What were the non-current assets related to Budget's pension plans as of December 31, 2024?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
y. For the year ended December 31, 2022, $1 million was included in selling, general and administrative
expenses. (b) Included in selling, general and administrative expenses.
Net funded status
We use a measurement date of December 31st for our pension plans. The funded status of the pension plans were as follows:
| 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 |
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, 2024, the non-current assets related to their pension plans were $39 million. The document also provides comparative data from December 31, 2023, when these assets were valued at $24 million. This information is part of the broader financial statements detailing the company's assets, liabilities, and equity.
Understanding the pension plan assets can be important for prospective franchisees as it provides insight into Budget's financial health and stability. Pension obligations are a significant liability for many large companies, and the level of assets available to meet those obligations can indicate the company's ability to manage its long-term financial commitments. A well-funded pension plan can be seen as a sign of financial prudence.
However, it is important to note that the value of pension plan assets can fluctuate based on market conditions and investment performance. The FDD also mentions that Budget's defined benefit pension plans' assets are primarily invested in mutual funds, which are subject to risks such as interest rate and credit risk, as well as overall market volatility. These factors could potentially affect the amounts reported in Budget's financial statements.
Therefore, while the $39 million in non-current assets related to pension plans provides a snapshot of Budget's financial position at a specific point in time, prospective franchisees should consider this information in the context of the company's overall financial performance, market conditions, and the inherent risks associated with pension plan investments. It would be prudent to review the complete financial statements and consult with a financial advisor to fully understand the implications for the franchise.