Nucor 2013 Annual Report Download - page 56

Download and view the complete annual report

Please find page 56 of the 2013 Nucor annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 92

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92

55
7. PROPERTY, PLANT AND EQUIPMENT
(in thousands)
December 31, 2013 2012
Land and improvements $ 555,309 $ 546,234
Buildings and improvements 941,379 899,944
Machinery and equipment 9,159,151 8,136,206
Proved oil and gas properties 487,033 203,959
Construction in process and equipment deposits 400,373 652,230
11,543,245 10,438,573
Less accumulated depreciation (6,626,221) (6,155,517)
$ 4,917,024 $ 4,283,056
The estimated useful lives primarily range from 5 to 25 years for land improvements, 4 to 40 years for buildings and improvements
and 2 to 15 years for machinery and equipment. The useful life for proved oil and gas properties is based on the unit-of-production
method and varies by well.
In the third quarter of 2013, a storage dome collapsed at Nucor Steel Louisiana in St. James Parish. As a result, Nucor recorded a
partial write down of assets at the facility, including $21.0 million of property, plant and equipment and $7.0 million of inventory, offset
by a $14.0 million insurance receivable that was based on management’s current estimate of probable insurance recoveries. The
associated net charge of $14.0 million is included in marketing, administrative and other expenses in the consolidated statement of
earnings. Nucor may receive additional insurance proceeds as it continues to investigate the cause or causes of the dome collapse.
Nucor capitalized $10.9 million of interest expense in 2013 ($4.7 million in 2012 and $3.5 million in 2011) related to the borrowing
costs associated with various construction projects.
8. RESTRICTED CASH AND INVESTMENTS
There were no restricted cash or investments as of December 31, 2013 ($275.2 million at December 31, 2012). As of December 31,
2012, restricted cash and investments consisted of net proceeds from $600.0 million 30-year variable rate Gulf Opportunity Zone
bonds issued in November 2010. The restricted cash and investments were held in a trust account and were used to partially fund
the capital costs associated with the construction of Nucor’s direct reduced ironmaking facility in St. James Parish, Louisiana.
Funds were disbursed as qualified expenditures for the construction of the facility were made ($275.3 million in 2013 and
$311.8 million in 2012). Included in the December 31, 2012 restricted cash and investments balance was $149.8 million of
restricted investments. The investments held at December 31, 2012 were in Federal Home Loan Bank (FHLB) obligations, which
carried high credit ratings from both Moody’s and Standard & Poor’s. The interest rates on the FHLBs were fixed at inception and
interest earned on the investments was subject to the same usage requirements as the bond proceeds. Since the restricted
cash, investments and interest on investments must be used for the construction of the facility, the entire balance was classified
as a non-current asset.