x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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20-1480589
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(State or Other Jurisdiction of
Incorporation or Organization)
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(I.R.S. Employer
Identification No.)
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150 North Riverside Plaza 8th Floor, Chicago, Illinois
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60606
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(Address of Principal Executive Offices)
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(Zip Code)
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Large accelerated filer
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x
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Accelerated filer
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¨
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Non-accelerated filer
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¨
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Smaller reporting company
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¨
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Emerging growth company
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¨
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PART I – FINANCIAL INFORMATION
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|
Item 1.
|
||
Item 2.
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||
Item 3.
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||
Item 4.
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||
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PART II – OTHER INFORMATION
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Item 1.
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||
Item 1A.
|
||
Item 2.
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||
Item 3.
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||
Item 4.
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||
Item 5.
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||
Item 6.
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||
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Three Months Ended
|
||||||
|
March 31, 2018
|
|
March 31, 2017
|
||||
REVENUES:
|
|
|
|
||||
Owned and leased hotels
|
$
|
515
|
|
|
$
|
569
|
|
Management, franchise, and other fees
|
132
|
|
|
114
|
|
||
Amortization of management and franchise agreement assets constituting payments to customers
|
(5
|
)
|
|
(4
|
)
|
||
Net management, franchise, and other fees
|
127
|
|
|
110
|
|
||
Other revenues
|
11
|
|
|
17
|
|
||
Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties
|
456
|
|
|
430
|
|
||
Total revenues
|
1,109
|
|
|
1,126
|
|
||
DIRECT AND SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES:
|
|
|
|
||||
Owned and leased hotels
|
384
|
|
|
424
|
|
||
Depreciation and amortization
|
83
|
|
|
87
|
|
||
Other direct costs
|
8
|
|
|
16
|
|
||
Selling, general, and administrative
|
95
|
|
|
99
|
|
||
Costs incurred on behalf of managed and franchised properties
|
460
|
|
|
445
|
|
||
Direct and selling, general, and administrative expenses
|
1,030
|
|
|
1,071
|
|
||
Net gains and interest income from marketable securities held to fund rabbi trusts
|
3
|
|
|
15
|
|
||
Equity losses from unconsolidated hospitality ventures
|
(13
|
)
|
|
(3
|
)
|
||
Interest expense
|
(19
|
)
|
|
(21
|
)
|
||
Gains on sales of real estate
|
529
|
|
|
—
|
|
||
Other income (loss), net
|
(18
|
)
|
|
43
|
|
||
INCOME BEFORE INCOME TAXES
|
561
|
|
|
89
|
|
||
PROVISION FOR INCOME TAXES
|
(150
|
)
|
|
(34
|
)
|
||
NET INCOME
|
411
|
|
|
55
|
|
||
NET INCOME AND ACCRETION ATTRIBUTABLE TO NONCONTROLLING INTERESTS
|
—
|
|
|
—
|
|
||
NET INCOME ATTRIBUTABLE TO HYATT HOTELS CORPORATION
|
$
|
411
|
|
|
$
|
55
|
|
EARNINGS PER SHARE
—
Basic
|
|
|
|
||||
Net income
|
$
|
3.47
|
|
|
$
|
0.43
|
|
Net income attributable to Hyatt Hotels Corporation
|
$
|
3.47
|
|
|
$
|
0.43
|
|
EARNINGS PER SHARE
—
Diluted
|
|
|
|
||||
Net income
|
$
|
3.40
|
|
|
$
|
0.42
|
|
Net income attributable to Hyatt Hotels Corporation
|
$
|
3.40
|
|
|
$
|
0.42
|
|
CASH DIVIDENDS DECLARED PER SHARE
|
$
|
0.15
|
|
|
$
|
—
|
|
|
Three Months Ended
|
||||||
|
March 31, 2018
|
|
March 31, 2017
|
||||
Net income
|
$
|
411
|
|
|
$
|
55
|
|
Other comprehensive income, net of taxes:
|
|
|
|
||||
Foreign currency translation adjustments, net of tax expense of $- for each of the three months ended March 31, 2018 and March 31, 2017
|
23
|
|
|
41
|
|
||
Unrealized gains on available-for-sale debt securities, net of tax expense of $- for each of the three months ended March 31, 2018 and March 31, 2017, and unrealized gains on available-for-sale equity securities, net of tax expense of $21 for the three months ended March 31, 2017
|
—
|
|
|
34
|
|
||
Other comprehensive income
|
23
|
|
|
75
|
|
||
COMPREHENSIVE INCOME
|
434
|
|
|
130
|
|
||
COMPREHENSIVE INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS
|
—
|
|
|
—
|
|
||
COMPREHENSIVE INCOME ATTRIBUTABLE TO HYATT HOTELS CORPORATION
|
$
|
434
|
|
|
$
|
130
|
|
|
Three Months Ended
|
||||||
|
March 31, 2018
|
|
March 31, 2017
|
||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
||||
Net income
|
$
|
411
|
|
|
$
|
55
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Gains on sales of real estate
|
(529
|
)
|
|
—
|
|
||
Depreciation and amortization
|
83
|
|
|
87
|
|
||
Deferred income taxes
|
(10
|
)
|
|
(16
|
)
|
||
Equity losses from unconsolidated hospitality ventures
|
13
|
|
|
3
|
|
||
Realized losses
|
1
|
|
|
41
|
|
||
Working capital changes and other
|
85
|
|
|
(29
|
)
|
||
Net cash provided by operating activities
|
54
|
|
|
141
|
|
||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
||||
Purchases of marketable securities and short-term investments
|
(97
|
)
|
|
(111
|
)
|
||
Proceeds from marketable securities and short-term investments
|
104
|
|
|
119
|
|
||
Contributions to equity method and other investments
|
(10
|
)
|
|
(8
|
)
|
||
Return of equity method and other investments
|
12
|
|
|
200
|
|
||
Acquisitions, net of cash acquired
|
—
|
|
|
(245
|
)
|
||
Capital expenditures
|
(60
|
)
|
|
(50
|
)
|
||
Proceeds from sales of real estate, net of cash disposed
|
992
|
|
|
—
|
|
||
Other investing activities
|
(6
|
)
|
|
(1
|
)
|
||
Net cash provided by (used in) investing activities
|
935
|
|
|
(96
|
)
|
||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
||||
Proceeds from debt
|
20
|
|
|
180
|
|
||
Repayments of debt
|
(21
|
)
|
|
(3
|
)
|
||
Repurchases of common stock
|
(75
|
)
|
|
(348
|
)
|
||
Proceeds from redeemable noncontrolling interest in preferred shares in a subsidiary
|
—
|
|
|
9
|
|
||
Repayments of redeemable noncontrolling interest in preferred shares in a subsidiary
|
(10
|
)
|
|
—
|
|
||
Dividends paid
|
(18
|
)
|
|
—
|
|
||
Other financing activities
|
(5
|
)
|
|
(4
|
)
|
||
Net cash used in financing activities
|
(109
|
)
|
|
(166
|
)
|
||
EFFECT OF EXCHANGE RATE CHANGES ON CASH
|
(3
|
)
|
|
1
|
|
||
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH
|
877
|
|
|
(120
|
)
|
||
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH—BEGINNING OF YEAR
|
752
|
|
|
573
|
|
||
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH—END OF PERIOD
|
$
|
1,629
|
|
|
$
|
453
|
|
|
Three months ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Cash paid during the period for interest
|
$
|
35
|
|
|
$
|
37
|
|
Cash paid during the period for income taxes
|
$
|
10
|
|
|
$
|
10
|
|
Non-cash investing and financing activities are as follows:
|
|
|
|
||||
Non-cash contributions to equity method investments
|
$
|
4
|
|
|
$
|
—
|
|
Change in accrued capital expenditures
|
$
|
1
|
|
|
$
|
17
|
|
|
|
|
|
•
|
Owned and leased hotels revenues:
|
•
|
Owned and leased hotels revenues are derived from room rentals and services provided at our owned and leased properties and are recognized over time as rooms are occupied and when services are rendered. We present revenue net of sales, occupancy, and other taxes. Taxes collected on behalf of and remitted to governmental taxing authorities are excluded from the
|
•
|
Management, franchise, and other fees:
|
•
|
Management fees primarily consist of a base fee, which is generally computed as a percentage of gross revenues, and an incentive fee, which is generally computed based on a hotel profitability measure. Management fees are recognized over time as services are performed. Additionally, we recognize royalty fees as owners derive value from access to Hyatt’s intellectual property ("IP"). Incentive fees may be subject to minimum annual profitability thresholds, and we recognize incentive fee revenues over time as services are rendered only to the extent that a significant reversal is not probable.
|
•
|
Franchise fees consist of an initial fee and ongoing royalty fees calculated based on a percentage of gross room revenues and, as applicable, food and beverage revenues. Royalty fees are recognized over time as franchisees derive value from the license to Hyatt's IP, including Hyatt's brand names. Initial fees are deferred and recognized over the expected customer life, which is typically the initial term of the franchise agreement.
|
•
|
Management, franchise, and other fees include license fees revenue associated with the licensing of the Hyatt brand name through our co-branded credit card program. License fee revenue is recognized over time as the licensee derives value from access to Hyatt’s brand names.
|
•
|
Net management, franchise, and other fees are reduced by the amortization of management and franchise agreement assets constituting payments to customers ("Contra Revenue"). Consideration provided to customers is recognized in other assets and amortized over the expected customer life, which is typically the initial term of the management or franchise agreement.
|
•
|
Other revenues:
|
•
|
Other revenues include revenues from the sale of promotional awards through our co-branded credit card and spa and fitness revenues from exhale. We recognize the revenue from our co-branded credit card upon the fulfillment or expiration of a card member's promotional awards. Revenue is recognized net of expenses incurred to fulfill the promotional award as we are deemed to be the agent in the transaction. Spa and fitness revenue is recognized at the point in time the products or services are provided to the customer.
|
•
|
Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties:
|
•
|
Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties represent the reimbursement of costs incurred on behalf of the owners of properties. These costs relate primarily to payroll costs at managed properties where we are the employer, as well as costs associated with reservations, sales, marketing, technology (collectively, "systemwide services"), and the loyalty program operated on behalf of owners of managed and franchised properties. Hyatt is reimbursed for costs incurred based on the terms of the contracts, and revenue is recognized as the underlying performance obligations are satisfied.
|
•
|
Equity securities consist of interest bearing money market funds, mutual funds, common shares, and preferred shares. Equity securities with a readily determinable fair value are recorded at fair value on our condensed consolidated balance sheets based on listed market prices or dealer quotations where available. Equity investments without a readily determinable fair value are recognized at cost less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for the identical or similar investment of the same issuer.
