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Microsoft Excel LibreOffice Calc


Analysis of Property, Plant and Equipment

Difficulty: Advanced


Property, Plant and Equipment Accounting Policy

The following table summarizes Delta's property and equipment:

Estimated Useful Life
Flight equipment 20-32 years
Ground property and equipment 3-40 years
Flight and ground equipment under capital leases Shorter of lease term or estimated useful life

Delta records property and equipment at cost and depreciates or amortizes these assets on a straight-line basis to their estimated residual values over their estimated useful lives. The estimated useful life for leasehold improvements is the shorter of lease term or estimated useful life. Depreciation and amortization expense related to Delta's property and equipment was $2.2 billion, $1.9 billion and $1.8 billion for each of the years ended December 31, 2017, 2016 and 2015, respectively. Residual values for owned aircraft, engines, spare parts and simulators are generally 5% to 10% of cost.

Source: Delta Air Lines Inc., Annual Report


Property, Plant and Equipment Disclosure

Delta Air Lines Inc., Statement of Financial Position, Property, Plant and Equipment

USD $ in millions

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Flight equipment hidden hidden hidden hidden hidden
Ground property and equipment hidden hidden hidden hidden hidden
Flight and ground equipment under capital leases hidden hidden hidden hidden hidden
Advance payments for equipment hidden hidden hidden hidden hidden
Property and equipment, gross hidden hidden hidden hidden hidden
Accumulated depreciation and amortization hidden hidden hidden hidden hidden
Property and equipment, net hidden hidden hidden hidden hidden

Source: Based on data from Delta Air Lines Inc. Annual Reports

Item Description The company
Flight and ground equipment under capital leases The total gross amount of assets subject to a lease meeting the criteria for capitalization. Delta Air Lines Inc.'s flight and ground equipment under capital leases declined from 2015 to 2016 but then increased from 2016 to 2017 exceeding 2015 level.
Property and equipment, gross Carrying amount at the balance sheet date for long-lived physical assets used in the normal conduct of business and not intended for resale. This can include land, physical structures, machinery, vehicles, furniture, computer equipment, construction in progress, and similar items. Amount does not include depreciation. Delta Air Lines Inc.'s property and equipment, gross increased from 2015 to 2016 and from 2016 to 2017.
Property and equipment, net Tangible assets that are held by an entity for use in the production or supply of goods and services, for rental to others, or for administrative purposes and that are expected to provide economic benefit for more than one year; net of accumulated depreciation. Examples include land, buildings, and production equipment. Delta Air Lines Inc.'s property and equipment, net increased from 2015 to 2016 and from 2016 to 2017.

Property, Plant and Equipment Ratios (Summary)

Delta Air Lines Inc., 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
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. Delta Air Lines Inc.'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. Delta Air Lines Inc.'s estimated total useful life of depreciable property, plant and equipment increased from 2015 to 2016 but then declined significantly from 2016 to 2017.
Estimated time elapsed since purchase The approximate age in years of a company's fixed assets. Useful for comparison purposes. Delta Air Lines Inc.'s estimated time elapsed since purchase of depreciable property, plant and equipment deteriorated from 2015 to 2016 but then slightly improved from 2016 to 2017.
Estimated remaining life Delta Air Lines Inc.'s estimated remaining life of depreciable property, plant and equipment increased from 2015 to 2016 but then declined significantly 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
Ratio
Average age1 hidden% hidden% hidden% hidden% hidden%

2017 Calculations

1 Average age = 100 × Accumulated depreciation and amortization ÷ Property and equipment, gross
= 100 × hidden ÷ hidden = 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. Delta Air Lines Inc.'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
Depreciation and amortization expense related to property and equipment hidden hidden hidden hidden hidden
Ratio
Estimated total useful life (years)1 hidden hidden hidden hidden hidden

2017 Calculations

1 Estimated total useful life (years) = Property and equipment, gross ÷ Depreciation and amortization expense related to property and equipment
= hidden ÷ 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. Delta Air Lines Inc.'s estimated total useful life of depreciable property, plant and equipment increased from 2015 to 2016 but then declined significantly from 2016 to 2017.

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 and amortization expense related to property and equipment hidden hidden hidden hidden hidden
Ratio
Time elapsed since purchase (years)1 hidden hidden hidden hidden hidden

2017 Calculations

1 Time elapsed since purchase (years) = Accumulated depreciation and amortization ÷ Depreciation and amortization expense related to property and equipment
= 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. Delta Air Lines Inc.'s estimated time elapsed since purchase of depreciable property, plant and equipment deteriorated from 2015 to 2016 but then slightly improved 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
Depreciation and amortization expense related to property and equipment hidden hidden hidden hidden hidden
Ratio
Estimated remaining life (years)1 hidden hidden hidden hidden hidden

2017 Calculations

1 Estimated remaining life (years) = Property and equipment, net ÷ Depreciation and amortization expense related to property and equipment
= hidden ÷ hidden = hidden

Ratio Description The company
Estimated remaining life Delta Air Lines Inc.'s estimated remaining life of depreciable property, plant and equipment increased from 2015 to 2016 but then declined significantly from 2016 to 2017.