Analysis of Property, Plant and Equipment
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- Balance Sheet: Assets
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Solvency Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Analysis of Reportable Segments
- Common Stock Valuation Ratios
- Enterprise Value to EBITDA (EV/EBITDA)
- Net Profit Margin since 2005
- Operating Profit Margin since 2005
- Price to Book Value (P/BV) since 2005
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Property, Plant and Equipment Disclosure
Verizon Communications 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
- The value of land shows a steady increase from 608 million USD at the end of 2020 to a peak of 751 million USD in 2023, followed by a slight decrease to 740 million USD in 2024. This suggests a relatively stable investment with minor fluctuations in this asset category.
- Buildings and equipment
- Buildings and equipment have demonstrated consistent growth over the analyzed period, rising from 32,933 million USD in 2020 to 39,130 million USD by the end of 2024. This indicates ongoing capital expenditures likely aimed at expanding or upgrading infrastructure.
- Central office and other network equipment
- This category fluctuates, starting at 160,369 million USD in 2020, dipping to 153,240 million USD in 2021, and then increasing steadily to 176,680 million USD in 2024. The initial dip may reflect asset disposals or revaluations, while subsequent growth suggests renewed investment in network equipment.
- Antennas, cable, conduit, poles and towers
- There is a pronounced upward trend, from 56,814 million USD in 2020 to 82,810 million USD in 2024. The consistent growth over five years highlights significant investments in essential telecommunications infrastructure.
- Leasehold improvements
- Leasehold improvements show gradual increases from 9,497 million USD in 2020 to 10,562 million USD in 2024, reflecting ongoing enhancements to leased properties.
- Work in progress
- The value of work in progress increased notably from 8,576 million USD in 2020 to 13,057 million USD in 2021, but then declined steadily to 9,424 million USD by 2024. This pattern may indicate a surge in construction or equipment deployment projects in 2021, followed by their completion in subsequent years.
- Furniture, vehicles and other
- This category experienced a minor decline from 10,940 million USD in 2020 to 10,246 million USD in 2021, but recovered and increased to 12,060 million USD by 2024, suggesting replacement or addition of non-core physical assets.
- Plant, property and equipment, at cost
- Total plant, property and equipment at cost increased steadily from 279,737 million USD in 2020 to 331,406 million USD in 2024. This consistent upward movement affirms sustained capital investment in physical assets over the five-year period.
- Accumulated depreciation
- Accumulated depreciation has also risen reliably, moving from -184,904 million USD in 2020 down to -222,884 million USD in 2024. This growing depreciation reflects asset aging and usage in line with the increasing asset base.
- Plant, property and equipment, net
- Net plant, property and equipment increased from 94,833 million USD in 2020 to 108,522 million USD in 2024. The upward trend, although less steep than the gross asset growth, indicates that asset additions outpace depreciation, resulting in a growing net asset base.
Asset Age Ratios (Summary)
Verizon Communications 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 shows a slight fluctuation over the observed period. It began at 66.24% in 2020, decreasing marginally to 65.24% by 2022, then increasing steadily to 67.4% by 2024. This indicates a relatively stable aging profile of property, plant, and equipment, with a slight trend toward an older asset base in recent years.
- Estimated Total Useful Life
- The estimated total useful life of the assets remained constant at 20 years for the first two years, then increased to 21 years in 2022 and 2023, and further to 22 years in 2024. This upward revision suggests reassessments leading to a longer expected lifespan of property, plant, and equipment over time.
- Estimated Age, Time Elapsed Since Purchase
- The estimated age of the assets progressed consistently, increasing from 13 years in 2020 and 2021, to 14 years in 2022 and 2023, and then to 15 years in 2024. This steady increase aligns with the passage of time and reflects an aging asset base.
- Estimated Remaining Life
- The estimated remaining life remained constant at 7 years throughout the five-year period. Despite the increase in total useful life and the aging of assets, the remaining life has remained unchanged, implying adjustments in estimated useful life that offset the increase in asset age.
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 ÷ (Plant, property and equipment, at cost – Land)
= 100 × ÷ ( – ) =
- Plant, Property, and Equipment at Cost
- The value of plant, property, and equipment at cost exhibits a steady upward trend from 279,737 million US dollars in 2020 to 331,406 million US dollars in 2024. This reflects ongoing investment and capital expenditures over the years, with an overall increase of approximately 18.5% across the five-year period.
- Accumulated Depreciation
- Accumulated depreciation consistently rises each year, increasing from 184,904 million US dollars in 2020 to 222,884 million US dollars in 2024. This increment suggests a normal aging process and usage of assets, with depreciation expenses accumulating steadily every year. The increase in accumulated depreciation represents about a 20.5% growth over the five years, aligning with the expansion of asset base and usage.
