CHICAGO--Hyatt Hotels Corporation ("Hyatt" or the "Company") (NYSE: H) today reported second quarter 2014 financial results as follows:

  • Adjusted EBITDA was $231 million in the second quarter of 2014 compared to $212 million in the second quarter of 2013, an increase of 9.0%.
  • Adjusted for special items, net income attributable to Hyatt was $72 million, or $0.47 per share, during the second quarter of 2014 compared to net income attributable to Hyatt of $70 million, or $0.43 per share, during the second quarter of 2013.
  • Net income attributable to Hyatt was $74 million, or $0.48 per share, during the second quarter of 2014 compared to net income attributable to Hyatt of $112 million, or $0.70 per share, in the second quarter of 2013.
  • Comparable owned and leased hotels RevPAR increased 4.8% (4.0% excluding the effect of currency) in the second quarter of 2014 compared to the second quarter of 2013.
  • Comparable owned and leased hotels operating margins decreased 20 basis points in the second quarter of 2014 compared to the second quarter of 2013. Owned and leased hotels operating margins decreased 40 basis points in the second quarter of 2014 compared to the second quarter of 2013.
  • Comparable systemwide RevPAR increased 5.5% (6.1% excluding the effect of currency) in the second quarter of 2014 compared to the second quarter of 2013.
  • Comparable U.S. full service hotel RevPAR increased 5.5% in the second quarter of 2014 compared to the second quarter of 2013. Comparable U.S. select service hotel RevPAR increased 8.4% in the second quarter of 2014 compared to the second quarter of 2013.
  • Ten hotels were opened. As of June 30, 2014, the Company's executed contract base consisted of approximately 240 hotels or approximately 54,000 rooms.
  • The Company repurchased 1,563,153 shares of common stock at a weighted average price of $57.33 per share, for an aggregate purchase price of approximately $90 million.

Mark S. Hoplamazian, president and chief executive officer of Hyatt Hotels Corporation, said, "In the second quarter, we reported constant currency systemwide RevPAR growth of 6.1% driven by continued robust transient demand and rate growth. Comparable owned and leased hotels RevPAR increased 4.0% and comparable owned and leased hotels operating margins decreased 20 basis points partially due to a difficult comparison to a strong second quarter in 2013 as well as adverse market conditions at two hotels outside the Americas. On a year-to-date basis, we saw strong performance at owned and leased hotels with comparable RevPAR up 5.1% and comparable operating margins up 60 basis points.

"We opened 10 hotels in the quarter including iconic hotels, such as Andaz Tokyo Toranomon Hills and Park Hyatt Vienna. We opened six Hyatt Place hotels in important new locations including our first Hyatt Place hotels in China and Dubai. We are on track to open approximately 40 hotels this year, reflecting continued owner preference for our brands.

"We continue to be active asset recyclers. By year-end 2014, we expect to close on the sale of Hyatt Residential Group for $190 million. In addition, we are currently marketing for sale eight full service hotels and more than 40 select service hotels. We expect to maintain our brand presence on each hotel upon sale.

"In addition to pursuing investment opportunities, we continue to return capital to shareholders. Since the beginning of the second quarter, we have repurchased more than $100 million of Class A common shares.

"Looking ahead, we expect strong transient demand in the Americas and U.S. hotel supply growth to remain low in most markets. U.S. group pace for the coming years continues to improve giving us the confidence that we will continue seeing strong progression in overall rates and higher levels of food and beverage revenues. We remain focused on driving colleague, guest and owner preference for our brands and are well positioned for strong growth in the years ahead."

Owned and Leased Hotels Segment

Total segment Adjusted EBITDA increased 8.3% in the second quarter of 2014 compared to the same period in 2013.

Owned and leased hotels Adjusted EBITDA increased 4.8% in the second quarter of 2014 compared to the same period in 2013. See the table on page 16 of the accompanying schedules for a detailed list of portfolio changes and the year-over-year net impact to second quarter owned and leased hotels Adjusted EBITDA.

Pro rata share of unconsolidated hospitality ventures Adjusted EBITDA increased 31.6% in the second quarter of 2014 compared to the same period in 2013, primarily due to the Company's investment in the all inclusive segment.

Revenue increased 3.5% in the second quarter of 2014 compared to the same period in 2013. Owned and leased hotels expenses increased 4.1% in the second quarter of 2014 compared to the same period in 2013.

RevPAR for comparable owned and leased hotels increased 4.8% (4.0% excluding the effect of currency) in the second quarter of 2014 compared to the same period in 2013. Occupancy improved 100 basis points and ADR increased 3.5% (2.7% excluding the effect of currency) compared to the same period in 2013.

Comparable owned and leased hotels revenue increased 3.0% in the second quarter of 2014 compared to the same period in 2013. Excluding expenses related to benefit programs funded through rabbi trusts and non-comparable hotel expenses, expenses increased 3.3% in the second quarter of 2014 compared to the same period in 2013. See the table on page 10 of the accompanying schedules for a reconciliation of comparable owned and leased hotels expenses to owned and leased hotels expenses.

