Texas Instruments Inc. (NASDAQ:TXN)

Over the five-year period, significant growth is observed in property, plant, and equipment (PP&E). The largest components of this growth are buildings and improvements, and machinery and equipment. Accumulated depreciation has also increased consistently throughout the period, reflecting the ongoing use of these assets.

Land

The value of land initially remained constant between 2021 and 2022. An increase to US$150 million was noted in 2023, followed by a decrease to US$113 million in 2024, and a subsequent rise to US$162 million in 2025. These fluctuations suggest potential land sales or acquisitions, or revaluation of existing land holdings.

Buildings and Improvements

Buildings and improvements demonstrate a consistent upward trend, increasing from US$3,490 million in 2021 to US$6,830 million in 2025. This represents a substantial investment in building infrastructure over the period, with accelerating growth observed in later years. The increase from 2022 to 2023 was particularly notable.

Machinery and Equipment

Machinery and equipment also exhibit a strong upward trend, rising from US$4,236 million in 2021 to US$10,690 million in 2025. This indicates significant investment in production capabilities. Similar to buildings and improvements, the rate of increase accelerated in the later years of the period.

PP&E at Cost

The total cost of PP&E has more than doubled, increasing from US$7,858 million in 2021 to US$17,682 million in 2025. This growth is driven by the increases in both buildings and improvements, and machinery and equipment, and suggests a significant expansion of the company’s asset base.

Accumulated Depreciation

Accumulated depreciation has increased steadily from -US$2,717 million in 2021 to -US$5,362 million in 2025. This is expected as assets are utilized over time. The rate of depreciation expense appears to be increasing, likely due to the larger asset base.

PP&E, Net

Net PP&E has grown substantially, from US$5,141 million in 2021 to US$12,320 million in 2025. While accumulated depreciation reduces the net value, the significant increases in gross PP&E have resulted in a considerable overall increase in the net book value of the company’s fixed assets. The growth rate of net PP&E has been consistent throughout the period.

The consistent increases in both gross PP&E and accumulated depreciation suggest a period of substantial investment and asset utilization. The accelerating growth in buildings and improvements and machinery and equipment in the later years of the period may indicate a strategic expansion or modernization effort.

The analysis of property, plant, and equipment reveals evolving trends in asset age and useful life estimations. The average age ratio demonstrates a generally decreasing trend from 2021 to 2023, followed by a slight increase in 2024 and a further increase in 2025. Simultaneously, estimations of total useful life and remaining life fluctuate, potentially impacting depreciation calculations and asset valuation.

Average Age Ratio

The average age ratio decreased from 35.17% in 2021 to 24.92% in 2023, indicating a relative rejuvenation of the asset base. This could be due to significant asset disposals, new acquisitions, or revised depreciation methods. However, the ratio increased to 25.80% in 2024 and 30.61% in 2025, suggesting a potential slowing of asset replacement or an increase in the age of recently added assets. This reversal warrants further investigation.

Estimated Total Useful Life

The estimated total useful life of assets initially increased from 10 years in 2021 to 11 years in both 2022 and 2023. This suggests a potential reassessment of asset longevity. A subsequent decrease to 10 years in 2024 and further to 9 years in 2025 indicates a possible recalibration of useful life expectations, potentially reflecting technological obsolescence or increased wear and tear. These changes in estimated useful life directly affect depreciation expense.

Estimated Age and Remaining Life

The estimated age, representing the time elapsed since purchase, remained constant at 3 years from 2022 through 2025. This suggests consistent asset acquisition patterns over this period. The estimated remaining life increased from 7 years in 2021 and 2022 to 8 years in 2023, then decreased to 7 years in 2024 and 6 years in 2025. This fluctuation, coupled with the changes in total useful life, suggests a dynamic assessment of asset performance and potential for future use. The decreasing remaining life in 2025 could signal a need for increased capital expenditure to maintain operational capacity.

Overall, the trends suggest a period of asset base modernization between 2021 and 2023, followed by a potential shift towards slower replacement and revised useful life estimations. Continued monitoring of these ratios is recommended to assess the long-term implications for capital expenditure planning and financial reporting.

An examination of the financial information reveals significant changes in property, plant, and equipment over the five-year period. Accumulated depreciation consistently increased, while the cost of property, plant, and equipment experienced substantial growth, particularly between 2021 and 2023. The average age ratio demonstrates fluctuations, suggesting shifts in the composition and depreciation patterns of these assets.

Property, Plant, and Equipment Cost

The cost of property, plant, and equipment increased from US$7.858 billion in 2021 to US$17.682 billion in 2025. The most substantial increase occurred between 2021 and 2023, growing from US$7.858 billion to US$13.268 billion, representing a 68.8% increase. Growth continued, albeit at a slower pace, between 2023 and 2025, increasing by 33.3%. This indicates significant investment in property, plant, and equipment during this period.

Accumulated Depreciation

Accumulated depreciation rose steadily throughout the period, increasing from US$2.717 billion in 2021 to US$5.362 billion in 2025. The rate of increase accelerated between 2023 and 2024, with an increase of US$638 million, compared to US$195 million between 2022 and 2023. This suggests a higher depreciation expense recognized in 2024, potentially due to increased asset utilization or changes in depreciation methods.

Land

The value of land remained relatively stable between 2021 and 2022 at US$132 million. An increase to US$150 million was observed in 2023, followed by a decrease to US$113 million in 2024, and a subsequent increase to US$162 million in 2025. These fluctuations are comparatively small relative to the overall property, plant, and equipment values and may reflect reclassifications or minor land acquisitions/disposals.

