Hyatt Hotels Corporation (H, Financial) filed Annual Report for the period ended 2011-12-31.
Hyatt Hotels Corp. has a market cap of $1.92 billion; its shares were traded at around $43.05 with a P/E ratio of 75.5 and P/S ratio of 0.5.
Net gains and interest income from marketable securities held to fund operating programs. Net gains and interest income from marketable securities held to fund operating programs resulted in a net gain of $2 million for the year ended December 31, 2011 and a net gain of $21 million for the year ended December 31, 2010. Marketable securities held to fund our benefit programs funded through rabbi trusts resulted in a net loss of $2 million in the year ended December 31, 2011 compared to the net gain of $16 million in the year ended December 31, 2010 due to poor performance of the underlying securities as a result of market conditions. The gains or losses on securities held in the rabbi trusts offset our owned and leased hotels expense for our hotel staff and selling, general and administrative expenses for our corporate staff and personnel supporting our business segments, having no net impact on our earnings. Of the $18 million change in the underlying securities, $12 million was offset in selling, general and administrative expenses and $6 million was offset in owned and leased hotel expenses. Marketable securities held to fund our Hyatt Gold Passport program and related to our owned and leased hotels, generated a net gain of $4 million in the year ended December 31, 2011 compared to a net gain of $5 million for the year ended December 31, 2010. The gains and losses on securities held to fund our Hyatt Gold Passport program and related to our owned and leased hotels, are offset by corresponding changes to our owned and leased hotel revenues, thus having no net impact on our earnings.
Revenues. Consolidated revenues in the year ended December 31, 2010 increased $197 million, or 6%, compared to the year ended December 31, 2009, including $14 million in net favorable currency effects and a $90 million increase in other revenues from managed properties. The increase in other revenues from managed properties was due to higher costs reimbursed by managed properties, driven by higher occupancy levels and revenues. Included in other revenues from managed properties is a decrease of $7 million in benefits costs resulting from decreased performance of the underlying assets for benefit programs funded through rabbi trusts. These expenses are offset in other costs from managed properties, thus having no net impact to our earnings. Excluding this amount, other revenues from managed properties increased $97 million, or 8%, in the year ended December 31, 2010 compared to the year ended December 31, 2009. Comparable owned and leased hotel revenue increased $107 million over the same period, which includes net favorable currency effects of $10 million. Non-comparable owned and leased hotel revenue decreased $28 million for the year ended December 31, 2010 compared to the year ended December 31, 2009. This decrease reflected the sale of six hotels in 2010, with the largest impact attributable to the Hyatt Regency Boston in the first quarter of 2010 partially offset by increases in revenues for a hotel opened in 2010. The remaining increase in revenues related primarily to increased management and franchise fees of $32 million in our management and franchising segments. Included in consolidated management fees for the year ended December 31, 2010 were base management fees of $132 million, a 12% increase from 2009, and incentive management fees of $93 million, an 18% increase from 2009. These increases in hotel revenue and management fees were primarily driven by an increase in demand
Equity losses from unconsolidated hospitality ventures. Equity losses from unconsolidated hospitality ventures were $40 million in the year ended December 31, 2010, compared to $13 million for the year ended December 31, 2009. In 2010, we recorded impairment charges of $31 million, which included impairment of interests in hospitality venture properties of $16 million and vacation ownership properties of $15 million. In 2009, we also recorded impairment charges of $14 million, which included impairment of interests in hospitality venture properties of $11 million and a vacation ownership property of $3 million. There was a $5 million decline attributable to lower earnings generated by the underlying hotels, of which the majority was related to newly opened hotels. Additionally, we had a $4 million reduction in foreign currency gains on one of our unconsolidated hospitality ventures.
Cash flows used in investing activities totaled $1,015 million in the year ended December 31, 2011 compared to cash used in investing activities of $663 million in the year ended December 31, 2010. During 2011, we acquired 20 hotels, branding and management rights to an additional four hotels and other assets from LodgeWorks for a total purchase price of approximately $661 million, of which approximately $639 million was paid during the year and approximately $20 million was placed into an escrow account pursuant to a holdback agreement. The amount in escrow is classified as restricted cash on our consolidated balance sheet. During the year ended December 31, 2011, we acquired three properties in California for a total purchase price of approximately $77 million. In the year ended December 31, 2011, we invested a total of $130 million in marketable securities, short-term investments and unconsolidated hospitality ventures, compared to $482 million in 2010. For the years ended December 31, 2011 and 2010, capital expenditures were $331 million and $310 million, respectively, (see Capital Expenditures below). During the year ended December 31, 2011, we entered into an agreement with a third party to sell eight properties for a combined sales price of $110 million ($90 million, net of $20 million contributed to a new joint venture) and we also sold a Company owned airplane for $18 million, net of closing costs. During the year ended December 31, 2010, we received $136 million in proceeds from the sale of real estate, which is net of $97 million in restricted cash for a potential like-kind exchange transaction. The $97 million in restricted cash as of December 31, 2010 was transferred from escrow to cash and cash equivalents during 2011.
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Hyatt Hotels Corp. has a market cap of $1.92 billion; its shares were traded at around $43.05 with a P/E ratio of 75.5 and P/S ratio of 0.5.
