Hyatt Annual Report Done

Finance Management Hyatt Hotel Corporation
HFT 6477 Spring 2015
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GETTING ACQUAINTED WITH THE ANNUAL REPORT
GENERAL INFORMATION
General information may be in several places of annual reports. This information generally
appears at the beginning of the report, the end of the annual report, or on or near the inside back
cover.
Answer the following questions about the annual report you have selected:
1. What is the name of the corporation you will analyze?
Hyatt Hotel Corporation
2. The corporate headquarters is located in what city?
Chicago, Illinois
3. When is the fiscal year end of the corporation?
2013
4. What is (are) the primary product(s) or service(s) of the corporation
Full service hotel and resorts Develop, sell, manage vacation properties
Consult with third parties in design and
development of mix-used projects based
on expertise
Manage, provide services to, or license
trademarks to residential ownership units
adjacent to a Hyatt full service hotel

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5. The corporation must show high and low selling prices of the corporation's common stock
each quarter for the last two years. Chart the common stock prices over the last two years
(Replace the below chart with the chart for this company’s analysis):
In the chart, mark the high price of each quarter with a diamond shape in blue. Then, mark
the low price of each quarter with a circle in red.
Connect the high prices with a line to indicate the trend. Then connect the low prices with a
dotted line.
6. Describe the trend in the price of the common stock over the last two years (for example, was
it upward, downward, volatile, or constant).
The price of the common stock had a steady increase until September 2013 where it
experienced a downfall. The price did manage to rise again, so the price has not been entirely
consistent, but has not been very volatile.
7. Did the stock trade within a narrow or wide price range? (For a two-year period, a range in
excess of 15% of the lowest price would likely be considered wide.)
The stock trade was within a wide range of price. The highest was 65, the lowest 43; the
difference is 22, over 50% of the lowest price.
0
10
20
30
40
50
60
1st Qtr
2012
2nd Qtr
2012
3rd Qtr
2012
4th Qtr
2012
1st Qtr
2013
2nd Qtr
2013
3rd Qtr
2013
4th Qtr
2013
High
Low

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INTERNET INFORMATION
The Corporate Website
1. What is the internet address of the corporation
www.hyatt.com
2. Corporations often provide financial information in websites under link names such as
"investor relations" or investor information." Indicate which items appear in the part of the
website that relates to investors:
× Operating highlights × Annual reports
× Information relating to corporate governance × SEC filings
× Stock price information Proxy statements
× Press releases × Investor relations contacts
3. What are other purposes of this website?
× Describe the corporation × Provide customer service
× Advertise corporate products or services × Publicize corporate citizenship
×
Facilitate the sales of company products or
services Publicize recent corporate events
Provide product financing information
Promote the industry the corporation is
in
Identify the location of retail sales sites × Provide employment information
The Securities and Exchange Commission's EDGAR Database
The primary purpose of the Securities and Exchange Commission (SEC) is to protect investors
and maintain the integrity of the securities markets. The commission regulates the issuance and
trading of publicly held securities.
The SEC requires filing of several forms including annual financial reports (10-K), quarterly
financial reports (10-Q), registration statements for newly offered securities (S-1, S-3), current
reports of material events or changes (8-K), and others. These forms are publicly available on the
internet (www.sec.gov) in a database called the Electronic Data Gathering, Analysis, and
Retrieval system (EDGAR). A tutorial on how to use EDGAR is at
www.sec.gov/edgar/quickedgar.htm.
Form 10-K is particularly useful in analyzing a corporation because it contains information that
sometimes does not appear in the annual report to stockholders. For example Form 10-K
contains a detailed description of the business (Item 1) and its properties (Item 2), a description
of executive compensation (Item 11), and description of management controls (Item 14).

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Find the latest Form 10-K of your corporation and answer the following questions:
1. What is the date of the latest Form 10-K?
December 31, 2013
2. What is the primary Standard Industrial Classification (SIC)?
7011
3. The Central Index Key (CIK) is a unique number assigned to corporations that file with the
SEC.
What is the corporation’s
CIK?
0001468174
THE PRIMARY FINANCIAL STATEMENTS
Income Statement
The income statement (sometimes called the "statement of earnings" or "statement of
operations") is usually the first major financial statement appearing in the report. The income
statement summarizes corporate revenues and expenses for a period of time. Corporations
provide three years of income statements for comparative purposes (if the corporation has been
in operation for three years).
1. Growth in Revenues and Profits - Revenue growth is determined by the percentage increase
(decrease) of revenues in comparison with the previous year:
Percentage of
Revenue Growth
=
Current Year Revenue - Previous Year Revenue
Previous Year Revenue
Indicate the growth in revenue during the current year (Ratio Analysis worksheet):
Percentag
e of
Revenue
Growth
=
4184-3949= 235
=0.06
%
3949
2. Corporations are required to show summarized historical data. Label the vertical axis of the
following chart with a scale that will accommodate revenue over the last five years. Then
chart the level of revenue for the last five years (Replace the below bar graph with a graph
from the company under analysis.)

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3. Did revenue increase or decrease over the last few years? An explanation of the change in
revenue is often contained in the management discussion and analysis section. What reasons
did management give for the change?
According to the Management Reason “These revenues have no effect on our profit, although
they do increase our total revenues and the corresponding costs increase our total expenses”
4. Trends in corporate profits are determined by calculating the percentage of increase
(decrease) in income from continuing operations over the previous year. Income from
continuing operations is net income without the effects of any discontinued operations or
extraordinary items.
Percentage
Growth in
Profits
=
Current Year Income from Continuing Operations
– Previous Year Income from Continuing Operations
Previous Year Revenue
Determine the percentage growth in profits during the current year (Ratio Analysis worksheet):
Percentage
Growth in
Profits
=
207-88= 119
=
3.01
%3949
$-
$500.00
$1,000.00
$1,500.00
$2,000.00
$2,500.00
$3,000.00
$3,500.00
$4,000.00
$4,500.00
2009 2010 2011 2012 2013
Revenue
Revenue

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Common-Size Analysis
Common-size (or percentage) analysis expresses items in a financial statement as a percentage of
a single item. This analysis permits comparisons between two or more years, or between two or
more corporations. In an income statement, items are usually expressed as a percentage of
revenue. Perform common-size analysis in relation to revenue for the following items in the
income statement for the current and previous years (Insert your common-size analysis below):
Current Year Previous Year
Revenue 100.0 % 100.0%
Cost of Goods/Service 78.47 79.03
Gross Profit 21.53 20.97
Operating Expense 15.97 16.94
Interest Expense 1.55 1.77
Research & Development Expense 0 0
Income Tax Expense 2.77 0.20
Income from Continuing Operations 5.57 4.03
Net Income 4.95 2.23
Based on your common-size analysis, compare current year operating results in terms of cost
control, debt servicing, tax burdens, and profitability. Information concerning the reasons for
change may be found in the management discussion and analysis.
1. Product or Service Cost Control- Did the percent of product costs (cost of goods or
services) to revenue change in the current year in comparison to the previous year? What are
possible explanations for changes, if any, that may have occurred?
Total Product cost and the services increased by $83 million in the year ended December
31, 2013 compared to the year ended December 31, 2012. Comparable owned and leased
hotels expense increased $56 million for the year ended December 31, 2013 compared to the
year ended December 31, 2012, largely attributable to higher compensation, health insurance

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and employment related costs, rent expense and real estate taxes. Non-comparable owned
and leased hotels expense increased $18 million in the year ended December 31, 2013 as
compared to the year ended December 31, 2012 due to three new wholly owned full service
hotels acquired in 2013, a full year of contribution from two properties acquired in 2012, and
the opening of one leased property in 2012, partially offset by 11 hotels sold during 2013 and
eight hotels sold in 2012. Additionally, expenses recognized with respect to our employee
benefit programs funded through rabbi trusts increased $6 million driven by the performance
of the underlying invested assets during the year ended December 31, 2013 as compared to
the year ended December 31, 2012. Changes in these expenses are fully offset to the account
net gains and interest income from marketable securities held to fund operating programs,
thus having no net impact to our earnings. Direct costs of our vacation ownership operations
increased $3 million. Total of 83 million cost of good sold increased
2. Operating Cost Control - Did the percentage of operating costs (selling and administrative
expenses) to revenue change in the current year in comparison to the previous year? What are
possible explanations for changes, if any, that may have occurred?
According to the 10K report: selling, general and administrative costs increased by $7
million or 2% in the year ended December 31, 2013 compared to the year ended December 31,
2012. Included in selling, general and administrative expenses is the financial performance of the
investment securities held in rabbi trusts to fund certain benefit programs.
3. Debt Servicing- How did the percentage of interest expense to revenue compare to the
previous year? What are possible explanations for changes, if any?
Interest expense decreased by $5 million in the year ended December 31, 2013 compared to
the year ended December 31, 2012. The reduction in interest expense was primarily due to an
increase in capitalized interest for construction in progress.
4. Tax Burden - Did the tax expense as a percentage of total revenue change in the current
year? What are possible explanations for these changes, if any? (Without knowledge of the
tax laws applying to the corporation, it may be impossible to determine specific reasons for
the change.)
Income taxes for the years ended December 31, 2013 and 2012 was a provision of $116
million and $8 million respectively, which resulted in effective income tax rates of 36.2% and
8.3%, respectively. Additional benefits arise from foreign earnings taxed at lower that the U.S.

