Stock Analysis on Net
Stock Analysis on Net
Microsoft Excel LibreOffice Calc

Vertex Pharmaceuticals Inc. (NASDAQ:VRTX)

Analysis of Property, Plant and Equipment

Advanced level

Property, Plant and Equipment Disclosure

Vertex Pharmaceuticals Inc., balance sheet: property, plant and equipment

US$ in thousands

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Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Buildings and improvements 876,091  713,412  657,438  634,061  548,232 
Furniture and equipment 346,698  317,567  280,908  256,509  236,634 
Leasehold improvements 234,585  175,769  103,428  117,806  108,702 
Computers and software 258,612  230,872  221,674  213,184  192,592 
Land 33,128  —  —  —  — 
Property and equipment, gross 1,749,114  1,437,620  1,263,448  1,221,560  1,086,160 
Accumulated depreciation (790,580) (692,540) (451,443) (432,123) (387,798)
Property and equipment, net 958,534  745,080  812,005  789,437  698,362 

Based on: 10-K (filing date: 2021-02-11), 10-K (filing date: 2020-02-13), 10-K (filing date: 2019-02-13), 10-K (filing date: 2018-02-15), 10-K (filing date: 2017-02-23).

Item Description The company
Property and equipment, gross Amount before accumulated depreciation, depletion and amortization of physical assets used in the normal conduct of business and not intended for resale. Examples include, but are not limited to, land, buildings, machinery and equipment, office equipment, and furniture and fixtures. Vertex Pharmaceuticals Inc.’s property and equipment, gross increased from 2018 to 2019 and from 2019 to 2020.
Property and equipment, net Amount after accumulated depreciation, depletion and amortization of physical assets used in the normal conduct of business to produce goods and services and not intended for resale. Examples include, but are not limited to, land, buildings, machinery and equipment, office equipment, and furniture and fixtures. Vertex Pharmaceuticals Inc.’s property and equipment, net decreased from 2018 to 2019 but then increased from 2019 to 2020 exceeding 2018 level.

Asset Age Ratios (Summary)

Vertex Pharmaceuticals Inc., asset age ratios

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Average age ratio 46.07% 48.17% 35.73% 35.37% 35.70%
Estimated total useful life (years) 16 13 17 20 18
Estimated age, time elapsed since purchase (years) 7 6 6 7 6
Estimated remaining life (years) 8 7 11 13 11

Based on: 10-K (filing date: 2021-02-11), 10-K (filing date: 2020-02-13), 10-K (filing date: 2019-02-13), 10-K (filing date: 2018-02-15), 10-K (filing date: 2017-02-23).

Asset age ratio Description The company
Average age ratio As long as straight-line depreciation is used, this is an accurate estimate of asset age as a percentage of depreciable life. The relative age is a useful measure of whether the company’s fixed asset base is old or new. Newer assets are likely to be more efficient. Vertex Pharmaceuticals Inc.’s average age ratio of depreciable property, plant and equipment deteriorated from 2018 to 2019 but then slightly improved from 2019 to 2020.
Estimated total useful life Over longer time periods, this ratio is a useful measure of company’s depreciation policy and can be used for comparisons with competitors. Vertex Pharmaceuticals Inc.’s estimated total useful life of depreciable property, plant and equipment decreased from 2018 to 2019 but then increased from 2019 to 2020 not reaching 2018 level.
Estimated time elapsed since purchase The approximate age in years of a company’s fixed assets. Useful for comparison purposes. Vertex Pharmaceuticals Inc.’s estimated time elapsed since purchase of depreciable property, plant and equipment deteriorated from 2018 to 2019 and from 2019 to 2020.
Estimated remaining life Vertex Pharmaceuticals Inc.’s estimated remaining life of depreciable property, plant and equipment decreased from 2018 to 2019 but then slightly increased from 2019 to 2020.

