CHICAGO--(BUSINESS WIRE)--Oct. 31, 2012--
Hyatt Hotels Corporation (“Hyatt” or the “Company”) (NYSE: H) today
reported financial results as follows:
-
Adjusted EBITDA was $154 million in the third quarter of 2012 compared
to $135 million in the third quarter of 2011, an increase of 14.1%.
-
Net income attributable to Hyatt was $23 million, or $0.14 per share,
during the third quarter of 2012 compared to net income attributable
to Hyatt of $14 million, or $0.08 per share, in the third quarter of
2011. Adjusted for special items, net income attributable to Hyatt was
$30 million, or $0.18 per share, during the third quarter of 2012
compared to net income attributable to Hyatt of $27 million, or $0.16
per share, during the third quarter of 2011. See the table on page 3
of the accompanying schedules for a summary of special items.
-
Comparable owned and leased hotel RevPAR increased 4.6% (6.3%
excluding the effect of currency) in the third quarter of 2012
compared to the third quarter of 2011.
-
Owned and leased hotel operating margins increased 70 basis points in
the third quarter of 2012 compared to the third quarter of 2011.
Comparable owned and leased hotel operating margins increased 20 basis
points in the third quarter of 2012 compared to the same period in
2011. See the table on page 9 of the accompanying schedules for a
reconciliation of comparable owned and leased hotel operating margin
to owned and leased hotel operating margin.
-
Comparable North American full service hotel RevPAR increased 4.2% in
the third quarter of 2012 compared to the third quarter of 2011.
Comparable North American select service hotel RevPAR increased 6.0%
in the third quarter of 2012 compared to the third quarter of 2011.
-
Comparable international hotel RevPAR increased 0.8% (5.2% excluding
the effect of currency) in the third quarter of 2012 compared to the
third quarter of 2011.
-
Five properties were opened during the third quarter of 2012.
-
During the third quarter, the Company repurchased 911,244 shares of
Class A common stock at an average price of $38.78 per share, for an
aggregate purchase price of approximately $35 million.
Mark S. Hoplamazian
, president and chief executive officer of Hyatt
Hotels Corporation, said, “We have made significant progress since our
IPO nearly three years ago. We have materially increased earnings,
expanded our presence in many key markets, improved guest satisfaction
levels, gained market share at many of our properties, and strengthened
engagement among our associates across our hotels.
“During the quarter, Adjusted EBITDA increased by over 14% as we
benefited from the recent acquisitions of hotels in the U.S. and Mexico,
as well as from the results of some of our key owned hotels that were
renovated last year. North American transient rate growth also benefited
overall results.
“Looking ahead over the long-term, we are well positioned for continued
growth. We have strong brands, a high-quality owned real estate
portfolio, and a large number of executed management or franchise
contracts for future hotels. In the short-term, we are seeing some
headwinds, including slower growth of near-term group booking activity
in North America and lower revenue growth in a number of international
markets due to individual market dynamics. We are confident in our
ability to manage through potential economic and marketplace volatility
and we continue to maintain margin and cost discipline.
“We are focused on creating long-term value for shareholders. We expect
to utilize our strong balance sheet and capital base to
opportunistically expand our presence and increase earnings in the years
ahead. We recently sold several hotel properties at attractive pricing,
while retaining long-term management agreements, as part of our asset
recycling strategy. We have repurchased approximately $69 million of our
stock since August. These actions reflect and reinforce our belief in
the intrinsic value of Hyatt.”
SEGMENT RESULTS & OTHER ITEMS
Owned and Leased Hotels Segment
Total segment Adjusted EBITDA increased 8.5% in the third quarter of
2012 compared to the same period in 2011. Owned and leased Adjusted
EBITDA increased 15.5% in third quarter of 2012 compared to the same
period in 2011. Owned and leased Adjusted EBITDA benefited from
acquisitions and renovations completed in the third quarter of 2011. Pro
rata share of unconsolidated hospitality ventures Adjusted EBITDA
decreased 18.2% in the third quarter of 2012 as a result of the sale of
two joint venture interests, negative foreign exchange and weaker
performance in two international markets compared to the same period in
2011.
RevPAR for comparable owned and leased hotels increased 4.6% (6.3%
excluding the effect of currency) in the third quarter of 2012 compared
to the same period in 2011. Occupancy improved 40 basis points and ADR
increased 4.0% (5.7% excluding the effect of currency) compared to the
same period in 2011.
Revenues increased 7.0% in the third quarter of 2012 compared to the
same period in 2011. Comparable hotel revenues increased 1.8% in the
third quarter of 2012 compared to the same period in 2011.
RevPAR for comparable owned and leased hotels was negatively impacted by
the timing of holidays in September as compared to the same period in
2011. In addition, specific market conditions negatively impacted
several international owned hotels.
Owned and leased hotel expenses increased 6.1% in the third quarter of
2012 compared to the same period in 2011. Excluding expenses related to
benefit programs funded through Rabbi Trusts and non-comparable hotel
expenses, expenses increased 1.4% in the third quarter of 2012 compared
to the same period in 2011. See the table on page 9 of the accompanying
schedules for a reconciliation of comparable owned and leased hotels
expenses to owned and leased hotels expenses.
North American Management and Franchising Segment
Adjusted EBITDA increased 20.0% in the third quarter of 2012 compared to
the same period in 2011.
RevPAR for comparable North American full service hotels increased 4.2%
in the third quarter of 2012 compared to the same period in 2011.
Occupancy decreased 50 basis points and ADR increased 4.9% (5.0%
excluding the effect of currency) compared to the same period in 2011.
RevPAR for comparable North American full service hotels was negatively
impacted by the timing of holidays in September as well as weaker
performance in Washington, D.C. compared to the same period in 2011.
Additionally, renovations at managed properties in Washington, D.C. and
Dallas negatively impacted results.
Group rooms revenue at comparable North American full service hotels
increased 0.6% in the third quarter of 2012 compared to the same period
in 2011. Group room nights decreased 2.6% and group ADR increased 3.3%
in the third quarter of 2012 compared to the same period in 2011.
Transient rooms revenue at comparable North American full service hotels
increased 5.8% in the third quarter of 2012 compared to the same period
in 2011. Transient room nights increased 0.3% and transient ADR
increased 5.5% in the third quarter of 2012 compared to the same period
in 2011.
Revenue from management and franchise fees increased 9.6% in the third
quarter of 2012 compared to the same period in 2011.
The following three hotels were added to the portfolio during the third
quarter:
-
Hyatt Place Delray Beach (franchised, 134 rooms)
-
Hyatt Place San Diego/Vista-Carlsbad (franchised, 150 rooms)
-
Hyatt House Falls Church
(franchised, 148 rooms)
One property was removed from the portfolio during the third quarter.
International Management and Franchising Segment
Adjusted EBITDA increased 11.8% in the third quarter of 2012 compared to
the same period in 2011.
RevPAR for comparable international hotels increased 0.8% (5.2%
excluding the effect of currency) in the third quarter of 2012 compared
to the same period in 2011. Occupancy increased 20 basis points and ADR
increased 0.4% (4.8% excluding the effect of currency) compared to the
same period in 2011.
Revenue from management and franchise fees increased 2.9% (8.3%
excluding the effect of currency) in the third quarter of 2012 compared
to the same period in 2011.
The following two hotels were added to the portfolio during the third
quarter:
-
Hyatt Regency Chongqing (managed, 321 rooms)
-
Grand Hyatt Kuala Lumpur (managed, 412 rooms)
Selling, General, and Administrative Expenses
Selling, general, and administrative expenses increased by 29.3% in the
third quarter of 2012 compared to the same period in 2011. Adjusted
selling, general, and administrative expenses were flat in the third
quarter of 2012 compared to the same period in 2011, partially as a
result of the Company's realignment. See the table on page 8 of the
accompanying schedules for a reconciliation of adjusted selling,
general, and administrative expenses to selling, general, and
administrative expenses.
OPENINGS AND FUTURE EXPANSION
Five hotels were added in the third quarter of 2012, each of which is
listed above.
The Company expects that a significant number of new properties will be
opened under various Company brands in the future. As of September 30,
2012 this effort was underscored by executed management or franchise
contracts for more than 175 hotels (or more than 39,000 rooms) across
all brands. The executed contracts represent potential entry into
several new countries and expansion into many new markets or markets in
which the Company is under-represented. Approximately 75% of the future
expansion is expected to be located outside North America.
