Sysco Corp. (NYSE:SYY)

The analysis of the annual property, plant, and equipment data reveals several notable trends in asset values and depreciation over the examined period.

Land

The value of land remained relatively stable throughout the period, fluctuating slightly between US$490 million and US$498 million. This indicates minimal changes in land holdings or valuation adjustments.

Buildings and Improvements

There has been a consistent increase in the value of buildings and improvements from US$4,545 million in 2019 to US$5,976 million in 2024. This represents an approximate 31.5% growth over six years, suggesting steady investments in infrastructure and facility enhancements.

Fleet and Equipment

The value of fleet and equipment initially decreased from US$3,697 million in 2019 to US$3,562 million in 2020, possibly reflecting asset retirements or disposals. Subsequently, it increased steadily, reaching US$4,788 million in 2024, marking an overall positive growth trend which may indicate fleet expansion or replacement with higher-value equipment.

Computer Hardware and Software

Computer hardware and software assets demonstrated consistent growth each year, increasing from US$1,214 million in 2019 to US$1,769 million in 2024. This trend reflects ongoing investments in technology infrastructure, likely supporting operational and strategic initiatives.

Plant and Equipment at Cost

The aggregate cost of plant and equipment rose steadily across the years from US$9,954 million in 2019 to US$13,023 million in 2024. This approximately 30.9% increase suggests sustained capital expenditures facilitating expansion or replacement of fixed assets.

Accumulated Depreciation

Accumulated depreciation showed a continual increase in its absolute value, growing from -US$5,453 million in 2019 to -US$7,526 million in 2024. This consistent rise in accumulated depreciation is indicative of regular asset usage and aging, which is typical as assets are employed over time.

Plant and Equipment, Net

Net plant and equipment values fluctuated slightly from US$4,502 million in 2019 down to US$4,326 million in 2021 but then increased to US$5,497 million by 2024. This upward movement after 2021 suggests effective asset management practices including additions exceeding depreciation, leading to enhanced net asset values.

Overall, the data exhibits a pattern of continual investment in fixed assets, supported by ongoing capital expenditures and technology upgrades, while depreciation steadily accrues. The net plant and equipment growth in the latter years reflects a positive balance between asset additions and depreciation impacts.

Average Age Ratio

The average age ratio shows a gradual upward trend from 57.66% in 2019 to a peak of 63% in 2022, indicating an increase in the relative age of the property, plant, and equipment over these years. After 2022, there is a slight decline to 60.05% by mid-2024, suggesting some renewal or replacement activities towards the most recent period.

Estimated Total Useful Life

The estimated total useful life experienced an incremental increase from 14 years in 2019 and 2020 to 16 years in 2021, further rising to 17 years in 2022 and reaching 18 years in 2023 before slightly decreasing back to 17 years in 2024. This reflects adjustments in asset lifespan expectations, possibly due to improved maintenance, asset upgrades, or revisions based on asset performance evaluation.

Estimated Age, Time Elapsed Since Purchase

The estimated age remained stable at 8 years through 2019 and 2020, then increased to 10 years in 2021 and 11 years in 2022 and 2023. In 2024, the estimated age decreases slightly to 10 years, implying the acquisition of newer assets or changes in the asset base resetting the average age.

Estimated Remaining Life

The estimated remaining life stays consistent at 6 years from 2019 through 2022, then increases to 7 years in 2023 and remains at that level in 2024. This extension suggests an expectation for longer asset utilization periods or improved asset condition extending their serviceability.

Accumulated Depreciation

The accumulated depreciation increased consistently over the examined period, rising from 5,453 million USD in 2019 to 7,526 million USD in 2024. This upward trajectory suggests ongoing depreciation of the company's plant and equipment assets, reflecting consistent asset aging and usage over time.

Plant and Equipment at Cost

The plant and equipment at cost showed a steady increase, growing from 9,954 million USD in 2019 to 13,023 million USD in 2024. This growth indicates continued investment in fixed assets, suggesting expansion or replacement activities aimed at maintaining or enhancing operational capacity.

Land

The value of land remained relatively stable throughout the period, fluctuating slightly around 490 million USD, with no clear upward or downward trend. This stability implies limited acquisition or disposal of land assets during the evaluated timeframe.

Average Age Ratio

The average age ratio, which indicates the relative age of the plant and equipment, exhibited an increasing trend from 57.66% in 2019 to a peak of 63% in 2022, followed by a gradual decline to 60.05% in 2024. The initial increase suggests aging assets, while the subsequent decrease may indicate asset renewal or additions of newer equipment, reducing the overall average age.

