John J. Ferriola - Chief Executive Officer, President and Director James D. Frias - Chief Financial Officer, Executive Vice President and Treasurer Raymond S. Napolitan - Executive Vice President of Fabricated Construction Products

Michelle Applebaum - Steel Market Intelligence Inc Martin Englert - Jefferies & Company, Inc., Research Division Nate Carruthers Curtis Rogers Woodworth - Nomura Securities Co. Ltd., Research Division Timna Tanners - BofA Merrill Lynch, Research Division Evan L. Kurtz - Morgan Stanley, Research Division David Galison - CIBC World Markets Inc., Research Division Philip Gibbs - KeyBanc Capital Markets Inc., Research Division Aldo J. Mazzaferro - Macquarie Research Brian Yu - Citigroup Inc, Research Division Luke Folta - Jefferies & Company, Inc., Research Division Anthony B. Rizzuto - Cowen Securities LLC, Research Division

Good day, everyone, and welcome to the Nucor Corporation Second Quarter of 2013 Earnings Conference Call. As a reminder, today's call is being recorded. [Operator Instructions] 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 these 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 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 now like to turn the call over to Mr. John Ferriola, Chief Executive Officer and President of Nucor Corporation. Please go ahead, sir. John J. Ferriola: Thank you, Dana. Good afternoon. This is John Ferriola, Nucor's Chief Executive Officer and President. Thank you for joining us for our conference call. As always, we appreciate your interest in Nucor. With me for today's call are other members of Nucor's senior leadership team: Dan Dimicco, our Executive chairman; Jim Frias, our Chief Financial Officer; and Executive Vice Presidents, Jim Darsey, Ladd Hall, Ray Napolitan and Joe Stratman. Executive Vice President, Keith Grass, is traveling today. First, and most importantly, we want to thank everyone on our teams at Nucor, Harris Steel, David J. Joseph, Duferdofin, NuMit, Steel Technologies and Skyline Steel for your hard work, taking care of all of our customers in what is now the fifth consecutive year of extremely challenging steel market and economic conditions. You have built and continued to build a stronger Nucor by working safely, working smart and working together. The more than 22,000 men and women of the Nucor team, our company's greatest asset and our greatest competitive advantage, you are the right people doing the right things every day. Thank you, all. While steel markets remain challenging, we have a number of exciting updates to share with you today on our success in growing Nucor's long-term earnings power. Nucor is in a position of strength in our industry, and we are growing strongly. We are primed and ready for the inevitable steel industry's cyclical upturn. I will now ask our CFO, Jim Frias, to discuss our second quarter results and financial position. Following Jim, I will discuss the execution on many of our initiatives focused on profitable growth. Jim? James D. Frias: Thanks, John, and good afternoon. Second quarter of 2013 earnings of $0.27 per diluted share were within our guidance range of between $0.25 to $0.30 per diluted share. Consistent with our guidance, there was no LIFO impact on the results for the just completed quarter. By comparison, first quarter of 2013 results included an after-tax LIFO charge of $0.03 per diluted share. On a sequential quarter basis, our steel mills' profitability declined. Our fabricated products business returned profitability in the second quarter, following a modest loss in the seasonally slow first quarter. Fabricated products, which included joist and decking, rebar fabrication and pre-engineered metal buildings have now reported profits for 4 of the past 5 quarters. This improved performance has been achieved during very depressed levels of nonresidential construction. A quick comment about our tax rate since it can be confusing due to the impact of profits from noncontrolling interests. After adjusting out profits belonging to our business partners, the second quarter of 2013 effective tax rate was 35.1%, or slightly higher than normal. Balance sheet strength remains an important attribute of Nucor's business model. Our total debt-to-capital ratio is 31%. Cash, short-term investments and restricted cash totaled $749 million at the end of the second quarter of 2013. Further to Nucor's strong liquidity, our $1.5 billion unsecured revolving credit facility is undrawn, and it does not mature until December 2016. We have no commercial paper outstanding. Nucor is the only steel producer in North America to enjoy the extremely important competitive advantage of an investment grade credit rating. Standard & Poor's highlighted our unrivaled position of financial strength in the steel industry in the second quarter of 2013 review of U.S. metals and mining companies' strongest to weakest. Nucor was again ranked #1 for credit rating and business risk profile among the universe of 66 companies. Nucor's second quarter cash position decreased by $330 million from the immediately preceding quarter. Decline was largely due to the retirement of $250 million of long-term debt maturing in June, as well as of the ongoing funding of our 2013 capital projects. In an uncertain economy, we are well positioned to benefit from the financial flexibility provided by our strong balance sheet and healthy cash flow generation through the cycle. Our balance sheet liquidity and cash flow have enabled us to continue Nucor's long tradition of growing stronger during downturns. 2013 capital expenditures are expected to exceed $1.1 billion. Of this total, we estimate that more than 80% is for what we consider to be strategic investments. The balance is for more recurring or maintenance capital spending. Our strategic investments are viewed as relatively low-risk and high-return projects focused on key objectives, such as lowering our raw material cost and shifting our product mix to include more value-added offerings. Lowering our raw materials cost improves our competitive position and profitability throughout the economic cycle. The shift in our portfolio to more value-added, higher margin products does the same, as well as reducing the competitive pressure we face from imports. The most significance of these investments, which are being completed over the balance of 2013 and into 2014 include: adding a normalizing line at our North Carolina plate mill; constructing our Louisiana direct-reduced iron facility and the related natural gas drilling investments; expanding our South Carolina flat-rolled mills product portfolio to include wider and lighter gauge sheet steel; expanding our north -- excuse me, expanding our Nucor-Yamato structural mills portfolio of sheet piling products to build upon our highly successful 2012 acquisition of Skyline Steel, the market leader in steel piling distribution; and expanding our value-added SBQ production capabilities at our bar mills in South Carolina, Nebraska and Tennessee. As the majority of our strategic projects will be completed by early to mid-2014, we expect lower capital expenditures next year. Total spending at our steelmaking, raw materials and downstream businesses should decline closer to more maintenance-type levels. At the same time, our natural gas drilling expenditures will be at contractual levels, which we have previously disclosed, totaling over $700 million for the 2-year period of 2014 and 2015. Nucor's natural gas investments will secure a long-term, low-cost supply of natural gas, sufficient to cover our expected future steelmaking and DRI production needs for more than 20 years. The performance of wells completed over the past 2 years has exceeded the projections we used to justify this capital allocation decision. That, of course, translates into lower gas cost and high returns from our drilling investments. We also expect our natural gas investments to be cash flow positive by 2016, meaning the cash generated from sales will exceed the cost of drilling new wells. Our team is excited by the opportunities we are executing to continue rewarding Nucor shareholders with very attractive long-term returns under valuable capital. The objective of our growth strategy is higher highs and peak earnings power and shareholder value through successive business cycles. For the third quarter of 2013, Nucor's earnings are expected to improve modestly from the second quarter level. This outlook reflects several factors. Lateral pricing has improved in the recent weeks due to market supply disruptions resulting from production and labor issues in several competitors. Our downstream businesses expect further improvement in earnings in the seasonally strong third quarter. We also expect our David J. Joseph scrap processing operations to benefit from the recent increase in scrap pricing. On the negative side, we expect pre-operating, start costs at our Louisiana due to actually increase in the third quarter. Overall, the outlook continues to be challenged by economic -- excuse me, overall, the outlook continues to be challenged by anemic economic growth and excess global