Ecolab Inc. (NYSE:ECL)

Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.

How can I help you?

Ecolab Inc., asset age ratios

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Average age ratio	55.43%	55.22%	52.09%	49.88%	49.61%
Estimated total useful life (years)	12	11	12	12	12
Estimated age, time elapsed since purchase (years)	6	6	6	6	6
Estimated remaining life (years)	5	5	6	6	6

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).

The asset age analysis indicates a consistent upward trend in the aging of the property, plant, and equipment portfolio over the five-year period from 2017 to 2021. This progression suggests that the assets are moving further into their estimated useful life cycle, with a gradual increase in the proportion of accumulated depreciation relative to the gross asset value.

Average Age Ratio: A steady increase is observed in the average age ratio, which rose from 49.61% in 2017 to 55.43% by the end of 2021. The most notable increase occurred between 2019 and 2020, where the ratio climbed from 52.09% to 55.22%, signaling an acceleration in the relative age of the asset base during that interval.
Estimated Useful Life and Asset Age: The estimated total useful life remained stable at 12 years for most of the period, with a brief decrease to 11 years in 2020 before returning to 12 years in 2021. Throughout the entire observation period, the estimated age since purchase remained constant at 6 years.
Remaining Asset Utility: The estimated remaining life of the assets was maintained at 6 years from 2017 through 2019. However, a reduction to 5 years was recorded in 2020 and maintained through 2021, coinciding with the increase in the average age ratio and reflecting a shortened window of remaining utility for the asset portfolio.

AI Ask an analyst for more

Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.

How can I help you?

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Selected Financial Data (US$ in thousands)
Accumulated depreciation	3,891,300)	3,656,500)	4,065,300)	3,603,500)	3,429,200)
Property, plant and equipment, gross	7,179,800)	6,781,400)	8,020,200)	7,439,500)	7,136,300)
Land	159,200)	159,700)	215,100)	214,500)	224,100)
Asset Age Ratio
Average age¹	55.43%	55.22%	52.09%	49.88%	49.61%

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 ÷ (Property, plant and equipment, gross – Land)
= 100 × 3,891,300 ÷ (7,179,800 – 159,200) = 55.43%

An analysis of the property, plant, and equipment (PP&E) reveals a consistent upward trend in the average age of the company's asset base. From December 31, 2017, to December 31, 2021, the average age ratio increased steadily from 49.61% to 55.43%, indicating that the depreciable assets are progressing further into their estimated useful lives.

Average Age Ratio Progression: The average age ratio experienced an uninterrupted annual increase over the five-year period. The most significant year-over-year growth occurred between 2019 and 2020, where the ratio rose from 52.09% to 55.22%. This trajectory suggests a gradual aging of the operational infrastructure and a potential lag in capital expenditures relative to the depreciation of existing assets.
Gross PP&E and Asset Volatility: Gross property, plant, and equipment showed growth from 2017 (US$ 7,136,300 thousand) through 2019 (US$ 8,020,200 thousand), followed by a sharp decline in 2020 to US$ 6,781,400 thousand. A partial recovery was observed in 2021, with values rising to US$ 7,179,800 thousand. The significant drop in 2020 suggests a substantial disposal of assets or a strategic write-down.
Accumulated Depreciation Trends: Accumulated depreciation generally followed the trend of gross PP&E, peaking in 2019 at US$ 4,065,300 thousand before decreasing to US$ 3,656,500 thousand in 2020. The simultaneous decrease in both gross assets and accumulated depreciation in 2020 confirms the removal of assets from the balance sheet; however, the fact that the average age ratio continued to climb during this period indicates that the assets retired were not sufficiently old to lower the overall age profile of the remaining portfolio.
Land Valuation: A downward trend is observed in land holdings, which decreased from US$ 224,100 thousand in 2017 to US$ 159,200 thousand by the end of 2021. This contraction in non-depreciable assets further concentrates the asset base toward depreciable equipment and facilities, contributing to the overall shift in the average age calculation.

AI Ask an analyst for more

Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.

How can I help you?

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Selected Financial Data (US$ in thousands)
Property, plant and equipment, gross	7,179,800)	6,781,400)	8,020,200)	7,439,500)	7,136,300)
Land	159,200)	159,700)	215,100)	214,500)	224,100)
Depreciation expense	604,400)	594,300)	654,100)	621,300)	585,700)
Asset Age Ratio (Years)
Estimated total useful life¹	12	11	12	12	12

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, plant and equipment, gross – Land) ÷ Depreciation expense
= (7,179,800 – 159,200) ÷ 604,400 = 12

The financial data indicates a period of volatility in the company's capital asset base between 2017 and 2021, characterized by an initial expansion, a significant contraction in 2020, and a partial recovery in 2021. The relationship between gross property, plant, and equipment (PP&E) and depreciation expenses remains closely aligned with the stated estimated useful lives of the assets.

