HP Inc. (NYSE:HPQ)

The data on property, plant, and equipment over the six-year period presents notable trends in both gross values and net balances after depreciation.

Land, buildings, and leasehold improvements

The values remained relatively stable from 2013 to 2015, fluctuating slightly around US$9.5 billion to US$9.7 billion. However, there was a substantial decline starting in 2016, where the value dropped sharply to approximately US$2.4 billion and continued a downward trend to US$1.9 billion by 2018. This indicates a significant reduction, possibly due to disposals, reclassifications, or impairments affecting these assets.

Machinery and equipment, including equipment held for lease

This category showed minor incremental growth from around US$16.6 billion in 2013 to US$16.8 billion in 2015. A pronounced decrease occurred in 2016, with values falling to about US$3.7 billion, but unlike land and buildings, there was a modest recovery afterward, increasing to approximately US$4.2 billion by 2018. This pattern suggests a major downsizing or asset revaluation in 2016, followed by some reinvestment or reclassification later on.

Property, plant, and equipment, gross

Gross property, plant, and equipment values reflect the combined trends of the preceding categories. A steady level was maintained between 2013 and 2015 at roughly US$26.1 billion to US$26.5 billion, then a stark drop to about US$6.1 billion in 2018 after falling to US$6.1 billion in 2016. This marked decrease aligns with the substantial reduction in the underlying asset categories observed in the same period.

Accumulated depreciation

The accumulated depreciation showed a steady increase in negativity (which represents growing depreciation expense) from approximately -US$14.7 billion in 2013 to nearly -US$15.4 billion in 2015, consistent with aging assets. A significant reduction in accumulated depreciation was seen from 2016 onward, moving to about -US$3.9 billion by 2018. The reduction in accumulated depreciation correlates logically with the considerable drop in gross assets, implying that many depreciated assets were removed from the books.

Property, plant, and equipment, net

The net value of property, plant, and equipment declined gradually from about US$11.5 billion in 2013 to nearly US$11.1 billion in 2015. A sharp fall followed in 2016, reaching a low of approximately US$1.7 billion, but with a gradual recovery to around US$2.2 billion by 2018. This net trend reflects the previously noted disposals or reclassifications, combined with ongoing depreciation and some asset additions or revaluations in the later years.

In summary, the data indicates a substantial restructuring or downsizing of property, plant, and equipment starting in 2016, characterized by marked reductions in gross asset values across all classes and corresponding decreases in accumulated depreciation. The slight recovery in machinery and equipment and net asset values after 2016 points to selective reinvestment or asset adjustments following this significant contraction period.

Average Age Ratio

The average age ratio exhibited a generally increasing trend from 56.14% in 2013 to a peak of 71.47% in 2016. After 2016, the ratio declined to 64.02% by 2018. This suggests that the overall asset base became older up to 2016, before indicating a relative rejuvenation or replacement of assets in the subsequent years.

Estimated Total Useful Life

The estimated total useful life of the assets increased notably from 8 years in 2013 and 2014, to 9 years in 2015, followed by a significant jump to 19 years in 2016. Afterwards, this figure decreased to 17 years in 2017 and further down to 14 years in 2018. Such variability may imply changes in asset composition, possibly reflecting acquisitions of longer-lived assets in 2016 and a later shift back to shorter-lived assets.

Estimated Age (Time Elapsed Since Purchase)

The estimated age of the assets remained constant at 5 years from 2013 through 2015. However, in 2016, there was a substantial increase to 14 years, followed by a decrease to 12 years in 2017 and then to 9 years in 2018. This pattern indicates that the asset pool included significantly older assets starting in 2016, with a gradual infusion of newer assets thereafter.

Estimated Remaining Life

The estimated remaining life of the assets displayed relative stability across the period. It was 4 years in 2013, dropped to 3 years in 2014, increased modestly to 4 years in 2015, then remained steady at 5 years from 2016 through 2018. This consistency in remaining life after 2015 suggests either a stabilization in asset replacement policies or balanced asset retirement and acquisition practices.

The analysis of the annual property, plant, and equipment financial data reveals distinct trends over the period from 2013 to 2018. There is a noticeable discontinuity in the values after the fiscal year 2015, which suggests that the data from 2016 onward may be reported under a different basis or accounting method, significantly impacting comparability.

Accumulated Depreciation

From 2013 to 2015, accumulated depreciation exhibited a gradual increase from $14,670 million to $15,385 million, indicating consistent depreciation expense reflecting asset usage. However, in 2016, a sharp decline to $4,348 million is observed, followed by further decreases in the subsequent years, reaching $3,911 million by 2018. This sudden drop signifies either a revaluation, disposal, or change in accounting practices related to depreciation reporting.

Property, Plant, and Equipment Gross

The gross value remained relatively stable and slightly increased from $26,133 million in 2013 to $26,475 million in 2015, indicating modest capital additions or acquisitions. Post-2015, a pronounced reduction occurs, with values dropping to approximately $6,084 million in 2016 and fluctuating modestly thereafter. This reduced scale is consistent with the pattern observed in accumulated depreciation and might reflect reclassification, asset sales, or a shift in accounting presentation.

