Analysis of Property, Plant and Equipment
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- Analysis of Solvency Ratios
- Analysis of Short-term (Operating) Activity Ratios
- Analysis of Long-term (Investment) Activity Ratios
- Analysis of Reportable Segments
- Analysis of Geographic Areas
- Common Stock Valuation Ratios
- Capital Asset Pricing Model (CAPM)
- Present Value of Free Cash Flow to Equity (FCFE)
- Return on Assets (ROA) since 2005
- Total Asset Turnover since 2005
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Property, Plant and Equipment Disclosure
Texas Instruments 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).
- Land
- The value of land fluctuated over the analyzed period, starting at 125 million USD in 2020, increasing slightly to 132 million USD by 2021 and remaining stable through 2022. It rose to 150 million USD in 2023 but then declined notably to 113 million USD in 2024, indicating potential disposals or revaluations.
- Buildings and improvements
- This category exhibited consistent growth throughout the period, beginning at 2,571 million USD in 2020 and rising substantially each year to reach 6,424 million USD by 2024. This trend suggests ongoing investments and expansions in building infrastructure.
- Machinery and equipment
- Machinery and equipment values showed a strong upward trend, increasing from 3,085 million USD in 2020 to 8,717 million USD in 2024. The steady and significant annual growth indicates ongoing capital expenditure on production assets.
- Property, plant and equipment at cost
- The total cost of property, plant, and equipment demonstrated a marked increase over the years, from 5,781 million USD in 2020 to 15,254 million USD in 2024. The acceleration in additions particularly after 2021 suggests an aggressive asset acquisition or expansion strategy.
- Accumulated depreciation
- Accumulated depreciation increased consistently from -2,512 million USD in 2020 to -3,907 million USD in 2024. Although the negative values are conventional for this item, the steady rise reflects the aging of assets and the corresponding recognition of depreciation expense in each period.
- Property, plant and equipment, net
- The net value of property, plant, and equipment, after accounting for depreciation, showed a robust upward trajectory. It rose from 3,269 million USD in 2020 to 11,347 million USD in 2024, more than tripling over the timeframe. This growth indicates substantial increases in asset base net of wear and tear, supporting possible expansion of operational capacity.
Asset Age Ratios (Summary)
Texas Instruments 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 Trend
- The average age ratio demonstrates a consistent decline from 44.41% in 2020 to 24.92% in 2023, followed by a slight increase to 25.8% in 2024. This suggests a general trend toward a younger asset base over the five-year period, reflecting either renewed investments or asset retirements that reduced the proportion of older equipment.
- Estimated Total Useful Life
- There is a noticeable increase in the estimated total useful life of property, plant, and equipment from 8 years in 2020 to 11 years in 2022 and 2023, before slightly decreasing to 10 years in 2024. This indicates adjustments in asset longevity assumptions, potentially reflecting improved maintenance, technology enhancements, or changes in the asset composition.
- Estimated Age (Time Elapsed Since Purchase)
- The estimated age of assets fluctuates within a narrow range, from 3 to 4 years over the period, with no clear upward or downward trend. This stability suggests ongoing asset acquisitions balanced with retirements, maintaining a relatively consistent asset age profile in terms of time elapsed since purchase.
- Estimated Remaining Life
- The estimated remaining useful life of assets increases significantly from 4 years in 2020 to 7 years in 2021, maintaining a range between 7 and 8 years through 2024. This reflects a shift toward assets with longer remaining usability, congruent with the increase in total useful life and the reduction in average age ratio.
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 at cost – Land)
= 100 × ÷ ( – ) =
- Property, Plant, and Equipment at Cost
- The cost of property, plant, and equipment has exhibited a consistent and significant increase over the observed period. Starting from US$5,781 million in 2020, it rose sharply to US$15,254 million by 2024. This suggests substantial capital investments or acquisitions of assets, reflecting a strategic commitment to expanding or upgrading physical assets.
- Accumulated Depreciation
- Accumulated depreciation increased steadily from US$2,512 million in 2020 to US$3,907 million in 2024. While this rise aligns with the increasing asset base, the rate of increase in accumulated depreciation is less steep than that of the property, plant, and equipment costs, indicating that new assets added are relatively recent and have not yet incurred full depreciation.
- Land
- The value of land remained relatively stable, fluctuating slightly within a narrow range — from US$125 million in 2020, peaking at US$150 million in 2023, and then decreasing to US$113 million in 2024. The limited variation suggests minimal changes in land holdings or revaluations.
