Analysis of Property, Plant and Equipment
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Property, Plant and Equipment Disclosure
Alphabet Inc., balance sheet: property, plant and equipment
US$ in millions
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
- Technical Infrastructure
- The value of technical infrastructure assets exhibits a significant increase, rising from $112,504 million in 2023 to $139,596 million in 2024, indicating a continuing investment in this category.
- Office Space
- The office space asset value shows growth from $40,435 million in 2023 to $43,714 million in 2024, reflecting moderate expansion or upgrades in office real estate holdings.
- Corporate and Other Assets
- Corporate and other assets increased from $13,728 million in 2023 to $16,519 million in 2024, suggesting increased capital allocation to miscellaneous or corporate-level asset categories.
- Assets Not Yet in Service
- Assets not yet in service grew considerably from $35,136 million in 2023 to $50,597 million in 2024, indicating substantial ongoing capital projects or assets under construction that are expected to be operational in the future.
- Property and Equipment, Gross (Legacy)
- This category shows figures only up to 2022, with a steady increase from $126,462 million in 2020 to $171,710 million in 2022. Post-2022, this legacy measure is no longer reported, having been replaced by an updated gross property and equipment total.
- Property and Equipment, Gross
- The gross property and equipment balance shows a consistent upward trend over the full period, growing from $126,462 million in 2020 to $250,426 million in 2024. The increase accelerates notably between 2023 and 2024, reflecting ongoing acquisitions or capital expenditures.
- Accumulated Depreciation
- Accumulated depreciation increases steadily from -$41,713 million in 2020 to -$79,390 million in 2024. This steady rise is consistent with the growing base of depreciable assets, reflecting ongoing aging and usage of property, plant, and equipment.
- Property and Equipment, Net
- The net property and equipment balance grows significantly from $84,749 million in 2020 to $171,036 million in 2024. This growth shows continued investment exceeding depreciation, signaling asset base expansion and possibly enhanced productive capacity.
Asset Age Ratios (Summary)
Alphabet Inc., asset age ratios
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
- Average Age Ratio
- The average age ratio experienced a gradual increase from 32.98% at the end of 2020 to a peak of 34.38% in 2022, indicating a slight aging trend in the property, plant, and equipment during this period. However, this ratio subsequently decreased to 31.7% by the end of 2024, suggesting a renewal or addition of newer assets mitigating the aging effect.
- Estimated Total Useful Life
- The estimated total useful life of the assets shows variability over the years, beginning at 10 years in 2020, increasing significantly to 14 years in 2021, then slightly declining to 13 years in 2022 before reaching higher estimates of 17 years and 16 years in 2023 and 2024 respectively. This pattern implies adjustments in asset life assumptions, possibly reflecting enhancements in asset durability or changes in asset composition.
- Estimated Age, Time Elapsed Since Purchase
- The estimated age of assets fluctuated moderately, starting at 3 years in 2020, increasing to 5 years in 2021, then dropping to 4 years in 2022 before rising again to 6 years in 2023 and settling at 5 years in 2024. These changes could be indicative of varied asset acquisition patterns or disposals impacting the average asset age.
- Estimated Remaining Life
- The estimated remaining useful life exhibited an increasing trend from 7 years in 2020 to 11 years by 2023, maintaining that level through 2024. This upward trend suggests an overall improvement in asset longevity expectations, possibly due to better maintenance practices, asset upgrades, or the inclusion of assets with longer anticipated useful lives.
Average Age
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Accumulated depreciation | ||||||
| Property and equipment, gross | ||||||
| Asset Age Ratio | ||||||
| Average age1 | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
2024 Calculations
1 Average age = 100 × Accumulated depreciation ÷ Property and equipment, gross
= 100 × ÷ =
The analysis of the annual property, plant, and equipment data reveals several key trends over the five-year period ending December 31, 2024.
- Accumulated Depreciation
- There is a consistent and significant increase in accumulated depreciation each year, rising from US$41,713 million in 2020 to US$79,390 million in 2024. This upward trajectory indicates ongoing depreciation expenses and usage of property and equipment assets over time, reflecting the aging or continual wear of these assets.
- Property and Equipment, Gross
- This item exhibits a strong upward trend, with gross property and equipment values increasing from US$126,462 million in 2020 to US$250,426 million in 2024. The near doubling of the gross asset base suggests substantial capital investments and expansions in physical assets over the period under review.
- Average Age Ratio
- The average age ratio, expressed as a percentage, shows a modest fluctuation but an overall decline from 32.98% in 2020 to 31.7% in 2024. This decline in the average age ratio despite the increase in accumulated depreciation and asset base suggests that new asset acquisitions are relatively recent or that older assets are being retired or replaced at a rate that keeps the average age from increasing substantially.
