Good day, ladies and gentlemen, and welcome to the Third Quarter 2016 Hyatt Hotels Corporation's Earnings Conference Call. My name is Mariana, and I'll be your operator for today. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. As a reminder, this conference call is being recorded for replay purposes. I would now like to turn the conference over to your host for today, Mr. Brian Karaba, Treasurer and Senior Vice President, Investor Relations and Corporate Finance. Please proceed.

Thank you, Mariana. Good morning, everyone, and thank you for joining us for Hyatt's third quarter 2016 earnings call. I am here in Chicago with Mark Hoplamazian, Hyatt's President and Chief Executive Officer; Pat Grismer, Hyatt's Chief Financial Officer and Amanda Bryant, Hyatt's Director of Investor Relations. Mark will begin today's call by providing a high-level review of our third quarter results, before turning to a more in-depth discussion of our global loyalty program, recent group transient trends and our asset recycling efforts. Mark will then turn the call over to Pat who will provide details on our financial performance this quarter and an update on our full year outlook. We will then take your questions. Before we get started, I would like to remind everyone that certain statements made on this call are not historical facts and are considered forward-looking statements. These statements are subject to numerous risks and uncertainties, as described in our Annual Report on Form 10-K and other SEC filings which could cause our actual results to differ materially from those expressed in or implied by our comments. Forward-looking statements in the earnings release that we issued earlier this morning, along with the comments on this call are made only as of today, November 3, 2016 and we undertake no obligation to publicly update any of these forward-looking statements as actual events unfold. You can find a reconciliation of non-GAAP financial measures referred to in our remarks on our website at hyatt.com under the Press Release section of our Investor Relations link and in this morning's earnings release. An archive of this call will be available on our website for 90 days per the information included in this morning's release. With that, I'll turn it over to Mark to get started.

Thanks very much, Brian. Good morning everyone and greetings from Chicago, home of the World Champion Chicago Cubs. Our hats are off to an amazing series with an amazing team, the Cleveland Indians, but after 108 years, it's nice to celebrate the Cubs' victory. So, welcome to our third quarter 2016 earnings call. Overall, we had another quarter of solid growth demonstrating the strength of our brands. Despite more modest levels of RevPAR growth over the course of the year, we delivered sequential improvements in quarterly earnings growth. After adjusting for foreign currency translation and the net impact of transaction activity, adjusted EBITDA increased approximately 12% during the quarter. This growth was fueled by the performance of our hotels in the U.S., coupled with effective cost management. Our recently opened Grand Hyatt Rio de Janeiro also contributed to this quarter's success. With respect to top-line results, system-wide comparable constant dollar RevPAR increased 2.5% in the quarter, including impressive growth in the United States of 3.4% for our full service hotels and 4.6% for our select service hotels. Our owned and leased portfolio RevPAR growth was more modest, as RevPAR increased by 1% on a constant currency basis due to softness in New York, Paris and Zurich in particular. According to Smith Travel Research, in a third quarter the luxury and upper upscale segments in the U.S. increased 1.5 % and 2.5% respectively. In that context, our U.S. full service growth of 3.4% was very encouraging. Further, our U.S. select service growth of 4.6% was even more impressive when considering the fact that the upscale segment in the U.S. was up only 2% during the quarter according to STR. For the seventh consecutive quarter, we grew market share as measured by RevPAR index across a majority of our hotels. As an…

Thank you, Mark, and good morning, everyone. Today, I'll share additional color on our third quarter results and provide an update on our full year outlook. Earlier today, we reported third-quarter net income of $62 million or earnings per share of $0.47 on a diluted basis. Adjusted EBITDA was $192 million, up 13% from prior year on a constant currency basis and up 12% from prior year when further adjusted for transaction impacts, which I'll discuss later. Before I cover the results of our operating segments, I'd like to highlight our 2.5% increase in comparable system-wide RevPAR growth in constant dollars for the third quarter. During the quarter, we removed Hyatt Regency Paris Étoile from our pool of comparable hotels because of its longer than expected renovation. This is consistent with the process we have in place to determine which hotels are truly comparable. Due to the size of the hotel at 950 rooms, our largest hotel in Europe, as well as the extent of the renovation with over half of the rooms decommissioned for renovation currently, the impact to our system-wide comparable RevPAR growth was significant. Had we included Étoile in our comparable hotel group, comparable system-wide RevPAR growth would have been 2.1% for the third quarter, reflecting both the rooms that are out of service as well as the challenging market conditions in France. Additionally, as Mark mentioned, the shift in timing of Jewish holidays favorably impacted our third quarter results, yielding a 60-basis point benefit to RevPAR. We expect this year-over-year benefit will reverse in the fourth quarter. Now on to our operating segments. First, I'll cover our owned and leased business, which also includes our joint ventures, and then I'll review the results of our managed and franchised business. Our owned and leased business, which accounted…

Your first question comes from Thomas Allen with Morgan Stanley. Your line is open. Thomas G. Allen - Morgan Stanley & Co. LLC: Hey, good morning. So just on your comments around China, your peers Hilton and Marriott have chosen to partner with local companies there to kind of grow out their businesses there. What's driving you to go it alone? Thank you.

