- Consolidated Adjusted EBITDA Increase of 15.1
Percent to $81.6 Million –
- Second Quarter Net Income Increase of 70.9
Percent to $28.0 Million –
- Second Quarter Adjusted FFO Increase of 14.2
Percent to $58.8 Million –
- Second Quarter Gross Advanced Group Bookings
of 640,000 Room Nights for All Future Years –
A table entitled, Adjusted Earnings Before Interest, Taxes,
Depreciation and Amortization ("Adjusted EBITDA"), has been
added to the end of the release.
The corrected release reads:
RYMAN HOSPITALITY PROPERTIES, INC. REPORTS
SECOND QUARTER 2014 RESULTS
- Consolidated Adjusted EBITDA Increase of 15.1
Percent to $81.6 Million –
- Second Quarter Net Income Increase of 70.9
Percent to $28.0 Million –
- Second Quarter Adjusted FFO Increase of 14.2
Percent to $58.8 Million –
- Second Quarter Gross Advanced Group Bookings
of 640,000 Room Nights for All Future Years –
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
announced its financial results for the second quarter ended June
30, 2014.
Colin Reed, chairman, chief executive officer and president of
Ryman Hospitality Properties said, “Our Company performed very well
in the second quarter of 2014 and drove record performances in
profitability and future advanced group bookings. These
performances signal that the transition-related issues our business
endured in 2013 are now predominantly behind us. The Company
produced consolidated Adjusted EBITDA of $81.6 million in the
second quarter, which we attribute to Total RevPAR growth of 4.6
percent over the prior-year quarter and continued synergy-related
margin improvement. Our hospitality business delivered these
results despite the shift of the Easter holiday this year and
15,700 room nights out of service at Gaylord Texan due to the
ongoing rooms renovation. We estimate that the combined effect of
these two events reduced both RevPAR and Total RevPAR growth by
approximately 200 basis points, respectively, for the quarter.
“In addition to record-breaking profitability, we reported
record second quarter gross advanced group bookings for all future
years of approximately 640,000 room nights and net advanced group
bookings for all future years of approximately 476,000 room nights,
which bodes well for our hotel business going forward.”
Second Quarter Results (As Compared to Second Quarter
2013)
- Total Revenue increased 5.2 percent to
$257.9 million.
- Hospitality Revenue increased 4.5
percent to $232.9 million.
- Net Income in second quarter 2014 was
$28.0 million compared to $16.4 million in second quarter
2013. Second quarter 2014 Net Income includes $6.6 million of
losses related to repurchases of convertible notes and warrants.
Second quarter 2013 Net Income included $5.4 million of costs
related to the REIT conversion.
- Adjusted EBITDA on a consolidated basis
increased 15.1 percent to $81.6 million.
- Hospitality Adjusted EBITDA increased
12.6 percent to $76.6 million.
- Adjusted Funds from Operations, or
Adjusted FFO, increased 20.6 percent to $58.8 million compared to
$48.8 million in second quarter 2013. Excluding $2.7 million in
second quarter 2013 tax-effected REIT conversion costs, Adjusted
FFO increased 14.2 percent.
- Hospitality Revenue Per Available Room,
or RevPAR, increased 3.4 percent to $134.85. Excluding the combined
impact of the Easter holiday shift and the 15,700 room nights out
of service at Gaylord Texan due to the ongoing rooms renovation, we
estimate that RevPAR would have increased by more than 5.0
percent.
- Hospitality Total RevPAR increased 4.6
percent to $316.09. Excluding the combined impact of the Easter
holiday shift and the 15,700 room nights out of service at Gaylord
Texan due to the ongoing rooms renovation, we estimate that Total
RevPAR would have increased by more than 6.5 percent.
- Transient room nights decreased 6.2
percent to approximately 125,700 room nights, while transient
Average Daily Rate, or ADR, increased 8.2 percent. An increase in
group occupancy more than offset the decline in transient occupancy
in our overall results.
- Cancellations in-the-year, for-the-year
decreased 57.2 percent to approximately 9,200 group rooms.
- Attrition for groups that traveled in
second quarter 2014 was 11.1 percent of contracted room block
(compared to 12.9 percent), and attrition and cancellation fees
collected during second quarter 2014 were $2.8 million (compared to
$1.3 million).
- Gross advanced group bookings for all
future periods increased 84.5 percent to approximately 640,000 room
nights; net advanced group bookings for all future periods
increased 150.4 percent to approximately 476,000 room nights.
