NUCOR CORPORATION 
Certain statements made in this Quarterly Report on Form 10-Q, or in other public filings, press releases, or other written or oral communications made byNucor , which are not historical facts are forward-looking statements subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve risks and uncertainties which we expect will or may occur in the future and may impact our business, financial condition and results of operations. The words "anticipate," "believe," "expect," "intend," "project," "may," "will," "should," "could" and similar expressions are intended to identify those forward-looking statements. These forward-looking statements reflect the Company's best judgment based on current information, and, although we base these statements on circumstances that we believe to be reasonable when made, there can be no assurance that future events will not affect the accuracy of such forward-looking information. As such, the forward-looking statements are not guarantees of future performance, and actual results may vary materially from the projected results and expectations discussed in this report. Factors that might cause the Company's actual results to differ materially from those anticipated in forward-looking statements include, but are not limited to: (1) competitive pressure on sales and pricing, including pressure from imports and substitute materials; (2)U.S. and foreign trade policies affecting steel imports or exports; (3) the sensitivity of the results of our operations to prevailing market steel prices and changes in the supply and cost of raw materials, including pig iron, iron ore and scrap steel; (4) the availability and cost of electricity and natural gas, which could negatively affect our cost of steel production or result in a delay or cancellation of existing or future drilling within our natural gas drilling programs; (5) critical equipment failures and business interruptions; (6) market demand for steel products, which, in the case of many of our products, is driven by the level of nonresidential construction activity inthe United States ; (7) impairment in the recorded value of inventory, equity investments, fixed assets, goodwill or other long-lived assets; (8) uncertainties surrounding the global economy, including excess world capacity for steel production; (9) fluctuations in currency conversion rates; (10) significant changes in laws or government regulations affecting environmental compliance, including legislation and regulations that result in greater regulation of greenhouse gas emissions that could increase our energy costs, capital expenditures and operating costs or cause one or more of our permits to be revoked or make it more difficult to obtain permit modifications; (11) the cyclical nature of the steel industry; (12) capital investments and their impact on our performance; (13) our safety performance; (14) the impact of the COVID-19 pandemic and any variants of the virus; and (15) the risks discussed in "Item 1A. Risk Factors" of the Company's Annual Report on Form 10-K for the year endedDecember 31, 2020 and elsewhere in this report. Caution should be taken not to place undue reliance on the forward-looking statements included in this report. We assume no obligation to update any forward-looking statements except as may be required by law. In evaluating forward-looking statements, these risks and uncertainties should be considered, together with the other risks described from time to time in our reports and other filings with theSecurities and Exchange Commission . The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the unaudited condensed consolidated financial statements and the notes thereto included elsewhere in this report, as well as the audited consolidated financial statements and the notes thereto, "Item 1A. Risk Factors" and "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" contained inNucor's Annual Report on Form 10-K for the year endedDecember 31, 2020 .
Overview
Nucor and its affiliates manufacture steel and steel products.Nucor also produces DRI for use in its steel mills. Through DJJ, the Company also processes ferrous and nonferrous metals and brokers ferrous and nonferrous metals, pig iron, hot briquetted iron and DRI. Most ofNucor's operating facilities and customers are located inNorth America .Nucor's operations include international trading and sales companies that buy and sell steel and steel products manufactured by the Company and others.Nucor isNorth America's largest recycler, using scrap steel as the primary raw material in producing steel and steel products.Nucor reports its results in the following segments: steel mills, steel products and raw materials. The steel mills segment includes carbon and alloy steel in sheet, bars, structural and plate; steel trading businesses; rebar distribution businesses; andNucor's equity method investments inNuMit and Nucor-JFE. The steel products segment includes steel joists and joist girders, steel deck, fabricated concrete reinforcing steel, cold finished steel, precision castings, steel fasteners, metal building systems, steel grating, tubular products businesses, piling products business, and wire and wire mesh. The raw materials segment includes DJJ, primarily a scrap broker and processor;Nu-Iron Unlimited and Nucor Steel Louisiana, two facilities that produce DRI used by the steel mills; and our natural gas related assets. OnAugust 9, 2021 ,Nucor acquired Cornerstone Building Brands, Inc.'s IMP business for a cash purchase price of approximately$1 billion , subject to customary adjustments. The Company believes this acquisition is strategically compelling and will broaden the value-added solutions thatNucor Buildings Group provides to targeted end markets such as warehousing, distribution and data centers. We expect these end-use markets to continue to grow in the coming years 18
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and that the use of IMP products within them will also increase. IMPs facilitate cost-effective climate control in the built environment and reduce energy usage and overall operations-related greenhouse gas emissions for owners and lessees. The IMP businessNucor is acquiring is comprised of two industry leading brands, CENTRIA and Metl-Span, and has seven manufacturing facilities located throughoutNorth America , complementing the Company's existing IMP business, Truecore. In addition,Nucor announced duringJuly 2021 that it had entered into an agreement to purchaseHannibal Industries, Inc. for a cash purchase price of approximately$370 million .Hannibal Industries is a leading national provider of steel racking solutions to warehouses. We expect thatHannibal Industries' business, serving customers in the e-commerce, industrial, food storage and retail segments, will also continue to grow in the coming years.Hannibal Industries has manufacturing facilities inLos Angeles andHouston , as well as three distribution centers. We expect this transaction to close in August of 2021.
