Nucor Corporation Notes to Condensed Consolidated Financial Statements
(Unaudited)
1.
|
BASIS OF INTERIM PRESENTATION: The information furnished in Item 1 reflects all adjustments which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented and
are of a normal and recurring nature unless otherwise noted. The information furnished has not been audited; however, the December 31, 2016 condensed consolidated balance sheet data was derived from audited financial statements but does not
include all disclosures required by accounting principles generally accepted in the United States of America. The unaudited condensed consolidated financial statements in this Item 1 should be read in conjunction with the consolidated financial
statements and the notes thereto included in Nucors Annual Report on Form
10-K
for the year ended December 31, 2016.
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Recently Adopted Accounting Pronouncements
In the first quarter of 2017, Nucor adopted new
accounting guidance that amends the accounting for employee share-based payment transactions. This new standard requires income statement recognition of all tax effects, including all excess tax benefits and tax deficiencies, resulting from the
settlement of share-based awards in the reporting period in which they occur. The standard also requires that all
tax-related
cash flows resulting from share-based payments, including the excess tax benefits
and tax deficiencies related to the settlement of stock-based awards, be classified as cash flows from operating activities, and that cash paid by directly withholding shares for tax purposes be classified as a financing activity in the statement of
cash flows. The standard also allows companies to make an accounting policy election to either estimate the number of awards that are expected to vest, consistent with current guidance, or account for forfeitures as they occur. This new guidance,
with the exception of the presentation of cash paid by directly withholding shares for tax purposes on the statement of cash flows, is applied prospectively for the Company beginning on January 1, 2017. The presentation of cash paid by directly
withholding shares for tax purposes on the statement of cash flows as a financing activity requires retrospective application beginning January 1, 2017 (there was no impact on the condensed consolidated statement of cash flows for the three
months ended April 2, 2016). The adoption of this guidance did not have a material effect on the Companys consolidated financial statements. There is no change to our accounting policy with respect to the estimation of awards that are
expected to vest.
In the January 2017, new guidance was issued regarding the simplification of the test for
goodwill impairment. The new guidance eliminates Step 2 from the goodwill impairment test and will require an entity to perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying
amount. The new guidance is effective for the Company for annual and interim reporting periods beginning after December 15, 2019, with early adoption permitted. The Company early adopted this new guidance in the first quarter of 2017. The
adoption of this guidance did not have a material impact on the Companys consolidated financial statements.
Recently Issued Accounting Pronouncements -
In May 2014, new accounting guidance was issued that will
supersede nearly all existing accounting guidance related to revenue recognition. The new guidance provides that an entity recognizes revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to
which the entity expects to be entitled in exchange for those goods or services. This update also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including
significant judgments and changes in judgments, and assets recognized from costs incurred to obtain or fulfill a contract. The Financial Accounting Standards Board has also issued a number of updates to this new accounting guidance. The standard is
effective for the Company for annual and interim reporting periods beginning after December 15, 2017 and is not expected to have a material effect on the Companys consolidated financial statements.
In January 2016, new accounting guidance was issued regarding the recognition and measurement of financial assets and
financial liabilities. Changes to the current accounting guidance primarily affect the accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments.
In addition, the Financial Accounting Standards
7
Board clarified guidance related to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on
available-for-sale
debt securities. The accounting for other financial instruments, such as loans, investments in debt securities, and financial liabilities, is largely unchanged. The standard is effective
for the Company for annual and interim reporting periods beginning after December 15, 2017 and is not expected to have a material effect on the Companys consolidated financial statements.
In February 2016, new accounting guidance was issued regarding the accounting for leases. The new guidance requires all
lessees to recognize on the balance sheet right to use assets and lease liabilities for the rights and obligations created by lease arrangements with terms greater than 12 months. The standard is effective for the Company for annual and interim
reporting periods beginning after December 15, 2018. The Company is evaluating the impact that the adoption of this new guidance will have on its consolidated financial statements., but we expect that assets and liabilities will increase on the
consolidated balance sheet.
In August 2016, new accounting guidance was issued regarding the presentation and
classification of certain cash receipts and cash payments in the statement of cash flows. The new guidance addresses specific cash flow presentation issues in order to reduce diversity in existing practice. The new guidance is effective for the
Company for annual and interim reporting periods beginning after December 15, 2017. The Company is evaluating the impact that the adoption of this new guidance will have on its consolidated financial statements.
In October 2016, new accounting guidance was issued regarding intra-entity transfers of assets other than inventory. The new
guidance requires that an entity should recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. The new guidance is effective for the Company for annual and interim reporting
periods beginning after December 15, 2017. The Company is evaluating the impact that the adoption of this new guidance will have on its consolidated financial statements.
Prior Year Change in Accounting Principle -
In the fourth quarter of 2016, the Company changed its
accounting method for valuing its inventories held by the parent company and Nucor-Yamato Steel Company to the
first-in,
first-out
(FIFO) method of accounting from the
last-in,
first-out
(LIFO) method. All inventories held by other subsidiaries of the parent company were previously and continue to be valued using the FIFO method.
