Nucor 2013 Annual Report Download - page 55

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The purchase price allocation to the identifiable intangible assets is as follows:
As of the date of acquisition (in thousands, except years)
Weighted-
Average Life
Customer relationships $184,500 17 years
Trademarks and trade names 28,500 20 years
Other 2,600 3 years
$215,600
The goodwill of $138.6 million is primarily attributed to the synergies expected to arise after the acquisition and has been allocated to the
steel mills segment (see Note 9). Approximately $128.2 million of the goodwill recognized is expected to be deductible for tax purposes.
In August 2012, Nucor sold the assets of Nucor Wire Products Pennsylvania, Inc., resulting in a loss of $17.6 million. This charge is
included in marketing, administrative and other expenses in the consolidated statement of earnings.
In November 2012, Nucor acquired a 50% economic and voting interest in Hunter Ridge Energy Services LLC (Hunter Ridge). Hunter
Ridge provides services for the gathering, separation and compression of energy products, including natural gas produced by Nucor’s
working interest drilling program. Nucor accounts for the investment (on a one-month lag basis) under the equity method (see Note
10). As of December 31, 2013, Nucor’s investment in Hunter Ridge was $134.5 million ($95.4 million at December 31, 2012).
Other minor acquisitions, exclusive of purchase price adjustments of acquisitions made in prior years, totaled $85.4 million in 2012
and $4.0 million in 2011 (none in 2013).
4. SHORT-TERM INVESTMENTS
Nucor’s short-term investments held as of December 31, 2013 and December 31, 2012 were $28.2 million and $104.2 million,
respectively. These investments consisted of certificates of deposit (CDs) and are classified as available-for-sale. The interest rates
on the CDs are fixed at inception and interest income is recorded as earned.
No realized or unrealized gains or losses were incurred in 2013, 2012 or 2011.
The contractual maturities of all of the CDs outstanding at December 31, 2013 are in 2014.
5. ACCOUNTS RECEIVABLE
An allowance for doubtful accounts is maintained for estimated losses resulting from the inability of our customers to make required
payments. Accounts receivable are stated net of the allowance for doubtful accounts of $58.3 million at December 31, 2013
($57.4 million at December 31, 2012 and $54.3 million at December 31, 2011).
6. INVENTORIES
Inventories consist of approximately 40% raw materials and supplies and 60% finished and semi-finished products at December
31, 2013 (37% and 63%, respectively, at December 31, 2012). Nucor’s manufacturing process consists of a continuous, vertically
integrated process from which products are sold to customers at various stages throughout the process. Since most steel products
can be classified as either finished or semi-finished products, these two categories of inventory are combined.
If the FIFO method of accounting had been used, inventories would have been $624.7 million higher at December 31, 2013
($607.2 million higher at December 31, 2012). There was no liquidation of LIFO inventory layers in 2013, 2012 or 2011. Use of the
lower of cost or market method reduced inventories by $2.1 million at December 31, 2013 ($3.5 million at December 31, 2012).