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

Thank you, Sharon. Good morning, everyone, and thank you for joining us for Hyatt's second quarter 2016 earnings call. I am here in Chicago with Mark Hoplamazian, Hyatt's President and Chief Executive Officer; Pat Grismer, Hyatt's Chief Financial Officer and Amanda Bryant, Hyatt's Direct of Investor Relations. Mark will begin the call by providing a high-level review of our second quarter results before turning for discussion about how we continue to drive preference on multiple fronts with our debt, shareholders and owners. Mark will then turn the call over to Pat to provide details on our financial performance during the quarter and to provide an update on our full year outlook. We will then take your questions. Before we get started, I would like to remind everyone that certain statements made on this call are not historical facts and are considered forward-looking statements. These statements are subject to numerous risks and uncertainties, as described in our Annual Report on Form 10-K and other SEC filings which could cause our actual results to differ materially from those expressed in or implied by our comments. Forward-looking statements in the earnings release that we issued earlier this morning, along with the comments on this call are made only as of today, August 2, 2016 and we undertake no obligation to publicly update any of these forward-looking statements as actual events unfold. You can find a reconciliation of non-GAAP financial measures referred to in our remarks on our website at, hyatt.com, under the Press Release section of our Investor Relations link and in this morning's earnings release. An archive of this call will be available on our website for 90 days per the information included in this morning's release. With that, I'll turn it over to Mark to get started. Mark S. Hoplamazian -…

Thank you, Mark, and good morning, everyone. Today, I'll review our second quarter results and provide an update on our full year outlook. Earlier today, we reported second quarter net income of $67 million or earnings per share of $0.49, on a diluted basis. This included adjusted EBITDA of $227 million, which was up 7% from prior year on a constant currency basis, and up nearly 10% from prior year, when further adjusted for $5 million of transaction impacts which I'll discuss later. First, I'll cover our owned and leased business, which also includes our joint ventures, and then I'll review the results of our managed and franchised business. Our owned and leased business, which accounted for about 58% of our adjusted EBITDA before corporate and other expenses in Q2, delivered a strong quarter. RevPAR at comparable owned and leased Hotels increased 4.5% in constant dollars led by very strong performance at our hotels in North America, notably our Hyatt Regency hotels in Mexico City, Orlando and Atlanta, partially offset by soft results at our hotels in Europe. In fact, RevPAR at our comparable owned and leased hotels in the Americas, increased by an impressive 6.1% in the second quarter, more than offsetting a 4.4% RevPAR decline at comparable owned and leased hotels in Europe. And while our comparable owned and leased margins were flat to prior year at 27.6%, there were significant regional differences underlying this result, commensurate with the variations in RevPAR performance, which I just described. In the Americas, comparable owned and leased margins improved by 60 basis points in the quarter, compared to last year, offsetting a nearly a four percentage point margin decline in Europe. As was the case in the first quarter, our joint ventures in total delivered strong results in Q2, more specifically,…

Your first question comes from Thomas Allen from Morgan Stanley. Your line is open. Thomas G. Allen - Morgan Stanley & Co. LLC: Hey, good morning. Can you just talk about, on the G&A savings, can you just talk about – on the CapEx savings, can you just give some more color there, I mean, where are you finding places to save? You said it was driven by lower RevPAR, but just wanted to understand some more granularity? Thank you.

