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March 31, 2012 | December 31, 2011 | ||||||
Equity method investments | $ | 227 | $ | 207 | |||
Cost method investments | 73 | 73 | |||||
Total investments | $ | 300 | $ | 280 |
Three Months Ended March 31, | |||||||
2012 | 2011 | ||||||
Total revenues | $ | 243 | $ | 239 | |||
Gross operating profit | 71 | 76 | |||||
Income (loss) from continuing operations | (2 | ) | 11 | ||||
Net income (loss) | (2 | ) | 11 |
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March 31, 2012 | Quoted Prices in Active Markets for Identical Assets (Level One) | Significant Other Observable Inputs (Level Two) | Significant Unobservable Inputs (Level Three) | ||||||||||||
Marketable securities included in short-term investments, prepaids and other assets and other assets | |||||||||||||||
Mutual funds | $ | 270 | $ | 270 | $ | — | $ | — | |||||||
Equity securities | 43 | 43 | — | — | |||||||||||
U.S. government obligations | 97 | — | 97 | — | |||||||||||
U.S. government agencies | 105 | — | 105 | — | |||||||||||
Corporate debt securities | 430 | — | 430 | — | |||||||||||
Mortgage-backed securities | 21 | — | 21 | — | |||||||||||
Asset-backed securities | 8 | — | 8 | — | |||||||||||
Municipal and provincial notes and bonds | 14 | — | 14 | — | |||||||||||
Marketable securities recorded in cash and cash equivalents | |||||||||||||||
Interest bearing money market funds | 161 | 161 | — | — | |||||||||||
Derivative instruments | |||||||||||||||
Interest rate swaps | 7 | — | 7 | — | |||||||||||
Foreign currency forward contracts | (2 | ) | — | (2 | ) | — |
December 31, 2011 | Quoted Prices in Active Markets for Identical Assets (Level One) | Significant Other Observable Inputs (Level Two) | Significant Unobservable Inputs (Level Three) | ||||||||||||
Marketable securities included in short-term investments, prepaids and other assets and other assets | |||||||||||||||
Mutual funds | $ | 242 | $ | 242 | $ | — | $ | — | |||||||
Equity securities | 35 | 35 | — | — | |||||||||||
U.S. government obligations | 102 | — | 102 | — | |||||||||||
U.S. government agencies | 132 | — | 132 | — | |||||||||||
Corporate debt securities | 487 | — | 487 | — | |||||||||||
Mortgage-backed securities | 23 | — | 21 | 2 | |||||||||||
Asset-backed securities | 7 | — | 7 | — | |||||||||||
Municipal and provincial notes and bonds | 14 | — | 14 | — | |||||||||||
Marketable securities recorded in cash and cash equivalents | |||||||||||||||
Interest bearing money market funds | 60 | 60 | — | — | |||||||||||
Derivative instruments | |||||||||||||||
Interest rate swaps | 7 | — | 7 | — | |||||||||||
Foreign currency forward contracts | (1 | ) | — | (1 | ) | — |
March 31, 2012 | |||||||||||||||
Cost or Amortized Cost | Gross Unrealized Gain | Gross Unrealized Loss | Fair Value | ||||||||||||
Corporate debt securities | $ | 343 | $ | 6 | $ | (6 | ) | $ | 343 | ||||||
U.S. government agencies and municipalities | 67 | — | — | 67 | |||||||||||
Equity securities | 9 | — | — | 9 | |||||||||||
Total | $ | 419 | $ | 6 | $ | (6 | ) | $ | 419 |
December 31, 2011 | |||||||||||||||
Cost or Amortized Cost | Gross Unrealized Gain | Gross Unrealized Loss | Fair Value | ||||||||||||
Corporate debt securities | $ | 406 | $ | 5 | $ | (5 | ) | $ | 406 | ||||||
U.S. government agencies and municipalities | 93 | — | — | 93 | |||||||||||
Equity securities | 9 | — | (2 | ) | 7 | ||||||||||
Total | $ | 508 | $ | 5 | $ | (7 | ) | $ | 506 |
March 31, 2012 | |||||||
Contractual Maturity | Cost or Amortized Cost | Fair Value | |||||
Due in one year or less | $ | 233 | $ | 233 | |||
Due in one to two years | 177 | 177 | |||||
Total | $ | 410 | $ | 410 |
Fair Value Measurements at Reporting Date Using Significant Unobservable Inputs (Level 3) - Mortgage Backed Securities | |||||||
2012 | 2011 | ||||||
Balance at January 1, | $ | 2 | $ | 2 | |||
Transfers into (out of) Level Three | — | — | |||||
Settlements | (2 | ) | — | ||||
Total gains (losses) (realized or unrealized) | — | — | |||||
Balance at March 31, | $ | — | $ | 2 |
Asset (Liability) | |||||||||||||||||||
March 31, 2012 | |||||||||||||||||||
Carrying Value | Fair Value | Quoted Prices in Active Markets for Identical Assets (Level One) | Significant Other Observable Inputs (Level Two) | Significant Unobservable Inputs (Level Three) | |||||||||||||||