The effects of the change in accounting principle from LIFO to FIFO have been retrospectively applied to all periods
presented. As a result of the retrospective application of the change in accounting principle, certain financial statement line items in the Companys condensed consolidated statement of earnings and condensed consolidated statement of cash
flows (no impact on total cash provided by operating activities) for the three months ended April 2, 2016 were adjusted as follows:
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|
|
|
|
|
|
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(in thousands, except share data)
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As Originally Reported
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Effect of Change
|
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As Currently Reported
|
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Condensed Consolidated Statement of Earnings for the Three Months (13 Weeks) Ended
April 2, 2016:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of products sold
|
|
$
|
3,428,628
|
|
|
$
|
(28,037
|
)
|
|
$
|
3,400,591
|
|
Provision for income taxes
|
|
|
37,065
|
|
|
|
10,001
|
|
|
|
47,066
|
|
Net earnings
|
|
|
104,461
|
|
|
|
18,036
|
|
|
|
122,497
|
|
Earnings attributable to noncontrolling interests
|
|
|
33,707
|
|
|
|
1,225
|
|
|
|
34,932
|
|
Net earnings attributable to Nucor stockholders
|
|
|
70,754
|
|
|
|
16,811
|
|
|
|
87,565
|
|
|
|
|
|
Net earnings per share:
|
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|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.22
|
|
|
$
|
0.05
|
|
|
$
|
0.27
|
|
Diluted
|
|
$
|
0.22
|
|
|
$
|
0.05
|
|
|
$
|
0.27
|
|
|
|
|
|
Condensed Consolidated Statement of Cash Flows for the Three Months (13 Weeks) Ended
April 2, 2016:
|
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|
|
|
|
|
|
|
|
|
|
|
Net earnings
|
|
$
|
104,461
|
|
|
$
|
18,036
|
|
|
$
|
122,497
|
|
Changes in inventories
|
|
|
142,516
|
|
|
|
(28,037
|
)
|
|
|
114,479
|
|
Changes in deferred income taxes
|
|
|
5,529
|
|
|
|
10,001
|
|
|
|
15,530
|
|
8
2.
|
ACQUISITIONS AND DISPOSITIONS: On January 20, 2017, Nucor used cash on hand to acquire Republic Conduit (Republic) for a purchase price of $331.3 million. Republic produces steel electrical conduit
primarily used to protect and route electrical wiring in various nonresidential structures such as hospitals, office buildings and stadiums. With its two facilities located in Kentucky and Georgia, Republics annual shipment volume has averaged
146,000 tons during the past two years. This acquisition not only further expands Nucors product portfolio to include the steel electrical conduit but the Company also believes it will be an important, value-added channel to market for
Nucors sheet mills. Republics financial results are included as part of the steel mills segment (see Note 18).
|
We have allocated the purchase price for Republic to its individual assets acquired and liabilities assumed. While the
purchase price allocation is substantially complete, it is still preliminary and subject to change.
The following
table summarizes the fair values of the assets acquired and liabilities assumed of Republic as of the date of acquisition (in thousands):
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|
|
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Cash
|
|
$
|
206
|
|
Accounts receivable
|
|
|
39,177
|
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Inventory
|
|
|
33,561
|
|
Other current assets
|
|
|
1,101
|
|
Property, plant and equipment
|
|
|
67,412
|
|
Goodwill
|
|
|
115,527
|
|
Other intangible assets
|
|
|
89,200
|
|
Other assets
|
|
|
3,118
|
|
|
|
|
|
|
Total assets acquired
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|
349,302
|
|
|
|
|
|
|
Current liabilities
|
|
|
17,955
|
|
|
|
|
|
|
Total liabilities assumed
|
|
|
17,955
|
|
|
|
|
|
|
Net assets acquired
|
|
$
|
331,347
|
|
|
|
|
|
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The following table summarizes the purchase price allocation to the identifiable intangible assets of
Republic as of the date of acquisition (in thousands, except years):
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|
|
|
|
|
|
|
|
|
|
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Weighted -
Average Life
|
|
|
|
|
|
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Customer relationships
|
|
$
|
80,800
|
|
|
|
12 years
|
|
Trademarks and trade names
|
|
|
8,400
|
|
|
|
13 years
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
89,200
|
|
|
|
|
|
|
|
|
|
|
|
|
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The goodwill of $115.5 million is calculated as the excess of the purchase price over
the fair values of the assets acquired and liabilities assumed and has been allocated to the steel mills segment (see Note 6). Goodwill recognized for tax purposes was $118.6 million, all of which is deductible for tax purposes.
Other acquisitions, exclusive of purchase price adjustments of acquisitions made and net of cash acquired, totaled
$150.8 million in the first quarter of 2017 ($1.4 million in the first quarter of 2016). Included the first quarter of 2017 amount is the January 9, 2017 acquisition of Southland Tube (Southland). Nucor used cash on hand to acquire
Southland for a purchase price of approximately $130 million. Southland is a manufacturer of HSS tubing, which is primarily used in nonresidential construction markets. Southland had shipments of approximately 240,000 tons in 2016 and has one
manufacturing facility in Birmingham, Alabama.
9
3.
|
ACCOUNTS RECEIVABLE: An allowance for doubtful accounts is maintained for estimated losses resulting from the inability of our customers to make required payments. Accounts receivable are stated net of an allowance
for doubtful accounts of $46.1 million at April 1, 2017 ($45.9 million at December 31, 2016).
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4.
|
INVENTORIES: Inventories consisted of approximately 39% raw materials and supplies and 61% finished and semi-finished products at April 1, 2017 (37% and 63%, respectively, at December 31, 2016).
Nucors manufacturing process consists of a continuous, vertically integrated process from which products are sold to customers at various stages throughout the process. Since most steel products can be classified as either finished or
semi-finished products, these two categories of inventory are combined. Use of the lower of cost or market methodology reduced inventories by $1.3 million at April 1, 2017 ($2.2 million at December 31, 2016).
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5.
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PROPERTY, PLANT AND EQUIPMENT: Property, plant and equipment is recorded net of accumulated depreciation of $8.31 billion at April 1, 2017 ($8.16 billion at December 31, 2016).
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Given the natural gas pricing environment, Nucor performed an impairment assessment of its proved
producing natural gas well assets in December 2016. One of the main assumptions that most significantly affects the undiscounted cash flows determination is managements estimate of future natural gas prices. The pricing used in this
impairment assessment was developed by management based on projected natural gas market supply and demand dynamics, in conjunction with a review of projections by numerous sources of market data. This analysis was performed on each of Nucors
three groups of wells, with each group defined by common geographic location. Each of Nucors three groups of wells passed the impairment test. One of the groups of wells had estimated undiscounted cash flows that were noticeably closer to
its carrying value of $80.8 million as of December 31, 2016. The carrying value of that group of wells was $78.4 million at April 1, 2017. Changes in the natural gas industry or a prolonged low price environment beyond what had
already been assumed in the analysis could cause management to revise the natural gas price assumptions, which could possibly result in an impairment of a portion or all of the groups of proved well assets.