Certainly, Thomas. As it relates to SG&A, we're looking at balance of year discretionary spend, and so we are deferring spending on certain projects, including professional fees associated with those projects. We're also looking at slowing down backfill of non-critical positions here at corporate. And then on the CapEx front, as we revisit the pace of corporate development activities and what we reasonably expect to incur on the maintenance CapEx front, given what our trend has been year-to-date, we can see a path to lower CapEx spending. Thomas G. Allen - Morgan Stanley & Co. LLC: That's helpful. And then just on the – my second question, just on the direct booking push, you said, I think, Mark said, some comments about how 70% of people who are going in are attracted to the member discount rates are actually booking other rates, can you just give us some more clarity around that? Thanks. Mark S. Hoplamazian - President, Chief Executive Officer & Director: Sure. So, we've got various rates deployed through our digital platform. And so what we're seeing is that a majority of the people and the number is in the range of 70%, who are clicking through and booking, so it's not just people who are clicking through, but actually who ultimately do book, are exploring other rates while they're in the site and then ultimately booking a different rate – a different rate than the member discount rate, which may have been the thing that attracted them to click through to begin with. So... Thomas G. Allen - Morgan Stanley & Co. LLC: So is it for a different class of room, or I mean, to me it seems if I'm going to get, I would go for the cheapest rate, so... Mark S. Hoplamazian - President, Chief Executive Officer & Director: Yeah, it actually – it spans across many different buying behaviors that relate to people who are booking actually for different time periods in different hotels and across different rate levels. We're actually doing more work on this right now to see if we can see other patterns, but I guess really the point that I would make is that what we're – our experience to-date is that what we're seeing is increased – an increased level of engagement and increased level of usage of the hyatt.com platform, whether it's through the app or through the website, and – or through mobile or through the website on PC. And so, it's really driven higher market share, higher channel share for hyatt.com overall. It just happens that the actual booking pattern isn't primarily of member discount rated rates. Thomas G. Allen - Morgan Stanley & Co. LLC: Great. Thank you. Mark S. Hoplamazian - President, Chief Executive Officer & Director: Thanks.

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

Hi. Good morning. I was wondering if you could give us a little bit more color about the – some of the acquisition and disposition activity, specifically the Andaz 5th Avenue sold and you guys gave a few metrics in the release on that. But it looks like that's at actually a discount to the cost that you constructed that hotel at. So, I am sure there is a lot more color there given all the puts and takes of any individual hotel, but any color on that? And then, I just wanted to clarify as sort of my follow-up, you said I think $17 million of incremental EBITDA from some of the M&A activity. Is that primarily from the contributions on a run-rate basis for the Royal Palms and The Confidante, is there anything else that's adding to that? Mark S. Hoplamazian - President, Chief Executive Officer & Director: Okay, great. Thanks. So, on the Andaz 5th Avenue, the hotel was originally developed to be actually two things. The first was 144-room hotel along with a 40-unit residential development and subsequent to the time that we completed the hotel, the residential market in New York was really in bad shape. So, we actually ended up operating the hotel as 184 room hotel. And I – that's really the key change in our really assumption versus putting the hotel into use once it was opened. And what we found is that the hotel – performance in the hotel positioning in the market was enhanced by the retention of the residential units within the hotel inventory because they were sold as suites in effect. And so, that's really the major difference in the underwriting. So, our original development was maybe at a higher price per key in part because we built…

Okay. And, Mark, just any color you could give us explicitly on how the cap rate or EBITDA multiple for the Andaz 5th Avenue looked, I just think it's a benchmark transaction for a lot of people, who are pretty focused on that market? Mark S. Hoplamazian - President, Chief Executive Officer & Director: Sure.

And if not, then maybe at least magnitude wise relative to where you guys currently trade? Mark S. Hoplamazian - President, Chief Executive Officer & Director: Yeah. No, I'm happy to provide you a little bit of color. So if you look at the total earnings at say the EBITDA level for the property on a trailing basis, it was in the range of $10 million. And if you then recognize that some portion of that will be retained through a management arrangement, management agreement rather, that will hopefully give you some measure for what – how the trade could be viewed. So if you look at it on an NOI basis, it's somewhere between 3% and 4% cap rate on an NOI basis.

Great. Thank you very much. Mark S. Hoplamazian - President, Chief Executive Officer & Director: Sure.

Your next question comes from Jeff Donnelly from Wells Fargo. Your line is open.