Financing receivables | |||||||||||||||||||
Secured financing to hotel owners | $ | 312 | $ | 315 | $ | — | $ | — | $ | 315 | |||||||||
Vacation ownership mortgage receivable | 41 | 42 | — | — | 42 | ||||||||||||||
Unsecured financing to hotel owners | 18 | 18 | — | — | 18 | ||||||||||||||
Debt, excluding capital lease obligations | (1,008 | ) | (1,117 | ) | — | (1,117 | ) | — |
Asset (Liability) | |||||||||||||||||||
December 31, 2011 | |||||||||||||||||||
Carrying Value | Fair Value | Quoted Prices in Active Markets for Identical Assets (Level One) | Significant Other Observable Inputs (Level Two) | Significant Unobservable Inputs (Level Three) | |||||||||||||||
Financing receivables | |||||||||||||||||||
Secured financing to hotel owners | $ | 312 | $ | 311 | $ | — | $ | — | $ | 311 | |||||||||
Vacation ownership mortgage receivable | 42 | 42 | — | — | 42 | ||||||||||||||
Unsecured financing to hotel owners | 16 | 15 | — | — | 15 | ||||||||||||||
Debt, excluding capital lease obligations | (1,008 | ) | (1,059 | ) | — | (1,059 | ) | — |
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March 31, 2012 | December 31, 2011 | ||||||
Secured financing to hotel owners | $ | 319 | $ | 319 | |||
Vacation ownership mortgage receivables at various interest rates with varying payments through 2022 | 49 | 50 | |||||
Unsecured financing to hotel owners | 93 | 91 | |||||
461 | 460 | ||||||
Less allowance for losses | (90 | ) | (90 | ) | |||
Less current portion included in receivables, net | (10 | ) | (10 | ) | |||
Total long-term financing receivables | $ | 361 | $ | 360 |
Year Ending December 31, | Amount | ||
2012 | $ | 1 | |
2013 | 289 | ||
2014 | — | ||
2015 | 29 | ||
2016 | — | ||
2017 | — | ||
Thereafter | — | ||
Total secured financing to hotel owners | 319 | ||
Less allowance | (7 | ) | |
Net secured financing to hotel owners | $ | 312 | |
Year Ending December 31, | Amount | ||
2012 | $ | 5 | |
2013 | 7 | ||
2014 | 8 | ||
2015 | 8 | ||
2016 | 7 | ||
2017 | 5 | ||
Thereafter | 9 | ||
Total vacation ownership mortgage receivables | 49 | ||
Less allowance | (8 | ) | |
Net vacation ownership mortgage receivables | $ | 41 | |
Analysis of Financing Receivables | |||||||||||||||||||||||
March 31, 2012 | |||||||||||||||||||||||
Total Past Due | Current | Total Financing Receivable | Receivables on Non-Accrual Status | Related Allowance for Credit Losses | Recorded Investment >90 Days and Accruing | ||||||||||||||||||
Secured financing to hotel owners | $ | — | $ | 319 | $ | 319 | $ | 41 | $ | (7 | ) | $ | — | ||||||||||
Vacation ownership mortgage receivables | 3 | 46 | 49 | — | (8 | ) | — | ||||||||||||||||
Unsecured financing to hotel owners | 3 | 90 | 93 | 76 | (75 | ) | — | ||||||||||||||||
Total | $ | 6 | $ | 455 | $ | 461 | $ | 117 | $ | (90 | ) | $ | — |
Analysis of Financing Receivables | |||||||||||||||||||||||
December 31, 2011 | |||||||||||||||||||||||
Total Past Due | Current | Total Financing Receivable | Receivables on Non-Accrual Status | Related Allowance for Credit Losses | Recorded Investment >90 Days and Accruing | ||||||||||||||||||
Secured financing to hotel owners | $ | — | $ | 319 | $ | 319 | $ | 41 | $ | (7 | ) | $ | — | ||||||||||
Vacation ownership mortgage receivables | 3 | 47 | 50 | — | (8 | ) | — | ||||||||||||||||
Unsecured financing to hotel owners | 6 | 85 | 91 | 76 | (75 | ) | — | ||||||||||||||||
Total | $ | 9 | $ | 451 | $ | 460 | $ | 117 | $ | (90 | ) | $ | — |
Non-Performing Financing Receivables | |||||||
March 31, 2012 | December 31, 2011 | ||||||
Secured financing to hotel owners | $ | — | $ | — | |||
Vacation ownership mortgage receivables | — | — | |||||
Unsecured financing to hotel owners | 3 | 6 |
Allowance for Credit Losses | |||||||||||||||||||||||
For the Three Months Ended March 31, 2012 | |||||||||||||||||||||||
Beginning Balance January 1, 2012 | Provisions | Other Adjustments | Write-offs | Recoveries | Ending Balance March 31, 2012 | ||||||||||||||||||
Secured financing to hotel owners | $ | 7 | $ | — | $ | — | $ | — | $ | — | $ | 7 | |||||||||||
Vacation ownership mortgage receivables | 8 | 1 | — | (1 | ) | — | 8 | ||||||||||||||||
Unsecured financing to hotel owners | 75 | 3 | — | (3 | ) | — | 75 | ||||||||||||||||
Total | $ | 90 | $ | 4 | $ | — | $ | (4 | ) | $ | — | $ | 90 |
