Good day, everyone, and welcome to the Nucor Corporation Third Quarter of 2016 Earnings Call. As a reminder, today’s call is being recorded. Later, we will conduct a question-and-answer session, and instructions will come at that time. Certain statements made during this conference will be forward-looking statements that involve risks and uncertainties. The words we expect, believe, anticipate and variations of such words and similar expressions are intended to identify those forward-looking statements, which are based on management’s current expectations and information that is currently available. Although Nucor believes they are based on reasonable assumptions, there can be no assurance that future effects will not affect their accuracy. More information about the risks and uncertainties relating to these forward-looking statements may be found in Nucor’s latest 10-K and subsequently filed 10-Qs, which are available on the SEC’s and Nucor’s website. The forward-looking statements made in this conference call speak only as of this date, and Nucor does not assume any obligation to update them either as a result of new information, future events or otherwise. For opening remarks and introductions, I would like to turn the call over to Mr. John Ferriola, Chairman, Chief Executive Officer and President of Nucor Corporation. Please go ahead, sir.

Good afternoon. Thank you for joining us for our conference call. We appreciate your interest in Nucor. With me for today’s call are the other members of Nucor’s senior management team: Chief Financial Officer, Jim Frias; and our other Executive Vice Presidents; Jim Darsey, Ladd Hall, Ray Napolitan, Joe Stratman, Dave Sumoski, and Chad Utermark. In addition to his leadership of our raw material business, Joe Stratman has recently taken on additional responsibilities as Nucor’s Chief Digital Officer. Joe’s assignment is to lead the development and implementation of an enterprise-wide information system to collect, analyze and distribute commercial, financial and management data. The objectives are two-fold, to drive continual improvement in our decision making and to provide our customers with world-class business-to-business tools and increase the overall value proposition Nucor provides them. Our leadership team in Charlotte would like to thank everyone on our Nucor, Harris Steel, David J. Joseph, Duferdofin, NuMit, Steel Technologies, and Skyline Steel teams for working together to build a safer, stronger and more profitable Nucor. You are the reason, our Company is thriving in theses challenging steel market conditions and will continue to thrive in the years ahead. Thank you. Our teammates at Duferdofin-Nucor, our long product steel making joint venture in Italy, provide a great example of how we respond to adverse market conditions, leveraging significant improvements in costs and product mix. They have increased volume and market share in a very challenging and oversupplied European long product markets. As a result, the Duferdofin-Nucor team has achieved positive EBITDA for the past 12 consecutive months and a positive operating profit for the last four months. They should feel very proud of their accomplishment as they continue their unrelenting drive for continual improvement and a brighter future. We’re very grateful to have them as members of the Nucor team. We also want to extend a very warm welcome to the newest members of the Nucor family. Our Nucor Steel Longview team at our recently acquired specialty plate mill in Texas. Nucor is very proud and very excited to have you on-board. Our Chief Financial Officer, Jim Frias, will now review Nucor’s third quarter performance and financial position. Following those comments, I will update you on the execution of our strategy for long-term profitable growth. Jim?

Thanks, John. Third quarter of 2016 earnings of $0.84 per diluted share were just below our guidance range of $0.85 to $0.90 per diluted share. However, relative to our guidance, our third quarter results included a larger than expected LIFO charge that decreased our quarterly earnings by $0.08 per diluted share. Third quarter earnings were also reduced by approximately $0.04 per diluted share, the net impact of onetime items. These included expenses for settlement of legal issues as well as a net gain related to asset valuation adjustments. The improvement in earnings in the third quarter compared to the second quarter was due to improved performance at our sheet mills and our direct reduced iron or DRI raw materials facilities. The sheet mills experienced improved margins under contract sales, which are priced on a lag basis. The DRI plants experienced improved transfer pricing of the DRI they sold during the quarter to our steel mills. Overall market conditions were very challenging during the third quarter. That was clearly evidenced by a decline in our steel mills segment’s capacity utilization rate to 71% in the third quarter from 83% in the second quarter. Third quarter total steel mill tons shipped decreased by 12% from the second quarter 2016. Our tax rate can be confusing due to the impact of profits from non-controlling interests. Excluding profits belonging to our business partners, the effective tax rate was approximately 32.8% for the third quarter and 32.9% for the first nine months of 2016. Nucor’s financial position remains strong. Our gross debt-to-capital ratio was 35% at the close of the third quarter. Cash and short-term investments totaled approximately $2.3 billion, which compares with total debt outstanding of $4.4 billion. Nucor’s strong liquidity position also includes our $1.5 billion unsecured revolving credit facility, which remains undrawn.…