Average Age

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Selected Financial Data (US$ in thousands)
Accumulated depreciation 790,580  692,540  451,443  432,123  387,798 
Property and equipment, gross 1,749,114  1,437,620  1,263,448  1,221,560  1,086,160 
Land 33,128  —  —  —  — 
Asset Age Ratio
Average age1 46.07% 48.17% 35.73% 35.37% 35.70%

Based on: 10-K (filing date: 2021-02-11), 10-K (filing date: 2020-02-13), 10-K (filing date: 2019-02-13), 10-K (filing date: 2018-02-15), 10-K (filing date: 2017-02-23).

2020 Calculations

1 Average age = 100 × Accumulated depreciation ÷ (Property and equipment, gross – Land)
= 100 × 790,580 ÷ (1,749,11433,128) = 46.07%

Asset age ratio Description The company
Average age As long as straight-line depreciation is used, this is an accurate estimate of asset age as a percentage of depreciable life. The relative age is a useful measure of whether the company’s fixed asset base is old or new. Newer assets are likely to be more efficient. Vertex Pharmaceuticals Inc.’s average age ratio of depreciable property, plant and equipment deteriorated from 2018 to 2019 but then slightly improved from 2019 to 2020.

Estimated Total Useful Life

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Selected Financial Data (US$ in thousands)
Property and equipment, gross 1,749,114  1,437,620  1,263,448  1,221,560  1,086,160 
Land 33,128  —  —  —  — 
Depreciation expense 109,500  106,900  72,400  61,400  60,800 
Asset Age Ratio (Years)
Estimated total useful life1 16 13 17 20 18

Based on: 10-K (filing date: 2021-02-11), 10-K (filing date: 2020-02-13), 10-K (filing date: 2019-02-13), 10-K (filing date: 2018-02-15), 10-K (filing date: 2017-02-23).

2020 Calculations

1 Estimated total useful life = (Property and equipment, gross – Land) ÷ Depreciation expense
= (1,749,11433,128) ÷ 109,500 = 16

Asset age ratio Description The company
Estimated total useful life Over longer time periods, this ratio is a useful measure of company’s depreciation policy and can be used for comparisons with competitors. Vertex Pharmaceuticals Inc.’s estimated total useful life of depreciable property, plant and equipment decreased from 2018 to 2019 but then increased from 2019 to 2020 not reaching 2018 level.

Estimated Age, Time Elapsed since Purchase

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Selected Financial Data (US$ in thousands)
Accumulated depreciation 790,580  692,540  451,443  432,123  387,798 
Depreciation expense 109,500  106,900  72,400  61,400  60,800 
Asset Age Ratio (Years)
Time elapsed since purchase1 7 6 6 7 6

Based on: 10-K (filing date: 2021-02-11), 10-K (filing date: 2020-02-13), 10-K (filing date: 2019-02-13), 10-K (filing date: 2018-02-15), 10-K (filing date: 2017-02-23).

2020 Calculations

1 Time elapsed since purchase = Accumulated depreciation ÷ Depreciation expense
= 790,580 ÷ 109,500 = 7

Asset age ratio Description The company
Estimated time elapsed since purchase The approximate age in years of a company’s fixed assets. Useful for comparison purposes. Vertex Pharmaceuticals Inc.’s estimated time elapsed since purchase of depreciable property, plant and equipment deteriorated from 2018 to 2019 and from 2019 to 2020.

Estimated Remaining Life

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Selected Financial Data (US$ in thousands)
Property and equipment, net 958,534  745,080  812,005  789,437  698,362 
Land 33,128  —  —  —  — 
Depreciation expense 109,500  106,900  72,400  61,400  60,800 
Asset Age Ratio (Years)
Estimated remaining life1 8 7 11 13 11

Based on: 10-K (filing date: 2021-02-11), 10-K (filing date: 2020-02-13), 10-K (filing date: 2019-02-13), 10-K (filing date: 2018-02-15), 10-K (filing date: 2017-02-23).

2020 Calculations

1 Estimated remaining life = (Property and equipment, net – Land) ÷ Depreciation expense
= (958,53433,128) ÷ 109,500 = 8

Asset age ratio Description The company
Estimated remaining life Vertex Pharmaceuticals Inc.’s estimated remaining life of depreciable property, plant and equipment decreased from 2018 to 2019 but then slightly increased from 2019 to 2020.