Analysis of Property, Plant and Equipment
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Property, Plant and Equipment Disclosure
Yahoo! Inc., balance sheet: property, plant and equipment
US$ in thousands
Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).
The analysis of the annual property, plant, and equipment data reveals several notable trends over the five-year period ending December 31, 2016.
- Land
- The recorded value of land remained relatively stable from 2012 through 2015, fluctuating slightly between 213,838 and 215,740 thousand US dollars. However, there was a significant decline in 2016, dropping sharply to 89,960 thousand US dollars.
- Buildings
- Buildings exhibited consistent growth each year, increasing steadily from 639,658 thousand US dollars in 2012 to 935,515 thousand US dollars in 2016, indicating ongoing investments or acquisitions in building assets.
- Leasehold Improvements
- Leasehold improvements showed a declining trend overall, beginning at 304,440 thousand US dollars in 2012, decreasing markedly in 2014 to 210,876 thousand, before slightly rising again in 2015 to 252,985 thousand, then dipping marginally to 249,698 thousand in 2016.
- Computers and Equipment
- This category experienced considerable volatility. It decreased notably from 2,040,381 thousand US dollars in 2012 to 1,512,860 thousand in 2013, then rebounded to peak at 2,143,413 thousand in 2015, followed by a decline to 1,901,619 thousand in 2016. This pattern suggests periods of asset disposals or write-downs combined with new investments.
- Capitalized Software and Labor
- Capitalized software and labor showed moderate fluctuations. Starting at 595,366 thousand US dollars in 2012, it increased to 766,368 thousand in 2013, then decreased in the following years, reaching 679,902 thousand by 2016, indicating some level of investment variability or project completions.
- Furniture and Fixtures
- Furniture and fixtures values declined overall from 75,559 thousand US dollars in 2012 to 61,280 thousand in 2013, followed by a rebound and peak at 86,418 thousand in 2015, then fell again to 74,526 thousand in 2016. This indicates cyclical replacement or acquisition activity.
- Assets Not Yet in Use
- Assets not yet in use showed fluctuations, with values decreasing from 81,979 thousand US dollars in 2012 to 80,830 thousand in 2013, rising substantially to a peak of 125,555 thousand in 2014, dropping again to 83,164 thousand in 2015, and finally declining sharply to 15,505 thousand in 2016. This pattern reflects changing stages of asset development or commissioning.
- Property and Equipment, Gross
- The gross property and equipment figures declined from 3,951,221 thousand US dollars in 2012 to 3,612,102 thousand in 2013, then increased steadily through 2015 to a high of 4,265,561 thousand, before decreasing to 3,946,725 thousand in 2016. This suggests cycles of asset acquisitions and disposals affecting the gross asset base.
- Accumulated Depreciation and Amortization
- Accumulated depreciation and amortization steadily increased (in absolute value) from -2,265,376 thousand US dollars in 2012 to -2,736,788 thousand in 2016, indicating ongoing asset usage and the aging of fixed assets over time.
- Property and Equipment, Net
- The net property and equipment value showed a decline over the period, starting at 1,685,845 thousand US dollars in 2012, decreasing to 1,488,518 thousand in 2013, remaining relatively stable through 2015, and then dropping significantly to 1,209,937 thousand in 2016. The decline in net assets reflects the combination of asset disposals, depreciation, and possibly limited replacement or acquisition of new assets toward the end of the period.
In summary, the data indicate initial fluctuations and modest increases in asset values, particularly in buildings and computers and equipment, followed by a general decline in total net property and equipment by 2016. The pattern of accumulated depreciation consistently rising aligns with asset aging, while the sharp declines in land and assets not yet in use in 2016 point to significant asset reclassification, disposal, or impairment activities during that year.
Asset Age Ratios (Summary)
Yahoo! Inc., asset age ratios
Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).
- Average Age Ratio
- The average age ratio exhibits a consistent upward trend over the five-year period, increasing from 60.61% in 2012 to 70.96% in 2016. This indicates that the assets are aging progressively, with a growing proportion of their useful life having been utilized each year.
