Ryman Hospitality Properties, Inc. (NYSE: RHP) today reported
financial results for the third quarter of 2012. Highlights
include:
- The transformation of Gaylord
Entertainment into Ryman Hospitality Properties was put into motion
during the third quarter.
- Despite the disruption to the business
resulting from the sale of Gaylord Hotels to Marriott International
on October 1, 2012, consolidated revenue increased 1.3 percent to
$228.1 million in the third quarter of 2012 from $225.2 million in
the same period last year. The hospitality segment, which includes
Gaylord Opryland, Gaylord Palms, Gaylord Texan, Gaylord National
and the Radisson Hotel at Opryland delivered total revenue of
$207.9 million in the third quarter of 2012, an increase of 0.4
percent compared to $207.1 million in the prior-year quarter.
- Revenue per available room1 (“RevPAR”)
for the third quarter of 2012 for the hospitality segment decreased
0.9 percent and total revenue per available room2 (“Total RevPAR”)
was flat, each compared to the third quarter of 2011. Total RevPAR
for the third quarter of 2012 for the hospitality segment included
attrition and cancellation fees of $1.7 million collected during
the quarter compared to $1.4 million collected in the prior-year
quarter.
- Loss from continuing operations was
$26.7 million, or $0.57 per fully diluted share (based on 46.5
million weighted average shares outstanding) in the third quarter
of 2012 compared to a loss from continuing operations of $1.7
million, or $0.03 per fully diluted share, in the prior-year
quarter (based on 48.4 million weighted average shares
outstanding). Income from continuing operations for the third
quarter 2012 includes $51.4 million in pretax expenses related to
the Company’s conversion to a real estate investment trust
(“REIT”). REIT conversion costs for the full year 2012, which have
been segregated from the normal operating costs of the Company and
presented separately in the accompanying financial information,
include conversion costs incurred in the first and second quarter
of 2012.
- Adjusted EBITDA3, which includes REIT
conversion costs of $51.4 million, was a loss of $2.7 million in
the third quarter of 2012 compared to income of $46.2 million in
the prior-year quarter.
- Consolidated Cash Flow4 (“CCF”) was
$22.6 million in the third quarter of 2012 compared to $48.8
million in the same period last year. CCF in the third quarter of
2012 included $30.3 million of costs associated with the REIT
conversion process.
- Gross advance group bookings in the
third quarter of 2012 for all future periods were 338,434 room
nights for the hospitality segment, a decrease of 22.2 percent
compared to the same period last year. Net of attrition and
cancellations, advance group bookings in the third quarter of 2012
for all future periods were 221,540 room nights, a decrease of 30.7
percent compared to the same period last year.
Colin V. Reed, chairman, chief executive officer and president
of Ryman Hospitality Properties, stated, “This was an important
quarter for our company, as we completed our transaction with
Marriott and took another step closer to officially operating under
the REIT structure. In the third quarter our focus was on achieving
a smooth transition of the transfer of management of our resort
hotel properties to Marriott on October 1st, completing the legal
and regulatory steps associated with the conversion from Gaylord
Entertainment to Ryman Hospitality Properties, establishing our new
corporate organizational structure, and executing a stock
repurchase and secondary offering. Our team has made significant
progress on each of these fronts and is well-positioned to complete
the REIT conversion process and elect REIT status effective January
1, 2013.
“Against the backdrop of the enormous change that took place
across the entire company, we are pleased with how our business
performed this quarter. We delivered an improved profitability
performance at our properties, with a hospitality segment CCF
margin increase of 100 basis points compared to the third quarter
last year. We also saw slight increases in ADR and revenue in our
hospitality segment, with Gaylord Palms and Gaylord National each
posting particularly solid performances for the second consecutive
quarter.
“In the third quarter we booked over 338,000 gross room nights
and over 221,000 on a net room night basis. While these totals both
were declines from the same period last year, given the magnitude
of the disruption to our sales team as they prepared for
integration into the Marriott system, we were pleased with this
performance. We are confident that with the transaction behind us,
the bookings performance should improve. In fact, during the month
of October, group sales leads and tentative bookings for our
hospitality segment each increased by over 20%, a solid indicator
that the bookings pipeline is filling again and sales activity is
increasing.”
Segment Operating
Results
Hospitality
Key components of the Company’s hospitality segment performance
in the third quarter of 2012 include:
- Hotel properties’ RevPAR decreased 0.9
percent to $116.24 in the third quarter of 2012 compared to $117.25
in the prior-year quarter. Total RevPAR for the hotel properties
was $280.49 in the third quarter of 2012 compared to $280.56 in the
prior-year quarter.
- Hotel properties’ CCF increased 4.1
percent in the third quarter of 2012 to $57.8 million compared to
$55.5 million in the prior-year quarter. Hotel properties’ CCF
Margin increased 100 basis points to 27.8 percent in the third
quarter of 2012 compared to 26.8 percent for the same period last
year.
- Attrition for our hotel properties that
occurred for groups that traveled in the third quarter of 2012 was
10.2 percent of the agreed-upon room block compared to 9.4 percent
for the same period in 2011. In-the-year, for-the-year
cancellations in the third quarter of 2012 for the hotel properties
totaled 21,912 room nights compared to 19,927 in the same period of
2011. Attrition and cancellation fee collections for the hotel
properties totaled $1.7 million in the third quarter of 2012
compared to $1.4 million for the same period in 2011.
