Hyatt Hotels Corp [H] Filings

10-Q 1 h-20220930.htm 10-Q h-20220930

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

Form 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2022


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File No. 001-34521

HYATT HOTELS CORPORATION

(Exact Name of Registrant as Specified in Its Charter)

Delaware

20-1480589

(State or Other Jurisdiction of
Incorporation or Organization)

(I.R.S. Employer
Identification No.)

150 North Riverside Plaza

8th Floor, Chicago, Illinois 60606

(Address of Principal Executive Offices) (Zip Code)

(312) 750-1234

(Registrant's Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of each exchange on which registered

Class A Common Stock, $0.01 par value

New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

At October 28, 2022, there were 48,101,088 shares of the registrant's Class A common stock, $0.01 par value, outstanding and 59,017,749 shares of the registrant's Class B common stock, $0.01 par value, outstanding.

Table of Contents

HYATT HOTELS CORPORATION

QUARTERLY REPORT ON FORM 10-Q

FOR THE PERIOD ENDED SEPTEMBER 30, 2022

TABLE OF CONTENTS



	PART I – FINANCIAL INFORMATION
Item 1.	Financial Statements	1
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	35
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	61
Item 4.	Controls and Procedures	62

	PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	63
Item 1A.	Risk Factors	63
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	63
Item 3.	Defaults Upon Senior Securities	63
Item 4.	Mine Safety Disclosures	63
Item 5.	Other Information	63
Item 6.	Exhibits	64

Signatures		65

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

HYATT HOTELS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)

(In millions of dollars, except per share amounts)

(Unaudited)


	Three Months Ended				Nine Months Ended
	September 30, 2022		September 30, 2021		September 30, 2022		September 30, 2021
REVENUES:
Owned and leased hotels	$	309	$	263	$	911	$	558
Management, franchise, and other fees	224		113		582		269
Contra revenue	(9)		(9)		(27)		(26)
Net management, franchise, and other fees	215		104		555		243
Distribution and destination management	244		—		746		—
Other revenues	68		28		206		69
Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties	705		456		1,885		1,082
Total revenues	1,541		851		4,303		1,952
DIRECT AND SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES:
Owned and leased hotels	236		208		675		506
Distribution and destination management	186		—		586		—
Depreciation and amortization	96		71		320		219
Other direct costs	73		31		209		78
Selling, general, and administrative	108		69		295		250
Costs incurred on behalf of managed and franchised properties	697		465		1,881		1,117
Direct and selling, general, and administrative expenses	1,396		844		3,966		2,170
Net gains (losses) and interest income from marketable securities held to fund rabbi trusts	(12)		(1)		(89)		35
Equity earnings (losses) from unconsolidated hospitality ventures	2		(12)		(6)		8
Interest expense	(38)		(40)		(116)		(123)
Gains (losses) on sales of real estate	(1)		307		250		412
Asset impairments	(9)		—		(19)		(2)
Other income (loss), net	(24)		(3)		(53)		34
INCOME BEFORE INCOME TAXES	63		258		304		146
PROVISION FOR INCOME TAXES	(35)		(138)		(143)		(339)
NET INCOME (LOSS)	28		120		161		(193)
NET INCOME (LOSS) ATTRIBUTABLE TO NONCONTROLLING INTERESTS	—		—		—		—
NET INCOME (LOSS) ATTRIBUTABLE TO HYATT HOTELS CORPORATION	$	28	$	120	$	161	$	(193)
EARNINGS (LOSSES) PER SHARE—Basic
Net income (loss)	$	0.25	$	1.17	$	1.46	$	(1.89)
Net income (loss) attributable to Hyatt Hotels Corporation	$	0.25	$	1.17	$	1.46	$	(1.89)
EARNINGS (LOSSES) PER SHARE—Diluted
Net income (loss)	$	0.25	$	1.15	$	1.44	$	(1.89)
Net income (loss) attributable to Hyatt Hotels Corporation	$	0.25	$	1.15	$	1.44	$	(1.89)

See accompanying Notes to condensed consolidated financial statements.