Good morning, guys. Actually just, Mark, sticking with the Andaz quickly. I was just curious, was that a broadly marketed transaction or was that one that you just went direct to the ultimate buyer? Mark S. Hoplamazian - President, Chief Executive Officer & Director: We ended up in a dialogue with the buyer with whom we've had a very long time relationship, because we – first of all, they are an existing owner, and secondly, we've had discussions with them about other projects around the world. They had expressed an interest in this particular hotel and that evolved into a discussion with them about them being the owner. This is a particularly important property for us, because it's a – it's really a very important brand representation for us in a critical location in a critical city. So, there – they are really a superb ownership group, they have demonstrated a great commitment to our brands in maintaining the other hotels that they've got with us. And the fact that we think that we're going to be growing with them in the future all pointed to a very sensible transaction. So, we – it did not – we did not widely market the property, this was really the evolution of a discussion that we had with a very close partner.

Thanks. And I guess more broadly, should we expect that your pace of owned hotel dispositions could, I guess, decelerate at this point in the cycle or do you continue to see opportunities to recycle capital? Mark S. Hoplamazian - President, Chief Executive Officer & Director: The later, we're active and in discussions on a couple of different situations on the disposition side. And likewise, we're continuing to see really interesting opportunities on the acquisition side. So, we've always said that we're not trying to market time and we also benefit from having a portfolio that includes a number of hotels that I think retain and have very strong inherent value, no matter where we are in the cycle. So, our ability to trade through the cycle and be able to recycle is alive and well. And we're seeing increased level of activity on both sides.

And just one last question, if I could is just concerning the regional demand impacts you've referenced in your remarks such as Paris or some of the Zika-affected territories, in both cases, do you feel, from what you're seeing that you've already experienced the worst of the demand erosion from those events, so while it's certainly down year-over-year. I guess, maybe, put it differently, do you think it's worsening sequentially or do you think that's really behind us and you can kind of see a time may be next year where you begin to sort of rebuild demand? Mark S. Hoplamazian - President, Chief Executive Officer & Director: Well, let me just start the answer, but let me turn it to Pat, who has got at least a little bit of an update on what's happened in the aftermath of these, which I think maybe he'll provide you with some reference point there. I would say that, some of what we saw in France and our performance there was in part driven by a significant renovation impact. So, I think that we're seeing sort of an outsized decline in the short-term relative to a market that's also down. So, we've – it's a weak market situation by virtue of some disruptions and security issues, but also exacerbated by the reno. And the same actually – almost exactly the same thing happened in the Middle East where we had – our largest hotel in the Middle East was under renovation in the quarter. The Ramadan – change in Ramadan timing hurt the quarter, so the market was down. So, I just think we had a couple of specific things that we're particularly outsized, which is why you see our – the difference between very, very strong performance in the U.S. versus weaker performance around the world in part driven by these particular things.

And just to build on Mark's comments, when we look at the performance of our hotels in the areas or the markets that have been disrupted by these external events, we're not seeing a level of performance that is materially different from general market behavior, with the exception, as we've mentioned, our Étoile hotel – Hyatt Regency Étoile in Paris, due to the significance of the renovation impact. But to add a little bit more color and context to what has happened in the wake of the terrorist attacks in Nice, we did see understandably rather significant cancellations of reservations that have been made for the months of July and August. And when we look at general market data for the upper scale segment in Nice, what we're seeing is that the market is down about 25%, since those attacks. And we're seeing similar outsized impacts, if you will, in Turkey as another example. But the other thing that I want to mention here is that, while these are very significant events, and not in any way to understate the impact of these, these businesses are relatively small from an EBITDA perspective, and to put them into context, when you look at Istanbul as an example, that market represents less than 5% of our adjusted EBITDA for our Europe, Africa, Middle East, Southwest Asia segment, which itself, as I mentioned earlier, accounted for less than 10% of Hyatt Hotels core total adjusted EBITDA.

That's helpful. Thank you.

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

Hi, everybody. Mark S. Hoplamazian - President, Chief Executive Officer & Director: Hey, Joe.

