Item 1. FINANCIAL STATEMENTS.
RYMAN HOSPITALITY PROPERTIES, INC. AND SUBSIDIARIES
CONDE
NSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
June 30,
|
|
|
December 31,
|
|
|
|
2018
|
|
|
2017
|
|
ASSETS:
|
|
|
|
|
|
|
|
|
Property and equipment, net of accumulated depreciation
|
|
$
|
2,121,165
|
|
|
$
|
2,065,657
|
|
Cash and cash equivalentsunrestricted
|
|
|
61,779
|
|
|
|
57,557
|
|
Cash and cash equivalentsrestricted
|
|
|
32,181
|
|
|
|
21,153
|
|
Notes receivable
|
|
|
113,789
|
|
|
|
111,423
|
|
Investment in Gaylord Rockies joint venture
|
|
|
88,993
|
|
|
|
88,685
|
|
Trade receivables, less allowance of $762 and $651, respectively
|
|
|
79,694
|
|
|
|
57,520
|
|
Deferred income tax assets, net
|
|
|
43,056
|
|
|
|
50,117
|
|
Prepaid expenses and other assets
|
|
|
66,645
|
|
|
|
72,116
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
2,607,302
|
|
|
$
|
2,524,228
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS EQUITY:
|
|
|
|
|
|
|
|
|
Debt and capital lease obligations
|
|
$
|
1,674,792
|
|
|
$
|
1,591,392
|
|
Accounts payable and accrued liabilities
|
|
|
176,145
|
|
|
|
179,649
|
|
Dividends payable
|
|
|
44,552
|
|
|
|
42,129
|
|
Deferred management rights proceeds
|
|
|
175,541
|
|
|
|
177,057
|
|
Other liabilities
|
|
|
162,578
|
|
|
|
155,845
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
Stockholders equity:
|
|
|
|
|
|
|
|
|
Preferred stock, $.01 par value, 100,000 shares authorized, no shares issued or
outstanding
|
|
|
|
|
|
|
|
|
Common stock, $.01 par value, 400,000 shares authorized, 51,322 and 51,198 shares issued and
outstanding, respectively
|
|
|
513
|
|
|
|
512
|
|
Additional
paid-in
capital
|
|
|
897,185
|
|
|
|
896,759
|
|
Treasury stock of 579 and 567 shares, at cost
|
|
|
(14,195
|
)
|
|
|
(13,253
|
)
|
Accumulated deficit
|
|
|
(483,279
|
)
|
|
|
(479,170
|
)
|
Accumulated other comprehensive loss
|
|
|
(26,530
|
)
|
|
|
(26,692
|
)
|
|
|
|
|
|
|
|
|
|
Total stockholders equity
|
|
|
373,694
|
|
|
|
378,156
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders equity
|
|
$
|
2,607,302
|
|
|
$
|
2,524,228
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these condensed consolidated financial statements.
3
RYMAN HOSPITALITY PROPERTIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME
(Unaudited)
(In
thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rooms
|
|
$
|
121,745
|
|
|
$
|
110,674
|
|
|
$
|
229,309
|
|
|
$
|
214,043
|
|
Food and beverage
|
|
|
141,053
|
|
|
|
128,441
|
|
|
|
273,992
|
|
|
|
254,610
|
|
Other hotel revenue
|
|
|
28,958
|
|
|
|
24,258
|
|
|
|
53,566
|
|
|
|
48,874
|
|
Entertainment
|
|
|
42,178
|
|
|
|
35,405
|
|
|
|
65,437
|
|
|
|
57,293
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues
|
|
|
333,934
|
|
|
|
298,778
|
|
|
|
622,304
|
|
|
|
574,820
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rooms
|
|
|
30,059
|
|
|
|
28,359
|
|
|
|
58,987
|
|
|
|
56,387
|
|
Food and beverage
|
|
|
72,394
|
|
|
|
68,285
|
|
|
|
144,372
|
|
|
|
137,442
|
|
Other hotel expenses
|
|
|
76,733
|
|
|
|
73,536
|
|
|
|
152,615
|
|
|
|
147,774
|
|
Management fees, net
|
|
|
8,635
|
|
|
|
6,178
|
|
|
|
15,765
|
|
|
|
11,709
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total hotel operating expenses
|
|
|
187,821
|
|
|
|
176,358
|
|
|
|
371,739
|
|
|
|
353,312
|
|
Entertainment
|
|
|
30,254
|
|
|
|
22,135
|
|
|
|
49,620
|
|
|
|
38,986
|
|
Corporate
|
|
|
7,640
|
|
|
|
7,468
|
|
|
|
15,969
|
|
|
|
14,877
|
|
Preopening costs
|
|
|
1,525
|
|
|
|
494
|
|
|
|
3,672
|
|
|
|
710
|
|
Depreciation and amortization
|
|
|
29,995
|
|
|
|
27,679
|
|
|
|
58,661
|
|
|
|
55,316
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses
|
|
|
257,235
|
|
|
|
234,134
|
|
|
|
499,661
|
|
|
|
463,201
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
76,699
|
|
|
|
64,644
|
|
|
|
122,643
|
|
|
|
111,619
|
|
Interest expense
|
|
|
(19,625
|
)
|
|
|
(17,155
|
)
|
|
|
(36,354
|
)
|
|
|
(33,019
|
)
|
Interest income
|
|
|
2,766
|
|
|
|
2,969
|
|
|
|
5,519
|
|
|
|
5,917
|
|
Income (loss) from joint ventures
|
|
|
1,346
|
|
|
|
(943
|
)
|
|
|
(1,242
|
)
|
|
|
(1,717
|
)
|
Other gains and (losses), net
|
|
|
36
|
|
|
|
(1,324
|
)
|
|
|
204
|
|
|
|
(1,396
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
|
61,222
|
|
|
|
48,191
|
|
|
|
90,770
|
|
|
|
81,404
|
|
Provision for income taxes
|
|
|
(5,676
|
)
|
|
|
(899
|
)
|
|
|
(7,885
|
)
|
|
|
(1,492
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
55,546
|
|
|
$
|
47,292
|
|
|
$
|
82,885
|
|
|
$
|
79,912
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic income per share
|
|
$
|
1.08
|
|
|
$
|
0.92
|
|
|
$
|
1.62
|
|
|
$
|
1.56
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fully diluted income per share
|
|
$
|
1.08
|
|
|
$
|
0.92
|
|
|
$
|
1.61
|
|
|
$
|
1.56
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends declared per common share
|
|
$
|
0.85
|
|
|
$
|
0.80
|
|
|
$
|
1.70
|
|
|
$
|
1.60
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income, net of taxes
|
|
$
|
55,630
|
|
|
$
|
47,326
|
|
|
$
|
83,047
|
|
|
$
|
79,957
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these condensed consolidated financial statements.
4
RYMAN HOSPITALITY PROPERTIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
|
|
|
|
June 30,
|
|
|
|
2018
|
|
|
2017
|
|
Cash Flows from Operating Activities:
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
82,885
|
|
|
$
|
79,912
|
|
Amounts to reconcile net income to net cash flows provided by operating activities:
|
|
|
|
|
|
|
|
|
Provision (benefit) for deferred income taxes
|
|
|
7,065
|
|
|
|
(129
|
)
|
Depreciation and amortization
|
|
|
58,661
|
|
|
|
55,316
|
|
Amortization of deferred financing costs
|
|
|
2,841
|
|
|
|
2,567
|
|
Write-off
of deferred financing costs
|
|
|
1,956
|
|
|
|
925
|
|
Stock-based compensation expense
|
|
|
3,929
|
|
|
|
3,213
|
|
Changes in:
|
|
|
|
|
|
|
|
|
Trade receivables
|
|
|
(22,074
|
)
|
|
|
(17,758
|
)
|
Accounts payable and accrued liabilities
|
|
|
(4,268
|
)
|
|
|
(11,390
|
)
|
Other assets and liabilities
|
|
|
720
|
|
|
|
1,252
|
|
|
|
|
|
|
|
|
|
|
Net cash flows provided by operating activities
|
|
|
131,715
|
|
|
|
113,908
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from Investing Activities:
|
|
|
|
|
|
|
|
|
Purchases of property and equipment
|
|
|
(95,353
|
)
|
|
|
(79,472
|
)
|
Investment in Gaylord Rockies joint venture
|
|
|
|
|
|
|
(16,309
|
)
|
Investment in other joint ventures
|
|
|
(2,199
|
)
|
|
|
(1,969
|
)
|
Purchase of remaining interest in Opry City Stage
|
|
|
(3,948
|
)
|
|
|
|
|
Other investing activities
|
|
|
(4,687
|
)
|
|
|
(3,654
|
)
|
|
|
|
|
|
|
|
|
|
Net cash flows used in investing activities
|
|
|
(106,187
|
)
|
|
|
(101,404
|
)
|
|
|
|
|
|
|
|
|
|
Cash Flows from Financing Activities:
|
|
|
|
|
|
|
|
|
Net borrowings (repayments) under revolving credit facility
|
|
|
80,500
|
|
|
|
(241,900
|
)
|
Borrowings under term loan A
|
|
|
|
|
|
|
200,000
|
|
Borrowings under term loan B
|
|
|
|
|
|
|
500,000
|
|
Repayments under term loan B
|
|
|
(1,250
|
)
|
|
|
(391,250
|
)
|
Deferred financing costs paid
|
|
|
(637
|
)
|
|
|
(12,220
|
)
|
Payment of dividends
|
|
|
(85,110
|
)
|
|
|
(79,788
|
)
|
Payment of tax withholdings for share-based compensation
|
|
|
(3,771
|
)
|
|
|
(3,769
|
)
|
Other financing activities
|
|
|
(10
|
)
|
|
|
18
|
|
|
|
|
|
|
|
|
|
|
Net cash flows used in financing activities
|
|
|
(10,278
|
)
|
|
|
(28,909
|
)
|
|
|
|
|
|
|
|
|
|
Net change in cash, cash equivalents, and restricted cash
|
|
|
15,250
|
|
|
|
(16,405
|
)
|
Cash, cash equivalents, and restricted cash, beginning of period
|
|
|
78,710
|
|
|
|
81,190
|
|
|
|
|
|
|
|
|
|
|
Cash, cash equivalents, and restricted cash, end of period
|
|
$
|
93,960
|
|
|
$
|
64,785
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of cash, cash equivalents, and restricted cash to balance sheet:
|
|
|
|
|
|
|
|
|
Cash and cash equivalentsunrestricted
|
|
$
|
61,779
|
|
|
$
|
49,610
|
|
Cash and cash equivalentsrestricted
|
|
|
32,181
|
|
|
|
15,175
|
|
|
|
|
|
|
|
|
|
|
Cash, cash equivalents, and restricted cash, end of period
|
|
$
|
93,960
|
|
|
$
|
64,785
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these condensed consolidated financial statements.
5
RYMAN HOSPITALITY PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS OF PRESENTATION:
On January 1, 2013, Ryman Hospitality Properties, Inc. (Ryman) and its subsidiaries (collectively with Ryman, the
Company) began operating as a real estate investment trust (REIT) for federal income tax purposes, specializing in group-oriented, destination hotel assets in urban and resort markets. The Companys owned assets include
a network of upscale, meetings-focused resorts that are managed by Marriott International, Inc. (Marriott) under the Gaylord Hotels brand. These resorts, which the Company refers to as the Gaylord Hotels properties, consist of the
Gaylord Opryland Resort & Convention Center in Nashville, Tennessee (Gaylord Opryland), the Gaylord Palms Resort & Convention Center near Orlando, Florida (Gaylord Palms), the Gaylord Texan Resort &
Convention Center near Dallas, Texas (Gaylord Texan) and the Gaylord National Resort & Convention Center near Washington D.C. (Gaylord National). The Companys other owned hotel assets managed by Marriott
include the Inn at Opryland, an overflow hotel adjacent to Gaylord Opryland, and the AC Hotel at National Harbor, Washington D.C. (AC Hotel), an overflow hotel adjacent to Gaylord National. The Company also owns a 35% interest in a joint
venture that is developing and owns Gaylord Rockies Resort & Convention Center near Denver, Colorado (Gaylord Rockies), which is scheduled to open in late 2018 and will be managed by Marriott.
The Company also owns a number of media and entertainment assets, including the Grand Ole Opry, the legendary weekly showcase of country musics finest
performers; the Ryman Auditorium, the storied live music venue and former home of the Grand Ole Opry;
WSM-AM,
the Oprys radio home; Ole Red, a brand of Blake Shelton-themed bar, music venue and event
spaces, with a flagship location in Nashville that opened in May 2018; Opry City Stage, a four-level entertainment complex in Times Square that opened in December 2017 under a joint venture agreement and of which the Company acquired the remaining
50% joint venture interest in the second quarter of 2018 for a combination of $3.9 million in cash and the forgiveness of a note receivable previously due to the Company from the other joint venture partner of $7.9 million; and three
Nashville-based assets managed by Marriott Gaylord Springs Golf Links, the Wildhorse Saloon, and the General Jackson Showboat.
The condensed
consolidated financial statements include the accounts of Ryman and its subsidiaries and have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the SEC). Certain
information and footnote disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted from this report pursuant to such rules and regulations. These
condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in the Companys Annual Report on Form
10-K
for
the year ended December 31, 2017. In the opinion of management, all adjustments necessary for a fair statement of the results of operations for the interim periods have been included. All adjustments are of a normal, recurring nature. The
results of operations for such interim periods are not necessarily indicative of the results for the full year because of seasonal and short-term variations.
The Company conducts its business through an umbrella partnership REIT, in which all of its assets are held by, and all of its operations are conducted
through, RHP Hotel Properties, LP, a subsidiary operating partnership (the Operating Partnership) that the Company formed in connection with its REIT conversion. Ryman is the sole limited partner of the Operating Partnership and
currently owns, either directly or indirectly, all of the partnership units of the Operating Partnership. RHP Finance Corporation, a Delaware corporation (Finco), was formed as a wholly-owned subsidiary of the Operating Partnership for
the sole purpose of being a
co-issuer
of debt securities with the Operating Partnership. Neither Ryman nor Finco has any material assets, other than Rymans investment in the Operating Partnership and its
100%-owned subsidiaries. As 100%-owned subsidiaries of Ryman, neither the Operating Partnership nor Finco has any business, operations, financial results or other material information, other than the business, operations, financial results and other
material information described in this Quarterly Report on Form
10-Q
and Rymans other reports, documents or other information filed with the SEC pursuant to the Securities Exchange Act of 1934, as
amended.
6
The Company principally operates, through its subsidiaries and its property managers, as applicable, in the
following business segments: Hospitality, Entertainment, and Corporate and Other.
Newly Issued Accounting Standards
In May 2014, the Financial Accounting Standards Board (the FASB) issued Accounting Standards Update (ASU)
No. 2014-09,
Revenue from Contracts with Customers
, the core principle of which is that a company will recognize revenue when it transfers promised goods or services to customers in an amount
that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. Under this guidance, companies will need to use more judgment and make more estimates than under previous guidance. These judgments
may include identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. Due to the short-term,
day-to-day
nature of the Companys hospitality and entertainment segment revenues, the pattern of revenue recognition did not change significantly upon adoption.
The Company adopted this ASU in the first quarter of 2018 using the modified retrospective approach and has applied the standard to all contracts at the date of initial application. As such, prior period amounts have not been restated, and the
Company recorded a transition adjustment to retained earnings of $0.1 million, which is reflected in the condensed consolidated balance sheet for June 30, 2018 included herein. See Note 2 of this Quarterly Report on Form
10-Q
for further disclosures.
In February 2016, the FASB issued ASU
No. 2016-02,
Leases
, that requires lessees to record most leases on their balance sheet, but recognize expenses on their income statements in a manner similar to previous accounting.
The ASU also eliminates the required use of bright-line tests for determining lease classification. The ASU is effective for the Company in the first quarter of 2019, and the Company plans to adopt this standard at that time using the modified
retrospective approach, with a cumulative-effect adjustment, if any, to retained earnings in the period of adoption. Prior period amounts will not be restated. The Company is creating an inventory of its leases, and the primary impact of the
adoption is estimated to be the inclusion of the Companys
75-year
ground lease at Gaylord Palms on its balance sheet. See Note 12 in the Companys Annual Report on Form
10-K
for the year ended December 31, 2017 for a further disclosure of the Companys outstanding leases.
In
June 2016, the FASB issued ASU
No. 2016-13,
Financial Instruments Credit Losses Measurement of Credit Losses on Financial Instruments
, which will change how entities
measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The ASU will replace the current incurred loss approach with an expected loss model for
instruments measured at amortized cost. For trade and other receivables,
held-to-maturity
debt securities, loans and other instruments, entities will be required to use
a new forward-looking expected loss model that generally will result in the earlier recognition of allowances for losses. The ASU is effective for the Company in the first quarter of 2020. The Company is currently evaluating the effects
of this ASU on its financial statements, and such effects have not yet been determined.
In November 2016, the FASB issued ASU
No. 2016-18,
Restricted Cash
, which requires entities to disclose changes in the total of cash and restricted cash in the statement of cash flows. As a result, entities no longer present
transfers between cash and restricted cash in the statement of cash flows, and present a reconciliation of the totals in the statement of cash flows to the related captions on the balance sheet. The Company adopted this ASU in the first quarter of
2018, and this adoption did not have a material impact on the Companys financial statements. The prior period presentation has been updated to conform to the current year presentation.
7
In March 2017, the FASB issued ASU
No. 2017-07,
Compensation Retirement Benefits: Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost
, which changes how employers that sponsor defined benefit pension and/or other
postretirement benefit plans present the cost of benefits in the income statement. Under the new guidance, the service cost component of net periodic benefit cost is presented in the same income statement line items as other employee compensation
costs. In addition, the other components of net periodic benefit cost are presented separately from service cost and outside of operating income, which the Company has included in other gains and (losses), net in the accompanying condensed
consolidated statements of operations and comprehensive income. The Company adopted this ASU in the first quarter of 2018, and this adoption did not have a material impact on the Companys financial statements. The prior period presentation has
been updated to conform to the current year presentation.
2. REVENUES:
Revenues from occupied hotel rooms are recognized over time as the daily hotel stay is provided to hotel groups and guests. Revenues from concessions, food and
beverage sales, and group meeting services are recognized over the period or at the point in time those goods or services are delivered to the hotel group or guest. Revenues from ancillary services at the Companys hotels, such as spa, parking,
and transportation services, are generally recognized at the time the goods or services are provided. Cancellation fees and attrition fees, which are charged to groups when they do not fulfill the minimum number of room nights or minimum food and
beverage spending requirements originally contracted for, are recognized as revenue in the period the Company determines it is probable that a significant reversal in the amount of revenue recognized will not occur, which is the period these fees
are collected. The Company generally recognizes revenues from the Entertainment segment at the point in time that services are provided or goods are delivered or shipped to the customer, as applicable. Almost all of the Companys revenues are
either cash-based or, for meeting and convention groups who meet the Companys credit criteria, billed and collected on a short-term receivables basis. The Company is required to collect certain taxes from customers on behalf of government
agencies and remit these to the applicable governmental entity on a periodic basis. These taxes are collected from customers at the time of purchase, but are not included in revenue. The Company records a liability upon collection of such
taxes from the customer and relieves the liability when payments are remitted to the applicable governmental agency.
