What was the value of Budget's net tax loss carryforwards as of December 31, 2023?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
91 | | 682 | | | (810) | $ 279 | | 880 | | Income (loss) before income taxes is comprised of the following: | 2024 | Year Ended December 31, | 2022 | | | United States (U.S.) | $ (2,642) | $ 1,418 | $ | 3,114 | | | 15 | 496 | | 522 | | Foreign Income (loss) before income taxes | $ (2,627) | $ 1,914 | $ | 3,636 | | Deferred income tax assets, net is comprised of the following: | | As of December 31, | | | | | |----------------------------------------------------------------|-------------|--------------------|-------|--|--|--| | | | 2024 | 2023 | | | | | Deferred income tax assets: | $ | 983 $ | 1,373 | | | | | Net tax loss carryforwards | • | 807 | 703 | | | | | Long-term operating lease liabilities | | 405 | 323 | | | | | Tax credits | | 358 | 179 | | | | | Deferred interest expense (a) | | 157 | 169 | | | | | Accrued liabilities and deferred revenue | | 24 | 22 | | | | | Depreciation and amortization | | 19 | 18 | | | | | Provision for doubtful accounts | | 28 | 34 | | | | | Other (a) | | (83) | (103) | | | | | Valuation allowance (b) | | 2,698 | 2,718 | | | | | Deferred income tax assets | | | | | | | | Deferred income tax liabilities:
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, 2023, Budget had net tax loss carryforwards valued at $703 million. This deferred income tax asset represents the amount of tax losses that Budget has incurred but has not yet used to reduce its taxable income. These carryforwards can be used in future years to offset taxable income, potentially reducing Budget's future tax liabilities.
Deferred income tax assets also include items such as long-term operating lease liabilities ($323 million), tax credits ($179 million), deferred interest expense ($169 million), accrued liabilities and deferred revenue ($22 million), depreciation and amortization ($18 million), and provision for doubtful accounts ($34 million). These, along with other smaller factors, contribute to a total deferred income tax asset of $1,373 million as of December 31, 2023.
It's important to note that Budget also has deferred income tax liabilities, which are obligations that will result in increased tax payments in the future. These liabilities include operating lease right of use assets ($117 million), depreciation and amortization ($33 million), and prepaid expenses ($7 million). As of December 31, 2023, the total deferred income tax liabilities amounted to $850 million. The net deferred income tax asset position, after considering both assets and liabilities, provides a more complete picture of Budget's future tax obligations and potential benefits.