Comparable owned and leased hotels operating margins decreased 20 basis points in the second quarter of 2014 compared to the second quarter of 2013. Comparable owned and leased hotels operating margins were negatively impacted by approximately 50 basis points due to adverse market conditions at two hotels outside the Americas. Comparable owned and leased hotels operating margins for hotels in the Americas increased 100 basis points in the second quarter of 2014 compared to the second quarter of 2013. Comparable owned and leased hotels operating margins in ASPAC and EAME/SW Asia decreased 400 basis points in the second quarter of 2014 compared to the second quarter of 2013.

Management and Franchise Fees

Total fee revenue increased 7.3% to $103 million in the second quarter of 2014 compared to the same period in 2013. Base management fees increased 11.6% to $48 million in the second quarter of 2014 compared to the same period in 2013, primarily due to strong RevPAR growth and newly opened hotels. Incentive management fees decreased 20.0% to $28 million in the second quarter of 2014 compared to the same period in 2013. This is primarily because no incentive management fees were earned at four managed hotels in France in the second quarter of 2014 as compared with $10 million of incentive management fees booked from these hotels in the second quarter of 2013. Franchise fees increased 41.7% to $17 million in the second quarter of 2014 compared to the same period in 2013, primarily due to new hotels and hotels recently converted from managed to franchised. Other fee revenues increased 66.7% to $10 million in the second quarter of 2014 compared to the same period in 2013, in part due to an increase in termination fees.

Americas Management and Franchising Segment

Adjusted EBITDA increased 27.4% in the second quarter of 2014 compared to the same period in 2013.

RevPAR for comparable Americas full service hotels increased 5.6% (6.3% excluding the effect of currency) in the second quarter of 2014 compared to the same period in 2013. Occupancy increased 140 basis points and ADR increased 3.7% (4.3% excluding the effect of currency) compared to the same period in 2013.

Group rooms revenue at comparable U.S. full service hotels increased 1.5% in the second quarter of 2014 compared to the same period in 2013. Group room nights increased 2.4% and group ADR decreased 0.8% in the second quarter of 2014 compared to the same period in 2013.

Transient rooms revenue at comparable U.S. full service hotels increased 7.9% in the second quarter of 2014 compared to the same period in 2013. Transient room nights increased 1.1% and transient ADR increased 6.7% in the second quarter of 2014 compared to the same period in 2013.

RevPAR for comparable Americas select service hotels increased 8.4% in the second quarter of 2014 compared to the same period in 2013. Occupancy increased 140 basis points and ADR increased 6.4% (6.5% excluding the effect of currency) compared to the same period in 2013.

Revenue from management, franchise and other fees increased 22.7% in the second quarter of 2014 compared to the same period in 2013. Revenue in the second quarter of 2014 benefited from approximately $5 million of non-recurring termination fees.

The following five hotels were added to the portfolio during the second quarter:

  • Hyatt Atlanta Perimeter at Villa Christina (franchised, 177 rooms)
  • Hyatt Place Champaign / Urbana (franchised, 145 rooms)
  • Hyatt Place Flushing / LaGuardia Airport (franchised, 168 rooms)
  • Hyatt Place Portland - Old Port (franchised, 130 rooms)
  • Hyatt Place Washington D.C. / U.S. Capitol (franchised, 200 rooms)

Two hotels were removed from the portfolio during the second quarter.

Southeast Asia, China, Australia, South Korea and Japan (ASPAC) Management and Franchising Segment

Adjusted EBITDA decreased 21.4% in the second quarter of 2014 compared to the same period in 2013.

RevPAR for comparable ASPAC hotels increased 3.6% (5.1% excluding the effect of currency) in the second quarter of 2014 compared to the same period in 2013. Occupancy increased 230 basis points and ADR increased 0.1% (1.6% excluding the effect of currency) compared to the same period in 2013.

Revenue from management, franchise and other fees decreased 9.1% in the second quarter of 2014 compared to the same period in 2013. Revenue in the second quarter of 2013 benefited from $2 million of non-recurring fees.

The following three hotels were added to the portfolio during the second quarter:

  • Andaz Tokyo Toranomon Hills, Japan (managed, 164 rooms)
  • Hyatt Regency Tianjin East, China (managed, 300 rooms)
  • Hyatt Place Shenzhen Dongmen, China (managed, 144 rooms)

Europe, Africa, Middle East and Southwest Asia (EAME/SW Asia) Management Segment

Adjusted EBITDA decreased 50.0% in the second quarter of 2014 compared to the same period in 2013.

RevPAR for comparable EAME/SW Asia hotels increased 3.8% (3.9% excluding the effect of currency) in the second quarter of 2014 compared to the same period in 2013. Occupancy increased 70 basis points and ADR increased 2.8% (2.9% excluding the effect of currency) compared to the same period in 2013.