Allowance for Credit Losses | |||||||||||||||||||||||
For the Three Months Ended March 31, 2011 | |||||||||||||||||||||||
Beginning Balance January 1, 2011 | Provisions | Other Adjustments | Write-offs | Recoveries | Ending Balance March 31, 2011 | ||||||||||||||||||
Secured financing to hotel owners | $ | 4 | $ | — | $ | — | $ | (1 | ) | $ | — | $ | 3 | ||||||||||
Vacation ownership mortgage receivables | 10 | 1 | — | (1 | ) | — | 10 | ||||||||||||||||
Unsecured financing to hotel owners | 68 | 1 | 1 | — | — | 70 | |||||||||||||||||
Total | $ | 82 | $ | 2 | $ | 1 | $ | (2 | ) | $ | — | $ | 83 |
Impaired Loans | |||||||||||||||
March 31, 2012 | |||||||||||||||
Gross Investment | Unpaid Principal Balance | Related Allowance | Average Recorded Investment | ||||||||||||
Secured financing to hotel owners | $ | 40 | $ | 40 | $ | (7 | ) | $ | 40 | ||||||
Unsecured financing to hotel owners | 50 | 45 | (46 | ) | 49 |
Impaired Loans | |||||||||||||||
December 31, 2011 | |||||||||||||||
Gross Investment | Unpaid Principal Balance | Related Allowance | Average Recorded Investment | ||||||||||||
Secured financing to hotel owners | $ | 41 | $ | 40 | $ | (7 | ) | $ | 40 | ||||||
Unsecured financing to hotel owners | 51 | 46 | (46 | ) | 51 |
Interest Income | |||||||
Three Months Ended March 31, | |||||||
2012 | 2011 | ||||||
Secured financing to hotel owners | $ | 1 | $ | 1 | |||
Unsecured financing to hotel owners | — | — |
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March 31, 2012 | Weighted Average Useful Lives | December 31, 2011 | |||||||
Contract acquisition costs | $ | 172 | 23 | $ | 167 | ||||
Acquired lease rights | 138 | 112 | 133 | ||||||
Franchise and management intangibles | 115 | 25 | 115 | ||||||
Other | 7 | 13 | 7 | ||||||
432 | 422 | ||||||||
Accumulated amortization | (68 | ) | (63 | ) | |||||
Intangibles, net | $ | 364 | $ | 359 |
Three Months Ended March 31, | |||||||
2012 | 2011 | ||||||
Amortization expense | $ | 5 | $ | 3 |
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March 31, 2012 | December 31, 2011 | ||||||
Pound Sterling | $ | 152 | $ | 126 | |||
Swiss Franc | 50 | 59 | |||||
Korean Won | 33 | 33 | |||||
Canadian Dollar | 26 | 27 | |||||
Australian Dollar | 4 | — | |||||
Total notional amount of forward contracts | $ | 265 | $ | 245 |
Asset Derivatives | Liability Derivatives | ||||||||||||||||||
Balance Sheet Location | March 31, 2012 | December 31, 2011 | Balance Sheet Location | March 31, 2012 | December 31, 2011 | ||||||||||||||
Derivatives designated as hedging instruments | |||||||||||||||||||
Interest rate swaps | Other assets | $ | 7 | $ | 7 | Other long-term liabilities | $ | — | $ | — | |||||||||
Derivatives not designated as hedging instruments | |||||||||||||||||||
Foreign currency forward contracts | Prepaids and other assets | — | — | Accrued expenses and other current liabilities | 2 | 1 | |||||||||||||
Total derivatives | $ | 7 | $ | 7 | $ | 2 | $ | 1 |
Three Months Ended March 31, | |||||||||
Location of Gain (Loss) | 2012 | 2011 | |||||||
Fair value hedges: | |||||||||
Interest rate swaps | |||||||||
Gains (losses) on derivatives | Other income, net* | $ | — | $ | (1 | ) | |||
Gains (losses) on borrowings | Other income, net* | — | 1 |
Three Months Ended March 31, | |||||||||
Location of Gain (Loss) | 2012 | 2011 | |||||||
Derivatives not designated as hedges: | |||||||||
Foreign currency forward contracts | Other income, net | $ | (6 | ) | $ | (2 | ) |
* | For the three months ended March 31, 2012, there was an insignificant loss recognized in income related to the ineffective portion of these hedges. For the three months ended March 31, 2011, there was an insignificant gain recognized in income related to the ineffective portion of these hedges. No incremental amounts were excluded from the assessment of hedge effectiveness for the three months ended March 31, 2012 and 2011. |
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Three Months Ended March 31, | |||||||
2012 | 2011 | ||||||
Defined contribution plans | $ | 9 | $ | 9 | |||
Deferred compensation plans | 4 | 3 |
