ASSET RETIREMENT OBLIGATIONS

12 Months Ended

Dec. 31, 2015

ASSET RETIREMENT OBLIGATIONS [Abstract]

NOTE 17: ASSET RETIREMENT OBLIGATIONS

Asset retirement obligations (AROs) are legal obligations associated with the retirement of long-lived assets resulting from the acquisition, construction, development and/or normal use of the underlying assets.

Recognition of a liability for an ARO is required in the period in which it is incurred at its estimated fair value. The associated asset retirement costs are capitalized as part of the carrying amount of the underlying asset and depreciated over the estimated useful life of the asset. The liability is accreted through charges to operating expenses. If the ARO is settled for other than the carrying amount of the liability, we recognize a gain or loss on settlement.

We record all AROs for which we have legal obligations for land reclamation at estimated fair value. Essentially all these AROs relate to our underlying land parcels, including both owned properties and mineral leases. For the years ended December 31, we recognized ARO operating costs related to accretion of the liabilities and depreciation of the assets as follows:



in thousands	2015	2014	2013
ARO Operating Costs
Accretion	$ 11,474	$ 11,601	$ 10,685
Depreciation	6,515	4,462	3,527
Total	$ 17,989	$ 16,063	$ 14,212

ARO operating costs are reported in cost of revenues. AROs are reported within other noncurrent liabilities in our accompanying Consolidated Balance Sheets.

Reconciliations of the carrying amounts of our AROs for the years ended December 31 are as follows:



in thousands	2015	2014
Asset Retirement Obligations
Balance at beginning of year	$ 226,565	$ 228,234
Liabilities incurred	6,235	9,130
Liabilities settled	(18,048)	(26,547)
Accretion expense	11,474	11,601
Revisions, net	368	4,147
Balance at end of year	$ 226,594	$ 226,565

The ARO liabilities incurred during 2015 and 2014 relate primarily to acquisitions (see Note 19). ARO liabilities settled during 2015 and 2014 include $13,117,000 and $18,637,000, respectively, of reclamation activities required under a development agreement and conditional use permits at two adjacent aggregates sites on owned property in Southern California. The reclamation required under the development agreement will result in the restoration and development of 90 acres of previously mined property suitable for commercial and retail development.