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Nucor Corporation (NYSE:NUE)

2012 Annual Meeting of the Stockholders

May 10, 2012 10:00 am ET

Executives

Daniel R. DiMicco - Chairman and Chief Executive Officer

A. Rae Eagle

Randy Jenkins

John J. Ferriola - President, Chief Operating Officer and Director

Daniel R. DiMicco

Good morning. We have a nice lively group today, not as lively as we might have feared based upon the things that have been going on in town in the last 2 weeks, which is nice, but lively enough.

I want to welcome you here all today. I am Dan DiMicco, Chairman and Chief Executive Officer of Nucor Corporation. And not only would I like to welcome you all here today, but all those Nucor employees, teammates, stockholders and others who are listening to the live webcast of this meeting.

As Chairman of the Board of Directors, I would like to call the 2012 Annual Meeting of the Stockholders of Nucor Corporation to order. Rae Eagle, Nucor's Corporate Secretary, will act as Secretary of this meeting. Rae, will you please stand? Thank you, Rae.

We have with us today several key members of Nucor's management team. Jim Frias, Chief Financial Officer, Treasurer and Executive Vice President. Jim -- as I mention your name, please stand up and turn around to the group; Jim Darsey, Executive Vice President of our Bar Products Group; Keith Grass, Executive Vice President of Nucor and President and CEO of the David J. Joseph Company; Ladd Hall, Executive Vice President of the Flat-Rolled Products; Hamilton Lott, Executive Vice President of Fabricated Construction Products; Joe Stratman, Executive Vice President of Beam & and Plate Products and Business Development. And I want to announce today a very special individual, John Ferriola, who was just given an award by the South Dakota School of Mines, an honorary doctorate in metallurgy and materials science. He's supposed to wear his hat and uniform in today but he didn't. John, will you throw your hat and say hello to everybody? Great, [indiscernible] after that, right? And as everybody knows, John is our President and Chief Operating Officer and a Director of the Board of Nucor.

We also have with us today the following current Directors and nominees for election as Directors: Peter Browning, who has served as the Director of Nucor since 1999. Peter was nonexecutive Chairman from 2000 until May 2006, at which time he became the Director of Nucor. Clay Daley, the former Vice Chairman and CFO of the Procter & Gamble Company. Clay has been a Director since 2001. Harvey Gantt, Principal Partner of Gantt Huberman Architects and former Mayor of Charlotte. Harvey has been a Director since 1999. Victoria Haynes, the former President and Chief Executive Officer of Research Triangle Institute. Victoria has been a Director since 1999 as well. Jim Hlavacek, the Chairman and CEO of the Corporate Development Institute. Jim has been the Director of Nucor since 1996 and is joined by his lovely wife, Ursula, today at our meeting. Bernard Kasriel, former Vice Chairman of Lafarge and a Director since 2007. Chris Kearney, the Chairman, President and CEO of SPX Corporation. Chris has been a Director since 2008. And John Walker, Chief Executive Officer of Global Brass and Copper and a Director of Nucor since 2008.

We also have with us today several of Nucor's advisors. Partners from the law firm of Moore & Van Allen, Mike Delaney and Dumont Clarke. And James White who is also here. James? From the accounting firm of PricewaterhouseCoopers, we have Wally Humann, the lead partner on the audit engagement as well as Angela Konkle, the manager of our engagement. Thank you.

We have a few friends of Nucor, former teammates of the company. In particular, Bill Dausch [ph]. Bill, would you like to stand up? Former Vice President and General Manager of Nucor, now into a thriving knife sharpening business and knife sales business and a proud supporter of our American military.

We also have a number of other folks with us today. Chris William, a shareholder of Nucor, a long-time shareholder of Nucor. Jerry Thompson [ph]. Jerry, where are you? There he is. John Sherwood [ph]. John? HE Capps Jr [ph]. Cheryl Capps [ph]. Francois -- all right, Francois, I got the first part right.

Unknown Attendee

Swanepoel.

