Analysis of Property, Plant and Equipment
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Philip Morris International Inc. pages available for free this week:
- Balance Sheet: Liabilities and Stockholders’ Equity
- Common-Size Balance Sheet: Assets
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Solvency Ratios
- Analysis of Short-term (Operating) Activity Ratios
- Analysis of Geographic Areas
- Common Stock Valuation Ratios
- Enterprise Value to FCFF (EV/FCFF)
- Price to Book Value (P/BV) since 2008
- Analysis of Revenues
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Property, Plant and Equipment Disclosure
Philip Morris International Inc., balance sheet: property, plant and equipment
US$ in millions
Based on: 10-K (reporting date: 2024-12-31), 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).
- Land and land improvements
- The value of land and land improvements exhibits a decreasing trend from 2020 to 2022, declining from 590 million USD to 545 million USD. This is followed by a modest recovery in 2023 and 2024, reaching 581 million USD, close to the initial level in 2020.
- Buildings and building equipment
- The cost associated with buildings and building equipment shows a slight overall decline over the five-year period. Starting at 4410 million USD in 2020, it decreases gradually to 4291 million USD by 2022, then temporarily rises to 4617 million USD in 2023 before settling back down to 4391 million USD in 2024.
- Machinery and equipment
- There is a clear upward trend in the machinery and equipment category. The value initially dips from 9460 million USD in 2020 to 9275 million USD in 2021, but subsequently increases significantly to reach 10632 million USD by 2024, indicating increased investment or acquisition in this asset category.
- Construction in progress
- Construction in progress demonstrates a strong increasing trend from 449 million USD in 2020 to a peak of 1200 million USD in 2023, followed by a slight decline to 1081 million USD in 2024. This pattern suggests ongoing development activities with some completion or slowdown in the final year.
- Property, plant and equipment, at cost
- The total property, plant, and equipment at cost reflects consistent growth over the observed period. After a slight dip from 14909 million USD in 2020 to 14732 million USD in 2021, the figure rises each year, peaking at 17080 million USD in 2023, and slightly retracts to 16685 million USD in 2024.
- Accumulated depreciation
- Accumulated depreciation displays a steady increase in magnitude (more negative), moving from -8544 million USD in 2020 to -9564 million USD in 2023, before a minor decrease to -9375 million USD in 2024. This consistent rise indicates ongoing depreciation charges on fixed assets over time.
- Property, plant and equipment, less accumulated depreciation
- The net value of property, plant, and equipment shows a general upward progression through the period. The figure declines from 6365 million USD in 2020 to a low of 6168 million USD in 2021, then ascends steadily to reach a maximum of 7516 million USD in 2023, followed by a slight reduction to 7310 million USD in 2024. This implies net asset growth despite increasing depreciation.
Asset Age Ratios (Summary)
Philip Morris International Inc., asset age ratios
Based on: 10-K (reporting date: 2024-12-31), 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).
- Average Age Ratio
- The average age ratio demonstrates minor fluctuations over the observed five-year period. Starting at 59.67% in 2020, it experienced a modest increase to 60.45% in 2021, after which it declined steadily to 57.86% in 2023 before a slight rise to 58.22% in 2024. This indicates a relatively stable but slightly decreasing trend in the relative age of the property, plant, and equipment assets after 2021.
- Estimated Total Useful Life
- The estimated total useful life of the assets has remained fairly consistent around 16 years initially, with a slight increase to 18 years in 2023 followed by a minor reduction to 17 years in 2024. This suggests some reassessment or refurbishment activities possibly extending the lifespan slightly before reverting to a marginally lower estimate.
- Estimated Age (Time Elapsed Since Purchase)
- The estimated age of the assets has steadily increased from 9 years in 2021 to 11 years in 2023, then decreased to 10 years in 2024. The initial aging aligns logically with the passage of time, while the reduction in 2024 may imply asset disposals, replacements, or reclassification of some equipment within the portfolio.
