Property and Equipment

Lottery and gaming machinery and equipment were as follows:



	As of December 31,
	2013			2012
Lottery machinery and equipment	$	350.3		$	333.2
Less: accumulated depreciation	(210.6		)	(167.5		)
Net lottery machinery and equipment	139.7			165.7

Gaming equipment	439.2			192.7
Less: accumulated depreciation	(145.0		)	(137.6		)
Net gaming equipment	294.2			55.1

Total lottery and gaming machinery and equipment, net	$	433.9		$	220.8

Property and equipment, including assets under capital leases, consist of the following:



	As of December 31,
	2013			2012
Land	$	25.6		$	10.7
Buildings and leasehold improvements	181.6			71.1
Furniture and fixtures	30.1			18.6
Transportation equipment	6.4			3.3
Construction in progress	33.4			27.8
Other property and equipment, at cost	239.1			191.2
Less: accumulated depreciation	(177.5		)	(166.6		)
Property and equipment, net	$	338.7		$	156.1

Total property and equipment, net	$	772.6		$	376.9

The increase in property and equipment, net, is primarily related to recording the assets of WMS at fair value upon acquisition. See Note 3 (Acquisitions and Dispositions).

Depreciation expense for the years ended December 31, 2013, 2012 and 2011 was $126.9 million, $122.6 million and $76.9 million, respectively. Cost of equipment (and related start-up costs) associated with specific lottery and gaming contracts not yet placed into service are recorded as construction in progress and not depreciated. When the equipment is placed into service, the related costs are transferred from construction in progress to lottery machinery and equipment or gaming equipment, and we commence depreciation. Depreciation expense is excluded from cost of services, cost of product sales and other operating expenses and is separately stated with amortization expense on the Consolidated Statements of Operations and Comprehensive Income.

As described in Note 1 (Description of the Business and Summary of Significant Accounting Policies), we assess the recoverability of long-lived assets whenever events or changes in circumstances indicate that the carrying value of such an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the asset to the expected net future undiscounted cash flows to be generated by that asset. If it is determined that an impairment has occurred, the amount of the impairment recorded is equal to the excess of the asset's carrying value over its estimated fair value, which is generally derived from a discounted cash flow model.

During 2013 and 2012, we recorded long-lived asset impairments of $2.5 million and $5.8 million, respectively, related to underperforming U.S. lottery systems contracts. There were no impairments related to U.S. lottery systems contracts in 2011. See Note 16 (Fair Value Measurements).

In December 2013, we initiated a reorganization plan to exit our instant lottery game operations in Mexico. We recorded $3.1 million of accelerated depreciation and amortization in 2013 related to this reorganization plan. During 2012, we recorded $3.4 million related to the reorganization of our Australia printing operations.

In 2012, we recorded long-lived asset impairments of $20.8 million related to a write-down of certain undeployed gaming machines. As described in Note 1 (Description of the Business and Summary of Significant Accounting Policies), our policy is to periodically review the estimated useful lives of our fixed assets. Our reviews during 2013 and 2012 indicated lower estimated useful lives for our gaming machines deployed to our U.K. LBO customers relative to historical estimates due to market changes that we believe impacted the replacement cycle of these gaming machines. During 2013 and 2012, we recorded accelerated depreciation related to our change in estimated lives of $8.7 million and $6.6 million, respectively.

The foregoing impairments and accelerated depreciation expense are included in depreciation and amortization expense in our Consolidated Statements of Operations and Comprehensive Income for the respective years ended December 31, 2013, 2012, and 2011 and included in accumulated depreciation in our Consolidated Balance Sheets as of December 31, 2013 and 2012, respectively.