The Companys revenues
disaggregated by major source are as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
Hotel group rooms
|
|
$
|
89,329
|
|
|
$
|
80,488
|
|
|
$
|
172,546
|
|
|
$
|
161,364
|
|
Hotel transient rooms
|
|
|
32,416
|
|
|
|
30,186
|
|
|
|
56,763
|
|
|
|
52,679
|
|
Hotel food and beveragebanquets
|
|
|
101,719
|
|
|
|
90,342
|
|
|
|
197,987
|
|
|
|
181,542
|
|
Hotel food and beverageoutlets
|
|
|
39,334
|
|
|
|
38,099
|
|
|
|
76,005
|
|
|
|
73,068
|
|
Hotel other
|
|
|
28,958
|
|
|
|
24,258
|
|
|
|
53,566
|
|
|
|
48,874
|
|
Entertainment admissions/ticketing
|
|
|
21,207
|
|
|
|
18,678
|
|
|
|
32,067
|
|
|
|
28,298
|
|
Entertainment food and beverage
|
|
|
11,813
|
|
|
|
8,394
|
|
|
|
18,394
|
|
|
|
14,518
|
|
Entertainment retail and other
|
|
|
9,158
|
|
|
|
8,333
|
|
|
|
14,976
|
|
|
|
14,477
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues
|
|
$
|
333,934
|
|
|
$
|
298,778
|
|
|
$
|
622,304
|
|
|
$
|
574,820
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8
The Companys Hospitality segment revenues disaggregated by location are as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
Gaylord Opryland
|
|
$
|
94,915
|
|
|
$
|
80,260
|
|
|
$
|
177,660
|
|
|
$
|
155,222
|
|
Gaylord Palms
|
|
|
50,274
|
|
|
|
48,184
|
|
|
|
108,170
|
|
|
|
102,381
|
|
Gaylord Texan
|
|
|
58,611
|
|
|
|
52,772
|
|
|
|
116,968
|
|
|
|
109,517
|
|
Gaylord National
|
|
|
79,687
|
|
|
|
73,995
|
|
|
|
140,443
|
|
|
|
136,452
|
|
AC Hotel
|
|
|
3,511
|
|
|
|
3,679
|
|
|
|
5,882
|
|
|
|
6,138
|
|
Inn at Opryland and other
|
|
|
4,758
|
|
|
|
4,483
|
|
|
|
7,744
|
|
|
|
7,817
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Hospitality segment revenues
|
|
$
|
291,756
|
|
|
$
|
263,373
|
|
|
$
|
556,867
|
|
|
$
|
517,527
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Almost all of the Companys Entertainment segment revenues are concentrated in Nashville, Tennessee.
The Company records deferred revenues when cash payments are received in advance of its performance obligations, primarily related to advanced deposits on
hotel rooms in its Hospitality segment and advanced ticketing in its Entertainment segment. At June 30, 2018 and December 31, 2017, the Company had $54.5 million and $51.2 million, respectively, in deferred revenues, which are
included in accounts payable and accrued liabilities in the accompanying condensed consolidated balance sheets. Of the amount outstanding at December 31, 2017, approximately $41.4 million was recognized in revenue during the six months
ended June 30, 2018.
3. INCOME PER SHARE:
The
weighted average number of common shares outstanding is calculated as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
Weighted average shares outstandingbasic
|
|
|
51,303
|
|
|
|
51,154
|
|
|
|
51,259
|
|
|
|
51,100
|
|
Effect of dilutive stock-based compensation
|
|
|
173
|
|
|
|
180
|
|
|
|
200
|
|
|
|
216
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstandingdiluted
|
|
|
51,476
|
|
|
|
51,334
|
|
|
|
51,459
|
|
|
|
51,316
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9
4. ACCUMULATED OTHER COMPREHENSIVE LOSS:
The Companys balance in accumulated other comprehensive loss is comprised of amounts related to the Companys minimum pension liability and amounts
related to an other-than-temporary impairment of a
held-to-maturity
investment with respect to the notes receivable discussed in Note 6 of this Quarterly Report on Form
10-Q
and Note 3 to the consolidated financial statements included in the Companys Annual Report on Form
10-K
for the year ended December 31, 2017. Changes in
accumulated other comprehensive loss by component for the six months ended June 30, 2018 and 2017 consisted of the following (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Minimum
Pension
Liability
|
|
|
Other-Than-
Temporary
Impairment of
Investment
|
|
|
Total
|
|
Balance, December 31, 2017
|
|
$
|
(20,149
|
)
|
|
$
|
(6,543
|
)
|
|
$
|
(26,692
|
)
|
Amounts reclassified from accumulated other comprehensive loss
|
|
|
(9
|
)
|
|
|
166
|
|
|
|
157
|
|
Income tax benefit
|
|
|
5
|
|
|
|
|
|
|
|
5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net other comprehensive income (loss)
|
|
|
(4
|
)
|
|
|
166
|
|
|
|
162
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, June 30, 2018
|
|
$
|
(20,153
|
)
|
|
$
|
(6,377
|
)
|
|
$
|
(26,530
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Minimum
Pension
Liability
|
|
|
Other-Than-
Temporary
Impairment of
Investment
|
|
|
Total
|
|
Balance, December 31, 2016
|
|
$
|
(22,268
|
)
|
|
$
|
|
|
|
$
|
(22,268
|
)
|
Amounts reclassified from accumulated other comprehensive loss
|
|
|
45
|
|
|
|
|
|
|
|
45
|
|
Income tax benefit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net other comprehensive income
|
|
|
45
|
|
|
|
|
|
|
|
45
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, June 30, 2017
|
|
$
|
(22,223
|
)
|
|
$
|
|
|
|
$
|
(22,223
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5. PROPERTY AND EQUIPMENT:
Property and equipment at June 30, 2018 and December 31, 2017 is recorded at cost and summarized as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
June 30,
2018
|
|
|
December 31,
2017
|
|
Land and land improvements
|
|
$
|
268,316
|
|
|
$
|
267,051
|
|
Buildings
|
|
|
2,547,565
|
|
|
|
2,440,471
|
|
Furniture, fixtures and equipment
|
|
|
707,836
|
|
|
|
647,988
|
|
Construction-in-progress
|
|
|
80,555
|
|
|
|
138,702
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,604,272
|
|
|
|
3,494,212
|
|
Accumulated depreciation
|
|
|
(1,483,107
|
)
|
|
|
(1,428,555
|
)
|
|
|
|
|
|
|
|
|
|
Property and equipment, net
|
|
$
|
2,121,165
|
|
|
$
|
2,065,657
|
|
|
|
|
|
|
|
|
|
|
6. NOTES RECEIVABLE:
As
further discussed in the Companys Annual Report on Form
10-K
for the year ended December 31, 2017, in connection with the development of Gaylord National, the Company is currently holding two
issuances of governmental bonds and receives debt service and principle payments thereon, payable from property tax increments, hotel taxes and special hotel rental taxes generated from Gaylord National through the maturity dates of July 1,
2034 and September 1, 2037, respectively. The Company records interest income over the life of the notes using the effective interest method.
10
During the three months ended June 30, 2018 and 2017, the Company recorded interest income of
$2.7 million and $2.9 million, respectively, on these bonds. During the six months ended June 30, 2018 and 2017, the Company recorded interest income of $5.3 million and $5.9 million, respectively, on these bonds. The
Company received payments of $3.1 million and $3.2 million during the six months ended June 30, 2018 and 2017, respectively, relating to these notes receivable.
7. DEBT:
The Companys debt and capital lease
obligations at June 30, 2018 and December 31, 2017 consisted of (in thousands):
|
|
|
|
|
|
|
|
|
|
|
June 30,
2018
|
|
|
December 31,
2017
|
|
$700 Million Revolving Credit Facility, interest at LIBOR plus 1.55%, maturing May 23, 2021,
less unamortized deferred financing costs of $7,828 and $9,076
|
|
$
|
243,672
|
|
|
$
|
161,924
|
|
$200 Million Term Loan A, interest at LIBOR plus 1.50%, maturing May 23, 2022, less
unamortized deferred financing costs of $1,390 and $1,557
|
|
|
198,610
|
|
|
|
198,443
|
|
$500 Million Term Loan B, interest at LIBOR plus 2.00%, maturing May 11, 2024, less
unamortized deferred financing costs of $5,743 and $7,595
|
|
|
489,257
|
|
|
|
488,655
|
|
$350 Million Senior Notes, interest at 5.0%, maturing April 15, 2021, less unamortized
deferred financing costs of $2,862 and $3,340
|
|
|
347,138
|
|
|
|
346,660
|
|
$400 Million Senior Notes, interest at 5.0%, maturing April 15, 2023, less unamortized
deferred financing costs of $4,513 and $4,929
|
|
|
395,487
|
|
|
|
395,071
|
|
Capital lease obligations
|
|
|
628
|
|
|
|
639
|
|
|
|
|
|
|
|
|
|
|
Total debt
|
|
$
|
1,674,792
|
|
|
$
|
1,591,392
|
|
|
|
|
|
|
|
|
|
|
The majority of amounts due within one year consist of the amortization payments for the $500 million term loan B of 1.0%
of the original principal balance, as described in the Companys Annual Report on Form
10-K
for the year ended December 31, 2017.
At June 30, 2018, the Company was in compliance with all of its covenants related to its outstanding debt.
$500 Million Term Loan B
On June 26, 2018,
the Company entered into an Amendment No. 2 (the Amendment) to the Companys Fifth Amended and Restated Credit Agreement (as amended, the Credit Agreement). The Amendment reduces the applicable interest rate margins
for borrowings under the term loan B to, at the Companys option, either (i) LIBOR plus 2.00% or (ii) a base rate as set in the Credit Agreement. In addition, the Amendment extends the date of commencement of any excess cash flow
payments by one year to December 31, 2019. The Amendment did not change the maturity dates existing under the Credit Agreement or result in any increase or decrease in outstanding borrowings.
As a result of the repricing of the term loan B, the Company wrote off $2.0 million of deferred financing costs during the three months and six months
ended June 30, 2018, which is included in interest expense in the accompanying condensed consolidated statement of operations.
11
For descriptions of the Companys other outstanding debt obligations, see Principal Debt
Agreements within Liquidity and Capital Resources in Item 2, Managements Discussion and Analysis of Financial Condition and Results of Operations included in this Quarterly Report on Form
10-Q.
8. DEFERRED MANAGEMENT RIGHTS PROCEEDS:
On October 1, 2012, the Company consummated its agreement to sell the Gaylord Hotels brand (the IP Rights) and rights to manage the Gaylord
Hotels properties (the Management Rights) to Marriott for $210.0 million in cash. Effective October 1, 2012, Marriott assumed responsibility for managing the
day-to-day
operations of the Gaylord Hotels properties pursuant to a management agreement for each Gaylord Hotel property. The Company allocated $190.0 million of
the purchase price to the Management Rights and $20.0 million to the IP Rights.
For financial accounting purposes, the amount related to the
Management Rights was deferred and is amortized on a straight line basis over the
65-year
term of the hotel management agreements, including extensions, as a reduction in management fee expense. The amount
related to the IP Rights was recognized into income as other gains and losses during 2012.
9. STOCK PLANS:
During the six months ended June 30, 2018, the Company granted 0.1 million restricted stock units with a weighted-average grant date fair value of
$71.34 per award. There were 0.4 million restricted stock units outstanding at June 30, 2018 and December 31, 2017.
The compensation
expense that has been charged against
pre-tax
income for all of the Companys stock-based compensation plans was $2.0 million and $1.6 million for the three months ended June 30, 2018 and
2017, respectively, and $3.9 million and $3.2 million for the six months ended June 30, 2018 and 2017, respectively.
10. PENSION AND
POSTRETIREMENT BENEFITS OTHER THAN PENSION PLANS:
Net periodic pension (income) expense reflected in the accompanying condensed consolidated
statements of operations included the following components for the respective periods (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
Interest cost
|
|
$
|
803
|
|
|
$
|
901
|
|
|
$
|
1,614
|
|
|
$
|
1,815
|
|
Expected return on plan assets
|
|
|
(1,070
|
)
|
|
|
(1,011
|
)
|
|
|
(2,172
|
)
|
|
|
(2,047
|
)
|
Amortization of net actuarial loss
|
|
|
264
|
|
|
|
297
|
|
|
|
519
|
|
|
|
579
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total net periodic pension (income) expense
|
|
$
|
(3
|
)
|
|
$
|
187
|
|
|
$
|
(39
|
)
|
|
$
|
347
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12
Net postretirement benefit income reflected in the accompanying condensed consolidated statements of operations
included the following components for the respective periods (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
Interest cost
|
|
$
|
24
|
|
|
$
|
28
|
|
|
$
|
48
|
|
|
$
|
54
|
|
Amortization of net actuarial loss
|
|
|
65
|
|
|
|
66
|
|
|
|
129
|
|
|
|
123
|
|
Amortization of prior service credit
|
|
|
(329
|
)
|
|
|
(329
|
)
|
|
|
(657
|
)
|
|
|
(657
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total net postretirement benefit income
|
|
$
|
(240
|
)
|
|
$
|
(235
|
)
|
|
$
|
(480
|
)
|
|
$
|
(480
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11. INCOME TAXES:
The
Company has elected to be taxed as a REIT effective January 1, 2013, pursuant to the U.S. Internal Revenue Code of 1986, as amended. As a REIT, generally the Company will not be subject to federal corporate income taxes on ordinary taxable
income and capital gains income from real estate investments that it distributes to its stockholders. The Company will continue to be required to pay federal and state corporate income taxes on earnings of its taxable REIT subsidiaries
(TRSs).
The Company recorded an income tax provision of $5.7 million and $0.9 million for the three months ended June 30, 2018
and 2017, respectively, and $7.9 million and $1.5 million for the six months ended June 30, 2018 and 2017, respectively, related to the current period operations of the Company. These results differ from the statutory rate primarily
due to the REIT dividends paid deduction in both periods and the change in valuation allowance required at the TRSs for the three months and six months ended June 30, 2017.
On December 22, 2017, the Tax Cuts and Jobs Act (TCJA) was enacted and included a reduction to the U.S. federal corporate income tax rate
from 35% to 21% for tax years beginning after December 31, 2017. The Company has not fully completed its accounting for the income tax effects of the TCJA. As discussed in SEC Staff Accounting Bulletin No. 118, the accounting for the TCJA
should be completed within one year from enactment. During the six months ended June 30, 2018, the Company has made no adjustments to the provisional amounts recorded at December 31, 2017. Any adjustments to the provisional amounts
recorded at December 31, 2017 will be reflected upon the completion of the Companys accounting for the TCJA.
At June 30, 2018 and
December 31, 2017, the Company had no unrecognized tax benefits.
12. COMMITMENTS AND CONTINGENCIES:
The Company owns a 35% interest in a joint venture that is developing and owns Gaylord Rockies, which is expected to open in late 2018. In connection with the
joint venture, the Company agreed to provide guarantees of the hotels construction loan, including a principal repayment guarantee of up to $21 million of the total $500 million principal amount of the construction loan previously
obtained from a consortium of eight banks, with such amount reducing to $14 million and further reducing to $8.75 million upon the hotels satisfaction of designated debt service coverage requirements following completion and opening
of the hotel. The Company has also provided a completion guarantee under the construction loan capped at its pro rata share of all costs necessary to complete the project within the time specified in the joint ventures loan documents. Further,
the Company has agreed to a guarantee capped at its pro rata share of the joint ventures obligations under the construction loan prior to the hotels opening related to interest accruing under the construction loan and the operating
expenses of the property (estimated pro rata share of interest prior to the hotel opening is $9.8 million). In addition to guarantees related to the construction loan, the Company agreed to provide a guarantee of the mezzanine debt related to the
hotel including a payment guarantee capped at $8.75 million for which the Company is only liable in the event there is a casualty or condemnation event at the hotel and the construction lenders elect to apply those
13
proceeds to the construction loan balance and release the construction loan guarantees and liens. The guarantee related to the mezzanine debt also includes an uncapped completion guarantee and an
uncapped guarantee of the joint ventures obligations under the mezzanine loan prior to the hotels opening related to interest accruing under the mezzanine loan and the operating expenses of the property to the extent not already
satisfied by the parties under the guarantees related to the construction loan. As of June 30, 2018, the Company had not recorded any liability in the consolidated balance sheet associated with these guarantees.
The Company has entered into employment agreements with certain officers, which provide for severance payments upon certain events, including certain
terminations in connection with a change of control.
The Company, in the ordinary course of business, is involved in certain legal actions and claims on
a variety of matters. It is the opinion of management that such legal actions will not have a material effect on the results of operations, financial condition or liquidity of the Company.
13. STOCKHOLDERS EQUITY:
On February 23,
2018, the Companys board of directors declared the Companys first quarter 2018 cash dividend in the amount of $0.85 per share of common stock, or an aggregate of approximately $43.6 million in cash, which was paid on April 16,
2018 to stockholders of record as of the close of business on March 30, 2018.
On June 18, 2018, the Companys board of directors declared
the Companys second quarter 2018 cash dividend in the amount of $0.85 per share of common stock, or an aggregate of approximately $43.6 million in cash, which was paid on July 16, 2018 to stockholders of record as of the close of
business on June 29, 2018.
14. FAIR VALUE MEASUREMENTS:
The Company uses a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined
as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which
little or no market data exists, therefore requiring an entity to develop its own assumptions.
At June 30, 2018 and December 31, 2017, the
Company held certain assets that are required to be measured at fair value on a recurring basis. These included investments held in conjunction with the Companys
non-qualified
contributory deferred
compensation plan. These investments consist of mutual funds traded in an active market. The Company determined the fair value of these mutual funds based on the net asset value per unit of the funds or the portfolio, which is based upon quoted
market prices in an active market. Therefore, the Company has categorized these investments as Level 1.
The Company has consistently applied the
above valuation techniques in all periods presented and believes it has obtained the most accurate information available for each type of instrument.
14
The Company had no liabilities required to be measured at fair value at June 30, 2018 and December 31,
2017. The Companys assets measured at fair value on a recurring basis at June 30, 2018 and December 31, 2017, were as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Markets for
|
|
|
Observable
|
|
|
Unobservable
|
|
|
|
June 30,
|
|
|
Identical Assets
|
|
|
Inputs
|
|
|
Inputs
|
|
|
|
2018
|
|
|
(Level 1)
|
|
|
(Level 2)
|
|
|
(Level 3)
|
|
Deferred compensation plan investments
|
|
$
|
25,420
|
|
|
$
|
25,420
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets measured at fair value
|
|
$
|
25,420
|
|
|
$
|
25,420
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Markets for
|
|
|
Observable
|
|
|
Unobservable
|
|
|
|
December 31,
|
|
|
Identical Assets
|
|
|
Inputs
|
|
|
Inputs
|
|
|
|
2017
|
|
|
(Level 1)
|
|
|
(Level 2)
|
|
|
(Level 3)
|
|
Deferred compensation plan investments
|
|
$
|
25,055
|
|
|
$
|
25,055
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets measured at fair value
|
|
$
|
25,055
|
|
|
$
|
25,055
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The remainder of the assets and liabilities held by the Company at June 30, 2018 are not required to be recorded at fair
value, and the carrying value of these assets and liabilities approximate fair value.
