The following excerpt is from the company's
Mark S. Hoplamazian, president and chief executive officer of Hyatt Hotels Corporation, said, "Our RevPAR growth was strong due to greater transient business and increased market share. These positive results drove solid fee growth across our system."
financial results are as follows:
Adjusted EBITDA was
, a decrease of
. Adjusted EBITDA in the
was negatively impacted by $17 million due to net dispositions and $7 m illion due to net unfavorable currency impacts, compared to the
Adjusted for special items, net income attributable to Hyatt was
per share, during the
compared to net income attributable to Hyatt of
Net income attributable to Hyatt was
per share, in the
Comparable owned and leased hotels RevPAR increased
excluding the effect of currency) in the
Comparable owned and leased hotels operating margins decreased
basis points in the
. Owned and leased hotels operating margins decreased
Comparable systemwide RevPAR increased
omparable U.S. full service hotel RevPAR increased 5.2% in the
. Comparable U.S. select service hotel RevPAR increased 7.1% in the
hotels were opened during the
. As of
September 30, 2015
, the Company's executed contract base consisted of approximately
hotels or approximately
The Company repurchased
shares of common stock at a weighted average price of
per share, for an aggregate purchase price of approximately
Mr. Hoplamazian continued, "Adjusted EBITDA grew nearly 10% in the third quarter, excluding the impact of foreign exchange and dispositions of hotels last year. This level of growth is a testament to the strength of our business model and reflects strong ongoing performance in our existing hotels and the positive effects of significant net growth in our hotel and rooms base around the world.
"Year-to-date through the third quarter, we added 37 hotels to our system, 28% more than the same period last year, and expect to open approximately 13 more hotels by year-end. Our base of executed contracts for new hotels increased to approximately
rooms in the third quarter, reflecting a significant potential increase relative to our existing size. We remain focused on opening new hotels across multiple geographies to expand our differentiated offering in new and attractive markets.
"Our growth profile is expected to yield greater management and franchise fees in the years ahead. Total fees grew nearly 12% year-to-date through the third quarter, or 16% excluding the impact of foreign exchange. We expect this strong fee growth profile to progress as we continue to realize meaningful net hotel and net rooms growth.
"Looking ahead, we expect overall operating performance at our hotels in the U.S. to remain strong, based on continued economic growth and positive group and transient trends."
Owned and Leased Hotels Segment
Total segment Adjusted EBITDA decreased
compared to the same period in
Owned and leased hotels Adjusted EBITDA decreased
. Refer to the table on page 18 of the schedules for a detailed list of portfolio changes and the year-over-year net impact to
quarter owned and leased hotels Adjusted EBITDA.
Pro rata share of unconsolidated hospitality ventures Adjusted EBITDA increased
. Owned and leased hotels expenses decreased
RevPAR for comparable owned and leased hotels increased
. Occupancy increased
basis points and ADR increased
excluding the effect of currency) compared to the same period in
Comparable owned and leased hotels revenue increased
. Excluding expenses related to benefit programs funded through rabbi trusts and non-comparable hotel expenses, expenses increased
. Refer to the table on page 12 of the schedules for a reconciliation of comparable owned and leased hotels expenses to owned and leased hotels expenses.
Management and Franchise Fees
Total fee revenue increased
(13.8% excluding the effect of currency) to
. Base management fees increased
. Incentive management fees decreased
, primarily due to unfavorable foreign exchange translation. Franchise fees increased
, primarily due to new hotels and hotels
recently converted from managed to franchised. Other fee revenues increased
as a result of increased amortization of deferred gains from hotels sold subject to long-term management agreements and termination fees.
