Property and Equipment
Property and equipment are carried at cost less accumulated depreciation. Property and equipment held for sale are recorded at the lower of cost or fair value less cost to sell. When certain events or changes in operating conditions occur, an impairment assessment may be performed on the recoverability of the carrying amounts.
As a result of the reductions in the anticipated future cash flows in our Nuclear Pharmacy Services division, as discussed in Note 5, we also performed recoverability testing for the long-lived assets of this division, which consist primarily of improvements, machinery and equipment. Based on the assessment performed, we determined that the carrying amounts of the long-lived assets are recoverable.
Depreciation expense is computed using the straight-line method over the estimated useful lives of the assets, including capital lease assets which are depreciated over the terms of their respective leases. We generally use the following range of useful lives for our property and equipment categories: buildings and improvements—3 to 39 years; machinery and equipment—3 to 20 years; and furniture and fixtures—3 to 7 years. We recorded depreciation expense of $259 million, $241 million and $244 million, for fiscal 2013, 2012 and 2011, respectively.
The following table presents the components of property and equipment, net at June 30:
|
| | | | | | | |
(in millions) | 2013 | | 2012 |
Land, building and improvements | $ | 1,398 |
| | $ | 1,126 |
|
Machinery and equipment | 2,149 |
| | 2,291 |
|
Furniture and fixtures | 122 |
| | 120 |
|
Total property and equipment, at cost | 3,669 |
| | 3,537 |
|
Accumulated depreciation and amortization | (2,180 | ) | | (1,986 | ) |
Property and equipment, net | $ | 1,489 |
| | $ | 1,551 |
|
Repairs and maintenance expenditures are expensed as incurred. Interest on long-term projects is capitalized using a rate that approximates the weighted-average interest rate on long-term obligations, which was 3.78 percent at June 30, 2013. The amount of capitalized interest was immaterial for all periods presented.
