Ryman Hospitality Properties, Inc. (NYSE: RHP), a lodging real
estate investment trust ("REIT") specializing in group-oriented,
destination hotel assets in urban and resort markets, today
reported financial results for the first quarter ended March 31,
2013.
The end of the first quarter marked the completion of the
Gaylord Hotels conversion to Marriott’s systems, allowing the
hotels to start to benefit from the many anticipated synergies.
Colin V. Reed, chairman, chief executive officer and president of
Ryman Hospitality Properties, stated, “Despite an unusual
confluence of events during the quarter that adversely impacted the
group sector, including government related attrition and
cancellations, the timing of the Easter holiday, and negative group
mix shift year-over-year, we are seeing encouraging signs that the
benefits of the Marriott affiliation are beginning to emerge. Our
hotels produced record first quarter forward group bookings, record
first quarter in-the-year, for-the-year group bookings, and record
first quarter transient room night production. All three were
material increases year-over-year. As the Marriott systems are
fully implemented and anticipated costs savings begin to be
realized, we continue to believe that our previously discussed cost
synergies projection of $13 million to $16 million at the property
level for 2013 will be accomplished. Furthermore, our projected
corporate cost savings are being realized as expected, which can be
seen in our first quarter numbers.”
First Quarter 2013 Results (as compared to First Quarter
2012):
- Gross advanced group bookings for all
future periods increased 57.9% to 587,682 room nights (a record
first quarter bookings production); Net advance group bookings for
all future periods increased 48.4% to 454,857 room nights
- Gross advanced group bookings of
in-the-year, for-the-year room nights increased 42.0% over the same
period last year (a record first quarter bookings production)
- Transient room night bookings, aided by
the Marriott Rewards program and transient delivery channels,
increased by 18,567 room nights (a record first quarter bookings
production) and transient Average Daily Rate, or ADR, grew by
$17.05
- Cancellations in-the-year, for-the-year
included 30,100 group rooms compared to 8,817 group rooms in the
first quarter 2012; Cancellations in-the-quarter, for-the-quarter
included 16,592 group rooms compared to 1,212 group rooms in the
same period in 2012
- Attrition for groups that traveled in
the first quarter of 2013 was 8.3% of the agreed-upon room block
compared to 4.5% in the same period in 2012; Attrition and
cancellation fees collected during the quarter were $1.8 million
compared to $1.2 million in the same period in 2012
- Hospitality Revenue Per Available Room,
or RevPAR, decreased 1.2% to $117.33
- Hospitality Total RevPAR decreased 5.3%
to $287.56 compared to Hospitality Retail Adjusted Total RevPAR in
the first quarter 2012, or a decrease of 6.3% compared to
unadjusted Total RevPAR in the first quarter 2012
- Total Revenue decreased 6.2% to $222.1
million compared to Retail Adjusted Revenue in the first quarter
2012, or a decrease of 7.0% compared to unadjusted Total Revenue in
the first quarter 2012
- Hospitality Revenue decreased 6.4% to
$209.6 million compared to Hospitality Retail Adjusted Revenue in
the first quarter 2012, or a decrease of 7.3% compared to
unadjusted Hospitality Revenue in the first quarter 2012
- Net income was $53.8 million (including
an income tax benefit of $66.3 million primarily relating to the
REIT conversion) compared to net income of $6.0 million in first
quarter 2012
- Adjusted EBITDA on a consolidated basis
decreased 21.6% to $50.6 million
- Hospitality Adjusted EBITDA decreased
26.1% to $54.7 million
- Adjusted Funds from Operations, or
Adjusted FFO, was $23.5 million while Adjusted FFO excluding REIT
conversion costs was $34.9 million
- Declared first quarter dividend of
$0.50 per share paid to stockholders on April 12, 2013
- Repurchased $55.7 million of the
Company’s common stock during the quarter against its $100 million
repurchase plan
For our definitions of RevPAR, Total RevPAR, Adjusted EBITDA,
Retail Adjusted Revenue, Retail Adjusted Total RevPAR, and Adjusted
FFO as well as a reconciliation of the non-GAAP financial measure
Adjusted EBITDA to Net Income, a reconciliation of the non-GAAP
financial measure Retail Adjusted Revenue to revenue, and a
reconciliation of the non-GAAP financial measure Adjusted FFO to
Net Income, see “Retail Adjusted Revenue”, “Calculation of RevPAR
and Total RevPAR”, “Non-GAAP Financial Measures”, and “Supplemental
Financial Results” below.
Refinancing After Quarter End
- Completed private placement of $350
million of 5% senior unsecured notes due 2021
- Successfully refinanced and upsized
credit facility to $1 billion from $925 million, improving pricing
and extending the maturity to April 2017
Reed continued, “In addition, to give ourselves maximum balance
sheet flexibility and take advantage of historically low interest
rates, after quarter end, we completed the refinancing of the
majority of our debt, which provides us with a strong balance sheet
and a tremendous amount of flexibility. Finally, we announced a
healthy planned 2013 dividend payout anticipated to be
approximately $2.00 per share, or $0.50 per quarter, which we
believe gives us one of the best dividend yields in the lodging
REIT sector.”
Hospitality
Property-level results and operating metrics for the first
quarter of 2013 and 2012 are presented in greater detail below
under “Supplemental Financial Results.”