Daniel R. DiMicco

Swanepoel? Francois. Our regular every year, Randy Jenkins. Randy, welcome back; Jeffrey Rubly [ph], came all the way from California with a business proposition for us today that Mr. Stratman will talk to him about after the meeting. Mr. Stratman, will you identify yourself? And Bill Barnhart. Bill? Welcome.

The Secretary will please report the stockholders present by proxy and in person.

A. Rae Eagle

Mr. Chairman, of the 317,039,194 shares issued outstanding and entitled to vote at this meeting, there are present by proxy and in person more than 275 million shares.

Daniel R. DiMicco

Since the holders of majority of the shares entitled to vote are present by proxy and in person, a quorum is present for the transaction of all items of business. I will ask the Secretary to file the proxies with Nucor's permanent records. Ms. Eagle, will you please report on the notice of meeting sent to stockholders of record as of March 12, 2012? These are the holders entitled to vote at this meeting.

A. Rae Eagle

I present to this meeting my affidavit showing the mailing on or about March 23, 2012, to each stockholder of record as of the close of business on March 12, 2012, the following: proxy statement and notice of 2012 Annual Meeting of Stockholders; 2011 annual report; proxy card and return envelope. Our counsel has advised us that the mailing was made in accordance with all applicable requirements of law, including the regulations of the Securities and Exchange Commission and the rules of the New York Stock Exchange.

Daniel R. DiMicco

Ms. Eagle, would you please annex your affidavit to the minutes of this meeting? Thank you.

Keisha Booker [ph] and Matt Hammond [ph] -- please identify yourselves, there you go -- have been appointed as inspectors of elections as required by Delaware law. They have submitted their oaths of office executed before a notary public, and I ask that their oaths be attached to the minutes of this meeting.

The next order of business is to consider the 3 matters to be voted on today. Proposal #1, that the election of 4 directors to one year. The terms of Clay Daley, John Ferriola, Harvey Gantt and Bernard Kasriel will which expire at this annual meeting. The board's Governance and Nominating Committee has recommended and the Board of Directors has nominated Mr. Daley, Mr. Ferriola, Mr. Gantt and Mr. Kasriel for re-election for one-year terms ending at the annual meeting in 2013. There are no other nominees.

Proposal #2 is the ratification of the appointment of the PricewaterhouseCoopers as Nucor's independent registered public accounting firm. The Audit Committee of the Board of Directors have selected the firm PricewaterhouseCoopers to serve as the independent auditors of Nucor for this year, ending December 31, 2012. PricewaterhouseCoopers is active in such capacity for Nucor since 1989.

And proposal #3 is a stockholder proposal that relates to the standard for electing Nucor's Directors. Randy Jenkins, a representative for the stockholder proponent, is here to present the proposal.

Under Nucor's rules for conduct of its annual meeting, the stockholder or stockholder group offering a proposal, as printed in the proxy statement, is allowed a total of 3 minutes to introduce and discuss the proposal. Randy? Feel free to introduce your proposal.

Randy Jenkins

Thank you again, Mr. Chairman. I am Randy Jenkins, representing the United Brotherhood of Carpenters Pension Fund. The carpenter pension funds are long-term Nucor shareholders, holding approximately 506,000 shares. We appreciate the opportunity to again introduce the majority vote shareholder proposal that we believe advances that important corporate governance reform.

While the majority vote proposal has not passed at previous shareholders' meetings, it has received as high as 40% of the votes cast despite the board's opposition. We believe that the proposal would pass overwhelmingly with board support or board neutrality. The majority of vote standard proposal presents a simpler proposition: in board elections when there's no oppositions to the slate of candidates, each nominee should receive 1/2 the votes cast to be elected. It's fair and reasonable. Unfortunately, the board continues to support plurality voting in director elections, which means that in uncontested elections, the outcome is guaranteed: every nominee will be elected. And while we can understand the board wanting an election standard, which assures the election of each of its nominees, shareholders deserve a meaningful voting right in these elections.

The board touts its director resignation policy as the basis for opposing the proposal. Under the board's resignation policy, a director who is duly elected but who receives a majority of so-called withhold votes is required to tender his or her resignation for board consideration.

