PepsiCo Inc. (NASDAQ:PEP)

Over the five-year period, property, plant, and equipment exhibited a consistent pattern of growth, both in gross value and net value. However, the rate of growth varied across different asset categories and over time. Significant investment appears to be occurring in buildings and machinery, while land holdings are relatively stable and construction in progress fluctuates.

Land

The value of land remained relatively stable throughout the period, experiencing a slight increase from US$1,123 million in 2021 to US$1,159 million in 2023, followed by a modest decline to US$1,110 million in 2025. This suggests limited activity in land acquisitions or disposals.

Buildings and Improvements

Buildings and improvements demonstrated substantial growth, increasing from US$10,279 million in 2021 to US$13,875 million in 2025. The growth rate accelerated between 2023 and 2025, indicating increased investment in building infrastructure. This represents a significant portion of the overall growth in gross property, plant, and equipment.

Machinery and Equipment

Machinery and equipment, including fleet and software, also showed consistent growth, rising from US$31,486 million in 2021 to US$41,113 million in 2025. The rate of increase was relatively steady, suggesting ongoing investment in operational capacity. This category represents the largest component of gross property, plant, and equipment.

Construction in Progress

Construction in progress increased from US$3,940 million in 2021 to a peak of US$5,941 million in 2024, before decreasing to US$4,811 million in 2025. This fluctuation suggests varying levels of ongoing construction projects, with a potential completion or shift in focus in 2025.

Gross Property, Plant, and Equipment

The gross value of property, plant, and equipment increased steadily from US$46,828 million in 2021 to US$60,909 million in 2025, reflecting the combined growth of its components. The largest increases occurred between 2023 and 2025.

Accumulated Depreciation

Accumulated depreciation increased consistently throughout the period, from -US$24,421 million in 2021 to -US$31,004 million in 2025. The rate of depreciation expense appears to be increasing alongside the growth in gross assets, which is expected.

Net Property, Plant, and Equipment

Net property, plant, and equipment increased from US$22,407 million in 2021 to US$29,905 million in 2025. The growth rate in net assets mirrors the growth in gross assets, adjusted for the increasing accumulated depreciation. The consistent growth in net PP&E suggests continued investment in productive assets.

In summary, the organization demonstrates a pattern of consistent investment in property, plant, and equipment, particularly in buildings and machinery. The increasing accumulated depreciation is consistent with the growth in asset base. The fluctuation in construction in progress warrants further investigation to understand project timelines and capital allocation strategies.

The analysis of property, plant, and equipment reveals a generally stable asset profile over the five-year period. The average age ratio demonstrates a slight decreasing trend initially, followed by a minor increase in the final year. Simultaneously, the estimated total useful life of assets has exhibited a modest increase and subsequent stabilization.

Average Age Ratio

The average age ratio decreased from 53.43% in 2021 to 51.03% in 2024, indicating a relative slowing in the aging of the asset base. However, a slight increase to 51.85% was observed in 2025. This suggests that, while the proportion of older assets within the total asset base is generally declining, the rate of decline has moderated recently.

Estimated Useful Life

The estimated total useful life of the assets increased from 18 years in 2021 to 20 years in 2023. This increase suggests a potential reassessment of asset longevity or the acquisition of newer, more durable assets. The useful life then stabilized at 19 years in 2024 and 2025, indicating a consistent expectation of asset lifespan.

Estimated Age and Remaining Life

The estimated age, representing the time elapsed since purchase, remained constant at 10 years throughout the period. This, coupled with the changes in estimated total useful life, directly impacts the estimated remaining life. The remaining life increased from 9 years in 2021 and 2022 to 10 years in 2023, mirroring the increase in total useful life. It then returned to 9 years in 2024 and 2025, aligning with the stabilization of the total useful life.

Overall, the asset base appears to be aging at a controlled rate, with a recent stabilization in the average age ratio. The increase and subsequent stabilization of the estimated useful life suggest proactive asset management and potentially a shift towards longer-lasting assets. The consistent estimated age indicates a steady pattern of asset acquisition over time.

The value of accumulated depreciation has consistently increased from 2021 to 2025, rising from US$24,421 million to US$31,004 million. Simultaneously, the gross value of property, plant, and equipment has also exhibited an upward trend, growing from US$46,828 million in 2021 to US$60,909 million in 2025. Land holdings have shown a modest increase initially, peaking in 2023 at US$1,159 million, before declining slightly to US$1,110 million in 2025.

Average Age Ratio

The average age ratio has remained relatively stable over the five-year period, fluctuating between 51.03% and 53.43%. A slight decreasing trend was observed from 2021 to 2024, falling from 53.43% to 51.03%. However, the ratio increased to 51.85% in 2025. This suggests a consistent rate of asset renewal or replacement, with minimal significant shifts in the overall age profile of the asset base.

The consistent growth in both accumulated depreciation and gross property, plant, and equipment suggests ongoing investment in new assets alongside the natural depreciation of existing ones. The relatively stable average age ratio indicates that the company is effectively managing the lifecycle of its assets, maintaining a consistent age profile despite the increases in overall asset value. The minor decline and subsequent increase in the average age ratio warrant continued monitoring, but do not currently indicate a substantial change in asset management strategy.

