What was the depreciation, depletion and amortization for Petro Stopping Center in 2024?
Petro_Stopping_Center Franchise · 2025 FDDAnswer from 2025 FDD Document
| Land and land improvements | Buildings | Oil and gas propertiesa | Plant, machinery and equipment | Fittings, fixtures and office equipment | Transportation | Oil depots, storage tanks and service stations | $ million Total | |
|---|---|---|---|---|---|---|---|---|
| Depreciation - owned PP&E | ||||||||
| At January 1, 2024 | 285 | 177 | 60,136 | 11,303 | 638 | 701 | 690 | 73,930 |
| Charge for the year | 27 | 12 | 5,730 | 1,091 | 64 | 42 | 269 | 7,235 |
| Impairment losses | — | — | 10 | 371 | — | — | 47 | 428 |
| Impairment reversals | — | — | (402) | (4) | — | (1) | — | (407) |
| Reclassified as assets held for sale | (6) | (2) | — | (364) | (1) | — | — | (373) |
| Deletions and disposals | (3) | (1) | (5,665) | (155) | (23) | (299) | (31) | (6,177) |
| At December 31, 2024 | 303 | 186 | 59,809 | 12,242 | 678 | 443 | 975 | 74,636 |
Source: Item 23 — RECEIPTS **RECEIPTS (FDD pages 87–131)
What This Means (2025 FDD)
According to Petro Stopping Center's 2025 Franchise Disclosure Document, the total charge for depreciation for the year 2024 was $7,235 million. This figure represents the depreciation of owned property, plant, and equipment (PP&E). Additionally, impairment losses of $428 million were recorded, offset by impairment reversals of $407 million. After accounting for reclassifications, deletions, and disposals, the total accumulated depreciation for owned PP&E as of December 31, 2024, stood at $74,636 million.
Specifically, the depreciation charge for oil and gas properties was $5,730 million in 2024. This indicates the portion of the total depreciation expense that is attributed to the reduction in value of Petro Stopping Center's oil and gas assets due to their use and depletion. The document also mentions that oil and natural gas properties are depreciated using a unit-of-production method, where the cost of producing wells is amortized over proved developed reserves, and license acquisition, common facilities, and future decommissioning costs are amortized over total proved reserves.
It is important for a prospective franchisee to understand these depreciation figures as they reflect the capital-intensive nature of Petro Stopping Center's operations. High depreciation expenses can impact the company's profitability and cash flow, which in turn could affect the financial stability of the franchise system. Additionally, the methods used for calculating depreciation, particularly for oil and gas properties, are subject to estimates and assumptions about reserves and future capital expenditures, which can introduce uncertainty into the financial reporting.