|
•
|
Our investments in debt securities consist of various types including preferred shares, time deposits, and fixed income securities, including U.S. government obligations, obligations of other government agencies, corporate debt, mortgage-backed and asset-backed securities, and municipal and provincial notes and bonds. Debt securities are classified as either trading, available for sale ("AFS"), or held to maturity ("HTM").
|
•
|
Trading securities—recorded at fair value based on listed market prices or dealer price quotations where available. Net gains and losses on trading securities are reflected in net gains and interest income from marketable securities held to fund rabbi trusts or other income (loss), net, depending on the nature of the investment, on our condensed consolidated statements of income.
|
•
|
AFS securities—recorded at fair value based on listed market prices or dealer price quotations, where available. Unrealized gains and losses on AFS debt securities are recognized in accumulated other comprehensive loss on our condensed consolidated balance sheets. Realized gains and losses on debt securities are recognized in other income (loss), net on our condensed consolidated statements of income.
|
•
|
HTM securities—debt security investments which we have the ability to hold until maturity and are recorded at amortized cost.
|
|
Three Months Ended March 31,
|
||
Increase/(decrease)
|
2017
|
||
Operating activities
|
$
|
(6
|
)
|
Investing activities
|
(5
|
)
|
|
Financing activities
|
(1
|
)
|
|
Cash, cash equivalents, and restricted cash - beginning of year
|
91
|
|
|
Cash, cash equivalents, and restricted cash - end of period
|
$
|
79
|
|
|
Three Months Ended March 31, 2017
|
||||||||||
|
As Reported
|
|
Effect of the adoption of
ASU 2014-09 |
|
As Adjusted
|
||||||
REVENUES:
|
|
|
|
|
|
||||||
Owned and leased hotels
|
$
|
572
|
|
|
$
|
(3
|
)
|
|
$
|
569
|
|
Management, franchise, and other fees
|
122
|
|
|
(8
|
)
|
|
114
|
|
|||
Amortization of management and franchise agreement assets constituting payments to customers
|
—
|
|
|
(4
|
)
|
|
(4
|
)
|
|||
Net management, franchise, and other fees
|
122
|
|
|
(12
|
)
|
|
110
|
|
|||
Other revenues
|
22
|
|
|
(5
|
)
|
|
17
|
|
|||
Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties
|
471
|
|
|
(41
|
)
|
|
430
|
|
|||
Total revenues
|
1,187
|
|
|
(61
|
)
|
|
1,126
|
|
|||
DIRECT AND SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES:
|
|
|
|
|
|
||||||
Owned and leased hotels
|
427
|
|
|
(3
|
)
|
|
424
|
|
|||
Depreciation and amortization
|
91
|
|
|
(4
|
)
|
|
87
|
|
|||
Other direct costs
|
19
|
|
|
(3
|
)
|
|
16
|
|
|||
Selling, general, and administrative
|
99
|
|
|
—
|
|
|
99
|
|
|||
Costs incurred on behalf of managed and franchised properties
|
471
|
|
|
(26
|
)
|
|
445
|
|
|||
Direct and selling, general, and administrative expenses
|
1,107
|
|
|
(36
|
)
|
|
1,071
|
|
|||
Net gains and interest income from marketable securities held to fund rabbi trusts
|
15
|
|
|
—
|
|
|
15
|
|
|||
Equity losses from unconsolidated hospitality ventures
|
(3
|
)
|
|
—
|
|
|
(3
|
)
|
|||
Interest expense
|
(21
|
)
|
|
—
|
|
|
(21
|
)
|
|||
Other income (loss), net
|
40
|
|
|
3
|
|
|
43
|
|
|||
INCOME BEFORE INCOME TAXES
|
111
|
|
|
(22
|
)
|
|
89
|
|
|||
PROVISION FOR INCOME TAXES
|
(41
|
)
|
|
7
|
|
|
(34
|
)
|
|||
NET INCOME
|
70
|
|
|
(15
|
)
|
|
55
|
|
|||
NET INCOME AND ACCRETION ATTRIBUTABLE TO NONCONTROLLING INTERESTS
|
—
|
|
|
—
|
|
|
—
|
|
|||
NET INCOME ATTRIBUTABLE TO HYATT HOTELS CORPORATION
|
$
|
70
|
|
|
$
|
(15
|
)
|
|
$
|
55
|
|
EARNINGS PER SHARE—Basic
|
|
|
|
|
|
||||||
Net income
|
$
|
0.54
|
|
|
$
|
(0.11
|
)
|
|
$
|
0.43
|
|
Net income attributable to Hyatt Hotels Corporation
|
$
|
0.54
|
|
|
$
|
(0.11
|
)
|
|
$
|
0.43
|
|
EARNINGS PER SHARE—Diluted
|
|
|
|
|
|
||||||
Net income
|
$
|
0.54
|
|
|
$
|
(0.12
|
)
|
|
$
|
0.42
|
|
Net income attributable to Hyatt Hotels Corporation
|
$
|
0.54
|
|
|
$
|
(0.12
|
)
|
|
$
|
0.42
|
|
•
|
Management and Franchise Agreements:
|
•
|
License to Hyatt’s IP, including the Hyatt brand names
—We receive variable consideration from third-party hotel owners in exchange for providing access to our IP, including the Hyatt brand names. The license represents a license of symbolic IP and in exchange for providing the license, Hyatt receives sales-based royalty fees. Royalty fees are generally determined based on a percentage of gross revenues for managed hotels and are generally included in the hotel management fee. Royalty fees for franchised hotels are based on a percentage of gross room revenues and, as applicable, food and beverage revenues. Fees are generally payable on a monthly basis as the third-party hotel owners derive value from access to our IP. Royalty fees are recognized over time through management, franchise, and other fees as services are rendered. Under our franchise agreements, we also receive initial fees from third-party hotel owners. The initial fees do not relate to a distinct performance obligation and, therefore, are combined with the royalty fees and recognized through management, franchise, and other fees over the expected customer life, which is typically the initial term of the agreement.
|
•
|
Systemwide services
—We provide sales, reservations, technology, and marketing services on behalf of owners of managed and franchised properties. The promise to provide systemwide services is not a distinct performance obligation because it is attendant to the license of our IP. Therefore, the promise to provide systemwide services is combined with the license of our IP to form a single performance obligation. We have two accounting models depending on the terms of the agreement:
|
•
|
Cost reimbursement model
—Third-party hotel owners are required to reimburse us for all costs incurred to operate the systemwide programs with no added margin. The reimbursements are recognized over time within revenues for the reimbursement of costs incurred on behalf of managed and franchised properties. We have discretion over how we spend program revenues and, therefore, we are the principal with respect to the promise to provide systemwide services. Expenses incurred related to our sales, reservations, technology, and marketing programs are recognized within costs incurred on behalf of managed and franchised properties. The reimbursement of systemwide services is billed on a monthly basis based upon an annual estimate of costs to be incurred and are recognized as revenue commensurate with incurring the cost. To the extent that actual costs vary from estimated costs, a true-up billing or refund is issued to the hotels. Any amounts collected and not yet recognized as revenues are deferred and recognized as contract liabilities. Any costs incurred in excess of revenues collected are recognized as receivables.
|
•
|
Fund model
—Third-party hotel owners are invoiced a systemwide assessment fee primarily based on a percentage of hotel revenues on a monthly basis. We recognize the revenues over time as services are provided through revenues for the reimbursement of costs incurred on behalf of managed and franchised properties. We have discretion over how we spend program revenues and, therefore, we are the principal with respect to systemwide services. Expenses related to the sales, reservations, technology, and marketing programs are recognized as incurred through costs incurred on behalf of managed and franchised properties. Over time, we manage the systemwide programs to break-even, but the timing of the revenue received from the owners may not align with the timing of the expenses to operate the programs and, therefore, the difference between the revenues and expenses may impact our net income.
|
•
|
Hotel management agreement services
—We provide hotel management agreement services, which form a single performance obligation that qualifies as a series, under the terms of our management agreements. In exchange for providing these services, we receive variable
|
•
|
Loyalty program administration
—We administer a loyalty program for the benefit of the Hyatt portfolio of properties owned, managed, franchised, or licensed by us. Under the program, members earn loyalty points that can be redeemed for future products and services. Points earned by loyalty program members represent a material right to free or discounted goods or services in the future.
|
•
|
Room rentals and other services provided at owned and leased hotels
—We provide room rentals and other services to our guests, including but not limited to spa, laundry, and parking. These products and services each represent individual performance obligations and, in exchange for these services, we receive fixed amounts based on published rates or negotiated contracts. Payment is due in full at the time the services are rendered or the goods are provided. If a guest enters into a package including multiple goods or services, the fixed price is allocated to each distinct good or service based on the stand-alone selling price for each item. Revenue is recognized over time within owned and leased hotels revenues when we transfer control of the good or service to the customer. Room rental revenue is recognized on a daily basis as the guest occupies the room, and revenue related to other products and services is recognized when the product or service is provided to the guest.
|
•
|
Spa and fitness services
—Exhale spa and fitness studios provide guests with spa and fitness services as well as retail products in exchange for fixed consideration. Each spa and fitness service represents an individual performance obligation. Payment is due in full and revenue is recognized at the point in time the services are rendered or the products are delivered. If a guest purchases a spa or fitness package, the fixed price is allocated to each distinct product or service based on the published stand-alone selling price for each item and revenues are recognized as the services are rendered.
|
•
|
Co-branded credit card
—We have a co-branded credit card agreement with a third party and under the terms of the agreement, we have various performance obligations: granting a license to the Hyatt name, arranging for the fulfillment of points issued to cardholders through the loyalty program, and awarding cardholders with free room nights upon achievement of certain program milestones. The loyalty points and free room nights represent material rights that can be redeemed for free or discounted services in the future.
|
•
|
revenues and operating profits earned by the hotels during the reporting period for access to Hyatt’s IP and brand names, as they are indicative of the value third-party owners derive;
|
•
|
underlying revenues and operating profits of the hotels for the promise to provide management agreement services to the hotels;
|
•
|
award night redemptions for the administration of the loyalty program performance obligation; and
|
•
|
cardholder spend for the license to our brand name through our co-branded credit card, as it is indicative of the value our partner derives from the use of our name.