- Estimated Total Useful Life
- The total estimated useful life fluctuates initially, starting at 7 years in 2012, then decreasing to 6 years in 2013. Subsequently, it increases significantly to 8 years in 2014 and stabilizes at 9 years for both 2015 and 2016. This suggests revisions in asset life assumptions, possibly reflecting changes in asset composition or accounting policies.
- Estimated Age, Time Elapsed since Purchase
- The estimated asset age shows a steady increase year over year, from 4 years at the beginning of the period in 2012 and 2013, rising by one year each subsequent year to reach 7 years in 2016. This progression aligns with the passage of time and indicates no substantial early retirements or replacements of assets during this period.
- Estimated Remaining Life
- The estimated remaining useful life of the assets varies between 2 and 3 years throughout the years analyzed. It starts at 3 years in 2012, declines to 2 years in 2013, then returns to and maintains 3 years from 2014 through 2016. This relative stability towards the end of the period suggests that the adjustments in total estimated life have offset aging effects to maintain a consistent expectancy of remaining utility.
Average Age
Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).
2016 Calculations
1 Average age = 100 × Accumulated depreciation and amortization ÷ (Property and equipment, gross – Land)
= 100 × ÷ ( – ) =
- Accumulated depreciation and amortization
- This metric demonstrates a fluctuating trend over the five-year period. It decreased from approximately 2.27 billion in 2012 to about 2.12 billion in 2013, followed by a consistent increase in the subsequent years, reaching approximately 2.74 billion by the end of 2016. This pattern suggests variations in asset utilization or changes in depreciation methods, with an overall accumulation of depreciation expense over time.
- Property and equipment, gross
- The gross value of property and equipment experienced a decline from nearly 3.95 billion in 2012 to 3.61 billion in 2013. Thereafter, it increased substantially to 4.27 billion by 2015, before slightly decreasing to approximately 3.95 billion in 2016. This indicates active investment and disposal activities over the period, with a peak of asset additions around 2015.
- Land
- The land asset value remained stable at roughly 214 million from 2012 to 2015, but it declined significantly to 89.96 million in 2016. This sharp drop may imply asset sales, revaluation, or impairment related to land holdings in that year.
- Average age ratio
- The average age ratio exhibits a consistent upward trend, increasing from 60.61% in 2012 to 70.96% in 2016. This indicates that, on average, the property and equipment assets have been aging steadily, possibly suggesting a slowdown in new capital expenditures or extended use of existing assets over time.
Estimated Total Useful Life
Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).
2016 Calculations
1 Estimated total useful life = (Property and equipment, gross – Land) ÷ Depreciation expense
= ( – ) ÷ =
The financial data for property, plant, and equipment exhibits notable trends over the five-year period.
- Property and equipment, gross
- The gross value of property and equipment decreased from 3,951,221 thousand US dollars at the end of 2012 to 3,612,102 thousand US dollars by the end of 2013, indicating a decline in asset base. This was followed by a rebound to 3,905,646 thousand US dollars in 2014 and then a peak at 4,265,561 thousand US dollars in 2015. In 2016, the value declined again to 3,946,725 thousand US dollars. Overall, this indicates fluctuations with some periods of growth but overall no clear upward trend by 2016 compared to 2012.
- Land
- The value attributed to land remained stable at approximately 213,838 thousand US dollars for 2012 and 2013, with a slight increase to 215,740 thousand US dollars in 2014 and 2015. A sharp decline is observed in 2016, with the value dropping to 89,960 thousand US dollars. This marked reduction could indicate a disposal or revaluation of land assets.
- Depreciation expense
- Depreciation expense shows a consistent downward trend over the period, beginning at 549,235 thousand US dollars in 2012 and decreasing progressively each year to 407,341 thousand US dollars in 2016. This suggests either a reduction in depreciable assets or changes in depreciation methods or asset useful lives.
