Hyatt Hotels : Q1 2025 Non-GAAP Reconciliation

Published: 2025-05-01 11:04:08 ET H

Published on 05/01/2025 at 11:04

‌Table of Contents

Reconciliations of Non-GAAP Financial Measures (unaudited)

Reconciliation of Net Income Attributable to Hyatt Hotels Corporation to Adjusted EBITDA G&A Expenses to Adjusted G&A Expenses

Special Items

Outlook: Reconciliations of Non-GAAP Financial Measures

A - 1

A - 2

A - 3

A - 4

Percentages on the following schedules may not recompute due to rounding. Not meaningful percentage changes are presented as "NM".

‌Reconciliation of Non-GAAP Financial Measure: Reconciliation of Net Income Attributable to Hyatt Hotels Corporation to Adjusted EBITDA

(in millions)

2025

2024

Net income attributable to Hyatt Hotels Corporation

$ 20

$ 522

Contra revenue

20

13

Revenues for reimbursed costs

(886)

(802)

Reimbursed costs

902

836

Stock-based compensation expense (a)

31

31

Transaction and integration costs (b)

23

8

Depreciation and amortization

80

92

Equity (earnings) losses from unconsolidated hospitality ventures

12

(75)

Interest expense

66

38

Gains on sales of real estate and other

-

(403)

Asset impairments

4

17

Other (income) loss, net

(43)

(54)

Provision for income taxes

28

19

Net income attributable to noncontrolling interests

4

-

Pro rata share of unconsolidated owned and leased hospitality ventures' Adjusted EBITDA

12

17

Includes amounts recognized in general and administrative expenses and distribution expenses.

During the year ended December 31, 2024, the Company revised its definition of Adjusted EBITDA to exclude transaction and integration costs and recast prior-period results to provide comparability. The revised definition excludes integration costs, which were recognized in integration costs, and transaction costs, which were recognized in general and administrative expenses, during the three months ended March 31, 2024. Previously, only transaction costs recognized in gains on sales of real estate and other and other income (loss), net were excluded from Adjusted EBITDA. As transaction and integration costs may vary in frequency or magnitude, the Company believes the revised definition presents a more representative measure of its core operations, assists in the comparability of results, and provides information consistent with how management evaluates operating performance. Refer to schedule A-11 for an explanation of how the Company utilizes Adjusted EBITDA, why the Company presents it, and material limitations on its usefulness.

The table below provides a breakdown for Adjusted EBITDA:

(in millions)

2025

2024

Management and franchising

$ 236

$ 203

Owned and leased

27

62

Distribution

49

39

Overhead

(40)

(46)

Eliminations

1

1

‌Reconciliation of Non-GAAP Financial Measure: G&A Expenses to Adjusted G&A Expenses

Results of operations as presented on the condensed consolidated statements of income include expenses recognized with respect to deferred compensation plans funded through rabbi trusts. Certain of these expenses are recognized in G&A expenses and are completely offset by the corresponding net gains (losses) and interest income from marketable securities held to fund rabbi trusts, thus having no net impact to our earnings. G&A expenses also include expenses related to stock-based compensation. Below is a reconciliation of this measure excluding the impact of our rabbi trust investments and stock-based compensation expense.

(in millions)

2025

2024

G&A expenses

$ 126

$ 169

Less: Rabbi trust impact

12

(22)

Less: Stock-based compensation expense

(29)

(29)

The table below provides a breakdown for Adjusted G&A Expenses:

(in millions)

2025

2024

Management and franchising

$

67

$

63

Owned and leased

2

3

Distribution

-

6

Overhead

40

46

‌Reconciliation of Non-GAAP Financial Measures: Net Income Attributable to Hyatt Hotels Corporation and Diluted Earnings Per Class A and Class B Share to Adjusted Net Income Attributable to Hyatt Hotels Corporation and Adjusted Diluted Earnings Per Class A and Class B Share

(in millions, except per share amounts)

2025

2024

Net income attributable to Hyatt Hotels Corporation

$ 20

$ 522

Diluted earnings per share

$ 0.19

$ 4.93

Special items:

Transaction and integration costs (a)

23

8

Fund deficits (b)

12

20

Utilization of Avendra and other proceeds (c)

5

6

Asset impairments (d)

4

17

Unconsolidated hospitality ventures (e)

1

(79)

Gains on sales of real estate and other (f)

-

(403)

Contingent consideration liabilities fair value adjustments (g)

(5)

(4)

Unrealized gains, net (h)

(10)

(13)

Other

7

-

Special items - pre-tax

37

(448)

Income tax (provision) benefit for special items

(11)

7

Total special items - after-tax

$ 26

$ (441)

Special items impact per diluted share

$ 0.27

$ (4.16)

Adjusted net income attributable to Hyatt Hotels Corporation

$ 46

$ 81

Adjusted diluted earnings per share

$ 0.46

$ 0.77

During the three months ended March 31, 2025 (Q1 2025), we recognized transaction costs primarily related to the planned Playa Hotels Acquisition, and integration costs primarily related to Apple Leisure Group and the Standard International and Bahia Principe Transactions. During the three months ended March 31, 2024 (Q1 2024), we recognized transaction costs primarily related to potential transactions and integration costs primarily related to Apple Leisure Group, Dream Hotel Group, and Mr & Mrs Smith. The costs were recognized in transaction and integration costs on our condensed consolidated statements of income.

