Analysis of Property, Plant and Equipment
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- Common-Size Balance Sheet: Assets
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Short-term (Operating) Activity Ratios
- Common Stock Valuation Ratios
- Selected Financial Data since 2013
- Net Profit Margin since 2013
- Return on Equity (ROE) since 2013
- Total Asset Turnover since 2013
- Price to Operating Profit (P/OP) since 2013
- Aggregate Accruals
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Property, Plant and Equipment Disclosure
Twitter Inc., balance sheet: property, plant and equipment
US$ in thousands
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
- Equipment
- The value of equipment shows a consistent upward trend throughout the observed period. Beginning at approximately 1.09 billion US dollars in 2017, it gradually increases each year, reaching over 2.60 billion US dollars by 2021. This indicates sustained investment or acquisition of new equipment assets over time.
- Furniture and Leasehold Improvements
- Furniture and leasehold improvements exhibit steady growth from 314.9 million US dollars in 2017 to 470.7 million US dollars in 2021. While the rate of increase is moderate compared to equipment, it reflects ongoing enhancement or expansion of physical office or operational facilities.
- Capitalized Software
- The capitalized software account also shows a clear upward trend, rising from 472.1 million US dollars in 2017 to nearly 948.7 million US dollars in 2021. This growth indicates significant investments in internally developed or acquired software assets, more than doubling over the span of five years.
- Construction in Progress
- Values for construction in progress show more variability. They nearly double from 49.4 million US dollars in 2017 to 96.5 million in 2018 and remain relatively stable in 2019. A notable surge occurs in 2020, with the figure rising sharply to approximately 350 million US dollars, followed by a decline to 261.3 million US dollars in 2021. This pattern may reflect fluctuations in ongoing capital projects or changes in construction activities during these years.
- Property and Equipment, Gross
- The total gross property and equipment amount shows strong and continuous growth, increasing from nearly 1.93 billion US dollars in 2017 to about 4.28 billion US dollars in 2021. This more than doubling of the asset base emphasizes substantial capital expenditures and asset acquisitions over the period.
- Accumulated Depreciation and Amortization
- The accumulated depreciation and amortization consistently increase in magnitude (more negative values) from -1.15 billion US dollars in 2017 to -2.20 billion US dollars in 2021. This reflects ongoing expense recognition as the assets depreciate or amortize over their useful lives, aligned with the growth in the asset base.
- Property and Equipment, Net
- Net property and equipment, representing the carrying value after depreciation and amortization, also demonstrate strong growth, rising from approximately 774 million US dollars in 2017 to over 2.08 billion US dollars in 2021. The growth in net assets signifies that additions and capitalizations have substantially exceeded depreciation charges over this period, indicating an expanding asset base with potential implications for future operational capacity.
Asset Age Ratios (Summary)
Twitter Inc., asset age ratios
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
- Average Age Ratio
- The average age ratio shows a consistent decline over the five-year period, dropping from 59.87% in 2017 to 51.4% in 2021. This trend indicates that the proportion of the assets' age relative to their useful life is decreasing, suggesting the company is potentially acquiring newer assets or effectively managing asset replacement.
- Estimated Total Useful Life
- The estimated total useful life of the assets fluctuates over the years, starting at 6 years in 2017, decreasing to 5 years in 2018, returning to 6 years in 2019, then increasing further to 7 years in 2020, and reaching 9 years in 2021. This pattern may reflect changes in the asset mix or improvements in asset quality leading to longer expected service lives.
- Estimated Age, Time Elapsed Since Purchase
- The estimated age of the assets remains relatively stable in the initial years, holding steady at 3 years from 2017 through 2019, then increasing to 4 years in both 2020 and 2021. This indicates that while assets are aging, the pace is moderate, possibly due to consistent asset additions balancing the aging from prior years.
- Estimated Remaining Life
- The estimated remaining life of the assets shows an increasing trend, moving from 2 years in the first three years to 3 years in 2020, and further to 4 years in 2021. This increase aligns with the rising total useful life estimate, suggesting extended asset longevity or investment in higher-quality assets with longer service lives.
Average Age
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
2021 Calculations
1 Average age = 100 × Accumulated depreciation and amortization ÷ Property and equipment, gross
= 100 × ÷ =
- Property and Equipment, Gross
- There is a consistent upward trend in the gross value of property and equipment over the five-year period. Starting from approximately 1.93 billion US dollars at the end of 2017, the value increased steadily each year, reaching about 4.28 billion US dollars by the end of 2021. This reflects a substantial investment in physical assets, more than doubling over the observed timeframe.
- Accumulated Depreciation and Amortization
- The accumulated depreciation and amortization figures also exhibit a rising pattern, increasing from roughly 1.15 billion US dollars in 2017 to around 2.20 billion US dollars in 2021. This growth is consistent with the increasing base of property and equipment, indicating ongoing usage and wear of these assets as expected over time.
