Nucor Corporation
Q1 2016 Earnings Call Transcript

Published: 22 Apr 2016

[Operator:]

Good day, everyone, and welcome to the Nucor Corporation first 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 call 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 events 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, only 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.

[John J. Ferriola:]

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

[James D. Frias:]

Thanks John. First quarter 2016 earnings of $0.22 per diluted share were within our guidance range of $0.20 to $0.25 per diluted share. First quarter results included a LIFO charge of $27.5 million or about $0.02 per share higher than projected in our guidance. Excluding the impact of LIFO inventory accounting, the first quarter's performance represented an improvement over the fourth quarter of 2015's adjusted net earnings of $0.45 per diluted share, which included a LIFO credit of $0.41 per share. Market conditions remain challenging during the first quarter but are now improving. Reflecting the impact of the 2014 to 2015 import surge, average steel mill prices and metal margins declined in the first quarter from already weak fourth quarter levels. However, imports have begun to subside, and steel mill pricing and metal margins improved notably by the end of the quarter. As the market bottomed, our team again capitalized on the opportunities provided by such core Nucor strengths as our highly flexible production capabilities and our unrivaled product diversity. Here are three examples. First, Nucor's Sheet Mill Group took advantage of competitor supply curtailments and lower imports to increase first quarter of 2016 shipments 25% over a year ago of first quarter shipments and 32% over fourth quarter of 2015 shipments. Second, Nucor's downstream steel products business achieved year-over-year growth in quarterly profitability as non-residential construction activity continued on its path of gradual improvement. These profitable channels to market also significantly enhanced the performance of our steelmaking business. Third, Nucor's Structural Steel group increased its first quarter shipments volume 15% over the prior-year quarter and 11% over the fourth quarter of 2015. Our teams at Nucor-Yamato, Nucor Steel Berkeley, and Skyline Steel together drove this growth. As the market leader in structural steel, Nucor derives drives great value from being the low-cost producer and offering North America's broadest product portfolio of beams and tiling. A quick comment about our first quarter 2016 tax rate, as it 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 34.4% for the first quarter. Nucor's financial position remains strong. We are the only North American steel producer to hold an investment grade credit rating. Our gross debt to capital ratio was 36% at the close of the first quarter. Cash and short-term investments totaled more than $2.3 billion, a $300 million increase from the end of 2015. This compares with total debt outstanding of $4.4 billion. Our next significant debt maturities are $600 million in notes due in December 2017 and $500 million in notes due in June of 2018. Nucor's strong liquidity position also includes our $1.5 billion unsecured revolving credit facility, which remains undrawn. The maturity for our revolving credit facility was recently extended to April of 2021. For 2016, we estimate capital spending of approximately $500 million. Depreciation and amortization for 2016 is expected to total about $700 million. Our capital spending budget for this year, includes a number of attractive growth projects. You will note the objective of these projects is to expand our portfolio to higher value-added applications, while maintaining our position as the market leader in more commodity products. Examples are

[John J. Ferriola:]

Thanks, Jim. Nucor's strategy for profitable growth is simple, flexible, and focused. Nucor capitalizes on its unrivaled position of strength to gain profitable market share in our core businesses of steel and steel products. We are doing this by taking care of our customers, with our unrelenting focus on providing products and services that our competitors simply can't match. Delivering an unmatched value proposition to our customers and getting paid for that value is how we will earn attractive returns on the valuable capital our shareholders have entrusted to the Nucor team. Anchoring the strategy and its execution is Nucor's business model. Its strength and adaptability is powered by these building blocks that include our culture, our robust balance sheet and cash flow generation through the cycle, our low and highly variable cost structure, our flexible and reliable production capabilities, our product diversity and vertical integration, and our leadership positions in most of the markets we serve. Put together, these competitive strengths provide Nucor with a powerful platform of creating value for our customers. Our teammates have done and continue to do excellent work implementing our multi-pronged strategy for profitable growth. They are doing it by executing on what we call Nucor's five drivers to profitable growth. Through the industry downturn that began in 2009 and continued into 2016, Nucor has invested more than $6 billion in these five drivers that increase our capacity to create and deliver value to our customers. Here are the five drivers to delivering value to our customers and profitable growth to our shareholders

[Operator:]

Thank you. And our first question will come from Evan Kurtz with Morgan Stanley.