|
|
Three months ended March 31, 2018
|
||||||||||||||||||||
Disaggregated revenue stream
|
Owned and leased hotels
|
Americas management and franchising
|
ASPAC management and franchising
|
EAME/SW Asia management and franchising
|
Corporate and other
|
Eliminations
|
Total
|
||||||||||||||
Rooms revenues
|
$
|
297
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
7
|
|
$
|
(9
|
)
|
$
|
295
|
|
Food and beverage
|
172
|
|
—
|
|
—
|
|
—
|
|
2
|
|
—
|
|
174
|
|
|||||||
Other
|
38
|
|
—
|
|
—
|
|
—
|
|
8
|
|
—
|
|
46
|
|
|||||||
Owned and leased hotels
|
507
|
|
—
|
|
—
|
|
—
|
|
17
|
|
(9
|
)
|
515
|
|
|||||||
|
|
|
|
|
|
|
|
||||||||||||||
Base management fees
|
—
|
|
49
|
|
11
|
|
7
|
|
—
|
|
(14
|
)
|
53
|
|
|||||||
Incentive management fees
|
—
|
|
13
|
|
17
|
|
10
|
|
—
|
|
(6
|
)
|
34
|
|
|||||||
Franchise fees
|
—
|
|
28
|
|
—
|
|
—
|
|
—
|
|
—
|
|
28
|
|
|||||||
Other fees
|
—
|
|
8
|
|
2
|
|
1
|
|
1
|
|
—
|
|
12
|
|
|||||||
License fees
|
—
|
|
—
|
|
—
|
|
—
|
|
5
|
|
—
|
|
5
|
|
|||||||
Management, franchise, and other fees
|
—
|
|
98
|
|
30
|
|
18
|
|
6
|
|
(20
|
)
|
132
|
|
|||||||
Contra revenue
|
—
|
|
(3
|
)
|
(1
|
)
|
(1
|
)
|
—
|
|
—
|
|
(5
|
)
|
|||||||
Net management, franchise, and other fees
|
—
|
|
95
|
|
29
|
|
17
|
|
6
|
|
(20
|
)
|
127
|
|
|||||||
|
|
|
|
|
|
|
|
||||||||||||||
Other revenues
|
—
|
|
—
|
|
—
|
|
—
|
|
9
|
|
2
|
|
11
|
|
|||||||
|
|
|
|
|
|
|
|
||||||||||||||
Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties
|
—
|
|
420
|
|
20
|
|
16
|
|
—
|
|
—
|
|
456
|
|
|||||||
|
|
|
|
|
|
|
|
||||||||||||||
Total
|
$
|
507
|
|
$
|
515
|
|
$
|
49
|
|
$
|
33
|
|
$
|
32
|
|
$
|
(27
|
)
|
$
|
1,109
|
|
|
Three months ended March 31, 2017
|
||||||||||||||||||||
Disaggregated revenue stream
|
Owned and leased hotels
|
Americas management and franchising
|
ASPAC management and franchising
|
EAME/SW Asia management and franchising
|
Corporate and other
|
Eliminations
|
Total
|
||||||||||||||
Rooms revenues
|
$
|
326
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
6
|
|
$
|
(9
|
)
|
$
|
323
|
|
Food and beverage
|
195
|
|
—
|
|
—
|
|
—
|
|
3
|
|
—
|
|
198
|
|
|||||||
Other
|
41
|
|
—
|
|
—
|
|
—
|
|
7
|
|
—
|
|
48
|
|
|||||||
Owned and leased hotels
|
562
|
|
—
|
|
—
|
|
—
|
|
16
|
|
(9
|
)
|
569
|
|
|||||||
|
|
|
|
|
|
|
|
||||||||||||||
Base management fees
|
—
|
|
48
|
|
9
|
|
6
|
|
—
|
|
(16
|
)
|
47
|
|
|||||||
Incentive management fees
|
—
|
|
12
|
|
14
|
|
9
|
|
—
|
|
(5
|
)
|
30
|
|
|||||||
Franchise fees
|
—
|
|
25
|
|
1
|
|
—
|
|
—
|
|
—
|
|
26
|
|
|||||||
Other fees
|
—
|
|
5
|
|
1
|
|
1
|
|
—
|
|
—
|
|
7
|
|
|||||||
License fees
|
—
|
|
—
|
|
—
|
|
—
|
|
4
|
|
—
|
|
4
|
|
|||||||
Management, franchise, and other fees
|
—
|
|
90
|
|
25
|
|
16
|
|
4
|
|
(21
|
)
|
114
|
|
|||||||
Contra revenue
|
—
|
|
(3
|
)
|
—
|
|
(1
|
)
|
—
|
|
—
|
|
(4
|
)
|
|||||||
Net management, franchise, and other fees
|
—
|
|
87
|
|
25
|
|
15
|
|
4
|
|
(21
|
)
|
110
|
|
|||||||
|
|
|
|
|
|
|
|
||||||||||||||
Other revenues
|
13
|
|
—
|
|
—
|
|
—
|
|
2
|
|
2
|
|
17
|
|
|||||||
|
|
|
|
|
|
|
|
||||||||||||||
Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties
|
—
|
|
401
|
|
17
|
|
12
|
|
—
|
|
—
|
|
430
|
|
|||||||
|
|
|
|
|
|
|
|
||||||||||||||
Total
|
$
|
575
|
|
$
|
488
|
|
$
|
42
|
|
$
|
27
|
|
$
|
22
|
|
$
|
(28
|
)
|
$
|
1,126
|
|
|
March 31, 2018
|
|
December 31, 2017
|
|
$ Change
|
|
% Change
|
|||||||
Contract liabilities - current
|
$
|
334
|
|
|
$
|
348
|
|
|
$
|
(14
|
)
|
|
(4.1
|
)%
|
Contract liabilities - noncurrent
|
431
|
|
|
424
|
|
|
7
|
|
|
1.9
|
%
|
|||
Total contract liabilities
|
$
|
765
|
|
|
$
|
772
|
|
|
$
|
(7
|
)
|
|
(0.8
|
)%
|
|
March 31, 2018
|
|
December 31, 2017
|
||||
Advanced deposits
|
$
|
51
|
|
|
$
|
59
|
|
Deferred revenue related to the loyalty program
|
570
|
|
|
561
|
|
||
Deferred revenue related to systemwide services
|
11
|
|
|
9
|
|
||
Initial fees received from franchise owners
|
29
|
|
|
27
|
|
||
Other deferred revenue
|
104
|
|
|
116
|
|
||
Total contract liabilities
|
$
|
765
|
|
|
$
|
772
|
|
•
|
Deferred revenue related to the loyalty program and revenue from base and incentive management fees are not included in the contracted revenue above, as the revenue is allocated to a wholly unperformed performance obligation in a series;
|
•
|
Revenues related to royalty fees as they are considered sales-based royalty fees; and
|
•
|
Revenues received for free nights granted through our co-branded credit card as the awards are required to be redeemed within 12 months.
|
|
March 31, 2018
|
|
December 31, 2017
|
||||
Equity method investments
|
$
|
174
|
|
|
$
|
185
|
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Total revenues
|
$
|
132
|
|
|
$
|
274
|
|
Gross operating profit
|
39
|
|
|
78
|
|
||
Loss from continuing operations
|
(19
|
)
|
|
(18
|
)
|
||
Net loss
|
(19
|
)
|
|
(18
|
)
|
|
March 31, 2018
|
|
December 31, 2017
|
||||
Loyalty program
|
$
|
389
|
|
|
$
|
403
|
|
Deferred compensation plans held in rabbi trusts (Note 8 and 10)
|
409
|
|
|
402
|
|
||
Captive insurance companies
|
111
|
|
|
111
|
|
||
Total marketable securities held to fund operating programs
|
$
|
909
|
|
|
$
|
916
|
|
Less current portion of marketable securities held to fund operating programs included in cash and cash equivalents, short-term investments, and prepaids and other assets
|
(151
|
)
|
|
(156
|
)
|
||
Marketable securities held to fund operating programs included in other assets
|
$
|
758
|
|
|
$
|
760
|
|
|
Three Months Ended March 31,
|
||||||
2018
|
|
2017
|
|||||
Loyalty program
|
$
|
(4
|
)
|
|
$
|
3
|
|
|
Three Months Ended March 31,
|
||||||
2018
|
|
2017
|
|||||
Unrealized gains (losses)
|
$
|
(1
|
)
|
|
$
|
11
|
|
Realized gains
|
4
|
|
|
4
|
|
||
Net gains and interest income from marketable securities held to fund rabbi trusts
|
$
|
3
|
|
|
$
|
15
|
|
|
March 31, 2018
|
|
December 31, 2017
|
||||
Interest bearing money market funds
|
$
|
9
|
|
|
$
|
26
|
|
Time deposits
|
37
|
|
|
37
|
|
||
Common shares
|
124
|
|
|
131
|
|
||
Total marketable securities held for investment purposes
|
$
|
170
|
|
|
$
|
194
|
|
Less current portion of marketable securities held for investment purposes included in cash and cash equivalents and short-term investments
|
(46
|
)
|
|
(63
|
)
|
||
Marketable securities held for investment purposes included in other assets
|
$
|
124
|
|
|
$
|
131
|
|
|
|
2017
|
||
Fair value at January 1
|
|
$
|
290
|
|
Gross unrealized losses
|
|
(54
|
)
|
|
Realized losses (1) (Note 18)
|
|
(40
|
)
|
|
Interest income (Note 18)
|
|
94
|
|
|
Cash redemption
|
|
(290
|
)
|
|
Fair value at March 31
|
|
$
|
—
|
|
(1) The realized losses were the result of a difference between the fair value of the initial investment and the contractual redemption price of $8.40 per share.