steel capacity. Nucor will again follow our practice of providing quantitative guidance in the final month of the quarter. John? John J. Ferriola: Thanks, Jim. As I mentioned earlier, we are now 5 years into what remains a stagnant global economic environment, and in turn, extremely difficult steel market conditions. Two facts tell the story of this harsh environment. First, in this so-called U.S. economic recovery that began in June of 2009, a realistic measure of the unemployment rate has seen very little progress over 4 years and currently stands at 17.5%. That rate includes the unemployed, underemployed, and those people who have simply given up hope to finding a job and have dropped out of the labor force. Second, imports continue to devastate the margins and output of the steel industry in the United States. Through May of this year, steel imports are running at an annualized rate of nearly 26 million tons. This makes no sense at all, given the fact that American producers are among the lowest-cost producers of steel in the world. The reason it is happening is the failure of U.S. trade policy to address imported steel sold at dumped and subsidized prices in a timely and effective manner. The recent pipe and tube trade case filed against Korea and 8 other countries is yet another example of our country's "too little, too late" approach to enforcing trade laws. Our view remains unchanged. These very serious challenges facing the U.S. economy all have solutions. The time is right and long overdue to reinvigorate the American economy by seizing very real and significant opportunities available to our nation in energy, infrastructure rebuilding and growing a globally competitive U.S. manufacturing sector that can only prosper in a environment of rules-based free trade. Why is it so important that we have effective and timely enforcement of rules-based free trade? If not for dumped steel and subsidized imports, we would have more production and more jobs in the United States. Put simply, the key ingredients required for healthy and sustainable U.S. economic growth are jobs, jobs and more jobs. For the steel industry, it is absolutely critical that policymakers address the issue of China's estimated excess of steel production capacity of at least 200 million tons. Most, if not virtually all of this capacity, is government-owned and subsidized. The bottom line is simple. The Chinese government must reduce government-owned capacity, not build more of it. The Chinese government must also stop providing financing and other subsidies to steel producers that are not cost effective and do not earn adequate returns to be sustained. You can expect Nucor to continue to be proactive and stake out a sound economic policy. It is vital to fulfilling our most important responsibility to be good stewards of our shareholders' valuable capital. The Nucor team has always managed our business with a long-term perspective. With that longer-term view, we are bullish on the profitable growth opportunities for both the American economy and for Nucor. We are optimistic regarding the desire and ability of the American people to do the right things over the long run to reinvigorate our economy. Quite frankly, the time is right for a U.S. economic renaissance fueled by our country's abundant energy resources and a workforce unrivaled in its productivity and ability to innovate. For those reasons, we are busy building a stronger Nucor. To that end, we have invested approximately $8 billion of our shareholders' capital from the last cyclical peak in the economy in 2008 through the end of 2013. As Jim discussed, our most recent period of investment to grow long-term earnings will peak this year. These investments have dramatically expanded Nucor's long-term earnings power. I would also like to reiterate Jim's point that our investments during this downturn are what we consider low risk and high return. Rather than just adding capacity to an oversupplied market, Nucor is reducing its raw materials cost and shifting our mix toward more value-added, higher-margin products. Over the next several years, our unrelenting focus will remain on executing our strategic plan and converting our $8 billion of investments into higher highs and profitability once the next cyclical upturn inevitably arrives. At the same time, we will continue to plan for tomorrow, while executing today. I will now update you on the excellent progress achieved by our team this quarter in executing our strategic growth. Construction is nearing completion on our 2.5 million metric ton annual capacity DRI facility in Louisiana. We expect to begin hot commissioning in August and to start production by the end of September. Our team in Louisiana is doing an excellent job bringing online a plan of enormous scope. For example, the material handling equipment includes 4.5 miles of conveyors. A port facility has one mile of Mississippi River frontage and is capable of receiving vessels as large as 950 feet in length, with cargoes of about 115,000 metric tons. Given the scope of this project, start-up tick ups are to be expected. However, our confidence is extremely high in the process technology. We expect completion of our Louisiana plant, paired with our long-term and low-cost natural gas supply, will be a game changer for Nucor's core structure for high-quality iron units. Nucor is preparing to take a huge step forward in the implementation of our raw materials strategy. Combining Louisiana's capacity with the 2 million tons of annual capacity of our existing Trinidad DRI plant will bring us to our 2/3 of our long-term goal to control 6 million to 7 million tons of annual capacity in high-quality scrap substitutes. In June, our Hertford County, North Carolina plate mill successfully started production on its new normalizing line. The initial output has been well received by our customers, who have noted superior flatness and surface quality of our normalized plate. Our 120,000 tons per year capacity normalizing line will serve attractive end-use markets, such as energy, transportation, shipbuilding and on the plate. Complementing our recent investments in the heat treat facility and a vacuum tank degasser, Herbert County's value-added plate product's annual capacity has now doubled to 240,000 tons. Our bar mill group is on track with the implementation of several projects to expand our SBQ production capabilities at our mills in South Carolina, Nebraska and Tennessee. In the current quarter, the South Carolina mill will start production on its new bar locker. This equipment will allow us to expand our participation in an attractive and underserved bar mill [ph] market in the Southeastern United States. In the second half of this year, our Tennessee mill will commission new state-of-the-art SBQ bar inspection equipment that will provide growth opportunities in supplying precision, engineered bars for the most demanding applications. In late 2013, our Nebraska mill will bring online significant upgrades that include a bar share [ph] straightener and cold shear. Other Nucor SBQ projects are scheduled for completion in 2014. It is important to understand that all of our SBQ investments had one objective: It is to expand the breadth and depth of Nucor's value-added SBQ product offerings. We see many attractive opportunities to better serve existing and new customers with our growing SBQ product portfolio. Our team at Berkeley County, South Carolina sheet mill remains on time and on budget for the first quarter of 2014 completion of its wide range project. This investment involves an upgrade in the modernization of equipment from the top of the caster through the reversing mills. It will provide Berkeley with the capability to produce wider and lighter gauge sheet steel. These expanded capabilities will provide profitable opportunities to move up the value chain in agricultural, [indiscernible] industrial equipment, heavy truck and automotive high-strength and ultra high-strength applications. Our Nucor-Yamato sheet piling product expansion is on schedule for production startup in the second half of 2014. This project will add several new sheet piling sections to their value-added offerings. This initiative is an excellent example of Nucor's time-proven, highest-return strategy for profitable growth investments that optimize our existing operations. In this case, we are expanding the opportunities for profitable growth, both in the production of sheet piling at Nucor-Yamato and in distribution by recently acquired Skyline Steel. While market conditions remain frustratingly challenged, these are nevertheless exciting times for the Nucor family as we grow stronger and stronger. A stronger Nucor is one that continually improves its capability to take care of our customers. As always, we define our customers as being the people who buy and use our products, our teammates and our shareholders. In closing, I want to, again, thank everyone on the Nucor team for working safely, working hard and working together to build a stronger Nucor. Thank you, and please keep it going. We would now be happy to take your questions.

