Supplemental Balance Sheet Information
INVENTORIES
Inventories as of December 31 consisted of the following:
|
| | | | | | | |
(millions) | 2015 | | 2014 |
Finished goods | $ | 210 |
| | $ | 232 |
|
Work in progress | 36 |
| | 35 |
|
Raw materials | 68 |
| | 62 |
|
Total | $ | 314 |
| | $ | 329 |
|
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment as of December 31 consisted of the following:
|
| | | | | | | |
(millions) | 2015 | | 2014 |
Land and mineral deposits | $ | 131 |
| | $ | 135 |
|
Buildings and improvements | 1,088 |
| | 1,095 |
|
Machinery and equipment | 2,505 |
| | 2,563 |
|
| 3,724 |
| | 3,793 |
|
Reserves for depreciation and depletion | (1,936 | ) | | (1,885 | ) |
Total | $ | 1,788 |
| | $ | 1,908 |
|
Annual depreciation and depletion expense | $ | 130 |
| | $ | 134 |
|
ACCRUED EXPENSES
Accrued expenses as of December 31 consisted of the following:
|
| | | | | | | |
(millions) | 2015 | | 2014 |
Self-insurance reserves | $ | 20 |
| | $ | 21 |
|
Employee compensation | 40 |
| | 42 |
|
Interest | 45 |
| | 45 |
|
Restructuring | — |
| | 1 |
|
Derivatives | 17 |
| | 18 |
|
Pension and other postretirement benefits | 18 |
| | 22 |
|
Environmental | 16 |
| | 16 |
|
Other | 58 |
| | 55 |
|
Total | $ | 214 |
| | $ | 220 |
|
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
Changes in the balances of each component of accumulated other comprehensive income (loss), or AOCI, are summarized in the following table:
|
| | | | | | | | | | | | | | | |
(millions) | Derivatives | | Pension and Other Postretirement Benefit Plans | | Foreign
Currency Translation | | Total AOCI |
Balance as of January 1, 2013 | $ | 32 |
| | $ | (303 | ) | | $ | 38 |
| | $ | (233 | ) |
Other comprehensive income (loss) before reclassifications | 4 |
| | 247 |
| | (17 | ) | | 234 |
|
Less: Amounts reclassified from AOCI, net of tax | 1 |
| | (24 | ) | | — |
| | (23 | ) |
Other comprehensive income (loss), net of tax | 3 |
| | 271 |
| | (17 | ) | | 257 |
|
Balance as of December 31, 2013 | $ | 35 |
| | $ | (32 | ) | | $ | 21 |
| | $ | 24 |
|
Other comprehensive loss before reclassifications | (15 | ) | | (272 | ) | | (68 | ) | | (355 | ) |
Less: Amounts reclassified from AOCI, net of tax | 4 |
| | (2 | ) | | 5 |
| | 7 |
|
Other comprehensive loss, net of tax | (19 | ) | | (270 | ) | | (73 | ) | | (362 | ) |
Balance as of December 31, 2014 | $ | 16 |
| | $ | (302 | ) | | $ | (52 | ) | | $ | (338 | ) |
Other comprehensive (loss) income before reclassifications | (5 | ) | | 74 |
| | (67 | ) | | 2 |
|
Less: Amounts reclassified from AOCI, net of tax | (9 | ) | | (7 | ) | | (6 | ) | | (22 | ) |
Other comprehensive income (loss), net of tax | 4 |
| | 81 |
| | (61 | ) | | 24 |
|
Balance as of December 31, 2015 | $ | 20 |
| | $ | (221 | ) | | $ | (113 | ) | | $ | (314 | ) |
Amounts reclassified from AOCI, net of tax, for the years ended December 31, 2015 and 2014, were as follows: |
| | | | | | | | | |
(millions) | | | 2015 | | 2014 |
Derivatives | | | | | |
Net reclassification from AOCI for cash flow hedges included in cost of products sold | | | $ | (8 | ) | | $ | 4 |
|
Net reclassification from ACOI for cash flow hedges included in income and gain from the sale of equity method investment to related party | | | 1 |
| | — |
|
Less: Income tax expense on reclassification from AOCI included in income tax expense | | | 2 |
| | — |
|
Net amount reclassified from AOCI | | | $ | (9 | ) | | $ | 4 |
|
| | | | | |
Pension and postretirement benefits | | | | | |
Net reclassification from AOCI for amortization of prior service (benefit) cost included in cost of products sold | | | $ | (5 | ) | | $ | 7 |
|
Net reclassification from AOCI for amortization of prior service (benefit) cost included in selling and administrative expenses | | | (3 | ) | | (10 | ) |
Less: Income tax expense on reclassification from AOCI included in income tax expense (benefit) | | | (1 | ) | | (1 | ) |
Net amount reclassified from AOCI | | | $ | (7 | ) | | $ | (2 | ) |
| | | | | |
Foreign Currency Translation | | | | | |
Net reclassification from AOCI for translation (loss) gain realized upon the sale of foreign entities | | | $ | (6 | ) | | $ | 5 |
|
Less: Income tax expense on reclassification from AOCI included in income tax expense (benefit) | | | — |
| | — |
|
Net amount reclassified from AOCI | | | $ | (6 | ) | | $ | 5 |
|
We estimate that we will reclassify a net $9 million after-tax loss on derivatives from AOCI to earnings within the next 12 months.
ASSET RETIREMENT OBLIGATIONS
Changes in our liability for asset retirement obligations during 2015 and 2014 consisted of the following:
|
| | | | | | | |
(millions) | 2015 | | 2014 |
Balance as of January 1 | $ | 123 |
| | $ | 132 |
|
Accretion expense | 7 |
| | 7 |
|
Liabilities incurred | 1 |
| | 2 |
|
Changes in estimated cash flows (a) | (5 | ) | | (13 | ) |
Liabilities settled | (2 | ) | | (2 | ) |
Foreign currency translation | (5 | ) | | (3 | ) |
Balance as of December 31 | $ | 119 |
| | $ | 123 |
|
| |
(a) | Changes in estimated cash flows for the year ended December 31, 2014 includes changes in estimates primarily for our gypsum quarry and ship loading facility in Windsor, Nova Scotia, Canada, which we permanently closed during the third quarter of 2011, and our mining operation in Little Narrows, Nova Scotia, Canada as a result of receiving regulatory approval of a revised reclamation plan in 2014. |
Our asset retirement obligations include reclamation requirements as regulated by government authorities related principally to assets such as our mines, quarries, landfills, ponds and wells. The accounting for asset retirement obligations requires estimates by management about the timing of asset retirements, the cost of retirement obligations, discount and inflation rates used in determining fair values and the methods of remediation associated with our asset retirement obligations. We generally use assumptions and estimates that reflect the most likely remediation method on a site-by-site basis. Our estimated liability for asset retirement obligations is revised annually, and whenever events or changes in circumstances indicate that a revision to the estimate is necessary.
In instances where a decrease in the asset retirement obligation is in excess of the related remaining net book value of the asset retirement costs, the excess is recorded to the consolidated statement of operations as a reduction in cost of products sold. Asset retirement obligations are included in other liabilities on the consolidated balance sheets.