- Average Age Ratio
- The average age ratio, which represents the proportion of accumulated depreciation to the total cost of property, plant, and equipment, decreased markedly from 44.41% in 2020 to 25.8% in 2024. This decline indicates that the asset base is becoming relatively newer, consistent with the substantial capital expenditures observed. The decreasing trend suggests ongoing asset renewal and modernization efforts.
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 at cost – Land) ÷ Depreciation expense
= ( – ) ÷ =
- Overall Trend in Property, Plant, and Equipment at Cost
- The value of property, plant, and equipment (PPE) at cost has shown a consistent increase over the five-year span. Starting from $5,781 million in 2020, the PPE value rose substantially each year, reaching $15,254 million by the end of 2024. This indicates significant capital investment and asset acquisitions during this period.
- Land Asset Value
- The value of land held as part of the PPE remained relatively stable with a minor increase from $125 million in 2020 to $132 million in 2021 and 2022. In 2023, it rose to $150 million but then experienced a decline to $113 million by 2024. This fluctuation suggests possible disposals or revaluations of land assets near the end of the period.
- Depreciation Expense
- The depreciation expense has increased each year, rising from $733 million in 2020 to $1,508 million in 2024. The steady growth in depreciation expense aligns with the substantial increase in the cost base of PPE, reflecting higher depreciation charges associated with the larger asset base.
- Estimated Total Useful Life of Assets
- The estimated total useful life of the PPE assets initially increased from 8 years in 2020 to 10 years in 2021, then further extended to 11 years by 2022 and 2023 before slightly decreasing back to 10 years in 2024. This variation might reflect changes in asset composition, technological updates, or revisions to asset depreciation policies over time.
- Summary Insights
- The company has demonstrated strong growth in its asset base, investing heavily in property, plant, and equipment. The increasing depreciation charges are consistent with this trend and indicate a larger and aging asset pool. The land asset value trend shows some variability possibly related to asset management strategies. Changes in estimated useful life suggest periodic reassessment of asset longevity reflecting evolving operational factors or accounting estimates.
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 over the five-year period. Starting at $2,512 million in 2020, it increased each year, reaching $3,907 million by 2024. The growth in accumulated depreciation suggests ongoing aging and use of property, plant, and equipment assets with annual depreciation additions higher than asset disposals or impairments.
- Depreciation Expense
- Depreciation expense increased substantially over the period analyzed. Beginning at $733 million in 2020, it rose moderately to $755 million in 2021, then accelerated to $1,508 million by 2024. The doubling of annual depreciation expense from 2020 to 2024 indicates increased capital expenditures in earlier years or a shift towards assets with shorter useful lives or higher cost bases being depreciated.
- Time Elapsed Since Purchase
- The average age of the assets, as measured by time elapsed since purchase, showed an increase from 3 years in 2020 to 4 years in 2021, then returned to 3 years for the subsequent years through 2024. This relatively stable average age suggests a consistent asset acquisition policy offsetting asset retirements, with no significant shifts in the asset base's age profile during this period.
- Overall Insights
- The data reveals a significant growth in depreciation expense while accumulated depreciation steadily increases, reflecting both ongoing asset usage and increased capital investment. The stable average asset age points to balanced asset turnover. The sharp increase in depreciation expense, especially post-2021, may imply accelerated asset additions or revaluation adjustments contributing to higher annual charges.
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) ÷ Depreciation expense
= ( – ) ÷ =
- Net Property, Plant, and Equipment
- The net value of property, plant, and equipment showed a consistent upward trajectory over the five-year period. Starting at $3,269 million in 2020, it increased significantly each year to reach $11,347 million by the end of 2024. This indicates sustained investment in long-term assets.
- Land
- The value of land remained relatively stable with minor fluctuations. It started at $125 million in 2020, rising slightly to $132 million in 2021 and 2022, before increasing to $150 million in 2023, then declining to $113 million in 2024. The decrease in the final year suggests possible divestment or revaluation of land assets.
- Depreciation Expense
- Depreciation expense increased steadily from $733 million in 2020 to $1,508 million in 2024. The rate of increase accelerated particularly after 2021, reflecting larger asset bases and/or changes in depreciation policies.
- Estimated Remaining Life of Assets
- The estimated remaining life of property, plant, and equipment fluctuated moderately, starting at 4 years in 2020, peaking at 8 years in 2023, and then slightly declining to 7 years in 2024. This suggests adjustments in asset useful life assumptions, possibly related to asset additions or reappraisals.
- Overall Insights
- The data demonstrates considerable growth in the long-term asset base, aligned with increasing depreciation costs. The fluctuating estimated asset life implies active asset management. The notable rise in net property, plant, and equipment, particularly between 2022 and 2024, may reflect expansion or modernization initiatives. The drop in land value in the last year could indicate selective disposal of land holdings.