15. FINANCIAL REPORTING BY BUSINESS SEGMENTS:
The Companys operations are organized into three principal business segments:
|
|
|
Hospitality
, which includes Gaylord Opryland, Gaylord Palms, Gaylord Texan, Gaylord National, the Inn at
Opryland, the AC Hotel, and the Companys equity investment in Gaylord Rockies;
|
|
|
|
Entertainment
, which includes the Grand Ole Opry, the Ryman Auditorium,
WSM-AM,
Ole Red, Opry City Stage, and the Companys Nashville-based attractions; and
|
|
|
|
Corporate and Other
, which includes the Companys corporate expenses.
|
15
The following information is derived directly from the segments internal financial reports used for
corporate management purposes (amounts in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hospitality
|
|
$
|
291,756
|
|
|
$
|
263,373
|
|
|
$
|
556,867
|
|
|
$
|
517,527
|
|
Entertainment
|
|
|
42,178
|
|
|
|
35,405
|
|
|
|
65,437
|
|
|
|
57,293
|
|
Corporate and Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
333,934
|
|
|
$
|
298,778
|
|
|
$
|
622,304
|
|
|
$
|
574,820
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hospitality
|
|
$
|
27,233
|
|
|
$
|
25,547
|
|
|
$
|
53,433
|
|
|
$
|
50,725
|
|
Entertainment
|
|
|
2,315
|
|
|
|
1,592
|
|
|
|
4,272
|
|
|
|
3,500
|
|
Corporate and Other
|
|
|
447
|
|
|
|
540
|
|
|
|
956
|
|
|
|
1,091
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
29,995
|
|
|
$
|
27,679
|
|
|
$
|
58,661
|
|
|
$
|
55,316
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hospitality
|
|
$
|
76,702
|
|
|
$
|
61,468
|
|
|
$
|
131,695
|
|
|
$
|
113,490
|
|
Entertainment
|
|
|
9,609
|
|
|
|
11,678
|
|
|
|
11,545
|
|
|
|
14,807
|
|
Corporate and Other
|
|
|
(8,087
|
)
|
|
|
(8,008
|
)
|
|
|
(16,925
|
)
|
|
|
(15,968
|
)
|
Preopening costs
|
|
|
(1,525
|
)
|
|
|
(494
|
)
|
|
|
(3,672
|
)
|
|
|
(710
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating income
|
|
|
76,699
|
|
|
|
64,644
|
|
|
|
122,643
|
|
|
|
111,619
|
|
Interest expense
|
|
|
(19,625
|
)
|
|
|
(17,155
|
)
|
|
|
(36,354
|
)
|
|
|
(33,019
|
)
|
Interest income
|
|
|
2,766
|
|
|
|
2,969
|
|
|
|
5,519
|
|
|
|
5,917
|
|
Income (loss) from joint ventures
|
|
|
1,346
|
|
|
|
(943
|
)
|
|
|
(1,242
|
)
|
|
|
(1,717
|
)
|
Other gains and (losses), net
|
|
|
36
|
|
|
|
(1,324
|
)
|
|
|
204
|
|
|
|
(1,396
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
$
|
61,222
|
|
|
$
|
48,191
|
|
|
$
|
90,770
|
|
|
$
|
81,404
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16. INFORMATION CONCERNING GUARANTOR AND
NON-GUARANTOR
SUBSIDIARIES:
The $350 Million 5% Senior Notes and the $400 Million 5% Senior Notes were each issued by the Operating Partnership and Finco and are guaranteed on a senior
unsecured basis by the Company, each of the Companys four wholly-owned subsidiaries that own the Gaylord Hotels properties, and certain other of the Companys subsidiaries, each of which guarantees the Operating Partnerships Credit
Agreement (such subsidiary guarantors, together with the Company, the Guarantors). The subsidiary Guarantors are 100% owned, and the guarantees are full and unconditional and joint and several. Not all of the Companys subsidiaries
have guaranteed the Companys $350 Million 5% Senior Notes and the $400 Million 5% Senior Notes.
The following condensed consolidating financial
information includes certain allocations of expenses based on managements best estimates, which are not necessarily indicative of financial position, results of operations and cash flows that these entities would have achieved on a stand-alone
basis.
16
RYMAN HOSPITALITY PROPERTIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING BALANCE SHEET
June 30, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands)
|
|
Parent
Guarantor
|
|
|
Issuer
|
|
|
Guarantors
|
|
|
Non-
Guarantors
|
|
|
Eliminations
|
|
|
Consolidated
|
|
ASSETS:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property and equipment, net of accumulated depreciation
|
|
$
|
|
|
|
$
|
|
|
|
$
|
1,647,578
|
|
|
$
|
473,587
|
|
|
$
|
|
|
|
$
|
2,121,165
|
|
Cash and cash equivalentsunrestricted
|
|
|
82
|
|
|
|
998
|
|
|
|
30
|
|
|
|
60,669
|
|
|
|
|
|
|
|
61,779
|
|
Cash and cash equivalentsrestricted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32,181
|
|
|
|
|
|
|
|
32,181
|
|
Notes receivable
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
113,789
|
|
|
|
|
|
|
|
113,789
|
|
Investment in Gaylord Rockies joint venture
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
88,993
|
|
|
|
|
|
|
|
88,993
|
|
Trade receivables, less allowance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
79,694
|
|
|
|
|
|
|
|
79,694
|
|
Deferred income tax assets, net
|
|
|
|
|
|
|
|
|
|
|
(299
|
)
|
|
|
43,355
|
|
|
|
|
|
|
|
43,056
|
|
Prepaid expenses and other assets
|
|
|
|
|
|
|
83
|
|
|
|
3
|
|
|
|
66,559
|
|
|
|
|
|
|
|
66,645
|
|
Intercompany receivables, net
|
|
|
|
|
|
|
|
|
|
|
1,800,263
|
|
|
|
|
|
|
|
(1,800,263
|
)
|
|
|
|
|
Investments
|
|
|
1,010,151
|
|
|
|
2,890,033
|
|
|
|
650,582
|
|
|
|
1,384,814
|
|
|
|
(5,935,580
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
1,010,233
|
|
|
$
|
2,891,114
|
|
|
$
|
4,098,157
|
|
|
$
|
2,343,641
|
|
|
$
|
(7,735,843
|
)
|
|
$
|
2,607,302
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS EQUITY:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt and capital lease obligations
|
|
$
|
|
|
|
$
|
1,674,163
|
|
|
$
|
|
|
|
$
|
629
|
|
|
$
|
|
|
|
$
|
1,674,792
|
|
Accounts payable and accrued liabilities
|
|
|
69
|
|
|
|
9,758
|
|
|
|
7,426
|
|
|
|
158,892
|
|
|
|
|
|
|
|
176,145
|
|
Dividends payable
|
|
|
44,552
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
44,552
|
|
Deferred management rights proceeds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
175,541
|
|
|
|
|
|
|
|
175,541
|
|
Other liabilities
|
|
|
|
|
|
|
|
|
|
|
97,573
|
|
|
|
65,005
|
|
|
|
|
|
|
|
162,578
|
|
Intercompany payables, net
|
|
|
591,918
|
|
|
|
935,823
|
|
|
|
|
|
|
|
272,522
|
|
|
|
(1,800,263
|
)
|
|
|
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock
|
|
|
513
|
|
|
|
1
|
|
|
|
1
|
|
|
|
2,387
|
|
|
|
(2,389
|
)
|
|
|
513
|
|
Additional
paid-in-capital
|
|
|
897,185
|
|
|
|
586,861
|
|
|
|
2,835,468
|
|
|
|
2,093,817
|
|
|
|
(5,516,146
|
)
|
|
|
897,185
|
|
Treasury stock
|
|
|
(14,195
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(14,195
|
)
|
Accumulated deficit
|
|
|
(483,279
|
)
|
|
|
(315,492
|
)
|
|
|
1,157,689
|
|
|
|
(398,622
|
)
|
|
|
(443,575
|
)
|
|
|
(483,279
|
)
|
Accumulated other comprehensive loss
|
|
|
(26,530
|
)
|
|
|
|
|
|
|
|
|
|
|
(26,530
|
)
|
|
|
26,530
|
|
|
|
(26,530
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total stockholders equity
|
|
|
373,694
|
|
|
|
271,370
|
|
|
|
3,993,158
|
|
|
|
1,671,052
|
|
|
|
(5,935,580
|
)
|
|
|
373,694
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders equity
|
|
$
|
1,010,233
|
|
|
$
|
2,891,114
|
|
|
$
|
4,098,157
|
|
|
$
|
2,343,641
|
|
|
$
|
(7,735,843
|
)
|
|
$
|
2,607,302
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17
RYMAN HOSPITALITY PROPERTIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING BALANCE SHEET
December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands)
|
|
Parent
Guarantor
|
|
|
Issuer
|
|
|
Guarantors
|
|
|
Non-
Guarantors
|
|
|
Eliminations
|
|
|
Consolidated
|
|
ASSETS:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property and equipment, net of accumulated depreciation
|
|
$
|
|
|
|
$
|
|
|
|
$
|
1,640,274
|
|
|
$
|
425,383
|
|
|
$
|
|
|
|
$
|
2,065,657
|
|
Cash and cash equivalentsunrestricted
|
|
|
38
|
|
|
|
759
|
|
|
|
36
|
|
|
|
56,724
|
|
|
|
|
|
|
|
57,557
|
|
Cash and cash equivalentsrestricted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21,153
|
|
|
|
|
|
|
|
21,153
|
|
Notes receivable
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
111,423
|
|
|
|
|
|
|
|
111,423
|
|
Investment in Gaylord Rockies joint venture
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
88,685
|
|
|
|
|
|
|
|
88,685
|
|
Trade receivables, less allowance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
57,520
|
|
|
|
|
|
|
|
57,520
|
|
Deferred income tax assets, net
|
|
|
|
|
|
|
|
|
|
|
(301
|
)
|
|
|
50,418
|
|
|
|
|
|
|
|
50,117
|
|
Prepaid expenses and other assets
|
|
|
|
|
|
|
|
|
|
|
5
|
|
|
|
72,111
|
|
|
|
|
|
|
|
72,116
|
|
Intercompany receivables, net
|
|
|
|
|
|
|
|
|
|
|
1,717,157
|
|
|
|
|
|
|
|
(1,717,157
|
)
|
|
|
|
|
Investments
|
|
|
1,006,461
|
|
|
|
2,890,032
|
|
|
|
651,006
|
|
|
|
1,364,814
|
|
|
|
(5,912,313
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
1,006,499
|
|
|
$
|
2,890,791
|
|
|
$
|
4,008,177
|
|
|
$
|
2,248,231
|
|
|
$
|
(7,629,470
|
)
|
|
$
|
2,524,228
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS EQUITY:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt and capital lease obligations
|
|
$
|
|
|
|
$
|
1,590,753
|
|
|
$
|
|
|
|
$
|
639
|
|
|
$
|
|
|
|
$
|
1,591,392
|
|
Accounts payable and accrued liabilities
|
|
|
150
|
|
|
|
11,180
|
|
|
|
15,795
|
|
|
|
152,524
|
|
|
|
|
|
|
|
179,649
|
|
Dividends payable
|
|
|
42,129
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
42,129
|
|
Deferred management rights proceeds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
177,057
|
|
|
|
|
|
|
|
177,057
|
|
Other liabilities
|
|
|
|
|
|
|
|
|
|
|
95,078
|
|
|
|
60,767
|
|
|
|
|
|
|
|
155,845
|
|
Intercompany payables, net
|
|
|
586,064
|
|
|
|
895,408
|
|
|
|
|
|
|
|
235,685
|
|
|
|
(1,717,157
|
)
|
|
|
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock
|
|
|
512
|
|
|
|
1
|
|
|
|
1
|
|
|
|
2,387
|
|
|
|
(2,389
|
)
|
|
|
512
|
|
Additional
paid-in-capital
|
|
|
896,759
|
|
|
|
671,875
|
|
|
|
2,835,468
|
|
|
|
2,073,818
|
|
|
|
(5,581,161
|
)
|
|
|
896,759
|
|
Treasury stock
|
|
|
(13,253
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(13,253
|
)
|
Accumulated deficit
|
|
|
(479,170
|
)
|
|
|
(278,426
|
)
|
|
|
1,061,835
|
|
|
|
(427,954
|
)
|
|
|
(355,455
|
)
|
|
|
(479,170
|
)
|
Accumulated other comprehensive loss
|
|
|
(26,692
|
)
|
|
|
|
|
|
|
|
|
|
|
(26,692
|
)
|
|
|
26,692
|
|
|
|
(26,692
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total stockholders equity
|
|
|
378,156
|
|
|
|
393,450
|
|
|
|
3,897,304
|
|
|
|
1,621,559
|
|
|
|
(5,912,313
|
)
|
|
|
378,156
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders equity
|
|
$
|
1,006,499
|
|
|
$
|
2,890,791
|
|
|
$
|
4,008,177
|
|
|
$
|
2,248,231
|
|
|
$
|
(7,629,470
|
)
|
|
$
|
2,524,228
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18
RYMAN HOSPITALITY PROPERTIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
AND COMPREHENSIVE INCOME
For the Three Months Ended June 30, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands)
|
|
Parent
Guarantor
|
|
|
Issuer
|
|
|
Guarantors
|
|
|
Non-
Guarantors
|
|
|
Eliminations
|
|
|
Consolidated
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rooms
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
121,745
|
|
|
$
|
|
|
|
$
|
121,745
|
|
Food and beverage
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
141,053
|
|
|
|
|
|
|
|
141,053
|
|
Other hotel revenue
|
|
|
|
|
|
|
|
|
|
|
76,773
|
|
|
|
33,376
|
|
|
|
(81,191
|
)
|
|
|
28,958
|
|
Entertainment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
42,178
|
|
|
|
|
|
|
|
42,178
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues
|
|
|
|
|
|
|
|
|
|
|
76,773
|
|
|
|
338,352
|
|
|
|
(81,191
|
)
|
|
|
333,934
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rooms
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30,059
|
|
|
|
|
|
|
|
30,059
|
|
Food and beverage
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
72,394
|
|
|
|
|
|
|
|
72,394
|
|
Other hotel expenses
|
|
|
|
|
|
|
|
|
|
|
11,050
|
|
|
|
142,341
|
|
|
|
(76,658
|
)
|
|
|
76,733
|
|
Management fees, net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,635
|
|
|
|
|
|
|
|
8,635
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total hotel operating expenses
|
|
|
|
|
|
|
|
|
|
|
11,050
|
|
|
|
253,429
|
|
|
|
(76,658
|
)
|
|
|
187,821
|
|
Entertainment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30,254
|
|
|
|
|
|
|
|
30,254
|
|
Corporate
|
|
|
62
|
|
|
|
364
|
|
|
|
2
|
|
|
|
7,212
|
|
|
|
|
|
|
|
7,640
|
|
Preopening costs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,525
|
|
|
|
|
|
|
|
1,525
|
|
Corporate overhead allocation
|
|
|
2,495
|
|
|
|
|
|
|
|
2,038
|
|
|
|
|
|
|
|
(4,533
|
)
|
|
|
|
|
Depreciation and amortization
|
|
|
|
|
|
|
|
|
|
|
15,305
|
|
|
|
14,690
|
|
|
|
|
|
|
|
29,995
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses
|
|
|
2,557
|
|
|
|
364
|
|
|
|
28,395
|
|
|
|
307,110
|
|
|
|
(81,191
|
)
|
|
|
257,235
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss)
|
|
|
(2,557
|
)
|
|
|
(364
|
)
|
|
|
48,378
|
|
|
|
31,242
|
|
|
|
|
|
|
|
76,699
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
|
|
|
|
(19,618
|
)
|
|
|
|
|
|
|
(7
|
)
|
|
|
|
|
|
|
(19,625
|
)
|
Interest income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,766
|
|
|
|
|
|
|
|
2,766
|
|
Income from joint ventures
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,346
|
|
|
|
|
|
|
|
1,346
|
|
Other gains and (losses), net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
36
|
|
|
|
|
|
|
|
36
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before income taxes
|
|
|
(2,557
|
)
|
|
|
(19,982
|
)
|
|
|
48,378
|
|
|
|
35,383
|
|
|
|
|
|
|
|
61,222
|
|
Provision for income taxes
|
|
|
|
|
|
|
|
|
|
|
(449
|
)
|
|
|
(5,227
|
)
|
|
|
|
|
|
|
(5,676
|
)
|
Equity in subsidiaries earnings, net
|
|
|
58,103
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(58,103
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
55,546
|
|
|
$
|
(19,982
|
)
|
|
$
|
47,929
|
|
|
$
|
30,156
|
|
|
$
|
(58,103
|
)
|
|
$
|
55,546
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income (loss)
|
|
$
|
55,630
|
|
|
$
|
(19,982
|
)
|
|
$
|
47,929
|
|
|
$
|
30,240
|
|
|
$
|
(58,187
|
)
|
|
$
|
55,630
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19
RYMAN HOSPITALITY PROPERTIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
AND COMPREHENSIVE INCOME
For the Three Months Ended June 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands)
|
|
Parent
Guarantor
|
|
|
Issuer
|
|
|
Guarantors
|
|
|
Non-
Guarantors
|
|
|
Eliminations
|
|
|
Consolidated
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rooms
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
110,674
|
|
|
$
|
|
|
|
$
|
110,674
|
|
Food and beverage
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
128,441
|
|
|
|
|
|
|
|
128,441
|
|
Other hotel revenue
|
|
|
|
|
|
|
|
|
|
|
78,827
|
|
|
|
28,144
|
|
|
|
(82,713
|
)
|
|
|
24,258
|
|
Entertainment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
35,405
|
|
|
|
|
|
|
|
35,405
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues
|
|
|
|
|
|
|
|
|
|
|
78,827
|
|
|
|
302,664
|
|
|
|
(82,713
|
)
|
|
|
298,778
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rooms
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
28,359
|
|
|
|
|
|
|
|
28,359
|
|
Food and beverage
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
68,285
|
|
|
|
|
|
|
|
68,285
|
|
Other hotel expenses
|
|
|
|
|
|
|
|
|
|
|
10,409
|
|
|
|
141,847
|
|
|
|
(78,720
|
)
|
|
|
73,536
|
|
Management fees, net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,178
|
|
|
|
|
|
|
|
6,178
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total hotel operating expenses
|
|
|
|
|
|
|
|
|
|
|
10,409
|
|
|
|
244,669
|
|
|
|
(78,720
|
)
|
|
|
176,358
|
|
Entertainment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22,134
|
|
|
|
1
|
|
|
|
22,135
|
|
Corporate
|
|
|
45
|
|
|
|
396
|
|
|
|
1
|
|
|
|
7,026
|
|
|
|
|
|
|
|
7,468
|
|
Preopening costs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
494
|
|
|
|
|
|
|
|
494
|
|
Corporate overhead allocation
|
|
|
2,233
|
|
|
|
|
|
|
|
1,761
|
|
|
|
|
|
|
|
(3,994
|
)
|
|
|
|
|
Depreciation and amortization
|
|
|
|
|
|
|
|
|
|
|
14,877
|
|
|
|
12,802
|
|
|
|
|
|
|
|
27,679
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses
|
|
|
2,278
|
|
|
|
396
|
|
|
|
27,048
|
|
|
|
287,125
|
|
|
|
(82,713
|
)
|
|
|
234,134
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss)
|
|
|
(2,278
|
)
|
|
|
(396
|
)
|
|
|
51,779
|
|
|
|
15,539
|
|
|
|
|
|
|
|
64,644
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
|
|
|
|
(17,149
|
)
|
|
|
|
|
|
|
(6
|
)
|
|
|
|
|
|
|
(17,155
|
)
|
Interest income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,969
|
|
|
|
|
|
|
|
2,969
|
|
Loss from joint ventures
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(943
|
)
|
|
|
|
|
|
|
(943
|
)
|
Other gains and (losses), net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,324
|
)
|
|
|
|
|
|
|
(1,324
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before income taxes
|
|
|
(2,278
|
)
|
|
|
(17,545
|
)
|
|
|
51,779
|
|
|
|
16,235
|
|
|
|
|
|
|
|
48,191
|
|
Provision for income taxes
|
|
|
|
|
|
|
|
|
|
|
(55
|
)
|
|
|
(844
|
)
|
|
|
|
|
|
|
(899
|
)
|
Equity in subsidiaries earnings, net
|
|
|
49,570
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(49,570
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
47,292
|
|
|
$
|
(17,545
|
)
|
|
$
|
51,724
|
|
|
$
|
15,391
|
|
|
$
|
(49,570
|
)
|
|
$
|
47,292
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income (loss)
|
|
$
|
47,326
|
|
|
$
|
(17,545
|
)
|
|
$
|
51,724
|
|
|
$
|
15,425
|
|
|
$
|
(49,604
|
)
|
|
$
|
47,326
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20
RYMAN HOSPITALITY PROPERTIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
AND COMPREHENSIVE INCOME
For the Six Months Ended June 30, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands)
|
|
Parent
Guarantor
|
|
|
Issuer
|
|
|
Guarantors
|
|
|
Non-
Guarantors
|
|
|
Eliminations
|
|
|
Consolidated
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rooms
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
229,309
|
|
|
$
|
|
|
|
$
|
229,309
|
|
Food and beverage
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
273,992
|
|
|
|
|
|
|
|
273,992
|
|
Other hotel revenue
|
|
|
|
|
|
|
|
|
|
|
153,016
|
|
|
|
62,614
|
|
|
|
(162,064
|
)
|
|
|
53,566
|
|
Entertainment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
65,461
|
|
|
|
(24
|
)
|
|
|
65,437
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues
|
|
|
|
|
|
|
|
|
|
|
153,016
|
|
|
|
631,376
|
|
|
|
(162,088
|
)
|
|
|
622,304
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rooms
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
58,987
|
|
|
|
|
|
|
|
58,987
|
|
Food and beverage
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
144,372
|
|
|
|
|
|
|
|
144,372
|
|
Other hotel expenses
|
|
|
|
|
|
|
|
|
|
|
22,877
|
|
|
|
282,528
|
|
|
|
(152,790
|
)
|
|
|
152,615
|
|
Management fees, net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,765
|
|
|
|
|
|
|
|
15,765
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total hotel operating expenses
|
|
|
|
|
|
|
|
|
|
|
22,877
|
|
|
|
501,652
|
|
|
|
(152,790
|
)
|
|
|
371,739
|
|
Entertainment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
49,644
|
|
|
|
(24
|
)
|
|
|
49,620
|
|
Corporate
|
|
|
125
|
|
|
|
725
|
|
|
|
2
|
|
|
|
15,117
|
|
|
|
|
|
|
|
15,969
|