|
|
March 31, 2018
|
|
Cash and cash equivalents
|
|
Short-term investments
|
|
Prepaids and other assets
|
|
Other assets
|
||||||||||
Level One - Quoted Prices in Active Markets for Identical Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest bearing money market funds
|
$
|
60
|
|
|
$
|
60
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Mutual funds
|
409
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
409
|
|
|||||
Common shares
|
124
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
124
|
|
|||||
Level Two - Significant Other Observable Inputs
|
|
|
|
|
|
|
|
|
|
||||||||||
Time deposits
|
50
|
|
|
—
|
|
|
40
|
|
|
—
|
|
|
10
|
|
|||||
U.S. government obligations
|
152
|
|
|
—
|
|
|
—
|
|
|
33
|
|
|
119
|
|
|||||
U.S. government agencies
|
46
|
|
|
—
|
|
|
2
|
|
|
6
|
|
|
38
|
|
|||||
Corporate debt securities
|
170
|
|
|
—
|
|
|
12
|
|
|
29
|
|
|
129
|
|
|||||
Mortgage-backed securities
|
24
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
19
|
|
|||||
Asset-backed securities
|
41
|
|
|
—
|
|
|
—
|
|
|
9
|
|
|
32
|
|
|||||
Municipal and provincial notes and bonds
|
3
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
2
|
|
|||||
Total
|
$
|
1,079
|
|
|
$
|
60
|
|
|
$
|
54
|
|
|
$
|
83
|
|
|
$
|
882
|
|
|
December 31, 2017
|
|
Cash and cash equivalents
|
|
Short-term investments
|
|
Prepaids and other assets
|
|
Other assets
|
||||||||||
Level One - Quoted Prices in Active Markets for Identical Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest bearing money market funds
|
$
|
75
|
|
|
$
|
75
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Mutual funds
|
402
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
402
|
|
|||||
Common shares
|
131
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
131
|
|
|||||
Level Two - Significant Other Observable Inputs
|
|
|
|
|
|
|
|
|
|
||||||||||
Time deposits
|
50
|
|
|
—
|
|
|
39
|
|
|
—
|
|
|
11
|
|
|||||
U.S. government obligations
|
158
|
|
|
—
|
|
|
—
|
|
|
38
|
|
|
120
|
|
|||||
U.S. government agencies
|
47
|
|
|
—
|
|
|
2
|
|
|
7
|
|
|
38
|
|
|||||
Corporate debt securities
|
179
|
|
|
—
|
|
|
8
|
|
|
33
|
|
|
138
|
|
|||||
Mortgage-backed securities
|
25
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
19
|
|
|||||
Asset-backed securities
|
40
|
|
|
—
|
|
|
—
|
|
|
10
|
|
|
30
|
|
|||||
Municipal and provincial notes and bonds
|
3
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
2
|
|
|||||
Total
|
$
|
1,110
|
|
|
$
|
75
|
|
|
$
|
49
|
|
|
$
|
95
|
|
|
$
|
891
|
|
|
March 31, 2018
|
|
December 31, 2017
|
||||
Unsecured financing to hotel owners
|
$
|
128
|
|
|
$
|
127
|
|
Less allowance for losses
|
(109
|
)
|
|
(108
|
)
|
||
Less current portion included in receivables, net
|
(1
|
)
|
|
—
|
|
||
Total long-term financing receivables, net of allowances
|
$
|
18
|
|
|
$
|
19
|
|
|
2018
|
|
2017
|
||||
Allowance at January 1
|
$
|
108
|
|
|
$
|
100
|
|
Provisions
|
2
|
|
|
2
|
|
||
Other adjustments
|
(1
|
)
|
|
1
|
|
||
Allowance at March 31
|
$
|
109
|
|
|
$
|
103
|
|
|
March 31, 2018
|
||||||||||||||
|
Gross loan balance (principal and interest)
|
|
Related allowance
|
|
Net financing receivables
|
|
Gross receivables on non-accrual status
|
||||||||
Loans
|
$
|
14
|
|
|
$
|
—
|
|
|
$
|
14
|
|
|
$
|
—
|
|
Impaired loans (1)
|
59
|
|
|
(59
|
)
|
|
—
|
|
|
59
|
|
||||
Total loans
|
73
|
|
|
(59
|
)
|
|
14
|
|
|
59
|
|
||||
Other financing arrangements
|
55
|
|
|
(50
|
)
|
|
5
|
|
|
50
|
|
||||
Total unsecured financing receivables
|
$
|
128
|
|
|
$
|
(109
|
)
|
|
$
|
19
|
|
|
$
|
109
|
|
|
December 31, 2017
|
||||||||||||||
|
Gross loan balance (principal and interest)
|
|
Related allowance
|
|
Net financing receivables
|
|
Gross receivables on non-accrual status
|
||||||||
Loans
|
$
|
13
|
|
|
$
|
—
|
|
|
$
|
13
|
|
|
$
|
—
|
|
Impaired loans (2)
|
59
|
|
|
(59
|
)
|
|
—
|
|
|
59
|
|
||||
Total loans
|
72
|
|
|
(59
|
)
|
|
13
|
|
|
59
|
|
||||
Other financing arrangements
|
55
|
|
|
(49
|
)
|
|
6
|
|
|
49
|
|
||||
Total unsecured financing receivables
|
$
|
127
|
|
|
$
|
(108
|
)
|
|
$
|
19
|
|
|
$
|
108
|
|
|
|
||
Current assets, net of cash acquired
|
$
|
1
|
|
Property and equipment
|
172
|
|
|
Indefinite-lived intangibles (1)
|
37
|
|
|
Management agreement intangibles (2)
|
14
|
|
|
Goodwill (3)
|
21
|
|
|
Other definite-lived intangibles (4)
|
7
|
|
|
Total assets
|
$
|
252
|
|
|
|
||
Current liabilities
|
$
|
13
|
|
Deferred tax liabilities
|
3
|
|
|
Total liabilities
|
16
|
|
|
Total net assets acquired attributable to Hyatt Hotels Corporation
|
236
|
|
|
Total net assets acquired attributable to noncontrolling interests
|
1
|
|
|
Total net assets acquired
|
$
|
237
|
|
|
|
|
March 31, 2018
|
|
Weighted-
average useful
lives in years
|
|
December 31, 2017
|
|||||
Management and franchise agreement intangibles
|
$
|
179
|
|
|
23
|
|
|
$
|
178
|
|
Lease related intangibles
|
131
|
|
|
110
|
|
|
127
|
|
||
Brand and other indefinite-lived intangibles
|
53
|
|
|
—
|
|
|
53
|
|
||
Advanced bookings intangibles
|
9
|
|
|
6
|
|
|
9
|
|
||
Other definite-lived intangibles
|
9
|
|
|
11
|
|
|
9
|
|
||
|
381
|
|
|
|
|
376
|
|
|||
Accumulated amortization
|
(76
|
)
|
|
|
|
(71
|
)
|
|||
Intangibles, net
|
$
|
305
|
|
|
|
|
$
|
305
|
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Amortization expense
|
$
|
3
|
|
|
$
|
3
|
|
|
March 31, 2018
|
|
December 31, 2017
|
||||
Marketable securities held to fund rabbi trusts (Note 4)
|
$
|
409
|
|
|
$
|
402
|
|
Management and franchise agreement assets constituting payments to customers
(1)
|
390
|
|
|
378
|
|
||
Loyalty program marketable securities (Note 4)
|
297
|
|
|
298
|
|
||
Common shares of Playa N.V. (Note 4)
|
124
|
|
|
131
|
|
||
Long-term investments
|
129
|
|
|
109
|
|
||
Other
|
70
|
|
|
66
|
|
||
Total other assets
|
$
|
1,419
|
|
|
$
|
1,384
|
|
(1) Assets include cash consideration as well as other forms of consideration provided, such as debt repayment or performance guarantees.
|
|
March 31, 2018
|
||||||||||||||||||
|
Carrying value
|
|
Fair value
|
|
Quoted prices in active markets for identical assets (level one)
|
|
Significant other observable inputs (level two)
|
|
Significant unobservable inputs (level three)
|
||||||||||
Debt (1)
|
$
|
1,451
|
|
|
$
|
1,510
|
|
|
$
|
—
|
|
|
$
|
1,426
|
|
|
$
|
84
|
|
|
December 31, 2017
|
||||||||||||||||||
|
Carrying value
|
|
Fair value
|
|
Quoted prices in active markets for identical assets (level one)
|
|
Significant other observable inputs (level two)
|
|
Significant unobservable inputs (level three)
|
||||||||||
Debt (2)
|
$
|
1,452
|
|
|
$
|
1,546
|
|
|
$
|
—
|
|
|
$
|
1,459
|
|
|
$
|
87
|
|
|
March 31, 2018
|
|
December 31, 2017
|
||||
Deferred compensation plans held to fund rabbi trusts (Note 4)
|
$
|
409
|
|
|
$
|
402
|
|
Guarantee liabilities (Note 12)
|
99
|
|
|
104
|
|
||
Self-insurance liabilities (Note 12)
|
73
|
|
|
69
|
|
||
Deferred income taxes
|
64
|
|
|
62
|
|
||
Other
|
227
|
|
|
226
|
|
||
Total other long-term liabilities
|
$
|
872
|
|
|
$
|
863
|
|
|
|
The four managed hotels in France
|
|
Other performance guarantees
|
|
All performance guarantees
|
||||||||||||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||||||
Beginning balance, January 1
|
|
$
|
58
|
|
|
$
|
66
|
|
|
$
|
13
|
|
|
$
|
13
|
|
|
$
|
71
|
|
|
$
|
79
|
|
Amortization of initial guarantee obligation liability into income
|
|
(4
|
)
|
|
(3
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|
(5
|
)
|
|
(4
|
)
|
||||||
Performance guarantee expense, net
|
|
27
|
|
|
26
|
|
|
1
|
|
|
—
|
|
|
28
|
|
|
26
|
|
||||||
Net payments during the period
|
|
(23
|
)
|
|
(22
|
)
|
|
(1
|
)
|
|
(4
|
)
|
|
(24
|
)
|
|
(26
|
)
|
||||||
Foreign currency exchange, net
|
|
2
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
2
|
|
||||||
Ending balance, March 31
|
|
$
|
60
|
|
|
$
|
69
|
|
|
$
|
12
|
|
|
$
|
8
|
|
|
$
|
72
|
|
|
$
|
77
|
|
Property description
|
|
Maximum potential future payments
|
|
Maximum exposure net of recoverability from third parties
|
|
Other long-term liabilities recorded at March 31, 2018
|
|
Other long-term liabilities recorded at December 31, 2017
|
|
Year of guarantee expiration
|
||||||||
Hotel property in Washington State
(1), (3), (4), (5)
|
|
$
|
215
|
|
|
$
|
—
|
|
|
$
|
24
|
|
|
$
|
26
|
|
|
2020
|
Hotel properties in India (2), (3)
|
|
184
|
|
|
184
|
|
|
15
|
|
|
17
|
|
|
2020
|
||||
Hotel property in Massachusetts (6)
|
|
107
|
|
|
107
|
|
|
1
|
|
|
1
|
|
|
2020
|
||||
Hotel and residential properties in Brazil (1), (4)
|
|
98
|
|
|
40
|
|
|
4
|
|
|
4
|
|
|
various, through 2021
|
||||
Hotel properties in California (1)
|
|
31
|
|
|
13
|
|
|
5
|
|
|
6
|
|
|
various, through 2021
|
||||
Hotel property in Minnesota
|
|
25
|
|
|
25
|
|
|
2
|
|
|
2
|
|
|
2021
|
||||
Hotel property in Arizona (1), (4)
|
|
25
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|
2019
|
||||
Other (1)
|
|
30
|
|
|
19
|
|
|
6
|
|
|
2
|
|
|
various, through 2022
|
||||
Total
|
|
$
|
715
|
|
|
$
|
388
|
|
|
$
|
58
|
|
|
$
|
59
|
|
|
|
|
Balance at
January 1, 2018 |
|
Current period other comprehensive income (loss) before reclassification
|
|
Amount reclassified from accumulated other comprehensive loss
|
|
Balance at March 31, 2018
|
||||||||
Foreign currency translation adjustments
|
$
|
(243
|
)
|
|
$
|
23
|
|
|
$
|
—
|
|
|
$
|
(220
|
)
|
Unrecognized pension cost
|
(7
|
)
|
|
—
|
|
|
—
|
|
|
(7
|
)
|
||||
Unrealized losses on derivative instruments
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
||||
Accumulated other comprehensive income (loss)
|
$
|
(253
|
)
|
|
$
|
23
|
|
|
$
|
—
|
|
|
$
|
(230
|
)
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
||||||||
|
Balance at
January 1, 2017 |
|
Current period other comprehensive income (loss) before reclassification
|
|
Amount reclassified from accumulated other comprehensive loss
|
|
Balance at
March 31, 2017 |
||||||||
Foreign currency translation adjustments
|
$
|
(299
|
)
|
|
$
|
41
|
|
|
$
|
—
|
|
|
$
|
(258
|
)
|
Unrealized gains on AFS securities
|
33
|
|
|
34
|
|
|
—
|
|
|
67
|
|
||||
Unrecognized pension cost
|
(7
|
)
|
|
—
|
|
|
—
|
|
|
(7
|
)
|
||||
Unrealized losses on derivative instruments
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
||||
Accumulated other comprehensive income (loss)
|
$
|
(277
|
)
|
|
$
|
75
|
|
|
$
|
—
|
|
|
$
|
(202
|
)
|
|
•
|
Owned and leased hotels
—This segment derives its earnings from owned and leased hotel properties located predominantly in the United States but also in certain international locations and for purposes of segment Adjusted EBITDA, includes our pro rata share of the Adjusted EBITDA of our unconsolidated hospitality ventures, based on our ownership percentage of each venture. Adjusted EBITDA includes intercompany expenses related to management fees paid to the Company's management and franchising segments, which are eliminated in consolidation. Intersegment revenues relate to promotional award redemptions earned by our owned and leased hotels related to our co-branded credit card and revenues that are deferred under the loyalty program for stays at our owned and leased hotels and are eliminated in consolidation.