In summary, the company has markedly expanded its property and equipment holdings, consistent with growth or capital investment strategies. The steady increase in accumulated depreciation aligns with the growing asset base, while the slight reduction in average age ratio implies effective asset management through replacement or acquisition of newer equipment, preventing the aging profile of the asset base from rising significantly.
Estimated Total Useful Life
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
2024 Calculations
1 Estimated total useful life = Property and equipment, gross ÷ Depreciation of property and equipment
= ÷ =
- Gross Property and Equipment
- The gross value of property and equipment has exhibited a consistent upward trend over the five-year period. Starting at $126,462 million in 2020, the figure rose progressively to $250,426 million by 2024. The increase has been substantial each year, with the most pronounced growth observed between 2023 and 2024, indicating significant investment or acquisition of new assets.
- Depreciation of Property and Equipment
- Depreciation expense showed fluctuation throughout the observed years. It decreased from $12,905 million in 2020 to $10,273 million in 2021, then increased in 2022 to $13,475 million before declining again in 2023 to $11,946 million. In 2024, depreciation rose to $15,311 million, the highest in the period. These variations may reflect changes in asset compositions, depreciation policies, or asset disposals.
- Estimated Total Useful Life
- The estimated total useful life of property and equipment extended over the period, starting at 10 years in 2020 and increasing to 16 years by 2024. The changes were not steady yearly but showed an upward adjustment overall, with a notable rise from 2021 onwards. This suggests possible changes in the company's asset management strategy, possibly extending the expected service life of its assets.
- Summary Insights
- The company has demonstrated a robust growth in its gross property and equipment base, reflecting ongoing capital expenditure. Despite this growth, depreciation expenses have varied, which may indicate shifts in asset age profiles or depreciation methodologies. The gradual increase in estimated useful life suggests an adjustment to asset longevity assumptions, potentially impacting future depreciation calculations and reflecting confidence in the durability or maintenance of assets.
Estimated Age, Time Elapsed since Purchase
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
2024 Calculations
1 Time elapsed since purchase = Accumulated depreciation ÷ Depreciation of property and equipment
= ÷ =
The data reveals significant trends related to the property, plant, and equipment over the five-year period from 2020 to 2024.
- Accumulated Depreciation
- The accumulated depreciation shows a consistent upward trend over the five years, increasing substantially from US$41,713 million in 2020 to US$79,390 million in 2024. This steady increase reflects the ongoing depreciation expenses being recorded each year and suggests continuous usage and aging of fixed assets.
- Depreciation Expense
- The depreciation expense fluctuates during this period. It started at US$12,905 million in 2020, declined to US$10,273 million in 2021, then rose significantly to US$13,475 million in 2022. A slight decrease followed in 2023 to US$11,946 million before reaching the highest reported amount of US$15,311 million in 2024. These variations may indicate changes in asset acquisition, disposal, or changes in depreciation methods or useful life estimates.
- Time Elapsed Since Purchase
- The average time elapsed since purchase of assets demonstrates some variability, moving from 3 years in 2020 to 5 years in 2021, then decreasing to 4 years in 2022. The figure rose again to 6 years in 2023 before slightly declining to 5 years in 2024. This fluctuation suggests variable asset turnover or acquisition cycles, influencing the depreciation patterns and accumulated depreciation totals.
Overall, the data indicates that while the company’s property, plant, and equipment assets continue to depreciate systematically, the annual depreciation expense varies, likely influenced by asset management strategies and purchasing activities. The increasing accumulated depreciation underscores the substantial investment in tangible fixed assets and their gradual consumption over normal useful lives.
Estimated Remaining Life
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
2024 Calculations
1 Estimated remaining life = Property and equipment, net ÷ Depreciation of property and equipment
= ÷ =
- Property and Equipment, Net
- The net value of property and equipment exhibits a consistent upward trend from 2020 to 2024. Starting at 84,749 million USD in 2020, the value increases steadily each year, reaching 171,036 million USD by the end of 2024. This reflects a significant growth of approximately 101% over the five-year period, indicating ongoing investments or asset acquisitions.
- Depreciation of Property and Equipment
- The annual depreciation expense demonstrates variability over the same period. It begins at 12,905 million USD in 2020, decreases to 10,273 million USD in 2021, then rises to 13,475 million USD in 2022. A decline follows in 2023 to 11,946 million USD, and a notable increase to 15,311 million USD is recorded in 2024. These fluctuations may reflect changes in asset composition, depreciation policies, or asset disposals.
- Estimated Remaining Life
- The estimated remaining life of property and equipment fluctuates between 7 and 11 years during the period under review. It starts at 7 years in 2020, increases to 10 years in 2021, slightly reduces to 8 years in 2022, and then stabilizes at 11 years in both 2023 and 2024. The overall upward trend suggests that newer or longer-lived assets may have been added, extending the average remaining useful life of the asset base.