Two questions for the board. First, why is this resignation policy built upon withhold votes that are not even legal votes? And second, why should a director, who is duly elected in accordance with state law and the company's governance documents, be required to tender his or her resignation? A director resignation policy only makes sense when combined with the Majority Vote Standard.

A Majority Vote Standard used in uncontested director elections establishes a meaningful vote threshold and provides shareholders meaningful voting rights. A companion resignation policy then provides a post-election process in which the board can exercise its judgment and make decisions on the continued status of unelected directors. This is exactly what over 80% of Americans largest corporations and Nucor's peer companies have done in recent years.

Once again, we urge the Nucor Board to establish a Majority Vote Standard along with this director resignation policy and join the mainstream of American corporations on this important election reform. Thank you.

Daniel R. DiMicco

Thank you, Randy. Nucor's Board of Directors unanimously recommends a vote against the proposal. Nucor already has a corporate governance principle that addresses better and more completely the proponent's concerns about giving stockholders a more meaningful role in director election process.

The polls are now open to vote on these 3 matters presented to the stockholders. If any of you prefer to vote in person rather than by proxy, please raise your hand for a ballot if you have not yet received one. I don't see any hands.

Under Nucor's Charter, stockholders have cumulative voting rights for the election of directors. Cumulative voting means that you have the number of votes equal to the number of shares you own times the number of directors to be elected, which is 4. You may cast the total number of votes you have in favor of only 1 the 4 nominees for director, or you may spread your votes among them as you wish.

With respect to the 2 other proposals, you have one vote for each share that you own. At this time, we will pause briefly for voting.

[Voting]

I'm getting indication that voting has been done by everybody who wanted to and the polls are now closed. I will ask the inspectors of election to count the votes. Are the votes counted? I would now request the inspectors of election to announce the results of the vote.

Unknown Attendee

Mr. Chairman, I submit a certificate of the inspectors of election certifying to the vote.

Proposal #1. Clayton Daley, John Ferriola, Harvey Gantt and Bernard Kasriel have been reelected as directors of the company.

Proposal #2, the selection of PricewaterhouseCoopers to serve as the registered independent accounting firm for the company for the fiscal year ending December 31, 2012 has been ratified by the stockholders.

Proposal #3, the stockholder proposal regarding the Majority Vote has been defeated by the stockholders.

Daniel R. DiMicco

Thank you, Matt. At this time, we will have a brief discussion of Nucor's business that I will present, accompanied by a PowerPoint presentation. Hopefully, we'll be in sync. I won't get too far ahead or behind. Thanks to Mr. Gabriel [ph] and Mr. Lucas [ph].

We have a forward-looking statement up there that I'm sure all of your young eyes can make out because I can't. But, it's the typical one. I won't read it.

Moving along to the next slide. It's titled "The Worst Economic Recovery In History." That's a quote by Professor Edward Lazear that appeared in an article that he had in the Wall Street Journal just recently, April 3, 2012.

Today's economic environment is the most challenging one faced by our country since the Great Depression. Stanford economist Edward Lazear described it very accurately in his recent Wall Street Journal opinion piece entitled, "The Worst Economic Recovery in History." As Professor Lazear notes, the anemic growth rate experienced since the recovery began in the second half of 2009 is well below the growth rate experienced in past recoveries.

While times maybe extremely tough in the economy and steel markets, Nucor's people, the right people, are getting the job done, day in and day out. On behalf of our senior management team and our Board of Directors, I want to thank everyone on our Nucor, Harris Steel, David J. Joseph, Duferdofin and NuMit/Steel Technologies teams for their excellent work in 2011.

Earnings increased almost sixfold to $778 million from 2010's net income of $134 million. And in December, Nucor's board increased our regular or base dividend for the 39th consecutive year. It was worth noting that the base quarterly dividend has increased approximately tenfold over the past 11 years.

Even better, Nucor's superior competitive position is allowing us to use the economic downturn that we are in as an opportunity to grow stronger. The 21,000 men and women of Nucor are continuing a long tradition of our company. We use the good times to prepare for the bad, and we use the bad times to prepare for the good.

