Certain statements made in this quarterly report are forward-looking statements that involve risks and uncertainties. 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 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) the sensitivity of the results of our operations to prevailing steel prices and the changes in the supply and cost of raw materials, including scrap steel;
(2) availability and cost of electricity and natural gas; (3) market demand for steel products and scrap steel; (4) competitive pressure on sales and pricing, including pressure from imports and substitute materials; (5) uncertainties surrounding the global economy, including excess world capacity for steel production and fluctuations in international conversion rates; (6) U.S. and foreign trade policy affecting steel imports or exports; (7) significant changes in government regulations affecting environmental compliance; (8) the cyclical nature of the steel industry; (9) capital investments and their impact on our performance; and (10) our safety performance.

The following discussion should be read in conjunction with the unaudited condensed consolidated financial statements included elsewhere in this report, as well as the audited consolidated financial statements and "Management's Discussion and Analysis of Financial Condition and Results of Operations" contained in Nucor's Annual Report on Form 10-K for the year ended December 31, 2007.

Overview

Nucor and affiliates are manufacturers of steel products, with operating facilities primarily in the U.S. and Canada. The steel mills segment produces carbon and alloy steel in bars, beams, sheet and plate. The steel products segment produces steel joists and joist girders; steel deck; fabricated concrete reinforcing steel; cold finished steel; steel fasteners; metal building systems; light gauge steel framing; steel grating and expanded metal; and wire and wire mesh. The raw materials segment produces direct reduced iron used by the steel mills; brokers ferrous and nonferrous metals, pig iron and HBI/DRI; supplies ferro-alloys; and processes ferrous and nonferrous scrap. Nucor is North America's largest recycler.

In February 2008, Nucor completed its acquisition of the stock of SHV North America Corporation, which owns 100% of The David J. Joseph Company and related affiliates, for a purchase price of approximately $1.44 billion. DJJ now operates as a wholly owned subsidiary of Nucor Corporation and is headquartered in Cincinnati, Ohio. The principal activities of DJJ, which has been the broker of ferrous scrap to Nucor since 1969, include the operation of scrap recycling facilities (processing); brokerage services for scrap, ferro-alloys, pig iron and scrap substitutes; mill and industrial services; and rail and logistics services. DJJ is included in Nucor's raw materials segment.

Since scrap is Nucor's largest single cost, the acquisition of DJJ provides an ideal growth platform for Nucor to expand our direct ownership in the steel scrap supply chain and further our raw materials strategy. At the beginning of the second quarter of 2008, Nucor acquired substantially all the assets of Metal Recycling Services Inc. ("MRS") for approximately $57.0 million. Based in Monroe, North Carolina, MRS, which is now part of DJJ, operates a full-service processing facility and two feeder yards. In April 2008, DJJ acquired substantially all the assets of Galamba Metals Group, which now operates under the Advantage Metals Recycling, LLC ("AMR") name, for approximately $112.6 million. AMR operates 16 full-service scrap processing facilities in Kansas, Missouri and Arkansas. In the third quarter of 2008, DJJ acquired substantially all the assets of the American Compressed Steel operations of Secondary Resources, Inc. American Compressed Steel has facilities in Kansas City, St. Joseph and Sedalia, Missouri, and processes nearly 180,000 tons annually. DJJ is now operating these facilities under the AMR name.

Also in the third quarter of 2008, Nucor's wholly owned subsidiary, Harris Steel, Inc., acquired all of the issued and outstanding common shares of Ambassador Steel Corporation ("Ambassador") for a cash purchase price of approximately $185.1 million. At closing, Harris Steel also repaid Ambassador's bank debt of approximately $135.6 million. Based in Auburn, Indiana, Ambassador is a fabricator and distributor of concrete reinforcing steel and related products.

In July 2008, Nucor acquired 50% of the stock of Duferdofin-Nucor S.r.l. for approximately $667.0 million. Duferdofin-Nucor operates a steel melt shop with a bloom/billet caster and two rolling mills in Italy. Total production in 2007 was approximately one million tons. A new merchant bar mill, which is expected to produce approximately 450,000 tons, is under construction at the Giammoro plant and is expected to be fully operational in late 2008. Since Nucor accounts for this equity method investment on a one-month lag, only two months of Duferdofin-Nucor's earnings have been included in Nucor's results for the third quarter of 2008.

