift from heavy for investments to heavy adjacencies or what we call the expand beyond investments over the next several years.

Maybe just a follow-up to your comment about M&A, can you talk a little bit more? I know you said adjacencies, are there specific products? Or how should we think about these type of businesses?

Yes, Katja, again, I shared a little bit earlier. But look, we've been fairly open with our investment filters and strategy in M&A and particularly adjacencies that they're going to have some steel centricity. There's going to be some connection to Nucor gaining and using and having the opportunity to have synergies. So something that's going to connect us to, for example, like CHI, with the overhead door businesses in Rytec. What a wonderful adder where they've been a huge player in the residential space, a little less so in the commercial. Well, again, that's where we play in the commercial side. So our teams and our Buildings Group, our Nucor warehouse systems groups to be able to use and combine forces to be able to provide that the hyperscalers and co-locators in the data center. It provides a wonderful platform for us to continue to grow Nucor and as well that business footprint. So when you think about the mega trends in the U.S. today, energy, energy infrastructure, data centers, tower and structures, those are the areas you can be looking and expect that Nucor is searching really hard for those companies that would be additive in where we see synergies and value and creating [ EVA ] for our shareholders.

Our next question comes from Andrew Jones from UBS.

Just a few questions. First of all, on pricing. I'm just curious how you're looking at your pricing policy now given, obviously, we have on import parity, your traditional imports that are probably getting sort of close to $1,000 on HRC. I would guess. I guess if you're talking about like East Asia, they can probably land HRC in the U.S. at close to $800. So given that gap is now growing to import parity versus, say, some of these East Asian countries, like what stops those volumes starting to tick up in the coming months? And do you see that as a material risk? And does that hold you back from potentially lifting prices much there? How do you think about that in the context of changing trade flows?

And I got a second question, if you'll answer that first.

Yes, Andrew, I want to make sure I'm getting at the heart of your question. I think I understood what it is, but Steve, if I missed parts of that or -- jump in. But look, we had similar questions back in '21 and '22 when the U.S. economy was so hot and the world pricing was less, right? We saw spreads of HRC that were $200, $300 a ton and in some cases and short points greater than that. And what's sustainable, and are you taking -- Look, we are a commodity-driven business who values our shareholders and our customers a great deal. It is that bedrock that ultimately dictates pricing, not our wishes. It is what the demand profiles in supply chain is looking like in the U.S.? And what I would tell you is the separation today in the U.S. from the world market is for a good reason. Look at the demand profile against the backdrop of a really healthy and robust economy outside of just steel. You're seeing growth reshoring investments, nuclear energy, like just a number of facets that are creating this. So it's not a false narrative that it's the only reason pricing is up because President Trump put in place tariffs. That's not it at all. Shoot, about 5, 6 months ago, we saw HRC at $800 a ton, it's not that. It's a much broader economic picture of strength in the U.S. and why every foreign investment wants to come and build here. It's why you saw -- and now what was a U.S. company, now a Japanese company in U.S. Steel. It's not an American company today. It is a Japanese-owned company. And you're going to see continued investments from foreign companies that are looking to capitalize and come to the U.S. because of that strength. And so the forecasted [indiscernible] on pricing, look, I'm not going to try to predict. What I would tell you is, based on what we're sharing with you our historic backlogs, volumes, that demand, the robustness that we see in this economy. Again, I think '26 is shaping up to be a very, very solid year for Nucor.

Okay. That's clear. And then just on the CapEx, I mean, you talked about it a bit already, but I guess the guide for '26 was lower than what the street had in and if there isn't substantial overspill into '27, it looks like the cost of some of those projects have come down despite obviously all the tariff risks. I mean, what do you attribute that to? I mean were you building in a lot of contingency that hasn't come to pass or what's changed?

Andrew, this is Steve. In many regards, it's the -- you have to look at '25 coupled with '26. So if you're only looking at '26, it looks like maybe relative to what your estimate would have been that our forecast is lower. But we also -- we ended up spending $3.4 billion, which is a little bit more than a year ago on this call, we would have guided you closer to $3 billion for the spin. So our teams did an outstanding job advancing those projects and we -- as Leon mentioned in his opening comments, we brought a number of projects online this year. So kudos to our team, they covered a lot of ground. We -- there almost arbitrarily there's a year-end stuck in there. But under the course of time, when you look at both of those two numbers together, it's in line. So it's not that there's been a reduction in cost. It's really just timing difference between the two periods.

Okay. That's clear. And just finally, on the M&A front, I mean, obviously, your peers have been pretty active. From the perspective of your market share, I mean, do you think that M&A would be possible for you on the actual upstream steel side of the market, given how large you are relative to others obviously with imports going down? I mean do you have scope or interest in expanding in the upstream side? Or is it mainly just focused on some of those downstream avenues you've alluded to?

Yes, Andrew, look, we are the largest steel producer in the western hemisphere. So yes, every M&A opportunity in our pipeline holds interest. And so where we think we can grow and do and move, we will absolutely do so. But make no mistake, Nucor is a steel company at its heart. And we will continue to grow through adjacencies and expand beyond, but it's the capabilities through our steel that fuel and fund all of that growth. And so yes, as those opportunities emerge, you can bet Nucor's looking hard and evaluating part of how we think about growth in the core businesses.

Our next question comes from Tristan Gresser from BNP Paribas.

Yes. The first one is on the incremental EBITDA from the completed [ deck ]. Could you give us a sense of how much those projects contributed in 2025? And what do you expect in terms of EBITDA contribution for 2026?

Yes. Tristan, that's a great question. So if you just took -- are you talking about just -- I want to clarify, just if you're talking about the projects that came online last year, there's 4 major projects that came online. When you put those along with continued progress at Brandenburg, the delta in the EBITDA is about $500 million between just those 4 projects and progress at Brandenburg. So it's a meaningful uplift in 2026's outlook for us just from those recently completed projects.