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statutory rate.
5. Profitability- How did net income as a percentage of revenue change in the current year?
What items in the income statement explain the change in income from continuing operations
as a percentage of revenue?
Net income increased by 135%, which is 88 million. It is a lot of increased caused by
owned and leased hotels. Also as I mentioned on the cost of good sold Primarily to three new
wholly owned full service hotels acquired in 2013, a full year of contribution from two
properties acquired in 2012, and the opening of one leased property in 2012, partially offset
by 11 hotels sold during 2013 and eight hotels sold in 2012 including the increase in
management and franchise fee revenues for the year ended December 31, 2013. During 2013,
Hyatt Corp sold the Hyatt Fisherman’s Wharf, Hyatt Santa Barbara, and Hyatt Regency
Denver Tech to unrelated third parties for a combined sale price of $219 million, net of
closing costs, resulting in a pre-tax gain of $125 million. Hyatt entered into long-term
franchise agreements for each of these properties and therefore recognized the full gain on
sale of real estate in our consolidated statements of income in the period of sale. There were
no gains on sales of real estate in the period ended December 31, 2012.
6. Other Income Statement Items- Generally accepted accounting principles in the U.S.
require amounts related to discontinued operations and extraordinary items be shown, net of
taxes, at the bottom of the income statement. If any of these items are present, describe the
nature and amount.
Other income, net, increased by $10 million in the year ended December 31, 2013 compared
to the year ended December 31, 2012, primarily due to the favorable impact of cost method
investment income and a gain on the sale of artwork, partially offset by debt settlement costs and
a charitable contribution to Hyatt Thrive Foundation.

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BALANCE SHEET
The balance sheet summarizes assets and equities (liabilities and stockholders' equity) of a
corporation. Assets are usually grouped in one of five categories: current assets, investments,
fixed assets (sometimes referred to as property, plant, and equipment), intangible assets, and
other assets. Liabilities are typically grouped into current liabilities and long-term liabilities.
Asset Growth
The "size" of a corporation is commonly measured by the amount of total assets on the
corporation's balance sheet. A corporation is considered "growing" if total assets increase from
one year to the next. The rate of growth is measured by the change in total assets divided by the
total assets of the previous year:
Percentage
Growth of
Assets
=
Current Year Total Assets
– Previous Year Total Assets
Previous Year Total Assets
1. Determine the percentage of growth in assets (Ratio Analysis worksheet):
Percentage
Growth of
Assets
=
8177-7630=547
=
7.17
%7630
2. Did total assets increase or decrease? What were the primary reasons for the change in total
assets?
The total assets increased. Primary reasons for this increase are due to growth in the
number of management and franchise agreements and earnings therefrom, The capital
required to build and maintain hotels that Hyatt manages or franchises for third-party owners
is typically provided by the owner of the respective property with minimal capital required
by Hyatt as the manager or franchisor, and ownership of hotels allows Hyatt to capture the
full benefit of increases in operating profits during periods of increasing demand and room
rates.

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COMMON-SIZED ANALYSIS
In the balance sheet, common-size analysis is performed by expressing accounts as a percentage
of total assets. These percentages are often compared to the percentage of previous years or to
the percentages calculated for another corporation in the same industry. Complete the common-
size analysis for the following items in the balance sheet ( IHl Ratio Analysis worksheet):
Current Assets 14.22 23.01
Long-term Investments 4.02 3.84
Fixed Assets 57.12 54.18
Total Assets 100.0% 100.0%
Current Liabilities 10.65 8.09
Total Liabilities 41.68 36.90
Stockholders’ Equity 58.32 63.10
3. Which balance sheet accounts changed the most in comparison to the previous year? What
events explain the reasons for the changes in these accounts?
The total liabilities changed the most in comparison to the previous year. Total liabilities
of the Fund were $368 million and $345 million, respectively, including $106 million and
$78 million of current liabilities, respectively. The current liabilities include $94 million and
$68 million of accrued expenses and other current liabilities as of December 31, 2013 and
2012, respectively. The non-current liabilities of the Fund are included in other long-term
liabilities. In connection with the inception of the performance guarantee, The Hyatt
recognized a liability for the fair value of our guarantee obligation within other long-term
liabilities on our consolidated balance sheets, with an offsetting intangible asset.

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CASH FLOW STATEMENT
1. Indicate the cash flows resulting from operating, investing, and financing activities. Be sure
to identify whether the cash flow is positive or negative. Then indicate the change in cash,
and the beginning and ending cash balances:
Cash Flow Activity Current Year
Previous Year
Operating 456 499
Investing -747 -489
Increase (decrease) in cash 41 -121
Beginning cash balance 413 534
Ending cash balance 454 413
2. What were the three most significant sources of cash?
The three most significant sources of cash are marketable securities, short-term
investments, sales of real estate, and assets held for sales.
3. What were the three most significant uses of cash?
The three most significant uses of cash are acquisitions net of cash acquired, sales
perceived transferred to escrow as restricted cash, and contributions to investments.
4. Chart the net income and cash flow from operations over the last three years (Replace the
below chart with a chart from the company under analysis.):
a. Label the vertical axis of the following chart with a scale that will accommodate net

Page 12 of 50
income and cash flow from operations over the last three years.
b. Mark the level of net income for each year with an X. Then, mark the cash flow from
operations for each year with a •.
c. Connect the net income amounts with a line to indicate the trend. Then connect the
amounts of cash flow from operations with a dotted line.
5. Based on a comparison of the income statement to the statement of cash flows, what caused
the greatest differences between net income (loss) and cash flow from operations?
The greatest differences between net income and cash flow from operation was the
depreciation and amortization. These are non-cash expenses that primarily consist of
depreciation of fixed assets such as buildings, furniture, fixtures and equipment at our
consolidated owned and leased hotels. Amortization expense primarily consists of amortization
of management agreement acquisition costs and acquired franchise and management intangibles,
which are amortized over their estimated useful lives. Non-comparable hotel depreciation and
amortization expense increased $2 million in 2013 as compared to 2012 due primarily to hotels
acquired or newly opened during the comparable periods partially offset by hotels sold in 2013
and 2012.
0
100
200
300
400
500
600
2011 2012 2013
Net Income
Cash Flow form
Operations

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STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
The statement of changes in stockholders' equity explains the changes in individual equity
accounts during the year. Most annual reports show the statement of changes in stockholders'
equity as a formal financial statement; however, some corporations show the statement of
stockholders' equity in the notes of the financial statements. If the retained earnings are the only
capital account that changed during the fiscal year, a statement of changes in retained earnings is
usually presented instead.
Shares Outstanding
Label the vertical axis of the chart with a scale that will accommodate number of shares over the
last three years. Then chart the number of common shares outstanding over the last three years
(Replace the below bar chart with one from the company under analysis.)
Did the number of common shares increase, decrease, or remain constant? What were the
reasons, if any, for the changes?
150,000,000
152,000,000
154,000,000
156,000,000
158,000,000
160,000,000
162,000,000
164,000,000
166,000,000
2011 2012 2013
Number of Shares
Number of Shares

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The number decreased dramaticly, they have two different stocks, called Class A common
stocks and Class B common stock. The Class A stocks were reserved for issuance under the
Second Amended and Restated Hyatt Hotels Corporation Long-Term Incentive Plan. Unlike
Class A common stock is available for public market, under LTIP. Class B common stock had
23.3% outstanding and that representing about 16.1% of the approximately 22.3% of our
outstanding Class B common stock, representing approximately 16.1% of the
outstanding shares of our common stock and approximately 21.5% of the total
voting power of our outstanding common stock. The company has the availability of
$400 million repurchase on the outstanding stock under the authorization of the
Board of Director. In 2012, they repurchase $136 million outstanding stock, but in
2013, they repurchase $275 million outstanding stock
Retained earnings
Record the amounts in the statement of changes in stockholders' equity for the following items:
Beginning Retained Earnings 1,614 1,517
Dividends (if any) 0 0
Net Income (Net Loss) 207 88
Other Items
Ending Retained Earnings 1,821 1,605

