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Fifth Third Bancorp's quarterly net PPE declined from Dec. 2014 ($3,193 Mil) to Mar. 2015 ($3,128 Mil) and declined from Mar. 2015 ($3,128 Mil) to Jun. 2015 ($2,968 Mil).
Fifth Third Bancorp's annual net PPE increased from Dec. 2012 ($3,123 Mil) to Dec. 2013 ($3,261 Mil) but then declined from Dec. 2013 ($3,261 Mil) to Dec. 2014 ($3,193 Mil).
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:
Companies with lots of property, plant, and equipment often have special categories. For example, railroad property includes:
There is often a note in the financial statements - found in a companys 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 companys 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.
A company with durable competitive advantage doesnt 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 doesnt 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.
* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.
Fifth Third Bancorp Annual Data
Fifth Third Bancorp Quarterly Data