Sorry, just to clarify, you expect the $500 million additional contribution for those projects plus Brandenburg in 2026 versus 2025?

Yes. That's the delta and the EBITDA between all of those projects together. Correct.

Okay. No. Got it. And second question, could you provide us a bit of an update on the plate market? You referenced Brandenburg, it would be good to know where the -- what's the situation today? But also on plate, I think we've seen some price hike announcement in December, January. But when I look at spot prices, they've not moved too much. So are you facing some resistance? Can you discuss a bit the demand environment and also keen to get some sort of update on the rebar market and where do you see the ramp-up at Lexington? That would be great.

Okay. Tristan you have -- Brad Ford will kick us off on plate and then maybe Randy, why don't you touch on the start-up in Lexington?

Yes. Thanks for the question. Overall, we're pretty excited about where we're at on plate, entering '26. As we touched on a few times on this call, backlogs are strong. Backlog's in play, they are up 40% from this time last year. And we're coming off a pretty good year in terms of overall domestic consumption, which was up 15% year-over-year. And really the best since we've seen since 2019. Obviously, couple that with an import picture where imports ended 20% down on cut-to-length plate for '25. And a lot of that was in the second half of the year as the market kind of worked through higher levels of imports from earlier in the year.

So [ on told ], we feel pretty strong going into '26. Strength in certain end-use markets, specifically energy, line pipe transmission, wind are pretty strong. Nonres construction continues to be robust. I know Leon's referenced our structural backlog. And then infrastructure and specifically bridge continue to being robust. So strong demand picture, low import levels and strong backlogs, we feel pretty confident going in '26.

Tristan, just to give you update on Lexington. First, I certainly want to thank our Lexington and Kingman teams for their continued focus on safely and successfully ramping up these new investments. We are extremely encouraged by those operations. They're ramping up, developing and how that team is executing on those projects. We continue to hit more and more milestones. Each week, we're setting and breaking production records on a regular basis. So this is an absolutely fantastic time to be bringing these investments up. We are currently sitting with record backlog on that side of the business. So we remain confident that both, quite frankly, our Lexington and Kingman operations will be EBITDA positive by the end of the first quarter, and we would expect both also to be fully ramped by the end of the year.

We currently have no further questions. And I would like to hand back to Leon Topalian, Chair and CEO, for any closing remarks.

Well, thank you for joining us for today's call. We feel very good about the position we're heading into 2026 and look forward to the opportunities we have before us. Thank you to our team for safety, operational and financial performance you delivered in 2025. And thank you to our customers for choosing to do business with Nucor each and every day and thank you, finally, to our shareholders for investing your valuable shareholder capital with us. Have a great day.

Thank you. This now concludes today's call. Thank you all for joining. You may now disconnect your lines.

Good morning, and welcome to Nucor's Third Quarter 2025 Earnings Call. [Operator Instructions] And today's call is being recorded. [Operator Instructions] At this time, I would like to introduce Chris Jacobi, Director of Investor Relations. You may begin your call.

Thank you, and good morning, everyone. I'm excited to join you this morning as the newest member of the Nucor IR team and welcome you to our third quarter earnings review and business update. Leading our call today is Leon Topalian, Chair, President and CEO; along with Steve Laxton, Executive Vice President and CFO. Other members of the new core executive team are also here with us today. and may participate during the Q&A portion of the call.

Yesterday, we posted our third quarter earnings release and investor presentation to Nucor's IR website. We encourage you to access these materials as we will cover portions of them during the call. Today's discussion will include the use of non-GAAP financial measures and forward-looking information within the meaning of securities laws. Actual results may be different than forward-looking statements and involve risks outlined in our safe harbor statement and disclosed in Nucor's SEC filings. The appendix of today's presentation includes supplemental information and disclosures along with a reconciliation of non-GAAP financial measures.

With that, let's turn the call over to Leon.

Thanks, Chris. I want to begin by thanking our 33,000 Nucor teammates for their continued commitment to safety. Our team has been lowering our injury and illness rate every year since 2017, and we are on track to do it again in 2025. This level of performance would be impressive at any point, but to do it through a period of significant growth is an amazing accomplishment. Congratulations to the entire Nucor team and let's make the last 2 months of 2025 the safest in Nucor's history.

Turning to Nucor's third quarter financial performance. We generated EBITDA of approximately $1.3 billion and earned $2.63 of EPS. These results exceeded our third quarter guidance driven by stronger-than-expected shipments from our steel mills and favorable corporate adjustments. Steve will provide more details during his financial update.

We remain committed to prudent capital management on behalf of our shareholders, balancing long-term growth with meaningful shareholder returns while maintaining our industry-leading credit profile. During the third quarter, we reinvested $807 million into the company with the majority of this capital related to growth projects that are nearing completion.

We've also returned approximately $230 million to Nucor shareholders through dividends and share buybacks, bringing our year-to-date returns to nearly $1 billion or 72% of net earnings. We also saw our long-term credit ratings upgraded to A3 by Moody's. Following the Moody's upgrade, we are now rated A- or A3 by all 3 rating agencies, making us the only major North American steel producer to hold that distinction.

Creating value for our stakeholders requires a relentless focus on execution, and I'm proud of the work our team has done to advance our long-term mission to grow the core, expand beyond and live our culture. We are in the final phase of our multiyear capital investment campaign and will complete 4 major projects by the end of this year. Recent milestones include the commissioning of 2 bar mill projects and the commencement of pull production in galvanizing operations at our Alabama Towers & Structures facility. Our 2 new sheet coating facilities at Crawfordsville and Berkeley County remain on track, and the team in Crawfordsville recently processed the first coil through their new galvanizing line.

And construction of our new sheet mill in West Virginia is 2/3 complete and remains on schedule to begin ramping up by the end of next year. Even as we invest to grow our capabilities, we remain focused on leveraging our existing asset base to generate attractive returns for our shareholders. For example, in steel products, we've taken steps to repurpose 2 existing steel products facilities to support our faster-growing Nucor data systems businesses.