- Gaylord Opryland occupancy increased
4.2 percentage points compared to the first quarter of 2012 to 70.4
percent, and RevPAR increased 5.9 percent to $110.76. In spite of a
challenging comparison to first quarter last year, revenue at the
property declined only 2.9 percent. The decline in revenue and
Adjusted EBITDA from prior year was primarily related to a decrease
in food and beverage spending as a result of a change in group mix,
as the property experienced a shift from premium corporate and
association groups toward less profitable SMERF (Social, Military,
Educational, Religious, and Fraternal) groups and transient guests.
This shift in business mix resulted in a reduction in
outside-the-room spending by $3.4 million for the quarter.
- Gaylord Palms occupancy declined 1.9
percentage points to 79.9 percent compared to the first quarter of
2012, and RevPAR decreased 4.7 percent to $142.47. The property
experienced a significant shift in business mix during the quarter,
as the property had over 24,000 fewer corporate and association
room nights than the first quarter of 2012. This reduction in
premium business was replaced by over 21,000 transient and SMERF
group room nights that resulted in lower outside-the-room spending
by $4.0 million for the quarter.
- Gaylord Texan occupancy decreased 1.2
percentage points compared to the first quarter of 2012 and RevPAR
declined 3.2 percent. The property experienced a similar shift in
business mix during the quarter, as the property had over 14,000
fewer corporate and association room nights than in the 2012
quarter. This reduction in premium business was replaced by over
11,000 transient and SMERF group room nights resulting in a
reduction in outside-the-room spending by $2.9 million for the
quarter.
- Gaylord National occupancy decreased
9.1 percentage points compared to the first quarter of 2012, and
RevPAR decreased 6.2 percent. Of the occupancy decline, 4.7
percentage points were attributable to cancellations of government
groups during the quarter, as Federal budget sequestration issues
continued to negatively weigh on the behavior of these groups and
subsequently the performance of the property in the quarter. In
particular, two government related groups cancelled on short notice
during the quarter resulting in 6,758 fewer room nights. The impact
of these cancellations and general effect of government
sequestration impacted the property’s outside-the-room spending,
which decreased by $4.3 million for the quarter.
Reed continued, “While we anticipated the shift in mix at our
properties would impact our first quarter performance, the
challenges brought about by government budget issues had a negative
impact on Gaylord National. Given that our properties traditionally
rely on a mix of roughly 80 percent group and 20 percent transient
business, the significant government group cancellations were felt
more acutely by our business than some competitors in the D.C. area
who focus more heavily on the transient segment and can thus
reclaim more of those lost room nights in the quarter.
“Looking at our properties as a whole, we were pleased that in
spite of the issues in D.C., occupancy and RevPAR were only
slightly down compared to the first quarter of last year, and ADR
actually improved modestly. Our Total RevPAR performance
represented a decrease compared to last year, due to a decline in
corporate and association business partially offset by an increase
in SMERF and transient business. The negative impact of this shift
away from premium corporate and association business was felt in
terms of outside-the-room spending. However, these types of shifts
tend to occur from quarter-to-quarter, and based on the group and
association business we have secured for the remainder of the year,
we are optimistic that this shift does not reflect an ongoing
trend.”
Gross advance group bookings set a record first quarter
production level with 587,682 group room nights booked for all
future periods. Gross group room night production in-the year,
for-the-year set a record first quarter production level and
reflect a 42.0% increase over the same period last year.
Additionally, transient room night production, a first quarter
production record, increased 18,567 room nights and transient ADR
grew $17.05 compared to the prior year quarter as the Marriott
Rewards program began to gain traction and the Marriott transient
delivery channels continued to ramp for Gaylord Hotels.
Reed continued, “Despite a potentially disruptive transition
from the legacy Gaylord Hotels’ sales system to the new Marriott
sales system (CI/TY) during February and March, the sales team did
an outstanding job of not only migrating over five million group
room nights to the new system, but also generating a record sales
production quarter. Furthermore, 17% of first quarter production
resulted from new customers obtained through Marriott sales
channels, which we see as an encouraging sign.”
Opry and Attractions
Opry and Attractions segment revenue declined 2.6 percent to
$12.5 million in the first quarter of 2013 from $12.9 million in
the prior-year quarter. The segment’s Adjusted EBITDA declined 36.7
percent to $1.4 million in the first quarter of 2013, from $2.2
million in the prior-year quarter. Due to the REIT conversion, this
segment shares a greater proportion of allocated expenses for
centralized services than in the past.
Corporate
Corporate and Other Adjusted EBITDA totaled a loss of $5.4
million in the first quarter of 2013 compared to a loss of $11.5
million in the same period last year. The reduction in costs at the
Corporate level are directly related to the transition of the
Company from a C-Corp to a REIT and are in-line with previously
discussed estimated cost synergies.
REIT Conversion Costs
The Company has allocated all REIT conversion costs by operating
segments and reported these amounts separately as REIT conversion
costs in the accompanying financial information. During the first
quarter of 2013, the Company incurred $15.0 million of costs
associated with this conversion. These costs include employment and
severance costs ($11.2 million), professional fees ($1.1 million),
and various other transition costs ($2.7 million).
During the quarter, the Company recorded an income tax benefit
of $66.3 million. This benefit was primarily due to the reversal of
$137.4 million in net deferred tax liabilities that are no longer
necessary as a result of the Company’s REIT conversion, partially
offset by a valuation allowance of $76.1 million on the net
deferred tax assets of the Company’s taxable REIT subsidiaries, or
TRSs.
