Leon J. Topalian
President and Chief Executive Officer at Nucor
Good afternoon and welcome to our first quarter earnings call. I'd like to begin the call by introducing our new Chief Financial Officer, Steve Laxton. During the first quarter, we announced the retirement of Jim Frias and the appointment of Steve to the role of CFO. Steve began his career in Nucor in 2003 and has spent the last eight years as our Vice President of Business Development. We're excited for Steve's future as CFO and welcome him to the executive team. And you'll be hearing from Steve in a few minutes about our first quarter financial performance.
I'd also like to take the opportunity to thank Jim Frias for his 30 years with Nucor. He has had a tremendous impact on me, our team and our company, and we wish Jim and his wife, Sharon and family the very best in his upcoming retirement.
Also joining us on the call today are members of the Nucor executive team, including Dave Sumoski, our Chief Operating Officer; Al Behr, responsible for Plate and Structural Products; Doug Jellison, responsible for Raw Materials and Logistics; Greg Murphy, responsible for Business Services and our General Counsel; Dan Needham, responsible for Bar, Engineered Bar and Rebar Fabrication; Rex Query, responsible for Sheet and Tubular Products; MaryEmily Slate, responsible for our Enterprise, Commercial Strategy; and Chad Utermark, responsible for Fabricated Construction Products.
Last year, we achieved record safety performance, beating the safety record we set in 2020. And the Nucor team is off to another strong start in the first quarter of 2022. We continue to see excellent safety performance across our divisions as our teams work to meet strong demand from our customers. I'm proud of our team's commitment and progress toward achieving our goal of becoming the world's safest steel company. Team together, let's set another record in 2022.
Turning to our financial performance, we achieved record first quarter results with earnings per share of $7.67. The quarter was marked by pronounced volatility as Russia's invasion of Ukraine impacted commodity markets and the supply chains of nearly every industry. While the Ukraine-Russia conflict certainly is having an impact on our industry, the much larger concern is the humanitarian disaster that is unfolding in Ukraine. The images coming out of Ukraine are heartbreaking. And our thoughts and prayers are with the Ukrainian people who continue to endure significant suffering due to the invasion.
The onset of the pandemic in March of 2020 and the Russian invasion of Ukraine are two recent events that upended markets and showed the resilience and sustainability of our business model. Our flexible production process and diversified product portfolio have helped us to thrive in the volatile market conditions that followed. I'm extremely proud of how our Nucor team has navigated the pandemic and several unexpected supply chain disruptions over the past two years.
We are on the cusp of completing $4.1 billion in strategic organic growth investments by the end of 2022. We have also completed $2.1 billion in strategic acquisitions and returned approximately $4.8 billion in capital to our investors through the last five quarters. Our balance sheet remains underlevered and we have a fresh series of new organic growth initiatives that are just getting underway. Nucor delivered breakout record performance in 2021. And now, we're beginning 2022 with a new quarterly record, which we expect to surpass again in the second quarter.
Our team's ability to navigate the current disruption to the seaborne pig iron markets highlight the benefit of Nucor's powerful and adaptive business model. Pig iron makes up roughly 10% of Nucor's overall metallic supply in a typical year. Russia and Ukraine have historically accounted for over half of that supply. However, at the onset of this war, we immediately ceased all purchases of pig iron and any other raw materials from Russian suppliers. We could do this without disrupting customer supply or quality because we have worked over the years to effectively manage the risks related to our raw material needs. While we have not been able to source material from Ukraine since the war began, we look forward to partnering with our Ukrainian suppliers when conditions in the region permit.
We have several advantages that are enabling us to manage through this disruption, including good long-term relationships with numerous pig iron producers globally, reliable DRI production capabilities in Trinidad and Louisiana that are particularly helpful in this environment. The ability to increase our production of low copper shred and to continue to invest in additional technologies for high quality metallics, especially those that can help us further reduce Nucor's carbon footprint. And our DJJ brokerage arm that has once again proven its value as it utilizes its broad network to ensure our steel mills have the scrap they need to meet our customers' requirements.
Turning to current market conditions, we continue to see robust demand across the key end use markets we serve. Some markets like automotive continue to be constrained due to supply chain issues. Last year, we realized outstanding results despite key markets such as automotive and energy being challenged and well below their averages and our initial expectations. The first quarter of 2022 was similar with very strong overall demand despite continued supply constraints, production challenges in automotive and relatively tepid response for energy products despite strong pricing for hydrocarbons.