- Estimated total useful life
- The estimated total useful life of the assets varies during the period. It decreased from 7 years in 2012 to 6 years in 2013, then increased to 8 years in 2014 and further to 9 years in both 2015 and 2016. The increase in useful life estimates may contribute to the declining depreciation expense, as assets are depreciated over longer periods.
In summary, the gross property and equipment values show fluctuations with a lack of consistent growth, while land values remain stable until a significant drop in 2016. Depreciation expense steadily decreases, likely influenced by an increase in the estimated useful life of assets. These patterns may reflect strategic asset management decisions, including asset disposals, revaluations, and revisions to depreciation policies.
Estimated Age, Time Elapsed since Purchase
Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).
2016 Calculations
1 Time elapsed since purchase = Accumulated depreciation and amortization ÷ Depreciation expense
= ÷ =
The analysis of the annual property, plant, and equipment data reveals several notable trends over the five-year period ending December 31, 2016.
- Accumulated depreciation and amortization
- There is a general upward trend in accumulated depreciation and amortization from 2012 through 2016. Specifically, the accumulated amount increased from 2,265,376 thousand US dollars in 2012 to 2,736,788 thousand US dollars in 2016. This steady increase reflects the ongoing consumption of the asset base's value over time.
- Depreciation expense
- The depreciation expense shows a declining trend over the same period. It decreased from 549,235 thousand US dollars in 2012 to 407,341 thousand US dollars in 2016. This reduction in depreciation expense may indicate fewer additions to the asset base or changes in depreciation rates or methods. The consistent decrease year-on-year suggests reduced charges against income related to asset depreciation.
- Time elapsed since purchase
- The time elapsed since purchase increased incrementally from 4 years in 2012 and 2013 to 7 years in 2016. This aligns with the natural aging of the assets, which correlates with the rising accumulated depreciation and declining depreciation expense, indicating an aging asset base with potentially fewer new asset acquisitions.
Overall, the data depict a maturing property, plant, and equipment portfolio with increasing accumulated depreciation, reducing annual depreciation expenses, and an increasing age of the assets. This pattern may suggest limited recent capital expenditures on fixed assets, impacting the depreciation charge dynamics.
Estimated Remaining Life
Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).
2016 Calculations
1 Estimated remaining life = (Property and equipment, net – Land) ÷ Depreciation expense
= ( – ) ÷ =
The financial data related to property, plant, and equipment over the five-year period reveals several notable trends and changes.
- Property and Equipment, Net
- The net value of property and equipment decreased overall from 1,685,845 thousand US dollars in 2012 to 1,209,937 thousand US dollars in 2016. There was a decline between 2012 and 2013, followed by stability in 2014 and a slight increase in 2015, but the figure fell sharply in 2016 to its lowest point during the period analyzed.
- Land
- The value of land remained relatively stable at approximately 213,838 to 215,740 thousand US dollars from 2012 through 2015. However, in 2016, there was a significant reduction to 89,960 thousand US dollars, representing more than a 50% decrease compared to prior years.
- Depreciation Expense
- Depreciation expense showed a consistent downward trend, decreasing year by year from 549,235 thousand US dollars in 2012 to 407,341 thousand US dollars in 2016. This suggests either a reduction in depreciable assets or changes in asset usage or depreciation methods over the period.
- Estimated Remaining Life (Years)
- The estimated remaining life of the assets was relatively stable, fluctuating between 2 and 3 years. The value was 3 years in 2012, dropped to 2 years in 2013, then returned to 3 years from 2014 through 2016.
Overall, the data indicate a shrinking asset base and reduced depreciation expense, possibly reflecting disposal or write-downs of assets, particularly land, in 2016. The stability in estimated remaining life after 2013 suggests consistency in asset aging and replacement planning during the latter years. The significant decline in land value in 2016 may warrant further investigation to understand underlying causes such as sales, impairments, or reclassifications impacting the company's asset structure.