Dividend Update
The Company paid its first quarterly cash dividend
of $0.50 per share of common stock on April 12,
2013 to stockholders of record on March 28, 2013. It is
the Company’s current plan to distribute total annual dividends of
approximately $2.00 per share for 2013 in cash in equal
quarterly payments in April, July, October, and January, subject to
the board’s future determinations as to the amount of quarterly
distributions and the timing thereof.
Balance Sheet/Liquidity Update
As of March 31, 2013, the Company had total debt outstanding of
$1,092.1 million and unrestricted cash of $44.8 million. At March
31, 2013, $171.0 million of borrowings were undrawn under the
Company’s $925 million credit facility, and the lending banks had
issued $7.7 million in letters of credit, which left $163.3 million
of availability under the credit facility. On January 17, 2013, the
Company redeemed its remaining 6.75% senior notes at par at a cost
of $152.2 million, which was funded using borrowings under the
revolving credit line of the Company’s $925 million credit
facility.
During the quarter, the Company announced a private placement of
$350 million aggregate principal amount of 5.00% senior notes due
2021 (the “Notes”), which closed on April 3, 2013. The Notes are
senior unsecured obligations of the Company’s issuing subsidiaries
and are guaranteed by the Company and all of the Company’s
subsidiaries that guarantee its senior credit facility. Aggregate
net proceeds from the sale of the notes were approximately $342
million, after deducting the initial purchasers’ discounts and
commissions and estimated offering expenses. The Company used
substantially all of the net proceeds of the offering to repay
amounts outstanding under its revolving credit facility.
In addition, the Company announced on April 18, 2013 that it
successfully refinanced its $925 million credit facility that was
scheduled to mature in August 2015. The increased and extended $1
billion credit facility will mature in April 2017 and is
comprised of a $700 million revolving credit line
($154 million of which was drawn at close) and a fully funded
$300 million term loan. The Company was able to secure
favorable pricing on the facility as the interest rate is LIBOR
plus an applicable margin based on the Company’s consolidated
funded indebtedness to total asset value ratio, or the base rate
plus the applicable margin. The initial rate is set at LIBOR +
1.75%. The extended facility reflects both a reduction in the term
loan and an increase in the revolving credit line, as well as
improved pricing. The previous credit facility was comprised of a
$400 million term loan and a $525 million revolving
credit line. At April 30, 2013, $439.0 million of borrowings were
drawn under the Company’s $1 billion credit facility, and the
issuing banks had issued $7.7 million in letters of credit, which
left $553.3 million of availability under the credit facility.
During the quarter, the Company repurchased and cancelled
approximately 1.3 million shares of its common stock for an
aggregate purchase price of $55.7 million, which the Company funded
using cash on hand and borrowings under the revolving credit line
of its credit facility.
Guidance Update:
The Company is reiterating its 2013 Guidance for Hospitality
RevPAR, Hospitality Total RevPAR, Adjusted EBITDA and Adjusted FFO,
as originally announced on February 15, 2013. However, due to
higher than expected employee transition and pension cost
associated with the REIT conversion, the Company is modifying its
2013 guidance for Adjusted FFO after
REIT conversion costs as outlined in the following table. In
addition, the Company has updated the estimated basic shares
outstanding to reflect the recent share repurchase activity.
Original Guidance
Revised Guidance Low High Low
High Hospitality RevPAR 1 3.0 %
6.0 % 3.0 % 6.0 % Hospitality
Total RevPAR 1 2.0 % 5.0 % 2.0 % 5.0 % Hospitality $ 278.0 $
288.0 $ 278.0 $ 288.0 Opry and Attractions 15.0 17.0 15.0 17.0
Corporate and Other (24.0 ) (20.0 ) (24.0 ) (20.0 ) Gaylord
National Bonds 2 12.0
12.0 12.0
12.0 Adjusted EBITDA $ 281.0 $
297.0 $ 281.0 $
297.0 Adjusted FFO 3 $ 212.0 $ 225.0 $ 212.0 $
225.0 REIT conversion costs (tax effected) $ 13.0 $ 12.0 $ 19.0 $
18.0
Adjusted FFO after REIT conversion costs 3
$ 199.0 $ 213.0 $ 193.0 $ 207.0 Adjusted FFO per Share 3 $
4.03 $ 4.27 $ 4.09 $ 4.34
Adjusted FFO per Share after REIT conversion costs 3
$ 3.78 $ 4.04 $ 3.72 $ 3.99 Estimated Basic Shares Outstanding 52.7
52.7 51.9 51.9
- Hospitality RevPAR estimated annual
increases are based on 2012 RevPAR of $123.36 (as adjusted to
reflect a change in room counting methods that does not exclude
renovation rooms from the calculation of rooms available, per
Marriott room counting methods), and Hospitality Total RevPAR
estimated annual increases are based on 2012 Retail Adjusted Total
RevPAR of $305.30 (as adjusted to reflect the elimination from the
first three quarters of 2012 of revenues from retail operation that
were outsourced to a third-party retailer beginning in the fourth
quarter of 2012, as well as Marriott room counting methods).
- Interest income from Gaylord National
bonds reported in hospitality segment results in 2013.
- Adjusted FFO guidance includes a
deduction for maintenance capital expenditures of $36.0 to $38.0
million.
