UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

Form 10-Q

(Mark One)



x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September 30, 2015~~March 31, 2016



¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File No. 001-34521

HYATT HOTELS CORPORATION

(Exact Name of Registrant as Specified in Its Charter)



Delaware		20-1480589
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

71 South Wacker Drive 12th Floor, Chicago, Illinois		60606
(Address of Principal Executive Offices)		(Zip Code)

(312) 750-1234

(Registrant’s Telephone Number, Including Area Code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check One):



Large accelerated filer	x	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

As of ~~October 30, 2015,~~April 29, 2016, there were ~~29,197,002~~24,742,779 shares of the registrant’s Class A common stock, $0.01 par value, outstanding and 109,628,962 shares of the registrant’s Class B common stock, $0.01 par value, outstanding.

HYATT HOTELS CORPORATION

QUARTERLY REPORT ON FORM 10-Q

FOR THE PERIOD ENDED ~~SEPTEMBER 30, 2015~~MARCH 31, 2016

TABLE OF CONTENTS




	PART I – FINANCIAL INFORMATION
Item 1.	Financial Statements	1
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2923
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	5238
Item 4.	Controls and Procedures	5339

	PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	5440
Item 1A.	Risk Factors	5440
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	5440
Item 3.	Defaults Upon Senior Securities	5541
Item 4.	Mine Safety Disclosures	5541
Item 5.	Other Information	5541
Item 6.	Exhibits	5642

Signatures		5743

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

HYATT HOTELS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In millions of dollars, except per share amounts)

(Unaudited)


	Three Months Ended						Nine Months Ended						Three Months Ended
	September 30, 2015			September 30, 2014			September 30, 2015			September 30, 2014			March 31, 2016			March 31, 2015
REVENUES:
Owned and leased hotels	$	500		$	555		$	1,549		$	1,695		$	516		$	509
Management and franchise fees	103			94			320			286			107			105
Other revenues	10			24			26			68			9			7
Other revenues from managed properties	440			431			1,324			1,287			457			433
Total revenues	1,053			1,104			3,219			3,336			1,089			1,054
DIRECT AND SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES:
Owned and leased hotels	385			422			1,160			1,267			389			384
Depreciation and amortization	78			91			233			269			81			79
Other direct costs	8			11			20			29			6			5
Selling, general, and administrative	54			77			221			244			88			94
Other costs from managed properties	440			431			1,324			1,287			457			433
Direct and selling, general, and administrative expenses	965			1,032			2,958			3,096			1,021			995
Net gains (losses) and interest income from marketable securities held to fund operating programs	(15		)	(3		)	(6		)	9
Net gains and interest income from marketable securities held to fund operating programs													1			8
Equity earnings (losses) from unconsolidated hospitality ventures	(17		)	6			(46		)	22			2			(6		)
Interest expense	(17		)	(17		)	(51		)	(54		)	(17		)	(17		)
Asset impairments	(5		)	—			(5		)	(7		)
Gains on sales of real estate	—			3			9			65
Other income (loss), net	11			2			(3		)	(11		)
Gain on sale of real estate													—			8
Other loss, net													(4		)	(18		)
INCOME BEFORE INCOME TAXES	45			63			159			264			50			34
PROVISION FOR INCOME TAXES	(20		)	(30		)	(72		)	(100		)	(16		)	(12		)
NET INCOME	25			33			87			164			34			22
NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS	—			(1		)	—			(2		)	—			—
NET INCOME ATTRIBUTABLE TO HYATT HOTELS CORPORATION	$	25		$	32		$	87		$	162		$	34		$	22
EARNINGS PER SHARE - Basic
EARNINGS PER SHARE—Basic
Net income	$	0.18		$	0.22		$	0.60		$	1.06		$	0.25		$	0.15
Net income attributable to Hyatt Hotels Corporation	$	0.18		$	0.21		$	0.60		$	1.05		$	0.25		$	0.15
EARNINGS PER SHARE - Diluted
EARNINGS PER SHARE—Diluted
Net income	$	0.18		$	0.22		$	0.60		$	1.06		$	0.25		$	0.15
Net income attributable to Hyatt Hotels Corporation	$	0.18		$	0.21		$	0.60		$	1.05		$	0.25		$	0.15

See accompanying notes to condensed consolidated financial statements.

HYATT HOTELS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In millions of dollars)

(Unaudited)


	Three Months Ended						Nine Months Ended						Three Months Ended
	September 30, 2015			September 30, 2014			September 30, 2015			September 30, 2014			March 31, 2016			March 31, 2015
Net income	$	25		$	33		$	87		$	164		$	34		$	22
Other comprehensive income (loss), net of taxes:
Foreign currency translation adjustments, net of tax (benefit) expense of $- and $(1) for the three months ended and $(2) and $- for the nine months ended September 30, 2015 and September 30, 2014, respectively	(35		)	(49		)	(82		)	(36		)
Unrealized gains (losses) on available for sale securities, net of tax expense of $6 and $3 for the three months ended and $10 and $2 for the nine months ended September 30, 2015 and September 30, 2014, respectively	9			—			15			(6		)
Unrealized gains on derivative activity, net of tax expense of $- and $- for the three months ended and $- and $- for the nine months ended September 30, 2015 and September 30, 2014, respectively	1			1			1			1
Other comprehensive loss	(25		)	(48		)	(66		)	(41		)
Foreign currency translation adjustments, net of tax expense of $- and $- for the three months ended March 31, 2016 and March 31, 2015, respectively													24			(55		)
Unrealized gains (losses) on available for sale securities, net of tax (benefit) expense of $(3) and $- for the three months ended March 31, 2016 and March 31, 2015, respectively													(4		)	2
Other comprehensive income (loss)													20			(53		)
COMPREHENSIVE INCOME (LOSS)	—			(15		)	21			123			54			(31		)
COMPREHENSIVE INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS	—			(1		)	—			(2		)	—			—
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO HYATT HOTELS CORPORATION	$	—		$	(16	)	$	21		$	121		$	54		$	(31	)

See accompanying notes to condensed consolidated financial statements.

HYATT HOTELS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions of dollars, except share and per share amounts)

(Unaudited)


	September 30, 2015			December 31, 2014			March 31, 2016			December 31, 2015
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	569		$	685		$	771		$	457
Restricted cash	97			359			73			96
Short-term investments	65			130			55			46
Receivables, net of allowances of $15 and $13 at September 30, 2015 and December 31, 2014, respectively	325			274
Receivables, net of allowances of $16 and $15 at March 31, 2016 and December 31, 2015, respectively							328			298
Inventories	13			17			16			12
Prepaids and other assets	109			108			160			152
Prepaid income taxes	84			47			59			63
Deferred tax assets	25			26
Assets held for sale	—			63
Total current assets	1,287			1,709			1,462			1,124
Investments	323			334			332			327
Property and equipment, net	4,032			4,186			4,023			4,031
Financing receivables, net of allowances	20			40			20			20
Goodwill	130			133			129			129
Intangibles, net	541			552			546			547
Deferred tax assets	233			196			305			301
Other assets	1,106			993			1,082			1,112
TOTAL ASSETS	$	7,672		$	8,143		$	7,899		$	7,591
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt	$	318		$	9		$	265		$	328
Accounts payable	131			130			135			141
Accrued expenses and other current liabilities	472			468			516			516
Accrued compensation and benefits	122			120			96			122
Liabilities held for sale	—			3
Total current liabilities	1,043			730			1,012			1,107
Long-term debt	1,059			1,381			1,441			1,042
Other long-term liabilities	1,436			1,401			1,446			1,447
Total liabilities	3,538			3,512			3,899			3,596
Commitments and contingencies (see Note 10)
Commitments and contingencies (see Note 11)
EQUITY:
Preferred stock, $0.01 par value per share, 10,000,000 shares authorized and none outstanding as of September 30, 2015 and December 31, 2014	—			—
Class A common stock, $0.01 par value per share, 1,000,000,000 shares authorized, 30,159,762 outstanding and issued at September 30, 2015, Class B common stock, $0.01 par value per share, 441,623,374 shares authorized, 109,628,962 shares issued and outstanding at September 30, 2015 and Class A common stock, $0.01 par value per share, 1,000,000,000 shares authorized, 37,676,490 outstanding and 37,712,763 issued at December 31, 2014, Class B common stock, $0.01 par value per share, 443,399,875 shares authorized, 111,405,463 shares outstanding and issued at December 31, 2014	1			2
Preferred stock, $0.01 par value per share, 10,000,000 shares authorized and none outstanding as of March 31, 2016 and December 31, 2015							—			—
Class A common stock, $0.01 par value per share, 1,000,000,000 shares authorized, 25,157,815 issued and outstanding at March 31, 2016, and Class B common stock, $0.01 par value per share, 441,623,374 shares authorized, 109,628,962 shares issued and outstanding at March 31, 2016. Class A common stock, $0.01 par value per share, 1,000,000,000 shares authorized, 26,604,687 issued and outstanding at December 31, 2015, and Class B common stock, $0.01 par value per share, 441,623,374 shares authorized, 109,628,962 shares issued and outstanding at December 31, 2015							1			1
Additional paid-in capital	2,103			2,621			1,882			1,931
Retained earnings	2,252			2,165			2,323			2,289
Treasury stock at cost, 0 shares and 36,273 shares at September 30, 2015 and December 31, 2014, respectively	—			(1		)
Accumulated other comprehensive loss	(226		)	(160		)	(210		)	(230		)
Total stockholders’ equity	4,130			4,627			3,996			3,991
Noncontrolling interests in consolidated subsidiaries	4			4			4			4
Total equity	4,134			4,631			4,000			3,995
TOTAL LIABILITIES AND EQUITY	$	7,672		$	8,143		$	7,899		$	7,591

See accompanying notes to condensed consolidated financial statements.

HYATT HOTELS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions of dollars)

(Unaudited)


	Nine Months Ended						Three Months Ended
	September 30, 2015			September 30, 2014			March 31, 2016			March 31, 2015
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	87		$	164		$	34		$	22
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	233			269			81			79
Deferred income taxes	(43		)	(16		)	(1		)	3
Asset impairments	5			7
Equity (earnings) losses from unconsolidated hospitality ventures and distributions received	70			40
Equity (earnings) losses from unconsolidated hospitality ventures, net of distributions received							(1		)	6
Foreign currency losses	13			2			—			7
Gains on sales of real estate	(9		)	(65		)
Provisions (recoveries) on hotel loans	(6		)	—
Gain on sale of real estate							—			(8		)
Working capital changes and other	46			(39		)	(62		)	(94		)
Net cash provided by operating activities	396			362			51			15
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of marketable securities and short-term investments	(450		)	(270		)	(85		)	(157		)
Proceeds from marketable securities and short-term investments	422			249			83			175
Contributions to investments	(29		)	(97		)	(15		)	(12		)
Proceeds from sale of investments	3			—
Return of investment	4			47
Acquisitions, net of cash acquired	—			(391		)
Capital expenditures	(185		)	(168		)	(38		)	(61		)
Proceeds from financing receivables	28			1
Proceeds from sales of real estate, net of cash disposed	86			324
Sales proceeds transferred to escrow as restricted cash	—			(232		)
Proceeds from sale of real estate, net of cash disposed							—			69
Sales proceeds transferred from escrow to cash and cash equivalents	143			306			29			—
Decrease in restricted cash	19			16
(Increase) decrease in restricted cash—investing							(12		)	18
Other investing activities	(17		)	(35		)	26			9
Net cash provided by (used in) investing activities	24			(250		)
Net cash (used in) provided by investing activities							(12		)	41
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long-term debt	12			184
Proceeds from long-term debt, net of issuance costs of $4 and $0, respectively							426			—
Repayments of long-term debt	(5		)	(43		)	(95		)	—
Repurchase of common stock	(539		)	(228		)	(63		)	(187		)
Repayment of capital lease obligation	—			(191		)
Other financing activities	(2		)	(9		)	(4		)	(6		)
Net cash used in financing activities	(534		)	(287		)
Net cash provided by (used in) financing activities							264			(193		)
EFFECT OF EXCHANGE RATE CHANGES ON CASH	(2		)	(4		)	11			15
NET DECREASE IN CASH AND CASH EQUIVALENTS	(116		)	(179		)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS							314			(122		)
CASH AND CASH EQUIVALENTS—BEGINNING OF YEAR	685			454			457			685
Reclassification of cash and cash equivalents to assets held for sale	—			(12		)
CASH AND CASH EQUIVALENTS—END OF PERIOD	$	569		$	263		$	771		$	563
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for interest	$	66		$	70		$	33		$	32
Cash paid during the period for income taxes	$	121		$	181		$	16		$	18
Non-cash investing activities are as follows:
Change in accrued capital expenditures	$	(1	)	$	3		$	4		$	(6	)

See accompanying notes to condensed consolidated financial statements.

HYATT HOTELS CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(amounts in millions of dollars, unless otherwise indicated)

(Unaudited)

1. ORGANIZATION

Hyatt Hotels Corporation, a Delaware corporation, and its consolidated subsidiaries (collectively "Hyatt Hotels Corporation") provide hospitality services on a worldwide basis through the development, ownership, operation, management, franchising ~~licensing~~ and ~~ownership~~licensing of hospitality related businesses. We develop, own, operate, manage, franchise, license or provide services to a portfolio of properties consisting of full service hotels, select service hotels, resorts and other properties, including timeshare, fractional and other forms of residential or vacation properties. As of ~~September 30, 2015,~~March 31, 2016, (i) we operated or franchised ~~290~~296 full service hotels, comprising ~~115,729~~117,998 rooms throughout the world, (ii) we operated or franchised ~~299~~316 select service hotels, comprising ~~41,025~~43,574 rooms, of which ~~281~~296 hotels are located in the United States, and (iii) our portfolio of properties included 56 franchised all inclusive Hyatt-branded resorts, comprising ~~1,854~~2,401 rooms. Our portfolio of properties ~~operate~~operates in 5253 countries around the world and we hold ownership interests in certain of these properties.

As used in these Notes and throughout this Quarterly Report on Form 10-Q, (i) the terms "Company," "HHC," "we," "us," or "our" mean Hyatt Hotels Corporation and its consolidated subsidiaries and (ii) the term ~~"Hyatt portfolio of properties" or~~ "portfolio of properties" refers to hotels and other properties or residential ownership units that we develop, own, operate, manage, franchise, license or provide services to, including under our Park Hyatt, ~~Andaz, Hyatt,~~ Grand Hyatt, Hyatt Regency, Hyatt, Andaz, Hyatt Centric, The Unbound Collection by Hyatt, Hyatt Place, Hyatt House, Hyatt Ziva, Hyatt Zilara ~~Hyatt Residences~~ and Hyatt ~~Residential~~Residence Club brands.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information, the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all information or footnotes required by GAAP for complete annual financial statements. As a result, this Quarterly Report on Form 10-Q should be read in conjunction with the Consolidated Financial Statements and accompanying Notes in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2014~~2015 (the "~~2014~~2015 Form 10-K").

We have eliminated all intercompany accounts and transactions in our condensed consolidated financial statements. We consolidate entities ~~for which~~under our control, including entities where we ~~either have a controlling financial interest or~~ are ~~considered~~deemed to be the primary

beneficiary.

Management believes that the accompanying condensed consolidated financial statements reflect all adjustments, which are all of a normal recurring nature, considered necessary for a fair presentation of the interim periods.

2. RECENTLY ISSUED ACCOUNTING STANDARDS

Adopted Accounting Standards

—In April ~~2014,~~2015, the Financial Accounting Standards Board ("FASB") released Accounting Standards Update No. ~~2014-08~~2015-03 ("ASU ~~2014-08"~~2015-03"), Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of ~~Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity~~Debt Issuance Costs. ASU ~~2014-08 changes~~2015-03 requires that debt issuance costs related to a recognized debt liability be presented in the ~~requirements for reporting discontinued operations and expands~~balance sheet as a direct deduction from the ~~required disclosures surrounding discontinued operations.~~carrying amount of that debt liability, consistent with debt discounts. The provisions of ASU ~~2014-08~~2015-03 are effective for ~~fiscal years, and~~ interim periods ~~within those~~and fiscal years beginning after December 15, ~~2014. Early adoption was permitted for disposals that had not been reported~~2015. We adopted the standard on January 1, 2016, and as a result we reclassified $5 million of debt issuance costs previously included in ~~previously issued~~other assets to long-term debt on our condensed consolidated financial ~~statements. We elected to early adopt ASU 2014-08 in the second quarter~~statements as of ~~2014 and have no disposals which qualify as discontinued operations.~~December 31, 2015.

Future Adoption of Accounting Standards

—In May 2014, the FASB released Accounting Standards Update No. 2014-09 ("ASU 2014-09"), Revenue from Contracts with Customers (Topic 606). ASU 2014-09 provides a single, comprehensive revenue recognition model for contracts with customers. In August 2015, the FASB released Accounting Standards Update No. 2015-14 ("ASU 2015-14"), Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date. ASU 2015-14 delays the effective date of ASU 2014-09 by one year, making it effective for ~~fiscal years, and~~ interim periods ~~within~~

~~those~~and fiscal years beginning after December 15, 2017, with early adoption permitted as of the original effective date. The Company is currently evaluating the impact of adopting ASU 2014-09.

In ~~June 2014,~~January 2016, the FASB released Accounting Standards Update No. ~~2014-10~~2016-01 ("ASU ~~2014-10"~~2016-01"), ~~Development Stage Entities (Topic 915)~~Financial Instruments - Overall (Subtopic 825-10): ~~Elimination~~Recognition and Measurement of ~~Certain~~ Financial ~~Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation.~~ Assets and Financial Liabilities. ASU ~~2014-10 removes~~2016-01 revises the accounting for equity investments, financial ~~reporting distinction between development stage entities~~liabilities under the fair value option, and ~~other reporting entities from GAAP~~the presentation and ~~it eliminates an exception provided in the consolidation guidance~~disclosure requirements for ~~development stage enterprises.~~financial instruments. The provisions of ASU ~~2014-10~~2016-01 are effective for ~~fiscal years, and~~ interim periods ~~within those~~and fiscal years beginning after December 15, ~~2015. When adopted,~~2017. The Company is currently evaluating the impact of adopting ASU ~~2014-10 is not expected to materially impact our condensed consolidated financial statements.~~2016-01.

In ~~August 2014,~~February 2016, the FASB released Accounting Standards Update No. ~~2014-15~~2016-02 ("ASU ~~2014-15"~~2016-02"), ~~Presentation of Financial Statements-Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability~~Leases (Topic 842). ASU 2016-02 requires lessees to ~~Continue as~~record lease contracts on the balance sheet by recognizing a ~~Going Concern.~~ ~~ASU 2014-15 provides guidance related to management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern~~right-of-use asset and ~~the related footnote disclosures.~~lease liability. The provisions of ASU ~~2014-15~~2016-02 are effective for ~~annual periods ending after December 15, 2016, and~~ interim periods ~~within annual periods~~and fiscal years beginning after December 15, ~~2016. When adopted,~~2018, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU ~~2014-15 is not expected to materially impact our condensed consolidated financial statements.~~2016-02.

In ~~February 2015,~~March 2016, the FASB released Accounting Standards Update No. ~~2015-01~~2016-09 ("ASU ~~2015-01"~~2016-09"), ~~Income Statement - Extraordinary~~Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. ASU 2016-09 simplifies the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and ~~Unusual Items (Subtopic 225-20): Simplifying Income Statement Presentation by Eliminating~~classification on the ~~Concept~~statement of ~~Extraordinary Items.~~ ~~ASU 2015-01 eliminates all requirements regarding the separate classification, presentation, and disclosure of extraordinary events and transactions.~~cash flows. The provisions of ASU ~~2015-01~~2016-09 are effective for ~~fiscal years, and~~ interim periods ~~within those years, beginning after December 15, 2015. When adopted, ASU 2015-01 is not expected to materially impact our condensed consolidated financial statements.~~

~~In February 2015, the FASB released Accounting Standards Update No. 2015-02 ("ASU 2015-02"),~~ ~~Consolidation (Topic 810): Amendments to the Consolidation Analysis. ASU 2015-02 provides guidance related to management’s evaluation of consolidation for certain legal entities. The provisions of ASU 2015-02 are effective for fiscal years,~~ and ~~interim periods within those years, beginning after December 15, 2015. When adopted, ASU 2015-02 is not expected to materially impact our condensed consolidated financial statements.~~

~~In April 2015, the FASB released Accounting Standards Update No. 2015-03 ("ASU 2015-03"),~~ ~~Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs~~. ASU 2015-03 requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. In August 2015, the FASB released Accounting Standards Update No. 2015-15 ("ASU 2015-15"), Interest - Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements - Amendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015 EITF Meeting (SEC Update). ASU 2015-15 states that, given the absence of authoritative guidance within ASU 2015-03 for debt issuance costs related to line-of-credit arrangements, the SEC staff would not object to an entity presenting debt issuance costs as an asset and subsequently amortizing over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. The provisions of ASU 2015-03 are effective for fiscal years beginning after December 15, ~~2015, and~~2016, with early adoption permitted. The Company is currently evaluating the ~~interim periods within those fiscal years. When adopted,~~impact of adopting ASU ~~2015-03, as clarified by ASU 2015-15, is not expected to materially impact our condensed consolidated financial statements.~~2016-09.

~~In September 2015, the FASB released Accounting Standards Update No. 2015-16 ("ASU 2015-16"),~~ ~~Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments~~. ASU 2015-16 eliminates the requirement to retrospectively account for adjustments to provisional amounts recognized in a business combination that are identified during the measurement period, and instead requires an acquirer to recognize adjustments in the reporting period in which the adjusted amounts are determined. The provisions of ASU 2015-16 are effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. When adopted, ASU 2015-16 is not expected to materially impact our condensed consolidated financial statements.

3. EQUITY AND COST METHOD INVESTMENTS

We have investments that are recorded under both the equity and cost methods. These investments are considered to be an integral part of our business and are strategically and operationally important to our overall results. Our equity and cost method investment balances recorded at ~~September 30, 2015~~March 31, 2016 and December 31, ~~2014~~2015 are as follows:

September 30, 2015 December 31, 2014
Equity method investments $ 300
$ 311
Cost method investments 23
23
Total investments $ 323
$ 334

During the three months ended September 30, 2015, we sold an entity which held an interest in one of our foreign currency denominated equity method joint ventures within our owned and leased hotels segment, for which we received proceeds of $3 million. In connection with the sale, we released $21 million of accumulated foreign currency translation losses, which has been recorded to equity earnings (losses) from unconsolidated hospitality ventures on our condensed consolidated statements of income.

During the three months ended September 30, 2014, a joint venture in which we held an ownership interest and which was classified as an equity method investment within our owned and leased hotels segment, sold the Hyatt Place Houston/Sugar Land to a third party, for which we received proceeds of $12 million. We recorded a deferred gain of $10 million, which is being amortized over the term of the management agreement for the hotel into management and franchise fees within the Americas management and franchising segment.

During the three months ended September 30, 2014, a joint venture in which we held an ownership interest and which was classified as an equity method investment within our owned and leased hotels segment, sold the Hyatt Regency DFW International Airport and another building to a third party, for which we received proceeds of $19 million. We recorded a deferred gain of $18 million, which is being amortized over the remaining term of the management agreement for the hotel into management and franchise fees within the Americas management and franchising segment.

During the three months ended September 30, 2014, a joint venture in which we held an ownership interest and which was classified as an equity method investment within our owned and leased hotels segment, sold the Hyatt Place Coconut Point to a third party, for which we received proceeds of $5 million. This hotel was sold subject to a franchise agreement. We recorded a gain of $2 million, which has been recorded to equity earnings (losses) from unconsolidated hospitality ventures on our condensed consolidated statements of income.

During the nine months ended September 30, 2014, a joint venture in which we held an ownership interest and which was classified as an equity method investment within our owned and leased hotels segment, sold the Hyatt Place Austin Downtown to a third party, for which we received proceeds of $28 million. The hotel was sold subject to a franchise agreement. We recorded a gain of $20 million, which has been recorded to equity earnings (losses) from unconsolidated hospitality ventures on our condensed consolidated statements of income.

During the three and nine months ended September 30, 2015, we recorded no impairment charges related to our unconsolidated hospitality ventures. During the three and nine months ended September 30, 2014, we recorded $1 million and $3 million, respectively, in impairment charges in equity earnings (losses) from unconsolidated hospitality ventures related to two equity method investments.



	March 31, 2016		December 31, 2015
Equity method investments	$	309	$	304
Cost method investments	23		23
Total investments	$	332	$	327

The following table presents summarized financial information for all unconsolidated ventures in which we hold an investment that is accounted for under the equity method:


	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended March 31,
	2015		2014		2015		2014		2016		2015
Total revenues	$	280	$	320	$	825	$	936	$	284	$	244
Gross operating profit	88		98		236		262		70		60
Income from continuing operations	42		22		26		38
Net income	42		22		26		38
Income (loss) from continuing operations									20		(13		)
Net income (loss)									20		(13		)

4. ~~FAIR VALUE MEASUREMENT~~MARKETABLE SECURITIES

~~Fair value is defined as the price that would be received~~We hold marketable securities to ~~sell an asset or paid~~fund certain operating programs and for investment purposes. We periodically transfer cash and cash equivalents to ~~transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). GAAP establishes a valuation hierarchy~~time deposits, highly liquid and transparent commercial paper, corporate notes and bonds, and U.S. government obligations and obligations of other government agencies for ~~prioritizing the inputs that places greater emphasis on the use of observable market inputs~~investment purposes.

