Hyatt Hotels Corporation ("Hyatt" or the "Company") (NYSE: H)
today reported fourth quarter 2014 financial results as
follows:
- Adjusted EBITDA was $146 million in the
fourth quarter of 2014 compared to $178 million in the fourth
quarter of 2013, a decrease of 18.0%.
- Adjusted EBITDA in the fourth quarter
of 2014 was negatively impacted by a $22 million nonrecurring stock
based compensation expense related to prior periods.
- Adjusted for special items, net income
attributable to Hyatt was $47 million, or $0.31 per share, during
the fourth quarter of 2014 compared to net income attributable to
Hyatt of $51 million, or $0.32 per share, during the fourth quarter
of 2013.
- Net income attributable to Hyatt was
$182 million, or $1.20 per share, during the fourth quarter of 2014
compared to net income attributable to Hyatt of $32 million, or
$0.20 per share, in the fourth quarter of 2013.
- Comparable owned and leased hotels
RevPAR increased 1.9% (3.4% excluding the effect of currency) in
the fourth quarter of 2014 compared to the fourth quarter of
2013.
- Comparable owned and leased hotels
operating margins decreased 50 basis points in the fourth quarter
of 2014 compared to the same period in 2013. Owned and leased
hotels operating margins decreased 50 basis points in the fourth
quarter of 2014 compared to the fourth quarter of 2013.
- Comparable systemwide RevPAR increased
3.1% (5.1% excluding the effect of currency) in the fourth quarter
of 2014 compared to the fourth quarter of 2013.
- Comparable U.S. full service hotel
RevPAR increased 5.8% in the fourth quarter of 2014 compared to the
fourth quarter of 2013. Comparable U.S. select service hotel RevPAR
increased 7.2% in the fourth quarter of 2014 compared to the fourth
quarter of 2013.
- Fourteen hotels were opened. As of
December 31, 2014, the Company's executed contract base
consisted of approximately 250 hotels or approximately 55,000
rooms.
- The Company repurchased 3,645,096
shares of common stock at a weighted average price of $59.06 per
share, for an aggregate purchase price of approximately $215
million.
The Company also provided an update on selected topics discussed
during the Company's first quarter 2014 Investor Meeting as
follows:
High quality expansion of system leads to higher fees
- Opened 14 hotels in the fourth quarter,
43 hotels in 2014
- 7% net hotel growth in 2014; 5% net
rooms growth in 2014
- Total fees up more than 7% in fourth
quarter, up more than 13% in 2014
- Executed contract base for new hotels
represents over 35% system growth
- Strong fee growth potential from
increased system size over the next five years
Strong execution of asset recycling strategy
- $1.2 billion of dispositions in the
fourth quarter
- $1.6 billion of total dispositions in
2014 at attractive prices: blended 13x ttm EBITDA multiple
- Realized gains of more than $340
million as a result of 2014 dispositions
- Maintained brand presence on all
dispositions and executed transactions in a tax efficient
manner
- $800 million invested in recent high
quality acquisitions including newly opened hotels
- Significant liquidity available to be
reinvested over time
Accelerated return of capital to shareholders
- Repurchased 3.6 million shares for $215
million in the fourth quarter
- 5% reduction in shares outstanding in
2014
- Strong pace of share repurchases in
2015 to date
Mark S. Hoplamazian, president and chief executive officer of
Hyatt Hotels Corporation, said, "In the fourth quarter, systemwide
RevPAR grew 5.1% in constant dollars and benefited from strong
average daily rate growth. Comparable owned and leased margins in
the Americas increased 50 basis points while margins at hotels
outside the Americas were negatively impacted by market-specific
factors.
"Our pace of new openings and our executed contract base
position us well to continue expanding our presence in markets
where our guests are traveling. We opened 94 hotels since the
beginning of 2013 through the end of 2014, representing an 18% net
increase in system size. We have opened four hotels year-to-date
and expect to open approximately 50 hotels in 2015. We are excited
to launch our newest brand, Hyatt Centric, a full service lifestyle
brand that puts our guests in the center of some of the world's
greatest destinations. We believe this new brand will further
strengthen the overall Hyatt brand portfolio and we expect Hyatt
Centric to be well received by guests and owners.
"Last year was a very successful one on the transaction and
asset recycling front. In 2014, we realized proceeds of
approximately $1.6 billion from the sale of 52 select service
hotels, four full service hotels, our vacation ownership business
and four joint venture hotels. We also realized approximately $55
million of repayments of loans we had made as part of structured
transactions. Last month, we also sold Hyatt Regency Indianapolis
for approximately $71 million. We maintained our brand presence
with long-term agreements on all hotels sold since the beginning of
2014.
"Our strong balance sheet continues to support our balanced
approach to capital allocation - we continue to reinvest in the
business while returning capital to shareholders. Our investment
priorities remain the same - hotels located in key gateway cities,
resorts, urban select service hotels and group-oriented hotels -
and we see opportunities to deploy our capital in the year ahead.
In addition, we accelerated our pace of share repurchases in 2014
and into the first quarter of 2015.
"Looking ahead, we expect continued strength in most U.S.
markets while international markets will continue to be challenged
due to market-specific factors. Transient demand continues to be
strong in most markets while our U.S. group pace for 2015 remains
robust - up approximately 7%. These factors, along with limited new
supply in most U.S. markets, gives us the confidence that we are
well positioned for strong and sustainable growth."
Owned and Leased Hotels Segment
Total segment Adjusted EBITDA decreased 2.5% in the fourth
quarter of 2014 compared to the same period in 2013.
Owned and leased hotels Adjusted EBITDA increased 1.0% in the
fourth quarter of 2014 compared to the same period in 2013. See the
table on page 19 of the accompanying schedules for a detailed list
of portfolio changes and the year-over-year net impact to fourth
quarter owned and leased hotels Adjusted EBITDA.
Pro rata share of unconsolidated hospitality ventures Adjusted
EBITDA decreased 20.0% in the fourth quarter of 2014 compared to
the same period in 2013, primarily due to portfolio changes.
Revenue decreased 1.1% in the fourth quarter of 2014 compared to
the same period in 2013. Owned and leased hotels expenses decreased
0.5% in the fourth quarter of 2014 compared to the same period in
2013.
RevPAR for comparable owned and leased hotels increased 1.9%
(3.4% excluding the effect of currency) in the fourth quarter of
2014 compared to the same period in 2013. Occupancy increased 90
basis points and ADR increased 0.7% (2.2% excluding the effect of
currency) in the fourth quarter of 2014 compared to the same period
in 2013.
Comparable owned and leased hotels revenue was flat in the
fourth 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 0.6%
in the fourth quarter of 2014 compared to the same period in 2013.
See the table on page 11 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
50 basis points in the fourth quarter of 2014 compared to the
fourth quarter of 2013. Comparable owned and leased hotels
operating margins for hotels in the Americas increased 50 basis
points in the fourth quarter of 2014 compared to the fourth quarter
of 2013. Comparable owned and leased hotels operating margins in
ASPAC and EAME/SW Asia decreased 240 basis points in the fourth
quarter of 2014 compared to the fourth quarter of 2013. Comparable
owned and leased hotels operating margins in ASPAC and EAME/SW Asia
were negatively impacted by one hotel in ASPAC.
