Hyatt Hotels Corporation ("Hyatt" or the "Company") (NYSE: H)
today reported financial results as follows:
o 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%.
o 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.
o 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.
o 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.
o 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.
o 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.
o Five properties were opened during the third quarter of 2012.
o 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 noncomparable
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:
o Hyatt Place Delray Beach (franchised, 134 rooms)
o Hyatt Place San Diego/Vista-Carlsbad (franchised, 150 rooms)
o 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:
o Hyatt Regency Chongqing (managed, 321 rooms)
o 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:
o Maintenance: $21 million
o Enhancements to existing properties: $30 million
o 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 highlyrated
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:
o Adjusted SG&A expense is expected to be approximately $305 million.
o Capital expenditures are expected to be approximately $340 million.
o Depreciation and amortization expense is expected to be approximately $355 million.
o Interest expense is expected to be approximately $70 million.
o The Company expects to open over 20 hotels in 2012.
