Kellogg Company and Kraft Food Group, Inc. are two companies operating in the packaged food industry. You have noticed their products in numerous grocery and convenience stores and are interested in their production process. One of your first steps is analyzing the information on their productive capacity. Examine the fixed asset disclosures in the two companies€™ financial statements to address the following issues:
a. What categories of tangible long- lived assets do each of the companies report? What is the useful life of each category? Compare the categories and useful lives disclosed by each company.
b. For each company, what is the percent of long- lived tangible to total assets in 2013 and 2012? In the definition of long- lived tangible assets, include the total of property, plant, and equipment (PPE) €“ net. Comment on any differences between the two companies.
c. Compute average age and average remaining life for 2013 and 2012. Comment on any differences between the two companies.
d. Compute the fixed asset turnover in 2013. In the definition of long- lived tangible assets (fixed assets), include the total property, plant, and equipment (PPE) €“ net. Comment on any differences between the two companies.
The Company€™s property consists mainly of plants and equipment used for manufacturing activities. These assets are recorded at cost and depreciated over estimated useful lives using straight- line methods for financial reporting and accelerated methods, where permitted, for tax reporting. Major property categories are depreciated over various periods as follows ( in years): manufacturing machinery and equipment 5€“ 30; office equipment 4€“ 5; computer equipment and capitalized software 3€“ 7; building components 15€“ 25; building structures 50. Cost includes interest associated with significant capital projects. . . .

Additional financial statement information:

Property, plant, and equipment are stated at historical cost and depreciated by the straight- line method over the estimated useful lives of the assets. Machinery and equipment are depreciated over periods ranging from 3 to 20 years and buildings and improvements over periods up to 40 years€¦
Property, plant, and equipment at December 28, 2013 and December 29, 2012 were:

Additional financial statement information:

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2013 2012 Land Buildings Machinery and equipment Capitalized software Construction in progress Accumulated depreciation $ 125 2,155 6,059 325 693 (5,501) $3,856 2.084 5,978 279 533 (5,209) $3,782 Property, net (dollars in millions) Revenues Depreciation Expense Total Assets Average Net Fixed Assets 2013 $14,792 S 532 $15,474 3,819 2012 $14,197 $ 448 $15,194 $ 3,532 in millions) Land Buildings and improvements Machinery and equipment Construction in progress December 28, 2013 S 72 1,806 5,584 360 7922 (3,707 S 4,115 December 29, 2012 S 119 1,996 5,922 365 8,402 4,198) $4.204 Accumulated depreciation Property, plant, and equipment, net (dollars in millions) Revenues Depreciation Expense Total Assets Average Net Fixed Assets 2013 $18,218 S 393 $23,148 s 4,160 2012 $18,339 $ 428 $23,329 4,241