Analysis of Property, Plant and Equipment
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Property, Plant and Equipment Disclosure
HCA Healthcare Inc., balance sheet: property, plant and equipment
US$ in millions
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Land | |||||||||||
| Buildings | |||||||||||
| Equipment | |||||||||||
| Construction in progress | |||||||||||
| Property and equipment, at cost | |||||||||||
| Accumulated depreciation | |||||||||||
| Property and equipment, net |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
The analysis of property, plant, and equipment data over the five-year period reveals distinct trends in asset composition and valuation.
- Land
- There is a consistent increase in the value of land assets, rising from $1,746 million at the end of 2017 to $2,496 million by the end of 2021. This represents a steady growth, indicating ongoing investments or acquisitions in land holdings.
- Buildings
- The value of buildings also shows a continuous upward trend, growing from $14,249 million in 2017 to $19,211 million in 2021. The increase is gradual but sustained, highlighting continued expansion or enhancement of building infrastructure.
- Equipment
- Equipment assets have exhibited a substantial increase, ascending from $22,168 million at the end of 2017 to $28,256 million in 2021. The growth reflects ongoing investment in equipment, likely to support operational capacity and technological upgrades.
- Construction in Progress
- Contrary to other asset categories, construction in progress declines year-over-year from $1,921 million in 2017 to $1,387 million in 2021. This downward trend may indicate completion of previously ongoing projects with fewer new projects initiated or a shift in capital expenditure timing.
- Property and Equipment, at Cost
- The aggregate cost basis of property and equipment rises steadily from $40,084 million in 2017 to $51,350 million in 2021. This figure aligns with the increases observed in individual asset components, reflecting overall capital investments and asset additions.
- Accumulated Depreciation
- Accumulated depreciation shows a growing negative balance, increasing in absolute value from -$22,189 million in 2017 to -$27,287 million in 2021. This trend is consistent with ongoing asset usage and aging, leading to higher depreciation expenses over time.
- Property and Equipment, Net
- Net property and equipment value, calculated as cost less accumulated depreciation, increases from $17,895 million in 2017 to $24,063 million in 2021. The net asset base grows moderately each year, indicating that capital expenditures and asset acquisitions outpace depreciation, thereby expanding the long-lived asset base.
Overall, the data depicts a company that is actively investing in its physical assets, with increasing land, building, and equipment values. The reduction in construction in progress could suggest a completion phase in recent capital projects or a strategic shift in investment timing. The balance between rising asset costs and accumulated depreciation points to sustained growth in net property and equipment, supporting ongoing operational capacity and future growth potential.
Asset Age Ratios (Summary)
HCA Healthcare Inc., asset age ratios
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
- Average Age Ratio
- The average age ratio experienced a slight overall decline from 57.88% in 2017 to 54.42% in 2019, indicating a modest reduction in the relative age of the property, plant, and equipment. However, from 2019 onward, the ratio showed a marginal increase, reaching 55.85% by the end of 2021. This suggests a stabilization with a slight aging tendency in recent years.
- Estimated Total Useful Life
- The estimated total useful life of assets decreased from 18 years in 2017 and 2018 to 17 years from 2019 onwards. This adjustment could reflect updated assessments of asset longevity or changes in asset composition.
- Estimated Age (Time Elapsed Since Purchase)
- The estimated age of the assets decreased from 11 years in 2017 to 10 years from 2018 through 2021 and remained constant thereafter. This implies either acquisitions of newer assets or retirements of older assets, maintaining a relatively consistent average asset age in recent periods.
- Estimated Remaining Life
- The estimated remaining life of the assets remained stable at 8 years throughout the entire period under review, reflecting consistent assumptions about asset longevity beyond their current age.
Average Age
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Accumulated depreciation | ||||||
| Property and equipment, at cost | ||||||
| Land | ||||||
| Asset Age Ratio | ||||||
| Average age1 | ||||||
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
2021 Calculations
1 Average age = 100 × Accumulated depreciation ÷ (Property and equipment, at cost – Land)
= 100 × ÷ ( – ) =
- Property and Equipment at Cost
- The cost of property and equipment exhibited a steady increase from US$40,084 million in 2017 to US$51,350 million in 2021. This upward trend indicates consistent capital investment in assets over the five-year period, reflecting ongoing expansion or modernization efforts.
- Accumulated Depreciation
- Accumulated depreciation rose progressively from US$22,189 million in 2017 to US$27,287 million by 2021. This increase is consistent with growing asset bases and the aging of property, plant, and equipment. The steady rise suggests systematic expensing of asset value over time.
