Depreciation and Amortization

9 Months Ended

Sep. 30, 2016

Property, Plant and Equipment [Abstract]

Depreciation and Amortization

The Company received an aggregate of $63.5 million from the U.S. Department of Defense (DoD) in previous periods for reimbursement of the DoD's share of the cost of the equipment in property, plant, and equipment, and the reimbursements are reported as unearned income, a liability on the Consolidated Balance Sheets. The equipment was placed in service during 2012, and its full cost is being depreciated in accordance with Company policy. The unearned income liability is being reduced ratably with the depreciation expense recorded over the life of the equipment.

In the first nine months of 2016 and 2015, the depreciation expense reimbursed for this equipment was $3.4 million and $4.7 million, respectively. Accordingly, in the first nine months of 2016 and 2015, unearned income was reduced by $3.4 million and $4.7 million, respectively, with the offset recorded as a credit to cost of sales. Depreciation, depletion, and amortization expense on the Consolidated Statements of Cash Flows is shown net of the reduction in unearned income.