Thanks. I'm not sure that the characterization is correct because we've got a lot of multi-hotel owners, partners in China. Our approach to this has been to really develop strong relationships with larger enterprises that can develop and grow in multiple markets, and we've got several organizations with which we have done that. Our focus historically has been to do that in the full-service hotel and luxury hotel representation that we've got in China, but increasingly, we're turning our attention to accelerating Hyatt Place and Hyatt House expansion there. We now have Hyatt Place and Hyatt House hotels open, and we've got the beginnings of being able to look back on operating results which will help us, I think, turn to a more aggressive approach to expanding the brands because the visibility to brand performance is really one of the critical factors in being able to accelerate development. So, I would say that we've got very strong relationships with very capable developers. Thomas G. Allen - Morgan Stanley & Co. LLC: Okay. Thanks for the clarification. And then just on your 2% to 3% RevPAR growth, year-to-date RevPAR growth is up around 2.6%. Should we kind of imply that given the holiday shifts in the fourth quarter, it likely won't accelerate from where it is today? So kind of thinking of it that way?

Well, Thomas, as you know, we don't guide RevPAR on a quarterly basis. We have reaffirmed our full year, which takes into account the fact that there will be some headwinds in Q4. As you mentioned the holiday timing, which was a benefit to Q3, that will reverse in Q4. As Mark mentioned in his prepared remarks, we expect that the U.S. election will have a dampening effect on Q4 results, and then also we expect consistent with trends thus far this year, lower in the quarter for the year group business. Thomas G. Allen - Morgan Stanley & Co. LLC: Okay. Thank you.

Your next question comes from Stephen Grambling with Goldman Sachs. Your line is open. Stephen Grambling - Goldman Sachs & Co.: Hey, good morning. Two quick questions. First on the RevPAR outperformance, there's a lot of moving parts there, but what do you think has been the biggest contributor driving the improvement, which seems to have started about six quarters ago and been pretty consistent?

Well, I think it's a combination of factors, but as we mentioned in the past, we've deployed a new revenue management system that we've been working on for some time. And I think we now have enough evidence with respect to our performance, at least in the Americas, which is where we have the longest deployment in place, to be able to feel confident that the algorithms that we've established and the deployment is working well. I think the other thing that's been true is that we've enjoyed a network effect that's, I think, persisted and increased over time with respect to the growth in Hyatt Place and Hyatt House. We have more markets covered, which allows us to serve more of the needs of our corporate volume accounts, managed corporate travel accounts. And so, I would say that it's really been discipline around the tools that we've provided and the fact that our brands are performing very well. The last thing I would just say by way of reminder is that our philosophy has been to make sure that we provide data and analytics and tools to our hotel teams. But our philosophy is not to price from the center, but to ask the hotel teams to be responsive real-time to their local market conditions. And we think that's the best way we can both care for our colleagues who need to manage their hotels on a real-time basis as well as our owners so that we can be very responsive and make decisions quickly. Stephen Grambling - Goldman Sachs & Co.: That's helpful. My second question is just on expense control. You mentioned the improved efficiencies in the owned hotels segment, can you just walk us through some of the changes you've made there and how we should be thinking about the leverage point on RevPAR going forward?

Certainly, Stephen. Well, with respect to that leverage point, typically for our owned and leased hotels, we need to achieve about 3% comparable RevPAR growth in order to hold margins flat. What happened in Q3 was that, as I mentioned in my prepared remarks, we had very good productivity gains at are owned and leased hotels, which helped to offset or help partially mitigate the inflation that we're seeing in wages and benefits. But then we also had some upside from what we've described as non-operational items, rent and property tax, which may not necessarily recur. And so, that contributed to our improvement in comparable owned and leased hotel margins. Stephen Grambling - Goldman Sachs & Co.: Okay.

