Zoetis Inc. (NYSE:ZTS)

The financial data for property, plant, and equipment over the five-year period exhibits consistent growth across almost all categories, reflecting ongoing investments and expansion activities.

Land

The value of land remained steady at $22 million from 2019 through 2021, followed by a slight increase to $26 million in 2022 and a marginal decrease to $25 million in 2023. This indicates relatively stable land holdings with minor adjustments in recent years.

Buildings

Buildings showed a continuous upward trend from $983 million in 2019 to $1,316 million in 2023. The annual increases were steady, reflecting consistent capital expenditure in building infrastructure over the period.

Machinery, Equipment, and Fixtures

This category experienced significant growth, rising from $2,119 million in 2019 to $3,372 million in 2023. The growth rate suggests ongoing upgrades and expansions of machinery and equipment assets, with the largest yearly increase observed between 2022 and 2023.

Construction-in-Progress

Construction-in-progress values increased from $553 million in 2019 to $1,085 million in 2023. The steady rise suggests sustained investment in new projects under development, with a notable acceleration in 2023.

Property, Plant, and Equipment, Gross Carrying Amount

The gross carrying amount steadily increased from $3,677 million in 2019 to $5,798 million in 2023, reflecting the aggregate growth of all asset categories and indicating overall expansion in fixed assets.

Accumulated Depreciation

Accumulated depreciation increased from negative $1,737 million in 2019 to negative $2,594 million in 2023, consistent with the aging and usage of assets over time. The increase corresponds proportionally with the growth in asset base.

Property, Plant, and Equipment, Net of Accumulated Depreciation

The net value grew from $1,940 million in 2019 to $3,204 million in 2023, showing a robust upward trend. This increase suggests not only ongoing capital investments but also that asset additions exceed the depreciation charges, reflecting strengthening fixed asset net worth.

In summary, the data reveals a deliberate and sustained expansion of property, plant, and equipment assets. Investments in buildings, machinery, and construction projects have progressively increased, contributing to a significant rise in both gross and net asset values. The steady growth in accumulated depreciation aligns naturally with asset aging, but the net figures highlight an overall increase in the company’s productive capacity and asset base over the analyzed period.

The analysis of the annual property, plant, and equipment financial data reveals several notable trends regarding the age and useful life of the assets over the five-year period under review.

Average Age Ratio (%)

The average age ratio exhibits a gradual decline from 47.52% in 2019 to 44.93% in 2023. This downward trend indicates a consistent reduction in the relative age of the asset base, suggesting either the acquisition of newer assets or the retirement of older ones, contributing to a younger overall asset profile.

Estimated Total Useful Life (in years)

The estimated total useful life of the assets shows a slight fluctuation, decreasing from 21 years in 2019 to 18 years in 2021 and 2022, before increasing marginally to 19 years in 2023. This variation may reflect changes in asset composition or updated management estimates regarding the longevity of the assets.

Estimated Age, Time Elapsed Since Purchase (in years)

The estimated age of the assets steadily decreases from 10 years in 2019 to 8 years in 2021 and remains stable at 8 years through 2023. The initial decrease suggests replacement or renewal of older assets with newer ones, while the stabilization in later years indicates a period without significant changes in asset age.

Estimated Remaining Life (in years)

The estimated remaining useful life remains relatively constant, decreasing from 11 years in 2019 to 10 years starting in 2020 and maintaining this level through 2023. The consistency in remaining life indicates a stable expectation regarding the service duration of assets moving forward.

Overall, the data show a trend toward maintaining a relatively youthful and stable asset base, with management’s estimates of useful life reflecting minor adjustments but no significant shifts. The combination of a decreasing average age ratio and a stable estimated remaining life implies ongoing asset renewal and effective lifecycle management.

Accumulated depreciation

The accumulated depreciation of property, plant, and equipment has shown a consistent upward trend from 2019 to 2023. It increased from US$1,737 million in 2019 to US$2,594 million in 2023, indicating substantial depreciation charges over the years. This progressive increase reflects ongoing asset usage and aging of the asset base.

Property, plant and equipment, gross carrying amount

The gross carrying amount of property, plant, and equipment has also risen steadily over the five-year period, starting at US$3,677 million in 2019 and reaching US$5,798 million in 2023. This growth suggests ongoing capital investments and additions to the asset base, supporting operational expansion or modernization efforts.