Together, the Cornerstone Building Brands and
The average utilization rates of all operating facilities in the steel mills, steel products and raw materials segments were approximately 96%, 76% and 77%, respectively, in the first six months of 2021 compared with approximately 79%, 69% and 62%, respectively, in the first six months of 2020.
Results of Operations
For the second quarter in a row,Nucor reported the most profitable quarter in the Company's history. The Company reported record consolidated net earnings of$1.51 billion , or$5.04 per diluted share, in the second quarter of 2021. This surpassed the previous quarterly record for consolidated net earnings of$942.4 million , or$3.10 per diluted share, that was set in the first quarter of 2021. All three operating segments continued to generate robust profitability in the second quarter of 2021. The steel mills segment and the steel products segment set new records for profitability in the second quarter of 2021, surpassing the previous record that was set in the first quarter of 2021. Overall strong demand across most of the end markets we serve is supporting higher average selling prices. In the steel mills segment, the greatest improvement in profitability in the second quarter of 2021 as compared to the first quarter of 2021 came from our sheet and plate mills. Our steel products segment continues to benefit from strong demand in nonresidential construction markets. Backlogs for our steel mills and steel products segments remain strong, which we believe indicates that these strong market conditions will continue into the third quarter of 2021. We expect the Company to set a new record for quarterly earnings in the third quarter of 2021.Nucor reported consolidated net earnings of$108.9 million , or$0.36 per diluted share, in the second quarter of 2020, which were the lowest quarterly earnings that the Company reported in 2020. The onset of the COVID-19 pandemic late in the first quarter of 2020 had a major negative impact on the markets that we serve in the second quarter of 2020, causing customer production disruptions and generally lower shipment activity. However, nonresidential construction markets remained resilient, and conditions in the other markets we serve recovered over the remainder of 2020. The strong demand generated by the recovery combined with lean inventory levels across supply chains contributed to the dramatic increase in average selling prices in the second quarter of 2021 as compared to the second quarter of 2020.
The following discussion will provide greater quantitative and qualitative
analysis of
Net sales to external customers by segment for the second quarter and first six months of 2021 and 2020 were as follows (in thousands):
Three Months (13 Weeks) Ended Six Months (26 Weeks) Ended
July 3, 2021 July 4, 2020 % Change July 3, 2021 July 4, 2020 % Change
Steel mills $5,909,909 $2,513,961 135% $10,518,686 $6,033,231 74%
Steel products 2,241,107 1,523,168 47% 4,051,162 3,250,022 25%
Raw materials 638,148 290,177 120% 1,236,456 668,390 85%
Total net sales $8,789,164 $4,327,306 103% $15,806,304 $9,951,643 59%
Net sales for the second quarter of 2021 increased 103% from the second quarter
of 2020. Average sales price per ton increased 49% from $790 in the second
quarter of 2020 to $1,175 in the second quarter of 2021. Total tons shipped to
outside customers in the second quarter of 2021 were 7,482,000 tons, a 37%
increase from the second quarter of 2020.
