Thermo Fisher Scientific Inc. (NYSE:TMO)

The analysis of the property, plant, and equipment (PP&E) data over the five-year period reveals several notable trends and changes in the asset base and related depreciation.

Land

The value of land shows a gradual increase from 410 million USD in 2020 to a peak of 458 million USD in 2023, followed by a slight decline to 439 million USD in 2024. This suggests relatively stable land holdings with minor fluctuations possibly due to disposals or revaluations.

Buildings and Improvements

Buildings and improvements display consistent growth throughout the period, increasing steadily from 2,192 million USD in 2020 to 3,728 million USD in 2024. The growth appears to accelerate particularly after 2021, indicating substantial investment in infrastructure expansion or upgrades during these years.

Machinery, Equipment, and Leasehold Improvements

This category also shows a continuous upward trend, rising from 6,975 million USD in 2020 to 9,858 million USD in 2024. The steady increase reflects ongoing capital expenditure on production and operational assets, supporting potential capacity enhancement or modernization efforts.

Construction in Progress

Values start from zero in 2020 (no data) and reach a high point of 2,695 million USD in 2022, before declining to 2,034 million USD in 2024. This pattern suggests active ongoing projects that began after 2020, with some projects completing and being capitalized into fixed assets in later years, as indicated by the subsequent rise in buildings and equipment.

Property, Plant and Equipment, at Cost

The total gross cost of PP&E demonstrates a strong upward trajectory from 9,577 million USD in 2020 to 16,059 million USD in 2024. This increase aligns with the expansions observed in buildings, machinery, and construction in progress, reflecting significant investment activity overall.

Accumulated Depreciation and Amortization

Accumulated depreciation, presented as negative values, grows in magnitude from -3,665 million USD in 2020 to -6,753 million USD in 2024. The increasing balance of accumulated depreciation is consistent with the aging of assets and the addition of new fixed assets subject to depreciation over time.

Property, Plant and Equipment, Net

The net book value of PP&E rises sharply from 5,912 million USD in 2020 to 9,448 million USD in 2023 but shows a slight decline to 9,306 million USD in 2024. This slight drop may result from accelerated depreciation or asset disposals exceeding new capital expenditures in the final year, despite overall asset additions across the period.

In summary, the data indicates robust capital investment and asset base growth from 2020 through 2023, supported by ongoing construction projects and significant increases in buildings and equipment. The slight reduction in net PP&E in 2024 warrants attention but does not offset the broader trend of expansion and asset accumulation. Accumulated depreciation growth corresponds appropriately with the increasing asset base, reflecting standard accounting depreciation practices.

The data reflects trends related to the average age and estimated useful life of property, plant, and equipment over a five-year period ending in 2024.

Average Age Ratio (%)

The average age ratio shows a general upward trend over the period. Starting at 39.98% in 2020, it decreases to 35.03% in 2021 but then increases steadily to 36.11% in 2022, 40.33% in 2023, and reaches 43.23% by 2024. This suggests that the asset base is becoming progressively older relative to its total estimated useful life.

Estimated Total Useful Life (in years)

The estimated total useful life remained fairly stable, fluctuating slightly between 14 and 15 years. Specifically, it was 14 years in 2020, increased to 15 years in 2021, and then reverted to 14 years from 2022 through 2024. These slight changes indicate a relatively consistent expectation of asset longevity throughout the period.

Estimated Age, Time Elapsed Since Purchase (in years)

The estimated age of assets shows minor variations, initially declining from 6 years in 2020 to 5 years in both 2021 and 2022, then rising again to 6 years in 2023 and remaining at that level in 2024. This pattern may reflect periods of acquisition or disposal activity affecting the asset base's average age.

Estimated Remaining Life (in years)

The estimated remaining life correspondingly exhibits slight fluctuations, increasing from 8 years in 2020 to 10 years in 2021, then decreasing to 9 years in 2022, and stabilizing at 8 years in 2023 and 2024. This pattern is consistent with the changes in estimated age and indicates adjustments in asset valuation or usage expectations.

Overall, the asset base appears to be aging, as indicated by the increasing average age ratio and stable to slightly declining estimated remaining life. The estimated total useful life has remained consistent, suggesting stable assumptions about asset longevity. These trends could imply a need for future reinvestment or capital expenditure to maintain operational capacity as assets approach the end of their useful lives.

Property, Plant, and Equipment at Cost

The cost of property, plant, and equipment showed a consistent increase over the period analyzed. From US$9,577 million at the end of 2020, the value rose steadily each year, reaching US$16,059 million by the end of 2024. This trend indicates ongoing investments in fixed assets.

