What was the amount of depreciation, amortization, and accretion for Aplus in 2021?

According to Aplus's 2024 Franchise Disclosure Document, the total depreciation, amortization, and accretion expenses for the year ended December 31, 2021, was $177 million. This figure represents the accounting expense recognized for the reduction in value of Aplus's assets over that year. These assets include tangible assets subject to depreciation and intangible assets subject to amortization. Accretion expense relates to the increase in the discounted value of asset retirement obligations, such as the cost to remove underground storage tanks over their useful life.

For a prospective Aplus franchisee, understanding depreciation, amortization, and accretion is crucial because it reflects the capital-intensive nature of the business. These non-cash expenses impact Aplus's net income and are important to consider when evaluating the company's financial performance. While these expenses don't represent immediate cash outlays, they do reflect the wearing down of assets that will eventually need replacement, which will require significant capital expenditure.

Furthermore, the FDD reveals that total amortization expense on finite-lived intangibles included in depreciation, amortization, and accretion was $52 million for the year ended December 31, 2021. This indicates a significant portion of the $177 million is related to the amortization of intangible assets like customer relations and supply agreements. These agreements are amortized on a straight-line basis over their remaining terms, which generally range from five to twenty years.

Therefore, a franchisee should pay close attention to the nature and lifespan of these assets, as they impact the long-term financial health and stability of Aplus. Understanding these accounting practices helps franchisees better assess the true profitability and cash flow dynamics of the Aplus business model.