What was the total amount of Hardees' deferred income tax assets in 2024?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
| \$ 11,248 |
| State | 2,449 | 3,066 | | Foreign | 6,404 | 5,926 | | | 16,135 | 20,240 | | Deferred: | | | | Federal | (8,988) | (4,512) | | State | (2,857) | 714 | | Foreign | (24) | 60 | | | (11,869) | (3,738) | | Total income tax expense | $ 4,266 | $ 16,502 |
The following is a reconciliation of income tax expense at the federal statutory rate of 21.0% to our income tax expense for fiscal 2025 and 2024, respectively:
| Income tax expense at statutory rate | $ | 5,262 | $ 12,942 |
|---|---|---|---|
| State income taxes, net of federal income tax effec |
Source: Item 21 — Financial Statements (FDD pages 84–85)
What This Means (2025 FDD)
According to Hardees' 2025 Franchise Disclosure Document, the total deferred income tax assets for 2024 amounted to $174,636. This figure is derived from several components, including operating lease liabilities ($115,175), financing method sale-leaseback obligations ($32,229), interest limitation carryforward ($13,345), reserves and allowances ($5,546), franchise fees ($7,803), net operating loss carryforwards ($4,749), and federal and state tax credits ($4,536), offset by a valuation allowance of ($8,747).
Deferred income tax assets represent the future tax benefits that Hardees expects to realize from existing deductible temporary differences and carryforwards. These assets arise because of differences between the financial reporting and tax bases of Hardees' assets and liabilities. For instance, Hardees may have deductions or credits available for tax purposes in the future that are not yet reflected on its financial statements.
A valuation allowance is established to reduce deferred tax assets if it is more likely than not that some portion or all of the deferred tax assets will not be realized. The valuation allowance of ($8,747) suggests that Hardees has some uncertainty regarding its ability to utilize all of its deferred tax assets. Prospective franchisees should be aware of how these deferred tax assets and liabilities can impact Hardees' overall financial health and stability. Understanding these figures can provide insight into the company's tax planning strategies and potential future tax obligations.