|
Preopening costs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,672
|
|
|
|
|
|
|
|
3,672
|
|
Corporate overhead allocation
|
|
|
5,110
|
|
|
|
|
|
|
|
4,164
|
|
|
|
|
|
|
|
(9,274
|
)
|
|
|
|
|
Depreciation and amortization
|
|
|
|
|
|
|
|
|
|
|
30,035
|
|
|
|
28,626
|
|
|
|
|
|
|
|
58,661
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses
|
|
|
5,235
|
|
|
|
725
|
|
|
|
57,078
|
|
|
|
598,711
|
|
|
|
(162,088
|
)
|
|
|
499,661
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss)
|
|
|
(5,235
|
)
|
|
|
(725
|
)
|
|
|
95,938
|
|
|
|
32,665
|
|
|
|
|
|
|
|
122,643
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
|
|
|
|
(36,341
|
)
|
|
|
|
|
|
|
(13
|
)
|
|
|
|
|
|
|
(36,354
|
)
|
Interest income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,519
|
|
|
|
|
|
|
|
5,519
|
|
Loss from joint ventures
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,242
|
)
|
|
|
|
|
|
|
(1,242
|
)
|
Other gains and (losses), net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
204
|
|
|
|
|
|
|
|
204
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before income taxes
|
|
|
(5,235
|
)
|
|
|
(37,066
|
)
|
|
|
95,938
|
|
|
|
37,133
|
|
|
|
|
|
|
|
90,770
|
|
Provision for income taxes
|
|
|
|
|
|
|
|
|
|
|
(84
|
)
|
|
|
(7,801
|
)
|
|
|
|
|
|
|
(7,885
|
)
|
Equity in subsidiaries earnings, net
|
|
|
88,120
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(88,120
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
82,885
|
|
|
$
|
(37,066
|
)
|
|
$
|
95,854
|
|
|
$
|
29,332
|
|
|
$
|
(88,120
|
)
|
|
$
|
82,885
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income (loss)
|
|
$
|
83,047
|
|
|
$
|
(37,066
|
)
|
|
$
|
95,854
|
|
|
$
|
29,494
|
|
|
$
|
(88,282
|
)
|
|
$
|
83,047
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21
RYMAN HOSPITALITY PROPERTIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
AND COMPREHENSIVE INCOME
For the Six Months Ended June 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands)
|
|
Parent
Guarantor
|
|
|
Issuer
|
|
|
Guarantors
|
|
|
Non-
Guarantors
|
|
|
Eliminations
|
|
|
Consolidated
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rooms
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
214,043
|
|
|
$
|
|
|
|
$
|
214,043
|
|
Food and beverage
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
254,610
|
|
|
|
|
|
|
|
254,610
|
|
Other hotel revenue
|
|
|
|
|
|
|
|
|
|
|
158,321
|
|
|
|
56,577
|
|
|
|
(166,024
|
)
|
|
|
48,874
|
|
Entertainment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
57,317
|
|
|
|
(24
|
)
|
|
|
57,293
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues
|
|
|
|
|
|
|
|
|
|
|
158,321
|
|
|
|
582,547
|
|
|
|
(166,048
|
)
|
|
|
574,820
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rooms
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
56,387
|
|
|
|
|
|
|
|
56,387
|
|
Food and beverage
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
137,442
|
|
|
|
|
|
|
|
137,442
|
|
Other hotel expenses
|
|
|
|
|
|
|
|
|
|
|
22,356
|
|
|
|
283,523
|
|
|
|
(158,105
|
)
|
|
|
147,774
|
|
Management fees, net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,709
|
|
|
|
|
|
|
|
11,709
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total hotel operating expenses
|
|
|
|
|
|
|
|
|
|
|
22,356
|
|
|
|
489,061
|
|
|
|
(158,105
|
)
|
|
|
353,312
|
|
Entertainment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
39,009
|
|
|
|
(23
|
)
|
|
|
38,986
|
|
Corporate
|
|
|
90
|
|
|
|
802
|
|
|
|
2
|
|
|
|
13,983
|
|
|
|
|
|
|
|
14,877
|
|
Preopening costs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
710
|
|
|
|
|
|
|
|
710
|
|
Corporate overhead allocation
|
|
|
4,429
|
|
|
|
|
|
|
|
3,491
|
|
|
|
|
|
|
|
(7,920
|
)
|
|
|
|
|
Depreciation and amortization
|
|
|
|
|
|
|
|
|
|
|
29,684
|
|
|
|
25,632
|
|
|
|
|
|
|
|
55,316
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses
|
|
|
4,519
|
|
|
|
802
|
|
|
|
55,533
|
|
|
|
568,395
|
|
|
|
(166,048
|
)
|
|
|
463,201
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss)
|
|
|
(4,519
|
)
|
|
|
(802
|
)
|
|
|
102,788
|
|
|
|
14,152
|
|
|
|
|
|
|
|
111,619
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
|
|
|
|
(33,006
|
)
|
|
|
|
|
|
|
(13
|
)
|
|
|
|
|
|
|
(33,019
|
)
|
Interest income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,917
|
|
|
|
|
|
|
|
5,917
|
|
Loss from joint ventures
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,717
|
)
|
|
|
|
|
|
|
(1,717
|
)
|
Other gains and (losses), net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,396
|
)
|
|
|
|
|
|
|
(1,396
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before income taxes
|
|
|
(4,519
|
)
|
|
|
(33,808
|
)
|
|
|
102,788
|
|
|
|
16,943
|
|
|
|
|
|
|
|
81,404
|
|
Provision for income taxes
|
|
|
|
|
|
|
|
|
|
|
(37
|
)
|
|
|
(1,455
|
)
|
|
|
|
|
|
|
(1,492
|
)
|
Equity in subsidiaries earnings, net
|
|
|
84,431
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(84,431
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
79,912
|
|
|
$
|
(33,808
|
)
|
|
$
|
102,751
|
|
|
$
|
15,488
|
|
|
$
|
(84,431
|
)
|
|
$
|
79,912
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income (loss)
|
|
$
|
79,957
|
|
|
$
|
(33,808
|
)
|
|
$
|
102,751
|
|
|
$
|
15,533
|
|
|
$
|
(84,476
|
)
|
|
$
|
79,957
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22
RYMAN HOSPITALITY PROPERTIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
For the Six Months Ended June 30, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands)
|
|
Parent
Guarantor
|
|
|
Issuer
|
|
|
Guarantors
|
|
|
Non-
Guarantors
|
|
|
Eliminations
|
|
|
Consolidated
|
|
Net cash provided by (used in) operating activities
|
|
$
|
88,925
|
|
|
$
|
(78,374
|
)
|
|
$
|
39,783
|
|
|
$
|
81,381
|
|
|
$
|
|
|
|
$
|
131,715
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchases of property and equipment
|
|
|
|
|
|
|
|
|
|
|
(39,789
|
)
|
|
|
(55,564
|
)
|
|
|
|
|
|
|
(95,353
|
)
|
Investment in other joint ventures
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2,199
|
)
|
|
|
|
|
|
|
(2,199
|
)
|
Purchase of remaining interest in Opry City Stage
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3,948
|
)
|
|
|
|
|
|
|
(3,948
|
)
|
Other investing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4,687
|
)
|
|
|
|
|
|
|
(4,687
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in investing activities
|
|
|
|
|
|
|
|
|
|
|
(39,789
|
)
|
|
|
(66,398
|
)
|
|
|
|
|
|
|
(106,187
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net borrowings under revolving credit facility
|
|
|
|
|
|
|
80,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
80,500
|
|
Repayments under term loan B
|
|
|
|
|
|
|
(1,250
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,250
|
)
|
Deferred financing costs paid
|
|
|
|
|
|
|
(637
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(637
|
)
|
Payment of dividends
|
|
|
(85,110
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(85,110
|
)
|
Payment of tax withholdings for share-based compensation
|
|
|
(3,771
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3,771
|
)
|
Other financing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(10
|
)
|
|
|
|
|
|
|
(10
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) financing activities
|
|
|
(88,881
|
)
|
|
|
78,613
|
|
|
|
|
|
|
|
(10
|
)
|
|
|
|
|
|
|
(10,278
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net change in cash, cash equivalents, and restricted cash
|
|
|
44
|
|
|
|
239
|
|
|
|
(6
|
)
|
|
|
14,973
|
|
|
|
|
|
|
|
15,250
|
|
Cash, cash equivalents, and restricted cash, beginning of period
|
|
|
38
|
|
|
|
759
|
|
|
|
36
|
|
|
|
77,877
|
|
|
|
|
|
|
|
78,710
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash, cash equivalents, and restricted cash, end of period
|
|
$
|
82
|
|
|
$
|
998
|
|
|
$
|
30
|
|
|
$
|
92,850
|
|
|
$
|
|
|
|
$
|
93,960
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23
RYMAN HOSPITALITY PROPERTIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
For the Six Months Ended June 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands)
|
|
Parent
Guarantor
|
|
|
Issuer
|
|
|
Guarantors
|
|
|
Non-
Guarantors
|
|
|
Eliminations
|
|
|
Consolidated
|
|
Net cash provided by (used in) operating activities
|
|
$
|
83,581
|
|
|
$
|
(55,377
|
)
|
|
$
|
35,875
|
|
|
$
|
49,829
|
|
|
$
|
|
|
|
$
|
113,908
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchases of property and equipment
|
|
|
|
|
|
|
|
|
|
|
(35,871
|
)
|
|
|
(43,601
|
)
|
|
|
|
|
|
|
(79,472
|
)
|
Investment in Gaylord Rockies joint venture
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(16,309
|
)
|
|
|
|
|
|
|
(16,309
|
)
|
Investment in other joint ventures
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,969
|
)
|
|
|
|
|
|
|
(1,969
|
)
|
Other investing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3,654
|
)
|
|
|
|
|
|
|
(3,654
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in investing activities
|
|
|
|
|
|
|
|
|
|
|
(35,871
|
)
|
|
|
(65,533
|
)
|
|
|
|
|
|
|
(101,404
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net repayments under revolving credit facility
|
|
|
|
|
|
|
(241,900
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(241,900
|
)
|
Borrowings under term loan A
|
|
|
|
|
|
|
200,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
200,000
|
|
Borrowings under term loan B
|
|
|
|
|
|
|
500,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
500,000
|
|
Repayments under term loan B
|
|
|
|
|
|
|
(391,250
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(391,250
|
)
|
Deferred financing costs paid
|
|
|
|
|
|
|
(12,220
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(12,220
|
)
|
Payment of dividends
|
|
|
(79,788
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(79,788
|
)
|
Payment of tax withholdings for share-based compensation
|
|
|
(3,769
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3,769
|
)
|
Other financing activities
|
|
|
28
|
|
|
|
|
|
|
|
|
|
|
|
(10
|
)
|
|
|
|
|
|
|
18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) financing activities
|
|
|
(83,529
|
)
|
|
|
54,630
|
|
|
|
|
|
|
|
(10
|
)
|
|
|
|
|
|
|
(28,909
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net change in cash, cash equivalents, and restricted cash
|
|
|
52
|
|
|
|
(747
|
)
|
|
|
4
|
|
|
|
(15,714
|
)
|
|
|
|
|
|
|
(16,405
|
)
|
Cash, cash equivalents, and restricted cash, beginning of period
|
|
|
28
|
|
|
|
1,234
|
|
|
|
23
|
|
|
|
79,905
|
|
|
|
|
|
|
|
81,190
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash, cash equivalents, and restricted cash, end of period
|
|
$
|
80
|
|
|
$
|
487
|
|
|
$
|
27
|
|
|
$
|
64,191
|
|
|
$
|
|
|
|
$
|
64,785
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24
ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
Ryman Hospitality Properties, Inc. (Ryman) is a Delaware corporation that conducts its operations so as to maintain
its qualification as a real estate investment trust (REIT) for federal income tax purposes. The Company conducts its business through an umbrella partnership REIT, in which all of its assets are held by, and operations are conducted
through, RHP Hotel Properties, LP, a subsidiary operating partnership (the Operating Partnership). RHP Finance Corporation, a Delaware corporation (Finco), was formed as a wholly-owned subsidiary of the Operating Partnership
for the sole purpose of being a
co-issuer
of debt securities with the Operating Partnership. Neither Ryman nor Finco has any material assets, other than Rymans investment in the Operating Partnership and
its 100%-owned subsidiaries. As 100%-owned subsidiaries of Ryman, neither the Operating Partnership nor Finco has any business, operations, financial results or other material information, other than the business, operations, financial results and
other material information described in this Quarterly Report on Form
10-Q
and Rymans other reports, documents or other information filed with the Securities and Exchange Commission (the SEC)
pursuant to the Securities Exchange Act of 1934, as amended (the Exchange Act). In this report, we use the terms, the Company, we or our to refer to Ryman Hospitality Properties, Inc. and its
subsidiaries unless the context indicates otherwise.
The following discussion and analysis should be read in conjunction with our condensed consolidated
financial statements and related notes included elsewhere in this report and our audited consolidated financial statements and related notes for the year ended December 31, 2017, included in our Annual Report on Form
10-K
that was filed with the SEC on February 27, 2018.
Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report on Form
10-Q
contains forward-looking statements intended to qualify for
the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements concern our goals, beliefs, expectations, strategies, objectives, plans, future operating results and underlying
assumptions, and other statements that are not necessarily based on historical facts. Without limitation, you can identify these statements by the fact that they do not relate strictly to historical or current facts, and these statements may contain
words such as may, will, could, should, might, projects, expects, believes, anticipates, intends, plans,
continue, estimate, or pursue, or the negative or other variations thereof or comparable terms. In particular, they include statements relating to, among other things, future actions, strategies, future
performance, the outcome of contingencies such as legal proceedings and future financial results. These also include statements regarding (i) the effect of our election to be taxed as a REIT for federal income tax purposes; (ii) the
holding of our
non-qualifying
REIT assets in one or more taxable REIT subsidiaries (TRSs); (iii) our announced dividend policy, including the frequency and amount of any dividend we may pay;
(iv) potential growth opportunities, including future expansion of the geographic diversity of our existing asset portfolio through acquisitions and our investment in the Gaylord Rockies joint venture (defined below); (v) Marriott
International, Inc.s (Marriott) ability to effectively manage our hotels and other properties; (vi) our anticipated capital expenditures and investments; (vii) the potential operating and financial restrictions imposed on
our activities under existing and future financing agreements and other contractual arrangements with third parties, including management agreements with Marriott; and (viii) any other business or operational matters. We have based these
forward-looking statements on our current expectations and projections about future events.
We caution the reader that forward-looking statements involve
risks and uncertainties that cannot be predicted or quantified, and, consequently, actual results may differ materially from those expressed or implied by such forward-looking statements. Important factors that could cause actual results to differ
materially from those in the forward-looking statements include, among other things, the risks and uncertainties associated with economic conditions affecting the hospitality business generally, the geographic concentration of our hotel properties,
business levels at our hotels, the effect of our election to be taxed as a REIT for federal income tax purposes
25
commencing with the year ended December 31, 2013, our ability to remain qualified as a REIT, our ability to execute our strategic goals as a REIT, our ability to generate cash flows to
support dividends, future board determinations regarding the timing and amount of dividends and changes to the dividend policy, our ability to borrow funds pursuant to our credit agreements and to refinance indebtedness, and those factors described
in our Annual Report on Form
10-K
for the year ended December 31, 2017 or described from time to time in our other reports filed with the SEC.
Any forward-looking statement made in this Quarterly Report on Form
10-Q
speaks only as of the date on which the
statement is made. New risks and uncertainties arise from time to time, and it is impossible for us to predict these events or how they may affect us. We have no duty to, and do not intend to, update or revise the forward-looking statements we make
in this Quarterly Report on Form
10-Q,
except as may be required by law.
Overview
We operate as a REIT for federal income tax purposes, specializing in group-oriented, destination hotel assets in urban and resort markets. Our owned assets
include a network of four upscale, meetings-focused resorts totaling 8,114 rooms that are managed by Marriott under the Gaylord Hotels brand. These four resorts, which we refer to as our Gaylord Hotels properties, consist of the Gaylord Opryland
Resort & Convention Center in Nashville, Tennessee (Gaylord Opryland), the Gaylord Palms Resort & Convention Center near Orlando, Florida (Gaylord Palms), the Gaylord Texan Resort & Convention
Center near Dallas, Texas (Gaylord Texan) and the Gaylord National Resort & Convention Center near Washington D.C. (Gaylord National). Our other owned hotel assets managed by Marriott include the Inn at Opryland, a
303-room
overflow hotel adjacent to Gaylord Opryland, and the AC Hotel at National Harbor, Washington D.C. (AC Hotel), a
192-room
overflow hotel adjacent to
Gaylord National. We also own a 35% interest in a joint venture that is developing and owns the Gaylord Rockies Resort & Convention Center near Denver, Colorado (Gaylord Rockies), which is scheduled to open in late 2018 and will
be managed by Marriott.
We also own and operate media and entertainment assets including the Grand Ole Opry, the legendary weekly showcase of country
musics finest performers for over 90 years; the Ryman Auditorium, the storied live music venue and former home of the Grand Ole Opry located in downtown Nashville;
WSM-AM,
the Oprys radio home; Ole
Red, a brand of Blake Shelton-themed bar, music venue and event spaces, with a flagship location in Nashville that opened in May 2018; Opry City Stage, a four-level entertainment complex in Times Square that opened in December 2017 under a joint
venture agreement and of which we acquired the remaining 50% joint venture interest in the second quarter of 2018; and three Nashville-based assets managed by Marriott Gaylord Springs Golf Links, the Wildhorse Saloon, and the General Jackson
Showboat.
Each of our award-winning Gaylord Hotels properties incorporates not only high quality lodging, but also at least 400,000 square feet of
meeting, convention and exhibition space, superb food and beverage options and retail and spa facilities within a single self-contained property. As a result, our Gaylord Hotels properties provide a convenient and entertaining environment for
convention guests. Our Gaylord Hotels properties focus on the large group meetings market in the United States.
See Cautionary Note Regarding
Forward-Looking Statements in this Item 2 and Item 1A, Risk Factors, in our Annual Report on Form
10-K
for the year ended December 31, 2017 for important information regarding
forward-looking statements made in this report and risks and uncertainties we face.