6.
|
GOODWILL AND OTHER INTANGIBLE ASSETS: The change in the net carrying amount of goodwill for the three months ended April 1, 2017 by segment is as follows (in thousands):
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|
|
|
|
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Steel Mills
|
|
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Steel Products
|
|
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Raw Materials
|
|
|
Total
|
|
Balance at December 31, 2016
|
|
$
|
620,156
|
|
|
$
|
702,995
|
|
|
$
|
729,577
|
|
|
$
|
2,052,728
|
|
Acquisitions
|
|
|
125,293
|
|
|
|
|
|
|
|
|
|
|
|
125,293
|
|
Translation
|
|
|
|
|
|
|
(745
|
)
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|
|
|
|
|
(745
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)
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at April 1, 2017
|
|
$
|
745,449
|
|
|
$
|
702,250
|
|
|
$
|
729,577
|
|
|
$
|
2,177,276
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nucor completed its most recent annual goodwill impairment testing during the fourth quarter
of 2016 and concluded that there was no impairment of goodwill for any of its reporting units. There have been no triggering events requiring an interim assessment for impairment since the most recent annual impairment testing date.
10
Intangible assets with estimated useful lives of 5 to 22 years are amortized
on a straight-line or accelerated basis and are comprised of the following (in thousands):
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
April 1, 2017
|
|
|
December 31, 2016
|
|
|
|
Gross
Amount
|
|
|
Accumulated
Amortization
|
|
|
Gross
Amount
|
|
|
Accumulated
Amortization
|
|
Customer relationships
|
|
$
|
1,408,658
|
|
|
$
|
584,962
|
|
|
$
|
1,295,803
|
|
|
$
|
566,884
|
|
Trademarks and trade names
|
|
|
174,021
|
|
|
|
69,149
|
|
|
|
161,851
|
|
|
|
66,494
|
|
Other
|
|
|
62,807
|
|
|
|
21,883
|
|
|
|
62,807
|
|
|
|
20,248
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1,645,486
|
|
|
$
|
675,994
|
|
|
$
|
1,520,461
|
|
|
$
|
653,626
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intangible asset amortization expense for the first quarter of 2017 and 2016 was
$22.4 million and $18.1 million, respectively. Annual amortization expense is estimated to be $90.9 million in 2017; $88.8 million in 2018; $85.9 million in 2019; $83.5 million in 2020; and $82.3 million in 2021.
7.
|
EQUITY INVESTMENTS: The carrying value of our equity investments in domestic and foreign companies was $660.0 million at April 1, 2017 ($663.4 million at December 31, 2016) and is recorded in
other assets in the condensed consolidated balance sheets.
|
NUMIT
Nucor has a 50% economic and voting interest in NuMit LLC (NuMit). NuMit owns 100% of the equity interest in Steel
Technologies LLC, an operator of 25 sheet processing facilities located throughout the U.S., Canada and Mexico. Nucor accounts for the investment in NuMit (on a
one-month
lag basis) under the equity method, as
control and risk of loss are shared equally between the members. Nucors investment in NuMit at April 1, 2017, was $304.9 million ($325.1 million as of December 31, 2016). Nucor received distributions of $30.2 million
and $36.0 million from NuMit during the first quarter of 2017 and 2016, respectively.
DUFERDOFIN NUCOR
Nucor owns a 50% economic and voting interest in Duferdofin Nucor S.r.l. (Duferdofin Nucor), an Italian steel manufacturer,
and accounts for the investment (on a
one-month
lag basis) under the equity method, as control and risk of loss are shared equally between the members.
Nucors investment in Duferdofin Nucor at April 1, 2017 was $258.6 million ($256.6 million at
December 31, 2016). Nucors 50% share of the total net assets of Duferdofin Nucor was $103.4 million at April 1, 2017, resulting in a basis difference of $155.2 million due to the
step-up
to fair value of certain assets and liabilities attributable to Duferdofin Nucor as well as the identification of goodwill ($82.3 million) and finite-lived intangible assets. This basis difference,
excluding the portion attributable to goodwill, is being amortized based on the remaining estimated useful lives of the various underlying net assets, as appropriate. Amortization expense associated with the fair value
step-up
was $2.1 million and $2.2 million in the first quarter of 2017 and 2016, respectively.
As of April 1, 2017, Nucor had outstanding notes receivable of 35.0 million ($37.4 million) from Duferdofin
Nucor (35.0 million, or $36.9 million, as of December 31, 2016). The notes receivable bear interest at 0.94% and reset annually on September 30 to the
12-month
Euro Interbank Offered
Rate (Euribor) plus 1% per year. The principal amounts are due on January 31, 2019. As of April 1, 2017, and December 31, 2016, the note receivable was classified in other assets in the condensed consolidated balance sheets.
Nucor has issued a guarantee, the fair value of which is immaterial, for its ownership percentage (50%) of
Duferdofin Nucors borrowings under Facility A of a Structured Trade Finance Facilities Agreement (Facility A). The maximum amount Duferdofin Nucor can borrow under Facility A is 122.5
11
million ($130.8 million as of April 1, 2017). As of April 1, 2017, there was 102.5 million ($109.5 million) outstanding under that facility (107.0 million, or
$112.7 million, at December 31, 2016). Facility A was amended in 2015 to extend the maturity date to October 12, 2018. If Duferdofin Nucor fails to pay when due any amounts for which it is obligated under Facility A, Nucor could be
required to pay 50% of such amounts pursuant to and in accordance with the terms of its guarantee. Any indebtedness of Duferdofin Nucor to Nucor is effectively subordinated to the indebtedness of Duferdofin Nucor under Facility A. Nucor has not
recorded any liability associated with this guarantee.
