DERIVATIVES

9 Months Ended

Sep. 29, 2012

DERIVATIVES

9. 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 to scrap, 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.

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

Fair Value of Derivative Instruments

		Fair Value at
	Balance Sheet Location	Sept. 29, 2012			Dec. 31, 2011
Asset derivatives not designated as hedging instruments:
Commodity contracts	Other current assets	$	—		$	5,071
Liability derivatives designated as hedging instruments:
Commodity contracts	Accrued expenses and other current liabilities	$	—		$	(21,100	)
Liability derivatives not designated as hedging instruments:
Commodity contracts	Accrued expenses and other current liabilities		(1,277	)		—
Foreign exchange contracts	Accrued expenses and other current liabilities		(63	)		(334	)
Total liability derivatives not designated as hedging instruments			(1,340	)		(334	)
Total liability derivatives		$	(1,340	)	$	(21,434	)

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					Three Months (13 weeks) Ended						Three Months (13 weeks) Ended
		Sept. 29, 2012		Oct. 1, 2011			Sept. 29, 2012			Oct. 1, 2011			Sept. 29, 2012		Oct. 1, 2011
Commodity contracts	Cost of products sold	$	—	$	(4,531	)	$	(10,554	)	$	(9,023	)	$	—	$	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						Nine Months (39 weeks) Ended						Nine Months (39 weeks) Ended
		Sept. 29, 2012			Oct. 1, 2011			Sept. 29, 2012			Oct. 1, 2011			Sept. 29, 2012		Oct. 1, 2011
Commodity contracts	Cost of products sold	$	(2,264	)	$	(7,230	)	$	(31,961	)	$	(27,282	)	$	500	$	600

Derivatives Not Designated as Hedging Instruments

Derivatives Not Designated as Hedging Instruments	Statement of Earnings Location	Amount of Gain or (Loss) Recognized in Earnings on Derivatives
		Three Months (13 weeks) Ended					Nine Months (39 weeks) Ended
		Sept. 29, 2012			Oct. 1, 2011		Sept. 29, 2012			Oct. 1, 2011
Commodity contracts	Cost of products sold	$	(1,454	)	$	7,485	$	(231	)	$	9,462
Foreign exchange contracts	Cost of products sold		(25	)		721		146			129
Total		$	(1,479	)	$	8,206	$	(85	)	$	9,591

During the first quarter of 2012, Nucor settled all of its open natural gas forward purchase contracts that were previously in place. These settlements will affect earnings over the periods specified in the original agreements, none of which expire beyond December 31, 2012. At September 29, 2012, $10.6 million of net deferred losses on cash flow hedges on these contracts included in accumulated other comprehensive income will be reclassified into earnings during the next three months.