Property and Equipment, net

12 Months Ended

Dec. 31, 2012

Property, Plant and Equipment [Abstract]

Property and equipment, net consists of the following:



	As of December 31,
(In millions)	2012			2011
Land and land improvements	$	7,208.8		$	7,411.8
Buildings, riverboats, and improvements	8,725.7			8,939.2
Furniture, fixtures, and equipment	2,491.0			2,333.3
Construction in progress	378.3			342.5
	18,803.8			19,026.8
Less: accumulated depreciation	(3,102.1		)	(2,541.2		)
	$	15,701.7		$	16,485.6

Interest capitalized was $38.2 million and $22.8 million for the years ended December 31, 2012 and 2011, respectively. Interest capitalized in 2012 was primarily related to Project Linq.

Depreciation expense, which is included in depreciation and amortization, corporate expense, and income from discontinued operations in our Consolidated Statements of Comprehensive Loss, is as follows:



	Year Ended December 31,
(In millions)	2012		2011		2010
Depreciation expense	$	751.6	$	724.7	$	747.0

Tangible asset impairments

Atlantic City

We review the carrying value of property and equipment for impairment whenever events or circumstances indicate that the carrying value may not be recoverable from the estimated future cash flows expected to result from its use and eventual disposition. There has been growing competitive and economic pressure in Atlantic City due to new competition in surrounding markets, exacerbated by significant hurricane-related closures in 2012 and 2011. The collective effect of these trends has resulted in downward pressure on the Company's actual results from operations compared with prior years and with previous forecasts. As a result, the Company continues to evaluate its options for participation in the market. In connection with that evaluation, the Company determined it was necessary to complete an assessment for impairment for one of its Atlantic City properties. Upon the failure of step one of the assessment, we performed a fair value assessment of the property. As a result of this assessment, in December 2012, we recorded a tangible asset impairment of $450.0 million related to the property, comprised of $251.0 million related to building and improvements, $190.0 million for land and $9.0 million for furniture, fixtures, and equipment. With the help of a third-party valuation firm, we estimated the fair value of the property starting with a “Replacement Cost New” approach, and then deducting appropriate amounts for both functional and economic obsolescence to arrive at the fair value estimate. This analysis is sensitive to management assumptions and the estimates of the obsolescence factors, and increases or decreases in these assumptions and estimates would have a material impact on the analysis.

Macau

During 2012, we determined that it is more likely than not that we will divest of our investment in a land concession in Macau prior to the end of the remaining 35-year term of the concession. As a result, we performed an impairment assessment on this investment and recorded a tangible asset impairment of $101.0 million. In the fourth quarter 2012, we began discussions with interested investors on a sale of the subsidiaries that hold our land concession in Macau. As a result of this plan of disposal the impairment charge was reclassified to discontinued operations in our Consolidated Statement of Comprehensive Loss for the year ended December 31, 2012.

Biloxi

In 2012, we recorded tangible asset impairments on a previously halted development project in Biloxi, Mississippi of $180.5 million.

- Definition

The entire disclosure for long-lived, physical assets that are used in the normal conduct of business to produce goods and services and not intended for resale. Examples include land, buildings, machinery and equipment, and other types of furniture and equipment including, but not limited to, office equipment, furniture and fixtures, and computer equipment and software. This disclosure may include property plant and equipment accounting policies and methodology, a schedule of property, plant and equipment gross, additions, deletions, transfers and other changes, depreciation, depletion and amortization expense, net, accumulated depreciation, depletion and amortization expense and useful lives, income statement disclosures, assets held for sale and public utility disclosures.

+ References+ Details