Nucor 2011 Annual Report Download - page 30

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29
In 2010, Nucor recorded a pre-tax charge of $10.0 million for our share of the estimated closure costs of the HIsmelt facility.
EQUITY IN LOSSES OF UNCONSOLIDATED AFFILIATES
Nucor incurred equity method investment losses of $32.1 million and $82.3 million in 2010 and 2009, respectively. The decrease
in the equity method investment losses is primarily due to decreased losses at Duferdofin Nucor S.r.l., which included a pre-tax
charge to write down inventories to the lower of cost or market of $46.8 million in 2009 (none in 2010).
INTEREST EXPENSE (INCOME)
Net interest expense is detailed below:
(in thousands)
Year Ended December 31, 2010 2009
Interest expense $161,140 $149,922
Interest income (8,047) (15,170)
Interest expense, net $153,093 $134,752
Gross interest expense increased 7% over 2009 primarily because of increased average debt outstanding of approximately 7%. Gross
interest income decreased 47% because of a significant decrease in the average interest rate earned on investments combined with
a 21% decrease in average investments.
EARNINGS (LOSS) BEFORE INCOME TAXES AND NONCONTROLLING INTERESTS
Earnings (loss) before income taxes and noncontrolling interests by segment for 2010 and 2009 are as follows:
(in thousands)
Year Ended December 31, 2010 2009
Steel mills $778,946 $(350,372)
Steel products (173,433) (112,800)
Raw materials 106,317 (76,965)
All other 4,344 (14,130)
Corporate/eliminations (449,059) 140,289
Earnings (loss) before income taxes
and noncontrolling interests $267,115 $(413,978)
Earnings before income taxes and noncontrolling interests increased primarily due to increases in average sales price per ton, tons
shipped to outside customers and metal margins in 2010 as compared to 2009.
In the steel mills segment, we were able to significantly raise mill selling prices in response to rising raw material costs and some
improvement in end-use demand. The average utilization rate in our steel mills was 70% in 2010, compared with a historically low
average utilization rate of 54% in 2009.
In the steel products segment, the market environment for our fabricated construction products was extremely challenging in 2010
and 2009. Sales of cold finished bar products increased primarily due to improved demand in the heavy equipment and transportation
markets. The average utilization rate in the steel products segment was 54% in 2010, compared with a utilization rate of 49% in 2009.
Increases in selling prices for scrap contributed to the increase in earnings before income taxes and noncontrolling interests in the
raw materials segment in 2010 compared with 2009. The average utilization rate in the raw materials segment was 69% in 2010,
compared with a utilization rate of 53% in 2009.
NONCONTROLLING INTERESTS
The 28% increase in earnings attributable to noncontrolling interests was primarily attributable to the increased earnings of NYS,
which were due to improvements in the structural steel market. In 2009, the amount of cash distributed to noncontrolling interest
holders exceeded the earnings attributable to noncontrolling interests based on mutual agreement of the general partners; however,
the cumulative amount of cash distributed to partners was less than the cumulative net earnings of the partnership.