Dividend Policy
Pursuant to our current dividend policy, we plan to continue to pay a quarterly cash dividend to shareholders in an amount equal to an annualized payment of at
least 50% of adjusted funds from operations (as defined by us) less maintenance capital expenditures or 100% of REIT taxable income, whichever is greater. On February 27, 2018, our board of directors declared our first quarter 2018 cash
dividend in the amount of $0.85 per share of common
26
stock, or an aggregate of approximately $43.6 million in cash, which was paid on April 16, 2018 to stockholders of record as of the close of business on March 30, 2018. On
June 18, 2018, our board of directors declared our second quarter 2018 cash dividend in the amount of $0.85 per share of common stock, or an aggregate of approximately $43.6 million in cash, which was paid on July 16, 2018 to
stockholders of record as of the close of business on June 29, 2018.We currently plan to pay a quarterly cash dividend of $0.85 per share of common stock in October 2018 and January 2019. The declaration, timing and amount of dividends will be
determined by action of our board of directors. Our dividend policy may be altered at any time by our board of directors.
Our Strategic Plan
Our goal is to become the nations premier hospitality REIT for group-oriented meeting hotel assets in urban and resort markets.
Existing Hotel Property Design
. Our Gaylord Hotels properties focus on the large group meetings market in the United States and incorporate meeting and
exhibition space, signature guest rooms, food and beverage offerings, fitness and spa facilities and other attractions within a large hotel property so attendees needs are met in one location. This strategy creates a better experience for both
meeting planners and guests, and has led to our current Gaylord Hotels properties claiming a place among the leading convention hotels in the country.
Expansion of Hotel Asset Portfolio
. While our short-term capital allocation strategy has focused on returning capital to stockholders, part of our
long-term growth strategy includes acquisitions of other hotels, particularly in the group meetings sector of the hospitality industry, either alone or through joint ventures or alliances with one or more third parties. We intend to pursue
attractive investment opportunities which meet our acquisition parameters, specifically, group-oriented large hotels and overflow hotels with existing or potential leisure appeal. We are interested in highly accessible upper-upscale assets with over
400 hotel rooms in urban and resort group destination markets. We also consider assets that possess or are located near convention centers that present a repositioning opportunity and/or would significantly benefit from capital investment in
additional rooms or meeting space. We plan to expand the geographic diversity of our existing asset portfolio through acquisitions. As a REIT, we do not view independent, large-scale development of resort and convention hotels as a part of our
long-term growth strategy.
Leverage Brand Name Awareness
. We believe the Grand Ole Opry is one of the most recognized entertainment brands in the
United States. We promote the Grand Ole Opry name through various media, including our
WSM-AM
radio station, the Internet and television, and through performances by the Grand Ole Oprys members, many of
whom are renowned country music artists. As such, we have alliances in place with multiple distribution partners in an effort to foster brand extension. We are continuously exploring additional products, such as television specials and retail
products, through which we can capitalize on our brand affinity and awareness. To this end, we have invested in Opry City Stage, a four-level entertainment complex in Times Square, as well as a Company-owned, Blake Shelton-themed four-level bar,
music venue and event space in Nashville named after the Shelton hit Ole Red. We believe that licensing our brand for products may provide an opportunity to increase revenues and cash flow with relatively little capital investment.
27
Our Current Operations
Our ongoing operations are organized into three principal business segments:
|
|
|
Hospitality, consisting of our Gaylord Hotels properties, the Inn at Opryland, the AC Hotel, and our investment
in the Gaylord Rockies joint venture.
|
|
|
|
Entertainment, consisting of the Grand Ole Opry, the Ryman Auditorium,
WSM-AM,
Ole Red, Opry City Stage, and our other Nashville-based attractions.
|
|
|
|
Corporate and Other, consisting of our corporate expenses.
|
For the three months and six months ended June 30, 2018 and 2017, our total revenues were divided among these business segments as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
June 30,
|
|
|
June 30,
|
|
Segment
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
Hospitality
|
|
|
87
|
%
|
|
|
88
|
%
|
|
|
89
|
%
|
|
|
90
|
%
|
Entertainment
|
|
|
13
|
%
|
|
|
12
|
%
|
|
|
11
|
%
|
|
|
10
|
%
|
Corporate and Other
|
|
|
0
|
%
|
|
|
0
|
%
|
|
|
0
|
%
|
|
|
0
|
%
|
Key Performance Indicators
The operating results of our Hospitality segment are highly dependent on the volume of customers at our hotels and the quality of the customer mix at our
hotels, which are managed by Marriott. These factors impact the price that Marriott can charge for our hotel rooms and other amenities, such as food and beverage and meeting space. The following key performance indicators are commonly used in the
hospitality REIT industry:
|
|
|
hotel occupancy a volume indicator;
|
|
|
|
average daily rate (ADR) a price indicator calculated by dividing room revenue by the number
of rooms sold;
|
|
|
|
Revenue per Available Room (RevPAR) a summary measure of hotel results calculated by dividing
room revenue by room nights available to guests for the period;
|
|
|
|
Total Revenue per Available Room (Total RevPAR) a summary measure of hotel results calculated
by dividing the sum of room, food and beverage and other ancillary service revenue by room nights available to guests for the period; and
|
|
|
|
Net Definite Group Room Nights Booked a volume indicator which represents, on an aggregate basis, the
total number of definite group bookings for future room nights at our Gaylord Hotels properties confirmed during the applicable period, net of cancellations.
|
Hospitality segment revenue from our occupied hotel rooms is recognized over time as the daily hotel stay is provided to hotel groups and guests. Revenues
from concessions, food and beverage sales, and group meeting services are recognized over the period or at the point in time those goods or services are delivered to the group or hotel guest. Revenues from ancillary services at our hotels, such as
spa, parking, and transportation services, are generally recognized at the time the goods or services are provided. Cancellation fees, as well as attrition fees that
28
are charged to groups when they do not fulfill the minimum number of room nights or minimum food and beverage spending requirements originally contracted for, are recognized as revenue in the
period we determine it is probable that a significant reversal in the amount of revenue recognized will not occur, which is the period these fees are collected. Almost all of our Hospitality segment revenues are either cash-based or, for meeting and
convention groups who meet our credit criteria, billed and collected on a short-term receivables basis. The hospitality industry is capital intensive, and we rely on the ability of our hotels to generate operating cash flow to repay debt financing
and fund maintenance capital expenditures.
The results of operations of our Hospitality segment are affected by the number and type of group meetings and
conventions scheduled to attend our hotels in a given period. A variety of factors can affect the results of any interim period, including the nature and quality of the group meetings and conventions attending our hotels during such period, which
meetings and conventions have often been contracted for several years in advance, the level of attrition our hotels experience, and the level of transient business at our hotels during such period. We rely on Marriott, as the manager of our hotels,
to manage these factors and to offset any identified shortfalls in occupancy.
Selected Financial Information
The following table contains our unaudited selected summary financial data for the three months and six months ended June 30, 2018 and 2017. The table
also shows the percentage relationships to total revenues and, in the case of segment operating income, its relationship to segment revenues (in thousands, except percentages).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unaudited
|
|
|
|
|
|
|
|
|
Unaudited
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
|
Six Months Ended June 30,
|
|
|
|
2018
|
|
|
%
|
|
|
2017
|
|
|
%
|
|
|
2018
|
|
|
%
|
|
|
2017
|
|
|
%
|
|
Income Statement Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
REVENUES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rooms
|
|
$
|
121,745
|
|
|
|
36.5
|
%
|
|
$
|
110,674
|
|
|
|
37.0
|
%
|
|
$
|
229,309
|
|
|
|
36.8
|
%
|
|
$
|
214,043
|
|
|
|
37.2
|
%
|
Food and beverage
|
|
|
141,053
|
|
|
|
42.2
|
%
|
|
|
128,441
|
|
|
|
43.0
|
%
|
|
|
273,992
|
|
|
|
44.0
|
%
|
|
|
254,610
|
|
|
|
44.3
|
%
|
Other hotel revenue
|
|
|
28,958
|
|
|
|
8.7
|
%
|
|
|
24,258
|
|
|
|
8.1
|
%
|
|
|
53,566
|
|
|
|
8.6
|
%
|
|
|
48,874
|
|
|
|
8.5
|
%
|
Entertainment
|
|
|
42,178
|
|
|
|
12.6
|
%
|
|
|
35,405
|
|
|
|
11.8
|
%
|
|
|
65,437
|
|
|
|
10.5
|
%
|
|
|
57,293
|
|
|
|
10.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues
|
|
|
333,934
|
|
|
|
100.0
|
%
|
|
|
298,778
|
|
|
|
100.0
|
%
|
|
|
622,304
|
|
|
|
100.0
|
%
|
|
|
574,820
|
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rooms
|
|
|
30,059
|
|
|
|
9.0
|
%
|
|
|
28,359
|
|
|
|
9.5
|
%
|
|
|
58,987
|
|
|
|
9.5
|
%
|
|
|
56,387
|
|
|
|
9.8
|
%
|
Food and beverage
|
|
|
72,394
|
|
|
|
21.7
|
%
|
|
|
68,285
|
|
|
|
22.9
|
%
|
|
|
144,372
|
|
|
|
23.2
|
%
|
|
|
137,442
|
|
|
|
23.9
|
%
|
Other hotel expenses
|
|
|
76,733
|
|
|
|
23.0
|
%
|
|
|
73,536
|
|
|
|
24.6
|
%
|
|
|
152,615
|
|
|
|
24.5
|
%
|
|
|
147,774
|
|
|
|
25.7
|
%
|
Hotel management fees, net
|
|
|
8,635
|
|
|
|
2.6
|
%
|
|
|
6,178
|
|
|
|
2.1
|
%
|
|
|
15,765
|
|
|
|
2.5
|
%
|
|
|
11,709
|
|
|
|
2.0
|
%
|
Entertainment
|
|
|
30,254
|
|
|
|
9.1
|
%
|
|
|
22,135
|
|
|
|
7.4
|
%
|
|
|
49,620
|
|
|
|
8.0
|
%
|
|
|
38,986
|
|
|
|
6.8
|
%
|
Corporate
|
|
|
7,640
|
|
|
|
2.3
|
%
|
|
|
7,468
|
|
|
|
2.5
|
%
|
|
|
15,969
|
|
|
|
2.6
|
%
|
|
|
14,877
|
|
|
|
2.6
|
%
|
Preopening costs
|
|
|
1,525
|
|
|
|
0.5
|
%
|
|
|
494
|
|
|
|
0.2
|
%
|
|
|
3,672
|
|
|
|
0.6
|
%
|
|
|
710
|
|
|
|
0.1
|
%
|
Depreciation and amortization:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hospitality
|
|
|
27,233
|
|
|
|
8.2
|
%
|
|
|
25,547
|
|
|
|
8.6
|
%
|
|
|
53,433
|
|
|
|
8.6
|
%
|
|
|
50,725
|
|
|
|
8.8
|
%
|
Entertainment
|
|
|
2,315
|
|
|
|
0.7
|
%
|
|
|
1,592
|
|
|
|
0.5
|
%
|
|
|
4,272
|
|
|
|
0.7
|
%
|
|
|
3,500
|
|
|
|
0.6
|
%
|
Corporate and Other
|
|
|
447
|
|
|
|
0.1
|
%
|
|
|
540
|
|
|
|
0.2
|
%
|
|
|
956
|
|
|
|
0.2
|
%
|
|
|
1,091
|
|
|
|
0.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total depreciation and amortization
|
|
|
29,995
|
|
|
|
9.0
|
%
|
|
|
27,679
|
|
|
|
9.3
|
%
|
|
|
58,661
|
|
|
|
9.4
|
%
|
|
|
55,316
|
|
|
|
9.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses
|
|
|
257,235
|
|
|
|
77.0
|
%
|
|
|
234,134
|
|
|
|
78.4
|
%
|
|
|
499,661
|
|
|
|
80.3
|
%
|
|
|
463,201
|
|
|
|
80.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING INCOME:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hospitality
|
|
|
76,702
|
|
|
|
26.3
|
%
|
|
|
61,468
|
|
|
|
23.3
|
%
|
|
|
131,695
|
|
|
|
23.6
|
%
|
|
|
113,490
|
|
|
|
21.9
|
%
|
Entertainment
|
|
|
9,609
|
|
|
|
22.8
|
%
|
|
|
11,678
|
|
|
|
33.0
|
%
|
|
|
11,545
|
|
|
|
17.6
|
%
|
|
|
14,807
|
|
|
|
25.8
|
%
|
Corporate and Other
|
|
|
(8,087
|
)
|
|
|
(A
|
)
|
|
|
(8,008
|
)
|
|
|
(A
|
)
|
|
|
(16,925
|
)
|
|
|
(A
|
)
|
|
|
(15,968
|
)
|
|
|
(A
|
)
|
Preopening costs
|
|
|
(1,525
|
)
|
|
|
(A
|
)
|
|
|
(494
|
)
|
|
|
(A
|
)
|
|
|
(3,672
|
)
|
|
|
(A
|
)
|
|
|
(710
|
)
|
|
|
(A
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating income
|
|
|
76,699
|
|
|
|
23.0
|
%
|
|
|
64,644
|
|
|
|
21.6
|
%
|
|
|
122,643
|
|
|
|
19.7
|
%
|
|
|
111,619
|
|
|
|
19.4
|
%
|
Interest expense
|
|
|
(19,625
|
)
|
|
|
(A
|
)
|
|
|
(17,155
|
)
|
|
|
(A
|
)
|
|
|
(36,354
|
)
|
|
|
(A
|
)
|
|
|
(33,019
|
)
|
|
|
(A
|
)
|
Interest income
|
|
|
2,766
|
|
|
|
(A
|
)
|
|
|
2,969
|
|
|
|
(A
|
)
|
|
|
5,519
|
|
|
|
(A
|
)
|
|
|
5,917
|
|
|
|
(A
|
)
|
Income (loss) from joint ventures
|
|
|
1,346
|
|
|
|
(A
|
)
|
|
|
(943
|
)
|
|
|
(A
|
)
|
|
|
(1,242
|
)
|
|
|
(A
|
)
|
|
|
(1,717
|
)
|
|
|
(A
|
)
|
Other gains and (losses), net
|
|
|
36
|
|
|
|
(A
|
)
|
|
|
(1,324
|
)
|
|
|
(A
|
)
|
|
|
204
|
|
|
|
(A
|
)
|
|
|
(1,396
|
)
|
|
|
(A
|
)
|
Provision for income taxes
|
|
|
(5,676
|
)
|
|
|
(A
|
)
|
|
|
(899
|
)
|
|
|
(A
|
)
|
|
|
(7,885
|
)
|
|
|
(A
|
)
|
|
|
(1,492
|
)
|
|
|
(A
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
55,546
|
|
|
|
(A
|
)
|
|
$
|
47,292
|
|
|
|
(A
|
)
|
|
$
|
82,885
|
|
|
|
(A
|
)
|
|
$
|
79,912
|
|
|
|
(A
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(A)
|
These amounts have not been shown as a percentage of revenue because they have no relationship to revenue.
|
29
Summary Financial Results
Results of Operations
The following table summarizes our
financial results for the three months and six months ended June 30, 2018 and 2017 (in thousands, except percentages and per share data):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
2018
|
|
|
2017
|
|
|
% Change
|
|
|
2018
|
|
|
2017
|
|
|
% Change
|
|
Total revenues
|
|
$
|
333,934
|
|
|
$
|
298,778
|
|
|
|
11.8
|
%
|
|
$
|
622,304
|
|
|
$
|
574,820
|
|
|
|
8.3
|
%
|
Total operating expenses
|
|
|
257,235
|
|
|
|
234,134
|
|
|
|
9.9
|
%
|
|
|
499,661
|
|
|
|
463,201
|
|
|
|
7.9
|
%
|
Operating income
|
|
|
76,699
|
|
|
|
64,644
|
|
|
|
18.6
|
%
|
|
|
122,643
|
|
|
|
111,619
|
|
|
|
9.9
|
%
|
Net income
|
|
|
55,546
|
|
|
|
47,292
|
|
|
|
17.5
|
%
|
|
|
82,885
|
|
|
|
79,912
|
|
|
|
3.7
|
%
|
Net income per share - fully diluted
|
|
|
1.08
|
|
|
|
0.92
|
|
|
|
17.4
|
%
|
|
|
1.61
|
|
|
|
1.56
|
|
|
|
3.2
|
%
|
Total Revenues
The
increase in our total revenues for the three months ended June 30, 2018, as compared to the same period in 2017, is attributable to increases in our Hospitality segment and Entertainment segment of $28.4 million and $6.8 million,
respectively, each as discussed more fully below. The increase in our total revenues for the six months ended June 30, 2018, as compared to the same period in 2017, is attributable to increases in our Hospitality segment and Entertainment
segment of $39.3 million and $8.1 million, respectively, each as discussed more fully below.
Total Operating Expenses
The increase in our total operating expenses for the three months ended June 30, 2018, as compared to the same period in 2017, is primarily the result of
increases in our Hospitality segment and Entertainment segment expenses of $11.5 million and $8.1 million, respectively, as well as an increase in depreciation and amortization expenses of $2.3 million, each as discussed more fully
below. The increase in our total operating expenses for the six months ended June 30, 2018, as compared to the same period in 2017, is primarily the result of increases in our Hospitality segment and Entertainment segment expenses of
$18.4 million and $10.6 million, respectively, as well as increases in depreciation and amortization expenses and preopening expenses of $3.3 million and $3.0 million, respectively, each as discussed more fully below.
Net Income
The increase in our net income to
$55.5 million for the three months ended June 30, 2018, as compared to $47.3 million for the same period in 2017, was due to the changes in our revenues and operating expenses reflected above and the following factors, each as
described more fully below:
|
|
|
A $4.8 million increase in the provision for income taxes in the 2018 period.
|
|
|
|
A $2.5 million increase in interest expense for the 2018 period.
|
|
|
|
Income from joint ventures of $1.3 million in the 2018 period, compared to a loss from joint ventures of
$0.9 million in the 2017 period.
|
30
The increase in our net income to $82.9 million for the six months ended June 30, 2018, as compared to
$79.9 million for the same period in 2017, was due to the changes in our revenues and operating expenses reflected above and the following factors, each as described more fully below:
|
|
|
A $6.4 million increase in the provision for income taxes in the 2018 period.
|
|
|
|
A $3.3 million increase in interest expense for the 2018 period.
|
Factors and Trends Contributing to Performance
The most
important factors and trends contributing to our performance during the three months and six months ended June 30, 2018 described herein were:
|
|
|
Increased occupancy (an increase of 8.6 and 6.3 points of occupancy, respectively), ADR (an increase of 7.5% and
7.4%, respectively) and
outside-the-room
spending (an increase of 16.8% and 12.6%, respectively) at Gaylord Opryland during the 2018 periods, as compared to the 2017
periods, each primarily due to increases in group business partially attributable to a prior year rooms renovation project. The increase in ADR was also influenced by an increase in transient rates.
|
|
|
|
Increased ADR (an increase of 2.1% and 2.7%, respectively) and
outside-the-room
spending (an increase of 10.0% and 7.3%, respectively) at Gaylord Texan during the 2018 periods, as compared to the 2017 periods, each primarily due to increases in group business partially
attributable to the recent rooms and meeting space expansion.
|
|
|
|
Increased ADR (an increase of 3.6% and 2.7%, respectively) at Gaylord Palms during the 2018 periods, as compared
to the 2017 periods, due primarily to an increase in transient business, as well an increase in
outside-the-room
spending (an increase of 4.4% and 6.3%, respectively),
due primarily to an increase in catering.
|
|
|
|
Increased ADR (an increase of 5.9% and 1.6%, respectively) and
outside-the-room
spending (an increase of 11.7% and 4.7%, respectively) at Gaylord National during the 2018 periods, as compared to the 2017 periods, each primarily due to increases in group business.
|
|
|
|
Increased revenue for our Entertainment segment during the 2018 periods, as compared to the 2017 periods (an
increase of 19.1% and 14.2%, respectively), due primarily to the opening of our flagship Ole Red location in Nashville in May 2018.
|
|
|
|
Increased Net Definite Group Room Nights Booked during the 2018 periods, as compared to the 2017 periods (an
increase of 62.0% and 21.3%, respectively).
|
31
Operating Results Detailed Segment Financial Information
Hospitality Segment
Total
Segment Results.
