Nucor 2015 Annual Report Download - page 35

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33
INTEREST EXPENSE (INCOME)
Net interest expense is detailed below:
(in thousands)
Year Ended December 31, 2014 2013
Interest expense $174,142 $151,986
Interest income (4,886) (5,091)
Interest expense, net $169,256 $146,895
The 15% increase in gross interest expense from 2013 is primarily attributable to a 13% increase in average debt outstanding.
Gross interest income decreased 4% due to a 13% decrease in average investments, partially offset by an increase in the average
interest rate on investments.
EARNINGS BEFORE INCOME TAXES AND NONCONTROLLING INTERESTS
Earnings before income taxes and noncontrolling interests by segment for 2014 and 2013 are as follows:
(in thousands)
Year Ended December 31, 2014 2013
Steel mills $ 1,594,352 $1,156,715
Steel products 166,323 82,129
Raw materials (29,053) 13,686
Corporate/eliminations (527,045) (461,407)
Earnings before income taxes
and noncontrolling interests $ 1,204,577 $ 791,123
Earnings before income taxes and noncontrolling interests in the steel mills segment for 2014 increased significantly from 2013
due to higher sales volume, higher average sales prices and higher metal margins resulting from factors discussed above. Negatively
impacting the steel mills segment profitability in 2014 were the $12.5 million charge related to the partial write-down of assets,
the $9.0 million charge related to the disposal of assets and $8.9 million of inventory-related purchase accounting adjustments
at newly acquired Nucor Steel Gallatin. The steel mills segment benefited from improved results at NuMit and Duferdofin Nucor.
In the steel products segment, earnings before income taxes and noncontrolling interests increased significantly in 2014 compared
to 2013. The largest increases in profitability in 2014 compared to 2013 were at our joist, deck and building systems operations,
while the profitability of our rebar and cold finish operations also increased. The steel products segment benefited from improving
conditions in nonresidential construction markets and market leadership positions held by our joist, deck, building systems, rebar
and cold finish operations.
The decrease in profitability of our raw materials segment for 2014 as compared to 2013 is due primarily to operating losses at our
Louisiana DRI facility as discussed above. Earnings before income taxes and noncontrolling interest in the raw materials segment in
2013 was impacted by the charges related to the net $14.0 million write-down of inventory and property, plant and equipment as a
result of the dome collapse at Nucor Steel Louisiana that occurred in the third quarter of 2013. Partially offsetting the losses at the
Louisiana DRI plant was increased profitability from DJJ’s brokerage and scrap processing operations due to increased volumes and
margin improvement, and increased profitability from our natural gas working interest drilling investment. The DRI facility in Trinidad
also experienced an increase in profitability.
NONCONTROLLING INTERESTS
The 4% increase in noncontrolling interests from 2013 to 2014 was primarily attributable to Nucor-Yamato Steel’s increased average
sales prices and increased metal margins, partially offset by decreased volumes and the impact of a planned three-week outage
associated with a capital project in the second quarter of 2014.