Hyatt(US:H)2025-08-07 22:02PART I – FINANCIAL INFORMATION Item 1. Financial Statements The financial statements for the period ended June 30, 2025, reflect a significant decrease in net income due to non-recurring gains and acquisition costs, with total assets and liabilities increasing substantially from the Playa Hotels acquisition Condensed Consolidated Statements of Income (Loss) Q2 and Six Months Ended June 30, 2025 vs 2024 | Financial Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | $1,808 million | $1,703 million | $3,526 million | $3,417 million | | Net Income (Loss) | ($4) million | $359 million | $20 million | $881 million | | Net Income (Loss) Attributable to Hyatt | ($3) million | $359 million | $17 million | $881 million | | Diluted EPS | ($0.03) | $3.46 | $0.17 | $8.42 | - Total revenues increased by 6.2% in Q2 2025 year-over-year, driven by higher fees and reimbursed costs. However, net income saw a sharp decline from a $359 million profit in Q2 2024 to a $4 million loss in Q2 2025, largely due to the absence of significant gains from real estate sales that occurred in the prior year and an increase in transaction costs9 Condensed Consolidated Balance Sheets Balance Sheet Summary as of June 30, 2025 | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Assets | $15,907 million | $13,324 million | | Cash and cash equivalents | $846 million | $1,011 million | | Goodwill | $3,450 million | $2,541 million | | Total Liabilities | $12,020 million | $9,498 million | | Long-term debt | $5,627 million | $3,326 million | | Total Equity | $3,887 million | $3,826 million | - Total assets increased by $2.6 billion since year-end 2024, primarily due to a $909 million increase in Goodwill and the addition of $1.9 billion in assets held for sale, both related to the Playa Hotels acquisition. This was financed by a $2.3 billion increase in long-term debt13 Condensed Consolidated Statements of Cash Flows Cash Flow Summary for Six Months Ended June 30 | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $86 million | $419 million | | Net cash used in investing activities | ($1,120) million | ($306) million | | Net cash provided by financing activities | $936 million | $237 million | | Net (decrease) in cash | ($164) million | $349 million | - Operating cash flow decreased significantly in the first six months of 2025 compared to 2024, mainly due to higher cash payments for transaction costs, income taxes, and interest. Investing activities saw a large cash outflow of $1.27 billion for acquisitions (net of cash acquired), primarily for Playa Hotels. Financing activities provided $936 million, driven by $2.68 billion in debt proceeds, which was used to fund the acquisition and repay other debt15326 Notes to Condensed Consolidated Financial Statements The notes detail significant corporate events, including the $1.5 billion Playa Hotels acquisition, subsequent asset sale agreement, and related debt financing, alongside disclosures on revenue recognition and loyalty program litigation - As of June 30, 2025, Hyatt's portfolio included 1,487 hotels (363,790 rooms) across 80 countries24 - Total contract liabilities were $2.35 billion, with the largest portion ($1.47 billion) related to the World of Hyatt loyalty program32 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses a 6.2% revenue increase in Q2 2025, offset by a net loss due to Playa Hotels acquisition costs and absent asset sale gains, with comparable RevPAR growing 1.6% and strong liquidity supporting strategic growth - In Q2 2025, consolidated revenues rose 6.2% YoY to $1.81 billion, but the company reported a net loss of $3 million attributable to Hyatt, a sharp contrast to the $359 million net income in Q2 2024. This was primarily due to transaction costs from the Playa Hotels acquisition and a lack of asset sale gains216221 - The company completed the acquisition of Playa Hotels on June 17, 2025, and subsequently entered into a definitive agreement on June 29, 2025, to sell the Playa Hotels real estate portfolio for $2.0 billion213 RevPAR and Net Package RevPAR Statistics Q2 2025 Key Performance Indicators (vs. Q2 2024) | Metric | Value | Change (Constant $) | | :--- | :--- | :--- | | Comparable System-wide Hotels RevPAR | $151 | +1.6% | | - United States RevPAR | $158 | -0.1% | | - Asia Pacific (ex-China) RevPAR | $144 | +7.4% | | Comparable All-Inclusive Resorts Net Package RevPAR | $210 | +8.6% (Reported $) | - System-wide RevPAR