[Evan L. Kurtz:]

Hey. Good afternoon, guys.

[John J. Ferriola:]

Good afternoon, Evan, how are you?

[Evan L. Kurtz:]

Doing well. Doing well. So, my first question is on the sheet business. It looks like you posted record shipments number in sheet. And I guess between Gallatin and all the upgrades at Berkeley, I don't really know how high you could go there. I mean, what's the upside on the sheet market for Nucor? What sort of operating rate where the sheet mill is running? If you can give me that number, that would be great.

[John J. Ferriola:]

The utilization rate overall for our company was about – in the steel business, about 74%, and in our sheet group particular, we were operating at about 81%, 82%.

[Evan L. Kurtz:]

Great, thank you. And so, you expect to see a pick-up I guess in volumes and pricing as we move into the next couple of quarters, given that seems there's more gas you can put into the mills?

[John J. Ferriola:]

Yeah. We definitely anticipate seeing an increase in both volume and in pricing as we go into the second quarter. Frankly, when you look at our sheet number that we gave you, clearly, there was a stronger utilization rate in our value-added cold-rolled and galvanized products. And that's really a function of what the market was looking for in the first quarter. Clearly, the demand was greater for cold-rolled and galvanized. So, when you look at the hot band side of our business, we have quite a bit more gas in our tank, so to speak, and we expect that that market to improve significantly as we go into the second quarter. Some of the reasons behind that, clearly, in first quarter and at the end of last year, hot band was the sheet product most impacted by illegally-traded imports and we believe that we're seeing a significant change in that, as the cases are moving forward and people are getting confidence that our administration, our elected officials are going to be enforcing our laws more rigorously. So, we anticipate a pick-up in volume and in pricing in our hot band and, as I said earlier, of the three products galvanized, furlough, and hot band, we've got the most room to expand our hot-band products.

[Evan L. Kurtz:]

All right. Thanks for all the color. My second question is just on trade. Thanks for the detail in your prepared remarks. I did want to dig in a little bit more. There's been a lot of news flow recently as far as USTR, DOC, OECD, a lot of different organizations getting together and talking about taking action on global oversupply in the steel industry. And a couple things that have come up, I guess one in the U.S. has been Section 201, recently Section 232, and I just wanted to get a sense on how – are those two of the actions that are being discussed and are those two avenues that you see is a potential to do more of a blanket tariff on steel coming in?

[John J. Ferriola:]

What I can tell you, let me start by answering your direct question

[Evan L. Kurtz:]

Okay, thanks. I'll turn it over.

[John J. Ferriola:]

Thank you.

[Operator:]

Your next question will come from Garrett Nelson of BB&T Capital Markets.

[Garrett Scott Nelson:]

Hi, thank you. It looks like you pulled back a bit on your share repurchases in Q1 from the amount of stock that you bought back in the fourth quarter. Have your thoughts regarding capital allocation and returning cash to shareholders shifted at all? And by that, I mean are you perhaps considering special dividends in lieu of buybacks in light of the recent share price appreciation?

[John J. Ferriola:]

Let me jump in and start by saying, as you heard during the prepared remarks, our priorities for our cash have not changed at all. First priority, as always, has been investment for long-term sustainable profitable growth; looking at optimizing our existing operations, where we always get our biggest bang for our buck; acquisitions where they make the most sense and where they're not overpriced and if they in fact fit within our five tenets of profitable growth; and greenfield expansions also a possibility. And of course, in a world filled with overcapacity, I have to add to that and say we would only do that in cases where we found very specific niche markets or niche geographical locations where we're not represented well. The second priority is to provide our shareholders with dividends consistent with our success in delivering long-term results. And the third priority would be to opportunistically repurchase our shares when the price is good to do so. In the repurchasing program we mentioned earlier, we had a strike price that we thought was the right number and we bought when we were under that strike price and we stopped when it went over. Now clearly, when we look at where our stock is today, we probably could have been a little bit more aggressive in the buyback. It was impossible to know that at that time. Does that answer your question?

[Garrett Scott Nelson:]

It does. Thanks a lot, John.