For our definitions of RevPAR, Total RevPAR, Adjusted EBITDA,
Retail Adjusted Revenue, Retail Adjusted Total RevPAR, and Adjusted
FFO as well as a reconciliation of the non-GAAP financial measure
Adjusted EBITDA to Net Income, a reconciliation of the non-GAAP
financial measure Retail Adjusted Revenue to revenue, and a
reconciliation of the non-GAAP financial measure Adjusted FFO to
Net Income, see “Retail Adjusted Revenue”, “Calculation of RevPAR
and Total RevPAR”, “Non-GAAP Financial Measures”, “Supplemental
Financial Results” and “Reconciliation of Forward-Looking
Statements” below.
Reed continued, “When we originally announced our outlook for
the year it was with the understanding that our performance would
strengthen as the year progressed and we would begin to realize the
revenue and cost synergies we expected once the Marriott systems
were fully implemented. With the successful integration of our
hotels on the Marriott platform, coupled with the strong
in-the-year, for-the-year group bookings and transient demand, we
believe we will end the year within our original guidance range
other than for Adjusted FFO after REIT conversion costs. Despite
the challenges we experienced in the first quarter, our hotel
assets are heading in the right direction, our corporate cost
savings are being realized as expected, and we are seeing many
positive signs for the future. As a result, we are reiterating our
guidance for Hospitality RevPAR, Hospitality Total RevPAR, Adjusted
EBITDA and Adjusted FFO.”
Earnings Call information
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, Inc. (NYSE: RHP) is a REIT for
federal income tax purposes, specializing in group-oriented,
destination hotel assets in urban and resort markets. The Company’s
owned assets include a network of four upscale, meetings-focused
resorts totaling 7,795 rooms that are managed by world-class
lodging operator Marriott International, Inc. under the Gaylord
Hotels brand. Other owned assets managed by Marriott International,
Inc. include Gaylord Springs Golf Links, the Wildhorse Saloon, the
General Jackson Showboat and The Inn at Opryland, a 303-room
overflow hotel adjacent to Gaylord Opryland. The Company 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, the Opry’s radio home. 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 future performance of our business,
the effect of the Company’s election of REIT status, the amount of
REIT conversion or other costs relating to the restructuring
transactions, anticipated cost synergies and revenue enhancements
from the Marriott relationship, the expected approach to making
dividend payments, the board’s ability to alter the dividend policy
at any time, plans to engage in common stock repurchase
transactions and the timing and form of such 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 economic
conditions affecting the hospitality business generally, the
geographic concentration of the Company’s hotel properties,
business levels at the Company’s hotels, the effect of the
Company’s election to be taxed as a REIT for federal income tax
purposes effective for the year ending December 31, 2013, the
Company’s ability to remain qualified as a REIT, the Company’s
ability to execute its strategic goals as a REIT, the effects of
business disruption related to the Marriott management transition
and the REIT conversion, the Company’s ability to realize cost
savings and revenue enhancements from the REIT conversion and the
Marriott transaction, the Company’s ability to generate cash flows
to support dividends, future board determinations regarding the
timing and amount of dividends and changes to the dividend policy,
which could be made at any time, the determination of Adjusted FFO
and REIT taxable income, and the Company’s ability to borrow funds
pursuant to its credit agreements. 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, 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.
Additional Information
This release should be read in conjunction with the consolidated
financial statements and notes thereto included in our most recent
report on Form 10-K. Copies of our reports are available on our
website at no expense at www.rymanhp.com and through the SEC’s
Electronic Data Gathering Analysis and Retrieval System (“EDGAR”)
at www.sec.gov.
Retail Adjusted Revenue
Under Marriott International, Inc.’s management of Gaylord
Opryland, Gaylord Texan, and Gaylord National, the retail
operations of such hotels were outsourced to a third party retailer
beginning in the fourth quarter of 2012. The properties now receive
rental lease payments rather than full retail revenue and
associated expense. The net impact of this change lowered overall
retail revenue for each affected property. During the first quarter
of 2013 the change resulted in revenue decreases of approximately
$2.2 million (Gaylord Opryland–$1.3 million, Gaylord Texan–$0.5
million, and Gaylord National–$0.4 million). The change impacted
consolidated revenue, Hospitality segment revenue, property
revenue, and Total RevPAR as explained below. To enable
period-over-period comparison, we have included adjusted 2012
revenue and 2012 Total RevPAR figures to reflect the elimination of
retail revenues from operations that have been outsourced in the
2013 period. No adjustments were made to the Gaylord Palms’ results
due to the fact that during all periods presented, retail
operations were outsourced at that property. A reconciliation of
actual revenue to Retail Adjusted Revenue for the 2012 period is
set forth below under “Supplemental Financial Results.”
Calculation of RevPAR and Total RevPAR
We calculate revenue per available room (“RevPAR”) for our
hotels by dividing room revenue by room nights available to guests
for the period. We calculate total revenue per available room
(“Total RevPAR”) for our hotels by dividing the sum of room
revenue, food & beverage, and other ancillary services revenue
by room nights available to guests for the period. We calculate
retail adjusted total revenue per available room (“Retail Adjusted
Total RevPAR”) for our hotels by dividing the sum of room revenue,
food & beverage, and other ancillary services revenue minus the
retail inventory adjustment for the period by room nights available
to guests for the period.
