International Business Machines Corp. (NYSE:IBM)

Land and land improvements

The value of land and land improvements shows a consistent decline from 381 million US dollars in 2020 to 179 million US dollars in 2024, indicating a gradual reduction of these assets over the observed period.

Buildings and building and leasehold improvements

There is a notable downward trend in the value of buildings and related leasehold improvements, decreasing steadily from 9,416 million US dollars in 2020 to 4,825 million US dollars in 2024. This suggests ongoing depreciation or possible disposals exceeding new investments in this asset category.

Information technology equipment

The value of information technology equipment consistently decreases over the years, falling from 19,419 million US dollars in 2020 to 8,894 million US dollars in 2024. The steady decline indicates either a reduction in IT equipment holdings or that depreciation and disposals outweigh acquisitions.

Production, engineering, office and other equipment

Contrary to other fixed asset categories, production, engineering, office, and other equipment exhibit a declining trend initially from 3,695 million US dollars in 2020 to 3,161 million US dollars in 2022, then an increase occurs, reaching 3,792 million US dollars in 2024. This could reflect new capital expenditure or upgrades in these asset types after a period of contraction.

Rental machines

Data for rental machines is incomplete, with values available only for 2020 and 2021, showing a sharp decline from 265 million US dollars to 74 million US dollars, followed by absence of data in subsequent years. This may indicate disposal or reclassification of these assets or discontinued reporting.

Property, plant and equipment, gross

The gross property, plant, and equipment value decreases significantly from 33,176 million US dollars in 2020 to 17,690 million US dollars in 2024. This reduction reflects the overall decline in asset holdings or lower capital investments relative to retirements and disposals.

Accumulated depreciation

Accumulated depreciation shows a consistent decrease in absolute value from -23,136 million US dollars in 2020 to -11,959 million US dollars in 2024. The diminishing accumulated depreciation balance, which is negative by accounting convention, may indicate accelerated asset retirements or reclassifications reducing the depreciable asset base.

Property, plant and equipment, net

Net property, plant, and equipment values decline sharply from 10,040 million US dollars in 2020 to 5,334 million US dollars in 2022, then display a gradual recovery to 5,731 million US dollars by 2024. This pattern suggests that after a period of asset base contraction, there is slight reinvestment or slower rate of disposals and depreciation in more recent years.

Average Age Ratio

The average age ratio shows a gradual decline over the observed period, decreasing from 70.55% in 2020 to 68.29% in 2024. This trend reflects a slight reduction in the proportion of the asset's age relative to its total useful life, indicating a modest renewal or replacement of property, plant, and equipment assets over time.

Estimated Total Useful Life

The estimated total useful life of the assets exhibits variability, initially at 8 years in 2020, dropping sharply to 5 years in 2021, then returning to 8 years in 2022, rising to 9 years in 2023, and settling back at 8 years in 2024. This fluctuation suggests adjustments or reassessments in the expected longevity of the asset base, possibly reflecting changes in asset composition or maintenance policies.

Estimated Age, Time Elapsed Since Purchase

The estimated age of the assets does not follow a consistent growth pattern. It decreases from 5 years in 2020 to 4 years in 2021, then increases steadily to 6 years by 2022 and remains stable through 2024. The initial decrease could indicate the acquisition of newer assets or disposals of older ones, while the subsequent increase points to aging assets without significant new additions in later years.

Estimated Remaining Life

The estimated remaining life of the assets shows variation that inversely correlates with changes in estimated age. Starting at 2 years in 2020, it declines to 1 year in 2021, then increases to 2 years in 2022 and further to 3 years in 2023 and 2024. This pattern suggests fluctuations in asset renewal policies or changes in the useful life assessments, with an extended remaining life in the later years indicating either asset enhancements or more conservative depreciation estimates.

Accumulated Depreciation

The accumulated depreciation shows a consistent downward trend over the five-year period, decreasing from 23,136 million US dollars in 2020 to 11,959 million US dollars in 2024. This indicates a significant reduction in the total depreciation recorded against the property, plant, and equipment assets.

Property, Plant and Equipment, Gross

The gross value of property, plant, and equipment also decreases steadily from 33,176 million US dollars in 2020 to 17,690 million US dollars in 2024. This decline reflects a net reduction in the overall asset base, suggesting either disposals, write-downs, or reduced capital expenditure on these assets over the observed years.

Land and Land Improvements

Values for land and land improvements decrease marginally from 381 million US dollars in 2020 to 179 million US dollars in 2024. The small fluctuations and slight decline in this category imply relatively stable but slightly diminishing investments in land-related assets.

Average Age Ratio

The average age ratio, an indicator of the relative age of the assets, starts at 70.55% in 2020, peaking at 72.46% in 2021, then gradually decreasing to 68.29% by 2024. The initial rise followed by a steady decline suggests that while the asset base was aging early on, newer assets or refurbishments have been introduced in recent years, lowering the average age.

