Dollar General Corp. (NYSE:DG)

The financial data for property, plant, and equipment over the six-year period reveals a consistent upward trend across nearly all categories, indicating ongoing investments and asset growth.

Land

The value of land steadily increased from $214.6 million in early 2019 to $236.9 million by early 2024. The growth is gradual, suggesting steady acquisition or revaluation of land assets without rapid expansions.

Land Improvements

Land improvements have grown from approximately $85.1 million in 2019 to $106.3 million in 2024, demonstrating moderate but continuous enhancements to land-related assets.

Buildings

Building assets show a notable increase from $1.22 billion in 2019 to $1.69 billion in 2024. The steady rise, especially the substantial increments post-2021, reflects significant capital expenditure on building infrastructure.

Leasehold Improvements

This category increased substantially from $583.5 million in 2019 to $1.19 billion in 2024. The nearly doubling of this asset class over five years indicates heavy investments in leased properties, possibly for renovations or expansions.

Furniture, Fixtures, and Equipment

This item experienced robust growth from $3.30 billion in 2019 to $6.60 billion in 2024, doubling within the period. The consistent and substantial increases suggest ongoing upgrades and additions in operational equipment and furnishings.

Construction in Progress

Values in construction in progress fluctuate notably, starting at $117.3 million in 2019, dipping to $62.2 million in 2020, and then rising sharply to $539.2 million by 2024. This pattern indicates variable capital projects with a surge in ongoing construction activity in recent years.

Right of Use Assets, Finance Leases

This category appears from 2021 onwards, growing from $163.1 million to $233.3 million in 2024. The presence and increase of these assets reflect accounting for leased properties under finance leases, aligned with changes in lease accounting standards.

Gross Property and Equipment

The overall gross property and equipment value grew from $5.52 billion in 2019 to over $10.60 billion in 2024, nearly doubling within five years. This demonstrates a strong expansion in the company's physical asset base.

Accumulated Depreciation and Amortization

Accumulated depreciation increased in magnitude from -$2.55 billion in 2019 to -$4.51 billion in 2024, reflecting the aging and usage of the asset base alongside the growth in assets. The proportional rise in accumulated depreciation is consistent with the increasing property and equipment investments.

Net Property and Equipment

The net property and equipment, which accounts for depreciation, increased steadily from $2.97 billion in 2019 to $6.09 billion in 2024. This signifies that, despite depreciation, the company's property and equipment base has substantially grown over the period.

In summary, the data reflects strong and continuous capital investment leading to substantial growth in the asset base related to property, plant, and equipment. The increasing values in leasehold improvements and furniture, fixtures, and equipment particularly stand out, alongside a significant rise in construction activity. The growth in right of use assets after 2020 aligns with evolving leasing practices. Overall, the upward trajectory in both gross and net property assets indicates a strategic focus on expanding and enhancing operational capacity.

Average Age Ratio

The average age ratio demonstrates a consistent downward trend over the six-year period. Starting at 48.04% in 2019, the ratio gradually decreases to 43.53% by 2024. This indicates that, on average, the property, plant, and equipment assets are becoming relatively newer in proportion to their estimated total useful life.

Estimated Total Useful Life

The estimated total useful life remains steady at 12 years throughout the entire period, indicating no changes in management's assessment of the lifespan of the assets.

Estimated Age (Time Elapsed Since Purchase)

The estimated age of the assets remains mostly constant around 6 years from 2019 to 2022 but decreases to 5 years in 2023 and 2024. This suggests a replacement or acquisition of newer assets during the latter years, effectively rejuvenating the asset base.

Estimated Remaining Life

The estimated remaining life of the assets is stable at 6 years during 2019 to 2022, then increases to 7 years in 2023 and 2024. This increase aligns with the observed reduction in average age ratio and estimated age, reflecting the infusion of newer assets and an extension of the projected usability period of the asset base.

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

Gross Property and Equipment

There is a consistent and significant increase in the gross property and equipment value from US$5,518,977 thousand in 2019 to US$10,598,226 thousand in 2024. This upward trajectory suggests ongoing investments and expansion in physical assets, more than nearly doubling over the six years.

Accumulated Depreciation and Amortization

The accumulated depreciation and amortization also show a steady increase, rising from US$2,548,171 thousand in 2019 to US$4,510,504 thousand in 2024. This indicates continued wear and usage of assets, reflecting a growing depreciation base that corresponds with the increase in gross property and equipment.

Land

The value attributed to land rises gradually but modestly from US$214,632 thousand to US$236,899 thousand between 2019 and 2024. This relatively stable and slow growth suggests fewer acquisitions or changes in land holdings compared to other asset classes.