At the property level, Gaylord Opryland generated revenue of
$63.5 million in the third quarter of 2012, a 12.3 percent decrease
compared to the prior-year quarter of $72.4 million, driven by
decreases in occupancy and Average Daily Rate (“ADR”), and a
difficult comparison as a result of a record revenue and
profitability performance at the property in the third quarter of
2011. Occupancy for the third quarter of 2012 was down 3.7
percentage points to 69.6 percent compared to the prior-year
quarter. ADR during the third quarter of 2012 decreased 2.4 percent
to $149.39, compared to $153.12 in the prior-year quarter, driven
by lower-rated SMERF (Social, Military, Educational, Religious, and
Fraternal) groups. RevPAR in the third quarter of 2012 decreased
7.3 percent to $104.01 compared to $112.17 in the prior-year
quarter, as a result of the declines in occupancy and ADR. Total
RevPAR decreased 12.4 percent for the third quarter of 2012 to
$239.31 compared to $273.21 in the prior-year quarter, due to the
unfavorable group mix described above. CCF was $16.9 million for
the third quarter of 2012, a 29.2 percent decrease compared to
$23.8 million in the prior-year quarter, driven by lower
outside-the-room spending in food and beverage banquets and outlets
as a result of lower-rated group business. CCF Margin was 26.6
percent in the third quarter of 2012, a decrease of 6.3 percentage
points from the prior-year quarter.
Gaylord Palms posted revenue of $35.3 million in the third
quarter of 2012, a 32.3 percent increase compared to $26.7 million
in the prior-year quarter. The increase was driven by growth in
occupancy, ADR, and outside-the-room spending. Occupancy for the
third quarter of 2012 increased 7.8 percentage points over the
prior-year quarter to 74.0 percent, and was positively impacted by
an increase in group room nights. Room nights in the third quarter
of 2012 included approximately 4,000 room nights out-of-service for
renovations compared to approximately 6,340 room nights
out-of-service in the same period last year. ADR for the third
quarter of 2012 increased 9.8 percent to $144.37, compared to
$131.43 in the prior-year quarter as the mix of business at Gaylord
Palms shifted to higher-rated group business. Third quarter 2012
RevPAR increased 22.8 percent to $106.83 compared to $87.02 in the
prior-year quarter. Total RevPAR in the third quarter of 2012
increased 29.4 percent to $281.01 compared to $217.09 in the
prior-year quarter driven by the increase in outside-the-room
spending as the group mix shifted to higher-rated groups that spent
more on food and beverage – most notably in banquets. CCF in the
third quarter of 2012 increased 235.6 percent to $8.1 million
compared to $2.4 million in the prior-year quarter. This resulted
in a CCF Margin for the third quarter of 2012 of 22.8 percent, a
13.8 percentage point increase compared to 9.0 percent in the
prior-year quarter.
Gaylord Texan posted revenue of $46.7 million in the third
quarter of 2012, a 2.0 percent decrease compared to the prior-year
quarter of $47.6 million. It is important to note that Gaylord
Texan had a difficult comparison against the third quarter of 2011
when the property achieved its best third quarter revenue and
profitability performance on record. Occupancy for the third
quarter of 2012 decreased by 0.9 percentage points to 79.0 percent
compared to the third quarter of 2011, driven by a decrease in
transient room nights due to the July 4th holiday falling mid-week
in 2012 and the resulting negative impact on leisure transient
resort pool/room night packages. ADR decreased 0.4 percent to
$166.84 in the third quarter of 2012 compared to $167.51 in the
prior-year quarter, due to a decline in association group ADR.
RevPAR in the third quarter of 2012 decreased 1.5 percent to
$131.82 compared to $133.82 in the prior-year quarter. Total RevPAR
decreased 2.0 percent in the third quarter of 2012 to $335.60 from
$342.55 in the prior-year quarter, driven by a decrease in
outside-the-room spending as the group mix shifted to lower-rated
groups that spent less on banquet offerings and purchased fewer
banqueted events. CCF in the third quarter of 2012 decreased 8.1
percent to $14.1 million compared to $15.3 million in the
prior-year quarter, resulting in a 30.2 percent CCF Margin, a 2.0
percentage point decrease from 32.2 percent in the prior-year
quarter.
Gaylord National generated revenue of $60.0 million in the third
quarter of 2012, a 3.7 percent increase compared to the prior-year
quarter of $57.9 million, driven by increases in ADR and
outside-the-room spending. Occupancy for the third quarter of 2012
was down 6.0 percentage points to 69.9 percent compared to the
prior-year quarter, driven by a decrease in small executive
meetings which typically book in-the-year, for-the-year. ADR
increased 6.1 percent in the third quarter of 2012 to $196.14
compared to $184.78 in the prior-year quarter due to an increase in
higher-rated corporate groups with higher outside-the-room
spending. RevPAR in the third quarter of 2012 decreased 2.3 percent
to $137.07 compared to $140.25 in the prior-year quarter, driven by
the decrease in occupancy. Total RevPAR increased 3.7 percent to
$326.78 in the third quarter of 2012 compared to $315.19 in the
prior-year quarter, driven by an increase in outside-the-room
spending – most notably in banquets as several groups that traveled
selected especially robust banquet packages. CCF increased to $18.2
million in the third quarter of 2012 compared to $13.3 million in
the prior-year quarter. CCF in the third quarter in 2012 included a
$2.3 million marketing and maintenance expense reimbursement
associated with the municipal bonds received from Prince George’s
County in 2008 in connection with the development of the hotel.
Including the positive impact of the marketing and maintenance
expense reimbursement, CCF increased 36.4 percent to $18.2 million
in the third quarter of 2012 compared to $13.3 million in the prior
year quarter. Including the positive impact of the marketing and
maintenance expense reimbursement, CCF Margin increased 7.2
percentage points to 30.3 percent in the third quarter of 2012
compared to 23.1 percent in the prior-year quarter, driven by
increases in ADR and continued margin management efforts at the
property level that drove favorable food costs and reduced labor
costs.
