Microsoft Excel LibreOffice Calc

Pfizer Inc. (PFE)


Analysis of Property, Plant and Equipment

Difficulty: Advanced


Property, Plant and Equipment Accounting Policy

Property, plant and equipment, less accumulated depreciation assets are recorded at cost and are increased by the cost of any significant improvements after purchase. Property, plant and equipment assets, other than land and construction in progress, are depreciated on a straight-line basis over the estimated useful life of the individual assets. Depreciation begins when the asset is ready for its intended use. For tax purposes, accelerated depreciation methods are used as allowed by tax laws.

Source: 10-K (filing date: 2019-02-28).


Property, Plant and Equipment Disclosure

Pfizer Inc., Statement of Financial Position, Property, Plant and Equipment

USD $ in millions

Microsoft Excel LibreOffice Calc
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Land 500  540  530  588  529 
Buildings 9,920  10,254  9,810  9,604  9,355 
Machinery and equipment 11,871  11,902  11,248  10,933  9,671 
Furniture, fixtures and other 4,693  4,661  4,410  4,352  4,162 
Construction in progress 2,992  2,680  2,127  1,791  1,271 
Property, plant and equipment, gross 29,976  30,037  28,125  27,268  24,988 
Accumulated depreciation (16,591) (16,172) (14,807) (13,502) (13,226)
Property, plant and equipment, less accumulated depreciation 13,385  13,865  13,318  13,766  11,762 

Based on: 10-K (filing date: 2019-02-28), 10-K (filing date: 2018-02-22), 10-K (filing date: 2017-02-23), 10-K (filing date: 2016-02-29), 10-K (filing date: 2015-02-27).

Item Description The company
Property, plant and equipment, gross Amount before accumulated depreciation, depletion and amortization of physical assets used in the normal conduct of business and not intended for resale. Examples include, but are not limited to, land, buildings, machinery and equipment, office equipment, and furniture and fixtures. Pfizer Inc.’s property, plant and equipment, gross increased from 2016 to 2017 but then slightly declined from 2017 to 2018.
Property, plant and equipment, less accumulated depreciation Amount after accumulated depreciation, depletion and amortization of physical assets used in the normal conduct of business to produce goods and services and not intended for resale. Examples include, but are not limited to, land, buildings, machinery and equipment, office equipment, and furniture and fixtures. Pfizer Inc.’s property, plant and equipment, less accumulated depreciation increased from 2016 to 2017 but then slightly declined from 2017 to 2018 not reaching 2016 level.

Property, Plant and Equipment Ratios (Summary)

Pfizer Inc., Property, Plant and Equipment Ratios

Microsoft Excel LibreOffice Calc
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Average age 56.29% 54.83% 53.66% 50.61% 54.07%

Based on: 10-K (filing date: 2019-02-28), 10-K (filing date: 2018-02-22), 10-K (filing date: 2017-02-23), 10-K (filing date: 2016-02-29), 10-K (filing date: 2015-02-27).

Ratio Description The company
Average age As long as straight-line depreciation is used, this is an accurate estimate of asset age as a percentage of depreciable life. The relative age is a useful measure of whether the company’s fixed asset base is old or new. Newer assets are likely to be more efficient. Pfizer Inc.’s average age of depreciable property, plant and equipment deteriorated from 2016 to 2017 and from 2017 to 2018.

Average Age

Microsoft Excel LibreOffice Calc
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Selected Financial Data (USD $ in millions)
Accumulated depreciation 16,591  16,172  14,807  13,502  13,226 
Property, plant and equipment, gross 29,976  30,037  28,125  27,268  24,988 
Land 500  540  530  588  529 
Ratio
Average age1 56.29% 54.83% 53.66% 50.61% 54.07%

Based on: 10-K (filing date: 2019-02-28), 10-K (filing date: 2018-02-22), 10-K (filing date: 2017-02-23), 10-K (filing date: 2016-02-29), 10-K (filing date: 2015-02-27).

2018 Calculations

1 Average age = 100 × Accumulated depreciation ÷ (Property, plant and equipment, gross – Land)
= 100 × 16,591 ÷ (29,976500) = 56.29%

Ratio Description The company
Average age As long as straight-line depreciation is used, this is an accurate estimate of asset age as a percentage of depreciable life. The relative age is a useful measure of whether the company’s fixed asset base is old or new. Newer assets are likely to be more efficient. Pfizer Inc.’s average age of depreciable property, plant and equipment deteriorated from 2016 to 2017 and from 2017 to 2018.