CAPITAL EXPENDITURES
Capital expenditures during the third quarter of 2012 totaled $53
million, categorized as follows:
-
Maintenance: $21 million
-
Enhancements to existing properties: $30 million
-
Investment in new properties: $2 million
SHARE REPURCHASE
During the third quarter, the Company announced that its Board of
Directors authorized the repurchase of up to $200 million of the
Company's common stock. Repurchases under the authorization may be made
from time to time in the open market, in privately negotiated
transactions, or otherwise, including pursuant to a Rule 10b5-1 plan, at
prices that the Company deems appropriate and subject to market
conditions, applicable law and other factors deemed relevant in the
Company's sole discretion. During the third quarter, the Company
repurchased 911,244 shares of Class A common stock at an average price
of $38.78 per share, for an aggregate purchase price of approximately
$35 million. From October 1 through October 26, 2012, the Company
repurchased 862,687 shares of Class A common stock at an average price
of $38.86 per share, for an aggregate purchase price of approximately
$34 million. The Company has approximately $131 million remaining under
its current share repurchase authorization.
CORPORATE FINANCE
During the quarter, the Company sold its interest in two joint venture
full service hotels for approximately $52 million. In addition, as a
result of the sales, the Company's share of unconsolidated hospitality
venture indebtedness was reduced by approximately $51 million. The
Company will continue to manage these hotels under long-term management
agreements.
Subsequent to the end of the quarter, the Company closed on the sale of
eight select service hotels with an aggregate of 1,043 rooms for
approximately $87 million. The Company will continue to manage these
hotels under long-term management agreements.
On September 30, 2012, the Company had total debt of approximately $1.2
billion.
On September 30, 2012, the Company had cash and cash equivalents,
including investments in highly-rated money market funds and similar
investments, of approximately $450 million and short-term investments of
approximately $540 million.
On September 30, 2012, the Company had undrawn borrowing availability of
approximately $1.4 billion under its revolving credit facility.
2012 INFORMATION
The Company is providing the following information for the 2012 fiscal
year:
-
Adjusted SG&A expense is expected to be approximately $305 million.
-
Capital expenditures are expected to be approximately $340 million.
-
Depreciation and amortization expense is expected to be approximately
$355 million.
-
Interest expense is expected to be approximately $70 million.
-
The Company expects to open over 20 hotels in 2012.
CONFERENCE CALL INFORMATION
The Company will hold an investor conference call today, October 31,
2012, at 10:30 a.m. CT. The Company requests that questions be submitted
via email to earnings@hyatt.com
by 9:00 a.m. CT. Hyatt management will read and respond to as many
submitted questions as possible. All interested persons may listen to a
simultaneous webcast of the conference call, which may be accessed
through the Company's website at http://www.hyatt.com
and selecting the Investor Relations link located at the bottom of the
page, or by dialing 617.213.8856, passcode #95633907, approximately 10
minutes before the scheduled start time. For those unable to listen to
the live broadcast, a replay will be available from 1:00 p.m. CT on
October 31, 2012 through midnight on November 30, 2012 by dialing
617.801.6888, passcode #96350921. Additionally, an archive of the
webcast will be available on the Investor Relations website for
approximately 90 days.
DEFINITIONS
Adjusted EBITDA
We use the term Adjusted EBITDA throughout this earnings release.
Adjusted EBITDA, as we define it, is a non-GAAP measure. We define
consolidated Adjusted EBITDA as net income attributable to Hyatt Hotels
Corporation plus our pro-rata share of unconsolidated hospitality
ventures Adjusted EBITDA based on our ownership percentage of each
venture, adjusted to exclude the following items:
-
equity earnings (losses) from unconsolidated hospitality ventures;
-
asset impairments;
-
other income (loss), net;
-
net loss attributable to noncontrolling interests;
-
depreciation and amortization;
-
interest expense; and
-
(provision) benefit for income taxes.
We calculate consolidated Adjusted EBITDA by adding the Adjusted EBITDA
of each of our reportable segments to corporate and other Adjusted
EBITDA.
Our Board of Directors and executive management team focus on Adjusted
EBITDA as a key performance and compensation measure both on a segment
and on a consolidated basis. Adjusted EBITDA assists us in comparing our
performance over various reporting periods on a consistent basis because
it removes from our operating results the impact of items that do not
reflect our core operating performance both on a segment and on a
consolidated basis. Our president and chief executive officer, who is
our chief operating decision maker, also evaluates the performance of
each of our reportable segments and determines how to allocate resources
to those segments, in significant part, by assessing the Adjusted EBITDA
of each segment. In addition, the compensation committee of our Board of
Directors determines the annual variable compensation for certain
members of our management based in part on consolidated Adjusted EBITDA,
segment Adjusted EBITDA or some combination of both.
We believe Adjusted EBITDA is useful to investors because it provides
investors the same information that we use internally for purposes of
assessing our operating performance and making selected compensation
decisions.
Adjusted EBITDA is not a substitute for net income attributable to Hyatt
Hotels Corporation, net income, cash flows from operating activities or
any other measure prescribed by GAAP. There are limitations to using
non-GAAP measures such as Adjusted EBITDA. Although we believe that
Adjusted EBITDA can make an evaluation of our operating performance more
consistent because it removes items that do not reflect our core
operations, other companies in our industry may define Adjusted EBITDA
differently than we do. As a result, it may be difficult to use Adjusted
EBITDA or similarly named non-GAAP measures that other companies may use
to compare the performance of those companies to our performance.
Because of these limitations, Adjusted EBITDA should not be considered
as a measure of the income generated by our business or discretionary
cash available to us to invest in the growth of our business. Our
management compensates for these limitations by reference to our GAAP
results and using Adjusted EBITDA supplementally.
Adjusted Selling, General, and Administrative
Expense
Adjusted selling, general, and administrative expenses exclude the
impact of expenses related to benefit programs funded through Rabbi
Trusts.
Comparable Owned and Leased Hotel Operating Margin
We define Comparable Owned and Leased Hotel Operating Margin as the
difference between comparable owned and leased hotels revenue and
comparable owned and leased hotels expenses. Comparable owned and leased
hotels revenue is calculated by removing non-comparable hotels revenue
from owned and leased hotels revenue as reported in our condensed
consolidated statements of income. Comparable owned and leased hotel
expenses is calculated by removing both non-comparable hotels expenses
and the impact of expenses funded through Rabbi Trusts from owned and
leased hotel expenses as reported in our condensed consolidated
statements of income.
Comparable Hotels
“Comparable systemwide hotels” represents all properties we manage or
franchise (including owned and leased properties) and that are operated
for the entirety of the periods being compared and that have not
sustained substantial damage, business interruption or undergone large
scale renovations during the periods being compared or for which
comparable results are not available. We may use variations of
comparable systemwide hotels to specifically refer to comparable
systemwide North American full service or select service hotels or
comparable systemwide international full service hotels for those
properties that we manage or franchise within the North American and
international management and franchising segments, respectively.
“Comparable operated hotels” is defined the same as “Comparable
systemwide hotels” with the exception that it is limited to only those
hotels we manage or operate and excludes hotels we franchise.
“Comparable owned and leased hotels” represents all properties we own or
lease and that are operated and consolidated for the entirety of the
periods being compared and have not sustained substantial damage,
business interruption or undergone large scale renovations during the
periods being compared or for which comparable results are not
available. Comparable systemwide hotels and comparable owned and leased
hotels are commonly used as a basis of measurement in the industry.
“Non-comparable systemwide hotels” or “Non-comparable owned and leased
hotels” represent all hotels that do not meet the respective definition
of “comparable” as defined above.
Revenue per Available Room (RevPAR)
RevPAR is the product of the average daily rate and the average daily
occupancy percentage. RevPAR does not include non-room revenues, which
consist of ancillary revenues generated by a hotel property, such as
food and beverage, parking, telephone and other guest service revenues.
Our management uses RevPAR to identify trend information with respect to
room revenues from comparable properties and to evaluate hotel
performance on a regional and segment basis. RevPAR is a commonly used
performance measure in the industry.
RevPAR changes that are driven predominantly by changes in occupancy
have different implications for overall revenue levels and incremental
profitability than do changes that are driven predominantly by changes
in average room rates. For example, increases in occupancy at a hotel
would lead to increases in room revenues and additional variable
operating costs (including housekeeping services, utilities and room
amenity costs), and could also result in increased ancillary revenues
(including food and beverage). In contrast, changes in average room
rates typically have a greater impact on margins and profitability as
there is no substantial effect on variable costs.