Reed continued, “Our properties performed solidly this quarter.
Gaylord Palms delivered very strong results, posting impressive ADR
and occupancy increases, which drove RevPAR and Total RevPAR growth
of nearly 23 percent and over 29 percent, respectively. These
results contributed to a 13.8 percentage point increase in CCF
margin. While this type of growth is not sustainable every quarter,
it is certainly an indicator that with the completed rooms
renovation and amenity enhancements, Gaylord Palms is well
positioned in the Orlando market moving forward. Gaylord Texan and
Gaylord Opryland also performed solidly. However each posted modest
declines compared to the third quarter of 2011, due to
exceptionally difficult comparisons, as both properties delivered
their best third quarter CCF performance of all time in 2011.
Gaylord National was a strong performer this quarter, as lower
occupancy was offset by a higher-rated group mix. This resulted in
an increase in outside-the-room spending and Total RevPAR, which
along with continued cost management contributed to a CCF margin
increase. As a result of the improved performance of the hotel, we
are pleased to report that we are now receiving both the marketing
and maintenance reimbursement and cash on the accrued interest for
the Prince George’s County series “B” municipal bonds. Going
forward, we expect that the marketing and maintenance expense
reimbursement will generate an incremental $2 million of annual
proceeds as evident in the third quarter of 2012.”
Opry and Attractions
Opry and Attractions segment revenue increased 11.4 percent to
$20.2 million in the third quarter of 2012, compared to $18.1
million in the year-ago quarter driven by increased attendance at
the Grand Ole Opry. The segment’s CCF increased to $6.0 million in
the third quarter of 2012 from $4.8 million in the prior-year
quarter.
Corporate and Other
Corporate and Other operating loss totaled $14.5 million in the
third quarter of 2012 compared to an operating loss of $14.6
million in the same period last year. Corporate and Other CCF in
the third quarter of 2012 was a loss of $10.7 million compared to a
loss of $11.4 million in the same period last year. These figures
exclude the REIT conversion expenses described below.
Real Estate Investment Trust (REIT)
Conversion
On October 1, 2012, the Company completed the sale of the
Gaylord Hotels brand and the rights to manage its four resort
hotels to Marriott International for $210 million in cash. In
addition to assuming the management responsibilities for these
hotels, Marriott also assumed the management responsibilities for
three local Nashville attractions – the General Jackson Showboat,
Gaylord Springs Golf Links and Wildhorse Saloon. In addition, the
Company expects that Marriott will assume management duties for the
Radisson Hotel (to be renamed the Inn at Opryland) on December 1,
2012. The Company will continue to manage the Grand Ole Opry, the
Ryman Auditorium and WSM-AM.
As a component of the REIT conversion, effective October 1, 2012
the Company’s predecessor, Gaylord Entertainment Company, merged
with and into its wholly-owned subsidiary, Ryman Hospitality
Properties, Inc. The merger was approved by the stockholders of
Gaylord at a special meeting of stockholders held on September 25,
2012. As a result of the merger, each outstanding share of Gaylord
common stock converted into the right to receive one share of Ryman
Hospitality Properties common stock, and Ryman Hospitality
Properties succeeded to and began conducting, directly or
indirectly, all of the business conducted by Gaylord immediately
prior to the merger. Ryman Hospitality Properties intends to elect
to be taxed as a REIT for federal income tax purposes effective as
of January 1, 2013. The Company believes it will be the only
lodging REIT whose stated focus is on group-oriented destination
hotels in urban and resort markets.
Also in conjunction with the REIT conversion, Ryman Hospitality
Properties declared a special dividend on shares of its common
stock on November 2, 2012 to purge its undistributed earnings and
profits attributable to taxable periods ending prior to January 1,
2013. The special dividend will generally be treated as a taxable
distribution to stockholders. Ryman Hospitality Properties
stockholders as of the November 13, 2012 record date will have the
option to elect to receive the special dividend in the form of cash
or shares of Ryman Hospitality Properties common stock. Ryman
Hospitality Properties expects to limit the total amount of cash
payable in the special dividend to a maximum of 20% of the total
value of the special dividend. The balance of the special dividend
will be in the form of shares of Ryman Hospitality Properties
common stock. If the total amount of cash elected by stockholders
exceeds 20% of the total value of the special dividend, then, in
general, the available cash will be prorated among those
stockholders that elect to receive cash. Additional details and
consequences of the special dividend will be described to
stockholders in the election form and accompanying materials that
will be mailed to stockholders in connection with the special
dividend.
The Company has segregated all REIT conversion costs from normal
operations and reported these amounts as REIT conversion costs in
the accompanying financial information. During the third quarter of
2012, the Company incurred $51.4 million of various costs
associated with this conversion. These costs include noncash
impairment charges ($21.3 million), professional fees ($14.0
million), employment and severance costs ($10.3 million),
underwriting costs ($2.8 million), and various other transition
costs ($3.0 million).
