Stock Analysis on Net
Stock Analysis on Net
Microsoft Excel LibreOffice Calc

Philip Morris International Inc. (NYSE:PM)

Analysis of Property, Plant and Equipment

Advanced level

Property, Plant and Equipment Disclosure

Philip Morris International Inc., balance sheet: property, plant and equipment

US$ in millions

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Land and land improvements 590  566  600  639  590 
Buildings and building equipment 4,410  4,132  3,975  3,989  3,474 
Machinery and equipment 9,460  9,354  9,096  8,976  7,366 
Construction in progress 449  394  886  962  930 
Property, plant and equipment, at cost 14,909  14,446  14,557  14,566  12,360 
Accumulated depreciation (8,544) (7,815) (7,356) (7,295) (6,296)
Property, plant and equipment, less accumulated depreciation 6,365  6,631  7,201  7,271  6,064 

Based on: 10-K (filing date: 2021-02-09), 10-K (filing date: 2020-02-07), 10-K (filing date: 2019-02-07), 10-K (filing date: 2018-02-13), 10-K (filing date: 2017-02-14).

Item Description The company
Property, plant and equipment, at cost 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. Philip Morris International Inc.’s property, plant and equipment, at cost decreased from 2018 to 2019 but then increased from 2019 to 2020 exceeding 2018 level.
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. Philip Morris International Inc.’s property, plant and equipment, less accumulated depreciation decreased from 2018 to 2019 and from 2019 to 2020.

Asset Age Ratios (Summary)

Philip Morris International Inc., asset age ratios

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Average age ratio 59.67% 56.30% 52.70% 52.38% 53.49%
Estimated total useful life (years) 16 15 15 18 18
Estimated age, time elapsed since purchase (years) 9 9 8 9 9
Estimated remaining life (years) 6 7 7 8 8

Based on: 10-K (filing date: 2021-02-09), 10-K (filing date: 2020-02-07), 10-K (filing date: 2019-02-07), 10-K (filing date: 2018-02-13), 10-K (filing date: 2017-02-14).

Asset age ratio Description The company
Average age ratio 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. Philip Morris International Inc.’s average age ratio of depreciable property, plant and equipment deteriorated from 2018 to 2019 and from 2019 to 2020.
Estimated total useful life Over longer time periods, this ratio is a useful measure of company’s depreciation policy and can be used for comparisons with competitors. Philip Morris International Inc.’s estimated total useful life of depreciable property, plant and equipment increased from 2018 to 2019 and from 2019 to 2020.
Estimated time elapsed since purchase The approximate age in years of a company’s fixed assets. Useful for comparison purposes. Philip Morris International Inc.’s estimated time elapsed since purchase of depreciable property, plant and equipment deteriorated from 2018 to 2019 and from 2019 to 2020.
Estimated remaining life Philip Morris International Inc.’s estimated remaining life of depreciable property, plant and equipment decreased from 2018 to 2019 and from 2019 to 2020.

Average Age

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Selected Financial Data (US$ in millions)
Accumulated depreciation 8,544  7,815  7,356  7,295  6,296 
Property, plant and equipment, at cost 14,909  14,446  14,557  14,566  12,360 
Land and land improvements 590  566  600  639  590 
Asset Age Ratio
Average age1 59.67% 56.30% 52.70% 52.38% 53.49%

Based on: 10-K (filing date: 2021-02-09), 10-K (filing date: 2020-02-07), 10-K (filing date: 2019-02-07), 10-K (filing date: 2018-02-13), 10-K (filing date: 2017-02-14).

2020 Calculations

1 Average age = 100 × Accumulated depreciation ÷ (Property, plant and equipment, at cost – Land and land improvements)
= 100 × 8,544 ÷ (14,909590) = 59.67%

Asset age 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. Philip Morris International Inc.’s average age ratio of depreciable property, plant and equipment deteriorated from 2018 to 2019 and from 2019 to 2020.

Estimated Total Useful Life

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Selected Financial Data (US$ in millions)
Property, plant and equipment, at cost 14,909  14,446  14,557  14,566  12,360 
Land and land improvements 590  566  600  639  590 
Depreciation expense 908  898  907  787  669 
Asset Age Ratio (Years)
Estimated total useful life1 16 15 15 18 18

Based on: 10-K (filing date: 2021-02-09), 10-K (filing date: 2020-02-07), 10-K (filing date: 2019-02-07), 10-K (filing date: 2018-02-13), 10-K (filing date: 2017-02-14).

2020 Calculations

1 Estimated total useful life = (Property, plant and equipment, at cost – Land and land improvements) ÷ Depreciation expense
= (14,909590) ÷ 908 = 16

Asset age ratio Description The company
Estimated total useful life Over longer time periods, this ratio is a useful measure of company’s depreciation policy and can be used for comparisons with competitors. Philip Morris International Inc.’s estimated total useful life of depreciable property, plant and equipment increased from 2018 to 2019 and from 2019 to 2020.

Estimated Age, Time Elapsed since Purchase

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Selected Financial Data (US$ in millions)
Accumulated depreciation 8,544  7,815  7,356  7,295  6,296 
Depreciation expense 908  898  907  787  669 
Asset Age Ratio (Years)
Time elapsed since purchase1 9 9 8 9 9

Based on: 10-K (filing date: 2021-02-09), 10-K (filing date: 2020-02-07), 10-K (filing date: 2019-02-07), 10-K (filing date: 2018-02-13), 10-K (filing date: 2017-02-14).

2020 Calculations

1 Time elapsed since purchase = Accumulated depreciation ÷ Depreciation expense
= 8,544 ÷ 908 = 9

Asset age ratio Description The company
Estimated time elapsed since purchase The approximate age in years of a company’s fixed assets. Useful for comparison purposes. Philip Morris International Inc.’s estimated time elapsed since purchase of depreciable property, plant and equipment deteriorated from 2018 to 2019 and from 2019 to 2020.

Estimated Remaining Life

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Selected Financial Data (US$ in millions)
Property, plant and equipment, less accumulated depreciation 6,365  6,631  7,201  7,271  6,064 
Land and land improvements 590  566  600  639  590 
Depreciation expense 908  898  907  787  669 
Asset Age Ratio (Years)
Estimated remaining life1 6 7 7 8 8

Based on: 10-K (filing date: 2021-02-09), 10-K (filing date: 2020-02-07), 10-K (filing date: 2019-02-07), 10-K (filing date: 2018-02-13), 10-K (filing date: 2017-02-14).

2020 Calculations

1 Estimated remaining life = (Property, plant and equipment, less accumulated depreciation – Land and land improvements) ÷ Depreciation expense
= (6,365590) ÷ 908 = 6

Asset age ratio Description The company
Estimated remaining life Philip Morris International Inc.’s estimated remaining life of depreciable property, plant and equipment decreased from 2018 to 2019 and from 2019 to 2020.