Analysis of Property, Plant and Equipment
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AbbVie Inc. pages available for free this week:
- Balance Sheet: Assets
- Common-Size Balance Sheet: Assets
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Solvency Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Enterprise Value to EBITDA (EV/EBITDA)
- Present Value of Free Cash Flow to Equity (FCFE)
- Selected Financial Data since 2012
- Total Asset Turnover since 2012
- Price to Book Value (P/BV) since 2012
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Property, Plant and Equipment Disclosure
AbbVie Inc., balance sheet: property, plant and equipment
US$ in millions
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Land | |||||||||||
| Buildings | |||||||||||
| Equipment | |||||||||||
| Construction in progress | |||||||||||
| Property and equipment, gross | |||||||||||
| Accumulated depreciation | |||||||||||
| Property and equipment, net |
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).
Over the five-year period, the composition of property, plant, and equipment demonstrates a consistent pattern of investment and depreciation. Land holdings have remained relatively stable, with a slight increase in the final year. Significant changes are observed in buildings, equipment, and construction in progress, indicating ongoing capital expenditure programs.
- Land
- The value of land remained largely consistent between 2021 and 2023, at US$286 million. A minor decrease to US$284 million was noted in 2024, followed by a return to US$287 million in 2025. This suggests limited activity related to land acquisitions or disposals.
- Buildings
- Buildings experienced a moderate increase over the period. Starting at US$2,791 million in 2021, the value decreased to US$2,737 million in 2022, before steadily increasing to US$3,057 million in 2025. This growth likely reflects investments in new facilities or expansions of existing ones.
- Equipment
- Equipment represents the largest component of property, plant, and equipment, and demonstrates a consistent upward trend. From US$6,850 million in 2021, the value increased to US$8,785 million in 2025. This substantial growth suggests significant ongoing investment in operational capacity.
- Construction in Progress
- Construction in progress also exhibited a consistent increase, rising from US$799 million in 2021 to US$1,401 million in 2025. This indicates a sustained level of capital projects underway. The increase is not linear, suggesting varying levels of project initiation and completion each year.
- Gross Property and Equipment
- The gross value of property and equipment increased steadily from US$10,727 million in 2021 to US$13,530 million in 2025, reflecting the combined effect of investments in land, buildings, equipment, and construction in progress.
- Accumulated Depreciation
- Accumulated depreciation increased consistently throughout the period, from US$5,617 million in 2021 to US$7,902 million in 2025. This is expected as assets age and are utilized. The rate of increase appears to be relatively stable.
- Net Property and Equipment
- Net property and equipment, calculated as gross property and equipment less accumulated depreciation, showed a moderate increase from US$5,110 million in 2021 to US$5,628 million in 2025. While gross values increased significantly, the rise in accumulated depreciation partially offset this growth. A dip was observed in 2022, followed by steady growth in subsequent years.
In summary, the trends suggest a company actively investing in its property, plant, and equipment base, with a particular focus on expanding equipment capacity. The consistent increase in construction in progress indicates a pipeline of future asset additions. The growth in net property, plant, and equipment, while positive, is tempered by the ongoing impact of depreciation.
Asset Age Ratios (Summary)
AbbVie 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 examination of the asset age ratios reveals a consistent pattern over the five-year period. The average age ratio demonstrates a gradual, albeit decelerating, increase, while the estimated total useful life and elapsed time since purchase also exhibit increases. Simultaneously, the estimated remaining life shows initial stability followed by a slight extension.
- Average Age Ratio
- The average age ratio increased from 53.80% in 2021 to 59.67% in 2025. The rate of increase diminished over time, moving from a 2.75 percentage point rise between 2021 and 2022, to a 0.14 percentage point rise between 2024 and 2025. This suggests a slowing accumulation of older assets relative to newer ones.
- Useful Life and Age
- The estimated total useful life of the assets increased steadily from 13 years in 2021 to 17 years in 2025. Concurrently, the estimated age, representing the time elapsed since purchase, rose from 7 years to 10 years over the same period. This indicates that, on average, assets are being assigned longer useful lives and are becoming older.
- Remaining Life
- The estimated remaining life remained constant at 6 years from 2021 to 2024, before increasing to 7 years in 2025. This suggests that the rate of asset aging was initially offset by the increasing estimates of useful life, but the extension of remaining life in the final year may indicate recent asset acquisitions or revisions to depreciation schedules.
Collectively, these trends suggest a maturing asset base. While the increasing useful life estimates mitigate the impact of aging assets, the continued rise in the average age ratio warrants monitoring to assess potential future capital expenditure requirements for asset replacement or refurbishment.
Average Age
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| 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 financial information reveals a consistent pattern of growth in both property and equipment, gross, and accumulated depreciation over the five-year period from 2021 to 2025. This suggests ongoing investment in fixed assets. However, the average age ratio also demonstrates a steady, albeit gradual, increase throughout the same timeframe.
- Property and Equipment, Gross
- Property and equipment, gross increased from US$10,727 million in 2021 to US$13,530 million in 2025. The largest year-over-year increase occurred between 2023 and 2024, rising by US$632 million. This indicates a potentially accelerated pace of asset acquisition during that period.
- Accumulated Depreciation
- Accumulated depreciation mirrored the growth in gross property and equipment, increasing from US$5,617 million in 2021 to US$7,902 million in 2025. The rate of increase in accumulated depreciation appears to be consistent with the growth in the asset base, suggesting a standard depreciation schedule is being applied. The largest year-over-year increase in accumulated depreciation also occurred between 2023 and 2024, at US$487 million.