I would also highlight that we had some significant variability across our regions with respect to our owned and leased hotels. So, as you would expect would be the case in EAME, in our Europe, Africa, Middle East, Southwest Asia region, which was experiencing a decline in RevPAR growth, their margins were hit very significantly. Margins were up a bit in ASPAC, but really where, I would say our owned and leased hotels delivered very nicely was in the Americas, where they were up by nearly 200 basis points. Stephen Grambling - Goldman Sachs & Co.: Okay. So, there wasn't a specific kind of action plan or anything that was put into place that would have driven down that leverage point or that should sustain it?

Well, we do have, yeah, we do have a systematic program underway. I believe we've talked about it before on previous earnings calls, where we essentially send a SWOT team out to our hotels to work with the local teams to identify opportunities to drive productivity, to enhance revenue, and we're seeing that gain momentum nicely across our system. I would say typically the opportunities they focus on are around labor deployment, where we can do a better job of forecasting our business and scheduling our labor to best meet the needs of our guests, while at the same time implementing improved sales practices at the hotel. So, we're beginning to see those efforts gain momentum, as well. Stephen Grambling - Goldman Sachs & Co.: Great. Thank you.

I would just add to that since that program that Pat referred to does include, importantly, top line initiatives, I think that has also helped to support our market share gains. Stephen Grambling - Goldman Sachs & Co.: Thank you.

Your next question comes from Joseph Greff with JPMorgan. Your line is open.

Good morning, guys.

Hi, Joe.

Mark, when I heard your earlier comments, I thought you sounded maybe a little bit more optimistic about current trends in growth prospects than maybe some of your peers on these conference calls this earnings season and I know you all at least pay some attention to what others are saying. When you look at your business, do you look at the trends in your business differently than maybe how you assess others and how they're communicating that? Or am I just interpreting you're getting this from last night's World Series victory?

So, I think without trying to compare and contrast tone, which I think is really hard to do, what I would say is we had – look, we – it's unambiguous we had a very strong quarter, and we've actually seen improvement in earnings space over the course of the year no matter that there's been relative deceleration on the RevPAR growth front. But as we look at what's going on, I think there are some really fundamental things that are happening at Hyatt that give us confidence about how we're going to be able to perform on a relative basis. I think our focus around the single purpose as a company, around caring for people so they can be their best, has translated into not just sort of the soft aspects of how you might think about guest service and those kinds of things but also really it's caring for all people, including our hotel owners and including our colleagues. And as we have turned to a number of initiatives, whether that's new technology platforms to help facilitate operations, which tends to allow us to redeploy people in constructive ways and also elevate guest satisfaction at the same time, it has turned out to also allow us to more efficiently operate, because turnover in some key positions is costly, because training tends to be very high. But we've simplified a lot of processes and that friction has been reduced. So we're basically turning this idea of focusing on purpose into a platform for improvements across the company. So I am optimistic because of how we think about the application of that broadly in our business. The growth on the hotel side and in the development world has been very notable and I think it's – we're obviously having a…

Your next question comes from Chad Beynon with Macquarie. Your line is open. Chad Beynon - Macquarie Capital (USA), Inc.: Hi. Thanks for taking my questions. You mentioned in prepared remarks that your select service RevPAR index continues to improve. So with the backdrop of a very healthy executed contract base, do these higher RPIs give you more confidence that this growth could actually accelerate? And then also given the returns that this would give your owners, do you have the ability to potentially increase fees and would you consider doing that given the volatility in the lodging cycle right now? Thanks.

Thanks. Look, I think the answer to the first question is yes. We're seeing an increased demand by developers for Hyatt Place and Hyatt House hotels. We are I think extremely well-positioned for the growth that we have ahead of us because we really only began to open urban-based, city-based, urban located Hyatt Place and Hyatt House hotels a few years ago. So even though the brand had been performing well for several years running, we're only beginning our urban expansion. And that's really where a lot of the further success, building momentum has come from. And it's a very attractive, if you can call it an asset class, urban select service, it's very attractive asset class. The returns available are – tend to be very high. It's a very efficient operation and there's more demand for diversity in price points in most major markets. So I think we're not only positioned to accelerate growth for Hyatt Place and Hyatt House, but we're already seeing that happen. With respect to the fee structures we remain in a competitive environment. So in many ways, I think our approach to how we improve economics for us and for our owners has to do with finding great opportunities and we are in the business of identifying great sites and being able to partner with or even sell those development opportunities to partners. We believe that that's a very different approach to our very targeted kind of development effort than some of our competitors are following. In some cases we've gone ahead and actually gone down the path of building those hotels, but in many cases we've either partnered with a developer or sold the project to a developer. And so we believe that that will actually enhance both their returns because we've taken great care to identify the best locations and match the brand to it, and our returns because we're able to deliver a project without necessarily having to compete for a franchise agreement in that particular case. So that's actually served us very well. Chad Beynon - Macquarie Capital (USA), Inc.: Thanks. And then maybe to add on to that from a capital allocation standpoint, Pat, at the end of your prepared remarks you talked about maybe being a little bit more aggressive on the recycling strategy. You guys also talked about some multiples from a cap rate [ph and EVD (46:06) standpoint. So two-parter on recycling strategy. One, has anything really changed in terms of geographies or segments of what you're focusing on? And then secondly, how are you thinking about pricing? Thanks.