Upon completion of the REIT conversion, the Company will no
longer view independent, large-scale development of resort and
convention hotels as a means of its growth. As a result of its
decision to convert to a REIT, in connection with the preparation
of its quarterly financial statements, the Company evaluated its
previously capitalized costs associated with potential new
developments and expansions of its existing properties. As
discussed above, the Company incurred an impairment charge of $14.0
million with respect to the third quarter of 2012 to write off
previously capitalized costs associated with a potential future
expansion of Gaylord Opryland and the Company’s previous
development project in Mesa, Arizona as a result of the Company’s
decision to abandon these projects. In addition, the Company will
not proceed with its previously announced Aurora, Colorado
development project in the form previously anticipated. The Company
will reexamine how the Aurora project can be completed with minimal
financial commitment, although it may not identify such
opportunity. The Company also abandoned certain other projects
associated with its existing properties and recorded an additional
impairment charge of $7.3 million with respect to the third quarter
of 2012 to write off previously capitalized costs primarily
associated with information technology projects.
Including the costs incurred in the first and second quarter and
the costs noted above (but excluding non-cash impairment charges),
the Company currently estimates that it will incur approximately
$73 million in one-time costs related to the REIT conversion. The
Company also anticipates that it will incur federal income taxes
associated with the receipt of the purchase price in the Marriott
sale transaction and other transactions related to the REIT
conversion, net of remaining net operating losses, of approximately
$10 million to $20 million. In addition, the Company will be
required to make the special dividend on or before December 31,
2012 to be eligible to elect to be taxed as a REIT effective
January 1, 2013.
Reed stated, “We are excited to have completed the Marriott
transaction, and our relationship with Marriott to date has been an
excellent one. The ongoing transition process is progressing
smoothly and the Board and the management team would like to thank
our employees, our partners at Marriott, and our stockholders for
their ongoing efforts and support as we move through this
challenging period. Looking towards the future we believe that our
company will be well-positioned for sustained growth, and that with
our focus on the group and meeting segment, we will offer a unique
value proposition within the REIT sector.”
Development Update
As a REIT, the Company will no longer view large scale
development of resort and convention center hotels as a means for
growth. As a result, the Company will not proceed with its
previously announced development projects in the form previously
anticipated. In the third quarter, the Company informed the Mayor
of Mesa, Arizona as well as DMB Associates, the land owner in Mesa
that it will not be participating in the development phase of the
Mesa project. Ryman Hospitality Properties is reexamining how the
previously announced Aurora, Colorado project could be completed
with minimal financial commitment through the development phase.
This examination will be undertaken with investor expectations at
the forefront, and management will keep investors informed as the
process evolves.
Liquidity
As of September 30, 2012, the Company had long-term debt
outstanding, including current portion, of $1,148.5 million and
unrestricted cash of $24.2 million. At September 30, 2012, $260.0
million of borrowings were undrawn under the Company’s $925.0
million credit facility, and the lending banks had issued $8.0
million in letters of credit, which left $252.0 million of
availability under the credit facility. Subsequent to the end of
the quarter, the Company received $210 million from Marriott
International upon the closing of the sale transaction. In
addition, the Company expects to distribute up to approximately
$61.9 million in cash during the fourth quarter of 2012 as part of
the special dividend.
Outlook
The following business performance outlook is based on current
information as of November 6, 2012. The Company does not expect to
update the guidance provided below before next quarter’s earnings
release. However, the Company may update its full business outlook
or any portion thereof at any time for any reason.
Reed concluded, “The transformation that our company has been
undergoing negatively impacted our short-term bookings production
for the second half of the year. Additionally, we have seen
short-term cancellations at our four large hotels as a result of
Hurricane Sandy’s landfall on October 29th. While these
cancellations were minor at Gaylord Opryland, Gaylord Palms
received a cancellation notice from a 6,000+ room night military
group whose attendees were unable to depart from the Washington,
D.C. area due to the storm. Gaylord National received cancellations
that totaled over 7,000 room nights as a result of the storm. We
estimate the total CCF impact from the storm at approximately $3
million. As a result of the impact of this storm, coupled with the
temporary slowdown in our bookings during the transition process,
we believe it is appropriate to revise our guidance to more
appropriately reflect our expectations for the remainder of the
year. We are tightening the top end of our guidance for Hospitality
Segment RevPAR from an increase of 3 percent to 6 percent to an
increase of 3 percent to 4 percent, and we are revising our
guidance for Total RevPAR from an increase of 3 percent to 6
percent to an increase of 3 percent to 4 percent year-over-year.
While Hurricane Sandy has negatively impacted our hospitality
segment results, we are achieving improved performance in our Opry
and Attractions segment as well as our Corporate and Other segment.
Therefore, we are tightening the top end of our consolidated
guidance to reflect a total Company CCF range of $235 million to
$245 million in 2012. We anticipate that we will provide guidance
as a REIT for 2013 when we report our fourth quarter and 2012 full
year results in February of 2013.”
Previous
Revised Full Year Full Year 2012
Guidance 2012 Guidance Consolidated Cash Flow
Ryman Hospitality Properties
$235 - 252 million $235 -
245 million Hospitality Segment RevPAR 3% -
6% 3% - 4% Hospitality Segment Total RevPAR 3%
- 6% 3% - 4%
Note: The guidance above assumes 10,811 room nights out
of service in 2012 due to the renovation of rooms at Gaylord Palms
and a revised room count at Gaylord Opryland of 2,882 for 2012. As
we have outlined in previous releases, the guidance above includes
$3.1 million of expense incurred in the first quarter of 2012 as
part of our effort to explore opportunities to unlock shareholder
value, but excludes the $3.4 million of expense incurred in the
second quarter of 2012, $30.3 million of expense incurred in the
third quarter and any additional expenses that may be incurred in
the fourth quarter of 2012 as part of the REIT conversion process.
The guidance above does not include the potential impact on fourth
quarter results from Marriott management fees, Marriott
centralized/shared service fees or revenue and expense synergies
that may be realized now that Marriott is managing the resorts.
