What was the depreciation expense for Budget as of December 31, 2023?
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 expense as of December 31, 2023, was $187 million. This figure is part of the depreciation and amortization expense related to property and equipment. The document also specifies that this amount includes $101 million of amortization expense related to capitalized software.
For a prospective Budget franchisee, understanding depreciation and amortization expenses is crucial as it reflects the reduction in value of assets over time. In Budget's case, a significant portion of this expense is tied to capitalized software, which suggests a reliance on technology and digital infrastructure. Franchisees should consider how these technology costs and related depreciation might affect their operational expenses and profitability.
It's important to note that the document also mentions payables related to property and equipment. At December 31, 2023, Budget had $18 million in payables included in accounts payable and other current liabilities, and an additional $6 million in other non-current liabilities. These figures indicate outstanding obligations related to property and equipment, which could impact Budget's overall financial health and investment capacity. Franchisees should assess how Budget manages its liabilities and how this might affect the support and resources available to them.
Furthermore, the FDD provides depreciation and amortization expenses for 2024 and 2022, which were $207 million and $181 million, respectively. Reviewing these trends over multiple years can give potential franchisees a better understanding of how Budget manages its assets and investments, and how these expenses might fluctuate over time. This information can be valuable in forecasting future financial performance and assessing the long-term viability of a Budget franchise.