Highlight of Business Operations:
We primarily derive our revenues from hotel operations, management and franchise fees, other revenues from managed properties and sales of vacation ownership properties. For the years ended December 31, 2011 and 2010, revenues totaled $3.7 billion and $3.5 billion, respectively, net income attributable to Hyatt Hotels Corporation totaled $113 million and $66 million, respectively, and Adjusted EBITDA totaled $538 million and $476 million, respectively. See Part II, Item 7, Managements Discussion and Analysis of Financial Condition and Results of OperationsKey Business Metrics Evaluated by ManagementAdjusted EBITDA for our definition of Adjusted EBITDA, why we present it, and for a reconciliation of our consolidated Adjusted EBITDA to net income (loss) attributable to Hyatt Hotels Corporation for the periods presented. For the years ended December 31, 2011 and 2010, 78.7% and 79.4% of our revenues, respectively, were derived from operations in the United States. As of December 31, 2011, 78.8% of our long-lived assets were located in the United States. As of December 31, 2011, we had total debt of $1.2 billion, cash and cash equivalents of $534 million and short-term investments of $588 million. As of December 31, 2011, we had available borrowing capacity of $1.4 billion under our revolving credit facility. These sources provide us with significant liquidity and resources for future growth.Net gains and interest income from marketable securities held to fund operating programs. Net gains and interest income from marketable securities held to fund operating programs resulted in a net gain of $2 million for the year ended December 31, 2011 and a net gain of $21 million for the year ended December 31, 2010. Marketable securities held to fund our benefit programs funded through rabbi trusts resulted in a net loss of $2 million in the year ended December 31, 2011 compared to the net gain of $16 million in the year ended December 31, 2010 due to poor performance of the underlying securities as a result of market conditions. The gains or losses on securities held in the rabbi trusts offset our owned and leased hotels expense for our hotel staff and selling, general and administrative expenses for our corporate staff and personnel supporting our business segments, having no net impact on our earnings. Of the $18 million change in the underlying securities, $12 million was offset in selling, general and administrative expenses and $6 million was offset in owned and leased hotel expenses. Marketable securities held to fund our Hyatt Gold Passport program and related to our owned and leased hotels, generated a net gain of $4 million in the year ended December 31, 2011 compared to a net gain of $5 million for the year ended December 31, 2010. The gains and losses on securities held to fund our Hyatt Gold Passport program and related to our owned and leased hotels, are offset by corresponding changes to our owned and leased hotel revenues, thus having no net impact on our earnings.
Revenues. Consolidated revenues in the year ended December 31, 2010 increased $197 million, or 6%, compared to the year ended December 31, 2009, including $14 million in net favorable currency effects and a $90 million increase in other revenues from managed properties. The increase in other revenues from managed properties was due to higher costs reimbursed by managed properties, driven by higher occupancy levels and revenues. Included in other revenues from managed properties is a decrease of $7 million in benefits costs resulting from decreased performance of the underlying assets for benefit programs funded through rabbi trusts. These expenses are offset in other costs from managed properties, thus having no net impact to our earnings. Excluding this amount, other revenues from managed properties increased $97 million, or 8%, in the year ended December 31, 2010 compared to the year ended December 31, 2009. Comparable owned and leased hotel revenue increased $107 million over the same period, which includes net favorable currency effects of $10 million. Non-comparable owned and leased hotel revenue decreased $28 million for the year ended December 31, 2010 compared to the year ended December 31, 2009. This decrease reflected the sale of six hotels in 2010, with the largest impact attributable to the Hyatt Regency Boston in the first quarter of 2010 partially offset by increases in revenues for a hotel opened in 2010. The remaining increase in revenues related primarily to increased management and franchise fees of $32 million in our management and franchising segments. Included in consolidated management fees for the year ended December 31, 2010 were base management fees of $132 million, a 12% increase from 2009, and incentive management fees of $93 million, an 18% increase from 2009. These increases in hotel revenue and management fees were primarily driven by an increase in demand
Equity losses from unconsolidated hospitality ventures. Equity losses from unconsolidated hospitality ventures were $40 million in the year ended December 31, 2010, compared to $13 million for the year ended December 31, 2009. In 2010, we recorded impairment charges of $31 million, which included impairment of interests in hospitality venture properties of $16 million and vacation ownership properties of $15 million. In 2009, we also recorded impairment charges of $14 million, which included impairment of interests in hospitality venture properties of $11 million and a vacation ownership property of $3 million. There was a $5 million decline attributable to lower earnings generated by the underlying hotels, of which the majority was related to newly opened hotels. Additionally, we had a $4 million reduction in foreign currency gains on one of our unconsolidated hospitality ventures.
Cash flows used in investing activities totaled $1,015 million in the year ended December 31, 2011 compared to cash used in investing activities of $663 million in the year ended December 31, 2010. During 2011, we acquired 20 hotels, branding and management rights to an additional four hotels and other assets from LodgeWorks for a total purchase price of approximately $661 million, of which approximately $639 million was paid during the year and approximately $20 million was placed into an escrow account pursuant to a holdback agreement. The amount in escrow is classified as restricted cash on our consolidated balance sheet. During the year ended December 31, 2011, we acquired three properties in California for a total purchase price of approximately $77 million. In the year ended December 31, 2011, we invested a total of $130 million in marketable securities, short-term investments and unconsolidated hospitality ventures, compared to $482 million in 2010. For the years ended December 31, 2011 and 2010, capital expenditures were $331 million and $310 million, respectively, (see Capital Expenditures below). During the year ended December 31, 2011, we entered into an agreement with a third party to sell eight properties for a combined sales price of $110 million ($90 million, net of $20 million contributed to a new joint venture) and we also sold a Company owned airplane for $18 million, net of closing costs. During the year ended December 31, 2010, we received $136 million in proceeds from the sale of real estate, which is net of $97 million in restricted cash for a potential like-kind exchange transaction. The $97 million in restricted cash as of December 31, 2010 was transferred from escrow to cash and cash equivalents during 2011.
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