ALL EQUITY INVESTMENTS
Nucor reviews its equity investments for impairment if and when circumstances indicate that a decline in value below their carrying amounts
may have occurred. Nucor last assessed its equity investment in Duferdofin Nucor for impairment in 2015 due to the protracted challenging steel market conditions caused by excess global overcapacity, which increased in 2015, and the difficult
economic environment in Europe. After completing its assessment, the Company determined that the carrying amount exceeded its estimated fair value and incurred a partial impairment of its investment. While the operating performance of Duferdofin
Nucor showed meaningful improvement in 2016 and the first quarter of 2017, steel market conditions in Europe have continued to be challenging. Therefore, it is reasonably possible that material deviation of future performance from the estimates used
in our most recent valuation could result in further impairment of our investment in Duferdofin Nucor. We will continue to monitor for potential triggering events that could affect the carrying value of our investment in Duferdofin Nucor as a result
of future market conditions and any changes in our business strategy.
8.
|
CURRENT LIABILITIES: Book overdrafts, included in accounts payable in the condensed consolidated balance sheets, were $78.7 million at April 1, 2017 ($61.3 million at December 31, 2016). Dividends
payable, included in accrued expenses and other current liabilities in the condensed consolidated balance sheets, were $121.4 million at April 1, 2017 ($121.3 million at December 31, 2016).
|
9.
|
DERIVATIVES: Nucor periodically uses derivative financial instruments primarily to partially manage its exposure to price risk related to natural gas purchases used in the production process as well as to scrap,
copper and aluminum purchased for resale to its customers. In addition, Nucor periodically uses derivatives to partially manage its exposure to changes in interest rates on outstanding debt instruments and uses forward foreign exchange contracts to
hedge cash flows associated with certain assets and liabilities, firm commitments and anticipated transactions.
|
Nucor recognizes all derivative instruments in the condensed consolidated balance sheets at fair value. Any resulting
changes in fair value are recorded as adjustments to other comprehensive income (loss), net of tax, or recognized in net earnings, as appropriate.
At April 1, 2017, natural gas swaps covering approximately 20.4 million MMBTUs (extending through December 2019)
were outstanding.
12
The following tables summarize information regarding Nucors derivative
instruments (in thousands):
Fair Value of Derivative Instruments
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Fair Value at
|
|
|
|
Balance Sheet Location
|
|
|
April 1, 2017
|
|
|
Dec. 31, 2016
|
|
Asset derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Commodity contracts
|
|
|
Other current assets
|
|
|
$
|
500
|
|
|
$
|
1,250
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign exchange contracts
|
|
|
Other current assets
|
|
|
|
|
|
|
|
779
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total asset derivatives
|
|
|
|
|
|
$
|
500
|
|
|
$
|
2,029
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liability derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Commodity contracts
|
|
|
Deferred credits and other liabilities
|
|
|
$
|
(1,100
|
)
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liability derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Commodity contracts
|
|
|
Accrued expenses and other current liabilities
|
|
|
|
(441
|
)
|
|
|
(605
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign exchange contracts
|
|
|
Accrued expenses and other current liabilities
|
|
|
|
(92
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liability derivatives not designated as hedging instruments
|
|
|
|
|
|
|
(533
|
)
|
|
|
(605
|
)
|
Total liability derivatives
|
|
|
|
|
|
$
|
(1,633
|
)
|
|
$
|
(605
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Effect of Derivative Instruments on the Condensed Consolidated Statements of Earnings
Derivatives Designated as Hedging Instruments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivatives in
Cash Flow
Hedging
Relationships
|
|
Statement of
Earnings
Location
|
|
Amount of Gain or (Loss), net of
tax, Recognized in OCI on
Derivatives (Effective Portion)
|
|
|
Amount of Gain or (Loss), net of tax,
Reclassified from Accumulated OCI
into Earnings on
Derivatives
(Effective Portion)
|
|
|
Amount of Gain or (Loss), net of
tax, Recognized in Earnings on
Derivatives (Ineffective Portion)
|
|
|
|
Three Months (13 Weeks) Ended
|
|
|
Three Months (13 Weeks) Ended
|
|
|
Three Months (13 Weeks) Ended
|
|
|
|
April 1, 2017
|
|
|
April 2, 2016
|
|
|
April 1, 2017
|
|
|
April 2, 2016
|
|
|
April 1, 2017
|
|
|
April 2, 2016
|
|
Commodity contracts
|
|
Cost of products sold
|
|
$
|
(1,635
|
)
|
|
$
|
(1,731
|
)
|
|
$
|
(485
|
)
|
|
$
|
(3,031
|
)
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivatives Not Designated as Hedging Instruments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount of Gain or (Loss)
Recognized in Earnings on
Derivatives
|
|
Derivatives Not Designated as
Hedging Instruments
|
|
Statement of
Earnings Location
|
|
Three Months (13 Weeks) Ended
|
|
|
|
|
|
April 1, 2017
|
|
|
April 2, 2016
|
|
Commodity contracts
|
|
Cost of products sold
|
|
$
|
(2,555
|
)
|
|
$
|
88
|
|
Foreign exchange contracts
|
|
Cost of products sold
|
|
|
(896
|
)
|
|
|
(818
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
$
|
(3,451
|
)
|
|
$
|
(730
|
)
|
|
|
|
|
|
|
|
|
|
|
|
13
10.
