Hyatt Hotels Corporation

Table of Contents

Financial Information (unaudited)

  • Reconciliation of Non-GAAP Measure: Reconciliation of Net Income Attributable to Hyatt Hotels Corporation to EBITDA and EBITDA to Adjusted EBITDA and Total Revenues to Adjusted Revenues
  • Reconciliation of Non-GAAP Measure: Earnings per Diluted Share and Net Income Attributable to Hyatt Hotels Corporation, to Earnings per Diluted Share, Adjusted for Special Items and Adjusted Net Income Attributable to Hyatt Hotels Corporation - Three Months Ended September 30, 2020 and September 30, 2019
  • Reconciliation of Non-GAAP Measure: Earnings per Diluted Share and Net Income Attributable to Hyatt Hotels Corporation, to Earnings per Diluted Share, Adjusted for Special Items and Adjusted Net Income Attributable to Hyatt Hotels Corporation - Nine Months Ended September 30, 2020 and September 30, 2019
  • Reconciliation of Non-GAAP Measure: SG&A Expenses to Adjusted SG&A Expenses
  • Reconciliation of Non-GAAP Measure: Comparable Owned and Leased Hotels Operating Margin to Owned and Leased Hotels Operating Margin

Hyatt Hotels Corporation

Reconciliation of Non-GAAP Measure: Reconciliation of Net Income (Loss) Attributable to Hyatt Hotels Corporation to EBITDA and EBITDA to Adjusted EBITDA and Total Revenues to Adjusted Revenues (in millions)

Three Months Ended

Nine Months Ended

September 30,

Change

Change

September 30,

Change

Change

2020

2019

2020

2019

Net income (loss) attributable to Hyatt Hotels Corporation

($)

(%)

($)

(%)

$

(161)

$

296

$

(457)

(154.2)%

$

(500)

$

445

$

(945)

(212.3)%

Interest expense

35

19

16

88.7 %

87

58

29

49.9 %

(Benefit) provision for income taxes

(59)

109

(168)

(153.8) %

(188)

148

(336)

(227.0) %

Depreciation and amortization

80

85

(5)

(6.4) %

233

248

(15)

(6.0) %

EBITDA

(105)

509

(614)

(120.6)%

(368)

899

(1,267)

(140.9)%

Contra revenue

7

5

2

20.5 %

20

16

4

21.4 %

Revenues for the reimbursement of costs incurred on behalf of

(267)

(617)

350

56.8 %

(1,015)

(1,826)

811

44.5 %

managed and franchised properties

Costs incurred on behalf of managed and franchised properties

278

633

(355)

(56.1) %

1,068

1,871

(803)

(42.9) %

Equity losses from unconsolidated hospitality ventures

20

5

15

341.1 %

45

2

43

NM

Stock-based compensation expense

3

4

(1)

(25.5) %

20

28

(8)

(28.6) %

Gains on sales of real estate

-

(373)

373

100.0 %

(8)

(374)

366

97.9 %

Asset impairments

-

9

(9)

(99.5) %

52

13

39

277.7 %

Other (income) loss, net

19

(25)

44

173.9 %

114

(104)

218

208.9 %

Pro rata share of unconsolidated owned and leased hospitality

(3)

13

(16)

(127.5) %

(7)

38

(45)

(119.5) %

ventures Adjusted EBITDA

Adjusted EBITDA

$

(48)

$

163

$

(211)

(129.9)%

$

(79)

$

563

$

(642)

(114.1)%

Three Months Ended

Nine Months Ended

September 30,

Change

Change

September 30,

Change

Change

2020

2019

2020

2019

($)

(%)

($)

(%)

Total revenues

$

399

$

1,215

$

(816)

(67.2)%

$

1,642

$

3,745

$ (2,103)

(56.2)%

Add: Contra revenue

7

5

2

20.5 %

20

16

4

21.4 %

Less: Revenues for the reimbursement of costs incurred on behalf

(267)