[Operator Instructions] We'll go first to Michelle Applebaum with Steel Market Intelligence. Michelle Applebaum - Steel Market Intelligence Inc: So there was great article in the American Metal Market last week. You gave some interviews, and there were some new things in the article. There was one thing in particular that really surprised me. You said that with -- and I apologize this isn't the great first question. But you were talking about kind of how you would -- how you guys would be running the company going forward. And you said one thing you'll see more emphasis is commercial side. And then you said, "Without a doubt, we're known for our operational prowess. People say Nucor is one hell of an operating company, and we are. They might not say we are one hell of a commercial company, and we're going to change that." I got that's kind of unusual for even a new CEO to come out and say something like that. So I was going to kind of ask you to elaborate on what you meant by that, and where you thought the opportunities might be. John J. Ferriola: Okay. It's a good question. I don't remember using those words in the article, but I'm sure I did. So let me start by making a few comments. Yes, we are focused on commercial excellence. That's an area of improvement that we believe will -- is important to Nucor. I also want to make sure I stressed the fact that we've got a great commercial team, they're doing a great job already. But at Nucor, continuous improvement is our middle name, so we're focused on getting even better in commercial excellence. And I'll talk some of the areas that we will focus on. But I also have to make sure that I stress the fact that we are operationally excellent, and there will be no focus taken off of remaining excellent in our operations. So looking to expand our commercial excellence going forward, this isn't really any change of direction for the company. It's more of an expansion of expectations for all of our teammates. Commercial excellence isn't something that's just done by our commercial team. It's something that's the responsibility of every member of the Nucor family. And as we focus on commercial excellence, we talk about 5 areas of focus. We call them the 5 pillars of commercial excellence. And just going through them briefly, it's being more market driven, it means being more aware, more -- better at anticipating the needs of our customers and finding ways to create value for them. It's being easier to do business with. It's building strong, durable loyal relationships that bring value to our customers and to us. And it's about creating sustainable results, making decisions that are long-term decisions to bring extra value to us and to our customers. And finally, it's about doing it together, leveraging the overwhelming competitive advantage, our 22,000 teammates working together bring to our customers and are, of course, expecting to get paid for that value. Michelle Applebaum - Steel Market Intelligence Inc: Okay. Well, one of the things I wanted to say that really impressed me about you saying that whether those were exactly the words. I know you don't say swear words, so probably not. John J. Ferriola: It might have been a slip of the moment. Michelle Applebaum - Steel Market Intelligence Inc: Is that you've sort of been the Chief Commercial Officer. That sort of have been your mission at the company. So I just want to say -- I'm not going to opine whether what I think of your commercial efforts. But for you to say that about something that sort of been one of your main pillars last 10 years, I think, is quite impressive in and of itself. So I just wanted to say, kudos to you to kind of look for that in the public domain. My second question was an easier question. Why did your capacity utilization drop from 77% in the first half of last year to 72.5% in the first of this year? John J. Ferriola: Well, there was couple of reasons, Michelle. One, that I'll start with is that we had taken fairly large shutdowns in the first half of this year in preparation for many of the projects that we mentioned just a while ago. Our Darlington facility was offline for, I think, 3 weeks in preparing for the projects that we're doing there. NYS was offline for 17 days, preparing for the piling project work that we're doing there. We had a Memphis outage preparing for the second vacuum tank gasser. So we had a lot of things going on. And in addition to that, we typically take an awful lot of our maintenance shutdowns in the second quarter. A lot of our facilities are located in areas where you have extreme heat in summer and extremely cold weather in the winter. So we try to moderate shutdown temperatures by working in the second quarter. So we had a lot of maintenance shutdowns also in the second quarter. I guess, one final point that I would mention is when I look back at the -- at 2012, if memory serves me -- correct me, the first half of 2012, we were very strong on Flat-Rolled Products. Our sheet business was very strong in the first half of 2012, and it's down in the first half of 2013. And part of that, obviously, is driven by the topic that I had early in the opening comments, and that being imports. We've -- we at the whole industry, operating capacity utilization is down as a result of the tremendous number of imports that have been flooding into the United States in the first half of this year.

