Nucor 2011 Annual Report Download - page 49

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Comprehensive Income (Loss) Nucor reports comprehensive income (loss) and the changes in accumulated other comprehensive
income (loss) in its consolidated statements of stockholders’ equity. Accumulated other comprehensive loss is comprised of the
following:
(in thousands)
December 31, 2011 2010
Foreign currency translation,
net of income taxes when applicable $(12,311) $ 27,923
Early-retiree medical plan adjustments,
net of income taxes 14,384 13,190
Fair market value of derivatives,
net of income taxes (40,250) (68,889)
$(38,177) $(27,776)
Foreign Currency Translation For Nucor’s operations where the functional currency is other than the U.S. dollar, assets and liabilities
have been translated at year-end exchange rates, and income and expenses translated using average exchange rates for the
respective periods. Adjustments resulting from the process of translating an entity’s financial statements into the U.S. dollar have been
recorded in accumulated other comprehensive income (loss) and are included in net earnings only upon sale or liquidation of the
underlying investments. Foreign currency transaction gains and losses are included in operations in the period they occur.
Recent Accounting Pronouncements In June 2011, the Financial Accounting Standards Board (FASB) amended its guidance on the
presentation of comprehensive income in financial statements to improve the comparability, consistency and transparency of financial
reporting and to increase the prominence of items that are recorded in other comprehensive income. The new accounting guidance
requires entities to report components of comprehensive income in either (1) a continuous statement of comprehensive income or (2)
two separate but consecutive statements. The provisions of this new guidance are effective for Nucor in the first quarter of 2012. The
adoption of this guidance is not expected to have an effect on Nucor’s operating results or financial position.
In September 2011, the FASB issued updated guidance on the assessment of goodwill impairment. This guidance allows companies
to perform a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its
carrying amount before performing the two-step goodwill impairment test. We perform an impairment analysis of Nucor’s goodwill at
the beginning of the fourth quarter of each year, and we early adopted this guidance for our goodwill impairment testing in the fourth
quarter of 2011. The adoption of this guidance did not have an effect on Nucor’s operating results or financial position.
3. ACQUISITIONS
In April 2010, Nucor acquired a 50% economic and voting interest in NuMit LLC for a purchase price of approximately $221.3 million.
NuMit owns 100% of the equity interest in Steel Technologies LLC, an operator of 25 sheet processing facilities throughout the U.S.,
Canada and Mexico. Nucor accounts for the investment using the equity method (see Note 10).
Other minor acquisitions, exclusive of purchase price adjustments of acquisitions made in prior years, totaled $4.0 million in 2011
($64.8 million in 2010 and $8.1 million in 2009).
4. SHORT-TERM INVESTMENTS
Nucor’s short-term investments held as of December 31, 2011 and 2010 consisted of certificates of deposit (CDs), corporate debt,
Federal Home Loan Bank (FHLB) obligations and variable rate demand notes (VRDNs), and are all classified as available-for-sale. The
investments in corporate debt are debt securities issued by a financial institution that management believes has low credit risk. FHLB
consolidated obligations carry high credit ratings from both Moody’s and Standard & Poor’s. VRDNs are variable rate bonds tied to
short-term interest rates with stated original maturities in excess of 90 days. All of the VRDNs in which Nucor invests are secured by
a direct-pay letter of credit issued by financial institutions with low credit risk. Nucor can receive the principal invested and interest
accrued thereon no later than seven days after notifying the financial institution that Nucor elects to tender the VRDNs. The interest
rate on the CDs and the coupon rates on the corporate debt and FHLBs are fixed at inception, and the VRDNs trade at par value. No
realized or unrealized gains or losses were incurred in 2011, 2010 or 2009.