Marketable Securities Held to Fund Operating Programs—At March 31, 2016 and ~~less emphasis on unobservable inputs. When determining fair value, an entity is required~~December 31, 2015, total marketable securities held to ~~maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of the hierarchy~~fund operating programs, which are ~~as follows:~~

~~Level One—Fair values based on unadjusted quoted prices in active markets for identical assets and liabilities;~~

Level Two—Fair values based on quoted market prices for similar assets and liabilities in active markets, quoted prices in inactive markets for identical assets and liabilities, and inputs other than quoted market prices that are observable for the asset or liability;

Level Three—Fair values based on inputs that cannot be corroborated by observable market data and reflect the use of significant management judgment. Valuation techniques could include the use of discounted cash flow models and similar techniques.

~~We have various financial instruments that are measured~~recorded at fair value ~~including certain~~and included on the condensed consolidated balance sheets, were as follows:



	March 31, 2016			December 31, 2015
Marketable securities held by the Hyatt Gold Passport Fund	$	393		$	384
Marketable securities held to fund deferred compensation plans (Note 9)	332			333
Marketable securities held to fund our captive insurance company	78			82
Total marketable securities held to fund operating programs	$	803		$	799
Less current portion of marketable securities held for operating programs included in cash and cash equivalents, short-term investments, and prepaids and other assets	(143		)	(121		)
Marketable securities held to fund operating programs included in other assets	$	660		$	678

Net gains and interest income from marketable securities held to fund operating programs on the condensed consolidated statements of income includes realized and unrealized gains (losses) and interest income, net related to the following:



	Three Months Ended March 31,
	2016		2015
Hyatt Gold Passport Fund	$	1	$	1
Deferred compensation plans	—		7
Total net gains and interest income from marketable securities held to fund operating programs	$	1	$	8

Our captive insurance company holds marketable securities which have been classified as available for sale ("AFS") and are invested in U.S. government agencies, time deposits and corporate debt securities. We ~~currently do not~~ have classified these investments as current or long-term, based on their contractual maturity dates, which range from 2016 through 2021. During the three months ended March 31, 2016, we recorded insignificant unrealized gains (losses), net related to these AFS securities on the condensed consolidated statements of comprehensive income (loss).

Marketable Securities Held for Investment Purposes~~non-financial assets or~~ ~~non-financial liabilities that~~—At March 31, 2016 and December 31, 2015, our total marketable securities held for investment purposes, which are ~~required to be measured~~recorded at fair value ~~on a recurring basis.~~

~~We utilize the market approach~~ and income approach for valuing our financial instruments. The market approach utilizes prices and information generated by market transactions involving identical or similar assets and liabilities and the income approach uses valuation techniques to convert future amounts (for example, cash flows or earnings) to a single present amount (discounted). For instances in which the inputs used to measure fair value fall into different levels of the fair value hierarchy, the fair value measurement has been determined basedincluded on the lowest level input that is significant to the fair value measurement in its entirety. Our assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the classification of fair value assets and liabilities within the fair value hierarchy.condensed consolidated balance sheets, were as follows:

~~Assets and Liabilities Measured at~~



	March 31, 2016		December 31, 2015
Interest bearing money market funds	$	49	$	5
Time deposits	30		30
Preferred shares	328		335

Fair Value ~~on a Recurring Basis~~

—As of ~~September 30, 2015~~March 31, 2016 and December 31, ~~2014~~2015, we had the following financial assets ~~and liabilities~~ measured at fair value on a recurring basis:


	September 30, 2015		Cash and Cash Equivalents		Short-term Investments		Prepaids and Other Assets		Other Assets		March 31, 2016		Cash and Cash Equivalents		Short-term Investments		Prepaids and Other Assets		Other Assets
Level One - Quoted Prices in Active Markets for Identical Assets
Interest bearing money market funds	$	36	$	36	$	—	$	—	$	—	$	58	$	58	$	—	$	—	$	—
Mutual funds	319		—		—		—		319		332		—		—		—		332
Level Two - Significant Other Observable Inputs
Time deposits	69		—		62		—		7		47		—		37		—		10
U.S. government obligations	132		—		—		23		109		132		—		—		38		94
U.S. government agencies	81		—		1		7		73		79		—		17		12		50
Corporate debt securities	165		—		2		25		138		181		—		1		44		136
Mortgage-backed securities	26		—		—		5		21		26		—		—		7		19
Asset-backed securities	29		—		—		5		24		24		—		—		7		17
Municipal and provincial notes and bonds	3		—		—		1		2		3		—		—		1		2
Level Three - Significant Unobservable Inputs
Preferred shares	305		—		—		—		305		328		—		—		—		328
Total	$	1,165	$	36	$	65	$	66	$	998	$	1,210	$	58	$	55	$	109	$	988


	December 31, 2014		Cash and Cash Equivalents		Short-term Investments		Prepaids and Other Assets		Other Assets		December 31, 2015		Cash and Cash Equivalents		Short-term Investments		Prepaids and Other Assets		Other Assets
Level One - Quoted Prices in Active Markets for Identical Assets
Interest bearing money market funds	$	70	$	70	$	—	$	—	$	—	$	18	$	18	$	—	$	—	$	—
Mutual funds	341		—		—		—		341		333		—		—		—		333
Level Two - Significant Other Observable Inputs
Time deposits	130		—		130		—		—		45		—		38		—		7
U.S. government obligations	127		—		—		20		107		131		—		—		32		99
U.S. government agencies	34		—		—		5		29		83		—		6		10		67
Corporate debt securities	128		—		—		20		108		168		—		2		36		130
Mortgage-backed securities	23		—		—		4		19		26		—		—		6		20
Asset-backed securities	23		—		—		4		19		27		—		—		7		20
Municipal and provincial notes and bonds	3		—		—		—		3		3		—		—		1		2
Level Three - Significant Unobservable Inputs
Preferred shares	280		—		—		—		280		335		—		—		—		335
Total	$	1,159	$	70	$	130	$	53	$	906	$	1,169	$	18	$	46	$	92	$	1,013

During the three ~~and nine~~ months ended ~~September 30,~~March 31, 2016 and March 31, 2015, ~~and September 30, 2014,~~ there were no transfers between levels of the fair value hierarchy. Our policy is to recognize transfers in and transfers out as of the end of each quarterly reporting period. We currently do not have non-financial assets or non-financial liabilities that are required to be measured at fair value on a recurring basis.

~~Marketable Securities~~

Our portfolio of marketable securities consists of various types of money market funds, mutual funds, time deposits, fixed income securities, including U.S. government obligations, obligations of other U.S. government agencies, corporate debt securities, mortgage-backed securities, asset-backed securities, municipal and provincial notes and bonds, and preferred shares.

We invest a portion of our cash ~~balance~~ into ~~short-term~~short-term interest bearing money market funds that have a maturity of less than ninety days. Consequently, the balances are recorded in cash and cash equivalents. The funds are held with ~~open-ended~~open-ended registered investment companies and the fair value of the funds isare classified as Level One as we are able to obtain market available pricing information on an ongoing basis. The fair value of our mutual funds are classified as Level One as they trade with sufficient frequency and volume to enable us to obtain pricing information on an ongoing basis. Time deposits are recorded at par value, which approximates fair value and are ~~included within short-term investments and~~ classified as Level Two. The remaining securities, other than our investment in preferred shares, are classified as Level Two due to the use and weighting of multiple market inputs being considered in the final price of the security. Market inputs include quoted market prices from active markets for identical securities, quoted market prices for identical securities in inactive markets, and quoted market prices in active and inactive markets for similar securities.

~~Marketable Securities Held to Fund Operating Programs~~Preferred shares—~~At September 30, 2015 and~~During the year ended December 31, ~~2014, total marketable securities held~~2013, we invested $271 millionin Playa Hotels & Resorts B.V. ("Playa") for redeemable, convertible preferred shares. Hyatt has the option to convert its preferred shares into shares of common stock at any time through the later of the second anniversary of the closing of our investment or an initial public offering by Playa. The preferred investment is redeemable at Hyatt's option in August 2021. In the event of an initial public offering or other equity issuance by Playa, Hyatt ~~Gold Passport Fund, certain deferred compensation plans, and our captive insurance company recorded~~has the option to request that Playa redeem up to $125 million of preferred shares. As a result, we have classified the preferred investment as an AFS debt security, which is remeasured quarterly at fair value ~~and included in~~on the condensed consolidated balance sheets ~~were as follows:~~

September 30, 2015 December 31, 2014
Marketable securities held by the Hyatt Gold Passport Fund $ 386
$ 357
Marketable securities held to fund deferred compensation plans 319
341
Marketable securities held to fund captive insurance company 82
—
Total marketable securities $ 787
$ 698

The impact to net income from total gains or losses included in net gains (losses) and interest income from marketable securities held to fund operating programs due to the change in unrealized gains or losses relating to assets still held at the reporting date was insignificant for the ~~three and nine~~ ~~months ended~~ ~~September 30, 2015~~ ~~and September 30, 2014.~~

We hold redeemable, convertible preferred shares in Playa Hotels and Resorts B.V. ("Playa"), which we have classified as an available for sale ("AFS") debt security and is included in other assets on our condensed consolidated balance sheets. The investment is remeasured quarterly to fair value and the changes are recorded through other comprehensive income (loss). The fair value of the preferred shares was:



	2016			2015
Fair value at January 1	$	335		$	280
Gross unrealized gains	—			2
Gross unrealized losses	(7		)	—
Fair value at March 31	$	328		$	282

Due to the lack of availability of market data, the preferred shares are classified as Level Three. We estimated the fair value of the Playa preferred shares using an ~~option pricing~~option-pricing model. This model requires that we make certain assumptions regarding the expected volatility, term, risk-free interest rate over the expected term, dividend yield and enterprise value. Financial forecasts were used in the computation of the enterprise value using the income approach, based on assumed revenue growth rates and operating margin levels. The risks associated with achieving these forecasts were assessed in selecting the appropriate weighted-average cost of capital.

A summary of the significant assumptions used to estimate the fair value of our preferred shares as of March 31, 2016 and December 31, 2015 are as follows:



	March 31, 2016		December 31, 2015
Expected term	0.5 years		0.75 years
Risk-free Interest Rate	0.39	%	0.57	%
Volatility	48.0	%	46.0	%
Dividend Yield	12.0	%	12.0	%

There is inherent uncertainty in our assumptions, and fluctuations in these assumptions will result in different estimates of fair value. ~~Due to~~The significant unobservable assumptions driving the ~~lack~~value of ~~availability of market data,~~ the preferred shares are ~~classified as Level Three.~~

the enterprise value and the expected term. A ~~summary~~10% increase or decrease in the enterprise value primarily driven by the weighted-average cost of ~~the significant assumptions used to estimate~~capital assumption and financial forecasts may cause the fair value to fluctuate by approximately $20 million. Independent of ~~our preferred investment~~the enterprise value, a 0.5 year change in ~~Playa as~~the expected term assumption may cause the fair value to fluctuate by approximately $21 million.

Held-to-Maturity Debt Securities—As of~~September 30, 2015~~ March 31, 2016 and December 31, ~~2014, is as follows:~~

September 30, 2015 December 31, 2014
Expected term 0.50 years
0.75 years
Risk-free Interest Rate 0.08 % 0.19 %
Volatility 48.4 % 43.9 %
Dividend Yield 12 % 10 %

As2015, we have investments in held-to-maturity debt securities of ~~September 30, 2015~~ ~~and~~ ~~December 31, 2014, the cost or~~$25 million, which are investments in third-party entities that own certain of our hotels. The amortized cost ~~value for~~of our ~~preferred investment in Playa was $271 million and the fair value of this AFS debt security was as follows:~~

Fair Value Measurements at Reporting Date using Significant Unobservable Inputs (Level 3) - Preferred Shares
2015 2014
Fair value at January 1, recorded in other assets $ 280
$ 278
Gross unrealized gains, recorded in other comprehensive income (loss) 10
—
Gross unrealized losses, recorded in other comprehensive income (loss) —
(7 )
Fair value at June 30, recorded in other assets $ 290
$ 271
Gross unrealized gains, recorded in other comprehensive income (loss) 15
3
Fair value at September 30, recorded in other assets $ 305
$ 274

~~There were no realized gains or losses on AFS debt securities for the three and nine months ended September 30, 2015 and September 30, 2014.~~

~~Other Financial Instruments~~

We estimated the fair value of financing receivables using a discounted cash flow analysis based on current market assumptions for similar types of arrangements. Based upon the availability of market data, we have classified our financing receivables as Level Three. The primary sensitivity in these calculations is based on the selection of appropriate interest and discount rates. Fluctuations in these assumptions will result in different estimates ofinvestments approximates fair value. ~~For further information on financing receivables, see Note~~ 5.

~~We estimated the fair value of debt, excluding capital leases, which, as of September 30, 2015~~The securities are mandatorily redeemable between 2020 and December 31, 2014, consisted primarily of $250 million of 3.875% senior notes due 2016 (the "2016 Notes"), $196 million of 6.875% senior notes due 2019 (the "2019 Notes"), $250 million of 5.375% senior notes due 2021 (the "2021 Notes"), and $350 million of 3.375% senior notes due 2023 (the "2023 Notes" which, together with the 2016 Notes, the 2019 Notes, and the 2021 Notes are collectively referred to as the "Senior Notes"), bonds and other debt. Our Senior Notes and bonds are classified as Level Two due to the use and weighting of multiple market

inputs in the final price of the security. Market inputs include quoted market prices from active markets for identical securities, quoted market prices for identical securities in inactive markets, and quoted market prices in active and inactive markets for similar securities. We estimated the fair value of our other debt instruments using a discounted cash flow analysis based on current market inputs for similar types of arrangements. Based upon the availability of market data, we have classified our other debt as Level Three. The primary sensitivity in these calculations is based on the selection of appropriate discount rates. Fluctuations in these assumptions will result in different estimates of fair value.

~~The carrying amounts and fair values of our other financial instruments are as follows:~~

Asset (Liability)
September 30, 2015
Carrying Value Fair Value
Quoted Prices in
Active Markets for
Identical Assets
(Level One)

Significant Other
Observable Inputs
(Level Two)

Significant
Unobservable Inputs
(Level Three)
Financing receivables, net (current and long-term)
Secured financing to hotel owners $ —
$ —
$ —
$ —
$ —
Unsecured financing to hotel owners 21
21
—
—
21
Debt, excluding capital lease obligations (1,361 ) (1,433 ) —
(1,286 ) (147 )

Asset (Liability)
December 31, 2014
Carrying Value Fair Value
Quoted Prices in
Active Markets for
Identical Assets
(Level One)

Significant Other
Observable Inputs
(Level Two)

Significant
Unobservable Inputs
(Level Three)
Financing receivables, net (current and long-term)
Secured financing to hotel owners $ 26
$ 29
$ —
$ —
$ 29
Unsecured financing to hotel owners 15
14
—
—
14
Debt, excluding capital lease obligations (1,373 ) (1,479 ) —
(1,319 ) (160 )
2025.

5. FINANCING RECEIVABLES

~~We have divided our financing~~Financing receivables ~~which include loans~~at March 31, 2016 and other financing arrangements, into two portfolio segments based on their initial measurement, risk characteristics and our method for monitoring or assessing credit risk. These portfolio segments correspond directly with our assessed class of receivables andDecember 31, 2015 are as follows:

Secured Financing to Hotel Owners—These financing receivables are senior secured mortgage loans and are collateralized by underlying hotel properties currently in operation. At December 31, 2014, these loans represented financing provided to certain franchisees for the renovation and conversion of certain franchised hotels. At September 30, 2015, there are no outstanding secured financing to hotel owners.

Unsecured Financing to Hotel Owners—These financing receivables are primarily made up of individual unsecured loans and other types of financing arrangements provided to hotel owners. Our other financing receivables have stated maturities and interest rates. However, the expected repayment terms may be dependent on the future cash flows of the hotels and these instruments, therefore, are not considered loans

~~as the repayment dates are not fixed or determinable. Because the other types of financing arrangements are not considered loans, we do not include them in our impaired loans analysis.~~



	March 31, 2016			December 31, 2015
Unsecured financing to hotel owners	$	122		$	120
Less allowance for losses	(100		)	(98		)
Less current portion included in receivables, net	(2		)	(2		)
Total long-term financing receivables, net	$	20		$	20

During the ~~three months~~year ended ~~September 30,~~December 31, 2015, all of our outstanding secured financing receivables to hotel owners ~~financing receivables~~ were settled. We received net cash proceeds of $26 million, an unsecured financing receivable of $6 million, and preferred equity investments of $7 million. The preferred equity investments include a $6 million held-to-maturity debt security and a $1 million cost method investment, both of which are included within our owned and leased hotels segment. The settlements of the secured financing receivables resulted in a net recovery of $8 million, which has been recognized in other income (loss), net on our condensed consolidated statements of income during the three months ended September 30, 2015.

~~The two portfolio segments of financing receivables and their balances at September 30, 2015 and December 31, 2014 are as follows:~~

September 30, 2015 December 31, 2014
Secured financing to hotel owners $ —
$ 39
Unsecured financing to hotel owners 116
102
116
141
Less allowance for losses (95 ) (100 )
Less current portion included in receivables, net (1 ) (1 )
Total long-term financing receivables, net $ 20
$ 40

Allowance for Losses and Impairments

We individually assess all loans for impairment. In addition to loans, we include other types of financing arrangements in the unsecured financing to hotel owners portfolio which we do not assess individually for impairment. However, we regularly evaluate our reserves for these other types of financing arrangements and record provisions in the financing receivables allowance as necessary. Impairment charges for loans within both portfolios and reserves related to our other financing arrangements are recorded as provisions in the financing receivables allowance. We consider the provisions on all of our portfolio segments to be adequate based on the economic environment and our assessment of the future collectability of the outstanding loans.

—The following tables summarize the activity in our financing receivables allowance for the three ~~and nine~~ months ended ~~September 30, 2015~~March 31, 2016 and ~~September 30, 2014~~March 31, 2015:

Secured financing to hotel owners Unsecured financing to hotel owners Total
Allowance at January 1, 2015 $ 13
$ 87
$ 100
  Provisions 2
4
6
  Other Adjustments —
(1 ) (1 )
Allowance at June 30, 2015 $ 15
$ 90
$ 105
  Provisions 1
1
2
  Write-offs (1 ) —
(1 )
  Recoveries (9 ) —
(9 )
  Other Adjustments (6 ) 4
(2 )
Allowance at September 30, 2015 $ —
$ 95
$ 95



	Secured Financing		Unsecured Financing		Total
Allowance at January 1, 2016	$	—	$	98	$	98
Provisions	—		1		1
Other Adjustments	—		1		1
Allowance at March 31, 2016	$	—	$	100	$	100


	Secured financing to hotel owners		Unsecured financing to hotel owners			Total			Secured Financing		Unsecured Financing			Total
Allowance at January 1, 2014	$	13	$	83		$	96
Allowance at January 1, 2015									$	13	$	87		$	100
Provisions	—		3			3			—		2			2
Other Adjustments	—		1			1			—		(1		)	(1		)
Allowance at June 30, 2014	$	13	$	87		$	100
Provisions	—		2			2
Other Adjustments	—		(2		)	(2		)
Allowance at September 30, 2014	$	13	$	87		$	100
Allowance at March 31, 2015									$	13	$	88		$	101

~~We routinely evaluate loans within~~Credit Monitoring—Our unsecured financing receivables for impairment. To determine whether an impairment has occurred, we evaluate the collectability of both interest and principal. A loan is considered to be impaired when the Company determines that it is probable that we will not be able to collect all amounts due under the contractual terms. We do not record interest income for impaired loans unless cash is received, in which case the payment is recorded to other income (loss), net on the accompanying condensed consolidated statements of income.

~~An analysis of our loans included in secured financing to hotel owners and unsecured financing to hotel owners had the following impaired amounts at~~ ~~September 30, 2015~~ ~~and~~ ~~December 31, 2014, all of which had a related allowance recorded against them:~~

Impaired Loans
September 30, 2015
Gross Loan Balance (Principal and Interest)
Unpaid
Principal
Balance

Related
Allowance

Average
Recorded
Loan Balance
Secured financing to hotel owners $ —
$ —
$ —
$ —
Unsecured financing to hotel owners 57
41
(57 ) 54

Impaired Loans
December 31, 2014
Gross Loan Balance (Principal and Interest)
Unpaid
Principal
Balance

Related
Allowance

Average
Recorded
Loan Balance
Secured financing to hotel owners $ 39
$ 39
$ (13 ) $ 39
Unsecured financing to hotel owners 52
37
(52 ) 52

~~Interest income recognized on these impaired loans within other income (loss), net on our condensed consolidated statements of income for the~~ ~~three and nine~~ ~~months ended~~ ~~September 30, 2015~~ ~~and~~ ~~September 30, 2014~~ ~~was~~are as follows:

Three Months Ended September 30, Nine Months Ended September 30,
2015 2014 2015 2014
Secured financing to hotel owners $ —
$ —
$ 1
$ 1
Unsecured financing to hotel owners —
—
—
—



	March 31, 2016
	Gross Loan Balance (Principal and Interest)		Related Allowance			Net Financing Receivables		Gross Receivables on Non-Accrual Status
Loans	$	15	$	—		$	15	$	—
Impaired loans (1)	60		(60		)	—		60
Total loans	75		(60		)	15		60
Other financing arrangements	47		(40		)	7		40
Total unsecured financing receivables	$	122	$	(100	)	$	22	$	100

~~Credit Monitoring~~

~~On an ongoing basis, we monitor the credit quality of our financing receivables based on payment activity.~~

~~Past-due Receivables—We determine financing receivables to be past due based on the contractual terms of each individual financing receivable agreement.~~

~~Non-Performing Receivables—Receivables are determined to be non-performing based upon the following criteria:~~ (1) ~~if interest or~~The unpaid principal is more than 90 days past due for secured financing to hotel owners and unsecured financing to hotel owners or (2) if an impairment charge has been recorded for a loan or a provision established for our other financing arrangements. For the three and nine months ended September 30, 2015 and September 30, 2014, no interest incomebalance was ~~accrued for secured financing to hotel owners and unsecured financing to hotel owners more than 90 days past due.~~

~~If a financing receivable is non-performing, we place the financing receivable on~~ ~~non-accrual status. We only recognize interest income when cash is received for financing receivables on~~ ~~non-accrual status. Accrual of interest income is resumed when the receivable becomes contractually current and collection doubts are removed.~~

~~The following tables summarize our aged analysis of past-due financing receivables by portfolio segment, the gross balance of financing receivables greater than 90 days past due~~$43 million and the ~~gross~~average recorded loan balance ~~of financing receivables on~~ ~~non-accrual status~~was $59 million as of March 31, 2016.



	December 31, 2015
	Gross Loan Balance (Principal and Interest)		Related Allowance			Net Financing Receivables		Gross Receivables on Non-Accrual Status
Loans	$	15	$	—		$	15	$	—
Impaired loans (2)	58		(58		)	—		58
Total loans	73		(58		)	15		58
Other financing arrangements	47		(40		)	7		40
Total unsecured financing receivables	$	120	$	(98	)	$	22	$	98

~~September 30, 2015~~(2) The unpaid principal balance was $42 million and the average recorded loan balance was $55 million as of December 31, ~~2014~~:

Analysis of Financing Receivables
September 30, 2015

Receivables
Past Due
Greater than 90 Days Past Due
Receivables on
Non-Accrual
Status
Secured financing to hotel owners $ —
$ —
$ —
Unsecured financing to hotel owners* 3
3
88
Total $ 3
$ 3
$ 88

Analysis of Financing Receivables
December 31, 2014

Receivables
Past Due
Greater than 90 Days Past Due
Receivables on
Non-Accrual
Status
Secured financing to hotel owners $ —
$ —
$ 39
Unsecured financing to hotel owners* 3
3
87
Total $ 3
$ 3
$ 126

* Certain of these receivables have been placed on non-accrual status and we have recorded allowances for these receivables based on estimates of future cash flows available for payment of these financing receivables. However, a majority of these payments are not past due.2015

Fair Value—We estimated the fair value of financing receivables which are classified as Level Three in the fair value hierarchy to be approximately $22 million as of March 31, 2016 and December 31, 2015. During the three months ended March 31, 2016 and March 31, 2015, there were no transfers between levels of the fair value hierarchy.

6. ACQUISITIONS AND DISPOSITIONS

~~We continually assess strategic acquisitions and dispositions to complement our current business.~~ During the ~~nine~~three months ended ~~September 30,~~March 31, 2016 and March 31, 2015, we did not have any acquisitions.

~~Park Hyatt New York~~Dispositions—During the three months ended ~~September 30, 2014,~~March 31, 2016, we acquired the Park Hyatt New York hotel for a purchase price of approximately $392 million, including $1 million of cash. Of the $391 million net purchase price, significant assets acquired include $386 million of property and equipment, $3 million of inventories,

~~and $2 million of prepaids and other assets, which~~did not have been recorded in our owned and leased hotels segment. See "Like-Kind Exchange Agreements" below, as the purchase of the Park Hyatt New York has been designated as replacement property in a like-kind exchange.

~~Hyatt Regency Grand Cypress~~any dispositions.~~—During the nine months ended September 30, 2014, we exercised our purchase option under the capital lease to acquire the Hyatt Regency Grand Cypress hotel for $191 million.~~

~~Dispositions~~

Hyatt Regency Indianapolis—During the ~~nine~~three months ended ~~September 30,~~March 31, 2015, we sold Hyatt Regency Indianapolis for $69 million, net of closing costs, to an unrelated third party, and entered into a long-term franchise agreement with the owner of the property. The sale resulted in a pre-tax gain of $8 million, which has been recognized in ~~gains~~gain on ~~sales~~sale of real estate on our condensed consolidated statements of income during the ~~nine~~three months ended ~~September 30, 2015. The operating results and financial position of this hotel prior to the sale remain within our owned and leased hotels segment. As of December~~March 31, ~~2014, we had classified the assets and liabilities of this property as held for sale on our condensed consolidated balance sheets.~~

~~Land Held for Development~~—During the nine months ended September 30, 2015, we sold land and construction in progress for $14 million to an unconsolidated hospitality venture in which Hyatt has a 40% ownership interest. As of September 30, 2015, we received $12 million in cash proceeds and $2 million is recorded as a receivable on our condensed consolidated balance sheets. The assets prior to the sale remain within our owned and leased hotels segment.