And we'll go next to Martin Englert with Jefferies. Martin Englert - Jefferies & Company, Inc., Research Division: Looking to the release, you had noted this time around that construction market remain challenged. Last quarter, you kind of highlighted cautious optimism and slow improvement. Has your view changed at all? John J. Ferriola: Well, cautious optimism is the only thing that keeps us going in this market. We'll say it again. There are certain things that we see that give us some slight indication that things might be getting a little bit better. We always look at residential construction as a leading indicator, a 9- to 12-month leading indicator of nonresidential construction. And we have noticed an improvement in residential construction. If past performance holds true, that might lead to an improvement in nonresidential construction in 9 or 12 months. We also take a look at our downstream businesses, and they tend to be leading indicators for nonresidential construction. We look at our backlogs, our order entry rates, and although they haven't been spiking to the level that we'd like to see them, we do see an improvement in those areas. Martin Englert - Jefferies & Company, Inc., Research Division: When you start to look into the, I guess, backlogs and different type of work that's comprised of, is there anything that you're starting to see this cycle as far as the different types of nonresidential construction projects, if there's a greater focus, whether it be in manufacturing or energy versus infrastructure? Is there anything happening there this cycle relative to last that you see is different? John J. Ferriola: Well, I'll just make a couple of general comments. We see industrial nonconstruction being challenged. It's -- frankly, it's down a little bit. On the other hand, we see some of the commercial on residential construction picking up.