Average Age Ratio

The average age ratio of the assets decreases from 48.04% in 2019 to 43.53% in 2024. A declining average age ratio indicates that the company is investing in newer assets or replacing older assets at a rate that reduces the overall asset fleet's average age, pointing towards modernization and asset renewal efforts.

Overall, the data reflects a pattern of ongoing investment in property and equipment, with asset values increasing consistently. Despite the natural accumulation of depreciation, the reduction in the average age ratio suggests a strategic focus on updating or expanding the asset base. The relatively steady increase in land value contrasts with more substantial growth in total property and equipment, highlighting a focus on improvements or additions beyond land acquisition alone.

Gross Property and Equipment

The gross property and equipment value exhibits a consistent upward trend over the six-year period. Starting at approximately $5.52 billion in early 2019, the figure increases year over year, reaching about $10.60 billion by early 2024. This nearly doubles the asset base within the span, indicating ongoing investments in physical assets.

Land

The value attributed to land also shows a steady but more moderate increase. From around $215 million in 2019, the land value rises progressively to nearly $237 million by 2024. The growth rate here is much slower compared to the overall gross property and equipment, suggesting that expansions or improvements are more concentrated in other categories of property and equipment rather than land acquisition.

Depreciation and Amortization Expense Related to Property and Equipment

This expense has steadily increased from about $454 million in 2019 to nearly $840 million in 2024. The rising depreciation expense aligns with the growing gross property and equipment balance, reflecting higher asset base subject to amortization and depreciation over time. The increase may also suggest the addition of assets with significant useful lives being depreciated.

Estimated Total Useful Life

The estimated total useful life of the assets has remained stable at 12 years throughout the analyzed period, implying no changes in asset lifespan assumptions used for depreciation calculations.

In summary, the data reveals significant investments in property, plant, and equipment over the years, with gross assets nearly doubling from 2019 to 2024. Land values have increased modestly in comparison, indicating that major asset additions likely pertain to buildings and equipment rather than land. The rising depreciation expense corresponds with the expanding asset base, while the useful life assumption remains unchanged, maintaining consistency in asset valuation policies.

Accumulated Depreciation and Amortization

There is a clear upward trend in accumulated depreciation and amortization over the six-year period analyzed. The value increased consistently from $2,548,171 thousand in 2019 to $4,510,504 thousand in 2024, indicating ongoing allocation of asset costs over time. This steady increase reflects continued usage and aging of property, plant, and equipment assets.

Depreciation and Amortization Expense Related to Property and Equipment

The annual depreciation and amortization expense also shows a consistent increase each year, rising from $454,100 thousand in 2019 to $839,900 thousand in 2024. This trend suggests either higher asset acquisitions or a shift towards assets with higher depreciation rates. The continuous growth in expense impact highlights increased charges affecting profit margins.

Time Elapsed Since Purchase

The time elapsed since purchase remains constant at six years from 2019 through 2022, then decreases to five years in 2023 and 2024. This slight reduction may indicate recent asset additions or replacements that are newer, potentially affecting the depreciation schedules and expense recognition.

Overall Analysis

The simultaneous rise in both accumulated depreciation and depreciation expense points to an expanding asset base or accelerated wear patterns. The decrease in average asset age starting 2023 suggests recent investments in property and equipment. These factors combined imply a focus on maintaining or upgrading operational capacity, with an increasing impact on financial statements through higher non-cash expenses.

Net property and equipment

The net property and equipment balance shows a consistent increasing trend over the six-year period. It increased from approximately $2.97 billion in early 2019 to about $6.09 billion by early 2024, representing more than a twofold increase. This steady growth indicates continuous investment in fixed assets.

Land

The value of land assets gradually increased from roughly $215 million in early 2019 to nearly $237 million in early 2024. The growth here is modest compared to the overall net property and equipment growth, suggesting land acquisition or revaluation is less aggressive than other asset categories.

Depreciation and amortization expense related to property and equipment

The depreciation and amortization expense steadily rose during the period from $454.1 million to $839.9 million. This increase is in line with the growth in net property and equipment, reflecting the impact of higher asset bases and possibly asset aging. The upward trend also suggests a growing portion of assets reaching or progressing through their useful lives.

Estimated remaining life of property and equipment

The estimated remaining life remained consistent at 6 years from 2019 through 2021, then extended slightly to 7 years from 2023 onwards. This increase might reflect changes in asset composition or reassessments of asset longevity, possibly due to newer or higher-quality investments.

Summary

Overall, the data reveals a sustained expansion in property, plant, and equipment over the six-year span, underscored by increased depreciation expenses that correlate with the asset base growth. Land holdings have incrementally increased but at a slower pace relative to total assets. The slight extension in estimated remaining life in later years could signal improved asset durability or strategic capital expenditures designed for longer use.