Webcast and Replay
Ryman Hospitality Properties will hold a conference call to
discuss this release today at 10:00 a.m. ET. Investors can listen
to the conference call over the Internet at www.rymanhp.com. To
listen to the live call, please go to the Investor Relations
section of the website (Investor Relations/Presentations, Earnings,
and Webcasts) at least 15 minutes prior to the call to register,
download and install any necessary audio software. For those who
cannot listen to the live broadcast, a replay will be available
shortly after the call and will run for at least 30 days.
About Ryman Hospitality Properties,
Inc.:
Ryman Hospitality Properties (NYSE: RHP), formerly known as
Gaylord Entertainment Company, a leading hospitality and
entertainment company based in Nashville Tennessee, is in the
process of restructuring its assets and operations in order to
elect to be taxed as a real estate investment trust (REIT) for
federal income tax purposes effective as of January 1, 2013, at
which time, Ryman Hospitality Properties intends to specialize in
group-oriented, destination hotel assets in urban and resort
markets. Ryman Hospitality Properties’ owned assets include a
network of four upscale, meetings-focused resorts totaling 7,795
rooms that are managed, as of October 1, 2012, by world-class
lodging operator Marriott International under the Gaylord Hotels
brand. Other owned assets, managed or to be managed by an
independent third-party manager prior to the REIT election, include
Gaylord Springs Golf Links, the Wildhorse Saloon, the General
Jackson Showboat and the Radisson Hotel Opryland, a 303-room
overflow hotel adjacent to Gaylord Opryland. Ryman Hospitality
Properties also owns and operates a number of media and
entertainment assets including the Grand Ole Opry (opry.com), the
legendary weekly showcase of country music’s finest performers for
nearly 90 years; the Ryman Auditorium, the storied former home of
the Grand Ole Opry located in downtown Nashville; and WSM-AM. For
additional information about Ryman Hospitality Properties, visit
www.rymanhp.com.
Cautionary Note Regarding
Forward-Looking Statements
This press release contains statements as to the Company’s
beliefs and expectations of the outcome of future events that are
forward-looking statements as defined in the Private Securities
Litigation Reform Act of 1995. You can identify these statements by
the fact that they do not relate strictly to historical or current
facts. Examples of these statements include, but are not limited
to, statements regarding the Marriott sale transaction, the
Company’s expectation to elect REIT status, the timing and effect
of that election, the amount of conversion or other costs relating
to the transactions, and other business or operational issues.
These forward-looking statements are subject to risks and
uncertainties that could cause actual results to differ materially
from the statements made. These include the risks and uncertainties
associated with refinancing our indebtedness prior to its various
maturities, economic conditions affecting the hospitality business
generally, rising labor and benefits costs, the geographic
concentration of the Company’s hotel properties, business levels at
the Company’s hotels, the Company’s ability to elect and qualify
for REIT status and the timing and effect(s) of that election, the
Company’s ability to remain qualified as a REIT, the expected form,
timing and amount of the special distribution of the Company’s
accumulated earnings and profits, the effects of operating costs
and business disruption related to the Marriott sale transaction
and the REIT conversion, and the Company’s ability to realize cost
savings and revenue enhancements from the proposed REIT conversion
and the Marriott sale transaction. Other factors that could cause
operating and financial results to differ are described in the
filings made from time to time by the Company with the U.S.
Securities and Exchange Commission (SEC) and include the risk
factors described in the Company’s Annual Report on Form 10-K for
the fiscal year ended December 31, 2011 and our Quarterly Report on
Form 10-Q for the fiscal quarters ended March 31, 2012 and June 30,
2012. The Company does not undertake any obligation to release
publicly any revisions to forward-looking statements made by it to
reflect events or circumstances occurring after the date hereof or
the occurrence of unanticipated events.
1The Company calculates revenue per available room (“RevPAR”)
for its hotels by dividing room revenue by room nights available to
guests for the period.
2The Company calculates total revenue per available room (“Total
RevPAR”) for its hotels by dividing the sum of room revenue, food
& beverage, and other ancillary services revenue by room nights
available to guests for the period.
3 Adjusted EBITDA (defined as earnings before interest, taxes,
depreciation, amortization, as well as certain unusual items) is a
non-GAAP financial measure which is used herein because we believe
it allows for a more complete analysis of operating performance by
presenting an analysis of operations separate from the earnings
impact of capital transactions and without certain items that do
not impact our ongoing operations such as gains on the sale of
assets. In accordance with generally accepted accounting
principles, these items are not included in determining our
operating income. The information presented should not be
considered as an alternative to any measure of performance as
promulgated under accounting principles generally accepted in the
United States (such as operating income, net income, or cash from
operations), nor should it be considered as an indicator of overall
financial performance. Adjusted EBITDA does not fully consider the
impact of investing or financing transactions, as it specifically
excludes depreciation and interest charges, which should also be
considered in the overall evaluation of our results of operations.
Our method of calculating Adjusted EBITDA may be different from the
method used by other companies and therefore comparability may be
limited. A reconciliation of Adjusted EBITDA to net income (loss)
is presented in the Supplemental Financial Results contained in
this press release.
4As discussed in footnote 3 above, Adjusted EBITDA is used
herein as essentially operating income/(loss) plus depreciation and
amortization. Consolidated Cash Flow (which is used in this release
as that term is defined in the Indentures governing the Company’s
6.75 percent senior notes) is a non-GAAP financial measure which
also excludes the impact of impairment charges, preopening costs,
the non-cash portion of the Florida ground lease expense, stock
option expense, the non-cash gains and losses on the disposal of
certain fixed assets, and adds (subtracts) other gains (losses).
