How does The Standardx define Adjusted EBITDA?
The_Standardx Franchise · 2025 FDDAnswer from 2025 FDD Document
We define Adjusted EBITDA as net income (loss) attributable to Hyatt Hotels Corporation plus net income (loss) attributable to noncontrolling interests and our pro rata share of unconsolidated owned and leased hospitality ventures' Adjusted EBITDA, primarily based on our ownership percentage of each owned and leased venture, adjusted to exclude amortization of management and hotel services agreement and franchise agreement assets ("key money assets") and performance cure payments, which constitute payments to customers ("Contra revenue"); revenues for reimbursed costs; stock-based compensation expense; transaction and integration costs; depreciation and amortization; reimbursed costs that we intend to recover over the long term; equity earnings (losses) from unconsolidated hospitality ventures; interest expense; gains (losses) on sales of real estate and other; asset impairments; other income (loss), net; and benefit (provision) for income taxes.
Source: Item 1 — Financial Statements. (FDD pages 156–187)
What This Means (2025 FDD)
According to The Standardx's 2025 Franchise Disclosure Document, Adjusted EBITDA is defined as net income (or loss) attributable to Hyatt Hotels Corporation, plus net income (or loss) attributable to noncontrolling interests. It also includes The Standardx's pro rata share of unconsolidated owned and leased hospitality ventures' Adjusted EBITDA, primarily based on the ownership percentage of each owned and leased venture.
The calculation of Adjusted EBITDA then involves a series of adjustments. These adjustments exclude amortization of management and hotel services agreement and franchise agreement assets (referred to as "key money assets"), performance cure payments (considered payments to customers or "Contra revenue"), revenues for reimbursed costs, stock-based compensation expense, transaction and integration costs, and depreciation and amortization. Further exclusions involve reimbursed costs that The Standardx intends to recover over the long term, equity earnings (or losses) from unconsolidated hospitality ventures, interest expense, gains (or losses) on sales of real estate and other assets, asset impairments, other income (or loss), net, and the benefit (or provision) for income taxes.
For a prospective franchisee, understanding Adjusted EBITDA is crucial as it reflects how The Standardx assesses the performance of its various segments. By excluding certain non-operating items, The Standardx aims to provide a clearer picture of core operational profitability. The FDD also indicates that during the year ended December 31, 2024, The Standardx revised its definition of Adjusted EBITDA to exclude transaction and integration costs, recasting prior-period results for comparability. This change suggests that The Standardx is focused on presenting a more consistent and representative measure of its core operations, which could influence investment and resource allocation decisions.