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Table of Contents Net sales for the first six months of 2021 increased 59% from the first six months of 2020. Average sales price per ton increased 37% from$786 in the first six months of 2020 to$1,078 in the first six months of 2021. Total tons shipped to outside customers in the first six months of 2021 were 14,658,000, a 16% increase from the first six months of 2020.
In the steel mills segment, sales tons for the second quarter and first six months of 2021 and 2020 were as follows (in thousands):
Three Months (13 Weeks) Ended Six Months (26 Weeks) Ended
July 3, 2021 July 4, 2020 % Change July 3, 2021 July 4, 2020 % Change
Outside steel shipments 5,356 3,758 43% 10,546 8,940 18%
Inside steel shipments 1,378 1,011 36% 2,732 2,327 17%
Total steel shipments 6,734 4,769 41% 13,278 11,267 18%
Net sales for the steel mills segment increased 135% in the second quarter of
2021 from the second quarter of 2020, due primarily to a 65% increase in the
average sales price per ton from $672 to $1,107 as well as a 43% increase in
tons sold to outside customers. Average selling prices increased across all
product groups within the steel mills segment in the second quarter of 2021 as
compared to the second quarter of 2020.
Net sales for the steel mills segment increased 74% in the first six months of
2021 from the first six months of 2020, due to a 48% increase in the average
sales price per ton from $677 to $1,001 and an 18% increase in tons sold to
outside customers.
Outside sales tonnage for the steel products segment for the second quarter and first six months of 2021 and 2020 was as follows (in thousands):
Three Months (13 Weeks) Ended Six Months (26 Weeks) Ended
July 3, 2021 July 4, 2020 % Change July 3, 2021 July 4, 2020 % Change
Joist sales 167 122 37% 339 253 34%
Deck sales 130 111 17% 265 236 12%
Cold finished sales 128 75 71% 260 201 29%
Rebar fabrication sales 338 309 9% 620 620 -
Piling products sales 171 156 10% 307 336 -9%
Tubular products sales 269 249 8% 519 536 -3%
Other steel products sales 109 87 25% 209 186 12%
Total steel products sales 1,312 1,109 18% 2,519 2,368 6%
Net sales for the steel products segment increased 47% in the second quarter of
2021 compared to the second quarter of 2020, due to a 24% increase in the
average sales price per ton from $1,372 to $1,708 and an 18% increase in tons
sold to outside customers. Average selling prices increased across all
businesses within the steel products segment in the second quarter of 2021 as
compared to the second quarter of 2020, most notably at our tubular products
businesses.
Net sales for the steel products segment increased 25% in the first six months
of 2021 compared to the first six months of 2020, due to a 17% increase in the
average sales price per ton from $1,372 to $1,608 and a 6% increase in tons sold
to outside customers. Average selling prices increased across all businesses
within the steel products segment in the first six months of 2021 as compared to
the first six months of 2020, most notably at our tubular products businesses.
Net sales for the raw materials segment increased 120% and 85% in the second
quarter and first six months of 2021, respectively, from the same prior year
periods. The increases were due to increased average selling prices and volumes
at DJJ's brokerage and scrap processing operations. In the second quarter of
2021, approximately 90% of outside sales for the raw materials segment were from
the brokerage operations of DJJ, and approximately 9% of outside sales were from
the scrap processing operations of DJJ (89% and 8%, respectively, in the second
quarter of 2020). In the first six months of 2021, approximately 89% of outside
sales for the raw materials segment were from the brokerage operations of DJJ,
and approximately 9% of outside sales were from the scrap processing operations
of DJJ (88% and 8%, respectively, in the first six months of 2020).
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Table of Contents Gross MarginsNucor recorded gross margins of$2.47 billion (28%) in the second quarter of 2021, which was a significant increase compared with$378.0 million (9%) in the second quarter of 2020.
• The primary driver for the increase in gross margins in the second quarter
of 2021 as compared to the second quarter of 2020 was increased metal
margins in the steel mills segment. Metal margin is the difference between
the selling price of steel and the cost of scrap and scrap substitutes.
Scrap and scrap substitutes are the most significant element in the total cost of steel production. The average scrap and scrap substitute cost per gross ton used in the second quarter of 2021 was$457 , a 61% increase compared to$284 in the second quarter of 2020. The increase in the average scrap and scrap substitute cost per gross ton used was more than offset by the previously mentioned increases in average selling prices and volumes.