The Consolidated Cash Flow measure is one of the principal tools
used by management in evaluating the operating performance of the
Company’s business and represents the method by which the
Indentures calculate whether or not the Company can incur
additional indebtedness (for instance in order to incur certain
additional indebtedness, Consolidated Cash Flow for the most recent
four fiscal quarters as a ratio to debt service must be at least 2
to 1). The calculation of these amounts as well as a reconciliation
of those amounts to net income (loss) or segment operating income
(loss) is included as part of the Supplemental Financial Results
contained in this press release. CCF Margin is defined as CCF
divided by revenue.
RYMAN HOSPITALITY PROPERTIES, INC. AND
SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS Unaudited (In thousands, except per share data)
Three Months Ended Nine Months
Ended Sep. 30, Sep. 30, 2012
2011 2012
2011 Revenues $
228,129 $ 225,232 $ 720,273 $ 682,745 Operating expenses: Operating
costs 134,822 135,817 409,021 402,441 Selling, general and
administrative 44,510 42,704 139,162 128,830 REIT conversion costs
51,371 - 57,799 - Casualty loss 173 162 719 630 Preopening costs 1
345 340 386 Depreciation and amortization 30,701
32,367 93,389
90,695 Operating income (loss)
(33,449 ) 13,837
19,843 59,763
Interest expense, net of amounts capitalized (15,136 ) (18,075 )
(43,949 ) (60,261 ) Interest income 3,081 3,199 9,256 9,688 Income
from unconsolidated companies - 761 109 1,086 Other gains and
(losses), net 2,251 (444
) 2,251 (494 )
Income (loss) before income taxes (43,253 ) (722 ) (12,490 ) 9,782
(Provision) benefit for income taxes and discontinued
operations 16,581 (937 )
798 (4,769 )
Income (loss) from continuing operations (26,672 ) (1,659 ) (11,692
) 5,013 Income (loss) from discontinued operations, net of
taxes (2 ) 53 -
61 Net income
(loss) $ (26,674 ) $ (1,606 ) $ (11,692 )
$ 5,074
Basic net income
(loss) per share:
Income (loss) from continuing operations $ (0.57 ) $ (0.03 ) $
(0.24 ) $ 0.10 Income from discontinued operations, net of taxes
- - -
- Net income (loss) $
(0.57 ) $ (0.03 ) $ (0.24 )
$ 0.10
Fully diluted net
income (loss) per share:
Income (loss) from continuing operations $ (0.57 ) $ (0.03 ) $
(0.24 ) $ 0.10 Income from discontinued operations, net of taxes
- - -
- Net income (loss) $
(0.57 ) $ (0.03 ) $ (0.24 )
$ 0.10
Weighted average
common shares for the period:
Basic 46,546 48,399 48,073 48,331 Fully-diluted 46,546 48,399
48,073 50,613
RYMAN HOSPITALITY
PROPERTIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED
BALANCE SHEETS Unaudited (In thousands)
Sep. 30, Dec. 31, 2012
2011 ASSETS Current assets: Cash and cash equivalents -
unrestricted $ 24,230 $ 44,388 Cash and cash equivalents -
restricted 1,150 1,150 Trade receivables, net 60,369 41,939
Deferred income taxes 546 8,641 Other current assets 53,167
48,538 Total current assets 139,462 144,656 Property
and equipment, net of accumulated depreciation 2,172,788 2,209,127
Notes receivable, net of current portion 137,542 142,567 Long-term
deferred financing costs 12,572 15,947 Other long-term assets
46,736 50,713 Long-term assets of discontinued operations
346 390 Total assets $ 2,509,446 $ 2,563,400
LIABILITIES AND STOCKHOLDERS' EQUITY Current
liabilities: Current portion of long-term debt and capital lease
obligations $ 99,537 $ 755 Accounts payable and accrued liabilities
196,245 168,975 Current liabilities of discontinued operations
217 186 Total current liabilities 295,999 169,916
Long-term debt and capital lease obligations, net of current
portion 1,048,924 1,073,070 Deferred income taxes 98,345 108,219
Other long-term liabilities 172,052 166,209 Long-term liabilities
