Switch to:
CSX Corp  (NAS:CSX) Depreciation, Depletion and Amortization: \$1,326 Mil (TTM As of Sep. 2017)

CSX Corp's depreciation, depletion and amortization for the three months ended in Sep. 2017 was \$331 Mil. Its depreciation, depletion and amortization for the trailing twelve months (TTM) ended in Sep. 2017 was \$1,326 Mil.

Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

CSX Corp Annual Data

 Dec07 Dec08 Dec09 Dec10 Dec11 Dec12 Dec13 Dec14 Dec15 Dec16 Depreciation, Depletion and Amortization 1,059.00 1,104.00 1,151.00 1,208.00 1,301.00

CSX Corp Quarterly Data

 Dec12 Mar13 Jun13 Sep13 Dec13 Mar14 Jun14 Sep14 Dec14 Mar15 Jun15 Sep15 Dec15 Mar16 Jun16 Sep16 Dec16 Mar17 Jun17 Sep17 Depreciation, Depletion and Amortization 321.00 348.00 320.00 327.00 331.00

Calculation

Depreciation is a present expense that accounts for the past cost of an asset that is now providing benefits.

Depletion and amortization are synonyms for depreciation.

Generally:
The term depreciation is used when discussing man made tangible assets
The term depletion is used when discussing natural tangible assets
The term amortization is used when discussing intangible assets

Depreciation, Depletion and Amortization for the trailing twelve months (TTM) ended in Sep. 2017 was 348 (Dec. 2016 ) + 320 (Mar. 2017 ) + 327 (Jun. 2017 ) + 331 (Sep. 2017 ) = \$1,326 Mil.

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Explanation

One of the key tenets of Generally Accepted Accounting Principles (GAAP) is the matching principle. The matching principle states that companies should report associated costs and benefits at the same time.

For example:

If a company buys a \$300 million cruise ship in 1982 and then sells tickets to passengers for the next 30 years, the company should not report a \$300 million expense in 1982 and then ticket sales for 1982 through 2012. Instead, the company should spread the purchase price of the ship (the cost) over the same time period it sells tickets (the benefit).

To create income statements that meet the matching principle, accountants use an expense called depreciation.

So, instead of reporting a \$300 million purchase expense in 1982, the company might:

Report a \$30 million depreciation expense in 1982, 1983, 1984...and every year after that for the 30 years the company expects to sell tickets to passengers on this cruise ship.

To calculate depreciation, a company must make estimates and choices such as:

The cost of the asset
The useful life of the asset
The salvage value of the asset at the end of its useful life
And a way of spreading the cost of the asset to match the time when the asset provides benefits

The range of different ways of spreading the cost under GAAP accounting is too long to list. However, public companies in the United States explain their depreciation choices to shareholders in a note to their financial statements. It is critical that investors read this note. Investors can find this note in the company's 10-K.

Past depreciation expenses accumulate on the balance sheet. Most public companies choose not to show this contra asset account on the balance sheet they present to shareholders. Instead, they simply show a single item. This single asset item may be marked Net. Such as Property, Plant, and Equipment - Net. It is actually the asset account netted against the contra asset account.

A contra asset account is an account that offsets an asset account. So, for example a company might have:

Property, Plant, and Equipment - Gross: \$150 million
Accumulated Depreciation: \$120 million
Property, Plant, and Equipment - Net: \$30 million

In this case, the only item likely to be shown on the balance sheet is Property, Plant, and Equipment - Net. This is the cost of the company's property, plant, and equipment (asset account) minus the accumulated depreciation (the contra asset account). It means the company's assets cost \$150 million, the company has reported \$120 million in depreciation expense over the years, and the company is now reporting the assets have a book value of \$30 million.

It is possible for a company to have fully depreciated assets on its balance sheet. This means the company's estimate of the useful life of the asset was shorter than the asset's actual useful life. As a result, the asset - although it is still being used - is carried on the balance sheet at its salvage value.

This is a reminder that depreciation involves estimates and choices. It is not an infallible process.

Companies do not have cash layout for depreciation. Therefore, depreciation is added back in the cash flow statement.

