Analysis of Property, Plant and Equipment
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- Statement of Comprehensive Income
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Capital Asset Pricing Model (CAPM)
- Dividend Discount Model (DDM)
- Selected Financial Data since 2005
- Net Profit Margin since 2005
- Operating Profit Margin since 2005
- Return on Equity (ROE) since 2005
- Price to Operating Profit (P/OP) since 2005
- Price to Book Value (P/BV) since 2005
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Property, Plant and Equipment Disclosure
Humana Inc., balance sheet: property, plant and equipment
US$ in millions
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
The financial data shows varying trends in the components of property, plant, and equipment over the five-year period from 2019 to 2023. Land values exhibit a gradual decline, decreasing steadily from 20 million USD in 2019 to 16 million USD in 2023. This reduction suggests possible divestitures or revaluations impacting the land holdings.
Buildings and leasehold improvements display growth from 874 million USD in 2019, peaking at 1,143 million USD in 2022. However, there is a notable decline to 1,002 million USD in 2023, indicating either disposals, impairments, or reduced capital expenditures in that category during the latest period.
Equipment shows a consistent upward trajectory throughout the period, growing from 922 million USD in 2019 to 1,320 million USD in 2023. This steady increase reflects ongoing investment in tangible operational assets.
Computer software costs have increased significantly from 2,799 million USD in 2019 to a peak of 3,951 million USD in 2022, followed by a reduction to 3,546 million USD in 2023. This pattern may indicate heavy software development or acquisition investments followed by partial amortization or write-downs.
Total property and equipment cost escalated from 4,615 million USD in 2019 to 6,357 million USD in 2022 but then fell to 5,884 million USD in 2023. This peak and subsequent decline align with the patterns observed in buildings, leasehold improvements, and computer software, suggesting capital expenditure fluctuations and possible disposals in 2023.
Accumulated depreciation presents an irregular trend. It increased (more negative) from -2,660 million USD in 2019 to -3,136 million USD in 2022 but reversed to -2,854 million USD in 2023. The unusual decrease in accumulated depreciation may reflect reassessments, asset disposals, or changes in depreciation policies.
Consequently, the net property and equipment value rose from 1,955 million USD in 2019 to a peak of 3,221 million USD in 2022 before a reduction to 3,030 million USD in 2023. Despite the slight downturn in the latest year, the overall five-year trend indicates considerable asset base growth.
- Summary of Trends
- Land assets declined gradually, suggesting disposals or lower valuations.
- Buildings and leasehold improvements increased until 2022, then declined notably in 2023.
- Equipment consistently increased, reflecting ongoing investment.
- Computer software saw major growth until 2022, followed by a reduction in 2023.
- Total property and equipment cost grew until 2022 and then decreased in 2023, indicating fluctuating capital expenditures.
- Accumulated depreciation increased until 2022, then decreased in 2023, implying asset disposals or accounting changes.
- Net property and equipment values significantly increased over five years, peaking in 2022 with a slight decrease in 2023.
Asset Age Ratios (Summary)
Humana Inc., asset age ratios
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
The data reflects several key trends in the property, plant, and equipment profile over the five-year period from 2019 to 2023.
- Average Age Ratio
- The average age ratio exhibits a declining trend overall, starting at 57.89% in 2019 and decreasing to 48.64% by the end of 2023. This indicates a reduction in the relative age of the asset base over time, suggesting that newer assets have been introduced or that older assets have been retired or replaced.
- Estimated Total Useful Life
- The estimated total useful life of assets shows some variability, beginning at 9 years in 2019, increasing slightly to 10 years in 2020, then gradually decreasing to 7 years by 2023. This trend may indicate a shift in asset composition toward items with shorter useful lives or updates in asset life expectations.
- Estimated Age (Time Elapsed Since Purchase)
- This metric fluctuates over the years, with an initial increase from 5 years in 2019 to 6 years in 2020, followed by a decrease to 3 years by 2023. The overall downward trend after 2020 signals the acquisition of newer assets, which contributes to a younger asset base.
- Estimated Remaining Life
- The estimated remaining life remains relatively stable throughout the period, hovering between 4 and 5 years. This suggests consistency in the expected longevity of assets currently held, despite changes in their age and useful life estimates.
Overall, the data suggests a strategic renewal or updating of the asset base in recent years, reflected in younger average asset age and declining total useful life estimates. The stable remaining life implies maintained expectations for asset utility moving forward.
Average Age
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Accumulated depreciation | ||||||
| Property and equipment, cost | ||||||
| Land | ||||||
| Asset Age Ratio | ||||||
| Average age1 | ||||||
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
2023 Calculations
1 Average age = 100 × Accumulated depreciation ÷ (Property and equipment, cost – Land)
= 100 × ÷ ( – ) =
- Property and equipment, cost
- The cost of property and equipment exhibited an overall upward trend from 2019 through 2022, increasing from approximately 4.6 billion USD to nearly 6.4 billion USD. However, in 2023, this amount decreased to around 5.9 billion USD. This pattern indicates substantial investment and asset acquisition during the first four years, followed by a reduction in the asset base in the last observed year.
