Lockheed Martin Corp. (NYSE:LMT)

Property, plant, and equipment (PP&E) exhibited a consistent pattern of growth from 2021 through 2025. Gross PP&E increased steadily over the five-year period, while accumulated depreciation also rose, resulting in a net increase in PP&E, albeit at a slower rate.

Land

The value of land remained relatively stable, fluctuating modestly between US$143 million and US$147 million. A slight increase is noted in the final year, reaching US$147 million in 2025.

Buildings

Buildings demonstrated the most substantial growth among the PP&E components. The value increased from US$8,003 million in 2021 to US$10,209 million in 2025, representing a cumulative increase of approximately 27.3%. This indicates significant investment in building infrastructure over the period.

Machinery and Equipment

Machinery and equipment also showed consistent growth, increasing from US$9,053 million in 2021 to US$10,941 million in 2025, a cumulative increase of approximately 20.9%. The rate of increase was slightly lower than that of buildings.

Construction in Progress

Construction in progress initially increased from US$1,900 million in 2021 to US$2,081 million in 2023, then decreased to US$1,806 million in 2025. This suggests that projects under construction were largely completed or reclassified during the latter part of the period, leading to a reduction in the balance of ongoing construction.

Accumulated Depreciation

Accumulated depreciation increased consistently each year, from US$11,503 million in 2021 to US$14,228 million in 2025. This reflects the ongoing consumption of the economic benefits of the company’s PP&E assets. The rate of increase in accumulated depreciation generally mirrored the growth in gross PP&E.

Net PP&E

Net PP&E increased from US$7,597 million in 2021 to US$8,875 million in 2025. While positive, the growth rate slowed over time, as the increase in accumulated depreciation partially offset the growth in gross PP&E. The largest year-over-year increase in net PP&E occurred between 2022 and 2023.

Overall, the trends suggest a period of sustained investment in PP&E, particularly in buildings and machinery/equipment. The consistent increase in accumulated depreciation is expected and reflects the normal aging and utilization of these assets. The decrease in construction in progress towards the end of the period may indicate a shift in capital expenditure strategy or the completion of major projects.

An analysis of property, plant, and equipment age-related metrics reveals a consistent, albeit gradual, pattern over the five-year period. The average age ratio exhibits a steady increase, while the estimated total useful life and elapsed time since purchase also demonstrate incremental changes. These shifts suggest a potential aging of the asset base.

Average Age Ratio

The average age ratio increased from 60.68% in 2021 to 61.98% in 2025. This consistent upward trend indicates that, as a percentage of total useful life, the assets are becoming older on average. The increases are relatively small year-over-year, suggesting a slow but persistent aging process.

Estimated Total Useful Life

The estimated total useful life of the assets increased from 21 years in 2021 to 23 years in 2023, and remained constant at 23 years through 2025. This suggests a reassessment of asset longevity occurred between 2021 and 2023, potentially due to improved maintenance practices or technological advancements extending asset usability. The stabilization at 23 years indicates a settled expectation regarding asset lifespan.

Estimated Age & Remaining Life

The estimated age, representing the time elapsed since purchase, increased from 13 years in 2021 and 2022 to 14 years in 2023, 2024, and 2025. Concurrently, the estimated remaining life increased from 8 years in 2021 to 9 years in 2022 and remained constant through 2025. The increase in both elapsed time and remaining life, alongside the increase in total useful life, suggests a potential shift in asset acquisition timing or a change in depreciation methodologies. The consistent remaining life from 2022-2025, despite the increasing age, reinforces the impact of the extended useful life estimates.

Overall, the observed trends suggest a managed aging process of the asset base. While the average age ratio is increasing, the extension of estimated useful life mitigates the immediate implications of this aging. Continued monitoring of these ratios is recommended to assess the long-term impact on capital expenditure requirements and asset replacement strategies.

An examination of the financial information reveals a consistent pattern in property, plant, and equipment related metrics over the five-year period. Accumulated depreciation steadily increased from US$11,503 million in 2021 to US$14,228 million in 2025, indicating a continuous recognition of asset consumption. Simultaneously, the gross value of property, plant, and equipment also exhibited a consistent upward trend, rising from US$19,100 million in 2021 to US$23,103 million in 2025. Land holdings remained relatively stable throughout the period, fluctuating modestly between US$143 million and US$147 million.

Average Age Ratio

The average age ratio demonstrates a gradual, but consistent, increase over the observed timeframe. Starting at 60.68% in 2021, the ratio rose to 61.98% in 2025. This suggests that the company’s fixed assets are, on average, becoming older. The incremental increases, while small each year, collectively indicate a lengthening of the weighted-average age of the asset base. This trend warrants further investigation to assess potential implications for future capital expenditure requirements and asset performance.

The consistent growth in gross property, plant, and equipment, coupled with increasing accumulated depreciation, suggests ongoing investment in new assets alongside the natural depreciation of existing ones. The relatively stable land value indicates no significant land transactions during the period. The increasing average age ratio, while not dramatic, signals a potential need to monitor asset condition and plan for future replacements or upgrades to maintain operational efficiency.