And now, let me provide a quick update on some specific growth initiatives. During the first quarter, we completed our acquisition of a majority stake in California Steel Industries. And as we've discussed on our last call, this $400 million investment expands our geographic reach in the sheet market to the West Coast, grows our portfolio of value-added sheet products and creates supply chain efficiencies with Nucor's downstream businesses in the region, including Verco and Hannibal Industries. We welcome CSI teammates to our Nucor family.
We also announced plans to modernize and expand the product capabilities of our sheet mill in Crawfordsville, Indiana by adding a construction grade, continuous galvanizing line and prepaying line. The construction grade continuous galv line will have a capacity of 300,000 tons per year, while the prepaying line will have an annual capacity of 250,000 tons per year. Crawfordsville i our first sheet mill pioneering EAF thin-slab casting. These projects in Indiana will enhance Crawfordsville's ability to competitively serve the regional construction market.
Earlier this month, we announced plans to build our third rebar micro mill in Lexington, North Carolina. We have had great success with our micro mills in Missouri and Florida and saw a real opportunity to supply rebar to the fast-growing region between Washington and Atlanta. Population growth in this region, along with a new federal infrastructure spending, is increasing rebar demand. The site in Lexington is near abundant scrap supplies and transportation corridors, allowing us to efficiently deliver rebar to customers in the mid-Atlantic and Southeast. We're really excited to be growing our presence and creating jobs in our home state of North Carolina.
With regard to our modernization and expansion project at Gallatin, the team there has completed commissioning the EAF and LMF, the caster and second down coiler will be commissioned during the coming weeks. Following that, we'll have a seven-day outage in early June to commission the roughing mill in hot mill crops here. By June, all of Gallatin's new capabilities and capacities will be online. We currently anticipate shipping approximately 0.5 million tons of Gallatin's added capacity in 2022. By Q3, Gallatin should be able to produce at a 3 million ton per year rate.
Our team continues to receive recognition from our customers for the high quality products we provide. For the fourth year in a row, Nucor has received GM Supplier of the Year award. We remain the only EAF steelmaker to receive this award. In addition, Nucor received GM's Overdrive Award for supplying them with our Econiq products. GM is our first customer to receive these products and it is an example of how we work and listen to our customers to help them achieve their sustainability goals. These awards also demonstrate the benefits of investments we're making to serve our automotive and other customers with demanding applications for lower CO2 intensity steel. To our Nucor team, you should be extremely proud of receiving this recognition for four years running.
Econiq is just one example of our focus on sustainability. While our greenhouse gas emissions are just a quarter of the global average for the steel industry, we continue to look for ways to further reduce our emissions. We have supported the development of solar and wind energy projects by signing three power purchase agreements for roughly 600 megawatts of renewable power generation capacity. And earlier this month, we announced an investment in NuScale, a leading developer of new nuclear power technology called the small modular reactor. This investment in NuScale complements these efforts to help the United States develop new sources of clean power. An effective electric grid requires both base load and intermittent power sources, which is why we believe that both nuclear and renewable energy must be a part of the solution to achieve carbon reductions while maintaining grid reliability.
On the trade front, unfairly-traded imports remain a concern. The US ITC is conducting five-year sunset reviews this year of key trade orders on flat products, including cold roll steel and corrosion resistant steel. These orders are important to market stability and industry performance, and Nucor will vigorously work to ensure that they remain in place.
We view our advocacy for effective trade law enforcement as an essential component of Nucor's efforts to take care of our customers, teammates and shareholders. Nucor is investing more than $7.5 billion in our steelmaking operations over the 2019 to 2025 period. These investments are expanding the Nucor team by approximately 3,000 jobs and are driven by exciting opportunities to compete in a global steel marketplace, where winners are determined by real cost and quality advantages that create sustainable value for consumers and not by government subsidies or other non-economic factors.
I'm incredibly proud of the Nucor team's exceptional focus on delivering world class performance in every area of our business, particularly our record breaking results in safety and profitability. We are grateful for the trust our customers place in the Nucor team with every order and we strive to offer exceptional customer value by being leaders in delivering the cleanest and most sustainable steel solutions in the world.
Our key forward-looking indicators for 2022 remain favorable and we expect another strong year in both earnings and cash generation.
Now, Steve Laxton will provide more details about our first quarter performance. Steve?