For the Company’s definitions of RevPAR, Total RevPAR, Adjusted
EBITDA, and Adjusted FFO, as well as a reconciliation of the
non-GAAP financial measure Adjusted EBITDA to Net Income and a
reconciliation of the non-GAAP financial measure Adjusted FFO to
Net Income, see “Calculation of RevPAR and Total RevPAR,” “Non-GAAP
Financial Measures,” “Supplemental Financial Results,” and
“Reconciliation of Forward-Looking Statements” below.
Hospitality
Property-level results and operating metrics for second quarter
2014 and 2013 are presented in greater detail below and under
“Supplemental Financial Results.”
- Gaylord Opryland RevPAR increased 13.6
percent to $127.34 compared to second quarter 2013. Total RevPAR
increased 9.3 percent to $273.42 compared to second quarter 2013.
Occupancy increased 5.8 percentage points to 76.4 percent as a
result of an increase in association room nights when compared to
second quarter 2013. In addition, ADR increased 5.0 percent with
transient ADR improving 15.2 percent year over year. Adjusted
EBITDA improved 29.9 percent to $24.9 million in second quarter
2014 compared to second quarter 2013. Revenue growth along with
cost management improvements, especially in food and beverage,
drove a 5.5 percentage point improvement in Adjusted EBITDA margin
to 34.7 percent compared to 29.2 percent in second quarter
2013.
- Gaylord Palms RevPAR decreased 5.2
percent to $122.41 compared to second quarter 2013. Total RevPAR
decreased 4.5 percent to $316.44 compared to second quarter 2013,
driven by a decline in occupancy of 6.0 percentage points year over
year, to 72.3 percent. The decline in occupancy was partially due
to the shift of the Easter holiday into April this year as well as
softness in weekend transient demand. Adjusted EBITDA decreased
10.3 percent to $10.6 million in second quarter 2014 compared to
second quarter 2013, attributed to a lower mix of premium corporate
business. Adjusted EBITDA margin decreased to 26.3 percent from
28.0 percent in second quarter 2013.
- Gaylord Texan RevPAR decreased 7.7
percent to $120.03 in second quarter 2014 compared to second
quarter 2013. Total RevPAR decreased 0.8 percent to $316.99
compared to second quarter 2013. There were approximately 15,700
room nights out of service during second quarter 2014 due to an
ongoing rooms renovation project, which materially impacted group
and transient occupancy. The rooms renovation program is expected
to be completed by August 2014. ADR increased 4.0 percent to
$184.35 compared to second quarter 2013. Despite the decline in
occupancy, outside-the-room spending increased by 3.8 percent
compared to second quarter 2013, driven by increases in banquet
revenue. Adjusted EBITDA increased 18.7 percent to $13.7 million
compared to second quarter 2013. Adjusted EBITDA margin improved to
31.5 percent from 26.3 percent in second quarter 2013.
- Gaylord National RevPAR increased 4.6
percent to $172.91 in second quarter 2014 compared to second
quarter 2013. The increase in RevPAR was driven by a 3.6 percentage
point increase in occupancy to 79.5 percent resulting from an
increase in corporate room nights. Total RevPAR increased 9.0
percent to $406.47 compared to second quarter 2013. Total revenue
for the property increased 9.0 percent to $73.8 million compared to
second quarter 2013. The increase in corporate room nights led to
higher outside-the-room spending, specifically in banquets and
outlets. Adjusted EBITDA improved 7.1 percent to $26.2 million in
second quarter 2014 compared to second quarter 2013. Despite
increased expenses in utilities and property taxes, Adjusted EBITDA
margin for second quarter 2014 was 35.5 percent, which is
relatively flat compared to second quarter 2013.
Reed continued, “We are pleased with the performance of our
hospitality business in the second quarter of 2014. The cost
synergies originally envisioned as part of the REIT transition are
now consistently materializing in our margins. While we have made
considerable progress, we believe there is still opportunity for
additional margin improvement in our hotels and we will continue to
work with Marriott to harvest these savings.
“We are encouraged by Gaylord National’s second quarter
performance, particularly given the challenges that have impacted
the entire Washington, D.C. market. The National Harbor development
as a whole has become a premier destination in that region and the
introduction of gaming to National Harbor will only strengthen its
appeal, which we believe will provide a significant boost for
Gaylord National in the coming years.”
Opry and Attractions
Revenue for the Opry and Attractions segment rose 11.8 percent
to $25.0 million in second quarter 2014 from $22.4 million in
second quarter 2013. Adjusted EBITDA increased 23.4 percent to $9.7
million in second quarter 2014 from $7.9 million in second quarter
2013.