And within the steel mills, we have recently decided to no longer pursue a new rebar micro mill project in the Pacific Northwest region. With the recent investments we've made in the bar group, we can serve the Western U.S. and Canadian markets from our current footprint with superior cost and supply chain advantages. We will continue to monitor market developments to ensure the best use of our shareholder capital.

As I've said in the past, our growth strategy is not about growing our capacity. It's about providing more capabilities for our shareholders, customers and team. The investments we're making now to grow our core steelmaking capabilities and expand into downstream steel adjacent businesses will better position Nucor to offer comprehensive integrated solutions unmatched by any of our competitors. And by optimizing our full portfolio to operate as one team, we make it easier for our customers to buy, build and succeed.

Let me now take a few minutes to highlight a couple of the areas where Nucor is improving its position as the supplier, employer and investment of choice within the steel industry. One of these is Nucor's bar mill group. As many of you know, Nucor entered the steelmaking business in 1969 when we began operating our first bar mill in Darlington, South Carolina. Over the following 5 decades, we have harnessed the inherent advantages of scrap-based steelmaking and Nucor's performance-driven culture to grow our bar mill Group into the nationwide powerhouse that it is. The bar mill team has delivered strong results in 2025, fueled by increased demand in the nonres construction markets and infrastructure markets.

With our broad geographic coverage and capabilities, Nucor is well positioned to optimize both product mix and volume regionally. In fact, the team has set quarterly rebar shipment records twice so far this year, first in Q1 and then again in Q3. We also began ramping production in the third quarter at our new melt shop in Kingman, Arizona and our new rebar micro mill in Lexington, North Carolina. Both facilities are strategically located in high-growth regions with reliable access to local scrap supply, enhancing our existing footprint in the Western and Southeast markets. We will continue ramping up operations over the coming months, with both projects on track to be EBITDA positive by the first quarter of 2026.

While we build our leadership in steelmaking, we are also positioning Nucor as a key supplier to high-growth markets, like data center construction. The DOGE construction network is forecasting 60 million square feet of data center construction in 2025, a 30% increase over '24. And the state of Virginia alone has seen 54 new data center permit applications in the first 9 months of the year, underscoring the sector's momentum and long-term growth potential.

With our comprehensive portfolio of products, Nucor is uniquely equipped to partner with leading developers and hyperscalers who increasingly value speed and certainty of execution. We now supply over 95% of all steel products that go into a data center from the building envelope to the interior infrastructure. For example, we're the only provider capable of supplying steel for both conventional structures and preengineered buildings at scale. Inside of data centers, we're accelerating growth in our Nucor data systems businesses, implementing domestic production of server cabinets and increasing capacity for hot aisle containment and data center support structures. This unlocks powerful cross-selling opportunities for our diverse product portfolio, creating better outcomes for customers and driving shareholder value.

Turning to trade policy. We've seen meaningful federal action this year supporting the American steel industry. Section 232 measures and ongoing trade enforcement are curbing imports with finished deal imports down nearly 11% year-to-date through August. Since the broader Section 232 tariffs were implemented, we have seen larger month-over-month reductions in imports and expect the trend to continue.

While imports have decreased since the comprehensive 50% steel tariffs went into effect, they continue to be a necessary tool to counteract the massive amount of overcapacity that persist in the global steel sector. We believe that tariffs must stay in place with no exceptions or loopholes until there are fundamental changes in the global steel industry. Ongoing trade cases continue to provide another important defense against unfairly traded imports. In September, the ITC Commission rule that American steel producers were materially injured by imports of corrosion-resistant steel from 10 countries. Nucor is pleased with the decision, which clears the way for the Department of Commerce to issue final antidumping and countervailing duty orders in the coming weeks.

We are also following the Commerce Department's investigations into rebar imports from 4 countries and expect to see the preliminary determination later this quarter. Overall, we are encouraged by the administration's actions to help level the playing field for the American steel industry. And as North America's largest and most capable steel products company, Nucor is well positioned to create value for our customers and shareholders.

With that, let me turn it over to Steve, who will share additional details about our third quarter financial performance. Steve?

Thank you, Leon, and thank you all for joining us on the call this morning. For the third quarter, Nucor generated net earnings of $607 million or $2.63 per share. Earnings were in line with the second quarter's adjusted earnings per share of $2.60 and above adjusted earnings per share of $1.49 for the third quarter of last year. Year-to-date, Nucor's adjusted net earnings are approximately $1.4 billion or $5.98 a share.

Earnings for the third quarter exceeded the midpoint of our guidance range by approximately $0.50. The guidance beat was driven by 2 main factors: better-than-expected shipments and lower pre-operating and start-up costs. Our steel mills segment realized higher-than-expected shipments in sheet, bar and structural. In September, our Berkeley division set an all-time production record. And as Leon mentioned earlier, the bar group achieved another quarterly record for rebar shipments.

The steel mills group also saw stronger-than-expected shipment levels from several mills coming out of the third quarter planned outages. Additionally, the steel products segment exceeded volume expectations, contributing further to overall outperformance.

Several of our newer operations progressed through start-up activities more rapidly than anticipated, resulting in lower-than-expected pre-operating and start-up costs. Pre-operating and start-up costs for the third quarter were $103 million. Favorable corporate and administrative impacts also contributed to the outperformance. These included lower inventory eliminations due primarily to lower-than-expected inventories in our downstream steel products segment as well as lower overall corporate and administrative costs.

Turning to the segment level results for the third quarter. The steel mills segment generated $793 million of pretax earnings, a decrease of 6% from the prior quarter. We saw improved results across our bar and structural steel groups, but lower profitability in sheet and plate more than offset the gains in longs. We continue to see strong demand for long products and more subdued but stable demand for flats. That said, we are gaining market share and are encouraged by the recent operating performance of our steel mills.

