GE Aerospace (NYSE:GE)

A significant decline in property, plant, and equipment (PP&E) is observed over the five-year period. The original cost of PP&E decreased substantially from US$31,904 million in 2021 to US$17,388 million in 2025. This decrease is accompanied by a corresponding reduction in accumulated depreciation and amortization, though the decline in net carrying value is more pronounced.

Land and Improvements

Land and improvements experienced a consistent decrease, falling from US$585 million in 2021 to US$139 million in 2025. The most substantial reduction occurred between 2022 and 2023, and again between 2023 and 2024. This suggests potential land sales or reclassifications.

Buildings, Structures and Related Equipment

The original cost of buildings, structures, and related equipment decreased from US$8,311 million in 2021 to US$3,295 million in 2025. The rate of decline accelerated after 2023, indicating potential disposals or impairments. Accumulated depreciation for this category also decreased, but at a slower rate than the reduction in original cost, contributing to the overall decline in net carrying value.

Machinery and Equipment

Machinery and equipment, representing the largest portion of PP&E, decreased from US$21,037 million in 2021 to US$12,757 million in 2025. A significant drop is noted between 2022 and 2023, and again between 2023 and 2024. This suggests substantial asset retirements or disposals. The corresponding decrease in accumulated depreciation is evident, but the net carrying value still reflects a considerable reduction.

Leasehold Costs and Manufacturing Plant Under Construction

This category also shows a decreasing trend, moving from US$1,971 million in 2021 to US$1,197 million in 2025. While there are fluctuations, the overall trend is downward, potentially indicating the completion of construction projects and the associated capitalization of costs.

Net Carrying Value

The net carrying value of PP&E decreased significantly from US$13,003 million in 2021 to US$6,969 million in 2025. The most substantial decline occurred between 2023 and 2024, indicating a period of significant asset write-downs or disposals. The rate of decline slowed somewhat between 2024 and 2025, but the overall trend remains negative.

The consistent declines across most PP&E categories suggest a strategic shift in asset allocation, potentially involving divestitures, reduced capital expenditure, or a change in business focus. Further investigation into the specific reasons for these reductions would be necessary to fully understand the implications for the organization.

The analysis of property, plant, and equipment reveals a consistent pattern regarding asset age and useful life estimates over the five-year period. The average age ratio exhibits relative stability, while estimates of total useful life and remaining life demonstrate a gradual shift.

Average Age Ratio

The average age ratio remained relatively consistent, fluctuating between 60.35% and 62.12% throughout the period. It peaked at 62.12% in 2023 before decreasing slightly to 60.40% in 2025. This suggests a stable proportion of the asset base is nearing the midpoint of its useful life.

Useful Life and Age Estimates

Estimated total useful life increased steadily from 17 years in 2021 to 20 years in 2025. Simultaneously, the estimated age, representing the time elapsed since purchase, increased from 10 years in 2021 to 12 years in 2024 and remained constant through 2025. This indicates a potential shift in the composition of the asset base towards newer acquisitions or a reassessment of the useful lives of existing assets.

Remaining Useful Life

Estimated remaining useful life remained constant at 7 years from 2021 to 2024, despite the increase in estimated age and total useful life. However, in 2025, the remaining useful life increased to 8 years. This suggests that the impact of the increased total useful life estimate began to be reflected in the remaining life calculation, potentially due to recent asset acquisitions with longer expected lifespans or revisions to depreciation schedules.

Overall, the trends suggest a managed approach to asset valuation and depreciation. The consistent average age ratio, coupled with the increasing estimates of total useful life and, ultimately, remaining useful life, indicates a potential lengthening of the asset lifecycle or a strategic investment in assets with extended operational capabilities.

An examination of the financial information reveals notable trends in property, plant, and equipment, alongside associated depreciation and amortization. The original cost of property, plant, and equipment, excluding right-of-use operating lease assets, demonstrates a consistent decline over the five-year period. Accumulated depreciation and amortization also decreased significantly, particularly from 2022 to 2024, before showing a slight increase in the most recent year. Land and improvements experienced a more substantial reduction in value throughout the period.

Property, Plant, and Equipment – Original Cost

The original cost of property, plant, and equipment decreased from US$31,904 million in 2021 to US$17,388 million in 2025. The most significant reduction occurred between 2022 and 2024, suggesting substantial asset disposals or impairments during that timeframe. The rate of decline slowed between 2024 and 2025.

Accumulated Depreciation and Amortization

Accumulated depreciation and amortization began at US$18,901 million in 2021 and fell to US$9,674 million by 2024. This decrease aligns with the reduction in the original cost of assets, indicating that depreciated assets were being removed from the balance sheet. A modest increase to US$10,419 million in 2025 suggests a stabilization or resumption of depreciation on the remaining asset base.

Land and Improvements

The value of land and improvements decreased steadily from US$585 million in 2021 to US$139 million in 2025. This consistent decline could be attributed to asset sales, reclassifications, or write-downs. The reduction is proportionally larger than that observed in the overall property, plant, and equipment balance.

Average Age Ratio

The average age ratio remained relatively stable, fluctuating between 60.35% and 62.12% over the period. While there were minor variations, the ratio did not exhibit a clear upward or downward trend. The slight decrease in 2025, to 60.40%, may indicate a marginal shift towards a younger asset base, but the change is minimal.

The combined effect of decreasing original cost and decreasing accumulated depreciation suggests a significant restructuring of the asset base. The consistent decline in land and improvements warrants further investigation to understand the underlying reasons. The stable average age ratio, despite the substantial changes in asset values, implies that the company is not significantly altering the overall age profile of its remaining assets.