During Q1 2025 and Q1 2024, we recognized net deficits, which we intend to recover in future periods, on certain funds due to the timing of revenue and expense recognition. During Q1 2025, the net deficit was recognized in revenues for reimbursed costs, reimbursed costs, and depreciation and amortization expenses, and during Q1 2024, the net deficit was recognized revenues for reimbursed costs, reimbursed costs, and other income (loss), net on our condensed consolidated statements of income.

During Q1 2025 and Q1 2024, we recognized expenses related to the partial utilization of the Avendra LLC sale proceeds for the benefit of our hotels in reimbursed costs and depreciation and amortization expenses on our condensed consolidated statements of income. The gain recognized in conjunction with the sale of Avendra LLC was included as a special item during the year ended December 31, 2017.

During Q1 2025, we recognized $4 million of impairment charges related to intangible assets. During Q1 2024, we recognized a $15 million goodwill impairment charge in connection with the sale of the shares of the entities that own Hyatt Regency Aruba Resort Spa and Casino. The impairment charges were recognized in asset impairments on our condensed consolidated statements of income.

During Q1 2024, we recognized a $79 million non-cash pre-tax gain related to the dilution of our ownership interest in an unconsolidated hospitality venture in equity earnings (losses) from unconsolidated hospitality ventures on our condensed consolidated statements of income.

During Q1 2024, we recognized pre-tax gains related to the UVC Transaction ($231 million) and the sale of the shares of the entities that own Hyatt Regency Aruba Resort Spa and Casino ($172 million) in gains on sales of real estate and other on our condensed consolidated statements of income.

During Q1 2025, we recognized fair value adjustments related to Dream Hotel Group and the Standard International and Bahia Principe Transactions. During Q1 2024, we recognized fair value adjustments related to the Dream Hotel Group. These fair value adjustments were recognized in other income (loss), net on our condensed consolidated statements of income.

During Q1 2025 and Q1 2024, we recognized net unrealized gains due to the change in fair value of our marketable securities in other income (loss), net on our condensed consolidated statements of income.

‌Reconciliation of Non-GAAP Financial Measures: Outlook: Net Income Attributable to Hyatt Hotels Corporation to Adjusted EBITDA; G&A Expenses to Adjusted G&A Expenses; and Net cash provided by operating activities to Free Cash Flow and Adjusted Free Cash Flow

No additional disposition or acquisition activity beyond what has been completed as of the date of this release has been included in the 2025 Outlook. Our 2025 outlook does not account for the planned Playa Hotels Acquisition, however, our Adjusted Free Cash Flow excludes certain costs associated with the Playa Hotels Acquisition. The Company's 2025 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. Results of operations as presented on the condensed consolidated statements of income include expenses recognized with respect to deferred compensation plans funded through rabbi trusts. Certain of these expenses are recognized in G&A expenses and are completely offset by the corresponding net gains (losses) and interest income from marketable securities held to fund rabbi trusts, thus having no net impact to our earnings. G&A expenses also include expenses related to stock-based compensation. Below is a reconciliation of this forecasted measure excluding the impact of our rabbi trust investments and forecasted stock-based compensation expense.

(in millions)

Net income attributable to Hyatt Hotels Corporation

$

95

$ 150

Contra revenue

64

64

Reimbursed costs, net (a)

134

114

Stock-based compensation expense (b)

70

70

Transaction and integration costs

65

60

Depreciation and amortization

318

318

Equity (earnings) losses from unconsolidated hospitality ventures

42

42

Interest expense

258

258

Asset impairments

4

4

Other (income) loss, net

(112)

(132)

Provision for income taxes

86

116

Net income attributable to noncontrolling interests

4

9

Pro rata share of unconsolidated owned and leased hospitality ventures' Adjusted EBITDA

52

62

Adjusted EBITDA

$ 1,080

$ 1,135

Reimbursed costs are presented net of revenues for reimbursed costs as the Company cannot forecast the gross amounts without unreasonable effort.

Includes amounts recognized in general and administrative expenses and distribution expenses.

Low Case

High Case

G&A expenses

$ 505

$ 515

Less: Rabbi trust impact

12

12

Less: Stock-based compensation expense

(67)

(67)

Adjusted G&A Expenses

$ 450

$ 460

Low Case

High Case

Net cash provided by operating activities

$ 440

$ 490

Capital expenditures

(150)

(150)

Free Cash Flow

$ 290

$ 340

Cash taxes on asset sales

117

117

Costs associated with the Playa Hotels Acquisition (c)

43

43

Adjusted Free Cash Flow

$ 450

$ 500

Includes transaction costs incurred during the three months ended March 31, 2025 and interest expense that will be paid on September 30, 2025 related to the senior notes used to finance a portion of the purchase price.

Disclaimer

Hyatt Hotels Corporation published this content on May 01, 2025, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on May 01, 2025 at 15:03 UTC.