Hyatt Announces Redemption of $290 Million Playa Preferred Stock Investment; Commences $300 Million Accelerated Share Repurchase; Updates 2017 Outlook

CHICAGO–(BUSINESS WIRE)–In connection with the March 11, 2017 business combination of Playa
Hotels & Resorts B.V. (“Playa”) and Pace Holdings Corporation (“Pace”),
Hyatt Hotels Corporation (“Hyatt” or the “Company”) (NYSE:H) today
announced the full redemption of its $290 million preferred stock
investment in Playa. Following the redemption, Hyatt retains a common
equity stake of 11.57% in Playa Hotels & Resorts N.V., the ultimate
parent company of Playa as a result of the business combination between
Playa and Pace.

Hyatt also announced that it has entered into an accelerated share
repurchase agreement with an affiliate of Deutsche Bank AG (“DB”) to
repurchase $300 million of Hyatt’s Class A common stock. This agreement
is covered by Hyatt’s previously announced share repurchase program.

Year-to-date, Hyatt has repurchased $48 million of its Class A common
stock, prior to executing the accelerated share repurchase agreement.

Mark S. Hoplamazian, president and chief executive officer of Hyatt,
said, “We have been very pleased with our common and preferred equity
investment in Playa. In addition to providing a solid economic return,
the investment provided Hyatt entry into the all inclusive market, the
opportunity to launch the Hyatt Ziva and Hyatt Zilara brands, and a
long-term presence in six open and operating hotels comprising 2,401
rooms in key resort locations for our guests.”

Mr. Hoplamazian continued, “Our asset recycling program continues to
target an even balance of acquisitions and dispositions over time as a
vehicle to stimulate the growth of the Hyatt brand and generate
long-term shareholder value. Just as we were a net buyer of hotel
properties over the past 12 months, including our recent acquisition of
Miraval Group, we expect to be a net seller of hotel properties and
other investments over the next 12 months. Our solid liquidity position
enables us to commit our Playa redemption proceeds to Hyatt share
repurchases.”

As a result of the business combination between Playa and Pace and the
ensuing redemption of Hyatt’s preferred stock, Hyatt is providing the
following updated information for the 2017 fiscal year, which is
included on a Form 8-K filed today:

  • Net Income is expected to be approximately $130 million to $166
    million.
  • Adjusted EBITDA is expected to be approximately $769 million to $804
    million. These estimates include a negative impact from foreign
    currency translation of approximately $15 million (at the low end of
    the forecast) to $10 million (at the high end of the forecast).
  • Excluding the aforementioned negative impact from foreign currency
    translation, Adjusted EBITDA is expected to be approximately $784
    million to $814 million, reflecting a 0% to 4% increase over 2016.
  • Excluding foreign currency translation and Playa’s pro-rata share of
    Adjusted EBITDA, the revised 2017 outlook reflects an increase in
    Adjusted EBITDA of 3% to 7% over 2016.

Refer to the table at the end of this press release for a full
reconciliation of the Company’s forecast for Net Income attributable to
Hyatt Hotels Corporation to Adjusted EBITDA, a non-GAAP measure. No
additional disposition or acquisition activity has been included in the
forecast.

The Company’s outlook is based on a number of assumptions that are
subject to change and many of which are outside the control of the
Company. If actual results vary from these assumptions, the Company’s
expectations may change. There can be no assurance that the Company will
achieve these results.

Under the accelerated share repurchase agreement, DB is expected to make
an initial delivery to Hyatt no later than March 22, 2017 of
approximately 4.6 million shares of Hyatt’s Class A common stock, which
represents 80% of the payment amount divided by the closing price of
Hyatt’s Class A common stock on March 15, 2017. At the final settlement
of the agreement, which is expected to occur during the third quarter of
2017, DB may be required to deliver additional shares of Class A common
stock to Hyatt, or, under certain circumstances, Hyatt may be required
to deliver shares of its Class A common stock or may elect to make a
cash payment to DB, with the number of shares to be delivered or the
amount of such payment based on the volume-weighted average price of
Hyatt’s Class A common stock during the term of the transaction, less a
discount. The terms of the agreement are subject to adjustment if Hyatt
were to enter into or announce certain types of transactions or to take
certain corporate action.

