Time Warner Cable Inc. (NYSE:TWC)

The analysis of the property, plant, and equipment (PP&E) data over the five-year period reveals consistent growth in most asset categories, reflecting ongoing investment and expansion activities.

Land

The value of land showed a moderate increase from US$158 million in 2011 to US$174 million in 2015, indicating steady but limited acquisition or revaluation of land assets over the period.

Buildings and improvements

Buildings and improvements experienced a noticeable rise from US$1,399 million to US$1,919 million, signifying significant capital expenditure and possibly enhancements in infrastructure.

Distribution systems

This category, representing the largest asset component, saw a substantial increase from US$19,470 million to US$27,126 million. The growth underscores heavy investment geared towards expanding and upgrading the distribution network.

Converters and modems

The values fluctuated slightly but generally trended upward from US$5,591 million to US$6,743 million, suggesting continuous reinvestment in technology to maintain or improve service capabilities.

Capitalized software costs

A strong upward trend is evident in capitalized software costs, rising from US$1,643 million to US$2,924 million. This may indicate increased focus on software development and implementation related to operations or customer service.

Vehicles and other equipment

Incremental growth was observed, with values increasing from US$2,191 million to US$2,466 million, reflecting ongoing fleet refreshment and equipment purchases.

Construction in progress

This category remained relatively stable with minor fluctuations, ending at US$424 million in 2015 compared to US$468 million in 2011. This suggests consistent but controlled project execution during the period.

Property, plant and equipment, gross

The gross PP&E balance increased steadily from US$30,920 million to US$41,776 million, confirming substantial overall capital investments across the asset base.

Accumulated depreciation

Accumulated depreciation increased significantly from -US$17,015 million to -US$24,831 million, reflecting aging assets and the wear-down of existing equipment in proportion to the asset growth.

Property, plant and equipment, net

Net PP&E rose consistently from US$13,905 million to US$16,945 million. Despite increased depreciation, the net asset base expanded, indicating that additions to assets outpaced asset retirements and depreciation expenses.

Overall, the data reflects a strategic expansion and modernization of the physical and technological infrastructure. Capital expenditures appear to prioritize distribution systems and software development, while accumulated depreciation’s growth aligns with the aging(asset base, suggesting continuous asset turnover and renewal activities to sustain operational capacities.

Average age ratio

The average age ratio shows a consistent upward trend over the five-year period, increasing from 55.31% in 2011 to 59.69% in 2015. This indicates that, on average, the property, plant, and equipment are aging, suggesting that a larger proportion of the assets have been in use for a significant part of their estimated useful lives.

Estimated total useful life

The estimated total useful life of the assets remained stable at 10 years during 2011 and 2012, then increased to 11 years in 2013 and further to 12 years in 2014 and 2015. This upward adjustment could reflect changes in asset management strategies, improved asset durability, or reassessments of asset longevity.

Estimated age, time elapsed since purchase

The estimated age of the assets shows a gradual increase from 6 years in 2011 and 2012 to 7 years from 2013 through 2015. This progression aligns with the aging of the asset base over time, although the pace slows down slightly after 2013, remaining constant at 7 years.

Estimated remaining life

The estimated remaining life remains constant at 5 years throughout the five-year period. Despite the increase in total useful life, the remaining life does not show a corresponding change, implying a balance between aging assets and adding newer assets with longer useful lives.

Accumulated Depreciation

The accumulated depreciation shows a steady upward trend from 2011 to 2015. It increased from 17,015 million USD in 2011 to 24,831 million USD in 2015, indicating ongoing depreciation of property, plant, and equipment assets over the period.

Property, Plant and Equipment, Gross

The gross value of property, plant, and equipment also consistently increased throughout the years, rising from 30,920 million USD in 2011 to 41,776 million USD in 2015. This suggests continued investment and expansion in fixed assets over the five-year period.

