For Budget, where are currency gains and losses from foreign currency transactions generally included in the Consolidated Statements of Operations?

According to Budget's 2025 Franchise Disclosure Document, currency gains and losses resulting from foreign currency transactions are generally included in operating expenses within the Consolidated Statements of Operations. However, there is an exception for the net gain or loss of currency transactions on intercompany loans and the unrealized gain or loss on intercompany loan hedges.

For a Budget franchisee, this means that if their operations involve foreign currency transactions, the gains or losses from those transactions will typically be reflected in the operating expenses section of Budget's overall financial statements. This could impact the reported profitability of Budget as a whole.

The exception regarding intercompany loans and hedges is more relevant to Budget's corporate financial management. These specific gains or losses are included within interest expense related to corporate debt, net, indicating a different accounting treatment for these particular financial activities. This distinction likely reflects how Budget manages its internal financing and risk management strategies related to foreign currency exposures.

Prospective franchisees should be aware of how foreign currency fluctuations could affect Budget's financial performance, as this could indirectly impact the stability and resources available to support the franchise system. Understanding these accounting practices provides a clearer picture of Budget's financial health and risk management strategies.