Accumulated Depreciation and Amortization

Accumulated depreciation and amortization also increased over the five-year span. Starting at US$3,665 million at the end of 2020, it rose each year to US$6,753 million by the end of 2024. The growth in accumulated depreciation corresponds to the increase in asset base and suggests aging or continuous usage of assets.

Land

The value of land remained relatively stable with minor fluctuations. Beginning at US$410 million in 2020, it marginally increased to US$458 million by 2023 before a slight decrease to US$439 million in 2024. This stability suggests limited acquisition or disposal of land assets.

Average Age Ratio

The average age ratio experienced some variation but generally exhibited an upward trend. It declined from 39.98% in 2020 to 35.03% in 2021, indicating relatively newer assets or recent acquisitions. However, it then increased consistently each subsequent year, reaching 43.23% in 2024. This increase implies that the asset base is aging, and the company may need to consider asset replacement or refurbishment in the near future.

Property, Plant and Equipment, at Cost

The cost of property, plant, and equipment has demonstrated a consistent upward trend over the five-year period. Beginning at $9,577 million in 2020, the value increased significantly each year, reaching $16,059 million by the end of 2024. This represents a substantial growth, indicative of ongoing capital investments or acquisitions in this asset category.

Land

The value of land has exhibited relative stability compared to other items, with minor fluctuations. Starting at $410 million in 2020, it rose gradually to $458 million in 2023 before slightly declining to $439 million in 2024. This suggests limited changes in land holdings or revaluations during the period.

Depreciation of Property, Plant and Equipment

Depreciation expense has increased steadily from $658 million in 2020 to $1,156 million in 2024. The rise in depreciation correlates with the growth in the cost of property, plant, and equipment, reflecting expanding asset bases and corresponding usage over time.

Estimated Total Useful Life

The estimated total useful life of property, plant, and equipment remained relatively constant, fluctuating slightly between 14 and 15 years. This consistency indicates stable assumptions regarding the depreciation period and asset longevity across the years analyzed.

Accumulated Depreciation and Amortization

The accumulated depreciation and amortization exhibit a consistent increasing trend over the observed five-year period. Starting at US$3,665 million in 2020, the figure rose steadily to US$6,753 million by 2024. This growth reflects ongoing depreciation charges accumulating over time, indicative of sustained use and aging of property, plant, and equipment assets.

Depreciation of Property, Plant, and Equipment

Depreciation expense for property, plant, and equipment also demonstrates a rising trajectory from 2020 to 2024. The expense increased from US$658 million in 2020 to US$1,156 million in 2024. This upward movement suggests either an expansion in the asset base, changes in depreciation methods or rates, or that newer assets with higher values are being added, resulting in higher periodic depreciation charges.

Time Elapsed Since Purchase

The average time elapsed since the purchase of assets fluctuated slightly during the period. Starting at 6 years in 2020, it decreased to 5 years in 2021 and 2022, before returning to 6 years in both 2023 and 2024. This pattern may indicate a cycle of assets being added and older assets fully depreciating or being disposed of, maintaining an average asset age around five to six years.

Overall Insights

The combined data suggest a strategy of continuous investment in property, plant, and equipment alongside ongoing asset usage and depreciation. The increasing accumulated depreciation aligns with the rising depreciation expense, reflecting the aging of assets as well as possible asset growth or enhancements over time. The relatively stable average asset age supports the notion of a balanced renewal or replacement cycle within the fixed asset portfolio.

Property, Plant, and Equipment, Net

The net value of property, plant, and equipment demonstrates an overall increasing trend from 2020 to 2023, rising from 5,912 million US dollars in 2020 to a peak of 9,448 million US dollars in 2023. However, in 2024, there is a slight decline to 9,306 million US dollars. This suggests sustained investment in fixed assets over the years with a minor reduction or asset disposals in the most recent period.

Land

Land values show a gradual increase from 410 million US dollars in 2020 to 458 million US dollars by the end of 2023, followed by a small decrease to 439 million US dollars in 2024. The relatively stable but slightly fluctuating land valuation indicates limited acquisitions or disposals of land assets in recent years.

Depreciation of Property, Plant, and Equipment

Depreciation expenses have steadily increased each year, from 658 million US dollars in 2020 to 1,156 million US dollars in 2024. This continuous rise reflects ongoing allocation of asset costs over their useful lives and possibly an expanding asset base that contributes to higher depreciation charges.

Estimated Remaining Life

The estimated remaining life of property, plant, and equipment was 8 years in 2020, increased to 10 years in 2021, then slightly decreased to 9 years in 2022, and settled back to 8 years for the subsequent years 2023 and 2024. This variation may be influenced by changes in asset composition, re-assessment of useful lives, or asset replacements.