~~A Hyatt House Hotel~~—During the nine months ended September 30, 2015, we sold a select service property for $5 million to an unrelated third party resulting in a $1 million pre-tax gain which has been recognized in gains on sales of real estate on our condensed consolidated statements of income during the nine months ended September 30, 2015. The operating results and financial position of this hotel prior to the sale remain within our owned and leased hotels segment.

~~Hyatt, Hyatt Place, Hyatt House 2014—During the~~ ~~nine months ended~~ ~~September 30, 2014, we sold nine select service properties and one full service property for a total of~~ ~~$311 million~~, net of closing costs, to an unrelated third party. In connection with the sale, we transferred net cash and cash equivalents of $1 million, resulting in a net sales price of $310 million. We recorded a pre-tax gain of approximately $65 million for the nine months ended September 30, 2014. The properties will remain Hyatt-branded hotels for a minimum of 25 years under long-term agreements. The gain has been recognized in gains on sales of real estate on our condensed consolidated statements of income during the nine months ended September 30, 2014. The operating results and financial position of these hotels prior to the sale remain within our owned and leased hotels segment. See "Like-Kind Exchange Agreements" below, as proceeds from the sales have been used in a like-kind exchange.

As a result of certain ~~of the above-mentioned~~ dispositions, we have agreed to provide indemnifications to third-party purchasers for certain liabilities incurred prior to sale and for breach of certain representations and warranties made during the sales process, such as representations of valid title, authority, and environmental issues that may not be limited by a contractual monetary amount. These indemnification agreements survive until the applicable statutes of limitation expire, or until the agreed upon contract terms expire.

~~Like-Kind Exchange Agreements~~

Periodically, we enter into like-kind exchange agreements upon the disposition of certain properties. Pursuant to the terms of these agreements, the proceeds from the sales are placed into an escrow account administered by a qualified intermediary. The proceeds are recorded to restricted cash on our condensed consolidated balance sheets and released once they are utilized as part of a like-kind exchange agreement or when a like-kind exchange agreement is not completed within the allowable time period.

In conjunction with the sale of five Hyatt Place properties during the year ended December 31, 2014, we entered into like-kind exchange agreements with a qualified intermediary. Pursuant to the like-kind exchange agreements, the combined net proceeds of $51 million from the sales of these hotels were placed into an escrow account administered by a qualified intermediary. Accordingly, we classified net proceeds of $51 million related to the properties as restricted cash on our condensed consolidated balance sheets as of December 31, 2014.~~During the nine months ended September 30, 2015, we released the net proceeds since the identified replacement property was not acquired in order to complete the exchange.~~

In conjunction with the sale of thirty-eight select service properties during the year ended December 31, 2014, we entered into two separate like-kind exchange agreements with a qualified intermediary for twenty-seven of the select service hotels. In the fourth quarter of 2014, we utilized the net proceeds from twenty-one of the twenty-seven hotels as part of the like-kind exchange agreement to acquire the Park Hyatt New York. Accordingly, we classified net proceeds of $92 million related to the remaining six properties as restricted cash on our condensed consolidated balance sheets as of December 31, 2014. During the nine months ended September 30, 2015, we released the net proceeds from restricted cash as the intermediary distributed these funds from escrow to complete the reverse like-kind exchange transaction in connection with the acquisition of the Hyatt Regency Lost Pines Resort and Spa.

In conjunction with the sale of nine select service properties and one full service property during the nine months ended September 30, 2014, we entered into like-kind exchange agreements with a qualified intermediary for seven of the select service hotels. During the nine months ended September 30, 2014, we recorded and released net proceeds of $232 million from restricted cash as they were utilized as part of the like-kind exchange agreement to acquire the Hyatt Regency Orlando.

In conjunction with the sale of Hyatt Key West during the year ended December 31, 2013, we entered into a like-kind exchange agreement with a qualified intermediary. Pursuant to the like-kind exchange agreement, the $74 million net proceeds from the sale of this hotel were placed into an escrow account administered by the intermediary. During the nine months ended September 30, 2014, the net proceeds were released from restricted cash as they were utilized as part of the like-kind exchange agreement to acquire the Hyatt Regency Orlando.

7. ~~GOODWILL AND~~ INTANGIBLE ASSETS

We review the carrying value of our goodwill and indefinite-lived brand intangible asset during our annual impairment test during the fourth quarter of each year using balances as of October 1 and at an interim date if indications of impairment exist by performing either a qualitative or quantitative assessment. When determining fair value, we utilize internally developed discounted future cash flow models, third party appraisals and, if appropriate, current estimated net sales proceeds from pending offers. We then compare the estimated fair value to our carrying value. If the carrying value of our goodwill is in excess of the fair value, we must determine our implied fair value of goodwill to evaluate if any impairment charge is necessary. If the carrying value of our indefinite-lived brand intangible asset is in excess of the fair value, an impairment charge is recognized in an amount equal to the excess. During the three and nine months ended September 30, 2015 and September 30, 2014, no impairment charges were recorded related to goodwill or our indefinite-lived brand intangible asset. Goodwill was $130 million and $133 million at September 30, 2015 and December 31, 2014, respectively. As of December 31, 2014, we classified $14 million of goodwill related to Hyatt Regency Indianapolis as held for sale on our condensed consolidated balance sheets. During the nine months ended September 30, 2015, we sold Hyatt Regency Indianapolis (see Note 6).

Definite-lived intangible assets primarily include management and franchise agreement intangibles, lease related intangibles and advanced booking intangibles. Management and franchise agreement intangibles are generally amortized on a straight-line basis over their contract terms, which range from approximately 5 to 30 years. Lease related intangibles are amortized on a straight-line basis over the lease term. Advanced booking intangibles are generally amortized on a ~~straight-~~line basis over the period of the advanced booking. Definite-lived intangibles are tested for impairment whenever events or circumstances indicate that the carrying amount may not be recoverable. There were no impairment charges related to definite-lived intangible assets during the three and nine months ended September 30, 2015 and September 30, 2014.

The following is a summary of intangible assets at ~~September 30, 2015~~March 31, 2016 and December 31, ~~2014~~2015:


	September 30, 2015			Weighted- Average Useful Lives in Years	December 31, 2014			March 31, 2016			Weighted- Average Useful Lives in Years	December 31, 2015
Management and franchise agreement intangibles	$	521		25	$	511		$	522		25	$	535
Lease related intangibles	139			111	143			133			111	136
Advanced booking intangibles	12			5	12			12			5	12
Brand intangible	7			—	7			7			—	7
Other	8			11	8			7			12	8
	687				681			681				698
Accumulated amortization	(146		)		(129		)
Less accumulated amortization								(135		)		(151		)
Intangibles, net	$	541			$	552		$	546			$	547

Amortization expense relating to intangible assets for the three months ended March 31, 2016 and March 31, 2015 was as follows:

Three Months Ended September 30, Nine Months Ended September 30,
2015 2014 2015 2014
Amortization expense $ 8
$ 7
$ 23
$ 22



	Three Months Ended March 31,
	2016		2015
Amortization expense	$	7	$	8

8.DEBT

Long-term debt, net of current maturities, at March 31, 2016 and December 31, 2015, was $1,441 million and $1,042 million, respectively.

Senior Notes—During the three months ended March 31, 2016, we issued $400 million of 4.850% senior notes due 2026, at an issue price of 99.920% (the "2026 Notes"). We received net proceeds of $396 million from the sale of the 2026 Notes, after deducting discounts and offering expenses of approximately $4 million. We intend to use the net proceeds for general corporate purposes, including to pay for the redemption of the 2016 Notes (as

defined below). Interest on the 2026 Notes is payable semi-annually on March 15 and September 15 of each year, beginning on September 15, 2016.

The 2026 Notes, together with our $250 million of 3.875% senior notes due 2016 (the "2016 Notes"), $196 million of 6.875% senior notes due 2019 (the "2019 Notes"), $250 million of 5.375% senior notes due 2021 (the "2021 Notes"), and $350 million of 3.375% senior notes due 2023 (the "2023 Notes"), are collectively referred to as the "Senior Notes."

Senior Secured Term Loan—During the three months ended March 31, 2016, we repaid the senior secured term loan related to Hyatt Regency Lost Pines Resort and Spa of $64 million.

Debt Redemption—During the three months ended March 31, 2016, we gave notice to redeem our outstanding 2016 Notes, of which an aggregate principal amount of $250 million was outstanding as of March 31, 2016. See Note 18.

Fair Value—We estimated the fair value of debt, excluding capital leases, which consists of our Senior Notes, bonds and other long-term debt. Our Senior Notes and bonds are classified as Level Two due to the use and weighting of multiple market inputs in the final price of the security. Market inputs include quoted market prices from active markets for identical securities, quoted market prices for identical securities in inactive markets, and quoted market prices in active and inactive markets for similar securities. We estimated the fair value of our other long-term debt instruments using discounted cash flow analysis based on current market inputs for similar types of arrangements. Based upon the lack of availability of market data, we have classified our other long-term debt as Level Three. The primary sensitivity in these calculations is based on the selection of appropriate discount rates. Fluctuations in these assumptions will result in different estimates of fair value. During the three months ended March 31, 2016 and March 31, 2015, there were no transfers between levels of the fair value hierarchy.



	Asset (Liability)
	March 31, 2016
	Carrying Value			Fair Value			Quoted Prices in Active Markets for Identical Assets (Level One)		Significant Other Observable Inputs (Level Two)			Significant Unobservable Inputs (Level Three)
Debt, excluding capital lease obligations	$	(1,690	)	$	(1,791	)	$	—	$	(1,709	)	$	(82	)



	Asset (Liability)
	December 31, 2015
	Carrying Value			Fair Value			Quoted Prices in Active Markets for Identical Assets (Level One)		Significant Other Observable Inputs (Level Two)			Significant Unobservable Inputs (Level Three)
Debt, excluding capital lease obligations	$	(1,354	)	$	(1,421	)	$	—	$	(1,277	)	$	(144	)

9. LIABILITIES

Other long-term liabilities at ~~September 30, 2015~~March 31, 2016 and December 31, ~~2014~~2015 consist of the following:


	September 30, 2015		December 31, 2014		March 31, 2016		December 31, 2015
Deferred gains on sales of hotel properties	$	373	$	383	$	362	$	367
Deferred compensation plans	319		341		332		333
Hyatt Gold Passport Fund	312		284		275		280
Guarantee liabilities (see Note 10)	91		110
Guarantee liabilities (see Note 11)					113		120
Other	341		283		364		347
Total	$	1,436	$	1,401	$	1,446	$	1,447

Accrued expenses and other current liabilities includes ~~$145~~$174 million and ~~$132~~$166 million of liabilities related to the Hyatt Gold Passport Fund at ~~September 30, 2015~~March 31, 2016 and December 31, ~~2014,~~2015, respectively.

910. INCOME TAXES

The effective income tax rates for the three months ended ~~September 30,~~March 31, 2016 and March 31, 2015, were 31.7% and ~~September 30, 2014, were 44.6% and 47.7%~~35.3%, respectively. ~~The~~Our effective ~~income~~ tax ~~rates~~rate decreased for ~~the nine months ended September 30, 2015 and September 30, 2014, were 45.3% and 37.8%, respectively.~~

~~For~~ the three months ended ~~September 30,~~March 31, 2016 compared to the three months ended March 31, 2015, ~~the effective tax rate differs from the U.S. statutory federal income tax rate of 35%~~ primarily due to the ~~effect of state taxes on operations, the effect of certain foreign joint venture losses that are not benefited and a $4 million adjustment to true-up the provision for the U.S.~~ tax return filing. For the nine months ended September 30, 2015, the effective tax rate differs from the U.S. statutory federal income tax rate of 35% primarily due to the above-mentioned items, as well as a $2 million benefit for deferred tax adjustments to reflect the impact of ~~regulations issued by~~global transfer pricing changes implemented during the ~~Internal Revenue Service ("IRS") in the first~~fourth quarter of 2015, a benefit of $4 million (including $3 million of interest and penalties) related to the expiration of statutes of limitations in certain foreign locations and a benefit of $2 million related to a state legislative change enacted in the second quarter.

For the three months ended September 30, 2014, the effective tax rate differs from the U.S. statutory federal income tax rate of 35% primarily due to the impact of our earnings in locations with higher tax rates; an expense of $6 million (including $1 million of interest) due to a provision for uncertain tax positions, primarily offset

by other insignificant items. For the nine months ended September 30, 2014, the effective tax rate differs from the U.S. statutory federal income tax rate of 35% primarily due to the above-mentioned items, offset by a benefit of $4 million (including $2 million of interest and penalties) related to the expiration of statutes of limitations in certain foreign locations, a benefit of $2 million related to the settlement of tax audits, a $4 million benefit for the release of a valuation allowance of a foreign subsidiary and a benefit of $2 million related to a state legislative change enacted in the first quarter of 2014.2015.

Unrecognized tax benefits were ~~$106~~$108 million and ~~$40~~$110 million at ~~September 30, 2015~~March 31, 2016 and December 31, ~~2014,~~2015, respectively, of which ~~$23~~$24 million and ~~$20~~$21 million, respectively, would impact the effective tax rate if recognized. ~~The increase in unrecognized tax benefits during the quarter is primarily related to an accrual of $59 million for the U.S. tax treatment of the Hyatt Gold Passport Fund taken in prior years.~~

We are currently under audit by the Internal Revenue Service for tax years 2009 through 2011. In connection with such audit, we received a Notice of Proposed Adjustment ("NOPA") during the three months ended September 30, 2015 related to the tax treatment of the Hyatt Gold Passport Fund. The IRS is asserting that the Company should recognize income in the amount of the cash received by the fund and defer the tax deduction relating to the outstanding future rewards redemption liability until cash payments are made from the program. The Company disagrees with the NOPA and plans to pursue all available remedies, including the filing of a formal appeal upon receipt of the Revenue Agents Reports at the conclusion of the 2009 through 2011 audit. The NOPA, if sustained, would result in an additional current tax liability of $127 million (including interest of $29 million) that would be primarily offset by a deferred tax asset and therefore only a portion of the related interest would have an impact on the effective tax rate if recognized.

1011. COMMITMENTS AND CONTINGENCIES

In the ordinary course of business, we enter into various commitments, guarantees, surety bonds, and letter of credit agreements, which are discussed below:

Commitments—As of ~~September 30, 2015~~March 31, 2016, we are committed, under certain conditions, to lend or invest up to $~~207~~166 million, net of any related letters of credit, in various business ventures.

Performance Guarantees—Certain of our contractual agreements with third-party owners require us to guarantee payments to the owners if specified levels of operating profit are not achieved by their hotels. At inception of a performance guarantee, we recognize a guarantee obligation liability for the fair value of our guarantee obligation, which we amortize into income using a systematic and rational risk-based approach over the term of the performance guarantee. To the extent we determine an obligation to fund under a guarantee is both probable and estimable, we record an expense for the separate contingent liability.

Our most significant performance guarantee relates to four managed hotels in France that we began managing in the second quarter of 2013 ("the four managed hotels in France")~~; that guarantee~~, which has a term of 7 years, with approximately ~~4.75~~4.25 years remaining, and does not have an annual cap. The remaining maximum exposure related to our performance guarantees at ~~September 30, 2015~~March 31, 2016 was ~~$429~~$419 million, of which ~~€362~~€344 million ($~~404~~392 million using exchange rates as of ~~September 30, 2015~~March 31, 2016) ~~relates~~related to the four managed hotels in France.

We had total net guarantee liabilities of ~~$85 million and $111~~$97 million at ~~September 30, 2015~~March 31, 2016 and December 31, ~~2014, respectively,~~2015, which included ~~$86~~$76 million and ~~$103~~$81 million recorded in other long-term liabilities, $1$22 million and $8$16 million in accrued expenses and other current liabilities and $2$1 million and $0 in receivables on our condensed consolidated balance sheets, respectively. Our total guarantee liabilities are comprised of the fair value of the guarantee obligation liabilities recorded upon inception, net of amortization and any separate contingent liabilities, ~~or receivables,~~ net of cash payments. Performance guarantee expense or income and income from amortization of the guarantee obligation liabilities are recorded in other ~~income (loss),~~loss, net on the condensed consolidated statements of income, see Note ~~16.~~17.

The following table details the total ~~net~~ performance guarantee liability (inclusive of the initial guarantee ~~obligation~~ liability, net of amortization and the contingent liability, ~~or receivable,~~ net of cash payments):

The Four Managed Hotels in France Other Performance Guarantees All Performance Guarantees
2015 2014 2015 2014 2015 2014
Beginning balance, January 1 $ 106
$ 123
$ 5
$ 6
$ 111
$ 129
Amortization of initial guarantee obligation liability into income (5 ) (4 ) —
—
(5 ) (4 )
Performance guarantee (income) expense 15
12
(1 ) 1
14
13
Net (payments) receipts during the period (22 ) (20 ) —
(2 ) (22 ) (22 )
Foreign currency exchange (gain) loss (9 ) —
—
—
(9 ) —
Ending balance, June 30 $ 85
$ 111
$ 4
$ 5
$ 89
$ 116
Amortization of initial guarantee obligation liability into income (2 ) (1 ) (1 ) (1 ) (3 ) (2 )
Performance guarantee (income) expense (1 ) (1 ) (1 ) 1
(2 ) —
Net (payments) receipts during the period —
—
1
1
1
1
Foreign currency exchange (gain) loss —
(8 ) —
—
—
(8 )
Ending balance, September 30 $ 82
$ 101
$ 3
$ 6
$ 85
$ 107



	The Four Managed Hotels in France						Other Performance Guarantees						All Performance Guarantees
	2016			2015			2016			2015			2016			2015
Beginning balance, January 1	$	93		$	106		$	4		$	5		$	97		$	111
Amortization of initial guarantee obligation liability into income	(8		)	(2		)	—			—			(8		)	(2		)
Performance guarantee expense, net	19			16			—			—			19			16
Net (payments) receipts during the period	(14		)	1			(1		)	(1		)	(15		)	—
Foreign currency exchange, net	4			(13		)	—			—			4			(13		)
Ending balance, March 31	$	94		$	108		$	3		$	4		$	97		$	112

Additionally, we enter into certain management contracts where we have the right, but not an obligation, to make payments to certain hotel owners if their hotels do not achieve specified levels of operating profit. If we choose not to fund the shortfall, the hotel owner has the option to terminate the management contract. As of ~~September 30, 2015~~March 31, 2016 and December 31, ~~2014,~~2015, there were no amounts recorded ~~in accrued expenses and other current liabilities~~on our condensed consolidated balance sheets related to these performance test clauses.

Debt Repayment Guarantees—We have entered into various debt repayment guarantees primarily related to our unconsolidated hospitality ~~ventures. The maximum exposure under these agreements as of~~ ~~September 30, 2015~~ ~~was~~ ~~$222 million~~.ventures and certain managed hotels. As of ~~September 30, 2015~~March 31, 2016, we had a $537 million liability representing the carrying value of these guarantees, ~~recorded~~net of amortization within other long-term liabilities on our condensed consolidated balance ~~sheets with an offset to investments.~~sheets. Included within debt guarantees are the following:


Property Description	Maximum Guarantee Amount		Amount Recorded at September 30, 2015		Amount Recorded at December 31, 2014		Maximum Guarantee Amount		Amount Recorded at March 31, 2016		Amount Recorded at December 31, 2015		Year of Guarantee Expiration
Hotel properties in India							$	170	$	26	$	27	2020
Hotel property in Brazil	$	73	$	2	$	2	74		3		4		2020
Vacation ownership property	55		—		—		34		—		—		2016
Hotel property in Minnesota							25		2		2		2021
Hotel property in Arizona							23		3		3		2019
Hotel property in Hawaii	30		—		1		15		3		3		2017
Hotel property in Minnesota	25		3		3
Hotel property in Colorado	15		—		1		15		—		—		2016
Other	24		—		—		21		—		—		various, through 2020
Total Debt Repayment Guarantees	$	222	$	5	$	7	$	377	$	37	$	39

With respect to certain debt repayment guarantees related to unconsolidated hospitality ~~venture properties,~~ventures, the Company has agreements with its respective partners that require each partner to pay a ~~pro-~~pro rata portion of the guarantee amount ~~generally~~ based on each partner’s ownership percentage. ~~With respect~~In relation to ~~certain~~the vacation ownership property debt repayment ~~guarantees related to hotel and vacation ownership properties,~~guarantee, for which we no longer have an investment in the ~~Company has agreements with third parties that allow~~unconsolidated venture, we have the ~~Company~~ability to fully recover from third parties any amounts we may be required to fund. Assuming successful enforcement of these ~~types of~~ agreements with our respective partners and third parties, our maximum exposure under the various debt repayment guarantees as of ~~September 30, 2015~~ is ~~$100 million~~.March 31, 2016 would be $260 million. Additionally, with respect to the debt repayment guarantee associated with the hotel properties in India, we have the contractual right to recover all amounts funded under the guarantee from the unconsolidated hospitality venture, in which we have a 50% ownership interest. Furthermore, under certain conditions as stated in the hospitality ventures' operating agreements, we have the right to force the sale of the hotel properties in India in order to recover any amounts funded under the guarantee.

~~Self~~ Insurance—The Company obtains commercial insurance for potential losses for general liability, workers' compensation, automobile liability, employment practices, crime, property and other miscellaneous coverages. A portion of the risk is retained on a self insurance basis primarily through a U.S. based and licensed captive

insurance company that is a wholly owned subsidiary of Hyatt and generally insures our deductibles and retentions. Reserve requirements are established based on actuarial projections of ultimate losses. Losses estimated to be paid within twelve months are $3836 million and ~~$24~~$35 million as of ~~September 30, 2015~~March 31, 2016 and December 31, ~~2014,~~2015, respectively, and are classified within accrued expenses and other current liabilities on our condensed consolidated balance sheets, while losses expected to be payable in later periods are $5461 million and ~~$63~~$57 million as of ~~September 30, 2015~~March 31, 2016 and December 31, ~~2014,~~2015, respectively, and are included in other long-term liabilities on our condensed consolidated balance sheets. At ~~September 30, 2015~~March 31, 2016, standby letters of credit amounting to $7 million ~~had~~have been issued to provide collateral for the estimated claims, which are guaranteed by us. For further discussion, see the "—Letters of Credit" section of this footnote.

At March 31, 2016, we have a $3 million liability related to our estimated exposure for a cyber security malware issue that occurred in 2015. We maintain a separate cyber security insurance policy with a deductible of $3 million and expect our exposure to exceed our deductible but be significantly less than our maximum insurance coverage.

Collective Bargaining Agreements—At ~~September 30, 2015~~March 31, 2016, approximately 26% of our U.S. based employees were covered by various collective bargaining agreements, generally providing for basic pay rates, working hours, other conditions of employment and orderly settlement of labor disputes. Generally, labor relations have been maintained in a normal and satisfactory manner, and we believe that our employee relations are ~~satisfactory.~~good.

Surety Bonds—Surety bonds issued on our behalf totaled $23 million as of ~~September 30, 2015~~March 31, 2016 and primarily relate to workers’ compensation, taxes, licenses and utilities related to our lodging operations.

Letters of Credit—Letters of credit outstanding on our behalf as of ~~September 30, 2015~~March 31, 2016 totaled $56227 million, ~~the majority of~~ which relate to our ongoing ~~operations.~~operations and securitization of our performance under our debt repayment guarantee associated with the hotel properties in India, which is only called upon if we default on our guarantee. The ~~$56~~$227 million letters of credit outstanding do not reduce the available capacity under our revolving credit facility.

Capital Expenditures—As part of our ongoing business operations, significant expenditures are required to complete renovation projects that have been approved.

Other—We act as general partner of various partnerships owning hotel properties subject to mortgage indebtedness. These mortgage agreements generally limit the lender’s recourse to security interests in the assets financed and/or other assets of the partnership(s) and/or the general partner(s) thereof.

In conjunction with financing obtained for our unconsolidated hospitality ventures, we may provide standard indemnifications to the lender for loss, liability or damage occurring as a result of our actions or actions of the other hospitality venture owners.

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 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 condensed consolidated financial statements.

1112. EQUITY

Stockholders’ Equity and Noncontrolling Interests—The following table details the equity activity for the ~~nine~~three months ended~~September 30,~~ March 31, 2016 and March 31, 2015, ~~and September 30, 2014,~~ respectively.


