Analog Devices Inc. (NASDAQ:ADI)

Land and Buildings

The value of land and buildings exhibited a consistent upward trend from 2019 through 2024. The amount increased from approximately $956 million in 2019 to over $2.06 billion in 2024, indicating ongoing investments or acquisitions in this category. Notably, the most significant increments occurred between 2020 and 2021, and again between 2023 and 2024.

Machinery and Equipment

Machinery and equipment values also showed steady growth over the period analyzed. Starting at around $2.61 billion in 2019, the figure increased each year to reach approximately $4.46 billion by 2024. The growth pressure appears especially strong between 2020 and 2023, highlighting a substantial expansion or upgrade in operational assets.

Office Equipment

This category demonstrated a notable upward trajectory with some fluctuations. Values rose gradually from about $85 million in 2019 to a significant jump to $164 million in 2021, followed by a minor dip in 2022. Subsequently, assets increased sharply again, more than doubling by 2024 to nearly $478 million. This may reflect changes in workplace investment or reclassification of assets.

Leasehold Improvements

The amount allocated to leasehold improvements showed moderate variability. From $160 million in 2019, values remained relatively stable through 2021 before experiencing a notable decline in 2022. Thereafter, the values recovered, ending slightly higher than the starting point at about $191 million in 2024. This pattern suggests fluctuating activities concerning leased properties over the span examined.

Property, Plant and Equipment, at Cost

The aggregate cost of property, plant, and equipment demonstrated a clear growth trend, increasing from approximately $3.81 billion in 2019 to $7.19 billion in 2024. This steady increase reflects sustained capital expenditures and asset additions, roughly doubling over the six-year time frame.

Accumulated Depreciation and Amortization

Accumulated depreciation and amortization increased consistently in magnitude (more negative), from approximately -$2.59 billion in 2019 to -$3.77 billion in 2024. This trend is typical and indicates continuous allocation of expense to these assets, with depreciation rising in line with growing asset bases.

Net Property, Plant and Equipment

Net property, plant, and equipment, representing the book value after depreciation, exhibited a strong positive trend overall. After a slight decrease from around $1.22 billion in 2019 to $1.12 billion in 2020, the net asset base increased substantially to approximately $3.42 billion by 2024. This reflects both significant capital additions and the ongoing impact of depreciation, resulting in an overall growth in net asset value.

The analysis of the annual property, plant, and equipment data reveals several notable trends over the period from late 2019 to late 2024.

Average Age Ratio

The average age ratio shows a declining trend overall. It starts at 67.99% in 2019, initially rising slightly to 71.16% in 2020, and then decreases steadily to 52.48% by 2024. This decline indicates that, on average, the assets are becoming relatively newer compared to their estimated total useful lives, suggesting ongoing investment in newer assets or asset replacement.

Estimated Total Useful Life

There is an increase in the estimated total useful life from 16 years in 2019 to 21 years in 2021, followed by stabilization at 20 years in subsequent years through 2024. This upward revision in useful life assessments could reflect improvements in asset durability or changes in asset categorization and accounting estimates.

Estimated Age (Time Elapsed Since Purchase)

The estimated asset age rises in the first three years, from 11 years in 2019 to 13 years in 2021, but then reverses to 10 years in 2023 and remains stable in 2024. This decrease after 2021 may be attributed to the acquisition of new assets, which lowers the average age.

Estimated Remaining Life

The estimated remaining life of assets increases significantly from 5 years in 2019-2020 to 9-10 years starting in 2021, maintaining this higher level through 2024. This trend aligns with the increase in total useful life estimates and the infusion of newer assets, indicating a lengthened duration for future asset usability.

Overall, the data suggest that the company has refreshed its asset base during the period, increasing the useful life estimates and reducing the relative age of its property, plant, and equipment. These changes indicate a strategic approach to maintaining asset sustainability and potentially enhancing operational capacity over the medium term.

Property, plant, and equipment at cost

There is a consistent upward trend in the cost value over the years. Starting at approximately $3.81 billion in 2019, it increased to about $7.19 billion by 2024. This reflects a significant expansion in the company's investment in property, plant, and equipment, more than doubling over the six-year period.

Accumulated depreciation and amortization

Accumulated depreciation has also increased steadily, rising from around $2.59 billion in 2019 to roughly $3.77 billion in 2024. The gradual increase indicates ongoing usage and aging of the assets, consistent with the growth in the asset base.

Average age ratio

The average age ratio shows a declining trend from 67.99% in 2019 to a low of 51.55% in 2023, with a slight uptick to 52.48% in 2024. This decrease suggests that the asset base is relatively younger over time, likely due to new acquisitions or capital expenditures outpacing depreciation.