[Operator:]

And our next question will come from Phil Gibbs with KeyBanc Capital Markets.

[Philip N. Gibbs:]

Hi. Good afternoon, John, Jim.

[John J. Ferriola:]

Good afternoon. Phil, how are you?

[Philip N. Gibbs:]

Doing well. How are you?

[John J. Ferriola:]

Pretty good.

[Philip N. Gibbs:]

Good. I had a question on the automotive joint venture in Mexico potential with a partner. I'm wanting to just know how you're thinking about that evolution still and getting more into automotive and whether or not, if and when that takes place, you get into more exposed applications or whether or not you stay on the unexposed side. And then also, would you have more interest in other ventures in the future?

[John J. Ferriola:]

I'm going to answer that question in very general terms. I'm not going to address any potential JVs or anything like that. But I will speak to our interest in automotive and our continuing interest in moving up the value chain in automotive. Automotive has been great for us over the last three to five years. We continue to grow our presence there. Our products are being extremely well received by the automotive producers, both the domestic and the new domestics, frankly here and in Mexico. So we will continue to take a more active role in automotive. We will continue to move up the value chain. We have some interest in exposed, but it's not a focal point for us. We think that where we have to we can produce it and we will produce it, but it's not an area that we will put the majority of our efforts. We focus on body light, advanced high-strength steels that go into those products, into those areas. Now when the right opportunities come along for any specialized galvanizing facilities, we'll take a good hard look at them. And if we think that it continues to build upon our ability to grow in that market, we'll take them. I can tell you that Nucor as a whole as well as our products are being well received in the automotive market. Think about the fact that companies in the past, and I apologize if I'm repeating myself, but it's important to think about. When steel is specified for a product that's coming out to a platform, you specify the steel for a platform that's not even going to be stocked and going into production for two to three years. You want to make sure that when you're ready to go into production, the steel, and you specify it for that line, is still around. So the automotive companies are looking hard and making sure that they have reliable suppliers, sustainable suppliers, financially strong suppliers. You can just check the boxes on that when you consider Nucor. So our company and our products are being very well received in the marketplace, and we anticipate continuing to grow in automotive. If you look at just what we've done in Q1, our automotive volume was up about 20% compared to where we were in 2015, and we anticipate it to continue to grow.

[James D. Frias:]

And, John, that's the fourth quarter of 2015.

[John J. Ferriola:]

Thank you.

[Philip N. Gibbs:]

You're saying up 20% versus last quarter.

[John J. Ferriola:]

Yes, Q4 of 2015.

[Philip N. Gibbs:]

Okay. Terrific. And then, if I could ask just a follow-up here on SBQ. Anything different there in terms of the change in landscape? You have a handful of suppliers that are more cash or liquidity constrained right now, and you've got some other players down in terms of rounds production. Have you been able to take advantage of that, I guess, is sub part one. And then two, what are you seeing in the SBQ markets overall in your expectations for the remainder of the year? Thanks.

[John J. Ferriola:]

Well, for the first part of your question, I'll begin and maybe I'll turn it over to Jim Darsey or to Dave Sumoski to fill in on what they see for rest of the year. But you're right, a lot of our competitors are challenged. And as a result of that, there have been some divestitures that they've made that we've been able to pick up on, that have improved our ability to move further down the line, albeit they've been small, but we continue to look for those incremental opportunities to grow our business and move further downstream, Dave, what do you think about SBQ for the rest of the year?

[David A. Sumoski:]

On the idling side of facilities, we've seen a fair amount of facilities idle that produce SBQ and we have taken advantage of that this year and last year. We've gotten qualified on a number of different parts and our quality has been well-accepted into the auto market.

[John J. Ferriola:]

I think that it's important to note that although that market – as you look at last year versus going into this year, that market has been relatively flat. But yes, we've been able to pick up our market – improve our market share in that market even though it's been relatively flat over the last 12 to 14 months.

[Philip N. Gibbs:]

Thanks, John, and I appreciate it.

[Operator:]

Our next question will come from Matthew Korn with Barclays.