										Stockholders’ equity			Noncontrolling interests in consolidated subsidiaries		Total equity
Balance at January 1, 2016										$	3,991		$	4	$	3,995
Net income										34			—		34
Other comprehensive income										20			—		20
Repurchase of common stock										(63		)	—		(63		)
Employee stock plan issuance										1			—		1
Share-based payment activity										13			—		13
Balance at March 31, 2016										$	3,996		$	4	$	4,000

	Stockholders’ equity			Noncontrolling interests in consolidated subsidiaries			Total equity			Stockholders’ equity			Noncontrolling interests in consolidated subsidiaries		Total equity
Balance at January 1, 2015	$	4,627		$	4		$	4,631		$	4,627		$	4	$	4,631
Net income	87			—			87			22			—		22
Other comprehensive loss	(66		)	—			(66		)	(53		)	—		(53		)
Repurchase of common stock	(539		)	—			(539		)	(187		)	—		(187		)
Directors compensation	2			—			2
Employee stock plan issuance	3			—			3			1			—		1
Share based payment activity	16			—			16
Balance at September 30, 2015	$	4,130		$	4		$	4,134


Balance at January 1, 2014	$	4,769		$	8		$	4,777
Net income	162			2			164
Other comprehensive loss	(41		)	—			(41		)
Repurchase of common stock	(229		)	—			(229		)
Directors compensation	2			—			2
Employee stock plan issuance	2			—			2
Share based payment activity	17			—			17
Other	1			(2		)	(1		)
Balance at September 30, 2014	$	4,683		$	8		$	4,691
Share-based payment activity										12			—		12
Balance at March 31, 2015										$	4,422		$	4	$	4,426

Accumulated Other Comprehensive Loss—The following table details the accumulated other comprehensive loss activity for the three ~~and nine~~ months ended ~~September 30, 2015~~March 31, 2016 and ~~September 30, 2014,~~March 31, 2015, respectively.


												Balance at January 1, 2016			Current period other comprehensive income (loss) before reclassification			Amount Reclassified from Accumulated Other Comprehensive Loss		Balance at March 31, 2016
Foreign currency translation adjustments												$	(257	)	$	24		$	—	$	(233	)
Unrealized gains (losses) on AFS securities												39			(4		)	—		35
Unrecognized pension cost												(7		)	—			—		(7		)
Unrealized losses on derivative instruments												(5		)	—			—		(5		)
Accumulated Other Comprehensive Income (Loss)												$	(230	)	$	20		$	—	$	(210	)

	Balance at July 1, 2015			Current period other comprehensive income (loss) before reclassification			Amount Reclassified from Accumulated Other Comprehensive Loss (a)		Balance at September 30, 2015			Balance at January 1, 2015			Current period other comprehensive income (loss) before reclassification			Amount Reclassified from Accumulated Other Comprehensive Loss		Balance at March 31, 2015
Foreign currency translation adjustments	$	(202	)	$	(56	)	$	21	$	(237	)	$	(155	)	$	(55	)	$	—	$	(210	)
Unrealized gains on AFS securities	12			9			—		21			6			2			—		8
Unrecognized pension cost	(5		)	—			—		(5		)	(5		)	—			—		(5		)
Unrealized gains (losses) on derivative instruments	(6		)	1			—		(5		)
Unrealized losses on derivative instruments												(6		)	—			—		(6		)
Accumulated Other Comprehensive Loss	$	(201	)	$	(46	)	$	21	$	(226	)	$	(160	)	$	(53	)	$	—	$	(213	)
(a) Foreign currency translation adjustments, net of a tax impact of $0, reclassified from accumulated other comprehensive loss were recognized within equity earnings (losses) from unconsolidated hospitality ventures on our condensed consolidated statements of income.
	Balance at January 1, 2015			Current period other comprehensive income (loss) before reclassification			Amount Reclassified from Accumulated Other Comprehensive Loss (a)		Balance at September 30, 2015
Foreign currency translation adjustments	$	(155	)	$	(103	)	$	21	$	(237	)
Unrealized gains on AFS securities	6			15			—		21
Unrecognized pension cost	(5		)	—			—		(5		)
Unrealized gains (losses) on derivative instruments	(6		)	1			—		(5		)
Accumulated Other Comprehensive Loss	$	(160	)	$	(87	)	$	21	$	(226	)
(a) Foreign currency translation adjustments, net of a tax impact of $0, reclassified from accumulated other comprehensive loss were recognized within equity earnings (losses) from unconsolidated hospitality ventures on our condensed consolidated statements of income.
	Balance at July 1, 2014			Current period other comprehensive income (loss) before reclassification			Amount Reclassified from Accumulated Other Comprehensive Loss		Balance at September 30, 2014
Foreign currency translation adjustments	$	(49	)	$	(49	)	$	—	$	(98	)
Unrealized gains (losses) on AFS securities	—			—			—		—
Unrecognized pension cost	(5		)	—			—		(5		)
Unrealized gains (losses) on derivative instruments	(7		)	1			—		(6		)
Accumulated Other Comprehensive Loss	$	(61	)	$	(48	)	$	—	$	(109	)

	Balance at January 1, 2014			Current period other comprehensive income (loss) before reclassification			Amount Reclassified from Accumulated Other Comprehensive Loss		Balance at September 30, 2014
Foreign currency translation adjustments	$	(62	)	$	(36	)	$	—	$	(98	)
Unrealized gains (losses) on AFS securities	6			(6		)	—		—
Unrecognized pension cost	(5		)	—			—		(5		)
Unrealized gains (losses) on derivative instruments	(7		)	1			—		(6		)
Accumulated Other Comprehensive Loss	$	(68	)	$	(41	)	$	—	$	(109	)

Share Repurchase—During 2016, 2015, ~~2014~~ and ~~2013~~2014, the Company's board of directors authorized the repurchase of up to ~~$400~~$250 million ~~$700~~, $400 million and ~~$400~~$700 million, respectively, of the Company's common stock. These repurchases may be made from time to time in the open market, in privately negotiated transactions, or otherwise, including pursuant to a Rule 10b5-1 plan, at prices that the Company deems appropriate and subject to market conditions, applicable law and other factors deemed relevant in the Company's sole discretion. The common stock repurchase program applies to the Company’s Class A common stock and/or the Company’s Class B common stock. The common stock repurchase program does not obligate the Company to repurchase any dollar amount or number of shares of common stock and the program may be suspended or discontinued at any time.

During the ~~nine~~three months ended ~~September 30,~~March 31, 2016 and March 31, 2015, ~~and September 30, 2014,~~ the Company repurchased ~~9,614,463~~1,527,750 and ~~4,048,230~~3,192,629 shares of common stock, respectively. These shares of common stock were repurchased at a weighted-average price of ~~$56.05~~$41.37 and ~~$56.65~~$58.67 per share, respectively, for an aggregate purchase price of ~~$539~~$63 million and ~~$229~~$187 million, respectively, excluding related expenses that were insignificant in both periods. ~~Of the $229 millionaggregate purchase price during the nine months ended September 30, 2014, $228 million was settled in cash during the period.~~ The shares repurchased during the ~~nine~~three months ended ~~September 30, 2015~~March 31, 2016 represented approximately 6%1% of the Company's total shares of common stock outstanding as of December 31, ~~2014.~~2015. The shares repurchased during the ~~nine~~three months ended ~~September 30, 2014~~March 31, 2015 represented approximately 3%2% of the Company's total shares of common stock outstanding as of December 31, ~~2013.~~2014. The shares of Class A common stock that were repurchased on the open market were retired and returned to the status of authorized and unissued shares while the shares of Class B common stock that were repurchased were retired and the total number of authorized Class B shares was reduced by the number of shares repurchased. As of ~~September 30, 2015,~~March 31, 2016, we had ~~$305~~$316 million remaining under the share repurchase authorization.

~~Treasury Stock Retirement~~—~~During the nine mo~~nths ended September 30, 2015, the Company retired 195,423 shares of treasury stock. These shares were retired at a weighted-average price of $43.41 resulting in an $8 million reduction in treasury stock. ~~The retired shares of treasury stock were returned to the status of authorized and unissued.~~

12.

13. STOCK-BASED COMPENSATION

As part of our ~~Long-Term~~Long-Term Incentive Plan, we award Stock Appreciation Rights ("SARs"), Restricted Stock Units ("RSUs"), Performance Share Units ("PSUs") and Performance ~~Vested~~Vesting Restricted Stock ("PSSs") to certain employees. Compensation expense and unearned compensation ~~figures within this footnote~~presented below exclude amounts related to employees of our managed hotels and other employees whose payroll is reimbursed, as this expense has been and will continue to be reimbursed by our third-party hotel owners and is recorded inon the lines other revenues from managed properties and other costs from managed properties on our condensed consolidated statements of income. Compensation expense ~~(income)~~included in selling, general, and administrative expense on our condensed consolidated statements of income related to these awards for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2016 and March 31, 2015 ~~and~~ ~~September 30, 2014~~ are as follows:

Three Months Ended September 30, Nine Months Ended September 30,
2015 2014 2015 2014
Stock appreciation rights $ 1
$ 2
$ 9
$ 7
Restricted stock units 4
3
16
14
Performance vested restricted stock (5 ) 1
(3 ) 3



	Three Months Ended March 31,
	2016		2015
SARs	$	7	$	7
RSUs	8		8
PSUs and PSSs	1		1
Total stock-based compensation recorded within selling, general, and administrative expenses	$	16	$	16

~~Stock Appreciation Rights~~SARs—Each vested SAR gives the holder the right to the difference between the value of one share of our Class A common stock at the exercise date and the value of one share of our Class A common stock at the grant date. Vested SARs can be exercised over their life as determined by the plan. All SARs have a 10~~-year~~10-year contractual term, are settled in shares of our Class A common stock and are accounted for as equity instruments.

During the ~~nine~~three months ended ~~September 30, 2015~~,March 31, 2016, the Company granted ~~461,378~~924,424 SARs to employees with a weighted-average grant date fair value of ~~$21.36~~.$14.52. The fair value of each SAR was estimated on the grant date using the ~~Black-Scholes-Merton~~ ~~option-valuation~~Black-Scholes-Merton option-pricing model.

~~Restricted Stock Units~~RSUs—~~The Company grants both RSUs that may be settled in stock and RSUs that may be settled in cash.~~ Each vested~~stock-settled~~ RSU will be settled with a single share of our Class A common ~~stock.~~stock, with the exception of insignificant portions of certain awards which will be settled in cash. The value of the ~~stock-settled~~stock-settled RSUs is based on the ~~closing stock price~~fair value of our Class A common stock as of the grant date. ~~We record compensation expense for RSUs over the requisite service period of the individual grantee.~~

In certain situations we also grant ~~cash-settled~~cash-settled RSUs which are recorded as a liability instrument. ~~The liability and related expense for~~ ~~cash-settled RSUs is insignificant as of, and for~~During the three ~~and nine~~ months ended ~~September 30, 2015. During the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2015~~,March 31, 2016, the Company granted a total of ~~446,437~~444,629 RSUs (an insignificant portion of which are ~~cash-settled~~cash-settled RSUs) to employees which, with respect to ~~stock-settled~~stock-settled RSUs, had a weighted-average grant date fair value of ~~$56.50~~.$47.36.

~~Performance Vested Restricted Stock~~PSUs and PSSs—The Company has granted both PSUs and PSSs to certain executive officers.

The number of PSUs that will ultimately vest and be paid out in Class A common stock depends upon the performance of the Company at the end of the applicable three year performance period relative to the applicable performance target. During the three months ended March 31, 2016, the Company granted to its executive officers a total of 111,620 PSUs, with a weighted-average grant date fair value of $47.36. The performance period is a three year period beginning January 1, 2016 and ending December 31, 2018. The PSUs will vest at the end of the performance period only if the performance threshold is met; there is no interim performance metric.

The number of PSSs that will ultimately vest with no further restrictions on transfer depends upon the performance of the Company at the end of the applicable three year performance period relative to the applicable performance target. ~~During the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2015, the Company granted to its executive officers a total of~~ ~~146,902~~The PSSs ~~which~~ vest in full if the maximum performance metric is achieved. ~~The PSSs had a weighted-average grant date fair value~~At the end of ~~$56.27. The~~the performance period, ~~is three years beginning January 1, 2015 and ending December 31, 2017.~~the PSSs that do not vest will be forfeited. The PSSs will vest at the end of the performance period only if the performance threshold is met; there is no interim performance metric. During the three months ended September 30, 2015, we recorded a reversal of previously recorded compensation expense based on our current assessment of expected achievement relative to the applicable performance targets related to certain of these awards.

Our total unearned compensation for our ~~stock-based~~stock-based compensation programs as of ~~September 30, 2015~~March 31, 2016 was $3$8 million for SARs, ~~$22~~$24 million for RSUs and $3$5 million for PSUs and PSSs, which will be recorded to compensation expense over the next ~~four~~three years with respect to SARs and RSUs, with a limited portion of the SAR and RSU awards extending to ~~five~~four years,, and over the next two years with respect to PSUs and PSSs.

1314. RELATED-PARTY TRANSACTIONS

In addition to those included elsewhere in the ~~Notes~~notes to the condensed consolidated financial statements, related-party transactions entered into by us are summarized as follows:

Leases—Our corporate headquarters have been located at the Hyatt Center in Chicago, Illinois, since 2005. A subsidiary of the Company holds a master lease for a portion of the Hyatt Center and has entered into sublease agreements with certain related parties. Future expected sublease income for this space from related parties is $7$5 million.

~~Legal Services—A partner in a law firm that provided services to us throughout the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2015~~ ~~and September 30, 2014, is the~~ ~~brother-in-law of our Executive Chairman. We incurred $1 million and insignificant legal fees with this firm for the~~ ~~three~~ ~~months ended~~ ~~September 30, 2015~~ and September 30, 2014, respectively. We incurred $2 million of legal fees with this firm during each of the nine months ended September 30, 2015 and September 30, 2014. Legal fees, when expensed, are included in selling, general, and administrative expenses. As of ~~September 30, 2015~~ ~~and~~ ~~December 31, 2014, we had $1 million and insignificant amounts due to the law firm, respectively.~~

~~Other Services~~—A member of our board of directors is a partner in a firm whose affiliates previously owned hotels, which were sold during the first quarter of 2015, from which we recorded no management and franchise fees and $2 million of management and franchise fees during the three months ended September 30, 2015 and September 30, 2014, respectively. We recorded insignificant and $4 million of management and franchise fees during the nine months ended September 30, 2015 and September 30, 2014, respectively. As of September 30, 2015 we had no receivables due from these properties. As of ~~December 31, 2014~~ ~~we had insignificant receivables due from these properties.~~

Equity Method Investments—We have equity method investments in entities that own properties for which we provide management and/or franchise services and receive fees. We recorded fees of $7$6 million and $8$5 million for the three months ended ~~September 30,~~March 31, 2016 and March 31, 2015, ~~and September 30, 2014, respectively. We recorded fees of $19 million and $24 million for the nine months ended September 30, 2015 and September 30, 2014,~~ respectively. As of ~~September 30, 2015~~March 31, 2016 and December 31, ~~2014~~2015, we had receivables due from these properties of ~~$12 million and~~ ~~$11 million, respectively.~~$6 million. In addition, in some cases we provide loans (see Note 5) or guarantees (see Note 1011) to these entities. Our ownership interest in these ~~equity method investments~~unconsolidated hospitality ventures generally varies from 24% to 70%. See Note 3 for further details regarding these investments.

Class B Share Repurchase—During the ~~nine~~three months ended ~~September 30,~~March 31, 2016, we repurchased 0 shares of Class B common stock. During the three months ended March 31, 2015, we repurchased ~~1,776,501~~750,000 shares of Class B common stock atfor a ~~weighted-average~~weighted average price of ~~$58.91~~$59.54 per share, for an aggregate purchase price of approximately ~~$105~~$45 million. The shares repurchased represented approximately 1%0.5% of the

Company's total shares of common stock outstanding prior to the repurchase. The shares of Class B common stock were repurchased in privately negotiated transactions from trusts ~~and limited partnerships owned indirectly by trusts held~~ for the benefit of certain Pritzker family members ~~in privately-negotiated transactions~~and limited partnerships owned indirectly by trusts for the benefit of certain Pritzker family members and were retired, thereby reducing the total number of shares outstanding and reducing the shares of Class B common stock authorized and outstanding by the repurchased share amount.

1415. SEGMENT INFORMATION

Our reportable segments are components of the business which are managed discretely and for which discrete financial information is reviewed regularly by the chief operating decision maker to assess performance and make decisions regarding the allocation of resources. Our chief operating decision maker is the Chief Executive Officer. We define our reportable segments as follows:

Owned and leased hotels—This segment derives its earnings from owned and leased hotel properties located predominantly in the United States but also in certain international locations and for purposes of segment Adjusted EBITDA, includes our pro rata share of the Adjusted EBITDA of our unconsolidated hospitality ventures, based on our ownership percentage of each venture.

Americas management and franchising—This segment derives its earnings primarily from a combination of hotel management and licensing of our portfolio of brands to franchisees located in the United States, Latin America, Canada and the Caribbean. This segment’s revenues also include the reimbursement of costs incurred on behalf of managed hotel property owners and franchisees with no added margin. These costs relate primarily to payroll costs at managed properties where the Company is the employer. These revenues and costs are recorded on the lines other revenues from managed properties and other costs from managed properties, respectively. The intersegment revenues relate to management fees that are collected from the Company’s owned hotels, which are eliminated in consolidation.

ASPAC management and franchising—This segment derives its earnings primarily from a combination of hotel management and licensing of our portfolio of brands to franchisees located in Southeast Asia, as well as greater China, Australia, South Korea, Japan and ~~Japan.~~Micronesia. This segment’s revenues also include the reimbursement of costs incurred on behalf of managed hotel property owners and franchisees with no added margin. These costs relate primarily to reservations, marketing and IT costs. These revenues and costs are recorded on the lines other revenues from managed properties and other costs from managed properties, respectively. The intersegment revenues relate to management fees that are collected from the Company’s owned hotels, which are eliminated in consolidation.

EAME/SW Asia management—This segment derives its earnings primarily from hotel management of our portfolio of brands located primarily in Europe, Africa, the Middle East, India and Nepal, as well as countries along the Persian Gulf and the Arabian Sea. This segment’s revenues also include the reimbursement of

costs incurred on behalf of managed hotel property owners with no added margin. These costs relate primarily to reservations, marketing and IT costs. These revenues and costs are recorded on the lines other revenues from managed properties and other costs from managed properties, respectively. The intersegment revenues relate to management fees that are collected from the Company’s owned hotels, which are eliminated in consolidation.

Our chief operating decision maker evaluates performance based on each segment’s revenue and Adjusted EBITDA. We define Adjusted EBITDA as net income attributable to Hyatt Hotels Corporation plus our pro-rata share of unconsolidated hospitality ventures Adjusted EBITDA ~~before~~based on our ownership percentage of each venture, adjusted to exclude equity earnings (losses) from unconsolidated hospitality ventures; ~~asset impairments; gains~~stock-based compensation expense; gain on ~~sales~~sale of real estate; other ~~income (loss),~~loss, net; ~~net income attributable to noncontrolling interests;~~ depreciation and amortization; interest expense; and provision for income taxes.

25Effective January 1, 2016, our definition of Adjusted EBITDA has been updated to exclude stock-based compensation expense, to facilitate comparison with our competitors. We have applied this change in the definition of Adjusted EBITDA to 2015 historical results to allow for comparability between the periods presented.

The table below shows summarized consolidated financial information by segment. Included within corporate and other are unallocated corporate expenses, ~~our vacation ownership business prior to the sale in the fourth quarter of 2014,~~ license fees related to Hyatt Residence Club, and our ~~co-branded~~co-branded credit card.


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended March 31,
	2015			2014			2015			2014			2016			2015
Owned and leased hotels
Owned and leased hotels revenues	$	500		$	555		$	1,549		$	1,695		$	516		$	509
Adjusted EBITDA	110			123			374			405			131			124
Depreciation and amortization	69			82			208			245			68			71
Americas management and franchising
Management and franchise fees revenues	85			80			269			247			91			88
Other revenues from managed properties	409			389			1,225			1,166			421			400
Intersegment revenues (a)	15			21			55			66			20			19
Adjusted EBITDA	74			66			224			201			76			73
Depreciation and amortization	5			4			14			13			5			5
ASPAC management and franchising
Management and franchise fees revenues	21			22			65			63			22			21
Other revenues from managed properties	19			18			59			53			21			19
Intersegment revenues (a)	—			1			1			2			—			—
Adjusted EBITDA	12			9			35			31			12			12
Depreciation and amortization	—			1			1			1			—			—
EAME/SW Asia management
Management and franchise fees revenues	16			18			49			55			16			16
Other revenues from managed properties	12			13			40			38			15			14
Intersegment revenues (a)	4			4			10			11			2			3
Adjusted EBITDA	7			9			22			30			8			7
Depreciation and amortization	1			2			4			5			1			1
Corporate and other
Revenues	10			24			29			68			9			9
Other revenues from managed properties	—			11			—			30
Adjusted EBITDA	(31		)	(28		)	(104		)	(85		)	(33		)	(31		)
Depreciation and amortization	3			2			6			5			7			2
Eliminations (a)
Revenues	(19		)	(26		)	(66		)	(79		)	(22		)	(22		)
Adjusted EBITDA	—			—			—			—			—			—
Depreciation and amortization	—			—			—			—			—			—
TOTAL
Revenues	$	1,053		$	1,104		$	3,219		$	3,336		$	1,089		$	1,054
Adjusted EBITDA	172			179			551			582			194			185
Depreciation and amortization	78			91			233			269			81			79


(a)	Intersegment revenues are included in the management and franchise fees revenues and eliminated in Eliminations.

The table below provides a reconciliation of our consolidated Adjusted EBITDA to EBITDA and a reconciliation of EBITDA to net income attributable to Hyatt Hotels Corporation for the three ~~and nine~~ months ended ~~September 30, 2015~~March 31, 2016 and ~~September 30, 2014.~~March 31, 2015.


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended March 31,
	2015			2014			2015			2014			2016			2015
Adjusted EBITDA	$	172		$	179		$	551		$	582		$	194		$	185
Equity earnings (losses) from unconsolidated hospitality ventures	(17		)	6			(46		)	22			2			(6		)
Asset impairments (a)	(5		)	—			(5		)	(7		)
Gains on sales of real estate	—			3			9			65
Other income (loss), net (see Note 16)	11			2			(3		)	(11		)
Net income attributable to noncontrolling interests	—			(1		)	—			(2		)
Stock-based compensation expense (see Note 13)													(16		)	(16		)
Gain on sale of real estate													—			8
Other loss, net (see Note 17)													(4		)	(18		)
Pro rata share of unconsolidated hospitality ventures Adjusted EBITDA	(21		)	(19		)	(63		)	(64		)	(28		)	(23		)
EBITDA	140			170			443			585			148			130
Depreciation and amortization	(78		)	(91		)	(233		)	(269		)	(81		)	(79		)
Interest expense	(17		)	(17		)	(51		)	(54		)	(17		)	(17		)
Provision for income taxes	(20		)	(30		)	(72		)	(100		)	(16		)	(12		)
Net income attributable to Hyatt Hotels Corporation	$	25		$	32		$	87		$	162		$	34		$	22

~~(a)~~

In conjunction with our regular assessment of impairment indicators, we identified property and equipment whose carrying value exceeded its fair value and as a result recorded impairment charges of $5 million in the ~~three and nine~~ months ended September 30, 2015, and $7 million in the nine months ended September 30, 2014 to asset impairments within our owned and leased hotels segment on our condensed consolidated statements of income.

1516. EARNINGS PER SHARE

The calculation of basic and diluted earnings per share, including a reconciliation of the numerator and denominator, are as follows:


	Three Months Ended September 30,					Nine Months Ended September 30,					Three Months Ended March 31,
	2015		2014			2015		2014			2016		2015
Numerator:
Net income	$	25	$	33		$	87	$	164		$	34	$	22
Net income attributable to noncontrolling interests	—		(1		)	—		(2		)	—		—
Net income attributable to Hyatt Hotels Corporation	$	25	$	32		$	87	$	162		$	34	$	22
Denominator:
Basic weighted average shares outstanding	141,876,299		152,849,168			144,457,314		154,165,341			135,128,860		147,285,258
Share-based compensation	1,131,077		1,019,611			1,229,860		951,858			796,029		1,354,053
Diluted weighted average shares outstanding	143,007,376		153,868,779			145,687,174		155,117,199			135,924,889		148,639,311
Basic Earnings Per Share:
Net income	$	0.18	$	0.22		$	0.60	$	1.06		$	0.25	$	0.15
Net income attributable to noncontrolling interests	—		(0.01		)	—		(0.01		)	—		—
Net income attributable to Hyatt Hotels Corporation	$	0.18	$	0.21		$	0.60	$	1.05		$	0.25	$	0.15
Diluted Earnings Per Share:
Net income	$	0.18	$	0.22		$	0.60	$	1.06		$	0.25	$	0.15
Net income attributable to noncontrolling interests	—		(0.01		)	—		(0.01		)	—		—
Net income attributable to Hyatt Hotels Corporation	$	0.18	$	0.21		$	0.60	$	1.05		$	0.25	$	0.15

The computations of diluted net income per share for the three ~~and nine~~ months ended ~~September 30, 2015~~March 31, 2016 and ~~September 30, 2014~~March 31, 2015 do not include the following shares of Class A common stock assumed to be issued as stock-settled SARs and RSUs because they are anti-dilutive.

Three Months Ended September 30, Nine Months Ended September 30,
2015 2014 2015 2014
Stock-settled SARs 1,700
19,500
10,100
34,400



	Three Months Ended March 31,
	2016	2015
SARs	—	2,500
RSUs	12,000	—

1617. OTHER ~~INCOME (LOSS),~~LOSS, NET

The table below provides a reconciliation of the components in other ~~income (loss),~~loss, net, for the three ~~and nine~~ months ended ~~September 30, 2015~~March 31, 2016 and ~~September 30, 2014~~March 31, 2015, respectively.

