What was the amount of Budget's deferred interest expense as of December 31, 2023?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
91 | | 682 | | | (810) | $ 279 | | 880 | | Income (loss) before income taxes is comprised of the following: | 2024 | Year Ended December 31, | 2022 | | | United States (U.S.) | $ (2,642) | $ 1,418 | $ | 3,114 | | | 15 | 496 | | 522 | | Foreign Income (loss) before income taxes | $ (2,627) | $ 1,914 | $ | 3,636 | | Deferred income tax assets, net is comprised of the following: | | As of December 31, | | | | | |----------------------------------------------------------------|-------------|--------------------|-------|--|--|--| | | | 2024 | 2023 | | | | | Deferred income tax assets: | $ | 983 $ | 1,373 | | | | | Net tax loss carryforwards | • | 807 | 703 | | | | | Long-term operating lease liabilities | | 405 | 323 | | | | | Tax credits | | 358 | 179 | | | | | Deferred interest expense (a) | | 157 | 169 | | |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 79)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, the deferred interest expense as of December 31, 2023, was $169 million. This figure is part of the deferred income tax assets.
Deferred interest expense represents interest that has been incurred but not yet paid or recognized as an expense on the income statement. Instead, it is recorded as an asset on the balance sheet. This usually happens when the actual cash payment of interest is delayed beyond the period in which the expense is incurred. For Budget, this deferred expense is related to their vehicle programs.
For a prospective franchisee, understanding deferred interest expense is crucial because it impacts the company's overall financial health and tax obligations. While it's an asset, it also indicates future cash outflows. Franchisees should consider how these deferred expenses might affect Budget's financial strategies and stability, as this could indirectly influence the support and resources available to them.