|
FAIR VALUE MEASUREMENTS: The following table summarizes information regarding Nucors financial assets and financial liabilities that are measured at fair value as of April 1, 2017, and December 31,
2016 (in thousands). Nucor does not have any
non-financial
assets or liabilities that are measured at fair value on a recurring basis.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurements at Reporting Date Using
|
|
|
|
|
|
|
Quoted Prices
in Active
Markets for
Identical Assets
|
|
|
|
|
|
|
|
|
|
Carrying
Amount in
Condensed
Consolidated
|
|
|
|
Significant
Other
Observable
Inputs
|
|
|
Significant
Unobservable
Inputs
|
|
Description
|
|
Balance Sheets
|
|
|
(Level 1)
|
|
|
(Level 2)
|
|
|
(Level 3)
|
|
As of April 1, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash equivalents
|
|
$
|
1,193,130
|
|
|
$
|
1,193,130
|
|
|
$
|
|
|
|
$
|
|
|
Short-term investments
|
|
|
50,000
|
|
|
|
50,000
|
|
|
|
|
|
|
|
|
|
Commodity contracts
|
|
|
500
|
|
|
|
|
|
|
|
500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
1,243,630
|
|
|
$
|
1,243,130
|
|
|
$
|
500
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commodity and foreign exchange contracts
|
|
$
|
(1,633
|
)
|
|
$
|
|
|
|
$
|
(1,633
|
)
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash equivalents
|
|
$
|
1,609,523
|
|
|
$
|
1,609,523
|
|
|
$
|
|
|
|
$
|
|
|
Short-term investments
|
|
|
150,000
|
|
|
|
150,000
|
|
|
|
|
|
|
|
|
|
Commodity and foreign exchange contracts
|
|
|
2,029
|
|
|
|
|
|
|
|
2,029
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
1,761,552
|
|
|
$
|
1,759,523
|
|
|
$
|
2,029
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commodity contracts
|
|
$
|
(605
|
)
|
|
$
|
|
|
|
$
|
(605
|
)
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair value measurements for Nucors cash equivalents and short-term investments are
classified under Level 1 because such measurements are based on quoted market prices in active markets for identical assets. Our short-term investments are held in similar short-term investment instruments as described in Note 4 to the
consolidated financial statements included in Nucors Annual Report on Form
10-K
for the year ended December 31, 2016. Fair value measurements for Nucors derivatives are classified under
Level 2 because such measurements are based on published market prices for similar assets or are estimated based on observable inputs such as interest rates, yield curves, credit risks, spot and future commodity prices, and spot and future
exchange rates.
The fair value of short-term and long-term debt, including current maturities, was approximately
$4.70 billion at April 1, 2017 ($4.70 billion at December 31, 2016). The debt fair value estimates are classified under Level 2 because such estimates are based on readily available market prices of our debt at April 1,
2017, and December 31, 2016 or similar debt with the same maturities, ratings and interest rates.
11.
|
CONTINGENCIES: Nucor is subject to environmental laws and regulations established by federal, state and local authorities and, accordingly, makes provision for the estimated costs of compliance. Of the undiscounted
total of $20.9 million of accrued environmental costs at April 1, 2017 ($21.9 million at December 31, 2016), $6.6 million was classified in accrued expenses and other current liabilities ($9.5 million at
December 31, 2016) and $14.3 million was classified in deferred credits and other liabilities ($12.4 million at December 31, 2016). Inherent uncertainties exist in these estimates primarily due to unknown conditions, evolving
remediation technology and changing governmental regulations and legal standards.
|
14
We are from time to time a party to various lawsuits, claims and other legal
proceedings that arise in the ordinary course of business. With respect to all such lawsuits, claims and proceedings, we record reserves when it is probable a liability has been incurred and the amount of loss can be reasonably estimated. We do not
believe that any of these proceedings, individually or in the aggregate, would be expected to have a material adverse effect on our results of operations, financial position or cash flows. Nucor maintains liability insurance for certain risks that
is subject to certain self-insurance limits
.
12.
|
STOCK-BASED COMPENSATION:
Stock Options
Stock options may be granted to Nucors key employees, officers and
non-employee
directors with
exercise prices at 100% of the market value on the date of the grant. The stock options granted are generally exercisable at the end of three years and have a term of 10 years. New shares are issued upon exercise of stock options.
|
A summary of activity under Nucors stock option plans for the first quarter of 2017 is as
follows (in thousands, except year and per share amounts):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted -
Average
|
|
|
Weighted -
Average
|
|
|
Aggregate
Intrinsic
Value
|
|
|
|
Shares
|
|
|
Exercise
Price
|
|
|
Remaining
Contractual Life
|
|
|
Number of shares under option:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding at beginning of year
|
|
|
3,591
|
|
|
$
|
45.32
|
|
|
|
|
|
|
|
|
|
Granted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercised
|
|
|
(92
|
)
|
|
$
|
38.56
|
|
|
|
|
|
|
|
2,278
|
|
Canceled
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding at April 1, 2017
|
|
|
3,499
|
|
|
$
|
45.49
|
|
|
|
7.1 years
|
|
|
|
49,788
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options exercisable at April 1, 2017
|
|
|
1,466
|
|
|
$
|
40.94
|
|
|
|
5.2 years
|
|
|
|
27,523
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock options granted to employees who are eligible for retirement on the date of grant are
expensed immediately since these awards vest upon retirement from the Company. Retirement, for purposes of vesting in these stock options, means termination of employment after satisfying age and years of service requirements. Similarly,
stock options granted to employees who will become retirement-eligible prior to the end of the vesting term are expensed over the period through which the employee will become retirement-eligible. Compensation expense for stock options granted to
employees who are not retirement-eligible is recognized on a straight-line basis over the vesting period. Compensation expense for stock options was $0.3 million in the first quarter of 2017 ($0.2 million in the first quarter of 2016). As
of April 1, 2017, unrecognized compensation expense related to stock options was $1.3 million, which is expected to be recognized over a weighted-average period of 1.8 years.
Restricted Stock Units
Nucor annually grants restricted stock units (RSUs) to key employees, officers and
non-employee
directors. The RSUs typically vest and are converted to common stock in three equal installments on each of the first three anniversaries of the grant date. A portion of the RSUs awarded to an
officer vests upon the officers retirement. Retirement, for purposes of vesting in these RSUs only, means termination of employment with approval of the Compensation and Executive Development Committee of the Board of Directors after
satisfying age and years of service requirements. RSUs granted to
non-employee
directors are fully vested on the grant date and are payable to the
non-employee
director
in the form of common stock after the termination of the directors service on the Board of Directors.
RSUs
granted to employees who are eligible for retirement on the date of grant are expensed immediately, and RSUs granted to employees who will become retirement-eligible prior to the end of the vesting term are expensed over the period through which the
employee will become retirement-
15
eligible since these awards vest upon retirement from the Company. Compensation expense for RSUs granted to employees who are not retirement-eligible is recognized on a straight-line basis over
the vesting period.
Cash dividend equivalents are paid to holders of RSUs each quarter. Dividend equivalents paid
on RSUs expected to vest are recognized as a reduction in retained earnings.