RevPAR estimated annual increases included in our guidance are
based on 2012 RevPAR of $123.36 (as adjusted to reflect a change in
room counting methods that does not exclude renovation rooms from
the calculation of rooms available, per Marriott room counting
methods), and Total RevPAR estimated annual increases are based on
2012 Retail Adjusted Total RevPAR of $305.30 (as adjusted to
reflect the elimination from the first three quarters of 2012 of
revenues from retail operations that were outsourced to a
third-party retailer beginning in the fourth quarter of 2012, as
well as Marriott room counting methods).
Non-GAAP Financial Measures
We present the following non-GAAP financial measures we believe
are useful to investors as key measures of our operating
performance: Adjusted EBITDA, Adjusted FFO and Retail Adjusted
Revenue, as described above.
To calculate Adjusted EBITDA, we determine EBITDA, which
represents net income (loss) determined in accordance with GAAP,
plus loss (income) from discontinued operations, net; provision
(benefit) for income taxes; other (gains) and losses, net; (income)
loss from unconsolidated entities; interest expense; and
depreciation and amortization, less interest income. Adjusted
EBITDA is calculated as EBITDA plus preopening costs; non-cash
ground lease expense; equity-based compensation expense; impairment
charges; any closing costs of completed acquisitions; interest
income on Gaylord National bonds; other gains (and losses); REIT
conversion costs and any other adjustments we have identified in
this release. We believe Adjusted EBITDA is useful to investors in
evaluating our operating performance because this measure helps
investors evaluate and compare the results of our operations from
period to period by removing the impact of our capital structure
(primarily interest expense) and our asset base (primarily
depreciation and amortization) from our operating results. A
reconciliation of net income (loss) to EBITDA and Adjusted EBITDA
and a reconciliation of segment operating income to segment
Adjusted EBITDA are set forth below under “Supplemental Financial
Results.” Our method of calculating Adjusted EBITDA as used herein
differs from the method we used to calculate Adjusted EBITDA as
presented in press releases covering periods prior to 2013.
We calculate Adjusted FFO to mean net income (loss) (computed in
accordance with GAAP), excluding non-controlling interests, and
gains and losses from sales of property; plus depreciation and
amortization (excluding amortization of deferred financing costs
and debt discounts) and impairment losses; we also exclude
written-off deferred financing costs, non-cash ground lease
expense, amortization of debt discounts and amortization of
deferred financing costs; and gain (loss) on extinguishment of
debt, and subtract certain capital expenditures (the required
FF&E reserves for our managed properties plus maintenance
capital expenditures for our non-managed properties). We also
exclude the effect of the non-cash income tax benefit relating to
the REIT conversion. We have presented Adjusted FFO both excluding
and including REIT conversion costs. We believe that the
presentation of Adjusted FFO provides useful information to
investors regarding our operating performance because it is a
measure of our operations without regard to specified non-cash
items such as real estate depreciation and amortization, gain or
loss on sale of assets and certain other items which we believe are
not indicative of the performance of our underlying hotel
properties. We believe that these items are more representative of
our asset base than our ongoing operations. We also use Adjusted
FFO as one measure in determining our results after taking into
account the impact of our capital structure. A reconciliation of
net income (loss) to Adjusted FFO is set forth below under
“Supplemental Financial Results.”
We caution investors that amounts presented in accordance with
our definitions of Adjusted EBITDA and Adjusted FFO may not be
comparable to similar measures disclosed by other companies,
because not all companies calculate these non-GAAP measures in the
same manner. Adjusted EBITDA and Adjusted FFO, and any related per
share measures, should not be considered as alternative measures of
our net income (loss), operating performance, cash flow or
liquidity. Adjusted EBITDA and Adjusted FFO may include funds that
may not be available for our discretionary use due to functional
requirements to conserve funds for capital expenditures and
property acquisitions and other commitments and uncertainties.
Although we believe that Adjusted EBITDA and Adjusted FFO can
enhance an investor’s understanding of our results of operations,
these non-GAAP financial measures, when viewed individually, are
not necessarily better indicators of any trend as compared to GAAP
measures such as net income (loss) or cash flow from operations. In
addition, you should be aware that adverse economic and market and
other conditions may harm our cash flow.
RYMAN HOSPITALITY PROPERTIES, INC.
AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS Unaudited (In thousands, except per share data)
Three Months Ended Mar. 31, 2013
2012
Revenues:
Rooms $ 85,509 $ 87,534 Food and beverage 98,188 108,076 Other
hotel revenue 25,884 30,438 Opry and Attractions
12,532 12,867 Total revenues
222,113 238,915
Operating expenses: Rooms 25,087 22,968 Food and beverage
61,248 61,614 Other hotel expenses 69,568 72,894 Management fees
3,469 - Total
hotel operating expenses 159,372 157,476 Opry and Attractions
11,286 10,757 Corporate 6,666 13,006 REIT conversion costs 14,992
3,053 Casualty loss 32 174 Preopening costs - 331 Depreciation and
amortization 32,009
32,434 Total operating expenses 224,357
217,231 Operating income (loss)
(2,244 ) 21,684 Interest expense, net of amounts capitalized
(13,323 ) (14,362 ) Interest income 3,051 3,154 Other gains and
(losses), net (6 ) -
Income (loss) before income taxes (12,522 ) 10,476
(Provision) benefit for income taxes 66,292
(4,469 ) Income from continuing operations
53,770 6,007 Income from discontinued operations, net of
taxes 10 21 Net
income $ 53,780 $ 6,028
Basic net income per
share:
Income from continuing operations $ 1.03 $ 0.12 Income from
discontinued operations, net of taxes -
- Net income $ 1.03 $
0.12
Fully diluted net
income per share:
Income from continuing operations $ 0.81 $ 0.12 Income from
discontinued operations, net of taxes -
- Net income $ 0.81 $
0.12
Weighted average
common shares for the period:
Basic 52,427 48,715 Diluted (1) 66,720 50,137
(1)
Represents GAAP calculation of diluted
shares and does not consider anti-dilutive effect of the Company's
purchased call options associated with its convertible notes. For
the three months ended March 31, 2013 and 2012, the purchased call
options effectively reduce dilution by approximately 7.7 million
and 0.8 million shares of common stock, respectively.