- Estimated Remaining Life
- The estimated remaining life shows a consistent upward trend from 6 years in 2021 to 8 years in 2023, followed by a slight decrease to 7 years in 2024. This pattern indicates an extension of the assets' useful life over several years, potentially due to maintenance or refurbishment, with a minor contraction in the final recorded period.
Average Age
Based on: 10-K (reporting date: 2024-12-31), 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).
2024 Calculations
1 Average age = 100 × Accumulated depreciation ÷ (Property, plant and equipment, at cost – Land and land improvements)
= 100 × ÷ ( – ) =
- Property, Plant, and Equipment Cost
- The cost of property, plant, and equipment exhibited a general upward trend over the analyzed period, increasing from 14,909 million US dollars at the end of 2020 to a peak of 17,080 million US dollars in 2023 before slightly declining to 16,685 million US dollars in 2024. This indicates that the company invested significantly in PP&E assets particularly between 2021 and 2023, suggesting expansion or upgrades of physical assets before a mild reduction in net asset additions in 2024.
- Accumulated Depreciation
- Accumulated depreciation showed a consistent increase from 8,544 million US dollars in 2020 to 9,564 million in 2023. However, there was a moderate decrease to 9,375 million US dollars in 2024. The steady growth in depreciation aligns with the rising asset base throughout most of the period, reflecting wear and usage of assets. The decline in 2024 may reflect lower depreciation expenses or disposals of assets.
- Land and Land Improvements
- Values associated with land and land improvements remained relatively stable, fluctuating moderately between 545 and 590 million US dollars. Notably, after a declining trend until 2022, the figure increased again in 2023 and 2024, reaching 581 million US dollars. This stability suggests no significant acquisitions or sales regarding these assets, with slight adjustments likely occurring due to revaluation or minor transactions.
- Average Age Ratio
- The average age ratio of property, plant, and equipment showed a modest declining trend from 59.67% in 2020 to 57.86% in 2023, then slightly increased to 58.22% in 2024. This downward trend generally indicates that the company’s asset base was progressively renewed or supplemented with newer assets over time, slightly reversing in the last year, which might indicate a slowdown in asset replacement or an increase in the age of existing assets.
- Summary of Trends
- Overall, the company’s investments in property, plant, and equipment increased over the majority of the period, accompanied by increased accumulated depreciation consistent with asset usage. The relatively stable land values imply limited activity in that asset category. The decreasing average age ratio suggests ongoing renewal of the asset base, supporting operational modernization or capacity expansion, although the minor increase in 2024 may merit monitoring for potential impacts on future maintenance or capital expenditure needs.
Estimated Total Useful Life
Based on: 10-K (reporting date: 2024-12-31), 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).
2024 Calculations
1 Estimated total useful life = (Property, plant and equipment, at cost – Land and land improvements) ÷ Depreciation expense
= ( – ) ÷ =
- Property, plant and equipment, at cost
- The value of property, plant, and equipment at cost exhibited a fluctuating trend over the five-year period. Starting at $14,909 million in 2020, there was a slight decrease to $14,732 million in 2021, followed by an increase to $15,443 million in 2022. The upward trend continued more notably in 2023, reaching $17,080 million. However, in 2024, a slight decline occurred, with the figure decreasing to $16,685 million. Overall, the asset base showed growth with some variability, suggesting periodic investments and disposals or revaluations.
- Land and land improvements
- The value of land and land improvements demonstrated a generally stable pattern with minor fluctuations. It started at $590 million in 2020 and decreased gradually to $545 million by 2022. However, a modest recovery was observed in the following years, with the value increasing to $550 million in 2023 and further to $581 million in 2024. This trend indicates relative stability in land assets with slight adjustments possibly due to land sales or improvements.
- Depreciation expense
- Depreciation expense data is available from 2021 onward, showing slight variations across the four years. The expense was $902 million in 2021, slightly increasing to $918 million in 2022, then experiencing a minor decrease to $901 million in 2023, followed by a notable increase to $952 million in 2024. These fluctuations may reflect changes in asset composition, useful life estimates, or capital expenditure patterns.