Sheet shipments nearly matched our record volumes set in the prior quarter with sheet backlog tons up 13% year-over-year. And our bar products backlog at the end of the third quarter was 35% higher than the same time last year.

Turning to steel products. We generated pretax earnings of $319 million, down from $392 million in the second quarter. Despite the sequential decline, volumes held up better than expected, with external shipments increasing 4% quarter-over-quarter. However, operating profit was impacted by less favorable product mix, higher substrate pricing and planned outage cost. Our steel products backlog has moderated alongside typical seasonal ordering trends, but ended the third quarter 14% higher year-over-year. The backlog extends well into the second quarter of 2026 for some of our more custom engineered product lines.

Quoting activity remains robust, and we believe this reflects business confidence among our customers servicing the construction and infrastructure markets as well as their confidence in Nucor as a reliable provider of high-quality solutions.

Turning to the raw materials segment. We realized pretax earnings of approximately $43 million compared to $57 million for the prior quarter. The primary driver of the sequential decline was lower pricing, partially offset by lower operating cost.

Moving to the balance sheet. Nucor continues to have a differentiated position of strength and flexibility in our industry. An example of this was on display in the past quarter as evidenced by our recent ratings upgrade by Moody's. And we remain committed to maintaining a strong investment-grade credit profile.

We ended the third quarter with a total debt to capital ratio of approximately 24% and cash of approximately $2.7 billion. We generated $1.3 billion in operating cash flow during the quarter, a testament to Nucor's cash-generating operating model. Capital expenditures totaled $807 million for the quarter, bringing our year-to-date total to $2.6 billion. We now expect full year CapEx to be $3.3 billion for 2025 as some project spending was pulled forward from 2026. We will provide more detail on our CapEx budget for 2026 on our year-end earnings call in January, but we expect overall expenditures to decline by more than $0.5 billion compared with 2025.

The cornerstone of Nucor's capital allocation framework is providing meaningful cash returns to shareholders. During the second quarter, we returned $227 million to shareholders in the form of dividends and share repurchases. Through the end of the third quarter, we've returned nearly $1 billion, representing 72% of Nucor's year-to-date net earnings. During the same period, we repurchased approximately 4.8 million shares at a weighted average price of approximately $126 per share.

Turning to our near- to medium-term demand outlook. I'd like to take a closer look at the distinct demand drivers shaping our flats, longs and steel products markets. While we're seeing varying levels of demand across these products, we expect each will continue to benefit from further declines in imports as the effects of tariffs and trade cases are realized. Beginning with our flat products, we expect strong demand from energy, data centers and advanced manufacturing. At the same time, we're monitoring softer conditions in areas like residential construction, consumer durables, heavy equipment and agricultural machinery. Additionally, new domestic supply is still being absorbed in the market.

Turning to long products. Our bar and structural mills continue to benefit from a number of demand drivers, underpinning a more constructive near-term outlook that we remain mindful of typical seasonal purchasing trends. Infrastructure spending remains elevated. The American Road and Transportation Builders Association reports that bridge and tunnel contract awards are up nearly 20% year-over-year. And 60% of total funds allocated to the IIJA highway projects remain unspent. As Leon mentioned, data centers and energy infrastructure needed to power them will continue to drive pronounced demand for Nucor's long products.

We also see good demand from institutional construction, stadiums, warehouses and chip facilities. In addition, we expect to capitalize on the strong regional demand and gain market share as our North Carolina micro mill and new melt shop in Arizona ramp up.

Finally, in our steel products segment, many of our business lines are benefiting from pockets of strength in nonresidential construction. As the market leader in custom engineered building products like joist and deck, metal buildings and insulated metal panels, we're seeing strong customer interest in our capabilities, particularly from those prioritizing speed, quality and certainty of execution. We also expect healthy demand for our rebar fabrication business and incremental demand for tubular products. That said, we're closely monitoring the impact of evolving trade policy, higher construction cost and persistent softness among residential construction activity.

Turning to our fourth quarter outlook. We expect Nucor's consolidated earnings to be lower than the third quarter. We expect lower total volumes across all operating segments due to a combination of factors, including seasonal effects, Nucor's fiscal quarter continuing 5 less shipping days and 2 scheduled outages at our DRI facilities during the fourth quarter. We anticipate a decline in realized pricing within our steel mills segment, primarily driven by sheet. In contrast, pricing in our steel products segment is expected to remain stable.

Looking ahead to 2026, we expect stable domestic steel demand. With the broadest range of capabilities in the North American steel market, Nucor is confident in our ability to create value for our customers and shareholders as we capture a healthy share of that demand.

And with that, we'd like to hear from you and answer any questions you may have. Operator, please open up the line for questions.

[Operator Instructions] Our first question comes from Alex Hacking from Citi.

Congrats on the strong results. It seems like Nucor shipments are growing faster than the industry and you referenced are gaining share. Could you maybe give more color on the kind of specific products where you're gaining share? Any change in strategy that led to you gaining share?

Yes. Thanks, Alex. Look, let me begin, Alex, with our most important value, and that is the value of safety. We're on track for a historic eighth year in a row of lowering our I&I rates in creating the safest year in the history of our company. And so I just wanted to take a moment and thank the 33,000 team members that execute that incredible value each and every day across 40 states, 300 locations in multiple countries. So again, we begin there.

But specifically to address your question, Alex, yes, we continue to stay very focused in being the market leader means that we've got to do things to stay out in front. And so as we think about how we've restructured and positioned the plate group is a great example of that, where Brandenburg continue to ramp up. And as you heard Steve mention earlier, in his prepared remarks, the pre-operating start-up costs reduction means that Brandenburg is ramping up faster than we had anticipated. They're doing a great job. You'll hear more about that in a few moments, I'm sure as we get into plate later in the call. But plate is another broad example where we're focused on that.

