CHICAGO--October 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 [email protected] 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
|
|
|