Analysis of Property, Plant and Equipment
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- Income Statement
- Analysis of Liquidity Ratios
- Analysis of Short-term (Operating) Activity Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Enterprise Value to EBITDA (EV/EBITDA)
- Present Value of Free Cash Flow to Equity (FCFE)
- Operating Profit Margin since 2005
- Price to Earnings (P/E) since 2005
- Price to Operating Profit (P/OP) since 2005
- Price to Sales (P/S) since 2005
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Property, Plant and Equipment Disclosure
Gilead Sciences 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).
The analysis of the annual property, plant, and equipment (PP&E) data reveals several noteworthy trends in the composition and valuation of the assets over the five-year period ending December 31, 2024.
- Land and land improvements
- The value of land and land improvements remained stable at 404 million USD in 2020 and 2021, followed by a significant increase to 562 million USD in 2022. After reaching that higher level, the value slightly decreased to 561 million USD in 2023 and remained unchanged in 2024, indicating a one-time revaluation or acquisition event around 2022.
- Buildings and improvements, including leasehold improvements
- This category exhibited a consistent upward trend from 3,678 million USD in 2020 to 4,540 million USD by 2024, despite a minor decline in 2023. This growth suggests ongoing investment in infrastructure, with a peak in 2022 followed by a slight contraction and renewed growth in 2024.
- Laboratory and manufacturing equipment
- There was steady growth observed in this asset class, increasing from 904 million USD in 2020 to 1,192 million USD in 2024. The gradual but consistent rise indicates continued enhancement or augmentation of manufacturing and lab capabilities.
- Office, computer equipment and other
- The value increased moderately from 793 million USD in 2020 to 1,090 million USD in 2024. Notably, there was a sharper increase between 2021 and 2023, potentially reflecting technology upgrades or expansions in office equipment and computing infrastructure.
- Construction in progress
- This item peaked at 1,057 million USD in 2021 before declining steadily each year to 501 million USD in 2024. The decreasing trend implies completion or capitalization of ongoing projects over time and possibly fewer new construction starts in recent years.
- Property, plant and equipment, gross
- The overall gross PP&E value rose continuously from 6,635 million USD in 2020 to 7,884 million USD in 2024. This increasing trend reflects net additions to the asset base despite variations in individual asset categories.
- Accumulated depreciation
- Accumulated depreciation increased in magnitude from -1,668 million USD in 2020 to -2,470 million USD in 2024, showing a consistent pattern of asset aging and usage over time. The rate of increase in depreciation appears relatively stable, suggesting no major changes in depreciation policies or asset disposals.
- Property, plant and equipment, net
- The net PP&E value showed an overall upward trend from 4,967 million USD in 2020 to 5,414 million USD in 2024, albeit with a notable dip in 2023. The 2023 decline may be related to increased depreciation or asset write-downs, while the subsequent slight recovery in 2024 suggests renewed capital expenditures or less depreciation expense relative to asset growth.
In summary, the property, plant, and equipment assets experienced expansion, supported by steady investments across buildings, equipment, and technology. The completion of construction projects is indicated by the reduction in construction in progress, while depreciation steadily increased, reflecting asset utilization and aging. The net asset value generally strengthened over the period, reinforcing the company’s ongoing capital investment efforts.
Asset Age Ratios (Summary)
Gilead Sciences 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 exhibits a gradual increase from 26.77% in 2020 to a peak of 33.99% in 2023, followed by a slight decline to 33.73% in 2024. This indicates a general trend of aging property, plant, and equipment over the observed period, with a minor improvement in the most recent year.
- Estimated total useful life
- The estimated total useful life fluctuates over the years, starting at 22 years in 2020, decreasing to 20 years in 2021, returning to 22 years in 2022, then declining again to 20 years in 2023 and further to 19 years in 2024. This suggests a conservative reassessment of asset longevity, possibly reflecting changing expectations or asset compositions.
- Estimated age, time elapsed since purchase
- The estimated age of assets remains relatively stable, at 6 years in 2020 and 2021, increasing to 7 years in 2022 and 2023, and then decreasing back to 6 years in 2024. This pattern could imply asset turnover or acquisitions impacting the average age.
- Estimated remaining life
- The estimated remaining life shows a declining trend, dropping from 16 years in 2020 to 14 years in 2021, rebounding to 15 years in 2022, and then decreasing again to 13 years in both 2023 and 2024. This reflects a shortening expected remaining useful lifespan of the assets over time, aligning with the reductions seen in estimated total useful life.
Average Age
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, plant and equipment, gross – Land and land improvements)
= 100 × ÷ ( – ) =
The financial data for property, plant, and equipment over the period from 2020 to 2024 reveals several notable trends and developments.
- Accumulated Depreciation
- There is a consistent increase in accumulated depreciation, rising from 1,668 million US dollars in 2020 to 2,470 million US dollars in 2024. This steady growth suggests increasing usage and aging of the company's fixed assets, reflecting ongoing consumption of their economic value.