|
•
|
Americas management and franchising
—This segment derives its earnings primarily from a combination of hotel management and licensing of our portfolio of brands to franchisees located in the United States, Latin America, Canada, and the Caribbean. This segment's revenues also include the reimbursement of costs incurred on behalf of managed and franchised properties. These costs relate primarily to payroll costs at managed properties where the Company is the employer, as well as costs associated with reservations, sales, marketing, technology, and the loyalty program operated on behalf of owners of managed and franchised properties. The intersegment revenues relate to management fees earned from the Company's owned hotels and are eliminated in consolidation.
|
•
|
ASPAC management and franchising
—This segment derives its earnings primarily from a combination of hotel management and licensing of our portfolio of brands to franchisees located in Southeast Asia, Greater China, Australia, South Korea, Japan, and Micronesia. This segment's revenues also include the reimbursement of costs incurred on behalf of managed and franchised properties. These costs relate primarily to reservations, sales, marketing, technology, and the loyalty program operated on behalf of owners of managed and franchised properties. The intersegment revenues relate to management fees earned from the Company’s owned hotels and are eliminated in consolidation.
|
•
|
EAME/SW Asia management and franchising
—This segment derives its earnings primarily from a combination of hotel management and licensing of our portfolio of brands to franchisees located in Europe, Africa, the Middle East, India, Central Asia, and Nepal. This segment's revenues also include the reimbursement of costs incurred on behalf of managed and franchised properties. These costs relate primarily to reservations, sales, marketing, technology, and the loyalty program operated on behalf of owners of managed and franchised properties. The intersegment revenues relate to management fees earned from the Company’s owned hotels and are eliminated in consolidation.
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Owned and leased hotels
|
|
|
|
||||
Owned and leased hotels revenues
|
$
|
507
|
|
|
$
|
562
|
|
Other revenues
|
—
|
|
|
13
|
|
||
Intersegment revenues (a)
|
9
|
|
|
9
|
|
||
Adjusted EBITDA
|
113
|
|
|
142
|
|
||
Depreciation and amortization
|
68
|
|
|
74
|
|
||
Americas management and franchising
|
|
|
|
||||
Management, franchise, and other fees revenues
|
98
|
|
|
90
|
|
||
Contra revenue
|
(3
|
)
|
|
(3
|
)
|
||
Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties
|
420
|
|
|
401
|
|
||
Intersegment revenues (a)
|
18
|
|
|
19
|
|
||
Adjusted EBITDA
|
87
|
|
|
76
|
|
||
Depreciation and amortization
|
4
|
|
|
2
|
|
||
ASPAC management and franchising
|
|
|
|
||||
Management, franchise, and other fees revenues
|
30
|
|
|
25
|
|
||
Contra revenue
|
(1
|
)
|
|
—
|
|
||
Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties
|
20
|
|
|
17
|
|
||
Intersegment revenues (a)
|
—
|
|
|
—
|
|
||
Adjusted EBITDA
|
18
|
|
|
15
|
|
||
Depreciation and amortization
|
—
|
|
|
—
|
|
||
EAME/SW Asia management and franchising
|
|
|
|
||||
Management, franchise, and other fees revenues
|
18
|
|
|
16
|
|
||
Contra revenue
|
(1
|
)
|
|
(1
|
)
|
||
Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties
|
16
|
|
|
12
|
|
||
Intersegment revenues (a)
|
2
|
|
|
2
|
|
||
Adjusted EBITDA
|
10
|
|
|
8
|
|
||
Depreciation and amortization
|
—
|
|
|
—
|
|
||
Corporate and other
|
|
|
|
||||
Revenues
|
32
|
|
|
22
|
|
||
Intersegment revenues (a)
|
(2
|
)
|
|
(2
|
)
|
||
Adjusted EBITDA
|
(29
|
)
|
|
(28
|
)
|
||
Depreciation and amortization
|
11
|
|
|
11
|
|
||
Eliminations
|
|
|
|
||||
Revenues (a)
|
(27
|
)
|
|
(28
|
)
|
||
Adjusted EBITDA
|
3
|
|
|
5
|
|
||
TOTAL
|
|
|
|
||||
Revenues
|
$
|
1,109
|
|
|
$
|
1,126
|
|
Adjusted EBITDA
|
202
|
|
|
218
|
|
||
Depreciation and amortization
|
83
|
|
|
87
|
|
(a)
|
Intersegment revenues are included in management, franchise, and other fees revenues, owned and leased hotels revenues, and other revenues and eliminated in Eliminations.
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Net income attributable to Hyatt Hotels Corporation
|
$
|
411
|
|
|
$
|
55
|
|
Interest expense
|
19
|
|
|
21
|
|
||
Provision for income taxes
|
150
|
|
|
34
|
|
||
Depreciation and amortization
|
83
|
|
|
87
|
|
||
EBITDA
|
663
|
|
|
197
|
|
||
Contra revenue
|
5
|
|
|
4
|
|
||
Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties
|
(456
|
)
|
|
(430
|
)
|
||
Costs incurred on behalf of managed and franchised properties
|
460
|
|
|
445
|
|
||
Equity losses from unconsolidated hospitality ventures
|
13
|
|
|
3
|
|
||
Stock-based compensation expense (Note 14)
|
18
|
|
|
16
|
|
||
Gains on sales of real estate (Note 6)
|
(529
|
)
|
|
—
|
|
||
Other (income) loss, net (Note 18)
|
18
|
|
|
(43
|
)
|
||
Pro rata share of unconsolidated hospitality ventures Adjusted EBITDA
|
10
|
|
|
26
|
|
||
Adjusted EBITDA
|
$
|
202
|
|
|
$
|
218
|
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Numerator:
|
|
|
|
||||
Net income
|
$
|
411
|
|
|
$
|
55
|
|
Net income and accretion attributable to noncontrolling interests
|
—
|
|
|
—
|
|
||
Net income attributable to Hyatt Hotels Corporation
|
$
|
411
|
|
|
$
|
55
|
|
Denominator:
|
|
|
|
||||
Basic weighted average shares outstanding
|
118,652,054
|
|
|
129,746,644
|
|
||
Share-based compensation
|
2,126,296
|
|
|
1,250,891
|
|
||
Diluted weighted average shares outstanding
|
120,778,350
|
|
|
130,997,535
|
|
||
Basic Earnings Per Share:
|
|
|
|
||||
Net income
|
$
|
3.47
|
|
|
$
|
0.43
|
|
Net income and accretion attributable to noncontrolling interests
|
—
|
|
|
—
|
|
||
Net income attributable to Hyatt Hotels Corporation
|
$
|
3.47
|
|
|
$
|
0.43
|
|
Diluted Earnings Per Share:
|
|
|
|
||||
Net income
|
$
|
3.40
|
|
|
$
|
0.42
|
|
Net income and accretion attributable to noncontrolling interests
|
—
|
|
|
—
|
|
||
Net income attributable to Hyatt Hotels Corporation
|
$
|
3.40
|
|
|
$
|
0.42
|
|
|
Three Months Ended March 31,
|
||||
|
2018
|
|
2017
|
||
SARs
|
—
|
|
|
39,200
|
|
RSUs
|
200
|
|
|
—
|
|
Equity-classified forward contract under the March 2017 ASR
|
—
|
|
|
26,800
|
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Interest income (Note 4)
|
$
|
5
|
|
|
$
|
97
|
|
Depreciation recovery
|
5
|
|
|
6
|
|
||
Performance guarantee liability amortization (Note 12)
|
5
|
|
|
4
|
|
||
Debt repayment guarantee liability amortization (Note 12)
|
3
|
|
|
3
|
|
||
Pre-condemnation income
|
2
|
|
|
—
|
|
||
Realized losses (Note 4)
|
(1
|
)
|
|
(41
|
)
|
||
Unrealized (losses) gains (Note 4)
|
(12
|
)
|
|
1
|
|
||
Performance guarantee expense, net (Note 12)
|
(28
|
)
|
|
(26
|
)
|
||
Other, net
|
3
|
|
|
(1
|
)
|
||
Other income (loss), net
|
$
|
(18
|
)
|
|
$
|
43
|
|
•
|
311
managed properties (
101,594
rooms), all of which we operate under management agreements with third-party property owners;
|
•
|
355
franchised properties (
58,715
rooms), all of which are owned by third parties that have franchise agreements with us and are operated by third parties;
|
•
|
28
owned properties (
14,376
rooms) (including
1
consolidated hospitality venture),
1
capital leased property (
171
rooms), and
6
operating leased properties (
2,069
rooms), all of which we manage; and
|
•
|
23
managed properties and
4
franchised properties owned or leased by unconsolidated hospitality ventures (
7,905
rooms).