What do we mean when we say our team is working together building a stronger Nucor? A stronger Nucor is one positioned to deliver higher highs and higher lows and earnings power through the success of economic cycles. Make no mistake; we are subject to the economic cycle. That type of performance is exactly what Nucor has consistently delivered for nearly 5 decades.

The most recent example being the investments we made during the 2001 to 2003 downturn. They were major contributors to higher highs, with a sixfold increase in cyclical peak earnings from $311 million in 2000 to more than $1.8 billion in 2008.

We also achieved higher lows with cyclical trough earnings for 2009 through 2011, the Great Recession, that were 80% greater than earnings during the 2001 and 2003 trough. And average annual cash generated from operations through the current downturn is more than double the level achieved during the 2001 to 2003 downturn.

Nucor's long-term focus drives our ability to deliver through the cycle industry-leading returns on capital. The graph, the bar in the far right is an indication at relatively equal cash on the balance sheet percentages and what Nucor's return on equity would be over this period of 2004 to 2011 relative to our competition, which is 35.3%, not too shabby.

And Nucor's industry-leading returns on capital drive support -- superior total returns to our shareholders. From September 2000 when Nucor's new generation of leadership was put in place through the end of 2011, Nucor's total return to shareholders of 464% exceeded total returns of 174% for Standard & Poor's Steel Group Index and 4% for the S&P 500 Index.

Nucor teams were growing long-term earnings power, and shareholder value is ongoing. Over the 2008 through 2011 period, we have invested $5 billion of capital in growing our company's future profitability. That is more than double our depreciation and amortization over the same period.

Add to that our 2012 capital spending budget of $1 billion, which will bring our investments to a total of $6 billion since the last cyclical peak in the economy. We're investing and growing earnings power in each major segment of our business.

Of course, steelmaking businesses, as indicated on this slide, with improvements in Memphis, Alabama, Arkansas, South Carolina, our North Carolina plate mill and heat treat facility, our Arizona rod -- wire rod rolling mill and our Duferdofin-Nucor European long products investment.

And we are doing it in our Upstream and Raw Materials businesses: in Louisiana with our DRI facility, in Trinidad with our expansion there at our DRI facility, our natural gas investment, our David J. Joseph scrap bolt-on acquisitions and our David J. Joseph expanded nonferrous metals sortation capability.

And we are doing it in our downstream steel products through our NuMit/Steel Technologies sheet steel processing venture, an expansion in Mexico; Joist and Deck market share expansion, Metal Building Group expanded production and distribution capability and Harris rebar fabrication bolt-on acquisitions.

The bottom line is that Nucor's primed and ready to generate higher highs in earnings once a sustainable economic recovery inevitably arrives. Our focus has never been sharper or stronger than it is today and continuing to be effective stewards of our shareholders' investment in Nucor.

This is why we believe most confidently that Nucor's best years are yet to come. And that's why we have put in place a strategy to deliver on that belief for the decades to come, our 5-pronged growth strategy, of optimizing our existing operations, our Raw Materials investment strategy, our greenfield growth strategy, international growth through partnerships strategy and strategic acquisitions.

The multipronged growth strategy and a multiple growth platforms it has given Nucor, gives our team tremendous flexibility. It positions Nucor to be patient and to go where the growth opportunities are at any point in time. All we care about is growth and profitability and generating attractive returns in our shareholders' valuable capital entrusted to our stewardship, not the desire just to get bigger for the sake of getting bigger.

To our stockholders, our customers, our suppliers and most of all, our teammates, we say thank you for your vital support as members of the Nucor family. Thank you all very much.

At this point in time, I'd like to open -- well, let's put it -- I think I got ahead of myself again. Yes, I did. If there's no further business to come before this meeting, a motion to adjourn is in order.

Unknown Attendee

I move that this meeting be adjourned.

Daniel R. DiMicco

A motion has been made and seconded without objection. I declare this meeting adjourned. At this time, we will open the floor to questions from the audience and our shareholders.

