Analysis of Property, Plant and Equipment
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Old Dominion Freight Line Inc. pages available for free this week:
- Cash Flow Statement
- Analysis of Solvency Ratios
- Enterprise Value to FCFF (EV/FCFF)
- Present Value of Free Cash Flow to Equity (FCFE)
- Return on Equity (ROE) since 2005
- Current Ratio since 2005
- Debt to Equity since 2005
- Price to Earnings (P/E) since 2005
- Price to Book Value (P/BV) since 2005
- Analysis of Revenues
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Property, Plant and Equipment Disclosure
Old Dominion Freight Line Inc., balance sheet: property, plant and equipment
US$ in thousands
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
- Revenue Equipment
- The value of revenue equipment exhibits a consistent upward trend from 2018 through 2022. It increased from approximately $1.81 billion in 2018 to $2.50 billion in 2022, indicating ongoing investment or replacement of equipment to support revenue generation.
- Land and Structures
- Investment in land and structures has shown steady growth over the five-year period, rising from about $1.80 billion in 2018 to $2.75 billion in 2022. This reflects continuous expansion or enhancement of physical assets related to property.
- Other Fixed Assets
- The value of other fixed assets also increased progressively, moving from roughly $454 million in 2018 to $550 million in 2022. This suggests ongoing investment in various types of fixed assets beyond equipment and property.
- Leasehold Improvements
- Leasehold improvements demonstrate a modest but steady increase, growing from approximately $10.6 million in 2018 to about $13.5 million in 2022. The gradual growth indicates incremental improvements to leased properties over time.
- Gross Property and Equipment
- Overall gross property and equipment values have risen substantially, from around $4.07 billion in 2018 to $5.82 billion in 2022. This growth underscores extensive capital investment in the company's fixed assets across all categories.
- Accumulated Depreciation
- Accumulated depreciation has also increased consistently, moving from approximately -$1.32 billion in 2018 to -$2.13 billion in 2022. The increasing magnitude of accumulated depreciation reflects ongoing use and aging of the company's fixed assets.
- Net Property and Equipment
- Net property and equipment, calculated as gross property and equipment less accumulated depreciation, shows an overall upward trend, rising from about $2.75 billion in 2018 to $3.69 billion in 2022. There was a slight dip observed in 2020, but the value recovered in subsequent years. This indicates that despite depreciation, the company's net investment in fixed assets has grown, supporting operational capacity and future growth.
Asset Age Ratios (Summary)
Old Dominion Freight Line Inc., asset age ratios
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
- Average Age Ratio
- The average age ratio has shown an increasing trend from 32.36% in 2018 to a peak of 37.38% in 2021, followed by a slight decline to 36.61% in 2022. This indicates that the property, plant, and equipment have generally aged over the period, reaching their highest average age in 2021 before a modest reduction.
- Estimated Total Useful Life
- The estimated total useful life of the assets has varied across the years, beginning at 18 years in 2018, briefly decreasing to 17 years in 2019, then increasing steadily to 21 years by 2022. This upward adjustment suggests an improvement or reassessment of the asset longevity assumptions over time.
- Estimated Age (Time Elapsed Since Purchase)
- The estimated age of the assets remained stable at 6 years from 2018 through 2020, then incrementally increased to 7 years in 2021 and 8 years in 2022. This progression is consistent with the passage of time and reflects the natural aging of the asset base.
- Estimated Remaining Life
- The estimated remaining life displayed minor fluctuations, holding steady at 12 years in 2018, 2019, and 2021, dipping slightly to 11 years in 2020, and rising to 13 years in 2022. This pattern may be influenced by changes in the estimated total useful life and asset replacement or maintenance activities.
Average Age
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Accumulated depreciation | ||||||
| Gross property and equipment | ||||||
| Asset Age Ratio | ||||||
| Average age1 | ||||||
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
2022 Calculations
1 Average age = 100 × Accumulated depreciation ÷ Gross property and equipment
= 100 × ÷ =
- Accumulated depreciation
- The accumulated depreciation shows a consistent upward trend over the five-year period. Starting at approximately 1.32 billion USD in 2018, it increased each year, reaching about 2.13 billion USD by the end of 2022. This steady rise indicates ongoing wear and usage of the company's property, plant, and equipment assets, reflecting normal depreciation over time in alignment with asset aging and capital expenditure patterns.
- Gross property and equipment
- The gross property and equipment value also exhibited continuous growth throughout the period analyzed. It rose from around 4.07 billion USD in 2018 to approximately 5.82 billion USD in 2022. This upward trajectory suggests regular investments and acquisitions of assets, potentially supporting expansion or modernization initiatives. The increase was relatively steady, with no evident sharp spikes or declines.
