What was the total gross deferred tax liabilities for Burger King as of December 31, 2023?
Burger_King Franchise · 2025 FDDAnswer from 2025 FDD Document
d cost.
Income tax (benefit) expense allocated to continuing operations and amounts separately allocated to other items was (in millions):
| 2024 | 2023 | 2022 | |
|---|---|---|---|
| Income tax expense (benefit) from continuing operations | $ 364 | $ (265) $ | (117) |
| Cash flow hedge in accumulated other comprehensive income (loss) | 2 | (14) | 153 |
| Net investment hedge in accumulated other comprehensive income (loss) | (16) | 22 | 77 |
| Foreign Currency Translation in accumulated other comprehensive income (loss) | — | 1 | — |
| Pension liability in accumulated other comprehensive income (loss) | 1 | 2 | 2 |
| Total | $ 351 | $ (254) $ | 115 |
The significant components of deferred income tax (benefit) expense attributable to income from continuing operations are as follows (in millions):
| 2024 | 2023 | 2022 | |
|---|---|---|---|
| Deferred income tax (benefit) expense | $ (39) $ |
Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 109–124)
What This Means (2025 FDD)
According to Burger King's 2025 Franchise Disclosure Document, the total gross deferred tax liabilities as of December 31, 2023, was $2,274. This figure represents the cumulative amount of tax liabilities that Burger King has deferred to future periods. These liabilities arise from temporary differences between the book value of assets and liabilities and their tax bases. Common examples include differences in depreciation methods or revenue recognition timing.
Deferred tax liabilities generally indicate that Burger King will likely pay more taxes in the future. This is because the temporary differences will eventually reverse, leading to a higher taxable income. For a prospective franchisee, understanding these deferred tax implications is crucial for assessing the overall financial health and stability of the company. While franchisees are not directly responsible for these corporate-level taxes, they reflect the financial management and tax strategies of Burger King, which can indirectly affect the brand's long-term success and resources available for franchisee support.
The FDD also lists the components that make up the total gross deferred tax liabilities. These include items such as intangible assets ($1,743), leases ($128), and operating lease assets ($288). Reviewing these individual components provides a more detailed understanding of the specific factors contributing to the deferred tax liabilities. This level of detail allows potential investors to evaluate the underlying accounting practices and assess the potential impact of these liabilities on Burger King's future financial performance.