Steel production was 17,384,000 tons in the first nine months of 2008, compared with 16,503,000 tons produced in the first nine months of 2007, an increase of 5%. Total steel shipments increased 5% to 17,506,000 tons in the first nine months of 2008, compared with 16,663,000 tons in last year's first nine months. Steel sales to outside customers increased 1% to 15,285,000 tons in the first nine months of 2008, compared with 15,157,000 tons in last year's first nine months. In March 2007, Nucor acquired a large customer, Harris Steel Group Inc. ("Harris"), causing a shift from outside sales tons to inside sales tons. If Nucor continues to acquire downstream businesses, the percentage of our steel production sold to inside customers may continue to increase.

In the steel products segment, steel joist production during the first nine months was 391,000 tons, compared with 409,000 tons in the first nine months of 2007, a decrease of 4%. Steel deck sales increased to 388,000 tons in the first nine months of 2008, compared with 355,000 tons in last year's first nine months, an increase of 9%. Cold finished steel sales increased 22% to 394,000 tons in the first nine months of 2008 compared with 322,000 tons in the first nine months of 2007. Sales of fabricated concrete reinforcing steel were 669,000 tons in the first nine months of 2008, compared with 385,000 tons in the first nine months of 2007.

The average estimated utilization rates of all operating facilities in the steel mills, steel products and raw materials segments were approximately 91%, 75% and 89%, respectively, in the first nine months of 2008, compared with 87%, 78% and 80%, respectively, in the first nine months of 2007.

Results of Operations

Net Sales Net sales to external customers by segment for the third quarter and
the first nine months of 2008 and 2007 were as follows:



                                          Three Months (13 Weeks) Ended                                     Nine Months (39 Weeks) Ended
                             September 27, 2008       September 29, 2007      % Change        September 27, 2008       September 29, 2007      % Change
Steel mills                 $          5,192,082     $          3,344,116           55 %     $         13,844,672     $          9,953,526           39 %
Steel products                         1,238,642                  853,495           45 %                3,243,420                2,086,286           55 %
Raw materials                            897,539                       -            -                   2,059,797                       -            -
All other                                119,257                   61,610           94 %                  364,499                  156,404          133 %

Net sales                   $          7,447,520     $          4,259,221           75 %     $         19,512,388     $         12,196,216           60 %

Net sales for the third quarter of 2008 increased 75% from the third quarter of 2007. Average sales price per ton increased 51% from $738 in the third quarter of 2007 to $1,111 in the third quarter of 2008, while total tons shipped to outside customers increased 16% over the same period last year. Net sales increased 5% from the second quarter of this year due to a 21% increase in average sales price per ton over the second quarter of 2008, offset by a 13% decrease in total tons shipped to outside customers.

Net sales for the steel mills segment increased 55% over the third quarter of 2007 due to the $444 (67%) increase in the average sales price per ton, partially offset by a 7% decrease in steel sales to outside customers from 5,038,000 tons in the third quarter of 2007 to 4,688,000 tons in the third quarter of 2008.

The 45% increase in the steel products segment's sales for the third quarter was due to a 20% increase in shipments, primarily attributable to acquisitions, as well as a 22% increase in the average sales price per ton.

In the third quarter of 2008, approximately 78% of outside sales in the raw materials segment were from the brokerage operations of DJJ and approximately 21% of the outside sales were from the scrap processing facilities. Prior to the acquisition of DJJ, there were no outside sales of raw materials.

Net sales for the first nine months of 2008 increased 60% from last year's first nine months due to a 30% increase in average sales price per ton from $716 in the nine months of 2007 to $934 in the first nine months of 2008 and a 23% increase in total tons shipped to outside customers.

The 39% increase in sales for the first nine months of 2008 in the steel mills segment was primarily attributable to the $249 per ton (38%) increase in average realized prices from the same period last year. In addition, steel sales to outside customers increased 1% from the first nine months of 2007 to the first nine months of 2008.

The 55% increase in the steel products segment's sales for the first nine months of the year resulted primarily from an increase of approximately 35% in shipments. The higher volume of shipments is mainly attributable to the acquisition of Harris in March 2007, Magnatrax Corporation in August 2007 and Ambassador in August 2008. Subsequent to its acquisition by Nucor, Harris has continued to grow its rebar fabrication business by acquiring other rebar fabrication companies, which also contributed to the rise in shipments. The increased sales for this segment were also due to a 16% increase in average sales price per ton.

