Annual report pursuant to Section 13 and 15(d)

PROPERTY, PLANT AND EQUIPMENT

v3.3.1.900
PROPERTY, PLANT AND EQUIPMENT
 12 Months Ended
Dec. 31, 2015
Property, Plant and Equipment [Abstract]  
PROPERTY, PLANT AND EQUIPMENT
NOTE 4 - PROPERTY, PLANT AND EQUIPMENT
The following table indicates the value of each of the major classes of our consolidated depreciable assets as of December 31, 2015 and 2014:
 
(In Millions)
 
December 31,
 
2015
 
2014
Land rights and mineral rights
$
500.5

 
$
500.5

Office and information technology
71.0

 
73.7

Buildings
60.4

 
59.8

Mining equipment
594.0

 
585.1

Processing equipment
516.8

 
510.2

Electric power facilities
46.4

 
46.8

Land improvements
24.8

 
24.7

Asset retirement obligation
87.9

 
26.5

Other
28.2

 
28.5

Construction in-progress
40.3

 
14.4

 
1,970.3

 
1,870.2

Allowance for depreciation and depletion
(911.3
)
 
(799.7
)
 
$
1,059.0

 
$
1,070.5


We recorded depreciation expense of $119.2 million, $173.0 million and $191.5 million in the Statements of Consolidated Operations for the years ended December 31, 2015, 2014 and 2013, respectively.
During the second half of 2014, due to lower than previously expected profits as a result of decreased iron ore pricing expectations and increased costs, we determined that indicators of impairment with respect to certain of our long-lived assets or asset groups existed. Our asset groups generally consist of the assets and liabilities of one or more mines, preparation plants and associated reserves for which the lowest level of identifiable cash flows largely are independent of cash flows of other mines, preparation plants and associated reserves.
As a result of these assessments during 2014, we determined that the future cash flows associated with our Asia Pacific Iron Ore asset group and other asset groups were not sufficient to support the recoverability of the carrying value of these productive assets. Accordingly, during 2014, an other long-lived asset impairment charge of $537.8 million was recorded as Impairment of goodwill and other long-lived assets in the Statements of Consolidated Operations related to property, plant and equipment. The fair value estimates were calculated using income and market approaches. Refer to NOTE 6 - FAIR VALUE OF FINANCIAL INSTRUMENTS for further discussion of these impairments and related fair value estimates.
Although certain factors indicated that the carrying value of certain asset groups may not be recoverable during 2015, an assessment was performed and no further impairment was indicated for the year ended December 31, 2015.
The net book value of the land rights and mineral rights as of December 31, 2015 and 2014 is as follows:
 
(In Millions)
 
December 31,
 
2015
 
2014
Land rights
$
11.6

 
$
11.6

Mineral rights:

 

Cost
$
488.9

 
$
488.9

Depletion
(108.4
)
 
(101.0
)
Net mineral rights
$
380.5

 
$
387.9


Accumulated depletion relating to mineral rights, which was recorded using the unit-of-production method, is included in Cost of goods sold and operating expenses. We recorded depletion expense of $7.4 million, $79.6 million and $84.9 million in the Statements of Consolidated Operations for the years ended December 31, 2015, 2014 and 2013, respectively. As discussed above, during 2014 we performed impairment assessments with respect to certain of our long-lived assets or asset groups. As a result of these assessments, we recorded an other long-lived asset impairment charge related to mineral rights of $297.2 million associated primarily with our Asia Pacific Iron Ore asset group.