Three Months Ended September 30, Nine Months Ended September 30,
2015 2014 2015 2014
Recoveries on hotel loans, net (see Note 5) $ 8
$ —
$ 6
$ —
Guarantee liability amortization (see Note 10) 3
2
8
6
Performance guarantee income (expense) (see Note 10) 2
—
(12 ) (13 )
Interest income 2
3
6
8
Foreign currency losses (6 ) (1 ) (13 ) (2 )
Cost method investment income —
—
—
1
Realignment costs —
(1 ) —
(7 )
Transaction costs —
(2 ) —
(5 )
Other 2
1
2
1
Other income (loss), net $ 11
$ 2
$ (3 ) $ (11 )



	Three Months Ended March 31,
	2016			2015
Performance guarantee expense, net (see Note 11)	$	(19	)	$	(16	)
Foreign currency losses, net	—			(7		)
Interest income	1			2
Depreciation recovery	5			1
Guarantee liability amortization (see Note 11)	8			2
Other	1			—
Other loss, net	$	(4	)	$	(18	)

18. SUBSEQUENT EVENTS

Pursuant to the notice of redemption on March 15, 2016, all of the Company’s outstanding 2016 Notes, of which an aggregate principal amount of $250 million was outstanding at March 31, 2016, were redeemed on April 11, 2016 for $254 million.

On April 25, 2016, we acquired Thompson Miami Beach for approximately $238 million, from a seller that is indirectly owned by a limited partnership affiliated with the brother of our Executive Chairman. We have rebranded this hotel as The Confidante, the newest addition to The Unbound Collection by Hyatt.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.

This quarterly report contains "forward-looking statements" within the meaning of the Private Securities

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

The following discussion should be read in conjunction with the Company's Condensed Consolidated Financial Statements and accompanying Notes, which appear elsewhere in this Quarterly Report on Form 10-Q.

Executive Overview

We are a global hospitality company engaged in the development, ownership, operation, management, franchising ~~licensing~~ and ~~ownership~~licensing of a portfolio of properties, including hotels, resorts and residential and vacation ownership properties around the world. As of ~~September 30, 2015,~~March 31, 2016, our worldwide hotel portfolio consisted of ~~589~~612 hotels ~~(156,754~~(161,572 rooms), including:

~~258~~260 managed properties ~~(86,638~~(86,717 rooms), all of which we operate under management agreements with third-party property owners;

~~261~~280 franchised properties ~~(42,461~~(46,560 rooms), all of which are owned by third parties that have franchise agreements with us and are operated by third parties;

3334 owned properties ~~(17,300~~(17,735 rooms) (including 1 consolidated hospitality venture), 1 capital leased property (171 rooms), and 7 operating leased properties (2,411 rooms), all of which we manage;

1920 managed properties and 10 franchised properties owned or leased by unconsolidated hospitality ventures ~~(7,773~~(7,978 rooms).

Our worldwide property portfolio also includes:

56 all inclusive resorts ~~(1,854~~(2,401 rooms), all of which are owned and operated by an unconsolidated hospitality venture that has franchise agreements with us;

16 vacation ownership properties (1,038 units), all of which are licensed by Interval Leisure Group ("ILG") under the Hyatt Residence Club brand and operated by third parties, including ILG and its affiliates; and

1718 residential properties ~~(2,150~~(2,404 units), which consist of branded residences and serviced apartments. We manage all of the serviced apartments and those branded residential units that participate in a rental program with an adjacent Hyatt-branded hotel.

We report our consolidated operations in U.S. dollars and manage our business within four reportable segments as described below:

Owned and leased hotels, which consists of our owned and leased full service and select service hotels and, for purposes of segment Adjusted EBITDA, our pro rata share of the Adjusted EBITDA of our unconsolidated hospitality ventures, based on our ownership percentage of each venture;

Americas management and franchising, which consists of our management and franchising of properties located in the United States, Latin America, Canada and the Caribbean;

ASPAC management and franchising, which consists of our management and franchising of properties located in Southeast Asia, as well as greater China, Australia, South Korea, Japan and ~~Japan;~~Micronesia; and

EAME/SW Asia management, which consists of our management of properties located primarily in Europe, Africa, the Middle East, India and Nepal, as well as countries along the Persian Gulf and the Arabian Sea.

The results of our unallocated corporate overhead, ~~our vacation ownership business prior to the sale in the fourth quarter of 2014,~~ license fees related to Hyatt Residence Club and Hyatt co-branded credit card are reported within corporate and other. See Note 1415 for further discussion of our segment structure.

During the three months ended ~~September 30, 2015,~~March 31, 2016, we ~~announced several transactions~~launched The Unbound Collection by Hyatt. The Unbound Collection by Hyatt will include a portfolio of new and existing upper-upscale and luxury properties that ~~are consistent~~will maintain a distinct character while providing guests and owners Hyatt’s award-winning customer loyalty program, robust operational and marketing resources and a trusted, quality brand. Additionally, in April 2016, we purchased Thompson Miami Beach for approximately $238 million and rebranded it as The Confidante, the newest addition to The Unbound Collection by Hyatt. During the first quarter, we also opened the Grand Hyatt Rio de Janeiro in Brazil, expanding our presence in South America, along with the opening of our ~~goal to expand our brands. We opened seven select service hotels, including five hotels in the United States, one~~first Hyatt hotel in ~~Dubai and our first hotel, a Hyatt Place, in Honduras.~~Nicaragua. We ~~opened two full service hotels, our first Hyatt-branded hotel on the Japanese island of Okinawa and our first Hyatt-branded hotel in Hubei Province in China. In addition, we~~also announced plans for our first two international Hyatt ~~Place hotel~~Centric locations in ~~Australia.~~Uruguay and Japan.

Our financial performance for the quarter ended ~~September 30, 2015~~March 31, 2016 reflects ~~a decrease~~an increase in our consolidated revenues of ~~$51~~$35 million, or 5%3.3%, ($45 million or 4.3% excluding the impact of currency) compared to the quarter ended ~~September 30, 2014.~~March 31, 2015. Owned and leased hotels revenues for the quarter ended ~~September 30, 2015 decreased by $55~~March 31, 2016 increased $7 million compared to the quarter ended ~~September 30, 2014,~~March 31, 2015, which included net unfavorable currency ~~impacts~~impact of ~~$18~~$8 million. The ~~decrease~~increase in owned and leased hotels revenues ~~was driven by a decrease of $63 million~~resulted primarily from an increase in non-comparable hotels, including $4 million in net unfavorable currency impacts, due to dispositions in 2014 and 2015. See "—Segment Results" below for a discussion of the non-comparable owned and leased hotels' activity. These decreases were partially offset by increased comparable owned and leased hotels revenues of $8$9 million, ~~which included $14~~including $8 million in net unfavorable currency ~~impacts and~~impact, which was primarily driven by ~~revenue growth at our United States comparable~~ full service hotels ~~resulting from~~in the United States and Mexico as a result of improved transient ~~and group average daily rate~~Revenue per Available Room ("~~ADR"~~RevPAR") and ~~demand as well as increased food and beverage revenues.~~

improved group rate, partially offset by a decrease in group occupancy in the United States. Our management and franchise fees for the quarter ended ~~September 30, 2015~~March 31, 2016 increased $9$2 million compared to the quarter ended ~~September 30, 2014.~~March 31, 2015, which included $2 million in net unfavorable currency impact. Fee increases were primarily due to increased franchise fees from new and converted hotels and improved performance at existing hotels in the Americas. ~~Other fee revenues also increased as a result of amortization of deferred gains from hotels sold subject to long-term management agreements in the Americas and termination fees.~~

Our consolidated Adjusted EBITDA for the ~~third~~first quarter of ~~2015 decreased by $7~~2016 increased $9 million compared to the ~~third~~first quarter of ~~2014,~~2015, which included $7$4 million in net unfavorable ~~foreign~~ currency ~~impacts.~~impact. The ~~decrease~~increase was primarily driven by ~~dispositions affecting~~ our owned and leased hotels segment which ~~decreased $13~~increased $7 million ~~combined with a decrease of $3 million in corporate~~ and ~~other, partially offset by increases in~~ the Americas ~~of $8~~management and franchising segment which increased $3 million. See "—~~Non-~~

~~GAAP~~Non-GAAP Measure Reconciliation" below for an explanation of how we use Adjusted EBITDA, why we present it and material limitations on its usefulness.

Hotel Chain RevPAR Statistics



		RevPAR
		Three Months Ended March 31,
(Comparable Locations)	Number of Comparable Hotels (1)	2016		2015		Change		Change (in constant $)
Comparable systemwide hotels	541	$	128	$	127	0.6	%	2.2	%
Comparable owned and leased hotels	41	$	169	$	165	2.4	%	3.7	%
Americas full service hotels	148	$	142	$	140	1.3	%	2.2	%
Americas select service hotels	267	$	99	$	93	6.7	%	6.8	%
ASPAC full service hotels	60	$	139	$	141	(1.6	)%	1.9	%
EAME/SW Asia full service hotels	60	$	119	$	132	(10.0	)%	(5.9	)%
EAME/SW Asia select service hotels	5	$	71	$	59	19.4	%	21.9	%

(1) Comparable systemwide hotels include one select service hotel in ASPAC, which is not included in the ASPAC full service ~~Revenue per Available Room ("RevPAR") within our~~hotel statistics. The number of managed and franchised hotels presented above includes owned and leased hotels.

In the Americas management and franchising segment, ~~increased 4.0% (or 5.3% excluding~~transient demand and ADR growth at our full service hotels helped drive RevPAR in the ~~unfavorable effects~~first quarter of ~~currency) during the three months ended September 30, 2015~~2016 compared to the three months ended September 30, 2014. The improvement in RevPAR was primarily driven by increased transient ADR and demand. Group booking activity increased during the quarter, representing the eleventh consecutivefirst quarter of ~~year over year increases. Group booking activity and pace continues~~2015. Demand from groups was lower in the first quarter of 2016 due, in part, to ~~reflect strength due to increased demand from corporate and association groups. Comparable select service RevPAR within our Americas management and franchising segment increased 7.2% during~~ the ~~three months ended September 30, 2015~~timing of Easter. Short-term bookings were lower in the first quarter of 2016 compared to the ~~same period~~first quarter of 2015, however, long-term bookings continue to exhibit positive growth for future years. Our owned and leased hotels segment, which is made up primarily of hotels located in the ~~prior year, driven primarily by~~Americas, also saw similar transient demand and ADR growth in the quarter, as well as moderate group revenue growth as a result of increased ~~ADR.~~ADR in 2016 compared to 2015.

~~Comparable RevPAR in our~~ ASPAC management and franchising segment ~~decreased 5.6% (or increased 3.1% excluding the unfavorable effects of currency)~~results for the first quarter ~~ended September 30, 2015 compared~~of 2016 continued to ~~the quarter ended September 30, 2014. Excluding the unfavorable currency impacts, the increase in comparable full service RevPAR was primarily driven~~be negatively impacted by increased ~~occupancy~~hotel supply in ~~most areas within~~ the region and ~~increased ADR in Japan, western China and Macau,~~restrictions on inbound travel to Hong Kong. These declines were partially offset by ~~decreased ADR~~continued recovery and growth in ~~northern China, Hong Kong~~Shanghai and Thailand, as well as improved results in South ~~Korea.~~Korea, which was negatively impacted by the MERS outbreak in 2015. We expect the current trends in the ASPAC region to continue to impact the segment's results for 2016 although quarterly RevPAR growth will also vary due to differences in quarterly growth rates from 2015.

~~Our~~The RevPAR decline in our EAME/SW Asia management segment ~~had comparable full service RevPAR declines of 7.5% (or an increase of 6.2% excluding~~resulted from decreased occupancy in France, southern Europe, the unfavorable effects of currency) for the three months ended September 30, 2015 compared to the three months ended September 30, 2014. Excluding the unfavorable currency impacts, the increase in comparable full service RevPARMiddle East and Africa during the ~~three months ended September 30, 2015 was driven by increased occupancy~~first quarter of 2016. The hotels in ~~most areas of the region~~Paris and ~~increased~~Istanbul experienced lower demand following recent terrorist attacks. ADR ~~in Europe and Africa, partially offset by~~ decreased ~~ADR~~ in the Middle East, due to increased supply and ~~India.~~

~~Selling, general,~~reduced government spending in light of lower oil prices and ~~administrative expenses, excluding the impact of rabbi trust, for the quarter ended September 30, 2015~~ decreased ~~$13 million compared~~in Africa, due to reduced travel to the ~~quarter ended September 30, 2014. The $13 million decrease includes an $8 million decrease~~region. We expect the current trends in the EAME/SW Asia regions to continue to impact the segment's results for 2016 although quarterly RevPAR growth will also vary due to ~~the sale of our vacation ownership business~~differences in ~~the fourth quarter of 2014. Excluding both rabbi trust and the impact~~quarterly growth rates from the sale of our vacation ownership business, selling, general, and administrative expenses decreased $5 million in the three months ended September 30, 2015 compared to the three months ended September 30, 2014. This decrease was primarily driven by a $5 million decrease in payroll and related costs, primarily due to stock-based compensation expense as we recorded a reversal of previously recorded compensation expense based on our current assessment of expected achievement relative to reaching the applicable performance targets related to certain of these awards.

As of September 30, 2015, we had $569 million in cash and cash equivalents. At September 30, 2015, we had available credit facilities with banks for various corporate purposes. The amount of undrawn borrowing availability as of September 30, 2015 was approximately $1.5 billion.2015.

Results of Operations

Three ~~and Nine~~ Months Ended~~September 30, 2015~~ March 31, 2016 Compared with Three ~~and Nine~~ Months Ended~~September 30, 2014~~

~~Consolidated Results~~

Three Months Ended September 30,
(In millions, except percentages) 2015 2014 Better / (Worse)
REVENUES:
Total revenues $ 1,053
$ 1,104
$ (51 ) (5 )%
DIRECT AND SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES:
Owned and leased hotels 385
422
37
9 %
Depreciation and amortization 78
91
13
14 %
Other direct costs 8
11
3
27 %
Selling, general, and administrative 54
77
23
30 %
Other costs from managed properties 440
431
(9 ) (2 )%
Direct and selling, general, and administrative expenses 965
1,032
67
6 %
Net gains (losses) and interest income from marketable securities held to fund operating programs (15 ) (3 ) (12 ) (400 )%
Equity earnings (losses) from unconsolidated hospitality ventures (17 ) 6
(23 ) (383 )%
Interest expense (17 ) (17 ) —
— %
Asset impairments (5 ) —
(5 ) (100 )%
Gains on sales of real estate —
3
(3 ) (100 )%
Other income (loss), net 11
2
9
450 %
INCOME BEFORE INCOME TAXES 45
63
(18 ) (29 )%
PROVISION FOR INCOME TAXES (20 ) (30 ) 10
33 %
NET INCOME 25
33
(8 ) (24 )%
NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS —
(1 ) 1
100 %
NET INCOME ATTRIBUTABLE TO HYATT HOTELS CORPORATION $ 25
$ 32
$ (7 ) (22 )%

Nine Months Ended September 30,
(In millions, except percentages) 2015 2014 Better / (Worse)
REVENUES:
Total revenues $ 3,219
$ 3,336
$ (117 ) (4 )%
DIRECT AND SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES:
Owned and leased hotels 1,160
1,267
107
8 %
Depreciation and amortization 233
269
36
13 %
Other direct costs 20
29
9
31 %
Selling, general, and administrative 221
244
23
9 %
Other costs from managed properties 1,324
1,287
(37 ) (3 )%
Direct and selling, general, and administrative expenses 2,958
3,096
138
4 %
Net gains (losses) and interest income from marketable securities held to fund operating programs (6 ) 9
(15 ) (167 )%
Equity earnings (losses) from unconsolidated hospitality ventures (46 ) 22
(68 ) (309 )%
Interest expense (51 ) (54 ) 3
6 %
Asset impairments (5 ) (7 ) 2
29 %
Gains on sales of real estate 9
65
(56 ) (86 )%
Other income (loss), net (3 ) (11 ) 8
73 %
INCOME BEFORE INCOME TAXES 159
264
(105 ) (40 )%
PROVISION FOR INCOME TAXES (72 ) (100 ) 28
28 %
NET INCOME 87
164
(77 ) (47 )%
NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS —
(2 ) 2
100 %
NET INCOME ATTRIBUTABLE TO HYATT HOTELS CORPORATION $ 87
$ 162
$ (75 ) (46 )%

~~Revenues. Consolidated revenues for the three months ended September 30,~~ March 31, 2015 decreased $51 million, or 5%, compared to the three months ended September 30, 2014, which included $23 million in net unfavorable foreign currency impacts, and a $9 million increase in other revenues from managed properties. Consolidated revenues for the nine months ended September 30, 2015 decreased $117 million, or 4%, compared to the nine months ended September 30, 2014, which included $61 million in net unfavorable foreign currency impacts, and a $37 million increase in other revenues from managed properties.

Owned and leased hotels revenues decreased $55 million and $146 million for the three and nine months ended September 30, 2015, respectively, compared to the three and nine months ended September 30, 2014, which included $18 million and $48 million in net unfavorable currency impacts, respectively. Non-comparable owned and leased hotels revenues decreased $63 million and $180 million in the three and nine months ended September 30, 2015, compared to the three and nine months ended September 30, 2014, respectively, which included $4 million and $9 million, respectively, in net unfavorable currency impacts. These decreases in non-comparable owned and leased hotels revenues were driven by dispositions during 2014 and 2015. See "—Segment Results" below for a discussion of the non-comparable owned and leased hotels activity.

Comparable owned and leased hotels revenues increased $8 million and $34 million during the three and nine month periods ended September 30, 2015, respectively, compared to the same periods in the prior year, which includes net unfavorable foreign currency impacts of $14 million and $39 million, respectively. The increases were primarily driven by increases of $22 million and $69 million, respectively, at our full service hotels in the United States, partially offset by decreases of $14 million and $35 million, respectively, at our international hotels. For the three and nine months ended September 30, 2015, revenue growth at our United States comparable full service hotels was a result of improved transient and group ADR and demand as well as increased food and beverage revenues. The decreases in comparable international hotels were driven by the aforementioned unfavorable net currency impacts.

Management and franchise fees increased $9 million and $34 million during the three and nine month periods ending September 30, 2015, respectively, when compared to the same periods in the prior year, which included $4 million and $12 million in net unfavorable currency impacts, respectively.

~~Included in consolidated management and franchise fees for the~~ ~~three~~ ~~months ended~~ ~~September 30, 2015~~ ~~and September 30, 2014 were the following:~~

Three Months Ended September 30,
(in millions, except percentages) 2015 2014 Better / (Worse)
Base management fees $ 47
$ 45
$ 2
4 %
Incentive management fees 23
25
(2 ) (8 )%
Franchise fees 24
18
6
33 %
Other fee revenues 9
6
3
50 %
Total management and franchise fees $ 103
$ 94
$ 9
10 %

~~Included in~~Discussion on Consolidated Results

For additional information regarding our consolidated ~~management and franchise fees for the nine months ended September 30, 2015 and September 30, 2014 were the following:~~

Nine Months Ended September 30,
(in millions, except percentages) 2015 2014 Better / (Worse)
Base management fees $ 140
$ 134
$ 6
4 %
Incentive management fees 83
80
3
4 %
Franchise fees 67
49
18
37 %
Other fee revenues 30
23
7
30 %
Total management and franchise fees $ 320
$ 286
$ 34
12 %

The increases in franchise fees during the three and nine month periods ending September 30, 2015, respectively, when compared to the same periods in the prior year, were primarily driven by new and converted hotels and improved performance at existing hotels in the Americas. The increases in other fee revenues were driven by the amortization of deferred gains from hotels sold subject to long-term management agreements in the Americas. The three and nine month periods in the current year included termination fees of $2 million and $3 million, respectively, while the nine month period in the prior year included termination fees of $6 million.

Other revenues decreased $14 million and $42 million during the three and nine months ended September 30, 2015, respectively, compared to the same periods ended September 30, 2014. The decreases were primarily driven by a $15 million and $48 million decrease, respectively, related to the sale of our vacation ownership business during the fourth quarter of 2014, which was partially offset by increased revenues of $1 million and $6 million, respectively, relatedresults below, please also refer to our ~~co-branded credit card.~~

~~Other revenues~~condensed consolidated statements of income included in this quarterly filing. The impact from ~~managed properties includes an increase~~our investments in losses of $5 million and $8 million for the three and nine months ended September 30, 2015, respectively, compared to the three and nine months ended September 30, 2014, resulting from changes in the underlying assets held for our benefit programs funded through a rabbi trust. These losses are offset in other costs from managed properties, thus having no net impact to our earnings. Excluding these amounts, other revenues from managed properties increased $14 million, or 3%, in the three months ended September 30, 2015 compared to the three months ended September 30, 2014 and increased $45 million, or 4%, in the nine months ended September 30, 2015 compared to the nine months ended September 30, 2014. The increases in other revenues from managed properties for the three and nine months ended September 30, 2015 compared to the three and nine months ended September 30, 2014, respectively, were due to a higher volume of reimbursements paid to us by our managed properties for increased participation in our Gold Passport program, increased payroll and related benefits expense, increased technology costs and increased marketing expense, which was driven in part by new hotel openings and previously owned hotels that were sold subject to long-term management agreements. These increases were partially offset by decreases during the three and nine months ended September 30, 2015 as compared to the three and nine months ended September 30, 2014 of $11 million and $30 million, respectively, in reimbursements due to the sale of our vacation ownership business in 2014.

~~The table below provides a breakdown of revenues by segment for the~~ ~~three and nine~~ ~~months ended~~ ~~September 30, 2015~~ ~~and~~ ~~September 30, 2014. For further discussion of segment revenues for the periods presented, please refer to "—Segment Results" below.~~

Three Months Ended September 30,
(in millions, except percentages) 2015 2014 Better / (Worse)
Owned and leased hotels $ 500
$ 555
$ (55 ) (10 )%
Americas management and franchising 494
469
25
5 %
ASPAC management and franchising 40
40
—
— %
EAME/SW Asia management 28
31
(3 ) (10 )%
Corporate and other 10
35
(25 ) (71 )%
Eliminations (19 ) (26 ) 7
27 %
Consolidated revenues $ 1,053
$ 1,104
$ (51 ) (5 )%

Nine Months Ended September 30,
(in millions, except percentages) 2015 2014 Better / (Worse)
Owned and leased hotels $ 1,549
$ 1,695
$ (146 ) (9 )%
Americas management and franchising 1,494
1,413
81
6 %
ASPAC management and franchising 124
116
8
7 %
EAME/SW Asia management 89
93
(4 ) (4 )%
Corporate and other 29
98
(69 ) (70 )%
Eliminations (66 ) (79 ) 13
16 %
Consolidated revenues $ 3,219
$ 3,336
$ (117 ) (4 )%

~~Owned and leased hotels expense. Owned and leased hotels expense decreased~~ ~~$37 million~~ ~~and $107 million in the three and nine months ended September 30, 2015, respectively, compared to the~~ ~~three and nine~~ ~~months ended~~ ~~September 30, 2014~~.

Non-comparable owned and leased hotels expense decreased $44 million and $122 million during the three and nine months ended September 30, 2015, respectively, compared to the same periods in the prior year, due to the sale of four full service hotels and 52 select service hotels in 2014 and the sale of one full service hotel and one select service hotel in 2015. Comparable owned and leased hotels expense increased $9 million and $19 million in the three and nine months ended September 30, 2015, respectively, compared to the same periods in the prior year. The increase in the three months ended September 30, 2015 was primarily driven by increased rent expense and property taxes at certain properties. The increase in the nine months ended September 30, 2015 was primarily driven by increased rent expense and property taxes at certain properties and higher commissions resulting from increased group business. Additionally, expenses recognized with respect to our employee benefit programs funded through a rabbi trust decreased $2 million and $4 million in the three and nine months ended September 30, 2015, respectively, compared to the same periods in 2014. In each reporting period, changes in these expenses are fully offset within net gains (losses) and interest income from marketable securities held to fund operating programs, ~~thus having no net impact to our earnings.~~

~~Depreciation and amortization expense. Depreciation and amortization expense decreased by~~ ~~$13 million~~ ~~and $36 million in the three and nine months ended~~ ~~September 30, 2015, respectively, compared to the three and nine months ended~~ ~~September 30, 2014. The decreases were driven by non-comparable hotel depreciation expense due primarily to hotels sold during 2014 and 2015, partially offset by acquired or newly opened hotels.~~

~~Other direct costs~~. Other direct costs decreased $3 million and $9 million in the three and nine months ended September 30, 2015, respectively, compared to the three and nine months ended September 30, 2014 primarily due to the sale of our vacation ownership business, partially offset by increased costs related to our co-branded credit card.

