Analysis of Property, Plant and Equipment
Property, Plant and Equipment Disclosure
Philip Morris International Inc., balance sheet: property, plant and equipment
US$ in millions
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
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
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 ÷ (14,909 – 590) = 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
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
= (14,909 – 590) ÷ 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
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
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
= (6,365 – 590) ÷ 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. |