What was the total value of Budget's Level 3 assets as of December 31, 2024?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
gnificant leverage. Diversification of asset categories, investment styles and managers is central to managing investment risk. The alternative investment component is expected to approximate 5%-15% of the plans' assets.
The following table presents the defined benefit pension plans' assets measured at fair value:
| As of December 31, 2024 | ||||||||
|---|---|---|---|---|---|---|---|---|
| Asset Class | Level 1 | Level 2 Le | Level 3 Total | |||||
| Cash equivalents and short-term investments | $ | 8 | $ | 12 | $ | _ | $ | 20 |
| U.S. equities | 49 | 10 | _ | 59 | ||||
| Non-U.S. equities | 29 | 15 | _ | 44 | ||||
| Government bonds | 9 | 48 | _ | 57 | ||||
| Corporate bonds | 159 | 39 | 198 | |||||
| Other assets | _ | 73 | 59 | 132 | ||||
| Total assets | $ As of December 31, 2023 | 254 | $ | 197 | $ | 59 | $ | 510 |
| Asset Class | Level 1 | Level 2 | Level 3 | Total | ||||
| Cash equivalents and short-term investments |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 79)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, the company categorizes its assets into three levels based on fair value hierarchy. As of December 31, 2024, the value of Level 3 assets for 'Other assets' was $59 million. There were no Level 3 assets listed for any other asset class at that date. Therefore, the total value of Budget's Level 3 assets as of December 31, 2024, was $59 million.
It is important to understand the definitions of these levels. Level 1 assets are those with readily available quoted prices in active markets. Level 2 assets are those whose values are derived from observable inputs other than quoted prices. Level 3 assets rely on unobservable inputs and management's own assumptions about market participant assumptions. These Level 3 valuations are inherently more subjective.
For a prospective Budget franchisee, this information provides insight into the types of assets Budget holds and how they are valued. While franchisees do not directly own these assets, understanding the financial health and asset valuation practices of the franchisor is crucial for assessing the overall stability and risk associated with investing in a Budget franchise. Reviewing these figures over several years, if available, can reveal trends in asset valuation and the company's reliance on different valuation levels.