SOMNIGROUP INTERNATIONAL INC.SGI

SOMNIGROUP INTERNATIONAL INC. PP&E Disclosure

10-KFiled Feb 27, 20261 min read
Property, plant and equipment are carried at cost at acquisition date and are depreciated using the straight-line method over their estimated useful lives as follows:
Estimated Useful Lives
(in years)
Buildings
25-30
Computer equipment and software
3-7
Leasehold improvements
3-7
Machinery and equipment
3-7
Office furniture and fixtures
5-7
 
The Company records depreciation and amortization in cost of sales for long-lived assets used in the manufacturing process, and within each line item of operating expenses for all other long-lived assets. Leasehold improvements are amortized over the shorter of the life of the lease or their estimated useful lives. Assets under finance leases are included within property, plant and equipment and represent non-cash investing activities.

Property, plant and equipment, net consisted of the following:
December 31,
(in millions)20252024
Machinery and equipment$818.1 $713.0 
Land and buildings489.6 453.3 
Leasehold improvements305.6 182.0 
Computer equipment and software293.1 256.0 
Furniture and fixtures170.7 106.1 
Construction in progress75.4 54.0 
Total property, plant and equipment2,152.5 1,764.4 
Accumulated depreciation(1,133.3)(953.3)
Total property, plant and equipment, net$1,019.2 $811.1 

About PP&E Disclosures

The PP&E disclosure details a company's physical asset base — land, buildings, machinery, and equipment — along with the depreciation methods and useful life assumptions that determine how these costs flow through the income statement. Capitalization policy thresholds reveal management's judgment on the boundary between expense and asset, directly affecting both reported earnings and asset values.

Key signals: changes in estimated useful lives or depreciation methods can materially shift reported earnings without any operational change. Compare capital expenditures against depreciation expense — when capex consistently trails depreciation, the asset base may be aging and underinvested. Watch for large asset impairments or write-downs that signal overvalued carrying amounts. Asset retirement obligations reveal future environmental or decommissioning costs that are often underappreciated. Compare PP&E intensity (PP&E-to-revenue) against industry peers to assess capital efficiency and competitive positioning.

Other Available Disclosures

Income TaxesRevenueEarnings Per ShareFair ValueGoodwill & IntangiblesLeasesSegmentsDebtCommitmentsStock CompensationNew StandardsPay vs Performance