The following presents the financial results of our Hospitality segment for the three months and six months ended June 30, 2018 and 2017 (in thousands, except percentages and performance metrics):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
2018
|
|
|
2017
|
|
|
% Change
|
|
|
2018
|
|
|
2017
|
|
|
% Change
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rooms
|
|
$
|
121,745
|
|
|
$
|
110,674
|
|
|
|
10.0
|
%
|
|
$
|
229,309
|
|
|
$
|
214,043
|
|
|
|
7.1
|
%
|
Food and beverage
|
|
|
141,053
|
|
|
|
128,441
|
|
|
|
9.8
|
%
|
|
|
273,992
|
|
|
|
254,610
|
|
|
|
7.6
|
%
|
Other hotel revenue
|
|
|
28,958
|
|
|
|
24,258
|
|
|
|
19.4
|
%
|
|
|
53,566
|
|
|
|
48,874
|
|
|
|
9.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total hospitality revenue
|
|
|
291,756
|
|
|
|
263,373
|
|
|
|
10.8
|
%
|
|
|
556,867
|
|
|
|
517,527
|
|
|
|
7.6
|
%
|
Hospitality operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rooms
|
|
|
30,059
|
|
|
|
28,359
|
|
|
|
6.0
|
%
|
|
|
58,987
|
|
|
|
56,387
|
|
|
|
4.6
|
%
|
Food and beverage
|
|
|
72,394
|
|
|
|
68,285
|
|
|
|
6.0
|
%
|
|
|
144,372
|
|
|
|
137,442
|
|
|
|
5.0
|
%
|
Other hotel expenses
|
|
|
76,733
|
|
|
|
73,536
|
|
|
|
4.3
|
%
|
|
|
152,615
|
|
|
|
147,774
|
|
|
|
3.3
|
%
|
Management fees, net
|
|
|
8,635
|
|
|
|
6,178
|
|
|
|
39.8
|
%
|
|
|
15,765
|
|
|
|
11,709
|
|
|
|
34.6
|
%
|
Depreciation and amortization
|
|
|
27,233
|
|
|
|
25,547
|
|
|
|
6.6
|
%
|
|
|
53,433
|
|
|
|
50,725
|
|
|
|
5.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Hospitality operating expenses
|
|
|
215,054
|
|
|
|
201,905
|
|
|
|
6.5
|
%
|
|
|
425,172
|
|
|
|
404,037
|
|
|
|
5.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hospitality operating income (1)
|
|
$
|
76,702
|
|
|
$
|
61,468
|
|
|
|
24.8
|
%
|
|
$
|
131,695
|
|
|
$
|
113,490
|
|
|
|
16.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hospitality performance metrics:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Occupancy
|
|
|
79.0
|
%
|
|
|
76.7
|
%
|
|
|
3.0
|
%
|
|
|
76.4
|
%
|
|
|
74.7
|
%
|
|
|
2.3
|
%
|
ADR
|
|
$
|
200.16
|
|
|
$
|
191.00
|
|
|
|
4.8
|
%
|
|
$
|
197.72
|
|
|
$
|
190.68
|
|
|
|
3.7
|
%
|
RevPAR (2)
|
|
$
|
158.13
|
|
|
$
|
146.42
|
|
|
|
8.0
|
%
|
|
$
|
151.11
|
|
|
$
|
142.37
|
|
|
|
6.1
|
%
|
Total RevPAR (3)
|
|
$
|
378.94
|
|
|
$
|
348.45
|
|
|
|
8.8
|
%
|
|
$
|
366.97
|
|
|
$
|
344.24
|
|
|
|
6.6
|
%
|
Net Definite Group Room Nights Booked
|
|
|
500,653
|
|
|
|
309,065
|
|
|
|
62.0
|
%
|
|
|
845,293
|
|
|
|
696,789
|
|
|
|
21.3
|
%
|
(1)
|
Hospitality segment operating income does not include preopening costs of $0.6 million and
$0.2 million in the three months ended June 30, 2018 and 2017, respectively, and $2.0 million and $0.2 million in the six months ended June 30, 2018 and 2017, respectively. See discussion of preopening costs below.
|
(2)
|
We calculate Hospitality RevPAR by dividing room revenue by room nights available to guests for the period.
Hospitality RevPAR is not comparable to similarly titled measures such as revenues.
|
(3)
|
We calculate Hospitality Total RevPAR by dividing the sum of room, food and beverage, and other ancillary
services revenue (which equals Hospitality segment revenue) by room nights available to guests for the period. Hospitality Total RevPAR is not comparable to similarly titled measures such as revenues.
|
The increase in total Hospitality segment revenue in the three months ended June 30, 2018, as compared to the same period in 2017, is primarily due to
increases of $14.7 million, $5.8 million, $5.7 million and $2.1 million at Gaylord Opryland, Gaylord Texan, Gaylord National and Gaylord Palms, respectively. The increase in total Hospitality segment revenue in the six months
ended June 30, 2018, as compared to the same period in 2017, is primarily due to increases of $22.4 million, $7.5 million, $5.8 million and $4.0 million at Gaylord Opryland, Gaylord Texan, Gaylord Palms and Gaylord National,
respectively. See below for further discussion.
Total Hospitality segment revenues in the three months and six months ended June 30, 2018 include
$3.9 million and $5.1 million, respectively, in attrition and cancellation fee collections, an increase of $2.4 million and $0.8 million, respectively, from the 2017 periods.
32
The percentage of group versus transient business based on rooms sold for our Hospitality segment for the periods
presented was approximately as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
Group
|
|
|
75
|
%
|
|
|
75
|
%
|
|
|
77
|
%
|
|
|
77
|
%
|
Transient
|
|
|
25
|
%
|
|
|
25
|
%
|
|
|
23
|
%
|
|
|
23
|
%
|
Rooms operating expenses increased in the three months and six months ended June 30, 2018, as compared to the same
periods in 2017, due primarily to increases at Gaylord Opryland and Gaylord National, as described below.
Food and beverage operating expenses increased
in the three months ended June 30, 2018, as compared to the same period in 2017, primarily due to increases at Gaylord National and Gaylord Opryland, as described below. Food and beverage operating expenses increased in the six months ended
June 30, 2018, as compared to the same period in 2017, primarily due to increases at Gaylord Opryland, Gaylord National and Gaylord Texan, as described below.
Other hotel expenses for the three months and six months ended June 30, 2018 and 2017 consist of the following (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
2018
|
|
|
2017
|
|
|
% Change
|
|
|
2018
|
|
|
2017
|
|
|
% Change
|
|
Administrative employment costs
|
|
$
|
27,963
|
|
|
$
|
26,542
|
|
|
|
5.4
|
%
|
|
$
|
56,395
|
|
|
$
|
53,905
|
|
|
|
4.6
|
%
|
Utilities
|
|
|
6,915
|
|
|
|
6,968
|
|
|
|
-0.8
|
%
|
|
|
13,173
|
|
|
|
13,328
|
|
|
|
-1.2
|
%
|
Property taxes
|
|
|
8,369
|
|
|
|
7,643
|
|
|
|
9.5
|
%
|
|
|
16,670
|
|
|
|
16,806
|
|
|
|
-0.8
|
%
|
Other
|
|
|
33,486
|
|
|
|
32,383
|
|
|
|
3.4
|
%
|
|
|
66,377
|
|
|
|
63,735
|
|
|
|
4.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other hotel expenses
|
|
$
|
76,733
|
|
|
$
|
73,536
|
|
|
|
4.3
|
%
|
|
$
|
152,615
|
|
|
$
|
147,774
|
|
|
|
3.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Administrative employment costs include salaries and benefits for hotel administrative functions, including, among others,
senior management, accounting, human resources, sales, conference services, engineering and security. Administrative employment costs increased during the three months and six months ended June 30, 2018, as compared to the same periods in 2017.
The three-month 2018 increase is primarily due to increases at Gaylord Texan and Gaylord Opryland, and the
six-month
2018 increase is primarily due to increases at Gaylord Texan and Gaylord National. Utility
costs decreased slightly during the three months and six months ended June 30, 2018, as compared to the same periods in 2017. Property taxes increased during the three months ended June 30, 2018, as compared to the 2017 period, primarily
due to an increase at Gaylord Opryland due to the prior year period including an accrual reduction for a decreased tax rate and an increase at Gaylord Texan related to the propertys recent expansion. Property taxes decreased slightly during
the six months ended June 30, 2018, as compared to the same period in 2017, as the increase at Gaylord Texan was offset by a decrease at Gaylord National due to prior period tax settlements. Other expenses, which include supplies, advertising,
maintenance costs and consulting costs, increased during the three months and six months ended June 30, 2018, as compared to the same periods in 2017, primarily as a result of various increases at Gaylord Opryland, Gaylord National and Gaylord
Palms, partially offset by various decreases at Gaylord Texan.
33
Each of our management agreements with Marriott requires us to pay Marriott a base management fee of
approximately 2% of gross revenues from the applicable property for each fiscal year or portion thereof. Additionally, an incentive management fee is based on the profitability of our Gaylord Hotels properties calculated on a pooled basis. In the
three months ended June 30, 2018 and 2017, we incurred $5.9 million and $5.4 million, respectively, and in the six months ended June 30, 2018 and 2017, we incurred $11.2 million and $10.5 million, respectively, related
to base management fees for our Hospitality segment. In the three months ended June 30, 2018 and 2017, we also incurred $3.5 million and $1.6 million, respectively, and in the six months ended June 30, 2018 and 2017, we incurred
$6.0 million and $2.8 million, respectively, related to incentive management fees for our Hospitality segment. Management fees are presented throughout this Quarterly Report on Form
10-Q
net of the
amortization of the $190.0 million in deferred management rights proceeds discussed in Note 8 to the accompanying condensed consolidated financial statements included herein.
Total Hospitality segment depreciation and amortization expense increased in the three months and six months ended June 30, 2018, as compared to the same
periods in 2017, primarily due to increases at Gaylord Texan and Gaylord Opryland, as described below.
Property-Level Results.
The following
presents the property-level financial results of our Hospitality segment for the three months and six months ended June 30, 2018 and 2017.
Gaylord Opryland Results.
The results of Gaylord Opryland for the three months and six months ended June 30, 2018 and 2017 are as
follows (in thousands, except percentages and performance metrics):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
2018
|
|
|
2017
|
|
|
% Change
|
|
|
2018
|
|
|
2017
|
|
|
% Change
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rooms
|
|
$
|
41,406
|
|
|
$
|
34,447
|
|
|
|
20.2
|
%
|
|
$
|
77,164
|
|
|
$
|
65,947
|
|
|
|
17.0
|
%
|
Food and beverage
|
|
|
43,155
|
|
|
|
36,916
|
|
|
|
16.9
|
%
|
|
|
81,151
|
|
|
|
71,672
|
|
|
|
13.2
|
%
|
Other hotel revenue
|
|
|
10,354
|
|
|
|
8,897
|
|
|
|
16.4
|
%
|
|
|
19,345
|
|
|
|
17,603
|
|
|
|
9.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue
|
|
|
94,915
|
|
|
|
80,260
|
|
|
|
18.3
|
%
|
|
|
177,660
|
|
|
|
155,222
|
|
|
|
14.5
|
%
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rooms
|
|
|
9,288
|
|
|
|
8,299
|
|
|
|
11.9
|
%
|
|
|
17,971
|
|
|
|
16,246
|
|
|
|
10.6
|
%
|
Food and beverage
|
|
|
20,647
|
|
|
|
18,711
|
|
|
|
10.3
|
%
|
|
|
40,885
|
|
|
|
37,289
|
|
|
|
9.6
|
%
|
Other hotel expenses
|
|
|
23,878
|
|
|
|
22,103
|
|
|
|
8.0
|
%
|
|
|
46,464
|
|
|
|
45,160
|
|
|
|
2.9
|
%
|
Management fees, net
|
|
|
3,304
|
|
|
|
2,144
|
|
|
|
54.1
|
%
|
|
|
5,990
|
|
|
|
3,950
|
|
|
|
51.6
|
%
|
Depreciation and amortization
|
|
|
8,859
|
|
|
|
8,373
|
|
|
|
5.8
|
%
|
|
|
17,537
|
|
|
|
16,470
|
|
|
|
6.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses
|
|
|
65,976
|
|
|
|
59,630
|
|
|
|
10.6
|
%
|
|
|
128,847
|
|
|
|
119,115
|
|
|
|
8.2
|
%
|
Performance metrics:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Occupancy
|
|
|
81.4
|
%
|
|
|
72.8
|
%
|
|
|
11.8
|
%
|
|
|
76.9
|
%
|
|
|
70.6
|
%
|
|
|
8.9
|
%
|
ADR
|
|
$
|
193.54
|
|
|
$
|
180.11
|
|
|
|
7.5
|
%
|
|
$
|
192.07
|
|
|
$
|
178.76
|
|
|
|
7.4
|
%
|
RevPAR
|
|
$
|
157.55
|
|
|
$
|
131.07
|
|
|
|
20.2
|
%
|
|
$
|
147.62
|
|
|
$
|
126.16
|
|
|
|
17.0
|
%
|
Total RevPAR
|
|
$
|
361.16
|
|
|
$
|
305.40
|
|
|
|
18.3
|
%
|
|
$
|
339.87
|
|
|
$
|
296.95
|
|
|
|
14.5
|
%
|
Rooms revenue and RevPAR increased at Gaylord Opryland during the three months and six months ended June 30, 2018, as
compared to the same periods in 2017, as the result of increases in occupancy and ADR, due to increases in both group and transient room nights and rates. Rooms revenue and RevPAR were negatively impacted during the 2017 periods by a rooms
renovation project, which resulted in approximately 18,800 and 37,050 room nights out of service, respectively. The rooms renovation project was completed in September 2017. Rooms expenses increased during the 2018 periods, as compared to the 2017
periods, primarily due to increased variable costs associated with the increase in occupancy.
34
The increase in food and beverage revenue at Gaylord Opryland during the three months and six months ended
June 30, 2018, as compared to the same periods in 2017, was primarily due to increased catering revenue associated with the increased group business. Food and beverage expenses increased in the 2018 periods, as compared to the 2017 periods, due
to increased variable costs associated with the increase in revenue, partially offset by improved food, beverage, and labor margins.
Other hotel revenue
increased at Gaylord Opryland during the three months and six months ended June 30, 2018, as compared to the same periods in 2017, primarily due to an increase in ancillary revenue, such as parking and resort fees associated with the increase
in occupancy, as well as an increase in attrition and cancellation fee collections. Other hotel expenses increased in the 2018 periods, as compared to the 2017 periods, primarily due to increased sales and marketing expenses.
Depreciation and amortization increased at Gaylord Opryland during the three months and six months ended June 30, 2018, as compared to the same periods
in 2017, primarily as a result of recent rooms renovation projects that resulted in increased depreciable asset levels.
Gaylord Palms Results.
The
results of Gaylord Palms for the three months and six months ended June 30, 2018 and 2017 are as follows (in thousands, except percentages and performance metrics):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
2018
|
|
|
2017
|
|
|
% Change
|
|
|
2018
|
|
|
2017
|
|
|
% Change
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rooms
|
|
$
|
19,587
|
|
|
$
|
18,801
|
|
|
|
4.2
|
%
|
|
$
|
41,691
|
|
|
$
|
39,859
|
|
|
|
4.6
|
%
|
Food and beverage
|
|
|
25,383
|
|
|
|
24,808
|
|
|
|
2.3
|
%
|
|
|
55,649
|
|
|
|
53,305
|
|
|
|
4.4
|
%
|
Other hotel revenue
|
|
|
5,304
|
|
|
|
4,575
|
|
|
|
15.9
|
%
|
|
|
10,830
|
|
|
|
9,217
|
|
|
|
17.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue
|
|
|
50,274
|
|
|
|
48,184
|
|
|
|
4.3
|
%
|
|
|
108,170
|
|
|
|
102,381
|
|
|
|
5.7
|
%
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rooms
|
|
|
4,354
|
|
|
|
4,113
|
|
|
|
5.9
|
%
|
|
|
8,561
|
|
|
|
8,620
|
|
|
|
-0.7
|
%
|
Food and beverage
|
|
|
13,180
|
|
|
|
13,000
|
|
|
|
1.4
|
%
|
|
|
27,451
|
|
|
|
27,258
|
|
|
|
0.7
|
%
|
Other hotel expenses
|
|
|
16,064
|
|
|
|
15,767
|
|
|
|
1.9
|
%
|
|
|
32,910
|
|
|
|
32,062
|
|
|
|
2.6
|
%
|
Management fees, net
|
|
|
1,501
|
|
|
|
1,158
|
|
|
|
29.6
|
%
|
|
|
3,036
|
|
|
|
2,387
|
|
|
|
27.2
|
%
|
Depreciation and amortization
|
|
|
4,799
|
|
|
|
4,759
|
|
|
|
0.8
|
%
|
|
|
9,588
|
|
|
|
9,554
|
|
|
|
0.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses
|
|
|
39,898
|
|
|
|
38,797
|
|
|
|
2.8
|
%
|
|
|
81,546
|
|
|
|
79,881
|
|
|
|
2.1
|
%
|
Performance metrics:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Occupancy
|
|
|
80.8
|
%
|
|
|
80.3
|
%
|
|
|
0.6
|
%
|
|
|
81.5
|
%
|
|
|
80.1
|
%
|
|
|
1.7
|
%
|
ADR
|
|
$
|
188.15
|
|
|
$
|
181.68
|
|
|
|
3.6
|
%
|
|
$
|
199.48
|
|
|
$
|
194.21
|
|
|
|
2.7
|
%
|
RevPAR
|
|
$
|
152.01
|
|
|
$
|
145.91
|
|
|
|
4.2
|
%
|
|
$
|
162.67
|
|
|
$
|
155.52
|
|
|
|
4.6
|
%
|
Total RevPAR
|
|
$
|
390.16
|
|
|
$
|
373.94
|
|
|
|
4.3
|
%
|
|
$
|
422.05
|
|
|
$
|
399.47
|
|
|
|
5.7
|
%
|
Rooms revenue and RevPAR increased at Gaylord Palms during the three months and six months ended June 30, 2018, as
compared to the same periods in 2017, due to an increase in both occupancy and ADR for transient business. Rooms expenses increased during the three-month 2018 period and decreased during the
six-month
2018
period, as compared to the 2017 periods, as the increase in variable costs associated with the increase in occupancy was offset by decreased commission costs and improved labor margins during the six-month 2018 period.
Food and beverage revenue increased at Gaylord Palms during the three months and six months ended June 30, 2018, as compared to the same periods in 2017,
due primarily to increased catering revenue. Food and beverage expenses increased slightly in the 2018 periods, as compared to the 2017 periods, as the increase in variable costs associated with the increase in revenue was partially offset by
improved labor margins and decreased food costs.
35
Other hotel revenue at Gaylord Palms increased during the three months and six months ended June 30, 2018,
as compared to the same periods in 2017, primarily due to an increase in attrition and cancellation fee collections, as well as an increase in ancillary revenue, such as parking and resort fees associated with the increase in occupancy. The
six-month
2018 period increase was also impacted by increased holiday programming revenue that continued into January 2018. Other hotel expenses increased slightly in the three-month 2018 period, as compared to the
2017 period, and increased during the
six-month
2018 period, as compared to the 2017 period, primarily as a result of expenses associated with the holiday programming that continued into January 2018.
Depreciation and amortization were stable at Gaylord Palms during the three months and six months ended June 30, 2018, as compared to the same periods in
2017.