I'll take the first comment on this and then Pat can add his commentary. But in terms of focus on markets and types of hotels that we are seeking, the answer is we haven't changed our focus. We continue to find interesting opportunities on the resort front which we will continue to pursue because our resort presence really – increasing our resort presence allows us to provide richer and deeper experiences to especially our loyalty members. And so we're really looking to expand our opportunities on the resort front. Gateway city focus remains high. We have a roadmap for each of our brands on a global basis. So we've got specific cities identified in the past. We've talked about the need – our need to expand in places like Los Angeles, Miami, and London, and that remains true. And that's across most of our brand portfolio. And then, I would say the select service focus that I mentioned earlier, it remains high. And finally, on the group side, we have been very focused on adding in a very deliberate and focused way, in a very particular deliberate way, group capacity in key group markets. And we're thrilled about the Hyatt Regency Seattle opportunity, which will really, I think, significantly enhance Seattle as a group destination market with the newest, biggest hotel in the marketplace adjacent to this new expanded convention center. So, all of that is really the result of a lot of focus. We are not trying to blanket the world with as many flags as we can possibly sign up. We're really focused on quality growth in a very deliberate way. In terms of pricing, we really – it varies a lot by type of hotel that you're talking about. But in the markets in which we're focusing our time and attention and for the quality of the assets that we're talking about, we haven't seen material changes in pricing. The cap rate and multiple references that I provided to you we believe are appropriate and relevant to the Birmingham market in the U.K. So that's not really meant to be a commentary on valuation and pricing across many different markets.

And what I would add to Mark's comments is that as it relates to our asset recycling strategy, while we do expect to see some interesting acquisition opportunities in the months ahead, that's not to suggest that we are going to increase the overall size of our owned and leased portfolio, because equally, we're constantly identifying where there are opportunities to dispose of some of our existing owned and leased hotels to provide the capital to help drive this recycling activity, which as you know over time has stimulated the growth of our system. Chad Beynon - Macquarie Capital (USA), Inc.: Okay. Thank you both very much.

Thanks.

Your next question comes from Shaun Kelley with Bank of America. Your line is open.

Hi, good morning, and thanks for taking my question. I just wanted to revisit the margin commentary, and I appreciate you guys already gave some color on this. But just trying to think through owned and leased margin potential for next year, and as we look at – I think in the year-to-date period, margins are up slightly across the owned and leased segment. So, my question is sort of as we head into next year, can margins continue to expand in a low single-digit RevPAR environment, just given some of the unique things that Hyatt might be going on in your portfolio with assets ramping up, acquisitions, and dispositions?

Thank you, Shaun. Well, we're certainly not going to give an outlook for next year at this stage, but I am happy to perhaps provide a bit more insight as to our margin performance this quarter and how that might help you understand how these things come together, because I think there are a number of different dots that can be connected here. The first is that our owned and leased RevPAR growth performance for Q3 was 1%. And as I mentioned earlier, we need to achieve about 3% growth in comparable RevPAR in order to hold margins flat. So, that gives you a sense for the types of productivity gains that we saw at our owned and leased hotels primarily in the Americas during the third quarter. Also, as I mentioned, there was significant variability in our portfolio, our owned and leased portfolio for the third quarter, with much stronger performance in RevPAR growth at the Americas and ASPAC compared to our Europe, Africa, Middle East business, which was under pressure. And so, that explains why there were significant differences in comparable owned and leased hotel margin performance. It really is the totality of these and how they come together that explains where we landed for the quarter. But then, again, as I mentioned before, we did have some non-operational items, rent and property tax, which delivered upside to our owned and leased margins in the quarter. Not all of that would be recurring.

Okay.

And Shaun, I'm sorry, the last thing I would say is that we absolutely do expect that the efforts that have been underway for some time to drive revenue and productivity enhancements at our hotels will continue. We're gaining nice momentum. The team has done a great job of identifying best practices at specific hotels and then broadcasting those to the system so that we don't have hotels waiting for our teams to arrive to help identify those opportunities. But all hotels can begin to capitalize on those insights and drive the kind of improved productivity that is essential to expanding margins over time. I think it is fair to say that our margins do have room for improvement. And certainly, that is our goal going forward as we grow revenue and as we drive further efficiency. But we're not at this time giving guidance on what that might look like for 2017.