Scrap prices are driven by the global supply and demand for scrap and other iron-based raw materials used to make steel. Scrap prices have increased dramatically since the beginning of 2021 and we expect continued strong demand for scrap and volatility in scrap prices as we begin the third quarter.
• Pre-operating and start-up costs of new facilities were approximately
million in the second quarter of both 2021 and 2020. Pre-operating and
start-up costs in the second quarter of 2021 included costs related to the
plate mill being built in
the merchant bar quality mill expansion at our bar mill in
sheet mill expansion in
costs, all of which are expensed, as the losses attributable to facilities
or major projects that are either under construction or in the early stages
of operation. Once these facilities or projects have attained a utilization
rate that is consistent with our similar operating facilities, they are no
longer considered by
• Gross margins in the steel products segment increased in the second quarter
of 2021 as compared to the second quarter of 2020. The primary driver was
the increased margins at our tubular products, joist and cold finish
businesses that were partially offset by the decreased margins at our deck,
building systems and piling businesses. The largest increase in gross
margins was at our tubular products businesses. Led by large commercial,
warehouse and data center projects, demand in nonresidential construction
markets continues to be healthy. As we enter the third quarter of 2021,
backlogs for the steel products segment are strong.
• Gross margins in the raw materials segment significantly increased in the
second quarter of 2021 as compared to the second quarter of 2020, primarily
due to rising raw materials selling prices and margin expansion. The largest
improvement in gross margins in the second quarter of 2021 as compared to
the second quarter of 2020 was at our DRI facilities. The profitability of
DJJ's brokerage and scrap processing operations also significantly increased
in the second quarter of 2021 as compared to the second quarter of 2020.
Nucor recorded gross margins of$4.10 billion (26%) in the first six months of 2021, which was a significant increase compared with$1.01 billion (10%) in the first six months of 2020.
• The primary driver for the increase in gross margins in the first six months
of 2021 as compared to the first six months of 2020 was increased metal
margins in the steel mills segment. The average scrap and scrap substitute
cost per gross ton used in the first six months of 2021 was
increase compared to
the average scrap and scrap substitute cost per gross ton used was more than
offset by the previously mentioned increases in average selling prices and
volumes.
• Pre-operating and start-up costs of new facilities decreased to
approximately
and start-up costs was primarily due to the completion of the bar mills in
Missouri andFlorida . Pre-operating and start-up costs in the first six months of 2021 included costs related to the plate mill being built in
mill expansion at our bar mill in
• Gross margins in the steel products segment increased in the first six
months of 2021 as compared to the first six months of 2020. The primary
driver was the increased margins at our tubular products, rebar, joist and
cold finish businesses.
• Gross margins in the raw materials segment significantly increased in the
first six months of 2021 as compared to the first six months of 2020,
primarily due to rising raw materials selling prices and margin expansion.
The largest improvement in gross margins in the first six months of 2021 as
compared to the first six months of 2020 was at our DRI facilities. The
profitability of DJJ's brokerage and scrap processing operations also
significantly increased in the first six months of 2021 as compared to the
first six months of 2020.
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Marketing, Administrative and Other Expenses
A major component of marketing, administrative and other expenses is profit sharing and other incentive compensation costs. These costs, which are based upon and fluctuate withNucor's financial performance, increased by$215.5 million in the second quarter of 2021 as compared to the second quarter of 2020, and increased by$351.5 million in the first six months of 2021 as compared to the first six months of 2020. These increases were due toNucor's increased profitability in the second quarter and first six months of 2021 as compared to the respective prior year periods, which resulted in significantly increased accruals related to profit sharing.