The following hotel was added to the portfolio during the fourth
quarter:
- Hyatt Regency Lost Pines Resort and Spa
(owned, 491 rooms). The Company acquired the hotel from an
unconsolidated hospitality venture.
The following 46 hotels were removed from the owned and leased
hotels portfolio as they were sold during the fourth quarter:
- Park Hyatt Washington (216 rooms)
- Park Hyatt Toronto, Canada (346
rooms)
- Hyatt Regency Vancouver, Canada (644
rooms)
- 43 select service hotels (5,581
rooms)
The Company entered into a management or franchise agreement for
each hotel listed above and therefore the hotels remain included in
the Hyatt system.
Management and Franchise Fees
Total fee revenue increased 7.4% to $101 million in the fourth
quarter of 2014 compared to the same period in 2013. Base
management fees increased 9.5% to $46 million in the fourth quarter
of 2014 compared to the same period in 2013. Incentive management
fees increased 55.0% to $31 million in the fourth quarter of 2014
compared to the same period in 2013, primarily due to the reversal
of approximately $11 million of previously recognized incentive
management fees in the fourth quarter of 2013 related to four
managed hotels in France. Franchise fees increased 23.1% to $16
million in the fourth 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 decreased 57.9% to
$8 million in the fourth quarter of 2014 compared to the same
period in 2013, primarily due to a $12 million termination fee
recognized in the fourth quarter of 2013 related to one hotel in
the Americas.
Americas Management and Franchising Segment
Adjusted EBITDA decreased 26.8% in the fourth quarter of 2014
compared to the same period in 2013, primarily due to a $12 million
termination fee recognized in the fourth quarter of 2013 related to
one hotel and $4 million related to nonrecurring stock based
compensation expense in the fourth quarter of 2014.
RevPAR for comparable Americas full service hotels increased
5.0% (5.8% excluding the effect of currency) in the fourth quarter
of 2014 compared to the same period in 2013. Occupancy increased 30
basis points and ADR increased 4.5% (5.3% excluding the effect of
currency) in the fourth quarter of 2014 compared to the same period
in 2013.
Group rooms revenue at comparable U.S. full service hotels
increased 1.2% in the fourth quarter of 2014 compared to the same
period in 2013. Group room nights decreased 0.2% and group ADR
increased 1.4% in the fourth quarter of 2014 compared to the same
period in 2013.
Transient rooms revenue at comparable U.S. full service hotels
increased 7.3% in the fourth quarter of 2014 compared to the same
period in 2013. Transient room nights increased 0.1% and transient
ADR increased 7.2% in the fourth quarter of 2014 compared to the
same period in 2013.
RevPAR for comparable Americas select service hotels increased
7.3% in the fourth quarter of 2014 compared to the same period in
2013. Occupancy decreased 70 basis points and ADR increased 8.3% in
the fourth quarter of 2014 compared to the same period in 2013.
Revenue from management and franchise fees decreased 9.1% in the
fourth quarter of 2014 compared to the same period in 2013.
The following 11 hotels were added to the portfolio during the
fourth quarter:
- Hyatt Zilara Rose Hall, Jamaica
(franchised, 234 rooms)
- Hyatt Ziva Puerto Vallarta, Mexico
(franchised, 335 rooms)
- Hyatt Ziva Rose Hall, Jamaica
(franchised, 386 rooms)
- Hyatt Herald Square New York
(franchised, 122 rooms)
- Hyatt House San Juan, Puerto Rico
(managed, 126 rooms)
- Hyatt Place Baltimore / Inner Harbor
(franchised, 208 rooms)
- Hyatt Place Ciudad del Carmen, Mexico
(managed, 140 rooms)
- Hyatt Place Columbus (franchised, 99
rooms)
- Hyatt Place Marathon / Florida Keys
(franchised, 125 rooms)
- Hyatt Place Panama City / Downtown,
Panama (managed, 165 rooms)
- Hyatt Place Savannah Airport
(franchised, 82 rooms)
Southeast Asia, China, Australia, South Korea and Japan
(ASPAC) Management and Franchising Segment
Adjusted EBITDA decreased 27.8% in the fourth quarter of 2014
compared to the same period in 2013, primarily due to a $2 million
year-over-year negative impact of bad debt and $1 million of
nonrecurring stock compensation expense in the fourth quarter of
2014.
RevPAR for comparable ASPAC hotels decreased 0.9% (increased
3.1% excluding the effect of currency) in the fourth quarter of
2014 compared to the same period in 2013. Occupancy increased 130
basis points and ADR decreased 2.7% (increased 1.3% excluding the
effect of currency) in the fourth quarter of 2014 compared to the
same period in 2013.
Revenue from management and franchise fees was flat in the
fourth quarter of 2014 compared to the same period in 2013.
The following two hotels were added to the portfolio during the
fourth quarter:
- Hyatt City of Dreams Manila,
Philippines (managed, 365 rooms)
- Grand Hyatt Lijiang, China (managed,
312 rooms)
Europe, Africa, Middle East and Southwest Asia (EAME/SW Asia)
Management Segment
Adjusted EBITDA increased 900.0% in the fourth quarter of 2014
compared to the same period in 2013, primarily due to the reversal
of approximately $11 million of previously recognized incentive
management fees in the fourth quarter of 2013 related to four
managed hotels in France.
RevPAR for comparable EAME/SW Asia hotels decreased 3.2%
(increased 2.6% excluding the effect of currency) in the fourth
quarter of 2014 compared to the same period in 2013. Occupancy
increased 250 basis points and ADR decreased 6.8% (1.2% excluding
the effect of currency) in the fourth quarter of 2014 compared to
the same period in 2013.
Revenue from management and franchise fees increased 120.0% in
the fourth quarter of 2014 compared to the same period in 2013.
The following hotel was added to the portfolio during the fourth
quarter:
- Hyatt Place Gurgaon / Udyog Vihar,
India (managed, 176 rooms)
One hotel was removed from the portfolio during the fourth
quarter.
Selling, General, and Administrative Expenses
Selling, general, and administrative expenses increased 20.7% in
the fourth quarter of 2014 compared to the same period in 2013.
Adjusted selling, general, and administrative expenses increased
29.1% in the fourth quarter of 2014 compared to the same period in
2013. Adjusted selling, general, and administrative expenses in the
fourth quarter of 2014 were negatively impacted by approximately
$22 million of nonrecurring stock based compensation expense
related to prior periods. See the table on page 10 of the
accompanying schedules for a reconciliation of adjusted selling,
general, and administrative expenses to selling, general, and
administrative expenses.
OPENINGS AND FUTURE EXPANSION
Fourteen hotels were added in the fourth quarter of 2014, each
of which is listed above. During the 2014 fiscal year, the Company
opened 43 hotels, representing 8,612 rooms. Six hotels,
representing 1,483 rooms, were removed from the portfolio during
the 2014 fiscal year.
The Company expects that a significant number of new hotels will
be opened under all of the Company's brands in the future. As of
December 31, 2014 the Company had executed management or
franchise contracts for approximately 250 hotels (or approximately
55,000 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.
See the table on page 18 of the accompanying schedules for a
breakdown of the executed contract base.