In the raw materials segment, approximately 77% of outside sales in the first nine months of 2008 were from the brokerage operations of DJJ and approximately 22% of the outside sales were from the scrap processing facilities.

The "All other" category includes Novosteel S. A., a steel trading business of which Nucor, through Harris, owns 75%. The period over period increases in sales are due to Nucor owning the interest in Novosteel for all of 2008 versus only a portion of 2007 (since March 2007), combined with an increased sales price per ton.

Gross Margins For the third quarter of 2008, Nucor recorded gross margins of $1.46 billion (20%), compared to $810.0 million (19%) in the third quarter of 2007. The year-over-year dollar and gross margin increases were the result of increased average sales price per ton for all products, the 16% increase in total shipments to outside customers and the significant acquisitions made by Nucor in the last 21 months. The positive impact of these factors on our gross margin percentage was partially offset by the following:

• In the steel mills segment, the average price of raw materials used increased approximately 88% from the third quarter of 2007 to the third quarter of 2008, primarily due to the increased cost of scrap. The average scrap and scrap substitute cost per ton used was $533 in the third quarter of 2008, an increase of 92% compared with $277 in the third quarter of 2007. Energy costs increased $7 per ton over the prior year period. In the steel products segment, the average price of raw materials used increased approximately 39% from the third quarter of 2007 to the third quarter of 2008.

• Nucor incurred a LIFO charge of $140.0 million in the third quarter of 2008, compared with a charge of $11.0 million in last year's third quarter. (LIFO charges for interim periods are based on management's estimates of both inventory prices and quantities at year-end. The actual amounts will likely differ from these estimated amounts, and such differences may be significant.)

• DJJ's business of collecting and processing ferrous and non-ferrous materials for resale typically operates at lower margins than Nucor has historically experienced as a manufacturer of steel and steel products.

• Pre-operating and start-up costs of new facilities increased to $29.7 million in the third quarter of 2008, compared with $14.1 million in the third quarter of 2007. In 2008 and 2007, these costs primarily related to the HIsmelt project in Kwinana, Australia, the construction of the SBQ mill in Memphis, Tennessee, the start-up of our building systems facility in Brigham City, Utah and the Castrip® project in Blytheville, Arkansas.

For the first nine months of 2008, Nucor recorded gross margins of $3.57 billion (18%), compared to $2.35 billion (19%) in the first nine months of 2007. The year-over-year dollar increase was the result of increased average sales price per ton for all products, the 23% increase in total shipments to outside customers and the significant acquisitions made by Nucor in the last 21 months. The decrease in our gross margin percentage was due principally to the following factors:

• The cost of raw materials, including scrap and energy, continued to escalate. In the steel mills segment, the average price of raw materials used increased approximately 58% from the first nine months of 2007 to the first nine months of 2008, primarily due to the increased cost of scrap, our main raw material. The average scrap and scrap substitute cost per ton used in the first nine months of 2008 was $439, an increase of 60% compared with $275 in the first nine months of 2007. Energy costs increased $5 per ton over the prior year period. In the steel products segment, the average price of raw materials used increased approximately 25% from the first nine months of 2007 to the first nine months of 2008.

• DJJ's business of collecting and processing ferrous and non-ferrous materials for resale typically operates at lower margins than Nucor has historically experienced as a manufacturer of steel and steel products.

• Pre-operating and start-up costs of new facilities increased from $39.1 million in the first nine months of 2007 to $74.8 million in the first nine months of 2008.

Nucor's raw material surcharge has helped offset the impact of significantly more volatile scrap prices and allowed us to purchase the scrap needed to fill our customers' orders. Changes in scrap prices are based on changes in the global supply and demand for scrap, which is tied to the global supply and demand for steel products. Although it is currently moderating, demand for scrap and other raw materials has risen sharply in recent years in response to increased demand, both domestically and internationally, for a wide range of products made from steel without a corresponding increase in the global supply of those raw materials. Our surcharges are based upon changes in widely-available market indices for prices of scrap and other raw materials. We monitor those market indices closely and make adjustments as needed, but generally on a monthly basis, to the surcharges and sometimes directly to the selling prices, for our products. The majority of our steel sales are to spot market customers who place their orders each month based on their business needs and our pricing competitiveness compared with both domestic and global producers and trading companies. We also include in all of our contracts a method of adjusting prices on a monthly basis to reflect changes in scrap prices. Contract sales typically have a term ranging from six months to two years. Although there will always be a timing difference between changes in the prices we pay for raw materials and the adjustments we make, we believe that the surcharge mechanism, which our customers understand is a necessary response by us to the market forces of supply and demand for our raw materials, continues to be an effective means of maintaining our margins.