Thanks, Jim. Nucor’s strategy for profitable growth is working. We can see the payoff even in the challenging markets of the current prolonged downturn. It is evident in our strong cash flow generation and our industry-leading returns on capital. Most importantly, it is positioning Nucor to deliver higher highs and profitability during the inevitable cyclical upturn. We’re executing our long-term growth strategy by leveraging Nucor’s five drivers to profitable growth. The five drivers are: One, strengthen our position as a low cost producer; Two, achieve market leadership positions in every product line in our portfolio; Three, move up the value chain by expanding our capabilities to produce higher quality, higher margin products; Four, expand and leverage our downstream channels to the market to increase our steel mills base load volume, especially in weak markets; Five, achieve commercial excellence to complement our traditional operational strength. I will now update you on highlights of the recent progress implementing our strategy for profitable growth. In August, we completed the acquisition of Joy Global’s steel plate mill in Longview, Texas for approximately $29 million. Annual melting capacity is 180,000 tons. The mill produces specialty plate products, ranging from 1 to 12 inches thick and up to 138 inches wide. That expands Nucor’s plate product portfolio, as the capabilities of our North Carolina and Alabama plate mills reach up to 3 inches thick and 120 inches wide. Customer interest in our broaden plate offerings is very strong. Nucor Steel Longview is booking orders at levels exceeding our expectations. The mill has already doubled its production rate since completion of the acquisition. We are very excited about the opportunities for profitable, long-term growth Nucor Steel Longview offers our plate business. In September, we announced an agreement to acquire Independence Tube Corporation. Independence Tube is the second…

Thank you, Mr. Ferriola. [Operator Instructions] We’ll take our first question from Matthew Korn with Barclays.

So, looking and understanding your expectations for the fourth quarter, as you laid out in this morning’s release, how would you characterize just today, your inbound orders rates versus say two weeks ago or even last month? Are there any signs of buyers’ appetites increasing or their willingness to pay higher prices starting to merge even on the margin?

If you look at the order entry rate, particularly in our sheet products over the last couple of weeks, we have seen an uptick. This was not unexpected. It’s a typical annual order entry trend -- patterns that we see. Towards the end of the third quarter, towards the middle of the third quarter, you start seeing order entry slack, people beginning to look at year-end inventories. This year when you look at the third quarter and people saw scrap pricing starting to decline and also close and to slow down on their order entry rates. But then as they get into the latter part of the third quarter, the end of the quarter, as we go into the beginning of the fourth quarter, we would expect -- we see order entry rate picking up in anticipation of receiving the tonnage in the beginning of the New Year.

Let me ask then, you’ve been very active on the M&A and on the investment front, as you went over. Should we expect more from you as we look over the next six months, has this -- the current price declined in steel; is that dislodge [ph] of the assets that you’ve been interested in? And barring that what would be your sense the potential for any substantial buyback or a lift in the dividend? Thanks.

As we always say, we don’t comment on anything specific but clearly, our financial position is very strong, our cash generation from operations is very strong. We have the ability to go after targets that we think will bring long-term profitable growth to our Company and a great return to our shareholders. So, we are always on the lookout for opportunities. And then, of course as we’ve said many times in the past, if we don’t see any opportunities that are out there that we think will brining value to our Company and we have an excess of cash on hand, we’ll always look at -- we look at the possibility of share back buyback or in one form or another returning cash to our shareholders. But of course our first priority is always long-term profitable growth through investment when the opportunities present themselves.