|
•
|
3
destination wellness resorts (
399
rooms), all of which we own and operate (including
1
consolidated hospitality venture);
|
•
|
6
all inclusive resorts (
2,401
rooms), all of which are owned by a third party in which we hold common shares and which operates the resorts under franchise agreements with us;
|
•
|
16
vacation ownership properties under the Hyatt Residence Club brand and operated by third parties; and
|
•
|
20
residential properties, which consist of branded residences and serviced apartments. We manage all of the serviced apartments and those branded residential units that participate in a rental program with an adjacent Hyatt-branded hotel.
|
•
|
Owned and leased hotels, which consists of our owned and leased full service and select service hotels, and for purposes of segment Adjusted EBITDA, our pro rata share of the Adjusted EBITDA of our unconsolidated hospitality ventures, based on our ownership percentage of each venture;
|
•
|
Americas management and franchising, which consists of our management and franchising of properties located in the United States, Latin America, Canada, and the Caribbean;
|
•
|
ASPAC management and franchising, which consists of our management and franchising of properties located in Southeast Asia, Greater China, Australia, South Korea, Japan, and Micronesia; and
|
•
|
EAME/SW Asia management and franchising, which consists of our management and franchising of properties located in Europe, Africa, the Middle East, India, Central Asia, and Nepal.
|
•
|
sold Grand Hyatt San Francisco, Andaz Maui at Wailea Resort, and Hyatt Regency Coconut Point Resort and Spa to an unrelated third party as a portfolio for a net sales price of approximately
$992 million
;
|
•
|
returned capital to our shareholders through our first quarter dividend payment of $18 million and share repurchases of approximately $75 million; and
|
•
|
refinanced our $1.5 billion senior unsecured revolving credit facility, extending the maturity of the facility to January 2023.
|
|
|
|
|
RevPAR
|
||||||||||||
|
|
|
|
Three Months Ended March 31,
|
||||||||||||
(Comparable locations)
|
|
Number of comparable hotels (1)
|
|
2018
|
|
2017
|
|
Change
|
|
Change (in constant $)
|
||||||
Systemwide hotels
|
|
650
|
|
$
|
135
|
|
|
$
|
128
|
|
|
6.0
|
%
|
|
4.3
|
%
|
Owned and leased hotels
|
|
34
|
|
$
|
171
|
|
|
$
|
165
|
|
|
3.5
|
%
|
|
1.6
|
%
|
Americas full service hotels
|
|
162
|
|
$
|
153
|
|
|
$
|
148
|
|
|
3.2
|
%
|
|
3.1
|
%
|
Americas select service hotels
|
|
324
|
|
$
|
103
|
|
|
$
|
100
|
|
|
3.7
|
%
|
|
3.6
|
%
|
ASPAC full service hotels
|
|
77
|
|
$
|
153
|
|
|
$
|
136
|
|
|
12.0
|
%
|
|
6.7
|
%
|
ASPAC select service hotels
|
|
5
|
|
$
|
68
|
|
|
$
|
53
|
|
|
28.4
|
%
|
|
17.7
|
%
|
EAME/SW Asia full service hotels
|
|
70
|
|
$
|
127
|
|
|
$
|
113
|
|
|
13.0
|
%
|
|
7.0
|
%
|
EAME/SW Asia select service hotels
|
|
12
|
|
$
|
68
|
|
|
$
|
60
|
|
|
12.7
|
%
|
|
6.1
|
%
|
|
Three Months Ended March 31,
|
|||||||||||||||||
|
2018
|
|
2017
|
|
Better / (Worse)
|
|
Currency Impact
|
|||||||||||
Comparable owned and leased hotels revenues
|
$
|
430
|
|
|
$
|
414
|
|
|
$
|
16
|
|
|
3.9
|
%
|
|
$
|
8
|
|
Non-comparable owned and leased hotels revenues
|
85
|
|
|
155
|
|
|
(70
|
)
|
|
(45.0
|
)%
|
|
1
|
|
||||
Total owned and leased hotels revenues
|
$
|
515
|
|
|
$
|
569
|
|
|
$
|
(54
|
)
|
|
(9.4
|
)%
|
|
$
|
9
|
|
|
|
|
Three Months Ended March 31,
|
|||||||||||||
|
2018
|
|
2017
|
|
Better / (Worse)
|
|||||||||
Base management fees
|
$
|
53
|
|
|
$
|
47
|
|
|
$
|
6
|
|
|
12.2
|
%
|
Incentive management fees
|
34
|
|
|
30
|
|
|
4
|
|
|
13.5
|
%
|
|||
Franchise fees
|
28
|
|
|
26
|
|
|
2
|
|
|
9.9
|
%
|
|||
Other fee revenues
|
17
|
|
|
11
|
|
|
6
|
|
|
49.0
|
%
|
|||
Management, franchise, and other fees
|
$
|
132
|
|
|
$
|
114
|
|
|
$
|
18
|
|
|
15.7
|
%
|
|
|
Three Months Ended March 31,
|
|||||||||||||
|
2018
|
|
2017
|
|
Better / (Worse)
|
|||||||||
Management, franchise, and other fees
|
$
|
132
|
|
|
$
|
114
|
|
|
$
|
18
|
|
|
15.7
|
%
|
Contra revenue
|
(5
|
)
|
|
(4
|
)
|
|
(1
|
)
|
|
(18.5
|
)%
|
|||
Net management, franchise, and other fees
|
$
|
127
|
|
|
$
|
110
|
|
|
$
|
17
|
|
|
15.6
|
%
|
|
Three Months Ended March 31,
|
|||||||||||||
|
2018
|
|
2017
|
|
Change
|
|||||||||
Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties
|
$
|
456
|
|
|
$
|
430
|
|
|
$
|
26
|
|
|
6.0
|
%
|
Less: rabbi trust impact
|
(2
|
)
|
|
(7
|
)
|
|
5
|
|
|
75.4
|
%
|
|||
Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties excluding rabbi trust impact
|
$
|
454
|
|
|
$
|
423
|
|
|
$
|
31
|
|
|
7.3
|
%
|
|
|
Three Months Ended March 31,
|
|||||||||||||
|
2018
|
|
2017
|
|
Better / (Worse)
|
|||||||||
Comparable owned and leased hotels expense
|
$
|
326
|
|
|
$
|
317
|
|
|
$
|
(9
|
)
|
|
(2.9
|
)%
|
Non-comparable owned and leased hotels expense
|
58
|
|
|
104
|
|
|
46
|
|
|
44.8
|
%
|
|||
Rabbi trust impact
|
—
|
|
|
3
|
|
|
3
|
|
|
75.4
|
%
|
|||
Total owned and leased hotels expense
|
$
|
384
|
|
|
$
|
424
|
|
|
$
|
40
|
|
|
9.3
|
%
|
|
|
Three Months Ended March 31,
|
|||||||||||||
|
2018
|
|
2017
|
|
Change
|
|||||||||
Selling, general, and administrative expenses
|
$
|
95
|
|
|
$
|
99
|
|
|
$
|
(4
|
)
|
|
(3.0
|
)%
|
Less: rabbi trust impact
|
(3
|
)
|
|
(12
|
)
|
|
9
|
|
|
77.6
|
%
|
|||
Less: stock-based compensation expense
|
(18
|
)
|
|
(16
|
)
|
|
(2
|
)
|
|
(12.7
|
)%
|
|||
Adjusted selling, general, and administrative expenses
|
$
|
74
|
|
|
$
|
71
|
|
|
$
|
3
|
|
|
6.0
|
%
|
|
|
Three Months Ended March 31,
|
|||||||||||||
|
2018
|
|
2017
|
|
Change
|
|||||||||
Costs incurred on behalf of managed and franchised properties
|
$
|
460
|
|
|
$
|
445
|
|
|
$
|
15
|
|
|
3.2
|
%
|
Less: rabbi trust impact
|
(2
|
)
|
|
(7
|
)
|
|
5
|
|
|
75.4
|
%
|
|||
Costs incurred on behalf of managed and franchised properties excluding rabbi trust impact
|
$
|
458
|
|
|
$
|
438
|
|
|
$
|
20
|
|
|
4.4
|
%
|
|
|
Three Months Ended March 31,
|
|||||||||||||
|
2018
|
|
2017
|
|
Better / (Worse)
|
|||||||||
Rabbi trust impact allocated to selling, general, and administrative expenses
|
$
|
3
|
|
|
$
|
12
|
|
|
$
|
(9
|
)
|
|
(77.6
|
)%
|
Rabbi trust impact allocated to owned and leased hotels expense
|
—
|
|
|
3
|
|
|
(3
|
)
|
|
(75.4
|
)%
|
|||
Net gains and interest income from marketable securities held to fund rabbi trusts
|
$
|
3
|
|
|
$
|
15
|
|
|
$
|
(12
|
)
|
|
(77.2
|
)%
|
|
|
Three Months Ended March 31,
|
|||||||||||||
|
2018
|
|
2017
|
|
Better / (Worse)
|
|||||||||
Equity losses from unconsolidated hospitality ventures
|
$
|
(13
|
)
|
|
$
|
(3
|
)
|
|
$
|
(10
|
)
|
|
(360.9
|
)%
|
|
•
|
$16 million increase due to impairment charges related to unconsolidated hospitality ventures in Brazil. See Part I, Item 1 "Financial Statements—Note 4 to the Condensed Consolidated Financial Statements"; and
|
•
|
$2 million increase as 2017 included a gain on sale of a hotel by an unconsolidated hospitality venture.
|
•
|
$94 million of interest income and $40 million of realized losses recognized in 2017 related to the redemption of our preferred shares in Playa; and
|
•
|
$13 million decrease due to unrealized losses on marketable securities due in part to the adoption of ASU 2016-01. See Part I, Item 1 "Financial Statements—Note 18 to the Condensed Consolidated Financial Statements."
