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ENVIRONMENTAL LIABILITIES (Notes)
6 Months Ended
Jun. 30, 2014
Environmental Remediation Obligations [Abstract]  
ENVIRONMENTAL LIABILITIES
ENVIRONMENTAL LIABILITIES
We accrue environmental remediation costs associated with identified sites where an assessment has indicated that cleanup costs are probable and can be reasonably estimated. Such accruals are based on currently available information, estimated timing of remedial actions, existing technology, and enacted laws and regulations. The liability for environmental and closure costs is included on the consolidated balance sheets in accrued liabilities and other long term liabilities.
When we believe that both the amount of a particular environmental remediation liability and the timing of the payments are fixed or reliably determinable, we inflate the cost in current dollars using a weighted-average inflation rate (2.3% at June 30, 2014) and discount the cost to present value using a weighted-average risk-free discount rate (2.8% at June 30, 2014). The inflation rate is calculated based on a weighted-average inflation rate that considers the rate of inflation at the end of the year and average inflation rates for the past 10, 20, and 30 years. The discount rate is a weighted-average year-end discount rate based on rates for U.S. Treasury bonds for the next 10, 20, and 30 years. Both calculations factor in expected timing of cash outflows.
At June 30, 2014 the total environmental remediation liabilities recorded were $30.0 million, of which $2.5 million was classified as accrued liabilities and $27.5 million was classified as other liabilities. The portion of the recorded environmental remediation liabilities that are not subject to inflation or discounting, because the amounts and timing of payments are not fixed or reliably determinable, was $9.4 million. The portion of the recorded environmental remediation liabilities that are subject to inflation or discounting, because the amounts and timing of payments are fixed or reliably determinable, was $20.6 million. The total expected aggregate undiscounted amount of the liability at June 30, 2014 was $39.7 million.