First Solar Inc. (NASDAQ:FSLR)

Land

The value of land has exhibited a consistent upward trend over the period, increasing steadily from $14,241 thousand in 2019 to $35,364 thousand in 2023. Notably, there was a more significant jump between 2020 and 2022, indicating potential acquisitions or revaluations during these years.

Buildings and Improvements

Buildings and improvements remained relatively stable between 2019 and 2021, fluctuating around the $664 million to $693 million range. However, a marked increase is observed starting in 2022, with values rising to $893 million and further to $1.037 billion in 2023. This suggests significant investments in infrastructure or expansions during these later years.

Machinery and Equipment

Machinery and equipment values decreased from $2.437 billion in 2019 to $2.184 billion in 2020, indicating possible disposals or asset retirements. From 2020 onwards, there was steady growth each year, reaching $3.593 billion by 2023. The sharp increase in 2023 reflects substantial capital expenditures or asset upgrades.

Office Equipment and Furniture

Office equipment and furniture values showed a slight decline from $159.8 million in 2019 to $139.6 million in 2021. Thereafter, a gradual recovery is evident, increasing to $161.2 million by 2023. Overall, the fluctuations are minor, suggesting limited impact on total asset base.

Leasehold Improvements

Leasehold improvements decreased marginally from $48.8 million in 2019 to about $40.1 million in 2023. The continuous slight decline might be attributable to amortization exceeding new investments in this asset category.

Construction in Progress

Construction in progress displayed significant expansion throughout the period. Starting at $243.1 million in 2019, values nearly doubled by 2020, then continued to climb sharply to reach $1.224 billion by 2023. This robust increase suggests an extensive amount of ongoing development projects and capital investment initiatives.

Property, Plant and Equipment (Gross)

The gross property, plant, and equipment (PPE) increased consistently from approximately $3.567 billion in 2019 to $6.091 billion in 2023. This reflects expanding asset acquisitions and capital projects over the five-year span.

Accumulated Depreciation

Accumulated depreciation values decreased in absolute terms from $1.386 billion in 2019 to $1.095 billion in 2020, possibly due to adjustments or disposals. Thereafter, it rose gradually to $1.694 billion by 2023, indicating ongoing asset usage and aging.

Property, Plant and Equipment (Net)

Net PPE shows a clear upward trajectory, starting from $2.181 billion in 2019 and increasing each year to reach $4.397 billion by 2023. The considerable net growth is principally driven by new investments that surpass depreciation charges, highlighting the company’s expansion and renewal of its asset base.

The data reveals several key trends related to the age and useful life estimates of the property, plant, and equipment over a five-year period.

Average Age Ratio

The average age ratio steadily decreased from 39.01% in 2019 to 27.97% in 2023. This consistent decline suggests the asset base is getting younger on average, potentially indicating recent investments or disposals of older assets.

Estimated Total Useful Life

The estimated total useful life of the assets varied somewhat, starting at 20 years in 2019, dropping to 18 and then 17 years in 2020 and 2021 respectively, before returning to 20 years in 2022 and 2023. This reflects a reevaluation process that initially shortened the lifespan estimates but was later revised back to the original assumed useful life.

Estimated Age (Time Elapsed Since Purchase)

The estimated age of the assets decreased over time from 8 years in 2019 down to 5 years in 2023, with a slight increase to 6 years in 2020 and 2022. This reduction confirms a trend toward acquiring newer assets or retiring older ones.

Estimated Remaining Life

The estimated remaining life increased from 12 years in 2019-2020 to 14 years in 2022 and 2023, with a dip to 11 years in 2021. This trend aligns with the increase in total useful life estimates and the younger average age of assets, indicating an extended expected operational period for the asset base.

Overall, the data suggest a strategic refreshment of property, plant, and equipment, with newer assets lengthening the expected total useful life and remaining service life, alongside consistent adjustments to asset age and depreciation assumptions.

The analysis of the data on property, plant, and equipment over the indicated periods reveals several noteworthy trends related to asset growth, depreciation, and asset aging.

Property, plant, and equipment, gross

The gross value of property, plant, and equipment exhibited a consistent upward trend from 2019 to 2023. Starting at approximately $3.57 billion at the end of 2019, the figure slightly decreased in 2020, then increased significantly each subsequent year, reaching about $6.09 billion by the end of 2023. This reflects substantial investments or acquisitions of fixed assets over this time horizon.

Accumulated depreciation

The accumulated depreciation values showed fluctuations, initially decreasing from around $1.39 billion in 2019 to $1.10 billion in 2020, then progressively increasing through 2023 to reach about $1.69 billion. This pattern suggests an initial write-off or revaluation of depreciation followed by steady accumulation, which is consistent with asset aging and capitalization trends.

Land

The carrying value of land assets maintained a generally stable but slightly increasing pattern. The amount was around $14.2 million in 2019 and remained close to this figure through 2020, then rose to approximately $35.4 million by 2023. This indicates some incremental land acquisitions or revaluation during the later years.

Average age ratio

The average age ratio, expressed as a percentage, decreased steadily from 39.01% in 2019 to 27.97% in 2023. This decline implies that, on average, the asset base is becoming newer, likely due to acquisitions of recent assets outpacing the aging of existing assets. It reflects the company's continuous asset expansion and modernization efforts.

