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Microsoft Excel LibreOffice Calc


Analysis of Property, Plant and Equipment

Difficulty: Advanced


Property, Plant and Equipment Accounting Policy

Property, equipment and improvements to leased premises are depreciated using the straight-line method over the estimated useful lives of the assets, or when applicable, the term of the lease, whichever is shorter. Estimated useful lives generally range from 10 to 40 years for buildings, building improvements and leasehold improvements and 3 to 10 years for fixtures, equipment and internally developed software. Repair and maintenance costs are charged directly to expense as incurred. Major renewals or replacements that substantially extend the useful life of an asset are capitalized and depreciated. Application development stage costs for significant internally developed software projects are capitalized and depreciated.

The gross amount of property and equipment under capital leases was $588 million and $547 million as of December 31, 2017 and 2016, respectively. Accumulated amortization of property and equipment under capital lease was $140 million and $119 million as of December 31, 2017 and 2016, respectively. Amortization of property and equipment under capital lease is included within depreciation expense. Depreciation expense totaled $1.7 billion in both 2017 and 2016, and $1.5 billion in 2015.

Source: 10-K (filing date: 2018-02-14).


Property, Plant and Equipment Disclosure

CVS Health Corp., Statement of Financial Position, Property, Plant and Equipment

USD $ in millions

Microsoft Excel LibreOffice Calc

Based on: 10-K (filing date: 2018-02-14), 10-K (filing date: 2017-02-09), 10-K (filing date: 2016-02-09), 10-K (filing date: 2015-02-10), 10-K (filing date: 2014-02-11).

Item Description The company
Property and equipment, gross 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. CVS Health Corp.'s property and equipment, gross increased from 2015 to 2016 and from 2016 to 2017.
Property 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. CVS Health Corp.'s property and equipment, net increased from 2015 to 2016 and from 2016 to 2017.

Property, Plant and Equipment Ratios (Summary)

CVS Health Corp., Property, Plant and Equipment Ratios

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Average age hidden hidden hidden hidden hidden
Estimated total useful life (years) hidden hidden hidden hidden hidden
Estimated age, time elapsed since purchase (years) hidden hidden hidden hidden hidden
Estimated remaining life (years) hidden hidden hidden hidden hidden

Based on: 10-K (filing date: 2018-02-14), 10-K (filing date: 2017-02-09), 10-K (filing date: 2016-02-09), 10-K (filing date: 2015-02-10), 10-K (filing date: 2014-02-11).

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. CVS Health Corp.'s average age of depreciable property, plant and equipment deteriorated from 2015 to 2016 and from 2016 to 2017.
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. CVS Health Corp.'s estimated total useful life of depreciable property, plant and equipment declined from 2015 to 2016 but then increased from 2016 to 2017 exceeding 2015 level.
Estimated time elapsed since purchase The approximate age in years of a company's fixed assets. Useful for comparison purposes. CVS Health Corp.'s estimated time elapsed since purchase of depreciable property, plant and equipment improved from 2015 to 2016 but then deteriorated significantly from 2016 to 2017.
Estimated remaining life CVS Health Corp.'s estimated remaining life of depreciable property, plant and equipment declined from 2015 to 2016 but then slightly increased from 2016 to 2017.

Average Age

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Selected Financial Data (USD $ in millions)
Accumulated depreciation and amortization hidden hidden hidden hidden hidden
Property and equipment, gross hidden hidden hidden hidden hidden
Land hidden hidden hidden hidden hidden
Ratio
Average age1 hidden hidden hidden hidden hidden

Based on: 10-K (filing date: 2018-02-14), 10-K (filing date: 2017-02-09), 10-K (filing date: 2016-02-09), 10-K (filing date: 2015-02-10), 10-K (filing date: 2014-02-11).

2017 Calculations

1 Average age = 100 × Accumulated depreciation and amortization ÷ (Property and equipment, gross – Land)
= 100 × hidden ÷ (hiddenhidden) = hidden

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. CVS Health Corp.'s average age of depreciable property, plant and equipment deteriorated from 2015 to 2016 and from 2016 to 2017.

Estimated Total Useful Life

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Selected Financial Data (USD $ in millions)
Property and equipment, gross hidden hidden hidden hidden hidden
Land hidden hidden hidden hidden hidden
Depreciation expense hidden hidden hidden hidden hidden
Ratio
Estimated total useful life (years)1 hidden hidden hidden hidden hidden

Based on: 10-K (filing date: 2018-02-14), 10-K (filing date: 2017-02-09), 10-K (filing date: 2016-02-09), 10-K (filing date: 2015-02-10), 10-K (filing date: 2014-02-11).

2017 Calculations

1 Estimated total useful life (years) = (Property and equipment, gross – Land) ÷ Depreciation expense
= (hiddenhidden) ÷ hidden = hidden

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. CVS Health Corp.'s estimated total useful life of depreciable property, plant and equipment declined from 2015 to 2016 but then increased from 2016 to 2017 exceeding 2015 level.

Estimated Age, Time Elapsed since Purchase

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Selected Financial Data (USD $ in millions)
Accumulated depreciation and amortization hidden hidden hidden hidden hidden
Depreciation expense hidden hidden hidden hidden hidden
Ratio
Time elapsed since purchase (years)1 hidden hidden hidden hidden hidden

Based on: 10-K (filing date: 2018-02-14), 10-K (filing date: 2017-02-09), 10-K (filing date: 2016-02-09), 10-K (filing date: 2015-02-10), 10-K (filing date: 2014-02-11).

2017 Calculations

1 Time elapsed since purchase (years) = Accumulated depreciation and amortization ÷ Depreciation expense
= hidden ÷ hidden = hidden

Ratio Description The company
Estimated time elapsed since purchase The approximate age in years of a company's fixed assets. Useful for comparison purposes. CVS Health Corp.'s estimated time elapsed since purchase of depreciable property, plant and equipment improved from 2015 to 2016 but then deteriorated significantly from 2016 to 2017.

Estimated Remaining Life

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Selected Financial Data (USD $ in millions)
Property and equipment, net hidden hidden hidden hidden hidden
Land hidden hidden hidden hidden hidden
Depreciation expense hidden hidden hidden hidden hidden
Ratio
Estimated remaining life (years)1 hidden hidden hidden hidden hidden

Based on: 10-K (filing date: 2018-02-14), 10-K (filing date: 2017-02-09), 10-K (filing date: 2016-02-09), 10-K (filing date: 2015-02-10), 10-K (filing date: 2014-02-11).

2017 Calculations

1 Estimated remaining life (years) = (Property and equipment, net – Land) ÷ Depreciation expense
= (hiddenhidden) ÷ hidden = hidden

Ratio Description The company
Estimated remaining life CVS Health Corp.'s estimated remaining life of depreciable property, plant and equipment declined from 2015 to 2016 but then slightly increased from 2016 to 2017.