- Land
- The carrying value of land assets increased from US$1,746 million in 2017 to US$2,496 million in 2021. This consistent growth may indicate acquisitions of new land resources, supporting real estate expansion or strategic investments in land holdings.
- Average Age Ratio
- The average age ratio, expressed as a percentage, showed a modest decline from 57.88% in 2017 to 54.42% in 2019, followed by slight increases to 55.51% in 2020 and 55.85% in 2021. This pattern implies an overall slight reduction in the average age of property assets during the initial years, possibly due to recent additions or retirements of older equipment, with marginal aging occurring in the later years.
Estimated Total Useful Life
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
2021 Calculations
1 Estimated total useful life = (Property and equipment, at cost – Land) ÷ Depreciation expense, computed using the straight-line method
= ( – ) ÷ =
- Property and Equipment at Cost
- The value of property and equipment at cost showed a consistent upward trend over the five-year period. Starting at 40,084 million US dollars in 2017, the figure increased steadily each year, reaching 51,350 million US dollars in 2021. This represents a cumulative increase of approximately 28% over the period, indicating ongoing investment or acquisitions in property and equipment assets.
- Land
- Land holdings also increased steadily from 1,746 million US dollars in 2017 to 2,496 million US dollars in 2021. This increment, roughly 43% over five years, suggests expansion or acquisition of additional land assets contributing to the company's fixed asset base.
- Depreciation Expense (Straight-Line Method)
- Depreciation expense, calculated using the straight-line method, rose consistently from 2,111 million US dollars in 2017 to 2,826 million US dollars in 2021. This increase of about 34% aligns with the rise in property and equipment costs, reflecting higher depreciation charges due presumably to increased asset bases and ongoing capital investments.
- Estimated Total Useful Life
- The estimated total useful life of the assets remained stable at 18 years for the initial two years, then decreased slightly to 17 years from 2019 onwards. This minor adjustment may reflect changes in asset composition or updated management estimates regarding asset longevity.
Estimated Age, Time Elapsed since Purchase
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
2021 Calculations
1 Time elapsed since purchase = Accumulated depreciation ÷ Depreciation expense, computed using the straight-line method
= ÷ =
- Accumulated Depreciation
- The accumulated depreciation shows a consistent upward trend from 2017 to 2021. It increased every year from $22,189 million in 2017 to $27,287 million in 2021, indicating ongoing depreciation of property, plant, and equipment assets over the five-year period.
- Depreciation Expense
- The depreciation expense, calculated using the straight-line method, also exhibits a steady increase annually. Starting at $2,111 million in 2017, the expense rose each year to reach $2,826 million by 2021. This increase suggests either additions to depreciable assets or adjustments in their useful lives or valuations.
- Time Elapsed Since Purchase
- The average time elapsed since purchase remains fairly stable, maintaining around 10 years from 2018 onwards, after a slight decrease from 11 years in 2017. This stability implies that the asset base is renewing at a consistent rate, with new acquisitions balancing disposals or retirements.
Estimated Remaining Life
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
2021 Calculations
1 Estimated remaining life = (Property and equipment, net – Land) ÷ Depreciation expense, computed using the straight-line method
= ( – ) ÷ =
- Property and Equipment (net)
- The net value of property and equipment shows a consistent upward trend over the five-year period. Starting from approximately $17.9 billion at the end of 2017, it increased steadily each year to reach about $24.1 billion by the end of 2021. This growth indicates ongoing investments in fixed assets and suggests a strategic expansion or enhancement of physical infrastructure.
- Land
- The value of land also exhibited a continuous increase throughout the period. It rose from around $1.75 billion in 2017 to nearly $2.5 billion in 2021. This upward movement may reflect acquisitions of additional land or appreciation in land values, contributing to the overall increase in property assets.
- Depreciation Expense (Straight-Line Method)
- Depreciation expense calculated using the straight-line method shows a gradual increase each year. Beginning at $2.11 billion in 2017, it reached $2.83 billion in 2021. This rising trend corresponds with the growth in total property and equipment, indicating that the depreciation charges are proportionate to the increased asset base. The steady increase suggests consistent capital asset additions and replacement cycles.
- Estimated Remaining Life
- The estimated remaining life of the assets remained constant at 8 years across all reviewed periods. This suggests stable assumptions regarding the useful life of the property and equipment, likely reflecting a consistent approach to asset management and depreciation policies.