We'll go next to Nate Carruthers with Steel Market Intelligence.

So you were just talking about downstream a little bit. But I noticed that your rebar fab shipments are actually down 11% year-over-year in the first half. I guess, I was just wondering, what was driving that? And if you expect any kind of catch-up in the second half? John J. Ferriola: Well, I'll make some general comments, and I'll ask Ray Napolitan to jump in if he has anything he'd like to add. As a general comment, the rebar fabrication and rebar markets in the states -- in the United States have been challenged. Our business in Canada continues to be very strong, and we continue to see that growing. But we -- again, rebar imports have been a challenge for the country. Rebar fabrication, along with nonresidential construction is typically lower. Anything that you want to add, Ray? Raymond S. Napolitan: Well, this is Ray Napolitan. One thing I would add is weather has influenced us in the last -- in the first part of the year here. And shipments have been behind, but we're gradually seeing projects break lose and return to schedule. So weather's probably been the biggest impact of our rebar fabrication.

Okay. So do you expect, I guess, that to pick up a bit then in the second half? John J. Ferriola: I think in Jim's notes, he mentioned that we expect to see our downstream businesses perform a little bit better in the third quarter.

The next is Curtis Woodworth with Nomura. Curtis Rogers Woodworth - Nomura Securities Co. Ltd., Research Division: John, you talked a little bit about even going to lower more maintenance CapEx levels in the future and then harvesting a lot of the investments that you've made over the past couple of years. And it seems like you still have the ability from a liquidity perspective to pursue additional investments. I know that the additional DRI facility is on the table. But can you talk a little bit about the M&A strategy? And if we're in a environment, where the steel consumption growth rates continue to be low, would you look at using more capital to grow the M&A? John J. Ferriola: Let me start by making a comment on the maintenance CapEx. We did not say that we will lower our maintenance CapEx. We will keep the maintenance CapEx at the levels that we've always had at that. We will not in, anyway, sacrifice the condition of our equipment going forward. So we will continue to invest in the maintenance that we need to keep our mills in top-notch condition to produce high-quality product to be able to deliver it to our customers on time, so that's number one. Secondly, I did comment in my statement that we will continue to plan for the future while we execute today. And what I meant by that was that we will continue to be opportunistic in our M&A activities. If we see a great opportunity coming down the pipe, we're going to jump at it. A great example of that would be Skyline just last year. And we weren't anticipating that coming along. We didn't really plan for it, to be honest with you. But when the opportunity presented itself, we went after it, and successfully. And it's been a great addition to the Nucor family. We're really happy and proud to have them as part of the Nucor family. So we'll continue to look at opportunities. We'll continue to be opportunistic as we approach them. The point that I do want to stress though is we are focusing on execution. We've invested $8 billion growing our company. That's a lot of money. Our shareholders rightfully so have the expectation that we will convert that investment on their part into higher highs during the inevitable up cycle that we know is coming. So we are going to continue to look at M&A. There's really no difference in our strategy except perhaps we'll be a little bit more opportunistic as we look at those things that come across and become available. But we are going to focus our attention heavily on executing on the investments that we've already made.

We'll go next to Timna Tanners with Bank of America Merrill Lynch. Timna Tanners - BofA Merrill Lynch, Research Division: I really appreciated some of the detail that you gave on a lot of the different projects. Maybe this isn't the venue, but it'll be helpful to try to get a little more color on not just the timing but volumes or potential margin contribution. I don't know if that's something that you could offer at a later point or if you have some color that you can provide on some of the projects now. John J. Ferriola: Well, we've given some detail on the volume, so we are not going to be giving anything out on the margin improvements. That's information that I'm sure some of our competitors who are probably listening to this call would love to hear. We're not going to accommodate them. But we've talked about the SBQ, value-added volumes, in -- we talked roughly in terms of 1 million tons of additional -- and we want to stress this. It's very important to stress, this isn't just additional capacity in the SBQ business. There's a plenty of capacity out there, and there's plenty more capacity coming online. Our focus is twofold, focusing on adding to our value-added portfolio and on improving the effectiveness and efficiencies of our existing bar mills by shifting by product shift, by mixing, by changing on mix at those facilities. Timna Tanners - BofA Merrill Lynch, Research Division: Okay, understood. And then when you talked about maintenance CapEx or returning to a more maintenance CapEx-like level, with the addition of your natural gas investments, how does that factor in future DRI investments? Or are you still kind of waiting to decide on a second and further DRI investment? John J. Ferriola: When I talk about maintenance CapEx, I'm speaking of, specifically, of maintenance work. In terms of future growth of the company, we will continue to look very seriously at a second DRI facility at the appropriate time. Right now, our focus is on getting #1 up and running in Louisiana. I have to clarify that, because we refer to it is our #2 DRI facility, counting the one in Trinidad. But all of our focus today is on getting through the cold commissioning, the hot commissioning and the startup of a new facility in Louisiana. When we get that up and running, we will take a look at a second DRI facility.