Reed continued, “The growth we have seen in our Opry and
Attractions business over the past few quarters has been
tremendous, and this record second quarter profitability further
confirms our belief that the country music genre, with Nashville as
its epicenter, is still in the early stages of a meteoric rise to
mainstream popularity around the world. We will continue to invest
in this segment so that our Company is well positioned to
capitalize on and create additional demand for our one-of-a-kind
assets.”
Corporate
Corporate and Other Adjusted EBITDA totaled a loss of $4.7
million in second quarter 2014 compared to a loss of $5.0 million
in second quarter 2013.
Development Update
In June, the Company agreed to sell to an affiliate of The
Peterson Companies (the developer of National Harbor, where the
Gaylord National hotel is located) all of the Company’s rights
pursuant to a letter of intent between the Company and The Peterson
Companies, which entitles the Company to a portion of The Peterson
Companies’ economic interest in the income from the land underlying
the new MGM casino project at National Harbor. The Company
will receive $26.1 million over three years in exchange for the
sale of its contractual rights. The sale is expected to close
in December 2014.
Also in June, the Company agreed to purchase from an affiliate
of The Peterson Companies a 190-room hotel currently being operated
as the Aloft Hotel at National Harbor for a purchase price of $21.8
million. The transaction is scheduled to close in December
2014 and requires that the property be transferred to the Company
unencumbered by any existing hotel franchise or management
agreements. The Company expects to re-brand the hotel and to
contract with Marriott to operate the property in conjunction with
Gaylord National. Simultaneously with the purchase of this hotel,
the Company also agreed to acquire from an affiliate of The
Peterson Companies a vacant one-half-acre parcel of land located in
close proximity to Gaylord National suitable for development of a
hotel or other permitted uses. The purchase of the land is
expected to close in December 2014.
Dividend Update
The Company paid its second quarter 2014 cash dividend of $0.55
per share of common stock on July 15, 2014 to stockholders of
record on June 27, 2014. It is the Company’s current plan to
distribute total annual dividends of
approximately $2.20 per share for 2014 in cash in equal
quarterly payments, with remaining quarterly payments in October
2014 and January 2015, subject to the board’s future determinations
as to the amount of quarterly distributions and the timing
thereof.
Convertible Notes and Warrants Update
In April 2014, the Company repurchased in private transactions
approximately $56.3 million in aggregate principal amount of its
3.75% convertible senior notes due in 2014, which were subsequently
canceled, for aggregate consideration of $120.2 million, which was
funded by cash on hand and borrowings under the Company’s revolving
credit facility. In addition, during the second quarter, the
Company settled approximately $15.3 million in aggregate principal
amount of the convertible notes that were converted by holders for
aggregate consideration of $33.4 million. As a result, the Company
recorded a loss on extinguishment of debt of $2.1 million in second
quarter 2014. In connection with the repurchase of notes, the
Company proportionately adjusted the number of options underlying
the bond hedge transaction related to the convertible notes. In
addition, the number of warrants outstanding were reduced to
approximately 11.8 million. In consideration for these adjustments,
the counterparties to the call spread transactions paid the Company
approximately $9.2 million. After these transactions, approximately
$232.2 million in principal amount of the notes remain outstanding
as of June 30, 2014.
In May 2014, the Company modified an agreement with one of the
note hedge counterparties to cash settle 2.4 million warrants. In
June 2014, the Company settled this repurchase for $50.8 million,
funded by cash on hand and draws under the Company’s revolving
credit facility, and recorded a $2.5 million loss on the change in
the fair value of the warrants between the modification date and
the settlement date, which is included in other gains and losses,
net in the Company’s financial statements.
At June 30, 2014, the warrants covered approximately 9.6 million
shares, with an adjusted strike price of $25.01 per share, which
reflects the repurchases and conversions discussed above and the
adjustments made in connection with the cash dividend paid by the
Company to stockholders in July 2014.
Pursuant to a June 2014 agreement with one of the note hedge
counterparties, in the third quarter of 2014, the Company will cash
settle an additional 2.4 million warrants in the same manner as
described above and recorded a similar $2.3 million loss on the
change in the fair value of the warrants between the modification
date and June 30, which is included in other gains and losses, net
in the Company’s financial statements. After the settlement of this
transaction in the third quarter of 2014, the remaining warrants
will cover approximately 7.2 million shares with an adjusted strike
price of $25.01 per share. The Company estimates that this
repurchase will settle for approximately $57.9 million, funded by
cash on hand and draws under the Company’s revolving credit
facility.
The adjustments to the options and warrants were considered
modifications to the terms of the agreements, and the Company
recognized a charge of $5.0 million in the second quarter, which
reduced net income available to common shareholders and earnings
per share available to common shareholders.