of discontinued operations 451 451 Stockholders' equity
893,675 1,045,535 Total liabilities and stockholders'
equity $ 2,509,446 $ 2,563,400
RYMAN HOSPITALITY PROPERTIES, INC. AND
SUBSIDIARIES SUPPLEMENTAL FINANCIAL RESULTS Unaudited
(in thousands, except operating metrics)
Adjusted
Earnings Before Interest, Taxes, Depreciation and Amortization
("Adjusted EBITDA") and Consolidated Cash Flow ("CCF")
reconciliation: Three Months Ended Sep. 30, Nine
Months Ended Sep. 30, 2012 2011 2012
2011 $ Margin
$ Margin $
Margin $
Margin
Consolidated
Revenue $ 228,129 100.0 % $ 225,232 100.0 % $ 720,273 100.0
% $ 682,745 100.0 %
Net income (loss) $ (26,674 )
-11.7 % $ (1,606 ) -0.7 % $ (11,692 ) -1.6 % $ 5,074 0.7 % (Income)
loss from discontinued operations, net of taxes 2 0.0 % (53 ) 0.0 %
- 0.0 % (61 ) 0.0 % Provision (benefit) for income taxes (16,581 )
-7.3 % 937 0.4 % (798 ) -0.1 % 4,769 0.7 % Other (gains) and
losses, net (2,251 ) -1.0 % 444 0.2 % (2,251 ) -0.3 % 494 0.1 %
Income from unconsolidated companies - 0.0 % (761 ) -0.3 % (109 )
0.0 % (1,086 ) -0.2 % Interest expense, net 12,055
5.3 % 14,876 6.6 %
34,693 4.8 % 50,573
7.4 %
Operating income (loss) (33,449 ) -14.7 %
13,837 6.1 % 19,843 2.8 % 59,763 8.8 % Depreciation &
amortization 30,701 13.5 %
32,367 14.4 % 93,389
13.0 % 90,695 13.3 %
Adjusted
EBITDA (2,748 ) -1.2 % 46,204 20.5 % 113,232 15.7 % 150,458
22.0 % Preopening costs 1 0.0 % 345 0.2 % 340 0.0 % 386 0.1 %
Impairment charges 21,287 9.3 % - 0.0 % 21,287 3.0 % - 0.0 % Other
non-cash expenses 1,427 0.6 % 1,453 0.6 % 4,279 0.6 % 4,359 0.6 %
Stock option expense 334 0.1 % 797 0.4 % 1,830 0.3 % 2,392 0.4 %
Other gains and (losses), net 2,251 1.0 % (444 ) -0.2 % 2,251 0.3 %
(494 ) -0.1 % Loss on sales of assets -
0.0 % 445 0.2 % -
0.0 % 495 0.1 %
CCF $
22,552 9.9 % $ 48,800
21.7 % $ 143,219 19.9 % $ 157,596
23.1 %
Hospitality segment
(a)
Revenue $ 207,941 100.0 % $ 207,092 100.0 % $ 667,036 100.0
% $ 634,607 100.0 %
Operating income 27,947 13.4 % 25,092
12.1 % 114,067 17.1 % 96,218 15.2 % Depreciation & amortization
26,095 12.5 % 28,388 13.7 % 80,977 12.1 % 78,954 12.4 % Preopening
costs 1 0.0 % 345 0.2 % 340 0.1 % 386 0.1 % Other non-cash expenses
1,427 0.7 % 1,453 0.7 % 4,279 0.6 % 4,359 0.7 % Stock option
expense 67 0.0 % 240 0.1 % 461 0.1 % 776 0.1 % Other gains and
(losses), net 2,251 1.1 % (446 ) -0.2 % 2,251 0.3 % (449 ) -0.1 %
Loss on sales of assets - 0.0 %
447 0.2 % - 0.0 %
450 0.1 %
CCF $ 57,788
27.8 % $ 55,519 26.8 % $ 202,375
30.3 % $ 180,694 28.5 %
Opry and Attractions
segment (a)
Revenue $ 20,166 100.0 % $ 18,108 100.0 % $ 53,154 100.0 % $
48,044 100.0 %
Operating income 4,687 23.2 % 3,498 19.3 %
10,280 19.3 % 6,721 14.0 % Depreciation & amortization 1,262
6.3 % 1,296 7.2 % 3,825 7.2 % 3,968 8.3 % Stock option expense
33 0.2 % 47
0.3 % 91 0.2 % 119
0.2 %
CCF $ 5,982 29.7 % $ 4,841
26.7 % $ 14,196 26.7 % $
10,808 22.5 %
Corporate and Other
segment (a)
Revenue $ 22 $ 32 $ 83 $ 94
Operating loss (14,539 )
(14,591 ) (45,986 ) (42,546 ) Depreciation & amortization 3,344
2,683 8,587 7,773 Stock option expense 460 510 1,504 1,497 Other
gains and (losses), net - 2 - (45 ) (Gain) loss on sales of assets
- (2 ) - 45
CCF $ (10,735 ) $ (11,398 ) $ (35,895 ) $ (33,276 )
REIT Conversion
Costs (a)
Operating loss $ (51,371 ) $ - $ (57,799 ) $ - Impairment
charges 21,287 - 21,287 - Stock option expense (226 )
- (226 ) -
CCF $ (30,310 ) $ -
$ (36,738 ) $ -
Casualty Loss
(a)
Casualty loss $ (173 ) $ (162 ) $ (719 ) $ (630 ) Insurance
proceeds - - - -
Operating loss (173 ) (162 )
(719 ) (630 )
CCF $ (173 ) $ (162 ) $ (719 ) $ (630 )
(a) Individual segments exclude effect of REIT Conversion
Costs and Casualty Loss, which is shown separately.