Equity in (Earnings) Losses of Unconsolidated Affiliates
Equity in (earnings) losses of unconsolidated affiliates was$(19.4) million and$14.1 million in the second quarter of 2021 and 2020, respectively, and$(32.6) million and$14.9 million in the first six months of 2021 and 2020, respectively. The increase in equity method investment earnings were primarily due to increased earnings atNuMit and decreased losses at Nucor-JFE. Losses on Assets Included in the first six months of 2021 earnings was a non-cash loss on assets of$42.0 million related to our leasehold interest in unproved oil and natural gas properties in the raw materials segment. Also included in the first six months of 2021 earnings were losses on assets of$9.0 million in the steel products segment. Included in the first six months of 2020 earnings were losses on assets of$292.8 million related to our equity method investment in Duferdofin Nucor S.r.l. ("Duferdofin Nucor") that we have since exited.Nucor determined that a triggering event occurred in the first quarter of 2020 due to adverse developments in the joint venture's commercial outlook, which were exacerbated by the COVID19 pandemic, all of which negatively impacted the joint venture's strategic direction.
Interest Expense (Income)
Net interest expense for the second quarter and first six months of 2021 and 2020 was as follows (in thousands):
Three Months (13 Weeks) Ended Six Months (26 Weeks) Ended
July 3, 2021 July 4, 2020 July 3, 2021 July 4, 2020
Interest expense $ 37,661 $ 38,849 $ 78,631 $ 86,445
Interest income (1,881 ) (3,042 ) (3,207 ) (9,728 )
Interest expense, net $ 35,780 $ 35,807 $ 75,424 $ 76,717
Interest expense decreased in the second quarter and first six months of 2021
compared to the second quarter and first six months of 2020 due primarily to the
lower average interest rates on debt and an increase in capitalized interest in
the first six months of 2021.
Interest income decreased in the second quarter and first six months of 2021
compared to the second quarter and first six months of 2020 due to a decrease in
average interest rates on investments.
Earnings (Loss) Before Income Taxes and Noncontrolling Interests
Earnings (loss) before income taxes and noncontrolling interests by segment for
the second quarter and first six months of 2021 and 2020 were as follows (in
thousands). The changes between periods were driven by the quantitative and
qualitative factors previously discussed.
Three Months Six Months
(13 Weeks) Ended (26 Weeks) Ended
July 3, 2021 July 4, 2020 July 3, 2021 July 4, 2020
Steel mills $ 2,174,807 $ 150,424 $ 3,489,781 $ 306,930
Steel products 259,330 152,874 471,142 315,433
Raw materials 120,143 (1,389 ) 343,378 (9,300 )
Corporate/eliminations (528,532 ) (120,852 ) (980,307 ) (285,709 )
$ 2,025,748 $ 181,057 $ 3,323,994 $ 327,354
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Table of Contents Noncontrolling Interests Noncontrolling interests represent the income attributable to the noncontrolling partners ofNucor's joint ventures, primarily NYS of whichNucor owns 51%. The increase in earnings attributable to noncontrolling interests in the second quarter and first six months of 2021 as compared to the second quarter and first six months of 2020 was primarily due to the increased earnings of NYS, which was a result of the increased metal margins. Under the NYS limited partnership agreement, the minimum amount of cash to be distributed each year to the partners is the amount needed by each partner to pay applicableU.S. federal and state income taxes. In the first six months of 2020, the amount of cash distributed to noncontrolling interest holders exceeded the earnings attributable to noncontrolling interests based on mutual agreement of the general partners.
Provision for Income Taxes
The effective tax rate for the second quarter of 2021 was 22.4% compared to 26.5% for the second quarter of 2020. The effective tax rate for the second quarter of 2020 was elevated, relative to the second quarter of 2021, primarily due to a$5.3 million unfavorable non-cash, out-of-period adjustment to deferred tax balances. The out-of-period adjustment was not material to any previously reported period. The expected effective tax rate for the full year of 2021 is approximately 23.1%. We estimate that in the next 12 months our gross unrecognized tax benefits, which totaled$59.5 million atJuly 3, 2021 , exclusive of interest, could decrease by as much as$5.4 million as a result of the expiration of the statute of limitations and closures of examinations, substantially all of which would impact the effective tax rate.Nucor has concludedU.S. federal income tax matters for tax years through 2014 and for tax year 2016. The tax years 2015 and 2017 through 2019 remain open to examination by the Internal Revenue Service. The 2015 Canadian income tax returns forHarris Steel Group Inc. and certain related affiliates are currently under examination by theCanada Revenue Agency . The tax years 2014 through 2020 remain open to examination by other major taxing jurisdictions to whichNucor is subject (primarilyCanada and other state and local jurisdictions).