Average Daily Rate (ADR)
ADR represents hotel room revenues, divided by total number of rooms
sold in a given period. ADR measures average room price attained by a
hotel and ADR trends provide useful information concerning the pricing
environment and the nature of the customer base of a hotel or group of
hotels. ADR is a commonly used performance measure in the industry, and
we use ADR to assess the pricing levels that we are able to generate by
customer group, as changes in rates have a different effect on overall
revenues and incremental profitability than changes in occupancy, as
described above.
Occupancy
Occupancy represents the total number of rooms sold divided by the total
number of rooms available at a hotel or group of hotels. Occupancy
measures the utilization of our hotels' available capacity. Management
uses occupancy to gauge demand at a specific hotel or group of hotels in
a given period. Occupancy levels also help us determine achievable ADR
levels as demand for hotel rooms increases or decreases.
Select service
The term “select service” includes the brands Hyatt Place and
Hyatt
House
. These properties have limited food and beverage outlets and do
not offer comprehensive business or banquet facilities but rather are
suited to serve smaller business meetings.
FORWARD-LOOKING STATEMENTS
Forward-Looking Statements in this press release, which are not
historical facts, are forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. These statements
include statements about our plans, strategies, occupancy and ADR
trends, market share, the number of properties we expect to open in the
future, our expected adjusted SG&A expense, capital expenditures,
depreciation and amortization expense and interest expense estimates,
financial performance, prospects or future events and involve known and
unknown risks that are difficult to predict. As a result, our actual
results, performance or achievements may differ materially from those
expressed or implied by these forward-looking statements. In some cases,
you can identify forward-looking statements by the use of words such as
“may,” “could,” “expect,” “intend,” “plan,” “seek,” “anticipate,”
“believe,” “estimate,” “predict,” “potential,” “continue,” “likely,”
“will,” “would” and variations of these terms and similar expressions,
or the negative of these terms or similar expressions. Such
forward-looking statements are necessarily based upon estimates and
assumptions that, while considered reasonable by us and our management,
are inherently uncertain. Factors that may cause actual results to
differ materially from current expectations include, among others,
general economic uncertainty in key global markets, the rate and pace of
economic recovery following economic downturns; levels of spending in
business and leisure segments as well as consumer confidence; declines
in occupancy and average daily rate; limited visibility with respect to
short and medium-term group bookings; the impact of hotel renovations;
our ability to successfully execute and implement our organizational
realignment and the costs associated with such organizational
realignment; our ability to successfully execute and implement our
common stock repurchase program; loss of key personnel, including as a
result of our organizational realignment; hostilities, including future
terrorist attacks, or fear of hostilities that affect travel;
travel-related accidents; changes in the tastes and preferences of our
customers; relationships with associates and labor unions and changes in
labor law; the financial condition of, and our relationships with,
third-party property owners, franchisees and hospitality venture
partners; if our third-party owners, franchisees or development partners
are unable to access the capital necessary to fund current operations or
implement our plans for growth; risk associated with potential
acquisitions and dispositions and the introduction of new brand
concepts; changes in the competitive environment in our industry and the
markets where we operate; outcomes of legal proceedings; changes in
federal, state, local or foreign tax law; foreign exchange rate
fluctuations or currency restructurings; general volatility of the
capital markets; our ability to access the capital markets; and other
risks discussed in the Company's filings with the U.S. Securities and
Exchange Commission, including our Annual Report on Form 10-K, which
filings are available from the SEC. We caution you not to place undue
reliance on any forward-looking statements, which are made as of the
date of this press release. We undertake no obligation to update
publicly any of these forward-looking statements to reflect actual
results, new information or future events, changes in assumptions or
changes in other factors affecting forward-looking statements, except to
the extent required by applicable laws. If we update one or more
forward-looking statements, no inference should be drawn that we will
make additional updates with respect to those or other forward-looking
statements.
About Hyatt Hotels Corporation
Hyatt Hotels Corporation, headquartered in Chicago, is a leading global
hospitality company with a proud heritage of making guests feel more
than welcome. Thousands of members of the Hyatt family strive to make a
difference in the lives of the guests they encounter every day by
providing authentic hospitality. The Company's subsidiaries manage,
franchise, own and develop hotels and resorts under the Hyatt®,
Park Hyatt®, Andaz®, Grand Hyatt®, Hyatt Regency®, Hyatt Place® and
Hyatt HouseTM brand names and have locations on six
continents. Hyatt Residential Group, Inc., a Hyatt
Hotels Corporation subsidiary, develops, operates, markets or
licenses Hyatt ResidencesTM and Hyatt Residence
ClubTM. As of September 30, 2012, the Company's worldwide
portfolio consisted of 496 properties in 45 countries. For more
information, please visit www.hyatt.com.
Tables to follow
|
Hyatt Hotels Corporation
|
Table of Contents
|
Financial Information (unaudited)
|
|
|
|
1.
|
|
Condensed Consolidated Statements of Income
|
2.
|
|
Reconciliation of Non-GAAP to GAAP Measure: Adjusted EBITDA to
EBITDA and a Reconciliation of EBITDA to Net Income Attributable to
Hyatt Hotels Corporation
|
3.
|
|
Summary of Special Items - Three Months Ended September 30, 2012 and
2011
|
4.
|
|
Summary of Special Items - Nine Months Ended September 30, 2012 and
2011
|
5.
|
|
Segment Financial Summary
|
6.
|
|
Hotel Chain Statistics - Comparable Locations
|
7.
|
|
Fee Summary
|
8.
|
|
Reconciliation of Non-GAAP to GAAP Measure: Adjusted Selling,
General, and Administrative Expenses to Selling, General, and
Administrative Expenses
|
9.
|
|
Reconciliation of Non-GAAP to GAAP Measure: Comparable Owned and
Leased Hotel Operating Margin to Owned and Leased Hotel Operating
Margin
|
10.
|
|
Net Gains (Losses) and Interest Income from Marketable Securities
Held to Fund Operating Programs
|
11.
|
|
Properties and Rooms / Units by Geography
|
12.
|
|
Properties and Rooms / Units by Brand
|
|
|
|
|
|
|
Page 1
|
|
|
|
|
|
Hyatt Hotels Corporation
|
|
|
|
|
|
Condensed Consolidated Statements of Income
|
|
|
|
|
|
For the Three and Nine Months Ended September 30, 2012 and 2011
|
|
|
|
|
|
(in millions, except per share amounts)
|
|
|
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
|
September 30,
|
|
September 30,
|
|
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
REVENUES:
|
|
|
|
|
|
|
|
|
|
Owned and leased hotels
|
|
|
$
|
503
|
|
|
$
|
470
|
|
|
$
|
1,504
|
|
|
$
|
1,386
|
|
Management and franchise fees
|
|
|
68
|
|
|
66
|
|
|
227
|
|
|
211
|
|
Other revenues
|
|
|
22
|
|
|
18
|
|
|
59
|
|
|
49
|
|
Other revenues from managed properties (a)
|
|
|
384
|
|
|
343
|
|
|
1,159
|
|
|
1,062
|
|
Total revenues
|
|
|
977
|
|
|
897
|
|
|
2,949
|
|
|
2,708
|
|
DIRECT AND SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES:
|
|
|
|
|
|
|
|
|
|
Owned and leased hotels
|
|
|
382
|
|
|
360
|
|
|
1,148
|
|
|
1,086
|
|
Depreciation and amortization
|
|
|
88
|
|
|
75
|
|
|
263
|
|
|
218
|
|
Other direct costs
|
|
|
8
|
|
|
8
|
|
|
21
|
|
|
18
|
|
Selling, general, and administrative
|
|
|
75
|
|
|
58
|
|
|
238
|
|
|
199
|
|
Other costs from managed properties (a)
|
|
|
384
|
|
|
343
|
|
|
1,159
|
|
|
1,062
|
|
Direct and selling, general, and administrative expenses
|
|
|
937
|
|
|
844
|
|
|
2,829
|
|
|
2,583
|
|
Net gains (losses) and interest income from marketable securities
held to fund operating programs
|
|
|
8
|
|
|
(15
|
)
|
|
18
|
|
|
(7
|
)
|
Equity earnings (losses) from unconsolidated hospitality ventures
|
|
|
(5
|
)
|
|
1
|
|
|
(6
|
)
|
|
6
|
|
Interest expense
|
|
|
(18
|
)
|
|
(15
|
)
|
|
(53
|
)
|
|
(42
|
)
|
Asset impairments
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(2
|
)
|
Other income (loss), net
|
|
|
(5
|
)
|
|
(15
|
)
|
|
12
|
|
|
(21
|
)
|
INCOME BEFORE INCOME TAXES
|
|
|
20
|
|
|
8
|
|
|
91
|
|
|
59
|
|
(PROVISION) BENEFIT FOR INCOME TAXES
|
|
|
3
|
|
|
5
|
|
|
(19
|
)
|
|
—
|
|
NET INCOME
|
|
|
23
|
|
|
13
|
|
|
72
|
|
|
59
|
|
NET LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
2
|
|
NET INCOME ATTRIBUTABLE TO HYATT HOTELS CORPORATION
|
|
|
$
|
23
|
|
|
$
|
14
|
|
|
$
|
72
|
|
|
$
|
61
|
|
EARNINGS PER SHARE - Basic
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
$
|
0.14
|
|
|
$
|
0.08
|
|
|
$
|
0.44
|
|
|
$
|
0.35
|
|
Net income attributable to Hyatt Hotels Corporation
|
|
|
$
|
0.14
|
|
|
$
|
0.08
|
|
|
$
|
0.44
|
|
|
$
|
0.36
|
|
EARNINGS PER SHARE - Diluted
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
$
|
0.14
|
|
|
$
|
0.08
|
|
|
$
|
0.44
|
|
|
$
|
0.35
|
|
Net income attributable to Hyatt Hotels Corporation
|
|
|
$
|
0.14
|
|
|
$
|
0.08
|
|
|
$
|
0.44
|
|
|
$
|
0.36
|
|
Basic share counts
|
|
|
165.5
|
|
|
165.5
|
|
|
165.6
|
|
|
169.9
|
|
Diluted share counts
|
|
|
165.8
|
|
|
165.6
|
|
|
166.0
|
|
|
170.3
|
|
(a) The Company includes in total revenues the reimbursement of
costs incurred on behalf of managed hotel property owners with no
added margin and includes in direct and selling, general, and
administrative expenses these reimbursed costs. These costs relate
primarily to payroll costs where the Company is the employer.