Summary of Trends

Overall, there is a clear downward trend in both the gross value and accumulated depreciation of property, plant, and equipment, signaling a shrinking asset base and possibly asset disposals or less investment in these fixed assets. The average age ratio’s trajectory indicates a phase of asset aging followed by rejuvenation within the property, plant, and equipment portfolio. The modest decrease in land and land improvements further aligns with the pattern of reductions in physical asset holdings over the period.

Property, plant and equipment, gross

The gross value of property, plant, and equipment shows a consistent declining trend over the five-year period. Starting at $33,176 million in 2020, there is a marked decrease to $20,084 million in 2021, followed by smaller yet continuous declines through to $17,690 million in 2024. This trend suggests ongoing disposals, asset write-downs, or a lack of significant new asset additions.

Land and land improvements

Values for land and land improvements exhibit a downward movement from $381 million in 2020 to $179 million in 2024. The decline is gradual but steady, reflecting possible sales of land assets or reduced investments in land-related improvements over the period.

Depreciation expense

Depreciation expense decreases from $4,227 million in 2020 to $2,168 million in 2024, with a notable drop between 2021 and 2022. The reduction aligns with the declining asset base, indicating that the carrying amounts of property, plant, and equipment are decreasing, which in turn lowers depreciation charges. The slight increase from 2023 to 2024 could indicate changes in the composition of assets or depreciation policies.

Estimated total useful life

The estimated total useful life for assets fluctuates between 5 and 9 years during the observed period, showing no consistent trend. A low of 5 years is noted in 2021, while 9 years occurs in 2023. This variability may reflect adjustments in asset categorization, revisions in management’s estimates, or changes in the nature of the asset base.

The analysis of the property, plant, and equipment data reveals notable trends in accumulated depreciation, depreciation expense, and the time elapsed since purchase over the five-year period.

Accumulated Depreciation

Accumulated depreciation shows a decreasing trend from 23,136 million US dollars in 2020 to 11,959 million US dollars in 2024. This represents almost a 48% reduction over the five years. The decline is steady, with values dropping consistently year over year, indicating either asset disposals, revaluations, or changes in accounting estimates that reduce accumulated depreciation balances.

Depreciation Expense

Depreciation expense similarly demonstrates a downward trend from 4,227 million US dollars in 2020 to 2,168 million US dollars in 2024, representing nearly a 49% decrease. The largest decline occurs between 2021 (3,888 million) and 2022 (2,407 million), followed by stabilization around 2,100 to 2,200 million in subsequent years. This reduction in annual expense may reflect a lower asset base subject to depreciation or changes in depreciation methods or useful lives.

Time Elapsed Since Purchase

Regarding the time elapsed since purchase, the period starts at 5 years in 2020, decreases to 4 years in 2021, and then remains constant at 6 years from 2022 through 2024. This fluctuation suggests adjustments in asset age reporting or acquisition timing. The stabilization at six years for the last three years aligns with the period of declining depreciation amounts.

Overall, the data indicates a significant reduction in both accumulated depreciation and annual depreciation expense over time, coupled with a consistent average asset age in the latter years. These patterns might suggest a strategic asset management shift, such as disposing of older assets or revising depreciation assumptions. The steady time elapsed since purchase during the last three years supports the notion of a relatively stable asset base age following the earlier fluctuations.

Property, Plant, and Equipment, Net

There is a notable decline in the net value of property, plant, and equipment from 10,040 million USD at the end of 2020 to 5,694 million USD by the end of 2021. Following this sharp decrease, the net value continues to decrease slightly to 5,334 million USD in 2022 but then begins a gradual recovery, increasing to 5,501 million USD in 2023 and further to 5,731 million USD in 2024. This pattern suggests an initial significant reduction in asset base or revaluation followed by stabilization and modest growth in the subsequent years.

Land and Land Improvements

The value of land and land improvements decreases steadily over the period. Starting at 381 million USD in 2020, it drops to 224 million USD in 2021, then decreases marginally to 213 million USD in 2022, followed by further declines to 182 million USD in 2023 and 179 million USD in 2024. This consistent downward trend indicates ongoing disposals, impairments, or revaluations of land assets.

Depreciation Expense

Depreciation expense exhibits a declining trend from 4,227 million USD in 2020 down to 3,888 million USD in 2021, with a more pronounced drop to 2,407 million USD in 2022. The expense then reduces further to 2,109 million USD in 2023 but slightly increases to 2,168 million USD in 2024. This decline corresponds with the reduction in net property, plant, and equipment and may reflect accelerated depreciation practices, asset disposals, or changes in depreciation policies. The slight uptick in the last year may indicate new asset additions or changes in depreciation estimates.

Estimated Remaining Life

The estimated remaining life of property, plant, and equipment fluctuates over the period. It starts at 2 years in 2020, reduces to 1 year in 2021, then increases back to 2 years in 2022 and further extends to 3 years in both 2023 and 2024. The initial drop to 1 year may reflect aging assets or accelerated depreciation, while the subsequent increase suggests the recognition of newer assets or revised longer useful life estimates.