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Regeneron Pharmaceuticals Inc. (REGN)
Analysis of Property, Plant and Equipment
Difficulty: Advanced
Property, Plant and Equipment Accounting Policy
Property, plant, and equipment are stated at cost, net of accumulated depreciation. Depreciation is provided on a straight-line basis over the estimated useful lives of the assets. Leasehold improvements are amortized over the shorter of the estimated useful lives of the assets or the lease term. Costs of construction of certain long-lived assets include capitalized interest, which is amortized over the estimated useful life of the related asset. Expenditures for maintenance and repairs which do not materially extend the useful lives of the assets are charged to expense as incurred. The cost and accumulated depreciation or amortization of assets retired or sold are removed from the respective accounts, and any gain or loss is recognized in operations. The estimated useful lives of property, plant, and equipment are as follows:
| Building and improvements | 10–50 years |
| Laboratory and other equipment | 3–10 years |
| Furniture and fixtures | 5 years |
Regeneron periodically assesses the recoverability of long-lived assets, such as property, plant, and equipment, and evaluates such assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.
Source: 10-K (filing date: 2019-02-07).
Property, Plant and Equipment Disclosure
Regeneron Pharmaceuticals Inc., Statement of Financial Position, Property, Plant and Equipment
USD $ in thousands
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| Furniture, computer and office equipment, and other | |
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| Property, plant, and equipment, at cost | |
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| Accumulated depreciation and amortization | |
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| Property, plant, and equipment, net | |
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Based on: 10-K (filing date: 2019-02-07), 10-K (filing date: 2018-02-08), 10-K (filing date: 2017-02-09), 10-K (filing date: 2016-02-11), 10-K (filing date: 2015-02-12).
| Item | Description | The company |
|---|---|---|
| Property, plant, and equipment, at cost | Amount before accumulated depreciation, depletion and amortization of physical assets used in the normal conduct of business and not intended for resale. Examples include, but are not limited to, land, buildings, machinery and equipment, office equipment, and furniture and fixtures. | Regeneron Pharmaceuticals Inc.’s property, plant, and equipment, at cost increased from 2016 to 2017 and from 2017 to 2018. |
| Property, plant, and equipment, net | Amount after accumulated depreciation, depletion and amortization of physical assets used in the normal conduct of business to produce goods and services and not intended for resale. Examples include, but are not limited to, land, buildings, machinery and equipment, office equipment, and furniture and fixtures. | Regeneron Pharmaceuticals Inc.’s property, plant, and equipment, net increased from 2016 to 2017 and from 2017 to 2018. |
Property, Plant and Equipment Ratios (Summary)
Regeneron Pharmaceuticals Inc., Property, Plant and Equipment Ratios
| Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | ||
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| Estimated total useful life (years) | |
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| Estimated age, time elapsed since purchase (years) | |
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| Estimated remaining life (years) | |
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Based on: 10-K (filing date: 2019-02-07), 10-K (filing date: 2018-02-08), 10-K (filing date: 2017-02-09), 10-K (filing date: 2016-02-11), 10-K (filing date: 2015-02-12).
| Ratio | Description | The company |
|---|---|---|
| Average age | As long as straight-line depreciation is used, this is an accurate estimate of asset age as a percentage of depreciable life. The relative age is a useful measure of whether the company’s fixed asset base is old or new. Newer assets are likely to be more efficient. | Regeneron Pharmaceuticals Inc.’s average age of depreciable property, plant and equipment deteriorated from 2016 to 2017 and from 2017 to 2018. |
| Estimated total useful life | Over longer time periods, this ratio is a useful measure of company’s depreciation policy and can be used for comparisons with competitors. | Regeneron Pharmaceuticals Inc.’s estimated total useful life of depreciable property, plant and equipment declined from 2016 to 2017 but then increased from 2017 to 2018 not reaching 2016 level. |
| Estimated time elapsed since purchase | The approximate age in years of a company’s fixed assets. Useful for comparison purposes. | Regeneron Pharmaceuticals Inc.’s estimated time elapsed since purchase of depreciable property, plant and equipment improved from 2016 to 2017 but then deteriorated significantly from 2017 to 2018. |
| Estimated remaining life | Regeneron Pharmaceuticals Inc.’s estimated remaining life of depreciable property, plant and equipment declined from 2016 to 2017 but then slightly increased from 2017 to 2018. |
Average Age
Based on: 10-K (filing date: 2019-02-07), 10-K (filing date: 2018-02-08), 10-K (filing date: 2017-02-09), 10-K (filing date: 2016-02-11), 10-K (filing date: 2015-02-12).
2018 Calculations
1 Average age = 100 × Accumulated depreciation and amortization ÷ (Property, plant, and equipment, at cost – Land)
= 100 × ÷ ( – ) =
| Ratio | Description | The company |
|---|---|---|
| Average age | As long as straight-line depreciation is used, this is an accurate estimate of asset age as a percentage of depreciable life. The relative age is a useful measure of whether the company’s fixed asset base is old or new. Newer assets are likely to be more efficient. | Regeneron Pharmaceuticals Inc.’s average age of depreciable property, plant and equipment deteriorated from 2016 to 2017 and from 2017 to 2018. |
Estimated Total Useful Life
Based on: 10-K (filing date: 2019-02-07), 10-K (filing date: 2018-02-08), 10-K (filing date: 2017-02-09), 10-K (filing date: 2016-02-11), 10-K (filing date: 2015-02-12).
2018 Calculations
1 Estimated total useful life (years) = (Property, plant, and equipment, at cost – Land) ÷ Depreciation and amortization expense on property, plant, and equipment
= ( – ) ÷ =
| Ratio | Description | The company |
|---|---|---|
| Estimated total useful life | Over longer time periods, this ratio is a useful measure of company’s depreciation policy and can be used for comparisons with competitors. | Regeneron Pharmaceuticals Inc.’s estimated total useful life of depreciable property, plant and equipment declined from 2016 to 2017 but then increased from 2017 to 2018 not reaching 2016 level. |
Estimated Age, Time Elapsed since Purchase
Based on: 10-K (filing date: 2019-02-07), 10-K (filing date: 2018-02-08), 10-K (filing date: 2017-02-09), 10-K (filing date: 2016-02-11), 10-K (filing date: 2015-02-12).
2018 Calculations
1 Time elapsed since purchase (years) = Accumulated depreciation and amortization ÷ Depreciation and amortization expense on property, plant, and equipment
= ÷ =
| Ratio | Description | The company |
|---|---|---|
| Estimated time elapsed since purchase | The approximate age in years of a company’s fixed assets. Useful for comparison purposes. | Regeneron Pharmaceuticals Inc.’s estimated time elapsed since purchase of depreciable property, plant and equipment improved from 2016 to 2017 but then deteriorated significantly from 2017 to 2018. |
Estimated Remaining Life
Based on: 10-K (filing date: 2019-02-07), 10-K (filing date: 2018-02-08), 10-K (filing date: 2017-02-09), 10-K (filing date: 2016-02-11), 10-K (filing date: 2015-02-12).
2018 Calculations
1 Estimated remaining life (years) = (Property, plant, and equipment, net – Land) ÷ Depreciation and amortization expense on property, plant, and equipment
= ( – ) ÷ =
| Ratio | Description | The company |
|---|---|---|
| Estimated remaining life | Regeneron Pharmaceuticals Inc.’s estimated remaining life of depreciable property, plant and equipment declined from 2016 to 2017 but then slightly increased from 2017 to 2018. |