|
|
Page 2
|
Hyatt Hotels Corporation
|
Reconciliation of Non-GAAP to GAAP Measure: Adjusted EBITDA to
EBITDA and a Reconciliation of EBITDA to Net Income Attributable to
Hyatt Hotels Corporation
|
The table below provides a reconciliation of consolidated Adjusted
EBITDA to EBITDA and a reconciliation of EBITDA to net income
attributable to Hyatt Hotels Corporation. Adjusted EBITDA, as the
Company defines it, is a non-GAAP financial measure. See Definitions
for our definition of Adjusted EBITDA and why we present it.
|
(in millions)
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
September 30,
|
|
September 30,
|
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
Adjusted EBITDA
|
|
$
|
154
|
|
|
$
|
135
|
|
|
$
|
459
|
|
|
$
|
395
|
|
Equity earnings (losses) from unconsolidated hospitality ventures
|
|
(5
|
)
|
|
1
|
|
|
(6
|
)
|
|
6
|
|
Asset impairments
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(2
|
)
|
Other income (loss), net
|
|
(5
|
)
|
|
(15
|
)
|
|
12
|
|
|
(21
|
)
|
Net loss attributable to noncontrolling interests
|
|
—
|
|
|
1
|
|
|
—
|
|
|
2
|
|
Pro rata share of unconsolidated hospitality ventures Adjusted EBITDA
|
|
(18
|
)
|
|
(22
|
)
|
|
(58
|
)
|
|
(59
|
)
|
EBITDA
|
|
$
|
126
|
|
|
$
|
99
|
|
|
$
|
407
|
|
|
$
|
321
|
|
Depreciation and amortization
|
|
(88
|
)
|
|
(75
|
)
|
|
(263
|
)
|
|
(218
|
)
|
Interest expense
|
|
(18
|
)
|
|
(15
|
)
|
|
(53
|
)
|
|
(42
|
)
|
(Provision) benefit for income taxes
|
|
3
|
|
|
5
|
|
|
(19
|
)
|
|
—
|
|
Net income attributable to Hyatt Hotels Corporation
|
|
$
|
23
|
|
|
$
|
14
|
|
|
$
|
72
|
|
|
$
|
61
|
|
|
Page 3
|
Hyatt Hotels Corporation
|
Summary of Special Items - Three Months Ended September 30, 2012 and
2011
|
The following table represents a reconciliation of net income
attributable to Hyatt Hotels Corporation, adjusted for special
items, to net income attributable to Hyatt Hotels Corporation
presented for the three months ended September 30, 2012 and
September 30, 2011, respectively.
|
(in millions, except per share amounts)
|
|
|
Location on Condensed Consolidated
|
|
Three Months Ended
|
|
|
Statements of Income
|
|
September 30,
|
|
|
|
|
2012
|
|
2011
|
Net income attributable to Hyatt Hotels Corporation
|
|
|
|
$
|
23
|
|
|
$
|
14
|
|
Earnings per share
|
|
|
|
$
|
0.14
|
|
|
$
|
0.08
|
|
Special items
|
|
|
|
|
|
|
Asset impairments (a)
|
|
Asset impairments
|
|
—
|
|
|
1
|
|
Marketable securities (b)
|
|
Other income (loss), net
|
|
—
|
|
|
12
|
|
Gain on sublease agreement (c)
|
|
Other income (loss), net
|
|
(2
|
)
|
|
—
|
|
Realignment costs (d)
|
|
Other income (loss), net
|
|
12
|
|
|
—
|
|
Provisions on hotel loans (e)
|
|
Other income (loss), net
|
|
—
|
|
|
4
|
|
Transaction costs (f)
|
|
Other income (loss), net
|
|
—
|
|
|
4
|
|
Total special items - pre-tax
|
|
|
|
10
|
|
|
21
|
|
Provision for income taxes for special items
|
|
(Provision) benefit for income taxes
|
|
(3
|
)
|
|
(8
|
)
|
Total special items - after-tax
|
|
|
|
7
|
|
|
13
|
|
Special items impact per share
|
|
|
|
$
|
0.04
|
|
|
$
|
0.08
|
|
Net income attributable to Hyatt Hotels Corporation, adjusted for
special items
|
|
|
|
$
|
30
|
|
|
$
|
27
|
|
Earnings per share, adjusted for special items
|
|
|
|
$
|
0.18
|
|
|
$
|
0.16
|
|
(a) Asset impairments - During the third quarter of 2011, we
identified and recorded $1 million of asset impairment charges
related to the impairment of inventory at a vacation ownership
property.
|
(b) Marketable securities - Represents (gains) losses on investments
in trading securities not used to fund operating programs.
|
(c) Gain on sublease agreement - During the third quarter of 2012,
we recorded a $2 million gain due to the termination of a sublease.
|
(d) Realignment costs - Represents costs incurred as part of our
Company's realignment.
|
(e) Provisions on hotel loans - In the third quarter of 2011, we
recorded $4 million in provisions related to certain hotel developer
loans based on our assessment of their collectability.
|
(f) Transaction costs - In the third quarter of 2011, we incurred $4
million in transaction costs to acquire hotels and other assets from
LodgeWorks, L.P. and its private equity partners.
|
|
Page 4
|
Hyatt Hotels Corporation
|
Summary of Special Items - Nine Months Ended September 30, 2012 and
2011
|
The following table represents a reconciliation of net income
attributable to Hyatt Hotels Corporation, adjusted for special
items, to net income attributable to Hyatt Hotels Corporation
presented for the nine months ended September 30, 2012 and 2011,
respectively.
