Annual report pursuant to Section 13 and 15(d)

PROPERTY, PLANT AND EQUIPMENT

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PROPERTY, PLANT AND EQUIPMENT
 12 Months Ended
Dec. 31, 2013
Property, Plant and Equipment [Abstract]  
PROPERTY, PLANT AND EQUIPMENT
NOTE 5 - 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, 2013 and 2012:
 
(In Millions)
 
December 31,
 
2013
 
2012
Land rights and mineral rights
$
7,819.6

 
$
7,920.8

Office and information technology
125.7

 
92.4

Buildings
255.2

 
162.0

Mining equipment
1,600.3

 
1,290.7

Processing equipment
2,148.6

 
1,937.4

Railroad equipment
219.0

 
240.8

Electric power facilities
114.3

 
58.7

Port facilities
99.4

 
114.3

Interest capitalized during construction
23.8

 
20.8

Land improvements
69.3

 
43.9

Other
104.4

 
39.0

Construction in-progress
991.3

 
1,123.9

 
13,570.9

 
13,044.7

Allowance for depreciation and depletion
(2,417.5
)
 
(1,837.4
)
 
$
11,153.4

 
$
11,207.3


We recorded depreciation expense of $366.9 million, $293.5 million and $237.8 million in the Statements of Consolidated Operations for the years ended December 31, 2013, 2012 and 2011, respectively.
The accumulated amount of capitalized interest included within construction in-progress at December 31, 2013 is $31.4 million, of which $17.4 million was capitalized during 2013. At December 31, 2012, $17.1 million of capitalized interest was included within construction in-progress, of which $15.4 million was capitalized during 2012.
During the years ended December 31, 2013 and 2012, 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.
During the fourth quarter of 2013, we continued to experience higher than expected production costs and operational inefficiencies at our Wabush operations within our Eastern Canadian Iron Ore operation segment that have resulted in continued declines in our profitability of that business, which represents an asset group for purposes of testing our long-lived assets for recoverability. Upon completion of an impairment analysis, it was determined the fair value was less than the carrying value of the asset group, which resulted in an other long-lived asset impairment charge of tangible property, plant and equipment of $140.1 million as Impairment of goodwill and other long-lived assets in the Statements of Consolidated Operations for the year ended December 31, 2013. The fair value estimate was calculated using a market approach.
As a result of the assessment in the fourth quarter of 2012, we determined that the projected future cash flows associated with our Eastern Canadian pelletizing operations were not sufficient to support the recoverability of the carrying value of these productive assets. Accordingly, during the fourth quarter of 2012, an asset impairment charge of $49.9 million was recorded as Impairment of goodwill and other long-lived assets in the Statements of Consolidated Operations for the year ended December 31, 2012 related to the Wabush mine pelletizing operations reported in our Eastern Canadian Iron Ore operating segment. The fair value estimate was calculated using a market approach. There was no impairment of the dock facilities or the mine and concentrator long-lived assets that are part of the Wabush mine in 2012.
The net book value of the land rights and mineral rights as of December 31, 2013 and 2012 is as follows:
 
(In Millions)
 
December 31,
 
2013
 
2012
Land rights
$
46.3

 
$
46.4

Mineral rights:

 

Cost
$
7,773.3

 
$
7,874.4

Less depletion
942.6

 
727.0

Net mineral rights
$
6,830.7

 
$
7,147.4


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 $206.5 million, $209.8 million and $159.7 million in the Statements of Consolidated Operations for the years ended December 31, 2013, 2012 and 2011, respectively.