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Speech Outline

Speech Outline. Nucor Overview Steel Industry Outlook 2009-2013 U.S. Economy Outlook. Nucor Overview. Nucor’s History.

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Speech Outline

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  1. Speech Outline • Nucor Overview • Steel Industry Outlook 2009-2013 • U.S. Economy Outlook

  2. Nucor Overview

  3. Nucor’s History Ransom E. Olds, creator of the Oldsmobile, had a dispute with stockholders and left his own company – Olds Motor Works. He soon formed Reo Motor Company, which evolved into the Nuclear Corporation of America and ultimately Nucor. Nuclear Corporation acquires Vulcraft, an unassuming producer of steel joists and girders. To run the newly acquired Vulcraft, Nuclear Corporation hires Ken Iverson as CEO. Nucor’s first mini mill to produce merchant steel products, located in Darlington, SC, goes into production Nucor ushers in a new era of steelmaking as thin-slab technology goes on-line at the new mini mill in Crawfordsville, Indiana. It is the first mini mill in the world to make quality flat rolled steel using the technology. Nucor also established a joint venture beam facility with Yamato Kogyo of Japan, utilizing near net shape casting.

  4. Nucor’s History (continued) Dan DiMicco is named the new president and CEO of Nucor. DiMicco has led the company through an unparalleled period of growth. The company moved from green field growth to acquisition based growth. Another world first: Nucor’s Castrip micro mill goes on-line in Crawfordsville, Indiana. This revolutionary technology instantly transforms molten steel directly into steel sheets in just one remarkable step. Compared to an integrated steelmaking facility, the Castrip process consumes about 95% less energy and emits less than one-tenth the greenhouse gases.

  5. Nucor Today • 59 Operating Facilities in 18 states, Italy and Trinidad • Nucor operates scrap-based steel mills in 19 facilities – producing bars, beams, sheet, and plate. • In 2008, 21,682 employees generated $23.7 billion in sales and 20.9 million tons of steel shipments • Corporate Staff of 85 Employees • Harris Steel Group acquired in March 2007. Operated as a separate, wholly-owned subsidiary – 46 rebar fabrication facilities between Canada & United States; 2 cold finished bar, wire & mesh facilities; 11 metal grating facilities; steel trading and distribution • DJJ acquired in February 2008. Operates as a separate, wholly-owned subsidiary – 61 scrap processing facilities; Brokerage and service group, N.A. scrap processing yards; self-service used auto parts stores • Largest recycler in the North America • Largest producer of steel in North America

  6. Nucor Locations • Nucor Facilities • Bar Mill Group (12) • Structural Mills (2) • Sheet Mill Group (4) • Plate Mills (2) • Vulcraft / Verco joist & deck (16) • Cold Finish Group (5) • O Building Systems Group (10) • Fastener Division (1) • Nucon (2) • Harris Steel Group Facilities • Reinforcing Steel Fabrication Plants • - 23 Canadian Facilities • - 12 U.S. Facilities • Cold Finished Bar, Wire, Mesh (“IPG”) • - 2 Canadian Facilities • Steel & Aluminum Grating, Expanded Metal (“IPG”) • - 5 Canadian Facilities • - 6 U.S. Facilities • Int’l Offices: • Novosteel (Trading Co.) • Monterrey, MX • Neuchatel, SWZ Hawaii Kapolei Trinidad Nu-Iron DRI Facility North America’s most DIVERSIFIED steel producer

  7. Market Leadership in North America

  8. High Recycled Content

  9. Steel Industry Outlook 2009-2013

  10. US raw steel production vs. capacity Source: AISI, First River

  11. US GDP vs. Steel Demand1988 to 2008 Steel demand rises when GDP grows >2.5% Global Insight’s US Real GDP Percent Change Estimates 2009 – (2.5%) 2010 – 2.0% 2011 – 2.9% Steel demand falls when GDP grows <2.5% Source: US BEA, AISI, First River

  12. NA auto production forecast Logic Check: NA scraps 14 million per year Imports average 2.5 million NA must build 11.5 just to stay even 35%+ drop this year Average 11.5 2009 to 2013 NOTE:***Ward’s North America Vehicle Production was: 8.2M Vehicles in 2009 and 9.99M Vehicles in 2010 Source: CSM Worldwide (May 2009)

  13. Non-residential construction forecastNo return to 1990 levels thru 2013 Top forecast line is FW Dodge Bottom line is Portland Cement Association 30%+ drop 2008 to 2010 Average 1,115 2009 to 2013 Source: First River, FW Dodge and PCA (Spring 2009)

  14. US finished steel demand forecastWeak throughout forecast period Forecast 110 Actual ADC 35-40% drop this year Average 90-95 MT 2009-2013 Source: CSM, FW Dodge, PCA, WSA, First River

  15. Economic Recovery • Confidence • Credit • Government Action

  16. Recession Unemployment

  17. Consumer Economy in Transition Consumers transitioning from debt-driven economy to savings-driven economy.Consumers using less debt End-use demand determined by what consumers can afford, NOT by what they can borrow.

  18. Consumer Credit1997-2009 Annual % Increase in Consumer Credit Outstanding Consumer Credit During 2001 recession, credit still grew at rates of 5-10% per year Lehman Brothers 2009 - New credit approaching ZERO Source: U.S. Federal Reserve, Consumer Credit Outstanding, Millions of Dollars, Seasonally Adjusted

  19. Government Driving Economy US trade deficit at all time high US debt at all time high US budget deficit at all time high Government is picking up the debt that consumers are shedding.

  20. Government Action Needed in 2009 Consider American Manufacturing when enacting new public policy, such as: Employee Free Choice Act Cap-and-Trade and Climate Change National Health Care Energy Policy Government can drive costs and unemployment up by over regulation or make American manufacturing more competitive and create jobs.

  21. Government Action Needed in 2009 Enforcement of the Rules of International Trade End currency manipulation Challenge illegal export subsidies Fight foreign governments competing in commercial markets

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