General Dynamics Corp. (NYSE:GD)

Machinery and equipment

The value of machinery and equipment demonstrates a steady increase from 2015 to 2018, rising from $4,394 million to $5,534 million, followed by a slight decline to $5,441 million in 2019. This indicates ongoing investment in machinery and equipment with a minor reduction in the final year observed.

Buildings and improvements

There is a consistent upward trend in buildings and improvements, increasing from $2,666 million in 2015 to $3,232 million in 2019. The growth is gradual year-over-year, suggesting sustained investment in physical infrastructure.

Land and improvements

Land and improvements also show a steady, although modest, increase over the period, growing from $328 million in 2015 to $400 million in 2019. This reflects ongoing but limited acquisition or enhancement of land assets.

Construction in process

Construction in process exhibits a marked increase, starting at $288 million in 2015 and rising to $688 million by 2019. The substantial growth, especially from 2017 onward, suggests a significant increase in ongoing capital projects or expansions under development.

PP&E, gross

The gross property, plant, and equipment value consistently increased from $7,676 million in 2015 to $9,761 million in 2019. This overall upward trajectory reflects continued capital expenditures and asset additions across all categories.

Accumulated depreciation

Accumulated depreciation increases in magnitude each year, moving from -$4,210 million in 2015 to -$5,286 million in 2019, indicating a systematic accumulation of depreciation expense on fixed assets over time, which is expected as assets age.

PP&E, net

The net property, plant, and equipment value remains relatively stable from 2015 to 2017, around $3,466 million to $3,517 million, but then rises significantly in 2018 to $4,348 million and slightly more to $4,475 million in 2019. This increase is attributable to the accelerated growth in gross PP&E outpacing the increase in accumulated depreciation, reflecting expansion and investment in capital assets.

Summary

Overall, the data reflect a strategy of ongoing investment in fixed assets, with steady growth in all categories and particularly strong increases in construction in process and net PP&E in the later years. This pattern suggests active asset development and capacity expansion initiatives. Despite rising accumulated depreciation, net PP&E has increased, indicating that additions to capital assets are outstripping the depreciation of existing assets.

Average Age Ratio

The average age ratio demonstrated a generally stable pattern over the observed period, starting at 57.29% in 2015 and increasing slightly to 59.9% in 2017. However, there was a decline after 2017, with the ratio settling at 56.47% by the end of 2019. This indicates that the proportion of the asset life consumed relative to total estimated life varied modestly but remained close to the mid to high 50s percentile range.

Estimated Total Useful Life

There was a gradual increase in the estimated total useful life of the assets from 20 years in 2015 to a peak of 22 years in 2017, followed by a notable decrease to 18 years in 2018. The estimated life then rose again to 20 years by 2019. This fluctuation suggests periodic reassessment of asset longevity, possibly reflecting changes in maintenance practices, technological advancements, or asset composition.

Estimated Age, Time Elapsed Since Purchase

The estimated age of the assets shows minor fluctuations, remaining fairly consistent around 12 to 13 years from 2015 to 2017. A decrease to 10 years occurred in 2018, indicating the addition of newer assets or replacement of older ones, followed by a slight rise to 11 years in 2019. This trend points to ongoing investment and renewal of property, plant, and equipment during the period.

Estimated Remaining Life

The estimated remaining life of assets held steady at around 9 years from 2015 through 2017, with a small decline to 8 years in 2018, before returning to 9 years in 2019. The maintained remaining life levels suggest consistent replacement or extension of asset life to balance aging equipment.

The financial data for property, plant, and equipment over the period from 2015 to 2019 reveals several notable trends.

Accumulated Depreciation

There is a consistent increase in accumulated depreciation, rising from US$4,210 million in 2015 to US$5,286 million in 2019. This upward trend represents ongoing usage and aging of the company's fixed assets, reflecting the regular depreciation charges recognized each year.

Property, Plant, and Equipment (PP&E), Gross

The gross PP&E value shows a steady increase, growing from US$7,676 million in 2015 to US$9,761 million in 2019. This indicates that the company has been investing in acquiring or constructing fixed assets throughout the period, contributing to an expansion of its asset base.

Land and Improvements

Land and improvements also exhibit an increasing trend, though on a smaller scale compared to overall PP&E. The value rises from US$328 million in 2015 to US$400 million in 2019, suggesting steady investments in land-related assets or enhancements.

Average Age Ratio

The average age ratio, expressed as a percentage, fluctuates slightly but remains relatively stable over the five-year period. Starting at 57.29% in 2015, it peaks at 59.9% in 2017 before declining to around 56% in 2018 and 2019. This stability in the average age ratio suggests that the company's asset base is being refreshed at a rate that roughly offsets aging, maintaining a consistent asset lifecycle profile.

