Cintas Corp. (NASDAQ:CTAS)

The analysis of the annual property, plant, and equipment data reveals several notable trends in asset holdings and valuations over the six-year period.

Land

Land values remained relatively stable, fluctuating marginally between approximately $188.7 million and $194.7 million. The slight increase observed in the latest year suggests modest acquisitions or revaluations.

Buildings and Improvements

Buildings and improvements showed a gradual but consistent upward trend from $684.7 million to $744.6 million. This increase indicates ongoing investments in infrastructure enhancements and facility expansions.

Equipment

Equipment values exhibited strong growth across the period, rising from $2.21 billion to nearly $3.0 billion. This substantial increase reflects significant capital expenditure on machinery and equipment, likely supporting operational capacity expansion.

Leasehold Improvements

Leasehold improvements displayed minor fluctuations but an overall increase from $43.2 million to approximately $46.5 million. The modest growth points to periodic upgrades within leased properties.

Construction in Progress

Construction in progress experienced significant variation, initially decreasing from $67.1 million to $36.7 million by 2021, followed by a sharp increase reaching $166.6 million by 2024. This pattern suggests cycles of project completion and initiation, with recent years reflecting heightened construction activity.

Property and Equipment, Gross

The gross value of property and equipment increased steadily from $3.19 billion to over $4.1 billion. This steady upward movement endorses continuous investment in fixed assets.

Accumulated Depreciation

Accumulated depreciation increased in absolute terms from approximately $1.76 billion to $2.58 billion, consistent with asset aging and systematic depreciation expense recognition. The steady rise confirms ongoing use and wear of assets.

Property and Equipment, Net

Net property and equipment values displayed an initial decline from $1.43 billion to $1.32 billion by 2021-2022, followed by a recovery to $1.53 billion by 2024. The dip potentially reflects asset disposals or higher depreciation charges exceeding capital additions in the early years, with later recovery driven by renewed capital investments outpacing depreciation.

Overall, the data highlights a pattern of sustained capital investment, particularly in equipment and construction projects, alongside predictable asset aging reflected in depreciation trends. The recent acceleration in construction in progress and net property values suggests a strategic focus on asset growth and modernization in the latest period.

Average Age Ratio

The average age ratio shows a general upward trend from 58.67% in May 2019 to a peak of 66.21% in May 2023, before slightly decreasing to 65.84% in May 2024. This indicates that, over time, the portfolio of property, plant, and equipment is aging, reaching roughly two-thirds of its total useful life towards the end of the period.

Estimated Total Useful Life

The estimated total useful life of the assets remained constant at 13 years from May 2019 through May 2022 and then increased to 14 years from May 2023 onward. This change suggests a revision in the expected life span of the assets, potentially due to updated assessments or changes in asset composition.

Estimated Age (Time Elapsed Since Purchase)

The estimated age of the assets remained steady at 8 years from May 2019 through May 2021, then increased to 9 years starting in May 2022 and remained at that level through May 2024. This reflects the natural aging of the assets over the period without significant asset replacement or acquisition that would lower the average.

Estimated Remaining Life

The estimated remaining life decreased from 6 years in May 2019 to 5 years by May 2020 and has remained stable at 5 years through May 2024. This consistency in remaining life after the initial decline suggests a stabilization in the asset base or consistent asset turnover aligned with expected useful lives.

Accumulated Depreciation

The accumulated depreciation shows a consistent upward trend from May 31, 2019, through May 31, 2024. It increased steadily from approximately $1.76 billion in 2019 to about $2.58 billion in 2024. This reflects ongoing usage and aging of assets over time, indicating continued depreciation expense recognition in line with asset utilization.

Property and Equipment, Gross

The gross value of property and equipment has demonstrated a continuous increase over the analyzed period. The value rose from approximately $3.19 billion in 2019 to around $4.12 billion in 2024, suggesting ongoing capital investment or asset additions. This growth amplifies the asset base despite the rising accumulated depreciation, reflecting expansion or replacement activities within the company’s fixed assets.

Land

The value of land remained relatively stable throughout the years, fluctuating slightly around the $190 million mark. This indicates little to no change in land holdings or revaluation during the period, maintaining a consistent base within the fixed asset category.

