General Mills Inc. (NYSE:GIS)

The analysis of the annual property, plant, and equipment data reveals several noteworthy trends and fluctuations over the observed periods.

Land

The book value of land shows a consistent decline from 2014 to 2019, falling from $106.9 million to $73.6 million. This decline indicates potential divestiture, impairment, or revaluation adjustments affecting the land holdings.

Buildings

The value of buildings exhibits a generally upward trend, increasing from approximately $2.23 billion in 2014 to $2.48 billion in 2019. The increase is relatively steady, with a notable rise between 2017 and 2019, suggesting continued investment or capital improvements in building assets. The value of buildings under capital lease remains constant at $0.3 million throughout the period, indicating no new lease additions or disposals in this category.

Equipment

Equipment values also trend upward overall, climbing from about $5.98 billion in 2014 to $6.55 billion in 2019. While there are minor fluctuations, the general increase indicates ongoing investments in equipment assets. Equipment under capital lease experiences variability, initially increasing from $9 million to $9.8 million in 2015, then dropping sharply to $3 million in 2016 and remaining relatively stable thereafter with a slight increase in 2018.

Capitalized Software

Capitalized software shows consistent growth over the years, expanding from $468 million in 2014 to $632 million in 2019. This indicates increased capitalization of internally developed or acquired software, reflecting possibly growing focus on technology assets.

Construction in Progress

Construction in progress fluctuates considerably, starting at $600.8 million in 2014, peaking at $702.7 million in 2016, then decreasing to $343.8 million by 2019. The volatility suggests variability in ongoing projects' scale or timing of completion, with a significant reduction in unfinished assets in the final year.

Gross Property, Plant, and Equipment

The aggregate gross value of land, buildings, and equipment remains relatively stable throughout the period, with minor fluctuations hovering around $9.5 billion to $10 billion, ending at approximately $10.08 billion in 2019. This stability reflects balancing additions and disposals or revaluations in fixed assets.

Accumulated Depreciation

Accumulated depreciation increases steadily from -$5.45 billion in 2014 to -$6.29 billion in 2019, reflecting ongoing systematic allocation of asset cost over useful lives. The continuous increase is in line with higher asset bases and aging of existing assets.

Net Property, Plant, and Equipment

The net book value, which is gross assets less accumulated depreciation, shows a declining trend from $3.94 billion in 2014 to $3.79 billion in 2019, with a dip reaching the lowest point around 2017 ($3.69 billion) before partially recovering by 2018. The decrease indicates that depreciation expense and possibly disposals outweigh capital additions over time, leading to a gradual reduction in net asset value.

In summary, the data suggest a portfolio with steady investments in buildings, equipment, and software, alongside a declining land base and fluctuating construction projects in progress. Depreciation steadily accumulates, slightly outpacing gross asset growth, resulting in a modest contraction of net fixed assets by the end of the period under review.

The average age ratio of property, plant, and equipment demonstrates a generally increasing trend over the six-year period. This ratio reflects the proportion of the asset base that is aged, providing insights into the aging profile of fixed assets.

Trend Analysis

Starting at 58.7% in fiscal year 2014, the average age ratio rose to a peak of 61.81% by 2017, indicating a gradual aging of the company's fixed asset base over the initial four-year span. This suggests either steady asset acquisition with consistent depreciation or limited new investments relative to asset retirements.

Subsequent Period Movements

Following 2017, a mild decline is observed in 2018, trending down to 60.01%, before increasing again to 62.89% in 2019. The dip in 2018 could indicate asset renewals or disposals temporarily lowering the average age ratio. The rise in 2019 to its highest level in the data series implies an accumulation of older assets or a slowdown in capital investments during that year.

Overall Interpretation

The persistent increase and generally high average age ratio suggest the company’s property, plant, and equipment are aging steadily. This may warrant attention to asset replacement strategies and potential impacts on maintenance costs or operational efficiency. The data lacks signs of significant rejuvenation of the asset base within this timeframe.

Accumulated Depreciation

The accumulated depreciation exhibited a generally upward trend over the six-year period. Starting from 5,451,200 thousand US$ in 2014, the value increased to 6,293,300 thousand US$ by 2019. There was a slight dip observed between 2015 and 2016, but overall the increase indicates continued depreciation of property, plant, and equipment assets, reflecting ongoing usage and aging of fixed assets.

Land, Buildings, and Equipment, Gross

The gross value of land, buildings, and equipment showed moderate growth throughout the period. It began at 9,393,100 thousand US$ in 2014 and rose to 10,080,500 thousand US$ in 2019. The growth was relatively steady with a notable increase between 2017 and 2018, followed by a smaller increase into 2019. This upward movement suggests ongoing capital investments or revaluations contributing to asset base expansion.

Land

The value of land consistently declined each year, decreasing from 106,900 thousand US$ in 2014 to 73,600 thousand US$ in 2019. This downward trend may indicate disposals, impairment, or reclassification of land assets over time.

Average Age Ratio

The average age ratio of the assets fluctuated within a narrow range, starting at 58.7% in 2014 and ending at 62.89% in 2019. Intermediate years showed slight increases and decreases but generally indicate that the asset base is aging moderately. The peak in 2017 at 61.81% and subsequent slight variations imply that newer asset acquisitions may not have significantly offset asset aging during this period.