Net Earnings Attributable to Nucor Stockholders and Return on Equity
Nucor reported consolidated net earnings of$1.51 billion , or$5.04 per diluted share, in the second quarter of 2021 as compared to consolidated net earnings of$108.9 million , or$0.36 per diluted share, in the second quarter of 2020. Net earnings attributable toNucor stockholders as a percentage of net sales were 17.1% and 2.5% in the second quarter of 2021 and 2020, respectively.Nucor reported consolidated net earnings of$2.45 billion , or$8.13 per diluted share, in the first six months of 2021 as compared to consolidated net earnings of$129.2 million , or$0.42 per diluted share, in the first six months of 2020. Net earnings attributable toNucor stockholders as a percentage of net sales were 15.5% and 1.3% in the first six months of 2021 and 2020, respectively. Annualized return on average stockholders' equity was 42.5% and 2.5% in the first six months of 2021 and 2020, respectively.
Outlook
We expect earnings in the third quarter of 2021 to be the highest quarterly earnings inNucor history, surpassing the record set in the second quarter of 2021. The primary drivers for the expected increase in earnings in the third quarter of 2021 are improved pricing and margins in the steel mills segment. We expect increased profitability across the steel mills segment, with the largest increase at our sheet mills. The steel products segment and the raw materials segment are also expected to have increased earnings in the third quarter of 2021 compared to the second quarter of 2021.Nucor's largest exposure to market risk is via our steel mills and steel products segments. Our largest single customer in the second quarter of 2021 represented approximately 5% of sales and has consistently paid within terms. In the raw materials segment, we are exposed to price fluctuations related to the purchase of scrap and scrap substitutes, pig iron and iron ore. Our exposure to market risk is mitigated by the fact that our steel mills use a significant portion of the products of the raw materials segment.
Liquidity and Capital Resources
Nucor operates a capital-intensive business in highly cyclical markets. We therefore attempt to utilize conservative financial practices that maximize our financial strength during economic downturns like the one we experienced as a result of the COVID-19 pandemic. Our liquidity position, consisting of cash and cash equivalents, short-term investments and 23
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restricted cash and cash equivalents, remained strong at
We believe that our conservative financial practices have served us well in the past and are serving us well today.Nucor's financial strength allows for a consistent, balanced approach to capital allocation throughout the business cycle.Nucor's highest capital allocation priority is to reinvest in our business to ensure our continued profitable growth over the long term. We have historically done this by investing to optimize our existing operations, initiate greenfield expansions and make acquisitions. Our second priority is to return capital to our stockholders through cash dividends and share repurchases. We intend to return a minimum of 40% of our net earnings to our stockholders, while maintaining a debt-to-capital ratio that supports a strong investment grade credit rating. InMay 2021 ,Nucor's Board of Directors approved a share repurchase program under which the Company is authorized to repurchase up to$3.00 billion of its common stock and contemporaneously terminated any previously authorized share repurchase programs. As ofJuly 3, 2021 , the Company had approximately$2.80 billion remaining for share repurchases under the new program. Cash provided by operating activities was$1.88 billion in the first six months of 2021 as compared to$1.35 billion in the prior year period. Net earnings in the first six months of 2021 improved by$2.37 billion over the prior year period. Included in the first six months of 2021 earnings was a non-cash loss on assets of$42.0 million related to our leasehold interest in unproved oil and natural gas properties in the raw materials segment. Included in the first six months of 2020 was a non-cash loss on assets of$292.8 million related to our previously held equity method investment in Duferdofin Nucor. Changes in operating assets and operating liabilities (exclusive of acquisitions) resulted in a cash reduction of$1.27 billion in the first six months of 2021 compared with a cash increase of$331.2 million in the first six months of 2020. The funding of our working capital in the first six months of 2021 increased as compared to the first six months of 2020 mainly due to larger increases in inventories and accounts receivable, partially offset by changes in accounts payables and accruals. Inventories increased almost one million tons, or 15%, at the end of the second quarter of 2021 compared to year-end 2020, and the cost of scrap and scrap substitutes in our inventory increased 48% from year-end 2020. Inventories at the end of the second quarter of 2020 decreased by over one million tons, or 15%, compared to year-end 2019 due to working capital reduction initiatives focused on maintaining inventory levels at