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• | Our share of a hospitality venture’s commitment to purchase a hotel within a to-be constructed building in New York City for a total purchase price of $375 million. The hospitality venture will be funded upon the purchase of the hotel, and our share of the purchase price commitment is 66.67% (or approximately $250 million). In accordance with the purchase agreement, we have agreed to fund a $50 million letter of credit as security towards this future purchase obligation. The agreement stipulates that the purchase of the completed property is contingent upon the completion of certain contractual milestones. The $50 million funded letter of credit is included as part of our total letters of credit outstanding at March 31, 2012, and therefore netted against our future commitments amount disclosed above. For further discussion see the “Letters of Credit” section of this footnote below. |
• | Our commitment to acquire all of the outstanding shares of capital stock of a company that owns a full service hotel in Mexico City, Mexico, for approximately $190 million (see Note 6). |
• | Our commitment to develop, own and operate a hotel property in the State of Hawaii through a joint venture formed in 2010. The maximum remaining commitment under the joint venture agreement at March 31, 2012, is $97 million. |
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Stockholders’ equity | Noncontrolling interests in consolidated subsidiaries | Total equity | |||||||||
Balance at January 1, 2012 | $ | 4,818 | $ | 10 | $ | 4,828 | |||||
Net income | 10 | — | 10 | ||||||||
Other comprehensive income | 20 | — | 20 | ||||||||
Share based payment activity | 6 | — | 6 | ||||||||
Balance at March 31, 2012 | $ | 4,854 | $ | 10 | $ | 4,864 | |||||
Balance at January 1, 2011 | $ | 5,118 | $ | 13 | $ | 5,131 | |||||
Net income | 10 | — | 10 | ||||||||
Other comprehensive income | 23 | — | 23 | ||||||||
Share based payment activity | 5 | — | 5 | ||||||||
Balance at March 31, 2011 | $ | 5,156 | $ | 13 | $ | 5,169 |
Balance at January 1, 2012 | Current period other comprehensive income | Balance at March 31, 2012 | |||||||||
Foreign currency translation adjustments | $ | (64 | ) | $ | 18 | $ | (46 | ) | |||
Unrealized gain (loss) on AFS securities | (2 | ) | 2 | — | |||||||
Unrecognized pension cost | (6 | ) | — | (6 | ) | ||||||
Unrealized loss on derivative instruments | (8 | ) | — | (8 | ) | ||||||
Accumulated Other Comprehensive Loss | $ | (80 | ) | $ | 20 | $ | (60 | ) | |||
Balance at January 1, 2011 | Current period other comprehensive income | Balance at March 31, 2011 | |||||||||
Foreign currency translation adjustments | $ | (33 | ) | $ | 23 | $ | (10 | ) | |||
Unrealized loss on AFS securities | — | — | — | ||||||||
Unrecognized pension cost | (5 | ) | — | (5 | ) | ||||||
Unrealized loss on derivative instruments | — | — | — | ||||||||
Accumulated Other Comprehensive Loss | $ | (38 | ) | $ | 23 | $ | (15 | ) |
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Three Months Ended March 31, | |||||||
2012 | 2011 | ||||||
Stock appreciation rights | $ | 2 | $ | 2 | |||
Restricted stock units | 3 | 2 | |||||
Performance share units and Performance vested restricted stock | 1 | — |
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(in millions) | Three Months Ended March 31, | ||||||
2012 | 2011 | ||||||
North American Management and Franchising | |||||||
Revenues | $ | 431 | $ | 392 | |||
Intersegment Revenues (a) | 18 | 14 | |||||
Adjusted EBITDA | 46 | 40 | |||||
Depreciation and Amortization | 4 | 3 | |||||
International Management and Franchising | |||||||
Revenues | 55 | 51 | |||||
Intersegment Revenues (a) | 4 | 4 | |||||
Adjusted EBITDA | 20 | 20 | |||||
Depreciation and Amortization | — | — | |||||
Owned and Leased Hotels | |||||||
Revenues | 473 | 432 | |||||
Adjusted EBITDA | 93 | 75 | |||||
Depreciation and Amortization | 80 | 66 | |||||
Corporate and other | |||||||
Revenues | 21 | 18 | |||||
Adjusted EBITDA | (34 | ) | (26 | ) | |||
Depreciation and Amortization | 2 | 2 | |||||
Eliminations (a) | |||||||
Revenues | (22 | ) | (18 | ) | |||
Adjusted EBITDA | — | — | |||||
Depreciation and Amortization | — | — | |||||
TOTAL | |||||||
Revenues | $ | 958 | $ | 875 | |||
Adjusted EBITDA | 125 | 109 | |||||
Depreciation and Amortization | 86 | 71 |
(a) | Intersegment revenues are included in the segment revenue totals and eliminated in Eliminations. |
Three Months Ended March 31, | |||||||
