Hyatt Reports 7.6% RevPAR Increase In Q2

　　Highlights of the report include:

　　Adjusted EBITDA was $180 million in the second quarter of 2012 compared to $151 million in the second quarter of 2011, an increase of 19.2%.

　　Net income attributable to Hyatt was $39 million, or $0.24 per share, during the second quarter of 2012 compared to net income attributable to Hyatt of $37 million, or $0.22 per share, in the second quarter of 2011. Adjusted for special items, net income attributable to Hyatt was $39 million, or $0.24 per share, during the second quarter of 2012 compared to net income attributable to Hyatt of $46 million, or $0.27 per share, during the second quarter of 2011. See the table on page 3 of the accompanying schedules for a summary of special items. Note that net income in the second quarter of 2011 benefited from a $12 million, or $0.07 per share, release of a tax valuation allowance against certain foreign net operating losses.

　　Comparable owned and leased hotel RevPAR increased 7.6% (9.4% excluding the effect of currency) in the second quarter of 2012 compared to the second quarter of 2011.

　　Owned and leased hotel operating margins increased 320 basis points in the second quarter of 2012 compared to the second quarter of 2011. Comparable owned and leased hotel operating margins increased 120 basis points in the second quarter of 2012 compared to the same period in 2011. See the table on page 9 of the accompanying schedules for a reconciliation of comparable owned and leased hotel operating margin to owned and leased hotel operating margin.

　　Comparable North American full service hotel RevPAR increased 8.7% (8.9% excluding the effect of currency) in the second quarter of 2012 compared to the second quarter of 2011. Comparable North American select service hotel RevPAR increased 6.4% in the second quarter of 2012 compared to the second quarter of 2011.

　　Comparable international hotel RevPAR increased 3.8% (8.5% excluding the effect of currency) in the second quarter of 2012 compared to the second quarter of 2011.

　　The Company opened five properties during the second quarter of 2012.

　　The Company’s Board of Directors authorized a repurchase of common stock of up to $200 million.

　　Mark S. Hoplamazian, president and chief executive officer of Hyatt Hotels Corporation, said, “Our second quarter results were strong, with Adjusted EBITDA increasing over 19% compared to last year. RevPAR increased over 8% in North America as we experienced strong transient demand. Owned and leased RevPAR grew over 9% in constant dollars as we benefited from last year’s significant renovations.

　　“Our international hotels continued to perform well, with RevPAR up over 8% in constant dollars. In particular, most of our hotels in China continued to show solid results, with a sequential increase in year-over-year RevPAR growth for comparable hotels in the second quarter. In addition, results from our hotels in Europe, which are primarily located in gateway cities such as Paris and London, remained good, despite the economic uncertainty in the wider region.

　　“Over the last 18 months, we have completed hotel acquisitions totaling over $900 million. These properties are performing well, with re-branding largely complete and the benefits of our system leading to strong growth in RevPAR and in market share.

　　“Looking ahead, we are encouraged by recent trends in transient travel and positive group pace as compared to last year. Our base of executed contracts for future openings is the largest it has ever been – at 175 hotels. We are on track to open over 20 hotels this year, including our first select service hotel outside the U.S. In addition, the Company is well positioned to take advantage of growth opportunities, as our balance sheet remains strong. Our organizational realignment is progressing well and slated for completion during the fourth quarter of 2012.

　　“Our Board of Directors has authorized a repurchase of common stock of up to $200 million. The decision to authorize a repurchase of common stock reflects the Board’s judgment as to what is in the best interests of all shareholders in the context of our strategy, financial position, business results, and macro-economic factors.”

　　Owned and Leased Hotels Segment

　　Adjusted EBITDA increased 15.8% in the second quarter of 2012 compared to the same period in 2011.

　　RevPAR for comparable owned and leased hotels increased 7.6% (9.4% excluding the effect of currency) in the second quarter of 2012 compared to the same period in 2011. Occupancy improved 360 basis points and ADR increased 2.6% (4.4% excluding the effect of currency) compared to the same period in 2011.

　　Revenues increased 9.1% in the second quarter of 2012 compared to the same period in 2011. Comparable hotel revenues increased 4.5% in the second quarter of 2012 compared to the same period in 2011.

　　Owned and leased hotel expenses increased 4.6% in the second quarter of 2012 compared to the same period in 2011. Excluding expenses related to benefit programs funded through Rabbi Trusts and non-comparable hotel expenses, expenses increased 2.8% in the second quarter of 2012 compared to the same period in 2011. See the table on page 9 of the accompanying schedules for a reconciliation of comparable owned and leased hotels expenses to owned and leased hotels expenses.

　　The following hotel was added to the portfolio during the second quarter:

　　Hyatt Regency Mexico City (owned, 756 rooms)

　　North American Management and Franchising Segment

　　Adjusted EBITDA increased 22.7% in the second quarter of 2012 compared to the same period in 2011.

