Nucor 2015 Annual Report Download - page 59

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4. SHORT-TERM INVESTMENTS
Nucor held $100.0 million of short-term investments, which consisted of fixed term deposits and certificates of deposit (CDs), as of
December 31, 2015, and December 31, 2014. These investments are classified as available-for-sale. The interest rates on the fixed
term deposits and CDs are fixed at inception and interest income is recorded as earned.
No realized or unrealized gains or losses were incurred in 2015, 2014 or 2013.
The contractual maturities of all of the fixed term deposits and CDs outstanding at December 31, 2015 are before December 31, 2016.
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 $43.2 million at December 31, 2015
($65.4 million at December 31, 2014, and $58.3 million at December 31, 2013).
6. INVENTORIES
Inventories consist of approximately 38% raw materials and supplies and 62% finished and semi-finished products at December 31,
2015 (40% and 60%, respectively, at December 31, 2014). 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 $100.6 million higher at December 31, 2015
($567.4 million higher at December 31, 2014). Use of the lower of cost or market method reduced inventories by $5.1 million at
December 31, 2015 ($2.7 million at December 31, 2014).
7. PROPERTY, PLANT AND EQUIPMENT
(in thousands)
December 31, 2015 2014
Land and improvements $ 585,057 $ 576,511
Buildings and improvements 1,033,610 1,018,342
Machinery and equipment 10,229,602 10,080,640
Proved oil and gas properties 586,362 584,466
Construction in process and equipment deposits 197,278 193,594
12,631,909 12,453,553
Less accumulated depreciation (7,740,756) (7,165,914)
$ 4,891,153 $ 5,287,639
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.
Included within property, plant and equipment, net at December 31, 2015, is $20.3 million of assets, net of accumulated depreciation,
under a capital lease agreement ($22.8 million at December 31, 2014). The gross amount of property, plant and equipment acquired
in 2014 under the capital lease was $25.4 million, which was not included in capital expenditures on the condensed consolidated
statement of cash flows in 2014. Total obligations associated with this capital lease agreement were $21.0 million at December 31,
2015 ($23.2 million at December 31, 2014), of which $2.3 million was classified in accrued expenses and other current liabilities
($2.2 million at December 31, 2014) and $18.7 million was classified in deferred credits and other liabilities ($21.0 million at
December 31, 2014) in the consolidated balance sheets.
In 2013, one of three iron ore storage domes collapsed at Nucor Steel Louisiana in St. James Parish. At that time, Nucor initially
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 best estimate of probable insurance
recoveries. As of December 31, 2015, Nucor has received initial payments of $10.3 million related to the insurance receivable.
Nucor finalized its assessment process related to the two remaining storage domes during the third quarter of 2015 and determined