What was the reported operating lease cost for Aplus in 2023?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
ional contingent or variable lease payments based on factors specific to the individual agreement. Variable lease payments we are typically responsible for include payment of real estate taxes, maintenance expenses and insurance.
The components of lease expense consisted of the following:
| Year Ended December 31, | |||||||
|---|---|---|---|---|---|---|---|
| Lease cost | 2023 | 2022 | |||||
| Classification | |||||||
| Operating lease costs: | |||||||
| Operating lease cost | Lease expense | $ | 51 $ | 49 | |||
| Finance lease costs: | |||||||
| Amortization of leased assets | Depreciation, amortization and accretion | — | — | ||||
| Interest on lease liabilities | Interest expense | — | — | ||||
| Short-term lease cost | Lease expense | 2 | 2 | ||||
| Variable lease cost | Lease expense | 15 | 12 | ||||
| Sublease income | Lease income | (42) | (39) | ||||
| Net lease cost | $ | 26 $ | 24 | ||||
| Lease term and discount rate | December 31, 2023 | Decemb |
Source: Item 22 — CONTRACTS (FDD page 68)
What This Means (2024 FDD)
According to Aplus's 2024 Franchise Disclosure Document, the operating lease cost, categorized as lease expense, was reported as $51 for the year ended December 31, 2023. This figure represents the expense associated with operating leases that Aplus incurred during that year. In comparison, the operating lease cost for the previous year, 2022, was $49.
Additionally, the FDD provides a breakdown of other lease-related costs. Short-term lease costs were $2 in both 2023 and 2022, while variable lease costs were $15 in 2023 and $12 in 2022. Sublease income, which reduces the overall lease expense, was $(42) in 2023 and $(39) in 2022. The net lease cost, after accounting for all these factors, was $26 in 2023 and $24 in 2022.
For a prospective Aplus franchisee, understanding these lease costs is crucial. It provides insight into the company's financial obligations related to leased properties and equipment. The weighted average remaining lease term for operating leases was 22 years as of December 31, 2023, with a weighted average discount rate of 6%. This information can help franchisees assess the long-term lease commitments and associated financial implications.