Analysis of Property, Plant and Equipment
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- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Long-term (Investment) Activity Ratios
- Enterprise Value to EBITDA (EV/EBITDA)
- Price to FCFE (P/FCFE)
- Dividend Discount Model (DDM)
- Operating Profit Margin since 2005
- Price to Operating Profit (P/OP) since 2005
- Analysis of Revenues
- Analysis of Debt
- Aggregate Accruals
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Property, Plant and Equipment Disclosure
Danaher Corp., balance sheet: property, plant and equipment
US$ in millions
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
- Land and Improvements
- The value of land and improvements showed a generally increasing trend over the five-year period. It rose from $192 million in 2020 to $230 million in 2024, with a slight dip in 2023 to $210 million. Overall, this reflects modest growth with some variability.
- Buildings
- Buildings experienced significant growth, increasing steadily from $1,522 million in 2020 to $2,548 million in 2024. This increase is consistent year-over-year, indicating substantial investment or expansion in building assets over the period.
- Machinery and Equipment
- Machinery and equipment values showed a consistent upward trajectory, growing from $2,881 million in 2020 to $4,430 million in 2024. This suggests ongoing expansion or upgrades in operational capacity and equipment sophistication.
- Customer-leased Equipment
- The value of customer-leased equipment declined from $1,849 million in 2020 to $1,704 million in 2022 but then reversed course, increasing to $1,883 million in 2024. This pattern suggests some fluctuations in leasing activity or asset management before recovering to a higher level.
- Gross Property, Plant and Equipment
- The total gross property, plant, and equipment showed a clear upward trend, rising from $6,444 million in 2020 to $9,091 million in 2024. This reflects the combined growth in the categories noted above and signals ongoing capital investments.
- Accumulated Depreciation
- Accumulated depreciation increased in absolute terms from -$3,182 million in 2020 to -$4,101 million in 2024, reflecting consistent aging and usage of assets. A minor decrease in 2023 to -$3,826 million interrupts this trend, which may indicate some asset disposals or changes in depreciation methodology for that year.
- Net Property, Plant and Equipment
- The net property, plant, and equipment value also showed growth, moving from $3,262 million in 2020 to $4,990 million in 2024. This steady increase indicates that asset additions and improvements are outpacing depreciation, strengthening the company’s asset base over time.
Asset Age Ratios (Summary)
Danaher Corp., asset age ratios
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
The analysis of the property, plant, and equipment data over the five-year period reveals several notable trends and developments in asset management and valuation.
- Average Age Ratio
- The average age ratio exhibits a slight overall decline, starting at 50.9% in 2020 and reducing to 46.28% by 2024. This suggests a gradual decrease in the relative age of the company’s assets in relation to their estimated useful life, indicating either the addition of newer assets or the retirement of older ones during this period.
- Estimated Total Useful Life
- The estimated total useful life of assets remains constant at 10 years for the first three years (2020 through 2022) but increases to 12 years for the years 2023 and 2024. This adjustment might reflect changes in asset types, improvements in asset quality, or updated asset longevity assessments, indicating a longer expected usage period for newly acquired or revalued equipment.
- Estimated Age, Time Elapsed Since Purchase
- The estimated age remains steady at 5 years from 2020 to 2022, then rises to 6 years for the subsequent two years. This progression corresponds with the passage of time but remains stable relative to the useful life changes, suggesting consistent asset turnover or holding patterns.
- Estimated Remaining Life
- Estimated remaining life is consistent at 5 years through 2022, then increases to 6 years in 2023 and further to 7 years in 2024. This growth aligns with the increase in total useful life, implying that the assets held or acquired have a longer expected remaining usage period, potentially enhancing the value and utility of the plant and equipment over time.
In summary, the data reflects a trend toward improved asset longevity and a younger average asset base relative to their useful life. The increase in estimated total useful life and remaining life over the last two years suggests an extension in asset usability and possibly an investment in higher-quality or more durable equipment. The slight decline in average age ratio further corroborates a modernization or renewal strategy within the company’s fixed asset management practices.
Average Age
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
2024 Calculations
1 Average age = 100 × Accumulated depreciation ÷ (Gross property, plant and equipment – Land and improvements)
= 100 × ÷ ( – ) =
The analysis of the property, plant, and equipment (PP&E) data reveals several notable trends over the five-year period ending December 31, 2024.
- Gross Property, Plant and Equipment
- The gross PP&E value has shown a steady increase each year, rising from 6,444 million US dollars in 2020 to 9,091 million US dollars in 2024. This reflects consistent investment in tangible assets, with a total increase of approximately 41.1% over the period.
- Accumulated Depreciation
- The accumulated depreciation also increased over the years, starting at 3,182 million US dollars in 2020 and reaching 4,101 million US dollars by 2024. While there is an overall upward trend, a slight decline was observed in 2023 compared to 2022, with 3,826 million versus 3,893 million US dollars, respectively. However, depreciation resumed its increase in 2024. This pattern suggests possible changes in depreciation policies, disposals, or asset retirement activity in 2023.
- Land and Improvements
- The land and improvements category experienced moderate growth, increasing from 192 million US dollars in 2020 to 230 million US dollars in 2024. This reflects a progressive but modest expansion in land holdings or enhancement of existing land-related assets over time.
