Asset Retirement Obligation

9 Months Ended

Sep. 30, 2013

Asset Retirement Obligation Disclosure [Abstract]

13.

ASSET RETIREMENT OBLIGATION

During 2008, we recorded $11.5 million, net present value, of asset retirement obligations related to the legal requirement to close several lagoons at the Spring Grove, PA facility. Historically, lagoons were used to dispose of residual waste material. Closure of the lagoons, which is expected to be completed in 2016, will be accomplished by filling the lagoons, installing a non-permeable liner which will be covered with soil to construct the required cap over the lagoons. The amount referred to above, in addition to upward revisions, was accrued with a corresponding increase in the carrying value of the property, equipment and timberlands caption on the consolidated balance sheet. The amount capitalized is being amortized as a charge to operations on the straight-line basis in relation to the expected closure period. Following is a summary of activity recorded during the first nine months of 2013 and 2012:


In thousands	2013			2012
Balance at January 1,	$	8,882		$	9,679
Accretion		234			347
Payments		(2,719	)		(945	)
Gain		(1,255	)		—

Balance at September 30,	$	5,142		$	9,081

During the third quarter of 2013, we recognized a $1.3 million gain related to the progress of closure activities for a portion of the lagoons required to be retired. The gain is reflected in the accompanying condensed consolidated statements of income under the caption “costs of products sold.”

The following table summarizes the line items in the accompanying condensed consolidated balance sheets where the asset retirement obligations are recorded:


In millions	September 30 2013		December 31 2012
Other current liabilities	$	1.2	$	3.6
Other long-term liabilities		3.9		5.3

Total	$	5.1	$	8.9