Plant and Equipment at Cost

The plant and equipment at cost demonstrate a consistent upward trend over the six-year period. Starting at $9,954 million in 2019, this figure increased steadily each year, reaching $13,023 million by 2024. The annual increments exhibit a gradual acceleration, reflecting ongoing investment or capital expenditure in plant and equipment assets.

Land

The value of land remains relatively stable over the reported period, fluctuating minimally between $490 million and $498 million. This stability suggests limited acquisition or disposal activity related to land assets during these years.

Depreciation Expense, Including Amortization of Capital Leases

Depreciation expense shows some variability but generally increases over time. Beginning at $657 million in 2019, it peaks at $728 million in 2024, with a noticeable dip in 2021 where the expense decreased to $635 million before recovering. The overall rising trend aligns with the increasing plant and equipment cost base, reflecting greater allocated wear and tear or amortization expenses.

Estimated Total Useful Life

The estimated total useful life of assets has lengthened over the years, moving from 14 years in 2019 and 2020 to a peak of 18 years in 2023 before slightly decreasing to 17 years in 2024. This extension suggests adjustments in asset lifespan assessments, potentially reflecting improved technology, maintenance, or changes in depreciation policies.

Summary

Overall, the financial data indicates increasing investment in plant and equipment, supporting growth or asset replacement activities. The stable land values denote minimal changes in that asset category. Rising depreciation expenses correspond with the expanded asset base but show some fluctuations likely tied to asset management or accounting changes. The elongation of asset useful lives may have implications on depreciation schedules and future expense recognition.

Accumulated Depreciation Trends

Over the six-year period, accumulated depreciation steadily increased each year, rising from $5,453 million in 2019 to $7,526 million in 2024. This consistent growth indicates ongoing asset usage and gradual wear and tear on property, plant, and equipment. The upward trend suggests that the company is continually aging its asset base or possibly acquiring assets that contribute to higher accumulated depreciation.

Depreciation Expense Patterns

Depreciation expense fluctuated moderately but maintained a generally stable level with a slight upward trend. Starting at $657 million in 2019, it peaked at $728 million in 2024. The expense experienced a decline in 2021 to $635 million but rebounded thereafter. The increase in 2024 may reflect recent asset additions or adjustments in depreciation methods or estimates.

Time Elapsed Since Purchase

The average age of the assets, measured as time elapsed since purchase, remained relatively stable, fluctuating between 8 and 11 years. This consistency suggests a relatively stable asset turnover and replacement cycle without significant acceleration or deceleration in asset renewal.

Overall Insights

The data collectively indicates a steady consumption of property, plant, and equipment assets, with accumulated depreciation growing consistently, reflecting ongoing asset amortization. The somewhat stable depreciation expense alongside steady asset age suggests controlled management of asset utilization and replacement. The increase in depreciation expense in the latest year may signify recent capital investment or changes in depreciation policies, meriting further investigation.

Plant and Equipment, Net

The net value of plant and equipment initially declined from 4,502 million USD in 2019 to 4,326 million USD in 2021, reflecting a downward trend over these three years. Following this period, a reversal occurred, with values increasing to 4,456 million USD in 2022, then significantly rising to 4,915 million USD in 2023, and 5,497 million USD in 2024. This pattern indicates a phase of asset reduction followed by a phase of asset growth and reinvestment in property and equipment from 2021 onward.

Land

The value of land remained relatively stable throughout the six-year span, fluctuating minimally between 490 million USD and 498 million USD. This indicates no significant acquisitions or disposals of land assets during this period, reflecting a consistent land asset base.

Depreciation Expense, Including Amortization of Capital Leases

Depreciation expense showed variability, increasing from 657 million USD in 2019 to a peak of 705 million USD in 2020. It then decreased to 635 million USD in 2021, followed by modest increases in 2022 and 2023, and a notable rise to 728 million USD in 2024. The fluctuation suggests adjustments in asset usage intensity, asset base composition, or changes in accounting estimates impacting depreciation calculations over the years.

Estimated Remaining Life

The estimated remaining life of the assets remained consistent at 6 years from 2019 through 2022, before increasing to 7 years in 2023 and 2024. This extension may reflect asset acquisitions with longer useful lives or revisions in the estimation of asset longevity, potentially associated with changes in asset composition or maintenance programs.