Property, Plant and Equipment

9 Months Ended

Sep. 30, 2012

Property, Plant and Equipment [Abstract]

Note 6. 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	September 30, 2012		December 31, 2011
Plants, pipelines and facilities (1)	3-45 (6)	$	24,789.0	$	22,354.4
Underground and other storage facilities (2)	5-40 (7)		1,512.3		1,388.6
Platforms and facilities (3)	20-31		638.9		637.5
Transportation equipment (4)	3-10		167.8		151.5
Marine vessels (5)	15-30		677.1		615.9
Land			146.1		136.1
Construction in progress			2,293.4		2,145.6
Total			30,224.6		27,429.6
Less accumulated depreciation			5,913.1		5,238.0
Property, plant and equipment, net		$	24,311.5	$	22,191.6

(1) Plants and pipelines include processing plants; NGL, natural gas, crude oil and petrochemical and refined products pipelines; terminal loading and unloading facilities; office furniture and equipment; buildings; 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) Platforms and facilities include offshore platforms and related facilities and other associated assets located in the Gulf of Mexico. (4) Transportation equipment includes tractor-trailer tank trucks and other vehicles and similar assets used in our operations. (5) Marine vessels include tow boats, barges and related equipment used in our marine transportation business. (6) 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; office furniture and equipment, 3-20 years; buildings, 20-40 years; and laboratory and shop equipment, 5-35 years. (7) 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 presented:

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2012		2011		2012		2011
Depreciation expense (1)	$	228.3	$	195.0	$	662.3	$	571.3
Capitalized interest (2)		26.3		33.1		86.4		75.1
(1) Depreciation expense is a component of "Costs and expenses" as presented on our Unaudited Condensed Statements of Consolidated Operations. (2) We capitalize interest cost incurred on funds used to construct property, plant and equipment. 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. Capitalized interest reduces interest expense during the period it is recorded.

Asset Retirement Obligations

We record asset retirement obligations ("AROs") related to legal requirements to perform retirement activities as specified in contractual arrangements and/or governmental regulations. When an ARO is incurred, we record a liability for the ARO and capitalize an equal amount as an increase in the carrying value of the related long-lived asset. Over time, the ARO liability is accreted to its present value (through accretion expense) and the capitalized amount is depreciated over the remaining useful life of the related long-term asset. Property, plant and equipment at September 30, 2012 and December 31, 2011 includes $41.2 million and $37.7 million, respectively, of asset retirement costs capitalized as an increase in the associated long-lived asset.

The following table summarizes changes in our ARO liability balance during the nine months ended September 30, 2012:

ARO liability balance, December 31, 2011	$	112.0
Liabilities incurred during period		1.7
Liabilities settled during period		(21.2	)
Revisions in estimated cash flows		11.3
Accretion expense		4.1
ARO liability balance, September 30, 2012	$	107.9

The following table presents our forecast of accretion expense for the periods indicated:

Remainder of 2012				2013				2014				2015				2016
$	1.5			$	6.2			$	6.6			$	6.3			$	6.6

- Definition

The entire disclosure for long-lived, physical assets that are used in the normal conduct of business to produce goods and services and not intended for resale. Examples include land, buildings, machinery and equipment, and other types of furniture and equipment including, but not limited to, office equipment, furniture and fixtures, and computer equipment and software. This disclosure may include property plant and equipment accounting policies and methodology, a schedule of property, plant and equipment gross, additions, deletions, transfers and other changes, depreciation, depletion and amortization expense, net, accumulated depreciation, depletion and amortization expense and useful lives, income statement disclosures, assets held for sale and public utility disclosures.

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