Quarterly report pursuant to Section 13 or 15(d)

PROPERTY, PLANT AND EQUIPMENT

v3.19.3
PROPERTY, PLANT AND EQUIPMENT
 9 Months Ended
Sep. 30, 2019
Property, Plant and Equipment [Abstract]  
PROPERTY, PLANT AND EQUIPMENT PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment as of September 30, 2019 and December 31, 2018 consists of the following (in millions):
 
2019
 
2018
Vehicles
$
10,046

 
$
9,820

Aircraft
18,481

 
17,499

Land
2,068

 
2,000

Buildings
4,920

 
4,808

Building and leasehold improvements
4,595

 
4,323

Plant equipment
12,369

 
11,833

Technology equipment
2,184

 
2,093

Construction-in-progress
3,195

 
2,112

 
57,858

 
54,488

Less: Accumulated depreciation and amortization
(28,787
)
 
(27,912
)
 
$
29,071

 
$
26,576


 
As part of our ongoing investment in transformation, in 2018 we made prospective revisions to our estimates of useful lives for building improvements, vehicles and plant equipment which in general had the effect of lengthening the useful lives of these categories.
In the third quarter of 2019, depreciation expense increased $94 million, and net income decreased by $75 million, or $0.09 per share on a basic and diluted basis, as a result of investments in property, plant and equipment, net of disposals and assets becoming fully depreciated. Depreciation expense decreased $31 million, and net income increased $26 million, or $0.03 per share on a basic and diluted basis, as a result of lengthening our estimated useful lives for various asset categories in the latter half of 2018. The combined effect of the foregoing was a net increase in depreciation expense of $63 million and a decrease in net income of $49 million, or $0.06 per share on a basic and diluted basis, for the quarter.
For the year-to-date period of 2019, depreciation expense increased $280 million, and net income decreased by $218 million, or $0.25 per share on a basic and diluted basis, as a result of investments in property, plant and equipment, net of disposals and assets becoming fully depreciated. Depreciation expense decreased $212 million, and net income increased $165 million, or $0.19 per share on a basic and diluted basis, as a result of lengthening our estimated useful lives for various asset categories in the latter half of 2018. The combined effect of the foregoing was a net increase in depreciation expense of $68 million and a decrease in net income of $53 million, or $0.06 per share on a basic and diluted basis, for the nine month period.
We continually monitor our aircraft fleet utilization in light of current and projected volume levels, aircraft fuel prices and other factors. Additionally, we monitor all other property, plant and equipment categories for any indicators that the carrying value of the assets may not be recoverable. No impairment charges on property, plant and equipment were recorded during the three and nine months ended September 30, 2019 or 2018.