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 October 4, 2014, natural gas swaps covering approximately 16.0 million MMBTUs (extending through February 2017) were outstanding.

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

Fair Value of Derivative Instruments


		Fair Value at
	Balance Sheet Location	Oct. 4, 2014			Dec. 31, 2013
Asset derivatives not designated as hedging instruments:
Commodity contracts	Other current assets	$	1,384		$	—
Foreign exchange contracts	Other current assets		57			—

Total asset derivatives		$	1,441		$	—

Liability derivatives designated as hedging instruments:
Commodity contracts	Accrued expenses and other current liabilities		(1,700	)		—
Commodity contracts	Deferred credits and other liabilities		(100	)		—

Total Liability derivatives designated as hedging instruments			(1,800	)		—
Liability derivatives not designated as hedging instruments:
Commodity contracts	Accrued expenses and other current liabilities		—			(553	)
Foreign exchange contracts	Accrued expenses and other current liabilities		—			(2	)

Total liability derivatives not designated as hedging instruments			—			(555	)
Total liability derivatives		$	(1,800	)	$	(555	)

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
(Effective Portion)

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

Three Months
(13 weeks) Ended

Oct. 4, 2014

Sept. 28, 2013

Oct. 4, 2014

Sept. 28, 2013

Oct. 4, 2014

Sept. 28, 2013

Commodity contracts

Cost of products sold

103

—

(197

)

—

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
(Effective Portion)

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

Nine Months
(39 weeks) Ended

Oct. 4, 2014

Sept. 28, 2013

Oct. 4, 2014

Sept. 28, 2013

Oct. 4, 2014

Sept. 28, 2013

Commodity contracts

Cost of products sold

(1,530

)

—

(430

)

—

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

Oct. 4,
2014

Sept. 28,
2013

Oct. 4,
2014

Sept. 28,
2013

Commodity contracts

Cost of products sold

844

(789

)

1,282

4,193

Foreign exchange contracts

Cost of products sold

314

134

266

253

Total

1,158

(655

)

1,548

4,446