Domino’s (DPZ) recently made the news when it launched its pizza delivery vehicle, the Domino’s DXP™ (Delivery Expert). The DXP™ is a modified Chevy Spark electric automobile. At the October 2015 launch, there were 97 DXP™ in Domino’s nationwide fleet, with more to come.
Domino’s has several categories of Property, Plant and Equipment (PP&E) on its balance sheet. See the excerpts on the following pages from Domino’s 2014 Form 10-K and a related note for additional details about its PP&E.
Questions
1). What categories of PP&E does Domino’s have on its balance sheet? Give examples of assets that might be found in each of these PP&E categories. Where are the DXP™ vehicles likely to be categorized?
2). What is the largest category of PP&E on Domino’s balance sheet? Does this make sense to you? Why or why not?
3). What depreciation method(s) does Domino’s use for its PP&E?
4). Over how many years does Domino’s depreciate its various categories of PP&E? Why would it use different lives for different categories?
5). Look at the total balance of Property, Plant and Equipment and the related Accumulated Depreciation account at the end of 2014. What can you, in general, say about the age of the total portfolio of PP&E at Domino’s?
