What were the other adjustments for the tax valuation allowance for Budget in 2022?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
ed average interest rate of 8.01%. These notes were issued under previously outstanding series of debt.
In February 2025, we borrowed $500 million under a floating rate term loan due December 2025, which is part of our senior revolving credit facilities.
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Schedule II – Valuation and Qualifying Accounts
| (in millions) Description | Balance of | at Beginning Period | Expe | nse (Benefit) | Other Adjustments (a) | _ | Deductions | Balance at End of Period |
|---|---|---|---|---|---|---|---|---|
| Allowance for Doubtful Accounts: Year Ended December 31, 2024 2023 2022 |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 79)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, the tax valuation allowance saw other adjustments of $(3) during the year ended December 31, 2022. The table also shows the tax valuation allowance at the beginning of the period was $169 million and expense (benefit) was $(63) million. After deductions, the balance at the end of the period was $103 million.
Additionally, the FDD provides a breakdown of adjustments to reconcile the U.S. federal statutory rate to Budget's effective rate. In 2022, these adjustments included state and local income taxes, net of federal tax benefits (3.9%), changes in valuation allowances ((1.3)%), taxes on foreign operations at rates different than the U.S. federal statutory rates (1.2%), tax credits ((0.5)%), stock-based compensation (0.4)%, other non-deductible (non-taxable) items ((0.1)%).
For a prospective Budget franchisee, understanding these adjustments to the tax valuation allowance may not have a direct impact on day-to-day operations. However, it provides insight into the financial management and tax strategies of the parent company. It's important to note that footnote (a) indicates that the "other adjustments" are primarily currency translation adjustments, which can be influenced by global economic factors.
It is important to note that the tax valuation allowance and its adjustments are complex accounting items. Franchisees should consult with their own financial advisors to understand the implications of these figures for their individual business decisions.