Why did Caption By Hyatt revise the definition of Adjusted EBITDA?
Caption_By_Hyatt Franchise · 2025 FDDAnswer from 2025 FDD Document
included earnings from a paid membership program offering benefits exclusively at certain all-inclusive resorts primarily in Latin America and the Caribbean. Adjusted EBITDA includes intercompany commission fee expenses paid to our management and franchising segment, which are eliminated in consolidation.
Within overhead, we include unallocated corporate expenses.
During the year ended December 31, 2024, we revised our definition of Adjusted EBITDA to exclude transaction and integration costs (see Note 1), and we recast prior-period results to provide comparability. The revised definition excludes integration costs, which were previously recognized in integration costs during the three months ended March 31, 2024 and general and administrative expenses during the years ended December 31, 2023 and December 31, 2022, and transaction costs, which were previously recognized in general and administrative expenses during the three months ended March 31, 2024 and the years ended December 31, 2023 and December 31, 2022. Previously, only transaction costs recognized in gains (losses) on sales of real estate and other and other income (loss), net were excluded from Adjusted EBITDA.
Source: Item 21 — Financial Statements (FDD pages 84–85)
What This Means (2025 FDD)
According to Caption By Hyatt's 2025 Franchise Disclosure Document, the definition of Adjusted EBITDA was revised during the year ended December 31, 2024, to exclude transaction and integration costs. Prior-period results were also recast to ensure comparability. The revised definition excludes integration costs, which were previously recognized in integration costs during the three months ended March 31, 2024, and general and administrative expenses during the years ended December 31, 2023, and December 31, 2022, as well as transaction costs, which were previously recognized in general and administrative expenses during the three months ended March 31, 2024, and the years ended December 31, 2023, and December 31, 2022.
The previous definition of Adjusted EBITDA only excluded transaction costs recognized in gains (losses) on sales of real estate and other and other income (loss), net. Caption By Hyatt believes that the revised definition presents a more representative measure of its core operations because these costs may vary in frequency or magnitude.
Caption By Hyatt also believes the revised definition assists in the comparability of results and provides information consistent with how its management evaluates operating performance. The brand's Chief Operating Decision Maker (CODM) evaluates performance based on gross fee revenues, owned and leased revenues, distribution revenues, other revenues, and Adjusted EBITDA. The CODM uses these measures to evaluate trends and assess segment operating performance compared to the industry and competitors to determine how to allocate resources to each segment.