2012 | 2011 | ||||||
Adjusted EBITDA | $ | 125 | $ | 109 | |||
Equity earnings (losses) from unconsolidated hospitality ventures | (1 | ) | 3 | ||||
Other income, net | 12 | 3 | |||||
Pro rata share of unconsolidated hospitality ventures Adjusted EBITDA | (18 | ) | (15 | ) | |||
EBITDA | 118 | 100 | |||||
Depreciation and amortization | (86 | ) | (71 | ) | |||
Interest expense | (18 | ) | (13 | ) | |||
Provision for income taxes | (4 | ) | (6 | ) | |||
Net income attributable to Hyatt Hotels Corporation | $ | 10 | $ | 10 |
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Three Months Ended March 31, | |||||||
2012 | 2011 | ||||||
Interest income | $ | 5 | $ | 5 | |||
Gains (losses) on other marketable securities | 8 | (1 | ) | ||||
Foreign currency losses | — | (1 | ) | ||||
Other | (1 | ) | — | ||||
Other income, net | $ | 12 | $ | 3 |
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March 31, 2012 | December 31, 2011 | ||||||
Equity method investments | $ | 227 | $ | 207 | |||
Cost method investments | 73 | 73 | |||||
Total investments | $ | 300 | $ | 280 |
Three Months Ended March 31, | |||||||
2012 | 2011 | ||||||
Total revenues | $ | 243 | $ | 239 | |||
Gross operating profit | 71 | 76 | |||||
Income (loss) from continuing operations | (2 | ) | 11 | ||||
Net income (loss) | (2 | ) | 11 |
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March 31, 2012 | Quoted Prices in Active Markets for Identical Assets (Level One) | Significant Other Observable Inputs (Level Two) | Significant Unobservable Inputs (Level Three) | ||||||||||||
Marketable securities included in short-term investments, prepaids and other assets and other assets | |||||||||||||||
Mutual funds | $ | 270 | $ | 270 | $ | — | $ | — | |||||||
Equity securities | 43 | 43 | — | — | |||||||||||
U.S. government obligations | 97 | — | 97 | — | |||||||||||
U.S. government agencies | 105 | — | 105 | — | |||||||||||
Corporate debt securities | 430 | — | 430 | — | |||||||||||
Mortgage-backed securities | 21 | — | 21 | — | |||||||||||
Asset-backed securities | 8 | — | 8 | — | |||||||||||
Municipal and provincial notes and bonds | 14 | — | 14 | — | |||||||||||
Marketable securities recorded in cash and cash equivalents | |||||||||||||||
Interest bearing money market funds | 161 | 161 | — | — | |||||||||||
Derivative instruments | |||||||||||||||
Interest rate swaps | 7 | — | 7 | — | |||||||||||
Foreign currency forward contracts | (2 | ) | — | (2 | ) | — |
December 31, 2011 | Quoted Prices in Active Markets for Identical Assets (Level One) | Significant Other Observable Inputs (Level Two) | Significant Unobservable Inputs (Level Three) | ||||||||||||
Marketable securities included in short-term investments, prepaids and other assets and other assets | |||||||||||||||
Mutual funds | $ | 242 | $ | 242 | $ | — | $ | — | |||||||
Equity securities | 35 | 35 | — | — | |||||||||||
U.S. government obligations | 102 | — | 102 | — | |||||||||||
U.S. government agencies | 132 | — | 132 | — | |||||||||||
Corporate debt securities | 487 | — | 487 | — | |||||||||||
Mortgage-backed securities | 23 | — | 21 | 2 | |||||||||||
Asset-backed securities | 7 | — | 7 | — | |||||||||||
Municipal and provincial notes and bonds | 14 | — | 14 | — | |||||||||||
Marketable securities recorded in cash and cash equivalents | |||||||||||||||
Interest bearing money market funds | 60 | 60 | — | — | |||||||||||
Derivative instruments | |||||||||||||||
Interest rate swaps | 7 | — | 7 | — | |||||||||||
Foreign currency forward contracts | (1 | ) | — | (1 | ) | — |
March 31, 2012 | |||||||||||||||
Cost or Amortized Cost | Gross Unrealized Gain | Gross Unrealized Loss | Fair Value | ||||||||||||
Corporate debt securities | $ | 343 | $ | 6 | $ | (6 | ) | $ | 343 | ||||||
U.S. government agencies and municipalities | 67 | — | — | 67 | |||||||||||
Equity securities | 9 | — | — | 9 | |||||||||||
Total | $ | 419 | $ | 6 | $ | (6 | ) | $ | 419 |
December 31, 2011 | |||||||||||||||
Cost or Amortized Cost | Gross Unrealized Gain | Gross Unrealized Loss | Fair Value | ||||||||||||
Corporate debt securities | $ | 406 | $ | 5 | $ | (5 | ) | $ | 406 | ||||||
U.S. government agencies and municipalities | 93 | — | — | 93 | |||||||||||
Equity securities | 9 | — | (2 | ) | 7 | ||||||||||
