Analysis of Property, Plant and Equipment
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Johnson & Johnson pages available for free this week:
- Balance Sheet: Assets
- Analysis of Long-term (Investment) Activity Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Analysis of Reportable Segments
- Enterprise Value to EBITDA (EV/EBITDA)
- Price to FCFE (P/FCFE)
- Capital Asset Pricing Model (CAPM)
- Price to Earnings (P/E) since 2005
- Price to Sales (P/S) since 2005
- Aggregate Accruals
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Property, Plant and Equipment Disclosure
Johnson & Johnson, balance sheet: property, plant and equipment
US$ in millions
Based on: 10-K (reporting date: 2025-12-28), 10-K (reporting date: 2024-12-29), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
Over the five-year period, property, plant, and equipment exhibited notable shifts in composition and overall value. Gross property, plant, and equipment initially increased from 2021 to 2022, peaked in 2022, then experienced a slight decline in 2023 before increasing significantly in 2024 and 2025. This pattern suggests periods of investment followed by potential asset rationalization and then renewed expansion. Net property, plant, and equipment consistently increased throughout the period, indicating that investment in new assets, despite depreciation, outpaced reductions in value.
- Land and Land Improvements
- Land and land improvements demonstrated a consistent downward trend, decreasing from US$884 million in 2021 to US$701 million in 2025. This suggests potential sales of land or reclassification of assets. The rate of decline slowed in the final year of the period.
- Buildings and Building Equipment
- Buildings and building equipment remained relatively stable between 2021 and 2023, fluctuating around US$12,882 to US$12,375 million. A substantial increase was observed in 2025, reaching US$13,429 million, potentially reflecting significant investment in building infrastructure.
- Machinery and Equipment
- Machinery and equipment showed a moderate increase from 2021 to 2022, followed by a decrease in 2023. A subsequent increase occurred in 2024 and a more substantial increase in 2025, reaching US$32,873 million. This indicates ongoing investment in production capabilities, with a notable acceleration in the most recent year.
- Construction in Progress
- Construction in progress consistently increased throughout the period, rising from US$4,139 million in 2021 to US$7,361 million in 2025. This sustained growth suggests a continuous pipeline of new projects and capital expenditure. The increasing balance in this account contributes to the overall growth in gross property, plant, and equipment.
- Accumulated Depreciation
- Accumulated depreciation increased steadily from 2021 to 2025, moving from -US$28,717 million to -US$31,195 million. This is expected with the passage of time and the continued use of existing assets. The rate of increase appeared to accelerate in the final two years of the period.
- Net Property, Plant, and Equipment
- Net property, plant, and equipment increased consistently throughout the period, from US$18,962 million in 2021 to US$23,169 million in 2025. This growth indicates that the company’s investment in property, plant, and equipment, even considering depreciation, has resulted in a net increase in asset value. The largest increase occurred between 2024 and 2025.
The combined effect of these trends suggests a company actively managing its asset base, with a recent emphasis on expansion and modernization, particularly in machinery and equipment and building infrastructure. The consistent increase in construction in progress indicates a commitment to future growth.
Asset Age Ratios (Summary)
Johnson & Johnson, asset age ratios
Based on: 10-K (reporting date: 2025-12-28), 10-K (reporting date: 2024-12-29), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
An analysis of property, plant, and equipment age-related metrics reveals a consistent pattern over the five-year period. The average age ratio demonstrates a gradual decline, while the estimated total useful life fluctuates modestly. The estimated age of assets and remaining useful life also exhibit trends worthy of note.
- Average Age Ratio
- The average age ratio decreased steadily from 61.37% in 2021 to 58.13% in 2025. This suggests a relative slowing in the accumulation of older assets compared to newer ones, or potentially an increased rate of asset retirement or disposal. The consistent downward trend indicates a deliberate or naturally occurring shift towards a younger asset base, expressed as a percentage of total PP&E.
- Estimated Total Useful Life
- The estimated total useful life initially increased from 17 years in 2021 to 18 years in both 2022 and 2023. It then decreased to 17 years in 2024 before rising again to 19 years in 2025. This fluctuation could be attributed to changes in the composition of PP&E, with newer assets having different estimated useful lives than older ones, or revisions to depreciation policies. The overall range remains relatively narrow, suggesting stable long-term assumptions.