We’ll take our next question from Curt Woodworth with Credit Suisse.

John, when you look at your volume performance in the sheet mill this quarter, it was fairly similar from utilization rate basis as last quarter -- I’m sorry, a year ago quarter when you were facing pretty severe import pressure as well as a relatively choppy non-res market. Today, you have the greatest [ph] victory as you’ve got non-res improving, auto’s relatively more resilient, and you have the fact a lot of the U.S. blast furnaces have ceded a fair amount of hot band market share to the EAF. So, I’m just curious what is your take on that? And I guess from a macros basis, what do you see maybe is particularly weaker than you thought at the exit of last quarter?

Let me start by making a few comments on your question. When we look at automotive, we see it just about the same as last year; we don’t see it significantly better. In terms of non-residential construction, we really don’t see it much more improved than last year. In fact, if you go through the course of the year, particularly towards the middle of 2016, there was actually a decrease in the activity on non-residential construction. So, we don’t see much of a pop from that side either. And although we have been very successful in our trade cases, particularly on sheet, we’re really just beginning to see the impact of that. And frankly we do see imports going down but still they represent a very large portion of total market share that’s why we continue to fight the battle and we will continue to fight and be successful in the battle against illegal imports. So, we are just beginning to see some of that impact. But let me address another point of the capacity utilization, particularly as it applies here at Nucor. We’ve talked many times about our commitment to pursuing higher value products and we are going to continue to do that. We believe that having improved margins, and profitability is more important than utilization. And as we’ve said in the past, as you move, as you change your product mix to those higher valued, higher quality products that usually has an impact on your run rates in the mills. A great example would be the wide-wide projects at our Berkeley facility or the wider piling sections at our Nucor- Yamato facility. Both of those have reduced the run rate significantly although at much more profitable products. So, we don’t get so hung-up on utilization. We’ve mentioned on the last call and I’ll mention it again that we intend to at the end of the year, take a hard look at how our product mix has shifted over the last several years. It’s been forever since we adjusted the denominator in this calculation. And we’re going to take a hard look at how a product mix shift has impacted our capacity and as a result influenced our capacity utilization. So, that’s how I would answer your question. We’re looking more at the products that we’re producing and we feel good about the way that we’re that shifting our product mix.

And then, just with respect to trade and the Vietnam petition, it seems like there’s a problem of view that processing or cold-rolling material in Vietnam doesn’t fundamentally change the nature -- or does fundamentally change what the product is. Can you just kind of comment on the nuance of that and how you think the Department of Commerce is going to treat that issue specifically?

I’m not going to go into too much detail as this is an ongoing investigation and has not done a final determination on this. We feel strongly, very strongly that our opposition is a strong one, it’s clear to us. Our opinion is it’s clearly an issue of circumvention. You can look at the percentage of imports of cold-rolled products from China into Vietnam and seen a tremendous jump over the last six months. It’s clear what’s going on. And we think that particularly when you look at the political environment today where on both sides of the aisle, there’s a recognition of what’s going on around the world with illegal trade. I feel and our team feels very confident that we’ll be successful this circumvention case.

And your next question is from Jorge Beristain with Deutsche Bank.

Maybe, John, if you could comment about the current pricing that you’re seeing in -- sorry, in the heavy plate market. We just noticed that plate prices have fallen and are basically now below HRC and you’ve recently announced the price hikes. So, if you could just talk about what you’re seeing in that market? That’s my first question.

Well, let me -- I’ll start off and I’ll hand over to Chad, Executive Vice President, In-charge of our plate business. But just as a general comment, obviously, we’re not going to speak about any pricing specific, but the plate market has been very challenging. It’s had a tough year on plate, it doesn’t look like it’s getting much better towards the end of the year. We can go market-by-market but there’s no small market right now that we would point to say that we’re going to see a big pop in price. I would make one comment and then Chad you can build on this. When you look at the pricing levels in place today, personally I feel that it’s just not sustainable over the long term. Chad, would you like to add anything to that.