Average Age Ratio

The average age ratio, expressed as a percentage, increased from 58.67% in 2019 to a peak of 66.21% in 2023, before slightly declining to 65.84% in 2024. The upward trend implies that the asset base is aging over the years, with assets becoming relatively older in comparison to their useful lives. The slight decrease in the final year may suggest recent asset additions or disposals affecting this ratio.

Gross Property and Equipment

The gross value of property and equipment demonstrated a consistent upward trend from 2019 to 2024. Starting at approximately $3.19 billion in 2019, the figure increased annually, reaching about $4.12 billion by 2024. This steady growth indicates ongoing investments or acquisitions in property and equipment over the period.

Land

The carrying value of land showed stability with minor fluctuations. It began around $189.8 million in 2019, experiencing slight decreases and increases over the years, ultimately rising to about $194.7 million in 2024. This suggests limited changes in land holdings or valuations during the timeframe.

Depreciation

Depreciation expenses exhibited a gradual increase each year, from approximately $223.6 million in 2019 to $280.9 million in 2024. The consistent rise in depreciation aligns with the growth in property and equipment, reflecting the wear and tear or obsolescence of assets as the asset base expands.

Estimated Total Useful Life

The estimated total useful life of the property and equipment remained stable at 13 years from 2019 through 2022 and increased slightly to 14 years in 2023 and 2024. This increase may indicate revisions in asset lifespan assumptions, potentially impacting depreciation calculations.

Accumulated Depreciation

The accumulated depreciation shows a consistent upward trend over the six-year period, increasing from approximately $1.76 billion in 2019 to about $2.58 billion in 2024. This steady increase suggests ongoing depreciation of property, plant, and equipment assets without indication of major disposals or impairments that would reduce the balance. The growth in accumulated depreciation is relatively smooth, reflecting a systematic allocation of asset cost over their useful lives.

Depreciation Expense

Annual depreciation expense has gradually risen from $223.6 million in 2019 to $280.9 million in 2024. This increment indicates either an increase in asset base or adjustments related to depreciation methods or asset life estimates. The steady growth, roughly 25.6% over the period, aligns with the accumulated depreciation trend, confirming continuous investment in property, plant, and equipment and the corresponding consumption of these assets over time.

Time Elapsed Since Purchase

The average time elapsed since purchase of the assets remains relatively stable, moving slightly from 8 years to 9 years between 2019 and 2024. This stability suggests a consistent asset replacement or acquisition cycle with no significant deviation in the age profile of the assets. The slight increase to 9 years may indicate a gradual aging of the asset base or longer retention periods.

Summary of Trends

Overall, the data reflects a typical lifecycle pattern of property, plant, and equipment with ongoing depreciation charges accumulating over time in line with rising asset values or additions. The incremental increase in depreciation expenses supports the notion of continuous investment and asset growth. The relatively stable average age of assets implies consistent capital expenditure practices and asset management. No abrupt changes or irregularities are evident in the reported figures, indicating stable asset utilization and depreciation practices over the period analyzed.

Property and Equipment, net

Over the observed period, the net value of property and equipment exhibited a fluctuating but overall positive trend. Beginning at 1,430,685 thousand US dollars in May 2019, there was a decline through May 2021, reaching a low of 1,318,438 thousand US dollars. However, from May 2022 onward, a recovery trend is evident, culminating in a substantial increase to 1,534,168 thousand US dollars by May 2024. This recent growth suggests renewed investment or reduced disposals within the property and equipment assets.

Land

The value of land holdings remained relatively stable throughout the period, with values oscillating slightly around 190,000 thousand US dollars. Starting at 189,828 thousand US dollars in May 2019 and ending at 194,661 thousand US dollars in May 2024, the changes are minimal, indicating little acquisition or disposal activity related to land assets.

Depreciation

Accumulated depreciation shows a consistent upward trajectory across all periods, increasing steadily from 223,631 thousand US dollars in May 2019 to 280,866 thousand US dollars by May 2024. This reflects ongoing wear and usage of property and equipment assets, in line with typical asset aging and usage patterns.

Estimated Remaining Life

The estimated remaining life of the assets remained constant at 5 years since May 2020, with a reduction observed only from 6 years in May 2019 to 5 years thereafter. This stability suggests that asset aging or replacement planning has maintained a consistent outlook on the asset lifespan over recent years.