Gaylord Texan Results.
The results of Gaylord Texan for the three months and six months ended June 30, 2018 and 2017 are as follows (in
thousands, except percentages and performance metrics):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
2018
|
|
|
2017
|
|
|
% Change
|
|
|
2018
|
|
|
2017
|
|
|
% Change
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rooms
|
|
$
|
21,552
|
|
|
$
|
19,067
|
|
|
|
13.0
|
%
|
|
$
|
41,832
|
|
|
$
|
39,504
|
|
|
|
5.9
|
%
|
Food and beverage
|
|
|
30,403
|
|
|
|
29,047
|
|
|
|
4.7
|
%
|
|
|
63,572
|
|
|
|
59,613
|
|
|
|
6.6
|
%
|
Other hotel revenue
|
|
|
6,656
|
|
|
|
4,658
|
|
|
|
42.9
|
%
|
|
|
11,564
|
|
|
|
10,400
|
|
|
|
11.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue
|
|
|
58,611
|
|
|
|
52,772
|
|
|
|
11.1
|
%
|
|
|
116,968
|
|
|
|
109,517
|
|
|
|
6.8
|
%
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rooms
|
|
|
4,425
|
|
|
|
4,182
|
|
|
|
5.8
|
%
|
|
|
8,923
|
|
|
|
8,580
|
|
|
|
4.0
|
%
|
Food and beverage
|
|
|
15,052
|
|
|
|
14,701
|
|
|
|
2.4
|
%
|
|
|
31,302
|
|
|
|
30,010
|
|
|
|
4.3
|
%
|
Other hotel expenses
|
|
|
15,562
|
|
|
|
14,874
|
|
|
|
4.6
|
%
|
|
|
30,858
|
|
|
|
29,673
|
|
|
|
4.0
|
%
|
Management fees, net
|
|
|
2,074
|
|
|
|
1,244
|
|
|
|
66.7
|
%
|
|
|
3,773
|
|
|
|
2,483
|
|
|
|
52.0
|
%
|
Depreciation and amortization
|
|
|
6,001
|
|
|
|
5,140
|
|
|
|
16.8
|
%
|
|
|
11,168
|
|
|
|
10,250
|
|
|
|
9.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses
|
|
|
43,114
|
|
|
|
40,141
|
|
|
|
7.4
|
%
|
|
|
86,024
|
|
|
|
80,996
|
|
|
|
6.2
|
%
|
Performance metrics:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Occupancy
|
|
|
73.0
|
%
|
|
|
72.7
|
%
|
|
|
0.4
|
%
|
|
|
74.6
|
%
|
|
|
76.1
|
%
|
|
|
-2.0
|
%
|
ADR
|
|
$
|
194.82
|
|
|
$
|
190.73
|
|
|
|
2.1
|
%
|
|
$
|
194.87
|
|
|
$
|
189.76
|
|
|
|
2.7
|
%
|
RevPAR
|
|
$
|
142.18
|
|
|
$
|
138.66
|
|
|
|
2.5
|
%
|
|
$
|
145.47
|
|
|
$
|
144.44
|
|
|
|
0.7
|
%
|
Total RevPAR
|
|
$
|
386.67
|
|
|
$
|
383.79
|
|
|
|
0.8
|
%
|
|
$
|
406.75
|
|
|
$
|
400.44
|
|
|
|
1.6
|
%
|
Rooms revenue and RevPAR increased at Gaylord Texan during the three months and six months ended June 30, 2018, as
compared to the same periods in 2017, due primarily to an increase in ADR for both groups and transient business. The 2018 periods were also positively impacted by additional room availability from the recently completed rooms expansion. Rooms
expenses increased during the 2018 periods, as compared to the 2017 periods, primarily due an increase in group commissions.
Food and beverage revenue
increased at Gaylord Texan during the three months and six months ended June 30, 2018, as compared to the same periods in 2017, due to an increase in catering revenue. Food and beverage expenses increased in the 2018 periods, as compared to the
2017 periods, primarily due to the increase in variable costs associated with the increase in revenue, partially offset by decreased food costs.
Other
hotel revenue at Gaylord Texan increased during the three months and six months ended June 30, 2018, as compared to the same periods in 2017, primarily as a result of an increase in attrition and cancellation fee collections. Other hotel
expenses increased in the 2018 periods, as compared to the 2017 periods, due primarily to increased property tax and marketing expenses associated with the recent rooms and meeting space expansion.
36
Depreciation and amortization increased at Gaylord Texan during the three months and six months ended
June 30, 2018, as compared to the 2017 periods, primarily as a result of the recent rooms and meeting space expansion that resulted in increased depreciable asset levels.
Gaylord National Results.
The results of Gaylord National for the three months and six months ended June 30, 2018 and 2017 are as follows (in
thousands, except percentages and performance metrics):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
2018
|
|
|
2017
|
|
|
% Change
|
|
|
2018
|
|
|
2017
|
|
|
% Change
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rooms
|
|
$
|
32,415
|
|
|
$
|
31,680
|
|
|
|
2.3
|
%
|
|
$
|
57,608
|
|
|
$
|
57,356
|
|
|
|
0.4
|
%
|
Food and beverage
|
|
|
40,746
|
|
|
|
36,281
|
|
|
|
12.3
|
%
|
|
|
71,171
|
|
|
|
67,599
|
|
|
|
5.3
|
%
|
Other hotel revenue
|
|
|
6,526
|
|
|
|
6,034
|
|
|
|
8.2
|
%
|
|
|
11,664
|
|
|
|
11,497
|
|
|
|
1.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue
|
|
|
79,687
|
|
|
|
73,995
|
|
|
|
7.7
|
%
|
|
|
140,443
|
|
|
|
136,452
|
|
|
|
2.9
|
%
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rooms
|
|
|
10,468
|
|
|
|
10,309
|
|
|
|
1.5
|
%
|
|
|
20,676
|
|
|
|
20,181
|
|
|
|
2.5
|
%
|
Food and beverage
|
|
|
22,468
|
|
|
|
20,896
|
|
|
|
7.5
|
%
|
|
|
42,810
|
|
|
|
41,073
|
|
|
|
4.2
|
%
|
Other hotel expenses
|
|
|
18,970
|
|
|
|
18,597
|
|
|
|
2.0
|
%
|
|
|
37,992
|
|
|
|
36,696
|
|
|
|
3.5
|
%
|
Management fees, net
|
|
|
1,368
|
|
|
|
1,255
|
|
|
|
9.0
|
%
|
|
|
2,363
|
|
|
|
2,284
|
|
|
|
3.5
|
%
|
Depreciation and amortization
|
|
|
6,884
|
|
|
|
6,613
|
|
|
|
4.1
|
%
|
|
|
13,756
|
|
|
|
13,129
|
|
|
|
4.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses
|
|
|
60,158
|
|
|
|
57,670
|
|
|
|
4.3
|
%
|
|
|
117,597
|
|
|
|
113,363
|
|
|
|
3.7
|
%
|
Performance metrics:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Occupancy
|
|
|
78.6
|
%
|
|
|
81.3
|
%
|
|
|
-3.3
|
%
|
|
|
74.7
|
%
|
|
|
75.5
|
%
|
|
|
-1.1
|
%
|
ADR
|
|
$
|
227.17
|
|
|
$
|
214.42
|
|
|
|
5.9
|
%
|
|
$
|
213.54
|
|
|
$
|
210.19
|
|
|
|
1.6
|
%
|
RevPAR
|
|
$
|
178.46
|
|
|
$
|
174.41
|
|
|
|
2.3
|
%
|
|
$
|
159.46
|
|
|
$
|
158.76
|
|
|
|
0.4
|
%
|
Total RevPAR
|
|
$
|
438.72
|
|
|
$
|
407.38
|
|
|
|
7.7
|
%
|
|
$
|
388.74
|
|
|
$
|
377.69
|
|
|
|
2.9
|
%
|
Rooms revenue and RevPAR increased at Gaylord National during the three months and six months ended June 30, 2018, as
compared to the same periods in 2017, due primarily to an increase in ADR for group business. Rooms expenses increased at Gaylord National during the 2018 periods, as compared to the 2017 periods, primarily due to increased labor costs.
Food and beverage revenue increased at Gaylord National during the three months and six months ended June 30, 2018, as compared to the same periods in
2017, primarily as a result of an increase in banquets. Food and beverage expenses increased in the 2018 periods, as compared to the 2017 periods, as a result of increased variable costs associated with the increase in revenue.
Other hotel revenue increased during the three months and six months ended June 30, 2018, as compared to the same periods in 2017, primarily due to an
increase in attrition and cancellation fee collections. Other hotel expenses increased in the 2018 periods, as compared to the 2017 periods, due to an increase in sales and marketing expenses, partially offset by a decrease in property taxes due to
prior period tax settlements.
Depreciation and amortization at Gaylord National increased during the three months and six months ended June 30,
2018, as compared to the same periods in 2017, primarily due to the completion of a new riverfront ballroom in 2017, and the resulting increase in depreciable asset levels.
37
Entertainment Segment
Total Segment Results.
The following presents the financial results of our Entertainment segment for the three months and six months ended June 30,
2018 and 2017 (in thousands, except percentages):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
2018
|
|
|
2017
|
|
|
% Change
|
|
|
2018
|
|
|
2017
|
|
|
% Change
|
|
Revenues
|
|
$
|
42,178
|
|
|
$
|
35,405
|
|
|
|
19.1
|
%
|
|
$
|
65,437
|
|
|
$
|
57,293
|
|
|
|
14.2
|
%
|
Operating expenses
|
|
|
30,254
|
|
|
|
22,135
|
|
|
|
36.7
|
%
|
|
|
49,620
|
|
|
|
38,986
|
|
|
|
27.3
|
%
|
Depreciation and amortization
|
|
|
2,315
|
|
|
|
1,592
|
|
|
|
45.4
|
%
|
|
|
4,272
|
|
|
|
3,500
|
|
|
|
22.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (1)
|
|
$
|
9,609
|
|
|
$
|
11,678
|
|
|
|
-17.7
|
%
|
|
$
|
11,545
|
|
|
$
|
14,807
|
|
|
|
-22.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Entertainment segment operating income does not include preopening costs of $1.0 million and
$0.3 million in the three months ended June 30, 2018 and 2017, respectively, and $1.6 million and $0.5 million in the six months ended June 30, 2018 and 2017, respectively. See discussion of preopening costs below.
|
Entertainment segment revenue increased during the three months and six months ended June 30, 2018, as compared to the same
periods in 2017, primarily due to the opening of our flagship Ole Red location in Nashville in May 2018.
Entertainment operating expenses increased
during the three months and six months ended June 30, 2018, as compared to the same periods in 2017, primarily as a result of increased compensation and consulting costs, as well as increased variable costs associated with the increase in
revenue.
Entertainment depreciation expense increased in the three months and six months ended June 30, 2018, as compared to the same periods in
2017, primarily as a result of the opening of Ole Red Nashville that resulted in increased depreciable asset levels.
Corporate and Other Segment
Total Segment Results.
The following presents the financial results of our Corporate and Other segment for the three months
and six months ended June 30, 2018 and 2017 (in thousands, except percentages):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
2018
|
|
|
2017
|
|
|
% Change
|
|
|
2018
|
|
|
2017
|
|
|
% Change
|
|
Operating expenses
|
|
$
|
7,640
|
|
|
$
|
7,468
|
|
|
|
2.3
|
%
|
|
$
|
15,969
|
|
|
$
|
14,877
|
|
|
|
7.3
|
%
|
Depreciation and amortization
|
|
|
447
|
|
|
|
540
|
|
|
|
-17.2
|
%
|
|
|
956
|
|
|
|
1,091
|
|
|
|
-12.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating loss
|
|
$
|
(8,087
|
)
|
|
$
|
(8,008
|
)
|
|
|
1.0
|
%
|
|
$
|
(16,925
|
)
|
|
$
|
(15,968
|
)
|
|
|
6.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate and Other operating expenses, which consist primarily of costs associated with senior management salaries and
benefits, legal, human resources, accounting, pension, information technology and other administrative costs, increased in the three months and six months ended June 30, 2018, as compared to the same periods in 2017, primarily due to increased
administrative and employment costs associated with supporting our growth initiatives within our Hospitality and Entertainment segments.
38
Corporate and Other depreciation and amortization expense decreased in the three months and six months ended
June 30, 2018, as compared with the same periods in 2017.
Operating Results Preopening Costs
Preopening costs of $1.5 million and $3.7 million during the three months and six months ended June 30, 2018 primarily include costs associated
with an expansion of the guest rooms and convention space at Gaylord Texan, which opened in the second quarter of 2018, and costs associated with Ole Red Nashville, which opened in May 2018. Preopening costs of $0.5 million and
$0.7 million during the three months and six months ended June 30, 2017, respectively, include costs associated with a riverfront ballroom at Gaylord National, which opened in the second quarter of 2017, and costs associated with our
various Entertainment segment projects.
Non-Operating
Results Affecting Net Income
General
The following table summarizes the other factors
which affected our net income for the three months and six months ended June 30, 2018 and 2017 (in thousands, except percentages):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
2018
|
|
|
2017
|
|
|
% Change
|
|
|
2018
|
|
|
2017
|
|
|
% Change
|
|
Interest expense
|
|
$
|
(19,625
|
)
|
|
$
|
(17,155
|
)
|
|
|
-14.4
|
%
|
|
$
|
(36,354
|
)
|
|
$
|
(33,019
|
)
|
|
|
-10.1
|
%
|
Interest income
|
|
|
2,766
|
|
|
|
2,969
|
|
|
|
-6.8
|
%
|
|
|
5,519
|
|
|
|
5,917
|
|
|
|
-6.7
|
%
|
Income (loss) from joint ventures
|
|
|
1,346
|
|
|
|
(943
|
)
|
|
|
242.7
|
%
|
|
|
(1,242
|
)
|
|
|
(1,717
|
)
|
|
|
27.7
|
%
|
Other gains and (losses), net
|
|
|
36
|
|
|
|
(1,324
|
)
|
|
|
102.7
|
%
|
|
|
204
|
|
|
|
(1,396
|
)
|
|
|
114.6
|
%
|
Provision for income taxes
|
|
|
(5,676
|
)
|
|
|
(899
|
)
|
|
|
-531.4
|
%
|
|
|
(7,885
|
)
|
|
|
(1,492
|
)
|
|
|
-428.5
|
%
|
Interest Expense
Interest expense increased $2.5 million during the three months and increased $3.3 million in the six months ended June 30, 2018, as compared to
the same periods in 2017, due primarily to increased interest incurred in connection with our term loan A and increased borrowings under our term loan B, which were both refinanced in May 2017, and an increase of $1.0 million in interest
expense related to the
write-off
of deferred financing costs associated with our refinancing in each of the 2018 and 2017 periods. These increases were partially offset by increased capitalized interest in the
current periods.
Cash interest expense increased $2.8 million to $19.2 million in the three months and increased $4.8 million to
$37.1 million in the six months ended June 30, 2018, as compared to the same periods in 2017.
Non-cash
interest expense, which includes amortization of deferred financing costs and the
write-off
of deferred financing costs, offset by capitalized interest, decreased $0.3 million to $0.4 million in the three months and decreased $1.5 million to $(0.7) million in the six months ended
June 30, 2018, as compared to the same periods in 2017.
Our weighted average interest rate on our borrowings, excluding the write-off of deferred
financing costs and capitalized interest, was 4.8% and 4.4% for the three months ended June 30, 2018 and 2017, respectively, and 4.7% and 4.4% for the six months ended June 30, 2018 and 2017, respectively.
39
Interest Income
Interest income for the three months and six months ended June 30, 2018 and 2017 primarily includes amounts earned on the bonds that were received in
connection with the development of Gaylord National, which we hold as notes receivable. See Note 6 to the accompanying condensed consolidated financial statements for additional discussion of interest income on these bonds.
Income (Loss) from Joint Ventures
The income (loss) from
joint ventures for the three months and six months ended June 30, 2018 and 2017 primarily represents preopening expenses incurred by our Gaylord Rockies joint venture, which is anticipated to open in late 2018, as well as
pre-opening
expenses in the 2017 period, and losses incurred in the 2018 period, by our Opry City Stage joint venture in Times Square in New York City, which opened in December 2017. We acquired the remaining 50%
joint venture interest in Opry City Stage in the second quarter of 2018. In addition, the 2018 periods included a gain of $2.8 million recognized from the
re-measurement
of the
pre-existing
Opry City Stage equity method investment prior to consolidation. We expect the results of operations of Opry City Stage will negatively impact the Entertainment segment in the near term as we continue
to make investments to appropriately position this offering.
Other Gains and (Losses), net
Other gains and (losses), net for the three months and six months ended June 30, 2018 represents various miscellaneous items. Other gains and (losses),
net for the three months and six months ended June 30, 2017 primarily represents a loss on certain assets that were disposed of in our Entertainment and Corporate segments.
Provision for Income Taxes
As a REIT, we generally will
not be subject to federal corporate income taxes on ordinary taxable income and capital gains income from real estate investments that we distribute to our stockholders. We will continue to be required to pay federal and state corporate income taxes
on earnings of our TRSs.
For the three months ended June 30, 2018 and 2017, we recorded an income tax provision of $5.7 million and
$0.9 million, respectively. For the six months ended June 30, 2018 and 2017, we recorded an income tax provision of $7.9 million and $1.5 million, respectively. These results differ from the statutory rate primarily due to the
REIT dividends paid deduction in both periods and the change in valuation allowance required at the TRSs for the 2017 periods.
On December 22, 2017,
the Tax Cuts and Jobs Act (TCJA) was enacted and included a reduction to the U.S. federal corporate income tax rate from 35% to 21% for tax years beginning after December 31, 2017. We have not fully completed our accounting for the
income tax effects of the TCJA. As discussed in SEC Staff Accounting Bulletin No. 118, the accounting for the TCJA should be completed within one year from enactment. During the six months ended June 30, 2018, we have made no adjustments
to the provisional amounts recorded at December 31, 2017. Any adjustments to the provisional amounts recorded at December 31, 2017 will be reflected upon the completion of our accounting for the TCJA.
Liquidity and Capital Resources
Cash Flows
From Operating Activities
. Cash flow from operating activities is the principal source of cash used to fund our operating expenses, interest payments on debt, maintenance capital expenditures, and dividends to stockholders. During the six months
ended June 30, 2018, our net cash flows provided by operating activities were $131.7 million, primarily reflecting cash provided by our income before depreciation expense, amortization expense and other
non-cash
charges of approximately $157.3 million, partially offset by unfavorable changes in working capital of approximately $25.6 million. During the six months ended June 30, 2017, our net
cash flows provided by operating activities were $113.9 million, primarily reflecting cash provided by our income before
40
depreciation expense, amortization expense and other
non-cash
charges of approximately $141.8 million, partially offset by unfavorable changes in
working capital of approximately $27.9 million. The unfavorable changes in working capital in both periods primarily resulted from an increase in trade receivables due to a seasonal change in the timing of payments received from corporate group
customers at our Gaylord Hotels properties, as well as a decrease in accounts payable and accrued liabilities primarily attributable to the payment of liabilities associated with our Christmas-related and incentive compensation programs.
Cash Flows From Investing Activities.
During the six months ended June 30, 2018, our primary uses of funds for investing activities were purchases
of property and equipment, which totaled $95.4 million, and consisted primarily of construction of the new waterpark at Gaylord Opryland, the expansion of the guest rooms and convention space at Gaylord Texan, construction of Ole Red Nashville,
and ongoing maintenance capital expenditures for our existing properties.
During the six months ended June 30, 2017, our primary uses of funds for
investing activities were purchases of property and equipment, which totaled $79.5 million, and our investment of $16.3 million in the Gaylord Rockies joint venture. Purchases of property and equipment consisted primarily of the expansion
of the guest rooms and convention space at Gaylord Texan, the renovation of a portion of the guest rooms at Gaylord Opryland, a freestanding event ballroom and an expanded event space at Gaylord National, the commencement of construction of the new
waterpark at Gaylord Opryland, and ongoing maintenance capital expenditures for our existing properties.
