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Property, Plant and Equipment | 6 Months Ended
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Jun. 30, 2016
Property, Plant and Equipment [Abstract] |
Property, Plant and Equipment | Note 4. Property, Plant and Equipment The historical costs of our property, plant and equipment and related accumulated depreciation balances were as follows at the dates indicated:
|  | Estimated Useful Life in Years |  |  | June 30, 2016 |  |  | December 31, 2015 |
Plants, pipelines and facilities (1) |  | 3-45 (5) |  |  | $ | 33,739.3 |  |  | $ | 32,525.0 |
Underground and other storage facilities (2) |  | 5-40 (6) |  |  |  | 3,312.0 |  |  |  | 3,000.5 |
Transportation equipment (3) |  | 3-10 |  |  |  | 162.4 |  |  |  | 159.9 |
Marine vessels (4) |  | 15-30 |  |  |  | 782.2 |  |  |  | 769.8 |
Land |  |  |  |  |  |  | 262.8 |  |  |  | 262.7 |
Construction in progress |  |  |  |  |  |  | 3,889.0 |  |  |  | 3,894.0 |
Total |  |  |  |  |  |  | 42,147.7 |  |  |  | 40,611.9 |
Less accumulated depreciation |  |  |  |  |  |  | 9,136.2 |  |  |  | 8,577.2 |
Property, plant and equipment, net |  |  |  |  |  | $ | 33,011.5 |  |  | $ | 32,034.7 |
(1)Plants, pipelines and facilities include processing plants; NGL, natural gas, crude oil and petrochemical and refined products pipelines; terminal loading and unloading facilities; buildings; office furniture and equipment; laboratory and shop equipment and related assets. (2)Underground and other storage facilities include underground product storage caverns; above ground storage tanks; water wells and related assets. (3)Transportation equipment includes tractor-trailer tank trucks and other vehicles and similar assets used in our operations. (4)Marine vessels include tow boats, barges and related equipment used in our marine transportation business. (5)In general, the estimated useful lives of major assets within this category are: processing plants, 20-35 years; pipelines and related equipment, 5-45 years; terminal facilities, 10-35 years; buildings, 20-40 years; office furniture and equipment, 3-20 years; and laboratory and shop equipment, 5-35 years. (6)In general, the estimated useful lives of assets within this category are: underground storage facilities, 5-35 years; storage tanks, 10-40 years; and water wells, 5-35 years. |
The following table summarizes our depreciation expense and capitalized interest amounts for the periods indicated:
|  | For the Three Months Ended June 30, |  |  | For the Six Months Ended June 30, |
|  | 2016 |  |  | 2015 |  |  | 2016 |  |  | 2015 |
Depreciation expense (1) |  | $ | 298.2 |  |  | $ | 292.6 |  |  | $ | 594.1 |  |  | $ | 583.9 |
Capitalized interest (2) |  |  | 46.4 |  |  |  | 35.7 |  |  |  | 88.9 |  |  |  | 65.3 |
(1)Depreciation expense is a component of "Costs and expenses" as presented on our Unaudited Condensed Statements of Consolidated Operations. (2)We capitalize interest costs incurred on funds used to construct property, plant and equipment while the asset is in its construction phase. The capitalized interest is recorded as part of the asset to which it relates and is amortized over the asset's estimated useful life as a component of depreciation expense. When capitalized interest is recorded, it reduces interest expense from what it would be otherwise. |
Fire at Pascagoula Facility We acquired the remaining 60% undivided interest in the Pascagoula natural gas processing facility for $35.0 million in March 2016 and assumed operatorship of the facility on June 1, 2016. The facility is located in Pascagoula, Mississippi and processes natural gas received from third-party production developments located in the northern Gulf of Mexico. On June 27, 2016, we experienced a fire at the facility, which remains out of service as a result of damage sustained during the fire. Repairs to this location will commence as soon as the investigation by the U.S. Chemical Safety Board is completed; however, we expect the facility to return to commercial service during the fourth quarter of 2016. As a result of this event and based on currently available information, we recorded an estimated $7.1 million loss attributable to the assets damaged during the fire. Due to the recent nature of this event, the estimated loss is subject to revision as we obtain additional information regarding the affected assets. The costs to repair the facility will be capitalized as expenditures are incurred. Under our current insurance program, the standalone deductible for property damage claims is $55 million. We also have business interruption protection; however, such claims must involve physical damage and have a combined loss value in excess of $55 million and the period of interruption must exceed 60 days. We continue to evaluate the possibility of filing an insurance claim related to this event. Asset Retirement Obligations We record asset retirement obligations ("AROs") in connection with legal requirements to perform specified retirement activities under contractual arrangements and/or governmental regulations. Our contractual AROs primarily result from right-of-way agreements associated with our pipeline operations and real estate leases associated with our plant sites. In addition, we record AROs in connection with governmental regulations associated with the abandonment or retirement of above-ground brine storage pits and certain marine vessels. We also record AROs in connection with regulatory requirements associated with the renovation or demolition of certain assets containing hazardous substances such as asbestos. We typically fund our AROs using cash flow from operations. Property, plant and equipment at June 30, 2016 and December 31, 2015 includes $21.2 million and $17.6 million, respectively, of asset retirement costs capitalized as an increase in the associated long-lived asset. The following table presents information regarding our AROs since December 31, 2015:
ARO liability balance, December 31, 2015 |  | $ | 58.5 |
Liabilities incurred |  |  | 4.0 |
Liabilities settled |  |  | (1.6 | )
Revisions in estimated cash flows |  |  | 2.7 |
Accretion expense |  |  | 1.8 |
ARO liability balance, June 30, 2016 |  | $ | 65.4 |

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- Definition The entire disclosure for long-lived, physical assets used in the normal conduct of business and not intended for resale. Includes, but is not limited to, accounting policies and methodology, roll forwards, depreciation, depletion and amortization expense, including composite depreciation, accumulated depreciation, depletion and amortization expense, useful lives and method used, income statement disclosures, assets held for sale and public utility disclosures. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.13-14) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=51717284&loc=d3e1361-107760 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=51719941&loc=d3e2921-110230 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6391035&loc=d3e2868-110229 + Details
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