- Estimated Age & Remaining Life
- The estimated age, representing the time elapsed since purchase, remained stable at 11 years from 2021 to 2023, decreased to 10 years in 2024, and then increased to 11 years in 2025. This suggests a consistent pattern of asset acquisition, with a slight shift in the average age in 2024. Correspondingly, the estimated remaining life remained constant at 7 years from 2021 to 2024, increasing to 8 years in 2025. This increase in remaining life aligns with the slight decrease in average age in 2024 and the increase in total useful life in 2025, indicating that recently acquired assets may have longer expected lifespans.
In summary, the observed trends suggest a managed approach to asset age, with a gradual reduction in the average age ratio and a consistent, though slightly fluctuating, pattern in estimated useful life and remaining life. The slight variations observed in 2024 and 2025 warrant further investigation to determine the underlying drivers of these changes.
Average Age
Based on: 10-K (reporting date: 2025-12-28), 10-K (reporting date: 2024-12-29), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
2025 Calculations
1 Average age = 100 × Accumulated depreciation ÷ (Property, plant and equipment, gross – Land and land improvements)
= 100 × ÷ ( – ) =
An examination of the financial information reveals trends in property, plant, and equipment, alongside associated accumulated depreciation. Gross property, plant, and equipment experienced an initial increase from 2021 to 2022, followed by a decrease in 2023, and then a subsequent increase through 2025. Accumulated depreciation generally increased over the period, with a notable decrease observed in 2023 before resuming an upward trajectory. Land and land improvements consistently decreased in value throughout the observed timeframe.
- Gross Property, Plant, and Equipment
- The gross value of property, plant, and equipment increased from US$47,679 million in 2021 to US$49,253 million in 2022, representing a growth of approximately 3.3%. A decline was then noted in 2023, falling to US$47,776 million. This was followed by increases in both 2024 (US$48,768 million) and 2025 (US$54,364 million), with the 2025 value representing a substantial increase of approximately 11.5% from 2024.
- Accumulated Depreciation
- Accumulated depreciation increased from US$28,717 million in 2021 to US$29,450 million in 2022, and then decreased to US$27,878 million in 2023. Subsequent increases were observed in 2024 (US$28,250 million) and 2025 (US$31,195 million), with the 2025 value being the highest recorded during the period.
- Land and Land Improvements
- The value of land and land improvements exhibited a consistent downward trend throughout the period, decreasing from US$884 million in 2021 to US$701 million in 2025. This represents a cumulative decrease of approximately 20.7% over the five-year period.
- Average Age Ratio
- The average age ratio demonstrated a gradual, albeit slight, decreasing trend from 61.37% in 2021 to 58.13% in 2025. This suggests that, on average, the property, plant, and equipment are becoming relatively newer over time. The decreases were incremental, ranging from approximately 0.52% to 1.24% annually.
The interplay between gross property, plant, and equipment and accumulated depreciation suggests ongoing investment and asset turnover. The decrease in the average age ratio, coupled with the fluctuations in gross values and accumulated depreciation, warrants further investigation into capital expenditure policies and asset management strategies.
Estimated Total Useful Life
Based on: 10-K (reporting date: 2025-12-28), 10-K (reporting date: 2024-12-29), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
2025 Calculations
1 Estimated total useful life = (Property, plant and equipment, gross – Land and land improvements) ÷ Depreciation expense, including amortization of capitalized interest
= ( – ) ÷ =
Over the five-year period, property, plant and equipment, gross experienced fluctuation. An initial increase from $47,679 million in 2021 to $49,253 million in 2022 was followed by a decrease to $47,776 million in 2023. A subsequent rise to $48,768 million in 2024 was then surpassed by a more substantial increase to $54,364 million in 2025. Land and land improvements consistently decreased throughout the period, moving from $884 million in 2021 to $701 million in 2025.
- Depreciation Expense
- Depreciation expense remained relatively stable between 2021 and 2023, consistently around $2,700 million. A slight increase was observed in 2024, rising to $2,800 million, followed by a further increase to $2,900 million in 2025. This suggests a potential increase in the depreciable asset base or a shift in depreciation methods.
- Estimated Total Useful Life
- The estimated total useful life of property, plant and equipment exhibited some variability. It increased from 17 years in 2021 to 18 years in 2022, remaining at 18 years in 2023. A decrease to 17 years was noted in 2024, before increasing to 19 years in 2025. This fluctuation could indicate changes in the composition of the asset base, with newer assets having longer estimated lives, or revisions to depreciation policies. The increase in 2025 is particularly noteworthy and warrants further investigation.