A review of the presented financial information reveals notable trends in property, plant, and equipment, particularly concerning original cost and estimated useful life. The original cost of property, plant, and equipment, excluding right-of-use operating lease assets, demonstrates a significant decline over the five-year period. While relatively stable between 2021 and 2022, a substantial decrease is observed from 2022 to 2023, followed by further reductions in subsequent years. Land and improvements also exhibit a decreasing trend in value, though less pronounced than the overall property, plant, and equipment cost.

Concurrently, depreciation and amortization expenses have decreased over the period, mirroring the decline in the asset base. However, the rate of decrease in depreciation expense appears to be slowing relative to the decrease in the original cost of assets. This suggests a potential shift in the composition of the asset base or changes in depreciation methods.

Estimated Useful Life

The estimated total useful life of property, plant, and equipment has consistently increased from 17 years in 2021 to 20 years in 2025. This lengthening of the estimated useful life could indicate a change in the nature of the assets being acquired, improvements in asset maintenance extending their operational lifespan, or a deliberate accounting policy adjustment. The increase in estimated useful life would result in a lower annual depreciation expense, all other factors being equal, potentially impacting reported profitability.

The combined effect of decreasing asset costs and increasing estimated useful lives suggests a potential restructuring of the asset base. The significant reduction in original cost, coupled with the extended useful life estimates, warrants further investigation to understand the underlying drivers. This could include asset disposals, impairment charges, or a strategic shift towards assets with longer operational lives. The slowing decline in depreciation expense relative to the asset base reduction also merits attention, as it could indicate a change in the depreciation pattern or the asset mix.

The trend in land and improvements, while smaller in magnitude, aligns with the overall reduction in property, plant, and equipment. This suggests a consistent approach to asset management across different asset categories. Continued monitoring of these trends is recommended to assess their impact on future financial performance and capital expenditure requirements.

An examination of the provided financial information reveals notable trends in accumulated depreciation, annual depreciation expense, and the reported age of property, plant, and equipment. A significant decrease in accumulated depreciation is observed over the period, coupled with a corresponding decline in annual depreciation expense. The reported time elapsed since purchase remains relatively stable for the majority of the period, with a slight increase towards the end.

Accumulated Depreciation and Amortization

Accumulated depreciation and amortization decreased substantially from US$19,292 million in 2022 to US$9,674 million in 2024. This represents a reduction of nearly 50% over two years. While an increase is noted in 2025 to US$10,419 million, it remains significantly lower than the levels recorded in 2021 and 2022. This decline suggests either a significant reduction in the company’s depreciable asset base, a change in depreciation methods, or potentially, a revaluation of assets.

Depreciation and Amortization Expense

Depreciation and amortization expense mirrors the trend in accumulated depreciation, decreasing from US$1,802 million in 2022 to US$834 million in 2024. A slight increase to US$863 million is observed in 2025. This decrease is consistent with a shrinking depreciable asset base or a shift to depreciation methods resulting in lower expense recognition. The correlation between the expense and accumulated depreciation suggests the changes are systematic and not isolated events.

Time Elapsed Since Purchase

The time elapsed since purchase remained constant at 11 years in 2022 and 2023. An increase to 12 years is recorded in both 2024 and 2025. This indicates that, on average, the company’s property, plant, and equipment are aging. However, the substantial reduction in accumulated depreciation and depreciation expense suggests that newer assets may be replacing older ones, offsetting the natural aging process. The relatively small change in the time elapsed since purchase, despite the large changes in depreciation, warrants further investigation.

The combined trends suggest a potential strategic shift in asset management. The significant reduction in depreciation metrics, alongside a modest increase in the average age of assets, could indicate a program of asset disposals, replacements, or a change in accounting policies related to depreciation. Further analysis, including a review of asset additions and disposals, would be necessary to confirm the underlying drivers of these trends.

The net carrying value of property, plant, and equipment, excluding right-of-use operating lease assets, demonstrates a significant decreasing trend over the observed period. Beginning at US$13,003 million in 2021, the value declined to US$6,220 million in 2024 before increasing slightly to US$6,969 million in 2025. This suggests substantial asset write-downs or disposals occurred between 2021 and 2024, with a moderation of that trend in the most recent year.

Land and improvements also experienced a decline in carrying value, though less pronounced than the overall property, plant, and equipment. The value decreased from US$585 million in 2021 to US$131 million in 2024, followed by a modest increase to US$139 million in 2025. This could indicate land sales or impairment charges.

Depreciation and amortization expense consistently decreased from US$1,871 million in 2021 to US$834 million in 2024, before increasing slightly to US$863 million in 2025. The decrease in depreciation expense aligns with the reduction in the carrying value of property, plant, and equipment, as depreciation is calculated on the remaining book value of assets.

Estimated Remaining Life

The estimated remaining life of the property, plant, and equipment remained constant at 7 years from 2021 through 2024. An increase to 8 years is observed in 2025. This suggests a potential reassessment of asset useful lives, possibly due to recent capital expenditures extending the productive capacity of existing assets, or a change in depreciation methodology. The increase in estimated remaining life in 2025, coupled with the slight increase in net carrying value, may indicate investment in asset maintenance or upgrades.

The combination of decreasing asset values and decreasing depreciation expense suggests a significant turnover or retirement of assets. The stabilization in 2025, with a slight increase in both carrying value and depreciation, warrants further investigation to determine the underlying causes and potential implications for future capital expenditure requirements.