- Average Age Ratio
- The average age ratio, representing the proportion of accumulated depreciation to gross PP&E, demonstrated a mixed trend. It decreased from 50.9% in 2020 to 46.28% in 2024, with a slight increase in 2022 to 51%. The decrease in recent years indicates that newer assets were added at a faster rate relative to the depreciation of older assets, implying ongoing asset renewal and modernization.
Overall, the data indicates continued asset growth accompanied by investment in new property, plant, and equipment. The decline in the average age ratio towards the end of the period suggests the company's emphasis on maintaining a relatively younger asset base, which can be beneficial for operational efficiency and potential depreciation expense management.
Estimated Total Useful Life
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
2024 Calculations
1 Estimated total useful life = (Gross property, plant and equipment – Land and improvements) ÷ Depreciation expense
= ( – ) ÷ =
- Gross Property, Plant, and Equipment
- The gross value of property, plant, and equipment showed a consistent upward trend over the five-year period. It increased from $6,444 million at the end of 2020 to $9,091 million by the end of 2024. This represents a compound increase of approximately 41%, indicating ongoing investments or acquisitions in fixed assets.
- Land and Improvements
- The value of land and improvements also exhibited growth, rising from $192 million in 2020 to $230 million in 2024. Although the increase is more moderate compared to the overall gross PP&E, it suggests steady acquisition or enhancement of land-related assets. There was a small decline in 2023 compared to 2022, but the overall direction remained upward by 2024.
- Depreciation Expense
- Depreciation expense increased from $637 million in 2020 to $721 million in 2024, but with some fluctuation in the interim years. It rose sharply between 2020 and 2021, reaching $718 million, then slightly increased to $738 million in 2022 before decreasing to $675 million in 2023. It again increased in 2024. This pattern may reflect changes in asset base, depreciation methods, or asset useful life assumptions.
- Estimated Total Useful Life
- The estimated useful life of property, plant, and equipment remained stable at 10 years from 2020 through 2022 but increased to 12 years in 2023 and 2024. This extension in useful life could lead to lower annual depreciation expenses in the future despite rising asset values, which aligns with the temporary dip observed in 2023's depreciation expense.
Estimated Age, Time Elapsed since Purchase
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
2024 Calculations
1 Time elapsed since purchase = Accumulated depreciation ÷ Depreciation expense
= ÷ =
- Accumulated depreciation
- The accumulated depreciation shows a consistent upward trend over the years from 2020 to 2024, increasing from 3,182 million USD in 2020 to 4,101 million USD in 2024. This indicates a continual allocation of the cost of property, plant, and equipment over time, reflecting ongoing usage and aging of the assets.
- Depreciation expense
- The depreciation expense exhibits some fluctuations during the period. Starting at 637 million USD in 2020, it increased to a peak of 738 million USD in 2022, then decreased to 675 million USD in 2023, before rising again to 721 million USD in 2024. These variations may suggest changes in asset acquisition or disposal activity, differences in depreciation methods, or adjustments due to asset revaluation.
- Time elapsed since purchase
- The time elapsed since purchase remains relatively stable at 5 years from 2020 through 2022 and then increases slightly to 6 years in 2023 and 2024. This reflects the aging of the asset base with limited turnover or replacement activity during the period.
- Overall analysis
- The steady increase in accumulated depreciation alongside fluctuating depreciation expenses and a relatively stable asset age suggests that the company manages its property, plant, and equipment with incremental additions or disposals. The consistent aging of assets points to a mature asset portfolio with possible moderate investment or replacement cycles.
Estimated Remaining Life
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
2024 Calculations
1 Estimated remaining life = (Property, plant and equipment, net – Land and improvements) ÷ Depreciation expense
= ( – ) ÷ =
The analysis of property, plant, and equipment data over the five-year period reveals several notable trends and developments.
- Net Property, Plant and Equipment
- There is a consistent upward trend in the net value of property, plant, and equipment, increasing from $3,262 million in 2020 to $4,990 million in 2024. This represents a substantial growth of approximately 53% over the period, indicating ongoing investments and capital expenditures enhancing the asset base.
- Land and Improvements
- The value of land and improvements shows a moderate increase from $192 million in 2020 to $230 million in 2024. While values rose steadily through 2022, a slight decrease was observed in 2023 before growing again in 2024. This pattern suggests relatively stable investments in land-related assets with minor fluctuations.
- Depreciation Expense
- Depreciation expense rose from $637 million in 2020 to $738 million in 2022, followed by a decline to $675 million in 2023, then a rise again to $721 million in 2024. The initial increase aligns with asset base growth, while the subsequent fluctuation could reflect changes in asset utilization, disposal, or shifts in asset age composition.
- Estimated Remaining Life of Assets
- The estimated remaining life of property, plant, and equipment remained steady at 5 years from 2020 through 2022. However, it increased to 6 years in 2023 and further to 7 years in 2024. This extension suggests either the addition of new assets with longer useful lives or revisions in asset life estimates, potentially indicating improved long-term asset utility or revisions in asset management strategy.
Overall, the data indicates sustained capital investment and growth in the fixed asset base accompanied by evolving asset composition and management strategies that influence depreciation and asset longevity estimates.