The combination of fluctuating gross property, plant and equipment values, relatively stable depreciation expense until 2024, and changes in estimated useful life suggests ongoing asset management activities. The increase in gross property, plant and equipment in 2025, coupled with the rise in depreciation expense and the extended estimated useful life, may indicate significant capital investments made during that year.
Estimated Age, Time Elapsed since Purchase
Based on: 10-K (reporting date: 2025-12-28), 10-K (reporting date: 2024-12-29), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
2025 Calculations
1 Time elapsed since purchase = Accumulated depreciation ÷ Depreciation expense, including amortization of capitalized interest
= ÷ =
An examination of the provided financial information reveals trends in accumulated depreciation, depreciation expense, and the reported age of property, plant, and equipment. Accumulated depreciation exhibited an initial increase between 2021 and 2022, followed by a decrease in 2023, and a subsequent increase through 2025. Depreciation expense remained relatively stable between 2021 and 2023, before increasing in the latter two periods. The reported time elapsed since purchase remained consistently at eleven years for most of the observed period, with a single instance of ten years in 2024.
- Accumulated Depreciation
- Accumulated depreciation increased from US$28,717 million in 2021 to US$29,450 million in 2022, representing a growth of approximately 2.5%. A notable decrease occurred in 2023, with accumulated depreciation falling to US$27,878 million. This decrease suggests potential asset disposals or a revision of estimated useful lives. The value then increased to US$28,250 million in 2024 and further to US$31,195 million in 2025, indicating renewed depreciation accrual, potentially from recent acquisitions or increased capital expenditure.
- Depreciation Expense
- Depreciation expense remained constant at US$2,700 million for 2021 and 2022. A slight decrease to US$2,600 million was observed in 2023. An increase to US$2,800 million in 2024 and US$2,900 million in 2025 suggests a growing depreciable asset base or a change in depreciation methods. The increases in depreciation expense align with the increases in accumulated depreciation observed in 2024 and 2025.
- Time Elapsed Since Purchase
- The reported time elapsed since purchase was consistently eleven years between 2021 and 2023, and again in 2025. A single deviation occurred in 2024, where the time elapsed was reported as ten years. This suggests a significant portion of the asset base was acquired around the same time, or that the company consistently updates its asset base. The single year difference in 2024 could be due to a specific asset being revalued or a reporting anomaly.
The interplay between these figures suggests a dynamic asset base. While depreciation expense was initially stable, the increases in recent periods, coupled with the rising accumulated depreciation, indicate ongoing investment in property, plant, and equipment. The decrease in accumulated depreciation in 2023 warrants further investigation to understand the underlying cause.
Estimated Remaining Life
Based on: 10-K (reporting date: 2025-12-28), 10-K (reporting date: 2024-12-29), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
2025 Calculations
1 Estimated remaining life = (Property, plant and equipment, net – Land and land improvements) ÷ Depreciation expense, including amortization of capitalized interest
= ( – ) ÷ =
Property, plant, and equipment, net, exhibited a generally increasing trend over the five-year period, rising from US$18,962 million in 2021 to US$23,169 million in 2025. This growth was not consistent year-over-year, with a more substantial increase observed between 2024 and 2025. Land and land improvements, conversely, demonstrated a consistent decline throughout the period, decreasing from US$884 million in 2021 to US$701 million in 2025.
- Depreciation Expense
- Depreciation expense remained relatively stable between 2021 and 2023, consistently around US$2,700 million. A slight increase was noted in 2024, reaching US$2,800 million, followed by a further increase to US$2,900 million in 2025. This suggests a potential increase in the depreciable asset base or a change in depreciation methods.
- Estimated Remaining Life
- The estimated remaining life of property, plant, and equipment remained constant at seven years from 2021 to 2024. An increase to eight years was observed in 2025. This change could indicate recent asset acquisitions with longer useful lives, a reassessment of existing asset lives, or a shift in the company’s depreciation policy. The increase in estimated remaining life in 2025, coupled with the increase in net PP&E, suggests significant investment in assets expected to contribute to future operations for an extended period.
The combination of increasing net PP&E and rising depreciation expense suggests continued investment in property, plant, and equipment. The lengthening of the estimated remaining life in the most recent year warrants further investigation to understand the underlying drivers and potential impact on future depreciation charges and reported earnings.