Delta Air Lines Inc. (NYSE:DAL)

The data reveals several key trends in the company's property, plant, and equipment over the five-year period ending December 31, 2021.

Flight Equipment

The value of flight equipment generally increased from 2017 to 2019, rising from $30,688 million to $36,713 million. However, a notable decline occurred in 2020, dropping to $31,572 million, likely reflecting reduced investments or impairments during that year. By 2021, the value recovered somewhat to $33,368 million, though it remained below the 2019 peak.

Ground Property and Equipment

Ground property and equipment showed a downward trend from $7,665 million in 2017 to $4,667 million in 2018, followed by a gradual recovery over the next three years, climbing back to $7,758 million by 2021. This suggests initial disposal or impairment followed by renewed investment or acquisition activity in later years.

Information Technology-Related Assets

Starting from 2018, the reported values for information technology-related assets remained relatively stable, hovering around $3,300 to $3,400 million through 2021. This indicates consistent investment levels in IT hardware and software assets over these years.

Flight and Ground Equipment Under Finance Leases

The balance under finance leases increased steadily from $1,147 million in 2017 to $2,052 million in 2021, reflecting growing utilization of lease financing for equipment acquisition, which could indicate a strategic shift toward leveraging rather than outright purchases.

Advance Payments for Equipment

Advance payments decreased progressively from $1,160 million in 2017 to $853 million in 2021, signaling a reduction in prepayments possibly due to changes in purchasing patterns or payment terms with suppliers.

Property and Equipment, Gross

The gross value of property and equipment showed an overall upward trend, rising from $40,660 million in 2017 to a peak of $48,337 million in 2019. A decline occurred in 2020 to $44,040 million, with a partial recovery to $47,420 million in 2021. This pattern aligns with the trends observed in the flight and ground equipment categories.

Accumulated Depreciation and Amortization

Accumulated depreciation and amortization increased consistently year over year, from -$14,097 million in 2017 to -$18,671 million in 2021. This reflects ongoing depreciation expenses over the assets’ useful lives and suggests a mature asset base with substantial wear and usage.

Property and Equipment, Net

Net property and equipment rose from $26,563 million in 2017 to a high of $31,310 million in 2019, followed by a drop to $26,529 million in 2020, then a partial rebound to $28,749 million in 2021. This trend indicates that the net asset base expanded until 2019, was significantly impacted during 2020, possibly due to economic or operational challenges, and started to recover thereafter.

In summary, the company's property, plant, and equipment values demonstrate cyclical investment patterns with peaks around 2019, a contraction in 2020, and a partial recovery by 2021. Lease financing has been increasingly employed for equipment acquisitions, and accumulated depreciation continues to grow steadily, reflecting the aging asset base. The trends suggest responsive asset management in the face of external pressures affecting capital expenditures and asset utilization.

Average Age Ratio

The average age ratio exhibits a general increasing trend over the five-year period. It starts at 34.67% in 2017 and rises moderately to 35.83% in 2018, before slightly decreasing to 35.23% in 2019. Following this, there is a noticeable increase to 39.76% in 2020, with a minor decline to 39.37% in 2021. This pattern suggests an overall aging of property, plant, and equipment assets with some fluctuations.

Estimated Total Useful Life

The estimated total useful life of assets remains stable at 19 years from 2018 through 2020 after an initial 18 years in 2017. In 2021, a significant increase occurs, raising the useful life estimate to 24 years. This change indicates an adjustment in the asset lifespan assumptions, potentially reflecting updated accounting policies or improvements in asset durability.

Estimated Age (Time Elapsed Since Purchase)

The estimated age of assets progresses steadily each year, beginning at 6 years in 2017 and incrementing by approximately one year annually, reaching 9 years in 2021. This consistency is expected and aligns with normal asset aging over time.

Estimated Remaining Life

The estimated remaining life remains constant at 12 years from 2017 through 2020, despite the increase in asset age. In 2021, it rises to 14 years, which correlates with the increased total useful life in the same year. This suggests a revision in asset life expectations, allowing for a longer remaining usage period for the existing assets.

Accumulated Depreciation and Amortization

The accumulated depreciation and amortization figures demonstrate a consistent upward trajectory over the analyzed period. Starting at $14,097 million in 2017, the balance increased steadily each year, reaching $18,671 million by the end of 2021. This reflects ongoing asset usage and wear, indicative of the company's continuous operational activity and depreciation policies.

Property and Equipment, Gross

The gross value of property and equipment showed an overall increasing trend from 2017 through 2021, although with notable fluctuations. The value rose from $40,660 million in 2017 to a peak of $48,337 million in 2019. A decline was observed in 2020 to $44,040 million, likely influenced by external factors during that period, followed by a partial recovery to $47,420 million in 2021. This pattern suggests capital investments balanced against asset disposals or impairments.