|
(in millions, except per share amounts)
|
|
|
Location on Condensed Consolidated
|
|
Nine Months Ended
|
|
|
Statements of Income
|
|
September 30,
|
|
|
|
|
2012
|
|
2011
|
Net income attributable to Hyatt Hotels Corporation
|
|
|
|
$
|
72
|
|
|
$
|
61
|
|
Earnings per share
|
|
|
|
$
|
0.44
|
|
|
$
|
0.36
|
|
Special items
|
|
|
|
|
|
|
Asset impairments (a)
|
|
Asset impairments
|
|
—
|
|
|
2
|
|
|
|
Equity earnings (losses) from unconsolidated
|
|
|
|
|
|
|
Unconsolidated hospitality ventures impairment (b)
|
|
hospitality ventures
|
|
1
|
|
|
—
|
|
Loss on sale of real estate (c)
|
|
Other income (loss), net
|
|
—
|
|
|
2
|
|
Marketable securities (d)
|
|
Other income (loss), net
|
|
(17
|
)
|
|
19
|
|
(Gain) loss on sublease agreement (e)
|
|
Other income (loss), net
|
|
(2
|
)
|
|
5
|
|
Realignment costs (f)
|
|
Other income (loss), net
|
|
19
|
|
|
—
|
|
Provisions on hotel loans (g)
|
|
Other income (loss), net
|
|
—
|
|
|
4
|
|
Transaction costs (h)
|
|
Other income (loss), net
|
|
1
|
|
|
4
|
|
Total special items - pre-tax
|
|
|
|
2
|
|
|
36
|
|
Provision for income taxes for special items
|
|
(Provision) benefit for income taxes
|
|
1
|
|
|
(14
|
)
|
Total special items - after-tax
|
|
|
|
3
|
|
|
22
|
|
Special items impact per share
|
|
|
|
$
|
0.02
|
|
|
$
|
0.13
|
|
Net income attributable to Hyatt Hotels Corporation, adjusted for
special items
|
|
|
|
$
|
75
|
|
|
$
|
83
|
|
Earnings per share, adjusted for special items
|
|
|
|
$
|
0.46
|
|
|
$
|
0.49
|
|
(a) Asset impairments - During the nine months ended September 30,
2011, we identified and recorded $2 million of asset impairment
charges. The 2011 charge includes a $1 million impairment taken on
inventory at one of our vacation ownership properties.
|
(b) Unconsolidated hospitality ventures impairment - During the nine
months ended September 30, 2012, we recorded an impairment charge of
$1 million related to an investment in a vacation ownership property.
|
(c) Loss on sale of real estate - During the nine months ended
September 30, 2011, we sold eight hotels from our owned hotel
portfolio for a loss of $2 million.
|
(d) Marketable securities - Represents (gains) losses on investments
in trading securities not used to fund operating programs.
|
(e) (Gain) loss on sublease agreement - During the nine months ended
September 30, 2012, we recorded a $2 million gain due to the
termination of a sublease. During the nine months ended September
30, 2011, we recorded a $5 million loss on a sublease agreement with
a related party based on the terms of our existing master lease.
|
(f) Realignment costs - Represents costs incurred as part of our
Company's realignment.
|
(g) Provisions on hotel loans - During the nine months ended
September 30, 2011, we recorded $4 million in provisions related to
certain hotel developer loans based on our assessment of their
collectability.
|
(h) Transaction costs - In the nine months ended September 30, 2012,
we incurred $1 million in transaction costs to acquire the Hyatt
Regency Mexico City. In the nine months ended September 30, 2011, we
incurred $4 million in transaction costs to acquire hotels and other
assets from LodgeWorks, L.P. and its private equity partners.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Page 5
|
|
|
|
|
|
|
|
|
|
|
|
|
Hyatt Hotels Corporation
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Financial Summary
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
Nine Months Ended
|
|
|
|
|
|
|
September 30,
|
|
|
|
|
|
September 30,
|
|
|
|
|
|
|
2012
|
|
2011
|
|
Change ($)
|
|
Change (%)
|
|
2012
|
|
2011
|
|
Change ($)
|
|
Change (%)
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Owned and leased
|
|
$
|
503
|
|
|
$
|
470
|
|
|
$
|
33
|
|
|
7.0
|
%
|
|
$
|
1,504
|
|
|
$
|
1,386
|
|
|
$
|
118
|
|
|
8.5
|
%
|
North America
|
|
57
|
|
|
52
|
|
|
5
|
|
|
9.6
|
%
|
|
185
|
|
|
159
|
|
|
26
|
|
|
16.4
|
%
|
International
|
|
35
|
|
|
34
|
|
|
1
|
|
|
2.9
|
%
|
|
114
|
|
|
110
|
|
|
4
|
|
|
3.6
|
%
|
Total management and franchising
|
|
92
|
|
|
86
|
|
|
6
|
|
|
7.0
|
%
|
|
299
|
|
|
269
|
|
|
30
|
|
|
11.2
|
%
|
Corporate and other
|
|
22
|
|
|
18
|
|
|
4
|
|
|
22.2
|
%
|
|
59
|
|
|
49
|
|
|
10
|
|
|
20.4
|
%
|
Other revenues from managed properties
|
|
384
|
|
|
343
|
|
|
41
|
|
|
12.0
|
%
|
|
1,159
|
|
|
1,062
|
|
|
97
|
|
|
9.1
|
%
|
Eliminations
|
|
(24
|
)
|
|
(20
|
)
|
|
(4
|
)
|
|
(20.0
|
)%
|
|
(72
|
)
|
|
(58
|
)
|
|
(14
|
)
|
|
(24.1
|
)%
|
Total revenues
|
|
$
|
977
|
|
|
$
|
897
|
|
|
$
|
80
|
|
|
8.9
|
%
|
|
$
|
2,949
|
|
|
$
|
2,708
|
|
|
$
|
241
|
|
|
8.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Owned and leased
|
|
$
|
97
|
|
|
$
|
84
|
|
|
$
|
13
|
|
|
15.5
|
%
|
|
$
|
282
|
|
|
$
|
236
|
|
|
$
|
46
|
|
|
19.5
|
%
|
Pro rata share of unconsolidated hospitality ventures
|
|
18
|
|
|
22
|
|
|
(4
|
)
|
|
(18.2
|
)%
|
|
58
|
|
|
59
|
|
|
(1
|
)
|
|
(1.7
|
)%
|
Total owned and leased
|
|
115
|
|
|
106
|
|
|
9
|
|
|
8.5
|
%
|
|
340
|
|
|
295
|
|
|
45
|
|
|
15.3
|
%
|
North American management and franchising
|
|
48
|
|
|
40
|
|
|
8
|
|
|
20.0
|
%
|
|
148
|
|
|
124
|
|
|
24
|
|
|
19.4
|
%
|
International management and franchising
|
|
19
|
|
|
17
|
|
|
2
|
|
|
11.8
|
%
|
|
63
|
|
|
59
|
|
|
4
|
|
|
6.8
|
%
|
Corporate and other
|
|
(28
|
)
|
|
(28
|
)
|
|
—
|
|
|
—
|
%
|
|
(92
|
)
|
|
(83
|
)
|
|
(9
|
)
|
|
(10.8
|
)%
|
Adjusted EBITDA
|
|
$
|
154
|
|
|
$
|
135
|
|
|
$
|
19
|
|
|
14.1
|
%
|
|
$
|
459
|
|
|
$
|
395