- Accumulated depreciation
- Accumulated depreciation increased from about 2.7 billion USD in 2019 to over 3.1 billion USD in 2020, signaling increased wear and usage of assets. Unexpectedly, it then declined to roughly 2.9 billion USD in 2021, rose again to approximately 3.1 billion USD in 2022, and reduced once more to nearly 2.9 billion USD in 2023. This fluctuating pattern suggests adjustments or possible disposals of depreciated assets impacting the net depreciation value.
- Land
- The reported value of land consistently declined each year, from 20 million USD in 2019 to 16 million USD in 2023. This steady decrease could indicate sales or revaluation of land assets over time, or strategic divestments impacting the land portfolio.
- Average age ratio
- The average age ratio of property, plant, and equipment showed a notable drop between 2020 and 2021, decreasing from about 57% to 48%, reflecting either the acquisition of newer assets or the disposal of older ones. The ratio then slightly increased to 49.46% in 2022 before marginally declining again to 48.64% in 2023, suggesting the asset base age remained relatively stable and slightly younger compared to earlier years.
Estimated Total Useful Life
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
2023 Calculations
1 Estimated total useful life = (Property and equipment, cost – Land) ÷ Depreciation expense
= ( – ) ÷ =
- Property and Equipment Cost
- The cost of property and equipment showed an overall increasing trend from 2019 to 2022, rising from $4,615 million to $6,357 million. However, in 2023, this value declined to $5,884 million, indicating a reversal in the prior trend of growth. This may suggest asset disposals, impairment, or reduced capital expenditure in the most recent year.
- Land
- The value attributed to land steadily decreased over the five-year period, from $20 million in 2019 to $16 million in 2023. This consistent decline could represent sales or revaluation adjustments impacting land holdings specifically.
- Depreciation Expense
- Depreciation expense increased each year, starting at $505 million in 2019 and reaching $831 million in 2023. The growth in depreciation expense suggests either an increase in depreciable assets or changes leading to accelerated depreciation. This trend has implications for profit margins and asset replacement strategies.
- Estimated Total Useful Life
- The estimated total useful life for property and equipment declined progressively from 9 years in 2019 to 7 years in 2023. This reduction implies that assets are being depreciated over shorter periods, likely accelerating depreciation expenses and reflecting changes in asset utilization, technology obsolescence, or revised accounting estimates.
Estimated Age, Time Elapsed since Purchase
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
2023 Calculations
1 Time elapsed since purchase = Accumulated depreciation ÷ Depreciation expense
= ÷ =
- Accumulated depreciation
- Accumulated depreciation values show a generally fluctuating pattern over the observed period. Beginning at 2,660 million US dollars in 2019, it increased to 3,123 million in 2020, then decreased to 2,874 million in 2021. There was a subsequent increase in 2022 to 3,136 million, followed by a decline to 2,854 million in 2023. This variability may suggest changes in asset disposals or revaluation influences affecting the accumulated depreciation balance.
- Depreciation expense
- The depreciation expense exhibits a consistent upward trend throughout the years. Starting at 505 million US dollars in 2019, the expense rose steadily each year, reaching 831 million in 2023. This increase indicates a growing recognition of depreciation costs, potentially arising from recent significant capital investments or revised depreciation policies resulting in higher annual charges.
- Time elapsed since purchase
- The average time elapsed since the purchase of the property, plant, and equipment shows a declining trend, decreasing from 5 years in 2019 to 3 years in 2023. This trend suggests a recent increase in asset acquisitions, introducing younger assets into the balance sheet, which aligns with the rising depreciation expense observed over the same period.
- Overall insights
- The data reveals an apparent pattern of asset renewal or expansion, reflected by the decreasing average age of assets and increasing depreciation expenses. The fluctuations in accumulated depreciation could be explained by asset disposals or revaluations, but the general inference is that newer assets have been added to the portfolio more recently, prompting higher depreciation charges. This information indicates active management of property, plant, and equipment, with implications for both asset management strategy and the financial reporting of depreciation.
Estimated Remaining Life
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
2023 Calculations
1 Estimated remaining life = (Property and equipment, net – Land) ÷ Depreciation expense
= ( – ) ÷ =
- Property and Equipment, Net
- The net value of property and equipment exhibited an upward trend from 2019 through 2022, increasing from 1,955 million US dollars to a peak of 3,221 million US dollars. However, there was a slight decrease in 2023, with the value declining to 3,030 million US dollars. This suggests that while the company invested in or acquired more property and equipment over the initial years, some disposals, depreciation, or impairments may have occurred in the last year.
- Land
- The carrying value of land showed a gradual decline over the five-year period, decreasing modestly from 20 million US dollars in 2019 to 16 million US dollars in 2023. This continuous decrease might indicate asset disposals or reclassification.
- Depreciation Expense
- Depreciation expense consistently increased each year, climbing significantly from 505 million US dollars in 2019 to 831 million US dollars in 2023. This steady rise aligns with the increase in the property and equipment base but also indicates accelerated recognition of asset wear and tear or potential changes in depreciation policies or methods.
- Estimated Remaining Life
- The estimated remaining life of property and equipment remained relatively stable, fluctuating slightly between 4 and 5 years. This suggests consistent expectations for asset usage duration without significant extensions or reductions.