FORWARD-LOOKING STATEMENTS

Forward-Looking Statements in this press release, which are not
historical facts, are forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. These statements
include statements about our plans, strategies, outlook, our estimated
net income and Adjusted EBITDA growth, financial performance, prospects
or future events and involve known and unknown risks that are difficult
to predict. As a result, our actual results, performance or achievements
may differ materially from those expressed or implied by these
forward-looking statements. In some cases, you can identify
forward-looking statements by the use of words such as “may,” “could,”
“expect,” “intend,” “plan,” “seek,” “anticipate,” “believe,” “estimate,”
“predict,” “potential,” “continue,” “likely,” “will,” “would” and
variations of these terms and similar expressions, or the negative of
these terms or similar expressions. Such forward-looking statements are
necessarily based upon estimates and assumptions that, while considered
reasonable by us and our management, are inherently uncertain. Factors
that may cause actual results to differ materially from current
expectations include, among others, general economic uncertainty in key
global markets and a worsening of global economic conditions or low
levels of economic growth; the rate and the pace of economic recovery
following economic downturns; levels of spending in business and leisure
segments as well as consumer confidence; declines in occupancy and
average daily rate; limited visibility with respect to future bookings;
loss of key personnel; hostilities, or fear of hostilities, including
future terrorist attacks, that affect travel; travel-related accidents;
natural or man-made disasters such as earthquakes, tsunamis, tornadoes,
hurricanes, floods, oil spills, nuclear incidents and global outbreaks
of pandemics or contagious diseases or fear of such outbreaks; our
ability to successfully achieve certain levels of operating profits at
hotels that have performance guarantees in favor of our third-party
owners; the impact of hotel renovations; risks associated with our
capital allocation plans and common stock repurchase program, including
the risk that our common stock repurchase program could increase
volatility and fail to enhance stockholder value; the seasonal and
cyclical nature of the real estate and hospitality businesses; changes
in distribution arrangements, such as through internet travel
intermediaries; changes in the tastes and preferences of our customers,
including the entry of new competitors in the lodging business;
relationships with colleagues and labor unions and changes in labor
laws; financial condition of, and our relationships with, third-party
property owners, franchisees and hospitality venture partners; the
possible inability of third-party owners, franchisees or development
partners to access capital necessary to fund current operations or
implement our plans for growth; risks associated with potential
acquisitions and dispositions and the introduction of new brand
concepts; the timing of acquisitions and dispositions; failure to
successfully complete proposed transactions (including the failure to
satisfy closing conditions or obtain required approvals); unforeseen
terminations of our management or franchise agreements; changes in
federal, state, local or foreign tax law; increases in interest rates
and operating costs; foreign exchange rate fluctuations or currency
restructurings; lack of acceptance of new brands or innovation; our
ability to successfully implement our new global loyalty program, and
the level of acceptance of the new program by our guests; general
volatility of the capital markets and our ability to access such
markets; changes in the competitive environment in our industry,
including as a result of industry consolidation, and the markets where
we operate; cyber incidents and information technology failures;
outcomes of legal or administrative proceedings; violations of
regulations or laws related to our franchising business; and other risks
discussed in the Company’s filings with the SEC, including our annual
report on Form 10-K, which filings are available from the SEC. We
caution you not to place undue reliance on any forward-looking
statements, which are made only as of the date of this press release. We
do not undertake or assume any obligation to update publicly any of
these forward-looking statements to reflect actual results, new
information or future events, changes in assumptions or changes in other
factors affecting forward-looking statements, except to the extent
required by applicable law. If we update one or more forward-looking
statements, no inference should be drawn that we will make additional
updates with respect to those or other forward-looking statements.

About Hyatt Hotels Corporation

Hyatt Hotels Corporation, headquartered in Chicago, is a leading global
hospitality company with a portfolio of 13 premier brands. As
of December 31, 2016, the Company’s portfolio included 698 properties
in 56 countries. The Company’s purpose to care for people so they can be
their best informs its business decisions and growth strategy and is
intended to create value for shareholders, build relationships with
guests and attract the best colleagues in the industry. The Company’s
subsidiaries develop, own, operate, manage, franchise, license or
provide services to hotels, resorts, branded residences and vacation
ownership properties, including under the Park Hyatt®,
Miraval®, Grand Hyatt®, Hyatt Regency®, Hyatt®, Andaz®, Hyatt Centric®,
The Unbound Collection by Hyatt
, Hyatt
Place®,
 Hyatt House®, Hyatt Ziva,
Hyatt Zilara™ and Hyatt Residence
Club® 
brand names and have locations on six continents. For
more information, please visit www.hyatt.com.