Mark, just to understand better your full year 2016 RevPAR guidance or expectation. Is it the reduction entirely related to transient demand in the U.S., and say what we can characterize as these regional one-offs, Zika, terrorism events, and that group is relatively unchanged, or how do you think about those different buckets? Mark S. Hoplamazian - President, Chief Executive Officer & Director: Yeah, I think that's generally accurate, Joe. And the reason is that, while there are some possible disruptions, there's some uncertainty with respect to the fourth quarter, for some of the reasons that we mentioned on the group side. But frankly, a huge proportion, something like I think it's over 95%. It's just under 95% of our total group business for the year is already on the books, so – relative to our forecast. So, I guess what I would say is, the variability that we are in effect building in relative to the remainder of the year is mostly a reflection of how we see the evolution of transient for the remainder of the year. And the fourth quarter could be an incremental boost or drag, but I don't think it's going to have a significant – I mean it can't have a significant total impact, given the proportion of our group business that's already booked.

Great. Thank you. Mark S. Hoplamazian - President, Chief Executive Officer & Director: Sure.

Your next question comes from Carlo Santarelli from Deutsche Bank. Your line is open.

Hey guys. Thanks for taking my question. Mark, could you talk a little bit about what you're seeing in the development landscape domestically, and how the tenor of those conversations have evolved here as we've moved through the year? Mark S. Hoplamazian - President, Chief Executive Officer & Director: Sure. I guess what I would tell you, first and foremost, is that the pace of signings has clearly increased. And we are active across all of our brands. Hyatt Place and Hyatt House are particularly strong. So we had a significant number of signings that came through and got finalized in the second quarter and about – somewhere in the range of 60% to 65% of those were Hyatt Place and Hyatt House branded property. So, we see continued strength there. The fact is that construction costs are increasing everywhere, especially in the United States in a number of the key markets where a number of our hotel deals are signed up. So we have a big urban expansion of Hyatt Place and Hyatt House, which we're in the middle of, which is great. But it is also true that developers are under a bit more pressure because of increased construction costs. Financing tends to be relatively stable – has been relatively stable. Rates have come down, availability has been maybe a little tighter, but overall, I would say, very healthy level of activity. And I would say the same has been true in China. India has been, I think, really more tepid over the last several years because of a persistent decline in the market there; of course, recent results have been really strong and we're seeing a clear recovery in the market, so I think that will tend to bolster future development activity, assuming that the borrowing rate for money starts to stabilize there and comes down a little bit. So, I would say, generally speaking, I'm really encouraged and actually very happy with the progression of the base of executed contracts we've got.

Great. Thank you very much. Mark S. Hoplamazian - President, Chief Executive Officer & Director: Sure.

Your next question comes from David Loeb from Baird. Your line is open. David Loeb - Robert W. Baird & Co., Inc. (Broker): Hi, Mark. Just to continue down the development pipeline. You added 5,000 rooms, that's a lot this quarter, can you just talk a little bit about how much of a capital commitment you're making for those, and what's the breakdown in the pipeline between franchised and managed? Mark S. Hoplamazian - President, Chief Executive Officer & Director: I don't have a franchised/managed breakdown for you off the top of my head, but we can do a little research on that and maybe answer it while we're on the call or if not, subsequent. But I would say that the level of financial commitment has been quite modest. We have had a few deals in which we have participated, or committed to participate, in the capital stack for development, let's say and, of course, there are deals in which we have deployed key money. There's some other deals in which we have secured sites and then flipped those projects to developers, and that's also been a very effective way in which we've been able to move the pipeline along. Very cost effective and also, it allows us to actually target specific markets in which we want to have representation by brand, and then be able to get and list some good partners to then take the projects over and build those hotels.

And David, what I would add, on to what Mark has said, with respect to what accounts for the meaningful increase in our overall development pipeline, the single biggest contributor would be the hotel in Sydney, at about 1,000 rooms. So, that was a nice addition to our pipeline in the second quarter. And then I would say, broadly, the momentum we're seeing with our select service brands, Hyatt Place and Hyatt House.