Average Age Ratio

The average age ratio trends upward from 56.14% in 2013 to a peak of 71.47% in 2016, suggesting that, relative to their estimated useful lives, the assets became older, indicative of aging equipment or slower replacement. After 2016, the ratio declines to 64.02% by 2018, which could imply asset renewal, additions of newer assets, or accounting adjustments affecting the calculation.

Overall, the data from 2013 to 2015 presents a stable asset base with consistent depreciation patterns. The significant changes post-2015 likely result from a methodological change or major asset portfolio adjustments. The increase in the average age ratio until 2016 suggests aging assets, while the subsequent decrease indicates some degree of asset refresh or revaluation.

Gross Property, Plant and Equipment

The gross value of property, plant, and equipment remained relatively stable from 2013 to 2015, with values around 26,100 to 26,500 million US dollars. A significant decrease is observed beginning in 2016, where recorded values drop sharply to approximately 6,000 US dollars in millions and maintain this lower level through 2018.

Depreciation Expense

The depreciation expense showed minor fluctuations between 2013 and 2015, ranging from 3,100 to 3,300 million US dollars. From 2016 onward, there is a marked reduction, with expenses declining to the low hundreds of millions. A gradual increase is noted from 2016 through 2018, rising from 316 million to 448 million US dollars.

Estimated Total Useful Life

The estimated useful life of assets remained steady at 8 years from 2013 to 2014, then increased notably in 2015 to 9 years. Beginning in 2016, the useful life estimates substantially lengthened to 19 years, followed by a gradual decrease over the next two years to 17 years in 2017 and 14 years in 2018.

Summary of Trends

The data indicates a structural shift in the company's property, plant, and equipment starting in 2016. The gross asset values decreased drastically, suggesting a possible reclassification, disposal, or changes in accounting methodology. Corresponding depreciation expenses also dropped significantly, consistent with the reduced asset base or changes in operational scale. The extension of the estimated useful life from 2016 onward suggests a revision in asset valuation assumptions, potentially reflecting newer or different classes of assets with longer expected service periods. Overall, the trends point toward a major adjustment in fixed asset accounting or asset portfolio composition beginning in the 2016 fiscal year.

The analysis of the property, plant, and equipment financial data reveals several noteworthy trends over the reported periods.

Accumulated depreciation

Accumulated depreciation initially showed a steady increase from 14,670 million USD in 2013 to 15,385 million USD in 2015. However, a significant decline is observed from 2016 onward, dropping sharply to 4,348 million USD in 2016 and further decreasing to 3,911 million USD by 2018. This abrupt change suggests a potential reclassification, disposal, or impairment of assets that drastically affected the accumulated depreciation balance.

Depreciation expense

The annual depreciation expense remained relatively stable and consistent during the initial years, with slight fluctuations from 3,200 million USD in 2013 to 3,100 million USD in 2015. However, post-2015, depreciation expense drastically reduced to around 300–450 million USD annually, signaling a substantial change in the asset base or depreciation policies. This trend aligns with the sharp decline in accumulated depreciation, indicating possible disposals or significant adjustments in asset valuation.

Time elapsed since purchase

The metric representing the average age of assets shows stability at 5 years during 2013 to 2015, followed by a marked increase from 2016 onwards, peaking at 14 years in 2016 before gradually decreasing to 9 years by 2018. This pattern suggests that older assets were retained or new asset acquisitions slowed after 2015. The subsequent decrease in the average age by 2018 may indicate a recent influx of newer assets or retirement of the oldest holdings.

In summary, the data reveals a notable restructuring or realignment of the property, plant, and equipment portfolio beginning in 2016, characterized by significant reductions in accumulated depreciation and depreciation expense, coupled with fluctuations in the average asset age. These changes may reflect underlying operational adjustments, asset disposals, or strategic shifts in asset management.

The financial data for property, plant, and equipment indicates notable fluctuations over the reported periods. The net value of property, plant, and equipment demonstrates a consistent downward trend from 2013 through 2015, decreasing steadily from 11,463 million US dollars in 2013 to 11,090 million US dollars in 2015. However, a marked decline is evident in 2016, where the net value falls significantly to 1,736 million US dollars, followed by gradual increases in 2017 and 2018, reaching 2,198 million US dollars.

Depreciation expense remains relatively stable between 2013 and 2015, hovering around 3,100 to 3,300 million US dollars. Similar to the net value of assets, a sharp reduction occurs in 2016, with depreciation expense dropping to 316 million US dollars. This reduced expense then increases moderately over the subsequent years, reaching 448 million US dollars by 2018.

The estimated remaining life of the property, plant, and equipment shows variability over the period. It decreases from 4 years in 2013 to 3 years in 2014, then reverts back to 4 years in 2015. From 2016 onwards, the estimated life increases to 5 years and remains stable through 2018.

Key observations:

The significant decreases in net property, plant, and equipment and depreciation expense in 2016 suggest a possible reclassification, asset impairment, or disposal event affecting the asset base.

The subsequent increases in both net asset value and depreciation expense from 2016 to 2018 indicate some level of asset reinvestment or additions after the sharp decline.

The fluctuation in estimated remaining life, with a peak stabilization at 5 years beginning in 2016, may reflect changes in asset mix, usage patterns, or revised management estimates regarding the useful life of assets.