~~Selling, general, and administrative expenses.~~ ~~The table below provides a reconciliation of selling, general, and administrative expenses for the~~ ~~three and nine~~ ~~months ended September 30, 2015 and September 30, 2014:~~

Three Months Ended September 30,
(in millions, except percentages) 2015 2014 Better / (Worse)
Selling, general, and administrative expenses $ 54
$ 77
$ 23
30 %
Less: rabbi trust gains (losses) 12
2
(10 ) (500 )%
Adjusted selling, general, and administrative expenses 66
79
13
16 %
Less: vacation ownership business —
(8 ) (8 ) (100 )%
Adjusted selling, general, and administrative expenses excluding impact of sale of vacation ownership business $ 66
$ 71
$ 5
7 %

Nine Months Ended September 30,
(in millions, except percentages) 2015 2014 Better / (Worse)
Selling, general, and administrative expenses $ 221
$ 244
$ 23
9 %
Less: rabbi trust gains (losses) 5
(6 ) (11 ) (183 )%
Adjusted selling, general, and administrative expenses 226
238
12
5 %
Less: vacation ownership business —
(24 ) (24 ) (100 )%
Adjusted selling, general, and administrative expenses excluding impact of sale of vacation ownership business $ 226
$ 214
$ (12 ) (6 )%

Included in selling, general, and administrative expenses is the financial performance of the investment securities held in a rabbi trust to fund certain benefit programs, which are offset in net gains (losses) and interest income from marketable securities held to fund operating programs, thus having no net impact to our earnings. Included in adjusted selling, general, and administrative expenses are the results of our vacation ownership business prior to the sale in the fourth quarter of 2014. Excluding these impacts during the three months ended September 30, 2015 compared to the three months ended September 30, 2014, the $5 million decrease in expenses was primarily driven by a $5 million decrease in payroll and related costs, primarily due to stock-based compensation expense as we recorded a reversal of previously recorded compensation expense based on our current assessment of expected achievement relative to the applicable performance targets related to certain of these awards. Excluding these impacts for the nine month period, the $12 million increase in expenses was driven by a $6 million increase in payroll and related costs and a $4 million increase in professional fees. The increase in payroll and related costs was driven by increased bonus, salaries and wages, and stock grants in the nine months ended September 30, 2015 for certain individuals, which were expensed in full upon grant. These increases were partially offset by decreased stock compensation expense driven by the aforementioned reversal of previously recorded stock-based compensation expense.

~~Net gains (losses) and interest income from marketable securities held to fund operating programs.~~ ~~Net gains (losses) and interest income from marketable securities held to fund operating programs includes~~including securities held to fund our benefit programs funded through a rabbi trust and securities held to fund our Gold Passport Program, have been recorded on the various financial statement line items discussed below and have no impact on net income.

Owned and leased hotels revenues.



	Three Months Ended March 31,
(in millions, except percentages)	2016		2015		Better / (Worse)					Currency Impact
Comparable owned and leased hotels revenues	$	516	$	507	$	9		1.8	%	$	(8	)
Non-comparable owned and leased hotels revenues	—		2		(2		)	(100.0	)%	—
Total Owned and Leased Hotels Revenues	$	516	$	509	$	7		1.4	%	$	(8	)

The increase in comparable owned and leased hotels revenues for the three months ended March 31, 2016, compared to the three months ended March 31, 2015 was primarily driven by full service hotels in the United States and Mexico, partially offset by decreases at certain of our international hotels driven primarily by unfavorable net currency impact. The decrease in non-comparable owned and leased hotels revenues was driven by dispositions during 2015. See "—Segment Results" below for further discussion of owned and leased hotels revenues.

Management and franchise fee revenues.



	Three Months Ended March 31,
(in millions, except percentages)	2016		2015		Better / (Worse)
Base management fees	$	45	$	44	$	1		2.3	%
Incentive management fees	30		30		—			—	%
Franchise fees	23		21		2			9.5	%
Other fee revenues	9		10		(1		)	(10.0	)%
Total management and franchise fees	$	107	$	105	$	2		1.9	%

Management and franchise fees increased $2 million during the three months ending March 31, 2016 compared to the same period in the prior year, which included $2 million in net unfavorable currency impact. The increase in franchise fees was primarily driven by new and converted hotels and improved performance at existing hotels in the Americas.

Other revenues from managed properties.



	Three Months Ended March 31,
(in millions, except percentages)	2016		2015		Better / (Worse)
Other revenues from managed properties excluding rabbi trust impact	$	457	$	430	$	27		6.3	%
Rabbi trust impact	—		3		(3		)	(100.0	)%
Other revenues from managed properties	$	457	$	433	$	24		5.5	%

Excluding the impact of rabbi trust, other revenues from managed properties increased due to a higher volume of reimbursements paid to us by our managed properties for increased payroll and related costs and increased member participation in our Hyatt Gold Passport program. The ~~gains~~increased volume of reimbursements was driven in part by new hotel openings.

Owned and ~~losses generated from these securities are driven by the market performance of the underlying securities. The gains and losses on securities held in the rabbi trust are offset by our~~leased hotels expense.



	Three Months Ended March 31,
(in millions, except percentages)	2016		2015		Better / (Worse)
Comparable owned and leased hotels expense	$	387	$	380	$	(7	)	(1.8	)%
Non-comparable owned and leased hotels expense	2		3		1			33.3	%
Rabbi trust impact	—		1		1			100.0	%
Total Owned and Leased Hotels Expense	$	389	$	384	$	(5	)	(1.3	)%

Comparable owned and leased hotels expense ~~for~~increased $7 million, which included $6 million in net favorable currency impact, in the three months ended March 31, 2016, compared to the same period in the prior year primarily driven by increased health insurance costs and increased labor costs.

Selling, general, and administrative expenses.



	Three Months Ended March 31,
(in millions, except percentages)	2016			2015			Better / (Worse)
Selling, general, and administrative expenses	$	88		$	94		$	6		6.4	%
Less: rabbi trust impact	—			(6		)	(6		)	(100.0	)%
Less: stock-based compensation expense	(16		)	(16		)	—			—	%
Adjusted selling, general, and administrative expenses	72			72			—			—	%

Selling, general, and administrative expenses includes expenses related to stock-based compensation. Effective January 1, 2016 our ~~hotel colleagues and by our~~definition of Adjusted EBITDA has been updated to exclude stock-based compensation expense, therefore, adjusted selling, general, and administrative expenses has also been updated to exclude stock-based compensation expense. We have applied this change in the definition of adjusted selling, general, and administrative expenses to 2015 historical results to allow for ~~our corporate colleagues~~comparability between the periods presented.

Excluding these impacts, selling, general, and ~~personnel supporting our business segments, having no net impact on our earnings. The gains and losses on securities held~~administrative expenses were flat during the three months ended March 31, 2016 compared to ~~fund our Gold Passport program~~the three months ended March 31, 2015. An increase in payroll and related ~~to our owned and leased hotels are~~costs was offset by ~~corresponding changes to our owned~~reductions in professional fees and ~~leased hotels revenues, thus having no net impact on our earnings. The table below provides a reconciliation of net~~other miscellaneous expenses.

Net gains ~~(losses)~~ and interest income from marketable securities held to fund operating ~~programs for the~~ programs.~~three and nine~~ ~~months ended September 30, 2015 and September 30, 2014:~~


	Three Months Ended September 30,											Three Months Ended March 31,
(in millions, except percentages)	2015			2014			Better / (Worse)					2016		2015		Better / (Worse)
Rabbi trust impact allocated to selling, general, and administrative expenses	$	(12	)	$	(2	)	$	(10	)	(500	)%	$	—	$	6	$	(6	)	(100.0	)%
Rabbi trust impact allocated to owned and leased hotels expense	(3		)	(1		)	(2		)	(200	)%	—		1		(1		)	(100.0	)%
Net gains (losses) and interest income from marketable securities held to fund our Gold Passport program allocated to owned and leased hotels revenues	—			—			—			—	%
Net gains (losses) and interest income from marketable securities held to fund operating programs	$	(15	)	$	(3	)	$	(12	)	(400	)%
Net gains and interest income from marketable securities held to fund our Gold Passport program allocated to owned and leased hotels revenues												1		1		—			—	%
Net gains and interest income from marketable securities held to fund operating programs												$	1	$	8	$	(7	)	(87.5	)%

Nine Months Ended September 30,
(in millions, except percentages) 2015 2014 Better / (Worse)
Rabbi trust impact allocated to selling, general, and administrative expenses $ (5 ) $ 6
$ (11 ) (183 )%
Rabbi trust impact allocated to owned and leased hotels expense (2 ) 2
(4 ) (200 )%
Net gains (losses) and interest income from marketable securities held to fund our Gold Passport program allocated to owned and leased hotels revenues 1
1
—
— %
Net gains (losses) and interest income from marketable securities held to fund operating programs $ (6 ) $ 9
$ (15 ) (167 )%

Equity earnings (losses) from unconsolidated hospitality ventures. Equity ~~losses~~earnings from unconsolidated hospitality ventures were ~~$17 million and $46~~$2 million in the three ~~and nine~~ months ended ~~September 30, 2015, respectively,~~March 31, 2016, compared to equity ~~earnings~~losses from unconsolidated hospitality ventures of $6 million ~~and $22 million~~ in the three ~~and nine~~ months ended ~~September 30, 2014, respectively.~~March 31, 2015. The ~~$23~~$8 million ~~decrease~~increase during the three months ended ~~September 30, 2015,~~March 31, 2016, as compared to the three months ended September 30, 2014, was primarily driven by the sale of an entity that held an interest in one of our foreign currency denominated unconsolidated hospitality ventures which resulted in the release of $21 million of accumulated foreign currency translation losses upon sale. The $68 million decrease during the nine months ended September 30,March 31, 2015, as compared to the nine months ended September 30, 2014, was impacted by the aforementioned $21 million loss on the sale of an entity that held an interest in one of our foreign unconsolidated hospitality ventures. The decrease is also attributable to (i) a $12 million increase in foreign currency losses at one of our joint ventures which holds loans denominated in a currency other than its functional currency, resulting in losses due to currency volatility during the period, (ii) an $11 million decrease attributable to operating and non-operating losses related to one of our joint ventures which was driven primarily by interest, tax, and other nonrecurring expenses recorded during the period and (iii) the recognition during the nine months ended September 30, 2014 of $22 million related to gains on sales of hotels by hospitality ventures in which we held an interest.

~~Interest expense~~. Interest expense was flat and decreased $3 million in the three and nine months ended September 30, 2015, respectively, compared to the three and nine months ended September 30, 2014. The decrease compared to the nine months ended September 30, 2014 was primarily due to $7 million of equity earnings generated from one of our hospitality ventures related to a ~~reduction in interest expense~~forfeited deposit on ~~the Hyatt Regency Grand Cypress capital lease, for which we exercised our purchase option during 2014.~~a sale of hotels that did not close.

Asset impairments. Asset impairments are recorded as necessary based on our regular evaluation of impairment indicators. During the three ~~and nine~~ months ended ~~September 30,~~March 31, 2016 and March 31, 2015, we ~~recognized $5 million in~~did not record any asset impairment ~~charges~~charges.

During the first quarter of 2016, we identified an impairment indicator related to certain property and equipment ~~within~~and performed a recoverability analysis. Our estimate of the expected undiscounted future cash flows indicated that the net book value of the assets are expected to be recovered, therefore we did not record an impairment charge. However based on our ~~owned and leased hotels segment. During~~current analysis, asset impairments of approximately $25 million may be recorded in the ~~nine months ended September 30, 2014, we recognized $7 million in asset impairment charges related to~~future if our plans regarding our property and equipment ~~within our owned~~change. Accordingly, we will continue to monitor circumstances and ~~leased hotels segment.~~events in future periods to determine whether asset impairments are warranted.

~~Gains~~Gain on ~~sales~~sale of real estate. During the ~~nine~~three months ended ~~September 30,~~March 31, 2015, we sold Hyatt Regency Indianapolis ~~for $69 million, net of closing costs, to an unrelated third party~~ resulting in a pre-tax gain of $8 million, and entered into a long-term franchise agreement with the owner of the property. During the nine months ended September 30, 2015, we also sold a select service property for $5 million to an unrelated third party resulting in a $1 million pre-tax gain. During the nine months ended September 30, 2014, we sold nine select service properties and one full service property for a total of $311 million, net of closing costs, resulting in a pre-tax gain of $65 million in the nine months ended September 30, 2014, of which $3 million was recorded during the three months ended September 30, 2014 due to post-closing adjustments. We recognize the gains on sales of real estate on our condensed consolidated statements of income in the period of sale when we have concluded we do not retain significant continuing involvement with the hotel.million.

Other ~~income (loss), net~~loss, net.. ~~The table below provides a breakdown of~~ ~~other income (loss), net, for the~~ ~~three and nine~~ ~~months ended~~ ~~September 30, 2015~~ ~~and~~ ~~September 30, 2014~~:

Three Months Ended September 30,
(in millions, except percentages) 2015 2014 Better / (Worse)
Recoveries on hotel loans, net $ 8
$ —
$ 8
100 %
Guarantee liability amortization 3
2
1
50 %
Performance guarantee income (expense) 2
—
2
100 %
Interest income 2
3
(1 ) (33 )%
Foreign currency losses (1) (6 ) (1 ) (5 ) (500 )%
Realignment costs (2) —
(1 ) 1
100 %
Transaction costs (3) —
(2 ) 2
100 %
Other 2
1
1
100 %
Other income (loss), net $ 11
$ 2
$ 9
450 %



	Three Months Ended March 31,
(in millions, except percentages)	2016			2015			Better / (Worse)
Performance guarantee expense, net	$	(19	)	$	(16	)	$	(3	)	(18.8	)%
Foreign currency losses, net (1)	—			(7		)	7			100.0	%
Interest income	1			2			(1		)	(50.0	)%
Depreciation recovery (2)	5			1			4			400.0	%
Guarantee liability amortization	8			2			6			300.0	%
Other	1			—			1			100.0	%
Other loss, net	$	(4	)	$	(18	)	$	14		77.8	%

(1)

Includes foreign currency gains and losses recorded by entities which hold loans denominated in a currency other than ~~its~~their functional currency, ~~resulting in~~gains and losses ~~due to currency volatility primarily~~ related to foreign currency transactions and gains and losses from foreign currency forward contracts intended to offset our exposure associated with the ~~Brazilian Real during the period.~~fluctuations of certain foreign currencies.


(2)	Amounts represent ~~separation, recruiting~~recovery of depreciation expense charged out to our managed and ~~relocation costs incurred associated with the realignment of key management positions.~~franchised hotels. A corresponding expense is included in depreciation and amortization expense, therefore there is no impact on net income.


~~(3)~~	~~Represents transaction costs incurred to acquire the Park Hyatt New York and costs incurred in connection with the sale of Hyatt Residential Group.~~

Nine Months Ended September 30,
(in millions, except percentages) 2015 2014 Better / (Worse)
Recoveries on hotel loans, net $ 6
$ —
$ 6
100 %
Guarantee liability amortization 8
6
2
33 %
Performance guarantee income (expense) (1) (12 ) (13 ) 1
8 %
Interest income 6
8
(2 ) (25 )%
Foreign currency losses (2) (13 ) (2 ) (11 ) (550 )%
Cost method investment income —
1
(1 ) (100 )%
Realignment costs (3) —
(7 ) 7
100 %
Transaction costs (4) —
(5 ) 5
100 %
Other 2
1
1
100 %
Other income (loss), net $ (3 ) $ (11 ) $ 8
73 %

~~(1)~~

Includes $16 million and $15 million expense in the first quarters of 2015 and 2014, respectively, as we were required to pay the owner of the four managed hotels in France in accordance with our agreement. In the second quarters of 2015 and 2014, we outperformed the operating profit threshold and recorded $1 million and $3 million, respectively, of income for the four managed hotels in France. In the third quarters of 2015 and 2014, we outperformed the operating profit threshold and recorded $1 million and $1 million, respectively, of income for the four managed hotels in France. See Note 10 for further details.


~~(2)~~	Includes foreign currency losses recorded by entities which hold loans denominated in a currency other than its functional currency, resulting in losses due to currency volatility primarily related to the Brazilian Real during the period.


~~(3)~~	~~Amounts represent separation, recruiting and relocation costs incurred associated with the realignment of key management positions.~~


~~(4)~~	~~Represents transaction costs incurred in connection with the sale of Hyatt Residential Group and costs incurred to acquire the Park Hyatt New York.~~

Provision for income taxes.~~Our effective~~



	Three Months Ended March 31,
(in millions, except percentages)	2016			2015			Better / (Worse)
Income before income taxes	$	50		$	34		$	16		47.1	%
Income tax expense	(16		)	(12		)	(4		)	(33.3	)%
Effective tax rate	31.7		%	35.3		%				3.6	%

Income tax expense increased $4 million in the quarter ended March 31, 2016 compared to the quarter ended March 31, 2015, primarily due to an increase in pre-tax income tax rate was 44.6% and 47.7% for the three months ended September 30, 2015 and September 30, 2014, respectively, and 45.3% and 37.8% for the nine months ended September 30, 2015 and September 30, 2014, respectively.

~~For the three months ended September 30, 2015, our~~in 2016 compared to 2015. The decreased effective tax rate ~~was higher than the U.S. statutory federal income~~is primarily driven by an increased tax rate of 35% primarily due to the effect of state taxes on operations, the effect of certain foreign joint venture losses that are not benefited and a $4 million adjustment to true-up the provision for the U.S. tax return filing. For the nine months ended September 30, 2015, our effective tax rate was higher than the U.S. statutory federal income tax rate of 35% primarily due to the above-mentioned items, as wellbenefit recognized in 2016 as a ~~benefit~~result of ~~$4 million (including $3 million of interest and penalties) related to~~ the ~~expiration of statutes of limitations in certain foreign locations, a benefit of $2 million related to a state legislative change enacted in~~global transfer pricing changes implemented during the ~~second quarter of 2015, and a $2 million benefit for deferred tax adjustments to reflect the impact of regulations issued by the IRS in the first~~fourth quarter of 2015.

For the three months ended September 30, 2014, our effective tax rate was higher than the U.S. statutory federal income tax rate of 35% primarily due to the impact of our earnings in locations with higher tax rates and an expense of $6 million (including $1 million of interest) due to a provision for uncertain tax positions, primarily offset by other insignificant items. For the nine months ended September 30, 2014, our effective tax rate was lower than the U.S. statutory federal income tax rate of 35% primarily due to the above-mentioned items, offset by a $4 million benefit for the release of a valuation allowance of a foreign subsidiary and a benefit of $2 million related to a state legislative change enacted in the first quarter of 2014.

Segment Results

We evaluate segment operating performance using segment revenue and segment Adjusted EBITDA, as described in Note 14. 15, which includes discussion of an update to the definition of Adjusted EBITDA effective January 1, 2016.

The charts below illustrate revenues by segment ~~results presented below~~excluding other revenues from managed properties for the three months ended March 31, 2016 and March 31, 2015, which are presented before intersegment eliminations.

~~Owned and Leased Hotels. The tables below provide a reconciliation of owned and leased hotels~~

*Consolidated revenues for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2016 includes corporate and other revenues of $9 million, eliminations of $22 million and other revenues from managed properties of $457 million.

**Consolidated revenues for the three months ended March 31, 2015 includes corporate and ~~September 30, 2014.~~

other revenues of $9 million, eliminations of $22 million and other revenues from managed properties of $433 million.

Three Months Ended September 30,
(in millions, except percentages) 2015 2014 Better / (Worse) Currency Impact
Comparable owned and leased hotels revenues $ 463
$ 455
$ 8
1.8 % $ (14 )
Non-comparable owned and leased hotels revenues 37
100
(63 ) (63.0 )% (4 )
Total Owned and Leased Hotels Revenues $ 500
$ 555
$ (55 ) (9.9 )% $ (18 )
Owned and leased hotels revenues.



	Three Months Ended March 31,
(in millions, except percentages)	2016		2015		Better / (Worse)					Currency Impact
Comparable owned and leased hotels revenues	$	516	$	507	$	9		1.8	%	$	(8	)
Non-comparable owned and leased hotels revenues	—		2		(2		)	(100.0	)%	—
Total Owned and Leased Hotels Revenues	$	516	$	509	$	7		1.4	%	$	(8	)

Nine Months Ended September 30,
(in millions, except percentages) 2015 2014 Better / (Worse) Currency Impact
Comparable owned and leased hotels revenues $ 1,445
$ 1,411
$ 34
2.4 % $ (39 )
Non-comparable owned and leased hotels revenues 104
284
(180 ) (63.4 )% (9 )
Total Owned and Leased Hotels Revenues $ 1,549
$ 1,695
$ (146 ) (8.6 )% $ (48 )

The ~~increases~~increase in comparable hotels revenues during the three ~~and nine~~ months ended ~~September 30,~~March 31, 2016 compared to the three months ended March 31, 2015 ~~were~~was primarily driven by ~~increases~~an increase of ~~$22~~$12 million ~~and $69 million, respectively,~~ at our full service hotels in the United States, partially offset by ~~decreases~~a decrease of ~~$14~~$3 million ~~and $35 million, respectively,~~ at our comparable international hotels. ~~For the three and nine months ended September 30, 2015, revenue~~Revenue growth at our United States comparable full service hotels was primarily a result of improved transient occupancy and rate, and improved group ~~ADR and demand as well as food and beverage revenues.~~rate, partially offset by a decrease in group occupancy. The ~~decreases~~decrease in comparable international hotels ~~during the three and nine months ended September 30, 2015 were~~was primarily driven by unfavorable net currency ~~impacts~~impact of ~~$14~~$8 million, partially offset by improvements of $5 million at our owned hotel in Mexico driven by strong transient and ~~$39 million, respectively.~~group business.



	Three Months Ended March 31,
	RevPAR						Occupancy						ADR
(Comparable Owned and Leased Hotels)	2016		2015		Better / (Worse)		2016		2015		Change in Occ % pts		2016		2015		Better / (Worse)
Total Owned and Leased Hotels	$	169	$	165	2.4	%	74.3	%	74.2	%	0.1	%	$	227	$	222	2.2	%

Three Months Ended September 30,
RevPAR Occupancy ADR
(Comparable Owned and Leased
Hotels) 2015 2014 Better /
(Worse) 2015 2014 Change in
Occ % pts 2015 2014 Better /
(Worse)
Total Owned and Leased Hotels $ 167
$ 163
2.5 % 78.4 % 77.4 % 1.0 % $ 213
$ 211
1.2 %

Nine Months Ended September 30,
RevPAR Occupancy ADR
(Comparable Owned and Leased
Hotels) 2015 2014 Better /
(Worse) 2015 2014 Change in
Occ % pts 2015 2014 Better /
(Worse)
Total Owned and Leased Hotels $ 168
$ 164
2.6 % 77.7 % 76.8 % 0.9 % $ 216
$ 213
1.4 %

Comparable RevPAR at our owned and leased hotels in the three ~~and nine~~ months ended ~~September 30, 2015~~March 31, 2016 increased by ~~2.5%~~2.4% (or ~~5.9%~~3.7% excluding the net unfavorable currency ~~impacts) and 2.6% (or 5.7% excluding the net unfavorable currency impacts), respectively,~~impact) compared to the three ~~and nine~~ months ended ~~September 30, 2014.~~March 31, 2015. Excluding the unfavorable currency ~~impacts,~~impact, these increases were primarily driven by improved ADR at our ~~United States~~ comparable full service ~~hotels.~~

~~The decreases in non-comparable owned and leased hotels revenues were driven by the following activity, in order of significance:~~

•~~the sale of four full service hotels and 52 select service~~ hotels in ~~2014;~~the United States and

•~~the sale of one full service hotel in 2015.~~

~~These decreases in revenues were partially offset by the following activity:~~

~~the acquisition of one full service hotel from an unconsolidated hospitality venture in 2014; and~~

~~the acquisition of one full service and one select service hotel opening in 2014.~~ Mexico.

During the three months ended ~~September 30, 2015,~~March 31, 2016, no properties were removed from the comparable owned and leased hotels results. ~~During the nine months ended September 30, 2015, we removed two properties that were sold during the period from the comparable owned~~

Owned and leased hotels ~~results.~~segment Adjusted EBITDA.



	Three Months Ended March 31,
(in millions, except percentages)	2016		2015		Better / (Worse)
Owned and Leased Hotels Adjusted EBITDA	$	103	$	101	$	2	2.0	%
Pro rata share of unconsolidated hospitality ventures Adjusted EBITDA	28		23		5		21.7	%
Segment Adjusted EBITDA	$	131	$	124	$	7	5.6	%

~~The tables below provide a reconciliation of owned~~

Owned and leased hotels segment Adjusted EBITDA ~~for the three and nine months ended September 30, 2015 and September 30, 2014.~~

Three Months Ended September 30,
(in millions, except percentages) 2015 2014 Better / (Worse)
Owned and Leased hotels Adjusted EBITDA $ 89
$ 104
$ (15 ) (14.4 )%
Pro rata share of unconsolidated hospitality ventures Adjusted EBITDA 21
19
2
10.5 %
Segment Adjusted EBITDA $ 110
$ 123
$ (13 ) (10.6 )%

Nine Months Ended September 30,
(in millions, except percentages) 2015 2014 Better / (Worse)
Owned and Leased hotels Adjusted EBITDA $ 311
$ 341
$ (30 ) (8.8 )%
Pro rata share of unconsolidated hospitality ventures Adjusted EBITDA 63
64
(1 ) (1.6 )%
Segment Adjusted EBITDA $ 374
$ 405
$ (31 ) (7.7 )%

Adjusted EBITDA decreased by $13 million (including $4 million in net unfavorable currency impacts) and $31 million (including $9 million in net unfavorable currency impacts) in the three and nine months ended September 30, 2015, respectively, compared to the three and nine months ended September 30, 2014.. Adjusted EBITDA at our comparable owned and leased ~~properties decreased $1 million and~~hotels increased ~~$13~~$3 million during the three ~~and nine~~ months ended ~~September 30, 2015, respectively,~~March 31, 2016 compared to the same ~~periods~~period in ~~2014,~~2015, which included $3$2 million ~~and $6 million, respectively,~~ in net unfavorable currency ~~impacts. For the three and nine months ended September 30, 2015, revenue increases were primarily~~impact. This increase was largely due to ~~improved transient and group ADR and demand as well as food and beverage revenues~~revenue growth at our full service hotels in the United ~~States. The three months ended September 30, 2015 was impacted negatively by~~States and Mexico. Partially offsetting the revenue growth were increased ~~rent expense~~health insurance and increased property taxes at certain properties. The nine months ended September 30, 2015 was impacted by increased rent expense and property taxes at certain properties and higher commissions resulting from increased group business.labor costs. Adjusted EBITDA at our non-comparable hotels decreased ~~$14 million and $43~~$1 million during the three ~~and nine~~ months ended ~~September 30, 2015, respectively,~~March 31, 2016 compared to the same ~~periods~~period in ~~2014,~~2015, primarily due to ~~dispositions, and partially offset~~pre-opening costs at one hotel in the Americas that opened at the end of the first quarter of 2016.

