What was the value of deferred revenues for Embassy Suites By Hilton as of December 31, 2023?
Embassy_Suites_By_Hilton Franchise · 2025 FDDAnswer from 2025 FDD Document
ming of the audit, significant audit findings, and certain internal control related matters that we identified during the audits.
Tysons Corner, Virginia
March 18, 2025
Hilton Franchise Holding LLC Balance Sheets (in thousands)
| December 31, | |||
|---|---|---|---|
| 2024 | 2023 | ||
| ASSETS | |||
| Current Assets: | |||
| Cash | $ 317 | $ | 5,348 |
| Accounts receivable, net of allowance for credit losses of $10,411 and $7,339 | 135,970 | 127,999 | |
| Due from Hilton affiliates related to franchise deposits | 18,498 | 18,885 | |
| Financing receivables, net of allowance for credit losses of $3,375 and $383 | 11,438 | 19,683 | |
| Other receivables due from Hilton affiliates | 703,943 | 768,478 | |
| Other | 2,346 | 77 | |
| Total current assets | 872,512 | 940,470 | |
| Non-current Assets: | |||
| Franchise contracts, net | 392,748 | 238,533 | |
| Financing receivables, net of allowance for credit losses of $412 and $367 | 4,626 | 4,140 | |
| Other | 11 | 4 | |
| Total non-current assets | 397,385 | 242,677 | |
| TOTAL ASSETS | $ 1,269,897 | $ | 1,183,147 |
| LIABILITIES AND MEMBER'S EQUITY | |||
| Current Liabilities: | |||
| Franchise deposits | $ 18,498 | $ | 18,885 |
| Current intercompany payables | 89,994 | — | |
| Current portion of deferred revenues | 41,598 | 37,811 | |
| Current franchise contract acquisition costs payable | 17,120 | 9,041 | |
| Other | 400 | 395 | |
| Total current liabilities | 167,610 | 66,132 | |
| Deferred revenues | 517,282 | 486,418 | |
| Franchise contract acquisition costs payable | 8,000 | 8,575 | |
| Other | — | 5,568 | |
| Total liabilities | 692,892 | 566,693 | |
| Commitments and contingencies - see Note 7 | |||
| Member's Equity: | |||
| Contributed capital | 310,000 | 310,000 | |
| Retained e |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 97)
What This Means (2025 FDD)
According to the 2025 FDD, Embassy Suites By Hilton's deferred revenues as of December 31, 2023, totaled $486,418. Additionally, the current portion of deferred revenues was $37,811. Deferred revenue represents payments Embassy Suites By Hilton has received for services or goods that have not yet been fully earned or delivered. This is a common accounting practice, especially in franchise systems where initial fees or ongoing royalties might cover services extending over a period of time. The current portion represents the amount expected to be recognized as revenue within the next year.
For a prospective Embassy Suites By Hilton franchisee, understanding deferred revenue is crucial because it reflects the financial obligations and future revenue recognition of the franchisor. A significant deferred revenue balance can indicate a healthy pipeline of future earnings, but it also means that Embassy Suites By Hilton has an obligation to provide services or goods in the future. Franchisees should consider how these obligations might impact the franchisor's ability to support its franchisees and invest in the brand.
In the broader context of franchise financial health, deferred revenue is just one piece of the puzzle. Franchisees should also look at trends in deferred revenue, comparing current and prior years to assess the stability and growth of the franchise system. Furthermore, it's important to understand the specific services or goods that the deferred revenue relates to, as this can provide insights into the franchisor's business model and revenue streams. Reviewing the notes to the financial statements, as suggested in the FDD, can provide additional context and details about the nature of the deferred revenue and its implications for Embassy Suites By Hilton's financial performance.