Long products is another where Nucor is going to continue to look for the opportunities to grow in bar and beams in that segment. But ultimately, what I think the strategy that you've seen playing out over the last few years has really wrapped around our commercial and construction solutions group that are looking to attach these major developers, major hyperscalers that are looking for speed and a capability set that Nucor now has in bringing that to the market. So we're getting a ton of pull-through effect in our product groups from the upstream mills from sheet plate or engineered bar all the way through the downstream adjacent segments.

So we're seeing, I think, a lot of that play out, which is increasing our market share. And again, the capability set. You heard me say in my prepared remarks as well, Alex. You think about how white hot the data center trend is today with our Southwest data products acquisition, with our racking group, with the insulated metal panels as well as the breath of steel products that we make, we are now capable of making 95% of all steel components within the framework building and the hot aisle contained within that data center. So again, it offers a very unique solution set for, again, these developers and hyperscalers.

I guess just a follow-up on that point on the data centers, are there specific products that Nucor is selling that are particularly exposed to data centers? I mean I know that choice impact shipments are up over 20% like this year versus last year. Are they an obvious beneficiary from this?

Yes, Alex, it's really the gambit. So insulated metal panels, joys, grading, decking, fasteners, sprinkler, conduit, the foundations, the rebar and the foundations, the civil side, the sheeting on the outside of the building, the overhead doors from CHI, Ritec and so really, it's the full purview. But John, anything you else would you add to that?

Yes, Alex. On the joist and deck side, we're definitely feeling the benefits of the data center build-out as well as e-commerce. And we're just well positioned with these end-use markets because of our industry-leading capabilities, the breadth of our product offering, our nationwide coverage. Right now, our joist and deck backlogs are about 25% higher than what they were a year ago at this time. They extend well into 2026, and we're optimistic about what the next year is going to bring.

Our next question comes from Bill Peterson from JPMorgan.

Congrats on the quarter. Maybe to follow up on this data center opportunity, but maybe to contextualize relative to what I think is a larger market, much larger now, which is warehouses, I guess, based off of your backlog, how should we think about square foot growth beyond 2025, maybe from a market perspective as well as your own opportunity? And is there a way you can, I guess, help quantify or provide any anecdotes on how you're gaining share in the market with like Southwest data products compared to industry growth averages? Just trying to get more context on this opportunity relative to larger awards such as warehouses.

Yes, Bill, let me start with the -- to your point, the larger segment, which is the warehousing. Look, that is probably flat year-over-year and expect it to be about the same in '26. And so again, that peaked, I don't know, '21, '22, where we saw massive from Amazon, others that were building as fast as they could come. So the shift has come in the last 12, 18 months into the data center side. But again, with the energy infrastructure is a big piece of that, that Nucor is, again, tying into Southwest data products enables us to do things in that hot aisle that we weren't able to do prior. But Nucor now has a Nucor warehouse and data systems growth that kind of provides an overarching solution set for, again, these major developers.

And John, maybe unpack that just a little bit further on how we use that go to market with that?

Yes, Bill, when you think about a data center, and it's on our Slide 7 in our presentation, all of the different products that Nucor supplies into that market. And we're the only company that can supply all of those products. Many of our competitors can supply one of them. We have the ability to supply all and we work directly with a lot of these companies to guarantee the surety of their supply to meet their deliveries to get these facilities operational on time. It's a big advantage that we have with that entire portfolio of products. In addition to that, having redundancy in our portfolio we mentioned, we've converted a couple of facilities over the last several months to help the build-out of these data centers because we see that market being so hot moving into the coming years.

Bill, this is Steve. I'd like to just add one thing that's implicit in the questions that you and Alex both ask is a commentary on the flexibility of Nucor's overall portfolio. And so as you see different markets get strong, Nucor has excelled over the years at winning in a variety of different ways. And right now, you're focused in on data centers, and we can capture, as John and Leon described, unprecedented. We're unparalleled with anyone in the space and the ability to gain in that area. But it's not lost on us and shouldn't be on you that Nucor has won at various times when different markets have been strong because of the product diversity and the flexibility that we have in supply in the market.

No, I appreciate that color. I guess maybe just to follow-up, maybe I missed -- or I didn't hear it, but you said data center flat for 26. Is there a sense for how we should think about the data center growth next year? And then I have a follow-up...

Yes. Sorry, Bill. No, warehouse, traditional warehouse would be flat. Data centers are up double-digit growth for the next 5 to 6 years is what every major category where we're looking at is tracking. So I think in my prepared comments, that I opened with the forecast is for 60 million square feet of capacity in 2026. So it's an incredibly fast-growing segment. So not flat on the data center side.

Yes. Well, understood. On my second question, so scrap cost was down, but conversion costs were up. I guess can you speak to what contributed to the latter? Is this related to the new mill ramps? Or is there something else there? And I guess, more importantly, how should we think about this trend into the fourth quarter?

Thanks, Bill. This is Dave Sumoski. So although our cost quarter-over-quarter cost year-over-year are down 5%. But specifically, the items affecting the quarter-over-quarter results are slab costs for CSI. Some of our consumables was up such as refractory and labor was slightly up due to some significant planned outages in the quarter.

[Operator Instructions] Our next question comes from Lawson Winder from Bank of America.

I appreciate the update today. Could I ask about the guide, which, I mean, in the guidance for Q4, you pointed to lower volumes just because of fewer shipping days. I mean, that all makes sense. But you also suggested there was some lower realized cheap pricing factored in. Yesterday, Nucor's CSP was $10 higher. I mean was that factored in? I mean we also saw a competitor raise their pricing by $50 yesterday. How should we think about the movement we've just seen very recently in that?

Yes, Lawson. I appreciate the question. And most of Nucor's sheet deliveries are based on contracts. So while you see the moves today, what I would tell you is you're seeing that typical seasonality and a softer Q2 flow through the order book, which is our projection for Q4 to see lower realized pricing. But again, with the current price increases in that group, we anticipate Q1 will be -- we'll certainly realize those higher pricing. So it takes some time, right, to flow through that.

