Depreciation is computed using the straight-line method over the estimated useful lives of the major asset categories as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Rental equipment | | 15 | | to | | 25 | | years |
| Buildings and leasehold improvements | | 5 | | to | | 39 | | years |
| Machinery, equipment and furniture | | 5 | | to | | 7 | | years |
| Computer hardware and software | | 3 | | to | | 5 | | years |
| Vehicles | | | | | | 3 | | years |
The following table summarizes our rental equipment and accumulated depreciation as of the dates presented:
| | | | | | | | | | | |
| December 31, |
| 2025 | | 2024 |
| Compressor units | $ | 712,693 | | | $ | 579,373 | |
| Work-in-progress | 24,894 | | | 51,662 | |
| 737,587 | | | 631,035 | |
| Accumulated depreciation | (239,062) | | | (216,014) | |
| Rental equipment, net of accumulated depreciation | $ | 498,525 | | | $ | 415,021 | |
The following table summarizes our property and non-rental equipment as of the dates presented:
| | | | | | | | | | | | | | |
| | December 31, |
| | | 2025 | | 2024 |
| Land | | $ | 1,562 | | | $ | 1,680 | |
| Building | | 16,703 | | | 19,140 | |
| Leasehold improvements | | 1,026 | | | 1,346 | |
| Office equipment and furniture | | 2,099 | | | 2,057 | |
| Computer hardware and software | | 619 | | | 589 | |
| Machinery and equipment | | 5,068 | | | 4,430 | |
| Vehicles | | 15,315 | | | 12,739 | |
| Work-in-progress | | 1,137 | | | 168 | |
| | 43,529 | | | 42,149 | |
Less accumulated depreciation (1) | | (23,010) | | | (19,160) | |
| Total | | $ | 20,519 | | | $ | 22,989 | |
(1) Includes $2.6 million recognized as an impairment in 2025 as discussed below.
About PP&E Disclosures
The PP&E disclosure details a company's physical asset base — land, buildings, machinery, and equipment — along with the depreciation methods and useful life assumptions that determine how these costs flow through the income statement. Capitalization policy thresholds reveal management's judgment on the boundary between expense and asset, directly affecting both reported earnings and asset values.
Key signals: changes in estimated useful lives or depreciation methods can materially shift reported earnings without any operational change. Compare capital expenditures against depreciation expense — when capex consistently trails depreciation, the asset base may be aging and underinvested. Watch for large asset impairments or write-downs that signal overvalued carrying amounts. Asset retirement obligations reveal future environmental or decommissioning costs that are often underappreciated. Compare PP&E intensity (PP&E-to-revenue) against industry peers to assess capital efficiency and competitive positioning.