Derivatives

9 Months Ended

Sep. 28, 2013

Derivatives

8. 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.

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

Fair Value of Derivative Instruments

		Fair Value at
	Balance Sheet Location	Sept. 28, 2013			Dec. 31, 2012
Liability derivatives not designated as hedging instruments:
Commodity contracts	Accrued expenses and other current liabilities	$	(453	)	$	(303	)
Foreign exchange contracts	Accrued expenses and other current liabilities		(34	)		(15	)
Total liability derivatives		$	(487	)	$	(318	)

The Effect of Derivative Instruments on the Condensed Consolidated Statements of Earnings

Derivatives Designated as Hedging Instruments

			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)
Derivatives in Cash Flow Hedging Relationships
	Statement of  Earnings Location		Three Months (13 weeks) Ended				Three Months (13 weeks) Ended					Three Months (13 weeks) Ended
			Sept. 28, 2013		Sept. 29, 2012		Sept. 28, 2013		Sept. 29, 2012			Sept. 28, 2013		Sept. 29, 2012
Commodity contracts		Cost of products sold	$	—	$	—	$	—	$	(10,554	)	$	—	$	—

			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)
Derivatives in Cash Flow Hedging Relationships
	Statement of  Earnings Location		Nine Months (39 weeks) Ended					Nine Months (39 weeks) Ended					Nine Months (39 weeks) Ended
			Sept. 28, 2013		Sept. 29, 2012			Sept. 28, 2013		Sept. 29, 2012			Sept. 28, 2013		Sept. 29, 2012
Commodity contracts		Cost of products sold	$	—	$	(2,264	)	$	—	$	(31,961	)	$	—	$	500

Derivatives Not Designated as Hedging Instruments

			Amount of Gain or (Loss) Recognized in Earnings on  Derivatives
			Three Months (13 weeks) Ended						Nine Months (39 weeks) Ended
Derivatives Not Designated as Hedging Instruments	Statement of Earnings Location		Sept. 28, 2013			Sept. 29, 2012			Sept. 28, 2013		Sept. 29, 2012
Commodity contracts		Cost of products sold	$	(789	)	$	(1,454	)	$	4,193	$	(231	)
Foreign exchange contracts		Cost of products sold		134			(25	)		253		146
Total			$	(655	)	$	(1,479	)	$	4,446	$	(85	)

During the first quarter of 2012, Nucor settled all of its open natural gas forward purchase contracts that were previously in place. These settlements affected earnings over the periods specified in the original agreements throughout the remainder of 2012.