The fair value of an RSU is determined
based on the closing stock price of Nucors common stock on the date of the grant. A summary of Nucors RSU activity for the first quarter of 2017 is as follows (shares in thousands):
|
|
|
|
|
|
|
|
|
|
|
Shares
|
|
|
Grant Date
Fair Value
|
|
Restricted stock units:
|
|
|
|
|
|
|
|
|
Unvested at beginning of year
|
|
|
1,040
|
|
|
$
|
48.47
|
|
Granted
|
|
|
|
|
|
|
|
|
Vested
|
|
|
(11
|
)
|
|
$
|
48.64
|
|
Canceled
|
|
|
(4
|
)
|
|
$
|
48.53
|
|
|
|
|
|
|
|
|
|
|
Unvested at April 1, 2017
|
|
|
1,025
|
|
|
$
|
48.47
|
|
|
|
|
|
|
|
|
|
|
Shares reserved for future grants
(stock options and RSUs)
|
|
|
8,702
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation expense for RSUs was $5.0 million in the first quarter of 2017
($4.9 million in the first quarter of 2016). As of April 1, 2017, unrecognized compensation expense related to unvested RSUs was $26.1 million, which is expected to be recognized over a weighted-average period of 1.9 years.
Restricted Stock Awards
Nucors Senior Officers Long-Term Incentive Plan (LTIP) and Annual Incentive
Plan (AIP) authorize the award of shares of common stock to officers subject to certain conditions and restrictions.
The LTIP provides for the award of shares of restricted common stock at the end of each LTIP performance measurement period
at no cost to officers if certain financial performance goals are met during the period.
One-third
of the LTIP restricted stock award vests upon each of the first three anniversaries of the award date or, if
earlier, upon the officers attainment of age 55 while employed by Nucor. Although participants are entitled to cash dividends and may vote such awarded shares, the sale or transfer of such shares is limited during the restricted period.
The AIP provides for the payment of annual cash incentive awards. An AIP participant may elect, however, to defer
payment of up to
one-half
of an AIP award. In such event, the deferred AIP award is converted into common stock units and credited with a deferral incentive, in the form of additional common stock units, equal
to 25% of the number of common stock units attributable to the deferred AIP award. Common stock units attributable to deferred AIP awards are fully vested. Common stock units credited as a deferral incentive vest upon the AIP participants
attainment of age 55 while employed by Nucor. Vested common stock units are paid to AIP participants in the form of shares of common stock following their termination of employment with Nucor.
16
A summary of Nucors restricted stock activity under the AIP and the LTIP
for the first quarter of 2017 is as follows (shares in thousands):
|
|
|
|
|
|
|
|
|
|
|
Shares
|
|
|
Grant Date
Fair Value
|
|
Restricted stock awards and units:
|
|
|
|
|
|
|
|
|
Unvested at beginning of year
|
|
|
67
|
|
|
$
|
45.77
|
|
Granted
|
|
|
172
|
|
|
$
|
60.62
|
|
Vested
|
|
|
(144
|
)
|
|
$
|
51.69
|
|
Canceled
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unvested at April 1, 2017
|
|
|
95
|
|
|
$
|
54.45
|
|
|
|
|
|
|
|
|
|
|
Shares reserved for future grants
|
|
|
683
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation expense for common stock and common stock units awarded under the AIP and LTIP
is recorded over the performance measurement and vesting periods based on the anticipated number and market value of shares of common stock and common stock units to be awarded. Compensation expense for anticipated awards based upon Nucors
financial performance, exclusive of amounts payable in cash, was $4.3 million in the first quarter of 2017 ($2.2 million in the first quarter of 2016). As of April 1, 2017, unrecognized compensation expense related to unvested
restricted stock awards was $1.9 million, which is expected to be recognized over a weighted-average period of 2.2 years.
13.
|
EMPLOYEE BENEFIT PLAN: Nucor makes contributions to a Profit Sharing and Retirement Savings Plan for qualified employees based on the profitability of the Company. Nucors expense for these benefits totaled
$54.0 million and $11.8 million in the first quarter of 2017 and 2016, respectively. The related liability for these benefits is included in salaries, wages and related accruals in the condensed consolidated balance sheets.
|
14.
|
INTEREST EXPENSE (INCOME): The components of net interest expense are as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
Three Months (13 Weeks) Ended
|
|
|
|
April 1, 2017
|
|
|
April 2, 2016
|
|
Interest expense
|
|
$
|
46,300
|
|
|
$
|
47,374
|
|
Interest income
|
|
|
(2,695
|
)
|
|
|
(2,452
|
)
|
|
|
|
|
|
|
|
|
|
Interest expense, net
|
|
$
|
43,605
|
|
|
$
|
44,922
|
|
|
|
|
|
|
|
|
|
|
15.
|
INCOME TAXES: The effective tax rate for the first quarter of 2017 was 31.2% compared to 27.8% for the first quarter of 2016. The increase in the effective tax rate for the first quarter of 2017 as compared to the
first quarter of 2016 is primarily due to the change in relative proportions of net earnings attributable to noncontrolling interests to total
pre-tax
earnings between the periods. The increase in effective
tax rate is also due to a $4.5 million favorable
non-cash
out-of-period
adjustment to current tax balances during the first
quarter of 2016.
|
Nucor has concluded U.S. federal income tax matters for years through 2012. The tax
years 2013 through 2015 remain open to examination by the Internal Revenue Service. The Canada Revenue Agency has substantially concluded its examination of the 2012 Canadian returns for Harris Steel Group Inc. and certain related affiliates and is
now examining the 2013 Canadian returns. The tax
17
years 2009 through 2015 remain open to examination by other major taxing jurisdictions to which Nucor is subject (primarily Canada and other state and local jurisdictions).
Non-current
deferred tax liabilities included in deferred credits and other
liabilities in the condensed consolidated balance sheets were $546.5 million at April 1, 2017 ($558.6 million at December 31, 2016).