Upon maturity of the Convertible Notes on October 1, 2014, the
Company will settle its obligations upon conversion of each $1,000
principal amount of Convertible Notes with a specified dollar
amount of $1,000 and the remainder of the conversion settlement
amount in shares of common stock. Concurrently with settlement of
the Convertible Notes, the Company will receive and cancel shares
of its common stock pursuant to its rights under the convertible
note hedge transactions with respect to its common stock (the
“Purchased Options”) with counterparties affiliated with the
initial purchasers of the Convertible Notes, for purposes of
reducing the potential dilutive effect upon conversion of the
Convertible Notes.
Balance Sheet/Liquidity Update
On June 18, 2014, the Company added an additional senior secured
$400 million term loan, or Term Loan B, to its existing credit
agreement. The Term Loan B matures in January 2021 and currently
bears interest at a rate of LIBOR plus a 3.0 percent applicable
margin, subject to a LIBOR floor of 0.75 percent.
As of June 30, 2014, the Company had total debt outstanding of
$1,280.1 million and unrestricted cash of $77.8 million. As of June
30, 2014, $700.0 million of borrowings were drawn under the
Company’s credit facility including the new Term Loan B, which was
fully drawn at close, and the lending banks had issued $2.7 million
in letters of credit, which left $697.3 million of availability for
borrowing under the credit facility.
Guidance
The Company is maintaining its 2014 revised
guidance provided on May 6, 2014 on a consolidated as well as on a
segment basis. The following business performance outlook is based
on current information as of August 5, 2014. 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.
Guidance Full Year 2014 in
millions, except per share figures
Low High
Hospitality RevPAR 5.0 % 7.0 % Hospitality Total RevPAR 6.0
% 8.0 %
Adjusted
EBITDA
Hospitality 1,2 $ 273.0 $ 289.0 Opry and Attractions 20.0 22.0
Corporate and Other (23.0 ) (21.0 ) Adjusted EBITDA $
270.0 $ 290.0 Adjusted FFO 3 $ 177.0 $ 199.0
Adjusted FFO per Basic Share 3 $ 3.49 $ 3.92 Estimated Basic
Shares Outstanding 50.8 50.8 1. Hospitality segment
guidance assumes 33,400 room nights out of service in 2014 due to
the renovation of rooms at Gaylord Texan. The out of service rooms
do not impact total available room count for calculating hotel
metrics (e.g., RevPAR and Total RevPAR). 2. Estimated interest
income of $12.0 million from Gaylord National bonds reported in
hospitality segment guidance in 2014 and historical results in
2013. 3. Adjusted FFO guidance includes a deduction for maintenance
capital expenditures of $41.0 to $43.0 million.
For our definitions of RevPAR, Total RevPAR, Adjusted EBITDA and
Adjusted FFO as well as a reconciliation of the non-GAAP financial
measure Adjusted EBITDA to Net Income, and a reconciliation of the
non-GAAP financial measure Adjusted FFO to Net Income, see
“Calculation of RevPAR and Total RevPAR”, “Non-GAAP Financial
Measures,” “Supplemental Financial Results” and “Reconciliation of
Forward-Looking Statements” below.
Earnings Call information
Ryman Hospitality Properties will hold a conference call to
discuss this release today at 10 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 and
download any necessary audio software. For those who cannot listen
to the live broadcast, a replay will be available shortly after the
call and will be available 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 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 650 AM WSM, 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, anticipated
cost synergies and revenue enhancements from the Marriott
relationship, the effect of and degree of success of the joint
action plan to improve the performance of the Hospitality segment,
estimated capital expenditures, out-of-service rooms, the expected
approach to making dividend payments, the board’s ability to alter
the dividend policy at any time 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 commencing with the year ended 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 and to realize improvements
in profitability, 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 and other risks and uncertainties described in the
Company’s Annual Report on Form 10-K for the fiscal year ended
December 31, 2013 and its Quarterly Report on Form 10-Q for the
fiscal quarter ended March 31, 2014. 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.
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.
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 and Adjusted FFO, 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; loss on
extinguishment of debt; (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); (gain) and losses on warrant settlements; 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. The
losses on the call spread and warrant modifications related to our
convertible notes and warrant repurchases do not result in a charge
to net income; therefore, Adjusted EBITDA does not reflect the
impact of these losses.
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 gains (losses) on extinguishment of
debt and warrant settlements, 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.” The losses on the
call spread and warrant modifications related to our convertible
notes and warrant repurchases do not result in a charge to net
income; therefore, Adjusted FFO does not reflect the impact of
these losses.