|
|
|
$
|
64
|
|
|
16.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Page 6
|
|
|
|
|
|
|
|
|
|
|
|
|
Hyatt Hotels Corporation
|
|
|
|
|
|
|
|
|
|
|
|
|
Hotel Chain Statistics
|
|
|
|
|
|
|
|
|
|
|
|
|
Comparable Locations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
Nine Months Ended
|
|
|
|
|
|
|
|
|
September 30,
|
|
|
|
|
|
September 30,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change (in
|
|
|
|
|
|
|
|
Change (in
|
|
|
|
|
2012
|
|
2011
|
|
Change
|
|
constant $)
|
|
2012
|
|
2011
|
|
Change
|
|
constant $)
|
Owned and leased hotels (# hotels) (a)
|
|
|
|
|
Full service (39)
|
|
|
|
|
|
ADR
|
|
$
|
201.05
|
|
|
$
|
194.64
|
|
|
3.3
|
%
|
|
5.3
|
%
|
|
$
|
201.25
|
|
|
$
|
197.97
|
|
|
1.7
|
%
|
|
3.2
|
%
|
|
|
Occupancy
|
|
77.4
|
%
|
|
76.4
|
%
|
|
1.0
|
%
|
pts
|
|
|
75.6
|
%
|
|
71.8
|
%
|
|
3.8
|
%
|
pts
|
|
|
|
RevPAR
|
|
$
|
155.55
|
|
|
$
|
148.80
|
|
|
4.5
|
%
|
|
6.5
|
%
|
|
$
|
152.23
|
|
|
$
|
142.20
|
|
|
7.1
|
%
|
|
8.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Select service (46)
|
|
|
|
|
|
ADR
|
|
$
|
97.86
|
|
|
$
|
92.01
|
|
|
6.4
|
%
|
|
6.4
|
%
|
|
$
|
97.69
|
|
|
$
|
92.50
|
|
|
5.6
|
%
|
|
5.6
|
%
|
|
|
Occupancy
|
|
81.6
|
%
|
|
82.6
|
%
|
|
(1.0
|
)%
|
pts
|
|
|
77.9
|
%
|
|
78.4
|
%
|
|
(0.5
|
)%
|
pts
|
|
|
|
RevPAR
|
|
$
|
79.86
|
|
|
$
|
75.99
|
|
|
5.1
|
%
|
|
5.1
|
%
|
|
$
|
76.12
|
|
|
$
|
72.57
|
|
|
4.9
|
%
|
|
4.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comparable owned and leased hotels (85)
|
|
|
|
|
|
ADR
|
|
$
|
174.07
|
|
|
$
|
167.34
|
|
|
4.0
|
%
|
|
5.7
|
%
|
|
$
|
174.65
|
|
|
$
|
169.71
|
|
|
2.9
|
%
|
|
4.2
|
%
|
|
|
Occupancy
|
|
78.4
|
%
|
|
78.0
|
%
|
|
0.4
|
%
|
pts
|
|
|
76.2
|
%
|
|
73.5
|
%
|
|
2.7
|
%
|
pts
|
|
|
|
RevPAR
|
|
$
|
136.53
|
|
|
$
|
130.51
|
|
|
4.6
|
%
|
|
6.3
|
%
|
|
$
|
133.10
|
|
|
$
|
124.72
|
|
|
6.7
|
%
|
|
8.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Managed and franchised hotels (# hotels; includes owned
and leased hotels)
|
|
|
North America
|
|
|
|
|
|
Full service (127)
|
|
|
|
|
|
ADR
|
|
$
|
168.32
|
|
|
$
|
160.46
|
|
|
4.9
|
%
|
|
5.0
|
%
|
|
$
|
170.29
|
|
|
$
|
163.42
|
|
|
4.2
|
%
|
|
4.3
|
%
|
|
|
Occupancy
|
|
75.7
|
%
|
|
76.2
|
%
|
|
(0.5
|
)%
|
pts
|
|
|
74.4
|
%
|
|
72.5
|
%
|
|
1.9
|
%
|
pts
|
|
|
|
RevPAR
|
|
$
|
127.43
|
|
|
$
|
122.33
|
|
|
4.2
|
%
|
|
4.2
|
%
|
|
$
|
126.67
|
|
|
$
|
118.47
|
|
|
6.9
|
%
|
|
7.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Select service (195)
|
|
|
|
|
|
ADR
|
|
$
|
102.24
|
|
|
$
|
96.91
|
|
|
5.5
|
%
|
|
5.5
|
%
|
|
$
|
102.15
|
|
|
$
|
97.42
|
|
|
4.9
|
%
|
|
4.9
|
%
|
|
|
Occupancy
|
|
78.2
|
%
|
|
77.8
|
%
|
|
0.4
|
%
|
pts
|
|
|
75.8
|
%
|
|
74.7
|
%
|
|
1.1
|
%
|
pts
|
|
|
|
RevPAR
|
|
$
|
79.93
|
|
|
$
|
75.42
|
|
|
6.0
|
%
|
|
6.0
|
%
|
|
$
|
77.47
|
|
|
$
|
72.77
|
|
|
6.5
|
%
|
|
6.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International
|
|
|
|
|
|
International comparable hotels (97)
|
|
|
|
|
|
ADR
|
|
$
|
228.11
|
|
|
$
|
227.10
|
|
|
0.4
|
%
|
|
4.8
|
%
|
|
$
|
233.00
|
|
|
$
|
230.02
|
|
|
1.3
|
%
|
|
4.6
|
%
|
|
|
Occupancy
|
|
65.0
|
%
|
|
64.8
|
%
|
|
0.2
|
%
|
pts
|
|
|
65.7
|
%
|
|
64.4
|
%
|
|
1.3
|
%
|
pts
|
|
|
|
RevPAR
|
|
$
|
148.36
|
|
|
$
|
147.18
|
|
|
0.8
|
%
|
|
5.2
|
%
|
|
$
|
153.18
|
|
|
$
|
148.09
|
|
|
3.4
|
%
|
|
6.8
|
%
|
|
Comparable systemwide hotels (419)
|
|
|
|
|
|
ADR
|
|
$
|
168.11
|
|
|
$
|
162.58
|
|
|
3.4
|
%
|
|
4.9
|
%
|
|
$
|
171.03
|
|
|
$
|
165.55
|
|
|
3.3
|
%
|
|
4.5
|
%
|
|
|
Occupancy
|
|
73.3
|
%
|
|
73.5
|
%
|
|
(0.2
|
)%
|
pts
|
|
|
72.3
|
%
|
|
70.7
|
%
|
|
1.6
|
%
|
pts
|
|
|
|
RevPAR
|
|
$
|
123.29
|
|
|
$
|
119.44
|
|
|
3.2
|
%
|
|
4.7
|
%
|
|
$
|
123.73
|
|
|
$
|
117.12
|
|
|
5.6
|
%
|
|
6.8
|
%
|
(a) Owned and leased hotel figures do not include unconsolidated
hospitality ventures.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Page 7
|
|
|
|
|
|
|
|
|
|
|
|
|
Hyatt Hotels Corporation
|
|
|
|
|
|
|
|
|
|
|
|
|
Fee Summary
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
Nine Months Ended
|
|
|
|
|
|
|
September 30,
|
|
|
|
|
|
September 30,
|
|
|
|
|
|
|
2012
|
|
2011
|
|
Change ($)
|
|
Change (%)
|
|
2012
|
|
2011
|
|
Change ($)
|
|
Change (%)
|
Fees
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base management fees
|
|
$
|
37
|
|
|
$
|
36
|
|
|
$
|
1
|
|
|
2.8
|
%
|
|
$
|
115
|
|
|
$
|
107
|
|
|
$
|
8
|
|
|
7.5
|
%
|
Incentive management fees
|
|
18
|
|
|
18
|
|
|
—
|
|
|
—
|
%
|
|
70
|
|
|
69
|
|
|
1
|
|
|
1.4
|
%
|
Franchise fees and other revenue
|
|
13
|
|
|
12
|
|
|
1
|
|
|
8.3
|
%
|
|
42
|
|
|
35
|
|
|
7
|
|
|
20.0
|
%
|
Total fees
|
|
$
|
68
|
|
|
$
|
66
|
|
|
$
|
2
|
|
|
3.0
|
%
|
|
$
|
227
|
|
|
$
|
211
|
|
|
$
|
16
|
|
|
7.6
|
%
|
|
Page 8
|
Hyatt Hotels Corporation
|
Reconciliation of Non-GAAP to GAAP Measure: Adjusted Selling,
General, and Administrative Expenses to Selling, General, and
Administrative Expenses
|
Results of operations as presented on condensed consolidated
statements of income include the impact of expenses recognized with
respect to employee benefit programs funded through rabbi trusts.
Certain of these expenses are recognized in selling, general, and
administrative expenses and are completely offset by the
corresponding net gains (losses) and interest income from marketable
securities held to fund operating programs, thus having no net
impact to our earnings. Below is a reconciliation of this account
excluding the impact of our rabbi trust investments.
