What was the balance of the tax valuation allowance for Budget at the beginning of the period in 2024?
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 balance of the tax valuation allowance at the beginning of the period in 2024 was $106 million. The FDD also provides figures for the tax valuation allowance at the beginning of the period for 2023 and 2022, which were $103 million and $169 million, respectively.
A tax valuation allowance is a reduction in the value of a deferred tax asset, which is recorded when it is more likely than not that some portion or all of the deferred tax asset will not be realized. This allowance reflects an accounting estimate of potential future tax benefits that may not be received. The beginning balance is simply the valuation allowance amount at the start of the accounting period, before any adjustments are made during that year.
For a prospective Budget franchisee, understanding the tax valuation allowance may not directly impact day-to-day operations. However, it provides insight into Budget's overall financial health and tax strategies. A significant change in the valuation allowance from year to year could signal changes in the company's profitability or tax planning.
Franchisees typically do not deal with these high-level corporate tax matters directly, but this information is part of the overall financial picture presented in the FDD. Reviewing these figures can contribute to a more informed investment decision, especially when considered alongside other financial metrics and disclosures within the FDD.