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NOTES AND SUPPORTING SCHEDULES TO THE FINANCIAL STATEMENTS
The notes and supporting schedules to the financial statements are located after the financial
statements in the annual report. Notes, sometimes called "footnotes," provide additional
explanations, descriptions, and supporting information not conveniently displayed within the
body of the financial statements.
Inexperienced financial statement users sometimes regard the notes as unimportant. However,
most of the information contained in the notes are required by GAAP and can make a difference
in a decision the financial statement users make concerning the corporation. For example, a
contingent liability considered "reasonably possible" may be shown in the notes rather than the
liability section of the balance sheet. A financial statement user who ignores the notes would not
be aware of contingencies that may affect the corporation in the future.
The first note in an annual report usually summarizes the significant accounting policies used by
the corporation when preparing the financial statements. This note is generally followed by notes
addressing more specific topics.
Some of the following topics may not apply to the corporation you selected. For example, if the
corporation does not have a pension plan, there is no need for a pension note. If a note is not
applicable, write "NA" in the blank.
Cash and Cash Equivalents Corporations often report "cash equivalents" along with cash on
the balance sheet (FAS 95, lAS 7). Cash equivalents usually include short-maturity deposits and
liquid savings accounts. How does the corporation define their cash equivalents?
We consider all highly liquid investments purchased with an original maturity of three months
or less at the date of purchase to be cash equivalents
Accounts Receivable Corporations with receivables must disclose the net amount due and any
allowance for amounts deemed uncollectible. The percentage of uncollectibles is calculated by
dividing the allowance for uncollectibles by the gross accounts receivable. Gross accounts
receivable are net receivables before the allowance for uncollectibles is removed. (Receivables
worksheet)
Percent
Uncollectible
=
Allowance for Uncollectible
Gross Accounts Receivable
Determine the percentage of uncollectibles for the current and previous year

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38
=
13.92
%
37
= 6.97%
273 531
The receivables turnover ratio is an indication of the number of times a year the corporation
collects its accounts receivables. The ratio is determined by dividing credit sales by the average
accounts receivable. Average accounts receivable is usually determined by dividing beginning
and ending accounts receivable by two.
Receivables
Turnover
=
Credit Sales
Average
Receivables
Compute the receivables turnover ratio for the corporation in the current and previous year. If
credit sales are not available, assume that all sales are on credit. Beginning accounts receivable
for the previous year may be unavailable in the current annual report. The amount is easily
obtained from a previous year annual report (for example, Form 10-K on EDGAR at
www.sec.gov) (IHl Ratio Analysis worksheet).
Current Year Previous Years
4184
= 10.41times
3949
=
10.45
times(273+531)/2=402 (531+225)/2=378
How did the receivable turnover ratio change from the previous year to the current year? What
are the implications of this change?
It decreased by 0.05 times mainly because of their deduction on the average receivables
at 2013 compared with 2012. There are no significant changes from previous year to this year to
implicate.
Inventories Material classifications of inventories must be itemized on the balance sheet or in a
corresponding note (ARB 43, Chapter 4, Paragraph 15; lAS 2). Is the inventory classified into
more than one category? If so, what are those categories?
Food and beverage Vacation ownership

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The inventory flow method [for example, first-in, first-out (FIFO); average; or last-in, first-out
(LIFO)] selected by a corporation can significantly affect the amount allocated to inventory on
the balance sheet and cost of goods sold on the income statement.
A corporation is required to disclose flow method(s) used to value its inventory (W ARB 43,
Chapter 3A, Paragraph 9). In some cases, the corporation will value foreign and domestic
inventory groups in different ways. What method(s) is (are) used to account for inventories? ('11
inventory, last-in, first-in, first-out)
Inventory Group Inventory Flow Method
Domestic Inventories: FIFO
Foreign Inventories: FIFO
If the corporation uses a LIFO flow method, it must disclose the LIFO reserve, which is the
difference between the LIFO inventory amount and the current value or FIFO inventory amount
typically used for internal reporting. If the corporation uses LIFO to value the inventory, indicate
the following for the current year:
Inventory using LIFO (as shown on the balance
sheet)
$ N/A
LIFO Reserve $ N/A
Inventory at Current Cost / FIFO / Replacement
Cost
$ N/A
The inventory turnover ratio indicates of the number of times a year the corporation sells its
inventory during a year. It is determined by dividing cost of sales by the average inventory.
Average inventory is determined by dividing the sum of beginning and ending inventory by two.
Inventory
Turnover
=
Cost of Sales
Average Inventory
Compute the inventory turnover ratio for the corporation in the current and previous year. If

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beginning inventory for the previous year is not available in the current annual report it may be
obtained from a previous year annual report.
Cost of Sales
3283
= 41.82 times
Cost of Sales
3121
= 37.38 timesAverage
Inventory
(77+80)/2=78.5
Average
Inventory
(80+87)/2=83.5
How did the inventory turnover ratio change from the previous year to the current year? What
are the implications of this change?
They increased 4.44 times. In Hyatt Their inventories are comprised principally of unsold
vacation ownership intervals of $64 million and $66 million at December 31, 2013 and 2012,
respectively, and food and beverage inventories at they’re owned and leased hotels. Vacation
ownership inventory is carried at the lower of cost or market, based on relative sales value or net
realizable value. Food and beverage inventories are generally valued at the lower of cost (first-in,
first-out) or market. Vacation ownership interval inventory, which has an operating cycle that
exceeds 12 months, is classified as a current asset consistent with recognized industry practice.
Based on management's assessment, no impairment charges were recorded in 2013 or 2012
Property and Depreciation If material, separate categories of property, plant, and equipment
should be disclosed. Identify the categories of property, plant, and equipment. Corporations must
also disclose the depreciation method(s) used to value property, plant, and equipment (IJJ APB
12, 16). In some cases, the corporations will use more than one depreciation method. What
methods(s) is (are) used to depreciate property, plant, and equipment? (Buildings, machinery,
equipment, land depreciation, straight-line, accelerated)
Fixed Asset Group Depreciation Method
Property and Equipment
Buildings
Straight Line
Straight Line
Leasehold improvements Straight Line
Furniture, equipment and computers Straight Line

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Land N/A
Construction in progress N/A
Impairment of fixed assets occurs when the market value of an asset is significantly lower than
the carrying amount and that amount is not considered recoverable. Losses resulting from
impairment of long-lived assets must be charged against income (FAS 121 and 144, IAS 36).
Were any assets recognized as impaired during the current year? If so, what was the nature of the
impaired assets and the amount charged against income to recognize the impairment?
Changes in economic and operating conditions impacting these judgments could result in
impairments to their long-lived assets in future periods, which could be material to their
earnings. Hyatt had $5,255 million and $4,527 million of long-lived assets and definite-lived
intangibles as of December 31, 2013 and December 31, 2012, respectively
An approximation of the remaining usefulness of property, plant, and equipment may be
determined by computing the percentage that assets are depreciated. The ratio is calculated by
dividing accumulated depreciation by the gross depreciable fixed assets. Depreciable fixed assets
do not include land or construction in progress. (Fixed Assets worksheet)
Percentage of Fixed
Asset Depreciation
=
Accumulated Depreciation
Gross Depreciable Fixed Assets
Calculate the percentage of fixed asset depreciation for the corporation in the current and
previous year.
Current Year Current Year
2345
= 37.47 %
2212
= 39.51 %
(7016-672-86)=6258 (6351-688-65)=5598
How did the percentage of fixed asset depreciation change from previous year to the current
year? What might be the reasons for this change? What are the implications of this change for
the future?
Most assets are not depreciated each year. The company is using partially depreciation
method and only the percentage of the debt is paid each year. The implication will be that the
debt should lessen each year. Changes in depreciation expenses may be driven by renovations of
existing properties, acquisition or development of new properties or the disposition of existing
properties through sale or closure. Hyatt intends to consider strategic and complementary
acquisitions of and investments in businesses, properties or other assets. If Hyatt consummates

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any asset acquisitions, Hyatt would likely add depreciable assets, which would result in an
increase in depreciation expense.
The fixed asset turnover ratio indicates how efficiently fixed assets are used to generate revenue.
The ratio is particularly useful in a capital intensive corporation in which plant and equipment
are used to generate revenue. The ratio is calculated by dividing revenue by the fixed assets held
during the year.
Fixed Asset Turnover
Ratio
=
Revenue
Average Net Fixed Assets
Compute the fixed asset turnover ratio for the corporation in the current and previous year. If
beginning fixed assets for the previous year is not available in the current annual report, it may
be obtained by from a previous year annual report (for example, Form 10-K on EDGAR at
www.sec.gov) Ratio Analysis worksheet, Fixed Asset worksheet).
4184
= 0.943 times
3949
= 0.965 times
(4671+4139)/2=4405 (4139+4043)/2=4091

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Capitalized Leases Some corporations lease, rather than purchase, fixed assets. Capitalized
leases (referred to as "finance leases in international standards) transfer the benefits and risks of
ownership to the lessee. An asset and a liability approximately equal to the present value of the
rental payments is recorded. The asset associated with a capital lease is periodically amortized in
the same way that owned assets are depreciated. In addition, the lessee will make rental payment
that consists of interest and principal. (FAS 13, lAS 17) If the corporation uses capital leases ('1l
lease, capital(ized)) lease, lease obligation, imputed interest) (!Hl Leases worksheet):
What is the total amount of payments due over the life of the capitalized leases?
$ 221
Of the total payments due for capitalized leases, what amount is considered to be imputed
interest?
$ N/A
What is the long-term liability associated with leases recognized on the balance sheet?
$ 866
Assuming the corporation does not enter into additional lease agreements, what will be the
amount of the payment associated with capital leases next year?
$ 194
Operating Leases Operating leases are legal obligations that require the corporation to make
periodic payments for several years. These leases do not require recording of a long-term asset or
liability. However, GAAP requires disclosure of the expected payments over the life of the lease.
('1l lease, operating lease, rent) (IHl Leases worksheet)
What was the total obligation associated with operating leases?
$487
What was the rent expense associated with the operating leases in the current year?
$79
Assuming the corporation does not enter into additional lease agreements, what will be the
payment for operating leases next year?
$39

