What was the expense (benefit) for the tax valuation allowance for Budget in 2024?
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 expense (benefit) for the tax valuation allowance for the year ended December 31, 2024, was ($6) million. The beginning balance of the tax valuation allowance was $106 million, and after adjustments, the balance at the end of the period was $85 million.
This figure reflects the change in the company's assessment of the likelihood that it will be able to use its deferred tax assets in the future. A negative expense, or benefit, indicates that Budget reduced its valuation allowance, meaning it has increased confidence that it will be able to utilize its deferred tax assets. Deferred tax assets typically arise from net tax loss carryforwards, which were $807 million in 2024.
For a prospective Budget franchisee, understanding these figures is crucial for assessing the financial health and tax strategies of the company. While franchisees are not directly involved in these high-level corporate tax matters, they reflect the overall profitability and financial management of Budget, which can impact the stability and resources available to support the franchise system.