In summary, the data indicates a strategic emphasis on expanding the asset base through acquisitions or capital expenditures, as evidenced by the significant growth in gross property, plant, and equipment. The accumulated depreciation figures align with asset additions and ongoing usage, while the downward trend in average age ratio points to a relatively newer assembly of fixed assets overall. The relatively stable but increasing land values suggest some targeted investments in land held by the company.

The analysis of the property, plant, and equipment (PP&E) financial data over the period from 2019 to 2023 reveals several notable trends. The gross value of PP&E demonstrates consistent growth throughout these years, increasing from approximately $3.57 billion in 2019 to over $6.09 billion by the end of 2023. This rising trend suggests ongoing capital investment and asset acquisition, reflecting expansion or upgrading of operational capacity.

Regarding land holdings, a gradual increase in the reported value is observed, beginning at approximately $14.24 million in 2019 and nearly doubling to about $35.36 million by 2023. This indicates strategic acquisition or appreciation of land assets over time, complementing the broader asset growth.

The accumulated depreciation on PP&E also shows a steady upward trajectory, rising from $176.4 million in 2019 to $310 million by 2023. This increase aligns with the expanding asset base and the passage of time, indicating continued usage and aging of fixed assets. The increment in depreciation expense corresponds with the increased gross PP&E balance, signifying that while assets are being added, there is also recognition of their consumption or wear.

Examining the estimated useful life of these assets, a fluctuation is apparent. The useful life declined from 20 years in 2019 to 17 years in 2021 but rebounded to 20 years in both 2022 and 2023. This variability might reflect changes in asset composition, updated estimates due to technological developments, or reassessments of asset longevity. The restoration to a 20-year life in the latter years suggests a standardized or stabilized approach in useful life assumptions.

Key Points Summary:

- Gross PP&E increased significantly, reflecting substantial capital investment over the five-year span.

- Land asset values approximately doubled, indicating strategic growth in real estate holdings.

- Depreciation expenses rose steadily, consistent with asset base expansion and aging.

- Estimated useful life of assets showed variation, initially decreasing then returning to prior levels, possibly indicating reassessment of asset longevity.

Overall, the data depicts a company progressively investing in its property, plant, and equipment assets with a parallel acknowledgment of asset depreciation and adjustments in useful life estimates. These patterns suggest a focus on maintaining and expanding operational capacity while managing asset valuation prudently.

Accumulated depreciation

The accumulated depreciation amount shows a consistent upward trend over the presented periods, starting from approximately $1,385 million in 2019 and increasing to about $1,694 million by the end of 2023. Despite a decline in 2020 compared to 2019, likely due to an accounting adjustment or asset disposals, the overall trajectory from 2020 onward is upward, indicating ongoing depreciation of assets over time.

Depreciation of property, plant and equipment (annual depreciation expense)

The annual depreciation expense demonstrates a clear and steady increase throughout the period. It rises from roughly $176 million in 2019 to $310 million in 2023. This upward movement suggests accelerated depreciation or a growing asset base being depreciated, reflecting potential capital expenditures or changes in depreciation policy that increase annual depreciation charges.

Time elapsed since purchase

The average age of the property, plant, and equipment fluctuates over the years shown. Starting at 8 years in 2019, it decreases to 6 years in 2020, then briefly to 5 years in 2021, increasing slightly to 6 years in 2022 and again decreasing to 5 years in 2023. This variation suggests asset replacement or additions occurring during these years, leading to a relatively young average asset age by the end of the period.

Overall insights

The upward trends in both accumulated depreciation and annual depreciation expense, together with the decreasing average asset age, imply active management of the property, plant, and equipment portfolio. The data suggests ongoing investments or asset renewals that result in depreciation charges increasing year-over-year. The relatively young average age of assets towards 2023 may indicate recent acquisitions or upgrades to the asset base, which could impact future depreciation expenses.

The financial data reveals several key trends regarding the property, plant, and equipment (PP&E) of the company over the five-year period from 2019 to 2023.

Property, plant and equipment, net

The net PP&E value shows consistent growth throughout the period. Starting at approximately $2.18 billion in 2019, it increased steadily each year, reaching about $4.40 billion by the end of 2023. This represents a doubling of net PP&E over five years, indicating substantial investment and asset growth in this category.

Land

The value of land remained relatively stable in comparison to total PP&E, with a moderate increase from around $14.2 million in 2019 to about $35.4 million in 2023. Notably, there was a significant jump between 2021 and 2022, where the land value nearly doubled. This could reflect new land acquisitions or revaluation.

Depreciation of property, plant and equipment

Depreciation expenses increased progressively, starting from approximately $176.4 million in 2019 and rising to $310 million in 2023. While the year-over-year increases are generally moderate, there is a noticeable acceleration between 2022 and 2023, which may be associated with increased asset base or changes in depreciation methods or estimates.

Estimated remaining life

The estimated remaining life of the property, plant, and equipment exhibits a slight fluctuation. It remained stable at 12 years from 2019 to 2020, then decreased to 11 years in 2021, followed by an increase to 14 years in 2022 and 2023. This variation could indicate adjustments in asset lifespan assumptions, potentially reflecting extensions due to maintenance, upgrades, or asset replacements.

Overall, the data suggests a strategic expansion and upgrading of property, plant, and equipment assets, reflected in the substantial asset growth and increasing depreciation expenses. The changes in estimated remaining life propose revised assessments of asset durability or usage expectations. The steady increase in land value aligns with the broader asset growth trend, although it remains a relatively small proportion of total PP&E.