What was the pre-tax gain recognized by The Standardx in equity earnings (losses) from unconsolidated hospitality ventures from the sale of Hyatt of Baja, S. de. R.L. de C.V. during the year ended December 31, 2024?
The_Standardx Franchise · 2025 FDDAnswer from 2025 FDD Document
million of proceeds related to the sale of our ownership interest in an equity method investment and recognized an $8 million pre-tax gain in equity earnings (losses) from unconsolidated hospitality ventures on our consolidated statements of income, net of a $2 million reclassification from accumulated other comprehensive loss (see Note 16). At the time of sale, we had $28 million of outstanding financing receivables related to the unconsolidated hospitality venture, which were repaid in conjunction with the sale. Additionally, we retained long-term management and licensing agreements for the related hotel and residential units, respectively, upon sale.
We provided $10 million of seller financing with a maturity date of two years. Upon sale, we estimated the fair value of the seller financing to be approximately $8 million and recorded an unsecured financing receivable on our consolidated balance sheet. The fair value was estimated using a discounted future cash flow model and includes assumptions and judgments regarding the discount rate, which is primarily a Level Three assumption.
As part of total consideration, we may earn up to $13 million of contingent consideration. The contingent consideration will be earned upon the achievement of certain performance-based metrics subsequent to hotel opening. Upon sale, we recorded a $5 million contingent consideration receivable at fair value in other assets on our consolidated balance sheet. The fair value of the contingent consideration receivable was estimated using a Monte Carlo simulation to model the likelihood of achieving the performance-based metrics. The valuation methodology includes assumptions and judgments regarding discount rates and operating results, which are primarily Level Three assumptions.
Other—During the year ended December 31, 2024, we received $16 million of proceeds related
Source: Item 23 — Receipts (FDD pages 85–132)
What This Means (2025 FDD)
According to The Standardx's 2025 Franchise Disclosure Document, during the year ended December 31, 2024, The Standardx recognized an $8 million pre-tax gain in equity earnings (losses) from unconsolidated hospitality ventures related to the sale of its ownership interest in Hyatt of Baja, S. de. R.L. de C.V. The company received $21 million of proceeds from this sale. Additionally, $28 million of outstanding financing receivables related to the unconsolidated hospitality venture were repaid in conjunction with the sale.
Furthermore, The Standardx retained long-term management and licensing agreements for the related hotel and residential units after the sale. The company also provided $10 million of seller financing with a two-year maturity date, estimating its fair value at approximately $8 million and recording it as an unsecured financing receivable.
In addition to the above, The Standardx may earn up to $13 million of contingent consideration based on the achievement of certain performance-based metrics after the hotel opening. Upon the sale, the company recorded a $5 million contingent consideration receivable at fair value.