Pro rata share of unconsolidated hospitality ventures Adjusted EBITDA. Our pro rata share of Adjusted EBITDA from our joint venture hotels increased $5 million during the three months ended March 31, 2016, compared to the same period in 2015, which included insignificant net unfavorable currency impact. The increase was primarily driven by hotel openings and ~~acquisitions during 2014 and 2015.~~improved performance at two ventures that operate in resort markets.

~~Americas management and franchising~~. Americas management and franchising segment revenues.



	Three Months Ended March 31,
(in millions, except percentages)	2016		2015		Better / (Worse)
Segment Revenues
Management, Franchise and Other Fees	$	91	$	88	$	3	3.4	%
Other Revenues from Managed Properties	421		400		21		5.3	%
Total Segment Revenues	$	512	$	488	$	24	4.9	%

Americas management and franchising total revenues increased ~~by $25 million and $81~~$24 million in the three ~~and nine~~ months ended ~~September 30, 2015, respectively,~~March 31, 2016 compared to the three ~~and nine~~ months ended ~~September 30, 2014,~~March 31, 2015, which included ~~$1 million and $3 million in~~insignificant net unfavorable currency ~~impacts, respectively.~~ impact.

Management, franchise and other fees increased $3 million during the three months ended March 31, 2016 compared to the three months ended March 31, 2015. Franchise fees increased $2 million during the three months ended March 31, 2016 primarily driven by new and converted hotels and improved performance at existing hotels. Management fees increased $2 million during the three months ended March 31, 2016 driven by a $1 million increase in base fees and a $1 million increase in incentive fees, spread across the portfolio.

Other revenues from managed properties increased ~~by $20 million and $59~~$21 million in the three ~~and nine~~ months ended ~~September 30, 2015, respectively,~~March 31, 2016 compared to the three ~~and nine~~ months ended ~~September 30, 2014. These increases in other revenues from managed properties were~~March 31, 2015 due to a higher volume of reimbursements paid to us by our managed properties for increased ~~participation in our Gold Passport program, increased~~hotel employee payroll and related ~~benefits expense, increased technology~~ costs and increased ~~marketing expense.~~member participation in

our Hyatt Gold Passport program. The increased volume of reimbursements was driven in part by new hotel ~~openings and previously owned~~openings.



	Three Months Ended March 31,
	RevPAR						Occupancy						ADR
(Comparable Systemwide Hotels)	2016		2015		Better / (Worse)		2016		2015		Change in Occ % pts		2016		2015		Better / (Worse)
Americas Full Service	$	142	$	140	1.3	%	71.2	%	72.1	%	(0.9	)%	$	199	$	194	2.7	%
Americas Select Service	99		93		6.7	%	74.9	%	72.2	%	2.7	%	132		128		2.9	%

Our full service hotels ~~that have been sold subject to long-term management agreements.~~

~~Management, franchise and other fees increased by $5 million and $22 million during~~comparable RevPAR improved 1.3% (or 2.2% excluding the three and nine months ended September 30, 2015, respectively, compared to the three and nine months ended September 30, 2014. Franchise fees increased $6 million and $18 million during the three and nine months ended September 30, 2015, respectively, compared to the same periodsnet unfavorable currency impact) in ~~the prior year, primarily driven by new and converted hotels and improved performance at existing hotels. Management fees decreased $4 million during~~ the three months ended ~~September 30, 2015~~March 31, 2016 compared to the same period in the prior year driven by a $2 million decrease in base fees and a $2 million decrease in incentive fees. Management fees were flat during the nine months ended September 30, 2015 compared to the same period in the prior year. Other fee revenues increased $3 million and $4 million in the three and nine months ended September 30, 2015, respectively, compared to the same periods in the prior year, primarily due to amortization of deferred gains from hotels sold subject to long-term management agreements of $2 million and $8 million, respectively. The three and nine month periods in the current year included termination fees of $2 million and $3 million, respectively. The nine month period in the prior year included termination fees of $5 million.

Our full service hotels comparable RevPAR improved 4.0% (or 5.3% excluding the unfavorable currency impacts) and 5.9% (or 6.9% excluding the unfavorable currency impacts) in the three and nine months ended September 30, 2015, respectively, compared to the same periods in the prior year. The increase in the three months ended September 30, 2015 was primarily due to increased transient ADR and demand. ~~The~~This increase inwas partially offset by the ~~nine months ended September 30, 2015 was primarily due to increased transient and~~timing of Easter, which shifted group ~~ADR and demand.~~

~~Comparable RevPAR at our select service hotels in~~occupancy from the ~~three and nine months ended September 30, 2015 increased by 7.2% and 8.1%, respectively,~~first quarter into the second quarter, compared to ~~the three and nine months ended September 30, 2014, driven primarily by increased ADR.~~2015.

During the three months ended ~~September 30, 2015,~~March 31, 2016, we removed one property ~~that left the chain~~ from the comparable Americas full service systemwide hotels ~~and no properties were removed from the comparable Americas select service systemwide hotels. During the nine months ended September 30, 2015, we removed two properties~~ that left the chain ~~from the comparable Americas full service systemwide hotels~~ and no properties were removed from the comparable Americas select service systemwide hotels.

Three Months Ended September 30,
RevPAR Occupancy ADR
(Comparable Systemwide Hotels) 2015 2014 Better /
(Worse) 2015 2014 Change in
Occ % pts 2015 2014 Better /
(Worse)
Americas Full Service $ 152
$ 146
4.0 % 79.0 % 78.5 % 0.5 % $ 192
$ 186
3.2 %
Americas Select Service 106
99
7.2 % 81.9 % 80.2 % 1.7 % 130
124
5.0 %
Americas management and franchising segment Adjusted EBITDA.

Three Months Ended September 30,
(in millions, except percentages) 2015 2014 Better / (Worse)
Segment Revenues
Management, Franchise and Other Fees $ 85
$ 80
$ 5
6.3 %
Other Revenues from Managed Properties 409
389
20
5.1 %
Total Segment Revenues $ 494
$ 469
$ 25
5.3 %
Segment Adjusted EBITDA $ 74
$ 66
$ 8
12.1 %



	Three Months Ended March 31,
(in millions, except percentages)	2016		2015		Better / (Worse)
Segment Adjusted EBITDA	$	76	$	73	$	3	4.1	%

Nine Months Ended September 30,
RevPAR Occupancy ADR
(Comparable Systemwide Hotels) 2015 2014 Better /
(Worse) 2015 2014 Change in
Occ % pts 2015 2014 Better /
(Worse)
Americas Full Service $ 150
$ 142
5.9 % 77.1 % 76.0 % 1.1 % $ 195
$ 186
4.5 %
Americas Select Service 102
94
8.1 % 78.9 % 77.9 % 1.0 % 129
121
6.7 %

Nine Months Ended September 30,
(in millions, except percentages) 2015 2014 Better / (Worse)
Segment Revenues
Management, Franchise and Other Fees $ 269
$ 247
$ 22
8.9 %
Other Revenues from Managed Properties 1,225
1,166
59
5.1 %
Total Segment Revenues $ 1,494
$ 1,413
$ 81
5.7 %
Segment Adjusted EBITDA $ 224
$ 201
$ 23
11.4 %

Adjusted EBITDA increased ~~by $8 million and $23~~$3 million in the three ~~and nine~~ months ended ~~September 30, 2015, respectively (which~~March 31, 2016, which included insignificant net unfavorable currency ~~impacts of $1 million and $3 million, respectively),~~impact, compared to the three ~~and nine~~ months ended ~~September 30, 2014~~March 31, 2015 due primarily to the aforementioned ~~$5 million and $22~~$3 million increase in management, franchise and other fees. ~~Selling, general~~

ASPAC management and ~~administrative expenses decreased~~franchising segment revenues.



	Three Months Ended March 31,
(in millions, except percentages)	2016		2015		Better / (Worse)
Segment Revenues
Management, Franchise and Other Fees	$	22	$	21	$	1	4.8	%
Other Revenues from Managed Properties	21		19		2		10.5	%
Total Segment Revenues	$	43	$	40	$	3	7.5	%

ASPAC management and franchising total revenues increased $3 million in the three months ended ~~September 30, 2015,~~March 31, 2016, compared to the three months ended ~~September 30, 2014, primarily due to decreased payroll and related costs and professional fees. Selling, general and administrative expenses decreased~~March 31, 2015, which included $1 million in ~~the nine months ended September 30, 2015, compared to the nine months ended September 30, 2014,~~net unfavorable currency impact. The increase was primarily driven by other revenues from managed properties due to ~~decreased~~a higher volume of reimbursements paid to us for increased member participation in our Hyatt Gold Passport program and increased reimbursed payroll and related costs.



	Three Months Ended March 31,
	RevPAR						Occupancy						ADR
(Comparable Systemwide Hotels)	2016		2015		Better / (Worse)		2016		2015		Change in Occ % pts		2016		2015		Better / (Worse)
ASPAC Full Service	$	139	$	141	(1.6	)%	66.4	%	64.5	%	1.9	%	$	209	$	219	(4.4	)%

~~ASPAC management and franchising.~~ ASPAC management and franchising segment revenues were flat and increased $8 million in the three and nine months ended September 30, 2015, respectively (which included $2 million and $4 million, respectively, in net unfavorable currency impacts), compared to the three and nine months ended September 30, 2014.

Management, franchise and other fees decreased $1 million and increased $2 million in the three and nine months ended September 30, 2015, respectively, compared to the same periods in the prior year. The decrease in the three months ended September 30, 2015 was primarily driven by a decrease in incentive fees at certain properties in South Korea, while the increase in the nine months ended September 30, 2015 was primarily driven by increased base and incentive fees at certain properties in Japan and China, partially offset by declines at certain properties in South Korea.

During the three and nine months ended September 30, 2015, comparable full service RevPAR decreased 5.6% (or increased 3.1% excluding the unfavorable currency impacts) and decreased 3.3% (or increased 3.8% excluding the unfavorable currency impacts), respectively, compared to the three and nine months ended September 30, 2014. Excluding the aforementioned unfavorable currency impacts, the increase in comparable full service RevPAR during the three and nine months ended September 30, 2015 was driven by increased occupancy in most areas within the region and increased ADR in Japan, western China and Macau, partially offset by decreased ADR in northern China, Hong Kong and South Korea.

During the three months ended ~~September 30, 2015, we removed one property from the~~March 31, 2016, comparable ~~ASPAC~~ full service ~~systemwide hotels as a result of a significant renovation. During~~RevPAR decreased 1.6% (or increased 1.9% excluding the nine months ended September 30, 2015, we removed three properties from the comparable ASPAC full service systemwide hotels, one property that left the chain and two properties as a result of a significant renovation at each of those properties.

Three Months Ended September 30,
RevPAR Occupancy ADR
(Comparable Systemwide Hotels) 2015 2014 Better /
(Worse) 2015 2014 Change in
Occ % pts 2015 2014 Better /
(Worse)
ASPAC Full Service $ 148
$ 157
(5.6 )% 72.3 % 70.0 % 2.3 % $ 205
$ 225
(8.6 )%

Three Months Ended September 30,
(in millions, except percentages) 2015 2014 Better / (Worse)
Segment Revenues
Management, Franchise and Other Fees $ 21
$ 22
$ (1 ) (4.5 )%
Other Revenues from Managed Properties 19
18
1
5.6 %
Total Segment Revenues $ 40
$ 40
$ —
— %
Segment Adjusted EBITDA $ 12
$ 9
$ 3
33.3 %

Nine Months Ended September 30,
RevPAR Occupancy ADR
(Comparable Systemwide Hotels) 2015 2014 Better /
(Worse) 2015 2014 Change in
Occ % pts 2015 2014 Better /
(Worse)
ASPAC Full Service $ 149
$ 154
(3.3 )% 69.7 % 67.3 % 2.4 % $ 214
$ 229
(6.6 )%

Nine Months Ended September 30,
(in millions, except percentages) 2015 2014 Better / (Worse)
Segment Revenues
Management, Franchise and Other Fees $ 65
$ 63
$ 2
3.2 %
Other Revenues from Managed Properties 59
53
6
11.3 %
Total Segment Revenues $ 124
$ 116
$ 8
6.9 %
Segment Adjusted EBITDA $ 35
$ 31
$ 4
12.9 %

~~Adjusted EBITDA increased $3 million and $4 million in the three and nine months ended September 30, 2015, respectively (which included $1 million and $3 million~~ net unfavorable currency ~~impacts, respectively), compared to the three and nine months ended September 30, 2014, respectively. The increase during the three months ended September 30, 2015~~impact) compared to the three months ended ~~September 30, 2014 was driven by a~~

decrease in selling, general and administrative expenses of $4 million which included decreased payroll and related costs, partially offset by the aforementioned decrease in management, franchise and other fees. The increase during the nine months ended September 30, 2015 compared to the nine months ended September 30, 2014 was driven by a decrease in selling, general and administrative expenses of $2 million as well as the aforementioned increase in management, franchise and other fees. Selling, general and administrative expenses in the three and nine months ended September 30, 2014 included $2 million of owner accommodation costs.

~~EAME/SW Asia management.~~ EAME/SW Asia management segment revenues decreased $3 million and $4 million in the three and nine months ended September 30, 2015, respectively (including $2 million and $6 million in net unfavorable currency impacts, respectively), compared to the three and nine months ended September 30, 2014.

Management and other fees decreased $2 million and $6 million in the three and nine months ended September 30, 2015, respectively, compared to the three and nine months ended September 30, 2014. The decreases were due to a $1 million and $4 million decrease in incentive fees and a $1 million and $3 million decrease in base fees, primarily driven by properties in Europe due to impacts from the stronger U.S. dollar and decreased performance at certain properties in the Middle East.

During the three and nine months ended September 30, 2015, comparable full service RevPAR decreased 7.5% (or increased 6.2% excluding unfavorable currency impacts) and decreased 9.7% (or increased 2.4% excluding unfavorable currency impacts), respectively, compared to the same periods in the prior year.March 31, 2015. Excluding the unfavorable currency ~~impacts,~~impact, the increase in comparable full service RevPAR during the three months ended ~~September 30, 2015~~March 31, 2016 was driven by ~~increased ADR in Europe and Africa and~~ increased occupancy in most areas of ~~the region, partially offset by decreased ADR in the Middle East~~China, South Korea and India. Excluding the unfavorable currency impacts, the increase in comparable full service RevPAR during the nine months ended September 30, 2015 was driven by increased occupancy in India, Africa, and parts of western EuropeSoutheast Asia and increased ADR in ~~Europe and Africa.~~Japan. These increases were partially offset by decreased occupancy in Hong Kong, Japan and Macau and decreased ADR in South Korea, selected hotels in Southeast Asia, Hong Kong and Macau.

During the ~~Middle East~~three months ended March 31, 2016, we removed two properties from the comparable ASPAC full service systemwide hotels, one as a result of a significant renovation and ~~eastern Europe~~one that left the chain.

ASPAC management and franchising segment Adjusted EBITDA.



	Three Months Ended March 31,
(in millions, except percentages)	2016		2015		Better / (Worse)
Segment Adjusted EBITDA	$	12	$	12	$	—	—	%

Adjusted EBITDA was flat in the three months ended March 31, 2016, which included $1 million net unfavorable currency impact, compared to the three months ended March 31, 2015. The increase in management, franchise and other fees was offset by an increase in payroll and related costs.

EAME/SW Asia management segment revenues.



	Three Months Ended March 31,
(in millions, except percentages)	2016		2015		Better / (Worse)
Segment Revenues
Management and Other Fees	$	16	$	16	$	—	—	%
Other Revenues from Managed Properties	15		14		1		7.1	%
Total Segment Revenues	$	31	$	30	$	1	3.3	%

EAME/SW Asia management total revenues increased $1 million in the three months ended March 31, 2016, which included $1 million in net unfavorable currency impact, compared to the three months ended March 31, 2015, driven by an increase in other revenues from managed properties.



	Three Months Ended March 31,
	RevPAR						Occupancy						ADR
(Comparable Systemwide Hotels)	2016		2015		Better / (Worse)		2016		2015		Change in Occ % pts		2016		2015		Better / (Worse)
EAME/SW Asia Full Service	$	119	$	132	(10.0	)%	62.3	%	64.0	%	(1.7	)%	$	190	$	206	(7.5	)%
EAME/SW Asia Select Service	$	71	$	59	19.4	%	67.8	%	55.1	%	12.7	%	$	105	$	108	(2.8	)%

During the three months ended March 31, 2016, comparable full service RevPAR decreased 10.0% (or 5.9% excluding unfavorable currency impact) compared to the same period in the prior year. Excluding the unfavorable currency impact, the decrease in comparable full service RevPAR during the three months ended March 31, 2016 was driven by decreased ADR in the Middle East, Africa and Germany as well as decreased occupancy in the Middle East, Africa, France and Turkey. These decreases were partially offset by increased ADR and occupancy in Eastern Europe and India. During the three months ended March 31, 2016, comparable select service RevPAR increased 19.4% (or 21.9% excluding unfavorable currency impact) compared to the same period in the prior year driven by increased occupancy.

During the three months ended ~~September 30, 2015, no~~March 31, 2016, we did not remove any properties ~~were removed from the comparable EAME/SW Asia full service systemwide hotel results. During the nine months ended September 30, 2015, we removed one property that experienced a partial closure~~ from the comparable EAME/SW Asia full service systemwide hotel results.

Three Months Ended September 30,
RevPAR Occupancy ADR
(Comparable Systemwide Hotels) 2015 2014 Better /
(Worse) 2015 2014 Change in
Occ % pts 2015 2014 Better /
(Worse)
EAME/SW Asia Full Service $ 136
$ 147
(7.5 )% 65.6 % 63.6 % 2.0 % $ 207
$ 230
(10.3 )%
EAME/SW Asia management segment Adjusted EBITDA.

Three Months Ended September 30,
(in millions, except percentages) 2015 2014 Better / (Worse)
Segment Revenues
Management and Other Fees $ 16
$ 18
$ (2 ) (11.1 )%
Other Revenues from Managed Properties 12
13
(1 ) (7.7 )%
Total Segment Revenues $ 28
$ 31
$ (3 ) (9.7 )%
Segment Adjusted EBITDA $ 7
$ 9
$ (2 ) (22.2 )%

Nine Months Ended September 30,
RevPAR Occupancy ADR
(Comparable Systemwide Hotels) 2015 2014 Better /
(Worse) 2015 2014 Change in
Occ % pts 2015 2014 Better /
(Worse)
EAME/SW Asia Full Service $ 137
$ 152
(9.7 )% 65.8 % 64.7 % 1.1 % $ 208
$ 235
(11.2 )%



	Three Months Ended March 31,
(in millions, except percentages)	2016		2015		Better / (Worse)
Segment Adjusted EBITDA	$	8	$	7	$	1	14.3	%

Nine Months Ended September 30,
(in millions, except percentages) 2015 2014 Better / (Worse)
Segment Revenues
Management and Other Fees $ 49
$ 55
$ (6 ) (10.9 )%
Other Revenues from Managed Properties 40
38
2
5.3 %
Total Segment Revenues $ 89
$ 93
$ (4 ) (4.3 )%
Segment Adjusted EBITDA $ 22
$ 30
$ (8 ) (26.7 )%

Adjusted EBITDA ~~decreased $2 million and $8~~increased $1 million in the three ~~and nine~~ months ended ~~September 30, 2015, respectively, (which~~March 31, 2016, which included $1 million ~~and $4 million~~in net unfavorable currency ~~impacts),~~impact, compared to the three ~~and nine~~ months ended ~~September 30, 2014.~~March 31, 2015. The ~~decrease~~increase in Adjusted EBITDA during the three months ended ~~September 30, 2015~~March 31, 2016 was driven by ~~the aforementioned $2 million~~a decrease in management and other fees. The decrease in Adjusted EBITDA during the nine months ended September 30, 2015 was driven by the aforementioned $6 million decrease in management and other fees and a $2 million increase in selling, general, and administrative costs, primarily driven by an increase in payroll and related costs.

Corporate and other. Corporate and other includes unallocated corporate expenses, ~~the results of our vacation ownership business prior to the sale in the fourth quarter of 2014,~~ license fees related to Hyatt Residence Club, and the results of our co-branded credit card. Corporate and other revenues were flat during the three months ended March 31, 2016, compared to the same period in 2015.



	Three Months Ended March 31,
(in millions, except percentages)	2016			2015			Better / (Worse)
Corporate and other revenues	$	9		$	9		$	—		—	%
Corporate and other Adjusted EBITDA	$	(33	)	$	(31	)	$	(2	)	(6.5	)%

Adjusted EBITDA decreased ~~$25 million and $69~~$2 million during the three ~~and nine~~ months ended ~~September 30, 2015, respectively,~~March 31, 2016 compared to the same periods in 2014. As a result of the sale of our vacation ownership business, other revenues decreased $15 million and $48 million and other revenues from managed properties decreased $11 million and $30 million during the three and nine month periods ended September 30, 2015, respectively, compared to the same periods in 2014. These decreases were partially offset by increases of $1 million and $6 million during the three and nine months ended September 30, 2015, respectively, compared to the same periods in 2014 due to growth of our co-branded credit card program. We recorded $3 million in license fees related to Hyatt Residence Club during the nine months ended September 30, 2015.

Three Months Ended September 30, Nine Months Ended September 30,
(in millions, except percentages) 2015 2014 Better / (Worse) 2015 2014 Better / (Worse)
Corporate and other revenues $ 10
$ 35
$ (25 ) (71.4 )% $ 29
$ 98
$ (69 ) (70.4 )%
Corporate and other Adjusted EBITDA $ (31 ) $ (28 ) $ (3 ) (10.7 )% $ (104 ) $ (85 ) $ (19 ) (22.4 )%

~~Adjusted EBITDA decreased $3 million and $19 million during the three and nine months ended September 30, 2015, respectively, compared to the same periods~~period in the prior year. ~~These decreases were~~This decrease was driven by the aforementioned $25 million and $69 million decreases in other revenues which were partially offset by decreases in other costs from managed properties, selling, general and administrative costs and other direct costs. Expenses decreased $23 million and $68 million during the three and nine months ended September 30, 2015, respectively, compared to the same periods in the prior year due to the sale of our vacation ownership business. Excluding the impact of the sale of our vacation ownership business, selling, general and administrative costs increaseda $1 million ~~and $13 million in the three and nine months ended September 30, 2015, respectively, compared to the same periods in the prior year. The~~ increase in ~~the nine months ended September 30, 2015 was primarily due to increased~~ payroll and related costs ~~professional fees~~ and ~~marketing costs. Direct costs increased~~a $1 million ~~and $5 million~~increase in ~~the three and nine months ended September 30, 2015, respectively, compared~~other direct costs related to ~~the same periods in the prior year from~~ our co-branded credit card program.

Eliminations. Eliminations of ~~$19 million and $66~~$22 million for each of the three ~~and nine~~ months ended ~~September 30,~~March 31, 2016andMarch 31, 2015, ~~respectively, and eliminations of $26 million and $79 million for the three and nine months ended September 30, 2014, respectively,~~ primarily represent fees charged by our management and franchising segments to our owned and leased hotels ~~segment~~ for managing their operations.

Non-GAAP Measure Reconciliation

We use the term Adjusted EBITDA throughout this quarterly report. Adjusted EBITDA, as we define it, is a non-GAAP measure. We define consolidated Adjusted EBITDA as net income attributable to Hyatt Hotels Corporation plus our pro-rata share of unconsolidated hospitality ventures Adjusted EBITDA ~~using~~based on our ownership percentage of each venture, adjusted to exclude the following items:

equity earnings (losses) from unconsolidated hospitality ventures;

~~asset impairments;~~stock-based compensation expense;

~~gains~~gain on ~~sales~~sale of real estate;

other ~~income (loss),~~loss, net;

~~net income attributable to noncontrolling interests;~~

depreciation and amortization;

interest expense; and

provision for income taxes.

Effective January 1, 2016, our definition of Adjusted EBITDA has been updated to exclude stock-based compensation expense, to facilitate comparison with our competitors. We have applied this change in the definition of Adjusted EBITDA to 2015 historical results to allow for comparability between the periods presented.

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

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

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

Adjusted EBITDA is not a substitute for net income attributable to Hyatt Hotels Corporation, net income, cash flows from operating activities or any other measure prescribed by GAAP. There are limitations to using non-GAAP measures such as Adjusted EBITDA. Although we believe that Adjusted EBITDA can make an evaluation of our operating performance more consistent because it removes items that do not reflect our core operations, other companies in our industry may define Adjusted EBITDA differently than we do. As a result, it may be difficult to use Adjusted EBITDA or similarly named non-GAAP measures that other companies may use to compare the performance of those companies to our performance. Because of these limitations, Adjusted EBITDA should not be considered as a measure of the income generated by our business or discretionary cash available to us to invest in the growth of our business. Our management compensates for these limitations by reference to our GAAP results and using Adjusted EBITDA supplementally. See our condensed consolidated statements of income and condensed

consolidated statements of cash flows in our condensed consolidated financial statements included elsewhere in this quarterly report.

The ~~following table sets forth~~charts below illustrate Adjusted EBITDA by segment for the three ~~and nine~~ months ended ~~September 30, 2015~~March 31, 2016 and ~~September 30, 2014.~~March 31, 2015.