- Land
- The reported value of land increases modestly from 608 million US dollars in 2020 to a peak of 751 million US dollars in 2023, followed by a slight decrease to 740 million US dollars in 2024. The relatively stable values indicate limited land acquisitions or disposals, with minimal impact compared to the total asset base.
- Average Age Ratio
- The average age ratio fluctuates slightly, starting at 66.24% in 2020, dipping to 65.24% by 2022, and then increasing again to reach 67.4% by 2024. This indicates that despite continual asset additions, the overall asset base is aging marginally, particularly evident in the upward trend in the last two years. The increasing average age ratio suggests that a greater proportion of assets are older, which could imply potential future capital expenditure needs to replace aging infrastructure.
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 = (Plant, property and equipment, at cost – Land) ÷ Depreciation expense
= ( – ) ÷ =
- Plant, property and equipment, at cost
- The value of plant, property, and equipment at cost has shown a consistent upward trend over the five-year period. Starting at approximately $279.7 billion in 2020, the value increased steadily each year to reach about $331.4 billion by the end of 2024. This represents an overall increase of roughly 18.5%, indicating ongoing investment and expansion in physical assets.
- Land
- The recorded value of land also increased from $608 million in 2020 to $740 million in 2024, reflecting a generally positive growth trend. The increase was most notable between 2020 and 2022, after which it stabilized and slightly declined in the final year. Overall, land value grew by approximately 21.7% over the period.
- Depreciation expense
- Depreciation expense showed minor fluctuations but generally increased from $14.275 billion in 2020 to $15.112 billion in 2024. Despite a slight dip in 2021, the expense has demonstrated a gradual upward trajectory, reflecting either additional asset capitalization or updated depreciation policies. The total increase over the period is around 5.8%.
- Estimated total useful life
- The estimated total useful life of assets has incrementally increased from 20 years in 2020 and 2021 to 22 years by 2024. This trend suggests that assets are being evaluated as having a longer useful life, which may impact depreciation scheduling and expense recognition positively by spreading costs over more extended periods.
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
-
The accumulated depreciation shows a consistent upward trend from 2020 to 2024. Starting at 184,904 million US dollars at the end of 2020, it increased steadily each year, reaching 222,884 million US dollars by the end of 2024. This represents a total increase of approximately 37,980 million US dollars over the five-year period, indicating ongoing depreciation of property, plant, and equipment assets.
- Depreciation Expense
-
Depreciation expense remained relatively stable but displayed slight fluctuations over the five years. It started at 14,275 million US dollars in 2020, dipped marginally to 14,119 million in 2021, then increased to 14,592 million in 2022, rose further to 14,937 million in 2023, and reached 15,112 million in 2024. This gradual increase suggests steady use or aging of assets with a modest rise in annual depreciation charges.
- Time Elapsed Since Purchase
-
The average time elapsed since purchase of the assets aged from 13 years in 2020 and 2021 to 15 years by 2024. The incremental increase in asset age correlates with the rise in accumulated depreciation, as older assets accumulate more depreciation over time. This aging trend might indicate either limited new asset acquisitions or a portfolio comprised primarily of long-term assets.
- Overall Analysis
-
The data reveals a steady depreciation of property, plant, and equipment assets over the period examined, with accumulated depreciation increasing consistently each year. The depreciation expense shows a slight upward trend, reflecting either a marginal increase in the depreciation rate or an expanding asset base. The incremental increase in the average age of assets suggests limited recent addition of new assets or retention of older assets in use. Together, these patterns imply a mature asset portfolio undergoing systematic depreciation with controlled yearly expenses.
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 = (Plant, property and equipment, net – Land) ÷ Depreciation expense
= ( – ) ÷ =
- Plant, property and equipment, net
- There is a consistent growth trend in the net value of plant, property, and equipment over the five-year period. Starting at $94,833 million at the end of 2020, the value increased each year to reach $108,522 million by the end of 2024. The most notable increment occurred between 2021 and 2022, suggesting possible capital investments or asset revaluations during that time.
- Land
- The value of land assets showed a gradual increase from $608 million in 2020 to $751 million in 2023, followed by a slight decrease to $740 million in 2024. This pattern indicates an overall stable land asset base with minor fluctuations towards the end of the period, potentially reflecting land sales or reclassification.
- Depreciation Expense
- Depreciation expense remained relatively stable with a slight upward trajectory throughout the period. It began at $14,275 million in 2020 and increased to $15,112 million by 2024. The incremental rise each year suggests ongoing consumption of assets in line with or possibly exceeding capital expenditures, consistent with the expanding asset base.
- Estimated Remaining Life
- The estimated remaining useful life of the assets remained constant at 7 years across all reported years. This stability indicates no major adjustments in asset life assumptions, reflecting consistent asset age and expected usage patterns.