[Matthew J. Korn:]

Hey, good afternoon, everyone. Let me ask this on the demand side. With the rapid rebound of sheet pricing we've seen this past month, it seems like all of the credit's being placed on the supply side with lower inventories, reduced import availability. I'm just asking if there are any regions or products or group of buyers where you've actually been surprised of the upside on the demand level. And as a follow-up to that, we've been hearing a lot on the same split in the end market demand for a long time. Auto is very good; machinery and energy are very bad. Has there any sign you're seeing that these weak markets could be bottoming out, and what's your view on how long it might take to, let's say, oil returns to $60 before energy related buyers start calling again. Thanks.

[John J. Ferriola:]

Okay, let me start by saying that there hasn't been much change in the demand market, although we see some areas where we're beginning to see incremental improvement. Obviously, you mentioned automotive being strong; you mentioned the ones that were challenged. But I would suggest that one that we see to continually improve albeit a very slow – albeit at a very slow level is non-residential construction. And clearly, a lot of steel products go into non-residential construction. I also want to make a comment about your question on the oil side. It's clear that we really, particularly Nucor, took – being heavy into hot band took a big hit when the oil market collapsed and the demand for steel into that market collapsed. That said, we really haven't seen any pick-up in it. Now, we recognize that until oil pricing goes go back up into the $60, $70 range, you won't see the kind of drilling that took place in the past. Yeah, people say, well, maybe they'll be drilling at about 50% of the level where it is today for a long period of time. But even with drilling at 50% level it's at today, we haven't seen the pick-up in the steel demand go into the fee, that 50% of the market like we have in the past. So, we anticipate seeing that pick-up some time maybe in the middle of this year towards the end of the year as the steel in the inventory chain begins to use that. And that statement can also be held for when you look at our service center inventories. When you look at – across the board, in almost all of our steel products, service center inventory levels are down. Apparent demand at the service center level is up slightly. So, we see their shipments going up, but inventories coming down. That's good news. So, those are some of the areas that I would share with you.

[Matthew J. Korn:]

I appreciate it, that's helpful. Let me ask then – excuse me, let me ask by asking a question on the other side of the world. There's been a lot in the news, a lot of political commentary around the Chinese and their promise to restrict their capacity at least by 100 million – 150 million tons, several areas down the line. Do you believe – I think it's really different this time. Do you think there's much credibility there? Do you take any comfort at all that there's – they're at least talking about making the kind of changes that we and other countries have been asking for?

[John J. Ferriola:]

I'm going to really be careful with my comments here. But I'd just say, there's an old saying, seeing is believing, and that's my comment. That's my answer to whether or not the Chinese will take the action that they had promised. Now, having said that, I'm going to repeat what I said earlier, because I really believe this is the case. When you look at what took place at the OECD – I was not there personally, but our team was there. And what they reported back to me was an absolute growing level of frustration on the part of the American government and the rest of the governments around the world. Even the more traditional Asian governments intend to be a little bit quieter about being critical that China spoke up in terms of – listen, this is a problem that has to be addressed. If China could go out and say the only reason there's overcapacity in the world is because of the demand drop-off as a result of the economic turn down, it's a ridiculous statement. So at the end of the day, clearly I think that whether or not the Chinese choose to put out anything on their own air, okay, it would be the government – the rest of the governments around the world would take action for them, okay?

[Matthew J. Korn:]

Got it, skillfully said, John. Thanks very much.

[Operator:]

And our next question will come from Jorge Beristain of Deutsche Bank.

[Jorge M. Beristain:]

Hi, good afternoon guys. I just had a question in terms of some color on your raw material segment. We again saw some negative results coming out of your DRI facilities. I was just wondering if you could just talk to – is the wind kind of turning in your favor now, with what we're seeing globally with iron ore prices and the impact on DRI? But secondly, what is leading to sort of the near-term weak operating results there? And could you comment if operationally everything is now sort of on the demand there?