Total | $ | 508 | $ | 5 | $ | (7 | ) | $ | 506 |
March 31, 2012 | |||||||
Contractual Maturity | Cost or Amortized Cost | Fair Value | |||||
Due in one year or less | $ | 233 | $ | 233 | |||
Due in one to two years | 177 | 177 | |||||
Total | $ | 410 | $ | 410 |
Fair Value Measurements at Reporting Date Using Significant Unobservable Inputs (Level 3) - Mortgage Backed Securities | |||||||
2012 | 2011 | ||||||
Balance at January 1, | $ | 2 | $ | 2 | |||
Transfers into (out of) Level Three | — | — | |||||
Settlements | (2 | ) | — | ||||
Total gains (losses) (realized or unrealized) | — | — | |||||
Balance at March 31, | $ | — | $ | 2 |
Asset (Liability) | |||||||||||||||||||
March 31, 2012 | |||||||||||||||||||
Carrying Value | Fair Value | Quoted Prices in Active Markets for Identical Assets (Level One) | Significant Other Observable Inputs (Level Two) | Significant Unobservable Inputs (Level Three) | |||||||||||||||
Financing receivables | |||||||||||||||||||
Secured financing to hotel owners | $ | 312 | $ | 315 | $ | — | $ | — | $ | 315 | |||||||||
Vacation ownership mortgage receivable | 41 | 42 | — | — | 42 | ||||||||||||||
Unsecured financing to hotel owners | 18 | 18 | — | — | 18 | ||||||||||||||
Debt, excluding capital lease obligations | (1,008 | ) | (1,117 | ) | — | (1,117 | ) | — |
Asset (Liability) | |||||||||||||||||||
December 31, 2011 | |||||||||||||||||||
Carrying Value | Fair Value | Quoted Prices in Active Markets for Identical Assets (Level One) | Significant Other Observable Inputs (Level Two) | Significant Unobservable Inputs (Level Three) | |||||||||||||||
Financing receivables | |||||||||||||||||||
Secured financing to hotel owners | $ | 312 | $ | 311 | $ | — | $ | — | $ | 311 | |||||||||
Vacation ownership mortgage receivable | 42 | 42 | — | — | 42 | ||||||||||||||
Unsecured financing to hotel owners | 16 | 15 | — | — | 15 | ||||||||||||||
Debt, excluding capital lease obligations | (1,008 | ) | (1,059 | ) | — | (1,059 | ) | — |
|
March 31, 2012 | December 31, 2011 | ||||||
Secured financing to hotel owners | $ | 319 | $ | 319 | |||
Vacation ownership mortgage receivables at various interest rates with varying payments through 2022 | 49 | 50 | |||||
Unsecured financing to hotel owners | 93 | 91 | |||||
461 | 460 | ||||||
Less allowance for losses | (90 | ) | (90 | ) | |||
Less current portion included in receivables, net | (10 | ) | (10 | ) | |||
Total long-term financing receivables | $ | 361 | $ | 360 |
Year Ending December 31, | Amount | ||
2012 | $ | 1 | |
2013 | 289 | ||
2014 | — | ||
2015 | 29 | ||
2016 | — | ||
2017 | — | ||
Thereafter | — | ||
Total secured financing to hotel owners | 319 | ||
Less allowance | (7 | ) | |
Net secured financing to hotel owners | $ | 312 | |
Year Ending December 31, | Amount | ||
2012 | $ | 5 | |
2013 | 7 | ||
2014 | 8 | ||
2015 | 8 | ||
2016 | 7 | ||
2017 | 5 | ||
Thereafter | 9 | ||
Total vacation ownership mortgage receivables | 49 | ||
Less allowance | (8 | ) | |
Net vacation ownership mortgage receivables | $ | 41 | |
Analysis of Financing Receivables | |||||||||||||||||||||||
March 31, 2012 | |||||||||||||||||||||||
Total Past Due | Current | Total Financing Receivable | Receivables on Non-Accrual Status | Related Allowance for Credit Losses | Recorded Investment >90 Days and Accruing | ||||||||||||||||||
Secured financing to hotel owners | $ | — | $ | 319 | $ | 319 | $ | 41 | $ | (7 | ) | $ | — | ||||||||||
Vacation ownership mortgage receivables | 3 | 46 | 49 | — | (8 | ) | — | ||||||||||||||||
Unsecured financing to hotel owners | 3 | 90 | 93 | 76 | (75 | ) | — | ||||||||||||||||
Total | $ | 6 | $ | 455 | $ | 461 | $ | 117 | $ | (90 | ) | $ | — |
Analysis of Financing Receivables | |||||||||||||||||||||||
December 31, 2011 | |||||||||||||||||||||||
Total Past Due | Current | Total Financing Receivable | Receivables on Non-Accrual Status | Related Allowance for Credit Losses | Recorded Investment >90 Days and Accruing | ||||||||||||||||||
Secured financing to hotel owners | $ | — | $ | 319 | $ | 319 | $ | 41 | $ | (7 | ) | $ | — | ||||||||||
Vacation ownership mortgage receivables | 3 | 47 | 50 | — | (8 | ) | — | ||||||||||||||||
Unsecured financing to hotel owners | 6 | 85 | 91 | 76 | (75 | ) | — | ||||||||||||||||
Total | $ | 9 | $ | 451 | $ | 460 | $ | 117 | $ | (90 | ) | $ | — |
