Property, Plant and Equipment

Property, plant and equipment are recorded at historical cost, net of accumulated depreciation. Components of property, plant and equipment, net are summarized as follows:



	As of December 31,
(In millions)	2013			2012
Land	$	59.7		$	55.7
Buildings	961.5			902.5
Leasehold improvements	139.6			107.3
Machinery and equipment	944.5			882.0
Computer software and hardware	559.2			476.6
Furniture and fixtures	60.3			46.9
Construction in progress	144.2			212.3
Total cost	2,869.0			2,683.3
Less: accumulated depreciation	(1,118.3		)	(941.1		)
Total property, plant and equipment, net	$	1,750.7		$	1,742.2

Depreciation expense totaled $187.8 million, $164.3 million and $143.9 million for 2013, 2012 and 2011, respectively.

For 2013, 2012 and 2011, we capitalized interest costs related to construction in progress totaling approximately $7.8 million, $25.4 million and $32.6 million, respectively.

Cambridge Leases

In July 2011, we executed leases for two office buildings to be constructed in Cambridge, Massachusetts. Construction of these facilities began in late 2011. In accordance with accounting guidance applicable to entities involved with the construction of an asset that will be leased when the construction is completed, we were considered the owner of these properties during the construction period. Accordingly, we recorded an asset and a corresponding financing obligation on our consolidated balance sheet for the amount of costs incurred related to the construction for these buildings.

In July and November 2013, the construction of the two office buildings was completed and we started leasing the facilities. Upon completion of the construction of the buildings, we determined that we are no longer considered the owner of the buildings because we do not have any unusual or significant continuing involvement. Consequently, we derecognized the buildings and their associated financing obligation of approximately $161.5 million from our consolidated balance sheet. As of December 31, 2012, the amount recorded within our consolidated balance sheet as property, plant and equipment and financing obligation totaled approximately $86.5 million.

As a result of our decision to relocate our corporate headquarters to Cambridge, Massachusetts, we vacated part of our Weston, Massachusetts facility in the fourth quarter of 2013. We incurred a charge of $27.2 million in connection with this move. This charge represents our remaining lease obligation for the vacated portion of our Weston facility, net of sublease income expected to be received. The term of our sublease to the vacated portion of our Weston facility started in January 2014 and will continue through the remaining term of our lease agreement.

In addition, this decision has shortened the expected useful lives of certain leasehold improvements and other assets at our Weston facility. During the years ended December 31, 2013, 2012 and 2011, approximately $6.2 million, $11.4 million and $4.7 million of additional depreciation was recognized.

Hillerød, Denmark Facility

As of September 2012, our large-scale biologics manufacturing facility in Hillerød, Denmark was ready for its intended use as we began the process of manufacturing clinical products for sale to third parties. As a result, we transferred $465.9 million from construction in progress to various fixed asset accounts. We ceased capitalizing a majority of the interest expense and began recording depreciation on the various assets during the third quarter of 2012. The average estimated useful life for the facility and its assets is 20 years. In July 2013, the facility was approved by the FDA and EMA for the manufacture of commercial TYSABRI.

Research Triangle Park (RTP) Lease

In December 2012, we entered into an arrangement with Eisai, Inc. (Eisai) to lease a portion of their facility in RTP to manufacture our and Eisai's oral solid dose products and for Eisai to provide us with vial-filling services for biologic therapies and packaging services for oral solid dose products. The 10 year operating lease agreement, which is cancellable after 5 years, became effective in February 2013 and gives us the option to purchase the facility.