16.
|
STOCKHOLDERS EQUITY: The following tables reflect the changes in stockholders equity attributable to both Nucor and the noncontrolling interests of Nucors joint ventures, primarily Nucor-Yamato
Steel Company, of which Nucor owns 51% (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attributable to
Nucor Corporation
|
|
|
Attributable to
Noncontrolling Interests
|
|
|
Total
|
|
Stockholders equity at December 31, 2016
|
|
$
|
7,879,865
|
|
|
$
|
374,843
|
|
|
$
|
8,254,708
|
|
Total comprehensive income
|
|
|
357,750
|
|
|
|
20,749
|
|
|
|
378,499
|
|
Stock options
|
|
|
3,785
|
|
|
|
|
|
|
|
3,785
|
|
Issuance of stock under award plans, net of forfeitures
|
|
|
13,633
|
|
|
|
|
|
|
|
13,633
|
|
Amortization of unearned compensation
|
|
|
400
|
|
|
|
|
|
|
|
400
|
|
Dividends declared
|
|
|
(121,410
|
)
|
|
|
|
|
|
|
(121,410
|
)
|
Distributions to noncontrolling interests
|
|
|
|
|
|
|
(61,544
|
)
|
|
|
(61,544
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders equity at April 1, 2017
|
|
$
|
8,134,023
|
|
|
$
|
334,048
|
|
|
$
|
8,468,071
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders equity at December 31, 2015
|
|
$
|
7,477,816
|
|
|
$
|
372,061
|
|
|
$
|
7,849,877
|
|
Total comprehensive income
|
|
|
142,762
|
|
|
|
34,932
|
|
|
|
177,694
|
|
Stock options
|
|
|
150
|
|
|
|
|
|
|
|
150
|
|
Issuance of stock under award plans, net of forfeitures
|
|
|
8,618
|
|
|
|
|
|
|
|
8,618
|
|
Amortization of unearned compensation
|
|
|
200
|
|
|
|
|
|
|
|
200
|
|
Treasury stock acquired
|
|
|
(5,173
|
)
|
|
|
|
|
|
|
(5,173
|
)
|
Dividends declared
|
|
|
(120,156
|
)
|
|
|
|
|
|
|
(120,156
|
)
|
Distributions to noncontrolling interests
|
|
|
|
|
|
|
(49,853
|
)
|
|
|
(49,853
|
)
|
Other
|
|
|
|
|
|
|
(1,385
|
)
|
|
|
(1,385
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders equity at April 2, 2016
|
|
$
|
7,504,217
|
|
|
$
|
355,755
|
|
|
$
|
7,859,972
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
On September 2, 2015, the Company announced that the Board of Directors had approved a
stock repurchase program under which the Company is authorized to repurchase up to $900 million of the Companys common stock. The new $900 million share repurchase program has no stated expiration and replaced any previously
authorized repurchase programs. As of April 1, 2017, the Company had $828.3 million remaining available under the program. The Company expects any share repurchases to be made through purchases from time to time in the open market at
prevailing market prices, through private transactions or block trades. The timing and amount of any repurchases will depend on market conditions, share price, applicable legal requirements and other factors.
18
17.
|
ACCUMULATED OTHER COMPREHENSIVE LOSS: The following tables reflect the changes in other accumulated comprehensive loss by component (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months (13 Weeks) Ended
|
|
|
|
April 1, 2017
|
|
|
|
Gains and Losses on
Hedging Derivatives
|
|
|
Foreign Currency
Gain (Loss)
|
|
|
Adjustment to Early
Retiree Medical Plan
|
|
|
Total
|
|
Accumulated other comprehensive loss at December 31, 2016
|
|
$
|
750
|
|
|
$
|
(326,170
|
)
|
|
$
|
7,577
|
|
|
$
|
(317,843
|
)
|
Other comprehensive (loss) income before reclassifications
|
|
|
(1,635
|
)
|
|
|
2,001
|
|
|
|
|
|
|
|
366
|
|
Amounts reclassified from accumulated other comprehensive income into earnings
(1)
|
|
|
485
|
|
|
|
|
|
|
|
|
|
|
|
485
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net current-period other comprehensive (loss) income
|
|
|
(1,150
|
)
|
|
|
2,001
|
|
|
|
|
|
|
|
851
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated other comprehensive loss at April 1, 2017
|
|
$
|
(400
|
)
|
|
$
|
(324,169
|
)
|
|
$
|
7,577
|
|
|
$
|
(316,992
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months (13 Weeks) Ended
|
|
|
|
April 2, 2016
|
|
|
|
Gains and Losses on
Hedging Derivatives
|
|
|
Foreign Currency
Gain (Loss)
|
|
|
Adjustment to Early
Retiree Medical Plan
|
|
|
Total
|
|
Accumulated other comprehensive loss at December 31, 2015
|
|
$
|
(11,700
|
)
|
|
$
|
(351,665
|
)
|
|
$
|
12,003
|
|
|
$
|
(351,362
|
)
|
Other comprehensive (loss) income before reclassifications
|
|
|
(1,731
|
)
|
|
|
53,897
|
|
|
|
|
|
|
|
52,166
|
|
Amounts reclassified from accumulated other comprehensive loss into earnings
(1)
|
|
|
3,031
|
|
|
|
|
|
|
|
|
|
|
|
3,031
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net current-period other comprehensive (loss) income
|
|
|
1,300
|
|
|
|
53,897
|
|
|
|
|
|
|
|
55,197
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated other comprehensive loss at April 2, 2016
|
|
$
|
(10,400
|
)
|
|
$
|
(297,768
|
)
|
|
$
|
12,003
|
|
|
$
|
(296,165
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Includes $485 and $3,031 of accumulated other comprehensive income reclassifications into cost of products sold for net losses on commodity contracts in the first quarter of 2017 and 2016, respectively. The tax
impacts of those reclassifications were $300 and $1,700, respectively.
|
19
18.