Overall, the data indicates a pattern of ongoing capital investment alongside a consistent accumulation of depreciation, which is typical for a company maintaining and updating its operational infrastructure. The steady increase in both gross PP&E and land values, combined with a relatively stable average age ratio, implies a balanced approach to asset acquisition and replacement.

Gross Property, Plant, and Equipment (PP&E)

The gross PP&E value shows a consistent upward trend over the five-year period. Starting at $7,676 million in 2015, it increased steadily each year, reaching $9,761 million by the end of 2019. This represents a cumulative growth of approximately 27.2%, indicating ongoing investment in long-term assets.

Land and Improvements

The value of land and improvements also demonstrated gradual growth, rising from $328 million in 2015 to $400 million in 2019. This marks an increase of about 22%, which corresponds with the overall expansion in gross PP&E, reflecting enhancements or acquisitions related to land resources.

Depreciation of Property, Plant, and Equipment

Depreciation expense showed some volatility during the period. It remained stable at $366 million from 2015 through 2016, slightly decreased to $362 million in 2017, surged to $493 million in 2018, and then declined to $466 million in 2019. The spike in 2018 suggests a possible change in depreciation policy or acceleration of asset write-offs during that year.

Estimated Total Useful Life

The estimated total useful life of the PP&E assets generally trended upward from 20 years in 2015 to 22 years in 2017, followed by a notable decline to 18 years in 2018, and then a partial recovery to 20 years in 2019. This fluctuation may reflect asset revaluations or shifts in management’s estimates regarding the longevity or usage intensity of the assets.

Overall Observations

The data reveals continuous capital investment reflected in the growing gross PP&E and land values. However, the variability in depreciation expenses and estimated useful life indicates dynamic asset management practices over the period. These could point to adjustments in asset valuation or lifecycle assessment potentially aimed at optimizing financial reporting or tax strategies.

Accumulated Depreciation

The accumulated depreciation shows a consistent upward trend from 2015 to 2019, increasing from 4,210 million US dollars in 2015 to 5,286 million US dollars in 2019. This steady rise indicates ongoing depreciation of property, plant, and equipment assets over the observed period.

Depreciation Expense

The annual depreciation expense remained relatively stable from 2015 through 2017, hovering around 362 to 366 million US dollars. However, there was a notable increase in 2018 to 493 million US dollars, followed by a slight decrease to 466 million US dollars in 2019. This fluctuation may reflect changes in asset acquisition, write-offs, or revisions in depreciation methods or estimates during this period.

Time Elapsed Since Purchase

The time elapsed since purchase indicates some variability, generally reflecting the average age of the property, plant, and equipment assets. It was steady at 12 years for 2015 and 2016, increased marginally to 13 years in 2017, then decreased to 10 years in 2018, and rose back to 11 years in 2019. This variability suggests periodic acquisition or disposal of assets that affect the average holding period.

Overall Insights

Overall, the data reveals a consistent accumulation of depreciation, indicative of asset aging and usage over time. The spike in depreciation expense in 2018 and subsequent decrease in 2019 may correlate with asset portfolio changes or accounting adjustments. The fluctuation in the average time elapsed since purchase supports the notion of active asset management during the period.

Net Property, Plant, and Equipment (PP&E)

The net PP&E values show relative stability between 2015 and 2017, beginning at 3,466 million USD and slightly increasing by 51 million USD over this period. A substantial increase occurs in 2018, rising to 4,348 million USD, followed by a moderate increase in 2019 to 4,475 million USD. This indicates significant investment or acquisition of assets in 2018, followed by continued, though slower, growth the next year.

Land and Improvements

This category displays a consistent upward trend over the five years. The value increases steadily from 328 million USD in 2015 to 400 million USD in 2019. This consistent rise reflects ongoing investments or revaluation in land assets, suggesting strategic expansion or enhancements in property holdings.

Depreciation of Property, Plant, and Equipment

Depreciation expenses remain steady at 366 million USD for 2015 and 2016, slightly decreasing to 362 million USD in 2017. A marked increase is observed in 2018, reaching 493 million USD, followed by a slight decline to 466 million USD in 2019. The sharp rise in 2018 depreciation correlates with the significant increase in net PP&E for the same year, reflecting the accelerated recognition of asset usage or adjustments stemming from new assets or revised depreciation methods.

Estimated Remaining Life

The estimated remaining life of assets is relatively stable, maintaining nine years in most periods except for a dip to eight years in 2018. This temporary decrease coincides with the spike in depreciation and PP&E values that year, possibly related to changes in asset composition or revaluation practices. The return to nine years in 2019 indicates a normalization or reassessment aligning with previous estimates.

Overall Analysis

The period under review shows general growth in asset base, notably with a substantial expansion in 2018. The corresponding increase in depreciation expense suggests both asset additions and a possible shift in asset aging or cost allocation practices. The steady increase in land and improvements indicates focused investment in foundational property assets. The stability in estimated remaining life, except for the brief fluctuation in 2018, suggests consistent asset management policies throughout the five years.