What were the current liabilities related to Budget's pension plans as of December 31, 2023?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
| 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 | ||||
| Amounts recognized in the statement of financial position consist of the following: | As of December 31, | ||||||
| Funded Status | 20 | )24 | 2023 | ||||
| Classification |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 79)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, as of December 31, 2023, the current liabilities related to their pension plans were $(4) million. This figure represents the short-term portion of Budget's pension obligations that are due within the next year.
For a prospective franchisee, understanding these pension liabilities is crucial as it provides insight into Budget's overall financial health and stability. While pension liabilities are not directly the responsibility of franchisees, they reflect the financial obligations of the parent company, which can indirectly impact the support and resources available to franchisees.
The presence of current pension liabilities indicates that Budget has immediate obligations to its pension plan, and this can affect how the company manages its cash flow and investments. Franchisees should consider this information as part of their due diligence, assessing how well Budget is managing its financial commitments and whether these obligations could pose any risks to the franchise system.
It is important to note that this figure represents only the current portion of the liabilities. The FDD also lists non-current liabilities related to pension plans, offering a more complete picture of Budget's long-term obligations in this area. Reviewing both current and non-current liabilities provides a more comprehensive understanding of the company's financial position.