Table of Contents

HYATT HOTELS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In millions of dollars)

(Unaudited)


	Three Months Ended				Nine Months Ended
	September 30, 2022		September 30, 2021		September 30, 2022		September 30, 2021
Net income (loss)	$	28	$	120	$	161	$	(193)
Other comprehensive income (loss), net of taxes:
Foreign currency translation adjustments, net of tax of $— for the three and nine months ended September 30, 2022 and September 30, 2021	(22)		(24)		(35)		(53)
Unrealized gains on derivative activity, net of tax of $— for the three and nine months ended September 30, 2022 and September 30, 2021	2		1		5		5

Unrealized losses on available-for-sale debt securities, net of tax of $— for the three and nine months ended September 30, 2022 and September 30, 2021	(5)		—		(15)		(1)
Other comprehensive loss	(25)		(23)		(45)		(49)
COMPREHENSIVE INCOME (LOSS)	3		97		116		(242)
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO NONCONTROLLING INTERESTS	—		—		—		—
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO HYATT HOTELS CORPORATION	$	3	$	97	$	116	$	(242)

See accompanying Notes to condensed consolidated financial statements.

Table of Contents

HYATT HOTELS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions of dollars, except share and per share amounts)

(Unaudited)


	September 30, 2022		December 31, 2021
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	1,223	$	960
Restricted cash	356		57
Short-term investments	151		227
Receivables, net of allowances of $58 and $53 at September 30, 2022 and December 31, 2021, respectively	702		633
Inventories	9		10
Prepaids and other assets	128		149
Prepaid income taxes	35		26

Assets held for sale	30		—
Total current assets	2,634		2,062
Equity method investments	182		216
Property and equipment, net	2,361		2,848
Financing receivables, net of allowances of $43 and $69 at September 30, 2022 and December 31, 2021, respectively	63		41
Operating lease right-of-use assets	370		446
Goodwill	3,120		2,965
Intangibles, net	1,749		1,977
Deferred tax assets	11		14
Other assets	1,912		2,034
TOTAL ASSETS	$	12,402	$	12,603
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt	$	654	$	10
Accounts payable	402		523
Accrued expenses and other current liabilities	445		299
Current contract liabilities	1,219		1,178
Accrued compensation and benefits	195		187
Current operating lease liabilities	36		35
Liabilities held for sale	6		—
Total current liabilities	2,957		2,232
Long-term debt	3,150		3,968
Long-term contract liabilities	1,481		1,349
Long-term operating lease liabilities	293		349
Other long-term liabilities	1,075		1,139
Total liabilities	8,956		9,037
Commitments and contingencies (see Note 12)

EQUITY:
Preferred stock, $0.01 par value per share, 10,000,000 shares authorized and none outstanding at September 30, 2022 and December 31, 2021	—		—
Class A common stock, $0.01 par value per share, 1,000,000,000 shares authorized, 48,412,428 issued and outstanding at September 30, 2022, and Class B common stock, $0.01 par value per share, 391,012,161 shares authorized, 59,017,749 shares issued and outstanding at September 30, 2022. Class A common stock, $0.01 par value per share, 1,000,000,000 shares authorized, 50,322,050 issued and outstanding at December 31, 2021, and Class B common stock, $0.01 par value per share, 391,647,683 shares authorized, 59,653,271 shares issued and outstanding at December 31, 2021	1		1
Additional paid-in capital	404		640
Retained earnings	3,328		3,167
Accumulated other comprehensive loss	(290)		(245)
Total stockholders' equity	3,443		3,563
Noncontrolling interests in consolidated subsidiaries	3		3
Total equity	3,446		3,566
TOTAL LIABILITIES AND EQUITY	$	12,402	$	12,603

See accompanying Notes to condensed consolidated financial statements.

Table of Contents

HYATT HOTELS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions of dollars)

(Unaudited)


	Nine Months Ended
	September 30, 2022		September 30, 2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	161	$	(193)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	320		219

Gains on sales of real estate	(250)		(412)
Amortization of share awards	47		49
Amortization of operating lease right-of-use assets	25		20
Deferred income taxes	(7)		210
Asset impairments	19		2

Equity (earnings) losses from unconsolidated hospitality ventures	6		(8)


Loss on extinguishment of debt	8		—
Contra revenue	27		26

Unrealized (gains) losses, net	68		(20)
Distributions from unconsolidated hospitality ventures	11		—

Working capital changes and other	(32)		316
Net cash provided by operating activities	403		209
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of marketable securities and short-term investments	(780)		(693)
Proceeds from marketable securities and short-term investments	886		1,002
Contributions to equity method and other investments	(7)		(28)
Return of equity method and other investments	38		25
Acquisitions, net of cash acquired	(174)		(237)
Capital expenditures	(142)		(65)
Issuance of financing receivables	(22)		(20)
Proceeds from sales of real estate, net of cash disposed	590		759