But on the positive side, there's 2 factors I'd point out in terms of how quickly that can move through. One is the service center inventory side of things is pretty very, well, seasonally low in terms of that overall picture, but also internally to Nucor. We are not sitting on high volumes of inventory at our mills. So it's going to enable us a much faster realization of that pricing you just mentioned. So again, those 2 factors, we'll see that move through the order books into the balance sheet for Q1.

Fantastic. And can I ask on acquisition opportunities? When you look at the relevant acquisition set for Nucor, how would you characterize that in terms of product and region or segment upstream versus downstream? I appreciate any thoughts?

Yes, Lawson, broadly, here's how I would tell you, our mission statement is very [indiscernible]. We launched in January 1, 2020. It's to grow the core, expand beyond and move our culture. The core steelmaking capabilities, you're seeing that with the start-ups of electric fins, micro mill in North Carolina, the melt shop in Kingman, Arizona, they're ramping up and start-up at Crawfordsville's Galv line, Berkley next year, the start-up of our first towers and structures facility in Alabama, the next 2, that will be next year. And then that will ultimately culminate with the start-up of the largest investment in Nucor's history in Mason County, West Virginia, with the most state-of-the-art sheet mill that's going to offer a capability set unparalleled in our industry.

And so we're going to have the breadth of capabilities to provide our customers the steel they need today as well as what they're going to need for tomorrow. So that's the core. As we think about expand beyond, it sits in the CHI and Ritec Southwest data products, our Summit, which is the first acquisition in the Towers & Structures we made. The insulated metal panels group that continues to bring a really differentiated product mix to the Nucor offering. So as we look to the future now is -- again, we don't anticipate building any more greenfield facilities, at least in the near term. That capital is now going to get deployed in the adjacent space as well.

Again, right more we'll leave you that ambiguous. If we think a little bit more about, well, where is that going to go? It's going to go on the mega trends that we're seeing in the U.S. economy like Towers & Structure. So like energy, energy infrastructure, the data center community. So what are the things that we're not providing or don't provide today that again, hit a few boxes, right? So as we look for targets, it's got to be like-minded culture that fits who we are. It's going to be a converter model that we bring in terms of our competencies to that acquisition. Three, it's going to be low capital intensity. And four, we're going to look for 4 and 5 high margins. And fifth, the sort of countercyclical to the traditional cyclicality of steel. So we want something that isn't is affected by the true steel cycles that we see over, again, the last 60 years that we've been in this business.

And again, CHI, Ritec, IMP all provide a much more stable earnings platform. growth throughout all the sectors and highs and lows in both the financial crisis COVID and whatnot. They have -- their return profiles are incredibly stable. And so again, ultimately, our goal is to stabilize Nucor's overall earnings to provide higher highs and higher lows.

Our next question comes from Timna Tanners from Wells Fargo.

I like to ask about my home state is Washington and what's happening in Seattle. So I saw the announcement of not replacing the existing mill. Can you just elaborate on that decision? Does that -- you said you could supply it from other mills. But with imports to the West Coast down, I'm assuming like is there enough supply on the West Coast? Can you supply it from Kingman? And are you just not replacing the existing mall? Or are you just not shutting it down?

Yes. Look, you kind of answered the question within that question as well, Timna. So thank you for it. Look, have a great relationship with the city of Seattle and our team out there does an amazing job connecting with our community, being in that community and welcoming that committee with open arms and how we take care of our safety, the environmental, the sustainability side. So they do a really, really nice job.

But it is as we step back and look at our prudent capital allocation, where our dollars best spent. And where is the best returns on those dollars going to be? With the investment of the melt shop in Kingman, Arizona, our Utah facility and the breadth and exposure of our Seattle mill, we are adequately covered for the Western side of the United States as well as Western Canada. So again, as we step back to really evaluate that, we feel really good about where the mill is and its capability set in Seattle, but couple that with the addition of Kingman's melt shop, and we think we've got a very adequate coverage there. So we're going to use those dollars elsewhere to think about growth. And again, how do we not just meet our cost of capital, but double our cost of capital. How do we make sure that we're generating EVA for our shareholders for the long term? And that's where we're going to put that.

And again, if we don't have that home, as you've seen over the course of the years and following us, Timna, this year, we're at 72% return of our net earnings back to our shareholders and dividends or share buybacks, and that will continue.

Great. That's my next question. But just to clarify, the Seattle mill keeps operating. You're just not replacing it with the micro mill, is that right?

That's correct.

Okay, super. So along the lines of the shareholder returns, your third quarter buybacks at $100 million. Is the smallest you've had, I think, since 2020 when you didn't have any buybacks. Is that correct? And if so, is that a statement of anything? Do you have other uses of capital? Anything you can elaborate on there?

Yes, I'll let Steve answer that. But I would remind you the $13 billion that we've returned back to our shareholders over the last 5 years, but I think you're accurate. But Steve.

Yes. Timna, you're correct. That is the lowest quarterly return we've had, but we remain committed to getting back at least 40% of our earnings every year. We don't necessarily do that every quarter. And so over the course of the year, we're well ahead of that mark. And as Leon alluded to, over the last 5 years, we've given back around 60%. Just under 60% of the earnings. So we've continued that discipline of balancing investment with our capital and growing the company while we also maintain strong liquidity and a strong balance sheet position. We've actually improved that even getting the upgrade from Moody's this past September and give meaningful returns.

So those 3 elements remain in place, and that's not going to change going forward. So I wouldn't get too focused in on the quarter quarterly number. I'd just remind you that we remain very mindful and intentional about the management of those 3 pillars of our capital allocation framework.

[Operator Instructions] Our next question comes from Phil Gibbs from KeyBanc.

Just wondering if you could give us the state of the West Virginia sheet investment in terms of where you are in the spending and your expected start-up time frame.

Yes, certainly, Phil, I'll ask Noah Hanners, our EVP over Sheet Group, to give you a more detailed update. Noah?