Page 22 of 50
Long-term Debt Long-term debt is usually organized by type of lender, for example, loans from
banks and bond issues are usually grouped separately. Corporations disclose interest rates, due
dates, collateral, and loan covenants of long-term debt. What long-term debt obligations does the
corporation have? If the corporation has more than five debt instruments, list the five largest. ('1l
debt, credit facility, loan, maturity)
Instrument Rate Amount
$250 million senior unsecured notes maturing in 2015
$250 million senior unsecured notes maturing in 2016
5.750%
$ N/A
3.875% $259
$196 million senior unsecured notes maturing in 2019 6.875%
$196
$250
$347
Debt payments for each of the next five years must be disclosed. In which of the next five years
is the most long-term debt due?
Year: 2013 Amount to be paid $1.289
(Also There is Tax-Exempt Contract Revenue Empowerment Zone Bonds, Series 2005A. with
$130, Contract Revenue Bonds, Senior Taxable Series 2005B with $70, Floating Average Rate
construction loan with $32 and other (various, maturing through 2015) with $1)

Page 23 of 50
Contingencies Contingent liabilities are financial obligations that depend on the occurrence (or
nonoccurrence) of future events. Disclosure of these obligations depends on whether or not the
future event is probable, reasonably possible, or remote (tillFAS5, lAS37). For example, if losing
a $2,000,000 lawsuit is probable, the amount is shown as a liability and an expense and the
lawsuit is described in a note. If the loss of the lawsuit is reasonably possible, no liability is
recognized; however, the lawsuit is described in a note. Remote losses need not be disclosed.
Identify any contingencies that potentially affect the financial position of the corporation. Are
these contingencies probable or reasonably possible? Were any of the contingencies reported as
an expense on the income statement and a liability on the balance sheet? (contingency (ies),
legal, lawsuit)
According to Hyatt 10-k, they stated, “We are subject, from time to time, to various
claims and contingencies related to lawsuits, taxes, and environmental matters, as well as
commitments under contractual obligations. Many of these claims are covered under the current
insurance programs, subject to deductibles. We reasonably recognize a liability associated with
commitments and contingencies when a loss is probable and reasonably estimable. Although the
ultimate liability for these matters cannot be determined at this point, based on information
currently available, we do not expect that the ultimate resolution of such claims and litigation
will have a material effect on our consolidated financial statements.”
Interim (Quarterly) Financial Data Disclosure of quarterly data aids the financial statement
user in determining the seasonality of corporate operations. For example, American
manufacturers of confectionery will typically experience much higher sales in the quarter that
includes the Halloween and Christmas holidays. Large public companies are required by the SEC
(Item 302(a), Reg. S-K) to include quarterly amounts for revenues, gross profit, net income, and
net income per share. International standards also require interim reporting lAS 37) ('11 interim,
quarterly)
Chart the quarterly revenue for the corporation over the current year:
a. Label the vertical axis of the following chart with a scale that will accommodate the
quarterly revenue that occurred throughout the current year.
b. Mark the level of revenue for each year with an X.
c. Connect the revenue amounts with a line to indicate the trend.

Page 24 of 50
Do you detect significant fluctuations in quarterly data for the corporation? If so, explain the
reasons for the fluctuation(s)?
There is some fluctuation in quarterly data for the corporation over the year in 2013. The
revenue for first quarter is 975 million dollars. Compare with the revenue for the second quarter,
which is 1092 million dollars, there is a 117 million dollars differences. At the third quarter, the
revenue drops a little to 1026 million dollars. And it goes back up to 1091 million dollars for the
last quarter in 2013. The reason is the people prefer to go to the vacation during the second and
forth quarter.
900
920
940
960
980
1000
1020
1040
1060
1080
1100
1120
1st Qtr 2013 2nd Qtr 2013 3rd Qtr 2013 4th Qtr 2013
Revenue
Revenue

Page 25 of 50
REPORT OF THE INDEPENDENT AUDITORS
Auditing is a process by which an independent accounting firm accumulates and evaluates data
to determine whether the financial statements are presented in accordance with GAAP. The
Securities and Exchange Commission requires an annual audit for all companies whose capital
stock is traded on a recognized stock exchange.
The purpose of the audit report is to communicate the findings of the auditor to financial
statement users. The auditor's report usually appears immediately after the notes to the financial
statements. Who is the corporation's auditor and where is the auditor located?
Auditor: Deloitte & Touche LLP
City where auditor is
located
Chicago, Illinois
Report on the Financial Statements An audit report usually consists of three parts that (1)
define the responsibility of management, (2) describe the nature of the audit, and (3) express an
opinion on whether the financial statements are fairly presented and in conformity with generally
accepted accounting principles. The following are types of audit opinions that commonly in
annual reports:
An unqualified opinion states that, in the auditor's opinion, the financial statements are in
conformity with generally accepted accounting principles and that the auditor is reasonably
assured that the financial statements are free from material misstatement.
A qualified opinion is issued when the auditor detects non-pervasive departures from GAAP or
non- pervasive scope limitations. A qualified opinion includes the words "except for" in the
paragraph in which the auditor expresses an opinion.
Disclaimer of opinion occurs when the auditor experiences severe limitations on the scope of the
audit or if a non independent relationship exists between the auditor and the client. Each of these
conditions makes it impossible for the auditor to express an opinion on the financial statements.
A disclaimer of opinion will clearly state that the auditor does not render an opinion.
An adverse opinion is given only when the auditor believes the financial statements are
materially misstated or misleading. An adverse opinion will state specifically that the financial
statements do not in conform to GAAP.
Read the auditor's opinion carefully, then answer the following questions concerning the content
of the opinion.
X
Unqualified Disclaimer of opinion
Qualified Adverse opinion

Page 26 of 50
2. An auditor's report will state the responsibility of the auditor. What is the responsibility of
the auditor with regard to the financial statements?
Plan and perform the audit to obtain reasonable assurance about whether effective internal
control over financial reporting was maintained in all material respects
3. What guidelines does the auditor use to conduct the audit?
Included obtaining an understanding of internal control over financial reporting, assessing the
risk that a material weakness exists, testing and evaluating the design and operating effectiveness
of internal control based on the assessed risk, and performing such other procedures as they
considered necessary in the circumstances. They believe that their audit provides a reasonable
basis for their opinion
4. Does the auditor believe the financial statements were presented fairly? What statements in
the audit opinion support your conclusion?
Yes, the auditor believes the financial statements were presented fairly because the auditor
states that in their opinion such consolidated financial statements are presented fairly, in all
material respects, the financial position of Hyatt Hotels Corporation and subsidiaries as of
December 31, 2013 and 2012, and the results of their operations and their cash flows for each of
the three years in the period ended December 31, 2013, in conformity with accounting principles
generally accepted in the United States of America

Page 27 of 50
Report on Internal Controls Internal control is the process of providing assurance regarding
the reliability financial statement preparation. The auditor is required to express an opinion on
the effectiveness of the company's internal control over financial reporting.
1. What authority provides the criteria for establishing internal controls?
A company's internal control over financial reporting is a process designed by, or under the
supervision of, the company's principal executive and principal financial officers, or persons
performing similar functions, and effected by the company's board of directors, management,
and other personnel to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles.
2. Whose responsibility is it to maintain effective internal controls over financial statement
preparation process?
The management of Hyatt Hotels Corporation is responsible for establishing and maintaining
adequate internal control over financial reporting as such term is defined in Rules 13a-15(f) and
15d-15(f) under the Securities Exchange Act of 1934, as amended.
3. Does the auditor believe the corporation maintained adequate internal control over financial
reporting? If not, in what areas were there internal control deficiencies?
The auditor states that the Company maintained, in all material respects, effective internal
control over financial reporting as of December 31, 2013, based on the criteria established in
Internal Control-Integrated Framework (1992) issued by the Committee of Sponsoring
Organizations of the Treadway Commission