RYMAN HOSPITALITY PROPERTIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE
SHEETS Unaudited (In thousands)
Mar. 31, Dec.
31, 2013 2012 ASSETS: Property and
equipment, net of accumulated depreciation $
2,128,451 $ 2,148,999 Cash and cash equivalents -
unrestricted 44,848 97,170 Cash and cash equivalents - restricted
6,934 6,210 Notes receivable 148,925 149,400 Trade receivables, net
60,745 55,343 Deferred financing costs 9,660 11,347 Prepaid
expenses and other assets 55,879
63,982 Total assets $ 2,455,442 $
2,532,451 LIABILITIES AND STOCKHOLDERS'
EQUITY: Debt and capital lease obligations $ 1,092,081 $ 1,031,863
Accounts payable and accrued liabilities 145,042 218,461 Deferred
income taxes 35,026 88,938 Deferred management rights proceeds
185,615 186,346 Dividends payable 25,971 - Other liabilities
139,071 153,245 Stockholders' equity 832,636
853,598 Total liabilities and stockholders'
equity $ 2,455,442 $ 2,532,451
RYMAN HOSPITALITY
PROPERTIES, INC. AND SUBSIDIARIES SUPPLEMENTAL FINANCIAL
RESULTS ADJUSTED EBITDA RECONCILIATION Unaudited (in
thousands)
Three Months Ended Mar. 31,
2013 2012 $ Margin $
Margin
Consolidated
Revenue $ 222,113 $ 238,915
Net income $ 53,780 $ 6,028 Income from discontinued
operations, net of taxes (10 ) (21 ) Provision (benefit) for income
taxes (66,292 ) 4,469 Other (gains) and losses, net 6 - Interest
expense, net 10,272 11,208 Depreciation & amortization
32,009 32,434
EBITDA 29,765 13.4 % 54,118 22.7 % Preopening costs - 331
Non-cash lease expense 1,399 1,426 Equity-based compensation 1,394
2,356 Interest income on Gaylord National bonds 3,048 3,150 Other
gains and (losses), net (6 ) - (Gain) loss on disposal of assets 1
- Casualty loss 32 174 REIT conversion costs
14,992 3,053
Adjusted EBITDA $ 50,625
22.8 % $ 64,608 27.0 %
Hospitality
segment
Revenue $ 209,581 $ 226,048
Operating income 17,661
39,705 Depreciation & amortization 26,801 28,536 Preopening
costs - 331 Non-cash lease expense 1,399 1,426 Equity-based
compensation - 783 Interest income on Gaylord National bonds 3,048
3,150 Other gains and (losses), net (6 ) - (Gain) loss on disposal
of assets 1 - REIT conversion costs 5,747
-
Adjusted EBITDA $ 54,651 26.1 %
$ 73,931 32.7 %
Opry and Attractions
segment
Revenue $ 12,532 $ 12,867
Operating income (loss)
(190 ) 684 Depreciation & amortization 1,366 1,285 Equity-based
compensation 129 63 Casualty loss - 141 REIT conversion costs
70 -
Adjusted EBITDA $ 1,375
11.0 % $ 2,173 16.9 %
Corporate and Other
segment
Operating loss (19,715 ) (18,705 ) Depreciation &
amortization 3,842 2,613 Equity-based compensation 1,265 1,510
Casualty loss 32 33 REIT conversion costs
9,175 3,053
Adjusted
EBITDA $ (5,401 ) $ (11,496 )
RYMAN HOSPITALITY PROPERTIES,
INC. AND SUBSIDIARIES SUPPLEMENTAL FINANCIAL RESULTS
FUNDS FROM OPERATIONS ("FFO") AND ADJUSTED FFO
RECONCILIATION Unaudited (in thousands, except per share data)
Three Months Ended Mar. 31, 2013
2012 $
$
Consolidated
Net income $ 53,780 $ 6,028 Depreciation & amortization
32,009 32,434 (Gains) losses on sale of real estate assets 1
-
FFO 85,790 38,462 Capital
expenditures (1) (7,747 ) (13,842 ) Non-cash lease expense 1,399
1,426 Impairment charges 132 - Write-off of deferred financing
costs 544 - Amortization of deferred financing costs 1,165 1,212
Amortization of debt discounts 3,593 3,307 Noncash tax benefit
resulting from REIT conversion (61,340 ) -
Adjusted FFO $ 23,536 $ 30,565 REIT conversion
costs (tax effected) 11,338 1,944
Adjusted FFO excluding REIT conversion costs $ 34,874
$ 32,509 FFO per basic share $ 1.64 $ 0.79
Adjusted FFO per basic share $ 0.45 $ 0.63 Adjusted FFO (excl. REIT
conversion costs) per basic share $ 0.67 $ 0.67 FFO per
diluted share (2) $ 1.29 $ 0.77 Adjusted FFO per diluted share (2)
$ 0.35 $ 0.61 Adjusted FFO (excl. REIT conversion costs) per
diluted share (2) $ 0.52 $ 0.65
(1)
Represents FF&E reserve for managed
properties and maintenance capital expenditures for non-managed
properties.
