What was the net cash provided by operating activities for Embassy Suites in 2024?
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 net cash provided by operating activities in 2024 was $1,516,760. This figure represents the cash flow generated from the company's core business operations during that year. It's a key indicator of Embassy Suites's ability to generate cash from its operations, which can be used to fund investments, pay debts, and provide returns to its owner.
Several factors contribute to this net cash flow. These include net income, adjustments to reconcile net income (such as amortization of contract acquisition costs and amortization expense), changes in operating assets and liabilities (like accounts receivable and deferred revenues), and other items. For instance, in 2024, Embassy Suites had a net income of $1,487,571, which is a significant component of the net cash provided by operating activities. Adjustments like amortization of contract acquisition costs ($16,053) and changes in items like accounts receivable (-$7,971) also play a role in determining the final net cash figure.
For a prospective Embassy Suites franchisee, understanding the net cash provided by operating activities is crucial. It provides insight into the financial health and stability of the franchisor. A strong and positive net cash flow indicates that the franchisor is effectively managing its operations and generating sufficient cash to support its franchisees. This can translate to better support services, marketing initiatives, and overall brand strength, which can benefit the franchisee's business. Conversely, a declining or negative net cash flow could raise concerns about the franchisor's ability to invest in the franchise system and provide adequate support to its franchisees.