Page 28 of 50
RATIO ANALYSIS
Ratio analysis is a way to compare current performance and financial position to (1) previous
years, and (2) other corporations. Calculate the following ratios for your corporation. You should
show all of your calculations. In other words, indicate the components of the numerator and the
denominator for each ratio.
ANALYSIS OF PROFITABILITY
Ratios of profitability indicate the degree of success of the corporation's operations during the
year. Profitability ratios show the amount of resources required to generate profits and the
availability of profits to stockholders. These ratios are often used as a means for stockholders to
evaluate the performance of corporate management.
1. Profit Margin
The profit margin on revenue shows the relation of profits to revenue. The percentage is
computed by dividing income from continuing operations by net revenue for the year. Income
from continuing operations is net income without the effects of any discontinued operations or
extraordinary items.
Profit Margin =
Net Income from Continuing
Operations
Net Revenue
A higher profit margin indicates less revenue is needed to generate a desired level of profit.
Compute the profit margin on revenue for the current and previous years:
207
= 4.95 %
88
= 2.23%
4184 3949
2. Return on Assets
The return on assets (ROA) ratio indicates how well the assets of the corporation are utilized to
achieve a profit. The ratio demonstrates potential earning similar to the way a savings account
interest rate indicates how much you can earn on money invested in savings. The percentage is
computed by dividing income from continuing operations by average total assets held over the
year. Average assets are usually computed by adding current year total assets to previous year
total assets and dividing by two.
Return on Assets =
Income from Continuing Operations
(current year Total Assets + Previous Year Total Asset)/2

Page 29 of 50
Total assets for the current and previous years appear on the balance sheet; however, because a
balance sheet typically shows only two years of data, previous year total assets may appear in
another section of the of the annual report. Compute the return on assets for the current and
previous year:
207
= 2.62 %
88
=
1.16
%
(8177+7630)/2 = 7903.5 (7630+7507)/2 = 7568.5
3. Stockholders' Equity
Return on stockholders' equity is similar to return on assets except it removes the effect of funds
the corporation has borrowed. The ratio is calculated by dividing income from continuing
operations by the average stockholders' equity through the year.
Return on Equity =
Income from Continuing Operations for the Current Year
(Current year Equity + Previous Year Equity)/2
Total equity for the current and previous years appears on the balance sheet; however, because a
balance sheet typically shows only two years of data, previous year total equity may appear in
another section of the annual report.
Compute the return on stockholders' equity for the current and previous year:
207 = 4.31% 88 = 1.83%
(4777+4821)/2 = 4799 (4821+4818)/2 = 4819.5
What corporate characteristic causes the return on assets and return on equity percentages to be
different?
The biggest factor that changes the ROA and ROE is the income from continuing
operation expense. The Income from the continuing operations for the current year shifted from
88 millions in 2012 to 207 millions in 2013.

Page 30 of 50
All three of the preceding ratios indicate profitability by comparing income from continuing
operations to another number in the income statement or balance sheet.
In comparison to the previous year, has the corporation improved its ability to generate a profit?
Justify your answer based on the ratios you calculated.
The Hyatt is improving their ability on generating a profit. The ROA of Hyatt was 1.16% in
2012, and it raised to 2.62% in 2013. They strive to enhance the operating revenues by focusing
on increasing their share of hotel stays by their existing guests and increasing the number of new
guests they serve on a regular basis, which helps them to establish their guest loyalty to Hyatt.
4. Earnings Per Share
The earnings per share ratio (EPS) represents the amount of earnings attributable to each share of
stock in the corporation. The ratio is considered so important that GAAP requires EPS disclosure
on the face of the income statement (till FAS 128, 33). In its simplest form, EPS is calculated by
dividing net income, less preferred stock dividends, by the average number of common shares
outstanding. If the corporation has income or losses from discontinued operations or
extraordinary items, the effects of these items on earning per share must be disclosed separately.
In the spaces below, record the basic earnings per share for continuing operations as it appears
on the income statement:
$1.30 Amount Per Share $0.53 Amount Per Share
Did the current EPS improve compared to the previous year? Was the change in EPS a result of
changes in the numerator or the denominator of the ratio? Explain.
Yes it did, it is improved $0.77. The major change in EPS for Hyatt in 2013 was in the
numerator. The net income raised up from 88 million dollars in 2012 to 207 million dollars in
2013. Since the Hyatt Corporation has never declared or paid any cash dividends, the numerator
is raised to 207 million in 2013.
The equity section of a balance sheet may have dilutive securities (such as options, convertible
bonds and convertible preferred stock) that can decrease EPS by increasing the number of shares
in the denominator. In this case, the corporation may be required to show a diluted EPS in
addition to the basic EPS. Did the corporation disclose diluted EPS? If so, what equity securities
in the balance sheet have the potential of increasing the EPS denominator?
Yes, the Hyatt disclosed the diluted EPS on their consolidated statements of income. Both

Page 31 of 50
EPS basic and EPS diluted for the December 31, 2013 is $1.3. The EPS stays the same.
5. Cash Dividends Per Share
Cash dividends per share is similar to earnings per share except the numerator excludes the
portion of earnings retained in the corporation. In other words, the ratio indicates the amount of
cash dividends the stockholder received during the year for each share of stock owned.
Cash Dividends
Per Share
=
Cash Dividends Paid to Common Stockholders
(current year Number of Shares + Last Year Number of Shares)/2
The dividend paid to common stockholders appears in the statement of retained earnings. The
number of common stock shares outstanding appears on the balance sheet; however, because a
balance sheet typically shows only two years of data, the previous year number of shares may
appear in the selected financial data section of the annual report. Compute the cash dividends per
share for the current and previous year:
0
= $
0
= $
0 0
6. Dividend Payout Ratio
The dividend payout ratio indicates the percentage of earnings returned to the stockholder rather
than retained in the corporation. The ratio is computed by dividing cash dividends paid to
common stockholders by the amount of income available for payment of common stock
dividends.
Dividend Payout
Ratio
=
Cash Dividends Paid to Common Stockholders
Net Income – Preferred Dividends Paid
The dividend paid to common and preferred stockholders appears in the statement of retained
earnings. Net income appears on the income statement. Compute the dividend payout ratio for
the current and previous year.

Page 32 of 50
0
= %
0
= %
0 0
7. Price/Earnings (PIE) Ratio
The P/E ratio measures the relationship between the earnings of the corporation and the current
market price. A corporation with a P/E ratio of 15 is said to be selling at 15 times its current
earnings. Some analysts believe the P/E ratio is a good measure of the future earnings power of a
corporation. Companies with high P/E ratios have a stock price that reflects the expectation of
higher future earnings. A lower P/E ratio may indicate that lower earnings expectations are
reflected in the corporation's stock price.
Price/Earnings Ratio =
Market Price Per Share
Earnings Per Share
Calculate the P/E Ratio for the current and previous year. If end of the year market prices of
common shares are not available, use an average of the high and low price during the last quarter
of the year.
48.12
= 37.02 times
36.34
=
68.57
times1.3 0.53
In the past decade, the average P/E ratio for major corporations has ranged from 14 to 25. How
does the corporation's P/E ratio compare to this range? What may be concluded concerning the
expected growth of the corporation?
Company is growing so the ranges are going down. Our range was 68.57 as of December
31, 2013, it goes down to 37.02, which is a good progress of a success. Compare with their
earning per share ratio in 2012 with 2013, it raised up from 0.53 from 2012 to 1.3 in 2013, which
was 145% increase. For the Market Price per share, it raised up only 32.4%. The Market Price
Per Share is not rising as the same pace as the Earnings Per Share. And that is the reason the P/E
ratio goes down. Hyatt was not doing as good as the other major corporation, which has 14 to 25
times in P/E ratio, but they are growing significantly.
ANALYSIS OF LIQUIDITY
A common misconception is that corporations become bankrupt because they are unprofitable. In
reality, bankruptcy is declared because a corporation is not able to meet the current obligations to
the creditors, not when the corporation lacks profitability.

Page 33 of 50
Current assets are called "current" because they are converted into cash during the operating
cycle. Current liabilities are liabilities that will be liquidated by current assets or by the creation
of other current liabilities.
Liquidity ratios indicate the corporation's ability to meet short-term cash requirements. For this
reason, liquidity ratios are important to potential and existing creditors. There are two commonly
computed liquidity ratios:
1. Current (or Working Capital) Ratio
The current ratio indicates whether the firm will have enough resources to meet obligations
becoming due during the next period. The current ratio is the quotient of current assets divided
by current liabilities.  The ratio is usually expressed in a format in which the denominator is
equal to "1", for example, if current assets were twice as much as current liabilities the ratio is
expressed as "2:1".
Current Ratio =
Current Assets
Current Liabilities
Strictly speaking, a ratio less than one indicates a corporation will not meet obligations due
during the next period without additional resources. On the other hand, a ratio of greater than one
indicates the corporation is currently is able to meet current liabilities as they become due. All
components of the current ratio appear in the current sections of the balance sheet. Compute the
current ratio for the current and previous year:
1,163
= 1.34: 1
1758
= 2.84: 1
871 68
Based on the current ratio you calculated, do you believe the corporation able to meet the current
obligations as they become due? Why? Has the corporation established lines of credit with
lenders to obtain working capital if needed? ('11 lines of credit, revolving)
Yes I do Believe, They have a credit facility that provides them loans. They have a
revolving credit facility and Hyatt just entered into a second Amended and restated
credit agreement with a syndicate of lenders to make it better, and fix it the prior
problems, so they restated their prior revolving credit facility to extend the facility’s
expiration. Their revolving credit facility provide them financing for working capital
and general corporate purposes, also their credit facility provide them additionally
commercial paper back-up, permitted investment and acquisitions

