Asset Retirement Obligations

12 Months Ended

Dec. 31, 2015

Asset Retirement Obligation Disclosure [Abstract]

8. Asset Retirement Obligations

The Company considers the legal obligation to remediate its facilities upon a decommissioning of its radioactive related operations as an asset retirement obligation. The operations of the Company have radioactive production facilities at its North Billerica, Massachusetts and San Juan, Puerto Rico sites.

The Company is required to provide the U.S. Nuclear Regulatory Commission and Massachusetts Department of Public Health financial assurance demonstrating the Company’s ability to fund the decommissioning of the North Billerica, Massachusetts production facility upon closure, although the Company does not intend to close the facility. The Company has provided this financial assurance in the form of a $28.2 million surety bond, which itself is currently secured by an $8.8 million unfunded Standby Letter of Credit provided to the third party issuer of the bond.

The fair value of a liability for asset retirement obligations is recognized in the period in which the liability is incurred. As of December 31, 2015, the liability is measured at the present value of the obligation expected to be incurred, of approximately $26.6 million, and is adjusted in subsequent periods as accretion expense is recorded. The corresponding asset retirement costs are capitalized as part of the carrying value of the related long-lived assets and depreciated over the asset’s useful life.

The following is a reconciliation of the Company’s asset retirement obligations for the years ended December 31, 2015, 2014 and 2013:


(in thousands)
Balance at January 1, 2013	$	5,416
Net increase due to changes in estimated future cash flows		341
Accretion expense		628

Balance at December 31, 2013		6,385
Capitalization		277
Accretion expense		773

Balance at December 31, 2014		7,435
Net decrease due to changes in estimated future cash flows		(37	)
Accretion expense		747

Balance at December 31, 2015	$	8,145