|
SEGMENTS: 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
foundation distributors; tubular products businesses; steel trading businesses; rebar distribution businesses; and Nucors equity method investments in Duferdofin Nucor and NuMit. The steel products segment includes steel joists and joist
girders, steel deck, fabricated concrete reinforcing steel, cold finished steel, steel fasteners, metal building systems, steel grating and wire and wire mesh. The raw materials segment includes The David J. Joseph Company and its affiliates (DJJ),
primarily a scrap broker and processor;
Nu-Iron
Unlimited and Nucor Steel Louisiana, two facilities that produce direct reduced iron (DRI) used by the steel mills; our natural gas production operations; and
Nucors equity method investment in Hunter Ridge Energy Services LLC (Hunter Ridge). Nucor sold its 50% interest in Hunter Ridge during the third quarter of 2016. The steel mills, steel products and raw materials segments are consistent with
the way Nucor manages its business, which is primarily based upon the similarity of the types of products produced and sold by each segment.
|
Net interest expense, other income, profit sharing expense and stock-based compensation are shown under
Corporate/eliminations. Corporate assets primarily include cash and cash equivalents, short-term investments, allowances to eliminate intercompany profit in inventory, deferred income tax assets, federal and state income taxes receivable and
investments in and advances to affiliates. The balance of earnings (loss) before income taxes and noncontrolling interests as of and for the period ended April 2, 2016 was adjusted due to the change in accounting principle from LIFO to FIFO for
certain inventories (see Note 1).
Nucors results by segment were as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
Three Months (13 Weeks) Ended
|
|
|
|
April 1, 2017
|
|
|
April 2, 2016
|
|
Net sales to external customers:
|
|
|
|
|
|
|
|
|
Steel mills
|
|
$
|
3,542,789
|
|
|
$
|
2,634,589
|
|
Steel products
|
|
|
860,075
|
|
|
|
828,376
|
|
Raw materials
|
|
|
412,315
|
|
|
|
252,611
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
4,815,179
|
|
|
$
|
3,715,576
|
|
|
|
|
|
|
|
|
|
|
Intercompany sales:
|
|
|
|
|
|
|
|
|
Steel mills
|
|
$
|
660,918
|
|
|
$
|
470,263
|
|
Steel products
|
|
|
27,143
|
|
|
|
21,206
|
|
Raw materials
|
|
|
2,178,639
|
|
|
|
1,171,362
|
|
Corporate/eliminations
|
|
|
(2,866,700
|
)
|
|
|
(1,662,831
|
)
|
|
|
|
|
|
|
|
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) before income taxes and noncontrolling interests:
|
|
|
|
|
|
|
|
|
Steel mills
|
|
$
|
684,161
|
|
|
$
|
280,372
|
|
Steel products
|
|
|
26,922
|
|
|
|
42,367
|
|
Raw materials
|
|
|
26,391
|
|
|
|
(63,372
|
)
|
Corporate/eliminations
|
|
|
(188,499
|
)
|
|
|
(89,804
|
)
|
|
|
|
|
|
|
|
|
|
|
|
$
|
548,975
|
|
|
$
|
169,563
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
April 1, 2017
|
|
|
December 31, 2016
|
|
Segment assets:
|
|
|
|
|
|
|
|
|
Steel mills
|
|
$
|
9,054,369
|
|
|
$
|
8,084,773
|
|
Steel products
|
|
|
2,596,029
|
|
|
|
2,544,344
|
|
Raw materials
|
|
|
3,395,099
|
|
|
|
3,235,237
|
|
Corporate/eliminations
|
|
|
829,963
|
|
|
|
1,359,164
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
15,875,460
|
|
|
$
|
15,223,518
|
|
|
|
|
|
|
|
|
|
|
20
19.
|
EARNINGS PER SHARE: The computations of basic and diluted net earnings per share are as follows (in thousands, except per share amounts):
|
|
|
|
|
|
|
|
|
|
|
|
Three Months (13 Weeks) Ended
|
|
|
|
April 1, 2017
|
|
|
April 2, 2016
|
|
Basic net earnings per share:
|
|
|
|
|
|
|
|
|
Basic net earnings
|
|
$
|
356,899
|
|
|
$
|
87,565
|
|
Earnings allocated to participating securities
|
|
|
(1,192
|
)
|
|
|
(369
|
)
|
|
|
|
|
|
|
|
|
|
Net earnings available to common stockholders
|
|
$
|
355,707
|
|
|
$
|
87,196
|
|
|
|
|
|
|
|
|
|
|
Average shares outstanding
|
|
|
320,224
|
|
|
|
319,240
|
|
|
|
|
|
|
|
|
|
|
Basic net earnings per share
|
|
$
|
1.11
|
|
|
$
|
0.27
|
|
|
|
|
|
|
|
|
|
|
Diluted net earnings per share:
|
|
|
|
|
|
|
|
|
Diluted net earnings
|
|
$
|
356,899
|
|
|
$
|
87,565
|
|
Earnings allocated to participating securities
|
|
|
(1,188
|
)
|
|
|
(369
|
)
|
|
|
|
|
|
|
|
|
|
Net earnings available to common stockholders
|
|
$
|
355,711
|
|
|
$
|
87,196
|
|
|
|
|
|
|
|
|
|
|
Diluted average shares outstanding:
|
|
|
|
|
|
|
|
|
Basic shares outstanding
|
|
|
320,224
|
|
|
|
319,240
|
|
Dilutive effect of stock options and other
|
|
|
922
|
|
|
|
54
|
|
|
|
|
|
|
|
|
|
|
|
|
|
321,146
|
|
|
|
319,294
|
|
|
|
|
|
|
|
|
|
|
Diluted net earnings per share
|
|
$
|
1.11
|
|
|
$
|
0.27
|
|
|
|
|
|
|
|
|
|
|
The following stock options were excluded from the computation of diluted net earnings per share because
their effect would have been antidilutive (in thousands, except per share amounts):
|
|
|
|
|
|
|
|
|
|
|
Three Months (13 Weeks) Ended
|
|
|
|
April 1, 2017
|
|
|
April 2, 2016
|
|
Anti-dilutive stock options:
|
|
|
|
|
|
|
|
|
Weighted average shares
|
|
|
|
|
|
|
2,403
|
|
|
|
|
|
|
|
|
|
|
Weighted average exercise price
|
|
$
|
|
|
|
$
|
45.73
|
|
|
|
|
|
|
|
|
|
|
21