What was the balance of the tax valuation allowance for Budget at the end of the period in 2022?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
| (in millions) Description | Balance of | at Beginning Period | Expe | nse (Benefit) | Other Adjustments (a) | _ | Deductions | Balance at End of Period |
|---|---|---|---|---|---|---|---|---|
| Tax Valuation Allowance: Year Ended December 31, 2024 2023 2022 | $ | 106 103 169 | $ | (6) (2) (63) | (15) 5 (3) | $ | - | $ 85 106 103 |
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 end of 2022 was $103 million. The table provides a summary of the tax valuation allowance over three years.
The 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. This allowance reflects Budget's assessment of the recoverability of its deferred tax assets based on available evidence, including historical profitability, future taxable income projections, and tax planning strategies.
For a prospective Budget franchisee, understanding these figures is crucial for assessing the financial health and stability of the company. While franchisees are not directly involved in managing these specific tax assets, the overall financial performance of the franchisor can impact the support, resources, and brand strength available to franchisees. A strong balance sheet and effective tax management can contribute to the long-term success and sustainability of the Budget franchise system.