Non-Performing Financing Receivables | |||||||
March 31, 2012 | December 31, 2011 | ||||||
Secured financing to hotel owners | $ | — | $ | — | |||
Vacation ownership mortgage receivables | — | — | |||||
Unsecured financing to hotel owners | 3 | 6 |
Allowance for Credit Losses | |||||||||||||||||||||||
For the Three Months Ended March 31, 2012 | |||||||||||||||||||||||
Beginning Balance January 1, 2012 | Provisions | Other Adjustments | Write-offs | Recoveries | Ending Balance March 31, 2012 | ||||||||||||||||||
Secured financing to hotel owners | $ | 7 | $ | — | $ | — | $ | — | $ | — | $ | 7 | |||||||||||
Vacation ownership mortgage receivables | 8 | 1 | — | (1 | ) | — | 8 | ||||||||||||||||
Unsecured financing to hotel owners | 75 | 3 | — | (3 | ) | — | 75 | ||||||||||||||||
Total | $ | 90 | $ | 4 | $ | — | $ | (4 | ) | $ | — | $ | 90 |
Allowance for Credit Losses | |||||||||||||||||||||||
For the Three Months Ended March 31, 2011 | |||||||||||||||||||||||
Beginning Balance January 1, 2011 | Provisions | Other Adjustments | Write-offs | Recoveries | Ending Balance March 31, 2011 | ||||||||||||||||||
Secured financing to hotel owners | $ | 4 | $ | — | $ | — | $ | (1 | ) | $ | — | $ | 3 | ||||||||||
Vacation ownership mortgage receivables | 10 | 1 | — | (1 | ) | — | 10 | ||||||||||||||||
Unsecured financing to hotel owners | 68 | 1 | 1 | — | — | 70 | |||||||||||||||||
Total | $ | 82 | $ | 2 | $ | 1 | $ | (2 | ) | $ | — | $ | 83 |
Impaired Loans | |||||||||||||||
March 31, 2012 | |||||||||||||||
Gross Investment | Unpaid Principal Balance | Related Allowance | Average Recorded Investment | ||||||||||||
Secured financing to hotel owners | $ | 40 | $ | 40 | $ | (7 | ) | $ | 40 | ||||||
Unsecured financing to hotel owners | 50 | 45 | (46 | ) | 49 |
Impaired Loans | |||||||||||||||
December 31, 2011 | |||||||||||||||
Gross Investment | Unpaid Principal Balance | Related Allowance | Average Recorded Investment | ||||||||||||
Secured financing to hotel owners | $ | 41 | $ | 40 | $ | (7 | ) | $ | 40 | ||||||
Unsecured financing to hotel owners | 51 | 46 | (46 | ) | 51 |
Interest Income | |||||||
Three Months Ended March 31, | |||||||
2012 | 2011 | ||||||
Secured financing to hotel owners | $ | 1 | $ | 1 | |||
Unsecured financing to hotel owners | — | — |
|
March 31, 2012 | Weighted Average Useful Lives | December 31, 2011 | |||||||
Contract acquisition costs | $ | 172 | 23 | $ | 167 | ||||
Acquired lease rights | 138 | 112 | 133 | ||||||
Franchise and management intangibles | 115 | 25 | 115 | ||||||
Other | 7 | 13 | 7 | ||||||
432 | 422 | ||||||||
Accumulated amortization | (68 | ) | (63 | ) | |||||
Intangibles, net | $ | 364 | $ | 359 |
Three Months Ended March 31, | |||||||
2012 | 2011 | ||||||
Amortization expense | $ | 5 | $ | 3 |
|
March 31, 2012 | December 31, 2011 | ||||||
Pound Sterling | $ | 152 | $ | 126 | |||
Swiss Franc | 50 | 59 | |||||
Korean Won | 33 | 33 | |||||
Canadian Dollar | 26 | 27 | |||||
Australian Dollar | 4 | — | |||||
Total notional amount of forward contracts | $ | 265 | $ | 245 |
Asset Derivatives | Liability Derivatives | ||||||||||||||||||
Balance Sheet Location | March 31, 2012 | December 31, 2011 | Balance Sheet Location | March 31, 2012 | December 31, 2011 | ||||||||||||||
Derivatives designated as hedging instruments | |||||||||||||||||||
Interest rate swaps | Other assets | $ | 7 | $ | 7 | Other long-term liabilities | $ | — | $ | — | |||||||||
Derivatives not designated as hedging instruments | |||||||||||||||||||
Foreign currency forward contracts | Prepaids and other assets | — | — | Accrued expenses and other current liabilities | 2 | 1 | |||||||||||||
Total derivatives | $ | 7 | $ | 7 | $ | 2 | $ | 1 |
Three Months Ended March 31, | |||||||||
Location of Gain (Loss) | 2012 | 2011 | |||||||
Fair value hedges: | |||||||||
Interest rate swaps | |||||||||
Gains (losses) on derivatives | Other income, net* | $ | — | $ | (1 | ) | |||
Gains (losses) on borrowings | Other income, net* | — | 1 |
Three Months Ended March 31, | |||||||||
Location of Gain (Loss) | 2012 | 2011 | |||||||
Derivatives not designated as hedges: | |||||||||
Foreign currency forward contracts | Other income, net | $ | (6 | ) | $ | (2 | ) |