*Consolidated Adjusted EBITDA for the three months ended March 31, 2016 includes Corporate and other Adjusted EBITDA of $(33) million

**Consolidated Adjusted EBITDA for the three months ended March 31, 2015 includes Corporate and other Adjusted EBITDA of $(31) million

Three Months Ended September 30,
(in millions, except percentages) 2015 2014 Better / (Worse)
Owned and leased hotels $ 110
$ 123
$ (13 ) (10.6 )%
Americas management and franchising 74
66
8
12.1 %
ASPAC management and franchising 12
9
3
33.3 %
EAME/SW Asia management 7
9
(2 ) (22.2 )%
Corporate and other (31 ) (28 ) (3 ) (10.7 )%
Consolidated Adjusted EBITDA $ 172
$ 179
$ (7 ) (3.9 )%

Nine Months Ended September 30,
(in millions, except percentages) 2015 2014 Better / (Worse)
Owned and leased hotels $ 374
$ 405
$ (31 ) (7.7 )%
Americas management and franchising 224
201
23
11.4 %
ASPAC management and franchising 35
31
4
12.9 %
EAME/SW Asia management 22
30
(8 ) (26.7 )%
Corporate and other (104 ) (85 ) (19 ) (22.4 )%
Consolidated Adjusted EBITDA $ 551
$ 582
$ (31 ) (5.3 )%


(in millions)	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended March 31,
(in millions)	2015			2014			2015			2014			2016			2015			Better / (Worse)
Adjusted EBITDA	$	172		$	179		$	551		$	582		$	194		$	185		$	9		4.9	%
Equity earnings (losses) from unconsolidated hospitality ventures	(17		)	6			(46		)	22			2			(6		)	8			133.3	%
Asset impairments	(5		)	—			(5		)	(7		)
Gains on sales of real estate	—			3			9			65
Other income (loss), net	11			2			(3		)	(11		)
Net income attributable to noncontrolling interests	—			(1		)	—			(2		)
Stock-based compensation expense													(16		)	(16		)	—			—	%
Gain on sale of real estate													—			8			(8		)	(100.0	)%
Other loss, net													(4		)	(18		)	14			77.8	%
Pro rata share of unconsolidated hospitality ventures Adjusted EBITDA	(21		)	(19		)	(63		)	(64		)	(28		)	(23		)	(5		)	(21.7	)%
EBITDA	140			170			443			585			148			130			18			13.8	%
Depreciation and amortization	(78		)	(91		)	(233		)	(269		)	(81		)	(79		)	(2		)	(2.5	)%
Interest expense	(17		)	(17		)	(51		)	(54		)	(17		)	(17		)	—			—	%
Provision for income taxes	(20		)	(30		)	(72		)	(100		)	(16		)	(12		)	(4		)	(33.3	)%
Net income attributable to Hyatt Hotels Corporation	$	25		$	32		$	87		$	162		$	34		$	22		$	12		54.5	%

Liquidity and Capital Resources

Overview

We finance our business primarily with existing cash, short-term investments and cash generated from our operations. As part of our business strategy, we also recycle capital by using net proceeds from dispositions to support our acquisitions and new investment opportunities. When appropriate, we borrow cash under our revolving credit facility or from other third-party sources, and may also raise funds by issuing debt or equity securities as necessary. We maintain a cash investment policy that emphasizes preservation of capital. At ~~September 30, 2015~~March 31, 2016 and December 31, ~~2014~~2015, we had cash and cash equivalents and short-term investments of ~~$634~~$826 million and $~~815~~503 million, respectively. We believe that our cash position, short-term investments and cash from operations, together with borrowing capacity under our revolving credit facility and our access to the capital markets, will be adequate to meet all of our funding requirements and capital deployment objectives for the foreseeable future.

We may, from time to time, seek to retire or purchase additional amounts of our outstanding equity and/or debt securities through cash purchases and/or exchanges for other securities, in open market purchases, privately negotiated transactions or otherwise, including pursuant to a Rule 10b5-1 plan. Such repurchases or exchanges, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved may be material. ~~During the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2015, we continued to make purchases of~~

Recent Transactions Affecting our ~~common stock under our approved repurchase program.~~ Liquidity and Capital Resources

During the three ~~and nine~~ months ended ~~September 30,~~March 31, 2016 and March 31, 2015, ~~we repurchased $195 million~~several transactions impacted our liquidity. See "—Sources and ~~$539 million~~Uses of the Company's common stock, respectively. The common stock repurchase program does not obligate the Company to repurchase any dollar amount or number of shares of common stock and the program may be suspended or discontinued at any

~~time. See Note~~ 11 ~~for further details of our existing repurchase program. As of~~ ~~September 30, 2015, we had $305 million remaining under the share repurchase authorization.~~

~~During the nine months ended September 30, 2015, we sold Hyatt Regency Indianapolis for a net sales price of $69 million. We entered into a long-term franchise agreement with the purchaser.~~

During the nine months ended September 30, 2015, we sold land and construction in progress for $14 million to an unconsolidated hospitality venture in which Hyatt has a 40% ownership interest. Also during the nine months ended September 30, 2015, we sold a Hyatt House hotel for a net sales price of $5 million.

~~Our current expectation for is that our operating performance guarantees will not have a significant impact on our liquidity and capital resources in 2015. See Note 10 for further information.~~Cash."

Sources and Uses of Cash

At ~~September 30, 2015~~ ~~and~~ ~~December 31, 2014, we had cash and cash equivalents of $569 million and~~ ~~$685 million, respectively. Additionally, we had short-term investments in certificates of deposits and marketable securities of $65 million and $130 million as of~~ ~~September 30, 2015~~ ~~and~~ ~~December 31, 2014, respectively.~~


(in millions)	Nine Months Ended September 30,						Three Months Ended March 31,
	2015			2014			2016			2015
Cash provided by (used in):
Operating activities	$	396		$	362		$	51		$	15
Investing activities	24			(250		)	(12		)	41
Financing activities	(534		)	(287		)	264			(193		)
Effect of changes in exchange rate on cash and cash equivalents	(2		)	(4		)	11			15
Net decrease in cash and cash equivalents	(116		)	(179		)
Cash and cash equivalents - beginning of year	685			454
Cash and cash equivalents classified as assets held for sale	—			(12		)
Cash and cash equivalents - end of period	$	569		$	263
Net increase (decrease) in cash and cash equivalents							$	314		$	(122	)

Cash Flows from Operating Activities

Cash ~~flows~~ provided by operating activities ~~totaled $396~~increased $36 million infor the ~~nine~~three months ended ~~September 30, 2015,~~March 31, 2016, compared to ~~$362 million in~~ the ~~same period last year. The increase was driven by restricted cash released from our captive insurance company and the~~three months ended March 31, 2015, primarily due to timing of ~~income tax payments. This increase was partially offset by the timing of certain accruals.~~accounts receivable, accounts payable and accrued expenses.

Cash Flows from Investing Activities

~~Cash flows provided by investing activities totaled $24~~During the three months ended March 31, 2016:

Capital expenditures were $38 million (see "—Capital Expenditures" below).

We invested $15 million in unconsolidated hospitality ventures.

We funded $12 million into escrow related to our acquisition of Thompson Miami Beach.

We released $29 million from restricted cash related to the ~~nine months ended September 30, 2015 compared to cash used~~finalization from the Canada Revenue Agency in ~~investing activities~~connection with the 2014 disposition of ~~$250~~Park Hyatt Toronto.

We received distributions of $23 million ~~in the same period last year. Specific activity in each period was as follows:~~from unconsolidated hospitality ventures.

During the ~~nine~~three months ended ~~September 30,~~March 31, 2015:

We sold Hyatt Regency Indianapolis for approximately $69 million.

~~We sold land and construction in progress for approximately $14 million, of which $12 million has been received.~~

~~We sold a Hyatt House hotel for approximately $5 million.~~

~~We released $143 million from escrow to cash and cash equivalents related to release of proceeds from like-kind exchanges.~~

Capital expenditures were ~~$185~~$61 million (see ~~"Capital~~"—Capital Expenditures" below).

We invested ~~$29~~$12 million in unconsolidated hospitality ventures.

We ~~received proceeds~~sold a net total of ~~$28 million from financing receivables.~~

~~We received net proceeds of $75 million from the maturity of time deposits.~~

~~We purchased net $114~~$18 million of marketable securities and short-term ~~investments related to Hyatt Gold Passport and our insurance captive.~~investments.

We released ~~$19~~$18 million from restricted cash related to the development of a hotel in Brazil.

~~During the~~ ~~nine~~ ~~months ended September 30, 2014:~~

We sold nine select service properties and one full service property for $310 million, net of closing costs and cash transferred, of which $232 million was classified as restricted cash in anticipation of consummation of a like-kind exchange agreement and was released upon the completion of the like-kind exchange.

~~We released $74 million from restricted cash in conjunction with the 2013 sale of Hyatt Key West and the consummation of a like-kind exchange agreement.~~

~~We acquired the Park Hyatt New York hotel, for a net purchase price of $391 million.~~

~~Capital expenditures were $168 million (see "Capital Expenditures" below).~~

~~We invested $97 million in investments which includes $84 million in unconsolidated hospitality ventures.~~

~~We purchased a net total of $21 million of marketable securities and short-term investments.~~

Cash Flows from Financing Activities

~~Cash flows used in financing activities totaled $534 million in~~During the ~~nine months endedSeptember 30, 2015~~ ~~compared to~~ ~~$287 million~~ ~~in the~~ ~~nine~~three months ended ~~September 30, 2014~~.

~~During the nine months ended September 30, 2015,~~March 31, 2016, the Company repurchased ~~9,614,463~~1,527,750 shares of common stock for an aggregate purchase price of ~~$539~~$63 million. During the ~~nine~~three months ended~~September 30, 2014~~March 31, 2015, the Company repurchased ~~4,048,230~~3,192,629 shares of common stock for an aggregate purchase price of ~~$229 million of which $228 million was settled in cash during the period.~~$187 million.

During the ~~nine~~three months ended ~~September 30, 2014,~~March 31, 2016, we issued our 2026 Senior Notes and received net proceeds of $396 million, after deducting discounts and offering expenses of approximately $4 million.

During the ~~Company exercised its purchase option~~three months ended March 31, 2016, we repaid the senior secured term loan related to ~~acquire the~~ Hyatt Regency ~~Grand Cypress hotel for $191~~Lost Pines Resort and Spa of $64 million.

During the ~~nine~~three months ended ~~September 30,~~March 31, 2016, we drew and subsequently repaid $30 million on our revolving credit facility. During the three months ended March 31, 2015, we did not draw on our revolving credit facility. During the nine months ended September 30, 2014, we drew $170 million on our revolving credit facility and repaid $40 million. During the nine months ended September 30, 2015 and September 30, 2014, we drew $12 million and $14 million, respectively, on a construction loan for the development of a hotel in Brazil.

The following is a summary of our debt to capital ratios:


(in millions, except percentages)	September 30, 2015			December 31, 2014			March 31, 2016			December 31, 2015
Consolidated debt (1)	$	1,377		$	1,390		$	1,706		$	1,370
Stockholders’ equity	4,130			4,627			3,996			3,991
Total capital	5,507			6,017			5,702			5,361
Total debt to total capital	25.0		%	23.1		%	29.9		%	25.6		%
Consolidated debt (1)	1,377			1,390			1,706			1,370
Less: Cash and cash equivalents and short-term investments	634			815			826			503
Net consolidated debt (cash and short-term investments)	$	743		$	575		$	880		$	867
Net debt to total capital	13.5		%	9.6		%	15.4		%	16.2		%


(1)	Excludes approximately ~~$682~~$744 million and ~~$638~~$692 million of our share of unconsolidated hospitality venture indebtedness as of ~~September 30, 2015~~March 31, 2016 and December 31, ~~2014~~2015, respectively, substantially all of which is non-recourse to ~~us.~~us and a portion of which we guarantee pursuant to separate agreements.

Capital Expenditures

We routinely make capital expenditures to enhance our business. We classify our capital expenditures into maintenance, enhancements to existing properties and investment in new properties.

During the nine months ended September 30, 2015 and September 30, 2014, we had total capital expenditures of $185 million and $168 million, respectively. Maintenance expenditures were $81 million and $64

million for the nine months ended September 30, 2015 and September 30, 2014, respectively, with the increase driven by increased spending at full service properties and increased technology spending, partially offset by decreased spending related to owned select service hotels driven by dispositions during 2014. Expenditures related to investments in new properties were $69 million and $56 million for the nine months ended September 30, 2015 and September 30, 2014, respectively. Expenditures related to investments in new properties in 2015 were primarily driven by construction spending on our development of a hotel in Brazil. Expenditures related to investments in new properties in 2014 were primarily driven by construction spending on our development of a hotel in Brazil and spending related to owned select service hotels which were subsequently sold during 2014. Enhancements to existing properties were $35 million and $48 million for the nine months ended September 30, 2015 and September 30, 2014, respectively. The decrease is primarily driven by decreased spending at owned select service hotels driven by dispositions during 2014 and decreased renovation activity at international full service properties, partially offset by increased spending at full service properties in the United States. We have been and will continue to be prudent with respect to our capital spending, taking into account our cash flow from operations.

The following is a summary of our capital expenditures during the three months ended March 31, 2016 and March 31, 2015:



(in millions)	March 31, 2016		March 31, 2015
Maintenance	$	11	$	32
Enhancements to existing properties	11		10
Investment in new properties	16		19
Total capital expenditures	$	38	$	61

Expenditures related to new properties are driven by construction spending on our development of a hotel in Brazil, which opened in early 2016. The decrease in maintenance expenditures in 2016 compared to 2015 is driven by decreased technology spend and decreased spend at domestic and international full service properties.

Senior Notes

The table below sets forth the outstanding principal balance of our Senior ~~Notes.~~Notes as of March 31, 2016. Interest on the Senior Notes is payable semi-annually.


Description	Principal Amount (in millions)		Principal Amount (in millions)
2016 Notes	$	250	$	250
2019 Notes	196		196
2021 Notes	250		250
2023 Notes	350		350
2026 Notes			400
Total	$	1,046	$	1,446

We are in compliance with all applicable covenants under the indenture governing our Senior Notes as of ~~September 30, 2015~~.March 31, 2016.

Revolving Credit Facility

On January 6, 2014, we entered into a Second Amended and Restated Credit Agreement with a syndicate of lenders that amended and restated our prior revolving credit facility to extend the facility's expiration from September 9, 2016 to January 4, 2019. The revolving credit facility is intended to provide financing for working capital and general corporate purposes, including commercial paper back-up and permitted investments and acquisitions.

There were no borrowings under the revolving credit facility during the nine months ended September 30, 2015 and the average daily borrowings under the revolving credit facility during the nine months ended September 30, 2014 were $22 million. There was no outstanding balance on ~~this credit facility at~~ ~~September 30, 2015, or at~~ ~~December 31, 2014. At December 31, 2014, however, we had $9 million in outstanding undrawn letters of credit that we issued under~~ our revolving credit facility ~~(which reduces the availability thereunder by the corresponding amount).~~at March 31, 2016 or at December 31, 2015. As of ~~September 30, 2015,~~March 31, 2016, we had available borrowing capacity of approximately $1.5 ~~billion.~~billion under our revolving credit facility, net of outstanding undrawn letters of credit.

We are in compliance with all applicable covenants under the revolving credit facility as of ~~September 30, 2015~~.March 31, 2016.

Letters of Credit

We issue letters of credit either under the revolving credit facility or directly with financial institutions. WeAs of March 31, 2016 and December 31, 2015 we had a total of ~~$56~~$227 million and ~~$65~~$228 million, respectively, in ~~letters of credit outstanding at September 30, 2015 and December 31, 2014, respectively. We had~~ letters of credit issued directly with financial ~~institutions of $56 million at September 30, 2015 and December 31, 2014. The~~institutions. These letters of credit ~~issued directly with financial institutions~~ had weighted-average fees of 9499 basis points at ~~September 30, 2015.~~March 31, 2016. The range of maturity on these letters of credit was up to ~~one year~~five years as of ~~September 30, 2015~~March 31, 2016.

~~Other Debt Obligations~~

~~We are in compliance with all applicable covenants under all other debt instruments as of~~ ~~September 30, 2015~~.

Critical Accounting Policies and Estimates

The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect reported amounts and related disclosures. We have discussed those estimates that we believe are critical and require the use of complex judgment in their application in our ~~2014~~2015 Form ~~10-K~~.10-K. Since the date of our ~~2014~~2015 Form 10-K, there have been no material changes to our critical accounting policies or the methodologies or assumptions we apply under them.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

We are exposed to market risk primarily from changes in interest rates and foreign currency exchange rates. In certain situations, we seek to reduce earnings and cash flow volatility associated with changes in interest rates and foreign currency exchange rates by entering into financial arrangements to provide a hedge against a portion of the risks associated with such volatility. We continue to have exposure to such risks to the extent they are not hedged. We enter into derivative financial arrangements to the extent they meet the objectives described above, and we do not use derivatives for trading or speculative purposes. At ~~September 30, 2015~~March 31, 2016, we were a party to hedging transactions, including the use of derivative financial instruments, as discussed below.

Interest Rate Risk

In the normal course of business, we are exposed to the impact of interest rate changes due to our borrowing activities. Our objective is to manage the risk of interest rate changes on the results of operations, cash flows, and the market value of our debt by creating an appropriate balance between our fixed and floating-rate debt. We enter into interest rate derivative transactions from time to time, including interest rate swaps, in order to maintain a level of exposure to interest rate variability that the Company deems acceptable. As of ~~September 30, 2015~~March 31, 2016 and December 31, ~~2014~~2015, we held no interest rate swap contracts.

Foreign Currency Exposures and Exchange Rate Instruments

We transact business in various foreign currencies and utilize foreign currency forward contracts to offset our exposure associated with the fluctuations of certain foreign currencies. These foreign currency exposures typically arise from ~~intercompany loans~~third-party debt, debt repayment guarantees and ~~other~~ intercompany transactions.

The U.S. dollar equivalent of the notional amount of the outstanding forward contracts, the majority of which relate to intercompany ~~loans,~~transactions, with terms of less than one year, is as follows (in U.S. dollars):


(in millions)	September 30, 2015		December 31, 2014		March 31, 2016		December 31, 2015
Pound Sterling	$	170	$	171	$	164	$	170
Korean Won					35		33
Canadian Dollar	64		72		33		61
Korean Won	34		32
Indian Rupee					—		27
Swiss Franc	8		10		9		9
Brazilian Real	4		—		4		4
Total notional amount of forward contracts	$	280	$	285	$	245	$	304

We intend to offset the gains and losses related to our third-party debt, debt repayment guarantees and intercompany ~~loans and~~ transactions with gains or losses on our foreign currency forward contracts such that there is a negligible effect on net income. ~~The~~For the three months ended March 31, 2016 and March 31, 2015, the effects of these derivative instruments within other ~~income (loss),~~loss, net were ~~gains of $12~~an insignificant gain and a $14 million ~~and $16 million for the three and nine months ended~~ ~~September 30, 2015, respectively. For the three and nine months ended September 30, 2014, the effect of these derivative instruments were gains of $9 million and $1 million,~~gain, respectively. We expect to continue this practice relating to our intercompany ~~loans and~~ transactions, and ~~we will continue~~may also begin to manage the risks associated with other transactional ~~and translational~~ foreign currency volatility within our business.

Item 4. Controls and Procedures.

Disclosure Controls and Procedures. The Company maintains a set of disclosure controls and procedures designed to ensure that information required to be disclosed by the Company in reports that it files or submits under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission ("SEC") rules and forms. In accordance with Rule 13a-15(b) of the Exchange Act, as of the end of the period covered by this quarterly report, an evaluation was carried out under the supervision and with the participation of the Company's management, including its Principal Executive Officer and Principal Financial Officer, of the effectiveness of its disclosure controls and procedures. Based on that evaluation, the Company's Principal Executive Officer and Principal Financial Officer concluded that the Company's disclosure controls and procedures, as of the end of the period covered by this quarterly report, were effective to provide reasonable assurance that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and is accumulated and communicated to the Company's management, including the Principal Executive Officer and Principal Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting. There has been no change in the Company's internal control over financial reporting during the Company's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings.

We are involved in various claims and lawsuits arising in the normal course of business, including proceedings involving tort and other general liability claims, workers' compensation and other employee claims, intellectual property claims and claims related to our management of certain hotel properties. Most occurrences involving liability, claims of negligence and employees are covered by insurance with solvent insurance carriers. We recognize a liability when we believe the loss is probable and reasonably estimable. We currently believe that the ultimate outcome of such lawsuits and proceedings will not, individually or in the aggregate, have a material effect on our consolidated financial position, results of operations or liquidity.

Item 1A. Risk Factors.

At ~~September 30, 2015~~March 31, 2016, there have been no material changes from the risk factors previously disclosed in response to Item 1A. to Part I of our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2014~~2015.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Issuer Purchases of Equity Securities

The following table sets forth information regarding the Company's purchases of shares of Class A common stock during the quarter ended ~~September 30, 2015~~March 31, 2016:

Total Number
of Shares
Purchased (1)

Weighted Average
Price Paid
per Share

Total Number of
Shares Purchased
as Part of Publicly
Announced Plans

Maximum Number (or
Approximate Dollar
Value) of Shares that
May Yet Be Purchased
under the
Program
July 1 to July 31, 2015 430,659
$ 57.02
430,659
$ 75,281,771
August 1 to August 31, 2015 1,669,634
$ 52.32
1,669,634
$ 387,928,372
September 1 to September 30, 2015 1,635,167
$ 50.61
1,635,167
$ 305,168,061
Total 3,735,460
$ 52.11
3,735,460



	Total Number of Shares Purchased (1)	Weighted Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans	Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased under the Program
January 1 to January 31, 2016	602,006	$	39.86	602,006	$	105,098,221
February 1 to February 29, 2016	569,435	$	39.01	569,435	$	332,885,738
March 1 to March 31, 2016	356,309	$	47.70	356,309	$	315,890,664
Total	1,527,750	$	41.37	1,527,750

(1)

On each of ~~December 11, 2014 and~~ August 4, 2015 and February 18, 2016, we announced the approvals of expansions of our share repurchase program pursuant to which we are authorized to purchase up to an additional $400 million and ~~$400~~$250 million, respectively, of Class A and Class B common stock in the open market, in privately negotiated transactions, or otherwise, including pursuant to a Rule 10b5-1 plan. The repurchase programs do not have an expiration date. As of ~~September 30, 2015~~March 31, 2016, the Company had approximately ~~$305~~$316 million remaining under ~~the~~its current share repurchase ~~authorization.~~authorizations.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not Applicable.

Item 5. Other Information.

None.

Item 6. Exhibits.



Exhibit Number	Exhibit Description

3.1	Amended and Restated Certificate of Incorporation of Hyatt Hotels Corporation (incorporated by reference to Exhibit 3.1 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2015 (File No. 001-34521) filed with the Securities and Exchange Commission on August 4, 2015)

3.2	Amended and Restated Bylaws of Hyatt Hotels Corporation (incorporated by reference to Exhibit 3.2 to the Company's Current Report on Form 8-K (File No. 001-34521) filed with the Securities and Exchange Commission on September 11, 2014)

4.1	Sixth Supplemental Indenture, dated March 7, 2016, between Hyatt Hotels Corporation and Wells Fargo Bank, National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K (File No. 001-34521) filed with the Securities and Exchange Commission on March 8, 2016)

4.2	Form of 4.850% Senior Note due 2026 (included as part of Exhibit 4.1 above) (incorporated by reference to Exhibit 4.2 to the Company's Current Report on Form 8-K (File No. 001-34521) filed with the Securities and Exchange Commission on March 8, 2016)

+10.1	Form of Performance Share Unit Agreement under the Third Amended and Restated Hyatt Hotels Corporation Long-Term Incentive Plan (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K (File No. 001-34521) filed with the Securities and Exchange Commission on March 25, 2016)

+10.2	Employment Letter, dated as of February 10, 2016, between Hyatt Corporation and Patrick J. Grismer (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K (File No. 001-34521) filed with the Securities and Exchange Commission on February 11, 2016)

31.1	Certification of the Chief Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2	Certification of the Chief Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1	Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2	Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS	XBRL Instance Document

101.SCH	XBRL Taxonomy Extension Schema Document

101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF	XBRL Taxonomy Extension Definition Linkbase Document

101.LAB	XBRL Taxonomy Extension Label Linkbase Document

101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

+	Management contract or compensatory plan or arrangement.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



		Hyatt Hotels Corporation

Date:	~~November~~May 3, ~~2015~~2016	By:	/s/ Mark S. Hoplamazian
			Mark S. Hoplamazian
			President and Chief Executive Officer
			(Principal Executive Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the undersigned, in his capacity as the principal financial officer of the registrant.



		Hyatt Hotels Corporation

Date:	~~November~~May 3, ~~2015~~2016	By:	/s/ ~~Atish Shah~~Patrick J. Grismer
			~~Atish Shah~~Patrick J. Grismer
			~~Senior~~Executive Vice President, ~~Interim~~ Chief Financial Officer
			(Principal Financial Officer)

5743



Impaired Loans
September 30, 2015
	Gross Loan Balance (Principal and Interest)		Unpaid Principal Balance		Related Allowance			Average Recorded Loan Balance
Secured financing to hotel owners	$	—	$	—	$	—		$	—
Unsecured financing to hotel owners	57		41		(57		)	54



Analysis of Financing Receivables
September 30, 2015
	Receivables Past Due		Greater than 90 Days Past Due		Receivables on Non-Accrual Status
Secured financing to hotel owners	$	—	$	—	$	—
Unsecured financing to hotel owners*	3		3		88
Total	$	3	$	3	$	88