Other investing activities	41		(5)
Net cash provided by investing activities	430		738
CASH FLOWS FROM FINANCING ACTIVITIES:


Repayments and repurchases of debt	(17)		(258)
Repurchases of common stock	(263)		—

Proceeds from issuance of Class A common stock, net of offering costs of $— and $25, respectively	—		575

Utilization of restricted cash for legal defeasance of Series 2005 Bonds	(8)		—
Other financing activities	(17)		(17)
Net cash provided by (used in) financing activities	(305)		300
EFFECT OF EXCHANGE RATE CHANGES ON CASH	26		(3)
NET INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, INCLUDING CASH, CASH EQUIVALENTS, AND RESTRICTED CASH CLASSIFIED WITHIN CURRENT ASSETS HELD FOR SALE	554		1,244
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH RECLASSIFIED TO ASSETS HELD FOR SALE	(2)		—
NET INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH	552		1,244
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH—BEGINNING OF YEAR	1,065		1,237

CASH, CASH EQUIVALENTS, AND RESTRICTED CASH—END OF PERIOD	$	1,617	$	2,481

See accompanying Notes to condensed consolidated financial statements.

Supplemental disclosure of cash flow information:



	September 30, 2022		September 30, 2021
Cash and cash equivalents	$	1,223	$	2,418
Restricted cash (1)	356		15
Restricted cash included in other assets (1)	38		48
Total cash, cash equivalents, and restricted cash	$	1,617	$	2,481

(1) Restricted cash generally represents debt service on bonds, escrow deposits, and other arrangements. At September 30, 2022, restricted cash included cash in escrow for the redemption of our floating rate senior notes due 2023 (see Note 9).



	Nine Months Ended
	September 30, 2022		September 30, 2021
Cash paid during the period for interest	$	95	$	116
Cash paid (received) during the period for income taxes, net	$	87	$	(244)
Cash paid for amounts included in the measurement of operating lease liabilities	$	33	$	27

Non-cash investing and financing activities are as follows:
Non-cash contributions to equity method and other investments (Note 12)	$	—	$	42

Change in accrued capital expenditures	$	5	$	1
Non-cash right-of-use assets obtained in exchange for operating lease liabilities	$	20	$	16
Non-cash legal defeasance of Series 2005 Bonds (see Note 6)	$	166	$	—
Non-cash reduction in right-of-use assets and operating lease liabilities for lease reassessment	$	12	$	—
Non-cash held-to-maturity debt security received (see Note 6)	$	19	$	—
Non-cash repurchases of common stock (see Note 13)	$	16	$	—

See accompanying Notes to condensed consolidated financial statements.

Table of Contents

HYATT HOTELS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

(In millions of dollars, except share and per share amounts)

(Unaudited)

Hyatt Hotels Corp [H] Filings
10-Q	[2022-11-03]
10-Q	[2022-08-09]
10-Q	[2022-05-10]
10-K	[2022-02-17]
10-Q	[2021-11-04]
10-Q	[2021-08-04]
10-Q	[2021-05-05]
10-K	[2021-02-18]
10-Q	[2020-11-05]
10-Q	[2020-08-04]
10-Q	[2020-05-07]
10-K	[2020-02-20]
10-Q	[2019-10-31]
10-Q	[2019-08-01]
10-Q	[2019-05-02]
10-K	[2019-02-14]
10-Q	[2018-10-31]
10-Q	[2018-08-01]
10-Q	[2018-05-03]
10-K	[2018-02-15]
10-Q	[2017-11-02]
10-Q	[2017-08-03]
10-Q	[2017-05-04]
10-K	[2017-02-16]
10-Q	[2016-11-03]
10-Q	[2016-08-02]
10-Q	[2016-05-03]
10-K	[2016-02-18]
10-Q	[2015-11-03]
10-Q	[2015-08-04]
10-Q	[2015-05-05]
10-K	[2015-02-18]
10-Q	[2014-10-29]
10-Q	[2014-07-31]
10-Q	[2014-04-30]
10-K	[2014-02-18]
10-Q	[2013-10-30]
10-Q	[2013-07-31]
10-Q	[2013-05-01]
10-K	[2013-02-13]
10-Q	[2012-10-31]
10-Q	[2012-08-01]
10-Q	[2012-05-03]
10-K	[2012-02-16]