Yes. Thanks for the question, Phil. It gives me a good opportunity to congratulate, recognize the team on the progress there. I'd tell you, we're at about 75% on the build. And in terms of capital spending, we're about at that same point now. Most of the 25% we have remaining remains in the labor category. So if you go there today, it looks like a steel mill. And so we have the world's best steelmaking team, and you see the foundation of it starting there with that team in West Virginia. We have done an awesome job that West Virginia team has done an awesome job of bringing in some of the most talented people from across our sheet group and from across Nucor to lead that project.

We've done a great job of hiring and experience and I get often asked about like how do you feel about this investment and we could not be more excited because we're taking this awesome team, and we're giving them the world's best equipment, like they're going to have assets, capabilities there that are the best in our market. And then we are turning them loose in a region where we've been underserved, but where we have really strong customer demand. When you stack those things up, we're going to be extremely successful with that investment, and we're excited about what the future brings for West Virginia.

And then just a question for Steve. On the tax side, is there a distinct difference between your cash tax rate and your book tax rate for '25 and '26, given the recent changes in tax legislation?

No. Surprisingly, Phil, not necessarily because of the way that legislation was written, it accelerates things that start after legislation. Most of our spend has already been started. So to give you a sense and a feel for that, the deferred tax benefits, the cash flow benefits this year in '25 will be around $100 million. And when you look out into '26, that gets -- it will be smaller because of the nature of the bill. So the One Big Beautiful Bill had relatively modest impact for us on that. It does accelerate some of the R&D credits a little bit. That's where some of the gains coming from. But in terms of the capital spending, maybe not as pronounced as you might expect given the dollars we're spending on capital.

Our next question comes from Katja Jancic from BMO Capital.

Starting on the start-up costs, given that you have a couple of projects now that are ramping up, how should we think about these costs over the next few quarters?

Katja, this is Steve. We would expect over the next quarter then to be in line with the third quarter. And give or take, they're going to be in that range into the first quarter as well. So call it $100 million to $110 million a quarter going forward for the next couple of quarters.

And then I think some of the margin compression in the mill segment was tied to the slabs you purchased for the TSI operations. If I'm not mistaken, that mostly comes from Brazil. Is that correct? And if so, why not use more of the material produced internally?

Katja, this is Noah. I'll take that. Yes, mostly from Brazil, and we have been mostly slab served there this year, but we have a team that looks at the decision about whether to supply with internal substrates, so coils from our own mills like Allison or Profertil more to buy slabs. Most of this year, it's made the most economic sense to buy slab and roll it to our hot mill, but there have been months where we supplied a lot more coil. And I would tell you, over the course of this year, we've leaned into more of our own internal substrate. So that team will continue to look at what makes the most economic sense and we'll go that way.

Our next question comes from Andrew Jones from UBS.

I've got a couple of questions on price hikes. And first of all, aborted hike from some of your peers. It sounds from the commentary like you didn't support it. Curious on the reasons there. And then secondly, on plates, curious how you see the market at the moment. Obviously, we've had some relief on the import side or we should have done, and it doesn't seem like the Canada carve-out is coming anytime soon. So I'm curious how you're sort of thinking about pricing and the state of the market in the coming months in play given that sort of tighter supply side?

Okay. Andrew, we'll start off with the bar group. I'll ask Randy to just give you an update on your questions there, and then we'll take it to Brad on plate.

Yes. Andy, thank you for the question. Certainly, we're not going to comment on specific pricing actions. But what I can tell you is that the momentum across our bar products, it remains very strong. We're seeing robust order interest across all regions and key end markets. And as kind of has been mentioned, it's driven by infrastructure projects, chip plants, warehouses and data centers. And that strength is being amplified by the continued growth of our downstream businesses, Nucor rebar fab, Vulcraft and so forth.

So it's also worth noting we have implemented and realized meaningful price increases in merchant bar throughout 2025, supported by our multiyear high backlogs and extended lead times. So all of that gives us confidence as we move through Q4 and into 2026 that the market is strong and ready for us to continue in that space.

Yes. And I'm happy to comment on the plate side. Plate market overall this year has been pretty good. ADC based on the last data we got is trending up around 15% year-over-year, and we're starting to see the impact to tariffs on imports, right? Imports were pretty -- were up a little bit in the beginning of the year, but have come down pretty significantly over the last couple of months.

Similar pockets of strength in plate that you heard from Randy and Leon and Steve around energy, both traditional and renewable, infrastructure. Our bridge business has been very strong this year and then on the nonres construction side. As we sit today, our backlog is 58% higher at the end of Q3 than we ended Q3 of last year. So we're pretty optimistic about where -- about where the plate market is going.

Brad, why don't you touch on just the military applications and great development at Brandenburg as well?

Yes, quick Brandenburg update. Team continues to make significant progress at the mill. We announced last quarter that we achieved EBITDA positive results. We achieved that again in Q3. I'd mentioned some weekly or monthly records from last quarter, but honestly, the team has already shattered his records so far here into Q4.

And then on the product development side, we've had some pretty notable achievements, one being X70 API grade for line pipe. We've achieved qualifications and certifications there and captured a very large order for Q4 and into Q1.

And then on the military side, we're really encouraged by the early-stage military armour trials. Nucor's product breadth in place between our 3 plate mills, really is going to allow us to become the premier plate supplier in the U.S. military.

And then finally, Brandenburg's capabilities, I know we've mentioned on prior calls that we're seeing opportunities with existing customers, and we're really seeing that play out. The capabilities of Brandenburg are allowing us to sell deeper with our current customer base, and we're seeing that in our total plate volumes where we've shipped nearly as much plate through the first 3 quarters this year as we did for all of last year.

That covers the question Andrew.

Just one follow-up on the military side. Curious whether export markets like, obviously, Europe with sort of potential doubling tripling of defense spending. Is that a market you're focused on, given, I guess, with these higher-quality grades as more global market than the U.S. what? Is that a target for Nucor?