[John J. Ferriola:]

Let's start with the operational side, because there really is good news to report there. Louisiana facility is running very well. The cost of that facility continue to come down. Frankly, the cost at our facility in Louisiana today rival those in Trinidad, which as you know, are world-class. Quality continues to be excellent, coming out of Louisiana. And it continues to be great coming out of Trinidad also. In terms of whether or not the winds are changing, the answer to that is clearly, yes. Not only you referred to the iron ore price increase, but take a look at what's happening with scrap. In the last 60 days, the price of scrap has gone up maybe $70 a ton, $80 a ton. And pig iron pricing over the last two months has gone up about $100 a ton. When you look at those two factors and the impact that, that has on profitability of our – specifically our DRI operations, definitely, the wind is changing direction, and we anticipate much better results going forward. The last point I would make is remember that the economic impact of the – of our raw material group channel, particularly our DRI facilities, impacts our entire company, not just that one particular group. So, when you look at the benefit that we see from that across the steel mills and our ability to optimize our scrap mix, there's a great economic impact across the company as well as that offsets some of the impact of our DRI facilities in the raw material group. When we look at DRI, because of the way that the pricing goes, that we deliver it to our mills, we'll see a smaller improvement in Q2, with the majority of the improvement coming in Q3, because basically, there's a 60-day to 90-day lag in the increase in pricing that we see at our mills because we transferred the DRI to our mills at the time and at the price where the pig iron is delivered to those operations. So there's about a 60-day to 90-day lag in that. So you won't see this – the changing winds have a major impact in Q2 but we will see some, but you'll see a major impact in Q3.

[Jorge M. Beristain:]

Got it. But just to re-clarify, operationally, things are smooth there. It's simply the weak results that we saw in 4Q – sorry in 1Q were just a function of lower pricing.

[John J. Ferriola:]

Yes, very well said. Operationally, we could not be more pleased with the job our team is doing in Louisiana. The quality remains stellar. And as I've said earlier, they've driven the costs down to where they rival our Trinidad operation, which has always been known as world-class both in terms of cost and quality.

[Jorge M. Beristain:]

Got it. And if I could just have a second follow-up, on scrap pricing, obviously we've seen the strong year-to-date gains. How do you see scrap pricing evolving into May and for the second half of the year? And could you be seeing a catch-up play in scrap by the time when steel pricing power levels off?

[John J. Ferriola:]

Joe, what do you think?

[R. Joseph Stratman:]

That's a great question, Jorge. As you said, we have seen scrap demand increase over the last couple months. And quite frankly, that is steel mill demand-driven, especially demand from our EAF mill customers like Nucor, but others. And this demand increase has certainly pulled the price up, as John said, about $70 over the last 60 to 90 days. But this in turn has increased the flow of unprocessed scrap into the yards. As you know very well, scrap is an elastic commodity. So this price increase is starting to improve volumes. So we've seen a significant volume improvement into our scrap yards. So with the supply side improving along with the global reach we have on pig iron, the great performance John just talked about, about our DRI plants in terms of the volumes, the capacity utilization there, we really think that raw material prices, scrap prices are going to flatten out here in the second quarter – flatten out over the next 30 to 60 days. And so that's kind of what we think. I will also say that the big drop here – I think there was a little catch-up going on. Most steel mills in the country were running at pretty low capacity utilizations in the fourth quarter. They had left their inventories drift down a little bit. So what we've seen here in the first quarter is a response to improved steel mill demand orders but also a little catching up and rebuilding of inventories. So as that levels out here in the second quarter, we're going to see scrap prices returning to flat levels.

[Jorge M. Beristain:]

Perfect, thanks very much.

[Operator:]

And our next question will come from Timna Tanners of Bank of America Merrill Lynch.

[Timna Beth Tanners:]

Hey, good afternoon, guys.

[John J. Ferriola:]

Good afternoon. How are you?

[Timna Beth Tanners:]

Doing great, thank you. Question on the flat roll capacity, I think, that we started out the call with. I wanted to just dig down a little bit. If you look at your annualized run rate, it would be under 10 million tons. But as of your last presentation, you said capacity was 13 million tons. So I know you said you could ramp up, but is that 13 million tons like a true amount that Nucor could produce on an annualized basis?

[John J. Ferriola:]

Let me answer this. I'm trying to understand exactly what your question is.

[Timna Beth Tanners:]

It's the last presentation that you guys had on your – on page 13, it says your sheet capacity annually is 13.1 million tons. So if you look at – so I'm just wondering if that – is that a true – can you really produce that amount, or is that a number that implies – that incorporates maybe – or doesn't incorporate some outages or whatnot. I'm just wondering if Nucor would be able to run at a 3 million ton increase annualized from a $0.03 run rate?

