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, 2012
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, 2012 and 2011:
 
(In Millions)
 
December 31,
 
2012
 
2011
Land rights and mineral rights
$
7,920.8

 
$
7,868.7

Office and information technology
92.4

 
66.8

Buildings
162.0

 
132.2

Mining equipment
1,290.7

 
1,323.8

Processing equipment
1,937.4

 
1,311.6

Railroad equipment
240.8

 
161.6

Electric power facilities
58.7

 
57.9

Port facilities
114.3

 
64.1

Interest capitalized during construction
20.8

 
22.5

Land improvements
43.9

 
30.4

Other
39.0

 
43.2

Construction in progress
1,123.9

 
612.8

 
13,044.7

 
11,695.6

Allowance for depreciation and depletion
(1,837.4
)
 
(1,291.5
)
 
$
11,207.3

 
$
10,404.1


We recorded depreciation expense of $293.5 million, $237.8 million and $165.4 million in the Statements of Consolidated Operations for the years ended December 31, 2012, 2011 and 2010, respectively.
The accumulated amount of capitalized interest included within construction in progress is $17.1 million of which $15.4 million was capitalized during 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 at December 31, 2012. 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 this assessment, we determined that the 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 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.
We did not record any other long-lived tangible and intangible assets impairment charges in 2012, 2011 or 2010, except for as discussed below in Discontinued Operations.
The net book value of the land rights and mineral rights as of December 31, 2012 and 2011 is as follows:
 
(In Millions)
 
December 31,
 
2012
 
2011
Land rights
$
46.4

 
$
37.3

Mineral rights:
 
 
 
Cost
$
7,874.4

 
$
7,831.4

Less depletion
727.0

 
516.0

Net mineral rights
$
7,147.4

 
$
7,315.4


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 $209.8 million, $159.7 million and $95.5 million in the Statements of Consolidated Operations for the years ended December 31, 2012, 2011 and 2010, respectively.