Question-and-Answer Session

Unknown Shareholder

The first question I have this morning would be on the declassification of our Board of Directors. I know we voted on it a few years ago, and we're working on it so we can get to the point where the board would be declassified. Can you just remind us on when that will actually be fully implemented?

Daniel R. DiMicco

Next year.

Unknown Shareholder

Next year. Okay. All right. And then I know that our capital is currently being heavily invested in St. James Parish in Louisiana. Do you have any plans on buying back more stock more aggressively at this stage?

Daniel R. DiMicco

That is something that we always have on our list of things as possibilities. But as you've clearly stated and as you will see going forward, our plan is at is was during the last downturn, just to invest in future growth opportunities for the company, profitable growth. And that's our #1 priority for our use of our capital.

Unknown Shareholder

Has any of our steel been used in the rebuilding of the World Trade Center in New York City?

Daniel R. DiMicco

143,000-plus tons of steel produced by our Nucor teammates is in that building. Before you ask your next question, we happen to have somebody who actually went to the top of that building here recently and experienced that exhilarating feeling. I don't know how many feet up in the air, John? Would you like to share your experience?

John J. Ferriola

I did have the opportunity to visit the site, and those who came up, it was [indiscernible] 12,00 feet [indiscernible] in the World Trade Center. And the very first question I asked [indiscernible], "How does it feel above?" [indiscernible] it feels really good. And that was a little bit of a question. [indiscernible]

Daniel R. DiMicco

Thank you, John. I would add that John has multiple reasons to be proud of that building. Not only is 143,000 plus tons of Nucor Steel and Nucor products going into that building. But also, his son is one of the lead engineers on that project and responsible for helping getting that job done. John Jr. So again, he has multiple reasons to be proud. Anything else, Francois?

Unknown Shareholder

This is one question that I'm always interested in, and it has been asked on our conference call recently. But can you tell us again what percentage of our steel is being exported abroad?

Daniel R. DiMicco

We have a target of around 15% plus or minus. It's become a little bit more challenging with the global situation in the economy and the steel industry. Global slowdown is taking place, even though some places continue to overproduce. So we're probably somewhere, I think on our conference call we said 10% to 12%, about -- 11%.

Unknown Shareholder

Okay. On a side note, we always had Coca-Cola products before the meeting. Why the switch to Pepsi?

Daniel R. DiMicco

I'm not sure I caught that question, but everybody seemed to enjoy it. Would you repeat that, please?

Unknown Shareholder

Why did you switch to Pepsi from Coca-Cola?

Daniel R. DiMicco

Don't ask me. I'm a Coca-Cola fan.

Unknown Shareholder

I'm a Coca-Cola stockholder. Why did you switch?

Daniel R. DiMicco

I think it's the Marriott that made the switch. So you need to get on their -- buy their stock and get on their CEO. At corporate headquarters, we have Coke products.

Unknown Shareholder

My last question would be, would I see any steel come out of St. James Parish before I retire?

Daniel R. DiMicco

Before you retire? When are you planning on retiring?

Unknown Shareholder

It's a joke, Dan.

Daniel R. DiMicco

Thank you for clarifying that, Francois. And the answer is yes. Any other questions from the floor? None? Okay.

Well, if there are no further questions, I would like to thank you all for attending our 2012 Annual Stockholder Meeting -- Whoops.

How did we miss this guy? Mr. Rutkowski, would you please stand up? Mr. Rutkowski, would you please stand up again and stay standing? Just for a second.

As you all know, Joe is one of the Executive Vice Presidents and long-time teammates of Nucor that is responsible for supporting the overall team effort to grow our company over the last 12 years. Joe headed up our Business Development Group, and prior to that headed up our plate mill in Hartford, and our Darlington steel plant and a multiple of other jobs in the company. We're glad to see he's here in good health. And give our best to your wife, Debbie, for us all. Thank you.

I can't believe I didn't bring that up myself. He's wasted away, he's lost so much weight. It's hard to even pick him out anymore. Thank you all very much.

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