What was the change in other long-term liabilities for Embassy Suites in 2022?
Embassy_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
including the activity during the years ended December 31, 2024, 2023 and 2022, see Note 8: Related Party Transactions.
See notes to financial statements.
Hilton Franchise Holding LLC Statements of Cash Flows (in thousands)
| Year Ended December 31, | ||||||
|---|---|---|---|---|---|---|
| 2024 | 2023 | 2022 | ||||
| Operating Activities: | ||||||
| Net income | $ | 1,487,571 | $ | 1,372,281 | $ | 1,233,442 |
| Adjustments to reconcile net income to net cash provided by operating | ||||||
| activities: | ||||||
| Amortization of contract acquisition costs | 16,053 | 12,897 | 11,972 | |||
| Amortization expense | 3,751 | 414 | 410 | |||
| Franchise contract acquisition costs, net of refunds | (81,063) | (37,185) | (41,991) | |||
| Changes in operating assets and liabilities: | ||||||
| Accounts receivable, net | (7,971) | (5,787) | (8,139) | |||
| Other receivables due from Hilton affiliates | 64,535 | 30,383 | 335,087 | |||
| Other current assets | (2,269) | (54) | (23) | |||
| Other current liabilities | 5 | 10 | (1,542) | |||
| Change in other non-current assets | (7) | 85 | (3) | |||
| Change in deferred revenues | 34,651 | 46,130 | 42,148 | |||
| Change in other long-term liabilities | (5,568) | 5,405 | (62) | |||
| Decrease (increase) in due from Hilton affiliates related to franchise | 387 | (73) | 2,707 | |||
| deposits | ||||||
| Increase (decrease) in franchise deposits | (387) | 73 | (2,707) | |||
| Change in current intercompany payables | 4,690 | — | — | |||
| Other | 2,382 | (1,470) | (1,412) | |||
| Net cash provided by operating activities | 1,516,760 | 1,423,109 | 1,569,887 | |||
| Investing Activities: | ||||||
| Acquisition of franchise contract intangible assets | (85,304) | — | — | |||
| Payments received on financing receivables | 5,254 | — | — | |||
| Net cash used in investing activities | (80,050) | — | — | |||
| Financing Activities: | ||||||
| Issuance of short-term note | 85,304 | — | — | |||
| Distribution of retained earnings to Hilton affiliates | (1,500,000) | (1,400,000) | (1,550,000) | |||
| Increase in due from Hilton affiliates | (27,048) | (17,891) | (19,964) | |||
| Net cash used in financing activities | (1,441,744) | (1,417,891) | (1,569, |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 97)
What This Means (2025 FDD)
According to Embassy Suites's 2025 Franchise Disclosure Document, the change in other long-term liabilities in 2022 was a decrease of $62.
This figure reflects the net change in the company's obligations extending beyond the current year, which are not categorized as current liabilities. These liabilities can include items such as long-term debt, deferred compensation arrangements, or other obligations that Embassy Suites expects to settle over an extended period. A decrease in this category suggests that Embassy Suites reduced its long-term obligations during the year.
For a prospective franchisee, understanding these changes in liabilities can provide insights into the financial management and long-term financial health of Embassy Suites. While a decrease in long-term liabilities might generally be viewed positively, it is essential to consider the context and reasons behind the change. A significant decrease could result from paying off debt, which is a positive sign, but it could also be due to other factors that require further investigation.
It would be prudent for a potential Embassy Suites franchisee to seek clarification from the franchisor regarding the specific components of 'other long-term liabilities' and the reasons for the observed change in 2022. This deeper understanding will aid in assessing the overall financial stability and risk associated with investing in an Embassy Suites franchise.