Stock Analysis on Net
Stock Analysis on Net
Microsoft Excel LibreOffice Calc

Honeywell International Inc. (NYSE:HON)

Analysis of Property, Plant and Equipment

Advanced level

Property, Plant and Equipment Disclosure

Honeywell International Inc., balance sheet: property, plant and equipment

US$ in millions

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Land and improvements 251  262  287  363  367 
Machinery and equipment 9,586  9,435  10,762  9,956  10,505 
Buildings and improvements 3,152  3,125  3,463  3,248  3,188 
Construction in progress 724  588  675  940  848 
Property, plant and equipment, gross 13,713  13,410  15,187  14,507  14,908 
Accumulated depreciation (8,388) (8,114) (9,261) (8,714) (9,119)
Property, plant and equipment, net 5,325  5,296  5,926  5,793  5,789 

Based on: 10-K (filing date: 2020-02-14), 10-K (filing date: 2019-02-08), 10-K (filing date: 2018-02-09), 10-K (filing date: 2017-02-10), 10-K (filing date: 2016-02-12).

Item Description The company
Property, plant and equipment, gross Amount before accumulated depreciation, depletion and amortization of physical assets used in the normal conduct of business and not intended for resale. Examples include, but are not limited to, land, buildings, machinery and equipment, office equipment, and furniture and fixtures. Honeywell International Inc.’s property, plant and equipment, gross decreased from 2017 to 2018 but then slightly increased from 2018 to 2019.
Property, plant and equipment, net Amount after accumulated depreciation, depletion and amortization of physical assets used in the normal conduct of business to produce goods and services and not intended for resale. Examples include, but are not limited to, land, buildings, machinery and equipment, office equipment, and furniture and fixtures. Honeywell International Inc.’s property, plant and equipment, net decreased from 2017 to 2018 but then slightly increased from 2018 to 2019.

Asset Age Ratios (Summary)

Honeywell International Inc., asset age ratios

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Average age ratio 62.31% 61.71% 62.15% 61.61% 62.71%
Estimated total useful life (years) 20 18 21 19 22
Estimated age, time elapsed since purchase (years) 12 11 13 12 14
Estimated remaining life (years) 8 7 8 7 8

Based on: 10-K (filing date: 2020-02-14), 10-K (filing date: 2019-02-08), 10-K (filing date: 2018-02-09), 10-K (filing date: 2017-02-10), 10-K (filing date: 2016-02-12).

Asset age ratio Description The company
Average age ratio As long as straight-line depreciation is used, this is an accurate estimate of asset age as a percentage of depreciable life. The relative age is a useful measure of whether the company’s fixed asset base is old or new. Newer assets are likely to be more efficient. Honeywell International Inc.’s average age ratio of depreciable property, plant and equipment improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019.
Estimated total useful life Over longer time periods, this ratio is a useful measure of company’s depreciation policy and can be used for comparisons with competitors. Honeywell International Inc.’s estimated total useful life of depreciable property, plant and equipment decreased from 2017 to 2018 but then increased from 2018 to 2019 not reaching 2017 level.
Estimated time elapsed since purchase The approximate age in years of a company’s fixed assets. Useful for comparison purposes. Honeywell International Inc.’s estimated time elapsed since purchase of depreciable property, plant and equipment improved from 2017 to 2018 but then slightly deteriorated from 2018 to 2019 not reaching 2017 level.
Estimated remaining life Honeywell International Inc.’s estimated remaining life of depreciable property, plant and equipment decreased from 2017 to 2018 but then increased from 2018 to 2019 not reaching 2017 level.

Average Age

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Selected Financial Data (US$ in millions)
Accumulated depreciation 8,388  8,114  9,261  8,714  9,119 
Property, plant and equipment, gross 13,713  13,410  15,187  14,507  14,908 
Land and improvements 251  262  287  363  367 
Asset Age Ratio
Average age1 62.31% 61.71% 62.15% 61.61% 62.71%

Based on: 10-K (filing date: 2020-02-14), 10-K (filing date: 2019-02-08), 10-K (filing date: 2018-02-09), 10-K (filing date: 2017-02-10), 10-K (filing date: 2016-02-12).