Average Age Ratio

The average age ratio decreased from 35.17% in 2021 to 24.92% in 2023, indicating a relatively younger asset base in terms of accumulated depreciation as a percentage of cost. However, the ratio increased to 25.80% in 2024 and further to 30.61% in 2025. This reversal suggests that, despite continued investment, the rate of depreciation is catching up to the asset cost, potentially due to the increased depreciation expense observed in 2024 and 2025, or a slowing of asset additions relative to depreciation.

In summary, the company has been actively investing in property, plant, and equipment. While the average age ratio initially decreased, indicating a younger asset base, it has begun to increase in recent years, suggesting a potential shift in the depreciation profile of the asset base.

Property, plant, and equipment at cost exhibited a consistent upward trend throughout the observed period, increasing from US$7,858 million in 2021 to US$17,682 million in 2025. This indicates substantial investment in fixed assets over the five-year timeframe. Land holdings experienced fluctuations, initially remaining constant before increasing in 2023 and decreasing in 2024, then rising again in 2025. Depreciation expense also demonstrated a clear increasing trend, rising from US$755 million in 2021 to US$1,918 million in 2025, which is consistent with the growth in the asset base.

Estimated Useful Life

The estimated total useful life of property, plant, and equipment showed a decreasing trend. It began at 10 years in 2021, increased to 11 years in both 2022 and 2023, and then decreased to 10 years in 2024 and further to 9 years in 2025. This suggests a potential shift in the composition of assets, with newer acquisitions potentially having shorter estimated lives, or a reassessment of the longevity of existing assets. The decrease in estimated useful life, coupled with the increasing depreciation expense, implies a higher rate of asset consumption.

The correlation between the increasing property, plant, and equipment at cost and the rising depreciation expense is expected. However, the changing estimated useful life warrants further investigation. A shorter useful life will accelerate depreciation, impacting reported earnings. The initial increase in useful life followed by a decrease could be due to changes in technology, increased utilization, or alterations in the company’s depreciation policies. The increase in land value in 2023 and 2025 may indicate strategic acquisitions or revaluations.

Continued monitoring of these trends is recommended, particularly the interplay between capital expenditures, depreciation expense, and the estimated useful life of assets. Understanding the drivers behind the changes in estimated useful life is crucial for accurate financial forecasting and performance evaluation.

Analysis reveals a consistent increase in accumulated depreciation and depreciation expense over the observed period. Simultaneously, the reported time elapsed since purchase remains constant, suggesting a pattern of ongoing asset replacement or significant additions to the property, plant, and equipment base.

Accumulated Depreciation

Accumulated depreciation demonstrates a clear upward trend, increasing from US$2,717 million in 2021 to US$5,362 million in 2025. This represents a substantial cumulative increase of approximately 97.8% over the five-year period. The rate of increase appears to be accelerating, with larger absolute increases observed in later years.

Depreciation Expense

Depreciation expense also exhibits a consistent upward trajectory, rising from US$755 million in 2021 to US$1,918 million in 2025. This signifies a growth of approximately 154.1% over the period. Similar to accumulated depreciation, the annual increments in depreciation expense are growing, indicating potentially larger recent asset acquisitions or a shift towards depreciating more expensive assets.

Time Elapsed Since Purchase

The reported time elapsed since purchase consistently remains at 3 years from 2022 through 2025, despite the increasing depreciation figures. This suggests that the company is consistently acquiring new assets, offsetting the age of existing assets. The initial value of 4 years in 2021 could indicate a change in acquisition strategy or a one-time event affecting the average asset age.

The combination of rising depreciation expense and accumulated depreciation alongside a stable time elapsed since purchase suggests a significant and ongoing investment in property, plant, and equipment. Further investigation into the nature of these asset acquisitions and the company’s capital expenditure policy would be beneficial to fully understand these trends.

Property, plant, and equipment (PP&E), net, exhibited a substantial and consistent increase over the five-year period. Concurrent with this growth, depreciation expense also increased significantly. The estimated remaining life of these assets fluctuated modestly during the period.

PP&E Growth

PP&E, net, increased from US$5,141 million in 2021 to US$12,320 million in 2025, representing a cumulative increase of approximately 139.7%. The largest year-over-year increase occurred between 2022 and 2023, with an addition of US$3,123 million. Growth continued, though at a decreasing rate, in subsequent years.

Depreciation Expense Trend

Depreciation expense mirrored the trend in PP&E, rising from US$755 million in 2021 to US$1,918 million in 2025. This increase suggests a direct correlation between the expanding asset base and the associated depreciation charges. The rate of increase in depreciation expense accelerated in later years, potentially indicating the impact of newer, more substantial asset additions.

Estimated Remaining Life

The estimated remaining life of the PP&E was consistently around seven years, with a slight increase to eight years in 2023, before decreasing to six years in 2025. This fluctuation could be due to changes in asset acquisition patterns, revisions in depreciation policies, or the retirement of assets with shorter useful lives. The decrease in 2025 warrants further investigation to determine if it signals a potential need for increased capital expenditure in the near future.

The consistent growth in PP&E, coupled with the corresponding increase in depreciation expense, suggests ongoing investment in productive assets. The modest changes in estimated remaining life do not appear to indicate any immediate concerns, but the decline in 2025 should be monitored.