Broadcom Inc. (NASDAQ:AVGO)

The analysis of the annual property, plant, and equipment data reveals several significant trends over the six-year period.

Land

The value of land assets shows a steady increase, rising from $189 million in 2019 to $204 million in 2024. The growth is gradual but consistent, indicating either acquisitions or revaluations contributing to the asset base.

Construction in progress

This category exhibits volatility, with a peak at $113 million in 2020, followed by a sharp decline to $38 million in 2021. Subsequently, it stabilizes near $63 million in 2022 and 2023 before slightly decreasing to $57 million in 2024. This pattern suggests fluctuations in capital projects under development, with possible completion peaks and new projects initiation.

Buildings and leasehold improvements

A steady upward trend is evident from $1,078 million in 2019 to $1,518 million in 2024. The increment accelerates notably between 2023 and 2024, indicating substantial investment or expansion in buildings and improvements during the latest year.

Machinery and equipment

There is a consistent increase in machinery and equipment values, growing from $3,544 million in 2019 to $5,246 million in 2024. The steady increase reflects ongoing capital investments in operational assets, supporting capacity expansion or technological upgrades.

Property, plant and equipment, gross

The gross property, plant, and equipment balance demonstrates a continuous rise, increasing from $4,896 million in 2019 to $7,025 million in 2024. This growth aligns with the increases seen in individual categories, particularly machinery, equipment, and buildings.

Accumulated depreciation and amortization

The accumulated depreciation and amortization totals show a widening negative balance, growing from -$2,331 million in 2019 to -$4,504 million in 2024. This increase is consistent with the aging of assets and usage over time, reflecting systematic expense recognition.

Property, plant and equipment, net

Net property, plant, and equipment values present a declining trend from $2,565 million in 2019 to $2,154 million in 2023, indicating that depreciation outpaces capital additions during this period. However, in 2024, a rebound occurs, with net assets increasing to $2,521 million. This improvement suggests a substantial increment in asset additions or revaluations that contribute positively after accounting for depreciation.

Overall, the data indicates a consistent commitment to capital investment, particularly in machinery, equipment, and buildings, enhancing the production capacity or operational infrastructure. The temporary decline in net property, plant, and equipment up to 2023 is reversed in the latest year, implying renewed investment momentum. The patterns in construction in progress highlight the cyclical nature of capital projects within the company.

The analysis of the property, plant, and equipment data over the six-year period reveals several notable trends related to the asset aging profile and estimated useful life.

Average Age Ratio%

The average age ratio increased consistently from 49.52% in 2019 to a peak of 67.26% in 2023, followed by a slight decrease to 66.03% in 2024. This indicates a general aging of the asset base over the years, with a higher proportion of the asset life having elapsed as time progressed.

Estimated Total Useful Life (years)

This metric shows a steady upward trend, increasing by one year every period from 8 years in 2019 to 12 years by 2023 and remaining stable at 12 years in 2024. This suggests revisions or improvements in asset longevity assumptions or acquisitions of assets with longer useful lives.

Estimated Age, Time Elapsed Since Purchase (years)

The estimated age of the assets incrementally increased by one year each period, rising from 4 years in 2019 to 8 years in 2023 and remaining constant in 2024. This steady progression aligns with the passage of time, reflecting the aging of the asset base.

Estimated Remaining Life (years)

The estimated remaining life remained constant at 4 years throughout the entire period. This indicates that despite the assets aging and the estimated total useful life increasing, the expected remaining service duration has been maintained at a stable level.

Overall, these trends illustrate a portfolio of property, plant, and equipment that is maturing in age, but with adjustments in useful life expectations that compensate to maintain a consistent remaining life. The slight reduction in the average age ratio in the final year suggests possible asset additions or disposals influencing the asset mix.

Property, Plant, and Equipment Gross Value

The gross value of property, plant, and equipment exhibited a consistent upward trend over the six-year period. It increased from $4,896 million in 2019 to $7,025 million in 2024, reflecting sustained capital investments or asset acquisitions.

Accumulated Depreciation and Amortization

Accumulated depreciation and amortization also showed a steady increase, rising from $2,331 million in 2019 to $4,504 million in 2024. This indicates ongoing asset usage and aging, with depreciation charges consistently recorded year-over-year.

Land

The value attributed to land remained relatively stable throughout the period, remaining in the range of $189 million to $204 million. This consistency suggests limited acquisition or disposal activities related to land assets.

Average Age Ratio

The average age ratio of property, plant, and equipment increased notably from 49.52% in 2019 to a peak of 67.26% in 2023, followed by a slight decline to 66.03% in 2024. This upward trend suggests that the asset base is aging, meaning a larger proportion of assets are closer to the end of their useful lives. The minor decline in 2024 may indicate asset additions or retirements affecting the average age.