We'll go next to Evan Kurtz with Morgan Stanley. Evan L. Kurtz - Morgan Stanley, Research Division: Just a -- hey, I read an article that, John, you were in D.C. on Tuesday, meeting with congressional folks and some folks in commerce. Just -- what are the -- if you could share some of, I guess, one, who you met with, and what was discussed if -- anything you can comment on that going forward on the trade front? John J. Ferriola: Well, we will met with a few senators. We were given the opportunity to spend some time with Senator Sessions. And we also spent time with Ambassador Froman and Undersecretary Sanchez. And also, later in the afternoon, we had the opportunity to meet with Senator Brown. And I'm not going to go into specific details of the conversation. We presented our case very clearly. And I will make the following comment. We got a great reception by all of the parties involved. And I'll make the -- I'll take this opportunity to publicly thank them for their time and for listening to our arguments. Certainly, none could make any firm commitments, but I will tell you that having made several trips to Washington now, my sense is that we are getting -- the message is being better understood and better received each time we go and we speak to the appropriate people. The message is getting across about the impact that imports are having on our industry. And we stress each time we go that we are not asking for protection, we're not asking for subsidies, we're not asking for the government to invest in our companies. We're asking nothing more than a level playing field on which our teams can compete, because we absolutely believe that given a level playing field, our team here at Nucor will compete successfully against anyone, anywhere in the world. So that's a little bit of the color of what we talked about that day. I hope -- and we will continue to work hard to make sure that we continue to gain ground in this arena. It's extremely important to us. The current trade laws simply are not getting the job done. They are reactive. They are not proactive, and we need a more proactive approach to trade laws. The concept of waiting until serious injury occurs to the industry just simply doesn't make sense, and we need to become more productive. We certainly have the data to do it. We have information that we gather on the import licensing. So we know when the tsunami is heading our way. We know where it's coming from. We know when it's going to hit. And it's ridiculous that we don't use that information to take a more proactive approach to dealing with the tsunami that we know is coming. It's important to our industry, and it's important to our teammates here at Nucor. And frankly, it's important to the American worker. Evan L. Kurtz - Morgan Stanley, Research Division: Going back to the existing system, I guess. We saw OCTG case brought forward earlier this month. Are there any other products in particular that are in the works right now, where we might see something similar? John J. Ferriola: Well, this is why I would say all of the above, okay? We are looking carefully at every product that's being imported. We believe that there are many that fall into the same category that are being brought in illegally. They're bringing dumped. They're coming -- they're being subsidized. And we're gathering data now, and we'll take action in a very -- in a variety of products that we focus on. Evan L. Kurtz - Morgan Stanley, Research Division: Okay, great. And maybe just one modeling question on DRI. You mentioned that there could be some costs associated with the startup in the next quarter. How should we think about that as we go out the next kind of 12, 18 months as per modeling that you ramp and DRI, as far as getting a breakeven and moving to profitability and so forth? James D. Frias: This is Jim Frias. First of all, it's a pre-operating start-up cost. The total was roughly $6 million in the second quarter, and most of that was related to DRI. And the final weeks and months of starting up a facility has the most difficult amount of startup cost to predict. I think they could roughly double. And they might be a little higher and a little lower, but that's the range we they can roughly double. And in terms of reaching a breakeven at startup, it probably depends on how quickly it ramps -- it totally depends on how quickly it ramps up. The first DRI facility that we started up in Trinidad was profitable, I think, in the second or third month of operations. So it ought to be pretty quickly reaching a breakeven profit point in our view, if the start doesn't have glitches. But as John noted in his comments, a lot can happen in a startup. You can find it -- an equipment problem that you didn't know existed until you start running the equipment. John J. Ferriola: We certainly expect to see some hiccups as we get started. But we are very confident in our ability to deal with those hiccups. This isn't our first rodeo when it comes to startups. And we started up very complex facilities in the past. We've experienced the hiccups that come along with it. And at every case, we've overcome them and with that a successful operation. Facility in Louisiana will be no different.

