Analysis of Property, Plant and Equipment
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- Statement of Comprehensive Income
- Common-Size Balance Sheet: Assets
- Analysis of Profitability Ratios
- Enterprise Value (EV)
- Enterprise Value to FCFF (EV/FCFF)
- Price to FCFE (P/FCFE)
- Net Profit Margin since 2005
- Price to Book Value (P/BV) since 2005
- Price to Sales (P/S) since 2005
- Analysis of Revenues
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Property, Plant and Equipment Disclosure
Altria Group Inc., balance sheet: property, plant and equipment
US$ in millions
Based on: 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), 10-K (reporting date: 2019-12-31).
The analysis of the property, plant, and equipment data reveals several key trends and patterns over the period from the end of 2019 through 2023.
- Land and land improvements
- The value recorded for land and land improvements experienced a significant decline from 353 million US dollars in 2019 to 123 million US dollars by 2021. This lower valuation then remained stable without fluctuations through to 2023.
- Buildings and building equipment
- There was a slight upward trajectory in the value of buildings and building equipment, increasing from 1,461 million US dollars in 2019 to 1,535 million US dollars by 2023. Notable is a minor dip in 2021, but overall the trend points to moderate growth across the observed period.
- Machinery and equipment
- The machinery and equipment category showed a decrease from 2,998 million US dollars in 2019 to 2,578 million US dollars in 2022, with a modest rebound to 2,684 million US dollars in 2023. This decline followed by partial recovery suggests fluctuations in investments or disposals.
- Construction in progress
- Values for construction in progress fluctuated slightly, with a peak at 312 million US dollars in 2020, then declining to 240 million US dollars by 2023. These changes suggest ongoing adjustments in development projects or capital work activities.
- Property, plant and equipment, at cost
- The total property, plant, and equipment at cost showed a noticeable decline from 5,074 million US dollars in 2019 to 4,432 million US dollars in 2021. After stabilizing at around 4,427 million US dollars in 2022, a slight increase to 4,582 million US dollars was observed in 2023. This pattern indicates a reduction in asset acquisitions or a possible asset sale during the earlier years followed by a modest recovery in investment.
- Accumulated depreciation
- Accumulated depreciation steadily decreased in absolute value from -3,075 million US dollars in 2019 to -2,819 million US dollars in 2022, followed by a slight increase to -2,930 million US dollars in 2023. The reduction in accumulated depreciation may be attributed to asset disposals or revaluations, with the recent increase suggesting resumed asset aging or depreciation charging.
- Property, plant and equipment, net
- The net property, plant, and equipment value diminished from 1,999 million US dollars in 2019 to as low as 1,553 million US dollars in 2021. However, a subsequent gradual increase to 1,652 million US dollars by 2023 indicates a partial recovery in net asset value.
In summary, the data depicts an initial contraction in asset values, particularly for land and machinery, and a corresponding decline in total asset costs and net values until 2021. From 2022 onwards, there is evidence of stabilization and moderate growth in several categories, including buildings and net property, plant, and equipment, reflecting potential renewed investment or asset retention strategies.
Asset Age Ratios (Summary)
Altria Group Inc., asset age ratios
Based on: 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), 10-K (reporting date: 2019-12-31).
- Average Age Ratio
- The average age ratio shows a generally stable trend over the analyzed period, fluctuating narrowly between 65.13% and 66.81%. This indicates a consistent proportion of the asset base reaching or surpassing a certain age threshold, suggesting steady asset aging without significant acceleration or renewal.
- Estimated Total Useful Life
- The estimated total useful life of the property, plant, and equipment exhibits an upward trend. Starting at 26 years in 2019 and 2020, it decreased slightly to 25 years in 2021 before increasing notably to 28 years in 2022 and further to 31 years in 2023. This suggests either a reassessment of asset longevity or investments in longer-lasting assets over the recent years.
- Estimated Age, Time Elapsed Since Purchase
- The estimated age has increased progressively from 17 years in 2019 through 2021, to 18 years in 2022, and 20 years in 2023. This consistent increase reflects the natural aging of the asset base without significant additions of newly acquired or replaced assets that would lower the average age.
