Sherwin-Williams Co. (NYSE:SHW)

Property, plant, and equipment (PP&E) exhibited a consistent upward trend over the five-year period, although with variations in the growth rates of individual components. Significant increases were observed in both Buildings and Construction in Progress, particularly towards the later years of the period. Allowances for depreciation also increased steadily, as expected with a growing asset base.

Land

The value of Land remained relatively stable between 2021 and 2023, fluctuating around US$257,000 to US$263,000 thousand. A substantial increase to US$314,100 thousand was recorded in 2025, suggesting a significant land acquisition during that year.

Buildings

Buildings demonstrated an overall increase from US$1,157,800 thousand in 2021 to US$2,667,300 thousand in 2025. A decrease was noted between 2022 and 2023, from US$1,199,300 thousand to US$1,048,700 thousand, potentially due to asset disposals or revaluation. However, the value rebounded in 2024 and experienced a considerable surge in 2025.

Machinery and Equipment

Machinery and equipment consistently increased from US$3,043,600 thousand in 2021 to US$3,885,100 thousand in 2025, representing a steady investment in operational capacity. The growth rate appeared relatively consistent year-over-year.

Construction in Progress

Construction in progress showed the most volatile pattern. It increased significantly from US$205,400 thousand in 2021 to US$1,598,100 thousand in 2024, indicating substantial ongoing projects. A notable decrease to US$520,000 thousand in 2025 suggests the completion and capitalization of many of these projects, or a slowdown in new construction starts.

Gross PP&E

Gross PP&E increased steadily throughout the period, rising from US$4,664,500 thousand in 2021 to US$7,386,500 thousand in 2025. This growth was driven primarily by increases in Buildings, Machinery and Equipment, and Construction in Progress.

Accumulated Depreciation

Allowances for depreciation increased consistently from -US$2,797,200 thousand in 2021 to -US$3,249,100 thousand in 2025. The rate of increase appeared to align with the growth in the gross PP&E balance, as expected.

Net PP&E

Net PP&E increased substantially from US$1,867,300 thousand in 2021 to US$4,137,400 thousand in 2025. This growth reflects the combined effect of investments in PP&E and the associated depreciation expense. The most significant increase in net PP&E occurred between 2023 and 2025.

The significant increase in Construction in Progress followed by a decrease suggests a pattern of active capital expenditure projects being completed and transferred to other PP&E categories. The substantial rise in Buildings and overall net PP&E in 2025 indicates a considerable expansion of the company’s fixed asset base during that year.

An analysis of property, plant, and equipment age ratios reveals a consistent pattern of improvement over the five-year period. The average age ratio demonstrates a decreasing trend, while estimates of remaining useful life increase. These shifts suggest a rejuvenation of the asset base.

Average Age Ratio

The average age ratio decreased steadily from 63.47% in 2021 to 45.94% in 2025. This indicates a declining proportion of assets nearing the end of their useful lives relative to the total asset base. The most significant reduction occurred between 2021 and 2023, with a decrease of 9.37 percentage points.

Estimated Total Useful Life

The estimated total useful life of the assets initially increased from 17 years in 2021 to 19 years in 2022, remained constant through 2023, and then increased again to 22 years in 2024 before decreasing slightly to 21 years in 2025. This suggests potential revisions in depreciation schedules or the acquisition of assets with longer expected lifespans.

Estimated Age & Remaining Life

The estimated age, representing the time elapsed since purchase, remained relatively stable at 11 years in 2021, 2022, and 2024, and decreased to 10 years in 2023 and 2025. Simultaneously, the estimated remaining life increased from 6 years in 2021 to 11 years in both 2024 and 2025. This concurrent trend reinforces the conclusion that the asset base is becoming newer, with a greater proportion of assets having substantial remaining useful life.

Collectively, these ratios suggest a proactive approach to asset management, potentially involving strategic asset replacement or upgrades. The increasing remaining useful life, coupled with the decreasing average age ratio, indicates a strengthening position regarding the long-term productive capacity of property, plant, and equipment.

The allowances for depreciation, gross property, plant, and equipment, and land values all demonstrate increases over the five-year period. However, the average age ratio exhibits a consistent decline, suggesting a relative rejuvenation of the asset base.

Allowances for Depreciation

Allowances for depreciation increased steadily from US$2,797.2 million in 2021 to US$3,249.1 million in 2025. This indicates a cumulative recognition of asset consumption over time, consistent with ongoing operations and the passage of time.

Property, Plant, and Equipment, Gross

Gross property, plant, and equipment experienced substantial growth, rising from US$4,664.5 million in 2021 to US$7,386.5 million in 2025. This growth suggests significant investment in fixed assets during the period, potentially driven by expansion, modernization, or replacement initiatives.

Land

Land values showed a modest increase overall, moving from US$257.7 million in 2021 to US$314.1 million in 2025. The increase is not as pronounced as that of other property, plant, and equipment categories, and experienced a slight decrease in 2023.

Average Age Ratio

The average age ratio decreased consistently from 63.47% in 2021 to 45.94% in 2025. This decline indicates that, relative to the gross value of property, plant, and equipment, the accumulated depreciation is growing at a slower rate than the addition of new assets. This suggests a trend towards a younger asset base, potentially due to ongoing investment in newer, more efficient equipment or structures. The rate of decline in the average age ratio also accelerated over time, with larger decreases observed in later years.

The combination of increasing gross property, plant, and equipment values alongside a decreasing average age ratio suggests a proactive asset management strategy focused on maintaining a modern and productive asset base.