Property, plant, and equipment, gross, have demonstrated a consistent upward trend over the five-year period, increasing from US$19,100 million in 2021 to US$23,103 million in 2025. Land holdings have remained relatively stable, with minor fluctuations around US$145 million. Depreciation expense related to plant and equipment has also increased steadily, rising from US$904 million in 2021 to US$1,000 million in 2025. Notably, the estimated total useful life of these assets has been extended from 21 years in 2021 to 23 years in 2023, and has remained constant at 23 years for the subsequent two years.

Gross Property, Plant, and Equipment

The continuous growth in gross property, plant, and equipment suggests ongoing investment in fixed assets. This expansion could be indicative of increased production capacity, technological upgrades, or strategic acquisitions. The rate of increase appears relatively consistent year-over-year.

Depreciation Expense

The increasing depreciation expense correlates with the growth in gross property, plant, and equipment. This is expected, as a larger asset base naturally leads to higher depreciation charges. The consistent rise suggests a stable depreciation method and no significant changes in asset utilization.

Estimated Useful Life

The initial increase in estimated useful life from 21 to 23 years is a significant observation. This extension could be due to several factors, including improvements in asset maintenance, technological advancements extending asset longevity, or a reassessment of depreciation policies. The stabilization at 23 years from 2023 onwards suggests a finalized assessment of asset lifespan. A longer useful life will result in lower annual depreciation expense for each asset, potentially improving reported profitability.

The combined trends suggest a pattern of investment in long-term assets coupled with a revised assessment of their longevity. The consistent increases in both gross property, plant, and equipment and depreciation expense indicate a healthy and growing asset base. The extension of the estimated useful life warrants further investigation to understand the underlying reasons and potential impact on financial reporting.

Accumulated depreciation consistently increased from 2021 to 2025, indicating a continued recognition of the cost of plant and equipment over their useful lives. Depreciation expense related to plant and equipment remained relatively stable between 2021 and 2023, then exhibited a noticeable upward trend in 2024 and 2025. The reported time elapsed since purchase remained constant at 13 years for 2021 and 2022, then increased to 14 years for 2023, 2024, and 2025.

Accumulated Depreciation

Accumulated depreciation increased by approximately 5.3% year-over-year from 2021 to 2022, then by 5.3% from 2022 to 2023, 4.6% from 2023 to 2024, and 5.7% from 2024 to 2025. This consistent increase suggests a steady utilization of plant and equipment assets. The rate of increase appears to be accelerating slightly in the later years.

Depreciation Expense

Depreciation expense remained nearly flat between 2021 and 2023, with a slight decrease in 2022. However, a clear upward trend emerges in the latter two years, with increases of 7.1% from 2023 to 2024 and 3.4% from 2024 to 2025. This suggests either new asset additions becoming subject to depreciation, a change in depreciation methods, or a reassessment of asset useful lives.

Time Elapsed Since Purchase

The consistent age of 13 years for the first two years suggests a significant portion of the asset base was acquired around the same time. The increase to 14 years in 2023 and subsequent years indicates that the initial cohort of assets is maturing, potentially leading to increased maintenance costs or eventual replacement needs. The stability of this value from 2023-2025 suggests no major new asset purchases have significantly altered the average age of the asset base.

The combination of increasing accumulated depreciation and increasing depreciation expense suggests the company’s plant and equipment are being utilized and depreciated. The recent acceleration in depreciation expense, coupled with the aging of the asset base, warrants further investigation to understand the drivers behind these trends and their potential impact on future capital expenditure requirements.

Property, plant, and equipment, net, increased steadily from 2021 to 2025, rising from US$7,597 million to US$8,875 million. This growth suggests ongoing investment in fixed assets. Land remained relatively stable throughout the period, with minor fluctuations, indicating no significant land acquisitions or disposals. Depreciation expense related to plant and equipment exhibited an increasing trend, moving from US$904 million in 2021 to US$1,000 million in 2025. Notably, the estimated remaining life of these assets remained constant at nine years from 2022 through 2025, despite the increasing depreciation expense.

Net PP&E Growth

The consistent increase in net property, plant, and equipment suggests continued capital expenditure. The growth rate decelerated slightly between 2024 and 2025, with an increase of US$149 million compared to US$356 million between 2023 and 2024. This could indicate a moderation in investment or a larger impact from accumulated depreciation.

Depreciation Trend

The upward trend in depreciation expense is consistent with the growing base of property, plant, and equipment. The increase in depreciation expense outpaced the growth in net PP&E in 2024 and 2025, potentially indicating a shift towards assets with shorter useful lives being added to the asset base, or a change in depreciation methods. However, the stable estimated remaining life suggests the latter is unlikely.

Estimated Remaining Life

The estimated remaining life of property, plant, and equipment increased from eight years in 2021 to nine years in 2022 and remained constant thereafter. This stability, coupled with rising depreciation expense, implies that the company is not significantly altering its assessment of asset longevity despite increased investment. The consistent remaining life suggests a standardized approach to asset depreciation.

The combination of increasing net PP&E, rising depreciation expense, and a stable estimated remaining life warrants further investigation. While the increases in PP&E are positive, the accelerating depreciation expense should be monitored to ensure it aligns with the company’s asset utilization and replacement strategies.