Property, Plant, and Equipment

12 Months Ended

Dec. 31, 2014

Property, Plant and Equipment [Abstract]

Property, Plant, and Equipment

Property, Plant, and Equipment

Property, plant, and equipment on the Consolidated Balance Sheets is summarized as follows:

	December 31,
(Thousands)	2014			2013
Land	$	7,458		$	8,097
Buildings	129,673			128,187
Machinery and equipment	579,906			569,617
Software	34,525			31,571
Construction in progress	16,818			14,363
Allowances for depreciation	(534,908		)	(510,718		)
Subtotal	233,472			241,117
Capital leases	10,912			10,912
Allowances for depreciation	(1,988		)	(1,728		)
Subtotal	8,924			9,184
Mineral resources	4,980			4,979
Mine development	16,399			15,153
Allowances for amortization and depletion	(16,187		)	(8,540		)
Subtotal	5,192			11,592
Property, plant, and equipment — net	$	247,588		$	261,893

The Company had a Title III contract with the Department of Defense (DoD) for the design and development of a primary beryllium production facility. Construction of the facility would not have been economically feasible without assistance from the government. The cost of the project, which included the equipment and building and project design, administrative, and other general costs that were not capitalizable as fixed assets, totaled approximately $104.9 million. The Company capitalized $14.7 million of fixed assets and $10.0 million of capital leases as a portion of its cost share for the project. Reimbursements received by the Company from the DoD included $63.5 million for its share of the cost of equipment that was purchased by the Company and installed in the facility. The cost paid by the Company was recorded in property, plant and equipment, and the reimbursement from the government was recorded as unearned income on the Consolidated Balance Sheets. The unearned income liability will be reduced and credited to income ratably with the depreciation expense recorded over the useful life of the equipment.

The equipment was placed in service during 2012. Depreciation expense on the portion of the equipment whose cost was reimbursed by the DoD was $4.7 million in 2014 and 2013. Accordingly, unearned income was reduced by $4.7 million in 2014 and 2013 and credited to cost of sales in the Consolidated Statements of Income, offsetting the impact of the depreciation expense on the associated equipment on the Company's cost of sales and gross margin.

Depreciation, depletion, and amortization of mine development expense, including depreciation for assets recorded under capital leases, was $37.5 million in 2014, $36.1 million in 2013, and $31.0 million in 2012. The expense is net of the above referenced reductions in the unearned income liability. Depreciation, depletion, and amortization as shown on the Consolidated Statement of Cash Flows is also net of the reduction in the unearned income liability in 2014 and 2013. The net book value of capitalized software as of December 31, 2014 was $6.1 million and $7.0 million as of December 31, 2013. Depreciation expense related to software was $1.8 million in 2014, $1.7 million in 2013, and $1.6 million in 2012.