U.S. Steel 1. U.S. Steel provides the following information in the notes to its financial statements relating to its use of the straight-line method of depreciation. Can you interpret the information contained in the note?

Property, plant and equipment—U.S. Steel records depreciation on a modified straight-line or straight-line method utilizing a composite or group asset approach based upon estimated lives of assets. The modified straight-line method is utilized for domestic steel producing assets and is based upon raw steel production levels. The modification factors applied to straight-line calculations range from a minimum of 85% at a production level below 81% of capability, to a maximum of 105% for a 100% production level. No modification is made at the 95% production level, considered the normal long-range level.

2. U.S. Steel also provides information relating to the balances in its individual property, plant and equipment accounts, as shown below. In very general terms, how old is the company’s property, plant, and equipment? Provide support for your answer.

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December 31 (in millions) Land and depletable property Buildings.... Machinery and equipment Leased machinery and equipment Total Less accumulated depreciation, depletion and amortization Net 2005 2004 $ 165 $ 175 727 10,235 673 9,827 189 189 $11,316 7,301 $ 4,015 $10,864 7,237 $ 3,627