Thanks, John. I agree, the plate market is very challenged currently. Your assessment of where plate prices are compared to hot-rolled is true that being below hot-rolled prices which they are now according to CRU is something that we have rarely seen over the history of pricing. So, I do not believe that’s sustainable long term. There’s some fundamental demand, challenges out there in the plate market right now. And we did announce recently a plate price increase that was the late last week and we’re monitoring that situation at this time.

I just might mention too Chad that we didn’t have a successful plate trade case against a violator who was dumping a significant amount of plate into the country and that was China. And we had a very positive outcome on that case.

Yes. And there is a very important date coming up in November where we will get the AD rulings from commerce on the remaining eight countries. So, those are some of the things that we’re monitoring closely in the plate market.

Great. And sorry, I had a second question if possible. Just the housekeeping on Independence Tube, would you be segmenting that under your steel products or your structural steel tube segment, which is kind of that’s how your steel mill segment, just to try and understand, sort of how you view that operation in terms of value add?

Jim.

Right now, we’re probably going put it in steel products. We haven’t made a final determination, but we’re thinking it belongs to steel products.

We’ll go next to Timna Tanners with Bank of America Merrill Lynch.

In light of the fact that met coal is all of a sudden back to the region that you I think started to invest in DRI. I wanted to get a sense of if we were to believe that scrap moves with met, are we looking at it again returning to that advantage that you are hoping for in DRI and how’re you thinking about what heads that might offer you in a strong met coal environment into 2017?

Well, clearly there are several things that scrap price tends to be linked to, certainly, one of the most important is volume. And as the mill business picks up, people have greater demand for scarp, price for scrap goes up. There is also a linkage, as you mentioned to coking coal. And we expect to see some small increase as a result of that. But, as we see scrap right now, scrap is at a pretty low number, we think it’s probably at the bottom. As we look out for the rest of the year, we might see a small incremental increase but nothing substantial. Joe, anything you want to add to that?

No, I think you really covered it, John. As we head into the winter, there is always going to be a seasonality issue or potential on scrap a flow, northern scrap yards need to close down or slow down et cetera. But any strength that gives us just probably just seasonal, and ultimately it will follow the demand of the steel mills.

I will take it away scrap for a minute and say that as you look at what’s going to happen as these companies are going into next year’s contract for buying coking coal, we believe that there will be an increase based upon the current spot buy. And obviously on final product, we see that that’s going to put us in a more competitive position then we were when coking coal was at half the price that it’s today.

Right. And DRI versus pig iron, same story, maybe a little more explicit connection to the met coal price?

Yes. Timna, this is Joe Stratman. Clearly that’s true. I mean, obviously one of the major cost components of either pig iron or DRI is what form of reductant do you use and what reductant that -- what cost that reductant is at. So, you compare the cost of coking coal as your reductant in a pig iron environment versus natural gas and the DRI environment, you can clearly see some cost differential depending on where those two commodities are moving.

Timna, if I could just add something quickly and that is this is exactly why we move forward with the DRI strategy. We look at it as we’ve talked about many times just as a hedge. It gives us a flexibility, gives us balance and as cost of raw materials change, cost of raw materials and steel making represent more than 50% of the cost of the product, this gives us a tremendous advantage as things shift. And given, our DRI and our DJ Joseph Company, the ability to buy pig iron or HB iron when it makes sense, DRI facilities to be able to buy scrap internationally. These are the kinds of things when you have these kinds of movements as we’ve seen today in coking coal and really point to the value of our long-term raw material strategy.

Sure. That’s why we asked about it because we are back to those nickel prices [Multiple Speakers]. Okay, alright. I’ll ask the tougher question now. Sorry. So, I know you talked about -- or I guess I’ll ask about Big River I guess to ask a tougher question. By the end of the year, we’re expecting Big River volumes to come on that is little bit in your geographic sweet spot. I know that Nucor has been moving away from commodity steels and to more value add products. But can you give us a little bit more color on how you are thinking about the arrival of Big River values -- volume and what that means for Nucor?