SHARE REPURCHASE
During the fourth quarter of 2014, the Company repurchased
3,645,096 shares of common stock at a weighted average price of
$59.06 per share, for an aggregate purchase price of approximately
$215 million. During the 2014 fiscal year, the Company repurchased
7,693,326 shares of common stock at a weighted average price of
$57.79 per share, for an aggregate purchase price of approximately
$445 million.
On December 11, 2014 the Company's Board of Directors authorized
the repurchase of up to an additional $400 million of the Company's
common stock. From January 1 through February 13, 2015, the Company
repurchased 1,204,879 shares of common stock at a weighted average
price of $57.65 per share, for an aggregate purchase price of
approximately $69 million. As of February 13, 2015, the Company had
approximately $375 million remaining under its share repurchase
authorization.
CORPORATE FINANCE / ASSET
RECYCLING
During the fourth quarter, the Company completed the following
transactions:
- Acquired Hyatt Regency Lost Pines
Resort and Spa (491 rooms) from an unconsolidated hospitality
venture for approximately $143 million. As a result of the
acquisition, the Company assumed approximately $65 million of
property-level debt.
- Sold Hyatt Residential Group for
approximately $220 million. The sale price included Hyatt’s
interest in a joint venture that owns and is developing a shared
ownership property in Maui, Hawaii. The properties will continue to
be Hyatt-branded.
- Sold a portfolio of 38 select service
hotels (4,950 rooms) for approximately $590 million. The Company
entered into a franchise agreement for each hotel.
- Sold Hyatt Regency Vancouver (644
rooms) for approximately $123 million. The Company continues to
manage the hotel.
- Sold Park Hyatt Washington (216 rooms)
for approximately $100 million. The Company continues to manage the
hotel.
- Sold Park Hyatt Toronto (346 rooms) for
approximately $90 million. The Company continues to manage the
hotel.
- Sold five select service hotels (631
rooms) for approximately $53 million. The Company entered into a
franchise agreement for each hotel.
Subsequent to the end of the fourth quarter, the Company
completed the following transaction:
- Sold Hyatt Regency Indianapolis (499
rooms) for approximately $71 million. The Company entered into a
franchise agreement for the hotel.
BALANCE SHEET / OTHER ITEMS
As of December 31, 2014, the Company reported the
following:
- Total debt of approximately $1.4
billion.
- Pro rata share of non-recourse
unconsolidated hospitality venture debt of approximately $638
million compared with approximately $668 million as of September
30, 2014.
- Cash and cash equivalents, including
investments in highly-rated money market funds and similar
investments, of approximately $685 million, short-term investments
of approximately $130 million and restricted cash of approximately
$359 million.
- Undrawn borrowing availability of
approximately $1.5 billion under its revolving credit
facility.
2015 INFORMATION
The Company is providing the following information for the 2015
fiscal year:
- Adjusted SG&A expense is expected
to be approximately $320 million.
- Capital expenditures are expected to be
approximately $350 million, including approximately $175 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 $300 million.
- Interest expense is expected to be
approximately $70 million.
- The Company expects to open
approximately 50 hotels in 2015.
CONFERENCE CALL INFORMATION
The Company will hold an investor conference call today,
February 18, 2015, at 10:30 a.m. CT. 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 647.788.4901, passcode #62845475, 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 February 18, 2015 through February 19, 2015 at midnight
by dialing 404.537.3406, passcode #62845475. Additionally, an
archive of the webcast will be available on the Company’s 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;
- gains on sales of real estate and
other;
- asset impairments;
- other income (loss), net;
- net (income) loss attributable to
noncontrolling interests;
- depreciation and amortization;
- interest expense; and
- provision 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 Hotels
Operating Margin
We define Comparable Owned and Leased Hotels 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 hotels expenses is calculated by removing both
non-comparable hotels expenses and the impact of expenses funded
through rabbi trusts from owned and leased hotels 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 Americas full service or select service
hotels for those properties that we manage or franchise within the
Americas management and franchising segment, comparable systemwide
ASPAC full service hotels for those properties that we manage or
franchise within the ASPAC management and franchising segment, or
comparable systemwide EAME/SW Asia full service hotels for those
properties that we manage within the EAME/SW Asia management
segment. 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.
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, maintenance and enhancement to existing properties capital
expenditures, investments in new properties 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 future group bookings; the impact of
hotel renovations; our ability to successfully execute our common
stock repurchase program; loss of key personnel; hostilities, or
fear of hostilities, including future terrorist attacks, 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 laws; 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
capital necessary to fund current operations or implement our plans
for growth; risks associated with potential acquisitions and
dispositions and the introduction of new brand concepts; the timing
of acquisitions and dispositions; changes in the competitive
environment in our industry and the markets where we operate; cyber
risks and information technology failures; 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 and our ability to access
such 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 only as of the date of
this press release. We do not undertake or assume any 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 law. 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 develop, own, operate, manage, franchise,
license or provide services to hotels, resorts, branded residences
and vacation ownership properties, including under the Hyatt®,
Park Hyatt®, Andaz®, Grand Hyatt®, Hyatt Regency®, Hyatt
Place®, Hyatt House®, Hyatt Zilara™,
Hyatt Ziva™, Hyatt Residences® and Hyatt
Residence Club® brand names and have locations on six
continents. As of December 31, 2014, the Company's worldwide
portfolio consisted of 587 properties in 50 countries. For more
information, please visit www.hyatt.com.
Tables to follow
Hyatt Hotels Corporation
Table of Contents
Financial Information (unaudited)
1.
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.
Reconciliation of Non-GAAP to GAAP
Measure: Summary of Special Items - Three Months Ended December 31,
2014 and 2013
4. - 5.
Reconciliation of Non-GAAP to GAAP
Measure: Summary of Special Items - Year Ended December 31, 2014
and 2013
6. Segment Financial Summary 7. Hotel Chain
Statistics - Comparable Locations 8. Hotel Brand Statistics
- Comparable Locations 9. Fee Summary 10.
