Nucor 2013 Annual Report Download - page 35

34
The current ratio was 3.3 at year end 2013 compared with 2.8 at year end 2012. The current ratio was positively impacted by a
31% increase from 2012 in cash and cash equivalents and short-term investments. The increase in cash and cash equivalents
and short-term investments was primarily due to proceeds from the issuance of debt and cash generated by operations, partially
offset by cash paid for capital expenditures and dividend payments. In addition, inventories increased by 12% due primarily to
increases at the new DRI plant in Louisiana, as well as an 8% increase in inventory tons on hand and a 3% increase in scrap costs
in inventory over the prior year. The current ratio was also positively impacted by an 88% decrease from 2012 in long-term debt
due within one year and short-term debt, due primarily to the repayment of $250 million of debt in the second quarter of 2013.
The next significant debt maturity is not until 2017.
Accounts receivable increased by 6% over 2012 due primarily to the 10% increase in net sales in the fourth quarter of 2013
compared with the prior year fourth quarter. This increase is the result of a 10% increase in outside shipments in the fourth
quarter of 2013 as compared with the fourth quarter of 2012. In 2013, total accounts receivable turned approximately every
five weeks and inventories turned approximately every seven weeks. This compares to turns of every five weeks for accounts
receivable and every six weeks for inventory in 2012. Inventory turnover has slowed slightly from historical rates due mainly to
the acquisition of Skyline which, as a distributor, must keep a larger supply of inventory on hand.
Funds provided by operations, cash and cash equivalents, short-term investments and new borrowings under existing credit
facilities are expected to be adequate to meet future capital expenditure and working capital requirements for existing operations
for at least the next 24 months.
We have a simple capital structure with no off-balance sheet arrangements
or relationships with unconsolidated special purpose entities that we believe
could have a material impact on our financial condition or liquidity.
OPERATING ACTIVITIES
Cash provided by operating activities was $1.08 billion in 2013 compared with
$1.20 billion in 2012, a decrease of 10%. The change in operating assets and
liabilities of ($235.2) million in 2013 compared with ($86.1) million in 2012
was partially offset by the increase in deferred income taxes over the prior year.
The funding of working capital increased over the prior year due mainly to
increases in accounts receivable and inventory, somewhat offset by a decrease
in cash provided by the change in accounts payable. Accounts receivable
increased due to increased outside shipments in the fourth quarter over the
prior year fourth quarter. Inventory increased due to an increase in inventory
on hand and an increase in scrap prices in inventory from year end 2012. The
increase in scrap prices also drove the increase in the accounts payable balance.
INVESTING ACTIVITIES
Our business is capital intensive; therefore, cash used in investing activities primarily represents capital expenditures for new facilities,
the expansion and upgrading of existing facilities and the acquisition of other companies. Nucor invested $1.20 billion in new facilities
(exclusive of acquisitions) and expansion or upgrading of existing facilities in 2013 compared with $947.6 million in 2012, an increase
of 26%. This increase in capital expenditures was in large part due to the construction of our DRI facility in Louisiana and the funding of
our natural gas working interest drilling program. Offsetting the increase in capital expenditures was the decrease in acquisitions. In
2012, Nucor invested $760.8 million in the acquisition of other companies (primarily Skyline); however, there were no acquisitions in
2013. Another factor contributing to the increase in cash used in investing activities was the net decrease of $1.22 billion in proceeds
from the sale of investments and restricted investments (net of purchases) and changes in restricted cash from 2012.
FINANCING ACTIVITIES
Cash provided by financing activities was $196.0 million in 2013 compared with cash used in financing activities of $1.15 billion in 2012.
The increase in cash provided by financing activities is primarily attributable to the issuance of debt in 2013 and a decrease in required
debt repayments in 2013 than 2012. In the third quarter of 2013, Nucor issued $500.0 million of 4.0% notes due in 2023 and $500.0
million of 5.2% notes due in 2043. The bond offering effectively refinanced $900.0 million of debt that matured between the fourth
quarter of 2012 ($650.0 million) and the second quarter of 2013 ($250.0 million). The weighted average interest rate of the new debt is
35 basis points lower than the retired debt, and the new debt also lengthens our debt maturity profile with its weighted average term to
maturity of 20 years. Additionally, over 99% of our long-term debt matures in 2017 and beyond.
In 2013, Nucor increased its quarterly base dividend resulting in dividends paid of $471.0 million ($466.4 million in 2012).
Although there were no repurchases in 2013 or 2012, approximately 27.2 million shares remain authorized for repurchase under the
Company’s stock repurchase program.
year
500
1,000
1,500
2,000
2,500
11 12 130908
millions of dollars
CASH PROVIDED BY OPERATIONS
10