Property, Plant and Equipment

12 Months Ended

Dec. 31, 2013

Property, Plant and Equipment [Abstract]

Net property, plant and equipment is composed of the following:



		December 31,
	Depreciable Lives	December 31,
	Depreciable Lives	2013			2012
		(Dollars in millions)
Land	N/A	$	585		579
Fiber, conduit and other outside plant ⁽¹⁾	15-45	14,187			13,030
Central office and other network electronics ⁽²⁾	3-10	12,178			11,242
Support assets ⁽³⁾	3-30	6,420			6,235
Construction in progress ⁽⁴⁾	N/A	937			847
Gross property, plant and equipment		34,307			31,933
Accumulated depreciation		(15,661		)	(13,024	)
Net property, plant and equipment		$	18,646		18,909

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(1)	Fiber, conduit and other outside plant consists of fiber and metallic cable, conduit, poles and other supporting structures.


(2)	Central office and other network electronics consists of circuit and packet switches, routers, transmission electronics and electronics providing service to customers.


(3)	Support assets consist of buildings, computers and other administrative and support equipment.


(4)	Construction in progress includes inventory held for construction and property of the aforementioned categories that has not been placed in service as it is still under construction.

We recorded depreciation expense of $2.952 billion, $3.070 billion and $2.593 billion for the years ended December 31, 2013, 2012 and 2011, respectively.

On April 2, 2012, our subsidiary, Qwest Corporation ("QC"), sold an office building for net proceeds of $133 million. As part of the transaction, QC agreed to lease a portion of the building from the new owner. As a result, the $16 million gain from the sale was deferred and will be recognized as a reduction to rent expense over the 10 year lease term.

Asset Retirement Obligations

At December 31, 2013, our asset retirement obligations balance was primarily related to estimated future costs of removing equipment from leased properties and estimated future costs of properly disposing of asbestos and other hazardous materials upon remodeling or demolishing buildings. Asset retirement obligations are included in other long-term liabilities on our consolidated balance sheets.

The following table provides asset retirement obligation activity:



	Years Ended December 31,
	2013			2012		2011
	(Dollars in millions)
Balance at beginning of year	$	106		109		41
Accretion expense	7			7		9
Liabilities incurred	—			1		—
Liabilities assumed in Qwest and Savvis acquisitions	—			—		124
Liabilities settled and other	(4		)	(1	)	(3	)
Change in estimate	(3		)	(10	)	(62	)
Balance at end of year	$	106		106		109

During 2013, 2012 and 2011 we revised our estimates for the cost of removal of network equipment, asbestos remediation, and other obligations by $3 million, $10 million and $62 million, respectively. These revisions resulted in a reduction of the asset retirement obligation and offsetting reduction to gross property, plant and equipment.

- Definition

The entire disclosure for long-lived, physical assets used in the normal conduct of business and not intended for resale. Includes, but is not limited to, accounting policies and methodology, roll forwards, depreciation, depletion and amortization expense, including composite depreciation, accumulated depreciation, depletion and amortization expense, useful lives and method used, income statement disclosures, assets held for sale and public utility disclosures.

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