Property, Plant and Equipment

Property, plant and equipment are stated at cost less accumulated depreciation. Costs assigned to property, plant and equipment related to acquisitions are based on estimated fair values on the acquisition date. Depreciation is recorded using the straight-line method over the estimated useful lives of the assets: buildings, from 15 to 50 years, and machinery, equipment and office furnishings, from 2 to 20 years. Leasehold improvements are depreciated over the shorter of the lease term or the useful life of the asset, unless acquired in a business combination, in which case the leasehold improvements are amortized over the shorter of the useful life of the asset or a term that includes the reasonably assured life of the lease.

Property, plant and equipment consisted of the following (in millions):



	June 27, 2014			December 31, 2013
Land	$	112.4		$	120.8
Buildings and leasehold improvements	367.6			372.6
Machinery, equipment and office furnishings	1,275.5			1,290.6
Construction in progress	52.6			46.3
Total gross book value	1,808.1			1,830.3
Less accumulated depreciation	(778.6		)	(738.3		)
Total net book value	$	1,029.5		$	1,092.0

Depreciation expense for the three and six fiscal months ended June 27, 2014 was $28.9 million and $57.9 million, respectively. Depreciation expense for the three and six fiscal months ended June 28, 2013 was $29.7 million and $59.3 million, respectively.

The Company periodically evaluates the recoverability of the carrying amount of long-lived assets (including property, plant and equipment and intangible assets with determinable lives) whenever events or changes in circumstances indicate that the carrying amount of an asset may not be fully recoverable. The Company evaluates events or changes in circumstances based mostly on actual historical operating results, but business plans, forecasts, general and industry trends, and anticipated cash flows are also considered. Impairment is assessed when the undiscounted expected future cash flows derived from asset groups are less than its carrying amount. Impairment losses are measured as the amount by which the carrying value of asset groups exceeds its fair value and are recognized in earnings. The Company also continually evaluates the estimated useful lives of all long-lived assets and, when warranted, revises such estimates based on current events.

In the three months ended June 27, 2014, the Company’s executive management evaluated global operations to allow the Company to expand productivity and asset optimization. In the early stages of the evaluation process, the Company reviewed the financial performance of its General Cable India asset group ("India") and its PDIC Peru asset group ("Peru"). Due to the ongoing weak economic conditions at both asset groups and the weak economic outlook, the Company decided to no longer focus on the possible growth opportunities in its India and Peru businesses; therefore, the Company would no longer provide cash flow or operational support to these businesses. This decision was deemed a significant adverse change in the extent or manner in which the asset is currently being used; therefore, the Company performed an asset impairment review for its India and Peru asset groups in accordance with ASC 360 “Property, Plant and Equipment”.

The India and Peru results are reported within the ROW reportable segment. The India operations and assets include land, building and machinery and equipment which manufacture products including power cables, building wire, and specialty cables housed in a purpose-built manufacturing facility. The assets represent the lowest level for which identifiable cash flows can be determined independent of other groups of assets and liabilities. The Peru operations and assets include machinery and equipment which manufacture products including power cables and building wire, all housed in one manufacturing building.

The Company developed internal forward business plans under the guidance of local and regional leadership to determine the undiscounted expected future cash flows derived from the India and Peru long-lived assets. Such were based on management's best estimates considering the likelihood of various outcomes. Based on the internal projections, the Company determined that the undiscounted expected future cash flows were less than the carrying value of the assets and as a result engaged a third party valuation firm to assist in determining the fair value of the India and Peru long-lived assets. To determine the fair value, a current appraisal of the India and Peru machinery and equipment and real property assets was performed utilizing standard valuation approaches. Based on the results of the analysis, the Company recorded an impairment charge of $16.5 million for its India business and $6.9 million for its Peru business in the three and six months ended June 27, 2014. The impairment charge was recorded in the cost of sales caption on the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss).

In late July, the Company announced the closure of the India and Peru facilities in connection with the restructuring program announced on July 9, 2014.