Over the five-year period, property, plant and equipment, gross consistently increased, indicating ongoing investment in fixed assets. Land values remained relatively stable for the majority of the period, with a notable increase in the final year. Depreciation expense also exhibited a consistent upward trend, which is expected given the increasing gross value of property, plant and equipment. However, the estimated total useful life of these assets demonstrates fluctuations, warranting further examination.

Gross Property, Plant & Equipment Trend

The gross value of property, plant and equipment increased from US$4,664.5 million in 2021 to US$7,386.5 million in 2025. This represents a cumulative increase of approximately 58.2%. The largest year-over-year increase occurred between 2023 and 2024, suggesting a period of significant capital expenditure.

Land Value Trend

Land values remained relatively consistent between 2021 and 2023, fluctuating around US$260 million. A substantial increase to US$314.1 million was observed in 2025, potentially due to acquisitions or revaluation of existing land holdings.

Depreciation Expense Trend

Depreciation expense increased from US$263.1 million in 2021 to US$340.3 million in 2025, representing a cumulative increase of approximately 29.3%. This increase aligns with the growth in gross property, plant and equipment, as a larger asset base naturally leads to higher depreciation charges.

Estimated Useful Life Analysis

The estimated total useful life of property, plant and equipment began at 17 years in 2021, increased to 19 years in both 2022 and 2023, then rose to 22 years in 2024 before decreasing to 21 years in 2025. This fluctuation suggests potential changes in the composition of the asset base, alterations in depreciation methods, or revisions in estimates of asset longevity. The increase to 22 years in 2024, followed by a decrease in 2025, is particularly noteworthy and may warrant further investigation to understand the underlying reasons for these adjustments. A lengthening of useful life reduces annual depreciation expense, potentially impacting reported profitability.

The interplay between increasing gross property, plant and equipment, rising depreciation expense, and fluctuating estimated useful life requires continued monitoring. The changes in estimated useful life, in particular, should be examined in conjunction with the company’s capital expenditure policies and asset management practices.

The allowances for depreciation have exhibited a consistent upward trend over the five-year period. Depreciation expense has also generally increased, though with some variation in the rate of growth. The reported time elapsed since purchase shows a slight fluctuation, indicating potential shifts in the company’s investment in property, plant, and equipment.

Allowances for Depreciation

The allowances for depreciation increased from US$2,797,200 thousand in 2021 to US$3,249,100 thousand in 2025. This represents a cumulative increase of approximately 16.1% over the period. The growth rate appears relatively stable, with annual increases ranging from approximately 6.6% to 7.4%.

Depreciation Expense

Depreciation expense rose from US$263,100 thousand in 2021 to US$340,300 thousand in 2025, a cumulative increase of approximately 29.3%. The annual growth in depreciation expense was relatively consistent between 2021 and 2023, at approximately 0.7% and 10.6% respectively. A more substantial increase of approximately 13.8% occurred between 2024 and 2025, suggesting a potentially accelerated depreciation of recently acquired or revalued assets.

Time Elapsed Since Purchase

The reported time elapsed since purchase was 11 years in 2021 and 2022, decreased to 10 years in 2023, increased back to 11 years in 2024, and then decreased to 10 years in 2025. This fluctuation suggests a pattern of asset turnover, with new purchases occurring in 2023 and 2025, offsetting the aging of existing assets. The alternating values indicate a consistent cycle of asset replacement or significant additions to the property, plant, and equipment base.

The increasing allowances for depreciation and depreciation expense, coupled with the fluctuating time elapsed since purchase, suggest ongoing investment in property, plant, and equipment. The accelerated depreciation expense in 2025 warrants further investigation to determine the underlying cause, such as the acquisition of new assets or a change in depreciation methods.

Property, plant, and equipment, net has exhibited a consistent upward trend over the five-year period, increasing from US$1,867.3 million in 2021 to US$4,137.4 million in 2025. This growth suggests ongoing investment in fixed assets. Land values have also generally increased, though at a slower pace, rising from US$257.7 million to US$314.1 million over the same period. Depreciation expense has also increased steadily, from US$263.1 million in 2021 to US$340.3 million in 2025, which is expected given the growth in the asset base.

Estimated Remaining Life

The estimated remaining life of property, plant, and equipment has shown a notable increase over the period. Starting at 6 years in 2021, it rose to 7 years in 2022, then to 9 years in 2023, and stabilized at 11 years in both 2024 and 2025. This lengthening of the estimated useful life could indicate a shift in asset management strategy, potentially reflecting investments in higher-quality, more durable assets, or a reassessment of depreciation methods. Alternatively, it could be a result of extending the life of existing assets through maintenance and upgrades.

The combination of increasing net property, plant, and equipment alongside a rising, then stabilizing, estimated remaining life suggests a pattern of asset growth coupled with an expectation of long-term value from those assets. The increase in depreciation expense is consistent with the larger asset base. The significant jump in estimated remaining life from 2022 to 2023 warrants further investigation to understand the underlying reasons for this change.

Relationship between PPE and Depreciation

While both property, plant, and equipment, net and depreciation expense have increased, the rate of increase in PPE has consistently exceeded that of depreciation. This indicates that the company is investing in assets at a rate faster than the assets are being depreciated, contributing to the overall growth in net PPE. The depreciation expense as a percentage of net PPE decreased slightly over the period, from approximately 14.1% in 2021 to approximately 8.2% in 2025, potentially due to the lengthening of the estimated remaining life.