Reconciliation of Non-GAAP to GAAP Measure: Adjusted Selling,
General, and Administrative Expenses to Selling, General, and
Administrative Expenses 11. Reconciliation of Non-GAAP to
GAAP Measure: Comparable Owned and Leased Hotels Operating Margin
to Owned and Leased Hotels Operating Margin 12. Net Gains
and Interest Income from Marketable Securities Held to Fund
Operating Programs 13. Capital Expenditures and Investment
Spending Summary 14. - 15. Properties and Rooms / Units by
Geography 16. Properties and Rooms / Units by Brand
17. Owned and Leased Hotels Mix by Market and Brand 18.
Executed Contract Base Approximate Mix 19. Year-over-Year
Net Impact of Portfolio Changes to Owned and Leased Hotels Adjusted
EBITDA - Three Months Ended December 31, 2014
Hyatt Hotels Corporation
Consolidated Statements of Income
For the Three Months and the Year Ended
December 31, 2014 and 2013
(in millions, except per share
amounts)
(unaudited)
Three Months Ended Year Ended December 31,
December 31, 2014 2013 2014
2013 REVENUES: Owned and leased hotels $ 551 $
557 $ 2,246 $ 2,142 Management and franchise fees 101 94 387 342
Other revenues 7 15 75 78 Other revenues from managed properties
(a) 420 425 1,707 1,622 Total revenues
1,079 1,091 4,415 4,184
DIRECT AND SELLING, GENERAL, AND
ADMINISTRATIVE EXPENSES: Owned and leased hotels 424 426 1,691
1,629 Depreciation and amortization 85 91 354 345 Other direct
costs 6 7 35 32 Selling, general, and administrative 105 87 349 323
Other costs from managed properties (a) 420 425 1,707
1,622 Direct and selling, general, and administrative
expenses 1,040 1,036 4,136 3,951 Net gains and interest income from
marketable securities held to fund operating programs 6 12 15 34
Equity earnings (losses) from unconsolidated hospitality ventures 3
(11 ) 25 (1 ) Interest expense (17 ) (17 ) (71 ) (65 ) Gains on
sales of real estate and other 246 — 311 125 Asset impairments (10
) (11 ) (17 ) (22 ) Other income (loss), net (6 ) 29 (17 )
17 INCOME BEFORE INCOME TAXES 261 57 525 321 PROVISION FOR
INCOME TAXES (79 ) (27 ) (179 ) (116 ) NET INCOME 182 30 346 205
NET (INCOME) LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS —
2 (2 ) 2
NET INCOME ATTRIBUTABLE TO HYATT HOTELS
CORPORATION $ 182 $ 32
$ 344 $ 207
EARNINGS PER SHARE - Basic Net income $ 1.21 $ 0.20 $ 2.26 $
1.29 Net income attributable to Hyatt Hotels Corporation $ 1.21 $
0.21 $ 2.25 $ 1.30
EARNINGS PER SHARE - Diluted Net income $
1.20 $ 0.19 $ 2.24 $ 1.29 Net income attributable to Hyatt Hotels
Corporation $ 1.20 $ 0.20 $ 2.23 $ 1.30 Basic share counts 150.1
156.1 153.1 158.5 Diluted share counts 151.4 157.0 154.4 159.2
(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 1
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 Year Ended
December 31, December 31, 2014
2013 2014 2013 Adjusted EBITDA
$ 146 $ 178 $ 728
$ 680 Equity earnings (losses) from unconsolidated
hospitality ventures 3 (11 ) 25 (1 ) Gains on sales of real estate
and other 246 — 311 125 Asset impairments (10 ) (11 ) (17 ) (22 )
Other income (loss), net (6 ) 29 (17 ) 17 Net (income) loss
attributable to noncontrolling interests — 2 (2 ) 2 Pro rata share
of unconsolidated hospitality ventures Adjusted EBITDA (16 ) (20 )
(80 ) (68 )
EBITDA $ 363 $ 167
$ 948 $ 733 Depreciation and
amortization (85 ) (91 ) (354 ) (345 ) Interest expense (17 ) (17 )
(71 ) (65 ) Provision for income taxes (79 ) (27 ) (179 ) (116 )
Net income attributable to Hyatt Hotels Corporation $
182 $ 32 $ 344
$ 207
Page 2
Hyatt Hotels Corporation Reconciliation of Non-GAAP to GAAP
Measure: Summary of Special Items - Three Months Ended December 31,
2014 and 2013 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 December 31, 2014
and December 31, 2013, respectively.
(in millions, except per share
amounts)
Location on Consolidated Statements of Income
Three Months EndedDecember 31, 2014
2013 Net income attributable to Hyatt Hotels
Corporation $ 182 $ 32
Earnings per share $ 1.20
$ 0.20 Special items Gains on sales of
real estate and other (a) Gains on sales of real estate and other
(246 ) — Gain on sale of real estate held by unconsolidated
hospitality venture (b) Equity earnings (losses) from
unconsolidated hospitality ventures (12 ) — Transaction costs (c)
Other income (loss), net 1 7 Asset impairments (d) Asset
impairments 10 11 Stock based compensation expense (e) Selling,
general, and administrative expenses 22 — Provisions on hotel loans
(f) Other income (loss), net — 6 Loss on sublease agreement (g)
Other income (loss), net — 6 Unconsolidated hospitality ventures
impairment (h) Equity earnings (losses) from unconsolidated
hospitality ventures — 3 Marketable securities (i) Other income
(loss), net — (1 ) Total special items - pre-tax (225 ) 32
Income tax (provision) benefit for special items Provision for
income taxes 90 (13 )
Total special items - after-tax
(135 ) 19 Special items impact per
share $ (0.89 ) $ 0.12
Net income attributable to Hyatt Hotels Corporation,
adjusted for special items $ 47 $
51 Earnings per share, adjusted for special
items $ 0.31 $ 0.32
(a) Gains on sales of real estate and other - Includes gains of
$166 million on the sales of forty-three select service properties,
which will remain Hyatt-branded hotels under long-term franchise
agreements, and $80 million on the sale of our vacation ownership
business. (b) Gain on sale of real estate held by unconsolidated
hospitality venture - During the fourth quarter of 2014, a joint
venture in which we hold an ownership interest sold the Hyatt
Regency Lost Pines Resort and Spa and adjacent land, which was
accounted for as a step acquisition, and we recognized a gain of
$12 million. (c) Transaction costs - In the fourth quarter of 2014,
we incurred $1 million in transaction costs in connection with the
acquisition of the Hyatt Regency Lost Pines Resort and Spa and
adjacent land. In the fourth quarter of 2013, we incurred $7
million in transactions costs primarily in connection with the
acquisitions of the Hyatt Regency Orlando and Grand Hyatt San
Antonio. (d) Asset impairments - In the fourth quarter of 2014, we
recorded $10 million of impairment charges, which included $6
million of property and equipment, $2 million of franchise
intangibles, and $2 million of goodwill. During the fourth quarter
of 2013, in connection with the acquisition of the Grand Hyatt San
Antonio, we wrote off $11 million related to contract acquisition
costs.
(e) Stock based compensation expense -
During the fourth quarter of 2014, we recorded a nonrecurring stock
based compensation expense related to prior periods for grants made
to certain individuals.
(f) Provisions on hotel loans - In the fourth quarter of 2013, we
recorded a $6 million provision related to pre-opening loans based
on our assessment of collectability. (g) Loss on sublease agreement
- During the fourth quarter of 2013, we recorded a $6 million loss
related to a sublease agreement. (h) Unconsolidated hospitality
ventures impairment - During the fourth quarter of 2013, we
recorded $3 million in impairment charges related to hospitality
ventures. (i) Marketable securities - Represents (gains) losses on
investments not used to fund operating programs.
Page 3
Hyatt Hotels Corporation Reconciliation of Non-GAAP to GAAP
Measure: Summary of Special Items - Year Ended December 31, 2014
and 2013 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 year ended December 31, 2014 and
2013, respectively.
