Halliburton Co. (NYSE:HAL)

The financial data of property, plant, and equipment reveals distinct trends across various asset categories and overall net values.

Land

The value of land shows a steady but moderate increase throughout the period. Starting at US$217 million in 2014, it rises consistently each year to reach US$252 million by the end of 2018, reflecting a cumulative growth of approximately 16%. This suggests a modest expansion or appreciation in land assets over time.

Buildings and Property Improvements

This category remains relatively stable with slight incremental growth. Values increase gradually from US$3,311 million in 2014 to US$3,461 million in 2018. The narrow range indicates limited expansion or reinvestment in buildings and improvements during the five-year span.

Machinery, Equipment, and Other

A significant decline is observable in machinery and equipment values from 2014 through 2016, dropping from US$19,954 million to US$16,103 million. However, the trend reverses from 2017 onwards with an upward movement reaching US$18,430 million in 2018. This pattern implies an initial period of asset disposals, impairments, or underinvestment followed by reinvestment or acquisitions boosting this asset class.

Property, Plant and Equipment, Gross

The gross property, plant, and equipment value declines from US$23,482 million in 2014 to a low of US$19,730 million in 2016, reflecting the downturn in machinery and equipment. After 2016, the gross value exhibits recovery, increasing to US$22,143 million by 2018, consistent with the machinery category's rebound.

Accumulated Depreciation

Accumulated depreciation presents a generally increasing magnitude in negative value, starting at -US$11,007 million in 2014 and reaching -US$13,182 million in 2018. This upward trend in accumulated depreciation aligns with asset age and ongoing depreciation expense recognition over the period. A slight irregularity exists with an increase in depreciation from 2015 to 2016, which may correlate with the accelerated write-downs or revaluations.

Net Property, Plant and Equipment

The net value demonstrates a downward trend from US$12,475 million in 2014 to a trough of US$8,521 million in 2017, reflecting the impact of both asset disposals or impairments and depreciation. In 2018, a modest recovery to US$8,961 million occurs, indicating some asset additions or slower depreciation. Nonetheless, the net book value in 2018 remains considerably below the 2014 level, suggesting cautious capital expenditure or asset management policies during this timeframe.

Overall, the data indicates an initial reduction in gross asset base primarily driven by machinery and equipment depreciation or disposals, with a subsequent recovery phase starting in 2017. Accumulated depreciation steadily increased, which contributed to the decline in net property values. The modest but steady increases in land and buildings suggest selective investment, while the machinery segment reflects more volatile activity likely linked to operational strategy adjustments.

Average Age Ratio

The average age ratio shows a consistent upward trend over the five-year period from December 31, 2014, to December 31, 2018. Beginning at 47.31% in 2014, there is a gradual increase year-over-year, reaching 60.22% by the end of 2018. This indicates that the company's property, plant, and equipment have been aging steadily throughout the observed timeframe.

The most notable increase occurs between 2015 and 2016, where the ratio rises from 47.83% to 57.42%, an increase of approximately 9.6 percentage points. After 2016, the ratio continues to rise but at a slower pace, increasing by roughly 2 to 3 percentage points each subsequent year.

This upward trend in the average age ratio suggests that the company may be extending the useful life of its existing assets or not investing as heavily in new property, plant, and equipment during these years. It could also imply a strategic approach to asset management where the company is utilizing older assets more intensively or delaying capital expenditures.

Accumulated Depreciation

The accumulated depreciation decreased from 11,007 million USD in 2014 to 9,789 million USD in 2015, indicating a reduction in the depreciation recorded during that year. Subsequently, it increased steadily to reach 13,182 million USD by the end of 2018. This upward trend from 2016 onward suggests an increasing recognition of asset wear and usage over time, reflecting ongoing depreciation expenses.

Property, Plant, and Equipment, Gross

The gross value of property, plant, and equipment initially declined from 23,482 million USD in 2014 to 19,730 million USD in 2016. However, it then showed a gradual increase to 22,143 million USD in 2018. This pattern suggests asset disposals or impairments during the early period followed by reinvestment or acquisitions in subsequent years, leading to a partial recovery of the asset base.

Land

The land value demonstrated a modest but consistent increase over the period, rising from 217 million USD in 2014 to 252 million USD in 2018. This steady growth reflects either new land acquisitions or revaluation effects, indicating a stable investment in land assets.

Average Age Ratio

The average age ratio of property, plant, and equipment showed a continuous upward trend from 47.31% in 2014 to 60.22% in 2018. This rising ratio indicates that the asset base is aging, which could imply increasing maintenance costs or the need for asset replacement in future periods.