Land

The value attributed to land remained relatively stable across the years, showing only a minor increase from 158 million USD in 2011 to 174 million USD in 2015. This steadiness reflects the typically low depreciation and infrequent revaluation of land assets.

Average Age Ratio

The average age ratio increased gradually from 55.31% in 2011 to 59.69% in 2015. This indicates the asset base is aging, which could imply that the proportion of older assets to newer ones has increased, potentially affecting future maintenance costs and capital expenditure decisions.

Gross Property, Plant and Equipment

The gross value of property, plant, and equipment exhibits a consistent upward trend over the five-year period, increasing from US$30,920 million in 2011 to US$41,776 million in 2015. This represents an approximate 35% growth, indicating ongoing investment and asset accumulation.

Land

The value attributed to land remains relatively stable throughout the period, with a slight increase from US$158 million in 2011 to US$174 million in 2015. This suggests limited acquisition or revaluation activity related to land holdings.

Depreciation Expense

Depreciation expense shows a steady increase from US$2,994 million in 2011 to US$3,560 million in 2015. This upward trend aligns with the growth in gross property, plant, and equipment, reflecting a higher depreciable asset base. The increments each year are moderate, with the largest increase noted between 2014 and 2015.

Estimated Total Useful Life

The estimated total useful life of the assets shows an increase from 10 years in 2011 and 2012 to 11 years in 2013, and subsequently to 12 years in both 2014 and 2015. This extension may imply asset re-evaluations or changes in accounting estimates, potentially reducing annual depreciation rates despite growing asset values.

Accumulated Depreciation

The accumulated depreciation increased steadily each year, rising from $17,015 million at the end of 2011 to $24,831 million by the end of 2015. This consistent upward trend indicates ongoing wear and tear or obsolescence of the company's property, plant, and equipment assets over the five-year period.

Depreciation Expense

Depreciation expense showed a moderate increase, growing from $2,994 million in 2011 to $3,560 million in 2015. The increase was gradual, with the expense staying relatively stable between 2012 and 2014 before a notable rise in 2015. This suggests a relatively consistent level of asset usage and replacement activity with a slight acceleration in asset wear or additions leading up to 2015.

Time Elapsed Since Purchase

The time elapsed since purchase remained constant at six years from 2011 to 2012 and then increased to seven years from 2013 onwards through 2015. This stability in asset age indicates a relatively long life span of assets held, with limited new purchases or retirements affecting the average asset age during this period.

Overall Insights

The data reveals a steady accumulation of depreciation, reflecting sustained use of assets over time. The depreciation expense, while increasing, suggests stable asset management practices with a slight uptick in asset consumption or additions by 2015. The constant asset age measurement implies a focus on maintaining existing assets rather than significant reinvestment or replacement within these years.

Property, plant and equipment, net

The net value of property, plant, and equipment shows a consistent upward trend over the five-year period. It increased from $13,905 million at the end of 2011 to $16,945 million by the end of 2015, reflecting a steady investment in fixed assets. This growth suggests ongoing capital expenditure and possibly expansion or upgrades of operational facilities.

Land

The net book value of land remained relatively stable throughout the period, with a slight increase from $158 million in 2011 to $174 million in 2015. This stability indicates minimal acquisition or disposal activity related to land assets, suggesting that changes in property, plant, and equipment net value are driven primarily by other asset categories.

Depreciation expense

Depreciation expense exhibited a gradual increase year over year, rising from $2,994 million in 2011 to $3,560 million in 2015. This upward trend is consistent with the growth in the asset base, as higher capital investments generally lead to increased depreciation charges. The increase could also reflect a consistent accounting policy and asset usage pattern over the years.

Estimated remaining life

The estimated remaining life of assets remained constant at 5 years throughout the period. This constancy implies that there were no significant changes in asset lifespan assumptions or asset mix that would influence depreciation calculations. The stable remaining life assumption supports the reliability of the observed depreciation expense trends in relation to asset values.