(in millions, except per share
amounts)
Location on Consolidated Statements of Income
Year EndedDecember 31, 2014
2013 Net income attributable to Hyatt Hotels
Corporation $ 344 $ 207
Earnings per share $ 2.23
$ 1.30 Special items Gains on sales of
real estate and other (a) Gains on sales of real estate and other
(311 ) (125 ) Gains on sales of real estate held by unconsolidated
hospitality ventures (b) Equity earnings (losses) from
unconsolidated hospitality ventures (34 ) — Gain on sale of artwork
Other income (loss), net — (29 ) Gain on sale of residential
properties (c) Equity earnings (losses) from unconsolidated
hospitality ventures (2 ) (8 ) Gain on sale of cost method
investment (d) Other income (loss), net (1 ) — Marketable
securities (e) Other income (loss), net — (2 ) Foreign currency
translation loss on sale of joint venture (f) Equity earnings
(losses) from unconsolidated hospitality ventures — 2
Unconsolidated hospitality ventures impairment (g) Equity earnings
(losses) from unconsolidated hospitality ventures 3 3 Loss on
sublease agreement (h) Other income (loss), net — 6 Provisions on
hotel loans (i) Other income (loss), net — 6 Transaction costs (j)
Other income (loss), net 6 10 Charitable contribution to Hyatt
Hotels Foundation (k) Other income (loss), net — 20 Debt settlement
costs (l) Other income (loss), net — 35 Realignment costs (m) Other
income (loss), net 7 — Asset impairments (n) Asset impairments 17
22 Stock based compensation expense (o) Selling, general, and
administrative expenses 22 — Total special items -
pre-tax (293 ) (60 ) Income tax (provision) benefit for special
items Provision for income taxes 118 24
Total
special items - after-tax (175 ) (36
) Special items impact per share $
(1.14 ) $ (0.23 ) Net income
attributable to Hyatt Hotels Corporation, adjusted for special
items $ 169 $ 171
Earnings per share, adjusted for special items $
1.09 $ 1.07 (a) Gains on sales
of real estate and other - The year ended December 31, 2014
includes gains of $231 million on the sales of fifty-two select
service properties and one full service property, which will remain
Hyatt-branded hotels under long term agreements, and $80 million on
the sale of our vacation ownership business. The year ended
December 31, 2013 includes gains on the sales of three full service
properties, which were sold subject to long-term franchise
agreements. (b) Gains on sales of real estate held by
unconsolidated hospitality ventures - During the year ended
December 31, 2014, two joint ventures in which we hold an ownership
interest sold the Hyatt Place Austin Downtown and Hyatt Place
Coconut Point to third parties, for which we recognized a gain of
$20 million and $2 million, respectively. Additionally, a joint
venture in which we hold an ownership interest sold the Hyatt
Regency Lost Pines Resort and Spa and adjacent land, which was
accounted for as a step acquisition, and we recognized a gain of
$12 million. (c) Gain on sale of residential properties - During
2014 and 2013, we recognized gains of $2 million and $8 million,
respectively, in connection with the sales of residential
properties at one of our joint ventures. (d) Gain on sale of cost
method investment - During the year ended December 31, 2014, we
sold our interest in a joint venture classified as a cost method
investment and recorded a $1 million gain on sale. (e) Marketable
securities - Represents (gains) losses on investments not used to
fund operating programs. (f) Foreign currency translation loss on
sale of joint venture - During 2013, we had a foreign currency
translation loss of $2 million as a result of the sale of our
interest in a foreign joint venture. (g) Unconsolidated hospitality
ventures impairment - During 2014 and 2013, we recorded impairment
charges of $3 million and $3 million related to hospitality
ventures, respectively. (h) Loss on sublease agreement - During
2013, we recorded a $6 million loss related to a sublease
agreement. (i) Provisions on hotel loans - During 2013, we recorded
a $6 million provision related to pre-opening loans based on our
assessment of collectability.
Page 4
(j) Transaction costs - In the year ended December 31, 2014,
we incurred $6 million in transaction costs related to the sale of
our vacation ownership business and the acquisitions of the Park
Hyatt New York and the Hyatt Regency Lost Pines Resort and Spa and
adjacent land. In the year ended December 31, 2013, we incurred $10
million in transaction costs which primarily represent costs
incurred in connection with our investment in Playa, and the
acquisitions of the Hyatt Regency Orlando and Grand Hyatt San
Antonio. (k) Charitable contribution to Hyatt Hotels Foundation -
In the year ended December 31, 2013, we funded $20 million to Hyatt
Hotels Foundation, which we established in 2013 to further the
Company's philanthropic initiatives. (l) Debt settlement costs - In
the year ended December 31, 2013, we incurred $35 million in debt
settlement costs for the redemption of our 2015 Notes and the
tender of a portion of our 2019 Notes. (m) Realignment costs -
Represents separation, recruiting and relocation costs incurred
associated with the realignment of key management positions. (n)
Asset impairments - During 2014 we recorded $17 million in
impairment charges, which included $13 million of property and
equipment, $2 million of franchise intangibles, and $2 million of
goodwill. During 2013,we recorded $22 million of impairment
charges, which included the write-off of $11 million of contract
acquisition costs in conjunction with the acquisition of the Grand
Hyatt San Antonio and an $11 million impairment of property and
equipment.
(o) Stock based compensation expense -
During the fourth quarter of 2014, we recorded a nonrecurring stock
based compensation expense related to prior periods for grants made
to certain individuals.
Page 5
Hyatt Hotels Corporation
Segment Financial Summary
(in millions)
Three Months
EndedDecember 31, Year EndedDecember 31,
2014 2013 Change ($) Change (%)
2014 2013 Change ($) Change (%)
Revenue Owned and leased hotels $ 551 $ 557 $ (6 ) (1.1 )% $ 2,246
$ 2,142 $ 104 4.9 % Management and franchising Americas 80 88 (8 )
(9.1 )% 327 292 35 12.0 % ASPAC 25 25 — — % 88 83 5 6.0 % EAME/SW
Asia 22 10 12 120.0 % 77 72 5
