Analysis of Property, Plant and Equipment
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AbbVie Inc. pages available for free this week:
- Balance Sheet: Liabilities and Stockholders’ Equity
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Short-term (Operating) Activity Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Common Stock Valuation Ratios
- Selected Financial Data since 2012
- Net Profit Margin since 2012
- Return on Assets (ROA) since 2012
- Price to Earnings (P/E) since 2012
- Analysis of Revenues
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Property, Plant and Equipment Disclosure
AbbVie Inc., balance sheet: property, plant and equipment
US$ in millions
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Land | |||||||||||
| Buildings | |||||||||||
| Equipment | |||||||||||
| Construction in progress | |||||||||||
| Property and equipment, gross | |||||||||||
| Accumulated depreciation | |||||||||||
| Property and equipment, net |
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 shows a gradual decline over the period, decreasing from US$288 million in 2020 to US$284 million in 2024. This represents a marginal reduction, indicating minimal disposals or revaluations of land assets.
- Buildings
- Building assets experienced an overall upward trend, rising from US$2,555 million in 2020 to US$2,895 million in 2024. There was a dip in 2022, but the subsequent recovery and growth suggest ongoing investments or capital improvements in building infrastructure.
- Equipment
- Equipment values exhibit a slight fluctuation. After a decrease from US$6,976 million in 2020 to US$6,850 million in 2021, the value consistently increased each year, reaching US$7,995 million by 2024. This pattern may indicate active replacement or addition of equipment following a short period of decline.
- Construction in Progress
- Construction in progress saw a notable decrease from US$1,040 million in 2020 to US$799 million in 2021, followed by a steady increase to US$1,093 million in 2024. This suggests periods of construction activity slowing and then intensifying, reflecting fluctuating capital expenditure on projects under development.
- Property and Equipment, Gross
- The gross value of property and equipment remained relatively stable around US$10,700 million between 2020 and 2022, before rising more markedly to US$12,267 million in 2024. This overall increase is consistent with the growth in buildings, equipment, and construction in progress, signifying augmented investment in fixed assets.
- Accumulated Depreciation
- Accumulated depreciation increased steadily in absolute terms from -US$5,611 million in 2020 to -US$7,133 million in 2024, reflecting ongoing depreciation charges. The accelerating increase in accumulated depreciation aligns with the aging asset base and increased equipment and building investments.
- Property and Equipment, Net
- Net property and equipment values declined from US$5,248 million in 2020 to US$4,935 million in 2022, indicating that depreciation outpaced investment during that period. However, a modest recovery took place in 2023 and 2024, with net values rising to US$5,134 million, suggesting renewed investments beginning to offset depreciation effects.
Asset Age Ratios (Summary)
AbbVie Inc., asset age ratios
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
- Average Age Ratio
- The average age ratio exhibited an increasing trend from 53.08% in 2020 to 59.53% in 2024. This gradual rise suggests that the property, plant, and equipment (PP&E) assets have been aging steadily over the observed period, indicating either slower asset replacement or a greater proportion of older assets on the balance sheet.
- Estimated Total Useful Life
- There was a decrease in the estimated total useful life from 16 years in 2020 to 13 years in 2021, followed by a recovery to 16 years by 2024. This fluctuation may reflect changes in asset composition, possible revisions of asset lifespan assessments, or technological and operational factors impacting asset longevity projections.
- Estimated Age (Time Elapsed Since Purchase)
- The estimated age of the assets showed minor variability but generally remained stable, fluctuating between 7 and 9 years over the five-year period. This consistency indicates a relatively steady rotation or replacement rate of assets without significant early retirements or rapid additions.
- Estimated Remaining Life
- The estimated remaining life decreased from 7 years in 2020 to 6 years from 2021 onward and remained stable at this level through 2024. This suggests a slight reduction in asset longevity expectations which then stabilized, possibly due to revaluation of asset conditions or updated depreciation policies.
Average Age
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Accumulated depreciation | ||||||
| Property and equipment, gross | ||||||
| Land | ||||||
| Asset Age Ratio | ||||||
| Average age1 | ||||||
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 and equipment, gross – Land)
= 100 × ÷ ( – ) =
- Accumulated depreciation
- The accumulated depreciation has shown a consistent upward trend from 5,611 million US dollars at the end of 2020 to 7,133 million US dollars by the end of 2024. This steady increase suggests ongoing depreciation expenses, reflecting wear and tear or obsolescence on the property and equipment over the years.
