Second quarter of 2019 financial highlights as compared to the second quarter of 2018 are as follows:

• Net income increased 10.6% to $86 million.
• Adjusted EBITDA decreased 2.1% to $213 million, a decrease of 1.0% in constant currency.
• Comparable system-wide RevPAR increased 1.3%, including an increase of 2.3% at comparable owned and leased hotels. Excluding the negative impact from the timing of the Easter holiday, comparable RevPAR at system-wide hotels and comparable owned and leased hotels would have increased 1.7% and 2.8%, respectively.
• Comparable U.S. hotel RevPAR decreased 0.3%; full service hotel RevPAR increased 0.7% and select service hotel RevPAR decreased 2.3%.
• Net rooms growth was 12.6%, or 6.9% excluding the acquisition of Two Roads Hospitality LLC ("Two Roads") in the fourth quarter of 2018.
• Comparable owned and leased hotels operating margin increased 10 basis points to 26.4%.
• Adjusted EBITDA margin of 31.6% decreased 260 basis points in constant currency.

Management, Franchise and Other Fees

Americas Management and Franchising Segment

OPENINGS AND FUTURE EXPANSION

SHARE REPURCHASE/DIVIDEND

CAPITAL STRATEGY UPDATE

BALANCE SHEET / OTHER ITEMS

• Total debt of $1,712 million.
• Pro rata share of unconsolidated hospitality venture debt of approximately $547 million, substantially all of which is non-recourse to Hyatt and a portion of which Hyatt guarantees pursuant to separate agreements.
• Cash and cash equivalents, including investments in highly-rated money market funds and similar investments, of $515 million, restricted cash of $32 million, and short-term investments of $62 million.
• Undrawn borrowing availability of $1.4 billion under Hyatt's revolving credit facility.

2019 OUTLOOK

• Comparable system-wide RevPAR is expected to increase approximately 1% to 2%, as compared to fiscal year 2018. This compares to a prior range of approximately 1% to 3%.
• The Company expects to grow units, on a net rooms basis, by approximately 7.25% to 7.75%, reflecting approximately 85 new hotel openings. This compares to a prior range of 7.0% to 7.5% and over 80 new hotel openings.
• Net income is expected to be approximately $231 million to $275 million. This compares to a prior range of approximately $144 million to $183 million. Please refer to table on page 13 of the schedules for revised ranges impacting net income.
• Other income (loss), net is expected to be negatively impacted by approximately $40 million related to performance guarantee expense for the four managed hotels in France. This compares to the prior range of approximately $40 to $50 million.
• Adjusted EBITDA is expected to be approximately $755 million to $775 million, compared to prior expectations of approximately $780 million to $800 million, reflecting a $25 million reduction at the mid-point. These revised estimates are primarily driven by the following two items:
  • construction-related issues at Miraval properties in Austin, Texas and Lenox, Massachusetts, impacting operations at both properties. On a combined basis, these two properties are expected to account for nearly two-thirds of the $25 million reduction at the mid-point of the range of Adjusted EBITDA guidance.
  • the impact of two recent transactions including the sale of our interest in a joint venture which holds a hotel in San Francisco and the sale of a retail property adjacent to Grand Hyatt San Francisco. On a combined basis, these transactions are expected to impact 2019 Adjusted EBITDA by approximately $5 million.
• Other items affecting the range of Adjusted EBITDA guidance include an approximate $3 million increase at the mid-point of the expected range of negative foreign currency impact, and the reduction in system-wide RevPAR growth guidance by 50 basis points at the mid-point of the range. Refer to the table on page 13 of the schedules for a reconciliation of Net Income to Adjusted EBITDA.
• Depreciation and amortization expense is expected to be approximately $335 million to $340 million. This compares to a prior range of approximately $347 million to $352 million.
• The effective tax rate is expected to be approximately 25% to 27%. This compares to a prior range of approximately 28% to 30%.

• Adjusted EBITDA contribution from the Two Roads acquisition prior to non-recurring integration-related costs is estimated to be approximately $20 million to $25 million.
• Interest expense is expected to be approximately $78 million to $79 million.
• Adjusted selling, general, and administrative expenses are expected to be approximately $345 million inclusive of approximately $25 million of expenses related to non-recurring integration costs for Two Roads. Adjusted selling, general, and administrative expenses exclude approximately $33 million of stock-based compensation expense and any potential impact related to benefit programs funded through rabbi trusts.
• Capital expenditures are expected to be approximately $375 million.
• The Company expects to return approximately $300 million to shareholders through a combination of cash dividends on its common stock and share repurchases.

CONFERENCE CALL INFORMATION

NON-GAAP FINANCIAL MEASURES

AVAILABILITY OF INFORMATION ON HYATT'S WEBSITE

DEFINITIONS

• interest expense;
• provision for income taxes;
• depreciation and amortization;
• amortization of management and franchise agreement assets constituting payments to customers (Contra revenue);
• revenues for the reimbursement of costs incurred on behalf of managed and franchised properties;
• costs incurred on behalf of managed and franchised properties;
• equity earnings (losses) from unconsolidated hospitality ventures;
• stock-based compensation expense;
• gains (losses) on sales of real estate;
• asset impairments; and
• other income (loss), net

ABOUT HYATT HOTELS CORPORATION