- Estimated total useful life
- The estimated total useful life of property, plant, and equipment was 16 years in both 2021 and 2022, then increased to 18 years in 2023, before decreasing slightly to 17 years in 2024. This variation suggests adjustments in asset lifespan assumptions, possibly indicating a shift in asset types or revisions in depreciation policies.
Estimated Age, Time Elapsed since Purchase
Based on: 10-K (reporting date: 2024-12-31), 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).
2024 Calculations
1 Time elapsed since purchase = Accumulated depreciation ÷ Depreciation expense
= ÷ =
- Accumulated depreciation
- Over the five-year period from 2020 to 2024, accumulated depreciation exhibits a generally increasing trend. Starting at 8,544 million US dollars in 2020, it remains relatively stable in 2021 at 8,564 million but then rises progressively to 8,733 million in 2022 and peaks at 9,564 million in 2023 before showing a slight decrease to 9,375 million in 2024. This pattern suggests ongoing depreciation of property, plant, and equipment assets, with a minor reduction in total accumulated depreciation recorded in the latest year.
- Depreciation expense
- Depreciation expense data is available from 2021 onward, showing moderate fluctuations. It starts at 902 million US dollars in 2021, increases slightly to 918 million in 2022, then declines marginally to 901 million in 2023 before rising again to 952 million in 2024. This indicates that the annual charge for depreciation remains relatively consistent with some year-to-year variation, reflecting either changes in asset base or depreciation policies.
- Time elapsed since purchase
- The time elapsed since asset purchase increases from 9 years in 2021 to 11 years in 2023, followed by a decrease to 10 years in 2024. This trend may reflect the aging of assets held by the company, with a slight adjustment downward in the last year potentially due to asset additions or revaluation.
- Overall insights
- The data indicates a stable to increasing pattern in asset depreciation over the observed years, with accumulated depreciation increasing in line with consistent depreciation expenses. The time elapsed metric suggests assets are aging, but recent data points imply some renewal or modification of the asset base. Together, these trends illustrate a mature asset portfolio with ongoing depreciation consistent with standard accounting practices.
Estimated Remaining Life
Based on: 10-K (reporting date: 2024-12-31), 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).
2024 Calculations
1 Estimated remaining life = (Property, plant and equipment, less accumulated depreciation – Land and land improvements) ÷ Depreciation expense
= ( – ) ÷ =
- Property, Plant, and Equipment (Net)
- The net value of property, plant, and equipment experienced fluctuations over the five-year period. Beginning at US$6,365 million in 2020, the net value slightly decreased to US$6,168 million in 2021. Subsequently, it increased steadily to reach a peak of US$7,516 million in 2023 before experiencing a minor decline to US$7,310 million in 2024. This pattern suggests a general trend of asset growth with some variability likely due to acquisition, disposal, or depreciation effects.
- Land and Land Improvements
- The value attributed to land and land improvements showed a gradual decline from US$590 million in 2020 to US$545 million in 2022, followed by a modest recovery to US$581 million in 2024. The initial decline could indicate disposals or revaluations, while the later increase suggests additional investments or reassessments in land assets.
- Depreciation Expense
- Depreciation expense data started being reported from 2021 onwards. The expense was US$902 million in 2021, increasing narrowly to US$918 million in 2022. It then slightly decreased to US$901 million in 2023, before rising again to US$952 million in 2024. These changes reflect the consumption of the company's tangible assets and possibly changes in the asset base or useful life estimates.
- Estimated Remaining Life of Assets
- The estimated remaining life of property, plant, and equipment increased from 6 years in 2021 to 8 years by 2023, before a reduction to 7 years in 2024. This trend could indicate adjustments in the asset aging or re-evaluations of remaining useful lives, which would affect depreciation calculations and asset value estimations.