Marketing, Administrative and Other Expenses The major components of marketing, administrative and other expenses are freight and profit sharing costs. Unit freight costs increased 23% in the third quarter of 2008 over the third quarter of 2007, and increased 15% from the first nine months of 2007 to the first nine months of 2008, primarily due to higher fuel costs. Profit sharing costs, which are based upon and generally fluctuate with pre-tax earnings, more than doubled from third quarter of 2007 to the third quarter of 2008, and increased approximately 60% from the first nine months of 2007 to the first nine months of 2008. Profit sharing costs also fluctuate based on Nucor's achievement of certain financial performance goals, including comparisons of Nucor's financial performance to peers in the steel industry and to other high-performing companies.

Interest Expense (Income) Net interest expense (income) for the third quarter and first nine months of 2008 and 2007 was as follows:

                                       Three Months (13 Weeks) Ended                 Nine Months (39 Weeks) Ended
                                   Sept. 27, 2008         Sept. 29, 2007        Sept. 27, 2008         Sept. 29, 2007
Interest expense                   $        36,996        $        10,452       $       101,068        $        36,695
Interest income                            (13,966 )               (6,876 )             (32,959 )              (37,302 )

Interest expense, net              $        23,030        $         3,576       $        68,109        $          (607 )

In the third quarter of 2008, gross interest expense increased over the prior year primarily due to the tripling of average debt outstanding combined with an increase in average interest rates from 4.6% to 5.4%. Nucor has issued $2.3 billion in notes since the beginning of the fourth quarter of 2007. The interest rates on the $2.3 billion in notes are higher than the rates on the majority of Nucor's pre-existing debt. Gross interest income increased mainly due to the tripling of the balance of average investments, partially offset by a decrease in the average interest rate earned on investments.

Gross interest expense increased from the first nine months of 2007 to the first nine months of 2008 due to an increase in average debt outstanding of approximately 198% accompanied by an increase in average interest rates from 4.7% to 5.1%. During the first six months of 2008, Nucor issued and repaid $800 million of commercial paper. Gross interest income decreased from the first nine months of 2007 to the first nine months of 2008 due to a decrease in the average interest rate earned on investments.

Minority Interests Minority interests represent the income attributable to the minority partners of Nucor's joint ventures, primarily Nucor-Yamato Steel Company ("NYS"), Novosteel S.A., and Barker Steel Company, Inc., of which Nucor owns 51%, 75% and 90%, respectively. Minority interests in the third quarter of 2008 remained flat compared to the third quarter of 2007. The nine-month increase in minority interests was primarily attributable to the increased earnings of NYS in the first and second quarters of 2008, which were due to the strength of the structural steel market. Under the NYS partnership agreement, the minimum amount of cash to be distributed each year to the partners is the amount needed by each partner to pay applicable U.S. federal and state income taxes.

Provision for Income Taxes Nucor had an effective tax rate of 35.7% in the third quarter of 2008 compared with 34.8% in the third quarter of 2007. The effective tax rate in the first nine months of 2008 was 34.7% compared with 35.1% in the first nine months of 2007. In the third quarter of 2008, the effective tax rate trended upward to reflect an expected higher proportion of domestic to foreign pre-tax earnings for the year. The IRS is currently examining Nucor's 2005 and 2006 federal income tax returns. Management believes that the company has adequately provided for any adjustments that may arise from this audit.

Net Earnings and Return on EquityNet earnings and earnings per share in the third quarter of 2008 increased 93% and 79%, respectively, to a record $734.6 million and $2.31 per diluted share, compared with $381.2 million and $1.29 per diluted share in the third quarter of 2007. Net earnings as a percentage of net sales were 10% and 9%, respectively, in the third quarters of 2008 and 2007.