Average Age Ratio

The average age ratio of the assets reveals a gradual increase over the five-year span, beginning at 34.67% in 2017 and reaching a high of 39.76% in 2020. A slight decrease occurred in 2021 to 39.37%. This upward trend in average age indicates an aging asset base, which may imply either a slowdown in new asset acquisitions or prolonged utilization of existing assets. The marginal decrease in the final year suggests some revitalization of the asset portfolio.

Overall Observations

The data portrays a company with a steadily aging asset base, accompanied by growing accumulated depreciation, which aligns with the aging profile. Gross property and equipment values increased overall but with variability, reflecting strategic capital expenditure decisions in response to operational needs and external circumstances. The slight reduction in asset age in the latest year may signal renewed investment activity aimed at asset modernization.

Property and equipment, gross

The gross value of property and equipment experienced a general upward trend between 2017 and 2021, increasing from $40,660 million to $47,420 million. The value rose steadily from 2017 to 2019, reaching a peak of $48,337 million. However, there was a notable decline in 2020 to $44,040 million, likely influenced by external factors impacting the asset base. The value rebounded in 2021, though it did not fully regain the 2019 peak level.

Depreciation and amortization expense related to property and equipment

Depreciation and amortization expenses generally remained within a narrow range from 2017 to 2021. Expenses increased from $2,200 million in 2017 to a peak of $2,600 million in 2019. In 2020, the expense decreased to $2,300 million and further declined in 2021 to $2,000 million. This pattern suggests a reduction in depreciation charges potentially linked to asset disposals or changes in asset valuation.

Estimated total useful life

The estimated total useful life of property and equipment showed a slight upward adjustment from 18 years in 2017 to 19 years from 2018 through 2020. In 2021, the useful life estimate increased more significantly to 24 years. This extension indicates a reassessment of asset longevity, which would impact depreciation schedules by reducing annual depreciation charges going forward.

The data presents a clear overview of the accumulated depreciation, annual depreciation expense, and the aging of property, plant, and equipment over a five-year period ending in 2021.

Accumulated depreciation and amortization

There is a consistent upward trend in accumulated depreciation and amortization from 2017 through 2021. The balance increased from $14,097 million in 2017 to $18,671 million in 2021. This progression suggests ongoing depreciation charges on the asset base, reflecting the consumption of the assets' economic benefits over time.

Depreciation and amortization expense related to property and equipment

The annual depreciation expense shows some variability. It rose from $2,200 million in 2017 to a peak of $2,600 million in 2019, followed by a decline to $2,000 million by 2021. The peak in 2019 could indicate a period of accelerated depreciation or an increase in depreciable asset acquisitions prior to this date. The subsequent decrease might reflect a reduction in new asset additions, changes in asset mix, or modifications in depreciation policies.

Time elapsed since purchase

The average age of the property, plant, and equipment increased steadily from 6 years in 2017 to 9 years in 2021. This indicates an aging asset base, which may imply approaching the point for significant maintenance, upgrades, or replacements, potentially impacting future capital expenditure plans.

Overall, the data suggests an expanding accumulated depreciation consistent with asset aging. The reduction in depreciation expense after 2019 could signal shifts in asset acquisition or accounting policies, while the increasing asset age highlights the need to monitor the condition and renewal of the fixed asset portfolio.

Property and Equipment, Net

The net value of property and equipment exhibited an overall upward trajectory from 2017 to 2021. Beginning at $26,563 million in 2017, the figure increased to $31,310 million in 2019, representing steady growth. However, in 2020, there was a notable decline to $26,529 million, followed by a rebound to $28,749 million in 2021. This pattern suggests initial investment expansion, a potential asset reduction or impairment during 2020, and partial recovery thereafter.

Depreciation and Amortization Expense Related to Property and Equipment

The depreciation and amortization expense grew from $2,200 million in 2017 to a peak of $2,600 million in 2019. This increase aligns with the rising net property and equipment values, reflecting the amortization of higher asset bases. In 2020, the expense declined to $2,300 million and further decreased to $2,000 million by 2021. The reduction in expense during these years may relate to decreased asset utilization, changes in asset composition, or adjustments in amortization scheduling.

Estimated Remaining Life

The estimated remaining life of the property and equipment remained constant at 12 years from 2017 through 2020. In 2021, this estimate increased to 14 years, indicating a revision in asset longevity assumptions. This change could be attributed to updated maintenance practices, asset upgrades, or revisions in accounting estimates regarding useful life, which would affect depreciation calculations going forward.