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Bon-Ton Stores Inc (NAS:BONT)
Property, Plant and Equipment (PPE)
$640 Mil (As of Jan. 2014)

Bon-Ton Stores Inc's quarterly net PPE increased from Jul. 2013 ($643 Mil) to Oct. 2013 ($650 Mil) but then declined from Oct. 2013 ($650 Mil) to Jan. 2014 ($640 Mil).

Bon-Ton Stores Inc's annual net PPE declined from Jan. 2012 ($677 Mil) to Jan. 2013 ($653 Mil) and declined from Jan. 2013 ($653 Mil) to Jan. 2014 ($640 Mil).


Definition

Property, Plant and Equipment (PPE) are the fixed assets of the companyFixed assets are also known as non-current assets.

Property, plant, and equipment includes assets that will - in the normal course of business - neither be used up in the next year nor will become a part of any product sold to customers.

Some of the most common parts of property, plant, and equipment are:


• Land
• Buildings (and leasehold improvements)
• Transportation equipment
• Manufacturing equipment
• Office equipment
• Office furniture

Companies with lots of property, plant, and equipment often have special categories. For example, railroad property includes:


• Track
• Ties
• Ballast
• Bridges
• Tunnels
• Signals
• Locomotives
• Freight Cars

There is often a note in the financial statements - found in a company’s 10-K - that will explain the different categories of property a company owns.

The market value of property, plant, and equipment can differ tremendously from the book value of property, plant, and equipment.

For example, when Berkshire Hathaway liquidated its textile mills, it had to pay the buyers of the company’s manufacturing equipment to haul the equipment away. That property, plant, and equipment was literally worth less than zero. On the other hand, some companies own thousands of acres of land.

All property, plant, and equipment other than land is depreciated. Land is never depreciated. However, land is not marked up to market value either. Under Generally Accepted Accounting Principles (GAAP), land is shown on the balance sheet at cost.

The property, plant, and equipment line shown on the balance sheet is usually “net” property, plant, and equipment. This means it is the cost of the property, plant, and equipment less accumulated depreciation.


Explanation

A company with durable competitive advantage doesn’t need to constantly upgrade its equipment to stay competitive. The company replaces when it wears out. On the other hand, a company without any advantages must replace to keep pace.

Difference between a company with a moat and one without is that the company with the competitive advantage finances new equipment through internal cash flows, whereas the no advantage company requires debt to finance.

Producing a consistent product that doesn’t change equates to consistent profits. There is no need to upgrade plants which frees up cash for other ventures. Think Coca Cola, Johnson & Johnson etc.


Related Terms

Total Assets, Accumulated Depreciation, Gross Property, Plant and Equipment


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Bon-Ton Stores Inc Annual Data

Jan05Jan06Jan07Jan08Jan09Jan10Jan11Jan12Jan13Jan14
Net PPE 168168898885833757703677653640

Bon-Ton Stores Inc Quarterly Data

Oct11Jan12Apr12Jul12Oct12Jan13Apr13Jul13Oct13Jan14
Net PPE 679677662663661653642643650640
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