　　RevPAR for comparable North American full service hotels increased 8.7% (8.9% excluding the effect of currency) in the second quarter of 2012 compared to the same period in 2011. Occupancy increased 290 basis points and ADR increased 4.8% (5.0% excluding the effect of currency) compared to the same period in 2011.

　　Group rooms revenue at comparable North American full service hotels increased approximately 6% in the second quarter of 2012 compared to the same period in 2011, as a result of strong corporate revenue offset by slightly lower association revenue.

　　Transient rooms revenue at comparable North American full service hotels increased approximately 10% in the second quarter of 2012 compared to the same period in 2011, driven by strength from corporate customers.

　　Revenue from management and franchise fees increased 17.9% in the second quarter of 2012 compared to the same period in 2011.

　　The following four hotels were added to the portfolio during the second quarter:

　　Hyatt French Quarter (franchised, 254 rooms)

　　Hyatt Chicago Magnificent Mile (franchised, 417 rooms)

　　Hyatt Place Boston/Braintree (franchised, 204 rooms)

　　Hyatt Place Riverside/Downtown (franchised, 125 rooms)

　　International Management and Franchising Segment

　　Adjusted EBITDA increased 9.1% in the second quarter of 2012 compared to the same period in 2011.

　　RevPAR for comparable international hotels increased 3.8% (8.5% excluding the effect of currency) in the second quarter of 2012 compared to the same period in 2011. Occupancy increased 250 basis points and ADR decreased 0.1% (increased 4.4% excluding the effect of currency) compared to the same period in 2011.

　　Revenue from management and franchise fees increased 2.6% (7.3% excluding the effect of currency) in the second quarter of 2012 compared to the same period in 2011.

　　The following hotel was added to the portfolio during the second quarter:

　　Hyatt Regency Mexico City (owned, 756 rooms)

　　One property was removed from the portfolio during the second quarter.

　　Selling, General, and Administrative Expenses

　　Selling, general, and administrative expenses decreased by 1.4% in the second quarter of 2012 compared to the same period in 2011. Adjusted selling, general, and administrative expenses increased by $4 million, or 5.7%, in the second quarter of 2012 compared to the same period in 2011. Adjusted selling, general, and administrative expenses included an approximate $2 million benefit related to a bad debt reversal in the second quarter of 2012. See the table on page 8 of the accompanying schedules for a reconciliation of adjusted selling, general, and administrative expenses to selling, general, and administrative expenses.

　　Openings and future expansion

　　Hyatt added five hotels in the second quarter of 2012, each of which is listed above.

　　The Company expects to open a significant number of new properties in the future. As of June 30, 2012 this effort was underscored by executed management or franchise contracts for more than 175 hotels (or more than 39,000 rooms) across all brands. The executed contracts represent potential entry into several new countries and expansion into many new markets or markets in which the Company is under-represented. Approximately 75% of the future expansion is expected to be located outside North America.[page]

　　Capital expenditures

　　Capital expenditures during the second quarter of 2012 totaled $62 million, categorized as follows:

　　Maintenance: $20 million

　　Enhancements to existing properties: $32 million

　　Investment in new properties: $10 million

　　Common stock repurchase authorization

　　The Company’s Board of Directors authorized the repurchase of up to $200 million of the Company’s common stock. These repurchases may be made from time to time in the open market, in privately negotiated transactions, or otherwise, including pursuant to a Rule 10b5-1 plan, at prices that the Company deems appropriate and subject to market conditions, applicable law and other factors deemed relevant in the Company’s sole discretion.

　　The common stock repurchase authorization is effective immediately. It does not obligate the Company to repurchase any dollar amount or number of shares of common stock, and may be suspended or discontinued at any time. The Company intends to pay for shares repurchased with cash from its balance sheet. As of June 30, 2012, the Company had approximately 46.1 million shares of Class A common stock, par value $0.01 per share, and approximately 119.6 million shares of Class B common stock, par value $0.01 per share, issued and outstanding.

　　Corporate finance

　　During the second quarter of 2012, the Company purchased an existing 756-room hotel in Mexico City for a purchase price of approximately $190 million. The hotel was rebranded as Hyatt Regency Mexico City.

　　On June 30, 2012, the Company had total debt of approximately $1.2 billion.

　　On June 30, 2012, the Company had cash and cash equivalents, including investments in highly-rated money market funds and similar investments, of approximately $400 million and short-term investments of approximately $500 million.

　　On June 30, 2012, the Company had undrawn borrowing availability of approximately $1.4 billion under its revolving credit facility.

　　2012 Information

　　The Company is providing the following information for the 2012 fiscal year:

　　Adjusted SG&A expense is expected to be approximately $320 million.

　　Capital expenditures are expected to be approximately $360 million.

　　Depreciation and amortization expense is expected to be approximately $360 million.

　　Interest expense is expected to be approximately $70 million.

　　The Company expects to open over 20 hotels in 2012.