|
|
Three Months Ended March 31,
|
|||||||||||||
|
2018
|
|
2017
|
|
Better / (Worse)
|
|||||||||
Income before income taxes
|
$
|
561
|
|
|
$
|
89
|
|
|
$
|
472
|
|
|
526.2
|
%
|
Provision for income taxes
|
(150
|
)
|
|
(34
|
)
|
|
(116
|
)
|
|
(341.8
|
)%
|
|||
Effective tax rate
|
26.7
|
%
|
|
37.9
|
%
|
|
|
|
|
11.2
|
%
|
|
|
Three Months Ended March 31,
|
|||||||||||||||||
|
2018
|
|
2017
|
|
Better / (Worse)
|
|
Currency Impact
|
|||||||||||
Comparable owned and leased hotels revenues
|
$
|
439
|
|
|
$
|
423
|
|
|
$
|
16
|
|
|
3.9
|
%
|
|
$
|
8
|
|
Non-comparable owned and leased hotels revenues
|
68
|
|
|
139
|
|
|
(71
|
)
|
|
(51.6
|
)%
|
|
1
|
|
||||
Total owned and leased hotels revenues
|
507
|
|
|
562
|
|
|
(55
|
)
|
|
(9.9
|
)%
|
|
9
|
|
||||
Other revenues
|
—
|
|
|
13
|
|
|
(13
|
)
|
|
NM
|
|
|
—
|
|
||||
Total segment revenues
|
$
|
507
|
|
|
$
|
575
|
|
|
$
|
(68
|
)
|
|
(11.9
|
)%
|
|
$
|
9
|
|
|
|
Three Months Ended March 31,
|
|||||||||||||||||||||||||||||||||||
|
RevPAR
|
|
Occupancy
|
|
ADR
|
|||||||||||||||||||||||||||||||
|
2018
|
|
2017
|
|
Better /
(Worse) |
|
Better / (Worse) Constant $
|
|
2018
|
|
2017
|
|
Change in
% pts |
|
2018
|
|
2017
|
|
Better /
(Worse) |
|
Better / (Worse) Constant $
|
|||||||||||||||
Comparable owned and leased hotels
|
$
|
171
|
|
|
$
|
165
|
|
|
3.5
|
%
|
|
1.6
|
%
|
|
74.5
|
%
|
|
74.0
|
%
|
|
0.5
|
%
|
|
$
|
229
|
|
|
$
|
223
|
|
|
2.8
|
%
|
|
0.9
|
%
|
|
|
Three Months Ended March 31,
|
|||||||||||||
|
2018
|
|
2017
|
|
Better / (Worse)
|
|||||||||
Owned and leased hotels Adjusted EBITDA
|
$
|
103
|
|
|
$
|
116
|
|
|
$
|
(13
|
)
|
|
(11.9
|
)%
|
Pro rata share of unconsolidated hospitality ventures Adjusted EBITDA
|
10
|
|
|
26
|
|
|
(16
|
)
|
|
(60.1
|
)%
|
|||
Segment Adjusted EBITDA
|
$
|
113
|
|
|
$
|
142
|
|
|
$
|
(29
|
)
|
|
(20.7
|
)%
|
|
|
Three Months Ended March 31,
|
|||||||||||||
|
2018
|
|
2017
|
|
Better / (Worse)
|
|||||||||
Segment revenues
|
|
|
|
|
|
|
|
|||||||
Management, franchise, and other fees
|
$
|
98
|
|
|
$
|
90
|
|
|
$
|
8
|
|
|
9.5
|
%
|
Contra revenue
|
(3
|
)
|
|
(3
|
)
|
|
—
|
|
|
12.4
|
%
|
|||
Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties
|
420
|
|
|
401
|
|
|
19
|
|
|
4.6
|
%
|
|||
Total segment revenues
|
$
|
515
|
|
|
$
|
488
|
|
|
$
|
27
|
|
|
5.5
|
%
|
|
•
|
$8 million legal settlement proceeds related to a franchise agreement termination for an unopened property; and
|
•
|
$3 million increase in franchise fees and $2 million increase in management fees driven by new hotels and improved performance across the region.
|
|
Three Months Ended March 31,
|
|||||||||||||||||||||||||||||||||||
|
RevPAR
|
|
Occupancy
|
|
ADR
|
|||||||||||||||||||||||||||||||
(Comparable Systemwide Hotels)
|
2018
|
|
2017
|
|
Better /
(Worse) |
|
Better / (Worse) Constant $
|
|
2018
|
|
2017
|
|
Change in
% pts |
|
2018
|
|
2017
|
|
Better /
(Worse) |
|
Better / (Worse) Constant $
|
|||||||||||||||
Americas Full Service
|
$
|
153
|
|
|
$
|
148
|
|
|
3.2
|
%
|
|
3.1
|
%
|
|
73.1
|
%
|
|
71.4
|
%
|
|
1.7
|
%
|
|
$
|
209
|
|
|
$
|
207
|
|
|
0.9
|
%
|
|
0.8
|
%
|
Americas Select Service
|
$
|
103
|
|
|
$
|
100
|
|
|
3.7
|
%
|
|
3.6
|
%
|
|
74.3
|
%
|
|
72.8
|
%
|
|
1.5
|
%
|
|
$
|
139
|
|
|
$
|
137
|
|
|
1.5
|
%
|
|
1.5
|
%
|
|
|
Three Months Ended March 31,
|
|||||||||||||
|
2018
|
|
2017
|
|
Better / (Worse)
|
|||||||||
Segment Adjusted EBITDA
|
$
|
87
|
|
|
$
|
76
|
|
|
$
|
11
|
|
|
14.6
|
%
|
|
|
Three Months Ended March 31,
|
|||||||||||||
|
2018
|
|
2017
|
|
Better / (Worse)
|
|||||||||
Segment revenues
|
|
|
|
|
|
|
|
|||||||
Management, franchise, and other fees
|
$
|
30
|
|
|
$
|
25
|
|
|
$
|
5
|
|
|
20.1
|
%
|
Contra revenue
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|
(60.4
|
)%
|
|||
Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties
|
20
|
|
|
17
|
|
|
3
|
|
|
15.6
|
%
|
|||
Total segment revenues
|
$
|
49
|
|
|
$
|
42
|
|
|
$
|
7
|
|
|
17.9
|
%
|
|
|
Three Months Ended March 31,
|
|||||||||||||||||||||||||||||||||||
|
RevPAR
|
|
Occupancy
|
|
ADR
|
|||||||||||||||||||||||||||||||
(Comparable Systemwide Hotels)
|
2018
|
|
2017
|
|
Better /
(Worse) |
|
Better / (Worse) Constant $
|
|
2018
|
|
2017
|
|
Change in
% pts |
|
2018
|
|
2017
|
|
Better /
(Worse) |
|
Better (Worse) Constant $
|
|||||||||||||||
ASPAC Full Service
|
$
|
153
|
|
|
$
|
136
|
|
|
12.0
|
%
|
|
6.7
|
%
|
|
71.3
|
%
|
|
67.8
|
%
|
|
3.5
|
%
|
|
$
|
214
|
|
|
$
|
201
|
|
|
6.5
|
%
|
|
1.5
|
%
|
ASPAC Select Service
|
$
|
68
|
|
|
$
|
53
|
|
|
28.4
|
%
|
|
17.7
|
%
|
|
73.9
|
%
|
|
69.2
|
%
|
|
4.7
|
%
|
|
$
|
93
|
|
|
$
|
77
|
|
|
20.3
|
%
|
|
10.3
|
%
|
|
|
Three Months Ended March 31,
|
|||||||||||||
|
2018
|
|
2017
|
|
Better / (Worse)
|
|||||||||
Segment Adjusted EBITDA
|
$
|
18
|
|
|
$
|
15
|
|
|
$
|
3
|
|
|
23.4
|
%
|
|
|
Three Months Ended March 31,
|
|||||||||||||
|
2018
|
|
2017
|
|
Better / (Worse)
|
|||||||||
Segment revenues
|
|
|
|
|
|
|
|
|||||||
Management, franchise, and other fees
|
$
|
18
|
|
|
$
|
16
|
|
|
$
|
2
|
|
|
18.3
|
%
|
Contra revenue
|
(1
|
)
|
|
(1
|
)
|
|
—
|
|
|
24.2
|
%
|
|||
Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties
|
16
|
|
|
12
|
|
|
4
|
|
|
28.2
|
%
|
|||
Total segment revenues
|
$
|
33
|
|
|
$
|
27
|
|
|
$
|
6
|
|
|
22.6
|
%
|
|
|
Three Months Ended March 31,
|
|||||||||||||||||||||||||||||||||||
|
RevPAR
|
|
Occupancy
|
|
ADR
|
|||||||||||||||||||||||||||||||
(Comparable Systemwide Hotels)
|
2018
|
|
2017
|
|
Better /
(Worse) |
|
Better / (Worse) Constant $
|
|
2018
|
|
2017
|
|
Change in
% pts |
|
2018
|
|
2017
|
|
Better /
(Worse) |
|
Better / (Worse) Constant $
|
|||||||||||||||
EAME/SW Asia Full Service
|
$
|
127
|
|
|
$
|
113
|
|
|
13.0
|
%
|
|
7.0
|
%
|
|
67.5
|
%
|
|
63.7
|
%
|
|
3.8
|
%
|
|
$
|
189
|
|
|
$
|
177
|
|
|
6.7
|
%
|
|
1.0
|
%
|
EAME/SW Asia Select Service
|
$
|
68
|
|
|
$
|
60
|
|
|
12.7
|
%
|
|
6.1
|
%
|
|
68.0
|
%
|
|
63.6
|
%
|
|
4.4
|
%
|
|
$
|
100
|
|
|
$
|
95
|
|
|
5.5
|
%
|
|
(0.7
|
)%
|
|
|
Three Months Ended March 31,
|
|||||||||||||
|
2018
|
|
2017
|
|
Better / (Worse)
|
|||||||||
Segment Adjusted EBITDA
|
$
|
10
|
|
|
$
|
8
|
|
|
$
|
2
|
|
|
25.9
|
%
|
|
|
Three Months Ended March 31,
|
|||||||||||||
|
2018
|
|
2017
|
|
Better / (Worse)
|
|||||||||
Corporate and other revenues
|
$
|
32
|
|
|
$
|
22
|
|
|
$
|
10
|
|
|
52.6
|
%
|
Corporate and other Adjusted EBITDA
|
$
|
(29
|
)
|
|
$
|
(28
|
)
|
|
$
|
(1
|
)
|
|
(3.3
|
)%
|
|
•
|
interest expense;
|
•
|
provision for income taxes;
|
•
|
depreciation and amortization;
|
•
|
amortization of management and franchise agreement assets constituting payments to customers ("Contra Revenue");
|
•
|
revenues for the reimbursement of costs incurred on behalf of managed and franchised properties;
|
•
|
costs incurred on behalf of managed and franchised properties;
|
•
|
equity earnings (losses) from unconsolidated hospitality ventures;
|
•
|
stock-based compensation expense;
|
•
|
gains (losses) on sales of real estate;
|
•
|
asset impairments; and
|
•
|
other income (loss), net
.
