Quarterly report pursuant to Section 13 or 15(d)

PROPERTY, PLANT AND EQUIPMENT

v3.19.2
PROPERTY, PLANT AND EQUIPMENT
 6 Months Ended
Jun. 30, 2019
Property, Plant and Equipment [Abstract]  
PROPERTY, PLANT AND EQUIPMENT PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment as of June 30, 2019 and December 31, 2018 consists of the following (in millions):
 
2019
 
2018
Vehicles
$
9,975

 
$
9,820

Aircraft
17,908

 
17,499

Land
2,073

 
2,000

Buildings
4,890

 
4,808

Building and leasehold improvements
4,531

 
4,323

Plant equipment
12,165

 
11,833

Technology equipment
2,160

 
2,093

Construction-in-progress
2,847

 
2,112

 
56,549

 
54,488

Less: Accumulated depreciation and amortization
(28,454
)
 
(27,912
)
 
$
28,095

 
$
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 second quarter of 2019, we made capital investments in property, plant and equipment, net of disposals and fully-depreciated assets, that resulted in an increase in depreciation expense of $95 million and a decrease in net income of $73 million or $0.08 per share on a basic and diluted basis. The increase in depreciation expense was offset by the effect of lengthening the useful lives of various asset categories, in the latter half of 2018, which resulted in a decrease in depreciation expense of $54 million and an increase in net income of $41 million or $0.05 per share on a basic and diluted basis. Combining both impacts resulted in a net increase of $41 million in depreciation expense, and a net decrease in net income of $32 million or $0.03 per share on both a basic and diluted basis.
For the six months ended June 30, 2019, the impact of our ongoing capital investments in property, plant and equipment, net of disposals and fully-depreciated assets, resulted in an increase in depreciation expense of $185 million and a decrease in net income of $142 million or $0.16 per share on a basic and diluted basis. The increase in depreciation expense was offset by the effect of lengthening the useful lives of various asset categories, in the latter half of 2018, which resulted in a decrease in depreciation expense of $181 million and an increase in net income of $139 million or $0.16 per share on a basic and diluted basis. Combining both impacts resulted in a net increase of $4 million in depreciation expense, and a decrease in net income of $3 million or $0.00 per share on both a basic and diluted basis.
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 six months ended June 30, 2019 or 2018.