6.9 % Total management and franchising 127 123 4 3.3 % 492
447 45 10.1 % Corporate and other 7 15 (8 ) (53.3 )% 75 78 (3 )
(3.8 )% Other revenues from managed properties 420 425 (5 ) (1.2 )%
1,707 1,622 85 5.2 % Eliminations (26 ) (29 ) 3 10.3 % (105
) (105 ) — — %
Total revenues $ 1,079
$ 1,091 $ (12 )
(1.1 )% $ 4,415 $
4,184 $ 231 5.5 %
Adjusted EBITDA Owned and leased hotels $ 101 $ 100 $ 1 1.0
% $ 442 $ 403 $ 39 9.7 % Pro rata share of unconsolidated
hospitality ventures 16 20 (4 ) (20.0 )% 80 68
12 17.6 % Total owned and leased hotels 117 120 (3 )
(2.5 )% 522 471 51 10.8 % Americas management and franchising 52 71
(19 ) (26.8 )% 253 233 20 8.6 % ASPAC management and franchising 13
18 (5 ) (27.8 )% 44 50 (6 ) (12.0 )% EAME/SW Asia management 10 1 9
900.0 % 40 40 — — % Corporate and other (46 ) (32 ) (14 ) (43.8 )%
(131 ) (114 ) (17 ) (14.9 )%
Adjusted EBITDA $
146 $ 178 $ (32
) (18.0 )% $ 728 $
680 $ 48 7.1 %
Page 6
Hyatt Hotels Corporation
Hotel Chain Statistics
Comparable Locations
Three Months EndedDecember
31, Year EndedDecember 31,
2014 2013 Change
Change (in constant $)
2014 2013 Change
Change (in constant $)
Owned and leased hotels (# hotels) (a) Comparable owned and
leased hotels (36) ADR $ 222.90 $ 221.35 0.7 % 2.2% $ 219.85 $
212.54 3.4 % 3.2% Occupancy 73.5 % 72.6 % 0.9 % pts 76.2 % 74.8 %
1.4 % pts RevPAR $ 163.80 $ 160.78 1.9 % 3.4% $ 167.62 $ 159.05 5.4
% 5.2%
Managed and franchised hotels (# hotels; includes
owned and leased hotels) Americas Full service (137) ADR $
188.04 $ 179.86 4.5 % 5.3% $ 187.77 $ 178.81 5.0 % 5.7% Occupancy
70.6 % 70.3 % 0.3 % pts 75.0 % 73.9 % 1.1 % pts RevPAR $ 132.81 $
126.51 5.0 % 5.8% $ 140.89 $ 132.14 6.6 % 7.3% Select
service (224) ADR $ 117.06 $ 108.13 8.3 % 8.3% $ 117.70 $ 109.82
7.2 % 7.2% Occupancy 72.5 % 73.2 % (0.7 )% pts 76.8 % 76.1 % 0.7 %
pts RevPAR $ 84.91 $ 79.16 7.3 % 7.3% $ 90.41 $ 83.61 8.1 % 8.2%
ASPAC Full service hotels (50) ADR $ 231.01 $ 237.50 (2.7 )%
1.3% $ 228.73 $ 231.26 (1.1 )% 1.7% Occupancy 71.8 % 70.5 % 1.3 %
pts 69.1 % 67.0 % 2.1 % pts RevPAR $ 165.84 $ 167.40 (0.9 )% 3.1% $
158.14 $ 154.97 2.0 % 4.9% EAME/SW Asia Full service hotels
(46) ADR $ 231.26 $ 248.10 (6.8 )% (1.2)% $ 232.72 $ 235.82 (1.3 )%
1.4% Occupancy 69.0 % 66.5 % 2.5 % pts 66.4 % 64.2 % 2.2 % pts
RevPAR $ 159.66 $ 164.99 (3.2 )% 2.6% $ 154.60 $ 151.38 2.1 % 5.0%
Comparable systemwide hotels (457) ADR $ 181.70 $ 177.40 2.4
% 4.4% $ 180.40 $ 174.08 3.6 % 4.9% Occupancy 71.1 % 70.7 % 0.4 %
pts 73.7 % 72.4 % 1.3 % pts RevPAR $ 129.18 $ 125.35 3.1 % 5.1% $
133.00 $ 126.09 5.5 % 6.7%
(a) Owned and leased hotels figures do not include
unconsolidated hospitality ventures.
Page 7
Hyatt Hotels Corporation
Hotel Brand Statistics
Comparable Locations
Three Months EndedDecember 31,
Year EndedDecember 31,
2014 2013 Change
Change (in constant $)
2014 2013 Change
Change (in constant $)
Managed and franchised hotels (# hotels; includes owned
and leased hotels) Park Hyatt (28) ADR $ 353.01 $ 369.55
(4.5 )% 1.9% $ 349.85 $ 352.46 (0.7 )% 3.0% Occupancy 70.0 % 68.0 %
2.0 % pts 68.4 % 65.6 % 2.8 % pts RevPAR $ 247.23 $ 251.16 (1.6 )%
5.1% $ 239.20 $ 231.16 3.5 % 7.4% Andaz (8) ADR $ 309.81 $
306.75 1.0 % 2.0% $ 297.60 $ 288.06 3.3 % 2.2% Occupancy 81.0 %
75.7 % 5.3 % pts 81.4 % 75.4 % 6.0 % pts RevPAR $ 250.82 $ 232.28
8.0 % 9.1% $ 242.29 $ 217.20 11.6 % 10.3% Grand Hyatt (37)
ADR $ 244.65 $ 249.13 (1.8 )% 0.4% $ 241.72 $ 239.93 0.7 % 2.6%
Occupancy 75.0 % 74.1 % 0.9 % pts 75.1 % 73.4 % 1.7 % pts RevPAR $
183.59 $ 184.72 (0.6 )% 1.7% $ 181.46 $ 176.08 3.1 % 5.0%
Hyatt (27) ADR $ 177.51 $ 167.74 5.8 % 6.2% $ 176.38 $ 166.01 6.2 %
6.2% Occupancy 74.0 % 72.0 % 2.0 % pts 75.9 % 73.5 % 2.4 % pts
RevPAR $ 131.40 $ 120.73 8.8 % 9.2% $ 133.91 $ 121.93 9.8 % 9.8%
Hyatt Regency (133) ADR $ 172.15 $ 166.96 3.1 % 4.9% $
173.48 $ 167.12 3.8 % 4.9% Occupancy 68.7 % 68.3 % 0.4 % pts 71.9 %
70.8 % 1.1 % pts RevPAR $ 118.20 $ 114.02 3.7 % 5.5% $ 124.70 $
118.34 5.4 % 6.5% Hyatt Place (170) ADR $ 111.11 $ 102.68
8.2 % 8.2% $ 112.24 $ 104.66 7.2 % 7.3% Occupancy 72.0 % 72.4 %
(0.4 )% pts 76.0 % 75.0 % 1.0 % pts RevPAR $ 80.04 $ 74.32 7.7 %
7.7% $ 85.26 $ 78.53 8.6 % 8.6% Hyatt House (54) ADR $
133.94 $ 123.33 8.6 % 8.6% $ 132.92 $ 124.03 7.2 % 7.2% Occupancy
74.0 % 75.6 % (1.6 )% pts 79.3 % 79.3 % 0.0 % pts RevPAR $ 99.08 $
93.24 6.3 % 6.3% $ 105.41 $ 98.40 7.1 % 7.1%
Page 8
Hyatt Hotels Corporation
Fee Summary
(in millions)
Three Months EndedDecember 31,
Year EndedDecember 31,
2014 2013 Change ($) Change (%)
2014 2013 Change ($) Change (%)
Fees Base management fees $ 46 $ 42 $ 4 9.5 % $ 180 $ 163 $ 17 10.4
% Incentive management fees 31 20 11 55.0 % 111 100 11 11.0 %
Franchise fees 16 13 3 23.1 % 65 48 17 35.4 % Other fee revenues
(a) 8 19 (11 ) (57.9 )% 31 31 —
— % Total fees $ 101 $ 94 $ 7 7.4 % $ 387
$ 342 $ 45 13.2 %
(a) Total other fee revenues includes deferred gains, resulting
from the sales of hotels subject to management agreements, of $4
million and $2 million for the three months ended December 31,
2014 and 2013, respectively, and $12 million and $6 million for the
years ended December 31, 2014 and 2013, respectively.
Page 9
Hyatt Hotels Corporation Reconciliation of Non-GAAP to GAAP
Measure: Adjusted Selling, General, and Administrative Expenses to
Selling, General, and Administrative Expenses Results of operations
as presented on consolidated statements of income include the
impact of expenses recognized with respect to employee benefit
programs funded through rabbi trusts. Certain of these expenses are
recognized in selling, general, and administrative expenses and are
completely offset by the corresponding net gains and interest
income from marketable securities held to fund operating programs,
thus having no net impact to our earnings. Below is a
reconciliation of this account excluding the impact of our rabbi
trust investments.
(in millions)
Three Months EndedDecember 31,
Year EndedDecember 31,
2014 2013 Change ($) Change (%)
2014 2013 Change ($) Change (%)
Adjusted selling, general, and administrative expenses (a) $ 102 $
79 $ 23 29.1 % $ 340 $ 299 $ 41 13.7 % Rabbi trust impact 3
8 (5 ) (62.5 )% 9 24 (15 ) (62.5 )% Selling,
general and administrative expenses $ 105 $ 87 $ 18
20.7 % $ 349 $ 323 $ 26 8.0 %
(a) Segment breakdown for adjusted selling, general, and
administrative expenses.
