KLA Corp. (NASDAQ:KLAC)

The analysis of property, plant, and equipment over the periods from June 2019 to June 2024 reveals consistent growth and significant investment activity across most asset categories. The overall net value of land, property, and equipment increased steadily from $448,799 thousand to $1,109,968 thousand, indicating substantial asset base expansion.

Land

The value of land holdings remained relatively stable from 2019 to 2022, fluctuating marginally around $67,800 thousand. However, starting in 2023, there is a noticeable increase to $72,287 thousand and further to $78,260 thousand in 2024, suggesting recent acquisitions or revaluations.

Buildings and leasehold improvements

This category shows pronounced growth, particularly from 2020 onward. After a modest increase between 2019 and 2020, the value surged from $405,238 thousand in 2020 to $919,919 thousand in 2024. This more than doubling over four years points to major construction, expansion, or enhancement projects.

Machinery and equipment

Machinery and equipment values displayed steady escalation each year, rising from $669,316 thousand in 2019 to $1,116,793 thousand in 2024. The continual investment underscores ongoing efforts to upgrade production capacity or technological assets.

Office furniture and fixtures

This asset category also experienced consistent growth, nearly doubling from $28,282 thousand in 2019 to $64,480 thousand in 2024. The growth is more gradual compared to buildings and machinery but indicates ongoing capital expenditures toward workplace furnishings.

Construction-in-process

Construction-in-process showed high volatility, with an increase from $26,029 thousand in 2019 to a peak of $182,320 thousand in 2021, a subsequent decline in 2022, and then rising again to $215,006 thousand in 2024. This pattern suggests cyclical or phased construction activities, with project initiations and completions impacting recorded amounts.

Land, property and equipment, gross

The total gross asset value rose steadily across all periods, almost doubling from $1,194,188 thousand in 2019 to $2,394,458 thousand in 2024. This reflects cumulative capital investments and asset acquisitions without accounting for depreciation.

Accumulated depreciation

Accumulated depreciation increased consistently in magnitude, from -$745,389 thousand in 2019 to -$1,284,490 thousand in 2024. The increasing negative balance is indicative of ongoing depreciation charges aligned with asset additions and aging of fixed assets.

Land, property and equipment, net

The net property, plant, and equipment value, after depreciation, showed strong and steady growth over the five-year period. Rising from $448,799 thousand in June 2019 to $1,109,968 thousand in June 2024, this reflects both heavy investment into fixed assets and the company’s capacity to maintain an increasing asset base despite depreciation.

The analysis of the property, plant, and equipment data over the specified periods reveals several notable trends regarding asset aging and lifecycle estimates.

Average Age Ratio

The average age ratio shows a consistent downward trend from 66.18% in mid-2019 to a low of 53.63% in mid-2023, followed by a slight increase to 55.46% in mid-2024. This indicates a general reduction in the relative age of the assets over the years, suggesting ongoing asset renewal or additions of newer assets. The minor increase in the final year may reflect slower replacement rates or a stabilization in the asset base's age structure.

Estimated Total Useful Life

The estimated total useful life of assets has fluctuated, starting at 16 years in 2019, dropping to 12 years in 2020, then slightly increasing and stabilizing around 13 to 14 years from 2021 onward. This movement suggests adjustments in asset classification or reevaluation of useful life assumptions, possibly influenced by changing technology or operational factors.

Estimated Age, Time Elapsed Since Purchase

The estimated age of assets decreased significantly from 10 years in 2019 to 7 years by 2020 and has remained constant at 7 years through to 2024. This notable reduction early in the period followed by stability indicates an initial renewal or re-estimation of asset age, after which the age progression aligns with actual time elapsed.

Estimated Remaining Life

The estimated remaining life decreased from 5 years in 2019 to 4 years in 2020, then increased to 5 years in 2021 and further to 6 years by 2022, maintaining this through 2024. This pattern implies improvements in asset longevity estimates or successful life extension efforts post-2020, offsetting earlier declines.

In summary, the data reflects an initial phase of asset renewal or reassessment around 2019-2020, followed by relative stability and slight improvement in asset lifespan and remaining life estimates. This suggests effective asset management focused on prolonging useful life and maintaining a relatively young asset base over the analyzed periods.

Accumulated Depreciation

The accumulated depreciation of property, plant, and equipment shows a continuous increase over the six-year period. Starting from approximately $745 million in 2019, it rose steadily each year, reaching roughly $1.28 billion by 2024. This trend indicates ongoing asset usage and aging with regular depreciation charges applied consistently over time.

Land, Property, and Equipment, Gross

The gross value of land, property, and equipment demonstrates a notable upward trajectory. Beginning at about $1.19 billion in 2019, the value increased substantially each year, culminating at around $2.39 billion in 2024. This growth suggests sustained capital investments and asset acquisitions, reflecting expansion or upgrading of the company's physical asset base.