Americas Management and Franchising Segment
RevPAR for comparable Americas full service hotels increased
Group rooms revenue at comparable U.S. full service hotels increased 1.4% in the
. Group room nights decreased 3.2% and group ADR increased 4.7% in the
Transient rooms revenue at comparable U.S. full service hotels increased 9.2% in the
. Transient room nights increased 4.6% and transient ADR increased 4.4% in the
RevPAR for comparable Americas select service hotels increased
Revenue from management, franchise and other fees increased
The following six hotels were added to the portfolio during the
Hyatt Place Bloomington / Normal (franchised, 114 rooms)
Hyatt Place Buffalo / Amherst (franchised, 137 rooms)
Hyatt Place Charleston / Historic District (managed, 191 rooms)
Hyatt Place Tegucigalpa, Honduras (franchised, 126 rooms)
Hyatt House Atlanta / Downtown (franchised, 150 rooms)
Hyatt House Charleston / Historic District (managed, 113 rooms)
One hotel was removed from the portfolio during the third quarter.
Southeast Asia, China, Australia, South Korea and Japan (ASPAC) Management and Franchising Segment
RevPAR for comparable ASPAC full service hotels decreased
basis points and ADR decreased
Revenue from management, franchise and other fees decreased
The following two hotels were added to the portfolio during the
Hyatt Regency Naha, Okinawa, Japan (franchised, 294 rooms)
Hyatt Regency Wuhan Optics Valley, China (managed, 330 rooms)
Europe, Africa, Middle East and Southwest Asia (EAME/SW Asia) Management Segment
RevPAR for comparable EAME/SW Asia full service hotels decreased
basis points and ADR decreased
Revenue from management and other fees decreased
, primarily due to the impact from the stronger U.S. dollar and decreased performance at certain properties in the Middle East.
The following hotel was added to the portfolio during the
Hyatt Place Dubai Baniyas Square, United Arab Emirates (managed, 126 rooms)
Selling, General, and Administrative Expenses
Selling, general, and administrative expenses decreased
. Adjusted selling, general, and administrative expenses decreased
, primarily due to the sale of the Company's vacation ownership business and lower stock-based compensation expenses in the quarter. Refer to the table on page 11 of the schedules for a reconciliation of adjusted selling, general, and administrative expenses to selling, general, and administrative expenses.
OPENINGS AND FUTURE EXPANSION
hotels were added in the
, each of which is listed above. The Company added 37 hotels year-to-date through
and is on pace to open
hotels during the
, the Company had executed management or franchise contracts for approximately
hotels (or approximately
rooms). The executed contracts represent potential entry into several new countries and expansion into new markets or markets in which the Company is under-represented.
, the Company repurchased
. From October 1 through October 30,
shares of common stock at a weighted average price of $49.07 per share, for an aggregate purchase price of approximately
. As of October 30, 2015, the Company had approximately $257 million remaining under its share repurchase authorization.
CORPORATE FINANCE / ASSET RECYCLING
quarter, the Company completed the following transactions:
Sold an unconsolidated hospitality venture interest which owned one hotel for approximately $3 million. The Company continues to manage the hotel.
BALANCE SHEET / OTHER ITEMS
, the Company reported the following:
Total debt of approximately
Pro rata share of non-recourse unconsolidated hospitality venture debt of approximately
compared with approximately
Cash and cash equivalents, including investments in highly-rated money market funds and similar investments, of
, short-term investments of
and restricted cash of
Undrawn borrowing availability of approximately
under its revolving credit facility.
The Company is reaffirming the following information for the
Depreciation and amortization expense is expected to be approximately $310 million.
Interest expense is expected to be approximately $70 million.
The Company expects to open
The Company is revising the following information for the
Adjusted selling, general, and administrative expenses are expected to be approximately $305 million (compared to previous expectation of approximately $315 million).
Capital expenditures are expected to be approximately $290 million (compared to previous expectation of approximately $320 million), including investments in new properties of approximately $115 million (compared to previous expectation of approximately $150 million).
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.
CONFERENCE CALL INFORMATION
The Company will hold an investor conference call today,
November 3, 2015
, at 10:00 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
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;
other income (loss), net;
net income 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...