Analysis of Property, Plant and Equipment
Paying user area
Try for free
Vertex Pharmaceuticals Inc. pages available for free this week:
- Statement of Comprehensive Income
- Common-Size Income Statement
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Solvency Ratios
- Common Stock Valuation Ratios
- Selected Financial Data since 2005
- Net Profit Margin since 2005
- Operating Profit Margin since 2005
- Return on Assets (ROA) since 2005
- Debt to Equity since 2005
The data is hidden behind: . Unhide it.
Get full access to the entire website from $10.42/mo, or
get 1-month access to Vertex Pharmaceuticals Inc. for $24.99.
This is a one-time payment. There is no automatic renewal.
We accept:
Property, Plant and Equipment Disclosure
Vertex Pharmaceuticals Inc., balance sheet: property, plant and equipment
US$ in thousands
Based on: 10-K (reporting date: 2025-12-31), 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).
Property, plant, and equipment (PP&E) exhibited a general upward trend from 2021 through 2025, although with notable fluctuations in specific components. Gross PP&E increased from US$1,990.1 million in 2021 to US$2,724.4 million in 2025. Accumulated depreciation also increased consistently over the period, rising from US$896.0 million in 2021 to US$1,204.1 million in 2025. Consequently, net PP&E increased from US$1,094.1 million in 2021 to US$1,520.3 million in 2025.
- Buildings and Improvements
- Buildings and improvements showed modest growth from US$892.5 million in 2021 to US$928.6 million in 2023. However, a significant decrease was observed in 2024, falling to US$461.2 million, followed by a partial recovery to US$483.8 million in 2025. This decline in 2024 warrants further investigation to determine the underlying cause, such as potential asset disposals or reclassifications.
- Laboratory Equipment, Other Equipment and Furniture
- This category demonstrated consistent growth throughout the period, increasing from US$407.3 million in 2021 to US$788.1 million in 2025. This represents a substantial increase, suggesting ongoing investment in research and development or expansion of operational capacity.
- Leasehold Improvements
- Leasehold improvements experienced the most substantial growth among the PP&E categories, rising from US$363.5 million in 2021 to US$1,009.3 million in 2025. This indicates a significant increase in leased properties and associated improvements, potentially reflecting a shift in real estate strategy.
- Computers and Software
- Computers and software exhibited steady, albeit slower, growth, increasing from US$293.7 million in 2021 to US$410.1 million in 2025. This suggests a consistent, ongoing investment in technology infrastructure.
- Land
- The value of land remained constant at US$33.1 million throughout the entire period, indicating no acquisitions or disposals of land during these years.
The consistent increase in accumulated depreciation suggests a normal depreciation process occurring across the asset base. The overall trend in net PP&E indicates a growing investment in long-term assets, despite the notable fluctuation in buildings and improvements. The significant growth in leasehold improvements and laboratory equipment warrants further scrutiny to understand the strategic implications for the organization.
Asset Age Ratios (Summary)
Vertex Pharmaceuticals Inc., asset age ratios
Based on: 10-K (reporting date: 2025-12-31), 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).
An analysis of property, plant, and equipment age ratios reveals several trends over the five-year period. The average age ratio exhibits fluctuation, while estimates of useful life and asset age also demonstrate changes, potentially impacting depreciation schedules and future capital expenditure needs.
- Average Age Ratio
- The average age ratio increased from 45.78% in 2021 to 51.35% in 2023, indicating a growing proportion of the asset base is closer to the end of its useful life. However, this trend reversed in subsequent years, decreasing to 44.74% by 2025. This suggests potential asset turnover through sales or disposals, or the introduction of newer assets, particularly towards the end of the period.
- Estimated Total Useful Life
- The estimated total useful life of the assets decreased from 16 years in 2021 to 14 years in 2022 and remained constant through 2024. A notable increase to 17 years is observed in 2025. This change could reflect revisions in depreciation policies, the acquisition of assets with longer expected lifespans, or a reassessment of the wear and tear experienced by existing assets.