growth in Q2 2025 was driven by strong leisure travel outside the United States, particularly in the Asia Pacific (ex-China) and Middle East & Africa regions. The US market was approximately flat. All-inclusive resorts showed strong performance with an 8.6% increase in Net Package RevPAR220227232 Results of Operations Fee Revenues (Q2 2025 vs Q2 2024) | Fee Type | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Base management fees | $113M | $100M | +13.1% | | Incentive management fees | $62M | $54M | +15.0% | | Franchise and other fees | $126M | $121M | +4.1% | | Net fees | $286M | $259M | +10.4% | - Transaction and integration costs surged to $82 million in Q2 2025 from $10 million in Q2 2024, primarily due to the Playa Hotels Acquisition9261 - Gains on sales of real estate were only $2 million (negative) in Q2 2025, compared to a substantial $350 million gain in Q2 2024 from the sales of Park Hyatt Zurich and Hyatt Regency San Antonio Riverwalk9273 Segment Results Segment Adjusted EBITDA (Q2 2025 vs Q2 2024) | Segment | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Management and franchising | $238M | $222M | +7.3% | | Owned and leased | $64M | $79M | -17.8% | | Distribution | $43M | $43M | -0.2% | | Total Segment Adjusted EBITDA | $345M | $344M | +0.3% | - The Management and Franchising segment's Adjusted EBITDA grew 7.3% in Q2 2025, driven by higher gross fees. The Owned and Leased segment's Adjusted EBITDA declined 17.8%, impacted by net disposition activity in 2024. The Distribution segment's performance was flat year-over-year286292297 Liquidity and Capital Resources - To finance the Playa Hotels Acquisition, the company entered into a $1.7 billion delayed draw term loan (DDTL) facility and issued new senior notes. The company plans to use proceeds from the planned sale of the Playa Hotels Portfolio to repay the DDTL loans321322 Debt Ratios | Ratio | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total debt-to-total capital | 62.9% | 51.6% | | Net debt-to-total capital | 53.4% | 32.7% | - As of June 30, 2025, the company had $822 million remaining under its share repurchase authorization and $1.497 billion of available borrowing capacity under its revolving credit facility169121 Item 3. Quantitative and Qualitative Disclosures About Market Risk The company states that as of June 30, 2025, there have been no material changes to its market risk disclosures from those presented in its Annual Report on Form 10-K for the fiscal year ended December 31, 2024 - No material changes to market risk were reported as of June 30, 2025, compared to the disclosures in the 2024 Form 10-K339 Item 4. Controls and Procedures Management concluded that disclosure controls were effective as of quarter-end, while the company is integrating internal controls of the newly acquired Playa Hotels - The Principal Executive Officer and Principal Financial Officer concluded that disclosure controls and procedures were effective as of June 30, 2025340 - The company is in the process of assessing and integrating the internal control over financial reporting of the recently acquired Playa Hotels341 PART II – OTHER INFORMATION Item 1. Legal Proceedings The company is involved in various legal claims in the ordinary course of business, but management does not expect a material financial impact - The company is subject to various legal claims in the ordinary course of business but does not expect them to have a material financial impact343 Item 1A. Risk Factors There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2024, and the Quarterly Report on Form 10-Q for the quarter ended March 31, 2025 - No material changes to risk factors were reported as of June 30, 2025, from previous filings345 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The company did not repurchase any shares during the quarter ended June 30, 2025, with approximately $822 million remaining under the share repurchase authorization - No shares were repurchased during the three months ended June 30, 2025346 - As of June 30, 2025, approximately $822 million remained authorized for future share repurchases346 Item 5. Other Information On August 6, 2025, the company retired 364,620 Class B common shares converted to Class A, reducing the total authorized capital stock - On August 6, 2025, the company retired 364,620 shares of Class B common stock following their conversion to Class A shares, reducing the total authorized capital stock349351