- Estimated Remaining Life
- The estimated remaining life demonstrates an increase from 8-9 years in the earlier years (2019-2021) to 10 years in 2022 and 11 years in 2023. This trend aligns with the increasing total useful life, indicating a positive adjustment in asset longevity assumptions or improved maintenance and refurbishment extending the useful service period.
Average Age
Based on: 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), 10-K (reporting date: 2019-12-31).
2023 Calculations
1 Average age = 100 × Accumulated depreciation ÷ (Property, plant and equipment, at cost – Land and land improvements)
= 100 × ÷ ( – ) =
The financial data reflects several noteworthy trends related to property, plant, and equipment over the five-year period.
- Accumulated Depreciation
- The accumulated depreciation values initially increased slightly from 3,075 million US dollars at the end of 2019 to 3,138 million in 2020. However, the values then declined consecutively in 2021 and 2022, reaching 2,819 million. By 2023, a minor increase to 2,930 million was observed. This pattern indicates a reduction in accumulated depreciation after 2020, potentially due to asset disposals or changes in depreciation methods, followed by a slight rebound in the latest year.
- Property, Plant, and Equipment at Cost
- The cost of property, plant, and equipment remained relatively stable between 2019 and 2020, moving from 5,074 million to 5,150 million US dollars. A significant decrease occurred in 2021, with the value dropping to 4,432 million, and this lower level was sustained in 2022 at 4,427 million. The figure slightly increased to 4,582 million in 2023. The sharp reduction in 2021 may signal asset sales, impairments, or reduced capital expenditures, with the moderate recovery in 2023 possibly suggesting renewed investment or acquisitions.
- Land and Land Improvements
- Values for land and land improvements showed a marked decline from 353 million US dollars in 2019 to 348 million in 2020, followed by a substantial drop to 123 million from 2021 through 2023. This considerable decrease may reflect disposals or reclassifications of land assets, indicating a change in the company's asset management strategy or operational footprint.
- Average Age Ratio (%)
- The average age ratio remained fairly consistent over the period, starting at 65.13% in 2019, peaking slightly at 66.81% in 2021, and settling around 65.71% in 2023. The relative stability of this ratio suggests that the overall aging profile of the property, plant, and equipment did not experience significant fluctuations despite changes in asset values.
In summary, the data indicates a period of asset reduction particularly evident around 2021, followed by signs of stabilization or modest reinvestment in subsequent years. Depreciation levels correspondingly declined with the asset base but showed signs of increase in the latest year. The considerable reduction in land assets distinctly influences the overall asset profile. The consistent average age ratio points to a stable asset lifecycle management approach over time.
Estimated Total Useful Life
Based on: 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), 10-K (reporting date: 2019-12-31).
2023 Calculations
1 Estimated total useful life = (Property, plant and equipment, at cost – Land and land improvements) ÷ Depreciation expense
= ( – ) ÷ =
The analysis of the annual property, plant, and equipment financial data reveals notable trends over the five-year period ending in 2023. The total cost of property, plant, and equipment exhibited fluctuations, starting at $5,074 million in 2019 and peaking slightly to $5,150 million in 2020, followed by a decline to $4,432 million in 2021 and remaining relatively stable around $4,400 million in 2022. A moderate increase was observed in 2023, bringing the figure to $4,582 million. This pattern indicates a contraction phase after 2020, with some recovery towards the end of the period.
Regarding land and land improvements, a significant reduction took place from 2019 to 2021. The value dropped drastically from $353 million to $123 million and remained constant through 2023. This marked decrease might suggest asset reclassification, sale, or impairment of land-related assets during this period.
Depreciation expense showed a consistent downward trend throughout the timeframe. After a gradual increase from $182 million in 2019 to $185 million in 2020, depreciation expense declined steadily to reach $144 million by 2023. This reduction could correlate with the lowered asset base, changes in asset composition, or adjustments in depreciation policies.
The estimated total useful life of the assets increased progressively from 26 years in 2019 and 2020, briefly dropping to 25 years in 2021, before rising to 28 years in 2022 and further to 31 years in 2023. Extending the useful life could reflect reassessments of the asset longevity, changes in technology, maintenance practices, or a strategic decision to spread depreciation over longer periods.