- Average age ratio
- The average age ratio shows some variation but remains relatively stable over the years. Starting at 32.36% in 2018, it rose to a peak of 37.38% in 2021 before slightly declining to 36.61% in 2022. This indicates a modest increase in the average age of the assets, implying that while new assets were added, older assets also remained in service. The slight decrease in the final year may suggest some asset renewals or disposal of older equipment.
Estimated Total Useful Life
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
2022 Calculations
1 Estimated total useful life = Gross property and equipment ÷ Depreciation expense
= ÷ =
- Gross Property and Equipment
- The gross property and equipment value exhibited a consistent upward trend over the five-year period. Beginning at approximately $4.07 billion in 2018, the value increased each year, reaching nearly $5.82 billion by the end of 2022. This steady growth suggests ongoing investment and expansion in the company’s physical assets.
- Depreciation Expense
- The depreciation expense also increased over the period, starting from $230.4 million in 2018 and rising to $275.6 million in 2022. While this increase is less pronounced than the growth in gross property and equipment, it reflects the allocation of costs associated with aging assets and ongoing additions to the asset base. The slight decrease in 2021 relative to 2020 is minimal and may indicate adjustments in depreciation methodology or asset mix.
- Estimated Total Useful Life
- The estimated total useful life of the property and equipment showed a gradual increase over the period, from 18 years in 2018 to 21 years in 2022. This extension of useful life could indicate enhanced durability of new assets, changes in depreciation policies, or an assessment of longer service periods for existing assets.
Estimated Age, Time Elapsed since Purchase
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
2022 Calculations
1 Time elapsed since purchase = Accumulated depreciation ÷ Depreciation expense
= ÷ =
- Accumulated Depreciation
- The accumulated depreciation steadily increased from $1,318,209 thousand in 2018 to $2,128,985 thousand in 2022. This represents a continuous rise over the five-year period, indicating ongoing wear and tear or usage of the property, plant, and equipment assets. The growth in accumulated depreciation suggests that the company has been using its assets extensively or that the assets are aging.
- Depreciation Expense
- The depreciation expense showed a generally increasing trend, rising from $230,400 thousand in 2018 to $275,600 thousand in 2022. The expense increased each year, with a slight dip in 2021, but overall reflects consistent allocation of the cost of assets over their useful lives. The slight fluctuation in 2021's expense may indicate minor changes in asset mix or depreciation methods but does not significantly alter the upward trajectory.
- Time Elapsed Since Purchase
- The average time elapsed since purchase of property, plant, and equipment increased from 6 years in 2018-2020 to 7 years in 2021 and 8 years in 2022. This upward trend indicates that the asset base is aging progressively with fewer recent additions or replacements, which could imply the need for future investments to maintain or upgrade the asset base.
- Summary
- Overall, the financial data shows a consistent increase in both accumulated depreciation and depreciation expense, reflecting ongoing use and aging of the asset base. The increasing average age of the asset portfolio further supports the observation of an aging asset base. This situation may necessitate future capital expenditures to replace or refurbish existing property, plant, and equipment to sustain operational capacity.
Estimated Remaining Life
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
2022 Calculations
1 Estimated remaining life = Net property and equipment ÷ Depreciation expense
= ÷ =
- Net Property and Equipment
- The net property and equipment value exhibited a generally upward trend from 2018 to 2022. Starting at approximately $2,754,943 thousand in 2018, the value increased steadily each year with a slight dip observed in 2020, decreasing to around $2,914,031 thousand from the previous year’s $2,968,835 thousand. After this, it resumed rising, reaching $3,215,686 thousand in 2021 and further growing to $3,687,068 thousand in 2022. This indicates ongoing investment or capital expenditure in property, plant, and equipment over the period with a minor setback in 2020 that might be related to external factors affecting asset additions or disposals during that year.
- Depreciation Expense
- The depreciation expense has shown a consistent increase over the five years reviewed, starting at $230,400 thousand in 2018 and escalating steadily to $275,600 thousand by 2022. This rise suggests an increasing charge against earnings for the consumption or aging of the fixed assets, reflecting either growth in the asset base or changes in asset composition and depreciation methods. The moderate year-to-year increment also implies that the assets acquired possibly have similar depreciation patterns or useful lives.
- Estimated Remaining Life
- The estimated remaining life of the assets remained relatively stable, fluctuating marginally between 11 and 13 years throughout the period. The lowest point of estimated remaining life is 11 years in 2020, with an increase to 13 years by 2022. This slight increase may indicate recent acquisitions of assets with longer useful lives or revisions in asset life estimates, which could signify efforts to extend the use of assets or reflect newer equipment in the company’s portfolio.