And we'll go next to David Galison with CIBC. David Galison - CIBC World Markets Inc., Research Division: So just -- was I correct in understanding that Q3 start-up cost will be around $12 million? Is that what you're thinking? James D. Frias: That's a crude estimate, but yes. David Galison - CIBC World Markets Inc., Research Division: So then would it be fair to assume that the Q3 guidance that was provided for improvements in flat rolled, downstream and scrap pricing would be more than modest, I guess, and then offset by start-up costs? James D. Frias: We did not get that specific in our guidance, in our thinking. We think that the operational side -- my guess, is if I had to guess, the pre-operating cost won't completely offset the improvement. David Galison - CIBC World Markets Inc., Research Division: Okay. And we're still looking for -- reaching full production in 3 to 4 months? John J. Ferriola: Well, what we've said in the past is that we expect to be at full production by the end of the year, and we still feel confident that, that can be achieved. David Galison - CIBC World Markets Inc., Research Division: And then as you're just -- I guess, maybe to help us understand. As your ramping the facility up, will it have an impact on your steel production as you're, I guess, using this material? Do you have to -- there's some dial up you have to do in order to incorporate this material? How should we think about that? James D. Frias: We've been using DRI at a number of our steel mills for several years now. So there's really no effect in the steel operations to speak of. It's really going to be all about how quickly we can make the DRI and get it transported and delivered to our facilities.

We'll go next to Phil Gibbs with KeyBanc. Philip Gibbs - KeyBanc Capital Markets Inc., Research Division: Can you give us some sense of the timing of the Encana venture ramp, and when you may expect to be fully hedged in your natural gas needs for both DRI and steel? James D. Frias: Well, that's a great question, and we haven't really disclosed that at this point. And I would just say that it really depends on a number of factors. One, if we continue having the success in volumes coming from each well we drill is one factor. So as we noted in our comments, we've been performing better than we modeled, when we first made the investment. Another factor is the timing of when we build our next DRI facility. And we haven't made a commitment to when we're going to do that yet. So I would just say that we could be balanced within probably 3 to 4 years is the range to think of, and that would cover steelmaking and DRI. Philip Gibbs - KeyBanc Capital Markets Inc., Research Division: Just the first phase of the DRI, when you say you're balanced within a 3- to 4-year time from? James D. Frias: Yes. John J. Ferriola: But I do want to stress, Jim, that as we look out forward, and again, without giving the details of the volumes involved, and we've said in the past, that we will reach a point where we will have enough gas to supply, not only all of our steel mill operations but also 2 DRI facilities. Alternatively, we would have enough gas to supply 3 DRI facilities. Philip Gibbs - KeyBanc Capital Markets Inc., Research Division: Okay. I just had one follow-up if I could, for you, John. Can you just talk a little bit about the evolution of your automotive business, and where you feel like you even gained some traction maybe relative to last year? John J. Ferriola: Certainly. We continue to grow in automotive, not only in our flat-rolled business. During the -- during my comments, I spoke of the ultra-high strength steels that we are now supplying, going primarily into the automotive market. But we've also had a tremendous amount of success with our SBQ product in automotive. And again, you'll hear us talk often about the benefits of one Nucor and our ability to offer our customers a breadth of products under one umbrella. And automotive is a great example of that. We've piggybacked both sheet and SBQ off each other many times to gain entry into a new customer and allowed us to grow quicker than we anticipated in automotive. We have -- obviously, automotive is growing strongly in the Southeast. We have a strong presence in the Southeast. Automotive is growing rapidly in Mexico. We have a strong presence through our steel tech operations in Mexico to be able to serve that market. So we feel really good about where we are in automotive. And we're happy about that, because right now, automotive is one of the few bright spots in the marketplace.

We'll go next to Aldo Mazzaferro with Macquarie. Aldo J. Mazzaferro - Macquarie Research: I've got a couple of questions. First one on the CapEx forecast. I thought I heard you say that maintenance CapEx was about 20% of the $1.1 billion that you're projecting this year. Does that imply your CapEx next year is going to fall as low as below depreciation or anything like that? James D. Frias: The CapEx at the steel mills could be or -- excuse me, the operations could be below the CapEx, or below depreciation. That could be the case, yes. But keep in mind that depreciation tends to be a bit front-weighted in the steel industry, so we've been making a lot of investments recently. So our depreciation number is ramped up pretty high. Aldo J. Mazzaferro - Macquarie Research: Yes. And so in terms of your debt on your balance sheet, it's very low cost debt, you wouldn't really have an intention to repay that I would think, right? James D. Frias: We don't talk about our intentions relative to capital structure. That's publicly traded instruments as well. Aldo J. Mazzaferro - Macquarie Research: Okay. And then, John, one question. I know you might not want to discuss it too much, but could you outline a little bit about your -- about the pros and cons you see in the Tyson [ph] plant, possibly from Nucor's point of view, whether you'd consider owning that plant, or that's just out of the question? John J. Ferriola: I have to say you're very astute. It's something I do not want to discuss. And I'm not planning on discussing. We -- it's a process that's ongoing, and it's just not appropriate for me to comment at this time.

