What were the deductions for the Tax Valuation Allowance for Budget for the year ended December 31, 2023?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
| (in millions) Description | Balance of | at Beginning Period | Expe | nse (Benefit) | Other Adjustments (a) | _ | Deductions | Balance at End of Period |
|---|---|---|---|---|---|---|---|---|
| Tax Valuation Allowance: Year Ended December 31, 2024 2023 2022 | $ | 106 103 169 | $ | (6) (2) (63) | (15) 5 (3) | $ | - | $ 85 106 103 |
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 for the year ended December 31, 2023, were $0.
The table provided in the FDD outlines the changes in the Tax Valuation Allowance over three years. For the year ended December 31, 2023, the beginning balance of the Tax Valuation Allowance was $103 million. During that year, Budget recorded an expense benefit of ($2) million and other adjustments of $5 million. The deductions during this period were $0, resulting in an ending balance of $106 million.
Prospective franchisees should understand how Budget accounts for its tax valuation allowance, as it can provide insights into the company's financial health and tax strategies. A tax valuation allowance is used to reduce deferred tax assets when it is more likely than not that some portion or all of the deferred tax assets will not be realized. The changes in this allowance from year to year can reflect changes in the company's expectations about future profitability and tax liabilities.