Page 34 of 50
Net working capital is equal to current assets minus current liabilities. What is the net working
capital for the current year?
$1,163 – $871 = $292
2. Quick (or Acid-Test) Ratio
The quick ratio recognizes certain current assets are more liquid than others. For example,
inventories are usually not immediately available for the liquidation of current liabilities because
the corporation must first sell inventoried items to obtain cash.
The quick ratio is similar to the current ratio except the numerator includes only current assets,
which may be readily turned into cash. These current assets include cash, marketable securities,
and net receivables.
Quick Ratio =
Cash + Marketable Securities + Net Receivables
Current Liabilities
All components of the quick ratio appear in the current sections of the balance sheet. Compute
the quick ratio for the current and previous year:
1163-77 = 1,086
= 1.25:1
1,758-80 = 1,678
= 2.72:1
871 618
Based on your assessment of the two liquidity ratios you calculated, did the liquidity position of
the corporation strengthen or weaken compared to the previous year? What were the reasons for
the change, if any?
The reason why it weaken is because they are receivable are lowered compared to 2012,
they are not receiving as they were on 2012, but As of December 31, 2013, $194 million of their
outstanding debt will mature in the following twelve months. Hyatt believe that they will have
adequate liquidity to meet requirements for scheduled maturities for 2014
ANALYSIS OF SOLVENCY
Solvency ratios measure the corporation's ability to manage debt. The ratios indicate risk to long-
term creditors and equity investors. (Debt worksheet)
1. Debt to Total Assets
The debt to total assets ratio measures the amount of leverage used by the corporation. The ratio
indicates what percentage of the assets of the corporation is financed by those other than
stockholders of the corporation.

Page 35 of 50
Debt to Total Assets =
Total Liabilities
Total Assets
All components of the debt to total assets ratio appear on the balance sheet. Compute the debt to
total assets ratio for the current and previous year:
3400
= 41.58%
2809
=
36.82
%8177 7630
How did the debt position of the corporation change over the last year? What were the reasons
for these changes if any?
They owe more debt. Last year it was 36.82% and now it is 41.58%. The reason why is
that their market price raised up, which is their value of firm and they start to benefit
more from their operations
Would potential lenders prefer the debt to total assets ratio to be larger or smaller? Why?
Potential lenders prefer the debt to total assets ratio for the Hyatt Corporation from 25%
to 40% because the potential lenders may want a high return on their investment. They do not
want the debt to total assets ratio to be lower than 25%. At the mean time the potential lender do
not want to risk too much on their money. They want to control the debt to total assets ratio to be
lower than 40%.
2. Times Interest Earned Ratio
When payment of interest on debt becomes significant in proportion to the corporation's annual
income, it is often evidence the corporation is spending too much of its resources servicing debt.
The times interest earned ratio indicates the relationship of interest expense to income. The ratio
is computed by dividing income before tax and interest expense by interest expense.
Times Interest
Earned
=
Net Income + Interest Expense + Tax Expense
Interest Expense
All of the components of the times interest earned ratio appear on the income statement.
Compute the times interest earned ratio for the current and previous year:

Page 36 of 50
207+65+116 = 388
= 5.97 times
88+70+8 = 166
= 2.37 times
65 70
Some believe the times interest earned ratio is more appropriately calculated on a cash basis. In
this way, the ratio indicates the corporation's ability to pay interest from the cash from
operations. (Cash paid in interest may differ from interest expense to the extent of accruals are
made or a premium or discount is amortized.) In this case, the numerator includes cash flow from
operations as it appears in the cash flow statement. The denominator is cash paid for interest,
which appears in the cash flow statement or the note describing the corporation's debt
obligations.
Times Interest Earned on
the cash basis
=
Cash Flow from Operations + Cash Paid for Interest
Cash Paid for Interest Expense
Compute the times interest earned on the cash basis for the current and previous year:
456+66 = 522
= 8.03 times
499+68 = 567
=
8.1 times65 70

Page 37 of 50
Zehra Seren Koprek
3850518
INDUSTRY OR COMPETITOR COMPARISONS
One way to evaluate corporate success is to compare the corporation to others in the industry.
Industry common-size percentages and ratios are easily obtained in most libraries. (See
Appendix B, Obtaining Data for Industry Comparisons.) Most sources of industry wide data are
organized by Standard Industrial Classification (SIC) codes and by corporation size within that
code. SIC codes for a specific corporation are identified in the 10-K report of the corporation.
('11 standard, industrial)
Alternatively, you may want to compare your corporation to their closest competitor.
Information concerning a primary competitor may be obtained in the annual report to
stockholders or the Form 10-K of the competitor.
Mark the comparison method you will use:
Industry Comparison
SIC Code:
Industry Name:
Source of industry-wide data:
All industry comparisons should be made using the same fiscal years. The most current year of
operations may not yet be available in the industry source. What is the year of the comparison
you will be making?
X Primary Competitor
Name of Competitor:
In the following table, copy (1) common-size data and ratios calculated earlier for the appropriate
year, and (2) the corresponding industry or comparison data. You may need to adjust certain ratios
to make them comparable. For example, if the earnings before taxes are used to calculate return
ratios for the industry, you should calculate your corporation's ratio in a similar manner. If the data
is not available, indicate this by writing "NA" in the blank. (IHl Competitor Analysis worksheet)

Page 38 of 50
Hyatt Hilton
Corporation Industry or Competitor
Income Statement
Common-Size Data
Gross Profit/Sales
901/4,184=21.53% 5,858/9,735 =60.17%
Income from Continuing
Operations/Sales
207/4.184=4.95% 460/9,735=4.73%
Balance Sheet Common-
Size Data
Current Assets/Total Assets 1,163/8,177=14.2% 2,383/26,562=9%
Current Liabilities/Total
Assets
817/8,177= 10.0% 2,142/26,562=8.06%
Liabilities/Total Assets 3,400/8,177= 41.6% 22,199/26,562=83.57%
Equity/Total Assets 4,769/8,177=58.3% 4,363/26,562=16.43%
Profitability Ratios
Profit Margin 4.95 % 4.73% 460/9,735)
Return on Assets 2.62 %
1.72%
(460/(26,562+27,066)/2
Return on Equity 4.30 %
14.31%
(460/(4,276+2,155)/2
Dividend Payout Ratio N/A N/A
Liquidity Ratios
Current Ratio 1.34: 1 1.11:1 (2,383/2.142)
Quick Ratio
1.25:1 0.93:1
(2,383-396/2.142)
Solvency Ratios
Debt/Total Assets 41.6% 83.57%

Page 39 of 50
(3,400/8,177)=41.6%
Times Interest Earned 5.88 2.13(460+620+238)/620
Operational Ratios
Receivable Turnover 10.41 12.58 (92/731)
Inventory Turnover 41.82 9.56 (3,877/(396+415)/2

Page 40 of 50
1. Based on the ratios, what are the primary differences between the corporation and other
companies in the industry or the primary competitor? What specific ratios explain the
reasons for these differences?
Return on Equity= as a percentage of shareholders equity. Hilton has more probability
generated with the money shareholder invested unlike Hyatt is public company owe 275 million
in repurchase common stock in capital. The main reason is because Hyatt classifies two
different stock markets and stock market repurchase from trust held originally owned by
pritzker family member that is retiring
Debt-Hyatt has 41.1% but Hilton has 83.57% Hilton Investing properties because hey
want to purchase property while it s in current market price so that they can to pay less
because they are expecting the property market price might raise up in future so they are
eliminating their cash flow, and borrowing a lot of fund from third party. They have a significant
amount of indebtedness. Their total indebtedness was approximately $12.7 billion, including
$968 million of non-recourse debt, and their contractual debt maturities of their long-term debt
and non-recourse debt for the years ending December 31, 2014,
Times Interest Earned: Since Hilton owes a lot of debt, and their interest earned is 2.13,
they could be looking for a bankruptcy depending on their future performance and operating
activities. Hilton is not likely being able to meet its interest payments, since the ratio Hilton has
below 2,5; it is considered a warning sign of financial distress. They are trying to generate
enough income to cover their required interest payments. On Hilton 10k it even says that they
are now limited as to conduct their business and that they may not be able to raise any
additional debt or equity financing to compete effectively or they ay not even take advantage
of any new business opportunities. Hyatt is doing better, showing they can afford to pay their
interest payments when they come due better than Hilton.
Sales- Hyatt has fewer sales than Hilton; also their gross profits are lower
Inventory Turnover- on the other hand on the Inventory turnover Hilton is really good,
shows that they have a strong sales, Hilton using Timeshare like Hyatt does. Although Hilton
have some unsold properties included in their inventory, their revenue increased from their
operations, rentals, club fee, financing and sales commissions generated from projects
developed by third parties, but Hyatt has unsold vacation ownership and their sales are not
doing really good, but they are expecting to get better by 2014
:

Page 41 of 50
2. In your opinion, does the corporation compare favorably or unfavorably to the industry or the
primary competitor? Give examples to support your conclusion.
In my opinion Hyatt is more favorable compare to Hilton. Hilton is now in a process of
growing so they are dealing with a lot of debt. On the other hand Hyatt is also dealing with debt
and their sales are not as good as Hilton. I think none of them are favorable in the industry, but
they are getting there. Currently Hilton has a lot of long-term debt which reducing their ability
to use their cash flow to fund their operations, their future business opportunities and much
more, it is also limiting them to obtain any additional financing for working capital, product
developing and their debt service requirement and all the other purposes. Their interest rate
could increase. Hilton is now depending on their future performance of their operation to pay
their interest on their debts and make principal payments.

