Chevron Corp. (NYSE:CVX)

The analysis of property, plant, and equipment data over the five-year period reveals distinct trends across geographic segments, business units, and overall asset valuation categories.

Geographic Segments – United States

The net value of property, plant, and equipment located in the United States shows a general increase from 2020 to 2024. Specifically, the asset values rose from approximately $96.6 billion in 2020 to about $124.4 billion in 2024. Despite a slight dip in 2021, the trend from 2022 onwards indicates a noticeable upward trajectory.

Geographic Segments – International

In contrast to the United States, international assets experienced a consistent decline over the same period. The international segment's value decreased from approximately $209.8 billion in 2020 to roughly $176.4 billion in 2024, showing a steady contraction each year.

Business Units – Upstream

The upstream segment reveals a more variable pattern. Starting at around $306.4 billion in 2020, there was a decline to approximately $285.1 billion by 2022, followed by a partial recovery to roughly $301.9 billion in 2023. By 2024, the value slightly decreased again to approximately $300.8 billion. This suggests some volatility but generally stable values around the $300 billion mark.

Business Units – Downstream

The downstream segment shows a steady increase in asset values, growing from about $34.5 billion in 2020 to $40.7 billion in 2024. Both the United States and international subcomponents within downstream have exhibited marginal growth or remained relatively stable, with the United States showing consistent incremental increases.

Business Units – All Other

Assets classified as "All other" display fluctuations but no clear long-term trend. Starting at $4.3 billion in 2020, the value peaked at $4.9 billion in 2021, then declined to approximately $4.4 billion by 2024.

Overall Properties, Plant and Equipment at Cost

The total cost basis of properties, plant, and equipment decreased from around $345.2 billion in 2020 to $327.8 billion in 2022. It then saw an increase to $346.1 billion in 2023 before slightly declining again to about $345.9 billion in 2024. This pattern suggests a period of reduction followed by investment or acquisition activity and stabilization in recent years.

Accumulated Depreciation, Depletion, and Amortization

The accumulated depreciation, depletion, and amortization increased steadily in absolute terms (noting these are negative values) from -$188.6 billion in 2020 to -$198.1 billion in 2024. This steady increase reflects ongoing asset aging and usage over time, contributing to asset valuation adjustments.

Net Properties, Plant and Equipment

The net book value, representing the cost less accumulated depreciation and related amortization, shows a decline from approximately $156.6 billion in 2020 to $143.6 billion in 2022. It then improved to $153.6 billion in 2023 but dropped again to around $147.8 billion in 2024. This pattern indicates some recovery in asset values after initial decreases, potentially due to asset additions or revaluations, followed by moderate depreciation effects.

Average Age Ratio

The average age ratio exhibits a generally increasing trend over the five-year period. Starting at 54.63% in 2020, it rises slightly each year, reaching 57.28% by 2024. This gradual increase suggests that the property, plant, and equipment are aging steadily, with a larger proportion of the asset base closer to the end of its useful life.

Estimated Total Useful Life

The estimated total useful life of the assets shows an upward adjustment in the early years, increasing from 18 years in 2020 to 20 years by 2022. It remains stable at 20 years for both 2023 and 2024, implying a reassessment or extension of the asset lifespan, possibly due to improved maintenance or technological upgrades.

Estimated Age (Time Elapsed Since Purchase)

The estimated age of the assets increases by one year from 10 years in 2020 to 11 years by 2021 and then remains constant at 11 years through 2024. This plateau could indicate the inclusion of newer assets balancing out the aging of older assets, maintaining the average asset age.

Estimated Remaining Life

The estimated remaining life commences at 8 years in 2020 and 2021, then increases to 9 years from 2022 onwards, remaining constant through 2024. This increase aligns with the rise in total useful life and the stabilization of asset age, suggesting that asset replacements or reassessments have effectively extended the expected utility period of the equipment.

Accumulated depreciation, depletion and amortization

The balance shows a declining trend from 2020 (US$188,614 million) to 2022 (US$184,194 million), suggesting a reduction in the cumulative allocation of asset costs over time during this period. However, this trend reverses starting in 2023, with increases to US$192,462 million and US$198,134 million in 2023 and 2024 respectively. This shift may indicate an acceleration in depreciation or asset write-downs in the latest years.

Properties, plant and equipment, at cost

The carrying value at cost exhibits fluctuations throughout the five-year period. It decreases steadily from US$345,232 million in 2020 to US$327,785 million in 2022, signaling potential asset disposals, impairments, or limited capital expenditures during this timeframe. However, there is a notable rebound in 2023 to US$346,081 million, followed by slight stabilization at US$345,933 million in 2024. This pattern suggests renewed investment in property, plant, and equipment assets after 2022.

Average age ratio (%)

The average age ratio remains relatively stable across the years, ranging from 54.63% in 2020 to 57.28% in 2024. Minor fluctuations occur, with a slight increase initially, a marginal dip in 2022 and 2023, and an uptick in 2024. The consistently moderate percentage around 55-57% implies that the asset base has a balanced age profile, neither predominantly new nor excessively aged assets.