Although depreciation is not a cash cost, it is a real business cost because the company has to pay for the fixed assets when it purchases them. Both Warren Buffett and Charlie Munger hate the idea of EDITDA because depreciation is not included as an expense. Warren Buffett even jokingly said We prefer earnings before everything when criticizing the abuse of EDITDA.

Be Aware

Depreciation estimates make the calculation of net income susceptible to management's accounting choices. These choices can be either overly aggressive or overly conservative.

Related Terms

From the Internet

###### CSX Gets Through Its Darkest Hour

- Fool 2018-01-17 16:21:00

###### CSX's Quarterly Results Puts Pressure on Investor Day

- theStreet 2018-01-17 16:05:00

###### \$CSX Csx Expectations Robust Economy

- Seekingalpha 2018-01-17 13:54:50

###### CSX (CSX) Q4 2017 Earnings Conference Call Transcript

- Fool 2018-01-17 12:29:00

###### Stocks Rise as Strength in Tech Offsets Weakness in Bank Shares

- theStreet 2018-01-17 11:18:00

###### Stocks Rebound as Earnings Pace Wall Street Gains

- theStreet 2018-01-17 09:43:00

###### Stock Market News for Jan 17, 2018

- Zacks 2018-01-17 09:12:00

###### Morning Movers: Juno Soars; Goldman Sachs, CSX Slide

- Barron's 2018-01-17 09:00:00

###### CSX Earnings Surpass Estimates in Q4, Revenues Disappoint

- Zacks 2018-01-17 07:15:00

###### \$SPY \$QQQ \$ACN \$ARMH \$C \$CELG \$CSX \$DIS \$DNKN \$HTHIF \$ICE \$INTC \$JNJ \$JUNO \$OSTK \$TM \$VLKAY \$WMT \$AMD \$ATUS \$CCOI Wall Street Breakfast Investors Ready Fed Filled Day

- Seekingalpha 2018-01-17 07:01:18

###### Dow futures point to triple-digit gain and fresh push toward 26,000

- MarketWatch 2018-01-17 06:06:00

###### \$CSX Csx Corporation 2017 Q4 Results Earnings Call Slides

- Seekingalpha 2018-01-16 17:21:51

###### CSX Shares Fall as Earnings Beat Estimates, Revenue Doesn't

- theStreet 2018-01-16 16:29:00

###### CSX shares rise after railroad company's earnings beat expectations

- MarketWatch 2018-01-16 16:15:00

###### \$CP \$CSX Sell Csx Earnings

- Seekingalpha 2018-01-16 13:35:04

###### The Most Important Earnings Charts This Week

- Zacks 2018-01-16 10:05:00

###### Wall Street's Biggest Banks Start Earnings Season

- Zacks 2018-01-16 09:20:00

###### Banks Report Q4 Earnings, Take Tax Charges

- Zacks 2018-01-16 09:06:00

###### Dow futures surge 206 points, index set to hit 26,000 for the first time

- cnbc 2018-01-16 08:29:23

###### Rail Traffic Climbed By 2.9% in 2017. Can 2018 Be Even Better?

- Fool 2018-01-16 08:20:00

###### \$AMZN \$ATSG \$MCD \$YUM \$AAWW \$ALK \$ALL \$BA \$CAT \$CBRL \$CHRW \$CSX \$DAL \$DE \$FDX \$GD \$KSU \$LMT \$LUV \$NSC \$PGR \$RUTH Dividend Flow Turned Flood Part Ii

- Seekingalpha 2018-01-16 08:07:44

###### Dow 26,000 and Everything You Need to Know Tuesday Morning in Under a Minute

- theStreet 2018-01-16 07:22:00

###### Kansas City Southern's (KSU) Q4 Earnings: A Beat in Store?

- Zacks 2018-01-16 06:37:00

###### Dow 26,000, Citigroup, BP, AT&T - 5 Things You Must Know Before the Market Opens Tuesday

- theStreet 2018-01-16 06:06:00

###### \$BDX \$CNI \$CSX \$CVS \$HDB \$LMT \$LOW \$MMM \$MSFT \$NKE \$QCOM \$RTN \$SYK \$TJX \$UNP \$V \$VIG \$WBA Sales Growth Dividend Growth Danger

- Seekingalpha 2018-01-15 23:44:05

Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to \$400 per referral. ( Learn More)