What was the change in benefit obligation for Budget as of December 31, 2023?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
y. For the year ended December 31, 2022, $1 million was included in selling, general and administrative
expenses. (b) Included in selling, general and administrative expenses.
Net funded status
We use a measurement date of December 31st for our pension plans. The funded status of the pension plans were as follows:
| As of December 31, | |||||||
|---|---|---|---|---|---|---|---|
| 20 | 2023 | ||||||
| Change in Benefit Obligation | $ | 620 $ | 575 | ||||
| Benefit obligation at end of prior year | • | 3 | 3 | ||||
| Service cost | 28 | 2 |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 79)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, the change in benefit obligation as of December 31, 2023, was $575 million. This figure represents the difference in Budget's benefit obligations from the end of the prior year to the end of the current year.
The benefit obligation encompasses the projected future payments that Budget is obligated to make to its employees or retirees under its benefit plans. This includes items such as service cost ($27 million), interest cost ($30 million), actuarial loss, plan amendments ($15 million), and currency translation adjustment ($-30 million). Net benefits paid totaled $620 million.
Understanding the change in benefit obligation can be crucial for prospective franchisees as it provides insight into Budget's financial health and its long-term liabilities related to employee benefits. Significant changes in this obligation could impact the company's financial stability and, consequently, the support and resources available to franchisees.
It is important to note that this figure is just one component of Budget's overall financial picture, and prospective franchisees should consider it in conjunction with other financial data and disclosures in the FDD to gain a comprehensive understanding of the company's financial condition.