(617)

350

56.8 %

(1,015)

(1,826)

811

44.5 %

of managed and franchised properties

Adjusted revenues

$

139

$

603

$

(464)

(77.0)%

$

647

$

1,935

$ (1,288)

(66.5)%

Adjusted EBITDA Margin %

(35.0)%

26.9 %

(61.9)%

(12.3) %

29.1 %

(41.4) %

Adjusted EBITDA Margin % Change in Constant Currency

(61.8)%

(41.2)%

Page 2

Hyatt Hotels Corporation

Reconciliation of Non-GAAP Measure: Earnings (Losses) per Diluted Share and Net Income (Loss) Attributable to Hyatt Hotels Corporation, to Earnings (Losses) per Diluted Share, Adjusted for Special Items and Adjusted Net Income (Loss) Attributable to Hyatt Hotels Corporation - Three Months Ended September 30, 2020 and September 30, 2019

(in millions, except per share amounts)

Location on Condensed Consolidated

Three Months Ended

Statements of Income (Loss)

September 30,

Net income (loss) attributable to Hyatt Hotels Corporation

2020

2019

$

(161)

$

296

Earnings (losses) per diluted share

$

(1.59)

$

2.80

Special items

Restructuring expenses (a)

Other income (loss), net

22

-

Utilization of Avendra and other proceeds (b)

Costs incurred on behalf of managed and franchised properties;

depreciation and amortization

6

11

Fund deficits (c)

Revenues for the reimbursement of costs incurred and costs incurred on

behalf of managed and franchised properties; other income (loss), net

6

4

Unrealized gains (d)

Other income (loss), net

(8)

(3)

Gains on sales of real estate (e)

Gains on sales of real estate

-

(373)

Asset impairments (f)

Asset impairments

-

9

Unconsolidated hospitality ventures (g)

Equity losses from unconsolidated hospitality ventures

-

6

Other (h)

Other income (loss), net

(1)

(3)

Special items - pre-tax

25

(349)

Income tax benefit (provision) for special items

Benefit (provision) for income taxes

(14)

92

Total special items - after-tax

11

(257)

Special items impact per diluted share

$

0.11

$

(2.43)

Adjusted net income (loss) attributable to Hyatt Hotels Corporation

$

(150)

$

39

Earnings (losses) per diluted share, adjusted for special items

$

(1.48)

$

0.37

  1. Restructuring expenses - During the three months ended September 30, 2020 (Q3 2020), we recognized $22 million in restructuring expenses related to severance and related charges as a result of the COVID-19 pandemic.
  2. Utilization of Avendra and other proceeds - During Q3 2020 and the three months ended September 30, 2019 (Q3 2019), we recognized expenses related to the partial utilization of the Avendra LLC sale proceeds for the benefit of our hotels. The gain recognized in conjunction with the sale of Avendra LLC was included as a special item during the year ended December 31, 2017.
  3. Fund deficits - During Q3 2020 and Q3 2019, we recognized net deficits on certain funds due to the timing of revenue and expense recognition that we expect will reverse in future periods.
  4. Unrealized gains - During Q3 2020 and Q3 2019, we recognized unrealized gains due to the change in fair value of our marketable securities.
  5. Gains on sales of real estate - During Q3 2019, we recognized a $272 million gain on the sale of Hyatt Regency Atlanta and a $101 million gain on the sale of the property adjacent to Grand Hyatt San Francisco and assignment of the related Apple store lease.
  6. Asset impairments - During Q3 2019, we recognized a $9 million impairment charge related to certain management agreement intangibles.
  7. Unconsolidated hospitality ventures - During Q3 2019, we recognized a $6 million impairment charge related to one unconsolidated hospitality venture.
  8. Other - Q3 2019 includes $2 million of income related to the release of the contingent consideration liability recorded in connection with the acquisition of Two Roads in 2018.