|
(in millions)
|
|
|
Three Months Ended
|
|
|
|
|
|
Nine Months Ended
|
|
|
|
|
|
|
September 30,
|
|
|
|
|
|
September 30,
|
|
|
|
|
|
|
2012
|
|
2011
|
|
Change ($)
|
|
Change (%)
|
|
2012
|
|
2011
|
|
Change ($)
|
|
Change (%)
|
Adjusted selling, general, and administrative expenses (a)
|
|
$
|
70
|
|
|
$
|
70
|
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
227
|
|
|
$
|
206
|
|
|
$
|
21
|
|
|
10.2
|
%
|
Rabbi trust impact
|
|
5
|
|
|
(12
|
)
|
|
17
|
|
|
141.7
|
%
|
|
11
|
|
|
(7
|
)
|
|
18
|
|
|
257.1
|
%
|
Selling, general and administrative expenses
|
|
$
|
75
|
|
|
$
|
58
|
|
|
$
|
17
|
|
|
29.3
|
%
|
|
$
|
238
|
|
|
$
|
199
|
|
|
$
|
39
|
|
|
19.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Segment breakdown for adjusted selling, general, and
administrative expenses.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
Nine Months Ended
|
|
|
|
|
|
|
September 30,
|
|
|
|
|
|
September 30,
|
|
|
|
|
|
|
2012
|
|
2011
|
|
Change ($)
|
|
Change (%)
|
|
2012
|
|
2011
|
|
Change ($)
|
|
Change (%)
|
North American management and franchising
|
|
$
|
10
|
|
|
$
|
12
|
|
|
$
|
(2
|
)
|
|
(16.7
|
)%
|
|
$
|
38
|
|
|
$
|
35
|
|
|
$
|
3
|
|
|
8.6
|
%
|
International management and franchising
|
|
17
|
|
|
18
|
|
|
(1
|
)
|
|
(5.6
|
)%
|
|
52
|
|
|
51
|
|
|
1
|
|
|
2.0
|
%
|
Owned and leased
|
|
2
|
|
|
2
|
|
|
—
|
|
|
—
|
%
|
|
8
|
|
|
7
|
|
|
1
|
|
|
14.3
|
%
|
Corporate and other (1)
|
|
41
|
|
|
38
|
|
|
3
|
|
|
7.9
|
%
|
|
129
|
|
|
113
|
|
|
16
|
|
|
14.2
|
%
|
Adjusted selling, general, and administrative expenses
|
|
$
|
70
|
|
|
$
|
70
|
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
227
|
|
|
$
|
206
|
|
|
$
|
21
|
|
|
10.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Corporate and other includes vacation ownership expenses of $8
million and $7 million for the three months ended September 30, 2012
and 2011, respectively, and $23 million and $20 million for the nine
months ended September 30, 2012 and 2011, respectively.
|
|
Page 9
|
Hyatt Hotels Corporation
|
Reconciliation of Non-GAAP to GAAP Measure: Comparable Owned and
Leased Hotel Operating Margin to Owned and Leased Hotel Operating
Margin
|
Below is a breakdown of consolidated owned and leased hotels
revenues and expenses, as used in calculating comparable owned and
leased hotel operating margin percentages. Results of operations as
presented on condensed consolidated statements of income include the
impact of expenses recognized with respect to employee benefit
programs funded through rabbi trusts. Certain of these expenses are
recognized in owned and leased hotels expenses and are completely
offset by the corresponding net gains (losses) and interest income
from marketable securities held to fund operating programs, thus
having no net impact to our earnings. Below is a reconciliation of
this account excluding the impact of our rabbi trusts and excluding
the impact of non-comparable hotels.
|
(in millions)
|
|
|
Three Months Ended
|
|
|
|
|
|
Nine Months Ended
|
|
|
|
|
|
|
September 30,
|
|
|
|
|
|
September 30,
|
|
|
|
|
|
|
2012
|
|
2011
|
|
Change ($)
|
|
Change (%)
|
|
2012
|
|
2011
|
|
Change ($)
|
|
Change (%)
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comparable owned and leased hotels
|
|
$
|
453
|
|
|
$
|
445
|
|
|
$
|
8
|
|
|
1.8
|
%
|
|
$
|
1,378
|
|
|
$
|
1,318
|
|
|
$
|
60
|
|
|
4.6
|
%
|
Non-comparable hotels
|
|
50
|
|
|
25
|
|
|
25
|
|
|
100.0
|
%
|
|
126
|
|
|
68
|
|
|
58
|
|
|
85.3
|
%
|
Owned and leased hotels revenue
|
|
$
|
503
|
|
|
$
|
470
|
|
|
$
|
33
|
|
|
7.0
|
%
|
|
$
|
1,504
|
|
|
$
|
1,386
|
|
|
$
|
118
|
|
|
8.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comparable owned and leased hotels
|
|
$
|
350
|
|
|
$
|
345
|
|
|
$
|
5
|
|
|
1.4
|
%
|
|
$
|
1,066
|
|
|
$
|
1,031
|
|
|
$
|
35
|
|
|
3.4
|
%
|
Non-comparable hotels
|
|
30
|
|
|
20
|
|
|
10
|
|
|
50.0
|
%
|
|
77
|
|
|
58
|
|
|
19
|
|
|
32.8
|
%
|
Rabbi trust
|
|
2
|
|
|
(5
|
)
|
|
7
|
|
|
140.0
|
%
|
|
5
|
|
|
(3
|
)
|
|
8
|
|
|
266.7
|
%
|
Owned and leased hotels expense
|
|
$
|
382
|
|
|
$
|
360
|
|
|
$
|
22
|
|
|
6.1
|
%
|
|
$
|
1,148
|
|
|
$
|
1,086
|
|
|
$
|
62
|
|
|
5.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Owned and leased hotel operating margin percentage
|
|
24.1
|
%
|
|
23.4
|
%
|
|
|
|
0.7
|
%
|
|
23.7
|
%
|
|
21.6
|
%
|
|
|
|
2.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comparable owned and leased hotel operating margin percentage
|
|
22.7
|
%
|
|
22.5
|
%
|
|
|
|
0.2
|
%
|
|
22.6
|
%
|
|
21.8
|
%
|
|
|
|
0.8
|
%
|
|
Page 10
|
Hyatt Hotels Corporation
|
Net gains (losses) and interest income from marketable securities
held to fund operating programs
|
The table below provides a reconciliation of net gains (losses) and
interest income from marketable securities held to fund operating
programs, all of which are completely offset within other line items
of our condensed consolidated statements of income, thus having no
net impact to our earnings. The gains or losses on securities held
in rabbi trusts are offset to our owned and leased hotels expense
for our hotel staff and selling, general, and administrative
expenses for our corporate staff and personnel supporting our
business segments. The gains and losses on securities held to fund
our Hyatt Gold Passport program for our owned and leased hotels are
offset by corresponding changes to our owned and leased hotel
revenues. The table below shows the amounts recorded to the
respective offsetting account.
|
(in millions)
|
|
|
Three Months Ended
|
|
|
|
|
|
Nine Months Ended
|
|
|
|
|
|
|
September 30,
|
|
|
|
|
|
September 30,
|
|
|
|
|
|
|
2012
|
|
2011
|
|
Change ($)
|
|
Change (%)
|
|
2012
|
|
2011
|
|
Change ($)
|
|
Change (%)
|
Rabbi trust impact allocated to selling, general, and administrative
expenses
|
|
$
|
5
|
|
|
$
|
(12
|
)
|
|
$
|
17
|
|
|
141.7
|
%
|
|
$
|
11
|
|
|
$
|
(7
|
)
|
|
$
|
18
|
|
|
257.1
|
%
|
Rabbi trust impact allocated to owned and leased hotels expense
|
|
2
|
|
|
(5
|
)
|
|
7
|
|
|
140.0
|
%
|
|
5
|
|
|
(3
|
)
|
|
8
|
|
|
266.7
|
%
|
Net gains and interest income from marketable securities held to
fund our Gold Passport program allocated to owned and leased hotels
revenue
|
|
1
|
|
|
2
|
|
|
(1
|
)
|
|
(50.0
|
)%
|
|
2
|
|
|
3
|
|
|
(1
|
)
|
|
(33.3
|
)%
|