The slight decrease in land value towards the end of the period is a minor observation and may be attributable to reclassifications, disposals, or adjustments in valuation. Further investigation would be required to determine the underlying cause.

Over the five-year period examined, property, plant, and equipment, gross consistently increased, indicating ongoing investment in fixed assets. Land values experienced modest growth initially, followed by a slight decline in later years. Depreciation expense demonstrated a consistent upward trend throughout the period. The estimated total useful life of these assets exhibited a shift, initially increasing and then stabilizing.

Gross Property, Plant, and Equipment

The gross value of property, plant, and equipment increased from US$46,828 million in 2021 to US$60,909 million in 2025. This represents a cumulative increase of approximately 30.1%. The rate of increase accelerated between 2022 and 2023, then slowed slightly before resuming a higher growth rate in 2025.

Land Values

Land values increased from US$1,123 million in 2021 to US$1,159 million in 2023, representing a growth of 3.2%. However, values decreased to US$1,110 million by 2025, suggesting potential revaluation or disposals of land assets.

Depreciation Expense

Depreciation expense rose steadily from US$2,484 million in 2021 to US$3,213 million in 2025, representing an increase of 29.4%. This increase correlates with the growth in gross property, plant, and equipment, as a larger asset base typically results in higher depreciation charges. The rate of increase in depreciation expense accelerated in 2024 and 2025.

Estimated Total Useful Life

The estimated total useful life of property, plant, and equipment increased from 18 years in 2021 to 20 years in 2023. This suggests a potential reassessment of asset longevity, possibly due to improvements in maintenance practices or the acquisition of more durable assets. However, the estimated useful life then decreased to 19 years in 2024 and remained at 19 years in 2025, indicating a stabilization of this estimate.

The combination of increasing gross property, plant, and equipment and rising depreciation expense suggests continued investment in assets and a corresponding recognition of their consumption over time. The initial increase, followed by stabilization, in estimated useful life warrants further investigation to understand the underlying factors driving these changes.

Analysis of the presented financial information reveals consistent increases in accumulated depreciation and depreciation expense over the five-year period. Notably, the reported time elapsed since purchase remains constant throughout the observed timeframe.

Accumulated Depreciation

Accumulated depreciation demonstrates a steady upward trajectory, increasing from US$24,421 million in 2021 to US$31,004 million in 2025. This represents a total increase of US$6,583 million, or approximately 26.9%, over the five years. The rate of increase appears to be accelerating, with larger absolute increases observed in later years.

Depreciation Expense

Depreciation expense also exhibits a consistent increase, rising from US$2,484 million in 2021 to US$3,213 million in 2025. This signifies a total increase of US$729 million, or roughly 29.3%, over the period. Similar to accumulated depreciation, the annual increments in depreciation expense are growing, suggesting potentially increased investment in property, plant, and equipment or changes in depreciation methods.

Time Elapsed Since Purchase

The reported time elapsed since purchase consistently remains at 10 years. This suggests that the company is not reporting on the age of all assets, or that significant asset purchases have not occurred within the observed period that would alter the average age. The constant value warrants further investigation to understand the composition of the asset base and recent capital expenditure activity.

Relationship between Depreciation Expense and Accumulated Depreciation

The depreciation expense for each year is added to the accumulated depreciation from the prior year, as expected. The increasing depreciation expense directly contributes to the growth in accumulated depreciation. The accelerating growth in both metrics suggests a potential increase in the depreciable asset base or a shift towards more aggressive depreciation schedules.

In summary, the financial information indicates a consistent pattern of increasing depreciation charges against a stable asset age profile. Further investigation into capital expenditure patterns and depreciation policies would be beneficial to fully understand these trends.

Property, plant, and equipment, net has demonstrated a consistent upward trend over the five-year period, increasing from US$22,407 million in 2021 to US$29,905 million in 2025. This growth suggests ongoing investment in fixed assets. Land holdings have also increased, albeit at a slower pace, decreasing slightly in the latest year observed.

Net PP&E Growth

The net value of property, plant, and equipment increased by approximately 33.4% between 2021 and 2025. The largest single-year increase occurred between 2022 and 2023, with an addition of US$2,748 million. Growth slowed somewhat in the subsequent years, but remained positive.

Depreciation Expense

Depreciation expense has risen steadily throughout the period, from US$2,484 million in 2021 to US$3,213 million in 2025. This increase is consistent with the growth in the net book value of property, plant, and equipment, indicating that more assets are being depreciated. The rate of increase in depreciation expense accelerated in 2024 and 2025.

Estimated Remaining Life

The estimated remaining life of the property, plant, and equipment was consistently reported as 9 years, with a single year at 10 years in 2023. The brief increase to 10 years in 2023 may indicate a reassessment of asset useful lives, or the addition of assets with longer expected lifespans. The return to 9 years in subsequent periods suggests a stabilization of this estimate.

The combination of increasing net PP&E and rising depreciation expense suggests continued investment in assets and their subsequent utilization. The relatively stable estimated remaining life indicates a consistent approach to asset valuation and depreciation, with a possible, temporary adjustment in 2023.