Three Months EndedDecember 31,
Year EndedDecember 31,
2014 (c) 2013 Change ($) Change
(%) 2014 2013 Change ($) Change
(%) Americas management and franchising $ 28 $ 17 $ 11 64.7 % $
74 $ 59 $ 15 25.4 % ASPAC management and franchising 12 7 5 71.4 %
44 33 11 33.3 % EAME/SW Asia management 12 9 3 33.3 % 37 32 5 15.6
% Owned and leased hotels 3 5 (2 ) (40.0 )% 14 14 — — % Corporate
and other (b) 47 41 6 14.6 % 171 161
10 6.2 % Adjusted selling, general, and
administrative expenses $ 102 $ 79 $ 23 29.1 %
$ 340 $ 299 $ 41 13.7 % (b) Corporate and
other includes vacation ownership expenses of $0 and $7 million for
the three months ended December 31, 2014 and 2013, respectively,
and $24 million and $30 million for the year ended December 31,
2014 and 2013, respectively. (c) Adjusted selling, general, and
administrative expenses include $22 million of nonrecurring stock
based compensation expense, of which $4 million relates to Americas
management and franchising, $1 million relates to ASPAC management
and franchising, $1 million relates to EAME/SW Asia management and
$16 million relates to Corporate and other.
Page 10
Hyatt Hotels Corporation Reconciliation of Non-GAAP to GAAP
Measure: Comparable Owned and Leased Hotels Operating Margin to
Owned and Leased Hotels Operating Margin Below is a breakdown of
consolidated owned and leased hotels revenues and expenses, as used
in calculating comparable owned and leased hotels operating margin
percentages. Results of operations as presented on consolidated
statements of income include the impact of expenses recognized with
respect to employee benefit programs funded through rabbi trusts.
Certain of these expenses are recognized in owned and leased hotels
expenses and are completely offset by the corresponding net gains
and interest income from marketable securities held to fund
operating programs, thus having no net impact to our earnings.
Below is a reconciliation of this account excluding the impact of
our rabbi trusts and excluding the impact of non-comparable hotels.
(in millions)
Three Months EndedDecember 31,
Year EndedDecember 31,
2014 2013 Change ($) Change (%)
2014 2013 Change ($) Change (%)
Revenue Comparable owned and leased hotels $ 415 $ 415 $ — — % $
1,645 $ 1,591 $ 54 3.4 % Non-comparable owned and leased hotels 136
142 (6 ) (4.2 )% 601 551 50 9.1
% Owned and leased hotels revenue $ 551 $ 557 $ (6 )
(1.1 )% $ 2,246 $ 2,142 $ 104 4.9 %
Expenses Comparable owned and leased hotels $ 326 $ 324 $ 2 0.6 % $
1,268 $ 1,237 $ 31 2.5 % Non-comparable owned and leased hotels 97
98 (1 ) (1.0 )% 420 381 39 10.2 % Rabbi trust 1 4 (3
) (75.0 )% 3 11 (8 ) (72.7 )% Owned and leased hotels
expense $ 424 $ 426 $ (2 ) (0.5 )% $ 1,691 $
1,629 $ 62 3.8 % Owned and leased hotels
operating margin percentage 23.0 % 23.5 % (0.5 )% 24.7 % 23.9 % 0.8
% Comparable owned and leased hotels operating margin
percentage 21.4 % 21.9 % (0.5 )% 22.9 % 22.3 % 0.6 %
Page 11
Hyatt Hotels Corporation Net Gains and Interest Income From
Marketable Securities Held to Fund Operating Programs The table
below provides a reconciliation of net gains and interest income
from marketable securities held to fund operating programs, all of
which are completely offset within other line items of our
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 or 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 hotels revenues. The table below
shows the amounts recorded to the respective offsetting account.
(in millions)
Three Months Ended December
31,
Year Ended December 31,
2014 2013 Change ($)
Change (%) 2014 2013 Change ($)
Change (%) Rabbi trust impact allocated to selling, general,
and administrative expenses $ 3 $ 8 $ (5 ) (62.5 )% $ 9 $ 24 $ (15
) (62.5 )% Rabbi trust impact allocated to owned and leased hotels
expense 1 4 (3 ) (75.0 )% 3 11 (8 ) (72.7 )% Net gains (losses) and
interest income from marketable securities held to fund our Gold
Passport program allocated to owned and leased hotels revenue 2
— 2 100.0 % 3 (1 ) 4 400.0 % Net
gains and interest income from marketable securities held to fund
operating programs $ 6 $ 12 $ (6 ) (50.0 )% $ 15
$ 34 $ (19 ) (55.9 )%
Page 12
Hyatt Hotels Corporation
Capital Expenditures and Investment
Spending Summary
(in millions)
Three Months EndedDecember 31,
Year EndedDecember 31, 2014 2013
2014 2013 Capital Expenditures Maintenance $
38 $ 27 $ 102 $ 90 Enhancements to existing properties 24 41 72 81
Investment in new properties 23 14 79 61 Total
$ 85 $ 82 $ 253 $ 232
Three Months
EndedDecember 31, Year EndedDecember 31,
Investment Spending
2014 2013 2014 2013
Acquisitions, net of cash acquired $ 157 $ 729 $ 739 $ 814
Investments (equity, debt and other) 18 25 146
462 Total $ 175 $ 754 $ 885 $ 1,276
Page 13
Hyatt Hotels Corporation
Properties and Rooms / Units by
Geography
Owned and leased hotels (a)
December 31, 2014 September 30,
2014 December 31, 2013 QTD Change YTD
Change Properties Rooms/Units
Properties Rooms/Units Properties
Rooms/Units Properties Rooms/Units
Properties Rooms/Units Full service hotels United
States 27 15,914 27 15,639 27 15,498 — 275 — 416 Other Americas 2
1,112 4 2,102 4 2,102 (2) (990) (2) (990) ASPAC 1 601 1 601 1 601 —
— — — EAME/SW Asia 10 2,256 10 2,256 11 2,438 — — (1) (182) Select
service hotels United States 2 329 45 5,910 54 7,400 (43) (5,581)
(52) (7,071) EAME/SW Asia 1 330 1 330 — — — — 1 330 Total owned and
leased hotels 43 20,542 88 26,838 97 28,039 (45) (6,296) (54)
(7,497)
(a) Owned and leased hotels figures do not include
unconsolidated hospitality ventures.