- Property, Plant, and Equipment, Gross
- The gross property, plant, and equipment value shows a positive trend, growing from 6,635 million US dollars in 2020 to 7,884 million US dollars by 2024. The increase indicates continued capital investment and asset additions despite the rise in accumulated depreciation, suggesting expansion or replacement activities.
- Land and Land Improvements
- Values for land and land improvements exhibit an initial stagnation at 404 million US dollars for two years (2020 and 2021), followed by a notable increase to 562 million US dollars in 2022, and then stabilization around 561 million US dollars in the subsequent years. This pattern may point to a discrete acquisition or revaluation event during 2022, with no further significant changes afterward.
- Average Age Ratio
- The average age ratio of the assets shows a progressive upward trend from 26.77% in 2020 to a peak of 33.99% in 2023, with a slight decline to 33.73% in 2024. The increase over time indicates that, on average, the asset base is aging, meaning a greater portion of assets are approaching or past the midpoint of their useful lives. The slight dip in the final year might signal more recent asset additions or retirements of older assets.
Overall, the data reflects a trajectory of asset growth alongside increasing depreciation, consistent with a maturing asset base that is balanced by ongoing investments to sustain or expand operational capacity. The detailed movement in land values and the average age ratio further underline strategic asset management activities within the period.
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, plant and equipment, gross – Land and land improvements) ÷ Depreciation expense
= ( – ) ÷ =
- Property, plant and equipment, gross
- The gross value of property, plant, and equipment showed a consistent upward trend over the analyzed five-year period. Starting at $6,635 million at the end of 2020, it increased annually to reach $7,884 million by the end of 2024. This growth suggests ongoing investment in fixed assets, reflecting capacity expansion or asset enhancement initiatives.
- Land and land improvements
- The value attributed to land and land improvements remained stable at $404 million through 2020 and 2021, followed by a notable increase to $562 million in 2022. It then stabilized at $561 million for the subsequent two years, indicating a one-time acquisition or revaluation of land assets in 2022 with no further changes thereafter.
- Depreciation expense
- Depreciation expense experienced an overall increase during the period, rising from $288 million in 2020 to $381 million in 2024. Despite a slight decrease from 2021 to 2022, the general trend is upward, which aligns with the growth in gross property, plant, and equipment. The increasing depreciation expense signals expansion in depreciable assets and possibly changes in asset composition or useful life allocation.
- Estimated total useful life
- The estimated useful life of the assets exhibited minor fluctuations, varying between 19 and 22 years over the observed years. The value decreased from 22 years in 2020 to 19 years in 2024, suggesting a shortening of asset lifespan assumptions, which could contribute to the rising depreciation expense despite asset additions.
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 expense
= ÷ =
- Accumulated Depreciation
- The accumulated depreciation shows a consistent upward trend from 2020 to 2024, increasing from 1,668 million US dollars in 2020 to 2,470 million US dollars in 2024. The year-over-year increments indicate ongoing depreciation, reflecting sustained usage and aging of property, plant, and equipment assets.
- Depreciation Expense
- The depreciation expense exhibits a generally increasing pattern over the analyzed period. Starting at 288 million US dollars in 2020, it rises to 381 million US dollars in 2024, with a slight decline observed in 2022. The upward trajectory suggests an increasing annual allocation of depreciation, which may be attributed to asset additions or changes in depreciation policies.
- Time Elapsed Since Purchase
- The reported average time elapsed since purchase remains fairly stable, fluctuating between 6 and 7 years during the five-year period. This consistency implies a relatively steady age profile of the asset base without significant renewal or disposal activities altering the average asset age drastically.
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, plant and equipment, net – Land and land improvements) ÷ Depreciation expense
= ( – ) ÷ =
- Property, plant and equipment, net
- The net value of property, plant, and equipment exhibited a generally upward trend over the observed period. Starting at 4,967 million USD at the end of 2020, it increased to 5,121 million USD in 2021 and peaked at 5,475 million USD in 2022. A moderate decline occurred in 2023 to 5,317 million USD, followed by a slight recovery to 5,414 million USD by the end of 2024. This pattern suggests ongoing investment with some fluctuations possibly due to asset disposals or revaluations.
- Land and land improvements
- Values for land and land improvements remained stable initially at 404 million USD through 2020 and 2021. A significant increase to 562 million USD occurred in 2022, which then plateaued through 2023 and 2024, indicating an acquisition or revaluation event in 2022 followed by stable holdings.
- Depreciation expense
- Depreciation expense showed a consistent upward trajectory across the five years. Beginning at 288 million USD in 2020, it rose steadily to 329 million USD in 2021, slightly decreased to 323 million USD in 2022, then increased further to 354 million USD in 2023 and reached 381 million USD in 2024. This trend implies increasing wear or amortization of the assets, potentially reflecting capital expenditure timing and asset aging.
- Estimated remaining life
- The estimated remaining life of property, plant, and equipment generally decreased from 16 years in 2020 to 13 years by 2023, where it remained steady through 2024. This decline signals asset aging or a shift in asset composition toward older assets expected to be used over a shorter remaining period.