We'll go next to Brian Yu with Citi. Brian Yu - Citigroup Inc, Research Division: I got a follow-up question on the natural gas. And Jim, you said it was -- performed better. In the past, I believe the all-in cost number was somewhere around $4 per MMBtu. And given what you've seen so far, can you help us with order of magnitude and how does that change that $4 number so far? James D. Frias: Brian, we've never said a number, so I'm not sure where $4 came from. You may have backed into it, triangulated from things that we've shared. We perhaps said a number, but I think the important thing to think about is the fact that we do have some flexibility of the contract. And, John, do you want to speak to that, or would you prefer I... John J. Ferriola: Well, either way, I'll make some comments. And we do have a great deal of flexibility in the contract. So we have some flexibility in the volume and in our drilling. We do have a threshold level, which if the price of gas drops under that threshold point -- price, we are not obligated to continue to drill. And that's a -- that's a level -- it's a level in which we feel very comfortable in being able to get a return even at that threshold level. So over the course of the drilling program, we feel very good about the returns that we're going to getting in this investment and the variability and flexibility we have on drilling. Anything else that you want to add? James D. Frias: Just that we do have also flexibility to drill more wells that we're not committed to if, in fact, gas prices are higher, so we get an upside benefit too. On the downside, we can stop drilling if prices fall low on the upside. We can drill more at our option in certain areas. Brian Yu - Citigroup Inc, Research Division: Okay, that's helpful. Second one is with the DRI facility, there's more domestic iron ore miners, who are talking about making DR-grade pellets. I was wondering, if you guys have experimented with them? Any of the production has come out thus far? And then is it more cost advantageous to try to source it domestically than maybe from the international suppliers? John J. Ferriola: You mean the iron ore specific or... Brian Yu - Citigroup Inc, Research Division: Yes, the DR-grade iron ore pellets. John J. Ferriola: Well, we have -- we've had 3 long-term suppliers. We've added one recently, also an international supplier. We haven't really done much with domestic suppliers at all. We've got 3 very good suppliers that's been with us for a long time. We have a great deal of confidence that the fourth supplier will also be a high-quality supplier. We've done some testing in our facility in Trinidad, so we have no need to look further at this point.

And we'll take our final question from Luke Folta with Jefferies. Luke Folta - Jefferies & Company, Inc., Research Division: Yes, just a couple of quick ones, if I could. I think we've tallied up there being, I think, about 10 potential OCTG new projects coming in to North America. Some of them will have steel capacity and most won't. I was curious to know if Nucor has done anything and even speaking with the -- these new potential customers as far as Nucor's potential ability to source substrate, whether it be flat-rolled or bar products to those mills. John J. Ferriola: It's a great question. I can tell you that we have every single one of them, and we're in discussions with every single one of them. We're even in some discussions with new suppliers or new production facilities that currently have plans to provide their own substrate. We're in discussions with them, working actively to convince them that advantageous to do business with us and avoid the capital expenditure of building their own smelting facilities. Anthony B. Rizzuto - Cowen Securities LLC, Research Division: So at this point, you say that the prospects are pretty good, that Nucor has meaningful participation in those mills? John J. Ferriola: We've got a great commercial team. We're confident that they're going to be successful. Luke Folta - Jefferies & Company, Inc., Research Division: Great. All right, and then second one just relates to the DRI strategy. So when the -- so understand the DRI plant will, in part, probably displace some pig iron that you're currently bringing in from overseas or elsewhere. And then perhaps some of it will displace some prime scrap that you're purchasing domestically. And, I guess, I'm just trying to -- I mean, those kind of accomplished different things. And I just wanted to see if I can get a sense of initially, at least, when we bring the second plant up, is that mostly going to be just a pig iron offset? John J. Ferriola: It's really a question going back to our earlier question. It's a question of flexibility. What this is giving us is the ability to make those decisions and optimize the feedstock that goes into our furnaces. We'll take a look at the current pricing situation among all the iron units that are out there and available, fine scrap, HBI iron, pig iron, DRI and make the best decision to optimize the mix to reduce our cost going into the furnace. So we don't have a definitive plan on replacing pig iron or how much DRI will use in place of pig iron or prime scrap. We'll take a look, frankly, on a very regular basis, at what the best, lowest cost mix of iron units is available, and that's what we'll use.

And there are no further questions in the queue. John J. Ferriola: Okay. I'd like to make some -- Dana, I'd like to make some closing comments. So I'll go ahead and do it. I guess, we're still online.

Go ahead, sir. John J. Ferriola: Okay, thank you, Dana. At Nucor, we recognize the challenges of a weak economy and the tsunami of imports resulting from ineffective trade policies. And we will continue to fight to eliminate those challenges. But I want to stress that in the meantime, we will continue to do what Nucor does best. We will focus on the issues that are within our control. We will continue to grow profitably. We will continue to execute better than anyone else in the industry. And we will ensure that Nucor's best years are still ahead of us. Thank you, all, for joining our call today. Let's keep it going by working together. Thank you.

Again, that does conclude today's presentation. We thank you for your participation.