Revenue from management and other fees decreased 32.1% in the second quarter of 2014 compared to the same period in 2013. This is primarily because no incentive management fees were earned at four managed hotels in France in the second quarter of 2014 as compared with $10 million of incentive management fees booked from these hotels in the second quarter of 2013.

The following two hotels were added to the portfolio during the second quarter:

  • Park Hyatt Vienna, Austria (managed, 143 rooms)
  • Hyatt Place Dubai / Al Rigga, United Arab Emirates (managed, 210 rooms)

Selling, General, and Administrative Expenses

Selling, general, and administrative expenses increased 6.7% in the second quarter of 2014 compared to the same period in 2013. Adjusted selling, general, and administrative expenses decreased 1.3% in the second quarter of 2014 compared to the same period in 2013. Refer to the table on page 9 of the accompanying schedules for a reconciliation of adjusted selling, general, and administrative expenses to selling, general, and administrative expenses.

OPENINGS AND FUTURE EXPANSION

Ten hotels were added in the second quarter of 2014, each of which is listed above.

The Company expects that a significant number of new properties will be opened under all of the Company's brands in the future. As of June 30, 2014 this effort was underscored by executed management or franchise contracts for approximately 240 hotels (or approximately 54,000 rooms) across all brands. The executed contracts represent potential entry into several new countries and expansion into new markets or markets in which the Company is under-represented.

SHARE REPURCHASE

During the second quarter of 2014, the Company repurchased 1,563,153 shares of common stock at a weighted average price of $57.33 per share, for an aggregate purchase price of approximately $90 million. On May 16, 2014 the Company's Board of Directors authorized the repurchase of up to an additional $300 million of the Company's common stock. From July 1 through July 25, 2014, the Company repurchased 314,520 shares of common stock at a weighted average price of $61.49 per share, for an aggregate purchase price of approximately $19 million. As of July 25, 2014, the Company had approximately $319 million remaining under its share repurchase authorization.

CORPORATE FINANCE / ASSET RECYCLING

During the quarter, the Company completed the following transactions:

  • An unconsolidated hospitality venture sold Hyatt Place Austin Downtown (296 rooms). The Company received approximately $28 million for its equity interest. As a result of this sale, the Company's pro rata share of unconsolidated hospitality venture debt was reduced by approximately $18 million. The Company continues to franchise the hotel.
  • Acquired Hyatt Regency Grand Cypress (815 rooms) for $191 million thereby reducing the Company's capital lease obligations. The hotel remains within the owned and leased hotels segment.

BALANCE SHEET / OTHER ITEMS

On June 30, 2014, the Company reported the following:

  • Total debt of approximately $1.3 billion.
  • Pro rata share of non-recourse unconsolidated hospitality venture debt of approximately $694 million.
  • Cash and cash equivalents, including investments in highly-rated money market funds and similar investments, of approximately $553 million and short-term investments of approximately $30 million.
  • Undrawn borrowing availability of approximately $1.4 billion under its revolving credit facility.

2014 INFORMATION

The Company is providing the following information for the 2014 fiscal year:

  • Adjusted SG&A expense is expected to be approximately $325 million.
  • Capital expenditures are expected to be approximately $300 million, including approximately $125 million for investment in new properties.
  • In addition to the capital expenditures described above, the Company intends to continue a strong level of investment spending. Investment spending includes acquisitions, equity investments in joint ventures, debt investments, contract acquisition costs or other investments.
  • Depreciation and amortization expense is expected to be approximately $370 million.
  • Interest expense is expected to be approximately $75 million.
  • The Company expects to open approximately 40 hotels in 2014.

CONFERENCE CALL INFORMATION

The Company will hold an investor conference call today, July 31, 2014, 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 www.hyatt.com and selecting the Investor Relations link located at the bottom of the page, or by dialing 617.614.4909, passcode #21721745, 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 July 31, 2014 through August 1, 2014 at midnight by dialing 617.801.6888, passcode #82589306. Additionally, an archive of the webcast will be available on the Company's website for approximately 90 days.

To view all tables corresponding to this release please visit:

http://www.hyattpressroom.com/hyatt/en/news_releases0/2014/Hyatt-Reports-Second-Quarter-2014-Results.html

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®, Hyatt House®, Hyatt Zilara™and Hyatt Ziva™brand names and have locations on six continents. Hyatt Residential Group, Inc., a Hyatt Hotels Corporation subsidiary, develops, operates, markets or licenses Hyatt Residences® and Hyatt Residence Club®. As of June 30, 2014, the Company's worldwide portfolio consisted of 563 properties in 48 countries. For more information, please visit www.hyatt.com.

Contact: for investors: Atish Shah

atish.shah@hyatt.com / 312.780.5427

Contact: for media: Farley Kern

farley.kern@hyatt.com / 312.780.5506

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