What factors does Hardees consider when evaluating the realizability of deferred income tax assets?

According to Hardees's 2025 Franchise Disclosure Document, Hardees evaluates the realizability of deferred income tax assets on a quarterly basis. This involves determining whether it is more likely than not that the company will realize the tax benefits associated with these assets.

In performing this analysis, Hardees considers all available evidence, both positive and negative. This includes an examination of historical operating results to understand past performance and trends. The company also looks at the estimated timing of future reversals of existing taxable temporary differences, which are differences between the financial and tax bases of assets and liabilities. Furthermore, Hardees considers estimated future taxable income, excluding reversing temporary differences and carryforwards, to project future profitability.

Hardees also takes into account potential tax planning strategies that may be employed to prevent net operating loss (NOL) or tax credit carryforwards from expiring unused. These strategies could involve actions to accelerate income or defer deductions to maximize the utilization of available tax benefits. By considering these factors, Hardees aims to make a well-informed assessment of the likelihood of realizing its deferred income tax assets and to ensure accurate financial reporting.