Overall Insights

The data reveals a company that is expanding its asset base while simultaneously experiencing normal wear and tear on existing assets. The increasing accumulated depreciation alongside growing gross property, plant, and equipment values points to a balance between asset acquisition and aging. The stable land values indicate a focus on other asset types for expansion or renewal. The rising average age ratio over the years suggests possible future capital expenditure needs to replace or upgrade aging assets, although the slight reduction in the latest year may reflect initial steps towards asset renewal.

The analysis of the property, plant, and equipment financial data over the periods from November 3, 2019, to November 3, 2024, reveals several trends relating to asset base, depreciation, and useful life estimates.

Property, Plant, and Equipment, Gross

The gross value of property, plant, and equipment shows a steady upward trend across all observed periods. Beginning at US$4,896 million in 2019, the amount rises each year, reaching US$7,025 million by 2024. This consistent increase suggests ongoing capital investments or acquisitions contributing to the expansion of the asset base over the five-year span.

Land

The value attributed to land remains relatively stable over the same period, starting at US$189 million in 2019 and experiencing only minor incremental increases to US$204 million by 2024. This stability indicates limited acquisition or valuation changes related to land assets in comparison to the broader asset category.

Depreciation Expense

Depreciation expense displays a fluctuating pattern. Initially, it remains almost constant around US$569-570 million in 2019 and 2020, then declines over the next few years to US$502 million in 2023. However, depreciation expense notably increases again to US$593 million in 2024, surpassing prior values. This fluctuation may be reflective of changing depreciation policies, asset utilization, or shifts in the composition of depreciable assets.

Estimated Total Useful Life

The estimated total useful life for the assets generally increases from 8 years in 2019 to 12 years in 2024. The consistent upward adjustment each year (except stabilization at 12 years in 2023 and 2024) potentially indicates an expectation of longer asset service periods, possibly due to technological improvements, changes in asset mix, or accounting policy updates extending depreciable lives.

In summary, the data indicate ongoing capital expansion with gross property, plant, and equipment increasing materially. Despite this growth, land values remain relatively constant. Depreciation expense trends suggest variable recognition of asset consumption, while the gradual lengthening of estimated useful life points to an expectation of extended asset usability. These combined factors influence the reported asset values and depreciation charges over the observed periods.

Accumulated Depreciation and Amortization

The accumulated depreciation and amortization values exhibit a consistent upward trajectory over the analyzed periods. Starting from $2,331 million in 2019, the figure increases each year, reaching $4,504 million by 2024. This steady rise indicates ongoing allocation of asset costs over time, reflecting the aging and continued use of property, plant, and equipment.

Depreciation Expense

Depreciation expense shows a relatively stable pattern with minor fluctuations throughout the years. It commences at $569 million in 2019, slightly increases to $570 million in 2020, then decreases gradually over the next three years to a low of $502 million in 2023. In 2024, depreciation expense rises to $593 million, the highest in the period reported. These fluctuations may suggest variations in asset additions, disposals, or changes in depreciation methods during the years.

Time Elapsed Since Purchase

The time elapsed since purchase increases consistently from 4 years in 2019 to 8 years by 2023, remaining steady at 8 years in 2024. This indicates that the property, plant, and equipment assets under consideration are relatively mature, with an average age increasing as years progress. The plateau at 8 years in the final period may imply either a stable asset base or recent additions matching the rate of older asset retirements.

Overall Insights

The data portrays a scenario of steadily aging property, plant, and equipment assets, as evidenced by increasing accumulated depreciation and years since purchase. Despite the aging asset base, depreciation expense does not increase proportionally; rather, it shows a slight downward trend before a notable uptick in the last year. This could indicate recent capital expenditures leading to increased depreciation or adjustments in depreciation accounting policies. The steady growth in accumulated depreciation corroborates continuous use and wear of the asset base over time.

Property, plant and equipment, net

The net value of property, plant, and equipment has displayed a general downward trend from November 3, 2019, to October 29, 2023, decreasing from 2,565 million USD to 2,154 million USD. However, in the most recent period ending November 3, 2024, there is a notable increase to 2,521 million USD, indicating a potential reinvestment or acquisition of assets following the previous years' decline.

Land

The value attributed to land has remained relatively stable over the periods under review. The figures show a slight increase from 189 million USD in November 2019 to 204 million USD in November 2024. This steady holding suggests limited disposals or acquisitions related to land assets, maintaining nearly consistent valuation.

Depreciation expense

Depreciation expense has experienced fluctuations throughout the years. Starting at 569 million USD in 2019, it peaked slightly at 570 million USD in 2020, then gradually declined to a low of 502 million USD by October 29, 2023. This reduction might reflect lower depreciable base or adjustments in asset usage. The depreciation expense rises significantly to 593 million USD in the latest period, possibly correlating with the increased net property, plant, and equipment value seen concurrently.

Estimated remaining life

The estimated remaining life of the property, plant, and equipment has consistently remained at 4 years across all reported periods. This stability suggests consistent asset types or accounting policies concerning asset lifespan valuation.