Page 42 of 50
Zehra Seren Koprek
3850518
MAKING DECISIONS BASED ON THE ANNUAL REPORT
1. How would you assess the corporation's revenue performance over the last few years (for
example, is it increasing, stagnant, declining)? What are the reasons for your assessment?
Hyatt revenue performance over the last few years shows a gradual increase. Hyatt revenue
increasing because favorable currency effects, other managed properties. Their managed
properties increased $67 million, which is 4%. Also including the increasing from other revenue
from managed properties due to their higher volume of reimbursements paid by their managed
properties, including new hotel openings, owned hotel that have been sold because of long
term management agreements. Also their owned and leased hotels revenues increased $121
million, the reason for this increased were from the hotels in the United States, which benefit
them higher average daily rates and growth in their food in beverage revenues. Even their non-
comparable owned and leased hotels revenue increased by $25 million primarily due to their
three new wholly owned full service hotels acquired in 2013. Although they did sold 11 hotels
in 2013 and 8 hotels in 2012, it was partially offset. They also experiences a $35 million increase
in their management and franchise fee including in consolidated management fees which is
base of management fees of $163 million which is 6% in 2012. They had 20% increase from
2012 from franchise fees and 63% increase from other fee revenues. These increases were due
to management fees based on base management and incentive fess from hotels newly
converted to Hyatt brans in Asia, which also increased their average daily rate in Americas. The
reasons for the franchise fee increase were because of their new and converted hotels in the
Americas. They had $12 million termination fee received in 2012 and a $2 million increase
because of their amortization of deferred gains from hotels sold subject to a management
agreement and other revenues including vacation ownership businesses and their co-branded
credit card were flat

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2. What factors (such as the economy, consumer demand, product innovation, competition,
regulation, etc.) will have the greatest influence on in the determination of next year's
revenue? In what way would these factor(s) influence revenues
There are so many factors that determine next year’s revenue, such as their Sales,
Marketing, reservations, franchise fees, sold hotels, owned and leased hotels, vacation
ownership, their loyalty program, branded residential properties, their competitions,
seasonality.
Their key strategy is to maximize revenues and manage costs at their hotel property,
focusing on increase share hotel stays and their existing guest, along with their increase
number of new guest will enhance their revenues. They also were looking to increase their
guest loyalty for their brand. Therefore, expanding their Hyatt’s share of hotel stays by
providing genuine guest service and delivering satisfaction or value for their guest. They intend
tot expand their presence with increasing number of hotels with entering into new
management and franchising agreement
Consumer demand and global economic conditions; It is linked by their performance of
their general economy and their sensitive business and personal spending levels. Hyatt is able
to generate from their managed and franchised properties. Their vacation ownership business
is also linked to general economy and consumer spending. Americas segment, transient
business growth at both of there full service and their select service hotels, which helped them
growth, their revenue on 2012. Hyatt also began to see their sigh growth in-group business with
being cautious of their spending non related money. Their most significant improvement came
from their long-term group business with short-term booking show them some weakness.
Bookings for 2014 and beyond showed them strength throughout the year, so they expecting to
see further improvement in group businesses. They’re owned and leased hotels, primarily in
Americas, have benefited them and will continue benefiting them in future from those trends
Their greatest influence in revenue is Owned and leased hotels, which was primarily
driven by increased revenue from hotels in United States, benefited them higher daily rates and
growth in food and beverage revenues, even non-comparable owned and leased hotels
increased due to there new wholly owned full service hotels

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Their competition exists for their hotel guest, management agreements, franchise
agreements, sales of vacation ownership properties and branded residential properties, but
their primary competitors are other operators of full service, select service and all inclusive and
extended stay properties, including small chains and independent along with local owners and
operators. They compete for sales of their vacation ownership based on the location, quality,
price, financing, terms, quality of service, name recognition, reputation etc. Hyatt believes their
costumer base prominent brand recognition, strategic property location and their global
development team will enable them to compete effectively and effect their revenues positive
Seasonality: In the hospitality industry seasonal is depending on nature. The periods
when their lodging properties experience higher revenues vary from property to property
depending on their location or costumer base served. According to their historical data result,
their properties in the Americas typically generate the highest revenues in the second quarter
and lowest in the first quarter, but in Asia their highest revenue typically generated in the
fourth quarter along with the next highest revenues generated in their second quarter.
Cyclicality; it is follows on slow basis with the overall economy. Although there is a
history of increase and decrease in demand for hotel rooms, occupancy levels, rates realized by
owners of hotel through economic cycles. In an environment of their increase demand and
room rates caused the rate of increase in their earning, normally higher than the rate of their
increase revenue, however their vacation ownership business is also cyclical.
Sales: Their corporate sales organizations are generally focusing on growing market
share with identifying new business opportunity, maximizing local costumers base and key
accounts. Hyatt is more trying to grow, their key accounts are consists of major corporations,
national, state, regional associations, specialty market accounts including social, government,
military, educational, religious etc. They also have travel organizations with diversity group of
individual consumers.. Their global and regional sales teamtarget these brands to key costumer
accounts for those groups. Hyatt has 180 associations that focus on group business, leisure
trailer accounts and travel agencies. They have global and regional offices all around the world.
They also expand 15 associates in the Americas region to get new business opportunities with a
goal of establishing new worldwide accounts
Marketing: They focus on meeting specific business that needs hotel operation along
with maintaining and building brand value. This increases their Hyatt’s brand preference. Hyatt
focuses of their each brand to serve and support their hotel needs by analysis and application
of data and analytics. Their marketing strategy and their key components are Hyatt gold
Passport and Hyatt.com. Hyatt Gold Passport is a service and a loyalty program focusing for
guest satisfaction, enabling loyal guests to benefit more of Hyatt. Hyatt,com is their online
distribution channel enabling costumers with an efficient source of their hotel and enabling
them to book effectively. Hyatt gold passport is increased by 13.6% of total room nights during
2013. Their brand and Innovation has long track record of creative approaches for food and
beverage throughout the world, which enable them to profitable that create and enhance
demand for their hotel property

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Reservation; Hyatt enables costumer to book directly by hotels or via telephone, call
centers, travel agents and online through Hyatt.com. Hyatt has 10 global contact centers
globally 24 hours a day and seven days a week with 28 different languages. Although some
rooms at the hotel and their resort they manager or franchise are also booked through Internet
travel intermediaries, partners or online travel service providers. These third party
intermediaries collect fees by charging their hotels and resorts a commission fee on from
revenues.
Fees; their fees are generally from their franchisees pay them initial application fee and
ongoing royalty fees depending on their franchised property select or full service hotel.
Application fees are generally $60,000 with the greater of $100,000 or $300 per guest room of
their full services hotels. Some service franchises pay continuing franchise fees with the
percentage of their gross room revenues, such as 3% of first year, 4% in the second year and 5%
through the remainder of the term. Full service franchisees pay them 6% gross room revenues
along with 3% of gross food and beverage revenues.
3. What do you predict revenue to be next year? _______4,383,000________________
4. How would you assess the income performance of the corporation over the last few years?
Hyatt had a significantly increased from 2013 to 2012. They primarily receive their revenues
from their hotel operations, management and franchise fess with other revenues from
managed properties and sales of their vacation ownership properties. There net income totaled
were $207 million, unlike 2012 it was $88 million. We are looking at a big increased. Hyatt also
had available borrowing capacity of $1.4 billion under their revolving credit facility, which will
provide them future growth. This significant increased primary was from owned and leased
hotels, which increased $121 million, and their comparable owned and leased hotel, which
increased $96 million. On 2011 there net income was $113 million and on 2010 they were $66
million. Their significantly dropped on from $113 million to $88 million from 2011 to 2012 were
because of their investing and their net income from continuing operations were higher on
2011, but due to their renovations and income loss from continuing operations and due to their
benefiting more for income taxes
5. What do you predict net income to be next year?