- Property and equipment, gross
- The gross value of property and equipment has generally increased over the analyzed period, rising from 10,859 million US dollars in 2020 to 12,267 million US dollars in 2024. Despite a slight dip in 2021, the overall trend indicates continued investments or additions to the company's property and equipment base.
- Land
- The valuation of land has remained relatively stable with a minor decline from 288 million US dollars in 2020 to 284 million US dollars in 2024. This stability is expected as land typically does not depreciate but may fluctuate slightly due to revaluation or disposals.
- Average age ratio
- The average age ratio, representing the age of the property and equipment relative to their useful life, has increased steadily from 53.08% in 2020 to 59.53% in 2024. This rising ratio indicates an aging asset base, which may imply upcoming requirements for asset replacement or increased maintenance expenses.
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 and equipment, gross – Land) ÷ Depreciation expense
= ( – ) ÷ =
- Property and Equipment, Gross
- The gross value of property and equipment shows a generally increasing trend over the five-year period. Starting at 10,859 million US dollars in 2020, the value slightly declined to 10,727 million in 2021 but then consistently rose from 10,986 million in 2022 to 11,635 million in 2023, reaching 12,267 million in 2024. This indicates ongoing capital investment or acquisition of new assets over the latter part of the period examined.
- Land
- The value attributed to land remains relatively stable throughout the period, showing a slight decrease from 288 million US dollars in 2020 to 284 million in 2024. This minimal variation suggests little to no significant transactions involving land assets.
- Depreciation Expense
- Depreciation expense exhibits some fluctuation but overall remains in a similar range. It increased sharply from 666 million US dollars in 2020 to a peak of 803 million in 2021, then decreased slightly in subsequent years to 778 million in 2022, 752 million in 2023, and slightly rose again to 764 million in 2024. These changes could relate to changes in asset base, asset composition, or the company's depreciation policies.
- Estimated Total Useful Life
- The estimated total useful life of property and equipment shows variability, beginning at 16 years in 2020, decreasing sharply to 13 years in 2021, then gradually increasing to 14 years in 2022, 15 years in 2023, and returning to 16 years in 2024. This pattern may reflect revisions in asset life estimates, possibly due to changes in asset mix or reassessments of asset longevity.
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, increasing from 5,611 million US dollars at the end of 2020 to 7,133 million US dollars by the end of 2024. The annual increments indicate ongoing depreciation of property, plant, and equipment assets, reflecting the consumption or obsolescence of these assets year over year.
- Depreciation Expense
- Depreciation expense demonstrates some variability but remains relatively stable within the range of approximately 666 million to 803 million US dollars annually. It peaked in 2021 at 803 million, followed by a slight decline in 2022 and 2023, before increasing marginally again in 2024. This pattern suggests fluctuations in asset base additions or changes in depreciation methods or rates, but overall consistent expense recognition over the period.
- Time Elapsed Since Purchase
- The average time elapsed since purchase of property, plant, and equipment shows minor fluctuations, starting at 8 years in 2020, reducing to 7 years in 2021, then increasing back to 9 years by 2023 and remaining steady through 2024. This indicates a period of asset turnover or acquisition that temporarily lowered the average age of assets before it extended again, possibly due to acquisitions of older assets or slower replacement rates in recent years.
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 and equipment, net – Land) ÷ Depreciation expense
= ( – ) ÷ =
- Property and Equipment, Net
- The net value of property and equipment demonstrates a gradual decline from 5248 million US dollars at the end of 2020 to 4935 million US dollars by the end of 2022. This decline slows in subsequent years, with a slight increase to 4989 million in 2023 and further to 5134 million in 2024. The initial downward trend suggests a phase of asset depreciation or disposal exceeding acquisitions, followed by stabilization and moderate recovery in net asset value.
- Land
- The land asset value remains relatively stable over the five-year period, with a minor decrease from 288 million US dollars in 2020 to 284 million in 2024. This stability implies limited transactions or valuation changes associated with land holdings.
- Depreciation Expense
- Depreciation expense increased notably from 666 million US dollars in 2020 to a peak of 803 million in 2021. After that, depreciation decreased slightly to 778 million in 2022 and continued declining to 752 million in 2023, before rising marginally to 764 million in 2024. The peak in 2021 may reflect accelerated depreciation or asset write-downs during that period, with subsequent years showing a normalization of expense levels.
- Estimated Remaining Life
- The estimated remaining life of the property and equipment decreases from 7 years in 2020 to 6 years and remains steady at 6 years through 2024. This indicates a consistent assessment of asset longevity after the initial reduction, possibly reflecting the aging of the asset base or changes in asset composition.