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 Six Months Ended Jun. 30, Jun.
30, 2014 2013 2014 2013
Revenues:
Rooms $ 99,376 $ 96,073 $ 190,458 $ 181,582 Food and beverage
103,357 99,309 213,428 197,497 Other hotel revenue 30,197 27,449
61,247 53,333 Opry and Attractions 24,983
22,352 39,231 34,884
Total revenues 257,913 245,183
504,364 467,296
Operating expenses: Rooms 27,910 26,564 56,460 51,651 Food and
beverage 61,058 60,406 124,240 121,654 Other hotel expenses 67,816
68,583 138,846 138,151 Management fees 3,952
3,724 7,863 7,193
Total hotel operating expenses 160,736 159,277 327,409 318,649 Opry
and Attractions 15,411 14,629 27,682 25,915 Corporate 6,048 6,636
12,755 13,302 REIT conversion costs - 5,420 - 20,412 Casualty loss
- 17 - 49 Impairment and other charges - 1,247 - 1,247 Depreciation
and amortization 28,232 29,054
56,235 61,063 Total operating
expenses 210,427 216,280
424,081 440,637 Operating income
47,486 28,903 80,283 26,659 Interest expense, net of amounts
capitalized (15,472 ) (17,424 ) (31,142 ) (30,747 ) Interest income
3,038 3,052 6,069 6,103 Loss on extinguishment of debt (2,148 ) -
(2,148 ) - Other gains and (losses), net (4,349 )
53 (4,349 ) 47 Income
before income taxes 28,555 14,584 48,713 2,062 Benefit
(provision) for income taxes (576 ) 1,784
(92 ) 68,076 Income from
continuing operations 27,979 16,368 48,621 70,138 Income
from discontinued operations, net of taxes 12
11 23 21 Net
income 27,991 16,379 48,644 70,159 Loss on call spread and
warrant modifications related to convertible notes (4,952 )
(4,869 ) (4,952 ) (4,869 ) Net
income available to common shareholders $ 23,039 $
11,510 $ 43,692 $ 65,290
Basic net income per
share available to common shareholders:
Income from continuing operations $ 0.45 $ 0.22 $ 0.86 $ 1.26
Income from discontinued operations, net of taxes -
- - - Net
income $ 0.45 $ 0.22 $ 0.86 $
1.26
Fully diluted net
income per share available to common shareholders:
Income from continuing operations $ 0.38 $ 0.18 $ 0.73 $ 0.99
Income from discontinued operations, net of taxes -
- - - Net
income $ 0.38 $ 0.18 $ 0.73 $
0.99
Weighted average
common shares for the period:
Basic 50,814 51,244 50,719 51,832 Diluted (1) 60,535 64,890 60,078
65,987
(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 June 30, 2014 and 2013, the purchased call
options effectively reduce dilution by approximately 6.0 million
and 7.5 million shares of common stock, respectively. For the six
months ended June 30, 2014 and 2013, the purchased call options
effectively reduce dilution by approximately 5.8 million and 7.7
million shares of common stock, respectively.
RYMAN HOSPITALITY PROPERTIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE
SHEETS Unaudited (In thousands)
Jun. 30, Dec.
31, 2014 2013 ASSETS: Property and
equipment, net of accumulated depreciation $ 2,047,962 $ 2,067,997
Cash and cash equivalents - unrestricted 77,843 61,579 Cash and
cash equivalents - restricted 13,901 20,169 Notes receivable
150,959 148,350 Trade receivables, net 55,917 51,782 Deferred
financing costs 24,498 19,306 Prepaid expenses and other assets
53,469 55,446 Total assets $ 2,424,549 $ 2,424,629
LIABILITIES AND STOCKHOLDERS' EQUITY: Debt and
capital lease obligations $ 1,280,122 $ 1,154,420 Accounts payable
and accrued liabilities 136,906 157,339 Deferred income taxes
22,282 23,117 Deferred management rights proceeds 184,885 186,346
Dividends payable 28,575 25,780 Derivative liabilities 55,989 -
Other liabilities 120,575 119,932 Stockholders' equity
595,215 757,695 Total liabilities and stockholders' equity $
2,424,549 $ 2,424,629
RYMAN HOSPITALITY
PROPERTIES, INC. AND SUBSIDIARIES SUPPLEMENTAL FINANCIAL
RESULTS ADJUSTED EBITDA RECONCILIATION Unaudited (in
thousands)
Three Months Ended Jun. 30, Six
Months Ended Jun. 30, 2014 2013 2014
2013 $ Margin $ Margin $
Margin $ Margin
Consolidated
Revenue $ 257,913 $ 245,183 $ 504,364 $ 467,296
Net
