What was the balance of the Tax Valuation Allowance at the beginning of the period for Budget as of December 31, 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 Doubtfu |
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 for the year ended December 31, 2022, was $169 million.
A tax valuation allowance is a contra asset account used to reduce the carrying value of deferred tax assets when it is more likely than not that some portion or all of the deferred tax assets will not be realized. In simpler terms, it's an accounting practice that acknowledges potential uncertainty in a company's ability to use tax benefits in the future.
For a prospective Budget franchisee, this figure provides insight into Budget's financial accounting practices related to deferred tax assets. While it doesn't directly impact the franchisee's day-to-day operations, understanding these figures can offer a broader view of the company's financial health and how it manages its tax positions. Franchisees may want to discuss this with a financial advisor to understand the implications for the overall stability and profitability of Budget.