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United Rentals Inc (NYSE:URI)
Property, Plant and Equipment (PPE)
$6,569 Mil (As of Sep. 2014)

United Rentals Inc's quarterly net PPE increased from Mar. 2014 ($5,814 Mil) to Jun. 2014 ($6,452 Mil) and increased from Jun. 2014 ($6,452 Mil) to Sep. 2014 ($6,569 Mil).

United Rentals Inc's annual net PPE increased from Dec. 2011 ($2,983 Mil) to Dec. 2012 ($5,394 Mil) and increased from Dec. 2012 ($5,394 Mil) to Dec. 2013 ($5,795 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.

United Rentals Inc Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Net PPE 3972,6252,9203,2663,1932,8482,6732,9835,3945,795

United Rentals Inc Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
Net PPE 5,5145,5295,3945,3835,7976,0195,7955,8146,4526,569
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