It’s another competitor and we’ve never shied away from competition as well as long it’s fair and legal, we love it. And we’re confident that we can take it on without having an impact upon our business. Certainly, it’s going to hurt the market; certainly, it is going to have an influence on the market. But given what we’ve been doing, particularly in the southeast and then markets that we have been targeting, as we move up the value chain, certainly it’s going to be a while before they can move up into the same areas that -- products that we are producing, particularly the high strengths, franchise [ph] strengths and the automotive kind of markets that we are moving into. So, you’re right, as we move away from -- more and more away from these more commodity grades, we’ll have less of an impact. I’ll also point out to you, Timna, you heard in our script about our Specialty Cold Mill Complex that’s going into Hickman might point out the difference, I don’t know how many miles but not that many miles away from Big River steel. And we are confident that unique mill equipment that we are putting in there, it’s going to give us an ability to produce products that we can’t produce today but products that certainly Big River can’t produce today, and we think that that will give us another edge over them as they come up with their more commoditized products.

Okay, great. And if I could slip on last one on that same thing, I mean if we expect let’s say hypothetically autos is flat going forward from here is our case we made that Nucor could continue to increase its share there and can you quantify that?

Listen, we are very confident. We first of all -- just to comment on your statement, we agree. We think that going into 2017, orders will be basically flat, we don’t see it going up, it might go down a little bit but we don’t see it changing significantly. And even in that environment, we will continue to grow our market share, not only in the types of products that we can produce that go into automotive but frankly in the number of automotive companies that have interest in doing business with us. As we’ve said many times, our target is to reach 2 million tons by 2018; today we are somewhere around 1.4, 1.45 in that range. And the team here will tell you that our next target is 3 million tons by 2021. I will tell you that our next target is to be maintaining tons by 2020. And frankly the JV that you have heard us talk about in the script, the JV with JFE is going to be a big boost, not only in that particular project or on the galvanizing side, but frankly the recognition that Nucor has achieved by being picked as a partner with JFE, clearly the premier automotive field producer in the world will put to bed finally this argument about whether or not automotive grade steel can be made in an electric arc furnace shop, particularly one that has Nucor name on the front of the facility.

We’ll go to next to Evan Kurtz with Morgan Stanley.

I have a question for you on CRU-minus contracts. So, I guess as few years back we started hearing about these for the first time and they cause a lot of problems in the market because it kind of created negative feedback with the pricing. And I thought that they went away, but then I was actually talking to some steel buyers the last few months, and they were talking about having to compete with CRU-minus again. So, I was just wondering if you can give an update like are these a big factor in the market again? Has that changed much over the last few years? And how that’s influencing things right now?

Clearly CRU-minus drifts in and drifts out, depending upon how the market conditions are. And right now, we’ve heard the same things that you’ve heard that there are some companies out there offering CRU-minus contracts again. But, I want to be real clear about this, we do not do that; we don’t think it’s a good business practice. And we take a different approach to it. We think that we sell our products based on quality, service, on-time delivery and we do what we need to do to and be competitive to situations but we do not offer CRU-minus on our sheet business.

And then maybe one other on rebar trade case. So, I know -- the industry tried a trade case on rebar few years back in I guess Turkey and the numbers weren’t really -- rather de minimis. So, what about the case is different this time. I know there’s been some trade laws passed between now and then. How is that going to influence the outcome this time around?

Well, we feel very positive about the outcome. And frankly, we were disappointed with the outcome last time. But you’re right, the recent changes in the trade laws that we had put into effect last year, these levels of playing field that gave us more tools that we could better argue these cases, we believe more successfully argue these cases. And I will tell you that on rebar particular, we think that we have a strong case to be made. But frankly, when you look at the results that came out of the last trade case, particularly as they related to Turkey, there were commitments made during those hearings where Turkey said that they would not increase their imports into the United States, and you talk about the plastic hockey stick, these things went off the charts. And the fact that the way that the country acted with their imports into United States on rebar after the trade cases left on, we think provides tremendous ammunition for us in this case. And we’re anxious to prosecute it.