income $ 27,991 $ 16,379 $ 48,644 $ 70,159 Income from
discontinued operations, net of taxes (12 ) (11 ) (23 ) (21 )
Provision (benefit) for income taxes 576 (1,784 ) 92 (68,076 )
Other (gains) and losses, net 4,349 (53 ) 4,349 (47 ) Net loss on
the extinguishment of debt 2,148 - 2,148 - Interest expense, net
12,434 14,372 25,073 24,644 Depreciation & amortization
28,232 29,054 56,235
61,063
EBITDA 75,718 29.4 % 57,957 23.6 % 136,518
27.1 % 87,722 18.8 % Non-cash lease expense 1,371 1,398 2,741 2,797
Equity-based compensation 1,447 1,773 2,728 3,167 Impairment
charges - 1,247 - 1,247 Interest income on Gaylord National bonds
3,031 3,051 6,062 6,099 Other gains and (losses), net (4,349 ) 53
(4,349 ) 47 Loss on warrant settlements 4,496 - 4,496 - Gain on
disposal of assets (152 ) (53 ) (152 ) (52 ) Casualty loss - 17 -
49 REIT conversion costs - 5,420
- 20,412
Adjusted EBITDA $ 81,562
31.6 % $ 70,863 28.9 % $ 148,044 29.4 %
$ 121,488 26.0 %
Hospitality
segment
Revenue $ 232,930 $ 222,831 $ 465,133 $ 432,412
Operating
income 46,191 35,542 86,207 53,203 Depreciation &
amortization 26,003 25,528 51,517 52,329 Non-cash lease expense
1,371 1,398 2,741 2,797 Impairment charges - 1,247 - 1,247 Interest
income on Gaylord National bonds 3,031 3,051 6,062 6,099 Other
gains and (losses), net (5 ) 53 (5 ) 47 Gain on disposal of assets
- (53 ) - (52 ) REIT conversion costs -
1,237 -
6,984
Adjusted EBITDA $ 76,591
32.9 % $ 68,003 30.5 % $ 146,522
31.5 % $ 122,654 28.4 %
Opry and Attractions
segment
Revenue $ 24,983 $ 22,352 $ 39,231 $ 34,884
Operating
income 8,341 6,371 8,893 6,181 Depreciation & amortization
1,231 1,319 2,656 2,685 Equity-based compensation 126 133 257 262
Other gains and (losses), net 152 - 152 - Gain on disposal of
assets (152 ) - (152 ) - REIT conversion costs -
33 -
103
Adjusted EBITDA $
9,698 38.8 % $ 7,856 35.1 % $ 11,806
30.1 % $ 9,231 26.5 %
Corporate and Other
segment
Operating loss (7,046 ) (13,010 ) (14,817 ) (32,725 )
Depreciation & amortization 998 2,207 2,062 6,049 Equity-based
compensation 1,321 1,640 2,471 2,905 Other gains and (losses), net
(4,496 ) - (4,496 ) - Loss on warrant settlements 4,496 - 4,496 -
Casualty loss - 17 - 49 REIT conversion costs -
4,150 - 13,325
Adjusted EBITDA $ (4,727 ) $ (4,996 ) $ (10,284 ) $ (10,397
)
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 Jun. 30, Six
Months Ended Jun. 30, 2014 2013 2014
2013
Consolidated
Net income (1) $ 27,991 $ 16,379 $ 48,644 $ 70,159
Depreciation & amortization 28,232 29,054 56,235 61,063 Losses
on sale of real estate assets - (53 ) -
(52 )
FFO 56,223 45,380 104,879 131,170
Capital expenditures (2) (9,604 ) (7,126 ) (19,393 ) (14,873 )
Non-cash lease expense 1,371 1,398 2,741 2,797 Impairment charges -
1,654 - 1,786 Loss on extinguishment of debt 2,148 - 2,148 - Loss
on warrant settlements 4,496 - 4,496 - Write-off of deferred
financing costs - 1,301 - 1,845 Amortization of deferred financing
costs 1,415 1,477 2,836 2,642 Amortization of debt discounts 2,755
3,744 6,028 7,337 Noncash tax benefit resulting from REIT
conversion - 923 -
(60,417 )
Adjusted FFO (1) $ 58,804 $ 48,751 $
103,735 $ 72,287 REIT conversion costs (tax effected)
- 2,749 - 14,087
Adjusted FFO excluding REIT conversion costs (1) $
58,804 $ 51,500 $ 103,735 $ 86,374
FFO per basic share $ 1.11 $ 0.89 $ 2.07 $ 2.53
Adjusted FFO per basic share $ 1.16 $ 0.95 $ 2.05 $ 1.39 Adjusted
FFO (excl. REIT conversion costs) per basic share $ 1.16 $ 1.00 $
2.05 $ 1.67 FFO per diluted share (3) $ 0.93 $ 0.70 $ 1.75 $
1.99 Adjusted FFO per diluted share (3) $ 0.97 $ 0.75 $ 1.73 $ 1.10
Adjusted FFO (excl. REIT conversion costs) per diluted share (3) $
0.97 $ 0.79 $ 1.73 $ 1.31
(1)
As the impact of the loss on the call
spread and warrant modifications related to our convertible notes
does not represent a charge to net income, net income, adjusted FFO
and adjusted FFO excluding REIT conversion costs do not include
this loss.