Land

The value of land remained relatively stable, with minor fluctuations from US$22 million between 2019 and 2021, increasing slightly to US$26 million in 2022 before a slight decrease to US$25 million in 2023. This stability indicates limited acquisition or disposal of land assets during this period.

Average age ratio

The average age ratio of the property, plant, and equipment has shown a gradual decline from 47.52% in 2019 to 44.93% in 2023. This decrease suggests that the asset base is becoming relatively newer, likely due to ongoing investments in new assets that offset aging equipment.

Gross Carrying Amount of Property, Plant, and Equipment

The gross carrying amount of property, plant, and equipment shows a consistent upward trend over the five-year period. It increased from 3,677 million US dollars in 2019 to 5,798 million US dollars in 2023, reflecting a steady investment in tangible assets. The increase is relatively steady each year, with the largest incremental growth observed between 2022 and 2023.

Land

The value of land remained mostly stable, fluctuating slightly between 22 and 26 million US dollars. It stayed constant at 22 million in 2019 through 2021, increased to 26 million in 2022, then marginally decreased to 25 million in 2023. This indicates limited changes in land holdings during the period.

Depreciation Expense

Depreciation expense displays a clear increasing trend, rising from 175 million US dollars in 2019 to 306 million in 2023. This steady increase aligns with the growth in the gross carrying amount, suggesting that the accumulated value of depreciable assets is expanding over time, resulting in higher annual depreciation charges.

Estimated Total Useful Life

The estimated total useful life of the property, plant, and equipment shows a slight downward trend from 21 years in 2019 to 18 years in 2021 and 2022, followed by an increase to 19 years in 2023. This pattern may indicate periodic reassessments of asset longevity, potentially influenced by changes in asset composition or updated management estimates.

Accumulated Depreciation

The accumulated depreciation shows a consistent upward trend over the analyzed periods. Starting at US$ 1,737 million in 2019, it increased steadily each year, reaching US$ 2,594 million by the end of 2023. This rise indicates ongoing depreciation of property, plant, and equipment assets, reflecting both the aging of assets and potentially ongoing asset utilization.

Depreciation Expense

The depreciation expense also demonstrates a continuous increase from US$ 175 million in 2019 to US$ 306 million in 2023. The annual increment suggests that the company either acquired new property, plant, and equipment assets subject to depreciation or revised its depreciation methods or estimates. The growth in depreciation expense outpaces the asset’s aging trend, implying a possible expansion or reinvestment strategy in property, plant, and equipment.

Time Elapsed Since Purchase

The average time elapsed since purchase decreases from 10 years in 2019 to 8 years by 2021 and remains stable through 2023. This reduction followed by stability suggests the addition of newer assets into the asset base, which lowers the average age. The maintenance of this lower average age over the last three years may imply a steady rate of new acquisitions balanced with disposals or retirements of older assets.

Overall Analysis

The combined data reflect a company actively managing and expanding its property, plant, and equipment portfolio. The steady increases in accumulated depreciation and depreciation expense along with the decrease and then stabilization in average asset age indicate ongoing investment in newer assets. These patterns are consistent with growth or modernization initiatives, suggesting a focus on maintaining or enhancing operational capacity while managing asset lifecycle costs.

Property, Plant, and Equipment, Net of Accumulated Depreciation

The net value of property, plant, and equipment displayed a consistent upward trend over the five-year period. Starting at 1,940 million US dollars in 2019, it increased each year to reach 3,204 million US dollars by the end of 2023. This steady growth indicates ongoing investments or capital expenditures exceeding depreciation and disposals.

Land

The value of land remained relatively stable throughout the period, with a slight increase from 22 million US dollars in 2019-2021 to 26 million in 2022, followed by a minor decrease to 25 million in 2023. Such stability suggests limited acquisition or disposition activity related to land assets.

Depreciation Expense

Depreciation expense increased consistently each year, from 175 million US dollars in 2019 to 306 million in 2023. This increment aligns with the growth in property, plant, and equipment, reflecting higher depreciation charges due to a larger asset base or shorter useful lives.

Estimated Remaining Life

The estimated remaining life of the assets was 11 years in 2019 but decreased to 10 years from 2020 onwards, remaining constant through 2023. This slight reduction could reflect aging assets or adjustments in depreciation schedules.