Page 3

Hyatt Hotels Corporation

Reconciliation of Non-GAAP Measure: Earnings (Losses) per Diluted Share and Net Income (Loss) Attributable to Hyatt Hotels Corporation, to Earnings (Losses) per Diluted Share, Adjusted for Special Items and Adjusted Net Income (Loss) Attributable to Hyatt Hotels Corporation - Nine Months Ended September 30, 2020 and September 30, 2019

(in millions, except per share amounts)

Location on Condensed Consolidated

Nine Months Ended

Statements of Income (Loss)

September 30,

2020

2019

Net income (loss) attributable to Hyatt Hotels Corporation

$

(500)

$

445

Earnings (losses) per diluted share

$

(4.93)

$

4.17

Special items

Restructuring expenses (a)

Other income (loss), net

69

-

Asset impairments (b)

Asset impairments

52

13

Unrealized (gains) losses (c)

Other income (loss), net

36

(23)

Utilization of Avendra and other proceeds (d)

Costs incurred on behalf of managed and franchised properties;

depreciation and amortization

29

30

Fund deficits (e)

Revenues for the reimbursement of costs incurred and costs incurred on

behalf of managed and franchised properties; other income (loss), net

25

9

Gains on sales of real estate (f)

Gains on sales of real estate

(8)

(374)

Release of contingent consideration liability (g)

Other income (loss), net

-

(29)

Other (h)

Equity losses from unconsolidated hospitality ventures; Other income

(7)

(1)

(loss), net

Special items - pre-tax

196

(375)

Income tax benefit (provision) for special items

Benefit (provision) for income taxes

(64)

99

Total special items - after-tax

132

(276)

Special items impact per diluted share

$

1.30

$

(2.59)

Adjusted net income (loss) attributable to Hyatt Hotels Corporation

$

(368)

$

169

Earnings (losses) per diluted share, adjusted for special items

$

(3.63)

$

1.58

  1. Restructuring expenses - During the nine months ended September 30, 2020 (YTD 2020), we recognized $69 million in restructuring expenses related to severance and related charges as a result of the COVID-19 pandemic.
  2. Asset impairments - During YTD 2020, we recognized $52 million of impairment charges related to goodwill, property and equipment, operating lease right-of-use assets, and definite-lived intangibles. During the nine months ended September 30, 2019 (YTD 2019), we recognized $13 million of impairment charges related to certain management agreement intangibles.
  3. Unrealized (gains) losses - During YTD 2020 and YTD 2019, we recognized unrealized losses and gains, respectively, due to the change in fair value of our marketable securities.
  4. Utilization of Avendra and other proceeds - During YTD 2020 and YTD 2019, we recognized expenses related to the partial utilization of the Avendra LLC sale proceeds for the benefit of our hotels. The gain recognized in conjunction with the sale of Avendra LLC was included as a special item during the year ended December 31, 2017.
  5. Fund deficits - During YTD 2020 and YTD 2019, we recognized net deficits on certain funds due to the timing of revenue and expense recognition that we expect will reverse in future periods.
  6. Gains on sales of real estate - During YTD 2020, we recognized a $4 million pre-tax gain related to the sale of our controlling interest in entities that are developing a hotel, parking, and retail space and a $4 million pre-tax gain on the sale of a building. During YTD 2019, we recognized a $272 million gain on the sale of Hyatt Regency Atlanta and a $101 million gain on the sale of the property adjacent to Grand Hyatt San Francisco and assignment of the related Apple store lease.
  7. Release of contingent consideration liability - During YTD 2019, we recognized $29 million of income related to the release of the contingent consideration liability recorded in connection with the acquisition of Two Roads in 2018.
  8. Other - During YTD 2020, we recognized $5 million of realized gains. During YTD 2019, we recognized an $8 million gain attributable to sales activity related to certain unconsolidated hospitality ventures, which was offset by impairment charges of $7 million.

Page 4

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Hyatt Hotels Corporation published this content on 04 November 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 04 November 2020 21:40:05 UTC