What is the relationship between 'Propreciation and amoritation' and the capital expenditures of Sonesta Simply Suites?
Sonesta_Simply_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
-----------|---------------------------------------------------------------------------------------|---------|------------|------|------------|-------|---------|--|--| | Net income (loss) $ (2,913) $ 1,477 $ (3,186) Adjustments to reconcile net loss to cash provided by (used in) operating activities: 489 1,691 3,506 Depreciation and amortization 489 1,691 3,506 Amortization of key money and contract costs 1,514 396 7 Amortization of contract liabilities 192 1,497 713 Deferred income taxes 1,112 (1,819) 654 Other income (expense), net 2 1 9 486 Other income (expense), net 3,111 (942) (50 Change in current assets and liabilities (3,111) (942) (50 Prepaid expenses and other current assets (706) (414) (541) Other long term assets (19,498) (9,440) (1,007) Accounts receivable, net (3,111) (942) (50 Prepaid expenses and other current assets (706) (414) (541) Other long term assets (19,498) (9,440) (1,007) Accounts payable (2,132) | | | 2024 | 2023 | (Restated) | | 2022 | | | | Adjustments to reconcile net loss to eash provided by (used in) operating activities: 489 1,691 3,506 Depreciation and amorization 1,514 396 7 Amortization of Centract liabilities 192 1,497 713 Deferred income taxes - 1 1 Other income (expense), net - - 846 Loss (gain) on sale of hotel 153 (160) - Change in current assets and liabilities (3,111) (942) (50) Accounts receivable, net (3,111) (942) (50) Prepaid expenses and other current assets (706) (414) (541) Other long term assets (19,498) (9,440) (1,007) Accounts program liability 139 - - Accrued compensation, accrued expenses, and other liabilities 893 (2,777) 3,600 Net cash provided by (used
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 79)
What This Means (2025 FDD)
According to Sonesta Simply Suites's 2025 Franchise Disclosure Document, depreciation and amortization are adjustments used to reconcile net loss to cash provided by (used in) operating activities.
Specifically, the document provides figures for depreciation and amortization for the years 2022, 2023, and 2024. In 2024, depreciation and amortization was $489. In 2023, it was $1,691, and in 2022, it was $3,506. These figures indicate the level of non-cash expenses related to the use of assets, which are added back to net loss to arrive at a cash flow figure.
Capital expenditures, representing investments in property and equipment, are listed separately in the cash flow statement. For capital expenditures, the amounts are ($735) in 2024, ($43) in 2023, and the document does not specify the capital expenditures for 2022. Depreciation and amortization do not directly reduce capital expenditures but reflect the expense recognized over time as those assets are used. Capital expenditures reflect actual cash outflows for new assets or improvements, while depreciation is a non-cash accounting method to allocate the cost of those assets over their useful lives.