Cash Flows From Financing Activities
. Our
cash flows from financing activities primarily reflect the incurrence of debt, the repayment of long-term debt and the payment of cash dividends. During the six months ended June 30, 2018, our net cash flows used in financing activities were
approximately $10.3 million, primarily reflecting the payment of $85.1 million in cash dividends, partially offset by $79.3 million in net borrowings under our credit facility.
During the six months ended June 30, 2017, our net cash flows used in financing activities were approximately $28.9 million, primarily reflecting
the repayment of $241.9 million under our refinanced revolving credit facility, the payment of $79.8 million in cash dividends and the payment of $12.2 million in deferred financing costs related to our refinanced credit facility.
These uses of cash were partially offset by $200.0 million in borrowings under our new term loan A and $108.8 million in net borrowings under our refinanced term loan B.
Liquidity
At June 30, 2018, we had
$61.8 million in unrestricted cash and $446.1 million available for borrowing under our revolving credit facility. During the six months ended June 30, 2018, we net borrowed $79.3 million under our credit facility, incurred
capital expenditures of $95.4 million and paid cash dividends of $85.1 million. These net outflows were offset by cash flows from operating activities discussed above, resulting in the increase in our cash balance from December 31,
2017 to June 30, 2018.
We currently plan to pay a quarterly cash dividend of $0.85 per share in October 2018 and January 2019, subject to
determinations as to the timing and amount by our board of directors. We anticipate investing in our operations during the remainder of 2018 by spending between $85 million and $120 million in capital expenditures, which primarily includes
ongoing maintenance capital of our current facilities and the construction of a luxury indoor/outdoor waterpark at Gaylord Opryland.
We believe that our
cash on hand and cash from operations will be adequate to fund our general short-term commitments, as well as: (i) normal operating expenses, (ii) interest expense on long-term debt obligations, (iii) capital lease and operating lease
obligations, and (iv) declared dividends. If our existing cash and cash from operations were inadequate to fund such items, as well as capital expenditures, we could draw on our credit facility, subject to the satisfaction of covenants in the
credit facility.
41
Our outstanding principal debt agreements, none of which mature prior to 2021, are described below. Based on
current projections for compliance under our financial covenants contained in these agreements, we do not foresee a maturity issue prior to their scheduled maturity date.
At June 30, 2018, we were in compliance with all covenants related to our outstanding debt.
Principal Debt Agreements
Credit Facility
. On
May 11, 2017, we entered into a Fifth Amended and Restated Credit Agreement (the Credit Agreement) among the Company, as a guarantor, the Operating Partnership, as borrower, certain other subsidiaries of the Company party thereto,
as guarantors, certain subsidiaries of the Company party thereto, as pledgors, the lenders party thereto and Wells Fargo Bank, N.A., as administrative agent, which amended and restated the Companys existing credit facility. In addition, on
May 23, 2017, we entered into an Amendment No. 1 (the Amendment No. 1) and on June 26, 2018, we entered into an Amendment No. 2 (the Amendment No. 2) to the Credit Agreement among the same
parties, as discussed below. As amended, our credit facility consists of a $700.0 million senior secured revolving credit facility (the Revolver), a $200.0 million senior secured term loan A (the Term Loan A), and a
$500.0 million senior secured term loan B (the Term Loan B), each as discussed below.
Each of the Revolver, Term Loan A and Term Loan B
is guaranteed by us, each of our four wholly-owned subsidiaries that own the Gaylord Hotels properties, and certain of our other subsidiaries. Each is secured by (i) a first mortgage lien on the real property of each of our Gaylord Hotels
properties, (ii) pledges of equity interests in our subsidiaries that own the Gaylord Hotels properties, (iii) our personal property and the personal property of the Operating Partnership and our guarantor subsidiaries and (iv) all
proceeds and products from our Gaylord Hotels properties. Advances are subject to a 55% borrowing base, based on the appraisal value of the Gaylord Hotels properties (reduced to 50% in the event one of the Gaylord Hotels properties is sold).
In addition, each of the Revolver, Term Loan A and Term Loan B contains certain covenants which, among other things, limit the incurrence of additional
indebtedness, investments, dividends, transactions with affiliates, asset sales, acquisitions, mergers and consolidations, liens and encumbrances and other matters customarily restricted in such agreements. The material financial covenants, ratios
or tests contained in the Credit Agreement are as follows (and are unchanged from the previous credit agreement):
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We must maintain a consolidated funded indebtedness to total asset value ratio as of the end of each calendar
quarter of not more than .65 to 1.0.
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We must maintain a consolidated tangible net worth (as defined in the Credit Agreement) of not less than
$175 million plus 75% of the proceeds received by us or any of our subsidiaries in connection with any equity issuance.
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We must maintain a consolidated fixed charge coverage ratio (as defined in the Credit Agreement) of not less than
1.50 to 1.00.
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We must maintain an implied debt service coverage ratio (the ratio of adjusted net operating income to monthly
principal and interest that would be required if the outstanding balance were amortized over 25 years at an assumed fixed rate) of not less than 1.60 to 1.00.
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If an event of default shall occur and be continuing under the Credit Agreement, the commitments under the Credit Agreement may be terminated and the
principal amount outstanding under the Credit Agreement, together with all accrued unpaid interest and other amounts owing in respect thereof, may be declared immediately due and payable.
42
$700 Million Revolving Credit Facility
. Pursuant to Amendment No. 1, we extended the maturity of the
Revolver to May 23, 2021, with two additional
six-month
extension options, at our election. Borrowings under the Revolver bear interest at an annual rate equal to, at our option, either (i) LIBOR
plus the applicable margin ranging from 1.55% to 2.40%, dependent upon our funded debt to total asset value ratio (as defined in the Credit Agreement) or (ii) a base rate as set in the Credit Agreement. At June 30, 2018, the interest rate
on the Revolver was LIBOR plus 1.55%. Principal is payable in full at maturity. No additional amounts were borrowed under the Revolver at closing.
At
June 30, 2018, $251.5 million of borrowings were outstanding under the Revolver, and the lending banks had issued $2.4 million of letters of credit under the Credit Agreement, which left $446.1 million of availability under the
Revolver (subject to the satisfaction of debt incurrence tests under the indentures governing our $350 million in aggregate principal amount of senior notes due 2021 (the $350 Million 5% Senior Notes) and $400 million in
aggregate principal amount of senior notes due 2023 (the $400 Million 5% Senior Notes), which we met at June 30, 2018).
$200 Million
Term Loan A Facility.
Amendment No. 1 also provides for the Term Loan A, which has a maturity date of May 23, 2022. Borrowings bear interest at an annual rate equal to, at our option, either (i) LIBOR plus the applicable margin
ranging from 1.50% to 2.35%, dependent upon our funded debt to total asset value ratio (as defined in the Credit Agreement) or (ii) a base rate as set in the Credit Agreement. At June 30, 2018, the interest rate on the Term Loan A was
LIBOR plus 1.50%. Amounts borrowed under the Term Loan A that are repaid or prepaid may not be reborrowed. At closing, we drew down on the Term Loan A in full and proceeds were used to pay down a portion of the Revolver.
$500 Million Term Loan B Facility.
In May 2017, as part of the Credit Agreement discussed above, we increased the capacity under our previous
$400 million term loan B to $500 million. The Term Loan B has a maturity date of May 11, 2024 and, prior to June 26, 2018, borrowings bore interest at an annual rate equal to, at our option, either (i) LIBOR plus 2.25% or
(ii) a base rate as set in the Credit Agreement. On June 26, 2018, we entered into Amendment No. 2 that reduces the applicable interest rate margins for borrowings under the Term Loan B to, at our option, either (i) LIBOR plus
2.00% or (ii) a base rate as set in the Credit Agreement. At June 30, 2018, the interest rate on the Term Loan B was LIBOR plus 2.00%. The Term Loan B amortizes in equal quarterly installments in aggregate annual amounts equal to 1.0% of
the original principal amount of $500.0 million, with the balance due at maturity. In addition, if for any fiscal year, there is Excess Cash Flow (as defined in the Credit Agreement), an additional principal amount is required. As a result of
Amendment No. 2, the commencement date for any Excess Cash Flow payments has been extended to December 31, 2019. Amounts borrowed under the Term Loan B that are repaid or prepaid may not be reborrowed. At closing of Amendment No. 1,
we drew down on the Term Loan B in full. Net proceeds, after the repayment of the original $400 million term loan B and certain transaction expenses payable at closing, were used to pay down a portion of the Revolver. Amendment No. 2 did
not change the maturity dates existing under the Credit Agreement or result in any increase or decrease in outstanding borrowings.
As a result of the
repricing of the Term Loan B in 2018, we wrote off $2.0 million of deferred financing costs during the three months and six months ended June 30, 2018, which is included in interest expense in the accompanying condensed consolidated
statement of operations. At June 30, 2018, $495.0 million in borrowings were outstanding under the Term Loan B.
$350 Million 5% Senior
Notes.
In 2013, the Operating Partnership and Finco completed the private placement of $350.0 million in aggregate principal amount of senior notes due 2021, which are guaranteed by the Company and its subsidiaries that guarantee the Credit
Agreement. The $350 Million 5% Senior Notes and guarantees were issued pursuant to an indenture by and among the issuing subsidiaries and the guarantors and U.S. Bank National Association as trustee. The $350 Million 5% Senior Notes have a maturity
date of April 15, 2021 and bear interest at 5% per annum, payable semi-annually in cash in arrears on April 15 and October 15 of each year. The $350
43
Million 5% Senior Notes are general unsecured and unsubordinated obligations of the issuing subsidiaries and rank equal in right of payment with such subsidiaries existing and future senior
unsecured indebtedness and senior in right of payment to future subordinated indebtedness, if any. The $350 Million 5% Senior Notes are effectively subordinated to the issuing subsidiaries secured indebtedness to the extent of the value of the
assets securing such indebtedness. The guarantees rank equally in right of payment with the applicable guarantors existing and future senior unsecured indebtedness and senior in right of payment to any future subordinated indebtedness of such
guarantor. The $350 Million 5% Senior Notes will be effectively subordinated to any secured indebtedness of any guarantor to the extent of the value of the assets securing such indebtedness and structurally subordinated to all indebtedness and other
obligations of the Operating Partnerships subsidiaries that do not guarantee the $350 Million 5% Senior Notes.
The $350 Million 5% Senior Notes are
redeemable, in whole or in part, at a redemption price expressed as a percentage of the principal amount thereof, which percentage is 101.25%, and 100.00% beginning on April 15 of 2018, and 2019, respectively, plus accrued and unpaid interest
thereon to, but not including, the redemption date.
In connection with the issuance of the $350 Million 5% Senior Notes, we completed a registered offer
to exchange the $350 Million 5% Senior Notes for registered notes with substantially identical terms as the $350 Million 5% Senior Notes in November 2013.
$400 Million 5% Senior Notes.
In 2015, the Operating Partnership and Finco completed the private placement of $400.0 million in aggregate
principal amount of senior notes due 2023. The $400 Million 5% Senior Notes are general unsecured senior obligations of the Companys issuing subsidiaries and are guaranteed by the Company and its subsidiaries that guarantee the Credit
Agreement. The $400 Million 5% Senior Notes and guarantees were issued pursuant to an indenture by and among the issuing subsidiaries and the guarantors and U.S. Bank National Association as trustee. The $400 Million 5% Senior Notes have a maturity
date of April 15, 2023 and bear interest at 5% per annum, payable semi-annually in cash in arrears on April 15 and October 15 of each year. The $400 Million 5% Senior Notes are general unsecured and unsubordinated obligations of
the issuing subsidiaries and rank equal in right of payment with such subsidiaries existing and future senior unsecured indebtedness, including the $350 Million 5% Senior Notes, and senior in right of payment to future subordinated
indebtedness, if any. The $400 Million 5% Senior Notes are effectively subordinated to the issuing subsidiaries secured indebtedness to the extent of the value of the assets securing such indebtedness. The guarantees rank equally in right of
payment with the applicable guarantors existing and future senior unsecured indebtedness and senior in right of payment to any future subordinated indebtedness of such guarantor. The $400 Million 5% Senior Notes are effectively subordinated to
any secured indebtedness of any guarantor to the extent of the value of the assets securing such indebtedness and structurally subordinated to all indebtedness and other obligations of the Operating Partnerships subsidiaries that do not
guarantee the $400 Million 5% Senior Notes.
The $400 Million 5% Senior Notes are redeemable, in whole or in part, at any time on or after April 15,
2018 at a redemption price expressed as a percentage of the principal amount thereof, which percentage is 103.75%, 102.50%, 101.25%, and 100.00% beginning on April 15 of 2018, 2019, 2020, and 2021, respectively, plus accrued and unpaid interest
thereon to, but not including, the redemption date.
In connection with the issuance of the $400 Million 5% Senior Notes, we completed a registered offer
to exchange the $400 Million 5% Senior Notes for registered notes with substantially identical terms as the $400 Million 5% Senior Notes in September 2015.
44
Additional Debt Limitations
. Pursuant to the terms of the management agreements and pooling agreement with
Marriott, we are subject to certain debt limitations described below.
The management agreements provide for the following limitations on indebtedness
encumbering a hotel:
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The aggregate principal balance of all mortgage and mezzanine debt encumbering the hotel shall be no greater than
75% of the fair market value of the hotel; and
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The ratio of (a) aggregate Operating Profit (as defined in the management agreement) in the 12 months prior
to the closing on the mortgage or mezzanine debt to (b) annual debt service for the hotel shall equal or exceed 1.2:1; but is subject to the pooling agreement described below.
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The pooled limitations on Secured Debt (as defined in the pooling agreement) are as follows:
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The aggregate principal balance of all mortgage and mezzanine debt on Pooled Hotels (as defined in the pooling
agreement), shall be no more than 75% of the fair market value of Pooled Hotels.
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The ratio of (a) aggregate Operating Profit (as defined in the pooling agreement) of Pooled Hotels in the 12
months prior to closing on any mortgage or mezzanine debt to (b) annual debt service for the Pooled Hotels, shall equal or exceed 1.2:1.
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Off-Balance
Sheet Arrangements
As described in Note 12 to our condensed consolidated financial statements included herein, we have invested in a joint venture that is building and owns
Gaylord Rockies. In connection with this investment, we agreed to provide guarantees of the hotels construction loan, including a principal repayment guaranty of up to $21 million of the total $500 million principal amount of the
construction loan previously obtained from a consortium of eight banks, with such amount reducing to $14 million and further reducing to $8.75 million upon Gaylord Rockies satisfaction of designated debt service coverage requirements
following completion and opening of the hotel. We have also provided a completion guarantee under the construction loan capped at our pro rata share of all costs necessary to complete the project within the time specified in the senior loan
documents. Further, we have agreed to a guaranty capped at our pro rata share of the joint ventures obligations under the construction loan prior to the hotels opening related to interest accruing under the construction loan and the
operating expenses of the property (estimated pro rata share of interest prior to the hotel opening is $9.8 million). In addition to guaranties related to the construction loan, we agreed to provide a guaranty of the mezzanine debt related to the
hotel including a payment guaranty capped at $8.75 million for which we are only liable in the event there is a casualty or condemnation event at the hotel and the construction lenders elect to apply those proceeds to the construction loan
balance and release the construction loan guaranties and liens. The guaranty related to the mezzanine debt also includes an uncapped completion guaranty and an uncapped guaranty of the joint ventures obligations under the mezzanine loan prior
to the hotels opening related to interest accruing under the mezzanine loan and the operating expenses of the property to the extent not already satisfied by the parties under the guaranties related to the construction loan. As of
June 30, 2018, we have not recorded any liability in the condensed consolidated balance sheet associated with these guarantees.
In addition, we
enter into commitments under letters of credit, primarily for the purpose of securing our deductible obligations with our insurers, and lending banks under our Credit Agreement had issued $2.4 million of letters of credit at June 30, 2018.
Except as set forth in these paragraphs, we do not have any
off-balance
sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial
condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
45
Commitments and Contractual Obligations
The following table summarizes our significant contractual obligations at June 30, 2018, including long-term debt and operating and capital lease
commitments (amounts in thousands):
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Payment due by Period
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Total amounts
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Less than
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More than
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Contractual obligations
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committed
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1 year
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1-3
years
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3-5
years
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5 years
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Long-term debt (1)
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$
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1,696,500
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$
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5,000
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$
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611,500
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$
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610,000
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$
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470,000
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Capital leases
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628
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21
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44
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48
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515
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Operating leases (2)
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675,286
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7,458
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15,684
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16,528
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635,616
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Construction commitments (3)
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31,031
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31,031
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Total contractual obligations
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$
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2,403,445
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$
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43,510
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$
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627,228
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$
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626,576
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$
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1,106,131
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(1)
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Long-term debt commitments do not include approximately $317.6 million in interest payments projected to
be due in future years (less than 1 year $74.3 million;
1-3
years $143.3 million;
3-5
years $81.1 million; more than 5 years
$18.9 million) based on the stated interest rates on our fixed-rate debt and the rates in effect at June 30, 2018 for our variable-rate debt. Variable rates, as well as outstanding principal balances, could change in future periods. See
Principal Debt Agreements above for a discussion of our outstanding long-term debt. See Supplemental Cash Flow Information in Note 1 to the consolidated financial statements included in our Annual Report on Form
10-K
for the year ended December 31, 2017 for a discussion of the interest we paid during the fiscal years 2017, 2016 and 2015.
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(2)
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Total operating lease commitments of $675.3 million includes the
75-year
operating lease agreement we entered into during 1999 for 65.3 acres of land located in Osceola County, Florida where Gaylord Palms is located, which we may extend until January 2101.
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(3)
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With respect to our properties that are operated under management agreements with Marriott, we are obligated to
maintain an FF&E reserve account for future planned and emergency-related capital expenditures at these properties. The amount funded into each of these reserve accounts is determined pursuant to the management agreements and is generally 5.0%
of the respective propertys total annual revenue. At June 30, 2018, $31.0 million was held in FF&E reserve accounts for future capital expenditures at our properties. According to the terms of each management agreement with
Marriott, the reserve funds are to be held by Marriott in a restricted cash account. Although it is not required that such funds be expended in a given year, each management agreement provides any excess funds will carry over for use in future
years.
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The expected cash flows under our defined benefit pension plan, our
non-qualified
retirement plan, our
non-qualified
contributory deferred compensation plan and our defined benefit postretirement health care and life insurance plan are estimated based upon the best information currently
available, but are not driven by contractual terms. Therefore, these obligations have been excluded from the contractual obligations table above. See Note 8 and Note 9 to the consolidated financial statements included in our Annual Report on Form
10-K
for the year ended December 31, 2017 for further discussion related to these obligations.
Critical
Accounting Policies and Estimates
We prepare our condensed consolidated financial statements in conformity with accounting principles generally
accepted in the United States. Certain of our accounting policies, including those related to revenue recognition, impairment of long-lived and other assets, stock-based compensation, depreciation and amortization, income taxes, pension and
postretirement benefits other than pension plans, and legal contingencies, require that we apply significant judgment in defining the appropriate assumptions for calculating financial estimates. By their nature, these judgments are subject to an
inherent degree of uncertainty. Our judgments are based on our historical
46
experience, our observance of trends in the industry, and information available from other outside sources, as appropriate. There can be no assurance that actual results will not differ from our
estimates. For a discussion of our critical accounting policies and estimates, please refer to Item 7, Managements Discussion and Analysis of Financial Condition and Results of Operations and Notes to Consolidated Financial
Statements presented in our Annual Report on Form
10-K
for the year ended December 31, 2017. There were no newly identified critical accounting policies in the first six months of 2018 nor were
there any material changes to the critical accounting policies and estimates discussed in our Annual Report on Form
10-K
for the year ended December 31, 2017.