Gross Property, Plant, and Equipment Trends: Gross PP&E experienced a steady increase from 2017 to 2019, peaking at 8,020,200 thousand US dollars. However, a sharp decline occurred in 2020, where assets dropped to 6,781,400 thousand US dollars, representing a reduction of approximately 15.4% within a single year. By 2021, the asset base began to recover, rising to 7,179,800 thousand US dollars.
Land Asset Trajectory: A consistent downward trend is observed in land holdings over the five-year period. Land values decreased from 224,100 thousand US dollars in 2017 to 159,200 thousand US dollars in 2021. A notable drop occurred between 2019 and 2020, mirroring the broader contraction in gross PP&E.
Depreciation Expense and Asset Life Correlation: Depreciation expenses followed the trajectory of the gross asset base, increasing from 585,700 thousand US dollars in 2017 to a peak of 654,100 thousand US dollars in 2019, before declining in 2020 and slightly recovering in 2021. The estimated total useful life remained stable at 12 years for most of the period, with a brief reduction to 11 years in 2020. This temporary reduction in useful life coincides with the year of the most significant asset contraction, suggesting a possible reallocation of assets or a revision of depreciation schedules during that fiscal year.

AI Ask an analyst for more

Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.

How can I help you?

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Selected Financial Data (US$ in thousands)
Accumulated depreciation	3,891,300)	3,656,500)	4,065,300)	3,603,500)	3,429,200)
Depreciation expense	604,400)	594,300)	654,100)	621,300)	585,700)
Asset Age Ratio (Years)
Time elapsed since purchase¹	6	6	6	6	6

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 ÷ Depreciation expense
= 3,891,300 ÷ 604,400 = 6

The analysis of property, plant, and equipment reveals fluctuations in depreciation levels between 2017 and 2021, characterized by a period of growth followed by a notable correction in 2020.

Accumulated Depreciation Trends: Accumulated depreciation exhibited a steady upward trajectory from 2017 to 2019, increasing from 3,429,200 thousand US dollars to 4,065,300 thousand US dollars. A significant reduction occurred in 2020, where the balance fell to 3,656,500 thousand US dollars, before resuming an upward trend to reach 3,891,300 thousand US dollars by the end of 2021. The decline in 2020 indicates the likely disposal, sale, or write-off of a substantial volume of depreciable assets.
Depreciation Expense Patterns: Annual depreciation expenses followed a pattern closely correlated with the accumulated depreciation balances. Expenses rose from 585,700 thousand US dollars in 2017 to a peak of 654,100 thousand US dollars in 2019. In 2020, the expense decreased to 594,300 thousand US dollars, reflecting the reduced asset base observed in the accumulated depreciation figures, followed by a slight increase to 604,400 thousand US dollars in 2021.
Temporal Analysis of Asset Purchases: The time elapsed since purchase remained constant at six years across the entire reporting period from 2017 to 2021. This indicates a static weighted average age for the asset pool or the utilization of a consistent estimation period, suggesting that the overall age profile of the property, plant, and equipment remained stable despite the changes in total depreciation values.

AI Ask an analyst for more

Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.

How can I help you?

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Selected Financial Data (US$ in thousands)
Property, plant and equipment, net	3,288,500)	3,124,900)	3,954,900)	3,836,000)	3,707,100)
Land	159,200)	159,700)	215,100)	214,500)	224,100)
Depreciation expense	604,400)	594,300)	654,100)	621,300)	585,700)
Asset Age Ratio (Years)
Estimated remaining life¹	5	5	6	6	6

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, plant and equipment, net – Land) ÷ Depreciation expense
= (3,288,500 – 159,200) ÷ 604,400 = 5

The net value of property, plant, and equipment experienced a period of steady growth between 2017 and 2019, followed by a significant contraction in 2020 and a partial recovery in 2021. This fluctuation is mirrored in the depreciation expenses and the valuation of land assets.

Asset Lifecycle and Depreciation Strategy: The estimated remaining life of assets remained constant at six years from 2017 through 2019. A reduction to five years occurred in 2020 and was maintained through 2021. This acceleration in the estimated asset lifespan suggests a potential change in the asset composition or a revision in accounting estimates to reflect faster obsolescence or usage.
Net Asset Value and Land Trends: Net property, plant, and equipment rose from 3,707,100 thousand USD in 2017 to a peak of 3,954,900 thousand USD in 2019. A sharp decline to 3,124,900 thousand USD was recorded in 2020, which correlates with a decrease in land holdings from 215,100 thousand USD in 2019 to 159,700 thousand USD in 2020, indicating a reduction in the total asset base during that period.
Depreciation Expense Analysis: Depreciation expenses trended upward from 2017 to 2019, peaking at 654,100 thousand USD. In 2020, the expense decreased to 594,300 thousand USD. This decrease occurred despite the reduction in the estimated remaining life—which typically increases annual depreciation—suggesting that the overall reduction in the net property, plant, and equipment base was the dominant factor influencing the expense.

AI Ask an analyst for more