What were the other adjustments for the tax valuation allowance for Budget in 2023?
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 for 2023 had other adjustments of $5 million. This figure represents changes to the valuation of Budget's deferred tax assets, which are assets that can be used to reduce future tax liabilities.
The "other adjustments" primarily consist of currency translation adjustments. These adjustments arise from changes in exchange rates, which can impact the value of Budget's assets and liabilities held in foreign currencies. These currency fluctuations can create either gains or losses that affect the tax valuation allowance.
For a prospective Budget franchisee, understanding these adjustments is crucial for assessing the overall financial health and tax position of the company. While these adjustments don't directly impact the franchisee's day-to-day operations, they reflect the complexities of Budget's financial structure and international operations. Franchisees should consult with financial advisors to fully understand the implications of these adjustments and how they might affect the long-term stability of the franchise system.