Stock Analysis on Net
Stock Analysis on Net

Reynolds American Inc. (NYSE:RAI)

This company has been moved to the archive! The financial data has not been updated since May 3, 2017.

Analysis of Property, Plant and Equipment

Microsoft Excel

Property, Plant and Equipment Disclosure

Reynolds American Inc., balance sheet: property, plant and equipment

US$ in millions

Microsoft Excel
Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013 Dec 31, 2012
Land and land improvements 95 94 93 92 93
Buildings and leasehold improvements 757 727 729 717 758
Machinery and equipment 2,064 1,967 1,925 1,739 1,758
Construction-in-process 94 110 83 105 46
Property, plant and equipment, at cost 3,010 2,898 2,830 2,653 2,655
Accumulated depreciation (1,662) (1,643) (1,627) (1,579) (1,618)
Property, plant and equipment, net 1,348 1,255 1,203 1,074 1,037

Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).

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. Reynolds American Inc. property, plant and equipment, at cost increased from 2014 to 2015 and from 2015 to 2016.
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. Reynolds American Inc. property, plant and equipment, net increased from 2014 to 2015 and from 2015 to 2016.

Asset Age Ratios (Summary)

Reynolds American Inc., asset age ratios

Microsoft Excel
Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013 Dec 31, 2012
Average age ratio 57.02% 58.59% 59.44% 61.66% 63.15%
Estimated total useful life (years) 29 27 29 26 23
Estimated age, time elapsed since purchase (years) 17 16 17 16 15
Estimated remaining life (years) 13 11 12 10 9

Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).

Asset age ratio Description The company
Average age ratio 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 fixed asset base is old or new. Newer assets are likely to be more efficient. Reynolds American Inc. average age ratio of depreciable property, plant and equipment improved from 2014 to 2015 and from 2015 to 2016.
Estimated total useful life Over longer time periods, this ratio is a useful measure of company depreciation policy and can be used for comparisons with competitors. Reynolds American Inc. estimated total useful life of depreciable property, plant and equipment decreased from 2014 to 2015 but then increased from 2015 to 2016 exceeding 2014 level.
Estimated time elapsed since purchase The approximate age in years of a company fixed assets. Useful for comparison purposes. Reynolds American Inc. estimated time elapsed since purchase of depreciable property, plant and equipment improved from 2014 to 2015 but then slightly deteriorated from 2015 to 2016 not reaching 2014 level.
Estimated remaining life Reynolds American Inc. estimated remaining life of depreciable property, plant and equipment decreased from 2014 to 2015 but then increased from 2015 to 2016 exceeding 2014 level.

Average Age

Microsoft Excel
Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013 Dec 31, 2012
Selected Financial Data (US$ in millions)
Accumulated depreciation 1,662 1,643 1,627 1,579 1,618
Property, plant and equipment, at cost 3,010 2,898 2,830 2,653 2,655
Land and land improvements 95 94 93 92 93
Asset Age Ratio
Average age1 57.02% 58.59% 59.44% 61.66% 63.15%

Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).

2016 Calculations

1 Average age = 100 × Accumulated depreciation ÷ (Property, plant and equipment, at cost – Land and land improvements)
= 100 × 1,662 ÷ (3,010 – 95) = 57.02%

Asset age 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 fixed asset base is old or new. Newer assets are likely to be more efficient. Reynolds American Inc. average age ratio of depreciable property, plant and equipment improved from 2014 to 2015 and from 2015 to 2016.

Estimated Total Useful Life

Microsoft Excel
Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013 Dec 31, 2012
Selected Financial Data (US$ in millions)
Property, plant and equipment, at cost 3,010 2,898 2,830 2,653 2,655
Land and land improvements 95 94 93 92 93
Depreciation expense 100 104 95 98 110
Asset Age Ratio (Years)
Estimated total useful life1 29 27 29 26 23

Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).

2016 Calculations

1 Estimated total useful life = (Property, plant and equipment, at cost – Land and land improvements) ÷ Depreciation expense
= (3,010 – 95) ÷ 100 = 29

Asset age ratio Description The company
Estimated total useful life Over longer time periods, this ratio is a useful measure of company depreciation policy and can be used for comparisons with competitors. Reynolds American Inc. estimated total useful life of depreciable property, plant and equipment decreased from 2014 to 2015 but then increased from 2015 to 2016 exceeding 2014 level.

Estimated Age, Time Elapsed since Purchase

Microsoft Excel
Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013 Dec 31, 2012
Selected Financial Data (US$ in millions)
Accumulated depreciation 1,662 1,643 1,627 1,579 1,618
Depreciation expense 100 104 95 98 110
Asset Age Ratio (Years)
Time elapsed since purchase1 17 16 17 16 15

Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).

2016 Calculations

1 Time elapsed since purchase = Accumulated depreciation ÷ Depreciation expense
= 1,662 ÷ 100 = 17

Asset age ratio Description The company
Estimated time elapsed since purchase The approximate age in years of a company fixed assets. Useful for comparison purposes. Reynolds American Inc. estimated time elapsed since purchase of depreciable property, plant and equipment improved from 2014 to 2015 but then slightly deteriorated from 2015 to 2016 not reaching 2014 level.

Estimated Remaining Life

Microsoft Excel
Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013 Dec 31, 2012
Selected Financial Data (US$ in millions)
Property, plant and equipment, net 1,348 1,255 1,203 1,074 1,037
Land and land improvements 95 94 93 92 93
Depreciation expense 100 104 95 98 110
Asset Age Ratio (Years)
Estimated remaining life1 13 11 12 10 9

Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).

2016 Calculations

1 Estimated remaining life = (Property, plant and equipment, net – Land and land improvements) ÷ Depreciation expense
= (1,348 – 95) ÷ 100 = 13

Asset age ratio Description The company
Estimated remaining life Reynolds American Inc. estimated remaining life of depreciable property, plant and equipment decreased from 2014 to 2015 but then increased from 2015 to 2016 exceeding 2014 level.