- Estimated Age and Remaining Life
- The estimated age, representing the time elapsed since purchase, remained constant at 7 years from 2021 to 2024, before increasing to 8 years in 2025. Concurrently, the estimated remaining life decreased from 8 years in 2021 to 7 years from 2022 to 2024, then increased to 10 years in 2025. The correlation between the increasing estimated age and the increasing remaining life in 2025 suggests a significant influx of newer assets or a substantial extension of the useful life of existing assets during that year.
The interplay between these ratios suggests a dynamic asset base. The initial aging of the asset portfolio, as indicated by the rising average age ratio, appears to have been addressed in later years through asset management strategies, potentially including replacements or life extensions, resulting in a younger average age and increased remaining useful life.
Average Age
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Accumulated depreciation | ||||||
| Property and equipment, gross | ||||||
| Land | ||||||
| Asset Age Ratio | ||||||
| Average age1 | ||||||
Based on: 10-K (reporting date: 2025-12-31), 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).
2025 Calculations
1 Average age = 100 × Accumulated depreciation ÷ (Property and equipment, gross – Land)
= 100 × ÷ ( – ) =
An examination of the provided financial information reveals trends in property, plant, and equipment, specifically concerning accumulated depreciation, gross property and equipment, land holdings, and the average age ratio. Accumulated depreciation consistently increased from 2021 to 2023, peaking at US$1,188,900, before decreasing in 2024 to US$1,064,800 and then increasing again in 2025 to US$1,204,100. Gross property and equipment also exhibited a general upward trend, rising from US$1,990,100 in 2021 to US$2,724,400 in 2025, with a slight dip observed in 2024 to US$2,292,600. Land remained constant throughout the period, valued at US$33,100 each year.
- Average Age Ratio
- The average age ratio demonstrates a fluctuating pattern. It increased steadily from 45.78% in 2021 to 51.35% in 2023, indicating an aging asset base. A decrease was then observed in 2024 to 47.13%, followed by a further decline to 44.74% in 2025. This suggests a potential reversal in the aging trend, possibly due to recent asset acquisitions or disposals that lowered the overall average age.
The interplay between accumulated depreciation and gross property and equipment suggests ongoing investment in new assets, alongside the natural depreciation of existing ones. The decrease in the average age ratio in the latter years of the period warrants further investigation to determine the specific factors contributing to this change, such as significant capital expenditures or asset retirements. The consistent value of land indicates no material changes in land holdings during the analyzed timeframe.
The fluctuation in accumulated depreciation, particularly the decrease in 2024, could be due to asset impairments, disposals, or changes in depreciation methods. Further analysis of the underlying asset base and depreciation policies would be necessary to fully understand these movements.
Estimated Total Useful Life
Based on: 10-K (reporting date: 2025-12-31), 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).
2025 Calculations
1 Estimated total useful life = (Property and equipment, gross – Land) ÷ Depreciation expense
= ( – ) ÷ =
Gross property and equipment values have generally increased over the observed period, with a slight decrease occurring between 2023 and 2024. Land values have remained constant. Depreciation expense has consistently risen from 2021 to 2023, before exhibiting a modest decline in 2024 and 2025. The estimated total useful life of assets has fluctuated, showing a decrease initially, followed by an increase in the most recent year.
- Gross Property and Equipment
- The gross value of property and equipment increased from US$1,990.1 million in 2021 to US$2,348.2 million in 2023, representing significant investment in fixed assets. A decrease to US$2,292.6 million in 2024 was followed by a substantial increase to US$2,724.4 million in 2025, potentially indicating further acquisitions or major capital projects.
- Depreciation Expense
- Depreciation expense demonstrated an upward trend from US$125.6 million in 2021 to US$167.8 million in 2023, likely correlating with the increase in the gross value of depreciable assets. The expense decreased to US$160.4 million in 2024 and further to US$155.8 million in 2025, which could be attributed to changes in the asset base or adjustments to depreciation methods.
- Estimated Useful Life
- The estimated total useful life of assets began at 16 years in 2021, then decreased to 14 years in both 2022 and 2023. This reduction may reflect a change in the composition of assets, with newer acquisitions having shorter estimated lives, or a reassessment of existing asset lifecycles. An increase to 17 years in 2025 suggests a potential shift back towards longer-lived assets or a revision of useful life estimates.