|
|
Three Months Ended March 31,
|
|||||||||||||
2018
|
|
2017
|
|
Change
|
||||||||||
Net income attributable to Hyatt Hotels Corporation
|
$
|
411
|
|
|
$
|
55
|
|
|
$
|
356
|
|
|
643.6
|
%
|
Interest expense
|
19
|
|
|
21
|
|
|
(2
|
)
|
|
(7.4
|
)%
|
|||
Provision for income taxes
|
150
|
|
|
34
|
|
|
116
|
|
|
341.8
|
%
|
|||
Depreciation and amortization
|
83
|
|
|
87
|
|
|
(4
|
)
|
|
(4.4
|
)%
|
|||
EBITDA
|
663
|
|
|
197
|
|
|
466
|
|
|
237.7
|
%
|
|||
Contra revenue
|
5
|
|
|
4
|
|
|
1
|
|
|
18.5
|
%
|
|||
Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties
|
(456
|
)
|
|
(430
|
)
|
|
(26
|
)
|
|
(6.0
|
)%
|
|||
Costs incurred on behalf of managed and franchised properties
|
460
|
|
|
445
|
|
|
15
|
|
|
3.2
|
%
|
|||
Equity losses from unconsolidated hospitality ventures
|
13
|
|
|
3
|
|
|
10
|
|
|
360.9
|
%
|
|||
Stock-based compensation expense
|
18
|
|
|
16
|
|
|
2
|
|
|
12.7
|
%
|
|||
Gains on sales of real estate
|
(529
|
)
|
|
—
|
|
|
(529
|
)
|
|
NM
|
|
|||
Other (income) loss, net
|
18
|
|
|
(43
|
)
|
|
61
|
|
|
142.4
|
%
|
|||
Pro rata share of unconsolidated hospitality ventures Adjusted EBITDA
|
10
|
|
|
26
|
|
|
(16
|
)
|
|
(60.1
|
)%
|
|||
Adjusted EBITDA
|
$
|
202
|
|
|
$
|
218
|
|
|
$
|
(16
|
)
|
|
(7.3
|
)%
|
|
|
|
Three Months Ended March 31,
|
||||||
2018
|
|
2017
|
|||||
Cash provided by (used in):
|
|
|
|
||||
Operating activities
|
$
|
54
|
|
|
$
|
141
|
|
Investing activities
|
935
|
|
|
(96
|
)
|
||
Financing activities
|
(109
|
)
|
|
(166
|
)
|
||
Effect of exchange rate changes on cash
|
(3
|
)
|
|
1
|
|
||
Net increase (decrease) in cash, cash equivalents, and restricted cash
|
$
|
877
|
|
|
$
|
(120
|
)
|
•
|
We sold Grand Hyatt San Francisco, Andaz Maui at Wailea Resort, and Hyatt Regency Coconut Point Resort and Spa to an unrelated third party as a portfolio for approximately
$992 million
, net of proration adjustments and closing costs. Proceeds from the sale of Hyatt Regency Coconut Point Resort and Spa of
$221 million
are held as restricted for use in a potential like-kind exchange.
|
•
|
We sold our ownership interest in an unconsolidated hospitality venture for which we received proceeds of $
9 million
.
|
•
|
We invested
$60 million
in capital expenditures (see "—Capital Expenditures").
|
•
|
We acquired Miraval for approximately
$239 million
.
|
•
|
We invested
$50 million
in capital expenditures (see "—Capital Expenditures").
|
•
|
We invested $8 million in unconsolidated hospitality ventures.
|
•
|
We received distributions of $196 million related to the redemption of our Playa preferred shares.
|
•
|
We repurchased
1,209,987
shares of common stock at a weighted-average price of
$76.89
for $75 million. Of the shares repurchased, 244,260 were delivered in the settlement of the November 2017 ASR in 2018, for which payment was made during 2017.
|
•
|
We had borrowings of
$20 million
and repayments of $
20 million
on our revolving credit facility.
|
•
|
We paid a cash dividend of $0.15 per share on Class A common stock and Class B common stock totaling $18 million.
|
•
|
We redeemed the Miraval preferred shares for approximately
$10 million
.
|
•
|
We repurchased
5,480,636
shares of common stock at a weighted-average price of $52.48 for an aggregate purchase price of
$288 million
. Included in the repurchases were 4,596,822 shares repurchased under the March 2017 ASR at a price of $52.21 per share for an aggregate purchase price of $240 million.
|
•
|
We drew $180 million on our revolving credit facility.
|
•
|
In conjunction with the acquisition of Miraval, we issued
$9 million
of redeemable preferred shares of a subsidiary.
|
|
March 31, 2018
|
|
December 31, 2017
|
||||
Consolidated debt (1)
|
$
|
1,450
|
|
|
$
|
1,451
|
|
Stockholders’ equity
|
4,188
|
|
|
3,837
|
|
||
Total capital
|
5,638
|
|
|
5,288
|
|
||
Total debt to total capital
|
25.7
|
%
|
|
27.4
|
%
|
||
Consolidated debt (1)
|
1,450
|
|
|
1,451
|
|
||
Less: Cash and cash equivalents and short-term investments
|
(1,214
|
)
|
|
(552
|
)
|
||
Net consolidated debt
|
$
|
236
|
|
|
$
|
899
|
|
Net debt to total capital
|
4.2
|
%
|
|
17.0
|
%
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Maintenance and technology
|
$
|
13
|
|
|
$
|
13
|
|
Enhancements to existing properties
|
37
|
|
|
22
|
|
||
Investment in new properties under development or recently opened
|
10
|
|
|
15
|
|
||
Total capital expenditures
|
$
|
60
|
|
|
$
|
50
|
|
Description
|
Principal Amount
|
||
2019 Notes
|
$
|
196
|
|
2021 Notes
|
250
|
|
|
2023 Notes
|
350
|
|
|
2026 Notes
|
400
|
|
|
Total
|
$
|
1,196
|
|
|
Maturities by Period
|
|
|
|
|
||||||||||||||||||||||||||
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
Thereafter
|
|
Total Carrying Amount
(1)
|
|
Total Fair Value
|
||||||||||||||||
Fixed-rate debt
|
$
|
4
|
|
|
$
|
200
|
|
|
$
|
5
|
|
|
$
|
255
|
|
|
$
|
5
|
|
|
$
|
914
|
|
|
$
|
1,383
|
|
|
$
|
1,426
|
|
Average interest rate (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
4.88
|
%
|
|
|
|||||||||||||||
Floating-rate debt
|
$
|
4
|
|
|
$
|
5
|
|
|
$
|
6
|
|
|
$
|
6
|
|
|
$
|
6
|
|
|
$
|
41
|
|
|
$
|
68
|
|
|
$
|
84
|
|
Average interest rate (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
7.94
|
%
|
|
|
|
|
Total number
of shares
purchased (1)
|
|
Weighted average
price paid
per share
|
|
Total number of
shares purchased
as part of publicly
announced plans
|
|
Maximum number (or approximate dollar value) of shares that may yet be purchased under the program
|
||||||
January 1 to January 31, 2018 (2)
|
|
277,760
|
|
|
$
|
71.93
|
|
|
277,760
|
|
|
$
|
861,053,587
|
|
February 1 to February 28, 2018
|
|
66,377
|
|
|
$
|
79.12
|
|
|
66,377
|
|
|
$
|
855,801,629
|
|
March 1 to March 31, 2018
|
|
865,850
|
|
|
$
|
78.31
|
|
|
865,850
|
|
|
$
|
787,994,730
|
|
Total
|
|
1,209,987
|
|
|
$
|
76.89
|
|
|
1,209,987
|
|
|
|
(1)
|
On each of May 4, 2017 and December 14, 2017, we announced the approvals of expansions of our share repurchase program pursuant to which we are authorized to purchase up to an additional $500 million and $750 million, respectively, of Class A and Class B common stock in the open market, in privately negotiated transactions, or otherwise, including pursuant to a Rule 10b5-1 plan. The repurchase program does not have an expiration date. At
March 31, 2018
, we had approximately
$788
million remaining under the share repurchase authorization. During the period, we settled our November 2017 ASR. See Part I, Item 1 "Financial Statements—Note
13
to the Condensed Consolidated Financial Statements" for further detail.
|
(2)
|
The repurchase of shares includes the settlement of the November 2017 ASR. The initial delivery of shares occurred in November 2017, and the final tranche of shares was delivered in January 2018 in full settlement of the November 2017 ASR. Overall, we repurchased 1,397,164 shares at a weighted-average price per share of $71.57, representing our average share price over the duration of the November 2017 ASR agreement less a discount. See Part I, Item 1 "Financial Statements—Note
13
to the Condensed Consolidated Financial Statements" for further details regarding the November 2017 ASR.
|
Exhibit Number
|
Exhibit Description
|
|
|
2.1
|
|
|
|
3.1
|
|
|
|
3.2
|
|
|
|
+10.1
|
|
|
|
+10.2
|
|
|
|
31.1
|
|
|
|
31.2
|
|
|
|
32.1
|
|
|
|
32.2
|
|
|
|
101.INS
|
XBRL Instance Document
|
|
|
101.SCH
|
XBRL Taxonomy Extension Schema Document
|
|
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
Hyatt Hotels Corporation
|
|
|
|
|
|
Date:
|
May 3, 2018
|
By:
|
/s/ Mark S. Hoplamazian
|
|
|
|
Mark S. Hoplamazian
|
|
|
|
President and Chief Executive Officer
|
|
|
|
(Principal Executive Officer)
|
|
|
Hyatt Hotels Corporation
|
|
|
|
|
|
Date:
|
May 3, 2018
|
By:
|
/s/ Patrick J. Grismer
|
|
|
|
Patrick J. Grismer
|
|
|
|
Executive Vice President, Chief Financial Officer
|
|
|
|
(Principal Financial Officer)
|
A.
|
The Company currently maintains the Plan.
|
|
|
B.
|
The Board believes it is in the best interests of the Company and its stockholders to amend the Plan to make certain administrative and clarifying changes as set forth herein
|
|
|
|
Hyatt Hotels Corporation
|
||
|
|
|
By:
|
|
/s/ Margaret C. Egan
|
Name:
|
|
Margaret C. Egan
|
Title:
|
|
Executive Vice President, General Counsel and Secretary
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date: May 3, 2018
|
/s/ Mark S. Hoplamazian
|
|
Mark S. Hoplamazian
|
|
President and Chief Executive Officer
|
|
(Principal Executive Officer)
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
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a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
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b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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Date: May 3, 2018
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/s/ Patrick J. Grismer
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Patrick J. Grismer
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Executive Vice President, Chief Financial Officer
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(Principal Financial Officer)
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Date: May 3, 2018
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/s/ Mark S. Hoplamazian
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Mark S. Hoplamazian
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President and Chief Executive Officer
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(Principal Executive Officer)
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Date: May 3, 2018
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/s/ Patrick J. Grismer
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Patrick J. Grismer
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Executive Vice President, Chief Financial Officer
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(Principal Financial Officer)
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