Summary of trends

Between 2020 and 2022, the company appears to have reduced its net investment in property, plant, and equipment, as reflected by declining cost values and accumulated depreciation. The subsequent period from 2023 onward indicates increased asset additions or reinvestment, accompanied by a rising accumulated depreciation, which may reflect higher asset usage or updated accounting assessments. The stable average age ratio suggests a consistent lifecycle management of assets over the intervals analyzed.

The analysis of the annual property, plant, and equipment data reveals several notable trends over the five-year period from 2020 to 2024.

Properties, Plant and Equipment, at Cost

The total cost of properties, plant, and equipment exhibited a fluctuating pattern. The value decreased from 345,232 million US dollars in 2020 to 327,785 million in 2022, indicating a reduction in capital assets or divestitures during this period. Subsequently, it increased to 346,081 million in 2023, nearly reaching its initial level, and remained almost constant at 345,933 million in 2024.

Depreciation Expense

Depreciation expense showed a consistent decline from 19,508 million US dollars in 2020 to 16,319 million in 2022, suggesting lower charges against earnings for asset usage or disposal of older assets. However, this trend reversed slightly with an increase to 17,326 million in 2023 and a marginal decrease to 17,282 million in 2024. This fluctuation may reflect changes in depreciation policies, asset composition, or acquisition timing.

Estimated Total Useful Life

The estimated total useful life of the assets increased from 18 years in 2020 to 20 years by 2022 and remained stable thereafter. This increase indicates a reassessment of asset longevity, potentially leading to lower annual depreciation charges and reflecting confidence in the durability or extended usage of the property, plant, and equipment.

Overall, the data displays a contraction of fixed asset cost base initially, followed by recovery to previous levels. The decline in depreciation expense aligns with the extension of estimated useful life, which would typically reduce depreciation charges. The slight rise in depreciation after 2022 may be linked to asset additions or changes in accounting assumptions. Stability in total useful life and cost in the latter years suggests a period of consolidation.

The accumulated depreciation, depletion, and amortization show a general upward trend from 2020 to 2024. The value increased from 188,614 million US dollars in 2020 to 198,134 million US dollars in 2024, indicating a steady accumulation of depreciation over time. There was a slight dip in 2022, where the accumulated figure decreased to 184,194 million US dollars from 189,084 million US dollars in 2021, but the upward trend resumed thereafter.

Depreciation expense demonstrates a declining trend over the analyzed period, decreasing from 19,508 million US dollars in 2020 to 17,282 million US dollars in 2024. The expense consistently fell year-over-year from 2020 through 2022, with a minor increase in 2023 before decreasing again slightly in 2024. This pattern suggests a reduction in the rate of depreciation charges recognized annually.

The time elapsed since purchase stabilized at 11 years from 2021 onwards, reflecting a mature asset base that has not undergone significant new acquisitions or disposals affecting the average age of the assets.

Accumulated Depreciation, Depletion, and Amortization

Received consistent increases overall except for a decline in 2022. The increase indicates ongoing recognition of asset cost allocation across the asset life.

Depreciation Expense

Displayed a downward trend from 2020 to 2024, which may reflect slowing investment in new assets or changes in asset composition and useful life assumptions.

Time Elapsed Since Purchase

Remained constant at 11 years beyond 2020, suggesting an aging asset base without substantial renewal or turnover in recent years.

Overall, the data indicates a steady aging of the property, plant, and equipment portfolio, with continued but slightly decreasing annual depreciation charges. The slight fluctuation and the decrease in accumulated depreciation in 2022 warrant attention for further investigation into asset disposals or revaluations during that period.

The analysis of the property, plant, and equipment financial data over the five-year period reveals several notable trends and insights.

Net Properties, Plant, and Equipment Value

The net value of properties, plant, and equipment showed a general downward trend from 2020 to 2022, decreasing from 156,618 million USD in 2020 to 143,591 million USD in 2022. This decline suggests either asset disposals, impairments, or depreciation outpacing capital expenditures during this period. However, in 2023, the net value rebounded to 153,619 million USD, indicating possible investments or acquisitions that bolstered the asset base. The subsequent year 2024 saw a moderate decrease to 147,799 million USD, reflecting either continued depreciation or partial asset reductions.

Depreciation Expense

Depreciation expense exhibited a consistent decline from 19,508 million USD in 2020 to 16,319 million USD in 2022. This decrease aligns with the reducing net asset base during the same period. A moderate increase in depreciation to 17,326 million USD was observed in 2023, which may correspond to the increased net asset value that year. The depreciation expense slightly decreased again to 17,282 million USD in 2024, suggesting stabilization in asset usage or changes in depreciation policies.

Estimated Remaining Life of Assets

The estimated remaining life of property, plant, and equipment was stable at 8 years in 2020 and 2021, then increased to 9 years from 2022 onward. This change indicates an extension in the anticipated useful life of assets, potentially due to asset renewals, technological upgrades, or revisions in depreciation schedules.

Overall, the data suggests a period of asset contraction followed by reinvestment or expansion around 2023, coupled with adjustments in asset longevity expectations. The depreciation expense trends correlate logically with the fluctuations in the net asset values, reflecting changes in asset bases and their useful life estimations.