The interplay between increasing gross property and equipment and fluctuating depreciation expense and useful life estimates warrants further investigation. The increase in gross assets coupled with a decreasing depreciation expense in the latter years suggests a potential shift in the asset mix towards assets with lower depreciation rates or longer useful lives, although the increase in estimated useful life in 2025 supports the latter explanation.
Estimated Age, Time Elapsed since Purchase
Based on: 10-K (reporting date: 2025-12-31), 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).
2025 Calculations
1 Time elapsed since purchase = Accumulated depreciation ÷ Depreciation expense
= ÷ =
Analysis reveals a consistent increase in accumulated depreciation over the period from 2021 to 2023, followed by a decrease in 2024 and a subsequent increase in 2025. Depreciation expense also generally increased from 2021 to 2023, then decreased slightly in 2024 before decreasing further in 2025. The reported time elapsed since the initial purchase of these assets increased from seven to eight years between 2024 and 2025.
- Accumulated Depreciation
- Accumulated depreciation increased from US$896,000 thousand in 2021 to US$1,188,900 thousand in 2023, representing a cumulative increase of approximately 32.7%. A decrease was observed in 2024 to US$1,064,800 thousand, potentially indicating asset disposals or a change in depreciation methods. The value then rose again in 2025 to US$1,204,100 thousand.
- Depreciation Expense
- Depreciation expense exhibited an upward trend from US$125,600 thousand in 2021 to US$167,800 thousand in 2023, signifying increased recognition of asset cost as expense. A slight decrease to US$160,400 thousand occurred in 2024, followed by a further decrease to US$155,800 thousand in 2025. This decline could be attributed to a reduction in the asset base subject to depreciation, changes in estimated useful lives, or the adoption of different depreciation techniques.
- Time Elapsed Since Purchase
- The reported time elapsed since purchase remained constant at seven years from 2021 to 2024. An increase to eight years in 2025 suggests the potential for increased scrutiny regarding the remaining useful lives of the assets and potential impairment considerations. The consistent seven-year period prior to 2025 implies a concentrated period of asset acquisition.
The fluctuations in accumulated depreciation and depreciation expense warrant further investigation to determine the underlying causes, such as asset retirements, acquisitions, or modifications to depreciation policies. The increase in time elapsed since purchase in 2025 suggests a need to reassess the carrying values of the property, plant, and equipment to ensure they accurately reflect their remaining economic benefits.
Estimated Remaining Life
Based on: 10-K (reporting date: 2025-12-31), 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).
2025 Calculations
1 Estimated remaining life = (Property and equipment, net – Land) ÷ Depreciation expense
= ( – ) ÷ =
Property and equipment, net, increased consistently from 2021 to 2025, rising from US$1,094.1 million to US$1,520.3 million. Land remained constant throughout the period at US$33.1 million. Depreciation expense also exhibited an increasing trend from 2021 to 2023, peaking at US$167.8 million, before decreasing slightly in 2024 and 2025 to US$160.4 million and US$155.8 million, respectively. A notable shift occurred in the estimated remaining life of the assets.
- Property and Equipment, Net
- The consistent growth in net property and equipment suggests ongoing investment in assets. The increase is not solely attributable to capital expenditures, as depreciation is also occurring, indicating a potentially higher rate of investment than the impact of depreciation.
- Depreciation Expense
- The initial increase in depreciation expense aligns with the growth in the asset base. The subsequent decline in 2024 and 2025, despite continued growth in net property and equipment, could indicate a shift in the composition of the asset base towards assets with longer useful lives, or a change in depreciation methods. Further investigation would be needed to confirm the cause.
- Estimated Remaining Life
- The estimated remaining life decreased from 8 years in 2021 to 7 years in 2022 and remained at 7 years through 2024. This suggests that assets were being depreciated at a faster rate, or that the company was re-evaluating the useful lives of its existing assets downwards. However, a significant increase to 10 years is observed in 2025. This substantial change warrants further scrutiny, potentially indicating a significant influx of new assets with longer expected useful lives, a revision of depreciation policies, or a re-assessment of the remaining lives of existing assets.
The combination of increasing net property and equipment, fluctuating depreciation expense, and a dramatic change in estimated remaining life suggests a dynamic asset management strategy. The increase in estimated remaining life in the final year is a key observation that requires additional context to fully understand its implications.