Net earnings and earnings per share in the first nine months of 2008 increased 56% and 55%, respectively, to a record $1.73 billion and $5.70 per diluted share, compared with $1.11 billion and $3.68 per diluted share in the first nine months of 2007. Net earnings as a percentage of net sales were 9% in both the first nine months of 2008 and 2007. Return on average stockholders' equity was approximately 34.9% and 30.5% in the first nine months of 2008 and 2007, respectively.

Outlook The global economy continues to be negatively impacted by the unprecedented financial crisis. In the fourth quarter of 2008, we expect to experience a drop in demand and in the prices for our products. To some extent there is an offsetting trend of lower energy and scrap steel prices, but our margins and overall profitability are likely to be adversely affected for some time by the changes that have taken place so abruptly in the global balance of supply and demand for steel, steel products and raw materials.

Our margins have been much stronger since the severely depressed market conditions in 2002 and 2003 when most domestic and global steel companies reported operating losses and many filed for bankruptcy. We believe our variable cost structure allowed us to survive those market conditions as declining scrap prices and our incentive pay system, which reduced our hourly and salary payroll costs, combined to help offset lower selling prices for our products. We expect this same flexibility will work to our advantage during current market conditions.

Although the outlook for the performance of both the economy and the steel industry during the fourth quarter is negative, we believe 2008 as a whole will be our fifth consecutive year of exceptionally strong profitability. If the unprecedented initiatives undertaken since the end of the third quarter by the United States and other governments to stabilize domestic and international financial markets are successful, businesses, including many of our customers, could see significantly improved access to credit and resulting improved business conditions beginning in 2009.

Longer term, we continue to believe in the strength of the global infrastructure build and the associated bull market for steel. It is this global growth in steel demand that will help drive Nucor's future growth and profitability.

Liquidity and capital resources

The current ratio was 2.4 at the end of the first nine months of 2008 and 3.2 at year-end 2007. The percentage of long-term debt to total capital was 28% at the end of the first nine months of 2008 and 29% at year-end 2007. Accounts receivable increased 58% since year-end due to the 69% increase in net sales over the fourth quarter of 2007. Inventories increased 96% since year-end due to acquisitions, increased scrap inventory tons and increased cost per ton.

Capital expenditures increased approximately 144% in the first nine months of 2008 compared with the first nine months of 2007. Capital expenditures, excluding acquisitions, are projected to be approximately $1.1 billion for all of 2008.

In September, Nucor's board of directors declared a supplemental dividend of $0.20 per share in addition to the $0.32 per share base dividend. The total dividend of $0.52 per share is payable on November 11, 2008 to stockholders of record on September 30, 2008. The payment of a supplemental dividend in any future period will depend upon many factors, including Nucor's earnings, cash flow and financial position.

Nucor repurchased approximately 2.8 million shares at a cost of about $124.0 million during the third quarter and first nine months of 2008, and repurchased approximately 11.6 million shares at a cost of about $599.8 million during the third quarter of 2007. Nucor repurchased approximately 14.1 million shares at a cost of about $754.0 million during the first nine months of 2007. Approximately 27.2 million shares remain authorized for repurchase under the Company's stock repurchase program.

Existing cash and cash equivalents and short-term investments of approximately $1.44 billion funded the DJJ acquisition. In late May 2008, Nucor completed a public offering of 27,667,580 common shares at an offering price of $74.00 per share. In early June, Nucor issued $1.00 billion in debt with maturities from 2013 to 2037. Nucor used a portion of the $2.97 billion net proceeds from the common stock offering and the issuance of notes to fund the acquisition of Ambassador and other companies as well as the investment in Duferdofin-Nucor. We plan to use the remainder of the net proceeds for general corporate purposes including acquisitions, capital expenditures, working capital requirements and repayment of debt.

Funds provided from operations, existing credit facilities and new borrowings are expected to be adequate to meet future capital expenditure and working capital requirements for existing operations for at least the next 24 months. Nucor believes it has the ability to raise additional funds as needed to finance acquisitions and maintain reasonable financial strength.

In June 2008, Nucor received increased commitments under its existing five-year unsecured revolving credit facility to provide for up to $1.3 billion in revolving loans. The multi-year revolving credit agreement matures in November 2012 and was amended in June to allow up to $200 million in additional commitments at Nucor's election in accordance with the terms set forth in the credit agreement. No borrowings were outstanding under the credit facility as of September 27, 2008. Based on the information currently available, we believe that the lenders continue to have the ability to meet their obligations under . . .