What was the depreciation and amortization expense relating to property and equipment for Budget during 2022?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
| 2024 | 2023 | |
|---|---|---|
| Land | $ 61 | $ 61 |
| Buildings and leasehold improvements | 616 | 574 |
| 981 | 957 | |
| Capitalized software | 484 | 440 |
| Furniture, fixtures and equipment Projects in process | 92 | 154 |
| Buses and support vehicles | ||
| 94 | 94 | |
| 2,328 | 2,280 | |
| (1,631) | (1,561) | |
| Less: Accumulated depreciation and amortization Property and equipment, net | $ 697 | $ 719 |
Depreciation and amortization expense relating to property and equipment during 2024, 2023 and 2022 was $207 million, $187 million, and $181 million, respectively (including $102 million, $101 million, and $115 million, respectively, of amortization expense relating to capitalized software). At December 31, 2024, we had payables related
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 79)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, the depreciation and amortization expense relating to property and equipment in 2022 was $181 million. This figure includes $115 million specifically attributed to the amortization expense related to capitalized software.
For a prospective Budget franchisee, understanding these expenses is crucial as they reflect the wear and tear or consumption of assets used in the business. Depreciation and amortization are non-cash expenses that impact the company's net income, and therefore, its profitability. Knowing the breakdown between property and equipment versus software can provide insights into where Budget is investing and how they are managing their assets.
The fact that a significant portion of the depreciation and amortization expense is related to capitalized software suggests that Budget relies heavily on technology. This could mean that franchisees benefit from advanced systems but also face the risk of these systems becoming obsolete or requiring frequent upgrades. Franchisees should inquire about the lifecycle of the software and the costs associated with maintaining and updating these systems.
It's important to note that these figures represent the expenses at the corporate level and may not directly translate to the expenses a franchisee will incur. However, understanding the overall financial picture of Budget can help franchisees assess the stability and investment strategy of the company.