DERIVATIVES: Nucor uses derivative financial instruments from time-to-time primarily to partially manage its exposure to price risk related to natural gas purchases used in the production process as well as copper and aluminum purchased for resale to its customers. In addition, Nucor uses derivatives from time-to-time 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 October 1, 2011, natural gas swaps covering 4.2 million MMBTUs (extending through December 2012).

The following tables summarize information regarding Nucor's derivative instruments (in thousands):

Fair Values of Derivative Instruments


		Fair Value at
	Balance Sheet Location	Oct. 1, 2011			Dec. 31, 2010
Asset derivatives not designated as hedging instruments:
Commodity contracts	Other current assets	$	6,901		$	—
Foreign exchange contracts	Other current assets		133			266

Total asset derivatives		$	7,034		$	266

Liability derivatives designated as hedging instruments:
Commodity contracts	Accrued expenses and other current liabilities	$	(18,300	)	$	(8,900	)
Commodity contracts	Deferred credits and other liabilities		(4,600	)		(54,800	)

Total liability derivatives designated as hedging instruments			(22,900	)		(63,700	)
Liability derivatives not designated as hedging instruments:
Commodity contracts	Accrued expenses and other current liabilities		—			(2,961	)

Total liability derivatives		$	(22,900	)	$	(66,661	)

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)
Recognized in OCI on Derivatives
(Effective Portion)

Amount of Gain or (Loss)
Reclassified from Accumulated
OCI into Earnings
(Effective Portion)

Amount of Gain or (Loss)
Recognized in Earnings on
Derivatives (Ineffective Portion)

Three Months (13 weeks) Ended

Oct. 1, 2011

Oct. 2, 2010

Oct. 1, 2011

Oct. 2, 2010

Oct. 1, 2011

Oct. 2, 2010

Commodity contracts

Cost of products sold

(4,531

)

(6,702

)

(9,023

)

(9,420

)

600

—

Derivatives in

Cash Flow

Hedging

Relationships

Statement of

Earnings

Location

Amount of Gain or (Loss)
Recognized in OCI on Derivatives
(Effective Portion)

Amount of Gain or (Loss)
Reclassified from Accumulated
OCI into Earnings
(Effective Portion)

Amount of Gain or (Loss)
Recognized in Earnings on
Derivatives (Ineffective Portion)

Nine Months (39 weeks) Ended

Oct. 1, 2011

Oct. 2, 2010

Oct. 1, 2011

Oct. 2, 2010

Oct. 1, 2011

Oct. 2, 2010

Commodity contracts

Cost of products sold

(7,230

)

(29,967

)

(27,282

)

(25,619

)

600

1,100

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

Nine Months (39 weeks) Ended

Oct. 1, 2011

Oct. 2, 2010

Oct. 1, 2011

Oct. 2, 2010

Commodity contracts

Cost of products sold

7,485

(7,443

)

9,462

2,091

Foreign exchange contracts

Cost of products sold

721

129

233

Total

8,206

(7,366

)

9,591

2,324

At October 1, 2011, $39.6 million of net deferred losses on cash flow hedges on natural gas forward purchase contracts included in accumulated other comprehensive income are expected to be reclassified into earnings upon maturity of the derivatives within the next 12 months at the then prevailing values, which may be different from those at October 1, 2011.