Page 14
Hyatt Hotels Corporation
Properties and Rooms / Units by
Geography
Managed and franchised hotels (includes
owned and leased hotels)
December 31, 2014 September 30, 2014
December 31, 2013 QTD Change YTD Change
Properties Rooms/Units Properties
Rooms/Units Properties Rooms/Units
Properties Rooms/Units Properties
Rooms/Units Americas Full service hotels United States
managed 102 55,617 102 55,612 101 55,368 — 5 1 249 Other Americas
managed 15 5,660 15 5,660 16 5,953 — — (1) (293) Franchised 34
10,416 33 10,294 33 10,190 1 122 1 226 Subtotal 151 71,693 150
71,566 150 71,511 1 127 1 182 Select service hotels United
States managed 51 7,102 96 12,975 96 12,979 (45) (5,873) (45)
(5,877) Other Americas managed 6 893 4 588 2 277 2 305 4 616
Franchised 212 28,573 162 22,060 150 20,263 50 6,513 62 8,310
Subtotal 269 36,568 262 35,623 248 33,519 7 945 21 3,049
ASPAC Full service hotels ASPAC managed 64 23,954 62 23,278 57
21,429 2 676 7 2,525 ASPAC franchised 2 988 2 988 2 988
—
— — 0 Subtotal 66 24,942 64 24,266 59 22,417 2 676 7 2,525
Select service hotels ASPAC managed 1 144 1 144 — — — — 1 144
Subtotal 1 144 1 144 — — — —
1
144 EAME/SW Asia Full service hotels EAME managed 35 9,147
36 9,250 36 9,337 (1) (103) (1) (190) SW Asia managed 28 7,685 28
7,678 26 7,405 — 7 2 280 Subtotal 63 16,832 64 16,928 62 16,742 (1)
(96) 1 90 Select service hotels EAME managed 2 425 2 425 1
95 — — 1 330 SW Asia managed 3 501 2 325 1 115 1 176 2 386 Subtotal
5 926 4 750 2 210 1 176 3 716 Total managed and franchised
hotels 555 151,105 545 149,277 521 144,399 10 1,828 34 6,706
All Inclusive 5 1,881 2 926 2 925 3 955 3 956 Vacation ownership 16
1,094 15 963 15 963 1 131 1 131 Residential 11 1,185 11 1,185 10
1,101 — — 1 84
Total properties and rooms/units 587 155,265
573 152,351 548 147,388 14 2,914 39 7,877
Page 15
Hyatt Hotels Corporation
Properties and Rooms / Units by Brand
December 31, 2014 September 30,
2014 December 31, 2013 QTD Change
YTD Change
Brand
Properties Rooms/Units Properties
Rooms/Units Properties
Rooms/Units Properties
Rooms/Units Properties
Rooms/Units Park Hyatt 34 6,725 34 6,728 33 6,535
—
(3 ) 1 190 Andaz 12 2,433 12 2,433 11 2,269
—
—
1 164 Hyatt 41 9,205 39 8,713 38 8,609 2 492 3 596 Grand Hyatt 43
23,974 42 23,662 40 22,262 1 312 3 1,712 Hyatt Regency 150 71,130
151 71,224 149 70,995 (1 ) (94 ) 1 135 Hyatt Place 216 29,357 209
28,362 192 25,575 7 995 24 3,782 Hyatt House 59 8,281 58 8,155 58
8,154 1 126 1 127 Hyatt Ziva 3 1,340 1 619 1 619 2 721 2 721 Hyatt
Zilara 2 541 1 307 1 306 1 234 1 235 Vacation Ownership and
Residential 27 2,279 26 2,148 25 2,064 1 131 2 215 Total 587
155,265 573 152,351 548 147,388 14 2,914 39 7,877
Page 16
Hyatt Hotels Corporation
Owned and Leased Hotels Mix by Market and
Brand
Owned and Leased Hotels Adjusted EBITDA Mix
by Market Segment
% of 2014 Earnings (a)
Top 10 U.S. Markets (b)
% of 2014 Earnings (a)
Top 5 International
Markets
% of 2014 Earnings (a)
Americas 85% Orlando, FL 14% Switzerland 5% EAME/SW Asia 12% New
York, NY 9% Canada 4% ASPAC 3% San Antonio, TX 8% Mexico 4%
Atlanta, GA 5% United Kingdom 3% San Francisco/San Mateo, CA 5%
Aruba 3% Phoenix, AZ 3% Los Angeles/Long Beach, CA 3% Austin, TX 2%
Lake Tahoe, NV 2% Fort Myers, FL 2%
Total Top 10
53% Total Top 5 19% Other U.S. 22%
Other International 6%
Total 100% Total U.S.
75% Total International 25%
Owned and Leased Hotels Adjusted EBITDA Mix by Brand
Brand
% of 2014 Earnings (a)
Park Hyatt, Andaz, Grand Hyatt 35% Hyatt Regency, Hyatt 54% Hyatt
Place, Hyatt House 11%
Total 100% (a) Earnings
represent 2014 owned and leased hotels Adjusted EBITDA of $442
million. (b) Markets are defined according to Smith Travel Research
market definitions.
Page 17
Hyatt Hotels Corporation
Executed Contract Base Approximate Mix
(Total executed contract base:
approximately 250 hotels or approximately 55,000 rooms)
As of December 31, 2014 Approx. Hotels
Approx. Rooms Region Americas 100 18,000 ASPAC
80 21,000 EAME/SW Asia 70 16,000
Total 250
55,000 Market U.S. 75 12,000 China 65 17,000
India 30 6,000 Other 80 20,000
Total 250
55,000 Brand Park Hyatt, Andaz, Grand Hyatt 40
13,000 Hyatt Regency, Hyatt, Hyatt Ziva, Hyatt Zilara 65 19,000
Hyatt Place, Hyatt House 145 23,000
Total 250
55,000 Ownership / Contract Type Owned, Leased
and Unconsolidated Hospitality Ventures 20 5,000 Managed 160 39,000
Franchised 70 11,000
Total 250 55,000
Page 18
Hyatt Hotels Corporation
Year-over-Year Net Impact of Portfolio
Changes to Owned and Leased Hotels Adjusted EBITDA (a)
For the Three Months Ended
December 31, 2014
(in millions)
Rooms
Transaction / Opening
Date
4Q14 Adjusted EBITDA
Impact
Dispositions (b) Hyatt Key West Resort and Spa
118 4Q13 10 Hyatt House, Hyatt Place and Hyatt Hotels 1,560 1Q14
Park Hyatt Washington 216 4Q14 Hyatt Regency Vancouver 644 4Q14
Park Hyatt Toronto 346 4Q14 38 Select Service Hotels 4,950 4Q14 5
Select Service Hotels 631 4Q14
Year-over-Year Net
Impact of Dispositions to Owned and Leased Hotels Adjusted
EBITDA $ (14 )
Acquisitions or Openings (c)
Hyatt Regency Orlando 1,641 4Q13 Grand Hyatt San Antonio
1,003 4Q13 Hyatt Place Omaha Downtown Old Market 159 4Q13 Hyatt
Place Amsterdam Airport 330 1Q14 Park Hyatt New York 210 3Q14 Hyatt
Regency Lost Pines Resort and Spa 491 4Q14
Year-over-Year Net Impact of Acquisitions and Openings to Owned
and Leased Hotels Adjusted EBITDA $ 13
Year-over-Year Net Impact of Dispositions, Acquisitions and
Openings to Owned and Leased Hotels Adjusted EBITDA $
(1 ) (a) Excludes pro rata share of
unconsolidated hospitality ventures. (b) Reflects 2013 Adjusted
EBITDA for recently completed dispositions. (c) Reflects 2014
Adjusted EBITDA for recently completed acquisitions or openings.
Page 19
Hyatt Hotels CorporationInvestors:Atish Shah,
312-780-5427atish.shah@hyatt.comorMedia:Amy Patti,
312-780-5620amy.patti@hyatt.com
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