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As of the net income chart we did in our annual report, it was clearly showing us that there is
a almost 5% move every year, from the chart, it was clear that they would be having 4,384,000
net incomes.
6. How would you assess the corporation's total asset growth rate (for example, rapid increase,
stable increase, stagnant, declining)? What evidence justifies your answer?
They had a big growth rate because of their investment. Generally assets including liabilities
and equities, so looking at a 10k report, found out that there is a lot of things they did on their
equity, the reason of the total assets growth is mainly because of their investment. They
increased on their intangibles generally from franchise fess and their brand. During 2013, Hyatt
invested $325 million in a wholly owned Playa Hotels, their investment in common share gave
them a common ownership interest of 21.8%. Also they invested $68 million in Wailea Hotel.
That means they increased their long current asset. The hotel opened during the third quarter
of 2013. During 2013 Hyatt also purchased the remained 70% interest of the entity that owns
the Grand Hyatt San Antonio Hotel. Hyatt recorded income from cost method investments of
$50 million in other income, which they received a complete pay off of their $63 million
investment along with $30 million return on their equity interest, meaning they increased on
their growth of total assets. During 2013 they also sold their interest in two joint ventures,
which classified as equity method investment and included in their owned and leased segment,
to the third party for $52 million. In 2013, They also launched Hyatt Ziva and Hyatt Zilara, which
is their new all inclusive resort brands which developed to ensure their guest inclusive stay.
7. Do you expect total assets to increase, decrease, or remain relatively the same next year?
Justify your answer.
I believe it will be slightly increase or remain the same. Although they do have a lot
more franchise which mean more franchise fees and brand name, They also have
availability of $1.4 billion in their revolving credit center for them invest more. They
invested a lot during 2013. I believe they will have a lot more cash, including short term

Page 47 of 50
investment and their receivable will increase a lit due to those investments they did and
their franchise fees they obtaining. Hyatt had fastest development compare with the
previous year, but I don’t think they can keep their speed to develop and increase like 2013,
but maybe they can remain the same. I don’t believe they will be investing a lot more
because the market prices are going up in 2014. Which means the cost of the properties will
increase for them to invest.
8. Do you believe the corporation will need additional financing to meet needs over the next
few years? Why or why not? If financing is needed, do you believe the corporation would be
able to obtain financing easily?
I don’t think they should not be involving in financial need anymore because the
company will be in danger with the current debt of 41%, I think they already have the
enough money to develop and if they do need financial meets, they have an availability of
$1.4 billion in their revolving credit center and with the times interest ratio of 5.88, it will be
easy for them to obtain and growth. They also just entered into Second Amended and
restated credit agreement with a syndicate of lenders, so it is getting better and they are
fixing their prior problems and extending the facilities expiration. Their Credit facility
provides them financing for working capital, general corporate purposes and much more.
9. Identify what you believe to be the three strongest aspects of the corporation. Describe why
these might be considered advantages.?
Hyatt is no risk takers with big debts, like Hilton has almost 80% debt while Starwood has
almost 70% debt and Hyatt is at 40% they prefer to stay consisted and give their guest the same
comfort every time, Although they are expanding, but it is little by little, but no big steps that
could cause them any harm
Hyatt is growing significantly In 2013 Hyatt announced affiliate signed management
agreements with Constellation Hotels Holding Ltd, which enabling them doubled number of
Hyatt location in France located in Paris, Cannes and Nice that is converted to Hyatt brand. End
of 2013 Hyatt open 80 hotels under development in China including Beijing, Hong Kong, Macau,
Shanghai and Shanzhen. They also open or under developed 60 properties in India at 2013.

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Hyatt also announced expansion international markets including Austria, Russia, the
Netherlands, Latin America and the Middle East. In 2013, they also open 4 Hyatt Place outside
of the U.s operating Armenia, Costa Rica, India and Mexico. In addition to that Hyatt also
announced new management agreements for select service properties that is under
development in Brazil, China, India, Mexico, Morocco, Panama, Thailand and Saudi Arabia.
Hyatt also launched Hyatt Ziva and Hyatt Zilara, which is their new all inclusive resort brands
which developed to ensure their guest inclusive stay., A long with that Hyatt did a lot of
investments for their growth
Their revenues are consistently increasing 5% on every year for 5 years.
They are expanding aggressively overseas, with and emphasis on the luxury segment. Their
room growth rose by 21% between 2009 and 2013 with Asia leading the charge
Also looking back 5 years their Sales, 5 Year Compound Annual Growth Rate is 5.8, which is
better than other competitors.
Hyatt also has the availability to expand and grow more if they want to with their times
earned interest of 5.8 unlike Hilton having it really low, where they are depending on their
operation income to pay those debts in long term
Sometimes investors like to see if a company pays dividends so that they get dividends, and
the cash payments will add up over the time which will result their account for a big chunk of
total returns, but there are cases when investors might want to avoid dividends for tax reasons.
This might increase Hyatt investor’s portfolio. Many investors nowadays, avoiding dividends.
Dividends somewhat offer security because it is more of a sure thing, but with not paying
dividend, you can avoid tax rates. Since Hyatt is growing rapidly, they refuse to pay dividends,
so they can invest as much as possible for their future growth, which is a good sign. It also
increases share price. Hyatt paying no dividend will enable them to start a new project,
repurchase some of their shares, which they are already doing; they can even buy out another
company. It is a win-win situation. Where investors will benefit from not paying tax, since
dividends are taxable to investors as ordinary income. This can be a weakness of Hyatt, also
since some investors see a dividend payment as a sign of company’s strength including their
future earning, but according to Hyatt stocks, it has been increasing rapidly over the 5 years
Identify what you believe to be the three weakest aspects of the corporation. Is it likely
these weaknesses can be overcome in the next few years?
Hyatt is not picking up trends like their other competitors are. Their competitors are
way ahead of the game with picking up technology, new trends and making significant changes,
Those competitors are risk taking and having more debt to adapt into technology, while Hyatt
just staying consistent
Hyatt has not enough hotels. They are rounding around 500 hotels but that’s just the
half the hotel of Starwood preferred guest. Hyatt makes itself a much smaller program than
Marriot, Hilton and Priority Club. Compare to Marriott International and Hilton worldwide that

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have around 4,000 owned operated or franchised properties and Starwood Hotels and resorts
has around 1,200
Unfortunately Hyatt is way behind the new generation. They do not have enough
partners. Bonuses and not including a repeat of long standing promos like Faster free nights
earning in the program could be difficult. Hyatt did announced their co- branded credit card,
but they have no rental car or shopping partners and they don’t enable their guest to transfer
points from airlines. This is a major problem because unlike Starwood, Priority Club and Hilton,
Hyatt has no cash and points awards to stretch your points further. For example if we compare
them with other competitors Hyatt = $4,400 for 22,000 points while Marriott = $4,000 for
40,000 points and HHonors = $3,334 for 50,000 points, SPG = $15,000 for at 30,000 points, and
lastly IHG = $4,000 for top tier InterContinental at 40,000 points.
Lack of employees, unlike our competitors we only have 45,000 employees, where Hilton
has 157,000, Marriott has 123,500 and Starwood has 180,400. This is because of Hyatt has a lot
less hotels than their competitors, but expanding in the industry, employees could cause them
some issues, since they have really lower employee. This means they will be dealing with a lot
of hiring process, dealing with new employees and finding the appropriate one
10. Are you optimistic or pessimistic concerning the future of the corporation? What specific
corporate or industry characteristics influence your opinion?
Optimistic because of their brand name is recognized and they have strong teams they call
family. Hyatt has a lot of franchising; they can keep building their brand image and be more
popular, growth more. They also have a strong Credit facility, which enables them to loan and
be able to grow more. They’re Business strategy and their ability to reach variety of consumer
with a quality and satisfaction. Their revenue keeps increasing every year. Their market prices
of stocks are significantly increasing. They are no risk taking, and being consistent. They are also
expanding and growing. Their net income increased significantly over the 5 years. Also as I
mention on their strongest aspect Hyatt is expanding and growing rapidly. Just on 2013, they
open 80 hotels under new management in Asia, they open 60 properties in India, announced
expansion to other countries, open 4 Hyatt Place at Armenia, Costa Rica, India, Mexico,
announces new management agreements currently under development in 8 countries. In
addition to that Hyatt also launces their new resort brand Hyatt Ziva and Hyatt Zilara.

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11. Would you invest in the capital stock or bonds (if applicable) of this corporation if you had
sufficient funds? Would you rather invest in one of the corporation's competitors? What are
the reasons for your decision?
Even Though I am Optimistic about Hyatt, I wouldn’t invest in them yet, because Hyatt is
still in the process of growth with not having as much as sales as their other competitors and
not having enough hotels, which means they are not as big as their competitors. I would be
investing in Starwood hotels, I am actually investing in Starwood on investopedia.com and they
are doing just fine, since Starwood has a really different variety of hotels, under different
names which enables consumer to choose their hotel, by their comfort, money or the quality.
Also they are bigger company with bigger opportunities. Starwood has also a lot of debt but
that is due to their growing and expanding to countries with their new technology and
trending’s which they already have their hotel in those countries, but they are developing new
brand names under their management, or developing their existing brand names with new cool
trends. They also have a creative management, such as aloft; Their Aloft hotel is the first hotel
that has the beyond technology, using robots instead of an employee and enabling smartphone
room entries(keyless entry) and a lot more. They are reaching all kind costumers that are
looking for something unique, different or being themselves.

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