Where are Budget's currency translation adjustments reflected in the financial statements?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 21: FINANCIAL STATEMENTS]
| Year Ended December 31, | ||||
|---|---|---|---|---|
| 2024 | 2023 | 2022 | ||
| Net income (loss) | $ | (1,817) $ | 1,635 | $ 2,756 |
| Less: Net income (loss) attributable to non-controlling interests | 4 | 3 | (8) | |
| Net income (loss) attributable to Avis Budget Group, Inc. | (1,821) | 1,632 | 2,764 | |
| Other comprehensive income (loss), net of tax | ||||
| Currency translation adjustments: | (122) | 27 | (46) | |
| Currency translation adjustments, net of tax of $(19), $7 and $(11), respectively | (122) | 21 | (40) | |
| Cash flow hedges: | 15 | 5 | 57 | |
| Net unrealized holding gains (losses), net of tax of $(5), $(2), and $(20), respectively | (21) | (13) | 7 | |
| Reclassification of cash flow hedges to earnings, net of tax of $7, $5, and $(2), respectively | (21) | (.0) | • | |
| Minimum pension liability adjustment: | 10 | (18) | 11 | |
| Pension and post-retirement benefits, net of tax of $(4), $6, and $(4), respectively | 10 | (10) | 11 | |
| Reclassification of pension and post-retirement benefits to earnings, net of tax of $(1), $(1), and $(2), respectively | 4 | 4 | ||
| (114) | 5 | 32 | ||
| Total comprehensive income (loss) attributable to Avis Budget Group, Inc. | $ | (1,935) $ | 1,637 | $ 2,796 |
[Item 21: FINANCIAL STATEMENTS]
| As of December 31, | |||||||
|---|---|---|---|---|---|---|---|
| 20 | 2023 | ||||||
| Change in Benefit Obligation | $ | 620 $ | 575 | ||||
| Benefit obligation at end of prior year | • | 3 | 3 | ||||
| Service cost | 28 | 27 | |||||
| Interest cost | (43) | 30 | |||||
| Actuarial (gain) loss | (1) | _ | |||||
| Plan amendments | (11) | 15 | |||||
| Currency translation adjustment | (31) | (30) | |||||
| Net benefits paid | $ | 565 $ | 620 | ||||
| Benefit obligation at end of current year | |||||||
| Change in Plan Assets | _ | ^ | E14 | ||||
| Fair value of assets at end of prior year | $ | 540 $ | 514 35 | ||||
| Actual return on plan assets | 3 | 6 | |||||
| Employer contributions | 4 | 15 | |||||
| Currency translation adjustment | (6) | (30) | |||||
| Net benefits paid | (31) | 540 | |||||
| Fair value of assets at end of current year | $ | 510 $ | 540 |
[Item 21: FINANCIAL STATEMENTS]
| The components of accumulated other comprehensive mounts (1995) was as follows: | Currency Translation Adjustments | Net Unrealized Gains (Losses) on Cash Flow Hedges (e) | Minimum Pension Liability Adjustment (b) | Accumulated Other Comprehensive Income (Loss) |
|---|---|---|---|---|
| Balance, January 1, 2022 | 16 | $ (19) | $ (130) | $ (133) |
| Other comprehensive income (loss) before reclassifications | (46) | 57 | 11 | 22 |
| Gross (gains) losses reclassified | 9 | 5 | 14 | |
| Tax on (gains) losses reclassified | (2) | (2) | (4) | |
| (Gains) losses reclassified from accumulated other comprehensive income (loss), net of tax | _ | 7 | 3_ | 10 |
| Net current-period ather comprehensive income (loss) | (46) | 64 | 14 | 32 |
| Balance, December 31, 2022 | (30) | 45 | (116) | (101) |
| Other comprehensive income (loss) before reclassifications | 27 | 5 | (18) | 14 |
| Gross (gains) losses reclassified | (18) | 5 | (13) | |
| Tax on (gains) losses reclassified | 5_ | (1) | 4 | |
| (Gains) losses reclassified from accumulated other comprehensive income (loss), net of tax | _ | (13) | 4 | (9) |
| Net current-period other comprehensive income (loss) | 27 | (8) | (14) | 5 |
| Balance, December 31, 2023 | (3) | 37 | (130) | (96) |
| Other comprehensive income (loss) before reclassifications | (122) | 15 | 10 | (97) |
| Gross (gains) losses reclassified | (28) | 5 | (23) | |
| Tax on (gains) losses reclassified | 7 | (1) | 6 | |
| (Gains) losses reclassified from accumulated other comprehensive income (loss), net of tax | _ | (21) | 4 | (17) |
| Net current-period other comprehensive income (loss) | (122) | (6) | 14 | (114) |
| Balance, December 31, 2024 | (125) | $ 31 | $ (116) | $ (210) |
[Item 21: FINANCIAL STATEMENTS]
| Americas | 5 | International | Total Company | |
|---|---|---|---|---|
| • | 2.137 | $ 1,051 | $ 3,188 | |
| Goodwill as of January 1, 2023 | • | (1,587) | (531) | (2,118) |
| Accumulated impairment losses as of January 1, 2023 | 550 | 520 | 1,070 | |
| Goodwill as of January 1, 2023 | 330 | 10 | 10 | |
| Acquisitions | 1 | 18 | 19 | |
| Currency translation adjustments and other | 551 | 548 | 1,099 | |
| Goodwill as of December 31, 2023 | 551 | 3-10 | 2 | |
| Acquisitions | (27) | (30) | ||
| Currency translation adjustments and other | (3) | $ 523 | $ 1.071 | |
| Goodwill as of December 31, 2024 | $ | 548 | $ 523 | 3 1,071 |
| Goodwill as of December 51, 2027 |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 79)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, currency translation adjustments are reflected in several places within the financial statements. These adjustments appear within the 'Other comprehensive income (loss), net of tax' section of the income statement. For example, in 2024, the currency translation adjustment was a loss of $122,000, while in 2023, it was a gain of $27,000 and in 2022, a loss of $46,000. These figures are net of tax effects.
Currency translation adjustments also impact goodwill. The document shows that these adjustments are included in the calculation of goodwill as of December 31 for both 2023 and 2024. For instance, the currency translation adjustments and other factors contributed $10,000 to goodwill in the Americas and $18,000 internationally as of December 31, 2023. However, as of December 31, 2024, these adjustments resulted in a decrease of $3,000 in the Americas and a decrease of $27,000 internationally.
Additionally, currency translation adjustments are noted in the context of benefit obligations and plan assets. As of December 31, 2024, there was a currency translation adjustment of $(31,000) related to the change in benefit obligation and a currency translation adjustment of $(6,000) related to the change in plan assets. These adjustments reflect the impact of currency fluctuations on these specific financial items.
Finally, the components of accumulated other comprehensive income also reflect currency translation adjustments. The balances for currency translation adjustments were $(30,000) as of December 31, 2022, $(3,000) as of December 31, 2023, and $(125,000) as of December 31, 2024. These figures provide a historical view of how currency fluctuations have affected Budget's financial position over these years.