Nucor 2013 Annual Report Download - page 40

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It is reasonably possible that based on actual future performance the estimates used in our fourth quarter valuation could change
and result in further impairment of our investment. Changes in management estimates to the unobservable inputs would change the
valuation of the investment. The estimates for the projected revenue and discount rate are the assumptions that most significantly
affect the fair value determination.
ENVIRONMENTAL REMEDIATION
We are subject to environmental laws and regulations established by federal, state and local authorities, and we make provisions
for the estimated costs related to compliance. Undiscounted remediation liabilities are accrued based on estimates of known
environmental exposures. The accruals are reviewed periodically and, as investigations and remediation proceed, adjustments are
made as we believe are necessary. Our measurement of environmental liabilities is based on currently available facts, present laws
and regulations and current technology.
INCOME TAXES
We utilize the liability method of accounting for income taxes. Under the liability method, deferred taxes are determined based on the
temporary differences between the financial statement and tax basis of assets and liabilities using tax rates expected to be in effect
during the years in which the basis differences reverse. A valuation allowance is recorded when it is more likely than not that some of
the deferred tax assets will not be realized. We recognize the effect of income tax positions only if those positions are more likely than
not of being sustained. Potential accrued interest and penalties related to unrecognized tax benefits within operations are recognized
as a component of interest expense.
RECENT ACCOUNTING PRONOUNCEMENTS
See Note 2 to our consolidated financial statements for a discussion of new accounting pronouncements adopted by Nucor
during 2013 and the expected financial impact of accounting pronouncements recently issued or proposed but not yet required
to be adopted.
RECLASSIFICATIONS
In the first quarter of 2013, we began reporting the results of Nucor’s steel trading businesses and rebar distribution businesses in
the steel mills segment. Previously these businesses were reported in an “All other” category. These businesses were reclassified to
the steel mills segment as part of a realignment of Nucor’s reportable segments to better reflect the way in which they are managed.
The segment data for the comparable periods has also been reclassified into the steel mills segment in order to conform to the
current year presentation. The steel mills, steel products and raw materials segments are consistent with the way Nucor manages
its business, which is primarily based upon the similarity of the types of products produced and sold by each segment. Additionally,
the composition of assets by segment at December 31, 2012 and December 31, 2011 was reclassified to conform with the current
presentation. This reclassification between segments did not have any impact on the consolidated asset balances.
In 2012, we began classifying internal fleet and some common carrier costs in cost of products sold in the consolidated statements
of earnings. We made this change so that all freight costs will be recorded within the same financial statement line item to allow users
of our financial statements to better understand our expense structure. This change resulted in the reclassification of $67.2 million
of these costs from marketing, administrative and other expenses to cost of products sold for the year ended December 31, 2011 in
order to conform to the current presentation.