- Land
- The value of land remained relatively stable throughout the period, fluctuating slightly between US$284 million and US$287 million. This suggests that land acquisitions have not been a significant component of the company’s investment strategy during these years.
- Average Age Ratio
- The average age ratio increased from 53.80% in 2021 to 59.67% in 2025. While the increases are incremental, the consistent upward trend suggests that the company’s fixed assets are, on average, becoming older. This could be due to a slower rate of asset replacement relative to depreciation, or a shift towards investing in assets with longer useful lives. Further investigation into the company’s asset replacement policy and depreciation methods would be necessary to determine the underlying cause.
In summary, the company is consistently investing in property and equipment, as evidenced by the growth in gross fixed assets and accumulated depreciation. However, the increasing average age ratio warrants attention, as it may indicate a need to evaluate the long-term implications of an aging asset base.
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
= ( – ) ÷ =
Over the five-year period, property and equipment, gross consistently increased, rising from US$10,727 million in 2021 to US$13,530 million in 2025. Land remained relatively stable, experiencing minor fluctuations but generally holding around US$286-287 million. Depreciation expense exhibited a slight downward trend initially, decreasing from US$803 million in 2021 to US$752 million in 2023, before increasing modestly to US$764 million in 2024 and remaining at US$762 million in 2025. A clear upward trend is observed in the estimated total useful life of the assets.
- Gross Property and Equipment
- The consistent growth in gross property and equipment suggests ongoing investment in fixed assets. The increase from 2021 to 2025 indicates expansion or significant upgrades to existing facilities and equipment. The rate of increase appears to be accelerating, particularly between 2023 and 2025.
- Land
- The stability in land values suggests no significant revaluations or acquisitions/disposals of land occurred during the period. The minor fluctuations are likely due to accounting adjustments or immaterial transactions.
- Depreciation Expense
- The initial decrease in depreciation expense, followed by a stabilization and slight increase, could be attributed to a shift in the asset base towards newer, more efficient equipment with potentially lower depreciation rates. The relatively flat depreciation expense in the later years, despite the increasing gross property and equipment, suggests a larger proportion of recent additions with longer useful lives.
- Estimated Total Useful Life
- The estimated total useful life increased steadily from 13 years in 2021 to 17 years in 2025. This lengthening of the estimated useful life is a significant observation. It may indicate a change in the nature of the assets being acquired, with a greater emphasis on durable, long-lasting equipment. Alternatively, it could reflect a reassessment of the expected longevity of existing assets, potentially due to improved maintenance practices or technological advancements extending asset life. This trend will likely result in lower annual depreciation expense relative to the gross asset value, all else being equal.
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 five-year period, while depreciation expense exhibits relative stability. The reported time elapsed since purchase also demonstrates a clear progression, offering insights into the age of the asset base.
- Accumulated Depreciation
- Accumulated depreciation increased steadily from US$5,617 million in 2021 to US$7,902 million in 2025. This represents a cumulative increase of approximately 40.8% over the period. The rate of increase appears to be accelerating, with larger absolute increases observed in later years, particularly between 2023 and 2025.
- Depreciation Expense
- Depreciation expense remained relatively consistent, fluctuating between US$752 million and US$803 million annually. A slight downward trend is observable from 2021 to 2023, followed by a modest increase in 2024 and a further slight decrease in 2025. The consistency suggests a stable depreciation method and a relatively constant value of depreciable assets being expensed each year.
- Asset Age
- The reported time elapsed since purchase increased from 7 years in 2021 to 10 years in 2025. This indicates that the asset base is aging. The consistent annual increment suggests ongoing asset utilization without significant recent large-scale additions to the property, plant, and equipment base. The correlation between increasing accumulated depreciation and increasing asset age is expected.
The combination of rising accumulated depreciation and stable depreciation expense suggests that a significant portion of the asset base is approaching the later stages of its useful life. Continued monitoring of these trends is recommended to assess the potential need for future capital expenditures to replace or upgrade existing assets.
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, exhibited a fluctuating pattern over the five-year period. A decrease was observed from 2021 to 2022, followed by increases in subsequent years, culminating in a notable rise from 2024 to 2025. Land values remained relatively stable throughout the period, with minor fluctuations.
- Property and Equipment, Net
- The net value of property and equipment decreased from US$5,110 million in 2021 to US$4,935 million in 2022, representing a decline of approximately 3.5%. This was followed by increases to US$4,989 million in 2023, US$5,134 million in 2024, and a more substantial increase to US$5,628 million in 2025. The 2025 value represents an overall increase of approximately 10.2% from the 2021 level.
- Depreciation Expense
- Depreciation expense generally decreased from US$803 million in 2021 to US$752 million in 2023. A slight increase to US$764 million was noted in 2024, followed by a further increase to US$762 million in 2025. The depreciation expense remained relatively consistent between 2024 and 2025.
- Estimated Remaining Life
- The estimated remaining life of property and equipment remained constant at six years from 2021 through 2024. An increase to seven years was recorded in 2025. This suggests a potential reassessment of the useful lives of the assets, possibly due to upgrades, maintenance, or a change in expected usage patterns.
The increase in property and equipment, net, in 2025, coupled with the increase in estimated remaining life, suggests potential capital investments or a revision of depreciation policies. The relatively stable depreciation expense, despite the increasing net value of property and equipment, could indicate that new asset additions are offsetting the depreciation of older assets.