What were the deductions for the tax valuation allowance for Budget in 2022?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
ed average interest rate of 8.01%. These notes were issued under previously outstanding series of debt.
In February 2025, we borrowed $500 million under a floating rate term loan due December 2025, which is part of our senior revolving credit facilities.
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Schedule II – Valuation and Qualifying Accounts
| (in millions) Description | Balance of | at Beginning Period | Expe | nse (Benefit) | Other Adjustments (a) | _ | Deductions | Balance at End of Period |
|---|---|---|---|---|---|---|---|---|
| Allowance for Doubtful Accounts: Year Ended December 31, 2024 2023 2022 |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 79)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, the deductions for the tax valuation allowance in 2022 were $86 million. The tax valuation allowance started at $169 million at the beginning of 2022. During that year, there was an expense benefit of -$63 million and other adjustments of -$3 million. After deductions of $86 million, the tax valuation allowance ended the year at $103 million.
Tax valuation allowances are used to account for deferred tax assets that may not be realized in the future. These allowances are reduced when it is more likely than not that the related deferred income tax assets will be realized. The figures presented reflect adjustments made during the normal course of business, impacting Budget's overall tax strategy and financial reporting.
Prospective franchisees should understand that these tax-related adjustments are part of Budget's overall financial health and tax strategy. While these figures don't directly impact the operation of a franchise, they provide insight into the financial management and tax planning at the corporate level. Franchisees may want to discuss with Budget how these tax strategies could indirectly affect the company's ability to support its franchisees or invest in future growth.