2019 Calculations

1 Average age = 100 × Accumulated depreciation ÷ (Property, plant and equipment, gross – Land and improvements)
= 100 × 8,388 ÷ (13,713 – 251) = 62.31%

Asset age ratio Description The company
Average age As long as straight-line depreciation is used, this is an accurate estimate of asset age as a percentage of depreciable life. The relative age is a useful measure of whether the company’s fixed asset base is old or new. Newer assets are likely to be more efficient. Honeywell International Inc.’s average age ratio of depreciable property, plant and equipment improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019.

Estimated Total Useful Life

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Selected Financial Data (US$ in millions)
Property, plant and equipment, gross 13,713  13,410  15,187  14,507  14,908 
Land and improvements 251  262  287  363  367 
Depreciation expense 673  721  717  726  672 
Asset Age Ratio (Years)
Estimated total useful life1 20 18 21 19 22

Based on: 10-K (filing date: 2020-02-14), 10-K (filing date: 2019-02-08), 10-K (filing date: 2018-02-09), 10-K (filing date: 2017-02-10), 10-K (filing date: 2016-02-12).

2019 Calculations

1 Estimated total useful life = (Property, plant and equipment, gross – Land and improvements) ÷ Depreciation expense
= (13,713 – 251) ÷ 673 = 20

Asset age ratio Description The company
Estimated total useful life Over longer time periods, this ratio is a useful measure of company’s depreciation policy and can be used for comparisons with competitors. Honeywell International Inc.’s estimated total useful life of depreciable property, plant and equipment decreased from 2017 to 2018 but then increased from 2018 to 2019 not reaching 2017 level.

Estimated Age, Time Elapsed since Purchase

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Selected Financial Data (US$ in millions)
Accumulated depreciation 8,388  8,114  9,261  8,714  9,119 
Depreciation expense 673  721  717  726  672 
Asset Age Ratio (Years)
Time elapsed since purchase1 12 11 13 12 14

Based on: 10-K (filing date: 2020-02-14), 10-K (filing date: 2019-02-08), 10-K (filing date: 2018-02-09), 10-K (filing date: 2017-02-10), 10-K (filing date: 2016-02-12).

2019 Calculations

1 Time elapsed since purchase = Accumulated depreciation ÷ Depreciation expense
= 8,388 ÷ 673 = 12

Asset age ratio Description The company
Estimated time elapsed since purchase The approximate age in years of a company’s fixed assets. Useful for comparison purposes. Honeywell International Inc.’s estimated time elapsed since purchase of depreciable property, plant and equipment improved from 2017 to 2018 but then slightly deteriorated from 2018 to 2019 not reaching 2017 level.

Estimated Remaining Life

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Selected Financial Data (US$ in millions)
Property, plant and equipment, net 5,325  5,296  5,926  5,793  5,789 
Land and improvements 251  262  287  363  367 
Depreciation expense 673  721  717  726  672 
Asset Age Ratio (Years)
Estimated remaining life1 8 7 8 7 8

Based on: 10-K (filing date: 2020-02-14), 10-K (filing date: 2019-02-08), 10-K (filing date: 2018-02-09), 10-K (filing date: 2017-02-10), 10-K (filing date: 2016-02-12).

2019 Calculations

1 Estimated remaining life = (Property, plant and equipment, net – Land and improvements) ÷ Depreciation expense
= (5,325 – 251) ÷ 673 = 8

Asset age ratio Description The company
Estimated remaining life Honeywell International Inc.’s estimated remaining life of depreciable property, plant and equipment decreased from 2017 to 2018 but then increased from 2018 to 2019 not reaching 2017 level.