We’ll take our next question from Phil Gibbs with KeyBanc Capital Markets.

You mentioned a lot of these organic growth projects that you’ve got going on over the next couple of years, any sense in terms of the size, Jim, of the CapEx budget this year and next year just to help us with that?

Yes, we’ve been saying 500 million for this year but that’s actually now going to be up to 635 on a gross basis, because of the reallocation or resetting of our agreements with Encana. But we’re also disposing of a 135 million of assets. So, the net increase is still 500 in our total PP&E. Next year budget has not been set, but I know that there is fairly big ask on the table coming up from the divisions. So, I would think it’s going to probably be at least strong at this year’s that 500 million range.

We’ll take our next question from Aldo Mazzaferro with Macquarie.

A question for Jim on the LIFO. I would have guessed with scrap down and some of the other commodities down that you would be going the other way towards LIFO income. Can you comment on what you might expect for the full year or what drove the higher expected LIFO this quarter?

Yes. So, if you look at where we’re at end of the half, we have $46.5 million of expanse on a gross basis and we’re targeting 93 million for the year. And based on what we did in third quarter, we’re now targeting 141 for the year, which means we are going to have somewhere in the neighborhood, if our estimates today are accurate, in the neighborhood of 35 million of LIFO expense in the fourth quarter. And the reason we bumped up the pace is because of the timing of how -- mainly how, the timing how DIR and pig iron affect us. And we buy pig iron on a lagging quarter basis and it influences our overall cost of DIR as well. And so, those two commodities came in deliveries in the third quarter, and it influenced our inventory overall positioning; it took greater step than we were expecting. So that’s changed our outlook for the balance at the end of year.

Okay, thank you. And John, the question on the -- might be a little political but given both candidates are out there with pretty massive comments on infrastructure, one bigger than the other, and I know Trump has the nickel [ph] on his team. I am wondering whether you one candidate or the other as more beneficial to infrastructure spending and whether you also would expect either candidate to come out with something that could be significant and early in their tenure?

Well, I am just going to make a general comment, say that we’re really pleased that both sides of the aisle, both candidates and both political parties are finally understanding the importance of fair and balanced trade. And we’re really excited about that, whichever candidate that gives in, we hope that they live up to the campaign promises they made to recognize the importance of enforcing our trade laws. And also building on second part of your question, both candidates have spoken about the infrastructure of the United States. And I will tell you to me personally, as you know I come from New York. I was in New York a few weeks ago, the conditions of the highways and bridges in New York are deplorable; it’s an embracement to United States of America. And when you look at some of the estimates that are out there today by different agencies that rate the bridges, rate the roads, they are talking about a need of spending almost $3 trillion over the next five years, just to get them up to a B or B plus level. Think about that amount; that’s tremendous, it’s long overdue. I hope both candidates or whichever candidate -- excuse me, each of the candidates, whichever gets in, lives up to their commitment, both on infrastructure and on maintaining the strong enforcement of our trading loss. And that goes not only for the presidency but for congress also.

And John, the assets that you have not operating today, you know the utilization rate not at 100%, would you say it’s fair that the ones that are not at full capacity are mostly the construction related steels?

As a general statement, yes.

And ladies and gentlemen, that does conclude our question-and-answer session. At this time, I’d like to turn it back over to Mr. John Ferriola for any additional or closing remarks.

So, let me just conclude by saying to our Nucor family, our customers, our shareholders, our teammates, thank you. Thank you for your business, thank you for your support. To our teammates, thank you for your hard work that you do every day. Your contributions have led us to the position of strength that we enjoy today and ensure a bright future for all of us. Most importantly to my teammates, thank you for doing it safely. Thanks for your interest in Nucor. Have a great day.

And ladies and gentlemen, that does conclude today’s conference. Thank you for your participation. You may now disconnect.