(2)
Represents FF&E reserve for managed
properties and maintenance capital expenditures for non-managed
properties.
(3)
The GAAP calculation of diluted shares
does not consider anti-dilutive effect of the Company's purchased
call options associated with its convertible notes. For the three
months ended June 30, 2014 and 2013, the purchased call options
effectively reduce dilution by approximately 6.0 million and 7.5
million shares of common stock, respectively. For the six months
ended June 30, 2014 and 2013, the purchased call options
effectively reduce dilution by approximately 5.8 million and 7.7
million shares of common stock, respectively.
RYMAN HOSPITALITY PROPERTIES, INC. AND SUBSIDIARIES
SUPPLEMENTAL FINANCIAL RESULTS Unaudited (in thousands,
except operating metrics)
Three Months
Ended Jun. 30, Six Months Ended Jun. 30, 2014
2013 2014 2013 HOSPITALITY OPERATING
METRICS:
Hospitality
Segment
Occupancy 74.3 % 73.9 % 72.4 % 70.7 % Average daily rate
(ADR) $ 181.44 $ 176.33 $ 179.50 $ 175.15 RevPAR $ 134.85 $ 130.37
$ 129.94 $ 123.88 OtherPAR $ 181.24 $ 171.92 $ 187.40 $ 171.05
Total RevPAR $ 316.09 $ 302.29 $ 317.34 $ 294.93 Revenue $
232,930 $ 222,831 $ 465,133 $ 432,412 Adjusted EBITDA $ 76,591 $
68,003 $ 146,522 $ 122,654 Adjusted EBITDA Margin 32.9 % 30.5 %
31.5 % 28.4 %
Gaylord
Opryland
Occupancy 76.4 % 70.6 % 72.5 % 70.5 % Average daily rate
(ADR) $ 166.71 $ 158.78 $ 168.05 $ 158.06 RevPAR $ 127.34 $ 112.12
$ 121.79 $ 111.44 OtherPAR $ 146.08 $ 138.05 $ 154.68 $ 145.80
Total RevPAR $ 273.42 $ 250.17 $ 276.47 $ 257.24 Revenue $
71,710 $ 65,707 $ 144,220 $ 134,315 Adjusted EBITDA $ 24,909 $
19,171 $ 48,293 $ 40,404 Adjusted EBITDA Margin 34.7 % 29.2 % 33.5
% 30.1 %
Gaylord
Palms
Occupancy 72.3 % 78.3 % 78.1 % 79.1 % Average daily rate
(ADR) $ 169.35 $ 165.06 $ 176.57 $ 171.71 RevPAR $ 122.41 $ 129.18
$ 137.86 $ 135.79 OtherPAR $ 194.03 $ 202.13 $ 226.83 $ 214.78
Total RevPAR $ 316.44 $ 331.31 $ 364.69 $ 350.57 Revenue $
40,487 $ 42,389 $ 92,809 $ 88,831 Adjusted EBITDA $ 10,628 $ 11,849
$ 28,948 $ 24,635 Adjusted EBITDA Margin 26.3 % 28.0 % 31.2 % 27.7
%
Gaylord
Texan
Occupancy 65.1 % 73.4 % 68.1 % 70.8 % Average daily rate
(ADR) $ 184.35 $ 177.18 $ 182.88 $ 176.20 RevPAR $ 120.03 $ 129.99
$ 124.53 $ 124.75 OtherPAR $ 196.96 $ 189.70 $ 222.10 $ 199.46
Total RevPAR $ 316.99 $ 319.69 $ 346.63 $ 324.21 Revenue $
43,587 $ 43,934 $ 94,799 $ 88,615 Adjusted EBITDA $ 13,739 $ 11,570
$ 29,038 $ 23,813 Adjusted EBITDA Margin 31.5 % 26.3 % 30.6 % 26.9
%
Gaylord
National
Occupancy 79.5 % 75.9 % 71.8 % 65.8 % Average daily rate
(ADR) $ 217.43 $ 217.66 $ 206.23 $ 213.74 RevPAR $ 172.91 $ 165.28
$ 147.99 $ 140.73 OtherPAR $ 233.56 $ 207.59 $ 204.34 $ 178.32
Total RevPAR $ 406.47 $ 372.87 $ 352.33 $ 319.05 Revenue $
73,829 $ 67,726 $ 127,288 $ 115,262 Adjusted EBITDA $ 26,202 $
24,470 $ 38,593 $ 32,462 Adjusted EBITDA Margin 35.5 % 36.1 % 30.3