* | For the three months ended March 31, 2012, there was an insignificant loss recognized in income related to the ineffective portion of these hedges. For the three months ended March 31, 2011, there was an insignificant gain recognized in income related to the ineffective portion of these hedges. No incremental amounts were excluded from the assessment of hedge effectiveness for the three months ended March 31, 2012 and 2011. |
|
Three Months Ended March 31, | |||||||
2012 | 2011 | ||||||
Defined contribution plans | $ | 9 | $ | 9 | |||
Deferred compensation plans | 4 | 3 |
|
Stockholders’ equity | Noncontrolling interests in consolidated subsidiaries | Total equity | |||||||||
Balance at January 1, 2012 | $ | 4,818 | $ | 10 | $ | 4,828 | |||||
Net income | 10 | — | 10 | ||||||||
Other comprehensive income | 20 | — | 20 | ||||||||
Share based payment activity | 6 | — | 6 | ||||||||
Balance at March 31, 2012 | $ | 4,854 | $ | 10 | $ | 4,864 | |||||
Balance at January 1, 2011 | $ | 5,118 | $ | 13 | $ | 5,131 | |||||
Net income | 10 | — | 10 | ||||||||
Other comprehensive income | 23 | — | 23 | ||||||||
Share based payment activity | 5 | — | 5 | ||||||||
Balance at March 31, 2011 | $ | 5,156 | $ | 13 | $ | 5,169 |
Balance at January 1, 2012 | Current period other comprehensive income | Balance at March 31, 2012 | |||||||||
Foreign currency translation adjustments | $ | (64 | ) | $ | 18 | $ | (46 | ) | |||
Unrealized gain (loss) on AFS securities | (2 | ) | 2 | — | |||||||
Unrecognized pension cost | (6 | ) | — | (6 | ) | ||||||
Unrealized loss on derivative instruments | (8 | ) | — | (8 | ) | ||||||
Accumulated Other Comprehensive Loss | $ | (80 | ) | $ | 20 | $ | (60 | ) | |||
Balance at January 1, 2011 | Current period other comprehensive income | Balance at March 31, 2011 | |||||||||
Foreign currency translation adjustments | $ | (33 | ) | $ | 23 | $ | (10 | ) | |||
Unrealized loss on AFS securities | — | — | — | ||||||||
Unrecognized pension cost | (5 | ) | — | (5 | ) | ||||||
Unrealized loss on derivative instruments | — | — | — | ||||||||
Accumulated Other Comprehensive Loss | $ | (38 | ) | $ | 23 | $ | (15 | ) |
|
Three Months Ended March 31, | |||||||
2012 | 2011 | ||||||
Stock appreciation rights | $ | 2 | $ | 2 | |||
Restricted stock units | 3 | 2 | |||||
Performance share units and Performance vested restricted stock | 1 | — |
|
(in millions) | Three Months Ended March 31, | ||||||
2012 | 2011 | ||||||
North American Management and Franchising | |||||||
Revenues | $ | 431 | $ | 392 | |||
Intersegment Revenues (a) | 18 | 14 | |||||
Adjusted EBITDA | 46 | 40 | |||||
Depreciation and Amortization | 4 | 3 | |||||
International Management and Franchising | |||||||
Revenues | 55 | 51 | |||||
Intersegment Revenues (a) | 4 | 4 | |||||
Adjusted EBITDA | 20 | 20 | |||||
Depreciation and Amortization | — | — | |||||
Owned and Leased Hotels | |||||||
Revenues | 473 | 432 | |||||
Adjusted EBITDA | 93 | 75 | |||||
Depreciation and Amortization | 80 | 66 | |||||
Corporate and other | |||||||
Revenues | 21 | 18 | |||||
Adjusted EBITDA | (34 | ) | (26 | ) | |||
Depreciation and Amortization | 2 | 2 | |||||
Eliminations (a) | |||||||
Revenues | (22 | ) | (18 | ) | |||
Adjusted EBITDA | — | — | |||||
Depreciation and Amortization | — | — | |||||
TOTAL | |||||||
Revenues | $ | 958 | $ | 875 | |||
Adjusted EBITDA | 125 | 109 | |||||
Depreciation and Amortization | 86 | 71 |
(a) | Intersegment revenues are included in the segment revenue totals and eliminated in Eliminations. |
Three Months Ended March 31, | |||||||
2012 | 2011 | ||||||
Adjusted EBITDA | $ | 125 | $ | 109 | |||
Equity earnings (losses) from unconsolidated hospitality ventures | (1 | ) | 3 | ||||
Other income, net | 12 | 3 | |||||
Pro rata share of unconsolidated hospitality ventures Adjusted EBITDA | (18 | ) | (15 | ) | |||
EBITDA | 118 | 100 | |||||
Depreciation and amortization | (86 | ) | (71 | ) | |||
Interest expense | (18 | ) | (13 | ) | |||
Provision for income taxes | (4 | ) | (6 | ) | |||
Net income attributable to Hyatt Hotels Corporation | $ | 10 | $ | 10 |
|
Three Months Ended March 31, | |||||||
2012 | 2011 | ||||||
Interest income | $ | 5 | $ | 5 | |||
Gains (losses) on other marketable securities | 8 | (1 | ) | ||||
Foreign currency losses | — | (1 | ) | ||||
Other | (1 | ) | — | ||||
Other income, net | $ | 12 | $ | 3 |
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