- Average Age Ratio
- The average age ratio shows a gradual decline from 59.87% in 2017 to 51.4% in 2021. This decreasing trend suggests that, despite the growing asset base, the overall asset pool is becoming relatively younger. This could imply recent acquisitions of newer assets or retirements of older ones, contributing to a reduction in the average age of the property and equipment.
- Overall Insights
- The data indicates a strong focus on expanding property and equipment, with investments nearly doubling over five years. Concurrently, the accumulation of depreciation reflects sustained utilization and aging of assets. However, the declining average age ratio points to a newer asset base on average, possibly due to strategic asset renewal or replacement policies. This combination suggests an active management of asset lifecycle, emphasizing both growth and modernization.
Estimated Total Useful Life
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
2021 Calculations
1 Estimated total useful life = Property and equipment, gross ÷ Depreciation expense
= ÷ =
- Property and equipment, gross
- The gross value of property and equipment demonstrated consistent growth over the five-year period. Starting at approximately 1.93 billion US dollars at the end of 2017, it increased steadily each year, reaching about 4.28 billion US dollars by the end of 2021. This upward trend suggests ongoing investments in physical assets and possible expansion of operational capacity.
- Depreciation expense
- Depreciation expense also showed an increasing trend across the periods reviewed. It rose from 349.3 million US dollars in 2017 to 503.6 million US dollars in 2021. Despite the increase in the estimated total useful life of assets over the years, the annual depreciation expense continued to grow, indicating substantial additions to depreciable assets or changes in asset composition affecting depreciation charges.
- Estimated total useful life
- The estimated total useful life of property and equipment exhibited variability throughout the period. Initially recorded at 6 years in 2017, it decreased to 5 years in 2018, then increased back to 6 years in 2019, and further extended to 7 years in 2020 and 9 years in 2021. This gradual increase in useful life estimates may reflect changes in asset quality, improvements in maintenance, or reassessment of asset longevity assumptions, which can impact the depreciation method and expense recognition.
- Summary
- Overall, the data indicates a steady expansion in the company's physical asset base combined with increasing depreciation expenses, even as the estimated useful life of these assets has generally lengthened. The rising gross property and equipment value in conjunction with increasing depreciation expense suggests that asset additions are significant and outweigh the effects of extending estimated useful lives. This pattern implies a dynamic asset management approach and potentially higher capital expenditure levels over the period analyzed.
Estimated Age, Time Elapsed since Purchase
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
2021 Calculations
1 Time elapsed since purchase = Accumulated depreciation and amortization ÷ Depreciation expense
= ÷ =
- Accumulated Depreciation and Amortization
- There is a consistent upward trend in accumulated depreciation and amortization from 2017 to 2021. The amount increased from approximately 1,154,373 thousand US dollars in 2017 to 2,201,799 thousand US dollars in 2021, nearly doubling over the five-year period. This reflects ongoing usage and aging of property, plant, and equipment assets, as well as continued capital expenditures being depreciated over time.
- Depreciation Expense
- The depreciation expense shows a steady increase across the years. Starting at 349,300 thousand US dollars in 2017, it escalated to 503,600 thousand US dollars by 2021. This upward movement indicates either an increase in the value of depreciable assets or changes in asset usage intensity. The consistent rise suggests expanded capital assets or adjustments in depreciation policies or useful lives.
- Time Elapsed Since Purchase
- The time elapsed since purchase of related assets remains relatively stable at 3 years for the initial three reported periods (2017 to 2019), increasing slightly to 4 years for 2020 and 2021. This suggests that the asset base aging is relatively consistent, with the company possibly maintaining a replacement or upgrade cycle around this duration.
Estimated Remaining Life
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
2021 Calculations
1 Estimated remaining life = Property and equipment, net ÷ Depreciation expense
= ÷ =
The financial data pertaining to property, plant, and equipment over the five-year period demonstrates significant growth and notable trends in depreciation and asset lifespan.
- Property and Equipment, Net
-
The net value of property and equipment shows a consistent and substantial increase year over year. Starting from approximately 773.7 million US dollars at the end of 2017, the value rises steadily to about 2.08 billion US dollars by the end of 2021. This indicates considerable capital investment and expansion in fixed assets during the period under review.
- Depreciation Expense
-
Depreciation expense also exhibits an upward trend across the years. Beginning at 349.3 million US dollars in 2017, it escalates to 503.6 million US dollars by 2021. The increase in depreciation expense reflects the growing asset base as well as the allocation of expense related to these assets over their useful lives.
- Estimated Remaining Life
-
The estimated remaining life of the property and equipment remained constant at 2 years from 2017 to 2019 but shows an increase to 3 years in 2020 and further to 4 years in 2021. This change suggests either an extension in the useful life projections of existing assets or acquisition of assets with longer expected useful lives, which could impact future depreciation expenses and asset management strategies.