Overall patterns and insights

The simultaneous increase in total property, plant, and equipment and accumulated depreciation indicates a growing asset base with continuous utilization. The declining average age ratio supports the interpretation that recent investments have refreshed the asset pool, reducing the overall average asset age. The slight increase in average age ratio in the final year may warrant monitoring to understand potential shifts in asset acquisition or disposal strategies.

Property, plant and equipment, at cost

The value of property, plant, and equipment at cost shows a consistent upward trend over the examined periods. Starting at approximately 3.81 billion USD in 2019, the cost increased marginally to around 3.89 billion USD in 2020. A significant rise is observed in 2021, reaching nearly 4.94 billion USD, followed by further growth to approximately 5.55 billion USD in 2022. The upward trajectory continues in 2023 and 2024, with values approaching 6.64 billion USD and 7.19 billion USD respectively. This pattern suggests ongoing investments and expansions in physical assets.

Depreciation expense

The depreciation expense has fluctuated slightly but generally increased across the six-year span. It started at 240.7 million USD in 2019, declining to 233.8 million USD in 2020 and further to around 231.3 million USD in 2021, indicating a short-term decrease. From 2022 onwards, depreciation expense increased notably to 283.3 million USD, followed by 334.7 million USD in 2023 and reaching 362.8 million USD in 2024. The rise in depreciation expense corresponds with the increasing asset base, reflecting higher charges associated with larger or newly acquired assets.

Estimated total useful life

The estimated total useful life of the assets exhibits some variations over the periods. It was initially 16 years in 2019, then slightly increased to 17 years in 2020. A more considerable jump occurred in 2021, with the useful life estimated at 21 years. In 2022, the estimate slightly decreased to 20 years and remained stable at 20 years through 2023 and 2024. These adjustments in estimated useful life could impact depreciation calculations and suggest reassessments of asset longevity.

Accumulated Depreciation and Amortization

The accumulated depreciation and amortization shows a consistent upward trend over the analyzed periods, starting at 2,591,268 thousand US dollars in 2019 and rising to 3,772,438 thousand US dollars by 2024. This steady increase reflects ongoing wear and usage of the property, plant, and equipment assets, indicating that the company is continuously depreciating its fixed assets as expected over time.

Depreciation Expense

Depreciation expense demonstrates some variability across the years. It initially decreased slightly from 240,677 thousand US dollars in 2019 to 231,275 thousand US dollars in 2021. Subsequently, there is a notable increase reaching 362,771 thousand US dollars in 2024. This rise in depreciation expense in the later years could suggest accelerated depreciation, acquisition of new assets with higher depreciable amounts, or changes in the depreciation method or estimate.

Time Elapsed Since Purchase

The time elapsed since purchase has fluctuated mildly, ranging between 10 and 13 years. There is a decrease from 13 years in 2021 to 10 years in both 2023 and 2024, indicating that newer assets have been added or that asset turnover has increased, possibly contributing to changes in the depreciation expense observed.

Overall Insight

The data collectively depict a company managing a maturing asset base with increasing accumulated depreciation. The recent increases in depreciation expense coupled with a reduction in the average asset age suggest recent investment activities or asset replacement strategies. This pattern highlights an active asset management approach, balancing the aging of older assets with newer acquisitions that impact expense recognition.

Net Property, Plant and Equipment

There is an overall upward trend in net property, plant, and equipment over the examined period, with values rising from approximately 1,219,989 thousand US dollars in late 2019 to 3,415,550 thousand US dollars in late 2024. A notable increase occurs between 2020 and 2021, where the balance surged from 1,120,561 to 1,979,051 thousand US dollars. Subsequent periods show continued growth, although at a somewhat moderated pace, indicating ongoing capital investment or asset acquisitions.

Depreciation Expense

The depreciation expense exhibits fluctuations but generally trends upward. It starts at 240,677 thousand US dollars in 2019, slightly declining in 2020 and 2021 to around 233,775 and 231,275 thousand US dollars respectively, before increasing steadily through 2024, reaching 362,771 thousand US dollars. The initial dip followed by a continuous rise may reflect asset additions combined with depreciation policies or the aging of the asset base.

Estimated Remaining Life

The estimated remaining life of the property, plant, and equipment remains relatively stable, ranging between 5 to 10 years throughout the period. It starts at 5 years in 2019, increases to 9 years by 2021, fluctuates slightly thereafter, reaching a high of 10 years in 2023 before declining to 9 years in 2024. This suggests potential changes in asset composition or refurbishment extending the effective lifespan of assets.