(2)
The GAAP calculation of diluted shares
does not consider the anti-dilutive effect of the Company's
purchased call options associated with its convertible notes. For
the three months ended March 31, 2013 and 2012, the purchased call
options effectively reduce dilution by approximately 7.7 million
and 0.8 million shares of common stock, respectively.
RYMAN HOSPITALITY PROPERTIES, INC. AND
SUBSIDIARIES SUPPLEMENTAL FINANCIAL RESULTS Unaudited
(in thousands, except operating metrics)
Three Months Ended Mar. 31,
2013 2012 (1) HOSPITALITY OPERATING
METRICS:
Hospitality
Segment
Occupancy 67.5% 68.7% Average daily rate (ADR) $ 173.84 $
172.82 RevPAR $ 117.33 $ 118.78 OtherPAR $ 170.23 $ 187.97 Total
RevPAR $ 287.56 $ 306.75 Revenue $ 209,581 $ 226,048
Adjusted EBITDA $ 54,651 $ 73,931 Adjusted EBITDA Margin 26.1%
32.7%
Gaylord
Opryland
Occupancy 70.4% 66.2% Average daily rate (ADR) $ 157.33 $
158.00 RevPAR $ 110.76 $ 104.56 OtherPAR $ 153.62 $ 164.90 Total
RevPAR $ 264.38 $ 269.46 Revenue $ 68,608 $ 70,669 Adjusted
EBITDA $ 21,233 $ 22,895 Adjusted EBITDA Margin 30.9% 32.4%
Gaylord
Palms
Occupancy 79.9% 81.8% Average daily rate (ADR) $ 178.29 $
182.71 RevPAR $ 142.47 $ 149.44 OtherPAR $ 224.54 $ 253.32 Total
RevPAR $ 367.01 $ 402.76 Revenue $ 46,442 $ 51,532 Adjusted
EBITDA $ 12,786 $ 20,212 Adjusted EBITDA Margin 27.5% 39.2%
Gaylord
Texan
Occupancy 68.2% 69.4% Average daily rate (ADR) $ 175.13 $
177.75 RevPAR $ 119.46 $ 123.43 OtherPAR $ 209.32 $ 227.65 Total
RevPAR $ 328.78 $ 351.08 Revenue $ 44,681 $ 48,274 Adjusted
EBITDA $ 12,243 $ 16,609 Adjusted EBITDA Margin 27.4% 34.4%
Gaylord
National
Occupancy 55.6% 64.7% Average daily rate (ADR) $ 208.33 $
190.94 RevPAR $ 115.91 $ 123.51 OtherPAR $ 148.72 $ 170.55 Total
RevPAR $ 264.63 $ 294.06 Revenue $ 47,536 $ 53,413 Adjusted
EBITDA $ 7,992 $ 13,799 Adjusted EBITDA Margin 16.8% 25.8%
The Inn at
Opryland (2)
Occupancy 56.6% 55.6% Average daily rate (ADR) $ 109.09 $
103.57 RevPAR $ 61.74 $ 57.55 OtherPAR $ 23.13 $ 24.53 Total RevPAR
$ 84.87 $ 82.08 Revenue $ 2,314 $ 2,160 Adjusted EBITDA $
397 $ 416 Adjusted EBITDA Margin 17.2% 19.3% (1) For
purposes of comparability, both 2013 and 2012 occupancy, RevPAR,
OtherPAR and Total RevPAR are calculated using Marriott's method of
calculating available rooms and do not exclude renovation rooms
from the calculation of rooms available, which is different from
how the Company has previously accounted for renovation rooms prior
to the Marriott transition. In addition, both 2013 and 2012
occupancy and ADR do not include complimentary room nights in the
calculation of occupied rooms, which is different from how the
Company has previously accounted for complimentary rooms.
(2) Includes other hospitality revenue and expense.