     
Hyatt Hotels Corporation
Reconciliation of Non-GAAP Measure: Net Income, EBITDA, Adjusted
EBITDA Forecast
 
The Company’s outlook assumes no additional disposition or
acquisition activity, and is based on a number of assumptions that
are subject to change and many of which are outside the control of
the Company. If actual results vary from these assumptions, the
Company’s expectations may change. There can be no assurance that
the Company will achieve these results.
($ in millions)
 
2017 Forecast Range
Low Case   High Case
Net income attributable to Hyatt Hotels Corporation $ 130 $ 166
Interest expense 77 77
(Benefit) provision for income taxes 79 93
Depreciation and amortization   374       370  
EBITDA 660 706
Equity (earnings) losses from unconsolidated hospitality ventures (3 ) (3 )
Stock-based compensation expense 31 31
(Gains) losses on sales of real estate and other
Asset impairments
Other (income) loss, net 6 (9 )
Pro rata share of unconsolidated hospitality ventures Adjusted EBITDA   75       79  
Adjusted EBITDA $ 769     $ 804  
 
Adjusted EBITDA (as reported) growth, compared to prior year -2 % 2 %
Negative impact of foreign exchange $ 15 $ 10
Adjusted EBITDA (in constant currency) growth, compared to prior year 0 % 4 %
 
Adjusted EBITDA (in constant currency) growth, compared to prior
year excl. Playa (1)
3 % 7 %
 
NOTE (1): Excludes Hyatt’s pro-rata share of Adjusted EBITDA from
Playa of $34 million in 2016, and $12 million in 2017.
 

DEFINITIONS

Adjusted Earnings Before Interest Expense, Taxes,
Depreciation and Amortization (“Adjusted EBITDA”) and EBITDA

We use the terms Adjusted EBITDA and EBITDA in this press release.
Adjusted EBITDA and EBITDA, as the Company defines them, are non-GAAP
measures.

We define consolidated Adjusted EBITDA as net income attributable to
Hyatt Hotels Corporation plus its pro rata share of unconsolidated
hospitality ventures Adjusted EBITDA based on its ownership percentage
of each venture, adjusted to exclude the following items:

  • interest expense;
  • benefit (provision) for income taxes;
  • depreciation and amortization;
  • equity earnings (losses) from unconsolidated hospitality ventures;
  • stock-based compensation expense;
  • gains (losses) on sales of real estate and other;
  • asset impairments; and
  • other income (loss), net.

Effective January 1, 2016, our definition of Adjusted EBITDA, has been
updated to exclude stock-based compensation expense, to facilitate
comparison with our competitors.

We calculate consolidated Adjusted EBITDA by adding the Adjusted EBITDA
of each of our reportable segments to corporate and other Adjusted
EBITDA.

Our board of directors and executive management team focus on Adjusted
EBITDA as a key performance and compensation measure both on a segment
and on a consolidated basis. Adjusted EBITDA assists us in comparing our
performance over various reporting periods on a consistent basis because
it removes from our operating results the impact of items that do not
reflect our core operations both on a segment and on a consolidated
basis. Our president and chief executive officer, who is the chief
operating decision maker, also evaluates the performance of each of our
reportable segments and determines how to allocate resources to those
segments, in significant part, by assessing the Adjusted EBITDA of each
segment. In addition, the compensation committee of our board of
directors determines the annual variable compensation for certain
members of our management based in part on consolidated Adjusted EBITDA,
segment Adjusted EBITDA or some combination of both.

We believe Adjusted EBITDA is useful to investors because it provides
investors the same information that the Company uses internally for
purposes of assessing operating performance and making compensation
decisions.

Adjusted EBITDA and EBITDA are not substitutes for net income
attributable to Hyatt Hotels Corporation, net income or any other
measure prescribed by accounting principles generally accepted in the
United States of America (GAAP). There are limitations to using non-GAAP
measures such as Adjusted EBITDA and EBITDA. Although we believe that
Adjusted EBITDA can make an evaluation of our operating performance more
consistent because it removes items that do not reflect our core
operations, other companies in our industry may define Adjusted EBITDA
differently than we do. As a result, it may be difficult to use Adjusted
EBITDA or similarly named non-GAAP measures that other companies may use
to compare the performance of those companies to our performance.
Because of these limitations, Adjusted EBITDA should not be considered
as a measure of the income generated by our business. Our management
compensates for these limitations by reference to its GAAP results and
using Adjusted EBITDA supplementally.

Contacts

Hyatt Hotels Corporation
Investor Contact:
Amanda Bryant,
312.780.5539
[email protected]
or
Media
Contact:
Stephanie Sheppard, 312.780.5399
[email protected]