- Property, Plant, and Equipment at Cost
- Initial increase until 2020 followed by a notable decline and slight recovery in 2023.
- Land and Land Improvements
- Substantial decrease by 2021 and stable low values thereafter.
- Depreciation Expense
- Peak in 2020 followed by steady decrease through 2023.
- Estimated Total Useful Life
- Generally increasing trend, indicating longer asset life assumptions in recent years.
In summary, the data reflects a period of asset base reduction and altered asset management strategies, characterized by decreased property values, lower depreciation expenses, and extended asset useful lives. These patterns may suggest efforts to optimize asset utilization and align accounting practices with changing business conditions or economic expectations.
Estimated Age, Time Elapsed since Purchase
Based on: 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), 10-K (reporting date: 2019-12-31).
2023 Calculations
1 Time elapsed since purchase = Accumulated depreciation ÷ Depreciation expense
= ÷ =
The financial data for property, plant, and equipment reveals a few key trends over the five-year period analyzed.
- Accumulated Depreciation
- Accumulated depreciation shows a slight variation across the years. It increased marginally from 3,075 million US dollars in 2019 to 3,138 million in 2020. Subsequently, there was a downward trend reaching 2,879 million in 2021 and continuing to decline to 2,819 million in 2022. In 2023, it increased again to 2,930 million. This fluctuation suggests adjustments or changes in asset base or depreciation policy.
- Depreciation Expense
- The depreciation expense has steadily decreased each year, moving from 182 million US dollars in 2019 to 144 million in 2023. This consistent decline could indicate a reduction in assets being depreciated, potentially due to disposals or a shift in asset structure towards fully depreciated or older assets.
- Time Elapsed Since Purchase
- The average time elapsed since purchase of assets has remained almost constant at 17 years from 2019 to 2021, then increased to 18 years in 2022 and further to 20 years in 2023. This upward trend indicates a gradually aging asset base, which aligns with the decreasing depreciation expenses observed.
Overall, the data points to an aging portfolio of property, plant, and equipment with declining depreciation charges, possibly reflecting a slowdown in new capital investments or asset disposals. The fluctuations in accumulated depreciation may reflect accounting adjustments or revaluations during the period.
Estimated Remaining Life
Based on: 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), 10-K (reporting date: 2019-12-31).
2023 Calculations
1 Estimated remaining life = (Property, plant and equipment, net – Land and land improvements) ÷ Depreciation expense
= ( – ) ÷ =
- Property, Plant, and Equipment, Net
- The net value of property, plant, and equipment experienced a decline from 2019 to 2021, decreasing from $1,999 million to $1,553 million. Following this decline, there was a modest recovery with the net value increasing to $1,608 million in 2022 and further to $1,652 million in 2023. This trend suggests a period of asset reduction or disposals initially, followed by reinvestment or acquisition activities in more recent years.
- Land and Land Improvements
- The value allocated to land and land improvements remained relatively stable at around $353 million in 2019 and $348 million in 2020. However, there was a sharp decrease to $123 million in 2021, and this lower value persisted through 2022 and 2023. This significant reduction could indicate asset revaluation, disposals, or a reclassification occurring between 2020 and 2021.
- Depreciation Expense
- Depreciation expense showed a downward trend across the five-year period. Starting at $182 million in 2019, it peaked slightly at $185 million in 2020, then steadily decreased each year to $144 million by 2023. This decline may reflect aging assets reaching end of useful life, reduced acquisition of depreciable assets, or changes in depreciation policy.
- Estimated Remaining Life
- The estimated remaining life of property, plant, and equipment remained at 9 years in both 2019 and 2020, dropped to 8 years in 2021, then increased to 10 years in 2022 and further to 11 years in 2023. The increase in remaining life after 2021 may be indicative of recent capital investments or asset revaluations extending the expected usability of assets.
- Summary Insights
- Overall, the data reveals an initial contraction in the net book value of property, plant, and equipment which stabilized and improved in the latter years reviewed. The drastic decline in land and land improvements value stands out and warrants further examination. The consistent reduction in depreciation expense corresponds with an increasing estimated remaining life, suggesting a shift toward newer or better-maintained assets extending asset longevity. These factors combined point to active management of the asset base, involving both disposals and reinvestment activities over the five-year period.