[John J. Ferriola:]

We would be able to run at that level. Now we report – that number that you're hearing there is a melt rate. That's our ability to melt steel, about 12 million to 13 million tons. And then when you look at the total amount that we can produce, it always gets a little bit flexible, Timna, because it really depends a lot on mix. You have to take a hard look at what we're running. And as we drift into the higher-quality products, particularly advanced high-strength steels that have advanced high strength, they're harder to run. They have to run at a slower rate. Particularly, when you look at what we've done in our Berkeley facility by going to the wide and lighter facility, that has an adverse impact on the overall capacity. So it really depends, that's why I'm a little hesitant to give a specific number because it really depends on the mix that we're running at any given time. How wide is the product? How light is the product? What is the grade of the product? How hard is the product? What's the strength ratio of the product? All of those are factors. So what we typically do is we talk in terms of – if you want a single number, we talk in terms of what we melt and cast, which is in the neighborhood of 12 million to 13 million tons in our steel mills. The actual product or the capacity of the product coming off of the roller mills, the roller lines, the hot mills will be a function of what is the mix of the product that we're running on that mill at that given time.

[Timna Beth Tanners:]

Okay, I understand. Let me ask a little bit of a looking-forward question on the same idea. So as you pointed out, fewer imports coming in, pretty substantially fewer imports. You've got several integrated mills that don't seem to be restarting capacity. That's another 5 million tons offline. Nucor has, it sounds like, some spare capacity. But you also have this massive cash hoard that we've talked about for a while. Do you think about ways to expand your ability to produce flat rolled? Do you think about the different options out there in the market, more casted perhaps, taking advantage of some melt on the long product side that's not fully utilized, the ATI rolling mill? Like how much of an opportunity do you see there? And is that a priority for you?

[John J. Ferriola:]

Timna, let me answer it this way by starting to say the entire team thinks constantly day and night, weekends, seven days a week, 24 hours a day about how to best invest the cash that we have to enhance our long-term earnings power for our shareholders. Now, clearly, sheet is one. One other thing that's great about our company is that we have such a diversified portfolio, there are so many opportunities across the board to invest, to increase – to profitably grow our company. But you asked specifically about sheet. What would we be looking at in sheet? What we'd look at is not more of the same, but look for opportunities, whether they're organic or through acquisitions to improve our position in some key markets, to move up the value chain, and maybe some further value-added capacity to our portfolio. But at the end of the day, wherever we end up investing it, what I can tell you is that we'll invest it very well and get the best return. And I think that we have evidence that can prove we've known that over the last 10 years – when you look at our return on invested capital over the last 5-year period, 10-year period. We set the pace to the industry. So, I don't want to get cornered into just any one particular area to invest. In terms of sheet products, we would be very reluctant to just add more of the same as we invest in sheet. We look to move further up the value chain, look further down, the further processed area. Maybe it's more cold-rolled, galvanized painting. Those would all be possibilities. Does that answer your question?

[Timna Beth Tanners:]

Yes, sir. I just think, with the low utilization for long products, I wondered, if there was a way to take advantage of some of that melt capacity, if that's something you've considered, specifically?

[John J. Ferriola:]

Yes, there is. And I know exactly what you're thinking about. Clearly, in the past, we've had discussions about caster and where that could be applied. And as you know that we've just sold the license to Mexico – through a company in Mexico, who is a long product producer, who had extra melt, and that's exactly what they're doing. So, that is a possibility.

[Timna Beth Tanners:]

Okay, thank you.

[John J. Ferriola:]

All right, t Thank you.

[Operator:]

And it does appear we have no further questions at this time. I'll turn the conference back over to Mr. Ferriola for any additional or closing comments.

[John J. Ferriola:]

Okay, let me sign off by saying thank you to our customers. We really appreciate your business. We know that without you, there would be no us, so thank you for your business. I want to say thank you to the shareholders for our – that we really appreciate your ongoing confidence and your support. And finally, I want to say thank you to our Nucor teammates for everything that you do for Nucor every day. And most importantly, thank you for doing it safely. Thanks for your interest in Nucor. Have a great day.

[Operator:]

That does conclude today's teleconference. We thank you all for your participation.