RYMAN HOSPITALITY PROPERTIES, INC. AND
SUBSIDIARIES SUPPLEMENTAL FINANCIAL RESULTS Unaudited
(in thousands, except operating metrics)
Three Months
Ended Sep. 30, Nine Months Ended Sep. 30, 2012
2011 2012 2011 HOSPITALITY OPERATING
METRICS:
Hospitality
Segment
Occupancy 71.8 % 73.6 % 73.6 % 72.2 % Average daily rate
(ADR) $ 161.93 $ 159.25 $ 168.25 $ 165.75 RevPAR $ 116.24 $ 117.25
$ 123.89 $ 119.66 OtherPAR $ 164.25 $ 163.31 $ 178.04 $ 170.96
Total RevPAR $ 280.49 $ 280.56 $ 301.93 $ 290.62 Revenue $
207,941 $ 207,092 $ 667,036 $ 634,607 CCF $ 57,788 $ 55,519 $
202,375 $ 180,694 CCF Margin 27.8 % 26.8 % 30.3 % 28.5 %
Gaylord
Opryland
Occupancy 69.6 % 73.3 % 73.1 % 72.6 % Average daily rate
(ADR) $ 149.39 $ 153.12 $ 153.65 $ 150.51 RevPAR $ 104.01 $ 112.17
$ 112.30 $ 109.21 OtherPAR $ 135.30 $ 161.04 $ 151.48 $ 152.55
Total RevPAR $ 239.31 $ 273.21 $ 263.78 $ 261.76 Revenue $
63,452 $ 72,364 $ 208,300 $ 205,738 CCF $ 16,861 $ 23,826 $ 63,130
$ 64,020 CCF Margin 26.6 % 32.9 % 30.3 % 31.1 %
Gaylord Palms
(a)
Occupancy 74.0 % 66.2 % 80.9 % 72.8 % Average daily rate
(ADR) $ 144.37 $ 131.43 $ 165.35 $ 155.55 RevPAR $ 106.83 $ 87.02 $
133.77 $ 113.26 OtherPAR $ 174.18 $ 130.07 $ 216.64 $ 177.98 Total
RevPAR $ 281.01 $ 217.09 $ 350.41 $ 291.24 Revenue $ 35,322
$ 26,704 $ 131,207 $ 109,943 CCF $ 8,064 $ 2,403 $ 42,065 $ 27,919
CCF Margin 22.8 % 9.0 % 32.1 % 25.4 %
Gaylord
Texan
Occupancy 79.0 % 79.9 % 73.5 % 76.2 % Average daily rate
(ADR) $ 166.84 $ 167.51 $ 171.61 $ 176.16 RevPAR $ 131.82 $ 133.82
$ 126.06 $ 134.19 OtherPAR $ 203.78 $ 208.73 $ 209.76 $ 214.09
Total RevPAR $ 335.60 $ 342.55 $ 335.82 $ 348.28 Revenue $
46,653 $ 47,585 $ 139,405 $ 143,635 CCF $ 14,091 $ 15,331 $ 43,248
$ 47,848 CCF Margin 30.2 % 32.2 % 31.0 % 33.3 %
Gaylord
National
Occupancy 69.9 % 75.9 % 71.3 % 69.4 % Average daily rate
(ADR) $ 196.14 $ 184.78 $ 198.03 $ 194.37 RevPAR $ 137.07 $ 140.25
$ 141.16 $ 134.85 OtherPAR $ 189.71 $ 174.94 $ 188.80 $ 177.40
Total RevPAR $ 326.78 $ 315.19 $ 329.96 $ 312.25 Revenue $
60,006 $ 57,879 $ 180,457 $ 170,147 CCF $ 18,196 $ 13,342 $ 51,985
$ 40,243 CCF Margin 30.3 % 23.1 % 28.8 % 23.7 %
Nashville
Radisson (b)
Occupancy 58.8 % 63.7 % 62.5 % 62.1 % Average daily rate
(ADR) $ 101.96 $ 101.31 $ 104.03 $ 99.16 RevPAR $ 59.97 $ 64.49 $
65.00 $ 61.62 OtherPAR $ 32.05 $ 27.18 $ 28.97 $ 19.83 Total RevPAR
$ 92.02 $ 91.67 $ 93.97 $ 81.45 Revenue $ 2,508 $ 2,560 $
7,667 $ 5,144 CCF $ 576 $ 617 $ 1,947 $ 664 CCF Margin 23.0 % 24.1
% 25.4 % 12.9 % (a) Excludes 4,003 and 10,811 room nights
that were taken out of service during the three months and nine
months ended September 30, 2012, respectively, and 6,343 room
nights taken out of service during the three months and nine months
ended September 30, 2011, as a result of a rooms renovation program
at Gaylord Palms. (b) Includes other hospitality revenue and
expense.
Ryman Hospitality Properties
and Subsidiaries Reconciliation of Forward-Looking
Statements Unaudited (in thousands)
Adjusted Earnings Before Interest, Taxes, Depreciation and
Amortization ("Adjusted EBITDA") and Consolidated Cash Flow
("CCF") reconciliation: PREVIOUS GUIDANCE RANGE
REVISED GUIDANCE RANGE FOR FULL YEAR 2012 FOR FULL
YEAR 2012
Ryman Hospitality
Properties, Inc.
Estimated Operating Income/(Loss) $ 104,950 $ 118,450 $ 104,950 $
111,450 Estimated Depreciation & Amortization 119,900
122,400 119,900 122,400 Estimated Adjusted
EBITDA $ 224,850 $ 240,850 $ 224,850 $ 233,850 Estimated
Pre-Opening Costs $ 1,300 $ 1,400 $ 1,300 $ 1,400 Estimated
Non-Cash Lease Expense $ 5,800 $ 5,900 $ 5,800 $ 5,900 Estimated
Stock Option Expense 3,050 3,850 3,050 3,850 Estimated
Gains/(Losses), Net 0 0 0 0 Estimated
CCF $ 235,000 $ 252,000 $ 235,000 $ 245,000
Note: The guidance above assumes 10,811 room nights out of
service in 2012 due to the renovation of rooms at Gaylord Palms and
a revised room count at Gaylord Opryland of 2,882 for 2012. As we
have outlined in previous releases, the guidance above includes
$3.1 million of expense incurred in the first quarter of 2012 as
part of our effort to explore opportunities to unlock shareholder
value, but excludes the $3.4 million of expense incurred in the
second quarter of 2012, $30.3 million of expense incurred in the
third quarter and any additional expenses that may be incurred in
the fourth quarter of 2012 as part of the REIT conversion process.
The guidance above does not include the potential impact on fourth
quarter results from Marriott management fees, Marriott
centralized/shared service fees or revenue and expense synergies
that may be realized now that Marriott is managing the resorts.
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