Okay. Understood, Pat, and I think that was – that's actually really helpful and clear. Just to kind dig in one layer further then, where I was really going with it was trying to say, okay, you've sold like the Andaz 5th Avenue, you've added in Rio. As we think about some of the puts and takes in the actual portfolio itself, is there anything that would – that itself as you think about single assets or pluses and minuses that would be a net tailwind or headwind across the portfolio?

Nothing at this stage to highlight.

Okay, great. Thank you very much.

And Mariana, we'll take our last question.

All right. Your final question comes from the line of Bill Crow with Raymond James. Your line is open. Bill A. Crow - Raymond James & Associates, Inc.: Hey, good morning, Mark and Pat. I appreciate you taking the questions. It's good to hear the color on the Birmingham asset. Can you – and I think you said the IRR was 17%. What was the IRR on Andaz 5th Avenue?

I'll clear – let me just clarify, I think I said mid-teens, just to be clear. Bill A. Crow - Raymond James & Associates, Inc.: Okay.

I don't have an IRR for Andaz 5th Avenue handy. We can probably revisit that in the future, but we don't have the ability to give you an answer on the phone. Bill A. Crow - Raymond James & Associates, Inc.: Okay. Positive? Negative?

I think we – it would be modest IRR in either direction. That's a guess off the top of my head, just by virtue of the fact that we obviously had ramping earnings over that period of time plus the fee base of the hotel. Bill A. Crow - Raymond James & Associates, Inc.: Sure.

So – but we can further clarify that. Bill A. Crow - Raymond James & Associates, Inc.: Great. The pipeline of units is static (54:46) from last quarter at 61,000 rooms, and it seems like that might be the first time that it's failed to grow in recent years. Anything -- is that just a one quarter anomaly, or are we starting to see some of the impact from what we're hearing is tougher lending standards out there?

No. Actually – so just to clarify, we – it's not really the first time that we've reported a static or a carryover from the prior quarter. That was true at the end of last year into the first half of this year. And our development activity is varied and diverse across the globe. The pace of signings – I just want to make sure that everyone remembers that what we report is actually fully executed contracts. We don't report stuff that's in the hopper, LOIs, hope and prayers – that's not what we do. So we are tracking actual contracts, signed and, in our judgment, able to be built that is – these are financed projects. So we have a screen that we use to ensure that not only do we have a signed piece of paper in the drawer, but we also have, in our judgment, a live project that's going to get done. So the timing of when we actually realize those signings and add them to the executed contract base, they vary over the course of the year. It will maybe not surprise you to hear that the fourth quarter is always a very, very active quarter because that is the quarter by which the annual goals that have been established for the developers end up getting measured but – and it's also the cadence in some key markets that we cover. So I would say it's really a byproduct. The ebb and flow or the profile of our executed contract base is really the result of the individual activity.

And I will just add on. This is Brian. I think it's important to note that we've increased our existing hotel base by 9% over the past year. We've also grown our pipeline by 10% over the last year and this is during a year of record breaking openings for the company. So the fact that we can continue to grow our pipeline and continue to grow our existing room base is impressive. Bill A. Crow - Raymond James & Associates, Inc.: Okay. One clarification. If Playa is successful and they redeem your preferred, I guess, a, what is your plan for the capital? Could we see a surge in repurchase activity? B, what would that do to earnings next year? What line item is that captured in? Thanks.

I'll cover the first piece and Pat can cover the second. With respect to any cash that we might receive, our priorities remain as they always have been, which is first and foremost to deploy to grow the business and consistently provide a return of capital to shareholders, and we have done both. So those priorities remain in place and they won't change depending on no matter what the outcome with respect to the Playa IPO might be.

And with respect to what the impact might be to our reported earnings, it really depends on both the magnitude of the Playa IPO and the amount of our common stock ownership post IPO. That will determine whether or not we continue to account for that investment under the equity method. If we don't account for the investment under the equity method, then our share of earnings would no longer be included as part of our adjusted EBITDA. Bill A. Crow - Raymond James & Associates, Inc.: And how much was that this year, Pat?

It accounts for about one-third of our total JV share of adjusted EBITDA. Bill A. Crow - Raymond James & Associates, Inc.: Perfect. Thank you, guys.

And thanks, Mariana, and thank you everyone for joining us today and we look forward to talking to you soon. Goodbye.

This concludes today's conference call. You may now disconnect.