Yes. Thanks for the question. Certainly, it's an opportunity. Again, Brandenburg's capability set is unique in the world market. There's only so few folks that can produce the qualities and size ranges engages that Brandenburg can. So defense spending increases not just here in the U.S., but across the world. We're well positioned to take advantage of that.

Our next question comes from Tristan Gresser from BNP Paribas.

The first one is just on your prepared remarks, you mentioned stable demand outlook for next year. But in your presentation, it seems you have a lot of structural tailwinds, especially on resi and infra. So I'm just trying to understand what could be the pockets of weakness next year that would offset that growth? And that stable demand outlook. If you could split that between longs and flats that would be helpful as well.

Yes, Tristan, look, I'll touch on a couple of things that we expect to be, I guess, relatively tepid next year, but it is factored into our comments about next year being stable, and it could be up a couple of percent. But again, it's factored in with some softer markets like heavy equipment and ag, right? We don't see that coming back. We think the tariff impact of that has gotten into those heavy equipment suppliers in agriculture.

We think residential construction is, again, probably not going to be great. Interest rates will certainly help that, and we'll see what the Fed does over the next 70 or 80 days as we finish out 2025. And then auto is probably another one that's not a huge market for us today, again, about 5% or 6%. But one that we think we can continue to grow in because, again, we're increasing our capability sets. But again, I think those are probably 3 areas that we see either flat or down into '26.

All right. That's clear. And maybe just following up on that. I mean consensus has external shipments for the steel mills, I think, below 21 million tons for next year. Obviously, you have all those growth projects coming online and ramping up at different paces. So could you help us understand where the bit of the moving pieces into volumes for next year? And what sort of utilization rates for the new project do you expect? And do you see consensus is conservative or pretty well calibrated at this point?

Well, okay. Look, I appreciate the question and we'll be careful on how much detail we get into for obvious reasons, Tristan. But look, I'm an incredibly optimistic guy. We're sitting on the eighth safest year in the history of Nucor. We've returned $1 billion through the first 9 months of the year. We're ramping up 2 of our products today that we expect in Lexington with Carolina and Kingman, Arizona that we expect to be profitable in Q1 of '26. We've been upgraded by Moody's to A3. We started up the first of 3 Towers & Structures facility in Alabama, the other 2 next year. Continue to grow our capabilities and now make 95% of the data centers that steel that's in data centers that's required, starting up Crawfordsville galvanizing line and Berkeleys galvanizing line, culminating in West Virginia startup next year.

The tsunami of earnings power that's going to be brought to Newport's balance sheet is significant. And so I couldn't be more optimistic about our future and do I think there's upside in our forecast. Absolutely. But look, there's other external factors that we all weighed. But again, the investments Nucor has made are for the long term. Not the quarter-to-quarter, that's the 10-, 12-, 15-, 20-year cycles. And again, I think we are as well positioned today as we have ever been in our history.

All right. All right. No, that's fair. And maybe just a last one on steel products. Is it fair to expect higher ASP into 2026, have you've seen rebar prices going up? And joists and deck, you mentioned good momentum. And if you could also, I think, expand beyond we're supposed to do $450 million of EBITDA for this year? Do you think it's achievable? And lastly, if you could just remind us the timing and EBITDA contribution of the 2 new tower projects that would be also really helpful.

Yes, I'll start with the last. And if I forget the first, either, Steve can help me remember. But -- or you can, Tristan. If we start with the last question you asked about the other 2 towers facilities. Indiana is expected to be up and running midyear of next year and the Utah facility should be end of '26. So again, by the end of next year, we will rival some of the largest players in that space where the capability set that is truly differentiated, Tristan.

It's -- these facilities that are being built aren't -- they're fully automated. They are using the latest technologies that you can imagine that are making these -- the design window for those from a cost and technology standpoint, incredibly advantageous.

The product segment though, is also another area, and I'll let John comment here a little bit, but it's another area for us that we are incredibly optimistic about. If you think about the last 3, 4, 5 years of the products group, they have generated somewhere between 30% and 40% of Nucor's overall net earnings. We have seen in the cyclical market that we're in as a steel company. The products group has reached a new high, and we've seen the low and we're already climbing out. Our backlogs are up 25% to 30% year-over-year. We're seeing pricing stabilized and moving up in most of the segments within that group. And so again, do I think there's a lot of upside as we head into the new year and some tailwinds that could make that better? Yes, I absolutely believe that's to be the case.

Yes. Tristan, this is John. On the pricing side, look, the market is going to dictate what pricing is, but the one that we always get the question around is joist and deck pricing. And as we mentioned last quarter, we're expecting the trend and this is coming to a reality where our order entry is on joist and deck is matching our backlog pricing. That's been the case for about the last 9 months. We're seeing a lot of stability there. And just echoing what Leon said, this -- the margins and the profits produced by these businesses are much stronger than what they were pre-pandemic, which is important for our downstream performance.

All right. And just on the $450 million EBITDA target for Expand Beyond?

Yes. Tristan, thanks for that question. Expand is doing fine. It's hitting its clip, and it's a mixed bag of things as Leon was highlighting some of the progress we're making in towers. Keep in mind that's a bit of a build out, a greenfield build-out. So we still would point people to our long-term run rate of $700 million as a target, and we're not going to back off of that.

Thank you very much. We currently have no further questions. So I just like to hand back to Leon Topalian for any further remarks.

Well, thank you for joining us for today's call and for your questions. Nucor is continuing to execute on our strategy to grow our core steelmaking capabilities while expanding into downstream steel adjacent businesses. I'd like to thank our team for delivering solid financial performance and for your unwavering commitment to become the world's safest steel company. Thank you to our customers for allowing us to serve you and to our shareholders for investing your valuable capital with us. Have a great day.

As we conclude today's call, we'd like to thank everyone for joining. You may disconnect your lines.