% 28.2 %
The Inn at
Opryland (1)
Occupancy 75.9 % 75.1 % 70.8 % 65.9 % Average daily rate
(ADR) $ 114.94 $ 108.50 $ 111.28 $ 108.75 RevPAR $ 87.25 $ 81.47 $
78.76 $ 71.66 OtherPAR $ 33.09 $ 30.10 $ 30.94 $ 26.64 Total RevPAR
$ 120.34 $ 111.57 $ 109.70 $ 98.30 Revenue $ 3,317 $ 3,075 $
6,017 $ 5,389 Adjusted EBITDA $ 1,113 $ 943 $ 1,650 $ 1,340
Adjusted EBITDA Margin 33.6 % 30.7 % 27.4 % 24.9 % (1)
Includes other hospitality revenue and expense.
Adjusted Earnings Before Interest,
Taxes, Depreciation and Amortization ("Adjusted EBITDA")
and Adjusted Funds From Operations ("AFFO") reconciliation:
(in
thousands)
GUIDANCE RANGE FOR FULL YEAR 2014
Low High
Ryman Hospitality
Properties, Inc.
Net Income $ 83,000 $ 103,000 Provision (benefit) for income taxes
(4,000 ) (4,000 ) Other (gains) and losses, net (2,400 ) (2,400 )
Interest expense 64,000 64,000 Interest income (12,000 )
(12,000 ) Operating Income 128,600 148,600 Depreciation and
amortization 115,500 115,500 EBITDA
244,100 264,100 Non-cash lease expense 5,500 5,500 Equity based
compensation 6,000 6,000 Other gains and (losses), net 2,400 2,400
Interest income 12,000 12,000 Adjusted
EBITDA $ 270,000 $ 290,000
Hospitality
Segment
Operating Income $ 149,100 $ 165,100 Depreciation and amortization
104,000 104,000 EBITDA 253,100 269,100
Non-cash lease expense 5,500 5,500 Equity based compensation - -
Other gains and (losses), net 2,400 2,400 Interest income
12,000 12,000 Adjusted EBITDA $ 273,000
$ 289,000
Opry and
Attractions Segment
Operating Income $ 14,000 $ 16,000 Depreciation and amortization
5,500 5,500 EBITDA 19,500 21,500
Non-cash lease expense - - Equity based compensation 500 500
Interest income - - Adjusted EBITDA $
20,000 $ 22,000
Corporate and
Other Segment
Operating Income $ (34,500 ) $ (32,500 ) Depreciation and
amortization 6,000 6,000 EBITDA (28,500
) (26,500 ) Non-cash lease expense - - Equity based compensation
5,500 5,500 Interest income - -
Adjusted EBITDA $ (23,000 ) $ (21,000 )
Ryman Hospitality
Properties, Inc.
Net income $ 83,000 $ 103,000 Depreciation & amortization
115,500 115,500 Capital expenditures (43,000 ) (41,000 ) Non-cash
lease expense 5,500 5,500 Amortization of debt premiums/disc.
10,000 10,000 Amortization of DFC 6,000 6,000
Adjusted FFO $ 177,000 $ 199,000
Investor Relations:Ryman Hospitality Properties, Inc.Mark
Fioravanti, 615-316-6588Executive Vice President and Chief
Financial Officermfioravanti@rymanhp.com~or~Ryman
Hospitality Properties, Inc.Todd Siefert, 615-316-6344Vice
President of Corporate Finance &
Treasurertsiefert@rymanhp.com~or~Media:Ryman
Hospitality Properties, Inc.Brian Abrahamson, 615-316-6302Vice
President of Corporate
Communicationsbabrahamson@rymanhp.com~or~Sloane &
CompanyJosh Hochberg or Dan Zacchei212-446-1892 or
212-446-1882jhochberg@sloanepr.com;
dzacchei@sloanepr.com
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