our anticipated near-term production requirements in response to the COVID-19 pandemic. Accounts receivable increased in the first six months of 2021 from year-end 2020 due to a 14% increase in tons shipped to outside customers and a 45% increase in composite sales price in the second quarter of 2021 compared to the fourth quarter of 2020. Accounts receivable at the end of the second quarter of 2020 decreased from year-end 2019 due to a 16% decrease in tons shipped to outside customers. The current ratio was 3.1 at the end of the second quarter of 2021 and 3.6 at year-end 2020. The current ratio decreased due to the following: a 49% decrease in other current assets, most notably, the federal income tax receivable; a 54% increase in accounts payable driven by the previously discussed increased inventory costs; and an 84% increase in salaries, wages and related accruals due to increased profit sharing accruals resulting from the increased earnings of the Company. Partially offsetting these items were a 48% and 47% increase in accounts receivable and inventories, respectively, due to the previously discussed increases in inventory costs and selling prices. In the first six months of both 2021 and 2020, accounts receivable turned approximately every five weeks and inventories turned approximately every 10 weeks. Cash used in investing activities during the first six months of 2021 of$681.4 million decreased compared to the prior year period of$714.9 million . Cash used for capital expenditures in the first six months of 2021 decreased by 10%, or$74.9 million , from the same period in 2020. The projects that had the largest capital expenditures through the first six months of 2021 were associated with the plate mill under construction inBrandenburg, Kentucky , the sheet mill expansion atNucor Steel Gallatin , and the hot band galvanizing line atNucor Steel Arkansas. The reduction in capital spending was partially offset by the net increase in purchases of investments (purchases less sales of investments) in the first six months of 2021 of$43.0 million , as compared to the prior year period. Cash used in financing activities for the first six months of 2021 was$1.16 billion as compared to cash provided by financing activities of$623.8 million in the prior year period. A significant component of this change was the issuance of$500.0 million of 2.000% Notes due 2025 and$500.0 million of 2.700% Notes due 2030 in the first six months of 2020. In addition, there were approximately$916.1 million of stock repurchases in the first six months of 2021 as compared to$39.5 million in the prior year period. Offsetting the increase in cash used for acquisition of stock in the first six months of 2021 was$128.8 million of proceeds from the exercise of stock options.Nucor's $1.50 billion revolving credit facility is undrawn and was amended and restated inApril 2018 to extend the maturity date toApril 2023 . We believe our financial strength is a key strategic advantage among domestic steel producers, particularly during recessionary business cycles.Nucor continues to have the strongest credit rating in the North American steel sector (Baa1/A-) with stable outlooks at both Moody's andStandard & Poor's . Our credit ratings are dependent, however, upon a number of factors, both qualitative and quantitative, and are subject to change at any time. The disclosure 24
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of our credit ratings is made in order to enhance investors' understanding of our sources of liquidity and the impact of our credit ratings on our cost of funds. Our credit facility includes only one financial covenant, which is a limit of 60% on the ratio of funded debt to total capitalization. In addition, the credit facility contains customary non-financial covenants, including a limit onNucor's ability to pledge the Company's assets and a limit on consolidations, mergers and sales of assets. As ofJuly 3, 2021 , our funded debt to total capital ratio was 29.8% and we were in compliance with all non-financial covenants under our credit facility. No borrowings were outstanding under the credit facility as ofJuly 3, 2021 . Our financial strength allows a number of capital preservation options.Nucor's robust capital investment and maintenance practices give us the flexibility to reduce spending by prioritizing our capital projects, potentially rescheduling certain projects and selectively allocating capital to investments with the greatest impact on our long-term earnings power.Nucor currently estimates its 2021 capital expenditures to be$1.80 billion . The projects that we anticipate will have the largest capital expenditures in 2021 are the plate mill under construction inBrandenburg, Kentucky , the sheet mill expansion atNucor Steel Gallatin , and the hot band galvanizing line at Nucor Steel Arkansas.
In
Funds provided from operations, cash and cash equivalents, short-term investments, restricted cash and cash equivalents and new borrowings under our existing credit facilities are expected to be adequate to meet future capital expenditures, acquisitions and working capital requirements for existing operations for at least the next 24 months.
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