And finally, David, about 80% of our pipeline is managed hotels – managed rooms. David Loeb - Robert W. Baird & Co., Inc. (Broker): That's great. That's very helpful. And one more topic, you do continue to buy back stock, certainly returning capital to shareholders is a positive, but there is a price in (52:01) liquidity of the shares which has been decreasing over time. Can you just talk about how you view that trade-offs and how this ends? Mark S. Hoplamazian - President, Chief Executive Officer & Director: Yeah. Actually, as we have continued to repurchase a meaningful amount over the last several months, we have not seen a substantial impact to daily trading volumes. In fact, there was a period of time where we actually saw daily trading volumes increase. Things have leveled off in the last couple of months, but it is something we're watching very closely, but the level of share repurchases does not seem to have materially impacted the marketability of our stock. David Loeb - Robert W. Baird & Co., Inc. (Broker): Is there a point at which you think it might, or where you're going to stop buying back stock because you're concerned about the liquidity? Mark S. Hoplamazian - President, Chief Executive Officer & Director: Not in the near future. I would say it's a couple of years out before we reach that point. And, between now and then, there could be changes in ownership of B class, for example, we just don't know. David Loeb - Robert W. Baird & Co., Inc. (Broker): Okay. Great. Thank you.

Your next question comes from Bryan Maher from FBR & Co. Your line is open. Bryan A. Maher - FBR Capital Markets & Co.: Good morning. I was wondering if you could just expand a little bit more on your interest in The Unbound property in Miami and what kind of drew you to that, was it because you wanted an Unbound property there, was it pricing, was it something else. I know you have the Centric property right nearby there? Mark S. Hoplamazian - President, Chief Executive Officer & Director: Yeah. So, we've been actually keen to get into the Miami Beach market for years. We had a hotel that was affiliated with Hyatt some years ago in South Beach and then we got the Hyatt Centric as you pointed out. The thing that we really wanted to secure is a hotel that would have both transient and group capability. And The Confidante actually satisfied that perfectly and it's beachfront – it's actually very well positioned and beachfront with great facilities as they stand, we're also creating some additional meeting space in the hotel, because we see significant group demand for that market. And, very significant Gold Passport demand for that market from a transient leisure perspective, which we've not been able to satisfy for years. So, I would say this has been very high. I mean we've talked extensively over time about priorities with respect to application of capital and Miami has always been either number one or number two or number three on the list for some time now. So, the hotel itself fits our profile perfectly from a customer base perspective and the history of the hotel and the thoughtful way in which it was redeveloped allows for positioning of that property to really refer back…

And Sharon, we'll take our last question now.

Next question comes from Smedes Rose from Citi. Your line is open.

Hi. Thanks. I just wanted to ask you the equity earnings line that was quite high at least to our expectations and I think you mentioned how much the Playa contribution in the quarter, it was $6 million, is that what you said?

That is correct, $6 million of the $9 million increase in outline as part of adjusted EBITDA.

And just going forward, so it sounds like the Playa contribution was significantly higher year-over-year which I guess makes sense given your efforts with those guys. I mean how should we think about that line item over the course of the year or as you've just over – sort of big picture next year, like I mean where do you think that could go? And I take it as primarily driven by your participation in the Playa profits.

That is correct. Although I think it's fair to characterize this year's performance as a year of outsized growth for a couple of reasons. The first is that last year we had a resort closed following a hurricane and there was significant renovations undertaken and the property was reopened late in 2015, so we had the lapping benefit of that reopening this year. In addition to that, we had some significant new hotel openings last year, and so we're getting the benefit of the ramp of those new properties. And I would not necessarily expect that level of improvement into 2017.

Okay. Thanks.

Thanks, Sharon and thank you everyone for joining us today and we look forward to talking to you soon. Good bye.

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