Land

The value of land remains relatively stable compared to the gross property, plant, and equipment values, with a modest increase from approximately $67.9 million in 2019 to $78.3 million in 2024. The limited variation implies that land assets have not been significantly revalued or expanded during this period, maintaining a relatively constant component of the overall property assets.

Average Age Ratio

The average age ratio, which reflects the proportion of accumulated depreciation to the gross property, plant, and equipment, shows a declining trend from 66.18% in 2019 to 53.63% in 2023, before a slight increase to 55.46% in 2024. The initial downward movement indicates that the asset base is being refreshed or expanded with newer acquisitions, reducing the relative age of the asset pool. The minor uptick in the last year may suggest a period of slower asset replacement or increased depreciation expense relative to asset additions.

Gross Property, Plant, and Equipment

The gross value of property, plant, and equipment increased consistently over the examined periods. Starting from approximately 1.19 billion USD in mid-2019, the figure rose to about 2.39 billion USD by mid-2024. This steady growth indicates significant investment in physical assets over time, with an accelerated increase particularly noticeable between 2021 and 2024.

Land

The land value remained relatively stable throughout the period, fluctuating minimally around the range of 67.8 to 78.3 million USD. There was a slight upward trend observed in the last two years, increasing from approximately 67.8 million USD in 2019 to 78.3 million USD in 2024, suggesting limited acquisition or revaluation of land assets.

Depreciation Expense

Depreciation expense showed a clear upward trend, rising from 72.6 million USD in 2019 to 181.7 million USD in 2024. This significant increase may reflect both the growing asset base and possibly accelerated depreciation methods or shorter asset useful lives.

Estimated Total Useful Life

The estimated useful life of the assets exhibited some variability. It decreased from 16 years in 2019 down to 12 years in 2020, then fluctuated slightly, stabilizing at 13 years for the most recent periods. This suggests a reassessment of asset longevity, potentially affecting depreciation calculations.

Summary

Overall, the financial data indicate a robust expansion in property, plant, and equipment holdings, accompanied by a significant rise in associated depreciation. The relatively stable land values suggest focus on non-land asset growth. The shortening and stabilization of the estimated useful life imply adjustments in asset management or accounting policies affecting depreciation timing and expense recognition.

Accumulated Depreciation

The accumulated depreciation consistently increased over the periods analyzed. Starting at 745,389 thousand US dollars on June 30, 2019, it rose to 1,284,490 thousand US dollars by June 30, 2024. This upward trend reflects an ongoing allocation of depreciation expense over time, indicative of an aging asset base or continued use of property, plant, and equipment.

Depreciation Expense

Depreciation expense demonstrated a clear upward trajectory over the years. Beginning at 72,600 thousand US dollars in 2019, it increased steadily each year to reach 181,700 thousand US dollars by 2024. The growth in depreciation expense suggests either accelerated asset purchases, higher cost assets being depreciated, or changes in depreciation methods or useful life assumptions. This rising expense impacts the income statement by increasing operational costs.

Time Elapsed Since Purchase

The time elapsed since purchase was reported as 10 years in 2019 and remained stable at 7 years from 2020 onwards. This indicates either a shift in asset base to newer acquisitions starting in 2020 or a reclassification/revaluation of asset ages, resulting in a younger average age of assets held in subsequent years.

Overall Analysis

The data reveal a pattern of growing accumulated depreciation and annual depreciation expense, reflecting substantial investment and usage of fixed assets. The consistent rise in depreciation expense suggests the company maintains or enhances its asset base, likely through ongoing capital expenditures or asset replacements. Meanwhile, the stabilization of the average asset age at 7 years from 2020 onwards supports the notion of asset renewal or revaluation during that period. These trends collectively indicate active asset management with increasing financial implications on depreciation charges over time.

Net Land, Property, and Equipment Values

The net value of land, property, and equipment has shown a consistent upward trend over the six-year period. Starting at approximately $449 million in mid-2019, the value increased substantially each year, reaching roughly $1.11 billion by mid-2024. This steady growth suggests ongoing investment and expansion in fixed assets.

Land Values

The land value component remained relatively stable from 2019 through 2022, fluctuating narrowly around $67.8 million. Beginning in 2023, the land value increased to approximately $72.3 million, and further rose to about $78.3 million in 2024, indicating some acquisition or revaluation of land assets in recent years.

Depreciation Expense

Depreciation expense has increased significantly each year, from $72.6 million in 2019 to $181.7 million in 2024. The steady escalation in depreciation expense aligns with the increasing base of property, plant, and equipment, reflecting higher asset values and/or additions leading to greater expense recognition.

Estimated Remaining Useful Life

The estimated remaining life of the property, plant, and equipment items varied slightly, beginning at 5 years in 2019, dipping to 4 years in 2020, then stabilizing at 5 years in 2021 and extending to 6 years from 2022 onwards. This suggests either an extension of asset useful life estimates or investment in longer-lived assets in recent periods.