What was the actuarial (gain) loss for the U.S. pension benefits of Dollar Rent A Car in 2024?
Dollar_Rent_A_Car Franchise · 2025 FDDAnswer from 2025 FDD Document
of a 10 percent corridor, the excess is amortized on a straightline basis over the average remaining service period of active participants. Prior service cost is amortized on a straight-line basis from the date recognized over the average remaining service period of active participants, when applicable.
The tables below set forth the funded status and the net periodic pension cost of the Hertz Retirement Plan and the retirement plans for international operations ("Non-U.S."), together with amounts included in the accompanying consolidated balance sheets and statements of operations.
| Pension Benefits U.S. Non-U.S. | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| (In millions) | 2024 | 2023 | 2024 | 2023 | |||||||
| Change in Benefit Obligation | |||||||||||
| Benefit obligation as of January 1 | $ | 373 | $ | 371 | $ | 191 | $ | 172 | |||
| Service cost | — | — | 1 | 1 | |||||||
| Interest cost | 18 | 19 | 8 | 8 | |||||||
| Plan settlements | (28) | (21) | — | — | |||||||
| Benefits paid | (3) | (3) | (8) | (7) | |||||||
| Foreign currency exchange rate translation | — | — | (6) | 10 | |||||||
| Actuarial (gain) loss | (11) | 7 |
Source: Item 23 — RECEIPTS (FDD pages 102–301)
What This Means (2025 FDD)
According to Dollar Rent A Car's 2025 Franchise Disclosure Document, the actuarial activity related to U.S. pension benefits experienced a gain in 2024. The actuarial gain for U.S. pension benefits was ($11) million. This figure represents the change in the benefit obligation due to actuarial assumptions and experience.
Actuarial gains and losses can significantly impact a company's financial statements, particularly concerning pension liabilities. These gains or losses arise from changes in actuarial assumptions, such as discount rates, mortality rates, and inflation rates, which are used to estimate future pension obligations. In 2024, Dollar Rent A Car saw an actuarial gain due to an increase in discount rates.
For a prospective Dollar Rent A Car franchisee, understanding these pension-related figures might not directly impact their day-to-day operations. However, it provides insight into the overall financial health and stability of the parent company. Actuarial gains can reduce the company's pension liabilities, improving its financial position, while losses can increase liabilities. Franchisees should be aware of these factors as they reflect on the long-term viability of the franchise system.