RYMAN HOSPITALITY PROPERTIES, INC. AND SUBSIDIARIES
SUPPLEMENTAL FINANCIAL RESULTS RECONCILIATION OF ADJUSTED
RESULTS Unaudited (in thousands, except operating metrics)
Three Months Ended
Mar. 31, 2013 2012 Consolidated:
Revenue $ 222,113 $ 238,915 Less: Retail Inventory Adjustment
- (2,205 ) Retail Adjusted Revenue $ 222,113 $
236,710
Hospitality Segment: Revenue $ 209,581 $
226,048 Less: Retail Inventory Adjustment -
(2,205 ) Retail Adjusted Revenue $ 209,581 $ 223,843 Total
RevPAR $ 287.56 $ 306.75 Retail Adjusted Total RevPAR $ 287.56 $
303.76
Gaylord Opryland: Revenue $ 68,608 $ 70,669
Less: Retail Inventory Adjustment - (1,336 )
Retail Adjusted Revenue $ 68,608 $ 69,333 Total RevPAR $
264.38 $ 269.46 Retail Adjusted Total RevPAR $ 264.38 $ 264.37
Gaylord Palms: Revenue $ 46,442 $ 51,532 Less: Retail
Inventory Adjustment - - Retail
Adjusted Revenue $ 46,442 $ 51,532 Total RevPAR $ 367.01 $
402.76 Retail Adjusted Total RevPAR $ 367.01 $ 402.76
Gaylord Texan: Revenue $ 44,681 $ 48,274 Less: Retail
Inventory Adjustment - (474 ) Retail Adjusted
Revenue $ 44,681 $ 47,800 Total RevPAR $ 328.78 $ 351.08
Retail Adjusted Total RevPAR $ 328.78 $ 347.63
Gaylord
National: Revenue $ 47,536 $ 53,413 Less: Retail Inventory
Adjustment - (395 ) Retail Adjusted Revenue $
47,536 $ 53,018 Total RevPAR $ 264.63 $ 294.06 Retail
Adjusted Total RevPAR $ 264.63 $ 291.89
Inn at Opryland
(and Other Hospitality): Revenue $ 2,314 $ 2,160 Less: Retail
Inventory Adjustment - - Retail
Adjusted Revenue $ 2,314 $ 2,160 Total RevPAR $ 84.87 $
82.08 Retail Adjusted Total RevPAR $ 84.87 $ 82.08
Ryman Hospitality Properties,
Inc. and Subsidiaries RECONCILIATION OF FORWARD-LOOKING
STATEMENTS Unaudited (in thousands)
Adjusted Earnings Before Interest, Taxes, Depreciation and
Amortization ("Adjusted EBITDA") and Adjusted Funds From
Operations ("AFFO") reconciliation:
PRIOR GUIDANCE RANGE NEW GUIDANCE
RANGE FOR FULL YEAR 2013 FOR FULL YEAR 2013
Low High Low High
Ryman Hospitality
Properties, Inc.
Net Income $ 91,100 $ 98,100 $ 145,400 $ 152,400 Provision
(benefit) for income taxes (8,000 ) (7,000 ) (19,300 ) (18,400 )
Write off and Valuation Allowance - - (62,000 ) (62,000 ) Other
(gains) and losses, net (2,300 ) (2,300 ) (2,300 ) (2,300 )
Interest expense 46,000 50,900 60,000 64,000 Interest income
(12,000 ) (12,000 ) (12,000 ) (12,000 )
Operating Income 114,800 127,700 109,800 121,700 Depreciation and
amortization 120,000 125,000
120,000 125,000 EBITDA 234,800 252,700 229,800
246,700 Non-cash lease expense 5,600 5,600 5,600 5,600 Equity based
compensation 6,300 6,400 6,300 6,400 Other gains and (losses), net
2,300 2,300 2,300 2,300 Interest income 12,000 12,000 12,000 12,000
REIT conversion costs 20,000 18,000
25,000 24,000 Adjusted EBITDA $ 281,000
$ 297,000 $ 281,000 $ 297,000
Hospitality
Segment
Operating Income $ 159,100 $ 167,100 $ 156,800 $ 164,300
Depreciation and amortization 107,000 110,000
107,000 110,000 EBITDA 266,100
277,100 263,800 274,300 Non-cash lease expense 5,600 5,600 5,600
5,600 Equity based compensation - - - - Other gains and (losses),
net 2,300 2,300 2,300 2,300 Interest income 12,000 12,000 12,000
12,000 REIT conversion costs 4,000 3,000
6,300 5,800 Adjusted EBITDA $
290,000 $ 300,000 $ 290,000 $ 300,000
Opry and
Attractions Segment
Operating Income $ 8,900 $ 9,800 $ 8,700 $ 9,600 Depreciation and
amortization 5,500 6,500 5,500
6,500 EBITDA 14,400 16,300 14,200 16,100
Non-cash lease expense - - - - Equity based compensation 600 700
600 700 Interest income - - - - REIT conversion costs -
- 200 200 Adjusted
EBITDA $ 15,000 $ 17,000 $ 15,000 $ 17,000
Corporate and
Other Segment
Operating Income $ (53,200 ) $ (49,200 ) $ (55,700 ) $ (52,200 )
Depreciation and amortization 7,500 8,500
7,500 8,500 EBITDA (45,700 )
(40,700 ) (48,200 ) (43,700 ) Non-cash lease expense - - - - Equity
based compensation 5,700 5,700 5,700 5,700 Interest income - - - -
REIT conversion costs 16,000 15,000
18,500 18,000 Adjusted EBITDA $ (24,000
) $ (20,000 ) $ (24,000 ) $ (20,000 )
Ryman Hospitality
Properties, Inc.
Net Income $ 91,100 $ 98,100 $ 145,400 $ 152,400 Depreciation &
Amortization 120,000 125,000 120,000 125,000 Capital Expenditures
(38,000 ) (36,000 ) (38,000 ) (36,000 ) Non-Cash Lease Expense
5,600 5,600 5,600 5,600 Amortization of Debt Premiums/Disc. 15,000
15,000 15,000 15,000 Amortization of DFC 5,300 5,300 7,000 7,000
Other Non-recurring Items - - (62,000 ) (62,000 ) Loss (Gain) on
debt extinguishment - - -
- Adjusted FFO 199,000 213,000 193,000 207,000 REIT
Conversion Costs 13,000 12,000
19,000 18,000 Adjusted FFO Excl. REIT
Conversion Costs $ 212,000 $ 225,000 $ 212,000
$ 225,000
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