Net gains (losses) and interest income from marketable securities
held to fund operating programs
|
|
$
|
8
|
|
|
$
|
(15
|
)
|
|
$
|
23
|
|
|
153.3
|
%
|
|
$
|
18
|
|
|
$
|
(7
|
)
|
|
$
|
25
|
|
|
357.1
|
%
|
|
Page 11
|
Hyatt Hotels Corporation
|
Properties and Rooms / Units by Geography
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2012
|
|
June 30, 2012
|
|
December 31, 2011
|
|
QTD Change
|
|
YTD Change
|
|
|
|
|
|
Properties
|
|
Rooms/Units
|
|
Properties
|
|
Rooms/Units
|
|
Properties
|
|
Rooms/Units
|
|
Properties
|
|
Rooms/Units
|
|
Properties
|
|
Rooms/Units
|
Owned and leased hotels (a)
|
|
|
|
Full service hotels
|
|
|
|
North America
|
|
34
|
|
|
15,883
|
|
|
34
|
|
|
15,882
|
|
|
34
|
|
|
15,875
|
|
|
0
|
|
|
1
|
|
|
0
|
|
|
8
|
|
|
|
International
|
|
11
|
|
|
3,359
|
|
|
11
|
|
|
3,359
|
|
|
10
|
|
|
2,603
|
|
|
0
|
|
|
0
|
|
|
1
|
|
|
756
|
|
|
|
Select service
|
|
64
|
|
|
8,712
|
|
|
64
|
|
|
8,712
|
|
|
64
|
|
|
8,712
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
Total owned and leased hotels
|
|
109
|
|
|
27,954
|
|
|
109
|
|
|
27,953
|
|
|
108
|
|
|
27,190
|
|
|
0
|
|
|
1
|
|
|
1
|
|
|
764
|
|
|
Managed and franchised hotels
|
(includes owned and leased hotels)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2012
|
|
June 30, 2012
|
|
December 31, 2011
|
|
QTD Change
|
|
YTD Change
|
|
|
|
|
|
Properties
|
|
Rooms/Units
|
|
Properties
|
|
Rooms/Units
|
|
Properties
|
|
Rooms/Units
|
|
Properties
|
|
Rooms/Units
|
|
Properties
|
|
Rooms/Units
|
North America
|
|
|
|
Full service hotels
|
|
|
|
Managed
|
|
114
|
|
|
59,494
|
|
|
115
|
|
|
59,994
|
|
|
115
|
|
|
59,986
|
|
|
(1
|
)
|
|
(500
|
)
|
|
(1
|
)
|
|
(492
|
)
|
|
|
Franchised
|
|
23
|
|
|
7,047
|
|
|
23
|
|
|
7,047
|
|
|
20
|
|
|
6,046
|
|
|
0
|
|
|
0
|
|
|
3
|
|
|
1,001
|
|
|
|
Subtotal
|
|
137
|
|
|
66,541
|
|
|
138
|
|
|
67,041
|
|
|
135
|
|
|
66,032
|
|
|
(1
|
)
|
|
(500
|
)
|
|
2
|
|
|
509
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Select service hotels
|
|
|
|
Managed
|
|
95
|
|
|
12,781
|
|
|
95
|
|
|
12,781
|
|
|
95
|
|
|
12,781
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
|
Franchised
|
|
128
|
|
|
16,779
|
|
|
125
|
|
|
16,347
|
|
|
120
|
|
|
15,247
|
|
|
3
|
|
|
432
|
|
|
8
|
|
|
1,532
|
|
|
|
Subtotal
|
|
223
|
|
|
29,560
|
|
|
220
|
|
|
29,128
|
|
|
215
|
|
|
28,028
|
|
|
3
|
|
|
432
|
|
|
8
|
|
|
1,532
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International (b)
|
|
|
|
Managed
|
|
111
|
|
|
36,710
|
|
|
109
|
|
|
35,977
|
|
|
108
|
|
|
35,486
|
|
|
2
|
|
|
733
|
|
|
3
|
|
|
1,224
|
|
|
|
Franchised
|
|
2
|
|
|
988
|
|
|
2
|
|
|
988
|
|
|
2
|
|
|
988
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
|
Subtotal
|
|
113
|
|
|
37,698
|
|
|
111
|
|
|
36,965
|
|
|
110
|
|
|
36,474
|
|
|
2
|
|
|
733
|
|
|
3
|
|
|
1,224
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total managed and franchised hotels
|
|
473
|
|
|
133,799
|
|
|
469
|
|
|
133,134
|
|
|
460
|
|
|
130,534
|
|
|
4
|
|
|
665
|
|
|
13
|
|
|
3,265
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vacation ownership
|
|
15
|
|
|
963
|
|
|
15
|
|
|
963
|
|
|
15
|
|
|
963
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
|
Residential
|
|
8
|
|
|
1,230
|
|
|
8
|
|
|
1,230
|
|
|
8
|
|
|
1,230
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total properties and rooms/units
|
|
496
|
|
|
135,992
|
|
|
492
|
|
|
135,327
|
|
|
483
|
|
|
132,727
|
|
|
4
|
|
|
665
|
|
|
13
|
|
|
3,265
|
|
(a) Owned and leased hotel figures do not include unconsolidated
hospitality ventures.
|
(b) Additional details included for a regional breakout of
international managed and franchised hotels.
|
|
Page 12
|
International managed and franchised hotels
|
(includes owned and leased hotels)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2012
|
|
June 30, 2012
|
|
December 31, 2011
|
|
QTD Change
|
|
YTD Change
|
|
|
|
|
|
Properties
|
|
Rooms/Units
|
|
Properties
|
|
Rooms/Units
|
|
Properties
|
|
Rooms/Units
|
|
Properties
|
|
Rooms/Units
|
|
Properties
|
|
Rooms/Units
|
Asia Pacific
|
|
54
|
|
|
21,238
|
|
|
52
|
|
|
20,505
|
|
|
53
|
|
|
20,981
|
|
|
2
|
|
|
733
|
|
|
1
|
|
|
257
|
Southwest Asia
|
|
19
|
|
|
5,822
|
|
|
19
|
|
|
5,822
|
|
|
18
|
|
|
5,614
|
|
|
0
|
|
|
0
|
|
|
1
|
|
|
208
|
Europe, Africa, Middle East
|
|
32
|
|
|
7,964
|
|
|
32
|
|
|
7,964
|
|
|
32
|
|
|
7,961
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
3
|
Other Americas
|
|
8
|
|
|
2,674
|
|
|
8
|
|
|
2,674
|
|
|
7
|
|
|
1,918
|
|
|
0
|
|
|
0
|
|
|
1
|
|
|
756
|
Total International
|
|
113
|
|
|
37,698
|
|
|
111
|
|
|
36,965
|
|
|
110
|
|
|
36,474
|
|
|
2
|
|
|
733
|
|
|
3
|
|
|
1,224
|
|
Page 13
|
Hyatt Hotels Corporation
|
Properties and Rooms / Units by Brand
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2012
|
|
June 30, 2012
|
|
December 31, 2011
|
|
QTD Change
|
|
YTD Change
|
Brand
|
|
Properties
|
|
Rooms/Units
|
|
Properties
|
|
Rooms/Units
|
|
Properties
|
|
Rooms/Units
|
|
Properties
|
|
Rooms/Units
|
|
Properties
|
|
Rooms/Units
|
Park Hyatt
|
|
29
|
|
|
5,815
|
|
|
29
|
|
|
5,815
|
|
|
27
|
|
|
5,399
|
|
|
0
|
|
|
0
|
|
|
2
|
|
|
416
|
|
Andaz
|
|
8
|
|
|
1,701
|
|
|
8
|
|
|
1,701
|
|
|
6
|
|
|
1,408
|
|
|
0
|
|
|
0
|
|
|
2
|
|
|
293
|
|
Hyatt
|
|
29
|
|
|
7,478
|
|
|
29
|
|
|
7,478
|
|
|
26
|
|
|
6,010
|
|
|
0
|
|
|
0
|
|
|
3
|
|
|
1,468
|
|
Grand Hyatt
|
|
38
|
|
|
21,505
|
|
|
37
|
|
|
21,092
|
|
|
37
|
|
|
21,101
|
|
|
1
|
|
|
413
|
|
|
1
|
|
|
404
|
|
Hyatt Regency
|
|
146
|
|
|
67,740
|
|
|
146
|
|
|
67,920
|
|
|
149
|
|
|
68,588
|
|
|
0
|
|
|
(180
|
)
|
|
(3
|
)
|
|
(848
|
)
|
Hyatt Place
|
|
169
|
|
|
21,957
|
|
|
167
|
|
|
21,673
|
|
|
162
|
|
|
20,573
|
|
|
2
|
|
|
284
|
|
|
7
|
|
|
1,384
|
|
Hyatt House
|
|
54
|
|
|
7,603
|
|
|
53
|
|
|
7,455
|
|
|
53
|
|
|
7,455
|
|
|
1
|
|
|
148
|
|
|
1
|
|
|
148
|
|
Vacation Ownership and Residential
|
|
23
|
|
|
2,193
|
|
|
23
|
|
|
2,193
|
|
|
23
|
|
|
2,193
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
Total
|
|
496
|
|
|
135,992
|
|
|
492
|
|
|
135,327
|
|
|
483
|
|
|
132,727
|
|
|
4
|
|
|
665
|
|
|
13
|
|
|
3,265
|
|

Source: Hyatt Hotels Corporation
Investors:
Hyatt Hotels Corporation
Atish Shah, 312.780.5427
atish.shah@hyatt.com
or
Media:
Hyatt
Hotels Corporation
Farley Kern, 312.780.5506
farley.kern@hyatt.com